TORRANCE, Calif., Oct. 29,
2024 /PRNewswire/ --
CarParts.com, Inc. (NASDAQ: PRTS), a leading eCommerce
provider of automotive parts and accessories, and a premier
destination for vehicle repair and maintenance needs, is reporting
results for the third quarter ended September 28, 2024.
Third Quarter 2024 Summary vs. Year-Ago Quarter
- Net sales decreased to $144.8
million, down 13% from the year-ago quarter.
- Gross profit of $51.0 million vs.
$54.8 million.
- Gross margin of 35.2%, up from 32.9% from the year-ago
quarter.
- Net loss was ($10.0) million, or
($0.17) per share, compared to a net
loss of ($2.5) million, or
($0.04) per share.
- Adjusted EBITDA of ($1.2) million
vs. $3.0 million.
- Cash of $38.1 million and no
revolver debt.
- Our mobile app has cumulative downloads of over 550,000, more
than double the number from the beginning of the year.
- New semi-automated Las Vegas
distribution center fully operational and handling 20% of company
volume.
Management Commentary
"Over the last 12 months, we have been working on re-platforming
carparts.com to increase performance and shorten our development
cycles. I'm proud to announce that carparts.com is now on a
best-in-class cloud-based infrastructure which allows us to roll
out new features faster than ever.
We have recently rolled out several strategic initiatives, such
as our partnership with SimpleTire, offering a full assortment of
tires with installation, our new shipping and product protection
offering, and VIN lookup that has 30,000 uses in just two
weeks. Although we are early in the journey, all these
initiatives are seeing take rates and usage higher than
anticipated.
Additionally, we are happy to announce the launch of our eBay
store in Canada with a full
assortment of mechanical parts. We are leveraging our best-in-class
catalog and marketplaces capabilities to capture incremental
revenue in this new global market. Early signs are positive, and as
we continue to ramp up, we believe it could become a top line
revenue driver.
On the Amazon front, we have recently completed a pilot,
leveraging the Amazon fulfillment network to offer a selection of
our private label parts. This program offers amazon shoppers our
private label products with fast delivery and Prime badging.
Our OE premium brands are up 24% YOY, our European brands are up
23% YOY, and finally, our wholesale commercial sales channel,
excluding the impact of our Vegas move, is up mid-single digits"
said David Meniane, CEO.
Third Quarter 2024 Financial Results
Net sales in the third quarter of 2024 were $144.8 million, down 13% from the year-ago
quarter. The decrease was primarily driven by deliberate price
increases to focus on higher value customers, support gross margin
expansion, a continued challenging consumer environment in the
industry, and one-time impacts from the Crowd Strike issue and
hurricanes Helene and Milton in the quarter.
Gross profit in the third quarter was $51.0 million compared to $54.8 million in the year-ago quarter, with gross
margin increasing 230 basis points to 35.2%, and up sequentially
from 33.5% last quarter. This improvement in gross margin was
primarily driven by our price increases and lower product costs
resulting in expanded product margins, partially offset by
unfavorable freight costs.
Total operating expenses in the third quarter were $60.9 million compared to $57.7 million in the year-ago quarter.
Net loss in the third quarter was ($10.0) million compared to a
net loss of ($2.5) million in the
year-ago quarter.
Adjusted EBITDA in the third quarter was ($1.2) million compared to $3.0 million in the year-ago quarter.
On September 28, 2024, the Company
had a cash balance of $38.1 million
and no revolver debt, compared to no revolver debt and a
$51.0 million cash balance at prior
fiscal year-end December 30,
2023.
2024 Outlook
Due to the unexpected and continued impact from hurricanes
Helene and Milton, the Company is narrowing and lowering our full
year net revenue guidance by $5
million to $595 million to
$600 million; however, the Company is
narrowing our expected gross margin guidance to the high end of the
range, from 32%-34% to 33%-34%.
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, October 29,
2024
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, Inc. is a technology-driven eCommerce company
offering over 1 million high-quality automotive parts and
accessories. Operating for over 25 years, CarParts.com has
established itself as a premier destination for drivers seeking
repair and maintenance solutions. Our commitment lies in placing
the customer at the forefront of our operations, evident in our
easy-to-use, mobile-friendly website and app. With a commitment to
affordability and customer satisfaction, CarParts.com simplifies
the automotive repair process, aiming to eliminate the uncertainty
and stress often associated with vehicle maintenance.
