Record Third
Quarter Sales of $164.8 million, up 16%
Year over Year
Gross Profit of $56.1
million, up 19% Year over Year
11th Consecutive Quarter of Double-Digit
Year over Year Sales Growth
TORRANCE, Calif., Nov. 9, 2022
/PRNewswire/ -- CarParts.com, Inc. (NASDAQ: PRTS), one of
the leading e-commerce providers of automotive parts and
accessories, and a one-stop shop for vehicle repair and maintenance
needs, is reporting results for the third quarter ended October
1, 2022.
Third Quarter 2022 Summary vs. Year-Ago
Quarter
- Net sales increased 16% year over year to $164.8 million and increased 37% on a two-year
stack.
- Gross profit increased 19% to $56.1
million, with gross margin increasing 70 basis points to
34.1%.
- Net loss was ($0.9) million or
($0.02) per diluted share, compared
to a net loss of ($4.7) million or
($0.09) per diluted share.
- Adjusted EBITDA of $6.3 million
vs. $2.3 million.
- Completed ERP migration from 15-year old legacy system to
Microsoft Dynamics 365.
Management Commentary
"Q3 was another record for our company," said David Meniane, CEO
of CarParts.com. "We are excited to continue building a trusted and
disruptive platform where we can help our customers solve their
auto repair and maintenance needs. Over one-third of our
revenue comes from repeat customers and we are consistently growing
our addressable market. We launched our Do-It-For-Me program on our
website, called Get It Installed, and are one step closer to our
goal of becoming the number one destination for our
customers."
"One of our core strategic pillars is financial discipline. As
evidenced by our record third quarter Adjusted EBITDA and ample
liquidity, we feel confident that we do not need to raise capital
at current valuations and can continue to self-fund growth for the
foreseeable future."
"We see staying laser-focused on positive unit economics, free
cash flow, operational efficiencies, and customer experience as key
to building an exceptional and durable company for our long-term
stakeholders."
Third Quarter 2022 Financial Results
Net sales in the third quarter of 2022 were $164.8 million up 16% from the year-ago quarter.
For the month of October, we saw double digit, year-over-year
revenue growth and continue to balance growth with profitability
and free cash flow generation.
Gross profit in the third quarter increased 19% to
$56.1 million compared to
$47.3 million in the year-ago
quarter, with gross margin increasing 70 basis points
to 34.1%.
Total operating expenses in the third quarter were $56.7 million compared to $51.7 million in the year-ago quarter, mainly due
to an increase in sales and investments in the business.
Net loss in the third quarter was ($0.9) million
compared to a net loss of ($4.7)
million in the year-ago quarter.
Adjusted EBITDA in the third quarter was $6.3 million compared to $2.3 million in the year-ago quarter.
On October 1, 2022, the Company
had a cash balance of $16.7 million,
revolver debt of $5.0 million 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: Wednesday, November 9,
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
competitive prices.
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 (loss) income 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 (loss) income 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
|
|
Thirty-Nine
Weeks Ended
|
|
Thirty-Nine
Weeks Ended
|
|
|
|
October 1, 2022
|
|
October 2, 2021
|
|
October 1, 2022
|
|
October 2, 2021
|
|
Net sales
|
|
$
|
164.81
|
|
$
|
141.85
|
|
$
|
507.08
|
|
$
|
444.18
|
|
Gross profit
|
|
$
|
56.15
|
|
$
|
47.33
|
|
$
|
179.25
|
|
$
|
149.86
|
|
|
|
|
34.1
|
%
|
|
33.4
|
%
|
|
35.3
|
%
|
|
33.7
|
%
|
Operating
expense
|
|
$
|
56.73
|
|
$
|
51.67
|
|
$
|
173.14
|
|
$
|
154.35
|
|
|
|
|
34.4
|
%
|
|
36.4
|
%
|
|
34.1
|
%
|
|
34.7
|
%
|
Net (loss)
income
|
|
$
|
(0.95)
|
|
$
|
(4.66)
|
|
$
|
5.27
|
|
$
|
(5.31)
|
|
|
|
|
(0.6)
|
%
|
|
(3.3)
|
%
|
|
1.0
|
%
|
|
(1.2)
|
%
|
Adjusted
EBITDA
|
|
$
|
6.25
|
|
$
|
2.30
|
|
$
|
24.00
|
|
$
|
14.20
|
|
|
|
|
3.8
|
%
