Hello, my name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Motorcar Parts of America's Fiscal 2023 First Quarter 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, then the number one on your telephone keypad. To withdraw your question, please press star one again. Thank you. Gary Maier, VP of Investor Relations and Corporate Communications, you may begin.
Thank you, Chris. Thanks everyone for joining the call today. Before we begin, 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 that future developments affecting the company will be those anticipated by Motorcar Parts of America. Actual results may differ from those projected in these 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 more detailed discussion 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 and turn it over to Selwyn Joffe.
Thank you, Gary. I appreciate everyone joining us today. I hope you're all safe and healthy. As announced this morning, our new fiscal year is off to an excellent start with sales climbing 10% on a year-over-year basis, reaching record levels, supported by continued strong demand for non-discretionary products across our North American customer base. Let me highlight several items that support our optimism as fiscal 2023 evolves. Our brake pads line, utilizing an industry-leading proprietary formulation, is rolling out as planned, as are our brake rotors. Our brake calipers operation continues to gain momentum, with expected operating efficiency improvements as volume increases with fixed cost absorption opportunities. We are targeting our brake-related business to exceed $300 million in annual sales above our fiscal 2022 reported results in the next three to five years.
We are growing sales in Mexico with multiple product lines, including rotating electrical, wheel hubs, and master cylinders. All major automotive retailers continue the rollout of our rotating electrical bench-top tester, and we expect sales from this opportunity to reach a cumulative $80 million over the next five years. We also expect additional revenue for maintenance and add-on services. Our EV contract testing center in Detroit, Michigan, continues to attract interest to support the design and development of electric vehicles. This contract testing is an initial entry into SaaS, Software as a Service model. We're excited about all of our multiyear new business commitments and expect these numerous opportunities to continue to fuel our growth.
As I emphasized during our fiscal year-end call in June, we are well-positioned to address both the internal combustion engine market and the emerging electric vehicle market with product functionality and applications across both markets. Nonetheless, we expect strong demand for internal combustion engine application for decades, and we offer a broad line of non-discretionary aftermarket parts necessary to service the internal combustion engine car population of approximately 280 million. At the same time, our applications and services also offer significant opportunities to address the emerging electric vehicle market. Clearly, the electric vehicle market continues to gain momentum, so we will not only benefit from our non-discretionary product offerings, but also from increasing demand for battery power emulation, testing and development of inverters, electric motors, and high-speed battery charging applications offered by our electric vehicle subsidiary.
As I highlighted earlier, our bench-top testers for alternators and starters continue to roll out at more than 15,000 retail customer store locations. These bench-top testers enable retailers to offer accurate advice with the latest protocols to diagnose problems for consumers and reduce unnecessary returns. This provides a value-added benefit for the retailer while strengthening their consumer relationships. Notwithstanding the continuing challenges facing the aftermarket industry and all businesses, for that matter, during these unpredictable times, we are working diligently every day with our customers and suppliers to meet the demand for our products. Let me take a moment to summarize where we are today. Our strategic investments have been completed.
We have further solidified our position in the industry with an expanded line of non-discretionary automotive aftermarket products, customer commitments, and opportunities. Our global footprint is scalable, supported by approximately 6,000 global employees with vast experience to support growth and profitability. We believe our initiatives will fuel our growth to more than $1 billion in sales. I will now turn the call over to David to review our results in greater detail.
Thank you, Selwyn, and good morning, everyone. I would like to encourage everyone to read the earnings press release filed as an 8-K earlier today, which contains more detailed explanations of our results. On this call today, I will review our fiscal first quarter results. As Selwyn mentioned, we achieved record net sales for the fiscal first quarter, reaching $164 million, an increase of $15 million or 10% from $149 million for the prior year. Gross profit for the fiscal 2023 first quarter increased $6.7 million or 28.6% to $30.3 million from $23.6 million a year earlier. Gross profit for the quarter was impacted by non-cash items as well as cash items.
Let me provide details for each, and then I'll provide further details on the impact on each additional line item, so you can accurately understand the underlying fundamentals between periods and appreciate our optimism as the new fiscal year evolves. The non-cash items reflect core and finished goods premium amortization and revaluation of cores and customer 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 $3.6 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. In terms of cash items, let's begin with Malaysia. The shutdown of the country by the government due to COVID, and then the slow reopening impacted our facility and our regional network of key suppliers.
