Carparts.com, Inc. · NASDAQ:PRTS
Carparts.com — U.S. Auto Parts Network — Investor Presentation (November 2015)
25 slides from Carparts.com's investor presentation, Nov 2, 2015
Slide 1: Safe Harbor
Safe Harbor 2 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 the largest 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: Price & Product Availability: The Two Most Important Factors for DIY Customers
Price & Product Availability: The Two Most Important Factors for DIY Customers Our Value Proposition Low Cost Products: Our advanced supply chain & logistics network sources products from Asia, providing a broad selection and significant cost savings for the consumer Quality of Products: We stand by
Slide 4: Online DIY Sales' 11% Market Share Represents a Strong Growth Opportunity
Online DIY Sales’ 11% Market Share Represents a Strong Growth Opportunity Auto Parts Do-it-Yourself (DIY) Market Size 5 Digital Auto Care fact book estimates from 2014. Estimates by US Auto Parts where amounts are not publicly reported. Only includes estimated mail delivered business – does not incl
Slide 5: Market Transformation Underway
Market Transformation Underway 6 Dollars Spent at Brick-and-Mortar Transitioning to Online Internet Retailers Accomodates variety of makes & models Competitive prices with limited overhead Broad market reach across the globe Online Sales of Auto Parts and Accessories Expected to Increase from $5.1 B
Slide 6: DIY Online Sales Growth Surpassing Offline DIY Sales
DIY Market Revenue (in Billions) Offline $42.6 $43.5 $44.2 $44.8 $45.3 $45.5 Online¹ 4.6 5.5 6.6 8.0 9.5 11.5 Total² $47.2 $49.0 $50.8 $52.8 $54.8 $57.0 % Online 9.8% 11.3% 13.0% 15.1% 17.4% 20.1% DIY Online Sales Growth Surpassing Offline DIY Sales 7 Projections for online industry based upon estim
Slide 7: How We Go To Market: Channels & Percent of Revenue
Online Marketplaces: 3rd party auction sites and shopping portals, enabling access to additional consumer segments. How We Go To Market: Channels & Percent of Revenue 8 eCommerce Websites: Network of flagship websites supported by our call center agents. Sites also generate advertising & sponsorship
Slide 8: Competitive Landscape: Online Traffic Volume Comparison
Competitive Landscape Online Traffic Volume Comparison 9 Monthly Visitors¹ Competitor sites’ traffic based on Compete September 2015 reports. Our long domain history and quality content drives 2x as many monthly visitors as the next competitor Also reflects our ability to attract customers through p
Slide 9: 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 10 Brake Discs Catalytic Converters Radiators Headers Oxygen Sensors Alternators Exhaust Driveshaft Fuel Injection / Delivery Lamps Mirrors Bumpers Hoods Tailgates Doors Grills Wheels Window Regula
Slide 10: Our Private Label Products Provides Competitive Pricing Advantage
Our Private Label Products Provides Competitive Pricing Advantage Competitive Advantage Supply Chain Creates Pricing Benefits 11 Our ability to competitively price products while maintaining healthy margins reflects our robust private-label supply chain: Over 45,000 private label products Planning t
Slide 11: Competitive Advantage: Supply Chain Creates Pricing Benefits
Competitive Advantage EES Supply Chain Creates Pricing Benefits NASDAQ: PRS > Our ability to competitively price products while maintaining healthy margins reflects our robust private-label supply chain: > Over 45,000 private label products » Planning to add 6,000 — 7,000 private label SKUs by end o
Slide 12: Key Stats: PRTS (NASDAQ)
Revenues Key Stats: PRTS (NASDAQ) 13 Data sources: Yahoo! Finance, S&P Capital IQ, company filings. As of October 3, 2015. See slide 15 for a reconciliation of this non-GAAP measure. TTM is trailing 12 months. MRW is most recent quart All information above is as of 10/29/15 unless otherwise noted Tr
Slide 13: Positive Quarterly Comp Sales Trend
Positive Quarterly Comp Sales Trend 14 7 consecutive quarters with double digit Private Label growth PL CAGR 16.5% Branded CAGR (9.3%) Total CAGR 4.4% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Private Label Branded Total
Slide 14: Financial Performance (excluding AutoMD beginning in Q4-14)
Financial Performance (excluding AutoMD beginning in Q4-14) 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 based compensa
Slide 15: Current Margin Profile
Private Label Branded Total Q3 TTM Growth Rate1 19% (4%) 9% Revenue Mix 60% 40% 100% Gross Margins 34% - 36% 19% - 21% 28% - 30% Variable OPEX Costs 16% 11% 15% Incremental Fixed Cost 0% 0% 0% Incremental Flow Thru 18% - 20% 8% - 10% 13% - 15% Current Margin Profile Incremental flow through from pri
Slide 16: Strong EBITDA Growth Trends for U.S. Auto Parts
Strong EBITDA¹ Growth Trends for U.S. Auto Parts (Excluding AutoMD beginning in Q4-14) 17 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 ex
Slide 17: AutoMD Site
AutoMD Site AutoMD is an online auto repair source for the do-it-for-me (DIFM) market Serves as repair lead generation site for repair shops, while educating consumers on maint./service of their vehicles Raised $7.0M in capital in 2014 Fed Mogul: $3.0M Cox Automotive: $2.0M Insiders: $2.0M Post-fund
Slide 18: Key Takeaways
Revenues Key Takeaways Largest pure-play internet retailer of aftermarket auto parts $5 billion industry anticipated to double next 5-7 years ~10 million monthly website visitors – more than double next competitor Transitioning to a higher mix of private label products – to drive increased conversio
Slide 19: Key Takeaways
Key Takeaways AUTOPARTS NASDAQ:PRTS » Largest pure-play internet retailer of aftermarket auto parts > $5 billion industry anticipated to double next G 5-7 years > ~10 million monthly website visitors — more than double next competitor > Transitioning to a higher mix of private label products — to dr
Slide 20: 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 21: Experienced Leadership Team
Experienced Leadership Team 22 Shane Evangelist - Chief Executive Officer since October 2007 Over 10 years experience leading internet businesses Senior Vice President and General Manager of Blockbuster Online Vice President of Strategic Planning for Blockbuster Inc. B.A. degree in Business Administ
Slide 22: Financial Highlights – Q3-15 YTD
Financial Highlights – Q3-15 YTD Total revenue $223.5M Q3-15 YTD Comp sales up 6.9% for Q3-15 YTD Sales up 5.0% for Q3-15 YTD Adjusted EBITDA excluding AutoMD was $7.4M Q3-15 YTD Inventory at $46.2M as of Q3-15 vs. $44.8M the prior year Debt declining year over year by $2.6M 23 Non-GAAP financial me
Slide 23: Our Business Model Projects Significant Cost Leverage as Revenues Grow
Our Business Model Projects Significant Cost Leverage as Revenues Grow Financial Sensitivity 24 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. 1 FY-14 5% 10% 15% 20% 41%
Slide 24: 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 25 Gross Profit per Transaction Average Order Size Repeat Purchase Conversion Increased Traffic
Slide 25: 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 | | + Easyto find Product + We aridpate strategy + Cross-sell + Improved
U.S. Auto Parts Network — Investor Presentation (November 2015) on 6ix