U.S. Auto Parts Reports Third Quarter 2019 Results

Renewed Focus on Private Label Sales Drives Strongest Quarter of Gross Margin Since Q3 2016

Published

CARSON, Calif., Nov. 1, 2019 /PRNewswire/ -- U.S. Auto Parts Network, Inc. (NASDAQ: PRTS), one of the largest online providers of aftermarket automotive parts and accessories, is reporting results for the third quarter ended September 28, 2019.

Third Quarter 2019 Summary vs. Year-Ago Quarter

  • Gross profit increased 15% to $21.1 million compared to $18.4 million. As a percentage of net sales, gross profit increased 400 basis points to 30.5% compared to 26.5%.
  • Net sales were $69.3 million compared to $69.5 million.
  • Online sales increased 2% while offline sales declined 17%.
  • Net loss was $1.4 million or $(0.04) per share, compared to net loss of $0.2 million or $(0.01) per share.
  • Adjusted EBITDA (a non-GAAP measure defined below) was $1.3 million compared to $2.6 million.
  • Ended the quarter with no revolver debt.
  • Conversion rate increased 50 basis points to 3.2%.

Management Commentary

"Last quarter, we introduced a new operating plan that is centered on three key pillars: the right part, the right time, and the right place. Each of these pillars represents an important aspect of the customer experience as we need to ensure that our customers order the right part for their vehicle, deliver it quickly, and be agnostic to how the customer wants to install their auto parts.

"We have also renewed our focus on improving gross margins and profitability, which will be accomplished in-part by increasing the revenue mix of our highest margin products—private label—and better utilizing our resources to grow and optimize our three core websites.

"During the third quarter, we began to realize the early benefits of executing this new operating plan, highlighted by our second consecutive quarter of gross margin expansion, as well as our second consecutive quarter of positive adjusted EBITDA.  This was also our strongest quarter of private label sales growth in nearly two years, which tells us that our strategy is working. Further, our new 125,000 square foot distribution center went live in Las Vegas in early August, and we have already shipped more than 80,000 auto parts in less than 3 months.

"The momentum in our business is evident. Key metrics are trending in the right direction, our cash flow cycle is healthy and we remain debt-free. There is still plenty of work ahead to further improve our inventory optimization, cost structure and core websites. But everywhere we look, we see opportunity, and our team remains committed to delivering positive adjusted EBITDA this year and carrying this strong momentum into 2020," said Lev Peker, CEO of U.S. Auto Parts.

Third Quarter 2019 Financial Results

Net sales in the third quarter of 2019 were $69.3 million compared to $69.5 million in the year-ago quarter. The decline was largely driven by a reduction in branded sales and offline sales mostly offset by a 15% increase in higher margin private label sales.  Our online sales were up 2% and our offline sales declined 17% due to a change in pricing strategy and exiting unprofitable businesses.

Gross profit in the third quarter of 2019 increased 15% to $21.1 million compared to $18.4 million in the year-ago quarter. As a percentage of net sales, gross profit increased 400 basis points to 30.5% compared to 26.5%. Excluding detention and demurrage related costs from both quarters, gross margin for the quarter would be 31.3% compared to 28.9% last year. The increase was primarily driven by a greater proportion of higher margin private label sales and improved pricing strategies.

Total operating expenses in the third quarter were $22.6 million compared to $19.6 million in the third quarter of last year. As a percentage of net sales, operating expenses increased to 32.6% compared to 28.3% in the year ago quarter with the increase primarily driven by increased marketing spend and investments in marketing platforms and new employees.

Net loss in the third quarter was $1.4 million, or $(0.04) per share, compared to a net loss of $0.2 million or $(0.01) per share in the year-ago period.

Adjusted EBITDA in the third quarter of 2019 was $1.3 million compared to $2.6 million in the year-ago quarter.

At September 28, 2019, cash and cash equivalents totaled $1.1 million compared to $2.0 million at December 29, 2018. The decrease in cash is primarily a result of employee transition costs, technology capital expenditures, marketing, and setup costs for the company's new distribution center in Las Vegas, Nevada. U.S. Auto Parts also had no revolver debt at each of September 28, 2019 and December 29, 2018.

