Carparts.com, Inc. · NASDAQ:PRTS
Carparts.com — U.S. Auto Parts Network — Investor Presentation (November 2016)
31 slides from Carparts.com's investor presentation, Nov 1, 2016
Slide 1: Safe Harbor
Safe Harbor 1 This presentation contains “forward-looking” statements, within the meaning of the federal securities laws, that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include information concerning our pos
Slide 2: Company Overview
Company Overview US Auto Parts is a leading pure-play internet retailer of aftermarket auto parts We operate online sites, marketplaces and wholesale channels focused on the do-it-yourself (DIY) customer Offer over 1 million SKUs of high quality private label and branded aftermarket products Reach ~
Slide 3: Company Profile
Company Profile Revenues approximately $300M Trailing Twelve Month (TTM) Q3-2016 Net Income of $3M Trailing Twelve Month (TTM) Adjusted EBITDA of $14M Private label business is 65% of sales Private label has a 14% CAGR over the last 8 years Gross Margin over 30% Balance sheet cash over $5mm with no
Slide 4: How We Go To Market: Channels & Percent of Revenue
How We Go To Market: Channels & Percent of Revenue 4 91% Offline/Wholesale: Products distributed directly to commercial customers, mostly collision repair shops. Also our Kool-Vue™ branded products sold to wholesale distributors. 9% Based on estimates using TTM Q3-16 eCommerce Websites: Network of f
Slide 5: Aftermarket Auto Parts Sales Benefits From Macro Trends
Aftermarket Auto Parts Sales Benefits From Macro Trends 5 Source: Miles Traveled – U.S. Department of Transportation; Gas Prices – U.S. Energy Information Administration. IHS Lower Gas Prices Result in Increased Auto Miles Traveled Average Age of Light Vehicles on the Road Continues to Increase 10.0
Slide 6: Online Adoption of Aftermarket Auto Parts has Favorable Trends
Online Adoption of Aftermarket Auto Parts has Favorable Trends 6 Growth for auto parts online has accelerated in 2016 with parts & accessories reaching an all time high in Q2 Significant growth occurred during what is usually a slow season Source: : Google
Slide 7: Price & Product Availability: Customer Value Proposition
Price & Product Availability: The Two Most Important Factors for DIY Customers Customer Value Proposition 7 Source: Aftermarket Business World, Feb 2014 Low Cost Products Cost-conscious customers are able to purchase over 55,000 products at a significant cost savings because we are able to identify
Slide 8: We Address the Market with an Expansive Product Offering
We Address the Market with an Expansive Product Offering Over 1 Million SKUs Across Several Categories 8 Brake Discs Catalytic Converters Radiators Headers Oxygen Sensors Alternators Exhaust Driveshaft Fuel Injection / Delivery Lamps Mirrors Bumpers Hoods Tailgates Doors Grills Wheels Window Regulat
Slide 9: USAP Supply Chain Creates Pricing Advantage
USAP Supply Chain Creates Pricing Advantage 9 USAP has built a vertically integrated e-commerce business Importer Center Brand Warehouse Distributor Service Center Consumer Retail Store Consumer Off-Shore Manufacturing ~30% of Units Drop-Ship 5%-10% Flow Thru Jobber ~70% of Units Stock-Ship 17%-21%
Slide 10: Projected Margin Profile by Private Label and Branded
Private Label Branded Total Q3 YTD Growth Rate1 11% (7%) 4% Projected Revenue Mix 65% - 67% 33% - 35% 100% Projected Gross Margins 34% - 36% 17% - 20% 29% - 31% Projected Variable OPEX Costs 15% - 17% 10% - 12% 14% - 16% Incremental Fixed Cost 0% 0% 0% Incremental Flow Thru 17% - 21% 5% - 10% 13% -
Slide 11: Competitive Landscape
Competitive Landscape Online Traffic Volume Comparison 11 Monthly Visitors¹ Competitor sites’ traffic based on Compete using the average monthly traffic for Q3-16 Monthly Visitors for US Auto Parts is average monthly traffic for Q3-16 Our long domain history and quality content drives 1.5x as many m
Slide 12: Being Able to Spend More Gives USAP a Louder Voice
12 12 As we mix shift toward more private label parts with higher margins, we are able to increase advertisement spend and gain market share * For Illustration purposes only – numbers can vary depending on numerous factors including mix, price, cost, etc . Daily Ad Spend Incremental Projected Return
Slide 13: Being Able to Spend More Gives USAP a Louder Voice
Being Able to Spend More Gives USAP a AUTOPARTS: Louder Voice in the Marketplace* NASDAQ:PRTS As we mix shift toward more private label parts with higher margins, we are able to increase advertisement spend and gain market share Daily Incremental Projected Return Ad Spend Projected Return on Ad Spen
Slide 14: Key Stats: PRTS (NASDAQ)
Key Stats: PRTS (NASDAQ) – Consolidated 14 Data sources: Yahoo! Finance, S&P Capital IQ, company filings. Includes 4.1M preferred shares. As of October 31, 2016. Trading Data (@ October 28, 2016) Stock Price $3.08 52 Wk. High/Low $4.49/2.00 Avg. Daily Vol. (3 mo.) 118,946 Fully Diluted Shares Out.1
Slide 15: Strong Net Income & Adjusted EBITDA Growth Trends
Strong Net Income & Adjusted EBITDA¹ Growth Trends for U.S. Auto Parts 15 Non-GAAP financial measure EBITDA consists of net income before (a) interest expense, net; (b) income tax provisions; (c) amortization of intangible assets; (d) depreciation and amortization. Adjusted EBITDA excludes Stock bas
Slide 16: Financial Performance
