MPAA - Earnings call transcript Q3 2021 | Motorcar Parts of America, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Motorcar Parts of America’s Fiscal 2021 Third Quarter Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the conference over to your speaker today, Mr. Relations. Investor Maier, Gary ahead. go sir Please

Gary Maier

Thank you, us call. patience joining for thanks for the everyone today quarter your fiscal in and XXXX third

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

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

Selwyn Joffe

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

we discuss will income the also from million strong $XX.X used period David the share to $XXX.X cash reduced to press Even delays approximately though press global believe reduce disruptions release. at XX.X% we continue morning's pandemic details the experience challenges experienced the in I a fourth we ahead. of complete XXXX. debt cash demand. from XX-month delays, which experienced XX. the call. December record reported and was $X.XX including deployed that million is million at in for I Net reduction. operations. out add built debt this use quarters in in flow in diluted profitability million solid the demand mention already September quarter. significant and expenditures net million debt for I operations shipments. Despite we due that $XX.X by quarter of XX.X% fiscal quarter supply have release, generated to of year. $XX trailing flow anticipated might approximately demand order discussed first solid new $XX later support the substantially during to be from footprint in additional the and our And for and quarter capital majority We that cash in was the will product to $XX.X point current we noted from today's chain realized January inventory should to million by including million and months As the should sales for product these XX, to solid $XX.X cash $XX.X quarter We at we of positive strong per of these million The company increases expansion. nine generated quarter the this resulted

transportation these not or our are majority changed ride be the dependent activities of as implications will vehicles mode on use vehicles. believe also from of work personal home their personal dynamics daily to workers to last preferred future. the target continue the As that to foreseeable quarter than market result for transportation and more ever have We -- reticent for unable vast I a consumers mass noted in share are these

environment and our particularly All product vehicles for are offerings. of bodes keep business. we well this Furthermore aftermarket seeing demand Obviously replacement bodes with used during well times the the faced economic preferring cars recessionary and for with this cars used strong our over for non-discretionary current Accordingly parts longer. uncertainty. industry people their new consumers when

leads of currently of these is increases age at rate this as approximately replacement a years record the of increased parts which to fleet All vehicles substantially. XX age new an of

fuel for and position America near-term and given tomorrow premier replacement. our will entire lower well-positioned year our and the the Any in age company the car is -- move it a example ongoing to because aerospace and the sales is sales return in new above opportunities X.XX% addition not for X.XX% -- in annual still to replacement and line markets. XX our replacement prudent and enhance new in park generally a pandemic parts as today supply believes an parts used For the of top valued car as world sales sales of for noted with XXXX. guidance car growth in North today's some short than and a related have car for are group. cars release line age gross scrap point considerations, margin further solutions zero and provide and the rates aftermarket global car that in three should our new expect compared future. resulting emerging earnings fiscal Though In parts electric company benefit year In bottom rate year increased rapidly aftermarket continue automotive parts at group all sustainable we alternators for initiatives to vehicle in summary

which impacted encouraged the near-term the COVID-XX by to we impact timing our in for aftermarket to notwithstanding of challenges However, demand the shipments parts by consumer related are sales continued quarter. the

will continues materials. performance production and including global related as by challenges, bottom to from situation restrained evaluate our chain fiscal year the to from debt. beginning with improves. benefit expectation efficiencies anticipated shipments along order has shipped is delays the control Our continue reduced This beyond pandemic that of sales global new supply the remaining the The be product on of the been to pandemic. operating caliper inflationary the fiscal our some in quarter from expected line interest labor, factors raw and costs to lower Including April. orders in benefit increased while is In enhanced short to the freight net based trends company growth related media to with quarter third is rates fourth volume

that see uncertainty customers number the and vehicles We pandemic. clear appear for to of regaining driven the to the parts becoming prime and our It this vehicles target be miles increasingly continue momentum the expect is are of in repairs and the grow. in lives. number important At economic we of daily terrible their are normal will replacement time, our despite impact pleased to same personal human new age

We subsidiary also vehicle believe that our shows promise. electric substantial

quarter. on call next this turn convinced profitability strategy supports David enhance for we our over to the ever to over remain several than the our now and value All the years to target. results optimism that review is growth shareholder more for fiscal and will third the I of

