2nd
Quarter Sales of $177 million, up
Slightly Year over Year
14th Consecutive Quarter of Year
over Year Sales Growth
TORRANCE, Calif., Aug. 1, 2023
/PRNewswire/ -- CarParts.com, Inc. (NASDAQ: PRTS),
one of the leading eCommerce providers of automotive parts and
accessories, and a one-stop shop for vehicle repair and maintenance
needs, is reporting results for the second quarter ended July
1, 2023.
Second Quarter 2023 Summary vs. Year-Ago
Quarter
- Net sales increased to $177.0
million, up slightly year-over-year and up 12% on a two-year
stack.
- Gross profit decreased 2% to $60.4
million, with gross margin of 34.2%.
- Net loss was ($0.7) million,
compared to net income of $4.1
million.
- Adjusted EBITDA of $6.3 million
vs. $8.3 million.
- Cash of $79.2 million and no
revolver debt.
- Repurchased 250,000 shares for $1.05
million during the quarter.
- Launched mobile app on both iOS and Android.
Management Commentary
"Q2 2023 marks our 14th
consecutive quarter of year-over-year growth and the highest sales
level for any quarter in our company's history. The $79 million in cash on our balance sheet at the
end of the quarter is a testament to the strong unit economics and
cash generation capabilities of our business." said David Meniane,
CEO of CarParts.com. "For the remainder of the year, we will
be executing on six key strategic pillars: eCommerce fundamentals,
digital transformation, assortment and catalog, marketing and
customer experience, supply chain and logistics, and
innovation."
"CarParts.com has never been better positioned than it is
today. As we continue to build a world class organization,
focused on our strategic pillars, we believe we are creating a
foundation that is making our company significantly more valuable
and will benefit our stakeholders for years to come."
Second Quarter 2023 Financial Results
Net sales in the second quarter of 2023 were $177.0 million, up slightly from the year-ago
quarter.
Gross profit in the second quarter decreased 2% to $60.4 million compared to $61.9 million in the year-ago quarter, with gross
margin decreasing 90 basis points to 34.2%, primarily driven by
higher outbound transportation costs and product mix.
Total operating expenses in the second quarter were $61.3 million compared to $57.6 million in the year-ago quarter. The
increase was primarily driven by investments in our business, in
addition to the absence of a prior period reversal in stock
compensation expense from the departure of a key executive,
combined with higher advertising expense, partially offset by a
decrease in fulfillment expense primarily due to an improvement in
distribution center costs.
Net loss in the second quarter was ($0.7) million compared
to net income of $4.1 million in the
year-ago quarter.
Adjusted EBITDA in the second quarter was $6.3 million compared to $8.3 million in the year-ago quarter.
On July 1, 2023, the Company had a cash balance of
$79.2 million and no revolver debt,
compared to no revolver debt and a $18.8 million cash balance at prior fiscal
year-end December 31, 2022.
Conference Call
CarParts.com CEO David Meniane,
CFO Ryan Lockwood and COO
Michael Huffaker will host a
conference call today to discuss the results, followed by a
question and answer period.
Date: Tuesday, August 1, 2023
Time: 5:00 p.m. Eastern time
(2:00 p.m. Pacific time)
Webcast: www.carparts.com/investor/news-events
To listen to the live call, please click the link above to
access the webcast. A replay of the audio webcast will be archived
on the Company's website at
www.carparts.com/investor.
About CarParts.com, Inc.
CarParts.com is the leading destination for vehicle care,
maintenance, and accessories. Our easy-to-use, mobile-friendly
website and app allow drivers to access quality parts and
services without the guesswork typically associated with car repair
or the added expense of brick-and-mortar stores. Our
company-operated fulfillment network allows us to quickly deliver
the quality parts from top brands to our customers nationwide.
At CarParts.com, our global team is dedicated to removing the
friction from our customers' vehicle care and Empowering Drivers
Along Their Journey.
CarParts.com is headquartered in Torrance, California.
