Record Fiscal
Year Sales of $676 million
TORRANCE, Calif., March 7, 2024 /PRNewswire/ --
CarParts.com, Inc. (NASDAQ: PRTS), one of the leading
eCommerce providers of automotive parts and accessories, and a
one-stop shop for vehicle repair and maintenance needs, is
reporting results for the fourth quarter and fiscal year
ended December 30, 2023.
Fiscal Year 2023 Summary vs. Fiscal Year
2022
- Net sales increased to a record $675.7
million, up 2% and up 16% on a two-year stack.
- Gross profit of $229.4 million
vs. $230.9 million, with gross margin
of 33.9%.
- Net loss was ($8.2) million, or
($0.15) per share, compared to a net
loss of ($1.0) million, or
($0.02) per share.
- Adjusted EBITDA of $19.7 million
vs. $26.1 million.
- Cash of $51.0 million and no
revolver debt.
- Repurchased approximately 1.2 million shares for $4.3 million during the year.
Fourth Quarter 2023 Summary vs. Year-Ago
Quarter
- Net sales increased to $156.4
million, up 1% year-over-year and up 13% on a two-year
stack.
- Gross profit remained flat at $51.6
million, with gross margin of 33.0%.
- Net loss was ($6.1) million, or
($0.11) per share, compared to a net
loss of ($6.2) million, or
($0.11) per share.
- Adjusted EBITDA of $1.0 million
vs. $2.1 million.
Management Commentary
"We continued to see strong unit growth of approximately 8% in
the fourth quarter. We believe we are taking share from other
online players and as consumer confidence rebounds, we are well
positioned to support the $389
billion automotive aftermarket and deliver long-term
growth." said David Meniane, CEO. "In fiscal year 2023, our
team surpassed several company records and reached significant
achievements. However, we experienced a slow start to 2024 and we
continue to experience a difficult macro environment.
In light of these challenges, we have made the tough decision to
significantly reduce our cost structure including the elimination
of 150 global roles. These decisions are not made lightly but we
want to stay agile, protect shareholder value, and realign to the
reality of the environment.
We continue to believe the strategic priorities and areas of the
business we are focused on will lead to long-term shareholder
value. We have proven in the past that we can grow and
execute change management through difficult environments and now is
no different. In addition, we are supported by the strength
of our balance sheet with ample cash and inventory as well as an
undrawn facility with no long-term debt."
Fiscal Year 2023 Financial Results
Net sales in fiscal year 2023 were $675.7 million, up 2% from $661.6 million in fiscal year 2022.
Gross profit decreased slightly to $229.4
million in fiscal year 2023 compared to $230.9 million in fiscal year 2022. Gross margin
decreased 100 basis points to 33.9% in fiscal year 2023 compared to
34.9% in fiscal year 2022. The decrease in gross margin was
primarily driven by higher outbound transportation costs and a
shift in product mix.
Total operating expenses in fiscal year 2023 were $239.3 million compared to $230.2 million in fiscal year 2022. The increase
was primarily driven by investments in our business, combined with
higher advertising expense, partially offset by a decrease in
fulfillment expense primarily due to an improvement in distribution
center fulfillment costs.
Net loss in fiscal year 2023 was ($8.2) million compared to a
net loss of ($1.0) million in fiscal
year 2022.
Adjusted EBITDA in fiscal year 2023 was $19.7 million compared to $26.1 million in the fiscal year 2022.
On December 30, 2023, the Company had a cash balance
of $51.0 million and no revolver
debt, compared to no revolver debt and a $18.8 million cash balance at prior fiscal
year-end December 31, 2022.
Fourth Quarter 2023 Financial Results
Net sales in the fourth quarter of 2023 were $156.4 million, up 1% from the year-ago
quarter.
Gross profit in the fourth quarter remained flat at $51.6 million, with gross margin decreasing 40
basis points to 33.0%. The decrease in gross margin was primarily
driven by higher outbound transportation costs and a shift in
product mix.
Total operating expenses in the fourth quarter were $58.4 million compared to $57.1 million in the year-ago.
Net loss in the fourth quarter was ($6.1) million compared to a
net loss of ($6.2) million in the
year-ago quarter.
Adjusted EBITDA in the fourth quarter was $1.0 million compared to $2.1 million in the year-ago quarter.
2024 Outlook
For the full year, the Company expects comparable net sales in a
range from negative two percent to positive two percent. With gross
margin in the range of 30% to 32%.
