Financial Data and Key Metrics Changes - The company reported a net loss of $6.2 million for the fourth quarter and $1 million for the full year 2022, primarily due to non-cash expenses and higher seasonal freight charges [5] - Adjusted EBITDA for Q4 was $2.1 million, down from $2.6 million, while for the full year 2022, adjusted EBITDA was $26.1 million, up 55.5% from 2021 [6][5] - Cash and equivalents at the end of the quarter were $18.8 million, with no balance on the revolving credit line, and inventory decreased to $136 million from $138.9 million year-over-year [7] Business Line Data and Key Metrics Changes - Revenue for Q4 2022 was $154.5 million, an increase of 11.8% year-over-year, and for the full year, revenue was $661.6 million, up 13.6% from 2021 [24][38] - Gross profit for Q4 was $51.6 million, up 8.9%, with a gross margin of 33.4%, while for the full year, gross profit was $230.9 million, up 17%, with gross margins improving to 34.9% [25][24] Market Data and Key Metrics Changes - The company experienced high single-digit year-over-year revenue growth in the first eight weeks of fiscal year 2023, along with sequential gross margin expansion [24] - Repeat customers accounted for over one-third of e-commerce revenues, indicating a strong customer retention strategy [28] Company Strategy and Development Direction - The company aims to focus on outstanding customer service, operational excellence, financial discipline, and innovation to drive growth [44] - For 2023 and beyond, the company plans to maintain a customer-centric strategy while leveraging its vertically integrated supply chain and advanced capabilities [10][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow mid-single digits to high single digits, with potential for double-digit growth if the economy improves [26] - The management acknowledged the current macroeconomic uncertainty but emphasized the company's strong position to capitalize on market opportunities [26] Other Important Information - The company has undergone significant changes in its executive team and operational processes, which are expected to enhance efficiency and profitability [15][42] - The introduction of the "Do-It-For-Me" service has doubled bookings, indicating positive customer feedback and potential for future growth [20][49] Q&A Session Summary Question: Can you provide high-level thoughts on revenue growth for 2023? - Management indicated that while visibility is limited due to the macro environment, they expect to grow mid-single digits to high single digits, with potential for double-digit growth if conditions improve [30][26] Question: How has improving supply chain affected fourth quarter sales and profitability? - Management noted that improvements in the supply chain would positively impact landed costs, but benefits may not be fully realized until the latter half of the year [45] Question: What impact has the weather had on business? - Management stated that significant weather disruptions can slow demand temporarily, but historically, they have not seen a major long-term impact on sales [58] Question: What is the right inventory level for the business? - Management indicated that the current inventory level is appropriate and expected to remain stable throughout fiscal year 2023, with fluctuations expected quarter-to-quarter [59]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-33264 CARPARTS.COM, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 68-0623433 (State or Other ...

Carparts.Com, Inc. (NASDAQ:PRTS) Q3 2022 Earnings Conference Call November 9, 2022 5:00 PM ET Company Participants Tina Mirfarsi - VP, Communications and Culture David Meniane - CEO, SVP & Director Ryan Lockwood - CFO Conference Call Participants Thomas Forte - D.A. Davidson & Co. Ryan Meyers - Lake Street Capital Markets Dillon Heslin - ROTH Capital Partners Ryan Sigdahl - Craig-Hallum Operator Good afternoon, and welcome to the CarParts.com Third Quarter 2022 Conference Call. [Operator Instructions]. I wo ...

