Attached files
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| 8-K - FORM 8-K - CarParts.com, Inc. | d313539d8k.htm |
 1
U.S. Auto Parts Network, Inc.
Leading online source for automotive aftermarket parts and repair information
Investor Presentation
March 2012
Exhibit 99.1 |
 Safe
Harbor 2
This presentation may contain certain forward-looking statements and
management may make additional forward-looking statements in response to
your questions. These statements do not guarantee future performance and
speak only as of the date hereof, and qualify for the safe harbor provided by
Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933. We refer all of you to the risk factors
contained in US Auto Parts Annual Report on Form 10-K and quarterly
reports on Form 10-Q filed with the Securities and Exchange Commission,
for more detailed
discussion
on
the
factors
that
can
cause
actual
results
to
differ
materially from those projected in any forward-looking statements.
|
 US
Auto Parts Competitive Advantages US Auto Parts is a dominant e-commerce
specialty retailer of aftermarket auto parts to the Do It Yourself market and
is uniquely positioned to win.
Incremental revenue above current levels has incremental EBITDA flow thru of
around 15% Low Cost Acquisition
Efficient Supply Chain
Significant Capacity
Reach over 14mm monthly
visitors at a less than a $8 CAC.
Over 40% of product directly
sourced from Asia.
Over 70% of corporate
employees located in off shore
low cost operations.
3 |
 4
US Auto Parts History
1995
Founded and serviced local body shops in Los Angeles
2000
Launched first internet site selling automotive Body Parts
2000-2005
Launched a network of sites catered to consumer segments
2006
Acquired PartsBin -
Engine
2007
IPO (NASDAQ: PRTS), hired new CEO
2008-2009
Launched a network of sites catered to consumer segments
2010
Launched
AutoMD,
Acquired
JC
Whitney
–
Accessories
2011
Completed integration of JC Whitney |
 $153.0
$176.0
$262.0
$327.0
2008
2009
2010
2011
$5.2
$13.5
$19.5
$16.2
2008
2009
2010
2011
5
Sales & Adjusted EBITDA
Consolidated Sales
Consolidated Adjusted EBITDA
($ In Millions)
($ In Millions)
1. Excludes legal cost associated with protecting our
intellectual property. 2. Excludes
legal
cost
associated
with
protecting
our
intellectual
property,
one
time
charge
for
revenue
recognition
change,
and
acquisition
costs
3. Includes about $80mm from acquisition of WAG
Adj. EBITDA Margin
(1)
(2)
3%
5%
8%
10%
Year Impacted by:
•
JCW Acquisition
•
$7.5m of restructuring
charges for JCW
•
Adjusted EBITDA for
USAP of $18.9m and
JCW with a loss of
($2.6m)
(3) |
 6
•
Reflects Whitney Automotive Group, fully integrated
•
Excludes
stock
based
compensation,
depreciation
and
amortization
of
$2.5m
and
$16.2m,
respectively
•
For every incremental year required to achieve growth levels, fixed expenses
increase $1.2M Financial Sensitivity
Base
10%
20%
30%
40%
50%
Revenue
$327
$ 360
$392
$425
$ 458
$ 491
Gross Margin %
30.0%
-
33.0%
30.0%
-
33.0%
30.0%
-
33.0%
30.0%
-
33.0%
30.0%
-
33.0%
30.0%
-
33.0%
Variable:
Fulfillment
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
Marketing
9.5%
9.5%
9.5%
9.5%
9.5%
9.5%
Technology
0.7%
0.7%
0.7%
0.7%
0.7%
0.7%
G&A
2.0%
2.0%
2.0%
2.0%
2.0%
