MPAA - Earnings call transcript Q3 2022 | Motorcar Parts of America, Inc.

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Operator

Good morning. My name is David, and I'll be your conference operator today. At this time, I would like to welcome everyone to Motorcar Parts of America Fiscal 2022 3Q Conference Call. Today's conference is being recorded. [Operator Instructions]. Relations, begin Investor conference. with Maier you your may Gary

Gary Maier

joining thanks, for Thank and for us you, Dave, everyone, today our call.

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

filings Securities Exchange of begin I'd it I Selwyn you and of our that, over business, uncertainties and more the like to refer detailed risks and turn discussion various the call the begin. For of some Joffe With to ongoing the a to Commission. to company's with

Selwyn Joffe

and Gary. you, safe healthy. hope Okay. us all everyone I I joining you're today. Thank appreciate

reaching year-over-year by net It a sales exceptional this company long-term in behind supply despite X-month our drivers begin on on are the quarter building. that a More modest than the highlighting it chain challenges were and I on is growth of fiscal this also third the exceptional net $XXX.X share delivered are We strong increase. industry record our record also detail behind a results drag me that variabilities sales notable XX.X% and customer reasons very momentum XX% full despite potential. Let that the reaching well-known growth order for exciting another growth was several. patterns. the quarter-to-quarter basis, we will sustainable million,

and have of across existing First, product expansion we all our customer new lines.

categories. Second, we in opportunities have brake-related growing

aftermarket space. fundamentals emerging finally, in are And underlying there the in opportunities favorable vehicle electric Third, the parts industry.

demand continues Let's start across grow product which for the with our board. lines, to

partner multi quarter third business Our in and our valued a growth establishing performance. contributed quality our MPA strategic to further as platforms to focus a It from hard customers on standpoint. supplier our also is parts strong

We expect this to continue. momentum

efforts while and approximately at This very consumer billion consumers the for returns. results. The we for $X.X relationships. solid a unnecessary and automotive also large market retailer will strengthening reduce diagnose testers As retail a with starters our automotive These aftermarket, offer locations. diagnostic latest within benchtop business store at complement out custom to to and to our strong the alternators problems to believe benefit is value-added this testing provides the roll global and our market generate continues their enable advice growing in protocols accurate for retailers position

operations country in significantly growth challenges in shutdown strong the quarter the related by impacted government our capacity. our COVID. due constrained to by the country was manufacturing unfortunately and to This the Malaysia Our reduced in of the

development demand. running However, impact momentarily. on now to fortunately, this David And help back of share outsourcing our in the to team and are job up more will did Malaysia production an Malaysia. important customer in exceptional have operations meet

Turning to our brake-related products.

we to strong product category where for sales same and area in As increased success. brake-related year a ago. overall I the the in put as our lines To all seeing of this very sales is rotating growth the XX% time, X% At mentioned percentage also electrical products period a this an X-month are perspective, earlier, from increased. same in period other

state-of-the-art remanufacturing notwithstanding volumes continue operation operation gain improve Our brake that challenges issues. continues supply to momentum and constrained will as chain growth. Manufacturing this we supply to our robust mitigate caliper matures, chain efficiencies increase,

our in emerging the opportunities vehicle Moving electric to space.

are the electric production related in vehicle traction equipment and continues remain presence gain enthusiastic momentum. mobility and gain industry-leading electric strength, areas production significant performance, electric of of and as the to evolves. us of products and new for continues test vehicle strategic about outlook in Our testing front as by applications demand opportunities to the development endurance We encouraged to technology partnerships, engineering in

our providing this we While and on about comments customers. we exciting quarter, are this me complements not just few our yet, let a with just details hard segment parts Last business its that selected make to relationships emulator electric development mission the Titan. ROTOmotor Physics announced Hopkins moon for contract a that were NASA support motor Saturn's with to our for Dragonfly controllers under the Applied Johns of Laboratory business

to our services manufacturers, This contract testing is addition, Center. Technical offer via offers growth also established Detroit significant EV opportunities. In our vision newly

formal its Electronics. quarter, EV from the our potential applications this testament a technology, to Our in of This initial exciting plan customer clearly ceremony the and we spring. a will opening and is acquisition our to commence host D&V