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: Thursday, March 7, 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
improving the way drivers shop for the parts they
need. Operating 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. Offering a seamless shopping
experience, we aim to eliminate the uncertainty and stress often
associated with vehicle repair and 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 (benefit) provision;
(c) depreciation and amortization expense;
(d) amortization of intangible assets; and
(e) share-based compensation expense. 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
|
|
Fifty-Two Weeks
Ended
|
|
Fifty-Two Weeks
Ended
|
|
|
|
December 30, 2023
|
|
December 31, 2022
|
|
December 30, 2023
|
|
December 31, 2022
|
|
Net sales
|
|
$
|
156.40
|
|
$
|
154.52
|
|
$
|
675.73
|
|
$
|
661.60
|
|
Gross profit
|
|
$
|
51.60
|
|
$
|
51.65
|
|
$
|
229.41
|
|
$
|
230.89
|
|
|
|
|
33.0
|
%
|
|
33.4
|
%
|
|
33.9
|
%
|
|
34.9
|
%
|
Operating
expense
|
|
$
|
58.35
|
|
$
|
57.10
|
|
$
|
239.29
|
|
$
|
230.24
|
|
|
|
|
37.3
|
%
|
|
36.9
|
%
|
|
35.4
|
%
|
|
34.8
|
%
|
Net loss
|
|
$
|
(6.09)
|
|
$
|
(6.22)
|
|
$
|
(8.22)
|
|
$
|
(0.95)
|
|
|
|
|
(3.9)
|
%
|
|
(4.0)
|
%
|
|
(1.2)
|
%
|
|
(0.1)
|
%
|
Adjusted
EBITDA
|
|
$
|
0.97
|
|
$
|
2.12
|
|
$
|
19.69
|
|
$
|
26.11
|
|
|
|
|
0.6
|
%
|
|
1.4
|
%
|
|
2.9
|
%
|
|
3.9
|
%
|
The table below
reconciles net loss to Adjusted EBITDA for the periods presented
(in thousands):
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirteen Weeks
Ended
|
|
Fifty-Two Weeks
Ended
|
|
Fifty-Two Weeks
Ended
|
|
|
December 30, 2023
|
|
December 31, 2022
|
|
December 30, 2023
|
|
December 31, 2022
|
Net loss
|
|
$
|
(6,086)
|
|
$
|
(6,224)
|
|
$
|
(8,223)
|
|
$
|
(951)
|
Depreciation &
amortization
|
|
|
4,094
|
|
|
3,936
|
|
|
16,690
|
|
|
13,607
|
Amortization of
intangible assets
|
|
|
8
|
|
|
27
|
|
|
36
|
|
|
108
|
Interest (income)
expense, net
|
|
|
(313)
|
|
|
355
|
|
|
(636)
|
|
|
1,421
|
Income tax (benefit)
provision
|
|
|
(251)
|
|
|
514
|
|
|
145
|
|
|
632
|
EBITDA
|
|
$
|
(2,548)
|
|
$
|
(1,392)
|
|
$
|
8,012
|
|
$
|
14,817
|
Stock compensation
expense
|
|
$
|
3,517
|
|
$
|
3,510
|
|
$
|
11,675
|
|
$
|
11,296
|
Adjusted
EBITDA
|
|
$
|
969
|
|
$
|
2,118
|
|
$
|
19,687
|
|
$
|
26,113
|
CARPARTS.COM, INC.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE OPERATIONS (In Thousands, Except Per
Share Data)
|
|
|
|
Fiscal Year
Ended
|
|
|
December 30,
|
|
December 31,
|
|
January 1,
|
|
|
2023
|
|
2022
|
|
2022
|
Net sales
|
|
$
|
675,729
|
|
$
|
661,604
|
|
$
|
582,440
|
Cost of sales
(1)
|
|
|
446,323
|
|
|
430,714
|
|
|
385,157
|
Gross profit
|
|
|
229,406
|
|
|
230,890
|
|
|
197,283
|
Operating
expense
|
|
|
239,287
|
|
|
230,239
|
|
|
206,394
|
(Loss) income from
operations
|
|
|
(9,881)
|
|
|
651
|
|
|
(9,111)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
|
3,197
|
|
|
467
|
|
|
238
|
Interest
expense
|
|
|
(1,394)
|
|
|
(1,437)
|
|
|
(1,115)
|
Total other income
(expense), net
|
|
|
1,803
|
|
|
(970)
|
|
|
(877)
|
Loss before income
taxes
|
|
|
(8,078)
|
|
|
(319)
|
|
|
(9,988)
|
Income tax
provision
|
|
|
145
|
|
|
632
|
|
|
351
|
Net loss
|
|
|
(8,223)
|
|
|
(951)
|
|
|
(10,339)
|
Other comprehensive
(loss) gain:
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
—
|
|
|
127
|
|
|
93
|
Actuarial (loss) gain
on defined benefit plan
|
|
|
(305)
|
|
|
872
|
|
|
307
|
Unrealized (loss) gain
on deferred compensation trust assets
|
|
|
(38)
|
|
|
(147)
|
|
|
89
|
Total other
comprehensive (loss) gain
|
|
|
(343)
|
|
|
852
|
|
|
489
|
Comprehensive
loss
|
|
$
|
(8,566)
|
|
$
|
(99)
|
|
$
|
(9,850)
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share
|
|
$
|
(0.15)
|
|
$
|
(0.02)
|
|
$
|
(0.20)
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of basic net loss per share
|
|
|
56,570
|
|
|
54,137
|
|
|
51,381
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes depreciation
and amortization expense which is included in operating
expense.
