CarParts.com Reports Record Fourth Quarter and Full Year 2022 Results
CarParts.com (NASDAQ: PRTS) reported its fourth quarter and fiscal year results for 2022, marking record sales of $154.5 million in Q4 and $661.6 million for the year, representing growth of 12% and 14% year-over-year, respectively. Gross profit for the full year rose 17% to $230.9 million, with a gross margin of 34.9%. While the company reported a net loss of $1.0 million for the year, it significantly improved from a loss of $10.3 million in 2021. Adjusted EBITDA increased 56% year-over-year to $26.1 million. As of December 31, 2022, CarParts.com held $18.8 million in cash with no debt. The CEO emphasized a strong balance sheet and continued growth strategy for 2023.
- Record fiscal year sales of $661.6 million, up 14% YoY.
- Gross profit increased 17% to $230.9 million.
- Adjusted EBITDA rose 56% to $26.1 million.
- Third consecutive year of double-digit revenue growth.
- Robust balance sheet with $18.8 million cash and no debt.
- Net loss of $1.0 million for the fiscal year, though improved from previous year.
- Fourth quarter net loss increased to ($6.2) million from ($5.0) million.
Record Fourth Quarter Sales of
Record Fiscal Year Sales of
12th Consecutive Quarter of Double-Digit Year over Year Sales Growth
Fiscal Year 2022 Summary vs. Fiscal Year 2021
- Net sales increased
14% year over year to a record$661.6 million 45% on a two-year stack. - Gross profit increased
17% to$230.9 million 34.9% . - Net loss was
( or ($1.0) million $0.02 ( or ($10.3) million $0.20 - Adjusted EBITDA increased to
$26.1 million $16.8 million 56% year over year.
Fourth Quarter 2022 Summary vs. Year-Ago Quarter
- Net sales increased
12% year over year to$154.5 million 27% on a two-year stack. - Gross profit increased
9% to$51.6 million 33.4% . - Net loss was
( or ($6.2) million $0.11 ( or ($5.0) million $0.10 - Adjusted EBITDA of
$2.1 million $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
Gross profit increased
Total operating expenses in fiscal year 2022 were
Net loss in fiscal year 2022 was (
Adjusted EBITDA in fiscal year 2022 was
On December 31, 2022, the Company had a cash balance of
Fourth Quarter 2022 Financial Results
Net sales in the fourth quarter of 2022 were
Gross profit in the fourth quarter increased
Total operating expenses in the fourth quarter were
Net loss in the fourth quarter was (
Adjusted EBITDA in the fourth quarter was
Conference Call
Date:
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
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
Investor Relations:
IR@carparts.com
Summarized information for the periods presented is as follows (in millions): | |||||||||||||
Thirteen Weeks | Thirteen Weeks | Fifty-Two Weeks | Fifty-Two | ||||||||||
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 | Thirteen Weeks | Fifty-Two Weeks | Fifty-Two | |||||||||
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 | |||||||||
Fiscal Year Ended | |||||||||
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 | ||||||
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, | 57 | 56 | ||||
(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 | |||||||||
Fiscal Year Ended | |||||||||
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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