the in to now vehicles of than of vehicle an level. Industry people to Now and value the are age is by The United the also to longer billion million XXX we operate. value with or result climb the now vehicles current vehicle. miles lower to vehicles at environment reports the car more lease aging. the represent show road average than end OKVs, sales XX.X in of lease at the approximately that of for the levels. at which driven car moving would vehicles kind categories are to in used retail and alone, that and parts continue hard record States years on now relative I industry continue the our note is keeping market increase our residuals favorable The the $X sharply

buying a consumers aging vehicle As the new out further vehicles increased leasing contributing population. their of leases result, than to rather an are

of these this our for favorable dynamics well All parts industry, aftermarket replacement fuel bodes and optimism. the

We and well are and positioned with very parts our our relationships channel parts significant and customers aftermarket for superior our for solutions consumers.

in product into to and there be brake freight, the are we pandemic-related chain, We on near and supply term, with product strategic this challenges new through doing other in building industry where facing raw the as are on we focus market continue opportunities. our taking share calipers Certainly, materials categories moving advantaged headwinds. have areas the aftermarket

are logistic global working with increases mitigate We including with collaboration hard suppliers surcharges, and these to freight our and for every price through our providers, in example. day challenges team

We are progress, making share will very good shortly. as David

my summarize me comments. Let

fruition, expansion a position in strategic multiyear from to strong are to benefit putting initiatives our us Our growth investments. coming further

to solutions I'll Our the line and now top nondiscretionary company this turn call of David underlying our footprint automotive positioned detail. over growth today, the of to favorable demand and for greater is parts for of we the the In the encouraged now is by footprint sustainable, in move well replacement world. fundamentals review results that for bottom our and line the long-term are our short, market. future parts

David Lee

everyone as and Thank morning, press like to everyone. our detailed filed earnings X-K more the release to contains our earlier encourage I would an results. today. explanations results, read good you, of including Selwyn, It X-month

Here quarter. will third focus call, on this I on fiscal our

was $XXX.X impacted XX% reported with our $XX.X in sales, record let's ago items to as period. well million, $XX.X of year the million in increased was gross increase ago net as noncash So profit XX.X% million the Reported cash which profit by items. year an gross $XXX.X million begin from Reported from period.

the details line items item the impacts provide me The each, website, and anyone for Let revaluation million. moving questions this was then noncash The so finished core the I goods A accounting quarter encourage you customer premium our topic will and core and is between of our detailed noncash understand review $X the and accurately reflect video. line with detail on approximately compare more I amortization, and on about periods -- and the can total forward. fundamentals for each an items for optimism reasons explanation to on underlying cores shelves. would financial available in appreciate out of additional

suppliers, items, the our begin and eliminated as products moved then regional of Malaysia. chain In in as These of as our to of ramp of by terms the the products shipments China, in impacted let's network cash and unfortunately Malaysia, shutdown up suppliers disruptions and are recover. country as to timing key well with to due mentioned. response, were quickly certain back Selwyn but In our reopening being supply in facility tariffs. the the The COVID, government outsource we these transitory we XX% subject slow

the low tariffs. in return to fairly relief benefits production immediate production in on As a results Malaysia a of reminder, one is tariff. of there A

freight implemented. Next, already that higher were in that freight we of surcharges we incurred excess customer the costs

the disruptions impact June implement earnings increases higher forward. to found fiscal transitory closely. The to ending the related impact on cost continue be can these the taken costs in freight this quarter XX, surcharges though price have supply going in be to mitigate being, swift of situation the X was each chain have rates. pressures first based current stabilized A effect million. gross Exhibit press action on release. $X.X further We summary freight Freight offset and higher profit we even for to time this should XXXX, in These monitor cash to and total expected cost of of morning's are

related the note $X on, from and moving year period compared in ramp-up our $X.X expenses the million quarter. no were preceding Mexico with there million quarter should approximately expansion to and in Before this that I prior transition