|
|
1.6
|
%
|
|
4.7
|
%
|
|
3.2
|
%
|
The table below reconciles net (loss) income to Adjusted EBITDA
for the periods presented (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks Ended
|
|
Thirteen
Weeks Ended
|
|
Thirty-Nine
Weeks Ended
|
|
Thirty-Nine
Weeks Ended
|
|
|
October 1, 2022
|
|
October 2, 2021
|
|
October 1, 2022
|
|
October 2, 2021
|
Net (loss)
income
|
|
$
|
(948)
|
|
$
|
(4,659)
|
|
$
|
5,273
|
|
$
|
(5,309)
|
Depreciation &
amortization
|
|
|
3,406
|
|
|
2,573
|
|
|
9,671
|
|
|
7,123
|
Amortization of
intangible assets
|
|
|
26
|
|
|
28
|
|
|
81
|
|
|
83
|
Interest expense,
net
|
|
|
433
|
|
|
309
|
|
|
1,066
|
|
|
821
|
Taxes
|
|
|
49
|
|
|
39
|
|
|
118
|
|
|
207
|
EBITDA
|
|
$
|
2,966
|
|
$
|
(1,710)
|
|
$
|
16,209
|
|
$
|
2,925
|
Stock compensation
expense
|
|
$
|
3,288
|
|
$
|
4,005
|
|
|
7,786
|
|
|
11,277
|
Adjusted
EBITDA
|
|
$
|
6,254
|
|
$
|
2,295
|
|
$
|
23,995
|
|
$
|
14,202
|
|
|
|
CARPARTS.COM, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE
OPERATIONS
|
(Unaudited, in
Thousands, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
|
October 1,
|
|
October 2,
|
|
October 1,
|
|
October 2,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales
|
|
$
|
164,807
|
|
$
|
141,846
|
|
$
|
507,080
|
|
$
|
444,184
|
Cost of sales
(1)
|
|
|
108,659
|
|
|
94,513
|
|
|
327,835
|
|
|
294,328
|
Gross profit
|
|
|
56,148
|
|
|
47,333
|
|
|
179,245
|
|
|
149,856
|
Operating
expense
|
|
|
56,729
|
|
|
51,668
|
|
|
173,144
|
|
|
154,353
|
(Loss) income from
operations
|
|
|
(581)
|
|
|
(4,335)
|
|
|
6,101
|
|
|
(4,497)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
117
|
|
|
24
|
|
|
363
|
|
|
221
|
Interest
expense
|
|
|
(435)
|
|
|
(309)
|
|
|
(1,073)
|
|
|
(826)
|
Total other expense,
net
|
|
|
(318)
|
|
|
(285)
|
|
|
(710)
|
|
|
(605)
|
(Loss) income before
income taxes
|
|
|
(899)
|
|
|
(4,620)
|
|
|
5,391
|
|
|
(5,102)
|
Income tax
provision
|
|
|
49
|
|
|
39
|
|
|
118
|
|
|
207
|
Net (loss)
income
|
|
|
(948)
|
|
|
(4,659)
|
|
|
5,273
|
|
|
(5,309)
|
Other comprehensive
(loss) gain:
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
—
|
|
|
60
|
|
|
124
|
|
|
90
|
Unrealized (loss) gain
on deferred compensation trust assets
|
|
|
(36)
|
|
|
(5)
|
|
|
(170)
|
|
|
68
|
Total other
comprehensive (loss) gain
|
|
|
(36)
|
|
|
55
|
|
|
(46)
|
|
|
158
|
Comprehensive (loss)
income
|
|
$
|
(984)
|
|
$
|
(4,604)
|
|
$
|
5,227
|
|
$
|
(5,151)
|
Net (loss) income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss) income
per share
|
|
$
|
(0.02)
|
|
$
|
(0.09)
|
|
$
|
0.10
|
|
$
|
(0.10)
|
Diluted net (loss)
income per share
|
|
$
|
(0.02)
|
|
$
|
(0.09)
|
|
$
|
0.09
|
|
$
|
(0.10)
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of basic net (loss) income per share
|
|
|
54,481
|
|
|
52,264
|
|
|
54,009
|
|
|
50,903
|
Shares used in
computation of diluted net (loss) income per share
|
|
|
54,481
|
|
|
52,264
|
|
|
57,283
|
|
|
50,903
|
|
(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)
|
|
|
|
|
|
|
|
|
|
October 1,
|
|
January 1,
|
|
|
2022
|
|
2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
16,654
|
|
$
|
18,144
|
Accounts receivable,
net
|
|
|
9,501
|
|
|
5,015
|
Inventory,
net
|
|
|
154,751
|
|
|
138,851
|
Other current
assets
|
|
|
6,703
|
|
|
6,592
|
Total current
assets
|
|
|
187,609
|
|
|
168,602
|
Property and equipment,
net
|
|
|
25,021
|
|
|
20,736
|
Right-of-use - assets -
operating leases, net
|
|
|
25,042
|
|
|
28,680
|
Right-of-use - assets -
finance leases, net
|
|
|
19,705
|
|
|
15,130
|
Other non-current
assets
|
|
|
2,612
|
|
|
2,188
|
Total
assets
|
|
$
|
259,989
|
|
$
|
235,336
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
68,208
|
|
$
|
67,372
|
Accrued
expenses
|
|
|
19,997
|
|
|
17,517
|
Customer
deposits
|
|
|
250
|
|
|
826
|
Right-of-use -
obligation - operating, current
|
|
|
4,429
|
|
|
4,201
|
Right-of-use -
obligation - finance, current
|
|
|
4,614
|
|
|
2,953
|
Other current
liabilities
|
|
|
4,186
|
|
|
3,925
|
Total current
liabilities
|
|
|
101,684
|
|
|
96,794
|
