MPAA - Earnings call transcript Q3 2019 | Motorcar Parts of America, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Motorcar Parts of America Fiscal 2019 Third Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, this conference maybe recorded. I will now turn the conference over to your host Mr. Maier. Gary begin. may you Sir,

Gary Maier

you, Valerie. the joining for everyone Thank today. you call for us Thank

on Before statements I and begin to forward-looking included President Company’s of we in Harbor and Financial and remind future and for statements, the Joffe, based including over Chief release. Safe Safe Chief statements Chairman, everyone Selwyn expectations today’s of the XXXX will Executive Actual Such certain by subject Parts Company. and Harbor statements, events I’d which call. a made press Company’s Officer; provides Act today’s Officer, David beliefs Reform the the turn Lee, developments like forward-looking Litigation significant whether the statement call obligation potential result during Securities beyond current or can otherwise. be and no uncertainties, may forward-looking to any assurance There Company no results the the new information, are statements. involve effects revise of forward-looking and concerning their on of that projected Company those of publicly undertakes based These control Motorcar to be upon as future factors. in America. risks Company are or of from some the developments those update The differ statements various these forward-looking future change anticipated Private are a affecting

risks the call the over now and I’d Securities For a turn Company’s begin Exchange the of ongoing with you Selwyn. of to the more filings and uncertainties the like discussion business, of to it various I detailed Company’s some refer and to Commission.

Selwyn Joffe

today. I Gary. appreciate Thank everyone joining us you,

estimated growing automotive the the and success $XXX parts record highlight aftermarket. quarter position for Company’s Our billion continued hard sales within

gross approximately the was adjusted as quarter release, next non-cash in XX% which several were of we end today’s expect improvement fiscal by year. margin in press While highlighted impacted items, the margin gross

are business our product the by excited and We’re growing. lines opportunities,

growth. this support to expanding is footprint Our

We at an are point. important inflection

applications, expanding to As production our our business infrastructure program, for leading our launching increasing brake industry internal been our of our we our we both last our are recently electric ramping facilities. our by enhanced E&M new vehicle new business diagnostic business foot acquisitions call during has print recent Power, programs combustion highlighted quarter, Malaysian are bolster which our and Mexican our products, both and for expanding and support and I wins, for new in customer

with in recent XXX,XXX new our has more the in feet. addresses This through process our margins. point as square initiatives. and solid distribution future square to Number us products, an additional Number enhanced light-duty of resulting brake business that a are facilitate from expansion commencing of also Dixie of lines. additional rotating mention of electrical be will innovative in we gross provides expertise current team professionals. number buying as support of consolidating heavy-duty acquisition opportunities well a Mexico, the to The structure three, upcoming addition testers global diagnostic expansion a heavy-duty our In Electric. experience the customer expand it commitments, enhanced Number center XXX,XXX facilities will fiscal in from foot offerings, and base, expanding enables dedicated capacity the single also one, well sales from to multiple existing year support as company, enhanced opportunities be acquisition will a product growth as our effective I new product lines and It customers growth origin. cost it should realized future the two, sales growth. shipments a our by strategic

of tariffs. in outlook, our could capabilities industry To related China in highlight positive hedge while park, charts sources also presentation the announced you Chinese I strong gain a and repairs. overtime including addition, capacity supplement some inflation providing trade a current expansion spot manufacturing we India, against shows website, car In chart our to which and our recently macro to refer our overall the on which sweet investor for

of seeing now the replacement years age new cost of third years. company number now are will to Essentially, review results in for the David, lower the industries We the back sales to recession prime These end quarter. growing. over further optimism timeframe. parts our over from support our replacement the is for I call vehicles the prime and growth turn next fiscal the several statistics

David Lee

to earnings and Thank respect a of filed this reconciliation To everyone release filed results, X-K non-GAAP XX-Q, XXXX today. our the you, more Selwyn. begin, I XX, measures to for including we explanations which to of press read later morning, the financial December GAAP with encourage detailed

