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| 8-K - FORM 8-K - CarParts.com, Inc. | d828874d8k.htm |
 Investor
Presentation Exhibit 99.1 |
 Safe
Harbor 2
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. |
 Case
for Investment 3
Large and Growing Online Market
Significant Customer Reach
Significant Private Label Offering
Experienced Leadership Team |
 4
At 9.7% online market penetration, auto parts still lags industry average in the
teens. US Auto Parts is the largest pure-play online retailer of auto
parts 1
AASA estimates
2
Estimates by US Auto Parts where amounts are not publicly reported & we
estimate the total online DIY market to be larger than the $3.8B that is
reported in the 2014 AAIA Fact Book
3
Excludes AutoAnything which is wholly owned by AutoZone
Do It Yourself (DIY) Market Size
Company
2013 Est. Rev
% of total
Marketplaces
(in million)
eBay Motors
$2,200
47.6%
Amazon
$600
13.0%
Sub Total
$2,800
60.6%
Wholesale Online
Tire Rack (online)
$440
9.5%
Other Tire Companies
$190
4.1%
Sub Total
$630
13.6%
Pure Play
US Auto Parts
$250
5.4%
Rock Auto
$180
3.9%
Summit
$170
3.7%
Auto Anything
(AutoZone)
$120
2.6%
JEGS
$70
1.5%
CarID
$60
1.3%
All Other Pure Play
$90
1.9%
Sub Total
$940
20.3%
Brick & Mortar Retailers
AutoZone (w/o AA)
$110
2.4%
Advance
$80
1.7%
Pep
$30
0.6%
O'Reilly
$20
0.4%
NAPA
$10
0.2%
Sub Total
$250
5.4%
Total
4,620
100.0%
Total
DIY
Market
Size
for
2013
of
47.2B
1
$42.6B
90.3%
$4.6B
9.7%
2
3 |
 Booz & Co. estimates by 2018 that Online DIY
could reach 17% of the total DIY market
5
Online Market is Vibrant and Growing
Aftermarket e-Commerce Overview
DIY Online Penetration
8.3
8.4
8.8
8.9
8.9
9.6
9.7
9.8
9.8
9.9
10.0
10.1
10.3
10.6
10.9
11.1
11.3
0
2
4
6
8
10
12
Mean Light Vehicle age
Source: R.L. Polk and BB&TCM
Source: Booz & Co.
The average age of a light vehicle on the road
continues to increase each year since 1997
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
2012
2013
2014
2015
2016
2017
2018 |
 Offline
$42.6
$43.5
$44.2
$44.8
$45.3
$45.5
Online
4.6
5.5
6.6
8.0
9.5
11.5
Total
$47.2
$49.0
$50.9
$52.8
$54.8
$56.9
% Online
9.8%
11.3%
13.0%
15.1%
17.4%
20.1%
6
Do It Yourself (DIY) Projections
1
1
Projections obtained from AAIA 2014 Digital Automotive Aftermarket Fact Book and
March 2014 AASA Digital Disruption: e-tailing in the Automotive Aftermarket Report
DIY Projected Revenue (in Billions) |
 (some overlap of monthly visitors across websites)
7
USAP traffic includes traffic from continued sales channels
Competitive sites’
traffic based on Compete September 2014 reports
US Auto Parts Dominant Reach-
Largest Pure Play Internet Retailer
Customer Reach is a Competitive Moat
•
Over 500 man years of hand written unique content
•
Long domain history to help indexing in search
•
Multiple website management |
 8
Broad Auto Parts Product Offering
Body Parts
Engine Parts
Performance & Accessories
*Represents USAP online mix
36%
48%
16%
Revenue*
US
Auto
Parts
has
one
of
the
largest
product
offerings
with
over
1.5
million
products across body parts, engine parts, and performance & accessories
Broad Auto Parts Product Offering
Lamps
Mirrors
Bumpers
Hoods
Tailgates
Doors
Grills
Wheels
Window
Regulators
Catalytic
Converters
Radiators
Headers
Oxygen
Sensors
Alternators
Exhaust
Driveshaft
Fuel Injection /
Delivery
Seat Covers
Car Covers
Floor Mats /
Carpeting
Cold Air
Intakes
Vent Visors
Tonneau
Covers
Nerf Bars
Bug Shields
Car Bras
Brake
Discs |
 USAP’s ability to competitively price products while maintaining healthy
margins is a function of the Company’s ability to leverage its robust
private label supply chain. Currently
over
40,000
Private
Label
Products.
Adding
4,000
–
5,000
Private
Label
SKUs
this
year
The
Company
sources
product
directly
from
over
200
factories
in
Asia
9
Margin %
In-Stock
Private Label
(Asia Sourced)
Branded
(U.S. Sourced)
30% -
60%
15% -
30%
5% -
20%
Drop Shipped
Current Mix
57%
43%
Current Mix
65%
35%
USAP’s Supply Chain Creates
Pricing Advantage
The breadth of our Private Label products provides a significant competitive
moat |
 Revenue
100%
Gross Margins
25% -
28%
Variable OPEX Costs
15%
Fixed Cost
0%
Incremental Flow
10% -
13%
10
Incremental Flow Thru
Growth and Profitability
We
anticipate
to
have
double
digit
comps
in
the
back
half
of
the
year |
    11
Our business model has significant cost leverage as revenues grow
1.
