Exhibit 99.1

Gary S. Maier

- Revises Fiscal 2023 Guidance Despite Strong Fiscal Fourth Quarter Outlook –

•	Annualized price increases of $20 million commencing in current fourth quarter enhances cash flow and gross margin improvement

•	Approximately $52 million annualized net sales have resumed in the fourth quarter as delayed business and customer order patterns normalize

•	Solid new business wins in hard parts and EV emulation shipping in fiscal 2024

•	Brake pad and rotor product line net sales expected to double in fiscal 2024

•	Cost-saving initiatives and sales ramp up to enhance gross margins

LOS ANGELES, CA – February 9, 2023 – Motorcar Parts of America, Inc. (Nasdaq: MPAA) today reported results for its fiscal 2023 third quarter ended December 31, 2022 – reflecting the impact of ordering patterns by two customers, higher interest rates for customer vendor financing programs and lingering supply chain disruptions for critical components.

Fiscal 2023 Third Quarter Results

Net sales for the fiscal 2023 third quarter were $151.8 million compared with $161.8 million in the prior year.

Fiscal third quarter results were sharply impacted by a certain customer reducing orders by approximately $14 million compared with the prior year, despite no market share loss with the customer, and delays with other customer orders for new business of approximately $17 million. Orders have resumed in the current fiscal 2023 fourth quarter and are expected to continue through fiscal 2024, as customers focus on building appropriate inventory levels to meet growing demand for the upcoming spring and summer seasons.

Net income for the fiscal 2023 third quarter was $1.0 million, or $0.05 per diluted share, compared with net income of $3.1 million, or $0.16 per diluted share, a year ago.

Results were impacted by $7.5 million, or $0.29 per diluted share, of increased interest expenses mostly due to higher market rates, primarily related to customer vendor financing programs, as well as by approximately $500,000, or $0.02 per diluted share, of non-cash items, as detailed in Exhibit 1.  Results were also impacted by approximately $2.8 million, or $0.14 per diluted share, primarily due to transitory costs related to supply chain disruptions.  In addition to the above items, results for the quarter were impacted by inflationary costs not yet covered by price increases.  As further discussed below, gross margins were also negatively impacted by temporary lower absorption of overhead costs due to lower production volume and changes in product mix.

Prior-year net income of $3.1 million, or $0.16 per diluted share, was impacted by approximately $4.8 million, or $0.25 per diluted share, of non-cash items as detailed in Exhibit 1. The company also was impacted by approximately $3.7 million, or $0.19 per diluted share, of other costs, including transitory costs related to supply chain disruptions for the prior year.

Gross profit for the fiscal 2023 third quarter was $21.0 million compared with $32.6 million a year earlier.  Gross profit as a percentage of net sales for the fiscal 2023 third quarter was 13.8 percent compared with 20.1 percent a year earlier.  Gross margin for the fiscal 2023 third quarter was primarily impacted by inflationary costs not yet covered by price increases, temporary lower absorption of overhead costs due to lower production volume and changes in product mix.  In addition to the above items, gross margin for the fiscal 2023 third quarter was also impacted by $3.9 million, or 2.6 percent, of non-cash items, and $2.4 million, or 1.6 percent, by the transitory supply chain disruptions, as detailed in Exhibit 3. Gross margin improvement is expected to be enhanced as the full benefit of certain price increases is realized, and with higher sales volume.  A small portion of the price increases was realized late in the fiscal third quarter, with the balance taking effect in the current fiscal 2023 fourth quarter.

“Results for the quarter were significantly impacted by reduced orders, representing approximately $35 million for the nine-month period, including approximately $14 million for the quarter, by one of our customers -- despite no loss of our market share.  In addition, anticipated results were impacted by delays with other customer orders for new business of approximately $17 million. Fortunately, the current fiscal fourth quarter is benefiting from resumption of order flow across the board. We also were impacted by sharply higher interest rates related to long-established vendor finance programs offered by our retail customers. Higher interest rates continue to be challenging for the entire industry. As a critical supplier of non-discretionary automotive parts, we are committed to arriving at a satisfactory solution to this issue.

“We remain focused on achieving our near- and long-term financial targets by continuing to improve operating efficiencies. Despite recent challenges, we remain optimistic about our business including the current fourth quarter, supported by our leadership position and the opportunities we expect to realize from our investments in brake-related products and the emerging electric vehicle market,” said Selwyn Joffe, chairman, president, and chief executive officer.

Nine-Month Results

Net sales for the fiscal 2023 nine-month period were $488.3 million -- representing a 3.2 percent increase compared with $473.1 million in the prior year, which excludes $13.3 million in core revenue due to a realignment of inventory at customer distribution centers with sales benefits evolving as product mix changes.

Gross profit for the fiscal 2023 nine-month period was $77.8 million compared with $92.1 million a year earlier. Gross profit as a percentage of net sales for the fiscal 2023 nine-month period was 15.9 percent compared with 18.9 percent a year earlier. Gross margin for the fiscal 2023 nine-month period was impacted by $11.9 million, or 2.4 percent, of non-cash items, and $8.6 million, or 1.8 percent, by the transitory supply chain disruptions, as detailed in Exhibit 4. In addition, gross margin for the fiscal 2023 nine-month period was also impacted by various items discussed above for the quarter.  Gross margin improvement is expected to be enhanced as the full benefit of certain price increases is realized, and with higher sales volume.

