Financial Data and Key Metrics Changes - For the full year 2024, revenues were $589 million, down 13% from $675.7 million in 2023, with Q4 revenues at $133.5 million, down 15% from $156.4 million in the prior year [21][22] - Gross profit for the year was $197 million, with a gross profit margin of 33.4%, slightly down from 33.9% in 2023 [11][24] - GAAP net loss for the year was $40.6 million, compared to a loss of $8.2 million in 2023, indicating significant financial pressure [24][25] Business Line Data and Key Metrics Changes - The lighting and mirror business faced substantial pressure due to low-cost, non-compliant parts flooding the market, impacting overall performance [9] - The company has focused on expanding product offerings and targeting higher margin sales to improve profitability [10][12] Market Data and Key Metrics Changes - The economic environment in 2024 was challenging for lower-income consumers, leading to a significant pullback in spending on auto repairs [9] - The company remains the second largest importer of aftermarket collision parts in the U.S., with a significant portion of purchases sourced from Taiwan [16] Company Strategy and Development Direction - The company is focused on three key strategic elements: driving growth and net margin, accelerating efficiency, and achieving sustainable growth with strong long-term free cash flow [8] - Future priorities include expanding product offerings, monetizing website visits, scaling B2B offerings, and growing the mobile app business [28][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2024 but expressed confidence in the foundation laid for long-term sustainable positive adjusted EBITDA [28] - The company is committed to maximizing long-term shareholder value while capturing opportunities in the $400 billion auto parts market [30] Other Important Information - The company ended the year with $36.4 million in cash and no revolver debt, indicating a stable liquidity position [26] - Elevated expenses of $6.4 million were incurred in 2024 due to digital transformation and facility relocation, which are not expected to recur in 2025 [25] Q&A Session Summary - No specific questions or answers were documented in the provided content, as the management indicated they would not comment on strategic alternatives beyond previous announcements [7]