Financial Performance 16 Non-GAAP financial measure EBITDA consists of net income before (a) interest expense, net; (b) income tax provisions; (c) amortization of intangible assets; (d) depreciation and amortization. Adjusted EBITDA excludes Stock based compensation of $1.3M, $2.4M, $2.3M & $3.0M fo
Slide 17: Private Label Quarterly Sales Trend
2 Year Stacked Private Label Quarterly Sales Trend1 17 This year we have on improved profitability vs. high growth in sales Two Year Stack Comps 1Comparables net sales was calculated by excluding $2.0M in private label sales related to the extra week in Q4-14, as well as $1.7M, 1.4M, 0.8M and $0.5M
Slide 18: Increased Private Label Penetration Tracks to Margin Improvement
Increased Private Label Penetration tracks to Margin, Net Income & Adjusted EBITDA Improvement 18 Private Label continues to be a major focus of our business Our ability to grow our overall private label business has a positive impact to our overall margin, net income and adjusted EBITDA 1See Append
Slide 19: Key Takeaways
Key Takeaways A leading pure-play internet retailer of aftermarket auto parts $6.7 billion on-line DIY market anticipated to nearly double by 20202 ~10 million monthly website visitors – more than 1.5 times the next competitor Transitioning to a higher mix of private label products to drive increase
Slide 20: Key Takeaways
AUTOPARTS NASDAQ:PRTS Key Takeaways > A leading pure-play internet retailer of aftermarket auto parts > $6.7 billion on-line DIY market anticipated to nearly double by 2020? > ~10 million monthly website visitors — more than 1.5 times the next competitor > Transitioning to a higher mix of private la
Slide 21: Company History
Launched first internet site selling automotive Collision Line Launches a network of sites catered to various consumer segments Company begins significantly expanding its private label engine line JC Whitney completely integrated 1995 2000 2010 2005 2006 2011 Launches AutoMD / Acquires JC Whitney Ad
Slide 22: Experienced Leadership Team
Experienced Leadership Team 22 Aaron E. Coleman Chief Operating Officer Since April 2008 Former Executive Vice President of Operations and CIO from April 2008 - September 2010 Over 18 years of e-commerce experience Senior Vice President – Online Systems at Blockbuster Inc. B.A. degree in Business Ad
Slide 23: Financial Highlights – Q3-16
Financial Highlights – Q3-16 Total revenue $73.5M Total sales up 4.1% Gross Margin expansion of 80 basis points over prior year Net Income was flat at $0.4M vs. the prior year Adjusted EBITDA was 4.3% of net sales or $3.1M . A 10% increase over prior year $5.2M in cash with no borrowings on our revo
Slide 24: Key Business Metrics Over Last Five Quarters
Key Business Metrics Over Last Five Quarters 24 Private Label continues to be a major focus of our business 24 Y/Y BPS Change Y/Y BPS Change Q3-16 30.5% 0.8% Q3-16 66% 6% Q2-16 30.4% 3.2% Q2-16 65% 5% Q1-16 30.4% 2.3% Q1-16 67% 4% Q4-15 29.6% 2.9% Q4-15 63% 5% Q3-15 29.7% 2.6% Q3-15 60% 7% Y/Y % Cha
Slide 25: Yearly Adjusted EBITDA Reconciliation
Yearly Adjusted EBITDA Reconciliation 25 Non-GAAP financial measure EBITDA consists of net income before (a) interest expense, net; (b) income tax provisions; (c) amortization of intangible assets; (d) depreciation and amortization. Adjusted EBITDA excludes stock based compensation, restructuring co
Slide 26: Quarterly Adjusted EBITDA Reconciliation
Quarterly Adjusted EBITDA Reconciliation 26 Non-GAAP financial measure EBITDA consists of net income before (a) interest expense, net; (b) income tax provisions; (c) amortization of intangible assets; (d) depreciation and amortization. Adjusted EBITDA excludes stock based compensation, restructuring
Slide 27: Projected FY-16 Adjusted EBITDA Reconciliation
Projected FY-16 Adjusted EBITDA reconciliation 27 Non-GAAP financial measure EBITDA consists of net income before (a) interest expense, net; (b) income tax provisions; (c) amortization of intangible assets; (d) depreciation and amortization. Adjusted EBITDA excludes Stock based compensation (in thou
Slide 28: Projected FY-17 Adjusted EBITDA Reconciliation
Projected FY-17 Adjusted EBITDA reconciliation 28 Non-GAAP financial measure EBITDA consists of net income before (a) interest expense, net; (b) income tax provisions; (c) amortization of intangible assets; (d) depreciation and amortization. Adjusted EBITDA excludes Stock based compensation (in thou
Slide 29: Our Business Model Projects Significant Cost Leverage as Revenues Grow
Our Business Model Projects Significant Cost Leverage as Revenues Grow Financial Sensitivity 29 For every incremental year required to achieve growth levels, fixed expenses projected to increase $1.0M or 3%. Excludes stock based compensation, depreciation and amortization. ($ figures in millions) 20
Slide 30: Key Avenues for Growth – Increase Customer Lifetime Value
Increased customer LTV would result in greater mix of traffic from both direct-to-website and paid channels, and less dependence on organic search Key Avenues for Growth – Increase Customer Lifetime Value 30 Gross Profit per Transaction Average Order Size Repeat Purchase Conversion Increased Traffic
Slide 31: Key Avenues for Growth – Increase Customer Lifetime Value
Key Avenues for Growth — AUTOPARTS' Increase Customer Lifetime Value NASDAQ:PRTS Gross Profit per Average Order Repeat Purchase Conversion = Increased Traffic Transaction Size + emicient sourcing serthejob + Easytodo business | | + Easytofnd Product + We aridpate strategy + Cross-sell + Improved ser
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