Motorcar Parts of America, Inc. (MPAA) announced strong financial results in its third-quarter 2024 earnings call, with notable increases in sales, gross margins, EBITDA, and cash flow. The company also succeeded in reducing its net debt by $50M. Despite a net loss primarily attributed to a tax valuation allowance, the firm reported record net sales for the nine-month period and is optimistic about its growth prospects, particularly in the hard parts business, testing solutions, and the electric vehicle market.
Key Takeaways
- Motorcar Parts of America reported increased Q3 sales, gross margins, EBITDA, and positive cash flow.
- The company reduced its net debt by $50M and remains focused on sales, profitability, and neutralizing working capital.
- Net sales reached $171.9M for the quarter, with a gross margin of 17.5% and an operating income of $9.5M.
- A net loss of $47.2M was recorded, primarily due to a tax valuation allowance.
- For the nine-month period, net sales rose to $528.2M, gross profit to $97.8M, and operating income to $33.9M.
- The company is optimistic about its emerging brake categories and the growth of its quality-built product line, which has seen over 40% growth.
Company Outlook
- Motorcar Parts of America expects further improvement in results with higher sales volume and recent price increases.
- The opening of a new facility in Malaysia is anticipated to provide a competitive edge and contribute to revenue gains and market share growth.
Bearish Highlights
- The company reported a significant net loss due to non-cash items such as a deferred tax asset valuation allowance.
- A short-term dip is expected in a specific product line.
Bullish Highlights
- The company has experienced growth in net sales and gross profit for the nine-month period.
- There is strong momentum in the quality-built product line, which is becoming a nationally recognized brand without extra factoring or supply chain costs.
Misses
- The company experienced a soft period in November and December but expects recovery with implemented price increases.
Q&A Highlights
- Price increases are expected to generate an additional $10M in the next 12 months.
- The tax valuation allowance recognized does not affect the company's tax liability, cash, or operations.
- The new Malaysian facility is fully paid for and has already impressed a major customer.
In summary, Motorcar Parts of America is navigating a higher interest environment with strategic initiatives aimed at maintaining profitability and cash flow. The company's leadership expressed confidence in their market position and the continuous demand for their products. Investors are looking forward to the fiscal 2024 year-end conference call in June, where further developments will be discussed.
InvestingPro Insights
Motorcar Parts of America's (MPAA) recent financial results show a company poised for growth, with a clear focus on improving sales and operational efficiency. The InvestingPro data and tips provide additional insights that may be of interest to investors considering the company's future prospects.
InvestingPro Data:
- Market Cap (Adjusted): $168.62M USD
- Revenue Growth (Quarterly) for Q3 2024: 13.2%
- P/E Ratio (Adjusted) for the last twelve months as of Q3 2024: -3.52
The market capitalization reflects a modest-sized company, which could suggest potential for growth or acquisition interest. The quarterly revenue growth is a strong indicator that the company is increasing its market presence, aligning with the positive financial results reported. Despite the negative P/E ratio, which typically indicates that a company is not currently profitable, there's a broader context to consider.
InvestingPro Tips:
1. Analysts predict the company will be profitable this year, which is a significant turnaround signal for potential investors. This aligns with the company's own optimistic outlook for growth and profitability.
2. The stock has taken a significant hit over the last week, which may present a buying opportunity for those who believe in the company's growth trajectory and are willing to withstand short-term volatility.
For investors seeking more comprehensive analysis, there are additional InvestingPro Tips available on the Motorcar Parts of America's page on InvestingPro. With the use of the promo code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to in-depth financial data and expert insights. Currently, there are six more InvestingPro Tips listed, offering a more nuanced understanding of MPAA's financial health and future prospects.
Full transcript - Motorcar Parts of America (MPAA) Q3 2024:
Operator: Good afternoon. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Motorcar Parts of America Third Quarter 2024 webcast and Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Gary Maier, vice President of Communications and Investor Relations. You may begin your conference.
Gary Maier: Thanks. Thanks, Rob. Thanks, everyone for joining us for our call. Before we begin and I turn the call over to Selwyn Joffe, Chairman, President and Chief Executive Officer and David Lee, the company's 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 of future developments affecting the company will be those anticipated by Motorcar Parts of America. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainty, some of which are beyond the control of the company and are subject to change based upon various factors. In particular, expectations that 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 the various filings with the Securities and Exchange Commission. With that, I'd like to begin the call and turn it over to Selwyn.
