Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CarParts.com, Inc. | d889013d8k.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
Total revenue $283.4M
Sales up 11% for the year
Adjusted EBITDA was $8.1M
Adjusted EBITDA up 35% from $6.0M in FY-13
Highlights from FY-14
Earnings Call
* Revenue includes $3.6M in sales and $0.1M in EBITDA for additional week
|
 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. Rev²
% 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)
3
$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
$4.6B
9.7%
90.3%
5 |
 Booz & Co. estimates by 2018 that Online DIY
could reach 17% of the total DIY market
6
Online Market is Vibrant and Growing
Aftermarket e-Commerce Overview
DIY Online Penetration
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
1
2014 is estimated by IHS |
 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%
7
Do It Yourself (DIY) Projections¹
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)
8
Competitive sites’
traffic based on Compete December 2014 reports
US Auto Parts Dominant Reach-
Largest Pure Play Internet Retailer
Over 500 man years of hand written unique content
Long domain history to help indexing in search
Multiple website management
Customer Reach is a Competitive Moat |
 9
Broad Auto Parts Product Offering
Body Parts
Engine Parts
Performance & Accessories
*Represents USAP online mix
30%
50%
20%
Revenue*
US
Auto
Parts
has
one
of
the
largest
product
offerings
with
over
1.6 million
products across body parts, engine parts, and performance & accessories
Broad Auto Parts Product Offering
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 |
 –
Currently over 40,000 Private Label Products.
–
Adding 6,000 –
7,000 Private Label SKUs this year
–
The Company sources product directly from over 200 factories in Asia
10
Margin %
In-Stock
Private Label
(Asia Sourced)
Branded
(U.S. Sourced)
30% -
60%
15% -
30%
5% -
20%
Drop Shipped
Current Mix
58%
42%
Current Mix
66%
34%
The
breadth
of
our
Private
Label
products
provides
a
significant
competitive
moat
USAP’s Supply Chain Creates
Pricing Advantage
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. |
 Revenue
100%
Gross Margins
26% -
29%
Variable OPEX Costs
15%
Fixed Cost
0%
Incremental Flow
11% -
14%
11
Incremental Flow Thru
Growth and Profitability |
   12
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
10%
20%
30%
40%
50%
Revenue
$275
$303
$330
$358
$385
$413
Gross Margin %
26.0%
–
29.0%
26.0%
–
29.0%
26.0%
–
29.0%
26.0%
–
29.0%
26.0%
–
29.0%
26.0%
–
29.0%
Variable:
Fulfillment
3.3%
3.3%
3.3%
3.3%
3.3%
3.3%
Marketing
9.3%
9.3%
9.3%
9.3%
9.3%
9.3%
Technology
0.6%
0.6%
0.6%
0.6%
0.6%
0.6%
G&A
1.8%
1.8%
1.8%
1.8%
1.8%
1.8%
Total Variable
15.0%
15.0%
15.0%
15.0%
15.0%
15.0%
Fixed:
Fulfillment
2.0%
1.8%
1.7%
1.6%
1.5%
1.4%
Marketing
4.1%
3.7%
3.4%
3.1%
2.9%
2.7%
Technology
1.0%
0.9%
0.8%
0.8%
0.7%
0.7%
G&A
4.0%
3.6%
3.3%
3.1%
2.8%
2.7%
Total Fixed
11.1%
10.1%
9.2%
8.5%
7.9%
7.4%
Adjusted EBITDA %
-0.1%
–
2.9%
0.9%
–
3.9%
1.7%
–
4.7%
2.5%
–
5.5%
3.1%
–
6.1%
3.6%
–
6.6%
Adjusted EBITDA $
($0)
–
$8
$3
–
$12
$6
–
$16
$9
–
$19
$12
–
$23
$15
–
$27 |
 13
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 approximately 2,000 shops on
the program currently and growing |
 Case for Investment
14
Large and Growing Online Market
Significant Customer Reach
Significant Private Label Offering
Experienced Leadership Team |
 15
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 2008
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 |
 16
Over $19M of costs have been reduced over a two year period
Adjusted EBITDA
(Non-GAAP Financial Measure –
in thousands)
Fourteen
Weeks Ended
Fiscal Year Ended
January 3
December 28
January 3
December 28
2015
2013
2015
2013
Net loss
(2,613)
$
(1,325)
$
(7,086)
$
(15,634)
$
Interest expense, net
317
276
1,101
972
Income tax provision
70
(48)
138
43
Amortization of intangible assets
106
82
422
381
Depreciation and amortization expense
2,090
2,439
8,923
12,175
EBITDA
(30)
1,424
3,498
(2,063)
Share-based compensation expense
680
198
2,371
1,263
Impairment loss on property and equipment
-
-
-
4,832
Impairment loss on intangible assets
-
-
-
1,245
Inventory write-down related to Carson closure
419
-
897
-
Restructuring costs
102
-
1,137
723
Adjusted EBITDA
1,171
$
1,622
$
7,903
$
6,000
$
Thirteen
Weeks Ended |
 17
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.
