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| 8-K - FORM 8-K - CarParts.com, Inc. | d352792d8k.htm |
 1
U.S. Auto Parts Network, Inc.
Leading online source for automotive aftermarket parts and repair information
Investor Presentation
May 2012
Exhibit 99.1 |
 Safe
Harbor This presentation may contain certain forward-looking statements and
management may make additional forward-looking statements in response
to your questions. These statements do not guarantee future performance
and speak only as of the date hereof, and qualify for 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. We refer all of you
to the risk factors contained in US Auto Parts Annual Report on Form 10-K
and quarterly reports on Form 10-Q filed with the Securities and Exchange
Commission,
for
more
detailed
discussion
on
the
factors
that
can
cause
actual
results
to
differ
materially
from
those
projected
in
any
forward-
looking
statements.
2 |
 3
US Auto Parts Competitive Advantages
US Auto Parts is a dominant e-commerce specialty retailer of aftermarket auto
parts to the Do It Yourself market and is uniquely positioned to
win.
Incremental revenue above current levels has incremental EBITDA flow thru of
around 15% Low Cost Acquisition
Efficient Supply Chain
Significant Capacity
Over 40% of product directly
sourced from Asia.
Over 70% of corporate
employees located in off
shore low cost operations.
Reach nearly 15mm monthly
visitors at less than a $8 CAC. |
 4
US Auto Parts History
1995
Founded and serviced local body shops in Los Angeles
2000
Launched first internet site selling automotive Body Parts
2000-2005
Launched a network of sites catered to consumer segments
2006
Acquired PartsBin -
Engine
2007
IPO (NASDAQ: PRTS), hired new CEO
2008-2009
Launched a network of sites catered to consumer segments
2010
Launched AutoMD, Acquired JC Whitney –
Accessories
2011
Completed integration of JC Whitney |
 $153.4
$176.3
$262.2
$327.1
$87.4
2008
2009
2010
2011
Q1-12
$5.2
$13.5
$19.5
$16.3
$4.2
2008
2009
2010
2011
Q1-12
5
Sales & Adjusted EBITDA
Consolidated Sales
Consolidated Adjusted EBITDA
($ In Millions)
($ In Millions)
1.
Excludes legal cost associated with protecting our intellectual property.
2.
Excludes legal cost associated with protecting our intellectual property, one time
charge for revenue recognition change, and acquisition costs 3.
Includes approximately $39.1m from acquisition of WAG
4.
Includes approximately $83.4m from acquisition of WAG
Adj. EBITDA Margin
(1)
(2)
3%
5%
8%
7%
Year Impacted by:
•
JCW Acquisition
•
$7.4m of restructuring
charges for JCW
•
Adjusted EBITDA for
USAP of $19.1m and
JCW with a loss of
($2.8m)
(3)
5%
(4) |
 6
Our business model has significant cost leverage as revenues grow
•
Reflects Whitney Automotive Group, fully integrated
•
Excludes
stock
based
compensation,
depreciation
and
amortization
of
$2.5m
and
$16.2m,
respectively
•
For every incremental year required to achieve growth levels, fixed expenses
increase $1.2M Financial Sensitivity
Base
10%
20%
30%
40%
50%
Revenue
$327
$360
$392
$425
$458
$491
Gross Margin %
30.0%
-
33.0%
30.0%
-
33.0%
30.0%
-
33.0%
30.0%
-
33.0%
30.0%
-
33.0%
30.0%
-
33.0%
Variable:
Fulfillment
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
Marketing
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
Technology
0.7%
0.7%
0.7%
0.7%
0.7%
0.7%
G&A
2.0%
2.0%
2.0%
2.0%
2.0%
2.0%
Total Variable
14.6%
14.6%
14.6%
14.6%
14.6%
14.6%
Fixed:
Fulfillment
2.5%
2.3%
2.1%
1.9%
1.8%
1.7%
Marketing
3.8%
3.5%
3.2%
2.9%
2.7%
2.5%
Technology
1.3%
1.2%
1.1%
1.0%
0.9%
0.9%
G&A
3.4%
3.1%
2.8%
2.6%
2.4%
2.2%
Total Fixed
10.9%
9.9%
9.1%
8.4%
7.8%
7.3%
Adjusted EBITDA %
4.5%
-
7.5%
5.5%
-
8.5%
6.3%
-
9.3%
7.0%
-
10.0%
7.6%