Selwyn Joffe: Thank you, Gary. I appreciate everyone joining us today. We are encouraged by our operating results for the quarter, including strong sales performance, increased gross margins, increased EBITDA and significant positive cash flow and a revolver pay down of $50 million to $102.8 million of net debt. While some of this cash flow resulted from deferred collection catch up in the quarter; for the nine months, we generated $48.4 million in positive cash. I might add that these results were particularly impressive considering the industry's softness in November and December. Recent extreme weather conditions throughout the country should help bolster this industry's sales softness in future quarters. We were also pleased that gross profit for the quarter and nine months increased substantially. gross margins continued to improve and benefit from better operating efficiencies as anticipated, particularly from increased overhead absorption with higher sales and production in newer product categories. I should also add that price increases in effect, but not yet realized, will contribute an additional $10 million in annualized sales, and gross profit and EBITDA. We remain focused on three key initiatives: sales, profitability and neutralizing working capital. We are confident that our sales and profitability will grow organically and through market share gains in all of our product lines. Increased profitability along with our working capital initiatives will further enhance cash flow generation. With regard to working capital, we continue to focus on the balance sheet including extending vendor payment terms. This initiative is being supported by the launch of our vendor finance program offered to our suppliers. This enables us to extend our payment terms while facilitating a program for our suppliers to have early access to capital. We expect to increase the number of days outstanding for accounts payable, which will result in additional cash generation. While in its early stages, this program is progressing nicely and will gain increased traction in the months ahead. I should note that the effects of this program are not yet reflected in our results and will provide additional upside to cash flow generation. From a strategic standpoint, we are continuing to leverage our strengths, including great products manufactured at state-of-the-art facilities, solid customer relationships, industry leading skew coverage, not to mention our value-added merchandising and marketing support. We are continuing to expand hard part sales in Mexico with opportunities to further expand in other Latin American countries with multiple product lines as our customers experienced increased demand for aftermarket parts. The rate of growth is exciting and we are well positioned to utilize our footprint to meet the growing demand for our non-discretionary aftermarket parts. Our test solutions and diagnostic equipment in particular are industry leading JBT-1 benchtop testers for alternative starters used by major automotive retailers and professional installers continues to grow significantly. We believe the market opportunity for additional growth in the U.S. is approximately $110 million and we are well on our way. favorable industry dynamics continue to bode well for the company and we are extremely well positioned for sustainable top and bottom-line growth in our hard parts business, as well as the testing solutions. Let me take a moment to further discuss our near-term initiatives to support our long-term growth and profitability plan. Our near-term plan is in motion as we expect to achieve significant growth in all of our product lines, including our quality-built brand that continues to gain significant market share within the professional market. This includes our most recent additions to our portfolio of brake calipers, pads and rotors. Operating efficiency improvements are continuing as volume increases. Overall, this growth is supported by investments, especially the company's global footprint expansion in Mexico, backed by a well-trained and a seasoned team of professional employees. Also, we have expanded our Malaysian operation to add capacity and additional capabilities to support customers. We recently opened a new state-of-the-art wheel hub manufacturing facility in Malaysia, enabling us to ship product directly to our customer. Congratulations to our spectacular operating team, especially to those in Singapore and Malaysia. Our business growth is strategic and we are focused on generating solid cash flow and profitability. The strong cash generation will enable us the flexibility to further pay down debt and pursue other related opportunities to enhance shareholder value. In conclusion, non-discretionary aftermarket parts for the internal combustion engine market will be here for decades and outlook supported by recently updated industry data showing that the average age of vehicle is twelve and a half years. It is worth highlighting that the population of vehicles operating with internal combustion engines versus EVs represents 98 point -- approximately 98.3% of all vehicles on the road. One of our key competitive advantages is our ability to offer a broad range of applications for all makes and models. We remain focused on newer model applications and our ability to meet expected demand as these vehicles enter the replacement part [ph]. As you probably know, the emerging electric vehicle market is still quite small relative to the overall car park population. Recent news articles regarding EV range, particularly in cold regions in the country contribute to consumer hesitancy to plug in. but as technology improves and these types of issues are addressed, we expect to continue to benefit in both markets with product functionality and applications across both EV and ICE applications. While I am disappointed in the tax valuation allowance, I want to emphasize that it has no bearing on any operating metrics, cash flow, tax liability, or any economics of the company. It is simply required by GAAP. Finally, we have recently announced change to our sales team. Jamie Cook has been promoted to Senior Vice President of sales and marketing. She's succeeding Rick Mochulsky, who will transition to a new role as Senior Vice President of Business Development. Jamie and Rick have worked closely together at MPA for many years. Jamie is recognized throughout the automotive aftermarket. She is an exceptional leader with the added benefit of being a role model for women seeking to advance in the industry. Rick will remain an important member of our team in his new role, helping to drive demand for all of our products, both from existing and new retail and professional customers. I'll now turn the call over to David to review our results in greater detail.