[Report Overview & Highlights](index=1&type=section&id=Report%20Overview%20%26%20Highlights) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO David Meniane emphasized 2024's strategic shift towards margin improvement, operational efficiency, and sustainable growth through key initiatives like an AI-powered website and CarParts+ membership - The company's 2024 strategy focused on **three key elements**: **strengthening gross and net margins**, **accelerating efficiency for improved profitability**, and achieving **sustainable growth** with **strong long-term free cash flow**[4](index=4&type=chunk) - The **challenging economic environment** for lower-income consumers led to a **significant pullback in spending** and **deferral of auto repairs**[6](index=6&type=chunk) - Strategic initiatives include **enhancing site conversion**, **strengthening SEO**, driving **mobile app adoption (over 800,000 downloads)**, and **expanding the wholesale channel**[5](index=5&type=chunk)[6](index=6&type=chunk) - Key operational achievements in 2024 include making the **new Las Vegas distribution center fully operational**, **re-platforming the website with AI and machine learning**, and launching the **CarParts+ paid membership**[5](index=5&type=chunk) [Fiscal Year 2024 Highlights](index=1&type=section&id=Fiscal%20Year%202024%20Summary%20vs.%20Fiscal%20Year%202023) Fiscal Year 2024 saw a **13% decrease in net sales to $588.8 million**, a **net loss of ($40.6) million**, and **negative Adjusted EBITDA of ($7.1) million** Fiscal Year 2024 vs. 2023 Financial Summary | Metric | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Net Sales | $588.8 million | $675.7 million (-13%) | | Gross Profit | $196.7 million | $229.4 million | | Gross Margin | 33.4% | 33.9% | | Net Loss | ($40.6) million | ($8.2) million | | Net Loss Per Share | ($0.71) | ($0.15) | | Adjusted EBITDA | ($7.1) million | $19.7 million | | Cash Balance | $36.4 million | $51.0 million | [Fourth Quarter 2024 Highlights](index=1&type=section&id=Fourth%20Quarter%202024%20Summary%20vs.%20Year-Ago%20Quarter) Q4 2024 net sales declined **15% to $133.5 million**, with a **net loss of ($15.4) million** and **Adjusted EBITDA of ($6.8) million** Fourth Quarter 2024 vs. 2023 Financial Summary | Metric | Q4 2024 | Q4 2023 | | :--- | :--- | :--- | | Net Sales | $133.5 million | $156.4 million (-15%) | | Gross Profit | $43.4 million | $51.6 million | | Gross Margin | 32.5% | 33.0% | | Net Loss | ($15.4) million | ($6.1) million | | Net Loss Per Share | ($0.27) | ($0.11) | | Adjusted EBITDA | ($6.8) million | $1.0 million | [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) [Fiscal Year 2024 Financial Results](index=2&type=section&id=Fiscal%20Year%202024%20Financial%20Results) FY2024 net sales decreased **13% to $588.8 million** due to soft demand, with gross margin at **33.4%**, operating expenses at **40.3% of sales**, and a **net loss of ($40.6) million** - The **13% decline in annual net sales** was primarily driven by **soft consumer demand** and **significant pressures in lighting and mirrors**, which were impacted by the flooding of non-compliant illegal parts[7](index=7&type=chunk) - **Operating expenses increased to 40.3% of net sales**, up from 35.4% in 2023, mainly due to **investments in branding**, **higher customer acquisition costs**, **overlapping software expenses**, and **one-time costs related to the new Las Vegas distribution center**[8](index=8&type=chunk) FY 2024 Key Financial Metrics | Metric | Fiscal Year 2024 (in millions) | Fiscal Year 2023 (in millions) | | :--- | :--- | :--- | | Net Sales | $588.8 | $675.7 | | Gross Profit | $196.7 | $229.4 | | Net Loss | ($40.6) | ($8.2) | | Adjusted EBITDA | ($7.1) | $19.7 | | Cash Balance (Year-End) | $36.4 | $51.0 | [Fourth Quarter 2024 Financial Results](index=2&type=section&id=Fourth%20Quarter%202024%20Financial%20Results) Q4 2024 net sales decreased **15% to $133.5 million**, with gross margin at **32.5%**, a **net loss of ($15.4) million**, and **negative Adjusted EBITDA of ($6.8) million** Q4 2024 Key Financial Metrics | Metric | Q4 2024 (in millions) | Q4 2023 (in millions) | | :--- | :--- | :--- | | Net Sales | $133.5 | $156.4 | | Gross Profit | $43.4 | $51.6 | | Net Loss | ($15.4) | ($6.1) | | Adjusted EBITDA | ($6.8) | $1.0 | - The **decline in Adjusted EBITDA** was primarily attributed to **higher-than-expected advertising cost per click** and **lower flow-through from the decrease in revenue**[11](index=11&type=chunk) [Outlook and Corporate Information](index=2&type=section&id=Outlook%20and%20Corporate%20Information) [2025 Outlook](index=2&type=section&id=2025%20Outlook) CarParts.com is not providing 2025 financial guidance due to its ongoing evaluation of various strategic alternatives arising from inbound interest - The company is **not providing guidance for 2025**[12](index=12&type=chunk) - The reason for withholding guidance is that the company is currently **evaluating various strategic alternatives** in response to **inbound interest**[12](index=12&type=chunk) [About CarParts.com, Inc.](index=3&type=section&id=About%20CarParts.com%2C%20Inc.) CarParts.com is a technology-driven e-commerce company with over **25 years of experience**, offering **over 1 million automotive parts** and focusing on customer-centricity, affordability, and efficient fulfillment - CarParts.com is a **technology-driven eCommerce company** with **over 25 years of operating history**, offering **over 1 million high-quality automotive parts and accessories**[14](index=14&type=chunk) - The company emphasizes a **customer-first approach** through a **mobile-friendly website/app**, **affordability**, and a **company-operated fulfillment network** for **fast delivery**[14](index=14&type=chunk) - The company's vision is **'Empowering Drivers Along Their Journey'** and it is headquartered in **Torrance, California**[15](index=15&type=chunk) [Financial Statements & Non-GAAP Measures](index=4&type=section&id=Financial%20Statements%20%26%20Non-GAAP%20Measures) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA, a non-GAAP measure, is used to supplement GAAP results, providing a clearer view of operational trends by excluding specific non-cash and one-time costs, with a reconciliation to net loss provided - **Adjusted EBITDA** is a **non-GAAP measure** used to provide **supplemental information** to management and investors, offering an **additional way to view the company's operations**[16](index=16&type=chunk)[17](index=17&type=chunk) - Adjusted EBITDA is calculated by taking **net loss** and adding back **interest**, **taxes**, **depreciation & amortization**, **share-based compensation**, **workforce transition costs**, and **distribution center costs**[16](index=16&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | | Fifty-Two Weeks Ended Dec 28, 2024 | Fifty-Two Weeks Ended Dec 30, 2023 | | :--- | :--- | :--- | | Net loss | $ (40,601) | $ (8,223) | | Depreciation & amortization | 18,975 | 16,690 | | Amortization of intangible assets | 121 | 36 | | Interest (income) expense, net | (301) | (636) | | Income tax provision | 267 | 145 | | **EBITDA** | **$ (21,539)** | **$ 8,012** | | Stock compensation expense | 11,985 | 11,675 | | Workforce transition costs | 617 | — | | Distribution center costs | 1,882 | — | | **Adjusted EBITDA** | **$ (7,055)** | **$ 19,687** | [Consolidated Statements of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20OPERATIONS) FY2024 net sales were **$588.8 million**, with a **loss from operations of ($40.6) million**, resulting in a **net loss of ($40.6) million**, or **($0.71) per share** Consolidated Statements of Operations (In Thousands, Except Per Share Data) | | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Net sales | $ 588,846 | $ 675,729 | | Gross profit | 196,739 | 229,406 | | Loss from operations | (40,635) | (9,881) | | Net loss | (40,601) | (8,223) | | Basic and diluted net loss per share | $ (0.71) | $ (0.15) | [Consolidated Balance Sheets](index=8&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of December 28, 2024, total assets were **$210.6 million**, driven by decreases in **cash ($36.4 million)** and **inventory ($90.4 million)**, with total liabilities at **$125.4 million** and equity at **$85.2 million** Consolidated Balance Sheet Highlights (In Thousands) | | Dec 28, 2024 | Dec 30, 2023 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $ 36,397 | $ 50,951 | | Inventory, net | 90,353 | 128,901 | | Total current assets | 138,868 | 193,338 | | **Total assets** | **$ 210,574** | **$ 257,855** | | **LIABILITIES & EQUITY** | | | | Total current liabilities | 90,423 | 112,986 | | **Total liabilities** | **125,399** | **145,024** | | **Total stockholders' equity** | **85,175** | **112,831** | [Consolidated Statements of Cash Flows](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) FY2024 net cash from operations was **$10.3 million**, a decline from **$50.0 million** in 2023, with **net cash used in investing activities increasing to ($20.6) million** Consolidated Statements of Cash Flows Highlights (In Thousands) | | Year Ended Dec 28, 2024 | Year Ended Dec 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $ 10,338 | $ 50,001 | | Net cash used in investing activities | (20,557) | (11,901) | | Net cash used in financing activities | (4,422) | (5,916) | | **Net change in cash and cash equivalents** | **(14,554)** | **32,184** | | Cash and cash equivalents, end of period | $ 36,397 | $ 50,951 |