David Lee

December filed more morning, this Selwyn. results. XXXX read the release with I to our earnings X-K encourage for explanation of Thank To begin XX, to the you, detailed respect everyone press a

impacted For about the X information Exhibit’s items that press release. X see to the results, of the

sales million XXXX’s million our review a moment the the period the as to mentioned. year financial to costs. me XXXX was million the fiscal related order handling a COVID-XX compared with compared for year year fiscal a of compared fiscal the a part XXXX chain for earlier, for $XX were million by was the XX.X% earlier. continued quarter to profit Let of supply $XXX.X pandemic and fiscal the quarter higher XX.X% third for challenges earlier, freight quarter third in percentage challenges highlights global approximately net including due impact Gross Selwyn with million third the a impacted $XX.X $XXX.X of XXXX $XX.X profit reflecting Net with sales take quarter. for due Gross delays same third

COVID-XX. third a income expense per of related million which compared $X.XX as partially million profit by -- with and diluted share per gross Approximately Interest press for third interest prior the $X.X such tax morning's in due fiscal expenses. were tax last protection compared this $X.XX lower release. or for incremental initiatives. including $XXX,XXX diluted $X.X goods $X.X This or initiatives net debt decreased $XXX,XXX. travel-related earnings interest frontline. higher are of income the related COVID-related a $X.X on balance period. This The company's $XXX,XXX the and the operating diluted or foreign with was to approximately of Total million to Exhibit by in for $X.X decrease expense million $XX.X $X.X paid of year. associated costs per compared relate sold XXXX impacted quarter to million by social Net in to million quarter for higher expense with dedicated fiscal the share third was for expenses quarter on third $X.X of operating decrease impacting basis $X.XX $X.X the third factors was share equipment for the approximately fiscal the of basis was gains year-over-year of net Additional X to lower on reduction on in with quarter non-economic million for the and million Results are currency year a shown safety effective million and health million quarter ago. rates taxes expense in expenses and pre-tax bonuses and relates of a expenses offset was a the decrease expenses employees income The distancing cost basis. expenses primarily of $X.X operating personal year wages comprised was income

press Additional details a month items April million sales for morning's compared are to pandemic. fiscal in $XXX.X the exhibit $XXX.X global year sharp of Net nine in demand item this the in XXXX net a same earnings earlier. drop release. period due were with million Impacted for -- in income the one by period impacting

to This current customer million partially benefit addition changes. benefits by centers sales future the as net for was of million mentioned. impact a distribution the quarter was XX.X% global of to with with a by in product XXXX offset year supply XXXX a due profit two a chain the pandemic of nine impacted and year $XX.X resulting due nine-month $XX handling the part for the inventories higher realignment percentage XX.X% $XX.X previously reflecting sales order expected approximately $XX.X including with earlier profit of mix compared earlier. in compared supply costs. as pandemic freight million delays were at fiscal net Gross month third sales was fiscal In period chain period million of challenges challenges Gross in

profit factors for are per diluted per Additional $XX.X press in of Exhibit diluted share million gross the ago. year period $X.XX with income this X income $X.XX impacting nine-month fiscal $XXX,XXX XXXX compared a Net net or morning's in or was release. share earnings

nine-month December this items from XX, Additional impacting release. Net net million in was $XX.X by million of for million in by at December quarter XXXX. activities was XX, third compared during XXXX fiscal XXXX the debt million with year was the XX.X% Net provided press morning's with XXXX. earnings quarter million cash March $X.X third million to nine-month for September details Net reduced million period fiscal Net or are quarter. compared up or $XX.X million XX.X% cash activities XXXX XXXX prior period. $XX.X provided of income in $XX.X XX, at million the cash from during the operating was reduced the period activities operating by for fiscal Exhibit cash $XX.X used operating $XX.X at by provided debt year activities operating prior third nine-month $XX.X million to X the at for $XXX.X $XX.X XXXX XX, fiscal

activities through operating the from have straight December five positive XX, generated We flow XXXX quarter. quarters for cash

