What Motorcar Parts of America, Inc. told the SEC could break it.

Motorcar Parts derives a substantial portion of sales from a few large customers — its three largest were 86% of net sales in fiscal 2025 and its single largest customer 39% — so losing or reducing sales to any one would materially harm results.

“Sales to our three largest customers in the aggregate represented 86%, 83%, and 84%, and sales to our largest customer, represented 39%, 35%, and 37% of our net sales during fiscal 2025, 2024 and 2023, respectively.”

A substantial portion of Motorcar Parts' operations — headquarters, remanufacturing, and warehouse facilities — are in earthquake-prone Southern California, Baja California (Mexico), and Asia, so a natural disaster there could cause inventory loss and delivery disruption.

“A substantial portion of our operations are located in Southern California, Baja California, Mexico, and Asia, including our headquarters, remanufacturing and warehouse facilities.”

Many components used in remanufacturing are available from a very limited number of suppliers, and Used Core supply can be disrupted; Motorcar Parts is sometimes forced to buy new units to obtain hard-to-get cores, leaving it vulnerable to supply disruption.

“a number of the other components used in the remanufacturing process are available from a very limited number of suppliers. We are, as a result, vulnerable to any disruption in component supply and often are forced to purchase new units to obtain particularly difficult to get cores”

The U.S. has placed increased tariffs on goods from China and other countries (including products Motorcar Parts imports) and may impose more; combined with USMCA/trade-policy uncertainty and its Mexico operations, this could materially raise costs and hurt results.

“The U.S. government has recently placed increased tariffs on certain goods imported from China and other countries and may impose new tariffs on goods imported from China and other countries, including products that we import.”