Core Insights - CarParts.com, Inc. reported a significant decline in net sales for fiscal year 2024, totaling $588.8 million, down 13% from $675.7 million in fiscal year 2023, primarily due to soft consumer demand and pressures in specific product categories [5][9] - The company experienced a net loss of $40.6 million in fiscal year 2024, compared to a net loss of $8.2 million in fiscal year 2023, indicating a worsening financial performance [7][26] - Management emphasized a strategic focus on improving gross and net margins, enhancing operational efficiency, and achieving sustainable growth through various initiatives [3][4] Fiscal Year 2024 Financial Results - Net sales decreased to $588.8 million from $675.7 million, a decline of 13% [5][9] - Gross profit was $196.7 million, down from $229.4 million, with a gross margin of 33.4%, a decrease of 50 basis points [5][10] - Total operating expenses were $237.4 million, slightly down from $239.3 million, but operating expenses as a percentage of net sales increased to 40.3% from 35.4% [6][26] - Adjusted EBITDA for the year was ($7.1) million, a significant drop from $19.7 million in the previous year [7][9] Fourth Quarter 2024 Financial Results - Net sales for the fourth quarter were $133.5 million, down 15% from the same quarter last year [8][9] - Gross profit for the fourth quarter was $43.4 million, compared to $51.6 million, with a gross margin of 32.5% [10][9] - The net loss for the fourth quarter was ($15.4) million, compared to a net loss of ($6.1) million in the year-ago quarter [10][9] - Adjusted EBITDA for the fourth quarter was ($6.8) million, down from $1.0 million in the previous year [11][9] Strategic Initiatives and Outlook - The company is focusing on non-paid marketing initiatives, enhancing site conversion, and expanding product assortment to address economic challenges faced by lower-income consumers [4][3] - CarParts.com has launched a new website with AI-based search solutions and machine learning product recommendations, along with a paid membership program, CarParts+, which includes roadside assistance [9][10] - The company is currently evaluating various strategic alternatives and has not provided guidance for 2025 [12]