Financial Data and Key Metrics Changes - The company reported record sales of $176 million for Q2 2022, representing a 12% year-over-year increase and a 44% increase on a two-year stack [7][17] - Gross profit reached a record $62 million, up 16%, with gross margins improving by 120 basis points to 35% compared to 33.9% in the same period last year [18] - Net income for the quarter was $4.1 million, compared to $2.1 million in Q2 2021, while adjusted EBITDA was $8.3 million, flat compared to the previous year [19] Business Line Data and Key Metrics Changes - The mechanical parts business comprised 27% hard parts, 67% replacement parts, and 6% performance parts, remaining flat year-over-year [57] - The company aims for a long-term target of 45% to 50% mechanical parts, 45% to 50% collision parts, and 5% to 10% performance accessories [58] Market Data and Key Metrics Changes - The company is currently carrying approximately $40 million or eight extra weeks of inventory to account for longer lead times in the supply chain [21] - The company expects to convert excess inventory back to cash as the supply chain normalizes over the next six to twelve months [51] Company Strategy and Development Direction - The company is focusing on four areas: outstanding customer service, operational excellence, financial discipline, and innovation [8] - The strategy includes redefining the company from a parts provider to a customer-oriented company with a digital-first experience [9] - The company is expanding its offerings to include the ability for customers to find trusted local mechanics for repairs, which has already seen hundreds of successful bookings [14][33] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about achieving double-digit year-over-year growth in the second half of 2022 despite broader macroeconomic challenges [24][38] - The company is prioritizing free cash flow and operational efficiencies before investing in new fulfillment centers [34][36] - Management expressed confidence in handling potential cost pressures in 2023 due to effective hedging strategies [68] Other Important Information - The company has entered into a $150 million, five-year credit facility with JPMorgan Chase, enhancing liquidity for growth without tapping capital markets [7][20] - The Jacksonville distribution center is nearly fully operational and expected to contribute positively during the 2023 peak season [37] Q&A Session Summary Question: Can you talk about your gross margin performance? - Management highlighted that gross margins improved due to leveraging data science and a vertically integrated supply chain [30] Question: Where are you now with your do-it-for-me efforts? - Management indicated that hundreds of successful bookings have been completed, and while it may not contribute significantly to topline revenue immediately, it is expected to be a game changer in the long run [31][33] Question: What are your plans for additional fulfillment center square footage? - Management stated that the focus is currently on maximizing the existing network's efficiency before considering new investments [34][36] Question: How contributory was the Jacksonville center to topline? - Management noted that quantifying the contribution is challenging due to the focus on delivery speed and optimization [47] Question: What is the current state of container pricing and logistics? - Management observed signs of improvement in supply chain conditions and expects inventory levels to decrease over time [50][51] Question: How is the do-it-for-me initiative being marketed? - Management mentioned that the current customer base is the primary source for this initiative, with no additional marketing costs incurred [52][54] Question: What feedback have you received from mechanics regarding the do-it-for-me offering? - Management reported positive feedback from mechanics and customers, indicating a successful partnership and an expanded addressable market [64]

Financial Data and Key Metrics Changes - CarParts.com achieved record sales of $166 million, up 15% year-over-year, and adjusted EBITDA increased 165% to a record $9.4 million [6][16] - Gross profit rose 24% to $61 million, with gross margins improving by 280 basis points to 36.8% compared to 34% in the same period last year [17][18] - Net profit for the quarter was $2.1 million, compared to a loss of $2.7 million in Q1 2021 [18] Business Line Data and Key Metrics Changes - Hard parts contributed approximately 29% of sales, while replacement parts accounted for 66%, with a year-over-year increase in hard parts mix by about 600 basis points [41] Market Data and Key Metrics Changes - The total addressable market for aftermarket parts exceeds $300 billion, with CarParts.com capturing less than 1% of that market [10] Company Strategy and Development Direction - The company is focused on outstanding customer service, operational excellence, financial discipline, and innovation [11][12][13][14] - Plans to expand the "do-it-for-me" market, aiming to become a one-stop destination for auto repair and maintenance [14][46] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about demand despite macroeconomic pressures, emphasizing that the business serves essential needs [40] - The company expects to continue double-digit year-over-year revenue growth for fiscal year 2022, correlating with the opening of new distribution centers [21] Other Important Information - The company is currently carrying approximately $40 million in extra inventory to account for longer lead times in the supply chain [20] - The Texas distribution center is almost fully stocked, and the Jacksonville facility is on schedule to be operational by the end of Q2 [23] Q&A Session Summary Question: Was there anything unique affecting gross margin this quarter? - Management indicated that gross margin improvements are sustainable and driven by data science optimization [30] Question: How is the company navigating supply chain challenges? - Management highlighted their capabilities in demand planning and logistics to ensure parts availability and speed to customers [32] Question: What are the capital allocation priorities? - The focus is on profitable growth and free cash flow generation, with potential for stock buybacks subject to Board approval [50][52] Question: How is the demand environment for end customers? - Management confirmed solid demand, noting that the business addresses essential needs rather than discretionary spending [40] Question: What is the contribution of mechanical parts during the quarter? - Hard parts contributed 29% of the mix, which positively impacted gross margin [41][44] Question: Update on the do-it-for-me offering? - The initiative is progressing well, with expectations for it to become a larger part of the business over time [46]

