Motorcar Parts of America, Inc.

Thank you for standing by and welcome to the Motor Car Parts of America Inc. Fiscal 2026 Fourth Quarter and Year End Conference Call. 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'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question again, press star one. Thank you. I'd now like to turn the call over to Gary Mayer, Vice President, Corporate Communications and Investor Relations. You may begin.

Thanks, Rob. Thanks, everyone, for joining us today for our fiscal fourth quarter and year-end conference call. Before we begin, I turn it over to Selin Jaffe, Chairman, President, Chief Executive Officer, and David Lee, our Chief Financial Officer. I'd like to remind everyone of the Safe Harbor Statement included in today's press release. The 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 those 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 revise or update 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 the company's various filings with the Securities and Exchange Commission. With that said, I'd like to begin the call, turn it over to Selvin.

Thank you, Gary. I appreciate everyone joining us today. As stated in our earnings release issued this morning, the end of the year was a strong fourth quarter and numerous new business commitments. phasing in throughout fiscal 2027, as well as exciting new additional pending business opportunities. Let me start by highlighting our meaningful financial accomplishments for the fourth quarter and year. Net sales increased 9.9% for the quarter and 4.3% for the year. Gross profit increased 30.9% for the quarter and 3.9% for the year. Gross margin increased to 23.7% for the quarter and was 20.2% for the year. Operating income increased 29.4% for the quarter and 64.9% for the year. Net income for the quarter was 9.7 million compared with the net loss of 722,000 a year ago. And net income for the year was 12.4 million compared with the net loss of 19.5 million a year ago. We used cash from operating activities of 4.5 million in the quarter. This was primarily due to an increase in accounts receivable of 32.5 million, reflecting strong sales towards the end of March. For the year, we generated cash from operating activities of 19.2 million. We generated cash of $57 million before working capital reuse of $37.8 million. Working capital was impacted by an inventory ramp-up for new business in the upcoming fiscal year and a large increase in accounts receivable at fiscal year-end because of significantly strong sales late in the fourth quarter. We reduced net bank debt to $80 million despite repurchasing shares of $11.4 million for the year. David will discuss these metrics in more detail shortly. In short, we are encouraged by our achievements, particularly in the fourth quarter. Our strategy remains focused on increasing profitability, growing share, and neutralizing working capital. We believe accelerating gains in our break-related business will continue to support our overall margin goals, support about further efficiencies, and increased utilization of our facility. We have a number of initiatives that we were exploring, including utilizing AI tools to help neutralize working capital. We expect to continue to generate positive cash flow on an annual basis. Over the last three years, we have generated more than $100 million of cash from operating activities, which supports further debt reduction and share repurchases, while leveraging our strength to take advantage of additional opportunities in both the retail and traditional markets. We remain focused on gaining share across all product categories by leveraging our leadership position, our financial strength, and reputation. I might add that our quality-built brand products continue to gain name recognition and market share across the traditional distribution and repair market. Equally important, this growing brand name recognition within the professional aftermarket presents exciting opportunities for us to expand awareness and enhance loyalty among customers and consumers, both near and long term. In short, we offer our retail and traditional customers great products, industry-leading SKU coverage and order fill rates, supported by value-added merchandising and marketing support. I should mention that we continue to seek opportunities to support our customers, leveraging our low-cost footprint. As I've highlighted before, the average age of U.S. 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 consumers holding onto their vehicle longer. In short, we're all committed and focused on our customers, offering quality products and services with rational pricing. 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 and margins. Our vision is to leverage the reputation of our quality-built brand name, We anticipate this will build momentum and enhance our market position, particularly with regard to supplying alternators and starters to our channel partners who are leaders in the heavy-duty aftermarket segment and the overall heavy-duty rotating electrical market. I should note that we commenced the relocation of our heavy-duty operation to Mexico from Canada in the latter part of fiscal 2026. as part of our ongoing commitment to continuous improvement. And we look forward to further opportunities to enhance operating efficiencies as we complete the transition. In addition, we continue to experience increased demand for our aftermarket parts in Mexico, which complements our existing strategic operational and distribution footprint there. 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. Regarding our diagnostic business, our JBT1 benchtop tester leads the industry, and the installed base is continuing to grow. 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 non-discretionary aftermarket parts for the internal combustion engine market. And we are focused on leveraging our capability and capacity to offer a broad range of SKUs for all markets, all makes, and models with newer or older vehicles. As I've previously mentioned, 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 and profitability as the competitive landscape continues to change. I'd now like to turn the call over to David.