2.0%
Total Variable
14.6%
14.6%
14.6%
14.6%
14.6%
14.6%
Fixed:
Fulfillment
2.5%
2.3%
2.1%
1.9%
1.8%
1.7%
Marketing
3.8%
3.5%
3.2%
2.9%
2.7%
2.5%
Technology
1.3%
1.2%
1.1%
1.0%
0.9%
0.9%
G&A
3.4%
3.1%
2.8%
2.6%
2.4%
2.2%
Total Fixed
10.9%
9.9%
9.1%
8.4%
7.8%
7.3%
Adjusted EBITDA %
4.5%
-
7.5%
5.5%
-
8.5%
6.3%
-
9.3%
7.0%
-
10.0%
7.6%
-
10.6%
8.2%
-
11.2%
Adjusted EBITDA $
$15
-
$25
$20
-
$30
$25
-
$37
$30
-
$43
$35
-
$49
$40
-
$55
Our business model has significant cost leverage as revenues grow
|
 1)
Improve Customer Experience
Continue to improve all customer touch points
1)
Lower Prices
Launch disruptive price points through supply chain
efficiencies
2)
Increase Selection
Expand product offering within existing categories as
well as entering new categories
3)
Increase Unique Visitors
Drive increase unique visitors both organically and
through acquisitions
4)
Be the Consumer Advocate for Auto Repair
Reduce consumer spending on vehicle repair by
billions of dollars
Revenue
100%
Gross Margins
30% -
33%
Variable OPEX Costs
15%
Fixed Costs
0%
Incr EBITDA Flow Thru
15% -
18%
7
2012 Growth and Profitability
Revenue Growth
Incremental EBITDA Flow Thru |
 8
Broad Product Offering Unavailable
from Traditional Off-Line Retailers
Brake Discs
Catalytic
Converters
Radiators
Headers
Oxygen
Sensors
Alternators
Exhaust
Driveshaft
Fuel Injection /
Delivery
Lamps
Mirrors
Bumpers
Hoods
Tailgates
Doors
Grills
Wheels
Window
Regulators
Seat Covers
Car Covers
Floor Mats /
Carpeting
Cold Air
Intakes
Vent Visors
Tonneau
Covers
Nerf Bars
Bug Shields
Car Bras
Body Parts
Engine Parts
Performance & Accessories
*Represents online mix, **Source; AAIA Factbook Research
21%
45%
34%
$15B
$15B
Revenue*
Overall Market**
$50B |
 9
Source : Forrester; Wall Street research; Autopartswarehouse.com
Low Online Penetration-
Mobile Growth
Opportunity
Sep 2010
32,108
Oct 2011
117,501
45%
27%
24%
24%
21%
19%
19%
18%
13%
12%
11%
10%
10%
9%
9%
8%
6%
5%
4%
2%
1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Mobile Daily Unique Visitors
(over last 13 months)
Retail Category e-Commerce Penetration Rates |
  Online
vs. Brick and Mortar Customer – Mobile Growth Should Accelerate
Penetration 10
Los Angeles DMA
0.6%
0.6%
1.4%
5.6%
6.0%
8.4%
12.6%
7.3%
15.9%
18.7%
22.7%
0.1%
0.7%
0.1%
9.8%
14.9%
5.3%
9.6%
18.1%
5.1%
16.4%
19.8%
0.2%
0.6%
0.6%
6.2%
7.4%
7.6%
10.3%
11.3%
11.9%
16.0%
27.8%
Varying Lifestyles
Urban Essence
Rural Villages & Farms
Metro Fringe
Blue Collar Backbone
Small Town Contentment
American Diversity
Struggling Societies
Affluent Suburbia
Upscale America
Aspiring Contemporaries
All Households
Auto Zone
USAP
Compared to AutoZone and the general population, USAP
customers over-index in affluent segments, typical of
e-commerce shoppers
Affluent Suburbia
The wealthiest households in the U.S. living in exclusive suburban
neighborhoods enjoying the best of everything that life has to offer
Small Town Contentment
Middle-aged, upper-middle-class families living in small towns and
satellite cities with moderate educations employed in white-collar,
blue-collar and service professions
American Diversity
A diverse group of ethnically mixed singles and couples, middle-
aged and retired with middleclass incomes from blue-collar and
