CarParts.com(PRTS) - 2025 Q2 - Quarterly Results

Management Commentary and Strategic Outlook Management explores strategic alternatives, achieved positive Adjusted EBITDA in June, expects $10 million in annualized savings, and provides no 2025 financial outlook - The company is nearing completion of a process to explore strategic alternatives, including a potential sale or strategic investments to enhance capabilities[3] - A key operational milestone was achieved in June 2025 with positive Adjusted EBITDA, indicating strategic efforts are yielding tangible results[4] - Ongoing initiatives in fulfillment network realignment, AI, and automation are projected to generate approximately $10 million in annualized cost savings[4] - Due to the evaluation of strategic alternatives, the company is not providing financial guidance for 2025[10] Second Quarter 2025 Financial Performance Net sales increased to $151.9 million, but gross margin declined, leading to a wider net loss and an Adjusted EBITDA loss Q2 2025 Key Metrics vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $151.9 million | $144.3 million | | Gross Profit | $49.8 million | $48.4 million | | Gross Margin | 32.8% | 33.5% | | Net Loss | ($12.7) million | ($8.7) million | | Net Loss per Share | ($0.23) | ($0.15) | | Adjusted EBITDA | ($3.1) million | ($0.1) million | | Cash Balance | $19.8 million | - | | Inventory | $94.0 million | - | Detailed Financial Analysis - Net sales increased by 5% year-over-year, primarily driven by higher consumer demand through the carparts.com e-commerce channel, partially offset by weakness in marketplace sales[6] - Gross margin decreased by 70 basis points to 32.8%, mainly due to product mix and the impact of tariffs, while outbound transportation costs remained flat as a percentage of net sales[7] - Total operating expenses rose to $62.2 million from $57.1 million in the prior year, attributed to unfavorable marketing spend and one-time fees related to strategic alternatives exploration[8] Financial Statements This section presents unaudited consolidated financial statements for Q2 and H1 2025, covering operations, balance sheets, and cash flows Consolidated Statements of Operations Statement of Operations Highlights (Thirteen Weeks Ended, USD Thousands) | Account | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Net sales | $151,949 | $144,270 | | Gross profit | $49,779 | $48,393 | | Loss from operations | ($12,417) | ($8,728) | | Net loss | ($12,711) | ($8,687) | | Basic and diluted net loss per share | ($0.23) | ($0.15) | Consolidated Balance Sheets Balance Sheet Highlights (USD Thousands) | Account | June 28, 2025 | December 28, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $19,774 | $36,397 | | Inventory, net | $94,010 | $90,353 | | Total current assets | $126,418 | $138,868 | | Total assets | $189,584 | $210,574 | | Total current liabilities | $86,152 | $90,423 | | Revolving loan payable | $10,000 | $0 | | Total liabilities | $127,138 | $125,399 | | Total stockholders' equity | $62,446 | $85,175 | Consolidated Statements of Cash Flows Cash Flow Summary (Twenty-Six Weeks Ended, USD Thousands) | Cash Flow Activity | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($20,060) | $18 | | Net cash used in investing activities | ($4,408) | ($14,607) | | Net cash provided by (used in) financing activities | $7,845 | ($2,384) | | Net change in cash and cash equivalents | ($16,623) | ($16,886) | Non-GAAP Financial Measures and Reconciliations This section details Adjusted EBITDA as a non-GAAP measure, its purpose, and provides reconciliation from net loss - Adjusted EBITDA is a non-GAAP measure defined as net loss before interest, taxes, depreciation, amortization, share-based compensation, and other specific costs such as workforce transition and strategic alternatives exploration[15] Reconciliation of Net Loss to Adjusted EBITDA (Thirteen Weeks Ended, USD Thousands) | Line Item | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Net loss | ($12,711) | ($8,687) | | Depreciation & amortization | $4,978 | $4,455 | | Stock compensation expense | $2,273 | $3,328 | | Workforce transition costs | $1,657 | $108 | | Strategic alternatives exploration costs | $379 | $0 | | Other adjustments | $218 | $748 | | Adjusted EBITDA | ($3,116) | ($118) | Supplementary Information This section provides supplementary details, including conference call information, a corporate overview, and the Safe Harbor statement - A conference call with CEO David Meniane and CFO Ryan Lockwood was scheduled for August 12, 2025, at 5:00 p.m. Eastern time to discuss the quarterly results[11] - The press release contains forward-looking statements regarding future performance and growth, which are subject to risks and uncertainties as outlined in the company's SEC filings[19][20]