-
10.6%
8.2%
-
11.2%
Adjusted EBITDA $
$15
-
$25
$20
-
$30
$25
-
$37
$30
-
$43
$35
-
$49
$40
-
$55 |
 1)
Improve Customer Experience
Continue to improve all customer touch points
2)
Lower Prices
Launch disruptive price points through supply chain
efficiencies
3)
Increase Selection
Expand product offering within existing categories as
well as entering new categories
4)
Increase Unique Visitors
Drive increase unique visitors both organically and
through acquisitions
5)
Be the Consumer Advocate for Auto Repair
Reduce consumer spending on vehicle repair by
billions of dollars
Revenue
100%
Gross Margins
30% -
33%
Variable OPEX Costs
15%
Fixed Costs
0%
Incr EBITDA Flow Thru
15% -
18%
7
2012 Growth and Profitability
Revenue Growth
Incremental EBITDA Flow Thru |
 8
Broad Product Offering Unavailable
from Traditional Off-Line Retailers
*Represents online mix, **Source; AAIA Factbook Research
Brake Discs
Catalytic
Converters
Radiators
Headers
Oxygen
Sensors
Alternators
Exhaust
Driveshaft
Fuel Injection /
Delivery
Lamps
Mirrors
Bumpers
Hoods
Tailgates
Doors
Grills
Wheels
Window
Regulators
Seat Covers
Car Covers
Floor Mats /
Carpeting
Cold Air
Intakes
Vent Visors
Tonneau
Covers
Nerf Bars
Bug Shields
Car Bras
Body Parts
Engine Parts
Performance & Accessories
21%
45%
34%
$15B
$15B
Revenue*
Overall Market**
$50B |
 9
Source : Forrester; Wall Street research; Autopartswarehouse.com
Low Online Penetration-
Mobile Growth
Opportunity
Retail Category e-Commerce Penetration Rates |
  Online
vs. Brick and Mortar Customer – Mobile
Growth Should Accelerate Penetration
10
Los Angeles DMA
Compared to AutoZone and the general population, USAP
customers over-index in affluent segments, typical of
e-commerce shoppers
Affluent Suburbia
The wealthiest households in the U.S. living in exclusive suburban
neighborhoods enjoying the best of everything that life has to offer
Small Town Contentment
Middle-aged, upper-middle-class families living in small towns and
satellite cities with moderate educations employed in white-collar,
blue-collar and service professions
American Diversity
A diverse group of ethnically mixed singles and couples, middle-aged
and retired with middleclass incomes from blue-collar and service
industry jobs
In contrast, AutoZone store locations over-index in areas with
lower income, blue collar households
Struggling Societies
Young minorities, students and single parents trying to raise families
on low-level jobs in manufacturing, health care and food services
Blue Collar Backbone
Budget-conscious, young and old blue-collar households living in
older towns working in manufacturing, construction and retail trades
Metro Fringe
Racially mixed, lower-middle-class clusters in older single-family
homes, semi-detached houses and low-rise apartments in
satellite cities
*Auto zone distribution reflects population in zip codes of Auto Zone store
locations **Sources: 2008 Census estimates; autozone.com; MOSAIC
lifestyle segments
* |
 US
Auto Parts Dominant Reach- Largest
Pure Play Internet Retailer
(some overlap of monthly visitors across websites)
11
Conversion Rate *
0
3,000
6,000
9,000
12,000
15,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
2008
2009
2010
2011
2012
Year
Legacy Monthly Visitors*
1.00%
1.10%
1.20%
1.30%
1.40%
1.50%
1.60%
1.70%
2008
2009
2010
2011
2012
Year
USAP traffic includes traffic of USAP existing sites and WAG since the
acquisition Competitive sites’
traffic based on Comscore March 2012 reports
* Excludes growth from WAG acquisition |
 Pricing Competitive Advantage Through
Supply Chain Efficiencies
12
Product margin/price competitiveness determined more by sourcing strategy
than product categories. Current margins range from 30% -
33%.
