Record Fourth
Quarter Sales of $154.5 million, up 12%
Year over Year
Record Fiscal Year Sales of $661.6 million, up 14% Year over Year
12th Consecutive Quarter of Double-Digit
Year over Year Sales Growth
TORRANCE, Calif., March 7,
2023 /PRNewswire/ -- CarParts.com, Inc. (NASDAQ:
PRTS), one of the leading e-commerce 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 31, 2022.
Fiscal Year 2022 Summary vs. Fiscal Year
2021
- Net sales increased 14% year over year to a record $661.6 million and increased 45% on a two-year
stack.
- Gross profit increased 17% to $230.9
million, with gross margin increasing 100 basis points to
34.9%.
- Net loss was ($1.0) million or
($0.02) per diluted share, compared
to a net loss of ($10.3) million or
($0.20) per diluted share.
- Adjusted EBITDA increased to $26.1
million vs. $16.8 million, up
56% year over year.
Fourth Quarter 2022 Summary vs. Year-Ago
Quarter
- Net sales increased 12% year over year to $154.5 million and increased 27% on a two-year
stack.
- Gross profit increased 9% to $51.6
million, with gross margin of 33.4%.
- Net loss was ($6.2) million or
($0.11) per diluted share, compared
to a net loss of ($5.0) million or
($0.10) per diluted share.
- Adjusted EBITDA of $2.1 million
vs. $2.6 million.
Management Commentary
"2022 was a record-breaking year for us, marking our third
consecutive year of double-digit revenue growth. Since 2019,
we have more than doubled our revenues and returned the company to
profitability by leveraging our positive unit economics. I'm also
excited to announce we've built up a robust balance sheet which
reinforces our confidence that we can continue to self-fund our
future growth without reliance on outside capital," said David
Meniane, CEO of CarParts.com.
"For 2023 and beyond, we continue to put our customers and team
members at the center of our strategy and feel prepared to tackle
the future with intention, focus, and discipline as we gain market
share. We are in a strong position to thrive and continue
delivering profitable growth amid whatever changes the market
brings us. We believe that doing this will benefit our shareholders
in the years to come and grow the intrinsic value of our
company."
Fiscal Year 2022 Financial Results
Net sales in fiscal year 2022 were $661.6 million up 14% from $582.4 million in fiscal year 2021. For the
first eight weeks of fiscal year 2023, we produced high single
digit year-over-year revenue growth combined with sequential gross
margin expansion and continue to balance growth with profitability
and free cash flow generation.
Gross profit increased 17% to $230.9
million in fiscal year 2022 compared to $197.3 million in fiscal year 2021. Gross margin
increased 100 basis points to 34.9% in fiscal year 2022 compared to
33.9% in fiscal year 2021. The increase in gross margin was
primarily driven by favorable freight costs in 2022.
Total operating expenses in fiscal year 2022 were $230.2 million compared to $206.4 million in fiscal year 2021, mainly due to
an increase in sales and investments in the business.
Net loss in fiscal year 2022 was ($1.0) million compared to a
net loss of ($10.3) million in fiscal
year 2021, both predominantly driven by non-cash charges.
Adjusted EBITDA in fiscal year 2022 was $26.1 million compared to $16.8 million in the fiscal year 2021.
On December 31, 2022, the Company had a cash balance of
$18.8 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.
Fourth Quarter 2022 Financial Results
Net sales in the fourth quarter of 2022 were $154.5 million, up 12% from the year-ago
quarter.
Gross profit in the fourth quarter increased 9% to $51.6 million compared to $47.4 million in the year-ago quarter, with gross
margin decreasing 90 basis points to 33.4%, driven by seasonal
freight charges which were higher and started earlier than the
prior year.
Total operating expenses in the fourth quarter were $57.1 million compared to $52.0 million in the year-ago quarter, mainly due
to an increase in sales and investments in the business.
Net loss in the fourth quarter was ($6.2) million compared to a
net loss of ($5.0) million in the
year-ago quarter, both predominantly driven by non-cash
charges.
Adjusted EBITDA in the fourth quarter was $2.1 million compared to $2.6 million in the year-ago quarter.