Backed by a robust company-operated fulfillment network, we
ensure swift delivery of top-quality parts from leading brands to
customers across the nation.
At CarParts.com, our global team is united by a shared vision:
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" in this earnings release and on today's scheduled
conference call, which are non-GAAP financial measures. Adjusted
EBITDA consist of net loss before (a) interest (income)
expense, net; (b) income tax provision; (c) depreciation
and amortization expense; (d) amortization of intangible
assets; (e) share-based compensation expense; (f) workforce
transition costs; and (g) distribution center costs. A
reconciliation of Adjusted EBITDA to net loss is provided
below.
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 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
|
|
Thirty-Nine
Weeks
Ended
|
|
Thirty-Nine
Weeks
Ended
|
|
|
|
September 28, 2024
|
|
September 30, 2023
|
|
September 28, 2024
|
|
September 30, 2023
|
|
|
Net sales
|
|
$
|
144.75
|
|
$
|
166.86
|
|
$
|
455.31
|
|
$
|
519.33
|
|
|
Gross profit
|
|
$
|
50.98
|
|
$
|
54.82
|
|
$
|
153.29
|
|
$
|
177.81
|
|
|
|
|
35.2
|
%
|
|
32.9
|
%
|
|
33.7
|
%
|
|
34.2
|
%
|
|
Operating
expense
|
|
$
|
60.90
|
|
$
|
57.73
|
|
$
|
178.46
|
|
$
|
180.94
|
|
|
|
|
42.1
|
%
|
|
34.6
|
%
|
|
39.2
|
%
|
|
34.8
|
%
|
|
Net loss
|
|
$
|
(10.02)
|
|
$
|
(2.52)
|
|
$
|
(25.18)
|
|
$
|
(2.14)
|
|
|
|
|
(6.9)
|
%
|
|
(1.5)
|
%
|
|
(5.5)
|
%
|
|
(0.4)
|
%
|
|
Adjusted
EBITDA
|
|
$
|
(1.16)
|
|
$
|
3.05
|
|
$
|
(0.23)
|
|
$
|
18.72
|
|
|
|
|
(0.8)
|
%
|
|
1.8
|
%
|
|
(0.1)
|
%
|
|
3.6
|
%
|
|
The table below
reconciles net loss to Adjusted EBITDA for the periods presented
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine
Weeks
Ended
|
|
Thirty-Nine
Weeks
Ended
|
|
|
September 28, 2024
|
|
September 30, 2023
|
|
September 28, 2024
|
|
September 30, 2023
|
|
Net loss
|
|
$
|
(10,018)
|
|
$
|
(2,517)
|
|
$
|
(25,183)
|
|
$
|
(2,137)
|
|
Depreciation &
amortization
|
|
|
4,956
|
|
|
4,430
|
|
|
13,436
|
|
|
12,596
|
|
Amortization of
intangible assets
|
|
|
12
|
|
|
8
|
|
|
33
|
|
|
28
|
|
Interest (income)
expense, net
|
|
|
(35)
|
|
|
(449)
|
|
|
(240)
|
|
|
(323)
|
|
Income tax
provision
|
|
|
135
|
|
|
114
|
|
|
260
|
|
|
396
|
|
EBITDA
|
|
$
|
(4,950)
|
|
$
|
1,586
|
|
$
|
(11,694)
|
|
$
|
10,560
|
|
Stock compensation
expense
|
|
$
|
3,057
|
|
$
|
1,462
|
|
$
|
8,967
|
|
$
|
8,158
|
|
Workforce transition
costs(1)
|
|
|
26
|
|
|
—
|
|
|
617
|
|
|
—
|
|
Distribution center
costs(2)
|
|
|
705
|
|
|
—
|
|
|
1,882
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
(1,162)
|
|
$
|
3,048
|
|
$
|
(228)
|
|
$
|
18,718
|
|
___________________________
|
|
(1)
|
We incurred workforce
transition costs, primarily related to severance, as part of our
recent workforce reductions.
|
|
(2)
|
We incurred certain
non-recurring costs, primarily overlapping rent expense,
attributable to moving to our new Las Vegas, Nevada distribution
center.