In response, we quickly moved to outsource certain products from China, but these products were unfortunately subject to 25% tariff. These transitory disruptions in the supply chain, as well as timing of shipments, are being reduced as we ramp back up in Malaysia and our suppliers recover. As a reminder, one of the benefits of production in Malaysia is low tariff. A return to production at our facility in this country results in fairly immediate relief on tariff. Next, we incurred higher freight costs that were in excess of the customer freight surcharges that we already implemented. We have taken swift action to implement additional freight surcharges and further price increases to mitigate this impact going forward.
These are expected to be further in effect in the fiscal second quarter ending September 30, 2022, and should offset more of the higher freight costs we incurred based on current rates. The total cash impact of these transitory costs, including freight and tariffs related to supply chain disruptions on gross profit, was $2.5 million, compared with $4.8 million a year ago, as referenced in Exhibit 2 of this morning's earnings press release. In short, we are encouraged that these costs are decreasing. Before moving on, I should note that there were no ramp-up and transition expenses related to our Mexico expansion this quarter, compared with $1.9 million in the prior year first quarter. We are pleased that brake caliper production is increasing nicely.
Reported fiscal first quarter gross profit as a percentage of net sales was 18.5%, compared with 15.8% a year earlier. Reported gross margin was impacted by 2.2% from the previously mentioned non-cash items, as well as 1.6% from the previously mentioned cash items from transitory costs related to supply chain disruptions. We continue to experience extraordinary global supply chain challenges and inflationary costs, while our price increases were not fully in effect, and we made strategic inventory investments to support business growth and mitigate supply chain challenges. In addition, gross profit, as you would expect, was further impacted by three key items. First, we experienced inflationary costs related to raw materials and supplies and offshore wage increases. The price increases that I mentioned a moment ago should help offset these price pressures.
Second, we experienced ramp-up costs related to our growth initiatives for the new brake caliper product line. With price increases and the ramp-up of our new business opportunities, we expect enhanced gross margins. Finally, gross margin was impacted by product mix. Moving on. Operating expenses were $23 million, compared with $17.8 million for the prior year period. The increase was primarily due to a non-cash loss of $678,000 for the mark-to-market foreign exchange impact of lease liabilities and forward contracts, compared with a non-cash gain of $2.5 million for the prior year first quarter. The remaining $1.9 million increase was primarily due to increased commissions, employee-related expenses, professional fees, travel, outside service expenses, and non-cash foreign currency fluctuations. We reported a net loss of $175,000 or $0.01 per share.
A primary factor was due to higher interest expense, reflecting higher interest rates, which are being addressed by working with our customers, including price increases. We are focused on generating cash flow to pay down borrowings. Additionally, results were impacted by items that totaled $6.9 million or $0.36 per share as follows. These include non-cash items totaling $4.2 million or $0.22 per share, including core and finished premium amortization and revaluation of cores and customer shelves totaling $3.6 million, as previously explained. Non-cash items also included a loss of $678,000, or $0.04 per share on a pre-tax basis for the foreign exchange impact of lease liabilities and forward contracts. Cash items that impacted results include transitory costs related to supply chain disruptions totaling $2.8 million or $0.15 per share.
Additionally, results for the fiscal first quarter were also impacted by higher interest expenses, primarily due to higher interest rates compared with the prior year. Interest expense was $6.9 million, compared with $3.9 million for last year, primarily due to higher interest rates on the accounts receivable discount programs offered by our customers and higher borrowings to support higher sales. Additionally, income tax expense was $589,000 , compared with $947 ,000 in the prior year period. I should also mention that the effective tax rate was impacted in part due to specific foreign jurisdictions from which we did not expect to recognize the benefit of losses. However, we expect these losses will be utilized against future profits, which will benefit future tax rates.
