Carparts.com, Inc. · NASDAQ:PRTS
Carparts.com — U.S. Auto Parts Network — Investor Presentation (August 2017)
26 slides from Carparts.com's investor presentation, Aug 10, 2017
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 o
Slide 3: Aftermarket Auto Parts Sales Benefits From Macro Trends
Aftermarket Auto Parts Sales Benefits From Macro Trends 3 Source: US Auto Care Association Average age of light vehicles on the road continues to remain strong Online aftermarket sales expected to be $13.2B in 2018 and more than double by 2023 Source: IHS 10.0 10.1 10.3 10.6 10.9 11.0 11.2 11.4 11.5
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 Q2-17 eCommerce Websites: Network of f
Slide 5: Online Adoption of Aftermarket Auto Parts has Favorable Trends
Online Adoption of Aftermarket Auto Parts has Favorable Trends Growth for auto parts online has accelerated in Q2 2017 with parts & accessories searches 10% year over year. Significant growth occurred across all the aftermarket auto part categories in last 3 years. 5
Slide 6: Price & Product Availability: Customer Value Proposition
Price & Product Availability: The Two Most Important Factors for DIY Customers Customer Value Proposition 6 Low Cost Products Cost-conscious customers are able to purchase our private label products at a significant cost savings. A study conducted by Jefferies Automotive Aftermarket Equity Research
Slide 7: 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 7 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 8: USAP Supply Chain Creates Pricing Advantage
USAP Supply Chain Creates Pricing Advantage 8 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 3%-10% Flow Thru Jobber ~70% of Units Stock-Ship 16%- 21%
Slide 9: Projected Margin Profile
Private Label Branded Total FY-16 Growth Rate1 12% (8%) 4% Projected 2017 Revenue Mix 68% - 70% 30% - 32% 100% Projected Gross Margins 33% - 36% 15% - 20% 29% - 30% Projected Variable OPEX Costs 15% - 17% 10% - 12% 14% - 16% Incremental Fixed Cost 0% 0% 0% Incremental Flow Thru 16% - 21% 3% - 10% 13
Slide 10: Projected Margin Profile
AUTOPARTS NASDAQ:PRTS Projected Margin Profile > Incremental flow through ‘ FY-16 from private label , Growth Rate? 12% (8%) 4% business is driving higher margins - Projected 2017 5%. 70% 30%- 32% 100% a : Revenue Mix > Minimal fixed costs creates significant Proj : . jected leverage in our business
Slide 11: Company Profile
Company Profile Revenues over $300M FY-2016 Net Income of $3M FY-2016 Adjusted EBITDA of $14M High Margin private label business was 66% of sales for FY-16 Positive Free Cash Flow with no revolver debt over last 5 consecutive quarters Public Company since 2007 – NASDAQ (PRTS) 11 Non-GAAP financial m
Slide 12: Strong Net Income & Adjusted EBITDA Growth Trends
Strong Net Income & Adjusted EBITDA¹ Growth Trends for U.S. Auto Parts 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
Slide 13: Financial Performance
Financial Performance 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 $1.2M, $2.4M, $2.3M & $2.9M for F
Slide 14: Private Label Quarterly Sales Trend
2 Year Stacked Private Label Quarterly Sales Trend1 14 Private Label continues to be a major focus of our business 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 in sale
Slide 15: Key Takeaways
Key Takeaways A leading pure-play internet retailer of aftermarket auto parts $13 billion on-line market expected by 2018 and anticipated to nearly double by 20231 Over 8 million monthly website visitors Transitioning to a higher mix of private label products to drive increased conversion rates, hig
Slide 16: Key Takeaways
AUTOPARTS NASDAQ:PRTS Key Takeaways > A leading pure-play internet retailer of aftermarket auto parts > $13 billion on-line market expected by 2018 and anticipated to nearly double by 2023+ > Over 8 million monthly website visitors > Transitioning to a higher mix of private label products to drive i
Slide 17: 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 18: Experienced Leadership Team
Experienced Leadership Team Aaron E. Coleman Chief Executive Officer Since April 2017 President since October 2016 and COO since September 2010 Vice President of Operations and CIO from April 2008 - September 2010 Over 18 years of e-commerce experience Senior Vice President – Online Systems at Block
Slide 19: Financial Highlights – Q2-17
Financial Highlights – Q2-17 Total revenue $80.2M Income from continuing operations was $26.9M vs. the prior year $1.2M Adjusted EBITDA $3.8M vs. prior year of $4.0M $9.9M in cash with zero revolver debt vs. last year of $2.1M in cash with zero revolver debt vs. year-end of $2.7M cash and zero revol
Slide 20: Key Business Metrics Over Last Six Quarters
Key Business Metrics Over Last Six Quarters 20 20
Slide 21: Yearly Adjusted EBITDA Reconciliation
Yearly Adjusted EBITDA Reconciliation 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 cost,
Slide 22: Quarterly Adjusted EBITDA Reconciliation
Quarterly Adjusted EBITDA Reconciliation 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 23: Projected FY-17 Adjusted EBITDA Reconciliation
Projected FY-17 Adjusted EBITDA reconciliation 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 23
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 Gross Profit per Transaction Average Order Size Repeat Purchase Conversion Increased Traffic Ef
Slide 25: Key Stats: PRTS (NASDAQ) – Consolidated
Key Stats: PRTS (NASDAQ) – Consolidated 25 Data sources: Yahoo! Finance, S&P Capital IQ, company filings. As of August 8, 2017 (includes 2.8M preferred shares). As of December 31, 2016. Trading Data (@ August 8, 2017) Stock Price $2.78 52 Wk. High/Low $4.35/2.40 Avg. Daily Vol. (3 mo.) 237,880 Fully
Slide 26: Key Stats: PRTS (NASDAQ) – Consolidated
Key Stats: PRTS (NASDAQ) — Consolidated AUTOPARTS NASDAQ:PRTS Trading Data (@ august 8, 2017) Financial Highlights (@ vec 31, 2016) Stock Price $2.78 Revenues (77M) $303.6M 52 Wk. High/Low $4.35/2.40 _St0ss Margin (rr) 30.4% ‘Avg. Daily Vol. (3 mo.) 237,880 Cash & Equiv. $6.6 1 Total Assets $82.1M F
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