CarParts.com, Inc 10-K for FY2019

CarParts.com, Inc. (PRTS)

10-K 2020-03-10 For: 2019-12-28

Added on April 07, 2026

About this 10-K

CarParts.com, Inc filed this 10-K on March 10, 2020, covering the fiscal year ended December 28, 2019 (FY2019).

Headline figures

Fiscal year ended December 28, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $280.66M; down 3.0% from $289.47M a year earlier
Net loss: $31.55M; compared with a net loss of $4.89M a year earlier

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Non-Accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

		Page

	PART I	1

Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	25
Item 4.	Mine Safety Disclosures	25

	PART II	26

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	Selected Financial Data	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 8.	Financial Statements and Supplementary Data	43
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	43
Item 9A.	Controls and Procedures	44
Item 9B.	Other Information	44

	PART III	45

Item 10.	Directors, Executive Officers and Corporate Governance	45
Item 11.	Executive Compensation	45
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	45
Item 13.	Certain Relationships and Related Transactions, and Director Independence	45
Item 14.	Principal Accounting Fees and Services	46

	PART IV	47

Item 15.	Exhibits, Financial Statement Schedules	47


	52 Weeks Ended			52 Weeks Ended
	December 28, 2019			December 29, 2018
Unique Visitors (millions)(1)		59.5			69.3
E-commerce Orders (thousands)		1,705			1,760
Online Marketplace Orders (thousands)		1,707			1,573
Total Online Orders (thousands)		3,412			3,333
E-commerce Average Order Value	$	90		$	98
Online Marketplace Average Order Value	$	69		$	73
Total Online Average Order Value	$	80		$	86
Revenue Capture(1)		88.7	%		87.5	%
Conversion(1)		2.87	%		2.54	%


	Fifty-two weeks ended
	December 28, 2019		December 29, 2018
Net loss from continuing operations		(31,548)		(4,889)
Depreciation & amortization		6,252		5,802
Amortization of intangible assets		100		185
Interest expense, net		1,897		1,595
Taxes		21,437		(329)
EBITDA	$	(1,862)	$	2,364
Stock compensation expense	$	3,656	$	3,595
Employee transition costs(1)		2,274		774
Customs Costs(2)		464		5,046
Proceeds from AutoMD sale		—		(1,400)
Adjusted EBITDA	$	4,532	$	10,379


	Fiscal Year Ended
	December 28, 2019		December 29, 2018

Net sales	100.0	%	100.0	%
Cost of sales	70.0		72.8
Gross profit	30.0		27.2
Operating expenses:
Marketing	15.8		13.2
General and administrative	6.3		6.9
Fulfillment	8.9		7.4
Technology	1.9		1.4
Amortization of intangible assets	0.0		0.1
Total operating expenses	32.9		28.9
Loss from operations	(2.9)		(1.7)
Other income (expense):
Other income, net	0.0		0.5
Interest expense	(0.7)		(0.6)
Total other expense, net	(0.7)		(0.1)
Loss before income taxes	(3.6)		(1.8)
Income tax provision (benefit)	7.6		(0.1)
Net loss	(11.2)	%	(1.7)	%

		Page
Report of RSM US LLP, independent registered public accounting firm		F-1
Consolidated Balance Sheets as of December 28, 2019 and December 29, 2018		F-2
Consolidated Statements of Operations and Comprehensive Operations for each of the two years in the period ended December 28, 2019		F-3
Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 28, 2019		F-4
Consolidated Statements of Cash Flows for each of the two years in the period ended December 28, 2019		F-5
Notes to Consolidated Financial Statements		F-6


Exhibit No.		Description

2.1		Stock Purchase Agreement executed August 2, 2010 among the Acquisition Sub, WAG, Riverside and the other stockholders of WAG (incorporated by reference to Exhibit 10.57 to the Company’s Current Report on Form 8 K filed with the Securities and Exchange Commission on August 4, 2010).

3.1		Second Amended and Restated Certificate of Incorporation of U.S. Auto Parts Network, Inc. as filed with the Delaware Secretary of State on February 14, 2007 (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10 K filed with the Securities and Exchange Commission on April 2, 2007).

3.2		Amended and Restated Bylaws of U.S. Auto Parts Network, Inc. (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10 K filed with the Securities and Exchange Commission on April 2, 2007).

