Earnings call transcript Q4 2022

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Operator

Good afternoon. At this time, all participants will be in a listen-only mode. [Operator Instructions] Please note, this call is being recorded.

I would now like to pass the conference over to our host, Tina Mirfarsi, Vice President of Communications and Culture. Please go ahead.

Tina Mirfarsi

you Conference us Call. thank Fourth the and XXXX Quarter everyone, for for joining CarParts.com Hello, I'd investors are remotely. and to others like start who attending by this welcoming the meeting

Executive company Michael and Chief Operating David the Financial Huffaker, from today Lockwood, Chief me Meniane, Joining Chief Officer; Officer. Ryan Officer; are

under the to contain prepared in federal I responses remarks from the associated Before start to it the certain some with results have your materially the to these uncertainties to over risks I turn could the forward-looking or forward-looking and related statements important business to questions Actual and differ laws. David meeting, disclosures. by securities due implied Their business. statements may contained those

factors annual affect the found Relations with can For refer to on on please report the that which Investor could XX-Qs a the SEC, other discussion of as CarParts.com results, be the XX-K material Form and risks of filed both important website. and

GAAP measures issued today. measures On the release is press and financial the CarParts.com non-GAAP provided non-GAAP discussed. call, will A of to financial both in GAAP reconciliation be

And like the to with over to I that, would call now David. turn

David Meniane

Good Tina. us. and thank afternoon, you for joining everyone, you, Thank

XXth line for adjusted top for fiscal for XXXX, year both to $XXX.X QX XX.X% of $XX.X today's full company XX.X%. the consecutive in marked the revenues quarter year. were stack, sales the As reported records quarter On Also, up for we're year-over-year XXXX, prior excited $XXX.X million we double-digit release, EBITDA. from for beat of up our growth million, million a at X-year and

row in of is this score, For those keeping year third a posting revenue. record our

XXXX. in happened lot A

while for the credit extending buildings, team, facility much opened organization, this much did helping the our it we and of our customers our a Within tougher environment. years We navigate of increased economic more. size all while two refreshed five executive

lies around unit in delivered shareholders. laser an position. outperformed commitment our key our and with customers of success value. long-term to record-breaking business repeat free and inventory culture maximizing our We've sales, The positive flow centered to economics, while discipline, team a optimizing financial our and intention profitability and built shareholder all Our the on cash focus incredible

along are from the removing committed auto operational And to areas: repair maintenance. At and our continued four empowering discipline delivering to on drivers outstanding CarParts.com, executing service, their focus and journey innovation. and we customer stress team has excellence, financial on this, keep

an we outstanding one, critical Number is thing customer the delivering do. outstanding service, most customer experience

the website with well customers starts started are times. improvements seeing in which to the as Our already are streamlined ever. than delivery our XXXX cultural decision shift in and of customers part as Today, are we're faster a closer every delivery tangible on the to CarParts.com, These click experience more better at times that our customer.

for X/X for makes reminder, experience, a over relationship see customer repeat their our top As we improve account revenues. an e-commerce and puts mind CarParts.com of destination over we long-term automotive one to of the build all our And opportunity to that our us customers, with go-to a as customers continue time, needs.

last management profitable on operational two, our continued year, team excellence. Since and doubled focus transitioned the efficiency on growth. have Number down we

world, of to welcome He to Amazon. extensive Chief the Officer. at Michael some years recently, experience as us our retail Operating Huffaker at companies most excited and largest very are new comes e-commerce the XX We with in

will beyond. bringing on has and our to mindset. processes shares and chain made the cultural operational best-in-class provide the vertically integrated shortly. and him forward Michael supply business we improvements details further Michael to team both our look its

Stephanie's align our Chief to our for drive and XX implemented genuine has HR now Resources growth on She existing HR employees helped She business. will objectives. our critical establish for promotion Officer. Stephanie practices changes recent globally. focus talent the Human foundation of Also, us care with performance have experience a we are pleased of with years the function the Urbach, significant developing within and

Number business on built three, unit important economics. is financial is highlight positive that One our discipline.

was key over and XXXX, and on dollars. undrawn maximizing XX% we're in on adjusted transaction Our focusing profitability revolver. our is gross every currently up EBITDA of profit the The