Q3 2019 Q3 2018 Q2 2019
Conversion Rate 1 3.2 % 2.7 % 3.0 %
Unique Visitors (millions) 1 13.8 16.4 14.2
Number of Orders - E-commerce only (thousands) 441 443 423
Number of Orders - Online Marketplace (thousands) 412 372 463
Total Number of Internet Orders (thousands) 853 815 886
Revenue Capture (% Sales) 2 89.3 % 87.5 % 87.8 %
Average Order Value - Total Internet Orders $ 78 $ 85 $ 80

1. Excludes online marketplaces.
Q3 2019 Q3 2018 Q2 2019 2. Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment and excludes online marketplaces.
Conversion Rate 1 3.2 % 2.7 % 3.0 %
Unique Visitors (millions) 1 13.8 16.4 14.2
Number of Orders - E-commerce only (thousands) 441 443 423
Number of Orders - Online Marketplace (thousands) 412 372 463
Total Number of Internet Orders (thousands) 853 815 886
Revenue Capture (% Sales) 2 89.3 % 87.5 % 87.8 %
Average Order Value - Total Internet Orders $ 78 $ 85 $ 80

Conference Call

U.S. Auto Parts CEO Lev Peker and CFO/COO David Meniane will host the conference call, followed by a question and answer period.

Date: Friday, November 1, 2019Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)Toll-free dial-in number: 877‑407‑9039International dial-in number: 201‑689‑8470Conference ID: 13694403

Please call the conference telephone number 5‑10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1‑949‑574‑3860.

The conference call will be broadcast live and available for replay via the investor relations section of the Company's website at www.usautoparts.com.

A telephone replay of the conference call will also be available on the same day through November 15, 2019.

Toll-free replay number: 844‑512‑2921International replay number: 412‑317‑6671Replay ID: 13694403

About U.S. Auto Parts Network, Inc.

Established in 1995, U.S. Auto Parts is a leading online provider of automotive aftermarket parts, including collision, engine, and performance parts and accessories. Through the Company's network of websites, U.S. Auto Parts provides consumers with a broad selection of competitively priced products, all mapped by a proprietary database with applications based on vehicle makes, models and years. U.S. Auto Parts' flagship websites include www.autopartswarehouse.com, www.carparts.com, and www.jcwhitney.com, as well as the Company's corporate website at www.usautoparts.net.

U.S. Auto Parts is headquartered in Carson, 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," which is a non-GAAP financial measure. Adjusted EBITDA consists of net income before (a) interest expense, net; (b) income tax provision; (c) depreciation and amortization expense; (d) amortization of intangible assets; (e) share-based compensation expense; (f) costs associated with our customs issue; and (g) costs associated with the executive transitions.

The Company believes that this non-GAAP financial measure provides important supplemental information to management and investors. This 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 reconciliation 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 as one measure 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 and the costs associated with the customs issue, as well as items that are not expected to be recurring. Internally, this non-GAAP measure is 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 Adjusted EBITDA as a supplemental measure to evaluate the ongoing operations of companies in our industry.

This non-GAAP financial measure is 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, its future operating results and financial condition, the impact of changes in our key operating metrics, and our potential growth and our liquidity requirements. 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, the impact of the customs issues 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.usautoparts.net 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:

Sean Mansouri, CFA or Cody SlachGateway Investor Relations949‑574‑3860PRTS@gatewayir.com

Summarized information for our continuing operations for the periods presented is as follows (in millions):

1. Excludes online marketplaces. Thirteen Weeks Ended Thirty-nine Weeks Ended
Q3 2019 Q3 2018 Q2 2019 2. Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment and excludes online marketplaces. September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018
Conversion Rate 1 3.2 % 2.7 % 3.0 % (As Restated) (As Restated)
Unique Visitors (millions) 1 13.8 16.4 14.2 Net sales $ 69.27 $ 69.46 $ 217.70 $ 224.82
Number of Orders - E-commerce only (thousands) 441 443 423 Gross profit $ 21.14 18.41 $ 63.04 $ 62.16
Number of Orders - Online Marketplace (thousands) 412 372 463 30.5 % 26.5 % 29.0 % 27.6 %
Total Number of Internet Orders (thousands) 853 815 886 Operating expenses $ 22.60 $ 19.62 $ 69.14 $ 62.47
Revenue Capture (% Sales) 2 89.3 % 87.5 % 87.8 % 32.6 % 28.3 % 31.8 % 27.8 %
Average Order Value - Total Internet Orders $ 78 $ 85 $ 80 Net (loss) income $ (1.42) $ (0.18) $ (6.46) $ (0.41)
(2.1) % (0.3) % (3.0) % (0.2) %
Adjusted EBITDA $ 1.32 $ 2.59 2.65 $ 9.66
1.9 % 3.7 % 1.2 % 4.3 %

