Motorcar Parts of America Reports Strong Fiscal 2026 Performance Amid Growth Opportunities and Profit Gains
Motorcar Parts of America reported improved financial performance for the fourth quarter and full fiscal year ended March 31, 2026, driven by higher sales, stronger profitability, lower financing costs, and expanding business opportunities despite headwinds tied to customer ordering patterns.
The automotive aftermarket supplier posted growth across several key financial metrics during the fiscal 2026 fourth quarter, highlighting increasing momentum in its operations as the company positions itself for additional expansion in fiscal 2027.
The company reported net sales of $212.3 million for the fourth quarter, representing a 9.9 percent increase compared with $193.1 million during the same period in the prior year. According to the company, quarterly sales benefited from approximately $19.9 million in core revenue associated with inventory realignment at certain customer distribution centers.
Motorcar Parts of America, which manufactures and distributes replacement automotive parts including alternators, starters, wheel hub assemblies, brake products, turbochargers, and diagnostic equipment, also recorded notable gains in profitability during the quarter.
Gross profit climbed 30.9 percent year over year to $50.4 million from $38.5 million in the previous fiscal fourth quarter. Gross margin improved significantly to 23.7 percent, up from 19.9 percent a year earlier, reflecting stronger operational execution and margin expansion initiatives.
The company stated that gross margin during the quarter included the impact of certain non-cash expenses and one-time items. Excluding those factors, adjusted gross margin reached 25.8 percent, indicating stronger underlying performance and improved cost efficiency across operations.
Operating income for the fiscal fourth quarter increased to $21.1 million, compared with $16.3 million in the prior-year period. Company officials noted that operating income reflected approximately $6.7 million in non-cash expenses, partially offset by one-time net benefits totaling $3.3 million.
Lower borrowing costs also helped strengthen quarterly profitability. Interest expense declined by $2.3 million to $10.3 million, down from $12.5 million during the same quarter last year. The reduction was primarily attributed to lower utilization of accounts receivable discount programs, lower borrowing levels, and reduced interest rates.
The improved operating environment translated into a significant turnaround in bottom-line performance. Motorcar Parts of America reported net income of $9.7 million, or $0.42 per diluted share, during the fiscal 2026 fourth quarter. This marked a sharp improvement from a net loss of $722,000, or $0.04 per share, reported during the same quarter in fiscal 2025.
The company said quarterly earnings were impacted by non-cash expenses totaling $4.1 million, equivalent to $0.18 per diluted share, while benefiting from one-time items worth approximately $2.5 million, or $0.11 per diluted share.
Company leadership expressed confidence in future growth despite some challenges encountered during fiscal 2026, particularly changing order patterns from one of its larger customers.
Chairman, President, and Chief Executive Officer Selwyn Joffe said the company closed the year on a strong note and remains encouraged by a growing pipeline of new business opportunities.
According to Joffe, Motorcar Parts of America secured significant new business commitments during the year, which are expected to phase into operations throughout fiscal 2027. He emphasized that the evolving competitive landscape is creating favorable opportunities for the company to expand market share and enhance long-term revenue growth.
Management also highlighted the company’s strategic focus on strengthening shareholder value through operational discipline, working capital improvements, and sustained profitability.
In addition to pursuing growth opportunities, Motorcar Parts of America continued to return capital to shareholders through its share repurchase program. During the fourth quarter alone, the company repurchased 286,136 shares for approximately $3.0 million at an average share price of $10.48.
For the full fiscal year, the company repurchased 955,608 shares valued at $11.4 million at an average share price of $11.88 per share. Management indicated that $22.1 million remains available under the company’s current authorization for future repurchases.
Financial flexibility also remained a focal point for the company during fiscal 2026. As of March 31, 2026, Motorcar Parts of America reported revolver loan borrowings of $94.7 million and cash reserves totaling $14.7 million, resulting in net bank debt of $80 million.
Over the past three years ended March 31, 2026, the company generated approximately $103.8 million in cash from operating activities, underscoring the strength of its cash generation capabilities and liquidity profile.
For the full fiscal year, Motorcar Parts of America delivered solid top-line growth despite a decline in sales to one major customer.
Net sales for fiscal 2026 rose 4.3 percent to $789.8 million, compared with $757.4 million in fiscal 2025. Annual results included approximately $35 million in core revenue related to inventory realignment at customer distribution centers, offset in part by an estimated $30 million sales decline from one of the company’s major customers.
Gross profit for the full year increased to $159.9 million, compared with $153.8 million in the previous fiscal year. Gross margin remained relatively stable at 20.2 percent, compared with 20.3 percent a year earlier, despite external pressures and certain financial adjustments.
Meanwhile, operating income increased substantially to $65.8 million from $39.9 million during fiscal 2025. The company attributed the improvement in part to favorable foreign exchange impacts tied to lease liabilities and forward contracts.
Excluding non-cash expenses and certain one-time items, adjusted operating income reached approximately $76.6 million, demonstrating continued operational improvements and cost management initiatives.
Interest expense for the full year also moved lower, decreasing by $8.9 million to $46.7 million compared with $55.6 million in fiscal 2025. The reduction reflected lower average balances under the company’s credit facility, reduced reliance on accounts receivable financing arrangements, and lower prevailing interest rates.
The company returned to profitability for the full fiscal year, reporting net income of $12.4 million, or $0.62 per diluted share, compared with a net loss of $19.5 million, or $0.99 per share, in the prior year.
Management noted that annual earnings included non-cash expenses totaling approximately $7.8 million, equivalent to $0.39 per diluted share, while benefiting from certain one-time cash items worth roughly $593,000.
Looking ahead, Motorcar Parts of America expressed optimism regarding fiscal 2027 and expects accelerating growth driven by newly awarded business programs, operational efficiencies, and improved utilization of brake-related manufacturing capacity.
The company projects net sales growth between 7.5 percent and 10.2 percent year over year for fiscal 2027, translating into expected revenue between $780 million and $800 million. Guidance excludes certain non-recurring items, including tariff pass-throughs and temporary core revenue related to prior inventory realignment activities.
Management indicated that recently secured business awards are expected to ramp up during the second half of fiscal 2027. Timing considerations are tied partly to customer efforts to utilize existing liquidated inventory acquired from a prior supplier before transitioning to new sourcing arrangements.
In addition to currently forecasted gains, the company expects to secure more than $100 million in additional annualized net sales by the end of fiscal 2027. However, those opportunities have not been included in current guidance due to uncertainty around implementation timing.
Based on these expectations, Motorcar Parts of America anticipates annualized net sales to exceed $900 million by the conclusion of fiscal 2027.
Operating income for fiscal 2027 is expected to range between $86 million and $91 million, representing year-over-year growth between 12.3 percent and 18.8 percent. These projections include the anticipated impact of tariffs enacted as of June 8, 2026, while excluding certain non-cash expenses and one-time costs.
The company expects depreciation and amortization expenses to total approximately $9 million during the fiscal year, contributing to projected EBITDA between $95 million and $100 million.
As Motorcar Parts of America enters fiscal 2027, management remains focused on enhancing profitability, expanding market opportunities, and generating stronger shareholder returns through disciplined financial execution and sustained operational improvements. With new business wins beginning to materialize and margin expansion initiatives underway, the company appears positioned to build on the financial momentum established during fiscal 2026.
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