CarParts.com(PRTS) - 2021 Q4 - Annual Report

Financial Performance - For fiscal year 2020, the company generated net sales of $443,884, an increase of 58.2$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$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$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$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$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$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$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].