The table below reconciles income from continuing operations to Adjusted EBITDA for the periods presented (in thousands):

1. Excludes online marketplaces. Thirteen Weeks Ended Thirty-nine Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended
Q3 2019 Q3 2018 Q2 2019 2. Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment and excludes online marketplaces. September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018
Conversion Rate 1 3.2 % 2.7 % 3.0 % (As Restated) (As Restated) (As Restated) (As Restated)
Unique Visitors (millions) 1 13.8 16.4 14.2 Net sales $ 69.27 $ 69.46 $ 217.70 $ 224.82 (Loss) income from continuing operations (1,424) (180) (6,461) (409)
Number of Orders - E-commerce only (thousands) 441 443 423 Gross profit $ 21.14 18.41 $ 63.04 $ 62.16 Depreciation & amortization 1,531 1,419 4,572 4,412
Number of Orders - Online Marketplace (thousands) 412 372 463 30.5 % 26.5 % 29.0 % 27.6 % Amortization of intangible assets 25 46 75 140
Total Number of Internet Orders (thousands) 853 815 886 Operating expenses $ 22.60 $ 19.62 $ 69.14 $ 62.47 Interest expense, net 516 363 1,410 1,215
Revenue Capture (% Sales) 2 89.3 % 87.5 % 87.8 % 32.6 % 28.3 % 31.8 % 27.8 % Taxes (552) 8 (1,018) 270
Average Order Value - Total Internet Orders $ 78 $ 85 $ 80 Net (loss) income $ (1.42) $ (0.18) $ (6.46) $ (0.41) EBITDA $ 96 $ 1,656 $ (1,422) $ 5,628
(2.1) % (0.3) % (3.0) % (0.2) % Stock comp expense 792 567 $ 1,955 1,704
Adjusted EBITDA $ 1.32 $ 2.59 2.65 $ 9.66 Employee transition costs(1) 425 1,695
1.9 % 3.7 % 1.2 % 4.3 % Customs costs(2) 3 1,764 418 3,730
Proceeds from AutoMD sale (1,400) (1,400)
Adjusted EBITDA $ 1,316 $ 2,587 $ 2,646 $ 9,662

1. Excludes online marketplaces. Thirteen Weeks Ended Thirty-nine Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended (1) We incurred costs related to the transition of executive management related to severance, recruiting, hiring bonuses, and relocation costs.
Q3 2019 Q3 2018 Q2 2019 2. Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment and excludes online marketplaces. September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 (2) We incurred port and carrier fees and legal costs associated with our customs related issues.
Conversion Rate 1 3.2 % 2.7 % 3.0 % (As Restated) (As Restated) (As Restated) (As Restated)
Unique Visitors (millions) 1 13.8 16.4 14.2 Net sales $ 69.27 $ 69.46 $ 217.70 $ 224.82 (Loss) income from continuing operations (1,424) (180) (6,461) (409)
Number of Orders - E-commerce only (thousands) 441 443 423 Gross profit $ 21.14 18.41 $ 63.04 $ 62.16 Depreciation & amortization 1,531 1,419 4,572 4,412
Number of Orders - Online Marketplace (thousands) 412 372 463 30.5 % 26.5 % 29.0 % 27.6 % Amortization of intangible assets 25 46 75 140
Total Number of Internet Orders (thousands) 853 815 886 Operating expenses $ 22.60 $ 19.62 $ 69.14 $ 62.47 Interest expense, net 516 363 1,410 1,215
Revenue Capture (% Sales) 2 89.3 % 87.5 % 87.8 % 32.6 % 28.3 % 31.8 % 27.8 % Taxes (552) 8 (1,018) 270
Average Order Value - Total Internet Orders $ 78 $ 85 $ 80 Net (loss) income $ (1.42) $ (0.18) $ (6.46) $ (0.41) EBITDA $ 96 $ 1,656 $ (1,422) $ 5,628
(2.1) % (0.3) % (3.0) % (0.2) % Stock comp expense 792 567 $ 1,955 1,704
Adjusted EBITDA $ 1.32 $ 2.59 2.65 $ 9.66 Employee transition costs(1) 425 1,695
1.9 % 3.7 % 1.2 % 4.3 % Customs costs(2) 3 1,764 418 3,730
Proceeds from AutoMD sale (1,400) (1,400)
Adjusted EBITDA $ 1,316 $ 2,587 $ 2,646 $ 9,662

 