|
CARPARTS.COM, INC.
AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (In Thousands, Except Par Value
Data)
|
|
|
|
December 30,
|
|
December 31,
|
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
50,951
|
|
$
|
18,767
|
Accounts receivable,
net
|
|
|
7,365
|
|
|
6,406
|
Inventory,
net
|
|
|
128,901
|
|
|
136,026
|
Other current
assets
|
|
|
6,121
|
|
|
6,672
|
Total current
assets
|
|
|
193,338
|
|
|
167,871
|
Property and equipment,
net
|
|
|
26,389
|
|
|
24,290
|
Right-of-use - assets -
operating leases, net
|
|
|
19,542
|
|
|
23,951
|
Right-of-use - assets -
finance leases, net
|
|
|
15,255
|
|
|
19,750
|
Other non-current
assets
|
|
|
3,331
|
|
|
2,537
|
Total
assets
|
|
$
|
257,855
|
|
$
|
238,399
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
77,851
|
|
$
|
57,616
|
Accrued
expenses
|
|
|
20,770
|
|
|
16,466
|
Right-of-use -
obligation - operating, current
|
|
|
4,749
|
|
|
4,571
|
Right-of-use -
obligation - finance, current
|
|
|
4,308
|
|
|
4,753
|
Other current
liabilities
|
|
|
5,308
|
|
|
4,622
|
Total current
liabilities
|
|
|
112,986
|
|
|
88,028
|
Right-of-use -
obligation - operating, non-current
|
|
|
16,742
|
|
|
21,412
|
Right-of-use -
obligation - finance, non-current
|
|
|
12,327
|
|
|
15,916
|
Other non-current
liabilities
|
|
|
2,969
|
|
|
2,971
|
Total
liabilities
|
|
|
145,024
|
|
|
128,327
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common stock, $0.001
par value; 100,000 shares authorized; 57,564 and 54,693 shares
issued
and outstanding as of December 30, 2023 and
December 31, 2022 (of which 3,786 and 2,565 are
treasury stock, respectively)
|
|
|
60
|
|
|
57
|
Treasury
stock
|
|
|
(11,912)
|
|
|
(7,625)
|
Additional paid-in
capital
|
|
|
312,874
|
|
|
297,265
|
Accumulated other
comprehensive income
|
|
|
783
|
|
|
1,126
|
Accumulated
deficit
|
|
|
(188,974)
|
|
|
(180,751)
|
Total stockholders'
equity
|
|
|
112,831
|
|
|
110,072
|
Total liabilities and
stockholders' equity
|
|
$
|
257,855
|
|
$
|
238,399
|
CARPARTS.COM, INC.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (In Thousands)
|
|
|
|
Fiscal Year
Ended
|
|
|
December 30,
|
|
December 31,
|
|
January 1,
|
|
|
2023
|
|
2022
|
|
2022
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(8,223)
|
|
$
|
(951)
|
|
$
|
(10,339)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
|
16,690
|
|
|
13,607
|
|
|
9,895
|
Amortization of
intangible assets
|
|
|
36
|
|
|
108
|
|
|
110
|
Share-based
compensation expense
|
|
|
11,675
|
|
|
11,296
|
|
|
15,685
|
Stock awards issued for
non-employee director service
|
|
|
23
|
|
|
22
|
|
|
23
|
Stock awards related to
officers and directors stock purchase plan from payroll
deferral
|
|
|
—
|
|
|
26
|
|
|
—
|
(Gain) loss from
disposition of assets
|
|
|
(78)
|
|
|
(41)
|
|
|
52
|
Amortization of
deferred financing costs
|
|
|
65
|
|
|
53
|
|
|
18
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,101)
|
|
|
