Record
Quarterly Sales of $176.2 million, up 12%
year over year
10th Consecutive Quarter of Year over Year Sales Growth
Net Income of $4.1
million and Adjusted EBITDA of $8.3
million
TORRANCE, Calif., Aug. 2, 2022
/PRNewswire/ -- CarParts.com, Inc. (NASDAQ: PRTS), one of the
leading e-commerce providers of automotive parts and accessories,
is reporting results for the second quarter ended July
2, 2022.
Second Quarter 2022 Summary vs. Year-Ago
Quarter
- Net sales increased 12% year over year to $176.2
million and increased 44% on a two-year stack.
- Gross profit increased 16% to $61.9
million, with gross margin increasing 120 basis points to
35.1%.
- Net income was $4.1 million or
$0.07 per diluted share, compared to
net income of $2.1 million or
$0.04 per diluted share.
- Adjusted EBITDA of $8.3 million
vs. $8.3 million.
- Entered into an amended and restated $75
million credit facility with the ability to increase to
$150 million, subject to certain
terms and conditions. The facility is undrawn as of July 2, 2022.
- For net revenues in the back half of 2022, the company projects
double-digit year-over-year growth.
Management Commentary
"Q2 was another record for our company," said David Meniane, CEO
of CarParts.com. "We are excited to build a trusted and disruptive
platform where we can help our customers solve their auto repair
and maintenance needs. Our goal is to become the number one
destination for customers that need help fixing their
vehicles."
"One of our core strategic pillars is innovation and I'm excited
to announce our Do-It-For-Me experience is currently live on our
website in certain test markets."
Second Quarter 2022 Financial Results
Net sales in the second quarter of 2022 were $176.2 million compared to $157.5 million in the year-ago
quarter. The increase was primarily driven by continued
strong demand and the expanded capacity from
our Grand Prairie distribution center.
Gross profit in the second quarter increased 16% to $61.9 million compared to $53.3 million in the second quarter last year,
with gross margin increasing 120 basis points to 35.1%.
Total operating expenses in the second quarter were $57.6 million compared to $51.0 million in the second quarter last year due
to an increase in sales and investments in the business.
Net income in the second quarter was $4.1
million compared to a net income of $2.1 million in the second quarter last year.
Adjusted EBITDA in the second quarter was $8.3 million compared to $8.3 million in the year-ago quarter.
On July 2, 2022, the Company had a
cash balance of $15.2 million, no
revolver debt and no outstanding trade letters of credit ("LCs"),
compared to no revolver debt, no outstanding trade LCs and a
$18.1 million cash
balance at prior fiscal year-end January 1,
2022.
Conference Call
CarParts.com CEO David Meniane
and CFO Ryan Lockwood will host a
conference call today to discuss the results, followed by a
question and answer period.
Date: Tuesday, August 2, 2022
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.
With over 25 years of experience, and more than 50 million parts
delivered, we've streamlined our website and sourcing network to
better serve the way drivers get the parts they need. Utilizing the
latest technologies and design principles, we've created an
easy-to-use, mobile-friendly shopping experience that, alongside
our own nationwide distribution network, cuts out the
brick-and-mortar supply chain costs and provides quality parts at a
budget-friendly price.
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," which is a non-GAAP financial measure. Adjusted EBITDA
consists of net income (loss) before (a) interest 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 income (loss) is provided
below.
The Company believes that this non-GAAP financial measure
provides important supplemental information to management and
investors. This non-GAAP financial measure reflects an additional
way of viewing aspects of the Company's operations that, when
viewed with the GAAP results and the accompanying reconciliation 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 one measure 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, this non-GAAP measure is 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 Adjusted EBITDA as a
supplemental measure to evaluate the ongoing operations of
companies in our industry.
