PRTS CarParts com Inc

TORRANCE, Calif., May 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 first quarter ended March 30, 2024. 

First Quarter 2024 Summary vs. Year-Ago Quarter

• Net sales decreased to $166.3 million, down 5% from the year-ago quarter.
• Gross profit of $53.9 million vs. $62.6 million, with gross margin of 32.4%.
• Net loss was ($6.5) million, or ($0.11) per share, compared to a net income of $1.1 million, or $0.02 per share.
• Adjusted EBITDA of $1.1 million vs. $9.4 million.
• Cash of $46.0 million and no revolver debt.

Management Commentary

"In the past year, we have marked significant milestones. The successful launch of our mobile app stands out as it now contributes over 8% of our total eCommerce revenue. Additionally, we've captured 38% of our eCommerce revenue from loyal repeat customers, while our website has attracted over 100 million visits, affirming our strong online presence. We also realigned our cost structure to be leaner and more agile," said David Meniane, CEO. 

"We are well positioned to capture the tremendous and growing opportunities within the highly fragmented and underserved four hundred-billion-dollar aftermarket auto parts industry.

Despite these great achievements, we faced acute pressures throughout the year. However, financial discipline is ingrained in our organizational DNA. Given the evolving market dynamics, we are doubling down on opportunities for margin expansion, particularly centered around pricing optimization, marketing, supply chain and technology. Our endeavors for the remainder of fiscal 2024 will be laser-focused on improving efficiency and profitability to significantly increase Adjusted EBITDA for the years 2025 and 2026, ultimately enhancing shareholder value.

Through our continued efforts around our three strategic pillars and an unwavering commitment to efficiency and profitability, we are confident in achieving Adjusted EBITDA growth next year. Looking ahead to the medium term, our aim is to attain a 6-8% Adjusted EBITDA margin while also increasing our free cashflow generation."

First Quarter 2024 Financial Results

Net sales in the first quarter of 2024 were $166.3 million, down 5% from the year-ago quarter. The decrease was primarily driven by softness in consumer demand in certain parts and selling price compression.

Gross profit in the first quarter was $53.9 million compared to $62.6 million, with gross margin decreasing 320 basis points to 32.4%. The decrease in gross profit and gross margin was primarily driven by higher outbound transportation costs and selling price compression.

Total operating expenses in the first quarter were $60.4 million compared to $61.9 million in the year-ago quarter.

Net loss in the first quarter was ($6.5) million compared to net income of $1.1 million in the year-ago quarter.

Adjusted EBITDA in the first quarter was $1.1 million compared to $9.4 million in the year-ago quarter.

On March 30, 2024, the Company had a cash balance of $46.0 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

For the full year 2024, we are targeting gross profit to remain within the range we had previously forecasted but adjusting the net sales and gross margin ranges as follows:

• The Company expects net sales in a range of $600 million to $625 million to reflect our focus on gross margin improvement. Our previous net sales guidance had been in a range of $662 million to $688 million.
  
  
• The Company expects gross margin in a range of 33%, plus or minus 100 basis points, which will partially offset the lower expected net sales. Our previous guidance was 31%, plus or minus 100 basis points.

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, May 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) income 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 moving costs. A reconciliation of Adjusted EBITDA to net (loss) income 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):

The table below reconciles net (loss) income to Adjusted EBITDA for the periods presented (in thousands):

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SOURCE CarParts.com, Inc.