1. Excludes online marketplaces. Thirteen Weeks Ended Thirty-nine Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended (1) We incurred costs related to the transition of executive management related to severance, recruiting, hiring bonuses, and relocation costs.
Q3 2019 Q3 2018 Q2 2019 2. Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment and excludes online marketplaces. September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 (2) We incurred port and carrier fees and legal costs associated with our customs related issues. CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
Conversion Rate 1 3.2 % 2.7 % 3.0 % (As Restated) (As Restated) (As Restated) (As Restated) (Unaudited, in Thousands, Except Per Share Data)
Unique Visitors (millions) 1 13.8 16.4 14.2 Net sales $ 69.27 $ 69.46 $ 217.70 $ 224.82 (Loss) income from continuing operations (1,424) (180) (6,461) (409)
Number of Orders - E-commerce only (thousands) 441 443 423 Gross profit $ 21.14 18.41 $ 63.04 $ 62.16 Depreciation & amortization 1,531 1,419 4,572 4,412
Number of Orders - Online Marketplace (thousands) 412 372 463 30.5 % 26.5 % 29.0 % 27.6 % Amortization of intangible assets 25 46 75 140 Thirteen Weeks Ended Thirty-Nine Weeks Ended
Total Number of Internet Orders (thousands) 853 815 886 Operating expenses $ 22.60 $ 19.62 $ 69.14 $ 62.47 Interest expense, net 516 363 1,410 1,215 September 28, September 29, September 28, September 29,
Revenue Capture (% Sales) 2 89.3 % 87.5 % 87.8 % 32.6 % 28.3 % 31.8 % 27.8 % Taxes (552) 8 (1,018) 270 2019 2018 2019 2018
Average Order Value - Total Internet Orders $ 78 $ 85 $ 80 Net (loss) income $ (1.42) $ (0.18) $ (6.46) $ (0.41) EBITDA $ 96 $ 1,656 $ (1,422) $ 5,628 (As Restated) (As Restated)
(2.1) % (0.3) % (3.0) % (0.2) % Stock comp expense 792 567 $ 1,955 1,704 Net sales $ 69,273 $ 69,463 $ 217,698 $ 224,821
Adjusted EBITDA $ 1.32 $ 2.59 2.65 $ 9.66 Employee transition costs(1) 425 1,695 Cost of sales (1) 48,130 51,049 154,663 162,666
1.9 % 3.7 % 1.2 % 4.3 % Customs costs(2) 3 1,764 418 3,730 Gross profit 21,143 18,414 63,035 62,155
Proceeds from AutoMD sale (1,400) (1,400) Operating expenses:
Adjusted EBITDA $ 1,316 $ 2,587 $ 2,646 $ 9,662 Marketing 11,034 9,212 34,023 29,012
General and administrative 4,068 4,297 13,658 13,923
Fulfillment 6,268 5,034 17,664 16,276
Technology 1,206 1,035 3,724 3,121
Amortization of intangible assets 25 46 75 140
Total operating expenses 22,601 19,624 69,144 62,472
(Loss) income from operations (1,458) (1,210) (6,109) (317)
Other income (expense):
Other, net (1) 1,402 41 1,396
Interest expense (517) (364) (1,411) (1,218)
Total other expense, net (518) 1,038 (1,370) 178
(Loss) income before income taxes (1,976) (172) (7,479) (139)
Income tax (benefit) provision (552) 8 (1,018) 270
Net loss (1,424) (180) (6,461) (409)
Other comprehensive income:
Foreign currency translation adjustments 19 9 (19) 51
Total other comprehensive income 19 9 (19) 51
Comprehensive loss $ (1,405) $ (171) $ (6,480) $ (358)
Loss from continuing operations per share:
Basic and diluted net loss per share $ (0.04) $ (0.01) $ (0.18) $ (0.02)
Weighted average common shares outstanding:
Shares used in computation of basic and diluted net loss per share 35,856 34,983 35,623 34,925