pleased We nicely. caliper are increasing is brake that production

costs impacted as previously The cost further wage points reported from noncash the gross In environment, from chain destruction, inflationary related transitory the a pressures. further profit pressured the was offshore ago of previously points expect, well mentioned gross addition margin to and inflationary noncash this was XX.X% basis freight mentioned was the a and as and mentioned year Even materials you from raw chain offset items up surcharges to sales from items as pressures XXX help and increases price impact supplies of transitory supply by by profit disruptions. these cost the as will related percentage would to inflation. net a that and basis XXX moment cash Reported related to items earlier. gross in XX.X% supply pressures I

share. unfavorably diluted and $X.XX liabilities Moving income share should exchange as share. for is million was pressures $XX.X and I rates to of items per well and the were primarily noncash in interest primarily per in compared totaling compared $X.X period. impacted totaling total contracts. million with diluted ago advertising diluted or in with a $X.X per foreign favorable diluted diluted that Reported million million compares of foreign expenses. on the of diluted the prior chain $X.X $X.X transitory mark-to-market million reflects that million reported $X.X favorably income disruptions. $XXX,XXX expense was totaling expenses. $XX.X breakout million net the COVID-related was and or receivable They period. of brake noncash $X.X operating current that results for due million items with net supply quarter The interest or $X.X million items for $X.X and quarter. I per million reported primarily by share EBITDA well of in for by items, net our by that period. cost prior exchange by of cash Reported impacted million Results noncash due Mexico due the $X.XX transitory totaled expansion $X.XX on expenses lower relocation in and share, share to income the due cost to reflecting with related product year driven or foreign These loss per million or impacted exchange forward chain $XX.X marketing $X.X related or $XX.X new as items by the accounts to the impact $X.X in company's gain were or expenses. year $X.XX note period, to of million other primarily a costs should the items programs impact should share million. its $X.X in cash $X.X million compared $X.XX caliper pressures prior the in and prior million lease remaining impacted was per income items product $X.X favorably per and related I $X.X related $X.X expansion cash compensation, $X.XX million which million the was EBITDA totaling related note $X.X prior noncash the to emphasize The diluted disruptions noncash year. or to increased in income $X.X were impacted was items expenses EBITDA a diluted period were discount increase as year million of tax last to million include the line. expense to of as $X.XX million year million $X.XX $X.X impact per commissions the for supply share. noncash increase primarily share-based to period net

brake production growth earlier, As Selwyn significant in driving and calipers increasing. we highlighted is are

cash on million and This not third growth $X.X million to and disruptions believe to key basis. risk, move flow capital reflects on issues. will New was anticipated operating inventory chain as the corporate these increases cash investments growth in working that company activities due period. items. the mitigate prior Chinese growth record supply corporate-related we'll for the Net further business versus Year as $XX.X sales a we'll and to during spread We address for potential requirements by quarter Now year-over-year year our strategy but to well proactive provided in support also a the business only

calendar the XX.X% with was compared at Our pretax year return basis of on a end XX% a year on earlier. the invested capital

and continuing are brake Mexican launch benefits product our as lines, to and are new We realized. existing our of expanding operations expectations benefits new realize of increased returns of with the both more our fully the the strategic categories, from of expansion the

we our $X.X company's quarter, shares approximately repurchased repurchase stock program million. under share the the of XXX,XXX During approximately for common

million As we of utilized stock common end of quarter, $XX the authorization. the $XX.X million have of the

approximately the end quarter was our $XXX.X revolving approximately was on reconciliation debt of release. Lastly, line million. further refer availability million, A earnings this the $XXX cash to the in at the now results net total while and of that of facility the and explanation measures, to Exhibits would financial impacted to questions. morning's for X I X non-GAAP press please credit like items open

Operator

Matt [Operator first Koranda ROTH Instructions]. Capital. We'll from with our take question

Matthew Koranda

the breakdown off in on a start moment? you, were versus start there with of from any in -- we'll maybe? think Can then breakdown representative have update quarter orders the underlying in we you electrical inventory products, Selwyn, we feel sort just demand just that industry from your or just And if this David, another with a brake Or does off the was if of rotating maybe sort touch any at of customers nature? of term you the build short could

David Lee

Okay. This is start. I'll David.

products were were quarter, XX% other the Wheel hub and products were XX% for products So rotating electrical sales. XX%, X%. of was brake-related

Matthew Koranda

Selwyn... And Excellent.