David Lee: Thank you, Selwyn and good morning, everyone. I encourage everyone to read the earnings press release issued this morning, as well as the 10-Q that will be filed later today. Let me first provide key highlights for the fiscal third quarter. net sales increased 13.2% to $171.9 million. gross margin improved by 3.7 percentage points. Gross profit increased 43.1% to $30 million. Operating income increased 170.1% to $9.5 million, and the company generated cash of approximately $53.6 million. I should mention that gross profit for the quarter was impacted by non-cash items, as well as cash items. The non-cash items reflect core and finished good premium amortization, and revaluation of cores on customers' shelves, which are unique to certain of our products and required by GAAP. The total for these non-cash items in the quarter was approximately $4.4 million. A more detailed explanation of core accounting is available on our website and I would encourage anyone with questions about this topic to review the video. Third quarter gross margin was 17.5%, compared with 13.8% a year earlier. Gross margin was impacted by 2.6% from the previously-mentioned non-cash items, as well as 0.9% from cash items as detailed in Exhibit 3 of this morning's earnings press release. in summary, in addition to the non-cash and cash items explained previously, gross margin for the fiscal '24 third quarter reflects the partial benefit of pricing increases that went into effect during the current quarter and operating efficiencies. Additionally, we have meaningful annualized pricing increases that started in the current fourth quarter, which will further contribute to gross margin enhancements. Operating expenses were $20.5 million, compared with $17.5 million in the prior-year period. This included a non-cash gain of $3.1 million for the foreign exchange impact of lease liabilities in Florida contracts, compared with a prior-year non-cash gain of $4.3 million. The remaining $1.9 million of operating expense increases included employee-related expenses. Operating income for the third quarter increased 170.1% to $9.5 million from $3.5 million in the prior year. Results for the fiscal third quarter were impacted by $6.8 million or $0.26 per share of higher interest expenses, primarily due to higher market interest rates and higher utilization of the accounts receivable discount programs due to higher sales. interest expense was $18.3 million, compared with $11.5 million for last year, which is primarily related to our customers' accounts receivable discount programs. We are working diligently to address the higher interest environment, particularly areas that we can control. For example, among other initiatives, we are focused on neutralizing working capital to generate positive cash flow to pay down debt as evidenced by our year-to-date results. In addition, we continue to work with our customers to mitigate higher interest rates. due primarily to a $37.5 million U.S. federal and state deferred tax asset valuation allowance under U.S. GAAP recorded during the fiscal '24 third quarter, income tax expense was $37.3 million, compared with an income tax benefit of $9 million for the same period a year ago. Let me emphasize that this tax valuation allowance is required by GAAP and is non-cash and does not impact any operating metrics. due primarily to $40.4 million of non-cash items including a $37.5 million U.S. federal and state deferred tax asset valuation allowance under U.S. GAAP noted previously, we reported a net loss for the fiscal '24 third quarter of $47.2 million or $2.40 per share compared with net income of $1 million or $0.05 per diluted share a year ago. To reemphasize, this accounting item is non-cash and does not impact any operating metrics. The details of the non-cash and cash items impacting results are in exhibit 1 of this morning's earnings press release. As I mentioned previously, we experienced a 13.2% sales increase despite industry's softness in November and December with this higher expected sales volume moving forward and the full impact of certain price increases already in effect, results are expected to further improve. As someone mentioned, I should also add that price increases in effect will contribute an additional $10 million in annualized sales, gross profit and EBITDA. EBITDA for the fiscal third quarter was $11.2 million. EBITDA was impacted by $3.9 million of non-cash items and impacted by $1.9 million in cash items. EBITDA before the impact of non-cash and cash items mentioned above was $17 million