Excludes stock based compensation, depreciation and amortization
2.
For every incremental year required to achieve growth levels, fixed expenses
increase $1.0M or 3% Financial Sensitivity
Base
18%
27%
45%
64%
82%
$275
$325
$350
$400
$450
$500
25.0%
–
28.0%
25.0%
–
28.0%
25.0%
–
28.0%
25.0%
–
28.0%
25.0%
–
28.0%
25.0%
–
28.0%
3.2%
3.2%
3.2%
3.2%
3.2%
3.2%
9.4%
9.4%
9.4%
9.4%
9.4%
9.4%
0.6%
0.6%
0.6%
0.6%
0.6%
0.6%
1.8%
1.8%
1.8%
1.8%
1.8%
1.8%
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
1.9%
1.6%
1.5%
1.3%
1.2%
1.1%
3.6%
3.2%
2.9%
2.6%
2.3%
2.1%
0.9%
0.9%
0.8%
0.7%
0.6%
0.6%
3.9%
3.6%
3.4%
3.0%
2.6%
2.4%
10.3%
9.3%
8.7%
7.6%
6.7%
6.1%
-0.3%
–
2.7%
0.7%
–
3.7%
1.3%
–
4.3%
2.4%
–
5.4%
3.2%
–
6.2%
3.9%
–
6.9%
($1)
–
$7
$2
–
$12
$5
–
$15
$10
–
$22
$15
–
$28
$20
–
$35
Revenue
Gross Margin %
Variable:
Fulfillment
Marketing
Technology
G&A
Total Variable
Fixed:
Fulfillment
Marketing
Technology
G&A
Total Fixed
Adjusted EBITDA %
Adjusted EBITDA $
($1) |
 AutoMD
–
Repair
Lead
Generation
Site
Overview
•
Repair lead generation site addresses
the DIFM market
Recent Strategic Investment
•
$12.5M pre-money valuation
•
Raised $7.0M in capital
•
Fed Mogul: $3.0M
•
Cox Automotive: $2.0M
•
Insiders: $2.0M
•
Post-funding valuation of $19.5M
•
USAP in control with 64% of the
business
•
There are over 1,000 shops on the
program and growing
12 |
 Case for Investment
13
Large and Growing Online Market
Significant Customer Reach
Significant Private Label Offering
Experienced Leadership Team |
 14
Shane Evangelist -
Chief Executive Officer
Chief Executive Officer since October 2007 with over 10 years of
leading internet businesses
Senior Vice President and General Manager of Blockbuster Online
Vice President of Strategic Planning for Blockbuster Inc.
B.A. degree in Business Administration from the University of New
Mexico and a M.B.A. from Southern Methodist University
Michael Yoshida -
Interim Chief Financial Officer
Interim Chief Financial Officer since September 2014
Prior to his appointment as the Company's Principal Accounting Officer
and
Interim
Chief
Financial
Officer,
Mr.
Yoshida
has
served
as
the
Controller of the Company since 2009.
Vice
President
Finance
and
Controller
for
Hot
Topic,
Inc.
Senior
Director
of
Finance
and
Controller
for
Bristol
Farms
Chief Financial Officer, Vice President Finance at Farmers Market
B.S.
degree
in
Accounting
from
the
University
of
Southern
California
and
an
M.B.A.
from
the
California
State
University,
Los
Angeles
and is a Certified Public Accountant.
Aaron
E.
Coleman
-
Chief
Operating
Officer
Chief Operating Officer since September 2010, and was Executive
Vice President of Operations and CIO from April 2008 until September
2010 with over 18 years of e-commerce experience
Senior Vice President –
Online Systems at Blockbuster Inc.
Multiple positions with internet and technology companies including
American Airlines, Travelweb (Priceline), Baan
B.A. degree in Business Administration from Gonzaga University
Leadership Team
Charles Fischer -
Senior Vice President of Global Procurement
Senior Vice President of Global Sourcing and Procurement since May 2008
with over 30 years of global sourcing experience
Vice President, Supply Chain Management for Keystone Automotive
Industries
Director, Business Development for Modern Engineering
Multiple leadership positions with multiple companies in the automotive
aftermarket industry |
 15
Over $19M of costs have been reduced over a two year period
Adjusted EBITDA
(Non-GAAP Financial Measure –
in thousands)
Thirteen Weeks Ended
Twenty-Six Weeks Ended
September 27
September 28
September 27
September 28
2014
2013
2014
2013
Net loss
(2,494)
$
(1,399)
$
(4,473)
$
(14,309)
$
Interest expense, net
283
285
774
696
Income tax provision
15
1
68
91
Amortization of
intangible assets 106
86
316
299
Depreciation and
amortization expense 2,213
2,472
6,833
9,736
EBITDA
123
1,445
3,518
(3,487)
Share-based compensation expense
686
315
1,691
1,065
Impairment loss on property and
equipment -
-
-
4,832
Impairment loss on intangible assets
-
-
-
1,245
Inventory write-down related to Carson
closure -
-
478
-
Restructuring
costs 410
-
1,035
723
Adjusted EBITDA
1,219
$
1,760
$
6,722
$
4,378
$
|
 16
Consolidated Statements of Comprehensive Operations
(Unaudited, in Thousands, Except Per Share Data)
(1)
Excludes depreciation and amortization expense which is included
in marketing, general and administrative and fulfillment expense.