service industry jobs
In contrast, AutoZone store locations over-index in areas with
lower income, blue collar households
Struggling Societies
Young minorities, students and single parents trying to raise families
on low-level jobs in manufacturing, health care and food services
Blue Collar Backbone
Budget-conscious, young and old blue-collar households living in
older towns working in manufacturing, construction and retail trades
Metro Fringe
Racially mixed, lower-middle-class clusters in older single-family
homes, semi-detached houses and low-rise apartments in
satellite cities
*
*Auto zone distribution reflects population in zip codes of Auto Zone store
locations **Sources:
2008
Census
estimates;
autozone.com;
MOSAIC
lifestyle
segments |
 US
Auto Parts Dominant Reach- Largest
Pure Play Internet Retailer
(some overlap of monthly visitors across websites)
11
USAP traffic includes traffic of USAP existing sites and WAG since the acquisition
Competitive sites’ traffic based on Comscore September 2011 reportsfor September *
Excludes growth from WAG acquisition |
 Pricing Competitive Advantage Through
Supply Chain Efficiencies
12
Product margin/price competitiveness determined more by sourcing strategy
than product categories. Current margins range from 30% -
33%.
Margin %
In-Stock
(Asia Sourced)
Branded
(US Sourced)
40% -
70%
25% -
40%
10% -
25%
Drop Ship
Current
40%
60%
Current Mix
50%
50%
75%
25%
50%
50%
Goal
Goal
Private Label |
   Low
Cost Operating Structure Reduces Overhead and Enables Scale
13
Acquisition/Retention Marketing
Website Product Development
Call Center Operations
Product Sourcing
Catalog
Finance
Accounting
Analysis
IT
HR
Corporate Functions
Job functions are shared between the US and Philippines with a majority of the work
being performed in the Philippines. Total Corporate Employees
300
1,000
Distribution Centers
Carson, California (150,000 sq. ft.)
Chesapeake, Virginia (110,000 sq. ft)
LaSalle, Illinois (300,000 sq. ft)
75
50
100
Total Distribution Employees
225 |
 AutoMD-
Largest DIY Site
Repositioned to Target $140B DIFM Market
14 |
 Adjusted EBITDA (Consolidated)
15
Thirteen Weeks
Ended
Thirteen Weeks
Ended
Fifty
-Two Weeks
Ended
Fifty
-Two Weeks
Ended
December 31
January 1
December 31
January 1
(Amounts shown
in thousands)
2011
2011
2011
2011
Net (loss) income
$
(7,020)
$
(2,896)
$
(15,137)
$
(13,926)
Interest expense (income) net
244
240
963
371
Income tax provision
(1,727)
64
(1,512)
12,218
Amortization of intangibles
345
1,640
3,673
2,804
Depreciation and amortization
3,494
2,982
12,695
9,466
EBITDA
(4,664)
2,030
682
10,933
Impairment loss on intangibles
5,138
-
5,138
-
Share-based compensation
660
630
2,607
2,742
Legal costs to enforce intellectual property rights
19
87
462
2,284
Charge for change in revenue recognition
-
-
-
411
Add back Restructuring
784
1,534
7,375
3,124
Adjusted EBITDA
$
1,937
$
4,281
$
16,264
$
19,494 |
 Adjusted EBITDA excluding JC Whitney
16
Thirteen Weeks
Ended
Thirteen Weeks
Ended
Fifty-Two Weeks
Ended
Fifty-Two Weeks
Ended
December 31
January 1
December 31
January 1
(Amounts shown in thousands)
2011
2011
2011
2011
Net income
$
128
$
218
$
4,745
$
(7,909)
Interest expense (income) net
245
295
964
378
Income tax provision
(305)
29