Net income was $861,000 or $0.04 per diluted share in the year-ago period. Results a year earlier were impacted by a total of $7.6 million or $0.39 per diluted share. These include non-cash items totaling $2 million or $0.10 per diluted share, including a non-cash gain of $2.5 million or $0.13 per diluted share on a pre-tax basis for the foreign exchange impact of lease liabilities and forward contracts. Cash items totaling $5.6 million or $0.29 per diluted share, primarily transitory costs related to supply chain disruptions. EBITDA for the first quarter was $10.5 million. EBITDA was impacted by $5.5 million of non-cash items as well as $3.7 million in cash items, primarily due to the transitory costs related to supply chain disruptions.
EBITDA before the impact of non-cash and cash items mentioned above was $19.7 million for the first quarter. EBITDA for the prior year first quarter was $8.9 million. EBITDA a year ago was impacted by $2.7 million of non-cash items as well as $7.3 million of cash expenses, primarily transitory costs related to supply chain disruptions. EBITDA before the impact of non-cash and cash items mentioned above was $18.9 million for the prior year first quarter. Now we will move on to cash flow and key corporate items. Net cash used in operating activities during the fiscal first quarter was $982,000 versus $4.7 million cash used in operating activities in the prior year period.
This reflects working capital requirements, support record sales growth and inventory increases for anticipated business growth, as well as proactive strategic initiatives to address potential supply chain disruptions. We believe that these investments in our business will not only mitigate risk, but will also spur further growth on the company on a year-over-year basis. We do expect to generate cash from operating activities for fiscal 2023. We expect to generate an increase in operating profit on a year-over-year basis, supported by organic growth from customer demand, introduction of new product categories, price increases and operating efficiencies from our footprint expansion that we completed last year. Our return on invested capital on a pre-tax basis at June 30th, 2022 was 18.9%, compared with 22.1% a year earlier.
As our investments bear fruit, we expect to realize further benefit from the expansion of our Mexican operations and the launch of our new brake categories, with expectations of increased returns from both new and existing product lines. Lastly, our net debt at the end of the quarter was approximately $152.6 million, while cash and availability on the revolving credit facility was approximately $95.5 million. For further explanation on the reconciliation of items that impacted results and non-GAAP financial measures, please refer to Exhibits 1 through 3 in this morning's earnings press release. I would now like to open the line for questions.
Thank you. As a reminder, if you would like to ask a question, please press star then one on your telephone keypad. Our first question is from Brian Nagel with Oppenheimer. Your line is open.
Hi. Good morning. I guess I'm sorry.
Hi, Brian.
Okay.
Afternoon, morning, depending where you are.
Sorry. A couple questions. First off, I guess first maybe bigger picture. Just with regard, you talked about the nice sales increase here in the fiscal Q1, drivers behind that. Behind that, I mean, I know we talk a lot about just what you're seeing from a you know, a consumer's perspective, particularly given a lot of the you know, the various factors out there at play right now, whether it be gas prices or you know, just discretionary spending broadly. Then my second question, just with and David, you laid out a lot of the kind of the puts and takes with gross margin here in the quarter.
I guess the question I have is how should we think about, and recognize you don't really have long-term guidance out there, but how should we think about the underlying margin potential of the business as some of these factors begin to normalize?
Okay. Let me start out just with the demand side of the question, y ou know, I think the fundamentals of the aftermarket continue to be strong. I mean, the average age of vehicles is over 12 years. Yes, gas prices have gone up, but, you know, so have alternative costs of travel. We see a fundamental s trength in the demand for non-discretionary parts, and, y ou know, we're sort of seeing that across the board in our product lines.
I would say, you know, the miles driven is a little bit of headwind, but that, you know, we continue to see growth despite that. I think that's reversing out, and, y ou know, we're fairly comfortable with we'll continue to see, you know, strength in sales. We're off to a strong start this quarter, so that looks good.
And, you know, in addition to sort of the base organic growth that I see from the fundamental statistics within the aftermarket, we're also experiencing, you know, and I don't wanna be too exuberant, but I'll call it significant success in our brake pad and rotor business. The demand profile for that is turning out to be very, very strong and, as we ramp up through that, you know, we expect again, you know, we mentioned, you know, that we think our brake product lines can reach $300 million, and, y ou know, I think the speed depends on, you know, how fast we can ramp it and get changeovers done on customers' shelves. Very positive there. Our Mexico expansion is going well. We continue to grow that business.