Thirteen Weeks Ended
Twenty-Six Weeks Ended
September 27
September 28
September 27
September 28
2014
2013
2014
2013
Net sales
67,965
$
61,724
$
212,940
$
195,018
$
Cost of sales
(1)
49,551
43,817
153,405
138,360
Gross profit
18,414
17,907
59,535
56,658
Operating expenses:
Marketing
10,278
9,385
31,356
31,762
General and administrative
3,762
4,261
12,532
13,626
Fulfillment
5,256
4,217
15,351
14,589
Technology
1,228
1,204
3,640
4,035
Impairment loss on property and equipment
-
-
-
4,832
Impairment loss on intangible assets
-
-
-
1,245
Amortization of intangible assets
106
86
316
299
Total operating expenses
20,630
19,153
63,195
70,388
Loss from operations
(2,216)
(1,246)
(3,660)
(13,730)
Other income (expense):
Other income, net
24
135
39
214
Interest expense
(287)
(287)
(784)
(702)
Total other expense, net
(263)
(152)
(745)
(488)
Loss before income tax provision
(2,479)
(1,398)
(4,405)
(14,218)
Income tax provision
15
1
68
91
Net loss
(2,494)
(1,399)
(4,473)
(14,309)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments
23
6
19
31
Net unrealized losses on derivative instruments
(48)
-
(70)
-
Unrealized gains on investments
-
2
-
4
Total other comprehensive income (loss)
(25)
8
(51)
35
Comprehensive loss
(2,519)
$
(1,391)
$
(4,524)
$
(14,274)
$
Basic and diluted net loss per share
(0.08)
$
(0.04)
$
(0.14)
$
(0.40)
$
Shares used in computation of basic and
diluted net loss per share
33,532
33,218
33,459
32,493 |
 17
Consolidated Balance Sheet
(Unaudited, in Thousands, Except Par and Per Share Liquidation value)
September 27
December 28
ASSETS
2014
2013
Current assets:
Cash and cash equivalents
1,255
$
818
$
Short-term
investments 39
47
Accounts receivable, net of allowances of $295 and
$213 at June 28, 2014 and
December 28, 2013, respectively 3,958
5,029
Inventory
44,816
36,986
Other current assets
3,052
3,234
Total current assets 53,120
46,114
Property and equipment, net
17,321
19,663
Intangible assets, net
1,822
1,601
Other non-current assets
1,421
1,804
Total assets 73,684
$
69,182
$
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
21,715
$
19,669
$
Accrued expenses
6,902
5,959
Revolving loan
payable 10,869
6,774
Current portion of
capital leases payable 209
269
Other current liabilities 3,982
3,682
Total current liabilities 43,677
36,353
Capital leases payable, net of current portion
9,392
9,502
Deferred income taxes
321
335
Other non-current
liabilities 1,854
2,126
Total liabilities 55,244
48,316
Stockholders' equity:
Series A convertible preferred stock, $0.001 par
value; $1.45 per
share liquidation value or aggregate of $6,017; 4,150
shares authorized; 4,150 shares
issued and outstanding at
September 27, 2014 and December 28, 2013, respectively 4
4
Common stock, $0.001 par value; 100,000 shares
authorized; 33,542 shares
and 33,352 shares issued and outstanding
at September 27, 2014 and
December 28, 2013, respectively 34
33
Additional paid-in capital
170,969
168,693
Common stock dividend distributable
61
60
Accumulated other comprehensive income
395
446
Accumulated deficit (153,023)
(148,370)
Total stockholders' equity
18,440
20,866
Total
liabilities and equity 73,684
$
69,182
$
|
 Consolidated
Sales
1
($ In Millions)
Sales & Adjusted EBITDA
18
Adj. EBITDA Margin
3%
5%
8%
7%
3%
2%
3%
$5.2
$13.5
$19.5
$16.3
$9.4
$6.0
$6.7
2008
2009
2011
2011
2012
2013
Q1.14 -
Q3.14
$153.4
$176.3
$262.3
$327.1
$304.0
$254.8
$212.9
2008
2009
2011
2011
2012
2013
Q1.14 -
Q3.14
Consolidated
Adjusted
EBITDA
2
($ 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.
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 Stock based compensation of $2.9M, $3.3M, $2.7M, $2.6M,
$1.7M, $1.3M and $1.7M in 2008, 2009, 2010, 2011, 2012, 2013, and Q1-14 through
Q3-14, respectively and restructuring costs and other one time charges of $23.4M, $0.4M, $5.8M, $12.9M, $27.5M, $6.8M, and $1.5 in 2008, 2009, 2010, 2011, 2012, 2013
and Q1-14, through Q3-14, respectively.
|