(144)
12,182
Amortization of intangibles
125
125
500
494
Depreciation and amortization
2,564
2,325
9,928
8,458
EBITDA
2,756
2,992
15,993
13,603
Share-based compensation
660
630
2,607
2,742
Legal costs to enforce intellectual property
rights
19
87
462
2,284
Charge for change in revenue recognition
-
-
-
411
Adjusted EBITDA
$
3,436
$
3,709
$
19,062
$
19,040 |
 Income Statement (Consolidated)
17
Thirteen Weeks
Ended
Thirteen Weeks
Ended
Fifty-Two Weeks
Ended
Fifty-Two Weeks
Ended
December 31
January 1
December 31
January 1
2011
2011
2011
2011
Net sales
$ 77,233
$ 80,450
$ 327,072
$
262,277 Cost of sales
53,408
53,051
220,072
172,668
Gross profit
23,825
27,399
107,000
89,609
Operating expenses:
Marketing
13,832
13,261
55,785
38,757
General and administrative
6,222
8,339
31,961
28,628
Fulfillment
5,116
4,677
19,164
14,946
Technology
1,743
2,062
7,274
5,902
Amortization of intangibles
345
1,640
3,673
2,804
Impairment loss on intangibles
5,138
-
5,138
-
Total operating expenses
32,396
29,979
122,995
91,037
(Loss) income from operations
(8,571)
(2,580)
(15,995)
(1,428)
Other income (expense):
Other income
84
(12)
364
191
Interest (expense) income
(260)
(240)
(1,018)
(471)
Other (expense) income, net
(176)
(252)
(654)
(280)
(Loss) income before income taxes
(8,747)
(2,832)
(16,649)
(1,708)
Income tax provision (benefit)
(1,727)
64
(1,512)
12,218
Net (loss) income
$ (7,020)
$ (2,896)
$
(15,137)
$
(13,926) Basic net (loss) income per share
$ (0.23)
$
(0.10)
$
(0.50)
$
(0.46) Shares used in computation of basic net income
(loss) per share 30,617,963
30,402,264
30,545,638
30,269,462
(Amounts shown in thousands) |
 Balance Sheet
18
(Amounts shown in thousands)
December 31, 2011
January 1, 2011
ASSETS
Current assets:
Cash and cash equivalents
$
10,335
$
17,595 Short-term investments
1,125
1,062
Accounts receivable, net of allowance of $183 and $372,
respectively 7,922
5,339
Inventory
52,245
48,100
Deferred income taxes
446
359
Other current assets
3,548
5,646
Total current assets
75,621
78,101
Property and equipment, net
34,627
33,140
Intangible assets, net
9,984
18,718
Goodwill
18,854
18,647
Investments
2,104
4,141
Other non-current assets
1,026
790
Total assets
$ 142,216
$
153,537 LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
41,303
$
31,660 Accrued expenses
11,565
15,487
Notes Payable, current portion
6,250
6,125
Capital Leases payable, current portion
135
132
Other current liabilities
7,702
5,522
Total current liabilities
66,955
58,926
Non-current liabilities
Notes Payable, net of current portion
11,625
17,875
Capital Leases payable, net of current portion
37
185
Deferred tax liabilities
1,596
3,046
Other non current liabilities
1,079
701
Total liabilities
81,292
80,733
Commitments and contingencies
—
—
Stockholders’
equity:
Common
stock,
$0.001
par
value;
100,000,000
shares
authorized
at
December
31,
2011
and January 1,2011; 30,625,764 and 30,429,376 shares issued and
outstanding as of December 31, 2011 and January 1, 2011
respectively 31
30
Additional paid-in capital
157,140
153,962
Accumulated other comprehensive income
327
249
Accumulated deficit
(96,574)
(81,437)
Total stockholders’
equity
60,924
72,804
Total liabilities and stockholders’
equity
$ 142,216
$
153,537 |
 Thank You
19 |