CarParts.com Inc. (NASDAQ:PRTS) Q4 2021 Earnings Conference Call March 1, 2022 5:00 PM ET Company Participants Lev Peker - CEO Ryan Lockwood - SVP of Finance David Meniane - COO & CFO Conference Call Participants Darren Aftahi - ROTH Capital Partners Victoria James - D.A. Davidson Operator Good afternoon, and welcome to CarParts.com Fourth Quarter 2021 Conference Call. [Operator Instructions] On the call from the company are Lev Peker, Chief Executive Officer; David Meniane, Chief Operating Officer and Chi ...

CarParts.com (NASDAQ:PRTS) Q3 2021 Earnings Conference Call November 2, 2021 5:00 PM ET Company Participants Lev Peker - Chief Executive Officer David Meniane - Chief Operating Officer and Chief Financial Officer Conference Call Participants Ryan Sigdahl - Craig-Hallum Thomas Forte - D.A. Davidson Operator Welcome to the CarParts.com Third Quarter 2021 Earnings Conference Call. On the call from the company is Lev Peker, the Chief Executive Officer; and David Meniane, Chief Operating Officer and Chief Financ ...

CarParts.com, Inc. (NASDAQ:PRTS) Q2 2021 Earnings Conference Call August 5, 2021 5:00 PM ET Company Participants Lev Peker – Chief Executive Officer David Meniane – Chief Operating Officer and Chief Financial Officer Conference Call Participants Thomas Forte – D.A. Davidson Ryan Sigdahl – Craig-Hallum Capital Operator Welcome to the CarParts.com Second Quarter 2021 Conference Call. On the call from the company are Lev Peker, Chief Executive Officer; and David Meniane, Chief Operating Officer and Chief Finan ...

Financial Data and Key Metrics Changes - Revenues for Q1 2021 reached $144.8 million, a 65% increase from $87.8 million in Q1 2020 [14] - Gross profit also grew significantly to $49.2 million, up 65% year-over-year, with a gross margin of 34%, an increase of 10 basis points [15] - The total net loss for the quarter was $2.7 million, compared to a net loss of $1 million in Q1 2020, primarily due to increased non-cash charges [16] - Adjusted EBITDA was $3.6 million, down from $4.3 million in the previous year [16] - Cash position improved to $45.9 million from $35.8 million, driven by working capital improvements [18] Business Line Data and Key Metrics Changes - More than 30% of revenue comes from repeat purchases, indicating strong customer loyalty [6] - Mechanical parts accounted for approximately 23% of sales in Q1, with a goal to increase this mix closer to 50% over time [53] Market Data and Key Metrics Changes - The average new car price has crossed the $40,000 mark, leading consumers to keep their cars longer, which is expected to increase maintenance and repair demand [25] - The company is well-positioned to serve the growing electric vehicle (EV) market, as 90% of its products are compatible with various powertrains [25] Company Strategy and Development Direction - The company aims for 20% to 25% compounded top-line growth and plans to evolve from a parts supplier to a provider of turnkey solutions in the auto repair industry [2][11] - Expansion of the Texas warehouse by adding 156,000 square feet to increase inventory availability and support growth [20] - Focus on building brand awareness through partnerships and marketing campaigns [21] Management's Comments on Operating Environment and Future Outlook - Management believes that the current economic environment, including the chip shortage affecting new car manufacturing, will serve as a long-term tailwind for the business [32] - The company is optimistic about Q2 2021, citing improved inventory and capacity [62] Other Important Information - The company is in discussions to expand its Texas warehouse, which will enhance its distribution capabilities [19] - A new board member, Henry Maier, was welcomed, bringing extensive experience from FedEx [26] Q&A Session Summary Question: Are you 100% fully ramped now at the Texas facility? - Management confirmed that the Texas facility is operating at full outbound capacity but is currently 60% full [30] Question: How might the chip shortages impact your business over the next 12 months? - Management indicated that the aging fleet and longer vehicle retention will positively impact the business for an extended period [32] Question: Can you provide an update on the mobile mechanic initiative? - The mobile mechanic initiative remains in beta, with plans to analyze interactions before expanding [34] Question: How much of the revenue came from Texas in the quarter? - It was estimated that about $25 million of sales came from the Texas facility [36] Question: What is driving the rapid expansion of your distribution centers? - Management noted that the demand and operational success of existing distribution centers are key factors [38] Question: How quickly can you adjust your inventory orders? - Inventory orders can be adjusted in semi-real time, with weekly buys based on demand [49] Question: How much did mechanical parts contribute to sales in Q1? - Mechanical parts accounted for about 23% of sales in Q1, with plans to increase this mix [53] Question: How do you view the balance between driving website traffic and improving inventory selection? - Management believes both aspects are important for optimizing customer experience and sales [56]