for the third quarter. EBITDA for the prior year's fiscal third quarter was $6.6 million. EBITDA was impacted by $646,000 of non-cash items as was $3.8 million in cash items. EBITDA before the impact of non-cash and cash items mentioned above was $11 million for the prior-year third quarter. Now, let me discuss the nine-month results. Net sales for the fiscal '24 nine-month period increased 8.2% to a record $528.2 million from $488.3 million. gross profit for the fiscal '24 nine-month period increased 25.6% to $97.8 million from $77.8 million a year earlier. Gross margin for the fiscal '24 nine-month period was 18.5%, compared with 15.9% a year earlier. Gross margin for the fiscal '24 nine-month period was impacted by $12.6 million or a 2.4% of non-cash items and $6.7 million or 1.3% of cash items. operating income for the nine-month period increased 166.7% to $33.9 million from $12.7 million in the prior year. Results for the nine months were impacted by $17.7 million or $0.68 per share of higher interest expenses, primarily due to higher market interest rates and higher utilization for our customers' accounts receivable discount programs due to higher sales. interest expense was $45.4 million, compared with $27.7 million for last year. As I previously noted, we are working diligently to address the higher interest environment, particularly areas that we can control. due primarily to $49.5 million of non-cash items including a $37.5 million U.S. federal and state deferred tax assets valuation allowance under U.S. GAAP, we reported a net loss for the fiscal '24 nine-month period of $50.6 million or $2.58 per share, compared with a net loss of $5.7 million or $0.29 per share a year ago. Once again, this accounting item is non-cash and does not impact any operating metrics. The details of the non-cash and cash items impacting results on exhibit 2 of this morning's earnings press release, results are expected to improve from various initiatives that will be realized as I discussed earlier, concerning pricing increases in effect and higher sales volume. EBITDA for the fiscal '24 nine-month period was $40.9 million. EBITDA was impacted by $16 million of non-cash items, as well as $7.7 million in cash items. EBITDA before the impact of non-cash and cash items mentioned above was $64.7 million for the current period. EBITDA for the prior-year fiscal '23 nine-month period was $22 million. EBITDA was impacted by $12.9 million of non-cash items, as well as $12.6 million in cash items. EBITDA before the impact of non-cash and cash items mentioned above was $47.5 million for the prior-year nine-month period. Now, we will move on to cash flow and key corporate items. The company generated approximately $53.6 million of cash from operating activities during the quarter, including accounts receivable catch up from the prior quarter and approximately $48.4 million of cash from operating activities for the nine-month period, which is not impacted by any accounts receivable deferral. During the nine-month period, the company reduced net bank debt by $43.7 million to $102.8 million from $146.5 million. We expect to generate an increase in operating profit on a year-over-year basis for fiscal '24, supported by organic growth from customer demand and operating efficiencies from a now-completed footprint expansion and generate positive cash flow for fiscal '24. In addition to our goal of generating increased operating profits, we are diligently focused on opportunities to neutralize working capital growth, including customer product demand planning, enhanced inventory management and improving vendor payment terms. Our investments are bearing fruit. We are gratified by the ongoing success of our expanded operations in Mexico, and the growth and momentum of our emerging brake categories along with expectations of increasing financial performance from both new and existing product lines. Our net debt at the end of the quarter, excluding our convertible note, was approximately $102.8 million while total cash and availability was approximately $126.3 million. For further explanation, on the reconciliation of items that impact the results and non-GAAP financial measures, please refer to exhibits 1 through 5 in this morning's earnings press release. I would now like to open the line for questions.
Operator: [Operator Instructions] Your first question comes from the line of Matt Koranda from Roth MKM. Your line is open.
Mike Zabran: Hey guys, it's Mike Zabran on for Matt. Can we just start like usual with the breakdown of product revenue by mix?