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, March 7, 2023
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 is the go-to eCommerce platform for auto care and
maintenance. We offer drivers quality parts at competitive prices
and allow customers to schedule an appointment with a trusted
mechanic directly from our website. We use world-class design
principles and the latest technologies to deliver a fast,
easy-to-use, and mobile-intuitive website. And with our
company-owned national distribution network, we bring the best
brands and manufacturers directly to consumers, cutting out the
costs associated with brick-and-mortar retailers. Our team members
around the globe are dedicated to 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," which is a non-GAAP financial measure. Adjusted EBITDA
consists of net 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 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
|
|
Fifty-Two Weeks
Ended
|
|
Fifty-Two
Weeks Ended
|
|
|
|
December 31, 2022
|
|
January 1, 2022
|
|
December 31, 2022
|
|
January 1, 2022
|
|
Net sales
|
|
$
|
154.52
|
|
$
|
138.26
|
|
$
|
661.60
|
|
$
|
582.44
|
|
Gross profit
|
|
$
|
51.65
|
|
$
|
47.43
|
|
$
|
230.89
|
|
$
|
197.28
|
|
|
|
|
33.4
|
%
|
|
34.3
|
%
|
|
34.9
|
%
|
|
33.9
|
%
|
Operating
expense
|
|
$
|
57.10
|
|
$
|
52.01
|
|
$
|
230.24
|
|
$
|
206.39
|
|
|
|
|
36.9
|
%
|
|
37.6
|
%
|
|
34.8
|
%
|
|
35.4
|
%
|
Net loss
|
|
$
|
(6.22)
|
|
$
|
(5.03)
|
|
$
|
(0.95)
|
|
$
|
(10.34)
|
|
|
|
|
(4.0)
|
%
|
|
(3.6)
|
%
|
|
(0.1)
|
%
|
|
(1.8)
|
%
|
Adjusted
EBITDA
|
|
$
|
2.12
|
|
$
|
2.59
|
|
$
|
26.11
|
|
$
|
16.79
|
|
|
|
|
1.4
|
%
|
|
1.9
|
%
|
|
3.9
|
%
|
|
2.9
|
%
|
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 31, 2022
|
|
January 1, 2022
|
|
December 31, 2022
|
|
January 1, 2022
|
Net loss
|
|
$
|
(6,224)
|
|
$
|
(5,030)
|
|
$
|
(951)
|
|
$
|
(10,339)
|
Depreciation &
amortization
|
|
|
3,936
|
|
|
2,772
|
|
|
13,607
|
|
|
9,895
|
Amortization of
intangible assets
|
|
|
27
|
|
|
28
|
|
|
108
|
|
|
110
|
Interest expense,
net
|
|
|
355
|
|
|
268
|
|
|
1,421
|
|
|
1,089
|
Taxes
|
|
|
514
|
|
|
144
|
|
|
632
|
|
|
351
|
EBITDA
|
|
$
|
(1,392)
|
|
$
|
(1,818)
|
|
$
|
14,817
|
|
$
|
1,106
|
Stock compensation
expense
|
|
$
|
3,510
|
|
$
|
4,408
|
|
|
11,296
|
|
|
15,685
|
Adjusted
EBITDA
|
|
$
|
2,118
|
|
$
|
2,590
|
|
$
|
26,113
|
|
$
|
16,791
|
CARPARTS.COM, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS (In
Thousands, Except Per Share Data)
|
|
|
|
Fiscal Year
Ended
|
|
|
December 31,
|
|
January 1,
|
|
January 2,
|
|
|
2022
|
|
2022
|
|
2021
|
Net sales
|
|
$
|
661,604
|
|
$
|
582,440
|
|
$
|
443,884
|
Cost of sales
(1)
|
|
|
430,714
|
|
|
385,157
|
|
|
288,518
|
Gross profit
|
|
|
230,890
|
|
|
197,283
|
|
|
155,366
|
Operating
expense
|
|
|
230,239
|
|
|
206,394
|
|
|
155,071
|
Income (loss) from
operations
|
|
|
651
|
|
|
(9,111)
|
|
|
295
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Other, net
|
|
|
467
|
|
|
238
|
|
|
213
|
Interest
expense
|
|
|
(1,437)
|
|
|
(1,115)
|
|
|
(1,714)
|
Total other expense,
net
|
|
|
(970)
|
|
|
(877)
|
|
|
(1,501)
|
Loss before income
taxes
|
|
|
(319)
|
|
|
(9,988)
|
|
|
(1,206)
|
Income tax
provision
|
|
|
632
|
|
|
351
|
|
|
307
|
Net loss
|
|
|
(951)
|
|
|
(10,339)
|
|
|
(1,513)
|
Other comprehensive