Non-GAAP Financial Measures
Regulation G, and other provisions of the Securities Exchange
Act of 1934, as amended, define and prescribe the conditions for
use of certain non-GAAP financial information. We provide "Adjusted
EBITDA" in this earnings release and on today's scheduled
conference call, which are non-GAAP financial measures. Adjusted
EBITDA consist of net (loss) income before (a) interest
(income) expense, net; (b) income tax provision;
(c) depreciation and amortization expense;
(d) amortization of intangible assets; and
(e) share-based compensation expense. A reconciliation of
Adjusted EBITDA to net (loss) income is provided below.
The Company believes that these non-GAAP financial measures
provide important supplemental information to management and
investors. These non-GAAP financial measures reflect an additional
way of viewing aspects of the Company's operations that, when
viewed with the GAAP results and the accompanying reconciliations
to corresponding GAAP financial measures, provides a more complete
understanding of factors and trends affecting the Company's
business and results of operations.
Management uses Adjusted EBITDA as measures of the Company's
operating performance because it assists in comparing the Company's
operating performance on a consistent basis by removing the impact
of stock compensation expense as well as other items that we do not
believe are representative of our ongoing operating performance.
Internally, these non-GAAP measures are also used by management for
planning purposes, including the preparation of internal budgets;
for allocating resources to enhance financial performance; and for
evaluating the effectiveness of operational strategies. The Company
also believes that analysts and investors use these non-GAAP
measures as supplemental measures to evaluate the ongoing
operations of companies in our industry.
These non-GAAP financial measures are used in addition to and in
conjunction with results presented in accordance with GAAP and
should not be relied upon to the exclusion of GAAP financial
measures. Management strongly encourages investors to review the
Company's consolidated financial statements in their entirety and
to not rely on any single financial measure. Because non-GAAP
financial measures are not standardized, it may not be possible to
compare these financial measures with other companies' non-GAAP
financial measures having the same or similar names. In addition,
the Company expects to continue to incur expenses similar to the
non-GAAP adjustments described above, and exclusion of these items
from the Company's non-GAAP measures should not be construed as an
inference that these costs are all unusual, infrequent or
non-recurring.
Safe Harbor Statement
This press release contains statements which are based
on management's current expectations, estimates and projections
about the Company's business and its industry, as well as certain
assumptions made by the Company. These statements are forward
looking statements for the purposes of the safe harbor provided by
Section 21E of the Securities Exchange Act of 1934, as amended
and Section 27A of the Securities Act of 1933, as amended.
Words such as "anticipates," "could," "expects," "intends,"
"plans," "potential," "believes," "predicts," "projects," "seeks,"
"estimates," "may," "will," "would," "will likely continue" and
variations of these words or similar expressions are intended to
identify forward-looking statements. These statements include,
but are not limited to, statements regarding our
future operating results and financial condition, our
potential growth, our ability to innovate, our ability to gain
market share, and our ability to expand and improve our product
offerings. We undertake no obligation to revise or update publicly
any forward-looking statements for any reason. These statements are
not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to
predict. Therefore, our actual results could differ materially
and adversely from those expressed in any forward-looking
statements as a result of various factors.
Important factors that may cause such a difference include,
but are not limited to, competitive pressures, our dependence on
search engines to attract customers, demand for the Company's
products, the online market and channel mix for aftermarket auto
parts, the economy in general, increases in commodity and component
pricing that would increase the Company's product costs, the
operating restrictions in its credit agreement, the weather and any
other factors discussed in the Company's filings with the
Securities and Exchange Commission (the "SEC"), including the Risk
Factors contained in the Company's Annual Report on Form 10–K
and Quarterly Reports on Form 10–Q, which are available
at www.carparts.com/investor and the SEC's website
at www.sec.gov. You are urged to consider these factors
carefully in evaluating the forward-looking statements in this
release and are cautioned not to place undue reliance on such
forward-looking statements, which are qualified in their entirety
by this cautionary statement. Unless otherwise required by
law, the Company expressly disclaims any obligation to update
publicly any forward-looking statements, whether as result of new
information, future events or otherwise.