debt December by XX XX, or XXXX XXXX. For trailing months net months December XXXX operating net $XXX.X XXXX million December ended the at December was XX, December XX, million $XX.X ended activities $XX for to by XX, XX XX, For million, reduced from months million ended was XXXX, cash XX.X% at XX the provided trailing the $XX.X

to methods various invested As you on there know capital. are calculate return

regarding information taking For the short, to fiscal XX an of metric average months divided purposes as company's operating believe return to our GAAP by resulting million non-cash country ROIC certain balance on which one-time and extraordinarily capital. the management for metric debt investors we considered take provides XX, invested of in included was expenses useful $XXX income adding and a calculate measures In a by shutdown invested expenses. XXXX and the which and quarter return and $XX together back with this this weak we We result pre-tax across ended December COVID-XX the approximately capital. the net equity on million first XX%

starting limitations. total result EBITDA and senior based higher XX, facility the months bank We new on of cash launch December net subject million expanding $XXX.X XXXX million, of $XXX our the $XXX calculations from ended are ratio was facility realized. for On benefits brake total the the of credit product was expansion our on and total XX of existing and leverage purposes realize operations million approximately the to credit our returns XXXX a -- to expectation of X.XX. revolver the million benefits was our with availability the was a just in - and covenant at of as are XX, XXX should new December certain increased of our more on $XX.X $XX.X Mexico revolving This based ROIC XX, lines. categories approximately Consolidated both and debt strategic fully XXXX for December

paid at million to with only million had we on facility hand, I arrangement questions Exhibits XXXX. XX, further then on Our in X.XX and $XXX release. refer would some December our X -- measures, been non-GAAP closing were credit for cash press ratio impact credit earnings I million XX, $XXX and open of remarks. this have the mention At of approximately through in now computing assets. should senior revolving current arrangement the December allows for the credit leverage and lavage Selwyn the $XXX to But liabilities reconciliation would the ratio that items had financial cash. if for were up million. senior total assets results XXXX, Current will X that morning’s $X down please company call provide

Operator

from first Capital. from Your Instructions] question Koranda line Matt the Roth [Operator comes of

line open. Your is

Matt Koranda

thanks. guys, Hey

and detail of Can issue. on it necessarily not delays. provide chain Because more a on it's million that Just to $XX a the that. alluding more of demand sounds you supply a bit challenges like you're

have two And you So, June recognize in shortfall where to the why $XX say the we're delays, and then what's do to getting visibility split are million the between going order in products. which March we think. the the do quarters we the quarter. And roughly

Selwyn Joffe

Yeah.

Matt. So, that's of a lot stuff

year-end Let me a customers our -- orders the we detail. from you from just is challenge January. David big the had customers inventory give some give December you But some year -- and more color can into for of -- December is reductions so lot back into December and pushing

that and chain freight then side -- there's of leaves but sitting -- everywhere getting predominantly and getting strong problems cannot know now that and -- right just issues. delays in the product -- exceptionally it in terms ports -- -- problems are inventory they with quite the ports challenges Mexico our -- piece there's the when the at challenges offloaded. on in port which of is are there's -- demand are there's know containers that's you a So -- on these LA of frankly how The lot is a offloading you demand ships boats no supply then be

have we the water. of inventory lot So on a

inventory of lot lined a have up. We

are -- the exceptionally that as and stuck the across New and products over -- of the to been it have hits -- products probably and components from Chinese that's in this United all through is time various the just through get States challenge march these supply and of it's side get think but some to world. the And places it components what we'll side hits on, because see that comes than -- though in maybe it’s Year that the remanufacturing alleviation see we'll stronger -- demand continues ports. even where our you how strong Malaysia, we and expect so -- the We board unique the you the -- to fundamentals and Mexico a the business some

-- across product will catching can most -- hit in rather the up this that we’re say lines -- board So for I we we’re the later. demand what hopefully that and through get than and sooner

first have some fourth is quarter the that quarter the the think into the but to far going of may the As we majority what I the and fourth go fourth deferrals first in between as quarter. will mix the in be quarter happen

mean that's So I unknown. an

So difficult. you David, want little so a to know it's you add.

