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Exhibit 99.1 ![LOGO](https://capedge.com/proxy/8-K/0001193125-14-222644/g737595image01.jpg)
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Investor Presentation
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.
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Case for Investment
Large and Growing Online Market Significant Customer Reach Significant Private Label Offering Reduced Cost Structure
Bringing Pricing Transparency to the Do It For Me Customer through AutoMD
No Debt and over $10M in Bank Borrowing Availability Experienced Leadership Team
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Highlights from Q1-14 Earnings Call
Go forward sales channels up 11% with total comps up 4%
As of 5/6 go forward trend for Q2 trending up 20% and overall comps up 13%
Adjusted EBITDA was $3.3M up from $1.5M in Q1-13
Adjusted EBITDA less CAPEX was $1.8M up from ($1.1M) in Q1-13
As of 5/6 - $3M of cash on the balance sheet with no debt and bank borrowing availability of $10.3M
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Recent Revenue Trends
25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% -25.0% -30.0%
Q1 Q2 Q3 Q4 Q1 As of 2013 2013 2013 2013 2014 5/6/14
Continued Sale Channels Total
20.0%
11.4% 13.5%
4.0%
2.7%
(6.4%)
(5.0%) (15.5%) (16.0%)
Completed the retirement of a number of websites by the end of 2Q ‘13 (25.0%) 5
Sales & Adjusted EBITDA
Consolidated Sales1
($ In Millions)
$153.4 $176.3 $262.3 $327.1 $304.0 $254.8 $68.0
2008 2009 2010 2011 2012 2013 Q1-14
Consolidated Adjusted EBITDA2
($ In Millions)
$5.2 $13.5 $19.5 $16.3 $9.4 $6.0 $3.3
2008 2009 2010 2011 2012 2013 Q1-14
3% 8% 7% 5% 3% 2% 5%
Adj. EBITDA Margin
1. JC Whitney was acquired in Aug 2010 adding revenue of $39.1M in 2010 and $83.4M in 2011. Amounts not separately disclosed after 2011.
2. Non-GAAP financial measure EBITDA consists of net income before (a) interest expense, net; (b) income tax provisions; (c) amortization of intangible assets; (d) depreciation and amortization. Adjusted EBITDA excludes Stock based compensation of $2.9M, $3.3M, $2.7M, $2.6M, $1.7M , $1.3M and $0.4M in 2008, 2009, 2010, 2011, 2012, 2013 and Q1-14, respectively and restructuring costs and other one time charges of $23.4M, $0.4M, $5.8M, $12.9M, $27.5M and $6.8M in 2008, 2009, 2010, 2011, 2012 and 2013, respectively. There were no restructuring or one time charges in Q1-14.
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Do It Yourself (DIY) Market Size
At 9.7% online market penetration, auto parts still lags industry average in the teens. US Auto Parts is the largest pure-play online retailer of auto parts
Total DIY Market Size for 2013 of 47.2B1
$42.6B
90.3%
$4.6B 9.7%
Company Marketplaces eBay Motors Amazon Sub Total Wholesale Online Tire Rack (online) Other Tire Companies Sub Total Pure Play US Auto Parts Rock Auto Summit Auto Anything (AutoZone) JEGS CarID All Other Pure Play Sub Total Brick & Mortar Retailers AutoZone (w/o AA)3 Advance Pep O’Reilly NAPA Sub Total Total 2013 Est. Rev2 (in million) $2,200 $600 $2,800 $440 $190 $630 $250 $180 $170 $120 $70 $60 $90 $940 $110 $80 $30 $20 $10 $250 4,620 % of total 47.6% 13.0% 60.6% 9.5% 4.1% 13.6% 5.4% 3.9% 3.7% 2.6% 1.5% 1.3% 1.9% 20.3% 2.4% 1.7% 0.6% 0.4% 0.2% 5.4% 100.0% 1AASA estimates
2 Estimates by US Auto Parts where amounts are not publicly reported & we estimate the total online DIY market to be larger than the $3.8B that is reported in the 2014 AAIA Fact Book