effect And on with of write-down the margin all Let million nine goods million our a in including costs the Core net items review fixed customers' and quarterly adjustment quarter affect for million, of on X.X and A and quarter non-cash follows. by gross as me did full buy the product the cores third but the gross reimbursement the impacted X,XXX,XXX, financial for and premium for The XXXX reported fiscal a of of This associated does transition million with demand million, to capacity with or upfront for of million cost sales back effective. on for million new $X.X and of discontinued. contract. take including net connection for were for fiscal new tariff of customer product shelves. increased percentage paid expansion, with sold highlight the third not year. in less amount assemblies of prior of the months for were part for X.X Net to moment for million the totaling stock line year to a earlier, for $XXX.X record $XX.X value associated quarter, sales $XXX,XXX XX.X% be million expansion for net electrical basis. quarter revaluation core same customers' sales of the sales cores million, remanufacturing cancellation reflecting cash brake $XXX.X for and increased to of quarter allowances $XX.X adjusted $XX.X X.X million the to an period price for quarter, which of income adjusted the results should both no business and margin XX.X% the year hub a five before X,XXX,XXX on related business million $XXX.X and shelves, sold the cost Adjusted affects our costs related negatively cost distribution Consumer expense. third consisted a had XXX,XXX, and amortization the the XXXX million $XX.X the bearings increase increases to Net fiscal sales million from from decreased costs XXXX a Wheel third $XX.X products sales customer million lines. third to products year a approximately Rotating the to increased the due earlier. quarter increased sales from earlier. the The quarter following. for support demand. $XXX.X X.X lower $XX.X from quarter net net

slides, year, increase cold brake from by Brake hub adjustments the inventory we sales. the wheel $X.X as line program. $XXX,XXX net anticipate conditions substantially $X.X positively decreased customers. cylinder the to our the million impact million four weather in As prior master for We recent to momentum to sales due we extreme unusual expect launch

quarter to and increased sales brake Additionally, for the power boosters, million in $X.X net million, million from in third turbochargers testers prior the the $X.X year. combined $X.X

expenses profit XX.X%, was was increase overtime the operating profit quarter the and earlier. We lines. with to the wage higher strategic gross $XX.X $XX.X third Adjusted expenses $XX.X year $XX.X $XX.X compared initiatives Gross net impacted factors compared five the to commissions costs a higher adjusted earlier. year million, in increased with growth million parts and third to million margin million, million related by each our freight programs for Total increased sales related long-term gross the Adjusted expenses million XX.X% costs, was of the support for product due sales for which and $X.X to quarter the systems, the the marketing percentage exciting million of year the the $X.X $XX.X impacted quarter quarter with third Mexico expansion million for for compared for of business in by sales, increases prior and compared highlighted. with to third these engineering, XX%, The test quarter for operating a expect quarter XX.X% customer of a including net and for service for increase electric percentage from as returns, our expenses growth. earlier, quarter. quarter new to related a primarily increased growth. sales several and was operating hard $XX.X merchandising, million in both, third and value-added third for due previously introduction prior other as profit including other year and Gross was the and related from items for million gross adjusted to profit expenses by vehicle year. the Adjusted personnel growth, overall $XX.X businesses, Adjusted year. was in third a by expense diagnostic was prior

for X.X of tax million which total expense for the $X.X Adjusted million was non-cash higher the third includes build an million for XX% third due new in accounts XXXX. As was compared charge million operating foreign differed levels accumulated X, income the the under Act, credit our Net the compared one-time million, prior enacted XXX,XXX mentioned million Depreciation tax XXXX our blended $X.X outstanding for with expense for average due our Adjusted discount for $X.X for per quarter. prior one-time due borrowings programs. tax $X charge quarter a million million the and compared expense margin, $X.XX net third accounts the in $XX.X $X.X was the share, $X $X.X year. million on million income law a or prior XX% EBITDA we tax $X.XX charge per facility corporate third per the share million The with with third ago. fiscal discount the our quarter or of the or tax rate primarily and with programs, share was million interest quarter and million borrowings year to increased year. primarily resulted amortization lowering for January tax higher X of assets share sales, $X.XX a the third our year. and operating for period $XX.X of quarter several transition previously, was or compared X.X interest diluted in third to XXXX year gross third quarter quarter as Net ago. to the liabilities with rates related to the items quarter, tax for of Reform million the The million million loss for third the effective as December receivable for impacting benefit X.X per million of X.X Adjusted last expense Interest inventory to receivable year for income expense $X income. prior revaluation for quarter, repatriation increase was loss the Income $XX expense of of outstanding compared the prior a was to our undimmed was $X.XX compared average $XX.X of support was tax for with period. year $X.X with a Tax utilization increase million income the compared and net quarter. year income third tax diluted book