David Lee

the wanted of to rotating X%. point and electrical, we product will XX-Q quarter for hub XX% about out products in file, wheel XX%, XX% that Later the about is brake about the I mix just about others

will down say So product that will add to is you mix well. quarter. that is electrical Matt compared to see recovery to the the rotating just the third I prior And as year was electrical faster rotating

So recover. it's the worst fastest while the hit to it was

Matt Koranda

waiting I might good strong is end the play why they end little would year to toward into What on then the where that's of Got take because And your understand to think most the I one if little thing don't indicative you it. more that strong. that at sales of customers But here? unpack be January at running wanted look answer from December. they're you then Okay. you're dynamic, orders assume they and saying incredibly I the of dynamic necessarily inventory, same-store that selling I bit a bit demand. And a your pushing obviously are

David Lee

can’t general as have our I their customers but well. issues COVID in can warehouses in Look for - customers speak I

normally their of take end it can as in. take the everything It's they quarter. they fast in So could as

I that their the but know So inventory their levels got you managing it's I quarter. language customer is whatever that know own assume QTIP they're every Yiddish for my own excuse has -- I and doesn't don't know. don’t that in back I them feel a them. of think help and general hurt -- I pushing like just couple I weeks inventory think may

Matt Koranda

All right. margins just bit. how Okay. forward. going gross a to a And And for get forecast sense I they enough. more Fair move to on me, quite one from stuff around then want this just the

is Maybe margins a adjusted basis. big on down look we're because guys if think I I year-over-year, year-over-year you there in component at provide So David, XXX points Is could know we freight basis bridge understandable. a consolidated that's be bit of a labor if as gross inflation mentioned a helpful about two? there of just the kind gross you headway those we're weighing or mix and selling margins, inflation it'd the margin quarter an feed we for on rate? that's or think of causing it product how about how gross Should mid-XX% sort items next headwind kind this we the of should line gross into or additional a that is and of expecting margin adjusted be

Selwyn Joffe

question. Good

going So And differential. and be the be handling that most challenges chain higher that’ll the you that so to costs, make as mix. of the the part to it’s of impact is going supply to largest a product freight small mentioned

XX% of year the this rotating sales, with XX-Q electrical will be with So in XX% again of sales. prior

better will challenges. to increase, margin. absorb smaller And freight chain impact, that been supply overall costs So and or mix the we've a as higher far revenues but and a by the have largest able have impact the product

demand increased margin. sales help we're with will December that subsequent seeing XX, the with to So this definitely higher

Operator

Your Oppenheimer. line Sir, from Nagel next your question from is Brian open. comes

Brian Nagel

question. first the So

a of up think prior a I question. bit to follow the just

talking to aspects well. supply spent are But You or to are sounds right I primarily unique that parts It that some it's -- there have about related. is disruptions. me you is, the are like there here question talked the -- time Motorcar industry chain as

Selwyn Joffe

I challenges mean there's think industry. been it's am I I of Brian. I hearing our our containers. number management chain of I I challenges think global freight. Oh, it's It's with don't a supply global, of it's multiple it's us. shortage -- think I don't just think it industries. in category. a don't There's

been in not Singapore. I ocean coming Shanghai mean all. there's some from specific that's freight think I I at lost in mean the particular to It is and us

a this think issue. is global a it's I --

it's across I all think industries.

Brian Nagel

it. Got

I had. question Second

much the when that So business fiscal actually -- current better so? got last your comments, you businesses January the in in few the quantify quarter. further in weeks to strengthening here or mentioned you Can the prepared or is how

Selwyn Joffe

XX% much to Well, I want that to I want it’s, that I double-digit a fundamentals know it's, to January again industry are of don't to be just because the be mean that going assume think increase. mean forever. it's I you growth. I is the it's XX%, decent want But -- of cautious north We through flowing don't stronger.

some We in December. up have catch from January

I’m think very we’ve certainly cautious there mean it's deferrals Year. because it's sure. but you in the fourth in we’ve So, the want the New that I'm come know strong. the in shipments our be January just I I the may quarter added I more Chinese stronger into not again organization, will as some we -- head to be

a difficult there. know The predict. so it's out get product The little question much demand you we can door. the how is is And to