Fourteen
Weeks Ended
Fiscal Year Ended
January 3
December 28
January 3
December 28
2015
2013
2015
2013
Net sales
70,568
$
59,735
$
283,508
$
254,753
$
Cost of sales
(1)
51,653
42,260
205,058
180,620
Gross profit
18,915
17,475
78,450
74,133
Operating expenses:
Marketing
10,652
9,284
42,008
41,045
General and administrative
4,169
3,941
16,701
17,567
Fulfillment
5,017
4,112
20,368
18,702
Technology
1,223
1,093
4,863
5,128
Amortization of intangible assets
106
82
422
381
Impairment loss on property and equipment
-
-
-
4,832
Impairment loss on intangible assets
-
-
-
1,245
Total operating expenses
21,167
18,512
84,362
88,900
Loss from operations
(2,252)
(1,037)
(5,912)
(14,767)
Other income (expense):
Other income, net
26
(66)
65
148
Interest expense
(317)
(270)
(1,101)
(972)
Total other expense, net
(291)
(336)
(1,036)
(824)
Loss before income taxes
(2,543)
(1,373)
(6,948)
(15,591)
Income tax (benefit) provision
70
(48)
138
43
Net loss including noncontrolling interests
(2,613)
(1,325)
(7,086)
(15,634)
Net Loss attributable to non-controlling interests
(207)
-
(207)
Net loss attributable to U.S. Auto Parts
(2,406)
(1,325)
(6,879)
(15,634)
Other comprehensive income attributable to U.S. Auto Parts, net of
tax: Foreign currency translation adjustments
-
24
19
55
Actuarial loss on defined benefit plan
(106)
-
(106)
-
Unrealized gains on investments
-
3
-
7
Total other comprehensive income attributable to U.S. Auto Parts
(106)
27
(87)
62
Comprehensive loss attributable to U.S. Auto Parts
(2,512)
$
(1,298)
$
(6,966)
$
(15,572)
$
Basic and diluted net loss per share
(0.07)
$
(0.04)
$
(0.21)
$
(0.48)
$
Shares used in computation of basic and
diluted net loss per share
33,573
33,308
33,489
32,697
Thirteen
Weeks Ended |
 18
Consolidated Balance Sheet
(Unaudited, in Thousands, Except Par and Per Share Liquidation value)
January 3
December 28
ASSETS
2015
2013
Current assets:
Cash and cash equivalents
7,653
$
818
$
Short-term
investments 62
47
Accounts receivable, net of allowances of $41 and
$213 at January 3,
2015 and December 28, 2013, respectively 3,804
5,029
Inventory
48,362
36,986
Other current assets
2,669
3,234
Total current assets 62,550
46,114
Property and equipment, net
16,966
19,663
Intangible assets, net
1,707
1,601
Other non-current assets
1,684
1,804
Total assets 82,907
$
69,182
$
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
25,362
$
19,669
$
Accrued expenses
7,747
5,959
Revolving loan
payable 11,022
6,774
Current portion of
capital leases payable 269
269
Other current liabilities 3,505
3,682
Total current liabilities 47,905
36,353
Capital leases payable, net of current portion
9,270
9,502
Deferred income taxes
1,618
335
Other non-current
liabilities 1,891
2,126
Total liabilities 60,684
48,316
Commitments and contingencies
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
1/3/15 and 12/28/13, respectively 4
4
Common stock, $0.001 par value; 100,000 shares
authorized; 33, 624 shares &
33,352 shares issued and
outstanding at 1/3/15 & 12/28/13, 2013, respectively
33
33
Additional paid-in capital
174,369
168,693
Common stock dividend distributable on
Series A convertible preferred stock -
60
Accumulated other comprehensive income
360
446
Accumulated deficit (155,489)
(148,370)
Total stockholders' equity
19,277
20,866
Noncontrolling interest
2,946
-
Total stockholders' equity
22,223
20,866
Total
liabilities and equity 82,907
$
69,182
$
|
 Sales & Adjusted EBITDA
1
19
Consolidated Sales²
($ In Millions)
Consolidated Adjusted EBITDA³
($ In Millions)
1.
Excludes AMD starting in Q4-14 which is funded through capital raised
2.
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.
3.
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
$2.4M
in
2008,
2009,
2010,
2011,
2012,
2013,
and
2014,
respectively
and
restructuring
costs
and
other one
time
charges
of
$23.4M,
$0.4M,
$5.8M,
$12.9M,
$27.5M,
$6.8M,
and
$2.4
in
2008,
2009,
2010,
2011,
2012,
2013
and
2014,
respectively.
Adj. EBITDA Margin
3%
5%
8%
7%
3%
2%
3% |