This non-GAAP financial measure is 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 2, 2022
|
|
July 3, 2021
|
|
July 2, 2022
|
|
July 3, 2021
|
|
Net sales
|
|
$
|
176.22
|
|
$
|
157.54
|
|
$
|
342.27
|
|
$
|
302.34
|
|
Gross profit
|
|
$
|
61.94
|
|
$
|
53.35
|
|
$
|
123.10
|
|
$
|
102.52
|
|
|
|
|
35.1
|
%
|
|
33.9
|
%
|
|
36.0
|
%
|
|
33.9
|
%
|
Operating
expense
|
|
$
|
57.64
|
|
$
|
51.01
|
|
$
|
116.42
|
|
$
|
102.69
|
|
|
|
|
32.7
|
%
|
|
32.4
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
Net income
(loss)
|
|
$
|
4.12
|
|
$
|
2.07
|
|
$
|
6.22
|
|
$
|
(0.65)
|
|
|
|
|
2.43
|
%
|
|
1.3
|
%
|
|
1.8
|
%
|
|
(0.2)
|
%
|
Adjusted
EBITDA
|
|
$
|
8.49
|
|
$
|
8.35
|
|
$
|
17.74
|
|
$
|
11.91
|
|
|
|
|
4.7
|
%
|
|
5.3
|
%
|
|
5.2
|
%
|
|
3.9
|
%
|
The table below
reconciles net income (loss) to Adjusted EBITDA for the periods
presented (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirteen Weeks
Ended
|
|
Twenty-Six
Weeks Ended
|
|
Twenty-Six
Weeks Ended
|
|
|
July 2, 2022
|
|
July 3, 2021
|
|
July 2, 2022
|
|
July 3, 2021
|
Net income
(loss)
|
|
$
|
4,118
|
|
$
|
2,072
|
|
$
|
6,221
|
|
$
|
(650)
|
Depreciation &
amortization
|
|
|
3,308
|
|
|
2,171
|
|
|
6,265
|
|
|
4,550
|
Amortization of
intangible assets
|
|
|
27
|
|
|
27
|
|
|
55
|
|
|
55
|
Interest expense,
net
|
|
|
342
|
|
|
263
|
|
|
633
|
|
|
512
|
Taxes
|
|
|
17
|
|
|
113
|
|
|
69
|
|
|
168
|
EBITDA
|
|
$
|
7,812
|
|
$
|
4,646
|
|
$
|
13,243
|
|
$
|
4,635
|
Stock compensation
expense
|
|
$
|
506
|
|
$
|
3,699
|
|
|
4,498
|
|
|
7,272
|
Adjusted
EBITDA
|
|
$
|
8,318
|
|
$
|
8,345
|
|
$
|
17,741
|
|
$
|
11,907
|
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 2,
|
|
July 3,
|
|
July 2,
|
|
July 3,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales
|
|
$
|
176,220
|
|
$
|
157,536
|
|
$
|
342,273
|
|
$
|
302,338
|
Cost of sales
(1)
|
|
|
114,285
|
|
|
104,187
|
|
|
219,176
|
|
|
199,815
|
Gross profit
|
|
|
61,935
|
|
|
53,349
|
|
|
123,097
|
|
|
102,523
|
Operating
expense
|
|
|
57,644
|
|
|
51,013
|
|
|
116,415
|
|
|
102,685
|
Income (loss) from
operations
|
|
|
4,291
|
|
|
2,336
|
|
|
6,682
|
|
|
(162)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
190
|
|
|
116
|
|
|
246
|
|
|
197
|
Interest
expense
|
|
|
(346)
|
|
|
(267)
|
|
|
(638)
|
|
|
(517)
|
Total other expense,
net
|
|
|
(156)
|
|
|
(151)
|
|
|
(392)
|
|
|
(320)
|
Income (loss) before
income taxes
|
|
|
4,135
|
|
|
2,185
|
|
|
6,290
|
|
|
(482)
|
Income tax
provision
|
|
|
17
|
|
|
113
|
|
|
69
|
|
|
168
|
Net income
(loss)
|
|
|
4,118
|
|
|
2,072
|
|
|
6,221
|
|
|
(650)
|
Other comprehensive
gain (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
104
|
|
|
16
|
|
|
124
|
|
|
30
|
Unrealized (loss) gain
on deferred compensation trust assets
|
|
|
(100)
|
|
|
38
|
|
|
(134)
|
|
|
73
|
Total other
comprehensive gain (loss)
|
|
|
4
|
|
|
54
|