(1,424)
|
|
|
1,303
|
Inventory
|
|
|
6,681
|
|
|
2,825
|
|
|
(49,535)
|
Other current
assets
|
|
|
549
|
|
|
(141)
|
|
|
1,340
|
Other non-current
assets
|
|
|
(248)
|
|
|
(636)
|
|
|
551
|
Accounts payable and
accrued expenses
|
|
|
23,696
|
|
|
(9,629)
|
|
|
22,436
|
Other current
liabilities
|
|
|
686
|
|
|
(129)
|
|
|
374
|
Right-of-use obligation
- operating leases - current
|
|
|
631
|
|
|
402
|
|
|
1,696
|
Right-of-use obligation
- operating leases - long-term
|
|
|
(714)
|
|
|
(200)
|
|
|
(836)
|
Other non-current
liabilities
|
|
|
(367)
|
|
|
180
|
|
|
239
|
Net cash provided by
(used in) operating activities
|
|
|
50,001
|
|
|
15,368
|
|
|
(6,988)
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(11,879)
|
|
|
(12,585)
|
|
|
(11,578)
|
Cash paid for
intangible assets
|
|
|
(108)
|
|
|
—
|
|
|
—
|
Proceeds from sale of
property and equipment
|
|
|
86
|
|
|
68
|
|
|
27
|
Net cash used in
investing activities
|
|
|
(11,901)
|
|
|
(12,517)
|
|
|
(11,551)
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
Borrowings from
revolving loan payable
|
|
|
244
|
|
|
10,417
|
|
|
131
|
Payments made on
revolving loan payable
|
|
|
(244)
|
|
|
(10,417)
|
|
|
(131)
|
Repurchase of treasury
stock
|
|
|
(4,311)
|
|
|
—
|
|
|
(524)
|
Payments on finance
leases
|
|
|
(4,738)
|
|
|
(4,232)
|
|
|
(2,164)
|
Net proceeds from
issuance of common stock for ESPP
|
|
|
483
|
|
|
795
|
|
|
—
|
Statutory tax
withholding payment for share-based compensation
|
|
|
—
|
|
|
—
|
|
|
(3)
|
Proceeds from exercise
of stock options
|
|
|
2,650
|
|
|
1,284
|
|
|
3,661
|
Payment of registration
costs of common stock
|
|
|
—
|
|
|
—
|
|
|
(68)
|
Net cash (used in)
provided by financing activities
|
|
|
(5,916)
|
|
|
(2,153)
|
|
|
902
|
Effect of exchange rate
changes on cash
|
|
|
—
|
|
|
(75)
|
|
|
(21)
|
Net change in cash and
cash equivalents
|
|
|
32,184
|
|
|
623
|
|
|
(17,658)
|
Cash and cash
equivalents, beginning of period
|
|
|
18,767
|
|
|
18,144
|
|
|
35,802
|
Cash and cash
equivalents, end of period
|
|
$
|
50,951
|
|
$
|
18,767
|
|
$
|
18,144
|
Supplemental disclosure
of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
Right-of-use operating
asset acquired
|
|
$
|
—
|
|
$
|
—
|
|
$
|
15,000
|
Right-of-use finance
asset acquired
|
|
$
|
784
|
|
$
|
9,206
|
|
$
|
4,975
|
Accrued asset
purchases
|
|
$
|
1,499
|
|
$
|
624
|
|
$
|
1,764
|
Share-based
compensation expense capitalized in property and
equipment
|
|
$
|
804
|
|
$
|
1,180
|
|
$
|
2,159
|
Stock issued for
services
|
|
$
|
—
|
|
$
|
81
|
|
$
|
778
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid during the
period for income taxes
|
|
$
|
210
|
|
$
|
649
|
|
$
|
88
|
Cash paid during the
period for interest
|
|
$
|
1,394
|
|
$
|
1,437
|
|
$
|
1,115
|
Cash received during
the period for interest
|
|
$
|
2,030
|
|
$
|
16
|
|
$
|
26
|
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SOURCE CarParts.com, Inc.