Summary of Fiscal 2023 Considerations To Date

 

Updated Outlook

Use of Non-GAAP Measure

This press release includes the following non-GAAP measure – EBITDA, which is not a measure of financial performance under GAAP and should not be considered as an alternative to net income as a measure of financial performance. The company believes this non-GAAP measure, when considered together with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to the company’s results of operations. However, this non-GAAP measure has significant limitations in that it does not reflect all the costs and other items associated with the operation of the company’s business as determined in accordance with GAAP. In addition, the company’s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies. Therefore, investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. For a definition and reconciliation of EBITDA to net income, its corresponding GAAP measure, see the financial tables included in this press release. Also, refer to our Form 8-K to which this release is attached, and other filings we make with the SEC, for further information regarding this measure.

Earnings Conference Call and Webcast

Selwyn Joffe, chairman, president and chief executive officer, and David Lee, chief financial officer, will host an investor conference call today at 10:00 a.m. Pacific time to discuss the company’s financial results and operations. The call will be open to all interested investors either through a live audio webcast at www.motorcarparts.com or live by calling (888) 440-5584 (domestic) or (646) 960-0457 (international). For those who are not available to listen to the live broadcast, the call will be archived on Motorcar Parts of America’s website www.motorcarparts.com. A telephone playback of the conference call will also be available from approximately 1:00 p.m. Pacific time on February 9, 2023 through 8:59 p.m. Pacific time on February 16, 2023 by calling (800) 770-2030 (domestic) or (647) 362-9199 (international) and using access code: 1545314.

About Motorcar Parts of America, Inc.

Motorcar Parts of America, Inc. is a remanufacturer, manufacturer, and distributor of automotive aftermarket parts -- including alternators, starters, wheel bearings and hub assemblies, brake calipers, brake pads, brake rotors, brake master cylinders, brake power boosters, turbochargers, and diagnostic testing equipment utilized in imported and domestic passenger vehicles, light trucks, and heavy-duty applications. Its products are sold to automotive retail outlets and the professional repair market throughout the United States, Canada, and Mexico, with facilities located in California, New York, Mexico, Malaysia, China and India, and administrative offices located in California, Tennessee, Mexico, Singapore, Malaysia, and Canada. In addition, the company’s electrical vehicle subsidiary designs and manufactures testing solutions for performance, endurance, and production of multiple components in the electric power train – providing simulation, emulation, and production applications for the electrification of both automotive and aerospace industries, including electric vehicle charging systems. Additional information is available at www.motorcarparts.com.

 

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. The statements contained in this press release that are not historical facts are forward-looking statements based on the company’s current expectations and beliefs concerning future developments and their potential effects on the company. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the company) and are subject to change based upon various factors. Reference is also made to the Risk Factors set forth in the company’s Form 10-K Annual Report filed with the Securities and Exchange Commission (SEC) in June 2023 and in its Forms 10-Q filed with the SEC for additional risks and uncertainties facing the company. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

 

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(Financial tables follow)

Consolidated Statements of Operations

(Unaudited)

Consolidated Balance Sheets

Additional Information and Non-GAAP Financial Measures

 

To supplement the consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), the company has included the following additional information and non-GAAP financial measures for the three and nine months ended December 31, 2022 and 2021. Among other things, the company uses such additional information and non-GAAP adjusted financial measures in addition to and together with corresponding GAAP measures to help analyze the performance of its business.

 

The company believes this information helps provide a more complete understanding of the company's results of operations and the factors and trends affecting the company's business. However, this information should be considered as a supplement to, and not as a substitute for, or superior to, information contained in the company’s financial statements prepared in accordance with GAAP. In addition, the company’s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies.

The company defines EBITDA as earnings before interest, taxes, depreciation, and amortization. A reconciliation of EBITDA to net income is provided below along with information regarding such items.

(b) For the three-months ended December 31, 2022, consists of $2,370,000 impacting gross profit and $279,000 included in operating expenses.

For the three-months ended December 31, 2021, consists of of $4,344,000 impacting gross profit and $591,000 included in operating expenses.

(c) For the three-months ended December 31, 2022, consists of $1,103,000 included in operating expenses.

(b) For the nine-months ended December 31, 2022, consists of $8,572,000 impacting gross profit and $1,391,000 included in operating expenses.

For the nine-months ended December 31, 2021, consists of of $14,557,000 impacting gross profit and $1,700,000 included in operating expenses.

(c) For the nine-months ended December 31, 2022, consists of $2,642,000 included in operating expenses.

For the nine-months ended December 31, 2021, consists of $2,744,000 included in cost of goods sold and $323,000 included in operating expenses.

(a) gross margin reflecting impact to net sales and cost of goods sold

(a) Excludes depreciation, which is included in the depreciation and amortization line item.

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