|
|
CARPARTS.COM, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
OPERATIONS
(Unaudited, In Thousands, Except Per Share
Data)
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
|
September 28,
|
|
September 30,
|
|
September 28,
|
|
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net sales
|
|
$
|
144,751
|
|
$
|
166,864
|
|
$
|
455,310
|
|
$
|
519,334
|
|
Cost of sales
(1)
|
|
|
93,769
|
|
|
112,047
|
|
|
302,016
|
|
|
341,524
|
|
Gross profit
|
|
|
50,982
|
|
|
54,817
|
|
|
153,294
|
|
|
177,810
|
|
Operating
expense
|
|
|
60,900
|
|
|
57,734
|
|
|
178,457
|
|
|
180,935
|
|
Loss from
operations
|
|
|
(9,918)
|
|
|
(2,917)
|
|
|
(25,163)
|
|
|
(3,125)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
|
345
|
|
|
874
|
|
|
1,136
|
|
|
2,427
|
|
Interest
expense
|
|
|
(310)
|
|
|
(360)
|
|
|
(896)
|
|
|
(1,043)
|
|
Total other income,
net
|
|
|
35
|
|
|
514
|
|
|
240
|
|
|
1,384
|
|
Loss before income
taxes
|
|
|
(9,883)
|
|
|
(2,403)
|
|
|
(24,923)
|
|
|
(1,741)
|
|
Income tax
provision
|
|
|
135
|
|
|
114
|
|
|
260
|
|
|
396
|
|
Net loss
|
|
|
(10,018)
|
|
|
(2,517)
|
|
|
(25,183)
|
|
|
(2,137)
|
|
Other comprehensive
(loss) gain:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
adjustments
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
Unrealized (loss) gain
on deferred compensation trust assets
|
|
|
—
|
|
|
(21)
|
|
|
—
|
|
|
27
|
|
Total other
comprehensive (loss) gain
|
|
|
—
|
|
|
(21)
|
|
|
87
|
|
|
27
|
|
Comprehensive
loss
|
|
$
|
(10,018)
|
|
$
|
(2,538)
|
|
$
|
(25,096)
|
|
$
|
(2,110)
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share
|
|
$
|
(0.17)
|
|
$
|
(0.04)
|
|
$
|
(0.44)
|
|
$
|
(0.04)
|
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of basic and diluted net loss per share
|
|
|
57,334
|
|
|
57,179
|
|
|
56,897
|
|
|
56,252
|
|
_______________________
|
|
(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)
|
|
|
|
September 28,
|
|
December 30,
|
|
|
2024
|
|
2023
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
38,105
|
|
$
|
50,951
|
|
Accounts receivable,
net
|
|
|
8,427
|
|
|
7,365
|
|
Inventory,
net
|
|
|
97,235
|
|
|
128,901
|
|
Other current
assets
|
|
|
6,477
|
|
|
6,121
|
|
Total current
assets
|
|
|
150,244
|
|
|
193,338
|
|
Property and equipment,
net
|
|
|
34,494
|
|
|
26,389
|
|
Right-of-use - assets -
operating leases, net
|
|
|
28,029
|
|
|
19,542
|
|
Right-of-use - assets -
finance leases, net
|
|
|
11,808
|
|
|
15,255
|
|
Other non-current
assets
|
|
|
3,064
|
|
|
3,331
|
|
Total
assets
|
|
$
|
227,639
|
|
$
|
257,855
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
59,715
|
|
$
|
77,851
|
|
Accrued
expenses
|
|
|
19,020
|
|
|
20,770
|
|
Right-of-use -
obligation - operating, current
|
|
|
5,668
|
|
|
4,749
|
|
Right-of-use -
obligation - finance, current
|
|
|
3,655
|
|
|
4,308
|
|
Other current
liabilities
|
|
|
4,843
|
|
|
5,308
|
|
Total current
liabilities
|
|
|
92,901
|
|
|
112,986
|
|
Right-of-use -
obligation - operating, non-current
|
|
|
24,797
|
|
|
16,742
|
|
Right-of-use -
obligation - finance, non-current
|
|
|
9,680
|
|
|
12,327
|
|
Other non-current
liabilities
|
|
|
3,062
|
|
|
2,969
|
|
Total
liabilities
|
|
|
130,440
|
|
|
145,024
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common stock, $0.001
par value; 100,000 shares authorized; 57,386 and 56,303 shares
issued
and outstanding as of September 28, 2024 and
December 30, 2023 (of which 3,786 are treasury
stock)
|
|
|
61
|
|
|
60
|
|
Treasury
stock
|
|
|
(11,912)
|
|
|
(11,912)
|
|
Additional paid-in
capital
|
|
|