Revolving loan
payable
|
|
|
5,000
|
|
|
—
|
Right-of-use -
obligation - operating, non-current
|
|
|
22,402
|
|
|
26,367
|
Right-of-use -
obligation - finance, non-current
|
|
|
15,997
|
|
|
12,868
|
Other non-current
liabilities
|
|
|
3,323
|
|
|
3,739
|
Total
liabilities
|
|
|
148,406
|
|
|
139,768
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common stock, $0.001
par value; 100,000 shares authorized; 54,558 and 52,960 shares
issued and outstanding as of October 1, 2022 and
January 1, 2022 (of which 2,565 are treasury stock)
|
|
|
57
|
|
|
56
|
Treasury
stock
|
|
|
(7,625)
|
|
|
(7,625)
|
Additional paid-in
capital
|
|
|
293,450
|
|
|
282,663
|
Accumulated other
comprehensive gain
|
|
|
228
|
|
|
274
|
Accumulated
deficit
|
|
|
(174,527)
|
|
|
(179,800)
|
Total stockholders'
equity
|
|
|
111,583
|
|
|
95,568
|
Total liabilities and
stockholders' equity
|
|
$
|
259,989
|
|
$
|
235,336
|
|
|
|
CARPARTS.COM, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited, In
Thousands)
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks
Ended
|
|
|
October 1,
|
|
October 2,
|
|
|
2022
|
|
2021
|
Operating
activities
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
5,273
|
|
$
|
(5,309)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
|
9,671
|
|
|
7,123
|
Amortization of
intangible assets
|
|
|
81
|
|
|
83
|
Share-based
compensation expense
|
|
|
7,786
|
|
|
11,277
|
Stock awards issued for
non-employee director service
|
|
|
17
|
|
|
17
|
Stock awards related to
officers and directors stock purchase plan from payroll
deferral
|
|
|
27
|
|
|
—
|
(Gain) loss from
disposition of assets
|
|
|
(41)
|
|
|
15
|
Amortization of
deferred financing costs
|
|
|
37
|
|
|
13
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(4,624)
|
|
|
(1,737)
|
Inventory
|
|
|
(15,900)
|
|
|
(42,453)
|
Other current
assets
|
|
|
(124)
|
|
|
1,580
|
Other non-current
assets
|
|
|
(745)
|
|
|
556
|
Accounts payable and
accrued expenses
|
|
|
4,524
|
|
|
19,477
|
Other current
liabilities
|
|
|
(315)
|
|
|
266
|
Right-of-use obligation
- operating leases - current
|
|
|
279
|
|
|
960
|
Right-of-use obligation
- operating leases - long-term
|
|
|
(108)
|
|
|
(331)
|
Other non-current
liabilities
|
|
|
(136)
|
|
|
114
|
Net cash provided by
(used in) operating activities
|
|
|
5,702
|
|
|
(8,349)
|
Investing
activities
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(10,546)
|
|
|
(8,434)
|
Proceeds from sale of
property and equipment
|
|
|
44
|
|
|
27
|
Net cash used in
investing activities
|
|
|
(10,502)
|
|
|
(8,407)
|
Financing
activities
|
|
|
|
|
|
|
Borrowings from
revolving loan payable
|
|
|
10,351
|
|
|
105
|
Payments made on
revolving loan payable
|
|
|
(5,351)
|
|
|
(105)
|
Payments on finance
leases
|
|
|
(3,099)
|
|
|
(1,566)
|
Net proceeds from
issuance of common stock for ESPP
|
|
|
794
|
|
|
—
|
Statutory tax
withholding payment for share-based compensation
|
|
|
—
|
|
|
(3)
|
Proceeds from exercise
of stock options
|
|
|
1,113
|
|
|
3,230
|
Net cash provided by
financing activities
|
|
|
3,808
|
|
|
1,661
|
Effect of exchange rate
changes on cash
|
|
|
(498)
|
|
|
(27)
|
Net change in cash and
cash equivalents
|
|
|
(1,490)
|
|
|
(15,122)
|
Cash and cash
equivalents, beginning of period
|
|
|
18,144
|
|
|
35,802
|
Cash and cash
equivalents, end of period
|
|
$
|
16,654
|
|
$
|
20,680
|
Supplemental disclosure
of non-cash investing and financing activities:
|
|
|
|
|
|
|
Right-of-use operating
asset acquired
|
|
$
|
—
|
|
$
|
4,075
|
Right-of-use finance
asset acquired
|
|
$
|
7,889
|
|
$
|
4,257
|
Accrued asset
purchases
|
|
$
|
859
|
|
$
|
1,727
|
Share-based
compensation expense capitalized in property and
equipment
|
|
$
|
1,051
|
|
$
|
1,610
|
Stock issued for
services
|
|
$
|
81
|
|
$
|
622
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
Cash paid during the
period for income taxes
|
|
$
|
175
|
|
$
|
77
|
Cash paid during the
period for interest
|
|
$
|
1,011
|
|
$
|
811
|
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SOURCE CarParts.com, Inc.