Investor Relations:
Ryan Lockwood, CFA
IR@carparts.com
Summarized information for the periods presented is as follows
(in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks
Ended
|
|
Thirteen
Weeks
Ended
|
|
Twenty-Six
Weeks
Ended
|
|
Twenty-Six
Weeks
Ended
|
|
|
|
July 1, 2023
|
|
July 2, 2022
|
|
July 1, 2023
|
|
July 2, 2022
|
|
Net sales
|
|
$
|
176.98
|
|
$
|
176.22
|
|
$
|
352.47
|
|
$
|
342.27
|
|
Gross profit
|
|
$
|
60.44
|
|
$
|
61.94
|
|
$
|
122.99
|
|
$
|
123.10
|
|
|
|
|
34.2
|
%
|
|
35.1
|
%
|
|
34.9
|
%
|
|
36.0
|
%
|
Operating
expense
|
|
$
|
61.29
|
|
$
|
57.64
|
|
$
|
123.20
|
|
$
|
116.42
|
|
|
|
|
34.6
|
%
|
|
32.7
|
%
|
|
35.0
|
%
|
|
34.0
|
%
|
Net (loss)
income
|
|
$
|
(0.67)
|
|
$
|
4.12
|
|
$
|
0.38
|
|
$
|
6.22
|
|
|
|
|
(0.4)
|
%
|
|
2.3
|
%
|
|
0.1
|
%
|
|
1.8
|
%
|
Adjusted
EBITDA
|
|
$
|
6.30
|
|
$
|
8.32
|
|
$
|
15.67
|
|
$
|
17.74
|
|
|
|
|
3.6
|
%
|
|
4.7
|
%
|
|
4.4
|
%
|
|
5.2
|
%
|
The table below reconciles net (loss) income to Adjusted EBITDA
for the periods presented (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirteen Weeks
Ended
|
|
Twenty-Six
Weeks Ended
|
|
Twenty-Six
Weeks Ended
|
|
|
July 1, 2023
|
|
July 2, 2022
|
|
July 1, 2023
|
|
July 2, 2022
|
Net (loss)
income
|
|
$
|
(671)
|
|
$
|
4,118
|
|
$
|
380
|
|
$
|
6,221
|
Depreciation &
amortization
|
|
|
4,247
|
|
|
3,308
|
|
|
8,166
|
|
|
6,265
|
Amortization of
intangible assets
|
|
|
9
|
|
|
27
|
|
|
20
|
|
|
55
|
Interest (income)
expense, net
|
|
|
(221)
|
|
|
342
|
|
|
126
|
|
|
633
|
Taxes
|
|
|
141
|
|
|
17
|
|
|
282
|
|
|
69
|
EBITDA
|
|
$
|
3,505
|
|
$
|
7,812
|
|
$
|
8,974
|
|
$
|
13,243
|
Stock compensation
expense
|
|
$
|
2,797
|
|
$
|
506
|
|
|
6,696
|
|
|
4,498
|
Adjusted
EBITDA
|
|
$
|
6,302
|
|
$
|
8,318
|
|
$
|
15,670
|
|
$
|
17,741
|
CARPARTS.COM, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE
OPERATIONS (Unaudited, In Thousands, Except Per Share
Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Twenty-Six Weeks
Ended
|
|
|
July 1,
|
|
July 2,
|
|
July 1,
|
|
July 2,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
|
$
|
176,978
|
|
$
|
176,220
|
|
$
|
352,470
|
|
$
|
342,273
|
Cost of sales
(1)
|
|
|
116,536
|
|
|
114,285
|
|
|
229,477
|
|
|
219,176
|
Gross profit
|
|
|
60,442
|
|
|
61,935
|
|
|
122,993
|
|
|
123,097
|
Operating
expense
|
|
|
61,286
|
|
|
57,644
|
|
|
123,201
|
|
|
116,415
|
(Loss) income from
operations
|
|
|
(844)
|
|
|
4,291
|
|
|
(208)
|
|
|
6,682
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
|
639
|
|
|
190
|
|
|
1,553
|
|
|
246
|
Interest
expense
|
|
|
(325)
|
|
|
(346)
|
|
|
(683)
|
|
|
(638)
|
Total other income
(expense), net
|
|
|
314
|
|
|
(156)
|
|
|
870
|
|
|
(392)
|
(Loss) income before
income taxes
|
|
|
(530)
|
|
|
4,135
|
|
|
662
|
|
|
6,290
|
Income tax
provision
|
|
|
141
|
|
|
17
|
|
|
282
|
|
|
69
|
Net (loss)
income
|
|
|
(671)
|
|
|
4,118
|
|
|
380
|
|
|
6,221
|
Other comprehensive
gain (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