While to gross you revenues to our optimize margin percentages and say, deposit can't for we the Internally, fluctuate, bank. in is always may percentage overall goal dollars. like

with on current And by we spend intentional more campaigns have customer-centric related branding incremental we to as capital a environment, upper the capital very funnel reallocating from focus In how on and been marketing spend into initiatives. such deploy headcount. heightened discretionary

we pricing are to removing categories. by additional an innovation. year, a four, we new repair that Installed, Last It expanding customers with doubled announce from We're we friction in installation website offering Get markets see burdensome capability, a and can is at path Number launched and our have The November, a our the disrupting notoriously select Do-It-For-Me book our on in where process. bookings certified to appointment excited since our call shop. last our industry

to turn excited with like team. it that, would I to Michael. to have we're And the you Michael, over to and welcome

Michael Huffaker

our here customer I our about thing aligned I've also had One directly unparalleled has our days I'm of my during been centers frontline pleasure an team visiting business XX is Thank ago on our distribution is experience. focus time with joined our had Manila, walk the and that far creating and visit objectives Philippines floor so to hear that corporate the clear office. members. David. the you, opportunity from I've and

positioned of the transit distribution feet XXXX time. In us was a million now process for improvements delivering to our space, with country cover have operational will forward our our of super to and and our of of here, remain I get to network. on for us, shareholders. be base, team execution, we we out built-out our XX% to laser-focused excited year allowing XXXX, expansion square more customers customer strategically efficiencies value I'm existing look to a two-day close X over and

Next, I'd like to to Ryan. turn it over

Ryan Lockwood

million, we year $XXX.X prior of QX, revenues Michael. up revenue increased generated the from On XX.X% you, XX.X%. period. X-year stack, a Thank In

XXXX million, X-year year For up full revenues on stack. the and XX.X% from XXXX, were a XX.X% up $XXX.X

For eight year XXXX, combined profitability flow year-over-year high expansion. revenue cash remain for the single-digit full weeks year balancing fiscal and first We with free the committed margin growth, generation we gross sequential to growth of XXXX. produced

Gross of profit prior with up for margin the the versus was $XX.X X.X% million, gross XX.X%. from quarter year period, XX.X%

compared was charges. both up full the in in year, margins with gross XXXX, XX%, million, For XX.X% driven XX.X% to by profit freight improving changes gross to $XXX.X

loss and by loss respectively. quarter GAAP and The higher for and million, fourth million freight expenses charges. year $X.X was seasonally Net predominantly $X driven the quarter non-cash full was

seasonal charges, quarter, of $X.X million, which EBITDA EBITDA in higher fourth adjusted and was reported than the driven down freight adjusted change the earlier For in we predominantly quarter from $X.X million. by started were prior The year. the

up For the generation. well free to growth reflecting economics $XX.X full of positive our our from as as discipline, year financial XXXX, million, commitment profitable cash unyielding XX.X% flow balancing we XXXX, on adjusted with reported EBITDA unit focus

have balance we with in compared or our Turning need and the intention of cash and to prior We sheet. year believe revolver have no $XXX to at balance with at ended the valuations. We quarter the we million capital $XXX.X no on We to ended inventory million the liquidity, equivalents line. and year. raise ample million $XX.X current

option undrawn growth. facility conditions. QX, and we $XXX million expand an our at and on on our inventory levels terms of on the focus self-funded We And certain credit revolving with continue were to to depending to end

And remarks. now I'd back like for to turn David it to some closing

David Meniane

all continue was build our to call. and XXXX and company through third XXXX made year every time go to since the incredible to Ryan, of than itself best a XXXX, balance of double-digit sheet. growth. everyone who and and today's and building ever, while robust returned join a you, have doubled a day. Thank the our company our to proud amazing full consecutive we transformation, marked watch continue we to we reinvent It's are company revenues more the deliver results. year And XX-year-old each profitability,

the We're the put intention, prepared our discipline future members us customers of gain beyond, changes our we and we market with delivering and and continue strategy data in focus chain, catalog like our proprietary thrive share. position the profitable growth a leveraging capabilities supply brings and continue science. integrated to XXXX and to feel advanced team strong tackle by For market vertically other to and at as amid center whatever

will to goal regardless investments value business Our continue is and to streamlined what of shareholders the to this, come grow our the without economy. balancing intrinsic in be in company. benefit an building that more our doing the of our compromising by happening extraordinary We believe years is on

experience. delivering cash unit We focused generation, free will outstanding on flow positive an remain customer operational efficiencies and economics,

our on global this from the of incredible without none commitment would Now and everyone work possible be team.

way. work to honored at seize day comes after each We're to CarParts.com, and opportunity say it. organization. come we amazing to such that lead an You grateful get And new each as your

turn now over it questions. it to to the open up operator for I'll

Operator

[Operator line the comes D.A. Instructions] from Our of Forte Thomas question first from Davidson.

