Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CarParts.com, Inc. | d540794d8k.htm |
 1
U.S. Auto Parts Network, Inc.
Leading online source for automotive aftermarket parts and repair information
Investor Presentation
May 20, 2013
Exhibit 99.1 |
 Safe
Harbor 2 |
 Company History
Launched first internet site selling
automotive Collision Line
Launches a network of sites catered to
various consumer segments
Company begins significantly
expanding its private label engine line
JC Whitney completely
integrated
1995
2000
2010
2005
2006
2011
Launch AutoMD /
Acquires JC Whitney
Adds Accessories Line
USAP founded to serve local
collision shops in Los Angeles
IPO (NASDAQ: PRTS)
Uniquely positioned to
capitalize on market growth.
2/2007
2008
2012
Acquires PartsBin
Adds Engine Line
3
10/2007
Hires Shane Evangelist
Raised $16.5M in
capital
2013
Initiated Site
Consolidation |
 Competitive Advantages
Low Customer Acquisition Cost
4
Nearly
12
million
unique
monthly
visitors
to
USAP’s
websites
Less
than
a
$7
customer
acquisition
cost
(“CAC”)
Efficient Supply Chain
Over 29,000 private
label collision SKUs
Over 9,500 private
label engine SKUs
Over 3,000 private
label accessory SKUs
Over 1.5M branded
SKUs
Robust
supply
chain
consisting
of
both
branded
and
private
label
products
Nearly
50%
of
product
sales
directly
sourced
from
Asia |
 Online sales of automotive parts and accessories continue to grow
–
Google has experienced a 6 year compound annual growth rate (“CAGR”) of
28% in queries for automotive
parts
before
conversion
increases
which
are
between
5%-10%
annually
-
making
real
online
growth closer to 35% annually
Mobile queries increased 100% and 800% for cellphones and tablets, respectively,
from Sept. 11 to Sept. 12 Online Market is Vibrant and Growing
Aftermarket e-Commerce Overview
Source: Google
5
Source: eBay filings, press releases |
 Online penetration for auto parts has trailed penetration rates of other consumer
product categories for two reasons:
1)
Auto parts are traditionally bought by demographics that have lower internet
penetration at home and less of a propensity to purchase products
online Internet penetration will grow at home but, more importantly, mobile
devices will drive online buying going forward 2)
Shopping for auto parts online can be difficult for consumers
The complexity required to buy an auto part (applications and attributes) has
limited consumption online because consumers
need
to
feel
comfortable
that
they
have
found
the
“right”
part
Online retailers have made vast improvements to the online shopping
experience •
The continued growth of website conversion rates over the last five years
demonstrates the progress that online retailers have made to make consumers
feel comfortable Size and Penetration of Online Automotive Parts
Aftermarket e-Commerce Overview
6
Low Automotive Online Sales Penetration
Source: AAIA
Estimate based on AAAI Fact book -
$85B in parts, $70B in labor
* Excludes eBay
Automotive Aftermarket by Segment
Desire to Repair
High
Low
$155B
Do-It-For-Me
$45B
Do-It-Yourself
(USAP Target Market)
$3.1B-$4.0B
Online Sales*
High |
 7
Broad Product Offering Across the
Auto Parts Spectrum
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
*Represents online mix, **Source; AAIA Factbook Research
21%
40%
39%
$15B
$15B
Revenue*
Overall Market**
$50B |
 USAP’s ability to competitively price products while maintaining healthy
margins is a function of the Company’s ability to leverage its robust
supply chain The Company is working to increase margins by shifting its
product mix toward increased private label and
in-stock
products
-
current
margins
range
from
29%
-
31%
The
Company
sources
product
directly
from
over
250
factories
in
Asia
Margin %
In-Stock
Private Label
(Asia Sourced)
Branded
(U.S. Sourced)
40% -
70%
25% -
40%
10% -
25%
Drop Shipped
Current Mix
49%
51%
Current Mix
63%
37%
75%
25%
Goal
60%
40%
Goal
USAP’s Supply Chain Creates Pricing Advantage
8 |
 US
Auto Parts Dominant Reach- Largest
Pure Play Internet Retailer
(some overlap of monthly visitors across websites)
9 |
 USAP’s Current Operating Environment
10
After eight consecutive quarters of 20% revenue and EBITDA growth, USAP’s
financial performance has been impacted by decreased visitors driven by two
main factors: 1.
Reduced SEO Traffic:
Changes made by search engines have impacted traffic
Addressing the loss in traffic by consolidating websites
2.
Margin Compression: Increased competition has hurt pricing, impacting marketing
spend Marketing spend is based on variable contribution from each SKU.
As overall margin has compressed,
marketing spend on a year-over-year (“YoY”) basis has lead to
lower traffic Addressing margin compression by increasing private label
mix * YoY web orders for top USAP sites that comprise 82% of total
sales Paid Traffic
(5%)
Organic
Traffic
(16%)
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
-40.0%
Year over Year Order Impact from Site Traffic and Conversion*
YoY Traffic Impact
YoY Conversion Impact
YoY Orders |
 $153.4
$176.3
$262.3
$327.1
$304.0
$65.4
2008
2009
2010
2011
2012
Q1-13
$5.2
$13.5
$19.5
$16.3
$9.4
$1.5
2008
2009
2010
2011
2012
Q1-13
11
Sales & Adjusted EBITDA
Consolidated Sales¹
Consolidated Adjusted EBITDA²
($ In Millions)
($ In Millions)
1.