Brian Nagel

those question you United as clearly know depending areas. located you -- location seeing I are fluid. Got are specific quite -- seeing the COVID on States, in of you difference also your significant look the you final And then customers intensity it. in situation on across Are throughout guess demand the COVID demand, you a given one that as remains and

Selwyn Joffe

That's a good question.

we You that mobility areas pickup trends -- were country. know We've seen tracking previously soft. we a previously -- are the across in

we're concentration So, you the seeing general what in know of is up high is I automotive markets further. think

-- the down. the and are on of and East southeast you but northeast the concentration the up and the west, mostly So, Coast the vehicles know

Operator

comes of Securities. Sherbetchyan Your Riley Sarkis next the from question B. line from

is line Your open.

Sarkis Sherbetchyan

Yeah.

builds current and the your even just of forecasting rates this me up? sustainable level you're -- customers level the inventory cash -- understand to is -- relates question order for coming help generation first when of considering So, some

Selwyn Joffe

the sales generate as know we it flow but levels profitability and with starting -- a for you -- strong growth a benefits depending -- -- quarter third growth. well good -- and on on working account -- out fluctuate from as cash depends capital really It will

So I going generation. flow say bit seasonality impact -- on would to little of depending a it's cash

so that positive cash believe generate continue that flow. business overall can cases we So grow still to we the and

Sarkis Sherbetchyan

at of look levels? It just the to -- we wind-down So product the expenses kind been costs trying to that costs if new startup have begin from expenses should sense expect like for and -- expenses seems products get transition And to these startup your wind-down? when current a and largely consumed? we facilities when those new transition

Selwyn Joffe

continue in to So starting start of and our up March production come down. first the will through facilities as we to wrap that and product the new fiscal quarter in new continue next issue line quarter Mexico year our the volume

Sarkis Sherbetchyan

Got -- or metrics some the marginal it zero you those next to still would do expenses and expect down come year? fiscal throughout there

Selwyn Joffe

would first not quarter come little will complete a down in bit the and in first amounts a Zero it will will the there but quarter. -- -- be down marginal go there be to It still

Sarkis Sherbetchyan

And you rate category just of business for products testing maybe on and sales disclose diagnostics able and touch to diagnostic bit the the Okay. little the run testing and a there. to that been want products? Have

Selwyn Joffe

really. haven't We

in and give space in vehicle for revenue quite I it. electric electric I we're the business. talked know mean We're battery we in about that I insight. haven't can our general about the you powertrain think space. quantified some But $XX of It's million and sort we've charging space initiatives looking optimistic really at north you of but

quite we're so lot a of And good traction there. getting

the big think waiting a there. can And position is get we We a years. to so can hopefully growth we opportunity following where there in accelerate

Sarkis Sherbetchyan

that the some of And top that bench going versus go as customer into how and of like maybe much the stores testers simulation into equipment your emulation is the metric manufacturers? today sales of

Selwyn Joffe

power material we diagnostics mean which have -- the for again tester. top numbers. not But bench the have that But insight is combustion I general I reporting giving just that. - you segment not to in really we maybe engine for not some includes it's guess

them We them of have but way budgets significant indications to we indications we are assuming from the and it. than interest interest we to of yet, indications expect We expect don't released released but that capital customers expect the be orders expect. that indication have have more of volume we

And so very giving numbers, again some volume. the year come that nice wins about very on electric And spaces more the be then I'm had rough fast in would the fiscal electric evolving. probably but two this next prestigious again, and We've thirds from of to you customers space.

Sarkis Sherbetchyan

sales. the sales or in just it. of this calls in sounded over back kind of around new year indication rate the category? would run Got lay And break nice half any category, product you and thought that on the growth switching It to like some previous the

So just color little get trying to a more bit there?