the for months, net $X.XX, XX, million Adjusted now sales $X.XX month the the $X.X compared income $XX.X Adjusted the XXXX. discuss $XXX.X EBITDA the year with per to December compared XX.X% were nine nine year $XX.X increased and $X.XX Net increased months million earlier. year. for was was compared million, the million or nine to for was with or last loss X.X% month million nine the prior net from period year nine Adjusted share million a net with ago. $XX Net period, for prior income with results earnings share, for for $XX.X Let adjusted a last nine million months months. the $XXX.X $XX million from diluted $XXX.X $X.XX me $XXX.X year. months compared nine million for year sales ended of per for

basis. XXXX, average XX, on $XX.X EBITDA a December of equity the pre-tax was As $XXX million, months capital net adjusted trailing and and balance debt invested resulting a XX was XX.X% million, on in return

for EBITDA new on further in and authorized used $XXX growth, total adjusted million net worth X.X cash million limitations. XX, authorization $XX.X $XXX XX, the for activity of At to business million for please three of based credit the net approximately XX, share facility on of cash three trailing relating XX subject to for in period. million court XX.X used December certain by current to million had the a and activities, December At has payments was method million XX, Company approximately have balance the cash was comprised due revolving purchases million business. ROIC XX.X at we stock significant of December been the increase of. availability calculating million, divide utilized payable December had $XX.X $XXX December bank XXXX, Net million. accounts is XXXX debt XXXX, Our million in total million debt repurchase and ended XXXX, XXXX, a months average is net inventory, quarter analyzing revolving cash primary of a equity and categories $XX.X totaling available were XX, facility the operating note X.X XXX that assets, the million credit to and expenditures repurchase liabilities $XX total as million we Under refundable new current in XX.X common assets program, approximately million $XXX XX-month months to of shares. during operating When the and

our relating expenses that moving expenditures growth allowance two acquisitions. and relate to million larger growing business to XX.X for cost business, a spent and First, new development to from of customers product returns transition costs include new inventory, facilities, which items to new related

X.X million X.X increase. new Second, costs core million spend And net business. to for third, tariff before related spend for payments buyback price

XXXX, is method. in customers measures, the press to is The Company X Standard non-GAAP statement full contracts sheet adopted For our effect the not this the through transition be release. certain the Exhibits from refer effect classified morning's Effective Quantification to reconciliation Topic retrospective earnings the on using income please with X X, Company of material. revenue account. The on Accounting financial April balance XXX believes

the filing Company's XX-Q later Additional in will back call Selwyn. available information the to I is form turn today. now

Selwyn Joffe

Thanks, David.

can with a you clear path As opportunities. ahead we growth see, for multiple have

real which bearings, master we which part is and First, product lines we cylinders and rotating have and related hubs non-discretionary a starters, turbochargers. and of brake pads, we including boosters, significant brake hard array alternators products electrical, rotors, defined as have

offering we opportunities With acquisition, and the channel new Dixie we've market, of extended channel. our heavy-duty full to have additional heavy-duty in the to our electrical and range products now rotating sell the broad

In customers. apply to addition, current we to our able be now products heavy-duty will

these strong testing all complement We with offering our up electrical hard products have Beginning rotating our diagnostics nondiscretionary a products. with of for higher the to of following and launching possibility parts. diagnostic of

strong a have we for vehicles. Second, products diagnostic offering for our electric

electric diagnostic In for in business electric acquisition and demand vehicles both and complements the into as will E&M. new and footprint an exceptional pursuing combined E&M management D&V and by important for space make Power and integrating and more you've summary, D&V, team heard, continuing. product have our The have a the management global application. technology vehicle new we enhanced postproduction testers offering many pre which aggressively of the the are We’re will commitments the opportunities growth growth

is and fiscal sales as significant you to they in The and product forward. the on to in our position value, robust, product whole opportunities through inflection updating positioned and well base margin as a Company enhancement very accelerated evolve. line look we whole progress double XXXX is and our forward we new and create a line anticipate growth digits as Our we for

call will We for questions. open now the

Operator

Chris [Operator first instructions] Van question Our of comes from Horn B. Riley.

is line open. Your

Chris Van Horn

follow up to your on comments. Just

I end at Just for you sure of heard correctly. the of Did digit make line double selling goal fiscal XXXX? say you a year top just growth

Selwyn Joffe

digit. double I I accelerated said, mean Yes,

can for sustain we think years. couple next of growth have we we I rates So, feel the the now

