Carparts.com, Inc. · NASDAQ:PRTS
Carparts.com — U.S. Auto Parts Network — Investor Presentation (March 2016)
26 slides from Carparts.com's investor presentation, Mar 14, 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: 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 45,000 products at a significant cost savings because USAP is able to identify
Slide 4: Online Market is Vibrant & Growing
Online Market is Vibrant & Growing 5 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 5: Aftermarket Auto Parts Industry Sales
Aftermarket Auto Parts Industry Sales¹ 6 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 6: Aftermarket Auto Parts Industry Sales
Aftermarket Auto Parts Industry Sales¹ 7 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 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 FY-15 eCommerce Websites: Network of flagsh
Slide 8: Competitive Landscape
Competitive Landscape Online Traffic Volume Comparison 9 Monthly Visitors¹ Competitor sites’ traffic based on Compete using the average monthly traffic for 2015 year Monthly Visitors for US Auto Parts is average monthly traffic for FY-15 Our long domain history and quality content drives 2x as many
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: Projected Margin Profile
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: Projected Margin Profile
Projected Margin Profile AUTOPARTS' NASDAQ:PRTS Private > Incremental flow through ~ FY-15 Growth from private label Rate? i 17% (9%) 6% business is driving higher margins i ae 65% 35% 100% > Minimal fixed costs creates significant Proj lf . jected leverage in our business Gross Margins 34%-36% —19%
Slide 12: Ramping Profitability Key Stats: PRTS (NASDAQ)
Ramping Profitability Key Stats: PRTS (NASDAQ) 14 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 13: Positive Private Label Quarterly Comp Sales Trend
Positive Private Label Quarterly Comp Sales Trend1 15 8 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 14: Financial Performance (excludes AutoMD)
Financial Performance (excludes AutoMD) 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
Slide 15: Strong EBITDA Growth Trends for U.S. Auto Parts
Strong EBITDA¹ Growth Trends for U.S. Auto Parts (excludes AutoMD) 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 excludes Stock based c
Slide 16: 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 17: Key Takeaways
Key Takeaways A leading pure-play internet retailer of aftermarket auto parts $5 billion industry anticipated to 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 conversion rates higher-
Slide 18: Key Takeaways
Key Takeaways > A leading pure-play internet retailer of aftermarket auto parts > $5 billion industry anticipated to double by 2020? > ~10 million monthly website visitors — more than double next competitor > Transitioning to a higher mix of private label products to drive increased conversion rates
Slide 19: 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 20: 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 21: Financial Highlights – FY-15 (excluding AutoMD)
Financial Highlights – FY-15 (excluding AutoMD) Total revenue $291M Comp sales up 5.6% Gross Margin expansion of 100 basis points over prior year Adjusted EBITDA was $10.0M. A 19.0% increase over prior year Net debt flat to last year with increased inventory and flat payables 23 Non-GAAP financial m
Slide 22: FY-13 – FY-15 Adjusted EBITDA reconciliation (excluding AutoMD)
FY-13 – FY-15 Adjusted EBITDA reconciliation (excluding AutoMD) 24 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 comp
Slide 23: Projected FY-16 Adjusted EBITDA reconciliation (excluding AutoMD)
Projected FY-16 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 co
Slide 24: Our Business Model Projects Significant Cost Leverage as Revenues Grow
Our Business Model Projects Significant Cost Leverage as Revenues Grow Financial Sensitivity 26 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
Slide 25: 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 27 Gross Profit per Transaction Average Order Size Repeat Purchase Conversion Increased Traffic
Slide 26: Ad Spend resulting in improved profitability
Ad Spend resulting in improved profitability 28 We are becoming less dependant on organic search for revenue generation and project it to be ~14% of overall revenues is FY-16 Center 1 1 FY-16 EBITDA is the midpoint of Management’s guidance of $11.5 - $14.0M
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