Motorcar Parts of America Inc. (MPAA) reported QQ1 2025 net sales of $169.9 million, up 6.4% year over year, driven by copper of growth in rotating electrical and brake product lines and ongoing global footprint expansion. Gross profit rose 9.8% to $29.2 million with a 17.2% gross margin, modestly higher than the prior year’s 16.6%. However, the quarter was heavily burdened by non-cash items including a $11.1 million foreign exchange loss tied to lease liabilities and forward contracts, and a $2.9 million severance expense related to strategic cost reductions. As a result, operating income was negative at $(6.46) million and net income declined to $(18.1) million, or $(0.92) per share, versus a year-ago loss of $(1.4) million and $(0.07) per share. EBITDA, excluding the aforementioned non-cash and cash items, was positive at $14.4 million, illustrating the ongoing profitability potential once non-operational headwinds subside. Management underscored a multi-year cost-reduction program expecting approximately $7 million in annualized savings, with roughly 90% impacting cost of goods sold. They also highlighted ongoing growth catalysts including: (i) brake program volume acceleration and better inventory turns, (ii) rapid new part-number introductions (targeting at least 800 per year), (iii) expansion of Diagnostic equipment and services, (iv) a Malaysia wheel hub manufacturing facility opened in 2024 to bolster competitiveness, and (v) strong cross-border expansion in Hard Parts within Mexico. For the full year, management guided to $746–$766 million in sales, implying mid-single-digit growth, with operating income before non-cash and one-time severance expected in the $90–$95 million range, representing margin expansion as volumes and price increases drive accretion. The company also maintained a substantial liquidity position (~$90 million available) and a debt-heavy balance sheet with net debt around $248 million. Investors should weigh the near-term FX and integration costs against a multi-pillar growth thesis centered on brake, diagnostics, and cross-border expansion in Mexico, with a path to cash flow generation and debt reduction through improved working capital and operating efficiencies.