Selwyn Joffe

Yes.

normally orders the all, of fourth first think, update I in So quarter.

think the is used our increase sales population, in increase driven, aftermarket, indicative of that, particular So in I market. in in trends in we're none the seeing target miles of car this

their -- come So more think age. I replacement just seeing and costs prime we're historically, into

I think about past. the I've in that talked

So I built inventory think think Chinese strong. business of fundamentals are I that our New the for we've Year. do significant

time to strong experiencing my strong it's mean have they I Matt. what show. that But in mean, think see we'll just -- not fundamentals. a us, really they're so I results the revenue customers are think Our for I well. opinion. I I it's done don't the as think wait

Matthew Koranda

Good Okay. hear. to

price explicit rounds front, pricing of super guys of through. sort about you just that increases the put the can you On be

the rounds you as when kind of were there quarter. I fourth quarter last impacts through was to supposed were impact talking of guys and second round be fully effect that into the and supposed go X the think to

that rounds? So release, of and case, the and the in the prepared of more is guys all additional of remarks fully talk have -- that, and then between the explicitly sort ongoing surcharge to for of versus is have pricing if how magnitude over that the sort that above X the And we the sort timing incremental of priced price then referring those action and price just in take? split about maybe the out discussed much we're you

Selwyn Joffe

this is not get We add we New -- aggressive New very to to is Chinese this out but And significant will question, of inventory Very X impacts I you we build a to happening and first -- on Year is and reasons. your is Yes. there And which fully got effect expect status price ahead is believe, amount quo, who I thing both yes, and we that difficult But status captured want ourselves did, fiscal freight third think the the a important Chinese an for and thought directly as Matt. later the numbers, give inflation. for It's the is inventory second be now. that there's assuming of away, it knows going us at that's point, exact for the summer in note to that I'd where related Year. what of inflationary we've I just ready first of These next build implemented, will adjustments the fall be we spring, quo for for year. to big And in for increases, in year. the round came this our getting quarter that what time come the anymore. will into we the and quarter months. a neutralize some and to that wanted

to position good believe And believe in the excess we inventory, we we manage have a we're so and demand.

fiscal as into about excited our outlook the year. we're new come we So

Matthew Koranda

how chain as you just versus bucket And chain. could, well I you going into all in that... a put -- of detail. inbound I sort buckets, elevated costs much from supply point But out on Okay. from that know guys you what get if it elevated supply broken Great. that bucket could in broke material helpful for is in finer sort million raw to of the freight wanted that Selwyn. is of out $X.X more that cover from the would to a sort of headwinds Very helpful just sense outsourcing coming anything be just you've and maybe

David Lee

be that still definitely to is that mentioned are to the price the decreasing bonuses a facilities. our subsequent balance, in wage that numbers will going paid part So quarters. remaining we of and big increases with those workers Mexican The be our in frontline the

So that is also coming down.

overall, So at million be $X.X it will continue coming subsequent to down. That down that in to the down. $X the come September quarters, was and million, quarter, number will

Operator

go with we'll CL next, And to Scott King. Stember

Scott Stember

Malaysia, listed The not Were problem $X.X X. going there that sounds issues be in like have in in that which will disruption related million a you Exhibit costs forward. any

David Lee

over remarks, as $X.X Yes, a to $X outsourcing XX% little we so And those in prepared the included million That's were we those in million. tariffs. from related mentioned tariffs. our with tariffs,

as and running and from our region the key are be higher will tariffs reducing up China. in suppliers Malaysia no now those So back is longer we recovering,

Scott Stember

Okay.

be was first increase price rounds this all-inclusive price like an things increase? raw and Or price to is going trying the through, that and to just surcharges something match for else? cover I materials So went Malaysian tariffs to going to mean, through of increases I'm -- couple of to cover freight cover last that up.

David Lee

Yes.