322,337
|
|
|
312,874
|
|
Accumulated other
comprehensive income
|
|
|
870
|
|
|
783
|
|
Accumulated
deficit
|
|
|
(214,157)
|
|
|
(188,974)
|
|
Total stockholders'
equity
|
|
|
97,199
|
|
|
112,831
|
|
Total liabilities and
stockholders' equity
|
|
$
|
227,639
|
|
$
|
257,855
|
|
CARPARTS.COM, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited, In Thousands)
|
|
|
|
Thirty-Nine Weeks
Ended
|
|
|
September 28,
|
|
September 30,
|
|
|
2024
|
|
2023
|
|
Operating
activities
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(25,183)
|
|
$
|
(2,137)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
|
13,436
|
|
|
12,596
|
|
Amortization of
intangible assets
|
|
|
33
|
|
|
28
|
|
Share-based
compensation expense
|
|
|
8,967
|
|
|
8,158
|
|
Stock awards issued for
non-employee director service
|
|
|
31
|
|
|
17
|
|
Stock awards related to
officers and directors stock purchase plan from payroll
deferral
|
|
|
7
|
|
|
—
|
|
Gain from disposition
of assets
|
|
|
(70)
|
|
|
(75)
|
|
Amortization of
deferred financing costs
|
|
|
49
|
|
|
49
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,063)
|
|
|
(3,185)
|
|
Inventory
|
|
|
31,666
|
|
|
11,616
|
|
Other current
assets
|
|
|
(355)
|
|
|
1
|
|
Other non-current
assets
|
|
|
261
|
|
|
(199)
|
|
Accounts payable and
accrued expenses
|
|
|
(19,352)
|
|
|
31,208
|
|
Other current
liabilities
|
|
|
(465)
|
|
|
386
|
|
Right-of-use obligation
- operating leases - current
|
|
|
1,259
|
|
|
613
|
|
Right-of-use obligation
- operating leases - long-term
|
|
|
(772)
|
|
|
(723)
|
|
Other non-current
liabilities
|
|
|
93
|
|
|
(488)
|
|
Net cash provided by
operating activities
|
|
|
8,542
|
|
|
57,865
|
|
Investing
activities
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(18,146)
|
|
|
(7,380)
|
|
Payments for intangible
assets
|
|
|
(76)
|
|
|
—
|
|
Proceeds from sale of
property and equipment
|
|
|
92
|
|
|
83
|
|
Net cash used in
investing activities
|
|
|
(18,130)
|
|
|
(7,297)
|
|
Financing
activities
|
|
|
|
|
|
|
|
Borrowings from
revolving loan payable
|
|
|
168
|
|
|
159
|
|
Payments made on
revolving loan payable
|
|
|
(168)
|
|
|
(159)
|
|
Payments on finance
leases
|
|
|
(3,243)
|
|
|
(3,592)
|
|
Repurchase of treasury
stock
|
|
|
—
|
|
|
(2,151)
|
|
Net proceeds from
issuance of common stock for ESPP
|
|
|
359
|
|
|
483
|
|
Statutory tax
withholding payment for share-based compensation
|
|
|
(461)
|
|
|
—
|
|
Proceeds from exercise
of stock options
|
|
|
—
|
|
|
2,604
|
|
Net cash used in
financing activities
|
|
|
(3,345)
|
|
|
(2,656)
|
|
Effect of exchange rate
changes on cash
|
|
|
87
|
|
|
—
|
|
Net change in cash and
cash equivalents
|
|
|
(12,846)
|
|
|
47,912
|
|
Cash and cash
equivalents, beginning of period
|
|
|
50,951
|
|
|
18,767
|
|
Cash and cash
equivalents, end of period
|
|
$
|
38,105
|
|
$
|
66,679
|
|
Supplemental disclosure
of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
Right-of-use operating
asset acquired
|
|
$
|
12,857
|
|
$
|
—
|
|
Right-of-use finance
asset acquired
|
|
$
|
—
|
|
$
|
784
|
|
Accrued asset
purchases
|
|
$
|
907
|
|
$
|
658
|
|
Share-based
compensation expense capitalized in property and
equipment
|
|
$
|
561
|
|
$
|
589
|
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
|
Cash paid during the
period for income taxes
|
|
$
|
48
|
|
$
|
180
|
|
Cash paid during the
period for interest
|
|
$
|
896
|
|
$
|
1,042
|
|
Cash received during
the period for interest
|
|
$
|
1,136
|
|
$
|
1,365
|
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SOURCE CarParts.com, Inc.