Record First
Quarter Sales of $175.5 million, up 6%
Year over Year
13th Consecutive Quarter of Year
over Year Sales Growth
TORRANCE, Calif., May 2, 2023
/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 first quarter ended April
1, 2023.
First Quarter 2023 Summary vs. Year-Ago
Quarter
- Net sales increased 6% year over year to $175.5 million and increased 20% on a two-year
stack.
- Gross profit increased 2% to $62.6
million, with gross margin of 35.6%.
- Net income was $1.1 million or
$0.02 per diluted share, compared to
$2.1 million or $0.04 per diluted share.
- Adjusted EBITDA was flat at $9.4
million.
- Cash of $49.3 million and no
revolver debt.
Management Commentary
"Q1 marked our 13th consecutive quarter of growth all
while building up a robust balance sheet. Our team grew
revenues and maintained profitability despite a challenging macro
environment," said David Meniane, CEO of CarParts.com. "For
the remainder of the year, we will continue to drive operating
improvements, expand our assortment, and enhance our website with
new functionality."
"These results are the latest chapter in our success story,
which is the product of a complete transformation that included a
refreshed management team, restructured departments, new tech
stacks, and improved operating efficiencies. No matter how you look
at it, what the team has accomplished is remarkable. Our commitment
to our customers, shareholders, and employees remains
unwavering. And as we look ahead, we believe we can continue
to drive growth, profitability, and shareholder returns."
First Quarter 2023 Financial Results
Net sales in the first quarter of 2023 were $175.5 million, up 6% from the year-ago
quarter.
Gross profit in the first quarter increased 2% to $62.6 million compared to $61.2 million in the year-ago quarter, with gross
margin decreasing 120 basis points to 35.6%, primarily driven by
unfavorable freight charges.
Total operating expenses in the first quarter were $61.9 million and 35.3% of sales compared to
$58.8 million and 35.4% of sales in
the year-ago quarter. The improvement in operating leverage was
primarily driven by increased operating efficiencies combined with
lower marketing expense as a percent of sales.
Net income in the first quarter was $1.1 million compared to net
income of $2.1 million in the
year-ago quarter.
Adjusted EBITDA in the first quarter was $9.4 million compared to $9.4 million in the year-ago quarter.
On April 1, 2023, the Company had a cash balance of
$49.3 million, no revolver debt and
no outstanding trade letters of credit ("LCs"), compared to no
revolver debt, no outstanding trade LCs 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, May 2, 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 go-to eCommerce platform for auto care and
maintenance. We offer drivers quality parts at competitive prices
and allow customers to schedule an appointment with a trusted
mechanic directly from our website. We use world-class design
principles and the latest technologies to deliver a fast,
easy-to-use, and mobile-intuitive website. And with our
company-owned national distribution network, we bring the best
brands and manufacturers directly to consumers, cutting out the
costs associated with brick-and-mortar retailers. Our team members
around the globe are dedicated to 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" and "EBITDAS," in this earnings release and on today's
scheduled conference call, which are non-GAAP financial measures.
Adjusted EBITDA, and EBITDAS, consist 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 and EBITDAS to net income (loss)
is provided below. With respect to EBITDAS from fiscal year 2018
(trailing twelve months ended December 29, 2018) provided below, we
excluded the previously disclosed adjustments of employee
transition costs, customs costs and proceeds from AutoMD sale in
order to provide a more accurate comparison, adjusting only for
share-based compensation expense.
