Motorcar Parts of America Inc. (MPAA, Financial) filed Quarterly Report for the period ended 2009-06-30.
Mototcar Parts & Accessories Inc. is a leading manufacturer of replacement alternators and starters for imported and domestic cars and light trucks in the United States and Canada. The company\'s full line of alternators and starters are remanufactured for vehicles imported from Japan Germany Sweden France and Korea. The imported vehicles for which the company remanufactures alternators and starters also include vehicles produced by GM Chrysler and Ford. The company also assembles and distributes ignition wire sets for imported and domestic cars and light trucks. Motorcar Parts of America Inc. has a market cap of $56.82 million; its shares were traded at around $4.75 with a P/E ratio of 9.5 and P/S ratio of 0.42.
resulted in a decrease in revenue of $867,000 for our scrap metal compared to the three months ended June 30, 2008, (iii) an increase in packaging costs of $392,000 compared to the three months ended June 30, 2008, and (iv) increases in other costs during the three months ended June 30, 2009 compared to the same period of the prior year. In addition, our gross profit in the prior year was positively impacted by acceleration of $2,300,000 of promotional allowances in the fourth quarter of fiscal 2008, which otherwise would have been earned by one of our customers during the fourth quarter of fiscal 2008 through the first quarter of fiscal 2009.
General and Administrative. Our general and administrative expenses for the three months ended June 30, 2009 were $2,512,000, which represents a decrease of $1,690,000, or 40.2%, from general and administrative expenses for the three months ended June 30, 2008 of $4,202,000. This decrease in general and administrative expenses during the three months ended June 30, 2009 was primarily due to the following: (i) a net gain of $761,000 recorded due to the changes in the fair value of foreign exchange contracts, (ii) $260,000 of decreased audit, consulting, and other professional services fees, (iii) $173,000 of decreased stock-based compensation, (iv) $105,000 of decreased severance and other related expenses, and (v) $273,000 decrease in other general and administrative expenses.
Interest Expense. Our interest expense, net of interest income, for the three months ended June 30, 2009 was $996,000. This represents an increase of $178,000, or 21.8%, over interest expense, net of interest income, of $818,000 for the three months ended June 30, 2008. This increase was primarily attributable to higher discount rates on factored receivables and higher average outstanding balances on our line of credit, which was partially offset by lower interest rates on our line of credit balance during the three months ended June 30, 2009 as compared to the three months ended June 30, 2008.
At June 30, 2009, we had negative working capital of $1,601,000, a ratio of current assets to current liabilities of 0.97:1, and cash of $1,147,000, compared to negative working capital of $3,569,000, a ratio of current assets to current liabilities of 0.94:1, and cash of $452,000 at March 31, 2009. The change in working capital from March 31, 2009 is primarily the result of (i) a pay down of our line of credit, (ii) a decrease in other current liabilities as a result of changes in the fair value of our forward foreign currency exchange contracts, (iii) a decrease in accounts payables balances, and (iv) higher cash on hand partly offset by lower accounts receivable due primarily to higher balances in accounts receivable offset accounts.
The bank holds a security interest in substantially all of our assets. The balance of the Revolving Loan was $20,100,000 and $21,600,000 at June 30, 2009 and March 31, 2009, respectively. Additionally, we had reserved $2,201,000 of the Revolving Loan for standby letters of credit for workers compensation insurance and $274,000 reserved for commercial letters of credit as of June 30, 2009. As of June 30, 2009, $17,425,000 was available under the Revolving Loan, and of this, $7,500,000 is reserved for use in the event our largest customer discontinues its current practice of having our receivables factored.