David Lee: Yes. So, for the third quarter, rotating electrical was 65%, brake-related products was 21%, wheel hubs was 11% and others was 3%.
Mike Zabran: Got it. Helpful. So, the release in the -- on the call, you talked about a slowdown in November, in December. Maybe, just elaborate a little bit further on what exactly happened and what's our sense for why demand was weak in those months?
Selwyn Joffe: Well, we started off the quarter with a great October and I think a lot of the professional installer base got soft. I think that we had some pretty mild weather. I mean, again, it's very hard for me to really put an accurate finger on the pulse as to why things softened up. The fundamental metrics remain good, but we've seen that now that there was some extreme weather mostly in the west and east part of the country. We've seen a pickup, so while it's hard to predict. I mean, we are maintaining our guidance for the year and we are optimistic, should come back. I mean, I just don't know, I wish I could give you an exact, x, y, z explanation as to why this happens. The other issue that we have is that and I don't know if this is a fact or not, but sometimes it's our customers' fiscal calendar year ends and maybe, they're managing their working capital level, so that could have an effect as well. But really, I think that the fundamentals for November, December on a macro level across the industry, across the base, it definitely was a little softer out there in particular. I mean, I can only refer to our products, but we think that just number of vehicles and footprint research that we've shown showed it a little bit softer.
Mike Zabran: Got it. Okay. And Selwyn, you said we are sticking with the guidance through the end of the year.
Selwyn Joffe: Yes. So, we've had a strong start to this quarter. And we'll see, as we come towards spring, we're optimistic still about demand. We're busy and yes, we're sticking to our guidance.
Mike Zabran: Got it. Okay. okay, maybe, just help level set us on how much pricing has been put through as of today. And we talked about it a little bit on the call, but just further elaborate on how much pricing has been put through today. Should we expect to keep continuing to take price and then I have a follow-up as well. but maybe, let's just start there.
Selwyn Joffe: Yes. So, it's becoming harder and harder to quantify on how much is put through and how much isn't put through. I mean, we put a significant amount through, there's $10 million of annualized pricing that's already in the existing price increases that hasn't been reflected in the numbers that'll start in this quarter. And we expect to mitigate inflationary costs and hopefully including interest in pricing strategies. We also, as we pick up volume, we become more operationally efficient and we've got a lot of initiatives on continuous improvement that continue to drive profitability. So, across the board, I mean, our biggest challenge today is mitigating the interest expense. I mean the interest expenses is due -- the vast majority is due to more success with sales. And with the new loan agreement that we have, we're able to collect that cash and you can see our operating metrics, we've paid down over $40 million in debt for the nine months. I think the quarter is a little disproportionate, because of some of the deferrals, but the nine months is not. And so we -- I think, everyone is aware of the interest rates and we expect to continue to mitigate it.
Mike Zabran: Got it. Makes sense. And so then the price increases that we started in the fourth quarter, I guess, when do those fully filter through? Do we have a sense for that?
Selwyn Joffe: Yes. So they start in the fourth quarter, just assume in middle, middle to late fourth quarter, but they filter through going forward on an annualized basis, all those, there's another $10 million that'll be over and above what we've already got in the numbers for the next 12 months.
Mike Zabran: Got it. Okay. So, those start filtering through as soon as --
Selwyn Joffe: That's right.
Mike Zabran: Okay. Okay, got it. Okay. that makes sense. Last one from me, the tax valuation allowance. So, I understand, it was required by GAAP and it's a non-cash expense. We made that very clear, but maybe just why exactly did we have to recognize that allowance? Just help us get a better sense for that.
Selwyn Joffe: Yes. So, the first thing, let me just sort of back up and say it's -- those assets remain on our balance sheet and we are optimistic that we're going to be able to use those assets and as we get more GAAP income, we'll be able to reverse it and it'll take some time. but assuming the company performs, which we expect it to, and we'll reverse them, it doesn't affect our tax liability, it doesn't affect cash, it doesn't affect anything. And the real, the trigger is that we had a higher expectation for results in the third quarter in this past quarter that we're reporting on. And we had a soft two months out of the three months and we had to revise our -- we had to -- we did revise our forecast, internal forecast down and that results in a taxable loss in the U.S. entities. And so we had to put a reserve on the tax asset. It's unfortunate, I hate it. but it's the rules and that's what's happened. And again, while the optics of it and the rules of the rules, in no way affects us other than what the perception is out, it no way affects us in terms of anything that we're doing right now. And our focus continues to drive to drive GAAP income and all income. And so as that reverses those assets, that valuation will come off the assets.
