![]() 1 U.S. Auto Parts Network, Inc. Leading online source for automotive aftermarket parts and repair information Investor Presentation December 2011 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. |
![]() 3 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 15% - 20% |
![]() 4 US Auto Parts History |
![]() 5 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 *Source; AAIA Factbook Research 28% 44% 28% $15B $15B USAP Revenue Overall Market* $50B |
![]() 6 Source : Forrester; Wall Street research; Autopartswarehouse.com Low Online Penetration- Mobile Growth Opportunity |
![]() ![]() Online vs. Brick and Mortar Customer – Mobile Growth Should Accelerate Penetration 7 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 * |
![]() US Auto Parts Dominant Reach- Largest Pure Play Internet Retailer (some overlap of monthly visitors across websites) 8 |
![]() Pricing Competitive Advantage Through Supply Chain Efficiencies 9 Product margin/price competitiveness determined more by sourcing strategy than product categories. Current margins range from 32% - 34%. Margin % 75% 25% |
![]() ![]() ![]() Low Cost Operating Structure Reduces Overhead and Enables Scale 10 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 320 1,056 Distribution Centers Carson, California (150,000 sq. ft.) Chesapeake, Virginia (110,000 sq. ft) LaSalle, Illinois (300,000 sq. ft) 106 90 Total Distribution Employees 196 99 99 |
![]() 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 1) Increase Gross Margins Expand Private Label direct import SKU’s Increase stock shipments of Branded product 2) Leverage Revenue Growth Every incremental dollar yields 15% 20% EBITDA flow thru 3) Monetize Web Traffic Sell advertising and sponsorship on new inventory 11 2011 Growth and Profitability Revenue Growth EBITDA Margin % Expansion |
![]() $153.4 $176.3 $262.2 $328.8 2008 2009 2010 2011 $5.2 $13.5 $19.5 $17.8 2008 2009 2010 2011 12 Sales & Adjusted EBITDA Consolidated Sales Consolidated Adjusted EBITDA ($ 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. Analysts Estimates for FY-11. Source – Yahoo 4. Includes a sales increase of approximately $38.6 million and $40.0 million in 2010 and 2011, respectively from partial and full year’s results related to the acquisition of J.C. Whitney Adj. EBITDA Margin (1) (2) 3% 5% 8% 10% (3) Year Impacted by: • Search engine changes impacting high converting sites. • Resolution anticipated in 2H 2012 • JCW Acquisition • Integration competed in Q4 2011 & anticipate return to profitability (3,4) (4) |
![]() 13 (millions$) Growth Base 10% 20% 30% 40% 50% Revenue Gross Margin 31% - 34% 31% - 34% 31% - 34% 31% - 34% 31% - 34% 31% - 34% Variable: Fufillment Marketing Technology G&A Total Variable Fixed: Fulfillment Marketing Technology G&A Total Fixed Adjusted EBITDA 6% - 9% 7% - 10% 8% - 11% 8% - 11% 9% - 12% 10% - 13% Adjusted EBITDA $ 20 $ - 29 $ 25 $ - 36 $ 30 $ - 42 $ 36 $ - 49 $ 41 $ - 55 $ 47 $ - 61 $ $488 14% $325 $358 $390 $423 $455 2% 9% 1% 2% 14% 2% 9% 1% 2% 2% 9% 2% 14% 14% 9% 14% 14% 1% 2% 2% 1% 2% 9% 1% 2% 2% 1% 9% 2% 2% 4% 1% 3% 11% 9% 8% 8% 7% 2% 3% 1% 3% 2% 10% 3% 1% 3% 2% 3% 1% 2% 2% 1% 2% 2% 2% 3% 1% 2% • Reflects Whitney Automotive Group, fully integrated • Excludes stock based compensation, depreciation and amortization • For every incremental year required to achieve growth levels, fixed expenses increase $1.2M Financial Sensitivity Our business model has significant cost leverage as revenues grow |
![]() AutoMD- Largest DIY Site Repositioned to Target $140B DIFM Market 14 |