|
|
(10)
|
|
|
103
|
Comprehensive income
(loss)
|
|
$
|
4,122
|
|
$
|
2,126
|
|
$
|
6,211
|
|
$
|
(547)
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share
|
|
$
|
0.08
|
|
$
|
0.04
|
|
$
|
0.12
|
|
$
|
(0.01)
|
Diluted net income
(loss) per share
|
|
$
|
0.07
|
|
$
|
0.04
|
|
$
|
0.11
|
|
$
|
(0.01)
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of basic net income (loss) per share
|
|
|
54,210
|
|
|
51,684
|
|
|
53,744
|
|
|
50,222
|
Shares used in
computation of diluted net income (loss) per share
|
|
|
57,210
|
|
|
57,122
|
|
|
57,315
|
|
|
50,222
|
(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 2,
|
|
January 1,
|
|
|
2022
|
|
2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
15,224
|
|
$
|
18,144
|
Accounts receivable,
net
|
|
|
7,085
|
|
|
5,015
|
Inventory,
net
|
|
|
163,016
|
|
|
138,851
|
Other current
assets
|
|
|
8,299
|
|
|
6,592
|
Total current
assets
|
|
|
193,624
|
|
|
168,602
|
Property and equipment,
net
|
|
|
24,172
|
|
|
20,736
|
Right-of-use - assets -
operating leases, net
|
|
|
26,103
|
|
|
28,680
|
Right-of-use - assets -
finance leases, net
|
|
|
20,289
|
|
|
15,130
|
Other non-current
assets
|
|
|
2,711
|
|
|
2,188
|
Total
assets
|
|
$
|
266,899
|
|
$
|
235,336
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
82,887
|
|
$
|
67,372
|
Accrued
expenses
|
|
|
18,724
|
|
|
17,517
|
Customer
deposits
|
|
|
571
|
|
|
826
|
Right-of-use -
obligation - operating, current
|
|
|
4,068
|
|
|
4,201
|
Right-of-use -
obligation - finance, current
|
|
|
4,489
|
|
|
2,953
|
Other current
liabilities
|
|
|
4,071
|
|
|
3,925
|
Total current
liabilities
|
|
|
114,810
|
|
|
96,794
|
Right-of-use -
obligation - operating, non-current
|
|
|
23,784
|
|
|
26,367
|
Right-of-use -
obligation - finance, non-current
|
|
|
16,602
|
|
|
12,868
|
Other non-current
liabilities
|
|
|
3,449
|
|
|
3,739
|
Total
liabilities
|
|
|
158,645
|
|
|
139,768
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common stock, $0.001
par value; 100,000 shares authorized; 54,360 and 52,960 shares
issued
and outstanding as of July 2, 2022 and January 1,
2022 (of which 2,565 are treasury stock)
|
|
|
57
|
|
|
56
|
Treasury
stock
|
|
|
(7,625)
|
|
|
(7,625)
|
Additional paid-in
capital
|
|
|
289,137
|
|
|
282,663
|
Accumulated other
comprehensive gain
|
|
|
264
|
|
|
274
|
Accumulated
deficit
|
|
|
(173,579)
|
|
|
(179,800)
|
Total stockholders'
equity
|
|
|
108,254
|
|
|
95,568
|
Total liabilities and
stockholders' equity
|
|
$
|
266,899
|
|
$
|
235,336
|
CARPARTS.COM, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited, In
Thousands)
|
|
|
|
|
|
|
|
|
|
Twenty-Six Weeks Ended
|
|
|
July 2,
|
|
July 3,
|
|
|
2022
|
|
2021
|
Operating activities
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
6,221
|
|
$
|
(650)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
|
6,265
|
|
|
4,550