1. Excludes online marketplaces. Thirteen Weeks Ended Thirty-nine Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended (1) We incurred costs related to the transition of executive management related to severance, recruiting, hiring bonuses, and relocation costs. (1) Excludes depreciation and amortization expense which is included in marketing, general and administrative and fulfillment expense.
Q3 2019 Q3 2018 Q2 2019 2. Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment and excludes online marketplaces. September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 (2) We incurred port and carrier fees and legal costs associated with our customs related issues. CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
Conversion Rate 1 3.2 % 2.7 % 3.0 % (As Restated) (As Restated) (As Restated) (As Restated) (Unaudited, in Thousands, Except Per Share Data)
Unique Visitors (millions) 1 13.8 16.4 14.2 Net sales $ 69.27 $ 69.46 $ 217.70 $ 224.82 (Loss) income from continuing operations (1,424) (180) (6,461) (409)
Number of Orders - E-commerce only (thousands) 441 443 423 Gross profit $ 21.14 18.41 $ 63.04 $ 62.16 Depreciation & amortization 1,531 1,419 4,572 4,412
Number of Orders - Online Marketplace (thousands) 412 372 463 30.5 % 26.5 % 29.0 % 27.6 % Amortization of intangible assets 25 46 75 140 Thirteen Weeks Ended Thirty-Nine Weeks Ended
Total Number of Internet Orders (thousands) 853 815 886 Operating expenses $ 22.60 $ 19.62 $ 69.14 $ 62.47 Interest expense, net 516 363 1,410 1,215 September 28, September 29, September 28, September 29,
Revenue Capture (% Sales) 2 89.3 % 87.5 % 87.8 % 32.6 % 28.3 % 31.8 % 27.8 % Taxes (552) 8 (1,018) 270 2019 2018 2019 2018
Average Order Value - Total Internet Orders $ 78 $ 85 $ 80 Net (loss) income $ (1.42) $ (0.18) $ (6.46) $ (0.41) EBITDA $ 96 $ 1,656 $ (1,422) $ 5,628 (As Restated) (As Restated)
(2.1) % (0.3) % (3.0) % (0.2) % Stock comp expense 792 567 $ 1,955 1,704 Net sales $ 69,273 $ 69,463 $ 217,698 $ 224,821
Adjusted EBITDA $ 1.32 $ 2.59 2.65 $ 9.66 Employee transition costs(1) 425 1,695 Cost of sales (1) 48,130 51,049 154,663 162,666
1.9 % 3.7 % 1.2 % 4.3 % Customs costs(2) 3 1,764 418 3,730 Gross profit 21,143 18,414 63,035 62,155
Proceeds from AutoMD sale (1,400) (1,400) Operating expenses:
Adjusted EBITDA $ 1,316 $ 2,587 $ 2,646 $ 9,662 Marketing 11,034 9,212 34,023 29,012
General and administrative 4,068 4,297 13,658 13,923
Fulfillment 6,268 5,034 17,664 16,276
Technology 1,206 1,035 3,724 3,121
Amortization of intangible assets 25 46 75 140
Total operating expenses 22,601 19,624 69,144 62,472
(Loss) income from operations (1,458) (1,210) (6,109) (317)
Other income (expense):
Other, net (1) 1,402 41 1,396
Interest expense (517) (364) (1,411) (1,218)
Total other expense, net (518) 1,038 (1,370) 178
(Loss) income before income taxes (1,976) (172) (7,479) (139)
Income tax (benefit) provision (552) 8 (1,018) 270
Net loss (1,424) (180) (6,461) (409)
Other comprehensive income:
Foreign currency translation adjustments 19 9 (19) 51
Total other comprehensive income 19 9 (19) 51
Comprehensive loss $ (1,405) $ (171) $ (6,480) $ (358)
Loss from continuing operations per share:
Basic and diluted net loss per share $ (0.04) $ (0.01) $ (0.18) $ (0.02)
Weighted average common shares outstanding:
Shares used in computation of basic and diluted net loss per share 35,856 34,983 35,623 34,925

 