Core Insights - The event "Fix-It Day" organized by CarParts.com aimed to provide essential vehicle repairs to individuals in need, emphasizing the importance of reliable transportation in the community [2][4] - Over 38 vehicles received critical repairs, including brake replacements and battery changes, with more than 250 parts donated by CarParts.com and its partners [2][3] - The event highlighted the collaboration between businesses and nonprofits, showcasing how such partnerships can create significant community impact [4][5] Company Overview - CarParts.com is a technology-driven eCommerce company that offers over 1 million high-quality automotive parts and accessories, operating for over 25 years [5][6] - The company focuses on customer satisfaction and affordability, aiming to simplify the automotive repair process and ensure swift delivery of parts [6][7] - CarParts.com is headquartered in Torrance, California, and is committed to empowering drivers along their journey [6][7] Community Engagement - Fix-It Day provided participants with complimentary CarParts+ Memberships, which included exclusive discounts and roadside assistance [3] - Participants also received care packages with essential car maintenance items, enhancing their ability to maintain their vehicles [3] - The event received recognition from local officials, reinforcing the commitment of CarParts.com and its partners to serve the community [4]

Core Viewpoint - CarParts.com is exploring strategic alternatives, including a potential sale, after receiving inbound inquiries, with no set timeline for completion and no certainty of a strategic change [1][2] Company Performance - In the third quarter, CarParts.com reported a 13% decline in net sales year-over-year, totaling $144.8 million, alongside a net loss of $10 million [3] - The sales decrease was attributed to deliberate price increases aimed at higher value customers, gross margin expansion, and challenges in the consumer environment, as well as one-time impacts from external events [4] Strategic Initiatives - The company has invested significantly in building a vertically integrated supply chain and a nationwide fulfillment network to enhance its eCommerce experience and mobile app [3] - CarParts.com is undergoing a re-platforming process to improve performance and reduce development cycles, with expectations to capitalize on opportunities in the $400 billion auto parts market [5] User Engagement - The cumulative downloads of CarParts.com's mobile app have more than doubled to over 550,000 at the beginning of the year, indicating growing user engagement despite sales challenges [4]

Core Viewpoint - CarParts.com is exploring strategic alternatives to maximize shareholder value, including a potential sale of the company, in response to inbound inquiries [1][2] Company Overview - CarParts.com is a technology-driven eCommerce company offering over 1 million high-quality automotive parts and accessories, operating for over 25 years [3] - The company has established itself as a premier destination for drivers seeking repair and maintenance solutions, emphasizing customer satisfaction and affordability [3] - CarParts.com operates a robust fulfillment network to ensure swift delivery of parts from leading brands across the nation [3] Strategic Initiatives - The Board of Directors has engaged Craig-Hallum Capital Group LLC as its financial advisor and Wilson Sonsini Goodrich & Rosati as its legal counsel to support the exploration of strategic alternatives [1] - CEO David Meniane highlighted significant investments made over the last 5 years in building a vertically integrated supply chain and a nationwide fulfillment network [2] - The company has not set a timeline for the completion of the exploration process and does not intend to provide updates unless definitive agreements are reached [2]