Our bench-top tester, we have all three retailers committing to roll out the bench-top tester in their stores and more interest from others. That bench-top tester business, while it's taken us some time to get here, it looks like the thesis is unfolding as we expected, but albeit a little bit longer than we thought it would take. Last but not least, I think there's some headwinds a little bit on the EV capital expenditure front where you know some of these OEs are not getting the supply that they want, so they're pulling back on some of the CapEx. Having said that, we see our base fundamentals in that business also perhaps strengthening and sort of a new direction. They're focused on trying to drive revenues from the software.
All in all for us, I think we have so many multiple drivers for our business right now that, you know, we're bullish on our opportunity. When you see more volume that goes through our facilities, you know, we've got an overhead structure designed to support this growth. Leveraging, you know, the existing overhead with incremental revenue will certainly contribute to better contributions on the gross margin side and on the operating income side. I think short term, you know, margin profile, we're looking, you know, in the mid- to upper 20s% as we get through that. We're gonna have to see, you know, what happens with inflation and how we keep up with that with the price increases.
We continue to lag the market on price increases just with the time delay of getting it through our customers. But, you know, we are getting price increases and we're you know, we're certainly eliminating any waste that we possibly can from our structure so that we can enhance the margins as we go forward.
Well, thank you so much. I appreciate all the detail.
Thank you.
Thank you.
The next question is from Matt Koranda with Roth Capital Partners. Your line is open.
Hey, guys. Good morning.
Hey, Matt.
Hey, guys. Maybe just I guess my traditional first question is usually, could you provide a breakdown of revenue by product category, David, between rotating electrical, wheel hub, brake and other products?
Yes. For the first quarter, rotating electrical was 67%, wheel hubs 12%, brake related products 17%, and others was 4%.
Okay, great. Thank you. I think in the release you guys had said that demand had improved throughout the quarter, especially in the May and June timeframe. Curious if you could maybe speak to the magnitude of that improvement. Just any commentary on sort of follow through as we've gotten through July, August, obviously a bit early here, but just any commentary on follow through on that demand through July.
Yeah. I don't know off the top of my head the exact increases between the first month and the back month, but it's double digits. It's continuing. I mean, we expect to have a strong quarter. Demand continues to be strong and that's fueled by, you know, organic demand and growth and then also by the rollout of our new brake pad and brake rotor business. As the quarters progress, we expect our bench-top tester business to continue to increase. We are starting to receive purchase orders from customers there and that's ramping up nicely. A lot of growth drivers.
I think as we get through, I think I'd mentioned in the past, Matt, that, you know, price increases in September, October, we should see the majority of them through that, and, y ou know, we should see the margin profile get better as volume and price increases kick in.
Okay. Got it. Yeah. Since you mentioned price-
Um-
Yeah, yeah.
Go ahead, sorry.
That was helpful, Selwyn. Since you mentioned price, maybe just curious if you could maybe disentangle or help us understand how much price contributed to the 10% year-over-year growth in the quarter. You did mention there's some incremental price action. It sounded like maybe even in addition to what you had talked about on the last call, when you had mentioned higher factoring costs. I'm curious, if that comment was in reference to price action that is incremental to what we've already discussed on calls before, or is that sort of just what's on the come from what you had mentioned on the last call?
I think, you know, it's hard to break down the differential because, you know, the mix of products has changed so dramatically that, you know, I mean, the new product launch certainly contributed, you know, to the growth of the pads and the rotors. There is some price increases that contributed to the growth. I still think that, you know, when I look at fundamental demand through the register, it continues to be strong. Can you repeat the second part of your question, Matt? I missed that. I'm sorry.
Yeah, sure. You had mentioned sort of in the prepared remarks that pricing action was either in place or in the process of being implemented to offset some of the increase in factoring costs that you guys are experiencing just with the higher rates. I'm just curious if that was incremental price take that is over and above what we've discussed on prior calls.
Yes, it is. We have product price increases that are staged to come in and now we're working through the factoring cost increases. That's separate and above, yes.
Okay. All right. Got it. Understood. Then I didn't hear you guys discuss the outlook for fiscal 2023, and maybe I missed it. Are we just to take you know sort of the Q1 in line here with our expectations as sort of a reiteration of the full year fiscal 2023 guidance for revenue and EBITDA? Any changes to sort of the outlook from your standpoint?
