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CarParts.com Reports Record Second Quarter 2022 Results

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Record Quarterly Sales of $176.2 million, up 12% year over year

10th Consecutive Quarter of Year over Year Sales Growth

Net Income of $4.1 million and Adjusted EBITDA of $8.3 million

TORRANCE, Calif., Aug. 2, 2022 /PRNewswire/ -- CarParts.com, Inc. (NASDAQ: PRTS), one of the leading e-commerce providers of automotive parts and accessories, is reporting results for the second quarter ended July 2, 2022.

CarParts.com Logo (PRNewsfoto/CarParts.com, Inc.)
CarParts.com Logo (PRNewsfoto/CarParts.com, Inc.)

Second Quarter 2022 Summary vs. Year-Ago Quarter 

  • Net sales increased 12% year over year to $176.2 million and increased 44% on a two-year stack.

  • Gross profit increased 16% to $61.9 million, with gross margin increasing 120 basis points to 35.1%.

  • Net income was $4.1 million or $0.07 per diluted share, compared to net income of $2.1 million or $0.04 per diluted share.

  • Adjusted EBITDA of $8.3 million vs. $8.3 million.

  • Entered into an amended and restated $75 million credit facility with the ability to increase to $150 million, subject to certain terms and conditions. The facility is undrawn as of July 2, 2022.

  • For net revenues in the back half of 2022, the company projects double-digit year-over-year growth.

Management Commentary

"Q2 was another record for our company," said David Meniane, CEO of CarParts.com. "We are excited to build a trusted and disruptive platform where we can help our customers solve their auto repair and maintenance needs. Our goal is to become the number one destination for customers that need help fixing their vehicles."

"One of our core strategic pillars is innovation and I'm excited to announce our Do-It-For-Me experience is currently live on our website in certain test markets."

Second Quarter 2022 Financial Results

Net sales in the second quarter of 2022 were $176.2 million compared to $157.5 million in the year-ago quarter. The increase was primarily driven by continued strong demand and the expanded capacity from our Grand Prairie distribution center.

Gross profit in the second quarter increased 16% to $61.9 million compared to $53.3 million in the second quarter last year, with gross margin increasing 120 basis points to 35.1%.

Total operating expenses in the second quarter were $57.6 million compared to $51.0 million in the second quarter last year due to an increase in sales and investments in the business.

Net income in the second quarter was $4.1 million compared to a net income of $2.1 million in the second quarter last year.

Adjusted EBITDA in the second quarter was $8.3 million compared to $8.3 million in the year-ago quarter.

On July 2, 2022, the Company had a cash balance of $15.2 million, no revolver debt and no outstanding trade letters of credit ("LCs"), compared to no revolver debt, no outstanding trade LCs and a $18.1 million cash balance at prior fiscal year-end January 1, 2022.

Conference Call

CarParts.com CEO David Meniane and CFO Ryan Lockwood will host a conference call today to discuss the results, followed by a question and answer period.

Date: Tuesday, August 2, 2022
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.

With over 25 years of experience, and more than 50 million parts delivered, we've streamlined our website and sourcing network to better serve the way drivers get the parts they need. Utilizing the latest technologies and design principles, we've created an easy-to-use, mobile-friendly shopping experience that, alongside our own nationwide distribution network, cuts out the brick-and-mortar supply chain costs and provides quality parts at a budget-friendly price.

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," which is a non-GAAP financial measure. Adjusted EBITDA consists of net income (loss) before (a) interest expense, net; (b) income tax provision; (c) depreciation and amortization expense; (d) amortization of intangible assets; and (e) share-based compensation expense. A reconciliation of Adjusted EBITDA to net income (loss) is provided below.

The Company believes that this non-GAAP financial measure provides important supplemental information to management and investors. This non-GAAP financial measure reflects an additional way of viewing aspects of the Company's operations that, when viewed with the GAAP results and the accompanying reconciliation 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 one measure 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, this non-GAAP measure is 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 Adjusted EBITDA as a supplemental measure to evaluate the ongoing operations of companies in our industry.

This non-GAAP financial measure is 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


Twenty-Six
Weeks
Ended


Twenty-Six
Weeks
Ended




July 2, 2022


July 3, 2021


July 2, 2022


July 3, 2021


Net sales


$

176.22


$

157.54


$

342.27


$

302.34


Gross profit


$

61.94


$

53.35


$

123.10


$

102.52





35.1

%


33.9

%


36.0

%


33.9

%

Operating expense


$

57.64


$

51.01


$

116.42


$

102.69





32.7

%


32.4

%


34.0

%


34.0

%

Net income (loss)


$

4.12


$

2.07


$

6.22


$

(0.65)





2.43

%


1.3

%


1.8

%


(0.2)

%

Adjusted EBITDA


$

8.49


$

8.35


$

17.74


$

11.91





4.7

%


5.3

%


5.2

%


3.9

%

 

 

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
















Thirteen Weeks
Ended


Thirteen Weeks
Ended


Twenty-Six
Weeks Ended


Twenty-Six
Weeks Ended



July 2, 2022


July 3, 2021


July 2, 2022


July 3, 2021

Net income (loss)


$

4,118


$

2,072


$

6,221


$

(650)

Depreciation & amortization



3,308



2,171



6,265



4,550

Amortization of intangible assets



27



27



55



55

Interest expense, net



342



263



633



512

Taxes



17



113



69



168

EBITDA


$

7,812


$

4,646


$

13,243


$

4,635

Stock compensation expense


$

506


$

3,699



4,498



7,272

Adjusted EBITDA


$

8,318


$

8,345


$

17,741


$

11,907

 

 

CARPARTS.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS
(Unaudited, in Thousands, Except Per Share Data)
