Company Overview - CarParts.com, Inc. is a technology-driven eCommerce company that offers over 1 million high-quality automotive parts and accessories [4] - The company has been operating for over 25 years and has established itself as a premier destination for drivers seeking repair and maintenance solutions [4] - CarParts.com focuses on customer satisfaction and affordability, simplifying the automotive repair process [4] Upcoming Financial Results - CarParts.com will hold a conference call on March 25, 2025, at 2:00 p.m. Pacific Time to discuss its financial results for the fourth quarter and fiscal year ended December 28, 2024 [1] - The financial results will be reported in a press release prior to the call [1] - The conference call will be hosted by CEO David Meniane, CFO Ryan Lockwood, and COO Michael Huffaker, followed by a question and answer period [2] Accessing the Conference Call - Participants can pre-register for the conference call using a provided link and will receive a confirmation email with dial-in details [2] - The live webcast of the event can be accessed on the company's investor relations website [2] - A replay of the webcast will be archived on the company's website for future access [3]

Core Points - CarParts.com is launching Fix-It Day 2025, a community initiative providing free car repairs to individuals and families in need, in partnership with Safe Parking LA and other organizations [1][2] - The event will take place on March 2, 2025, serving 38 pre-selected families who have faced hardships, including displacement from wildfires [2][3] - Skilled mechanics will offer essential services such as brake replacements and oil changes at no cost, addressing the financial burden of car repairs which can range from $500 to $1,000 [3][4] Company Overview - CarParts.com is a technology-driven eCommerce company specializing in automotive parts and accessories, with over 1 million products available [8] - The company has been operational for over 25 years and focuses on customer satisfaction through a user-friendly website and mobile app [8] - CarParts.com aims to simplify the automotive repair process and ensure swift delivery of quality parts nationwide [8] Partnership and Community Impact - Safe Parking LA, a nonprofit organization, is collaborating with CarParts.com to identify families in need, particularly those experiencing vehicular homelessness [9] - The Petersen Automotive Museum is providing venue and logistical support for the event, emphasizing the importance of reliable transportation for those affected by recent hardships [5][6] - Additional partners include Wrench, JC Whitney, LIQUI MOLY, and Bosch, contributing resources and services to enhance the event [5][6] Ongoing Support - Participants will receive complimentary CarParts+ Memberships, granting access to exclusive discounts and auto care resources [6] - The initiative aims to restore dignity and hope for families reliant on their vehicles for daily activities, reinforcing community support [4][7]

Core Insights - JC Whitney is revitalizing its brand by launching the JC Whitney Magazine, which aims to serve automotive enthusiasts across North America and Canada [1][2] - The magazine features over 100 pages of curated content, including industry trends, car culture, product innovations, and expert insights, along with a catalog section that revives the iconic JC Whitney Catalog [1] - The expansion of the magazine aligns with JC Whitney's 110th anniversary and its transformation under CarParts.com, reinforcing its commitment to the automotive community [2] Company Overview - CarParts.com, Inc. is a technology-driven eCommerce company that offers over 1 million high-quality automotive parts and accessories, focusing on customer satisfaction and affordability [4] - The company has been operating for over 25 years and aims to simplify the automotive repair process through a user-friendly website and app [4] - CarParts.com is headquartered in Torrance, California, and emphasizes a robust fulfillment network for swift delivery of parts [5]

Core Points - CarParts.com, Inc. has regained compliance with Nasdaq's minimum bid price requirement, closing at or above $1.00 per share for 10 consecutive business days from December 30, 2024, to January 14, 2025 [2][3] - The CEO of CarParts.com, David Meniane, emphasized that this milestone reflects the market's recognition of the company's operational execution and business potential [3] - The company is committed to creating long-term shareholder value through strategic initiatives and operational excellence in providing high-quality automotive parts and accessories [3] Company Overview - CarParts.com, Inc. is a technology-driven eCommerce company offering over 1 million high-quality automotive parts and accessories, operating for over 25 years [4] - The company aims to simplify the automotive repair process, focusing on customer satisfaction and affordability, with a mobile-friendly website and app [4] - CarParts.com has a robust fulfillment network to ensure swift delivery of parts from leading brands to customers nationwide [4][5]