No. No changes. We still, you know, have the same outlook but we're feeling real positive about how things are developing.
Great. Just lastly, you mentioned a goal of $300 million for the new brake products that you've launched over the next three to five years. Just curious if, you know, folks should be factoring in sort of a linear progression to that $300 million over the next, call it, four years or so, if I'm taking the midpoint of the goal. How does that sort of play out? When we get to maturity in the brake products business, what does that look like in terms of mix between pads, rotors, calipers, and other brake products?
Okay. I think linear is probably a good example. Let me try and do it one at a time. Linear is probably a good example. I mean, obviously, we're starting from zero. I think that we'll see, you know, as we go through this fiscal year to next fiscal year, I mean, we should see that business, you know, grow by 100% in the next fiscal year, y ou know, obviously, we're coming off a launch year. Then, you know, sequentially after that, we expect double-digit growth in that business. So, you know, that's good. The mix between, y ou know, that's a tougher one to predict.
I mean, we today, we include brake calipers in the brake-related products, so you know, that mix is we're pushing close to $100 million in that business as we get through our commitments with all of our new customers. Rotors and pads, I think we're probably looking you know, with existing commitments, you know, north of $50 million, $60 million just as a kickoff. The breakdown going forward eventually, and I'm not sure when this turns, but the pads and rotors will become the largest revenue generator out of the brake category. That's not to say that the rest of the brake category is not gonna grow significantly.
Just the fact is that brakes and rotors are not, I mean, they're not a failure item, they're a replacement item, and so you get far more volume out of that. I mean, the pads, certainly the most exciting part of the rotor pad equation for us is the, y ou know, we have a very unique proprietary formulation for our brake pads, and it's only you know, it's being sold under our own brand name. It's a proven formulation as well, and a very recognized formulation by the professional installer. As we get this product out, the traction and the ability to roll all of our other products out under the same brand names to customers that may not have tried our brands in the past is pretty significant.
You know, we're bullish on, in particular, the pad business, and the rotors come along as sort of a mandatory match, you know, where you can match up your friction with your metal. Hard to tell you exactly what that mix is gonna be, but again, longer term, as you will look out four to five years, the pads and rotors are gonna be the biggest part of it.
Got it. Yeah, it sounds like, if I'm paraphrasing, you know, calipers probably a little further along in the growth phase...
Yeah.
not hitting maturity yet, but more mature than the other two. Rotors and pads probably eventually eclipse the caliper opportunity over time.
Yeah. The size of the category is so much larger as well, you know, so just by definition, if we can get to our fair share in each of these categories, the pads and rotors should be very significant amount of revenue.
All right. Perfect. Got it. I'll drop back in queue, guys. Thank you.
Okay.
Thank you.
Thanks, Matt. Appreciate it.
Again, please press star one if you'd like to ask a question. The next question is from Bill Dezellem with Tieton Capital Management. Your line is open.
Thank you. I wanna pick up on comment in the release, and someone else has already asked about that momentum building in May and June. Would you discuss in a little more detail why that momentum has been accelerating?
Well, I think I wish I knew exactly, Bill. I couldn't tell you the exact reason, but I can give you some theories. Firstly, I think, you know, if you listen to the retailer public reports, I mean, they. There was a lot of rain early in the quarter, and so certainly DIYers are generally, you know, when weather's bad, you see sort of a decline in their immediate repairs. Then the next part of it is we've had some extreme heat throughout the country and, you know, certainly for our rotating electrical and for the brakes and, you know, when you have extreme heat, you have accelerated failure rates, so I see that.
You know, all over and above that, you've got, you know, we've had delayed update orders that are starting to come in. We have the launch of our new product lines are starting to come in. We have so much new business kicking in multiple categories. We have, you know, new business that's ramping up, you know, that starts now, really, as we go forward, and then price increases. Just coming from, you know, in a positive way, and I wanna be cautiously optimistic, but in a positive way, coming from a lot of different areas.
That's helpful. Thank you. Relative to inventory, we know that you have intentionally increased your inventory. Do you feel like you have won orders as a result of having that higher inventory and maybe in cases where others were not able to fulfill orders and you were able to slide in there?