1. Excludes online marketplaces. Thirteen Weeks Ended Thirty-nine Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended (1) We incurred costs related to the transition of executive management related to severance, recruiting, hiring bonuses, and relocation costs. (1) Excludes depreciation and amortization expense which is included in marketing, general and administrative and fulfillment expense.
Q3 2019 Q3 2018 Q2 2019 2. Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment and excludes online marketplaces. September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 (2) We incurred port and carrier fees and legal costs associated with our customs related issues. CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS CONSOLIDATED BALANCE SHEETS
Conversion Rate 1 3.2 % 2.7 % 3.0 % (As Restated) (As Restated) (As Restated) (As Restated) (Unaudited, in Thousands, Except Per Share Data) (Unaudited, In Thousands, Except Par and Liquidation Value)
Unique Visitors (millions) 1 13.8 16.4 14.2 Net sales $ 69.27 $ 69.46 $ 217.70 $ 224.82 (Loss) income from continuing operations (1,424) (180) (6,461) (409)
Number of Orders - E-commerce only (thousands) 441 443 423 Gross profit $ 21.14 18.41 $ 63.04 $ 62.16 Depreciation & amortization 1,531 1,419 4,572 4,412
Number of Orders - Online Marketplace (thousands) 412 372 463 30.5 % 26.5 % 29.0 % 27.6 % Amortization of intangible assets 25 46 75 140 Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, December 29,
Total Number of Internet Orders (thousands) 853 815 886 Operating expenses $ 22.60 $ 19.62 $ 69.14 $ 62.47 Interest expense, net 516 363 1,410 1,215 September 28, September 29, September 28, September 29, 2019 2018
Revenue Capture (% Sales) 2 89.3 % 87.5 % 87.8 % 32.6 % 28.3 % 31.8 % 27.8 % Taxes (552) 8 (1,018) 270 2019 2018 2019 2018 ASSETS
Average Order Value - Total Internet Orders $ 78 $ 85 $ 80 Net (loss) income $ (1.42) $ (0.18) $ (6.46) $ (0.41) EBITDA $ 96 $ 1,656 $ (1,422) $ 5,628 (As Restated) (As Restated) Current assets:
(2.1) % (0.3) % (3.0) % (0.2) % Stock comp expense 792 567 $ 1,955 1,704 Net sales $ 69,273 $ 69,463 $ 217,698 $ 224,821 Cash and cash equivalents $ 1,108 $ 2,031
Adjusted EBITDA $ 1.32 $ 2.59 2.65 $ 9.66 Employee transition costs(1) 425 1,695 Cost of sales (1) 48,130 51,049 154,663 162,666 Short-term investments 3 1
1.9 % 3.7 % 1.2 % 4.3 % Customs costs(2) 3 1,764 418 3,730 Gross profit 21,143 18,414 63,035 62,155 Accounts receivable, net 4,349 3,727
Proceeds from AutoMD sale (1,400) (1,400) Operating expenses: Inventory 47,699 49,626
Adjusted EBITDA $ 1,316 $ 2,587 $ 2,646 $ 9,662 Marketing 11,034 9,212 34,023 29,012 Other current assets 4,224 3,400
General and administrative 4,068 4,297 13,658 13,923 Total current assets 57,383 58,785
Fulfillment 6,268 5,034 17,664 16,276 Deferred income taxes 22,463 21,833
Technology 1,206 1,035 3,724 3,121 Property and equipment, net 9,806 15,184
Amortization of intangible assets 25 46 75 140 Right-of-use - assets - operating leases, net 5,047
Total operating expenses 22,601 19,624 69,144 62,472 Right-of-use - assets - financing leases, net 9,089
(Loss) income from operations (1,458) (1,210) (6,109) (317) Other non-current assets 1,782 2,163
Other income (expense): Total assets $ 105,570 $ 97,965
Other, net (1) 1,402 41 1,396 LIABILITIES AND STOCKHOLDERS' EQUITY
Interest expense (517) (364) (1,411) (1,218) Current liabilities:
Total other expense, net (518) 1,038 (1,370) 178 Accounts payable $ 35,777 $ 34,039
(Loss) income before income taxes (1,976) (172) (7,479) (139) Accrued expenses 12,566 10,247
Income tax (benefit) provision (552) 8 (1,018) 270 Current portion of capital leases payable 594
Net loss (1,424) (180) (6,461) (409) Customer deposits 521
Other comprehensive income: Notes payable, current portion 606
Foreign currency translation adjustments 19 9 (19) 51 Right-of-use - obligation - operating, current 1,573
Total other comprehensive income 19 9 (19) 51 Right-of-use - obligation - finance, current 686
Comprehensive loss $ (1,405) $ (171) $ (6,480) $ (358) Other current liabilities 3,078 2,918
Loss from continuing operations per share: Total current liabilities 54,286 48,319
Basic and diluted net loss per share $ (0.04) $ (0.01) $ (0.18) $ (0.02) Capital leases payable, net of current portion 8,559
Weighted average common shares outstanding: Notes payable, non-current portion 1,078
Shares used in computation of basic and diluted net loss per share 35,856 34,983 35,623 34,925 Right-of-use - obligation - operating, non-current 3,714
Right-of-use - obligation - finance, non-current 8,599
Other non-current liabilities 2,155 2,265
Total liabilities 69,832 59,143
Commitments and contingencies
Stockholders' equity:
Series A convertible preferred stock, $0.001 par value; $1.45 per share liquidation value or aggregate of $6,017; 4,150 shares authorized; 2,771 shares issued and outstanding at both September 28, 2019 and December 29, 2018 3 3
Common stock, $0.001 par value; 100,000 shares authorized; 35,924 and 34,992 shares issued and outstanding at September 28, 2019 and December 29, 2018 (of which 2,525 are treasury stock) 38 38
Common stock dividend 41
Treasury stock (7,146) (7,146)
Additional paid-in capital 184,992 183,139
Accumulated other comprehensive income 560 579
Accumulated deficit (142,750) (137,791)
Total stockholders' equity 35,738 38,822
Total liabilities and stockholders' equity $ 105,570 $ 97,965