JC
Whitney
was
acquired
in
Aug
2010
adding
revenue
of
$39.1M
in
2010
and
$83.4M
in
2011.
Amounts
not
separately
disclosed
after
2011.
Adj. EBITDA Margin
3%
5%
8%
7%
3%
2%
Non-GAAP financial measure EBITDA consists of net income before (a) interest
expense, net; (b) income tax provisions; (c) amortization of intangible assets;
(d) depreciation and amortization. Adjusted EBITDA excludes restructuring
costs and other one time charges of $0.4M, $5.8M, $8.0M, $.7M and $0.5M in 2009, 2010,
2011, 2012 and Q1-13, respectively, stock based compensation of $2.9M, $3.3M,
$2.7M, $2.6M, $1.7M and $0.4M in 2008, 2009, 2010, 2011, 2012 and Q1-13
respectively. There were no restructuring or other one time charges in
2008. 2. |
 1)
Improve Customer Experience
Continue to improve all customer touch points
Focus on two flagship sites, Autopartswarehouse and
JCWhitney
Ensure rich and unique content for our customers
2)
Increase Unique Visitors
Consolidate websites
3)
Increase Selection
Expand product offering within existing categories as
well as entering new categories
4)
Lower Prices
Launch disruptive price points through supply chain
efficiencies
5)
Be the Consumer Advocate for Auto Repair
Reduce consumer spending on vehicle repair and bring
transparency to the market place
Revenue
100%
Gross Margins
29% -
31%
Variable OPEX Costs
15%
Fixed Costs
0%
Incremental Flow Thru
14% -
16%
12
2013 Growth and Profitability
Revenue Growth
Incremental Flow Thru |
 AutoMD-
Largest DIY Site
Repositioned to Target $140B DIFM Market
13 |
 AutoMD –
Results page
14 |
 Adjusted EBITDA
15
Thirteen Weeks Ended
March 30
March 31
(unaudited, amounts shown in thousands)
2013
2012
Net loss
(3,343)
$
(788)
$
Interest expense, net
185
199
Income tax provision
21
124
Amortization of intangible assets
106
340
Depreciation and amortization expense
3,638
3,747
EBITDA
607
3,622
Share-based compensation expense
409
584
Restructuring costs
498
-
Adjusted EBITDA
1,514
$
4,206
$
|
 Income Statement
16
Thirteen Weeks Ended
March 30
March 31
(unaudited, amounts shown in thousands except per share data)
2013
2012
Net sales
65,405
$
87,436
$
Cost of sales
(1)
45,667
60,808
Gross profit
19,738
26,628
Operating expenses:
Marketing
11,191
13,450
General and administrative
4,687
5,870
Fulfillment
5,381
5,918
Technology
1,515
1,536
Amortization of intangible assets
106
340
Total operating expenses
22,880
27,114
Loss from operations
(3,142)
(486)
Other income (expense):
Other income, net
7
31
Interest expense
(187)
(209)
Total other expense, net
(180)
(178)
Loss before income tax provision
(3,322)
(664)
Income tax provison
21
124
Net loss
(3,343)
(788)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments
(6)
27
Unrealized gains on investments
-
25
Total other comprehensive (loss) income
(6)
52
Comprehensive loss
(3,349)
$
(736)
$
Basic and diluted net
loss per share (0.11)
$
(0.03)
$
Shares used in computation
of basic and diluted net loss per share
31,141
30,638
(1)
Excludes depreciation and amortization expense which is included in
marketing, general and administrative and fulfillment expense. |
 Balance Sheet
17
(amounts in thousands, except par and liquidation value)
March 30
December 29
2013
2012
ASSETS
(Unaudited)
Current assets:
Cash and cash equivalents
1,297
$
1,030
$
Short-term investments
111
110
Accounts receivable, net of allowances of $242 and $221
at March 30, 2013 and December
29, 2012, respectively 7,040
7,431
Inventory
37,633
42,727
Deferred income taxes
44
39
Other current assets
3,310
4,176
Total current assets 49,435
55,513
Property and equipment, net
27,123
28,559
Intangible assets, net
3,120
3,227
Other non-current assets
1,669
1,578
Total assets 81,347
$
88,877
$
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
23,055
$
28,025
$
Accrued expenses
9,475
10,485
Revolving loan payable
12,125
16,222
Current portion of capital
leases payable 35
70
Other current liabilities
4,704
4,738
Total current liabilities 49,394
59,540
Capital leases payable, net of current portion
69
70
Deferred
income taxes 350
314
Other non-current
liabilities 1,711
1,309
Total liabilities 51,524
61,233
Commitments and contingencies
Stockholders' equity:
Series A convertible preferred stock, $0.001 par
value; $1.45 per
share liquidation value or aggregate of $5.8 million; 4000 and 0
shares issued and outstanding as
of 3/30/13 & 12/29/12 respectively Common
stock, $0.001 par value; 31,151 shares and 31,128 shares issued
4
-
and outstanding as of 3/30/13 and
12/29/12. respectively 31
31
Additional paid-in capital
165,305
159,781
Accumulated other comprehensive income
378
384
Accumulated deficit (135,895)
(132,552)
Total stockholders' equity
29,823
27,644
Total
liabilities and equity 81,347
$
88,877
$
|
 Thank You
18
*
*
*
*
*
*
*
* |