1 U.S. Auto Parts Network, Inc. Leading online source for automotive aftermarket parts and repair information Investor Presentation May 2012 Exhibit 99.1 |
Safe Harbor 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. 2 |
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 around 15% Low Cost Acquisition Efficient Supply Chain Significant Capacity Over 40% of product directly sourced from Asia. Over 70% of corporate employees located in off shore low cost operations. Reach nearly 15mm monthly visitors at less than a $8 CAC. |
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 |
$153.4 $176.3 $262.2 $327.1 $87.4 2008 2009 2010 2011 Q1-12 $5.2 $13.5 $19.5 $16.3 $4.2 2008 2009 2010 2011 Q1-12 5 Sales & Adjusted EBITDA Consolidated Sales Consolidated Adjusted EBITDA ($ 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 approximately $39.1m from acquisition of WAG 4. Includes approximately $83.4m from acquisition of WAG Adj. EBITDA Margin (1) (2) 3% 5% 8% 7% Year Impacted by: • JCW Acquisition • $7.4m of restructuring charges for JCW • Adjusted EBITDA for USAP of $19.1m and JCW with a loss of ($2.8m) (3) 5% (4) |
6 Our business model has significant cost leverage as revenues grow • 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 |
1) Improve Customer Experience Continue to improve all customer touch points 2) Lower Prices Launch disruptive price points through supply chain efficiencies 3) Increase Selection Expand product offering within existing categories as well as entering new categories 4) Increase Unique Visitors Drive increase unique visitors both organically and through acquisitions 5) 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 *Represents online mix, **Source; AAIA Factbook Research 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 21% 45% 34% $15B $15B Revenue* Overall Market** $50B |
9 Source : Forrester; Wall Street research; Autopartswarehouse.com Low Online Penetration- Mobile Growth Opportunity Retail Category e-Commerce Penetration Rates |
Online vs. Brick and Mortar Customer – Mobile Growth Should Accelerate Penetration 10 Los Angeles DMA 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 Conversion Rate * 0 3,000 6,000 9,000 12,000 15,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 2008 2009 2010 2011 2012 Year Legacy Monthly Visitors* 1.00% 1.10% 1.20% 1.30% 1.40% 1.50% 1.60% 1.70% 2008 2009 2010 2011 2012 Year USAP traffic includes traffic of USAP existing sites and WAG since the acquisition Competitive sites’ traffic based on Comscore March 2012 reports * 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 Private Label (Asia Sourced) Branded (US Sourced) 40% - 70% 25% - 40% 10% - 25% Drop Ship Current 40% 60% Current Mix 60% 40% 75% 25% Goal 50% 50% Goal |
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 15 Net loss $ (788) $ (245) Interest expense, net 199 264 Income tax provision 124 18 Amortization of intangibles 340 1,627 Depreciation and amortization 3,747 3,003 EBITDA 3,622 4,667 Share-based compensation 584 681 Legal costs to enforce intellectual property rights 71 Restructuring costs - 1,233 Adjusted EBITDA $ 4,206 $ 6,652 Ended Ended April 2 March 31 2011 2012 - (Amounts shown in thousands) (Unaudited) (Unaudited) Thirteen Weeks Thirteen Weeks |
Income Statement 16 Thirteen Weeks Ended Thirteen Weeks Ended March 31 April 2 2012 2011 87,436 $ 86,978 $ 60,808 56,562 26,628 30,416 13,450 13,585 5,870 8,236 5,918 5,007 1,536 1,938 340 1,627 27,114 30,393 (486) 23 31 31 (209) (281) (178) (250) (664) (227) 124 18 (788) $ (245) $ Other comprehensive income, net of tax 27 $ 19 $ 25 11 Total other comprehensive income 52 30 Comprehensive loss (736) $ (215) $ (0.03) $ (0.01) $ 30,638,320 30,450,078 Net sales Cost of sales Gross profit Operating expenses: General and administrative Marketing Fulfillment Technology Amortization of intangibles Baisc and diluted net loss per share Shares used in computation of basic and diluted net loss per share Foreign currency translation adjustments Unrealized gain on investments Total operating expenses (Loss) income from operations Other income (expense): Other income Interest expense Other expense, net Loss before income taxes Income tax provision Net loss (Amounts shown in thousands) (Unaudited) (Unaudited) |
Balance Sheet 17 March 31, 2012 December 31, 2011 ASSETS (unaudited) Current assets: Cash and cash equivalents 8,834 $ 10,335 $ Short-term investments 1,893 1,125 Accounts receivable, net of allowance of $236 and $183, respectively 9,189 7,922 Inventory 46,109 52,245 Deferred income taxes 446 446 Other current assets 3,472 3,548 Total current assets 69,943 75,621 Property and equipment, net 33,764 34,627 Intangible assets, net 9,664 9,984 Goodwill 18,854 18,854 Investments 297 2,104 Other non-current assets 1,039 1,026 Total assets 133,559 $ 142,216 $ LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable 33,907 $ 41,303 $ Accrued expenses 10,109 11,565 Notes Payable, current portion 17,875 6,250 Capital Leases payable, current portion 132 135 Other current liabilities 7,704 7,702 Total current liabilities 69,727 66,955 Non-current liabilities Notes Payable, net of current portion - 11,625 Capital Leases payable, net of current portion 7 37 Deferred tax liabilities 1,722 1,596 Other non current liabilities 1,236 1,078 Total liabilities 72,692 81,292 Commitments and contingencies — — Stockholders’ equity: Common stock, $0.001 par value; 30,645,764 and 30,625,764 shares issued and outstanding as of 3/31/12 and 12/3111 respectively 31 31 Additional paid-in capital 157,819 157,140 Accumulated other comprehensive income 379 329 Accumulated deficit (97,362) (96,574) Total stockholders’ equity 60,867 60,924 Total liabilities and stockholders’ equity 133,559 $ 142,216 $ (Amounts shown in thousands) |
Thank You 18 |