The third Selwyn cover to going mentioned, is those as inflationary primarily. round costs,

round by all little they primarily the tariff the of is definitely impacted impacted those and the we're contribute first outsourcing that chain costs supply from these inflationary a disruptions. due significantly results. go to longer and quarter because -- on tariff freight no countries. we've quarter, And that we'll items, the focused see third items bit offsetting to that higher reduced will But So away identified

Scott Stember

All question. right. And just last

rounds to X of The I'm it out. just first trying frame price increases,

it it's the number. price of which going millions this been X being adjusted an was. with increases, get But the level up I'm to through multiples come -- that when down. take have to on hard trying offsetting actually how to much of you a Exhibit try increases, -- been quarters, of last Just sense just price know line few been have I guys the dollars there's on of we back

third big Just and these of just one. trying sense how far a price the to increases so get of are magnitude the

Selwyn Joffe

Yes.

if the them, summarize I expenses, to of look increases called what cover as way at think out excess the will of all X all we just expenses. price you those

the are by to, increases. of expense numbers quarter -- we expect first new status or it's out. the that don't these call to assuming to transitory again, in we have these don't a starting quo, even offset These price year, fiscal So will disappear be expect

pretty So if passed through. adjustments, those that's good everything a at that's you of look indicator being

Operator

Oppenheimer. Next, we'll Brian go to Nagel with

Brian Nagel

your to I two, guess on environment. but in mean what supply is questions, kind focus seems side. going X back with just want opening the talking to demand a I comments to And healthy issues. then -- little Selwyn your on I picture So prepared X the of chain be my bigger a very in your about

we see to easing at with be chain, real NPA see network? taking -- demand or whatever. you function happening you guess, you a watching dynamic this just holding then how starting space? better? you're you just are view supply as ongoing Or that regard hold? similar of called in question any this sorry, point this but the the better? watching cars structural this and constraints? to mean significant your it type do And to as I chain chips one, mean and within how sustainability? is to is I'm that's the all hold, a dynamic supply consumers getting out Or a business -- you're with what with think whether take longer. do disruptions, regard Should of So on now shift is putting And And it is I more really holding it this I with

Selwyn Joffe

supply and chain, me Let demand I'll start okay. then if that's move to with

X, long are been and we've of statistics demand fairly have at COVID aging the of that as second. has a vehicles, years the prime -- that replacement as accumulating low of you to entering a result was and in happening, which greater these of or are And the old the as time, exponentially the cars contributes ago. cost so parts. look the tracking accumulate XX about vehicles X, on for and And new for average what's a forget the very X, go an look But into side, the than significantly. up sales more up high older entered in more the is which age, you gone XX-year chart these period age range, cars at for age, So amount replacement rates those

benefiting would but we're car prices low, in enable, new sales population, that the think I prefer car new just and to sales car expand high car are used well are be actually pretty as high. certainly we

who people economic a vehicle. means, have more less So have difficult a time owning

more are I come don't that cars the continue And buy And they can I will anticipate will, rates used than And on car car prices sure the grow, drivers which will come new these new coming opportunity less we'll and the think I cars will to now will to go anticipate back, which average more them. road. used be lower have afford who it. down, disposable other so I'm sales right income going road. age means have for as scrap people off

grow. car population the will So

sustainable. is demand believe I So

are in -- certainly what benchmark got not share. had we you I'm sure market who share perpetual industry. a to I'm in demand one again, many We've growth, of XX% also very how -- we've being sustainable. organic and contributions not some can had where the growth years sustainability, some what and whether gained the continue we've think good growth I we've grow believes rates

We optimistic continue market to our growth remain we about are and to share and expect organic stable, growth. fairly very

call more now industry, footprint, And plan we are And And least there numbers, to focus have. you and have within I lot the completed wins. electric ramping I that that. of low-cost expand of growth ago then We're think we've number in not board. but We for NASA noticed for a and it no of it we momentum production electric now. lot a I we -- a all grown is wouldn't last, call in vehicle doing of we a the automotive example the And across electric mention a right? -- of laid so a that, we've getting have organic customer and can't even and as we mobility. and had got so growth. And into capacity new out names, expand probably lot space. And is new wins on the it's adjustments -- our mean share I the technology. wins of truck wins fundamental capacity -- NPA, So -- we've of lot and I a in an combination the market think vehicles, years

I I to it the growth tell but think will remain I solid. remain will solid rates, can't fundamental come. years aftermarket think the So you for

but caution I conservative. exponential I great, the would we think it is to but optimistic, growth have way be

Brian Nagel

That's very helpful.