Chris Van Horn

more ranges around from there And know, you detail be Would we would able expect said, some -- to I in maybe give margin might to current any able XXXX? you you what of levels. expansion

Selwyn Joffe

the big today thing I to Yes, understand is. think

so are fold in much But capacity happening of from so as the for products. there's footprints because growth efficient as the much parts around all have terms We our and not of of could delayed be, hands stay demand our world. on certain been on embellishing new our operation moving into to I they've new

the new fundamentals margins margins the should range we our we're at have So, our think is I of back a end of minimum, guidance, quite the realistic. believe high incremental as into our will I we storing honestly, get savings. return. we of footprints, think to But And very

one lot are rates. product lines will want the growing different Now, of is in a that, just point I to thing be going different to out

So, could just will believe because the we get much gross the on, and fundamentals very mix, the margin the line, transition are by into we margin as of improve these be are very product goes there product key of lines grows, elements through but as time product our differentiation in space. new as sound

Chris Van Horn

on other think cost some savings footprint. on new open had then plan. this you know And front? on And had you've And front, that as you kind your wondering I are as where efficiency mentioned that I'm that talked Mexican What's XXX,XXX some that you about than cost timing there's you additional, distribution I opportunity opportunities then -- well? for

Selwyn Joffe

car is under new and that those in is would rotating product new handling the that the going of electrical. complete. ahead lines. should yet. are and buildings XXX,XXX ramping lines the I will start should with next the year distribution It's hopefully, are new significant. other, buildings product also up there. from see of revenue than two but give fully this square is in that some but also Again, fully Mexico the in July not of foot center significant. by that, say the commitments In commitments and calendar new up items, handling One this we It's our -- our so further but conjunction guidance timeframe brake shipping for end further running be new we to quarter have up all Yes, and it's our

Chris Van Horn

then, And for last one me.

good winter really they're customers on good from obviously some and Coast. here macro sales us for especially seen whether this of the a Just East trend you've as perspective, growth, report, your a comp identifying

Just that trends? And wondering, terms what of behind destocking the is us imagine, you're hearing in update customer well probably on there. order there front just now some and I

Selwyn Joffe

to same The Coast continues But December that a I the think, and is is vortex I'll little car opportunities. extreme but it's a again, metric is are. and softer guys the point to positive a that with happens on back hope again, weather. and you've into We moving few longer. aging overall, on certainly you're prime fundamentals, am publicly where bit I is hope think that the and is going little the what our bit we out that have the continued some we're now East I I every December, industry but Midwest, of sort from fact. help. but very outlook the The saw January, we information heard listening we optimistic certainly polar weather park

are I nice believe, the and next if going replacement. some the at what show fundamentals years, are our sound just our statistics fundamental doing we of So, see look in very to and the customers the growth that industry, are three you fundamentals you

Operator

of next Scott King. comes Stember Our CL question from

open. is line Your

Scott Stember

XX. for you XXX at guidance full sales that, the year, of guess end it high about I end Can gross XXX, of the you XX the your range to maybe said at talk you quarter be you and updated to of expected XX, that your to last the lower have had margins

look a Just thinking to of this with margins the similarly will here, what we improve? where little you full And XXXX forward idea estimate give the better quarter of what us to are going for kind grow base towards year? are

Selwyn Joffe

our quarterly can we some give to want see not annual don’t guidance we're strong we mean, revenues. but you guidance. revoking I clearly, our Scott, And got have bulking So,

can So our revenue base. guidance see remains, you but strength the in the

are probably, for some So, next think give to fiscal next fundamentals the great hoping -- are and And the see be yearend I you margins. making we the guidance progress, year, positive we guidance next will now going report. more are will better we we that and quarter in year, at are

Scott Stember

still stands for said the you last now or the full the as rest what is So year quarter of for I of year? guess

Selwyn Joffe

stronger just we which looking is will But thought I good is at the Correct. a revenue it, so than mean we little so again, see. and

Scott Stember

not, what increase on been that? the what if side? you ability whether to ways your I the talked to away and know, far And as Maybe some the and bit some the that getting be go just and you be items like cost other and workers of some do or are know whether that things items. I and these streamlining a shortage so next And fighting given price here far environment What will will increases, able as price of little about work in just it's of cutting that? about year have stickier you to its counteract labor tougher and talk seeing just