Thomas Forte

Great.

the two and Ryan, great job follow-up, and then on question, David and quarter, So one year. questions, one the on

may given thoughts could know least but I if to I provide So question, first you want at challenging be recognize on your XXXX. growth high-level for limited, revenue visibility the environment, macro

David Meniane

Sure.

start let in ever really saying it's it shape company that me been. I by think better than the is

more double of to And grow execute But transparency of there's right our to ability balance economy have single I a mid-single can high ability lot to digits. macro our the lot now, reliability. if feel We turns uncertainty digits grow I with think environment. the good we think just a conviction we in on with [indiscernible] about positive, digits.

environment even is over continue the about few the good takeaway made improvements we able the So growing leverage We really, last challenging. to years. if plan we've to that feel all the is being

Thomas Forte

for can how have you and talk affected might profitability supply then may positively impact fourth And quarter about XXXX? sales how Great. improving chain you second it in and my your question,

David Meniane

Sure.

to not we're So thing LIFO. keep is in FIFO, mind one

landed supply when the into cost. improves, chain improvement goes So that

the unlike unfortunately, of of until not year. to So half going the benefit the people, probably back this some you're see LIFO

Operator

Markets. the question next from Ryan Street from Lake of Our comes line Meyers Capital

Ryan Meyers

my guys. Hi, Thanks questions. taking for

me, taking just a step backwards. First for kind one of

just a how and the saw two double-digit about flowed talked your growth in looks of those guys from demand quarter. guys like you last I'm of the that the for looking obviously It kind in what core curious customers? maybe month October. for perspective demand is of months rest the You through

David Meniane

Yes.

we last So on of demand. capitalize did back that half obviously year,

right have And significantly we're capitalize matter cheaper a lot right. think, to Tom, cautious. very they discerning how I I now think to they're kind is the we're being as ability to great a happens, mentioned they're the I position we We've than about things I think what to good spend money, no that of being, in way categorize of execute. consumers done And a competition.

So to that's may look defer as traditional the some we'll capture customers is able And spend. to here then that actual be I revenue balance choose versus what's on a And save think some to offset people there. to and money to growth. going lead the then brick-and-mortar, consumers obvious there,

Ryan Meyers

it. doubled of was like sounds from, looking X,XXX offering, it quarter. then I it of Got kind think at number bookings And the do-it-for-me just you the last

Now you that have feedback belt from quarters couple your mechanics? of and that, a under of future? for have with excited the what about customers guys gets you that you gotten And what sort

David Meniane

much made is feedback me the along comment solve someone their alone that Predominantly my is read and problem in every a exists. gives really The part go This in that buy many so the helping all actually through it and go individually. is This it for amazed of from buying compelling lines the get comments a offering life I'm I the that the cheaper part mean So that installed that me makes something brick-and-mortar is easier. cases, store. out. can confidence just and than good. part

great I consumers think a way difficult we're helping So especially through a a recession, economic in that's period. that

Ryan Meyers

Got for taking Thanks it. question. my

Operator

from from Our Darren line MKM. Roth next question comes of the Aftahi

Darren Aftahi

if impact about Thanks strange different? on I on that's first, good of talk country, had job across year-to-date, for business may, on the and taking my questions. better just nice the going any can If sort you weather quarter. And your the

your And times, or in then that of inventory the in should fell size softer look comments and I'm better given level the business you second made of Ryan, kind guys just of you sequentially one, growth, have? your curious, what's right you whether again. about times inventory think kind the

David Meniane

the Ryan. of I'll David. to it's first then hand it guess Darren, I'll I take part the question, off and

week. demand a think significant regions, then down of following weather, I when the disruption there's kind slows usually in the the certain pickup we but see

over in but a If see changes that in downs sales. swings usually ups we some the during seen year, long least demand term the potential course we wild least future. anything, temperature, haven't at the huge impact the it's at historically, the So over temperature on and and creates in of

Ryan Lockwood

take I'll the inventory level.

ended So inventory inventory year fluctuations you're year see Obviously, XXXX. position is levels up probably the end you'll the where going at down, good inventory where quarter-by-quarter, as to feel and us we our but fiscal we some sits. about see for of it pretty end

Darren Aftahi

Great. Thanks, guys.

Operator

concludes you participating. This call. Thank today's conference you. Thank for

You may now disconnect.

CarParts.com (PRTS) 7 Mar 232022 Q4 Earnings call transcript