Motorcar Parts of America, Inc.

Thank you for standing by and welcome to the Motor Car Parts of America Inc. Fiscal 2026 Third Quarter Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again press star 1. Thank you. I'd now like to turn the call over to Gary Mayer. Vice President, Corporate Communications, and Investor Relations. You may begin.

Thank you, Rob. Thanks, everyone, for joining us for our call today for our fiscal 2026 third quarter. Before I turn the call over to Selin Jaffe, Chairman, President, Chief Executive Officer, and David Lee, Company's Chief Financial Officer, I'd like to remind everyone of the Safe Harbor Statement included in today's press release. Private Securities Litigation Reform Act of 1995 provides a safe harbor for certain forward-looking statements, including statements made during today's conference call. Such forward-looking statements are based on the company's current expectations and beliefs concerning future developments and their potential effects on the company. There can be no assurance that future developments affecting the company will be those anticipated by Motor Car Parts of America. Actual results may differ. from these projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties, some of which are beyond the control of the company and are subject to change based upon various factors. In particular, expectations about anticipated future growth and opportunities with customers may not be achieved. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For a more detailed discussion of some of the ongoing risks and uncertainties of the company's business, I refer you to our various filings with the Securities and Exchange Commission. I would now like to turn the call over to Selwyn Jaffe to begin the call. Okay. Thank you, Gary.

I appreciate everyone joining us today. This is a day of contradictions for MPA, where our quarterly results were less than expected, but our outlook continues to gain favorable momentum. With the change in industry dynamics, especially related to the liquidation of the break-related businesses of one of our competitors, and the tailwinds of the growing age of our car population, we are well positioned. Results for the quarter were disappointing, particularly given our optimism in early November. As I noted at that time, one of our largest customers had reduced purchases. We believe that ordering activity from this large customer would resume faster. In fact, it did not. And as a result, we did not achieve our targets in the third order. We are pleased that we are now seeing a recovery with regard to this particular customer's ordering activity. Nevertheless, we are adjusting our year-end sales guidance for fiscal 2026 due to lower sales to this customer in the third quarter and a less than expected full recovery in the fourth quarter. Our outlook continues to be positive. We have secured numerous commitments for new business with many more pending. Specifically, we believe the gains in our breaking business will result in overall increased margins due to operating efficiencies and the utilization of our facilities. We also expect to continue to generate positive cash flow on an annual basis and focus on deploying capital to maximize shareholder value, including share repurchases and debt reduction. I might add that the company has strong liquidity to take advantage of its opportunities. In short, the fundamentals of our business are strong. With regard to our EV emulator business, which is a highly regarded brand with proprietary technology and a long history of serving blue chip customers across the automotive aerospace, electronics, and research sectors, we are exploring strategic alternatives. We are focused and committed to being the leading supplier of non-discretionary automotive aftermarket products. We believe our financial strength and reputation across the retail and professional industry provide distinct competitive advantages. We offer a well-respected portfolio of products and services, and have the capacity and ability to benefit from our state of the art North American operational footprint. We are well positioned to enhance our leadership position. As I've highlighted before, the average age of US light vehicles continues to rise. Most recent industry data shows that the average age has risen to 12.8 years from 12.5 years in 2024. In addition, The number of vehicles on the road climbed to 295.9 million from 291.1 million a year ago. We expect increased replacement opportunities for the life of vehicles, particularly with customers holding on to their vehicles for longer. We continue to leverage our strengths, offering our customers great products, industry-leading SKU coverage, and order fill rates, support about value-added merchandising and marketing support. In short, we all committed and focused on our customers, offering quality products and services with rational pricing. Our quality-built brand name products are offered to the professional installer market through warehouse distributors and continue to gain name recognition and market share. With regard to our heavy-duty business, we continue to leverage our reputation and industry position in this market, focused on opportunities to further enhance operating efficiencies that enhance margins We anticipate continued momentum, particularly with regard to supplying alternators and starters to our channel partners who are leaders in the heavy-duty aftermarket segment. We are becoming an increasingly important supplier to the heavy-duty rotating electrical market. We are experiencing increased demand for aftermarket parts in Mexico, which complements our existing strategic operational and distribution footprint there. As a point of reference, there are approximately 36 million vehicles in the Mexico market, up 2.8% from last year, with an average age of 16.2 years. As our US-based retailers and warehouse distributor customers expand throughout Latin and South America, we are well positioned to benefit while supporting their growth. With regard to our diagnostic business, our JVT-1 benchtop test that leads the industry and the installed bases continue to grow with additional service-related revenue related to software and database updates anticipated. We also expect more opportunities outside North America as the business evolves, including potential new applications that complement and leverage our technology. We believe the outlook is bright for nondiscretionary aftermarket parts, and we are focused on leveraging our capability and capacity to offer a broad range of SKUs, all makes and models, whether new or older vehicles. While the industry has experienced some recent headwinds due to consumers deferring certain repairs, deferment is not really a long-term option for our non-discretionary products. If your car doesn't start or stop, you're not driving. We believe we have meaningful opportunities for further growth as the competitive landscape changes. I would now like to turn the call over to David.