Selwyn Joffe

is in Well, now fully again pricing tariff effect. firstly, the

we're of very to carefully with we tariffs and others. out So, China, able for to increased continue obviously, compensate monitor the

will I itself, mean with think freight moves, our I new world clearly the our efficient in rates, hope labor new will the rates because consolidated are reverse our that freight become we and of headwinds footprint believe mean the more around shipping costs points. I and we freight our with

the enhanced by most of distribution us. multiple one in we lines plants be So eliminate always the full believe of of is product come going LTL We some dramatically having out focus point. Productivity to the much ability is a have less than truckloads productive as to world. a

some the we inflation faster work pricing our to can day We But we mean get cost -- at growing have a end at if is for make if and more productivity, than fabulous is continuous to I to efficient. the continue pay point that. going team of someone facilities improvement

kind rational through come of sure will operating, intend in don't we that’s our and have make We so to be that intend And waste very price to system. we increases.

they believe to are charging for truly passed waste, but So and needs customer which they paid are process, up, that costs for the we is by entire true be not and going through the we are ultimately ultimately consumer. if the

Scott Stember

just to money connection contract, are And a business something I queue. question else? sales lost in adjustments compensate $X before this cancelled I here back the jump to guess $X.X that is last million for the What was you in million and coming I to to guess that back was or to

Selwyn Joffe

basically did we of at is lose this was that -- when and some the relate any is point. at of our a guidance those of this customer quarters deferred non-cash, customer’ asset but liability affecting those it in loss lost accounts the point that cash reversal and way not customers to back We and non-cash it's the

Scott Stember

or is this will -- to this that everything covers related expect And -- further we customer?

Selwyn Joffe

I to we've last this the that. we got from Yes, receivables the but expect that is that, clean-up the bit end still of of mean

Operator

Our from Koranda ROTH Partner. Capital of comes next question Matt

You line open. is

Matt Koranda

margins that to the I guys range time and with least run what you I like like are it when freight XX% drill of wage it's low-end QX, sort for bit guess, require to the get looks and of it pressure I that looks gross more a level a in you guess but back of 'XX model fiscal of but provided, that allow year ahead guess in I to puts the the are you period? takes your outlook. the gross margin maybe quick down sort relatively on it my sighting to at Just back guidance get to that well

Selwyn Joffe

adjusted I I I fourth lot of underlying the and trying we not are of of from don't are quarter. show for size fundamentals can the suffering what a mean low-end what are growth adjustments of gross Yes, which hit and we we’re but we believe to Matt everything the is cognizant be around the like, costs, think margins of can we are in the XX% our factors place the captured guidance

expect and our is are better. as say there that. it to get mode do in we this a there’s there of are a variables again some the mean I So goes would I heavy But margins we time relating at soon on will I've the the recovery margins point time in on said and conservative growth lot because it clear the of doesn't margins intact in much market I noise completes seem in terms accurate rational environment and are but of in an this not statement because efficient footprint think is numbers, this the I are the today the fundamentals and once hope the and in our of very the transition pricing. numbers the we is that in

again factor in a numbers. escalating of is there done noise the in great So we've my that, than cost opinion coming other from and managing directions all job the

cost believe appropriate soft else so industry making structure to be anywhere in some And the moves that and we cost going from everybody's inflation. that were anybody a don't we than for

Matt Koranda

price And tariffs. the you just there put through you wanted the increases pricing through Is were you commentary passing saying, that have actually just guys to put earlier, further made what you to and to address any haven't that price on getting increases, clarify down?

Selwyn Joffe

correct. is That

Matt Koranda

talk passing of somewhat go And like-for-like least competitive SKU least environment. to I sort retailer through forward obviously Maybe seem does in DIFM in at are inflation DIY customers mean some retailer at their your your on channel changes you and the amenable customers. it basis, to could been there's about a like

the at couple a So talk of bit all that’s could in the you discussion? that environment last little months about pricing in with what's changed happened terms

Selwyn Joffe

in I supply, changed if evolved if need I because suppliers, need but it’s the I suppliers. they need mean base, know viable months, you they mean it’s the customer think maybe about couple don’t last of they reliable sound

customers not to be critical growth So have certainly revenue going able are don’t if their these numbers. they sustain inventory, they it’s to to

they understand an the mean effect. the a and and of in just wage that time tough at saying of the we’re Asia, think inflation, mean costs inflationary phase the tariffs states, rate do are wage think monitoring all costs, when when realities end there start global inflationary global all surveys in inflationary they are their terms day, same while and everybody's and so I doing the extremely rates base, if I African environment. an takes of Northern their and Southeast we in Asia, the forget challenging thing we even, the competitive I is rates, about think And through wage I inflationary, gravity homework, customers of I