124
|
Unrealized gain (loss)
on deferred compensation trust assets
|
|
|
24
|
|
|
(100)
|
|
|
48
|
|
|
(134)
|
Total other
comprehensive gain (loss)
|
|
|
24
|
|
|
4
|
|
|
48
|
|
|
(10)
|
Comprehensive (loss)
income
|
|
$
|
(647)
|
|
$
|
4,122
|
|
$
|
428
|
|
$
|
6,211
|
Net (loss) income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss) income
per share
|
|
$
|
(0.01)
|
|
$
|
0.08
|
|
$
|
0.01
|
|
$
|
0.12
|
Diluted net (loss)
income per share
|
|
$
|
(0.01)
|
|
$
|
0.07
|
|
$
|
0.01
|
|
$
|
0.11
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of basic net (loss) income per share
|
|
|
56,532
|
|
|
54,210
|
|
|
55,789
|
|
|
53,744
|
Shares used in
computation of diluted net (loss) income per share
|
|
|
56,532
|
|
|
57,210
|
|
|
58,028
|
|
|
57,315
|
|
|
|
(1) Excludes
depreciation and amortization expense which is included in
operating expense.
|
CARPARTS.COM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS (Unaudited, In Thousands, Except Par Value
Data)
|
|
|
|
|
|
|
|
|
|
July 1,
|
|
December 31,
|
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
79,213
|
|
$
|
18,767
|
Accounts receivable,
net
|
|
|
7,483
|
|
|
6,406
|
Inventory,
net
|
|
|
113,739
|
|
|
136,026
|
Other current
assets
|
|
|
6,675
|
|
|
6,672
|
Total current
assets
|
|
|
207,110
|
|
|
167,871
|
Property and equipment,
net
|
|
|
23,620
|
|
|
24,290
|
Right-of-use - assets -
operating leases, net
|
|
|
21,737
|
|
|
23,951
|
Right-of-use - assets -
finance leases, net
|
|
|
17,110
|
|
|
19,750
|
Other non-current
assets
|
|
|
2,472
|
|
|
2,537
|
Total
assets
|
|
$
|
272,049
|
|
$
|
238,399
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
82,998
|
|
$
|
57,616
|
Accrued
expenses
|
|
|
19,482
|
|
|
16,466
|
Right-of-use -
obligation - operating, current
|
|
|
4,726
|
|
|
4,571
|
Right-of-use -
obligation - finance, current
|
|
|
4,432
|
|
|
4,753
|
Other current
liabilities
|
|
|
5,546
|
|
|
4,622
|
Total current
liabilities
|
|
|
117,184
|
|
|
88,028
|
Right-of-use -
obligation - operating, non-current
|
|
|
19,024
|
|
|
21,412
|
Right-of-use -
obligation - finance, non-current
|
|
|
13,771
|
|
|
15,916
|
Other non-current
liabilities
|
|
|
3,312
|
|
|
2,971
|
Total
liabilities
|
|
|
153,291
|
|
|
128,327
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common stock, $0.001
par value; 100,000 shares authorized; 56,914 and 54,693 shares
issued and outstanding as of July 1, 2023 and
December 31, 2022 (of which 2,815 and 2,565 are treasury
stock, respectively)
|
|
|
59
|
|
|
57
|
Treasury
stock
|
|
|
(8,672)
|
|
|
(7,625)
|
Additional paid-in
capital
|
|
|
306,568
|
|
|
297,265
|
Accumulated other
comprehensive income
|
|
|
1,174
|
|
|
1,126
|
Accumulated
deficit
|
|
|
(180,371)
|
|
|
(180,751)
|
Total stockholders'
equity
|
|
|
118,758
|
|
|
110,072
|
Total liabilities and
stockholders' equity
|
|
$
|
272,049
|
|
$
|
238,399
|
CARPARTS.COM, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited, In
Thousands)