![]() Adjusted EBITDA (Consolidated) 15 (Amounts shown in thousands) Net (loss) income $ (5,308) $ (13,039) $ (8,118) $ (11,030) Interest expense (income) net 283 187 719 132 Income tax provision 2 10,979 215 12,154 Amortization of intangibles 338 919 3,328 1,164 Depreciation and amortization 3,126 2,547 9,202 6,483 EBITDA (1,559) 1,593 5,346 8,903 Share-based compensation 623 640 1,946 2,112 Legal costs to enforce intellectual property rights 211 306 443 2,199 Charge for change in revenue recognition - - - 411 Add back Other Restructuring 3,815 1,590 6,591 1,590 Adjusted EBITDA $ 3,090 $ 4,129 $ 14,326 $ 15,215 Thirteen Weeks Ended Thirteen Weeks Ended 2010 2011 October 2 October 1 2010 2011 October 1 October 2 Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended |
![]() Adjusted EBITDA excluding JC Whitney 16 (Amounts shown in thousands) Net income $ 214 $ (10,136) $ 4,617 $ (8,127) Interest expense (income) net 280 139 719 83 Income tax provision 2 10,979 160 12,154 Amortization of intangibles 125 124 375 369 Depreciation and amortization 2,514 2,197 7,364 6,132 EBITDA 3,134 3,303 13,235 10,611 Share-based compensation 623 640 1,946 2,112 Legal costs to enforce intellectual property rights 211 306 443 2,199 Charge for change in revenue recognition - - - 411 Adjusted EBITDA $ 3,968 $ 4,249 $ 15,624 $ 15,333 2011 2010 2011 2010 Thirteen Weeks Ended Thirteen Weeks Ended Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended October 1 October 2 October 1 October 2 |
![]() Income Statement (Consolidated) 17 Thirteen Weeks Ended Thirteen Weeks Ended Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended October 1 October 2 October 1 October 2 2011 2010 2011 2010 78,593 $ 72,349 $ 249,839 $ 181,828 $ 54,248 48,342 166,664 119,617 24,345 24,007 83,175 62,211 14,002 11,145 41,953 25,496 9,096 8,156 25,739 20,288 4,449 4,102 14,048 10,269 1,676 1,665 5,531 3,841 338 919 3,328 1,164 29,561 25,987 90,599 61,058 (5,216) (1,980) (7,424) 1,153 201 134 279 185 (291) (214) (758) (214) (90) (80) (479) (29) (5,306) (2,060) (7,903) 1,124 2 10,979 215 12,154 (5,308) $ (13,039) $ (8,118) $ (11,030) $ (0.17) $ (0.43) $ (0.27) $ (0.36) $ 30,571,472 30,357,988 30,521,529 30,225,194 Net sales Cost of sales Gross profit Operating expenses: General and administrative (1) Marketing (1) Fulfillment (1) Technology (1) Amortization of intangibles and impairment loss Total operating expenses (Loss) income from operations Other income (expense): Other income Interest (expense) income Other (expense) income, net (Loss) income before income taxes Income tax provision (benefit) Net (loss) income Basic net (loss) income per share Shares used in computation of basic net income (loss) per share |
![]() October 1, 2011 January 1, 2011 ASSETS (unaudited) Current assets: Cash and cash equivalents 15,151 $ 17,595 $ Short-term investments 1,117 1,062 Accounts receivable, net of allowance of $194 and $372, respectively 8,805 5,339 Inventory 45,717 48,100 Deferred income taxes 360 359 Other current assets 4,444 5,646 Total current assets 75,594 78,101 Property and equipment, net 34,800 33,140 Intangible assets, net 15,456 18,718 Goodwill 18,854 18,647 Investments 2,104 4,141 Other non-current assets 981 790 Total assets 147,789 $ 153,537 $ LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable 33,833 $ 31,660 $ Accrued expenses 15,480 15,487 Notes Payable, current portion 6,250 6,125 Capital Leases payable, current portion 128 132 Other current liabilities 7,454 5,522 Total current liabilities 63,145 58,926 Non-current liabilities Notes Payable, net of current portion 13,188 17,875 Capital Leases payable, net of current portion 67 185 Deferred tax liabilities 3,233 3,046 Other non current liabilities 983 701 Total liabilities 80,616 80,733 Commitments and contingencies — — Stockholders’ equity: Common stock, $0.001 par value; 30,587,401 and 30,429,376 shares issued and outstanding as of 10/1/11 and 1/1/11, respectively 31 30 Additional paid-in capital 156,372 153,962 Accumulated other comprehensive income 325 249 Accumulated deficit (89,555) (81,437) Total stockholders’ equity 67,173 72,804 Total liabilities and stockholders’ equity 147,789 $ 153,537 $ Balance Sheet 18 |
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