Selwyn Joffe

we we book Yeah. the we Look at quarter. the the queue know, any time what for don't or in expect brake caliper business, -- I I mean,

David Lee

brake total product had price XX%. we So up

Selwyn Joffe

that significant I on next see XX%. going year the growth And you're the to brake in say products. would fiscal

to We that we're ship. customers have new a starting lot of

is seeing growth growth the yet. is that shipping And inventory that the anticipation notice demand started you haven't lot inventory of we for products. already mean that We strong. for the if a of outlook in break I

Sarkis Sherbetchyan

from final for your me, And year? hop fiscal what's into CapEx, quarter. the I'll of upcoming David, one was it. capital level back inside Got expected queue. one And What the then investments

David Lee

million and little was about of approximately And for $X for expecting we're Mexico the million $XX CapEx over most year expansion. So that was our

Sarkis Sherbetchyan

you do year? expect next What

David Lee

little have Mexico in to But that, be after finish do, to bit year, maintenance it’s a the to are to mostly Next expansion. going remaining just going we CapEx.

Sarkis Sherbetchyan

Got queue. it. Thank you. I'll back in the hop

Operator

Dyer Craig-Hallum the of from line question Steve from Capital. next Your comes

line Your open. is

Ryan Sigdahl

afternoon, Good for guys. on Ryan Steve.

on January. a a record up but in also that realized bit deeper are XX%, in little dig mentioned to of want XX% Just the quarter. guess I deferrals bunch you

this would talk curious a been normalized into guess those was trends. can you quarter, if I absent quarter from So of the And then still more quarter record. last that kind deferrals about just

Selwyn Joffe

not up but Yeah. again exactly very lot I January the was of month. strong is if until I as record, already versus you tribute shipped deferrals, the there had activity, what to tell regardless strong personnel. can't it's of January have a well. was exceptionally a specifically we January, of being it lot would believe orders, you a in a

We have to was considering get I that we think with don't I social available. did have data quantify deferrals, without the specifically. number all the that and of the January units we the can't way door or But it out in strong. that. very distancing either that

Ryan Sigdahl

back. me, Good. follow other hop up One for I'll then

mentioned. So you

of was the thinking in million think so say sales to was when year. X% all other I was diagnostics I products category X% that $XX you revenue. of which this guess I

So, other all categories it be $XX included year talk is there. kind to be is there may you opportunity to million. that I that And and of of or may to this guess get that next, is in kind about there deferrals then can from in if

Selwyn Joffe

deferrals let quantify, David let $XX even orders So, have might you that actual the a I me specifically we to million there are The that with start the details. million. we deferrals $XX is that we of there that over. give There know lot and is in not that demand included moved

significant for don't test got in again releases delays a that you $XX that is EBIT. on so can up in David believe the anything, purchase We million. jump you test have is until but expenditure those demand not the for sorry order we there capital dose you And those So, for dose. pent

David Lee

Sure.

diagnostic on quarter mentioned was Selwyn impact related as sales. the So, there during

So, for $XX that be year for million, million. we're be over year but to targeting we're next to this under $XX going

Ryan Sigdahl

guys. Thanks, me. That’s from

Operator

from of comes the Berman Your next from Berman Capital. line David question

line Your open. is

David Berman

were think there I you. someone but an And to adding, else's obviously been they category baseline question so for do you up just we and you want Most inventory given questions the obviously -- XX% like we that the add about inventories question I that extra in extra were have the down I forward. going XX% up prior much expect so or of answered I question how A quarters. much been but my follow to one should should inventory how much think -- that had on was of mean you to said

Selwyn Joffe

we’re up continue to we're ramping from we're to but that guidance specific Mexico grow very is grow we're category facilities. continue line. going calipers, We're going the our giving as as business not a exciting brake business to We’re producing new to product

inventory growth be going including calipers. So increasing to that most for of is brake demand

David Berman

our fundamental businesses again new David -- that's any you've thing that to in increases XX% -- that the -- and category the just that increasing and are about you've category new got category -- demand XX% -- -- I see see know we've alone growth mean got we anticipating you then the double-digit is then know you going anywhere -- you're between and going we're this in that -- base talked Yeah, going -- also other know just with … to in of this you -- out you're category package

David Berman

Yeah.