Yeah. I won't comment on others 'cause I don't really know that as factual, but I can tell you that both significant wins in the brake pad business and in the brake caliper business were dependent on us having the inventory. Again, when you have uncertainty in supply chain, customers are not willing to take a chance without knowing that your supply chain is reliable. They don't wanna take a chance on switching suppliers because the last thing they wanna do is switch a supplier and then find out they're not getting product. Our fill rates are. Considering the environment, our fill rates are actually excellent.
I think at the end of the day, that is a competitive advantage. Yeah.
That, that's helpful. I did just hear what you said, so pardon this next question, but do you feel like inventory has now peaked out, and that it will fall from this level? Or is this really a new normal, particularly given what you just stated?
No, I think the supply chain is opening up. I mean, barring again, you know, if there's, you know, it's hard to predict, you know, shutdowns in different places, but it seems like the supply chain is opening up. I think we've got our arms around it, and I think we have peaked out on inventory. Certainly inventory as a percentage of revenue should start coming down, and we should see some, you know, positive cash flow and some easing of the inventory requirement.
Great. Thank you. I believe that with everything you've said, I think I understand the answer to this next question, but are you feeling like the March quarter, so last quarter, was the low point for both reported and adjusted gross margin? We had growth this quarter sequentially, but that will continue now going forward.
Yeah. Yeah. Look, I think theoretically that is correct. I mean, you know, we are subject to fluctuations in foreign exchange, which is unpredictable. But putting that aside, I mean, interestingly enough, I read this morning or yesterday that Warren Buffett made a comment on that people get confused assessing Berkshire Hathaway's performance because of the mark-to-market fluctuations in his portfolio. We have the same fluctuations in mark-to-market, whether it be for foreign exchange relating to our lease liabilities or to the non-cash write-down of closing customer shelves.
I just think that he said, you know, he encourages people to ignore those, when evaluating the his company's health, and I feel the same way. If you ignore those, I think you're correct. I think that we did see a low point. Yes. I mean, I think our fundamentals today, I mean, what we've done over the last five years, and I've been trying to say it as clearly as I can, is we've done a few things. We've changed the footprint of our organization to leverage low-cost production opportunities. We've also changed the footprint to become less dependent on China imports, which makes us less susceptible to the Chinese tariffs.
We've also increased capacity to leverage the existing G&A so that we can start seeing, you know, better operating income margins. We've also leveraged our capacity to take on all this, you know, the new product lines and the new business that we're getting, which ultimately will help the operating absorption and gross margin profile. All of that now is fundamentally completed. We've now just got to ramp up, get the new business under control, start shipping that, and, y ou know, again, we've given guidance, and we're optimistic about our guidance and we're optimistic about our business in general. Despite a pretty unpredictable time, I just do wanna be cautious there, y ou know, it is unpredictability in the world today, as we all know.
Putting that aside, you know, we feel like our strategic initiatives are all set to start reaping, you know, the benefits from.
Great. Thank you. If we have time for one more, I'd like to ask relative to the interest expense. David, what alternatives, if any, do you see to reduce your interest expense other than paying down debt and avoid the obvious?
As we had commented, we are working with our customers to address price increases, and as you pointed out, also generating positive cash flow for the year to pay down borrowings.
Those price increases are essentially in part to offset the higher AR factoring costs?
Just overall, market rates that have increased.
Great. Thank you both.
Thank you, Bill.
Thank you.
We have no further questions at this time. Mr. Joffe, I'll turn it to you for any closing remarks.
Okay. Well, I think, you know, as you've all heard and, you know, just in summary, we're excited about our future and the prospects ahead of us. We've built a solid foundation for both top line and bottom line growth from our existing product lines, and supported by strong demand for replacement parts and tailwinds from an aging car parc. In closing, as usual, I wanna thank all of our team members for their ongoing commitment and customer-centric focus on service. They've been absolutely outstanding. During these challenging times, we are particularly focused on the safety and wellbeing of our employees, and I'm extremely proud of our team members and company for their performance and conduct. We appreciate, you know, all their continued support.
I thank, you know, you all again for joining us for the call, and we look forward to speaking with you when we host our fiscal 2023 second quarter conference call in November and at investor conferences in the future. Thank you.
Ladies, and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.