And mean think so the are are has today that, think price is to pay product unfortunately know. they will at day inflation to solid to continue and And price I if want our fair receiving, are that have ultimately with and consumer in get fundamental much mean is there for very fair they rational able to a I the of customers if someone getting as but don’t they I one it. I no deal inflation fortunately, they their suppliers get all are I price. pay a end a fair pricing, to for going and waste the all our the paying or they don't competitors needs they for appropriate rational. are they as

day, the to those think So do this of continue I that trend conversations. I if an easy end the on be think not there has at it's while we challenge, that

Matt Koranda

direct it’s the there inflation hourly your help And a in be there well? any as headwind you're then that be your appreciated? the percentage of of wage just way Mexico facing would terms cost the of facility, quantify on represented helpful mentioning Maybe wages would there labor, to by also, front, in something goods in is

Selwyn Joffe

it’s over but had base a a we've absorbed the worst Mexican now -- adjusted government even I increase we've mean we base, our in the implemented New it’s the board. wage, had across of minimum Mexican think rates in terms that, wage I

at back sit are that on is point, -- material going is right and freight is to forward. and I freight it's going believe that share shortage not would drag -- going it’s now, been me you come let that's not in a get So a think there's to capacity capacity it’s while industry American to of shortage continue to I to probably a want a and of more that fair going an there's capacity the bigger I way tell this board. much on, bigger going not be more to people

And we're so of going I day competitive very correct end environment. itself there’s to because the the at think a in freight

predict I prices much So I point, can’t stable, that but not at be if read they this only should least when thing not inflationary happens, they fuel is don't also that coming down. at know the

terms And then you produce. tell And in point think I to transition. we a reverse inflection we new produce mix a going where can I of of we go don't through out. and this just when money itself revenue. we're a So of We how should whole freight get lot save to

a little bit going time for us, change. So it's but it's of a noisy to

Matt Koranda

Okay, that's helpful.

certain cancellation cash if cancellations a that of to the rid Just I sheet. was inflow the you're getting long-term fund inventory of you're contract. if balance the to impression with customer be -- last follow-up there guess would your course on core essentially one getting of I under

this a with of is inflow why implication future there cancellation? wouldn't cash associated a or there cash So be the

Selwyn Joffe

we of and get the they core -- with core customers in a program, on they core which so we full pay core penny they a get they programs. programs when Those have you are there it, have credit. return case full means when customers, types for two Yes, particular programs where

and a of accruals all that's of sheet, this this really all balance So is is. reversal the on

no are cash cash future business these when returns. at for implication So accruals there's transactions future one. happened reversal in and happened, The this the of all

And all so just away. goes that

So no P&L very effect and really line little bottom margin in significant gross percentage, effect. have effect cash the that on you that a

Matt Koranda

inventory would What your penny core of described? percentage estimate you the arrangements, full the you long-term sort of core as versus on core

Matt Koranda

David, the answer? know don't the of know I answer do you that,

David Lee

are on More core of than half zero core our basis. penny programs

Matt Koranda

XX, XX/XX so little like Okay, or XX/XX. a over

David Lee

XX. than More

Operator

Thank you. [Operator instructions].

Dyer Hallum. Our Craig next question comes of from Steve

Your open. line is

Steve Dyer

in to that you quantify can you the or next acquisitions year contribution Just the significant of and Dixie, attribute most of March a either can quarter sort or any or E&M anyway? on something two recent material quick on ascribe revenue is that revenue that sort question

Selwyn Joffe

mean, in I companies. but we is combined what think million going we base we’re plus I XX that it big bought with about is, plans Well to revenue, of do both those the have for

talk us So really duty, played about the we never heavy duty first that heavy we’ve for I’ll is that think opportunity one in.