3 Excludes AutoAnything which is wholly owned by AutoZone
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Online Market is Vibrant and Growing
Aftermarket e-Commerce Overview
Booz & Co. estimates by 2018 that Online DIY could reach 17% of the total DIY market
2012 2013 2014 2015 2016 2017 2018
18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 20.2% CAGR
DIY Online Penetration
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Do It Yourself (DIY) Projections1
% Online 9.8% 11.3% 13.0% 15.1% 17.4% 20.1%
1 Projections obtained from AAIA 2014 Digital Automotive Aftermarket Fact Book and March 2014 AASA Digital Disruption: e-tailing in the Automotive Aftermarket Report
DIY Projected Y/Y Revenue Growth
Offline Online Total
Revenue Increase 2.5 2.0 1.5 1.0 0.5 0.0
2013 2014 2015 2016 2017 2018
DIY Projected Revenue (in Billions)
Offline $42.6 $43.5 $44.2 $44.8 $45.3 $45.5
Online 4.6 5.5 6.6 8.0 9.5 11.5
Total $47.2 $49.0 $50.9 $52.8 $54.8 $56.9
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US Auto Parts Dominant Reach-Largest Pure Play Internet Retailer
(some overlap of monthly visitors across websites)
Customer Reach is a Competitive Moat
Over 500 man years of hand written unique content
Long domain history to help indexing in search
Multiple website management
Monthly Visitors (thousands)
10,000 8,000 6,000 4,000 2,000 0 Auto Zone Auto Anything
US AUTO PARTS
AUTOZONE.COM PARTSGEEK.COM ADVANCEAUTOPARTS.COM
CARID.COM
OREILLYAUTO.COM ROCKAUTO.COM TIRERACK.COM SUMMITRACING.COM PEPBOYS.COM NAPAOLINE.COM JEGS.COM
USAP traffic includes traffic from continued sales channels Competitive sites’ traffic based on Compete March 2014 reports
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Broad Auto Parts Product Offering
US Auto Parts has one of the largest product offerings with over 1.5 million products across body parts, engine parts, and performance & accessories
Body Parts
Engine Parts
Performance & Accessories
Lamps Mirrors Bumpers
Hoods Tailgates Doors
Grills Wheels Window Regulators
Brake Discs Catalytic Radiators Converters
Headers Oxygen Alternators Sensors
Exhaust Driveshaft Fuel Injection / Delivery
Seat Covers Car Covers Floor Mats / Carpeting
Cold Air Vent Visors Tonneau Intakes Covers
Nerf Bars Bug Shields Car Bras
Revenue* 48% 36% 16%
*Represents USAP online mix
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USAP’s Supply Chain Creates Pricing Advantage
USAP’s ability to competitively price products while maintaining healthy margins is a function of the Company’s ability to leverage its robust private label supply chain.
Currently over 40,000 Private Label Products.
Adding 4,000 – 5,000 Private Label SKUs this year
The Company sources product directly from over 200 factories in Asia
Private Label (Asia Sourced)
Branded (U.S. Sourced)
Current Mix
In-Stock Drop Shipped
30% - 60%
Margin %
15% - 30% 5% - 20%
68% 32%
40%
60% Current Mix
The breadth of our Private Label products provides a significant competitive
moat
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Growth and Profitability
Recent new trends for our go forward sales channel are growing at 20% as of the 5/6 earnings call
Incremental Flow Thru
Revenue 100% Gross Margins 27% - 29% Variable OPEX Costs 15% Fixed Cost 0% Incremental Flow 12% - 14%
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USAP has significantly reduced operating cost
OPEX (in thousands) Q1-14% of rev Q1-13% of rev $ Change% of rev change