Thirteen Weeks Ended


Twenty-Six Weeks Ended



July 2,


July 3,


July 2,


July 3,



2022


2021


2022


2021

Net sales


$

176,220


$

157,536


$

342,273


$

302,338

Cost of sales (1)



114,285



104,187



219,176



199,815

Gross profit



61,935



53,349



123,097



102,523

Operating expense



57,644



51,013



116,415



102,685

Income (loss) from operations



4,291



2,336



6,682



(162)

Other income (expense):













Other, net



190



116



246



197

Interest expense



(346)



(267)



(638)



(517)

Total other expense, net



(156)



(151)



(392)



(320)

Income (loss) before income taxes



4,135



2,185



6,290



(482)

Income tax provision



17



113



69



168

Net income (loss)



4,118



2,072



6,221



(650)

Other comprehensive gain (loss):













Foreign currency translation adjustments



104



16



124



30

Unrealized (loss) gain on deferred compensation trust assets



(100)



38



(134)



73

Total other comprehensive gain (loss)



4



54



(10)



103

Comprehensive income (loss)


$

4,122


$

2,126


$

6,211


$

(547)

Net income (loss) per share:













Basic net income (loss) per share


$

0.08


$

0.04


$

0.12


$

(0.01)

Diluted net income (loss) per share


$

0.07


$

0.04


$

0.11


$

(0.01)

Weighted-average common shares outstanding:













Shares used in computation of basic net income (loss) per share



54,210



51,684



53,744



50,222

Shares used in computation of diluted net income (loss) per share



57,210



57,122



57,315



50,222

 

(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)










July 2,


January 1,



2022


2022

ASSETS







Current assets:







Cash and cash equivalents


$

15,224


$

18,144

Accounts receivable, net



7,085



5,015

Inventory, net



163,016



138,851

Other current assets



8,299



6,592

Total current assets



193,624



168,602

Property and equipment, net



24,172



20,736

Right-of-use - assets - operating leases, net



26,103



28,680

Right-of-use - assets - finance leases, net



20,289



15,130

Other non-current assets



2,711



2,188

Total assets


$

266,899


$

235,336

LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities:







Accounts payable


$

82,887


$

67,372

Accrued expenses



18,724



17,517

Customer deposits



571



826

Right-of-use - obligation - operating, current



4,068



4,201

Right-of-use - obligation - finance, current



4,489



2,953

Other current liabilities



4,071



3,925

Total current liabilities



114,810



96,794

Right-of-use - obligation - operating, non-current



23,784



26,367

Right-of-use - obligation - finance, non-current



16,602



12,868

Other non-current liabilities



3,449



3,739

Total liabilities



158,645



139,768

Commitments and contingencies







Stockholders' equity:







Common stock, $0.001 par value; 100,000 shares authorized; 54,360 and 52,960 shares issued
and outstanding as of July 2, 2022 and January 1, 2022 (of which 2,565 are treasury stock)



57



56

Treasury stock



(7,625)



(7,625)

Additional paid-in capital



289,137



282,663

Accumulated other comprehensive gain



264



274

Accumulated deficit



(173,579)



(179,800)

Total stockholders' equity



108,254



95,568

Total liabilities and stockholders' equity


$

266,899


$

235,336

 

 

CARPARTS.COM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, In Thousands)










Twenty-Six Weeks Ended



July 2,


July 3,



2022


2021

Operating activities







Net income (loss)


$

6,221


$

(650)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:







Depreciation and amortization expense



6,265



4,550

Amortization of intangible assets



55



55

Share-based compensation expense



4,498



7,272

Stock awards issued for non-employee director service



11



12

Stock awards related to officers and directors stock purchase plan from payroll deferral



27



Gain from disposition of assets



(17)



Amortization of deferred financing costs



21



9

Changes in operating assets and liabilities:







Accounts receivable



(2,070)



(676)

Inventory



(24,165)



(24,649)

Other current assets



(1,739)



1,316

Other non-current assets



(741)



540

Accounts payable and accrued expenses



17,466



12,883

Other current liabilities



(109)



42

Right-of-use obligation - operating leases - current



(105)



430

Right-of-use obligation - operating leases - long-term



(20)



(76)

Other non-current liabilities



(139)



(77)

Net cash provided by operating activities



5,459



981

Investing activities







Additions to property and equipment



(7,797)



(5,398)

Proceeds from sale of property and equipment



44



Net cash used in investing activities



(7,753)



(5,398)

Financing activities







Borrowings from revolving loan payable



5,296



90

Payments made on revolving loan payable



(5,296)



(90)

Payments on finance leases



(1,966)



(990)

Net proceeds from issuance of common stock for ESPP



432



Statutory tax withholding payment for share-based compensation





(3)

Proceeds from exercise of stock options



929



2,779

Net cash (used in) provided by financing activities



(605)



1,786

Effect of exchange rate changes on cash



(21)



(22)

Net change in cash and cash equivalents



(2,920)



(2,653)

Cash and cash equivalents, beginning of period



18,144



35,802

Cash and cash equivalents, end of period


$

15,224


$

33,149

Supplemental disclosure of non-cash investing and financing activities:







Right-of-use operating asset acquired


$


$

17

Right-of-use finance asset acquired


$

7,235


$

3,629

Accrued asset purchases


$

1,060


$

1,954

Share-based compensation expense capitalized in property and equipment


$

579


$

1,018

Stock issued for services


$

81


$

389

Supplemental disclosure of cash flow information:







Cash paid during the period for income taxes


$

148


$

65

Cash paid during the period for interest


$

653


$

543

 

Cision
Cision

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SOURCE CarParts.com, Inc.