gain (loss):
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
127
|
|
|
93
|
|
|
(86)
|
Actuarial gain (loss)
on defined benefit plan
|
|
|
872
|
|
|
307
|
|
|
(400)
|
Unrealized (loss) gain
on deferred compensation trust assets
|
|
|
(147)
|
|
|
89
|
|
|
57
|
Total other
comprehensive gain (loss)
|
|
|
852
|
|
|
489
|
|
|
(429)
|
Comprehensive
loss
|
|
$
|
(99)
|
|
$
|
(9,850)
|
|
$
|
(1,942)
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share
|
|
$
|
(0.02)
|
|
$
|
(0.20)
|
|
$
|
(0.04)
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Shares used in
computation of basic and diluted net loss per share
|
|
|
54,137
|
|
|
51,381
|
|
|
42,333
|
________________________
|
(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 31,
|
|
January 1,
|
|
|
2022
|
|
2022
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
18,767
|
|
$
|
18,144
|
Accounts receivable,
net
|
|
|
6,406
|
|
|
5,015
|
Inventory,
net
|
|
|
136,026
|
|
|
138,851
|
Other current
assets
|
|
|
6,672
|
|
|
6,592
|
Total current
assets
|
|
|
167,871
|
|
|
168,602
|
Property and equipment,
net
|
|
|
24,290
|
|
|
20,736
|
Right-of-use - assets -
operating leases, net
|
|
|
23,951
|
|
|
28,680
|
Right-of-use - assets -
finance leases, net
|
|
|
19,750
|
|
|
15,130
|
Other non-current
assets
|
|
|
2,537
|
|
|
2,188
|
Total
assets
|
|
$
|
238,399
|
|
$
|
235,336
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
57,616
|
|
$
|
67,372
|
Accrued
expenses
|
|
|
16,466
|
|
|
17,517
|
Right-of-use -
obligation - operating, current
|
|
|
4,571
|
|
|
4,201
|
Right-of-use -
obligation - finance, current
|
|
|
4,753
|
|
|
2,953
|
Other current
liabilities
|
|
|
4,622
|
|
|
4,751
|
Total current
liabilities
|
|
|
88,028
|
|
|
96,794
|
Right-of-use -
obligation - operating, non-current
|
|
|
21,412
|
|
|
26,367
|
Right-of-use -
obligation - finance, non-current
|
|
|
15,916
|
|
|
12,868
|
Other non-current
liabilities
|
|
|
2,971
|
|
|
3,739
|
Total
liabilities
|
|
|
128,327
|
|
|
139,768
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Common stock, $0.001
par value; 100,000 shares authorized; 54,693 and 52,960 shares
issued
and outstanding as of December 31, 2022 and
January 1, 2022 (of which 2,565 are treasury
stock)
|
|
|
57
|
|
|
56
|
Treasury
stock
|
|
|
(7,625)
|
|
|
(7,625)
|
Additional paid-in
capital
|
|
|
297,265
|
|
|
282,663
|
Accumulated other
comprehensive income
|
|
|
1,126
|
|
|
274
|
Accumulated
deficit
|
|
|
(180,751)
|
|
|
(179,800)
|
Total stockholders'
equity
|
|
|
110,072
|
|
|
95,568
|
Total liabilities and
stockholders' equity
|
|
$
|
238,399
|
|
$
|
235,336
|
CARPARTS.COM, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (In Thousands)
|
|
|
|
Fiscal Year
Ended
|
|
|
December 31,
|
|
January 1,
|
|
January 2,
|
|
|
2022
|
|
2022
|
|
2021
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(951)
|
|
$
|
(10,339)
|
|
$
|
(1,513)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
|
13,607
|
|
|
9,895
|
|
|
7,657
|
Amortization of
intangible assets
|
|
|
108
|
|
|
110
|
|
|
102
|
Share-based
compensation expense
|
|
|
11,296
|
|
|
15,685
|
|
|
7,778
|
Stock awards issued for
non-employee director service
|
|
|
22
|
|
|
23
|
|
|
24
|
Stock awards related to
officers and directors stock purchase plan from payroll
deferral
|
|
|
26
|
|
|
—
|
|