Mike Zabran: Got it. Thanks, Selwyn. That's all from me guys.
Selwyn Joffe: Thank you very much.
David Lee: Thank you.
Operator: [Operator Instructions] Your next question comes from the line of Matt Dane from Titan Capital Management. Your line is open.
Matt Dane: Great. thank you. I wanted to ask about the new Malaysian facility that you referenced in the call. I was hoping you could walk through some of the benefits that you expect from that. I just wasn't certain if you were just expanding capacity or if there's other benefits or just help me understand that if you could.
Selwyn Joffe: Yes. So, that's a great question, Matt. That's -- it's very exciting for us. What we did there is we opened -- we've been in Malaysia, I wish I knew the exact number of years, I mean probably over three decades. And we've been able to continue to grow the old facility. What we've done is we've created a brand-new state-of-the-art facility, which allows us now to meet all the tests to ship our customers direct from Malaysia to our customers. So, it'll never be touched here. So, wheel hubs, the new wheel hub program, which we -- which is in line with what we've been doing, same thing now, has more capacity to go direct with storage for that inventory staging areas for that inventory to be shipped directly to our customers around the world, but in particular, in the United States. And that's a big deal, because our competitors are Chinese based and they have subject to tariffs, and our customers buy large orders of this and so want to take ship direct programs and we think that's going to open up some big opportunities going forward. I think short term you'll see a little bit of a dip in that product line and then in the next six months we should see some extreme -- I think we'll see some extreme gains in that product line. So, very exciting and it's a fabulous plant already had a major customer visit and he was extremely impressed with it. I mean and that's all in the CapEx. It's all paid for and done.
Matt Dane: Okay. So, you expect this plant and the cost efficiency of shipping directly to the customer, it's basically to lead to some substantial revenue gains as you gained share from your Chinese competitors. Is that what I heard you say more or less?
Selwyn Joffe: Yes. Yes, I think we'll see margin gain and share gain in time.
Matt Dane: Great, great. Glad to hear. I also did want to ask about the quality bill product line and reference that very briefly in the call as well. Just was curious, the traction that you are seeing with that product line, how is that relative to your expectations?
Selwyn Joffe: It's -- well, we have high expectations, I'll start there. So, although answering relative, every time I get results of how we're doing, my expectations grow. but I mean, we've growing that, we've had over 40% growth rates in that product line and that product branding name, and it's becoming a nationally recognized brand. and I'm extremely excited about how that's unfolding. We're adding many new customers to the brake line under our quality-built name, and we are just getting more and more demand for quality-built. And so that brand value and that brand equity, we are excited about that. The other side of that is there's no factoring cost, there's no supply chain cost on launching and growing that business. So that's also encouraging to us.
Matt Dane: Okay, good to know. I appreciate it.
Selwyn Joffe: Thank you.
David Lee: Thank you.
Operator: And there are no further questions at this time. I will now turn the call back over to Selwyn Joffe for some final closing remarks.
Selwyn Joffe: Okay, thank you. So, just in summary, we're excited about year-to-date accomplishments and our outlook; in particular, our strong cash flow, our pay down of debt. We expect the further benefit of additional price increases and the opportunities to further enhance shareholder value. We are encouraged by our leadership position in the industry and our solid customer partnerships. We built the platform for growth that is not easily duplicated and we expect this growth to continue on in the future, especially as the demand for our non-discretionary aftermarket products. So, the critical need for our consumers, the cars are on the road that the car population continues to grow and non-discussion parts will be there. There may be temporary ups and downs, but long-term, there's a medium-term and near-term, the demand will be there. In closing, I must recognize the contributions of all of our team members, who are continuously focused on providing the highest level of service. We are all committed to being the industry leader for parts and solutions that move our world today and in the future. We appreciate your continued support and we thank you again, for joining us the call -- on the call and we look forward to speaking with you when we host our fiscal 2024 year-end conference call in June and at the various investor conferences in the interim. Thank you.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
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