 

1. Excludes online marketplaces. Thirteen Weeks Ended Thirty-nine Weeks Ended Thirteen Weeks Ended Thirty-nine Weeks Ended (1) We incurred costs related to the transition of executive management related to severance, recruiting, hiring bonuses, and relocation costs. (1) Excludes depreciation and amortization expense which is included in marketing, general and administrative and fulfillment expense.
Q3 2019 Q3 2018 Q2 2019 2. Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment and excludes online marketplaces. September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 (2) We incurred port and carrier fees and legal costs associated with our customs related issues. CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF CASH FLOWS
Conversion Rate 1 3.2 % 2.7 % 3.0 % (As Restated) (As Restated) (As Restated) (As Restated) (Unaudited, in Thousands, Except Per Share Data) (Unaudited, In Thousands, Except Par and Liquidation Value) (Unaudited, In Thousands)
Unique Visitors (millions) 1 13.8 16.4 14.2 Net sales $ 69.27 $ 69.46 $ 217.70 $ 224.82 (Loss) income from continuing operations (1,424) (180) (6,461) (409)
Number of Orders - E-commerce only (thousands) 441 443 423 Gross profit $ 21.14 18.41 $ 63.04 $ 62.16 Depreciation & amortization 1,531 1,419 4,572 4,412 Thirty-Nine Weeks Ended
Number of Orders - Online Marketplace (thousands) 412 372 463 30.5 % 26.5 % 29.0 % 27.6 % Amortization of intangible assets 25 46 75 140 Thirteen Weeks Ended Thirty-Nine Weeks Ended September 28, December 29, September 28, September 29,
Total Number of Internet Orders (thousands) 853 815 886 Operating expenses $ 22.60 $ 19.62 $ 69.14 $ 62.47 Interest expense, net 516 363 1,410 1,215 September 28, September 29, September 28, September 29, 2019 2018 2019 2018
Revenue Capture (% Sales) 2 89.3 % 87.5 % 87.8 % 32.6 % 28.3 % 31.8 % 27.8 % Taxes (552) 8 (1,018) 270 2019 2018 2019 2018 ASSETS (As Restated)
Average Order Value - Total Internet Orders $ 78 $ 85 $ 80 Net (loss) income $ (1.42) $ (0.18) $ (6.46) $ (0.41) EBITDA $ 96 $ 1,656 $ (1,422) $ 5,628 (As Restated) (As Restated) Current assets: Operating activities
(2.1) % (0.3) % (3.0) % (0.2) % Stock comp expense 792 567 $ 1,955 1,704 Net sales $ 69,273 $ 69,463 $ 217,698 $ 224,821 Cash and cash equivalents $ 1,108 $ 2,031 Net loss $ (6,461) $ (409)
Adjusted EBITDA $ 1.32 $ 2.59 2.65 $ 9.66 Employee transition costs(1) 425 1,695 Cost of sales (1) 48,130 51,049 154,663 162,666 Short-term investments 3 1 Adjustments to reconcile net income to net cash provided by operating activities:
1.9 % 3.7 % 1.2 % 4.3 % Customs costs(2) 3 1,764 418 3,730 Gross profit 21,143 18,414 63,035 62,155 Accounts receivable, net 4,349 3,727 Depreciation and amortization expense 4,572 4,412
Proceeds from AutoMD sale (1,400) (1,400) Operating expenses: Inventory 47,699 49,626 Amortization of intangible assets 75 140
Adjusted EBITDA $ 1,316 $ 2,587 $ 2,646 $ 9,662 Marketing 11,034 9,212 34,023 29,012 Other current assets 4,224 3,400 Deferred income taxes (1,176) 189
General and administrative 4,068 4,297 13,658 13,923 Total current assets 57,383 58,785 Share-based compensation expense 1,955 1,704
Fulfillment 6,268 5,034 17,664 16,276 Deferred income taxes 22,463 21,833 Stock awards issued for non-employee director service 13 11
Technology 1,206 1,035 3,724 3,121 Property and equipment, net 9,806 15,184 Amortization of deferred financing costs 2 3
Amortization of intangible assets 25 46 75 140 Right-of-use - assets - operating leases, net 5,047 Changes in operating assets and liabilities:
Total operating expenses 22,601 19,624 69,144 62,472 Right-of-use - assets - financing leases, net 9,089 Accounts receivable (622) (562)
(Loss) income from operations (1,458) (1,210) (6,109) (317) Other non-current assets 1,782 2,163 Inventory 1,927 2,702
Other income (expense): Total assets $ 105,570 $ 97,965 Other current assets (731) (1,833)