3.3		Certificate of Designation, Preferences and Rights of the Series A Convertible Preferred Stock of U.S. Auto Parts Network, Inc. (incorporated by reference to the Current Report on Form 8 K filed on March 25, 2013).

3.4		Amendment to Amended and Restated Bylaws of U.S. Auto Parts Network, Inc. (incorporated by reference to Exhibit 3.4 to the Annual Report on Form 10 K file with the Securities and Exchange Commission on March 11, 2016).

4.1*		Specimen common stock certificate.

4.2		Description of Common Stock of the Company.

10.1+*		U.S. Auto Parts Network, Inc. 2006 Equity Incentive Plan.

10.2+*		Form of Stock Option Agreement under the U.S. Auto Parts Network, Inc. 2006 Equity Incentive Plan.

10.3+*		Form of Notice of Grant of Stock Option under the U.S. Auto Parts Network, Inc. 2006 Equity Incentive Plan.

10.4+*		Form of Acceleration Addendum to Stock Option Agreement under the U.S. Auto Parts Network, Inc. 2006 Equity Incentive Plan.

10.5+*		U.S. Auto Parts Network, Inc. 2007 Omnibus Plan and Form of Award Agreements.

10.6+		2019 Independent Director Compensation Plan (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10 Q filed with the Securities and Exchange Commission on August 9, 2018).

10.7+		Form of Indemnification Agreement for Officers and Directors (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10 K filed with the Securities and Exchange Commission on March 11, 2016).

10.8+		Employment Agreement dated March 15, 2019 between U.S. Auto Parts Network, Inc. and David Meniane (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on March 15, 2019).

10.9+		Employment Agreement dated February 7, 2019 between the Company and Houman Akhavan.

10.10+		Employment Agreement dated November 27, 2018 between the Company and Lev Peker (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on November 28, 2018).

10.11		Board Candidate Agreement dated May 31, 2018 by and among the Company, Mehran Nia, and the Nia Living Trust Established September 2, 2004 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on June 1, 2018).

10.12		Letter Agreement, dated May 31, 2018, by and U.S. Auto Parts Network, Inc., Mina Khazani, and the Mina Khazani Living Trust, Dated May 30, 2007 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on June 1, 2018).


Exhibit No.		Description
10.13+		Form of Notice of Grant of Restricted Stock Units to Directors under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10 Q filed with the Securities and Exchange Commission on August 9, 2018).

10.14+		U.S. Auto Parts Network Inc. Director Payment Election Plan (incorporated by reference to Exhibit 10.68 to the Company’s Quarterly Report on Form 10 Q filed with the Securities and Exchange Commission on November 9, 2011).

10.15		Credit Agreement, dated April 26, 2012, by and between U.S. Auto Parts Network, Inc., certain of its domestic subsidiaries and JP Morgan Chase Bank, N.A. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on April 30, 2012).

10.16		Lease Agreement dated April 17, 2013 by and among U.S. Auto Parts Network, Inc. and STORE Master Funding III, LLC (incorporated by reference to the Current Report on Form 8 K filed on April 23, 2013)

10.17+		Form of Stock Unit Award Agreement (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8‑K filed with the Securities and Exchange Commission on February 18, 2014).

10.18+		Form of Stock Unit Award Agreement under the U.S. Auto Parts Network, Inc. 2007 Omnibus Incentive Plan (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8‑K filed with the Securities and Exchange Commission on February 18, 2014).

10.19		Eleventh Amendment to Credit Agreement and Fifth Amendment to Pledge and Security Agreement, dated December 18, 2019 by and among U.S. Auto Parts Network Inc., certain of its domestic subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8 K filed on December 20, 2019).

10.20		Twelfth Amendment to Credit Agreement and Fifth Amendment to Pledge and Security Agreement, dated January 17, 2020 by and among U.S. Auto Parts Network Inc., certain of its domestic subsidiaries and JPMorgan Chase Bank, N.A.

10.21		Form of 2019 Performance Restricted Stock Unit Award Agreement under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10‑Q filed on August 8, 2019)).

10.22		Form of 2018 Restricted Stock Unit Agreement under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on January 11, 2018).

