Carparts.com, Inc. · NASDAQ:PRTS
Carparts.com — U.S. Auto Parts Network — Investor Presentation (May 2016)
28 slides from Carparts.com's investor presentation, May 10, 2016
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 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: Price & Product Availability: Customer Value Proposition
Price & Product Availability: The Two Most Important Factors for DIY Customers Customer Value Proposition 4 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 USAP is able to identify
Slide 4: Aftermarket Auto Parts Industry Sales: Miles Traveled and Vehicle Age
Aftermarket Auto Parts Industry Sales¹ 5 Miles Traveled and Average Gasoline Price Per Gallon Mean Light Vehicle Age Total miles traveled has increased in recent months while the average price of gas has declined over the same period The average age of a light vehicle on the road continues to increa
Slide 5: Aftermarket Auto Parts Industry Sales and Google Search Demand
Aftermarket Auto Parts Industry Sales¹ 6 Favorable macro trends including online/mobile adoption, increased miles driven and a peak average age of vehicle is supporting strong search demand for automotive related searches Drivers are increasingly relying on Google to search for parts and service inf
Slide 6: Online Market is Vibrant & Growing
Online Market is Vibrant & Growing 7 2012 – 2020P Total DIY CAGR: 4.0% 2012 – 2020P Online CAGR: 20.2% DIY Online Penetration The online portion of the DIY market is expected to double by 20201 Management estimates by 2020 Online DIY could reach 22% of the total DIY Market (1) Based on management as
Slide 7: How We Go To Market: Channels & Percent of Revenue
How We Go To Market: Channels & Percent of Revenue1 8 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 for TTM Q1-16 eCommerce Websites: Network of fl
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 9 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 10 USAP has built a vertically integrated e-commerce business that also uses low/no capital intensive branded product to identify demand, drive traffic and supplement products that have not been private labeled Importer Auto Service Center Brand Warehouse
Slide 10: Projected Margin Profile: Private Label vs Branded
Private Label Branded Total FY-15 Growth Rate1 17% (9%) 6% Projected Revenue Mix 65% 35% 100% Projected Gross Margins 34% - 36% 19% - 21% 29% - 31% Projected Variable OPEX Costs 16% - 17% 11% - 12% 15% - 16% Incremental Fixed Cost 0% 0% 0% Incremental Flow Thru 17% - 20% 7% - 10% 13% - 16% Projected
Slide 11: Competitive Landscape
Competitive Landscape Online Traffic Volume Comparison 12 Monthly Visitors¹ Competitor sites’ traffic based on Compete using the average monthly traffic for Q1-16 Monthly Visitors for US Auto Parts is average monthly traffic for Q1-16 Our long domain history and quality content drives 2x as many mon
Slide 12: Ad Spend resulting in improved profitability
Ad Spend resulting in improved profitability 13 We are becoming less dependant on organic search for revenue generation and project it to be ~14% of overall revenues in FY-16 Center 1 1 FY-16 EBITDA is the midpoint of Management’s guidance of $11.5 - $14.0M - 2 4 6 8 10 12 14 0% 10% 20% 30% 40% 50%
Slide 13: Ad Spend resulting in improved profitability
Ad Spend resulting in improved profitability (/G@¥zoPpaRTs: NASDAQ:PRTS > We are becoming less dependant on organic search for revenue generation and project it to be ~14% of overall revenues in FY-16 % of revenue 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% FY-13 Fy-14 FY-15 FY-16 MMMEPaid & Direct
Slide 14: Ramping Profitability: Key Stats PRTS
Ramping Profitability Key Stats: PRTS (NASDAQ) 15 Data sources: Yahoo! Finance, S&P Capital IQ, company filings. As of March 9, 2016. See Appendix for a reconciliation of non-GAAP measure. Revenue estimate represents low to mid-single digit growth from 2015. Guidance updated and effective only on Ma
Slide 15: Positive Private Label Quarterly Comp Sales Trend
Positive Private Label Quarterly Comp Sales Trend1 16 9 consecutive quarters with double digit Private Label growth 1 Comparable net sales was calculated by excluding $2.0M in private label sales related to the final week of Q4-14, as well as $1.7M, $1.4M, $0.8M and $0.5M in sales related to the Wes
Slide 16: Financial Performance (excludes AutoMD)
Financial Performance (excludes AutoMD) 17 Excludes one time write downs of $6.1 and $0.9M for FY-13 and FY-14, respectively 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 a
Slide 17: Strong EBITDA Growth Trends for U.S. Auto Parts
Strong EBITDA¹ Growth Trends for U.S. Auto Parts (excludes AutoMD) 18 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 c
Slide 18: 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 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 double next competitor Transitioning to a higher mix of private label products to drive increased conve
Slide 20: 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 double next competitor > Transitioning to a higher mix of private label products to drive increa
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 23 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 – Q1-16 (excluding AutoMD)
Financial Highlights – Q1-16 (excluding AutoMD) Total revenue $80.7M Total sales up 5.8% Gross Margin expansion of 230 basis points over prior year Adjusted EBITDA was 5.4% of net sales or $4.3M . A 52% increase over prior year Net Income improves 8x to $1.5M from $0.2M in the prior year Net debt de
Slide 24: Adjusted EBITDA reconciliation (excluding AutoMD)
Adjusted EBITDA reconciliation (excluding AutoMD) 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, rest
Slide 25: Projected FY-16 Adjusted EBITDA reconciliation (excluding AutoMD)
Projected FY-16 Adjusted EBITDA reconciliation (excluding AutoMD) 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 co
Slide 26: Our Business Model Projects Significant Cost Leverage as Revenues Grow
Our Business Model Projects Significant Cost Leverage as Revenues Grow Financial Sensitivity 27 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-15 5% 10% 15% 20% 38%
Slide 27: 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 28 Gross Profit per Transaction Average Order Size Repeat Purchase Conversion Increased Traffic
Slide 28: Key Avenues for Growth
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 anidpate strategy + Cross-sell + Improved
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