CarParts.com Reports Record First Quarter 2023 Results

Record First Quarter Sales of $175.5 million, up 6% Year over Year  

13th Consecutive Quarter of Year over Year Sales Growth

TORRANCE, Calif., May 2, 2023 /PRNewswire/ -- CarParts.com, Inc. (NASDAQ: PRTS), one of the leading e-commerce providers of automotive parts and accessories, and a one-stop shop for vehicle repair and maintenance needs, is reporting results for the first quarter ended April 1, 2023. 

First Quarter 2023 Summary vs. Year-Ago Quarter  

• Net sales increased 6% year over year to $175.5 million and increased 20% on a two-year stack.
• Gross profit increased 2% to $62.6 million, with gross margin of 35.6%.
• Net income was $1.1 million or $0.02 per diluted share, compared to $2.1 million or $0.04 per diluted share.
• Adjusted EBITDA was flat at $9.4 million.
• Cash of $49.3 million and no revolver debt.

Management Commentary

"Q1 marked our 13^th consecutive quarter of growth all while building up a robust balance sheet.  Our team grew revenues and maintained profitability despite a challenging macro environment," said David Meniane, CEO of CarParts.com.  "For the remainder of the year, we will continue to drive operating improvements, expand our assortment, and enhance our website with new functionality."

"These results are the latest chapter in our success story, which is the product of a complete transformation that included a refreshed management team, restructured departments, new tech stacks, and improved operating efficiencies. No matter how you look at it, what the team has accomplished is remarkable. Our commitment to our customers, shareholders, and employees remains unwavering.  And as we look ahead, we believe we can continue to drive growth, profitability, and shareholder returns."

First Quarter 2023 Financial Results

Net sales in the first quarter of 2023 were $175.5 million, up 6% from the year-ago quarter.

Gross profit in the first quarter increased 2% to $62.6 million compared to $61.2 million in the year-ago quarter, with gross margin decreasing 120 basis points to 35.6%, primarily driven by unfavorable freight charges.

Total operating expenses in the first quarter were $61.9 million and 35.3% of sales compared to $58.8 million and 35.4% of sales in the year-ago quarter. The improvement in operating leverage was primarily driven by increased operating efficiencies combined with lower marketing expense as a percent of sales.

Net income in the first quarter was $1.1 million compared to net income of $2.1 million in the year-ago quarter.

Adjusted EBITDA in the first quarter was $9.4 million compared to $9.4 million in the year-ago quarter.

On April 1, 2023, the Company had a cash balance of $49.3 million, no revolver debt and no outstanding trade letters of credit ("LCs"), compared to no revolver debt, no outstanding trade LCs and a $18.8 million cash balance at prior fiscal year-end December 31, 2022. 

Conference Call

CarParts.com CEO David Meniane, CFO Ryan Lockwood and COO Michael Huffaker will host a conference call today to discuss the results, followed by a question and answer period.

Date: Tuesday, May 2, 2023
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time) 
Webcast: www.carparts.com/investor/news-events 

To listen to the live call, please click the link above to access the webcast. A replay of the audio webcast will be archived on the Company's website at www.carparts.com/investor.  

About CarParts.com, Inc.

CarParts.com is the go-to eCommerce platform for auto care and maintenance. We offer drivers quality parts at competitive prices and allow customers to schedule an appointment with a trusted mechanic directly from our website. We use world-class design principles and the latest technologies to deliver a fast, easy-to-use, and mobile-intuitive website. And with our company-owned national distribution network, we bring the best brands and manufacturers directly to consumers, cutting out the costs associated with brick-and-mortar retailers. Our team members around the globe are dedicated to Empowering Drivers Along Their Journey.

CarParts.com is headquartered in Torrance, California.

Non-GAAP Financial Measures

Regulation G, and other provisions of the Securities Exchange Act of 1934, as amended, define and prescribe the conditions for use of certain non-GAAP financial information. We provide "Adjusted EBITDA" and "EBITDAS," in this earnings release and on today's scheduled conference call, which are non-GAAP financial measures. Adjusted EBITDA, and EBITDAS, consist of net income (loss) before (a) interest expense, net; (b) income tax provision; (c) depreciation and amortization expense; (d) amortization of intangible assets; and (e) share-based compensation expense. A reconciliation of Adjusted EBITDA and EBITDAS to net income (loss) is provided below. With respect to EBITDAS from fiscal year 2018 (trailing twelve months ended December 29, 2018) provided below, we excluded the previously disclosed adjustments of employee transition costs, customs costs and proceeds from AutoMD sale in order to provide a more accurate comparison, adjusting only for share-based compensation expense. 

The Company believes that these non-GAAP financial measures provide important supplemental information to management and investors. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company's operations that, when viewed with the GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provides a more complete understanding of factors and trends affecting the Company's business and results of operations.

Management uses Adjusted EBITDA, and EBITDAS, as measures of the Company's operating performance because it assists in comparing the Company's operating performance on a consistent basis by removing the impact of stock compensation expense as well as other items that we do not believe are representative of our ongoing operating performance. Internally, these non-GAAP measures are also used by management for planning purposes, including the preparation of internal budgets; for allocating resources to enhance financial performance; and for evaluating the effectiveness of operational strategies. The Company also believes that analysts and investors use these non-GAAP measures as supplemental measures to evaluate the ongoing operations of companies in our industry.

These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the Company's consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items from the Company's non-GAAP measures should not be construed as an inference that these costs are all unusual, infrequent or non-recurring.

Safe Harbor Statement

This press release contains statements which are based on management's current expectations, estimates and projections about the Company's business and its industry, as well as certain assumptions made by the Company. These statements are forward looking statements for the purposes of 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, as amended. Words such as "anticipates," "could," "expects," "intends," "plans," "potential," "believes," "predicts," "projects," "seeks," "estimates," "may," "will," "would," "will likely continue" and variations of these words or similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding our future operating results and financial condition, our potential growth, our ability to innovate, our ability to gain market share, and our ability to expand and improve our product offerings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors.

Important factors that may cause such a difference include, but are not limited to, competitive pressures, our dependence on search engines to attract customers, demand for the Company's products, the online market and channel mix for aftermarket auto parts, the economy in general, increases in commodity and component pricing that would increase the Company's product costs, the operating restrictions in its credit agreement, the weather and any other factors discussed in the Company's filings with the Securities and Exchange Commission (the "SEC"), including the Risk Factors contained in the Company's Annual Report on Form 10–K and Quarterly Reports on Form 10–Q, which are available at www.carparts.com/investor and the SEC's website at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements in this release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. Unless otherwise required by law, the Company expressly disclaims any obligation to update publicly any forward-looking statements, whether as result of new information, future events or otherwise.

Investor Relations:

Ryan Lockwood, CFA
IR@carparts.com

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SOURCE CarParts.com, Inc.