CarParts.com, Inc. · NASDAQ:PRTS
CarParts.com — U.S. Auto Parts Network — Investor Presentation (March 2017)
30 slides from CarParts.com's investor presentation, Mar 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 ~
Slide 3: Company Profile
Company Profile Revenues over $300M FY-2016 Net Income of $3M FY-2016 Adjusted EBITDA of $14M High Margin private label business is 66% of sales for FY-17 Private label has a 14% CAGR over the last 8 years Gross Margin over 30% Balance sheet cash over $2mm with no revolver debt Public Company since
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 FY-16 eCommerce Websites: Network of flags
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 increasing over 40% year over year Significant growth occurred across all the aftermarket auto part categories in FY-16 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 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 high demand SKUs and source them from one of
Slide 8: Price: Strong Contender in the Online Aftermarket Auto Parts Sector
Price: Strong Contender in the Online Aftermarket Auto Parts Sector Private Label provides USAP with a competitive advantage on pricing 8 Jefferies Automotive Aftermarket Equity Research conducted a study where offline retailers were compared to online competitors for the same branded product pricin
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 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 10: USAP Supply Chain Creates Pricing Advantage
USAP Supply Chain Creates Pricing Advantage 10 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 11: Private Label vs Branded Margin Profile
Private Label Branded Total FY-16 Growth Rate1 12% (8%) 4% Projected Revenue Mix 68% - 70% 30% - 32% 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% - 1
Slide 12: Competitive Landscape
Competitive Landscape Online Traffic Volume Comparison 12 Monthly Visitors1,2 Competitor sites’ traffic based on Alexa.com for January-17 Monthly Visitors for US Auto Parts is traffic for January-17 using our 3rd party traffic provider Omniture Our long domain history and quality content drives sign
Slide 13: Being Able to Spend More Gives USAP a Louder Voice in the Marketplace
13 13 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 14: Being Able to Spend More Gives USAP a Louder Voice in the Marketplace
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 15: 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 16: 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 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 $0.5
Slide 18: 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 20201 Approximately 10 million monthly website visitors Transitioning to a higher mix of private label products to drive increased conversion rates, higher-ma
Slide 19: 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+ > Approximately 10 million monthly website visitors > Transitioning to a higher mix of private label products to drive increas
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 Aaron E. Coleman President & Chief Operating Officer 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 Blockbuste
Slide 22: Financial Highlights – Q4-16
Financial Highlights – Q4-16 Total revenue $71.1M Total sales up 5.3% Gross Margin expansion of 50 basis points over prior year Net Income was ($0.2M) vs. the prior year ($0.1M) Adjusted EBITDA was 3.6% of net sales or $2.5M vs. prior year of $2.6M $2.7M in cash with no borrowings on our revolver de
Slide 23: Key Business Metrics Over Last Five Quarters
Key Business Metrics Over Last Five Quarters 23 Private Label continues to be a major focus of our business 23 Y/Y BPS Change Y/Y BPS Change Q4-16 30.1% 0.5% Q4-16 68% 5% 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% Y/Y % Cha
Slide 24: 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 25: 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 26: 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 26 (in thou
Slide 27: Our Business Model Projects Significant Cost Leverage as Revenues Grow
Our Business Model Projects Significant Cost Leverage as Revenues Grow Financial Sensitivity For every incremental year required to achieve growth levels, fixed expenses projected to increase $1.0M or 3%. Excludes stock based compensation, depreciation and amortization. 27 ($ figures in millions) 20
Slide 28: 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 29: Key Stats: PRTS (NASDAQ) – Consolidated
Key Stats: PRTS (NASDAQ) – Consolidated 29 Data sources: Yahoo! Finance, S&P Capital IQ, company filings. As of March 6, 2017 (includes 4.1M preferred shares). As of December 31, 2016. Trading Data (@ March 6, 2017) Stock Price $3.32 52 Wk. High/Low $4.49/2.40 Avg. Daily Vol. (3 mo.) 76,278 Fully Di
Slide 30: Key Stats: PRTS (NASDAQ) – Consolidated
Key Stats: PRTS (NASDAQ) — Consolidated Trading Data (@ march 6, 2017) Stock Price $3.32 52 Wk. High/Low $4.49/2.40 Avg. Daily Vol. (3 mo.) 76,278 Fully Diluted Shares Out.! 38.7M Institutional Holdings 37% Insider Holdings 36% Valuation Measures Market Cap $128.5M Enterprise Value $121.9M EV/Revenu
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