Fulfillment* 3,935 5.8% 3,994 6.1%(59)(30 bps)
Marketing* 8,691 12.8% 8,967 13.7%(276)(90 bps)
Technology* 1,129 1.7% 1,395 2.1%(266)(40 bps)
General & Administrative* 3,620 5.3% 3,873 5.9%(252)(60 bps)
Subtotal 17,376 25.5% 18,229 27.9%(853)(240 bps)
D&A and Stock Based Comp 2,829 4.2% 4,153 6.3%(1,324)(210 bps)
Restructuring - 0.0% 498 0.8%(498)(80 bps)
Total OPEX 20,205 29.7% 22,880 35.0%(2,675)(530 bps)
Fixed Cost 7,206 10.6% 8,253 12.6%(1,047)(200 bps)
Variable 10,170 14.9% 9,976 15.3% 193 40 bps
D&A & Stock Based Comp 2,829 4.2% 4,153 6.3%(1,324)(210 bps)
Restructuring - 0.0% 498 0.8%(498)(80 bps)
Total 20,205 29.7% 22,880 35.0%(2,675)(530 bps
CAPEX 1,558 2.3% 2,623 4.0%(1,065)(170 bps)
Total OPEX & CAPEX 21,763 32.0% 25,503 39.0%(3,740)(700 bps)
Annualized 87,053 102,012(14,959)
*Excludes non-cash D&A, stock based comp and restructuring
Over $19M of costs have been reduced over a two year period
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Financial Sensitivity
Our business model has significant cost leverage as revenues grow
Base 8% 18% 27% 37%
Revenue $275 $325
Gross Margin % 27.0% – 29.0% 27.0% – 29.0%
$255 $300 $350 27.0% - 29.0% 27.0% - 29.0% 27.0% - 29.0% 3.4% 3.4% 3.4% 9.2% 9.2% 9.2% 0.6% 0.6% 0.6% 1.7% 1.7% 1.7% 14.9% 14.9% 14.9% 2.5% 2.1% 1.8% 3.8% 3.2% 2.8% 1.1% 1.0% 0.8%
Variable:
Fulfillment 3.4% 3.4%
Marketing 9.2% 9.2%
Technology 0.6% 0.6%
G&A 1.7% 1.7%
Total Variable 14.9% 14.9%
Fixed:
Fulfillment 2.3% 2.0%
Marketing 3.5% 3.0%
Technology 1.1% 0.9%
G&A 3.8% 3.5% 3.2% 3.0% 2.8%
Total Fixed 11.2% 10.4% 9.5% 8.8% 8.2%
Adjusted EBITDA % 0.9% – 2.9% 1.7% – 3.7% 2.5% – 4.5% 3.3% – 5.3% 3.9% – 5.9%
Adjusted EBITDA $ $2 – $7 $5 – $10 $8 – $14 $11 – $17 $14 – $21
1. 2013 Revenue was $255M
2. Excludes stock based compensation, depreciation and amortization
3. For every incremental year required to achieve growth levels, fixed expenses increase $1.0M or 3%
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AutoMD – Addressing the DIFM Market
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Case for Investment
Large and Growing Online Market Significant Customer Reach Significant Private Label Offering Reduced Cost Structure
Bringing Pricing Transparency to the Do It For Me Customer through AutoMD
No Debt and over $10M in Bank Borrowing Availability Experienced Leadership Team 17
Leadership Team
Shane Evangelist - Chief Executive Officer
Chief Executive Officer since October 2007 with over 10 years of leading internet businesses Senior Vice President and General Manager of Blockbuster Online Vice President of Strategic Planning for Blockbuster Inc.
B.A. degree in Business Administration from the University of New Mexico and a M.B.A. from Southern Methodist University
David Robson - Chief Financial Officer
Chief Financial Officer since January 2012
Over 20 years of finance, accounting, and operational experience and has held senior positions with both public and private companies Executive Vice President and Chief Administrative Officer at Mervyns’ LLC, SVP of Finance and Principal Accounting Officer for Guitar Center, Inc. B.S. degree in Accounting from University of Southern California; certified public accountant
Aaron E. Coleman - Chief Operating Officer
Chief Operating Officer since September 2010, and was Executive Vice President of Operations and CIO from April 2008 until September 2010 with over 18 years of e-commerce experience Senior Vice President – Online Systems at Blockbuster Inc.