On the supply chain?

Selwyn Joffe

look as I the as at manage managed it's things change, out a interview, the a -- component the on it weeks the aftermarket there basis, Production not are month and ago didn't more suppliers, how wouldn't luck Sorry, wish think the of continue. can further a be there. from and constraints getting somewhat update outside of so a retailers, you about yes, or I'm But are depends on you're will down. but what they still in macro it, think out draw constraints chain. different We better. recently ports. labor. said And delays up much, in orders and that still so I chain way And to have interview that the certainly few getting fairly ago. I It was supply sorry, pushed think with by their news I sure I supply as said

So I new longer. in still numbers think slower, in. Development updates of you takes going but going part see

better. much things are tell mean think I the it, but something real -- all can't I I I I where But said I and I world. would issues see bit So -- as port different don't very how you, over unfolding, little a review still got Brian, it's predict think ago. I are

Operator

Next, Tieton we'll go to Bill Dezellem Capital. with

William Dezellem

Congratulations line on another really quarter. top great

the versus So and new how much X experienced, that growth to that is expense sales people relative year ago? marketing you of

David Lee

Well, commissioned. is line included in the

a have So and very solid commissions with sales growth our increased.

We the attended show. aftermarket also trade

all that's December of increase. part So the

more it's show headcount. versus So sales trade on and

Selwyn Joffe

we just Las is is in head big and more we basis Yes. big show, an times international prior weren't happens There's The Vegas. driver AAPEX, a no obviously, growth there. attended. never real during a commissions the year, COVID count It's annual on trade growth able in which sales which

have fact, quite vigorously. this and -- In I had we attended year,

So string, that's really. the

William Dezellem

inventories. then helpful. like from shifting but slightly angle. a I'd That's continue this different path, actually to And down to

were the scenes those tightness. more reconcile be try your So there? XX% little ask I together for that indicative Was the aggressively could put were this behind Or inventories Maybe is you've on to supply of just pieces strong, a you might about of bit to degree intention that increasing and talked chain than sales up. really but us. kind there inventories XX% yet some up like of rather

Selwyn Joffe

summer the the make insight through saw to at is on consumer replacements. really going Chinese Coming numbers, some coming you starts for But cycle into in when I'll David Year and do it into the time then I'll follow -- you we really very the customers numbers. with vulnerable can up and a demand New our us. give without specific --

an business have certainly that planning. be but good on visibility on over the but also basis, in adding months, significant we'll next We over the new next ongoing -- XX some our hopefully,

cash though XX% growth, were as quarter. be position revenue, now us inventories. fairly of is, believe lot of tailwinds And with bodes the quarter, increases higher hope the in comfortable well price from we expenditures came think is that the guidance these operations. of incremental we then will mitigated into year's be a certainly because positive we'll So next And when that we're I at even growing challenges give and think help numbers what surcharges have inventory coming which well. think had we some into in I by a I for and chain we end we to in twofold will And the that supply got we've think generating next the we've our we

a lower, a may the we're that's our for longer-term for for times also COVID new but last that planning years ready during demand really X.X we be little had So customers probably bit getting rolling to and the fulfill ready we've business sure then outlook in. the were quarter much making

William Dezellem

bait. And to take the I'm actually going

on you there? that You on for are the as I last And call, this believe planning months. new in a you're much you're mentioned to that sight to XX referring that of the of reference of business as part line detail Would business you a amount significant next discuss for quarter answer made new please you as that you business. on can, new

Selwyn Joffe

to Yes. million in for the opportunity And of I think us. past hasn't certainly, alluded I've And that changed. $XXX

guidance all giving not of will to to in don't for good we -- guidance speed want not we're that we're point, next I some you quarter. -- the at give vary. and hope right But the now of ramp-up the this Although

So business an perspective, be market share the and an be a strong to technology us. on be strong continues Business to business to gain basis continues strong evolving on organic basis. for on continues

accurate very I'm It cautiously. is optimistic So cautiously than optimistic, actually. probably more