|
—
|
(Gain) loss from
disposition of assets
|
|
|
(41)
|
|
|
52
|
|
|
—
|
Amortization of
deferred financing costs
|
|
|
53
|
|
|
18
|
|
|
18
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,424)
|
|
|
1,303
|
|
|
(3,650)
|
Inventory
|
|
|
2,825
|
|
|
(49,535)
|
|
|
(36,815)
|
Other current
assets
|
|
|
(141)
|
|
|
1,340
|
|
|
(2,983)
|
Other non-current
assets
|
|
|
(636)
|
|
|
551
|
|
|
(1,056)
|
Accounts payable and
accrued expenses
|
|
|
(9,629)
|
|
|
22,436
|
|
|
8,398
|
Other current
liabilities
|
|
|
(129)
|
|
|
374
|
|
|
1,120
|
Right-of-use obligation
- operating leases - current
|
|
|
402
|
|
|
1,696
|
|
|
1,143
|
Right-of-use obligation
- operating leases - long-term
|
|
|
(200)
|
|
|
(836)
|
|
|
(321)
|
Other non-current
liabilities
|
|
|
180
|
|
|
239
|
|
|
1,030
|
Net cash provided by
(used in) operating activities
|
|
|
15,368
|
|
|
(6,988)
|
|
|
(19,068)
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(12,585)
|
|
|
(11,578)
|
|
|
(9,657)
|
Payment for intangible
assets
|
|
|
—
|
|
|
—
|
|
|
(101)
|
Proceeds from sale of
property and equipment
|
|
|
68
|
|
|
27
|
|
|
—
|
Net cash used in
investing activities
|
|
|
(12,517)
|
|
|
(11,551)
|
|
|
(9,758)
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
Borrowings from
revolving loan payable
|
|
|
10,417
|
|
|
131
|
|
|
1,415
|
Payments made on
revolving loan payable
|
|
|
(10,417)
|
|
|
(131)
|
|
|
(1,415)
|
Proceeds from notes
payable
|
|
|
—
|
|
|
—
|
|
|
4,107
|
Payments of notes
payable
|
|
|
—
|
|
|
—
|
|
|
(5,333)
|
Repurchase of treasury
stock
|
|
|
—
|
|
|
(524)
|
|
|
—
|
Payments on finance
leases
|
|
|
(4,232)
|
|
|
(2,164)
|
|
|
(1,005)
|
Net proceeds from
issuance of common stock for ESPP
|
|
|
795
|
|
|
—
|
|
|
—
|
Net proceeds from
issuance of common stock
|
|
|
—
|
|
|
—
|
|
|
60,461
|
Statutory tax
withholding payment for share-based compensation
|
|
|
—
|
|
|
(3)
|
|
|
(93)
|
Proceeds from exercise
of stock options
|
|
|
1,284
|
|
|
3,661
|
|
|
4,257
|
Payment of registration
costs of common stock
|
|
|
—
|
|
|
(68)
|
|
|
—
|
Preferred stock
dividends paid
|
|
|
—
|
|
|
—
|
|
|
(33)
|
Net cash (used in)
provided by financing activities
|
|
|
(2,153)
|
|
|
902
|
|
|
62,361
|
Effect of exchange rate
changes on cash
|
|
|
(75)
|
|
|
(21)
|
|
|
(6)
|
Net change in cash and
cash equivalents
|
|
|
623
|
|
|
(17,658)
|
|
|
33,529
|
Cash and cash
equivalents, beginning of period
|
|
|
18,144
|
|
|
35,802
|
|
|
2,273
|
Cash and cash
equivalents, end of period
|
|
$
|
18,767
|
|
$
|
18,144
|
|
$
|
35,802
|
Supplemental disclosure
of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
Right-of-use operating
asset acquired
|
|
$
|
—
|
|
$
|
15,000
|
|
$
|
15,508
|
Right-of-use finance
asset acquired
|
|
$
|
9,206
|
|
$
|
4,975
|
|
$
|
4,766
|
Accrued asset
purchases
|
|
$
|
624
|
|
$
|
1,764
|
|
$
|
1,822
|
Share-based
compensation expense capitalized in property and
equipment
|
|
$
|
1,180
|
|
$
|
2,159
|
|
$
|
659
|
Stock issued for
services
|
|
$
|
81
|
|
$
|
778
|
|
$
|
—
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid during the
period for income taxes
|
|
$
|
649
|
|
$
|
88
|
|
$
|
135
|
Cash paid during the
period for interest
|
|
$
|
1,366
|
|
$
|
1,102
|
|
$
|
1,834
|
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SOURCE CarParts.com, Inc.