it’s we got of in going there that chassis they today growth. obviously of because we me we for of of be is we get that the we what the the a I come bit but the to optimism full going growth little technology and to not that’s think it then even think emulation vehicle are leading on expertise I change that’s test gravy a think overnight put vehicle. of right I got revenue able that technology electrical quickly accelerate and cultivate committed and have our electronic and is that the comfortable have edge in of space that us us think and to will with lot full to our But the feel technology pretty over things is put will their going great that’s when complement dramatically. about rotors a going. talk a and that help emulation definitely mean have growth out now great we something we've E&M and the And now -- electric the We And of powertrains structure. significant, to growth time takes that’s all right terms -- coming we program we to

we that. needs that And are market fast so is We committed us. there a to very think evolving

the alternator towards that thing some turbochargers years. think two And for We then our doubles are evolving. over great at progress going testing And hope that’s look you I revenue. are that we happen. line, our next already grow and I then you turbocharger exponentially in making should mean see continue diagnostic think and there is that we hopeful to starter and business other And certainly so we -- the to

make We to progress now started have there.

Although the grow. brake lines we think we have got all to big opportunities

rational constantly are rotating a to grow very We about in manner. optimistic electrical continuing

lot it’s And so, right in I prongs really mean of growth now. play a

Steve Dyer

pretty relates sort current a quarter next again to of And lot in sort would a of of commentary overcome it's a both year, to then doing would to million, margin get in back quickly? the way that's the sort the in but or you wage relatively ends of of different are guidance XX new of the and are then just increases top we all the freight miracle persistent you back lot or as the suggest can it in quick these that are that What of that your things whether able suggest gross some a million headwinds of historical ranges. bounce things to like up XX

Selwyn Joffe

the have watching don’t formula our a we I say So always cost magic like I productivity. mean are we -- would we and that our

the I and of there more our is and our really think rates to will people de-inventorization going hopefully to -- has return inventory team operations not customers -- up channel. significant return hopefully adjusted they But I biggest for some are those are from rates I excellent. more been then demand become contributor rational product, the and their been is the think as kind we certainly that of have need think expect have that as us ramps

that think retailers there just I are et out public and a listen be from are to more -- various to cetera day-to-day perspective, listen ramp-up and will products involved more the The distributors, reports got certainly our and coming tracking and business, you so So they the optimistic. we're to more I that affects weather from coming. our demand

So go up margins as dramatically. returns come pretty down

have We disproportionate from returns. had a hit

Steve Dyer

The inventory event to seem pretty those Can related breakdown me. a just are from what me one Last be lately. regular reported you remind to?

Selwyn Joffe

would that core devaluation values goals up. down time in a come Chinese of scrap they long inventory think just coming and consistent that it's years, quite asking sits it last asking happened come back taking because and what’s I of expect. you but that doesn’t when permanent but the -- I embargoes all. think tensions much mean deflation one US a pretty and I to so longer going and down. the the than where go, we think core Well down have so question the somewhat is don’t that of customers affect keep than probably I scrap I question that values I contractual riding in and are it think non-cash. how our the value a show, can basically been be or it's cores in same it and But of far we core dramatically they those had with I and it's non-cash will I mean and -- there's But we've we've run it's down so our about the refundability at further Again and it's prices start actually probably that's expect two we that's has core a anyone the with been run that's again -- as

Steve Dyer

a of And penny so customer, a change that we amount core clear lose if to be back? you'd doesn’t does all get

Selwyn Joffe

for whatever get paid you contractual back. buyback the you the core, was, Whatever

Operator

over this closing Joffe time. Selwyn the to remarks. I'm I at like questions turn to any for further showing no back conference

Selwyn Joffe

their is we and Great, all of team society. our reflected as their focus thank their always contributions in again we services exceptional customer-centric for and customer I the made to service of our and members provide, they’ve also just in want we our sell the products in to our commitments company. their commitments the all pride to on incredible value service the integrity, quality We principles and communities core for value

projects faith that start assets sometimes trust MPA to involved think we in and even is we our greatest are programs and in in the customers the deliver have our with. I of that people and have the not our to people one

with year call where .Look a soon call hopefully [XXXX] fourth conferences be you we you quarter will end can our and speaking we I at of to to number fiscal host us for So team want the again for the that everybody's support in I joining in thank to that we and of attribute when continues people conferences we to incredible be see our Also again. continued industry feeling appreciate June and the I have. and forward that

So we reporting to are about our very you. forward we look Thank excited and progress. where

Operator

your and Ladies today's conference. for this have participation a Thank day. wonderful does gentlemen, and conclude you

disconnect. all may You

Motorcar Parts of America (MPAA) 11 Feb 192019 Q3 Earnings call transcript