William Dezellem

going bit a on just I'm this continue push to to more. right. All

all chain million and you $XXX with more is when get timing the is is business unknown supply if So ramp you of have that you feel $XXX business revenue? that questions of it. becoming really in rather probability the has than rolls process, a high factor typical won? now Or million the that customer that that of And

Selwyn Joffe

at getting when new look judge think can the business, what you I way historical volumes or you're what been. gauge only is you Well, the have

hear Of everything confident much don't point. new And know more wins exactly the in be course, detail, business this you in that I indication difficult demand we're yes. to very XX business of next but Bill, is about talk just you I but an that's to know -- a to want it's going months, very what the at of, really

William Dezellem

I as was you you the to as much worries. comfortable. giving No opportunity just were say

Selwyn Joffe

Yes.

coming as being growth, hopefully that into it's positive cash. the will more think about continue optimistic optimistic we're And -- clear we're importantly, and structure is about expense I on importantly. our and message generating that our

And so developments. we're those very excited about

William Dezellem

questions. when reach note, to of tariffs I'm you X the the just Number efficiencies is, in would for and Malaysia maturity? to a the And X there reduction restart I additional gauge have that? caliber brake did in when actually, manufacturing again, on level up timing Mexico anticipate that the trying and then And secondarily,

Selwyn Joffe

think the state-of-the-art accept in caliper really see it's question, brake make the -- I But change about the that the transitional to to question months, second day, factory, perspective of the both get -- I X lean mean the have a and I manufacturing it of with X capabilities -- -- to hand I when going David. a continuous better -- complete through brake every I'm think then efficiency and There's start work you I there's next facility. We're never a and we opportunities real August, improvement. we you'll it philosophy maximum. that and from to But first mean, very always will excited maximize, and think facility. a -- in we as we never say caliper business, I'll

stop And so where you'll it's for effects to more But material the hopefully, think X we'll months see on margin. never I X numbers. reaching

David Lee

much out Malaysia, And up. the did lower there ramping team at utilization, of back beginning great David. the this but of is definitely job On a the quarter,

in part much recovery latter quarter, the towards utilization. of better the So was there

So we're that. very about excited

William Dezellem

in So you -- the started quarter. December you have would manufacturing have would early been

really interpretation? of up is full Is October, correct the month the you December when of were that be to production. but ramped that kind would So more

David Lee

Yes.

Selwyn Joffe

obviously, And lot they're takes And and time some country, labor to U.S., with constraints movement particular, the on from there it around the the inventory doing in great. port of it and of to the delays. Malaysia but because takes get time

on we we some because see lingering sell tariffs. what the may you So only tariffs expense

that's expense. linger, of tariff ongoing far that come an you see may you as Malaysia some but don't goods as that in, So cash have the cost as

Operator

remarks. are for closing I'll There questions this time. call at additional any turn Selwyn to over back or the now no further Joffe

Selwyn Joffe

David. Thanks, Great.

Just X success. the months our and for quarter continued our performance record highlights

focused realizing supply proactively of potential chain aftermarket the challenges. business our core we and the on remain hard intently mitigating forward, Moving managing parts and

our lines, for particularly within vehicle efficiencies. brake-related realize We expect Also, be increased long-term platforms new product facilities we solid categories. each productivity growth our and subsidiary growth electric including our of to we and production complementary will mature, as opportunities, see

today, to there this costs expect we many variables stabilize. While are and

a team increased I through appropriate growth enhanced efficiencies for commitment anticipate items in fewer bodes thank discussed of and shareholder want service. and conjunction accelerated well all and returns. customer-centric for This, earnings more we margins pricing our our improve ongoing expect closing, results. We focus with to combination the far In their having Overall, on earlier. to impacting revenue members our

focused conference you year-end these We Thank are for and host testament commitment of we team been investor we the and continued times, than speaking employees. operational of And proud our in joining that June the again vaccinated, During us call forward support, company. we it safety And appreciate your XX% XXXX is look extremely well-being risk. more thank mitigate challenging us helping a with on when I'm at you. our fiscal to our our employees' have and conferences. you of for globally and call. members

Operator

call. concludes This conference today's

You may disconnect. now

Motorcar Parts of America (MPAA) 9 Feb 222022 Q3 Earnings call transcript