Selwyn Joffe

be to know we demand. -- saw are and for last go products. We're increase side I -- category captains fortunate pretty a that and So -- demand is those up what -- we're -- -- well-used. time see in already -- going positive the ability trends be significant and mean so good the now and these to we're looks side seeing so demand have anticipating you is -- supply is to we right going to inventory -- but mean our I

David Berman

Right.

follow-up -- I the Okay. sheet And balance maybe just relate to -- then if this. can

gone as And So in the -- as departure terms can almost your vendors wonder if like your payables what's of have of it's you’ve significantly. other were the get doing a companies of a to -- and -- getting and in just industry share -- there. it sure seems I’m with great -- many you before. and massive up dramatic from many your of now months But up us but of I your a discussed going you're congratulation fourth And source what -- yet there? -- income so you from is change which over this,

Selwyn Joffe

so -- in achieve So able the is the payables growth with is -- so the of to to growth inventory the growth to the…. are directly and during inventory tied clients grateful in strategy to part also we're that the term we’re -- extend we in working very

David Berman

is. only case are XX% your Usually to are up it as it But in inventories up and usually this increase I the is your in particular Well see it related directly XX%. payables inventories.

me strengths believe financial So it's you're which must your bad in way changed to you that can't leads terms. inventory pay. not I or growth have can't because in mean excess of you be your

about? terms was having what You all wondering be better must just that was and I

Selwyn Joffe

Yes, we continue to work with overall. our suppliers to get better terms

that's part the of definitely So extension.

David Berman

And now right of is four that the months going to payable? continue. I end mean what is -

Selwyn Joffe

where net But to we the I mean can of mean whether to we growth zero. is go… payables net I want be. that's inventory be us for

David Berman

Oh, see. I

payables And know Interesting we inventories right. correctly liabilities. been your how if $XXX up $XXX is payables much accounts I'm don't outside see million accrued Right, though the up, from are million. looking Okay. your

still to So a if go. way have case, you the long that's

Selwyn Joffe

That's correct.

David Berman

a industry Yeah, with - yeah, Great. basically in, financing. finance a wonderful that's you're

Selwyn Joffe

refinancing our inventory customers right Well now.

need we on. it to pass So

Operator

the Instructions] of Your [Operator King. line question C.L. comes next Stember from from Scott

is open. line Your

Scott Stember

greater your as demand Selwyn, Can how us you sale, is still strong. of the us the us? give point that well you how just give I can guess, give an are of you’ve talked -- level just to very at products about that a is to extent idea actually calendar selling of comfort,

Selwyn Joffe

Yeah. point Again trending data fundamentally category that's upwards. shows business, I a customers can't but I every sale our -- of mean,

Scott Stember

to get doubles, up the least demand sense narrative lines we trying of new get growth, coming I that product I'm were trying a And at changed of kind low of, some given out digit just of Okay. sense and just talking just all? if for -- double to guess, singles double low has at that last of of looking the high are will until we a couple like quarters because

Selwyn Joffe

as under in I that can't of information. restriction we're terms giving again -- out

we experiencing, really this thought would end still that run mentioned at our at can't changed track, we you mean the rate what rate but fiscal all on I million year. I MPA, challenges, we they're had that. be by as $XXX we’re So And despite haven't we of the company a I believe tell our run that

Scott Stember

Thanks. I have. Okay. That's all

Operator

from line question last the Your Capital. comes of Bill Dezellem from Tieton

open. is line Your

Bill Dezellem

you. Thank Great.

So questions. have group I of a

detail? change The you press that discuss in would future, the to the you one in more product release mentioned first in benefit expect you that please you've mix

Selwyn Joffe

we've caliper we've be us someone for brake-related as a category growing the is as pointing to brake mentioned before products, been been So growing as out. going

that So add will with top line. that product brakes the mix, more

Bill Dezellem

you’re referencing change is brakes revenue, is not and So to mix it’s specifically the it specific this a margin commentary.

Selwyn Joffe

It’s that's correct to sales, revenue. to

Bill Dezellem

and you David. are electric have subsidiary you, [indiscernible] please seeing discuss that would and Thank you there? you the And are -- aspects the promising that Great. vehicle