10.23		Deed of Lease dated February 4, 2016 by and between U.S. Auto Parts Network, Inc. and Liberty Property Limited Partnership (incorporated by reference to Exhibit 10.43 to the Annual Report on Form 10 K filed with the Securities and Exchange Commission on March 11, 2016).

10.24		U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on June 2, 2016).

10.25		Form of Employee Option Agreement under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on June 2, 2016).

10.26		Form of Director Option Agreement under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8‑K filed with the Securities and Exchange Commission on June 2, 2016).

10.27		Form of Restricted Stock Unit Agreement under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8‑K filed with the Securities and Exchange Commission on June 2, 2016).


Exhibit No.		Description
10.28		Form of Performance Restricted Stock Unit Award Agreement under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8‑K filed with the Securities and Exchange Commission on January 26, 2017).

10.29		Form of Performance Cash Bonus Award Agreement under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8‑K filed with the Securities and Exchange Commission on January 26, 2017).

10.30		Form of Director and Section 16 Officer Restricted Stock Unit Agreement under the U.S. Auto Parts Network, Inc. 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8‑K filed with the Securities and Exchange Commission on January 26, 2017).

10.31		Deferred Compensation Plan (incorporated by reference to Exhibit 10.54 to the Annual Report on Form 10‑K filed with the Securities and Exchange Commission on March 7, 2017).

10.32		Dissolution Agreement, dated March 6, 2017, by and among AutoMD, Inc., Oak Investment Partners XI, L.P. and the Sol Khazani Living Trust. (incorporated by reference to Exhibit 10.55 to the Annual Report on Form 10‑K filed with the Securities and Exchange Commission on March 7, 2017).

10.33		Board Candidate Agreement dated January 18, 2019 by and among the Company, David Kanen, Kanen Wealth Management LLC, and Philotimo Fund, LP. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on January 23, 2019) .

10.34		Amendment to Board Candidate Agreement dated January 17, 2019 by and among the Company, Mehran Nia, and the Nia Living Trust Established September 2, 2004. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8 K filed with the Securities and Exchange Commission on January 23, 2019) .

21.1		Subsidiaries of U.S. Auto Parts Network, Inc.

23.1		Consent of Independent Registered Public Accounting Firm

31.1		Certification of the Principal Executive Officer required by Rule 13a‑14(a) or 15d‑14(a) of the Securities Exchange Act of 1934, as amended

31.2		Certification of the Principal Financial Officer required by Rule 13a‑14(a) or 15d‑14(a) of the Securities Exchange Act of 1934, as amended

32.1		Certification of the Chief Executive Officer required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of the Chief Financial Officer required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Report of RSM US LLP, independent registered public accounting firm		F- 1
Consolidated Balance Sheets as of December 28, 2019 and December 29, 2018		F- 2
Consolidated Statements of Operations and Comprehensive Operations for each of the two years in the period ended December 28, 2019		F- 3
Consolidated Statements of Stockholders’ Equity for each of the two years in the period ended December 28, 2019		F- 4
Consolidated Statements of Cash Flows for each of the two years in the period ended December 28, 2019		F- 5
Notes to Consolidated Financial Statements		F- 6


	December 28,		December 29,
	2019		2018
ASSETS
Current assets:
Cash and cash equivalents	$	2,273	$	2,031
Accounts receivable, net		2,669		3,727
Inventory		52,500		49,626
Other current assets		4,931		3,401
Total current assets		62,373		58,785
Deferred income taxes		—		21,833
Property and equipment, net		9,650		15,184
Right-of-use - assets - operating leases, net		4,544		—
Right-of-use - assets - financing leases, net		9,011		—
Other non-current assets		2,368		2,163
Total assets	$	87,946	$	97,965
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	44,433	$	34,039
Accrued expenses		9,519		10,247
Current portion of capital leases payable		—		594
Customer deposits		652		521
Notes payable, current		729		—
Right-of-use - obligation - operating, current		1,368		—
Right-of-use - obligation - finance, current		640		—
Other current liabilities		2,605		2,918
Total current liabilities		59,946		48,319
Capital leases payable, net of current		0		8,559
Notes payable, non-current		1,060		—
Right-of-use - obligation - operating, non-current		3,419		—
Right-of-use - obligation - finance, non-current		8,627		—
Other non-current liabilities		2,514		2,265
Total liabilities		75,566		59,143
Commitments and contingencies
Stockholders’ equity:
Series A convertible preferred stock, $0.001 par value; $1.45 per share liquidation value or aggregate of $6,017; 4,150 shares authorized; 2,771 shares issued and outstanding at both December 28, 2019 and December 29, 2018		3		3
Common stock, $0.001 par value; 100,000 shares authorized; 36,167 and 34,992 shares issued and outstanding at December 28, 2019 and December 29, 2018 (of which 2,525 are treasury stock)		38		38
Treasury stock		(7,146)		(7,146)
Additional paid-in capital		187,147		183,139
Accumulated other comprehensive income		214		579
Accumulated deficit		(167,876)		(137,791)
Total stockholders’ equity		12,380		38,822
Total liabilities and stockholders' equity	$	87,946	$	97,965