|
Amortization of
intangible assets
|
|
|
55
|
|
|
55
|
Share-based
compensation expense
|
|
|
4,498
|
|
|
7,272
|
Stock awards issued for
non-employee director service
|
|
|
11
|
|
|
12
|
Stock awards related to
officers and directors stock purchase plan from payroll
deferral
|
|
|
27
|
|
|
—
|
Gain from disposition
of assets
|
|
|
(17)
|
|
|
—
|
Amortization of
deferred financing costs
|
|
|
21
|
|
|
9
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(2,070)
|
|
|
(676)
|
Inventory
|
|
|
(24,165)
|
|
|
(24,649)
|
Other current
assets
|
|
|
(1,739)
|
|
|
1,316
|
Other non-current
assets
|
|
|
(741)
|
|
|
540
|
Accounts payable and
accrued expenses
|
|
|
17,466
|
|
|
12,883
|
Other current
liabilities
|
|
|
(109)
|
|
|
42
|
Right-of-use obligation
- operating leases - current
|
|
|
(105)
|
|
|
430
|
Right-of-use obligation
- operating leases - long-term
|
|
|
(20)
|
|
|
(76)
|
Other non-current
liabilities
|
|
|
(139)
|
|
|
(77)
|
Net cash provided by
operating activities
|
|
|
5,459
|
|
|
981
|
Investing activities
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(7,797)
|
|
|
(5,398)
|
Proceeds from sale of
property and equipment
|
|
|
44
|
|
|
—
|
Net cash used in
investing activities
|
|
|
(7,753)
|
|
|
(5,398)
|
Financing activities
|
|
|
|
|
|
|
Borrowings from
revolving loan payable
|
|
|
5,296
|
|
|
90
|
Payments made on
revolving loan payable
|
|
|
(5,296)
|
|
|
(90)
|
Payments on finance
leases
|
|
|
(1,966)
|
|
|
(990)
|
Net proceeds from
issuance of common stock for ESPP
|
|
|
432
|
|
|
—
|
Statutory tax
withholding payment for share-based compensation
|
|
|
—
|
|
|
(3)
|
Proceeds from exercise
of stock options
|
|
|
929
|
|
|
2,779
|
Net cash (used in)
provided by financing activities
|
|
|
(605)
|
|
|
1,786
|
Effect of exchange rate
changes on cash
|
|
|
(21)
|
|
|
(22)
|
Net change in cash and
cash equivalents
|
|
|
(2,920)
|
|
|
(2,653)
|
Cash and cash
equivalents, beginning of period
|
|
|
18,144
|
|
|
35,802
|
Cash and cash
equivalents, end of period
|
|
$
|
15,224
|
|
$
|
33,149
|
Supplemental disclosure
of non-cash investing and financing activities:
|
|
|
|
|
|
|
Right-of-use operating
asset acquired
|
|
$
|
—
|
|
$
|
17
|
Right-of-use finance
asset acquired
|
|
$
|
7,235
|
|
$
|
3,629
|
Accrued asset
purchases
|
|
$
|
1,060
|
|
$
|
1,954
|
Share-based
compensation expense capitalized in property and
equipment
|
|
$
|
579
|
|
$
|
1,018
|
Stock issued for
services
|
|
$
|
81
|
|
$
|
389
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
Cash paid during the
period for income taxes
|
|
$
|
148
|
|
$
|
65
|
Cash paid during the
period for interest
|
|
$
|
653
|
|
$
|
543
|
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multimedia:https://www.prnewswire.com/news-releases/carpartscom-reports-record-second-quarter-2022-results-301598431.html
SOURCE CarParts.com, Inc.