Other, net (1) 1,402 41 1,396 LIABILITIES AND STOCKHOLDERS' EQUITY Other non-current assets 775 (24)
Interest expense (517) (364) (1,411) (1,218) Current liabilities: Accounts payable and accrued expenses 3,874 5,492
Total other expense, net (518) 1,038 (1,370) 178 Accounts payable $ 35,777 $ 34,039 Other current liabilities (280) (1,197)
(Loss) income before income taxes (1,976) (172) (7,479) (139) Accrued expenses 12,566 10,247 Right-of-Use Obligation - Operating Leases - Current 1,573
Income tax (benefit) provision (552) 8 (1,018) 270 Current portion of capital leases payable 594 Right-of-Use Obligation - Operating Leases - Long-term (1,332)
Net loss (1,424) (180) (6,461) (409) Customer deposits 521 Other non-current liabilities 163 275
Other comprehensive income: Notes payable, current portion 606 Net cash provided by operating activities 4,327 10,903
Foreign currency translation adjustments 19 9 (19) 51 Right-of-use - obligation - operating, current 1,573 Investing activities
Total other comprehensive income 19 9 (19) 51 Right-of-use - obligation - finance, current 686 Additions to property and equipment (4,686) (4,328)
Comprehensive loss $ (1,405) $ (171) $ (6,480) $ (358) Other current liabilities 3,078 2,918 Proceeds from sale of property and equipment 1
Loss from continuing operations per share: Total current liabilities 54,286 48,319 Net cash used in investing activities (4,686) (4,327)
Basic and diluted net loss per share $ (0.04) $ (0.01) $ (0.18) $ (0.02) Capital leases payable, net of current portion 8,559 Financing activities
Weighted average common shares outstanding: Notes payable, non-current portion 1,078 Borrowings from revolving loan payable 11,514 3,246
Shares used in computation of basic and diluted net loss per share 35,856 34,983 35,623 34,925 Right-of-use - obligation - operating, non-current 3,714 Payments made on revolving loan payable (11,514) (3,246)
Right-of-use - obligation - finance, non-current 8,599 Proceeds from notes payable 162
Other non-current liabilities 2,155 2,265 Payments on capital leases (453) (445)
Total liabilities 69,832 59,143 Statutory tax withholding payment for share-based compensation (290) (430)
Commitments and contingencies Proceeds from exercise of stock options 99
Stockholders' equity: Payment of liabilities related to financing activities (100)
Series A convertible preferred stock, $0.001 par value; $1.45 per share liquidation value or aggregate of $6,017; 4,150 shares authorized; 2,771 shares issued and outstanding at both September 28, 2019 and December 29, 2018 3 3 Preferred stock dividends paid (80) (120)
Common stock, $0.001 par value; 100,000 shares authorized; 35,924 and 34,992 shares issued and outstanding at September 28, 2019 and December 29, 2018 (of which 2,525 are treasury stock) 38 38 Net cash used in financing activities (562) (1,095)
Common stock dividend 41 Effect of exchange rate changes on cash (2) (31)
Treasury stock (7,146) (7,146) Net change in cash and cash equivalents (923) 5,450
Additional paid-in capital 184,992 183,139 Cash and cash equivalents, beginning of period 2,031 2,850
Accumulated other comprehensive income 560 579 Cash and cash equivalents, end of period $ 1,108 $ 8,300
Accumulated deficit (142,750) (137,791) Supplemental disclosure of non-cash investing and financing activities:
Total stockholders' equity 35,738 38,822 Right-of-use financed asset acquired $ 749 $
Total liabilities and stockholders' equity $ 105,570 $ 97,965 Accrued asset purchases $ 1,200 $ 744
Fixed asset purchased through note payable 1,684
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $ 85 $ 63
Cash paid during the period for interest $ 1,385 $ 1,229

 

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SOURCE U.S. Auto Parts Network, Inc.

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