Margin %
In-Stock
Private Label
(Asia Sourced)
Branded
(US Sourced)
40% -
70%
25% -
40%
10% -
25%
Drop Ship
Current
40%
60%
Current Mix
60%
40%
75%
25%
Goal
50%
50%
Goal |
   Low
Cost Operating Structure Reduces Overhead and Enables Scale
13
Acquisition/Retention Marketing
Website Product Development
Call Center Operations
Product Sourcing
Catalog
Finance
Accounting
Analysis
IT
HR
Corporate Functions
Job functions are shared between the US and Philippines with a majority of the work
being performed in the Philippines. Total Corporate Employees
300
1,000
Distribution Centers
Carson, California (150,000 sq. ft.)
Chesapeake, Virginia (110,000 sq. ft)
LaSalle, Illinois (300,000 sq. ft)
75
50
100
Total Distribution Employees
225 |
 AutoMD-
Largest DIY Site
Repositioned to Target $140B DIFM Market
14 |
 Adjusted EBITDA
15
Net loss
$
(788)
$
(245)
Interest expense, net
199
264
Income tax provision
124
18
Amortization of intangibles
340
1,627
Depreciation and amortization
3,747
3,003
EBITDA
3,622
4,667
Share-based compensation
584
681
Legal costs to enforce intellectual property rights
71
Restructuring costs
-
1,233
Adjusted EBITDA
$
4,206
$
6,652
Ended
Ended
April 2
March 31
2011
2012
-
(Amounts shown in thousands)
(Unaudited)
(Unaudited)
Thirteen Weeks
Thirteen Weeks |
 Income Statement
16
Thirteen Weeks
Ended
Thirteen Weeks
Ended
March 31
April 2
2012
2011
87,436
$
86,978
$
60,808
56,562
26,628
30,416
13,450
13,585
5,870
8,236
5,918
5,007
1,536
1,938
340
1,627
27,114
30,393
(486)
23
31
31
(209)
(281)
(178)
(250)
(664)
(227)
124
18
(788)
$
(245)
$
Other comprehensive income, net of tax
27
$
19
$
25
11
Total other comprehensive income
52
30
Comprehensive loss
(736)
$
(215)
$
(0.03)
$
(0.01)
$
30,638,320
30,450,078
Net sales
Cost of sales
Gross profit
Operating expenses:
General and administrative
Marketing
Fulfillment
Technology
Amortization of intangibles
Baisc and diluted net loss per share
Shares used in computation of basic and diluted net loss per
share Foreign currency translation adjustments
Unrealized gain on investments
Total operating expenses
(Loss) income from operations
Other income (expense):
Other income
Interest expense
Other expense, net
Loss before income taxes
Income tax provision
Net loss
(Amounts shown in thousands)
(Unaudited)
(Unaudited) |
 Balance Sheet
17
March 31, 2012
December 31, 2011
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
8,834
$
10,335
$
Short-term investments
1,893
1,125
Accounts receivable, net of allowance of $236 and $183,
respectively 9,189
7,922
Inventory
46,109
52,245
Deferred income taxes
446
446
Other current assets
3,472
3,548
Total current assets
69,943
75,621
Property and equipment, net
33,764
34,627
Intangible assets, net
9,664
9,984
Goodwill
18,854
18,854
Investments
297
2,104
Other non-current assets
1,039
1,026
Total assets
133,559
$
142,216
$
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
33,907
$
41,303
$
Accrued expenses
10,109
11,565
Notes Payable, current portion
17,875
6,250
Capital Leases payable, current portion
132
135
Other current liabilities
7,704
7,702
Total current liabilities
69,727
66,955
Non-current liabilities
Notes Payable, net of current portion
-
11,625
Capital Leases payable, net of current portion
7
37
Deferred tax liabilities
1,722
1,596
Other non current liabilities
1,236
1,078
Total liabilities
72,692
81,292
Commitments and contingencies
—
—
Stockholders’
equity:
Common stock, $0.001 par value; 30,645,764 and 30,625,764 shares
issued and outstanding as of 3/31/12 and 12/3111
respectively 31
31
Additional paid-in capital
157,819
157,140
Accumulated other comprehensive income
379
329
Accumulated deficit
(97,362)
(96,574)
Total
stockholders’
equity
60,867
60,924
Total
liabilities
and
stockholders’
equity
133,559
$
142,216
$
(Amounts shown in thousands) |
 Thank You
18 |