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Mototcar Parts & Accessories Inc. is a leading manufacturer of replacement alternators and starters for imported and domestic cars and light trucks in the United States and Canada. The company\'s full line of alternators and starters are remanufactured for vehicles imported from Japan Germany Sweden France and Korea. The imported vehicles for which the company remanufactures alternators and starters also include vehicles produced by GM Chrysler and Ford. The company also assembles and distributes ignition wire sets for imported and domestic cars and light trucks. Motorcar Parts of America Inc. has a market cap of $56.82 million; its shares were traded at around $4.75 with a P/E ratio of 9.5 and P/S ratio of 0.42.
Highlight of Business Operations:
Net Sales. Net sales for the three months ended June 30, 2009 decreased by $15,000, to $32,690,000 compared to net sales for the three months ended June 30, 2008 of $32,705,000. In addition to the impact of general overall economic conditions, our sales in the first two months of the current fiscal quarter were negatively impacted by an inventory reduction program initiated by one of our largest customers and an understanding with a customer to delay shipments because of its then uncertain financial future. The net sales in the third month of this fiscal quarter was not affected by this and so our overall net sales to these customers for the three months ended June 30, 2009 were only slightly lower compared to the net sales for the three months ended June 30, 2008. The decrease in net sales to our other major existing customers was partially offset by net sales to certain new customers acquired as a result of our acquisitions.resulted in a decrease in revenue of $867,000 for our scrap metal compared to the three months ended June 30, 2008, (iii) an increase in packaging costs of $392,000 compared to the three months ended June 30, 2008, and (iv) increases in other costs during the three months ended June 30, 2009 compared to the same period of the prior year. In addition, our gross profit in the prior year was positively impacted by acceleration of $2,300,000 of promotional allowances in the fourth quarter of fiscal 2008, which otherwise would have been earned by one of our customers during the fourth quarter of fiscal 2008 through the first quarter of fiscal 2009.
General and Administrative. Our general and administrative expenses for the three months ended June 30, 2009 were $2,512,000, which represents a decrease of $1,690,000, or 40.2%, from general and administrative expenses for the three months ended June 30, 2008 of $4,202,000. This decrease in general and administrative expenses during the three months ended June 30, 2009 was primarily due to the following: (i) a net gain of $761,000 recorded due to the changes in the fair value of foreign exchange contracts, (ii) $260,000 of decreased audit, consulting, and other professional services fees, (iii) $173,000 of decreased stock-based compensation, (iv) $105,000 of decreased severance and other related expenses, and (v) $273,000 decrease in other general and administrative expenses.
Interest Expense. Our interest expense, net of interest income, for the three months ended June 30, 2009 was $996,000. This represents an increase of $178,000, or 21.8%, over interest expense, net of interest income, of $818,000 for the three months ended June 30, 2008. This increase was primarily attributable to higher discount rates on factored receivables and higher average outstanding balances on our line of credit, which was partially offset by lower interest rates on our line of credit balance during the three months ended June 30, 2009 as compared to the three months ended June 30, 2008.
At June 30, 2009, we had negative working capital of $1,601,000, a ratio of current assets to current liabilities of 0.97:1, and cash of $1,147,000, compared to negative working capital of $3,569,000, a ratio of current assets to current liabilities of 0.94:1, and cash of $452,000 at March 31, 2009. The change in working capital from March 31, 2009 is primarily the result of (i) a pay down of our line of credit, (ii) a decrease in other current liabilities as a result of changes in the fair value of our forward foreign currency exchange contracts, (iii) a decrease in accounts payables balances, and (iv) higher cash on hand partly offset by lower accounts receivable due primarily to higher balances in accounts receivable offset accounts.
The bank holds a security interest in substantially all of our assets. The balance of the Revolving Loan was $20,100,000 and $21,600,000 at June 30, 2009 and March 31, 2009, respectively. Additionally, we had reserved $2,201,000 of the Revolving Loan for standby letters of credit for workers compensation insurance and $274,000 reserved for commercial letters of credit as of June 30, 2009. As of June 30, 2009, $17,425,000 was available under the Revolving Loan, and of this, $7,500,000 is reserved for use in the event our largest customer discontinues its current practice of having our receivables factored.
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