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, and EBITDAS, 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
|
|
|
|
April 1, 2023
|
|
April 2, 2022
|
|
Net sales
|
|
$
|
175.49
|
|
$
|
166.05
|
|
Gross profit
|
|
$
|
62.55
|
|
$
|
61.16
|
|
|
|
|
35.6
|
%
|
|
36.8
|
%
|
Operating
expense
|
|
$
|
61.92
|
|
$
|
58.77
|
|
|
|
|
35.3
|
%
|
|
35.4
|
%
|
Net income
|
|
$
|
1.05
|
|
$
|
2.10
|
|
|
|
|
0.6
|
%
|
|
1.3
|
%
|
Adjusted
EBITDA
|
|
$
|
9.37
|
|
$
|
9.42
|
|
|
|
|
5.3
|
%
|
|
5.7
|
%
|
The table below
reconciles net income to Adjusted EBITDA for the periods presented
(in thousands):
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirteen Weeks
Ended
|
|
|
April 1, 2023
|
|
April 2, 2022
|
Net income
|
|
$
|
1,051
|
|
$
|
2,103
|
Depreciation &
amortization
|
|
|
3,919
|
|
|
2,957
|
Amortization of
intangible assets
|
|
|
11
|
|
|
28
|
Interest expense,
net
|
|
|
347
|
|
|
291
|
Taxes
|
|
|
141
|
|
|
52
|
EBITDA
|
|
$
|
5,469
|
|
$
|
5,431
|
Stock compensation
expense
|
|
$
|
3,899
|
|
$
|
3,992
|
Adjusted
EBITDA
|
|
$
|
9,368
|
|
$
|
9,423
|
The table below
reconciles net loss to EBITDAS for the periods presented (in
thousands):
|
|
|
|
Trailing Twelve
Months Ended
|
|
Trailing Twelve
Months Ended
|
|
|
April 1, 2023
|
|
December 29,
2018
|
Net loss
|
|
$
|
(2,003)
|
|
$
|
(4,889)
|
Depreciation &
amortization
|
|
|
14,569
|
|
|
5,802
|
Amortization of
intangible assets
|
|
|
91
|
|
|
185
|
Interest expense,
net
|
|
|
1,477
|
|
|
1,595
|
Taxes
|
|
|
721
|
|
|
(329)
|
EBITDA
|
|
$
|
14,855
|
|
$
|
2,364
|
Stock compensation
expense
|
|
$
|
11,203
|
|
$
|
3,595
|
EBITDAS
|
|
$
|
26,058
|
|
$
|
5,959
|
CARPARTS.COM, INC.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE OPERATIONS (Unaudited, In
Thousands, Except Per Share Data)
|
|
|
|
Thirteen Weeks
Ended
|
|
|
April 1,
|
|
April 2,
|
|
|
2023
|
|
2022
|
Net sales
|
|
$
|
175,492
|
|
$
|
166,053
|
Cost of sales
(1)
|
|
|
112,941
|
|
|
104,891
|
Gross profit
|
|
|
62,551
|
|
|
61,162
|
Operating
expense
|
|
|
61,915
|
|
|
58,771
|
Income from
operations
|
|
|
636
|
|
|
2,391
|
Other income
(expense):
|
|
|
|
|
|
|
Other income,
net
|
|
|
914
|
|
|
56
|
Interest
expense
|
|
|
(358)
|
|
|
(292)
|
Total other income
(expense), net
|
|
|
556
|
|
|
(236)
|
Income before income
taxes
|
|
|
1,192
|
|
|
2,155
|
Income tax
provision
|
|
|
141
|
|
|
52
|
Net income
|
|
|
1,051
|
|
|
2,103
|
Other comprehensive
gain (loss):
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
—
|
|
|
20
|
Unrealized gain (loss)
on deferred compensation trust assets
|
|
|
24
|
|
|
(34)
|
Total other
comprehensive gain (loss)
|
|
|
24
|
|
|
(14)
|
Comprehensive
income
|
|
$
|
1,075
|
|
$
|
2,089
|
Net income per
share:
|
|
|
|
|
|
|
Basic net income per
share
|
|
$
|
0.02
|
|
$
|
0.04
|
Diluted net income per
share
|
|
$
|
0.02
|
|
$
|
0.04
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
Shares used in
computation of basic net income per share
|
|
|
55,047
|
|
|
53,251
|
Shares used in
computation of diluted net income per share
|
|
|
58,037
|
|
|
57,172
|
|
|
(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)
|
|
|
|
April 1,
|
|
December 31,
|
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
49,305
|
|
$
|
18,767
|
Accounts receivable,
net
|
|
|
9,745
|
|
|
6,406
|
Inventory,
net
|
|
|
112,364
|
|
|
136,026
|
Other current
assets
|
|
|
7,183
|
|
|
6,672
|
Total current
assets
|
|
|
178,597
|
|
|
167,871
|
Property and equipment,
net
|
|
|
24,423
|
|
|
24,290
|
Right-of-use - assets -
operating leases, net
|
|
|
22,850
|
|
|
23,951
|
Right-of-use - assets -
finance leases, net
|
|
|
18,401
|
|
|
19,750
|
Other non-current
assets
|
|
|
2,589
|
|
|
2,537
|
Total
assets
|
|
$
|
246,860
|
|
$
|
238,399
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
55,221
|
|
$
|
57,616
|
Accrued
expenses
|
|
|
20,924
|
|
|
16,466
|
Right-of-use -
obligation - operating, current
|