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks
Ended
|
|
|
July 1,
|
|
July 2,
|
|
|
2023
|
|
2022
|
Operating
activities
|
|
|
|
|
|
|
Net income
|
|
$
|
380
|
|
$
|
6,221
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
|
8,166
|
|
|
6,265
|
Amortization of
intangible assets
|
|
|
20
|
|
|
55
|
Share-based
compensation expense
|
|
|
6,696
|
|
|
4,498
|
Stock awards issued for
non-employee director service
|
|
|
11
|
|
|
11
|
Stock awards related to
officers and directors stock purchase plan from payroll
deferral
|
|
|
—
|
|
|
27
|
Gain from disposition
of assets
|
|
|
(75)
|
|
|
(17)
|
Amortization of
deferred financing costs
|
|
|
32
|
|
|
21
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,090)
|
|
|
(2,070)
|
Inventory
|
|
|
22,286
|
|
|
(24,165)
|
Other current
assets
|
|
|
(4)
|
|
|
(1,739)
|
Other non-current
assets
|
|
|
60
|
|
|
(741)
|
Accounts payable and
accrued expenses
|
|
|
28,630
|
|
|
17,466
|
Other current
liabilities
|
|
|
925
|
|
|
(109)
|
Right-of-use obligation
- operating leases - current
|
|
|
380
|
|
|
(105)
|
Right-of-use obligation
- operating leases - long-term
|
|
|
(398)
|
|
|
(20)
|
Other non-current
liabilities
|
|
|
342
|
|
|
(139)
|
Net cash provided by
operating activities
|
|
|
66,361
|
|
|
5,459
|
Investing
activities
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(4,669)
|
|
|
(7,797)
|
Proceeds from sale of
property and equipment
|
|
|
83
|
|
|
44
|
Net cash used in
investing activities
|
|
|
(4,586)
|
|
|
(7,753)
|
Financing
activities
|
|
|
|
|
|
|
Borrowings from
revolving loan payable
|
|
|
117
|
|
|
5,296
|
Payments made on
revolving loan payable
|
|
|
(117)
|
|
|
(5,296)
|
Payments on finance
leases
|
|
|
(2,467)
|
|
|
(1,966)
|
Repurchase of treasury
stock
|
|
|
(1,052)
|
|
|
—
|
Net proceeds from
issuance of common stock for ESPP
|
|
|
221
|
|
|
432
|
Proceeds from exercise
of stock options
|
|
|
1,969
|
|
|
929
|
Net cash used in
financing activities
|
|
|
(1,329)
|
|
|
(605)
|
Effect of exchange rate
changes on cash
|
|
|
—
|
|
|
(21)
|
Net change in cash and
cash equivalents
|
|
|
60,446
|
|
|
(2,920)
|
Cash and cash
equivalents, beginning of period
|
|
|
18,767
|
|
|
18,144
|
Cash and cash
equivalents, end of period
|
|
$
|
79,213
|
|
$
|
15,224
|
Supplemental disclosure
of non-cash investing and financing activities:
|
|
|
|
|
|
|
Right-of-use finance
asset acquired
|
|
$
|
—
|
|
$
|
7,235
|
Accrued asset
purchases
|
|
$
|
408
|
|
$
|
1,060
|
Share-based
compensation expense capitalized in property and
equipment
|
|
$
|
411
|
|
$
|
579
|
Stock issued for
services
|
|
$
|
—
|
|
$
|
81
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
Cash paid during the
period for income taxes
|
|
$
|
155
|
|
$
|
148
|
Cash (received) paid
during the period for interest (income) expense, net
|
|
$
|
(32)
|
|
$
|
653
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/carpartscom-reports-highest-quarterly-sales-in-company-history-301890776.html
SOURCE CarParts.com, Inc.