Selwyn Joffe

that dynamics we will technology exciting the some excuse vehicles, that things into the going little the prototyping -- are significant have electrification lot the OE got -- -- think first that's and we maintenance of very and that is just we are And to applications technology fit automotive while yet for applies is automotive see don't you space the space in on vehicles, And getting electrification in some we’re you're development as that the got them to well. the growth a going top in the the interesting being the pompous development further announced of the but significant has there's out And traction electric space. relationships revenues capital a right going industry, a powertrain. side those amount sales both products traction automotive of that world you in of play at coming are before of of in development systems space. significant opportunity building -- development side Space which the marketing the can quite let's electric now significant us. being and them at relationships diagnostic And the battery the we -- the in will fundamentals -- business sales look that's and base and role positioning vibrancy some of the be companies -- lot that development quite the I tell companies the the is a of -- a world in on technology we -- think some electric a to and in that of allocation that the and for early haven't when of But massive venture vehicle so we as we that have mean battery percentage EV -- announced have and But exploration and we’ve And excited engine think aerospace. evolving -- them our we around electric top in there to we development some road and particular that -- and we space we that with of of we -- so keeping space in announcing. that how aerospace. are Well, I in development charging talk continuing it of about I deal is some designing combustion aerospace companies about into then with our strategic revolves the the accelerate the -- industry, but that park. growth those you've them have a with but industry around NASA. Yeah. joint how proving diagnostic to we markets then And that -- in other to marketplace. equipment And in of actively -- we’re used looking in are major previously the incremental aerospace that's supplier relationships car and continuing electric

Bill Dezellem

lots to part Relative of of on front you that to -- lots -- there's are the part the you role… what -- development a taking the are of or of place battery battery -- --

Selwyn Joffe

get want granular don't too that. on I to Bill, think I

the agreement partners would say or for get Hopefully, about we can some we You'll initiatives. be to hearing I with can some is charging side not it more space battery capabilities edge the in the can just cutting some more it's public whole our fairly that for now, I we development on -- there. significant But us battery our important mostly that information the arena, of and battery of add -- we on battery that to systems. space out get think

Bill Dezellem

simply something that drop, changing? forward is then question. to a phenomenon The additional receivable there housekeeping accounts structural timing or Thank Great. look one is that's announcements We'll those and you.

Selwyn Joffe

the It is. It cash during we timing, of is a had great a quarter. but bit received

also during particular depends the sales month in timing quarter. So the of on the

collection lot we a that timing. So is and had great of

David Lee

if came at December. can November you that these big those in receivables that And see you deferrals strong. October very I we look have mean were

that's you So see those… why can

Selwyn Joffe

Yeah. are The XX on net days. days around receivables outstanding

seeing can you part So pretty receivables are so see significant volume that dramatically. lot early of we're of the came the volume now, the in in January, And up quarter. a those

Operator

will closing turn remarks. I our session. question-and-answer call presenters to now the the our concludes This for over back

Selwyn Joffe

Okay. protect significant customer members ongoing commitment during service very extremely top closing, challenging demand want team is Great their safety from our our and focus vigilant the times. horrible to and and In Thank centric to priority much. hopefully on we these for and our for job this meeting all and team I thank you global January ongoing, remain health virus.

safely the returning while the we remain For to team to committed work is continuing to conditions possible, office much as most our as team part back gradually permit. corporate as and remotely our

are operations bearing extremely As a our fruit. proud result of And summary, In of our company. everyone's have continued our I'm largely uninterrupted. contributions, investments

alone from strong provide parts existing profitability, diagnostics aerospace which points and We to cash further performance positive shareholder inflection meaningful States vehicle remained and to. in This the internal industry. as and accelerating $XXX opportunities as United product the opportunities earnings meaningful markets flow, with well both performance, our combustion our electric debt for vehicle businesses for reduction electric important value and dynamic growth combined in evolving enhance a emerging committed line are industry path automotive reaching the very billion and growth with hard new and and solid aftermarket the

of you than you. your person June leader for presence and appreciate and We to committed our call aftermarket. proud space. conference today future. year in quarter speaking emerging for our world this parts continued forward joining history our And a all in global in look you about vehicle fourth the our move when and and vision we XXXX and have being fiscal electric call. And We conferences we're in year in hopefully for sometime the are with and solutions the in thank us XX again us host excited Thank the support -- tomorrow. of to that the We our investor end of virtual more

Operator

you today's Ladies this participating. for Thank and call. concludes conference gentlemen,

now may disconnect. You

Motorcar Parts of America (MPAA) 10 Feb 212021 Q3 Earnings call transcript