Financial Performance - For fiscal year 2020, the company generated net sales of $443,884, an increase of 58.2% compared to $280,657 in fiscal year 2019[197]. - Gross profit increased by 84.5% to $155,366, with gross margin rising 500 basis points to 35.0% compared to 30.0% in fiscal year 2019[198]. - The company incurred a net loss of $1,513 for fiscal year 2020, a reduction from a net loss of $31,548 in fiscal year 2019[197]. - Adjusted EBITDA for fiscal year 2020 was $16,025, compared to $4,532 in fiscal year 2019, reflecting improved operational performance[206]. - Operating expenses increased by $62,598, or 67.7%, to $155,071, representing 34.9% of net sales, compared to 32.9% in the previous year[218]. - Total other expense, net decreased by $360, or 19.3%, to $(1,501), primarily due to reduced interest expenses[219]. - The income tax provision decreased significantly by $21,130, or 98.6%, to $307, representing 0.1% of net sales[220]. Sales and Market Trends - Online sales contributed 95.5% of total net sales, increasing by $168,034, or 65.6%, to $424,085, driven by growth from the flagship website[198]. - The U.S. Auto Care Association projected that online sales of auto parts and accessories would exceed $17 billion by 2023, highlighting a significant market opportunity[190]. - Net sales increased by $163,227, or 58.2%, to $443,884 for the fiscal year ended January 2, 2021, compared to $280,657 for the fiscal year ended December 28, 2019[218]. - Online sales represented 95.5% of total net sales in fiscal year 2020, up from 91.2% in fiscal year 2019, with an increase of $168,034, or 65.6%[217]. - The company experienced higher sales of collision parts during winter months and expects this seasonal trend to continue[249]. Cash and Debt Management - Cash and cash equivalents increased by $33,529 to $35,802 as of January 2, 2021, compared to $2,273 as of December 28, 2019[225]. - Working capital rose to $67,396 as of January 2, 2021, up from $2,427 as of December 28, 2019, mainly due to increased cash and inventory purchases[227]. - Net cash provided by financing activities was $62,361 for the fiscal year ended January 2, 2021, primarily due to common stock issuances from a public equity offering[233]. - Total debt increased to $13,010 as of January 2, 2021, compared to $11,056 as of December 28, 2019[234]. - As of January 2, 2021, the company's excess availability under the credit facility was $26,627, significantly above the required threshold of $3,000[238]. - The company's LIBOR-based interest rate was 1.44% on $0 principal, while the prime-based rate was 3.0% on $0 principal as of January 2, 2021[238]. - The credit facility matures on December 16, 2022, and includes a commitment fee of 0.25% per annum on undrawn amounts[238]. - The company has no significant off-balance sheet arrangements, indicating a straightforward financial structure[248]. - The company believes its existing cash, cash equivalents, and available financing will be sufficient to meet operational cash needs for at least the next twelve months[247]. Operational Challenges and Responses - The company experienced minimal disruptions from COVID-19, with sales primarily impacted during mid to late March 2020[192]. - A ransomware attack in June 2020 was contained without significant impact on business operations, and enhanced security measures have been implemented[193]. - The company has added new distribution centers to optimize supply chain and shipping, aiming to reduce delivery times and manage rising import costs[196]. - Inflation has not materially impacted the company's operating results and is not expected to do so in the near future[250]. - The company is required to make mandatory prepayments of loans upon certain "prepayment events," which include sales of collateral and certain debt issuances[239]. - The company was in compliance with all covenants under the Credit Agreement as of January 2, 2021[243]. - The financing arrangement for the development of the company's third warehouse has an effective interest rate of approximately 7.70% per annum and was paid off during fiscal year 2020[245]. Vehicle Market Insights - The average age of U.S. light vehicles reached 11.9 years, indicating a growing demand for aftermarket parts as older vehicles typically require more repairs[187].