|
|
4,640
|
|
|
4,571
|
Right-of-use -
obligation - finance, current
|
|
|
4,601
|
|
|
4,753
|
Other current
liabilities
|
|
|
6,071
|
|
|
4,622
|
Total current
liabilities
|
|
|
91,457
|
|
|
88,028
|
Right-of-use -
obligation - operating, non-current
|
|
|
20,306
|
|
|
21,412
|
Right-of-use -
obligation - finance, non-current
|
|
|
14,826
|
|
|
15,916
|
Other non-current
liabilities
|
|
|
3,202
|
|
|
2,971
|
Total
liabilities
|
|
|
129,791
|
|
|
128,327
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common stock, $0.001
par value; 100,000 shares authorized; 56,203 and 54,693 shares
issued and outstanding as of April 1, 2023 and
December 31, 2022 (of which 2,565 are treasury
stock)
|
|
|
59
|
|
|
57
|
Treasury
stock
|
|
|
(7,625)
|
|
|
(7,625)
|
Additional paid-in
capital
|
|
|
303,185
|
|
|
297,265
|
Accumulated other
comprehensive income
|
|
|
1,150
|
|
|
1,126
|
Accumulated
deficit
|
|
|
(179,700)
|
|
|
(180,751)
|
Total stockholders'
equity
|
|
|
117,069
|
|
|
110,072
|
Total liabilities and
stockholders' equity
|
|
$
|
246,860
|
|
$
|
238,399
|
CARPARTS.COM, INC.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited, In Thousands)
|
|
|
|
Thirteen Weeks
Ended
|
|
|
April 1,
|
|
April 2,
|
|
|
2023
|
|
2022
|
Operating
activities
|
|
|
|
|
|
|
Net income
|
|
$
|
1,051
|
|
$
|
2,103
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
|
3,919
|
|
|
2,957
|
Amortization of
intangible assets
|
|
|
11
|
|
|
28
|
Share-based
compensation expense
|
|
|
3,899
|
|
|
3,992
|
Stock awards issued for
non-employee director service
|
|
|
6
|
|
|
6
|
Stock awards related to
officers and directors stock purchase plan from payroll
deferral
|
|
|
—
|
|
|
23
|
Amortization of
deferred financing costs
|
|
|
16
|
|
|
4
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(3,362)
|
|
|
(1,445)
|
Inventory
|
|
|
23,662
|
|
|
(19,087)
|
Other current
assets
|
|
|
(511)
|
|
|
(998)
|
Other non-current
assets
|
|
|
(55)
|
|
|
(503)
|
Accounts payable and
accrued expenses
|
|
|
2,399
|
|
|
18,296
|
Other current
liabilities
|
|
|
1,450
|
|
|
(136)
|
Right-of-use obligation
- operating leases - current
|
|
|
181
|
|
|
125
|
Right-of-use obligation
- operating leases - long-term
|
|
|
(117)
|
|
|
(1)
|
Other non-current
liabilities
|
|
|
232
|
|
|
(98)
|
Net cash provided by
operating activities
|
|
|
32,781
|
|
|
5,266
|
Investing
activities
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(2,745)
|
|
|
(3,760)
|
Net cash used in
investing activities
|
|
|
(2,745)
|
|
|
(3,760)
|
Financing
activities
|
|
|
|
|
|
|
Borrowings from
revolving loan payable
|
|
|
76
|
|
|
5,032
|
Payments made on
revolving loan payable
|
|
|
(76)
|
|
|
(32)
|
Payments on finance
leases
|
|
|
(1,242)
|
|
|
(844)
|
Net proceeds from
issuance of common stock for ESPP
|
|
|
221
|
|
|
431
|
Proceeds from exercise
of stock options
|
|
|
1,523
|
|
|
792
|
Net cash provided by
financing activities
|
|
|
502
|
|
|
5,379
|
Effect of exchange rate
changes on cash
|
|
|
—
|
|
|
6
|
Net change in cash and
cash equivalents
|
|
|
30,538
|
|
|
6,891
|
Cash and cash
equivalents, beginning of period
|
|
|
18,767
|
|
|
18,144
|
Cash and cash
equivalents, end of period
|
|
$
|
49,305
|
|
$
|
25,035
|
Supplemental disclosure
of non-cash investing and financing activities:
|
|
|
|
|
|
|
Right-of-use finance
asset acquired
|
|
$
|
—
|
|
$
|
3,206
|
Accrued asset
purchases
|
|
$
|
312
|
|
$
|
1,560
|
Share-based
compensation expense capitalized in property and
equipment
|
|
$
|
271
|
|
$
|
314
|
Stock issued for
services
|
|
$
|
—
|
|
$
|
81
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
Cash (received) paid
during the period for income taxes
|
|
$
|
(34)
|
|
$
|
15
|
Cash paid during the
period for interest
|
|
$
|
381
|
|
$
|
306
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/carpartscom-reports-record-first-quarter-2023-results-301813643.html
SOURCE CarParts.com, Inc.