Fenix Parts Inc. (NASDAQ: FENX) reported a better quarter in 1Q2016 than it did in the last 12 months and if you listen to the management carefully, you get the impression that things can only get better in the coming quarters and year.
According to CEO, Kent Robertson, the latest quarter was helped by favorable industry dynamics. But strong execution by the management team was also largely responsible for the gains. As such, favorable dynamics coupled with strong execution helped to drive sales of recycled OEM parts across Fenix Parts Inc. (NASDAQ: FENX)’s facilities.
Robertson disclosed that even the three locations they had acquired in 2H2015 posted an increase in recycled OEM parts sales. For the acquired facilities, Robertson said their focus remains on realizing synergies. However, the greatest commitment at Fenix Parts appears to be on improving organic growth.
The management sees a bright future for Fenix Parts given factors that include stabilization of the commodities market and improvement in the OEM parts division.
What transpired in 1Q for Fenix Parts Inc. (NASDAQ: FENX)?
Fenix Parts Inc. (NASDAQ: FENX) reported 9% increase in net revenue over the prior quarter to $32.8 million. But net revenue was up 4% over a similar quarter a year ago.
The company said that sales at its recycled OEM division increased to $28.8 million compared to $26.7 million for 4Q2015 and $27.3 million for the year-ago quarter. Sales booked in the recycled OEM business included revenues contributed by Tri-City, Ocean County and Butler.
From what Fenix Parts Inc. (NASDAQ: FENX) called ancillary activities, the company generated revenue of $4 million. That was an improvement from $3.5 million in the prior quarter but a slight decline from $4.1 million in the year-ago quarter.
Fenix Parts reported generating revenue of $3.1 million in 1Q2016 from its Canadian operations. That was a drop from $3.7 million in 4Q2015 and $3.4 million in 1Q2015. The decline in revenue contribution from Canadian operations was caused by changes in the company’s sourcing strategy.
Prices improve but remain down
Fenix Parts Inc. (NASDAQ: FENX) said that although commodity prices rose in 1Q2016, it was only a slight increase over 4Q and that left prices substantially lower than where they were a year ago.
Fenix Parts posted a net loss of $41 million and operating loss of $44.2 million.