Multiple positions with internet and technology companies including American Airlines, Travelweb (Priceline), Baan B.A. degree in Business Administration from Gonzaga University
Charles Fischer - Senior Vice President of Global Procurement
Senior Vice President of Global Sourcing and Procurement since May 2008 with over 30 years of global sourcing experience Vice President, Supply Chain Management for Keystone Automotive Industries Director, Business Development for Modern Engineering Multiple leadership positions with multiple companies in the automotive aftermarket industry 18
Adjusted EBITDA
(Non-GAAP Financial Measure – in thousands)
Thirteen Weeks Ended
March 29 March 30
2014 2013
Net income (loss) $ 201 $(3,343)
Interest expense, net 259 185
Income tax provision 32 21
Amortization of intangible assets 84 106
Depreciation and amortization expense 2,368 3,638
EBITDA 2,944 607
Share-based compensation expense 376 409
Restructuring costs - 498
Adjusted EBITDA $ 3,320 $ 1,514
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Consolidated Statements of Comprehensive Operations
(Unaudited, in Thousands, Except Per Share Data)
Thirteen Weeks Ended
March 29, 2014 March 30, 2013
Net sales $ 68,028 $ 65,405
Cost of sales (1) 47,327 45,667
Gross profit 20,701 19,738
Operating expenses:
Marketing 10,115 11,191
General and administrative 4,147 4,687
Fulfillment 4,712 5,381
Technology 1,148 1,515
Amortization of intangible assets 84 106
Total operating expenses 20,206 22,880
Income (loss) from operations 495(3,142)
Other income (expense):
Other income (expense), net (3) 7
Interest expense (259)(187)
Total other expense, net (262)(180)
Income (loss) before income tax provision 233(3,322)
Income tax provison 32 21
Net income (loss) 201(3,343)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments 8(6)
Total other comprehensive income (loss) 8(6)
Comprehensive income (loss) $ 209 $(3,349)
Net income (loss) per share:
Basic $ 0.00 $(0.11)
Diluted $ 0.00 $(0.11)
Weighted average common shares outstanding:
Basic 33,384 31,141
Diluted 34,158 31,141
(1)Excludes depreciation and amortization expense which is included in marketing, general and administrative and fulfillment expense.
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Consolidated Balance Sheet
(Unaudited, in Thousands, Except Par and Per Share Liquidation value)
March 29 December 28
ASSETS 2014 2013
Current assets:
Cash and cash equivalents $ 1,392 $ 818
Short-term investments 39 47
Accounts receivable, net of allowances of $152 and $213 at
March 29, 2014 and December 28, 2013, respectively 4,882 5,029
Inventory 36,613 36,986
Other current assets 2,959 3,234
Total current assets 45,885 46,114
Property and equipment, net 18,810 19,663
Intangible assets, net 1,517 1,601
Other non-current assets 1,720 1,804
Total assets $ 67,932 $ 69,182
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 21,469 $ 19,669
Accrued expenses 6,867 5,959
Revolving loan payable 750 6,774
Current portion of capital leases payable 277 269
Other current liabilities 5,383 3,682
Total current liabilities 34,746 36,353
Capital leases payable, net of current portion 9,431 9,502
Deferred income taxes 65 335
Other non-current liabilities 2,125 2,126
Total liabilities $ 46,367 $ 48,316
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; 4,150 shares issued and outstanding
at March 29, 2014 and December 28, 2013, respectively 4 4
Common stock, $0.001 par value; 100,000 shares authorized;
33,413 and 33,352 shares shares issued and outstanding
at March 29, 2014 and December 28, 2013, respectively 33 33
Additional paid-in capital 169,243 168,693
Common stock dividend distributable 59 60
Accumulated other comprehensive income 454 446
Accumulated deficit(148,228)(148,370)
Total stockholders’ equity 21,565 20,866
Total liabilities and equity $ 67,932 $ 69,182
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Online Market is Vibrant and Growing
Aftermarket e-Commerce Overview
Online sales of automotive parts and accessories have grown in the high teens and are expected to grow at 20% going forward
eBay Parts Sales Continue to Increase
Google Queries for Parts Growing
$2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.3 $1.2 $1.1 $1.0
$2.2
$2.1 $2.1
$2.0
$1.9 $1.9
$1.8 $1.8
$1.6
$1.5 $1.5 $1.5
$1.3 $1.3 $1.3
$1.2
Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13
16% CAGR
Source: eBay filings, press releases
Source: Google
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