											Accumulated
							Additional				Other				Total
	Preferred Stock			Common Stock			Paid-in-		Treasury		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Stock		Income (Loss)		Deficit		Equity
Balance as originally stated at December 30, 2017	2,771	$	3	34,666	$	37	$	179,906	$	(7,146)	$	557	$	(132,996)	$	40,361
Effect of new accounting adoption	—		—	—		—		—		—		—		255		255
Balance as currently stated at December 30, 2017	2,771		3	34,666		37		179,906		(7,146)		557		(132,741)		40,616
Net loss	—		—	—		—		—		—		—		(4,889)		(4,889)
Issuance of shares in connection with stock option exercises	—		—	6		—		6		—		—		—		6
Issuance of shares in connection with restricted stock units vesting	—		—	479		1		—		—		—		—		1
Minimum tax withholding on RSU’s	—		—	(166)		—		(430)		—		—		—		(430)
Issuance of shares in connection with BOD fees	—		—	7		—		14		—		—		—		14
Share-based compensation	—		—	—		—		3,643		—		—		—		3,643
Cash dividends on preferred stock	—		—	—		—		—		—		—		(161)		(161)
Effect of changes in foreign currencies	—		—	—		—		—		—		22		—		22
Balance, December 29, 2018	2,771	$	3	34,992	$	38	$	183,139	$	(7,146)	$	579	$	(137,791)	$	38,822

Balance as originally reported at December 29, 2018	2,771	$	3	34,992	$	38	$	183,139	$	(7,146)	$	579	$	(137,791)	$	38,822
Effect of new accounting adoption	—		—	—		—		—		—		—		1,623		1,623
Balance as currently stated at, December 29, 2018	2,771		3	34,992		38		183,139		(7,146)		579		(136,168)		40,445
Net loss	—		—	—		—		—		—		—		(31,548)		(31,548)
Issuance of shares in connection with stock option exercise	—		—	305		—		460		—		—		—		460
Issuance of shares in connection with restricted stock units vesting	—		—	795		—		(302)		—		—		—		(302)
Issuance of shares in connection with BOD fees	—		—	16		—		19		—		—		—		19
Share-based compensation	—		—	—		—		3,710		—		—		—		3,710
Dividend on preferred stock	—		—	59		—		121		—		—		(160)		(39)
Actuarial loss on defined benefit plan	—		—	—		—		—		—		(313)		—		(313)
Effect of changes in foreign currencies	—		—	—		—		—		—		(52)		—		(52)
Balance, December 28, 2019	2,771	$	3	36,167	$	38	$	187,147	$	(7,146)	$	214	$	(167,876)	$	12,380


			Charged to
	Balance at		Revenue,				Balance at
	Beginning		Cost or				End of
	of Period		Expenses		Deductions		Period
Fifty-Two Weeks Ended December 28, 2019
Allowance for sales returns	$	1,297	$	18,436	$	(18,539)	$	1,194
Allowance for doubtful accounts		21		28		(43)		6
Fifty-Two Weeks Ended December 29, 2018
Allowance for sales returns	$	861	$	19,691	$	(19,255)	$	1,297
Allowance for doubtful accounts		1		66		(46)		21


	December 28, 2019		December 29, 2018
Warranty liabilities, beginning of period	$	1,420	$	1,410
Additions to warranty liabilities		690		597
Reductions to warranty liabilities		(698)		(587)
Warranty liabilities, end of period	$	1,412	$	1,420


	December 28, 2019		December 29, 2018
Land	$	—	$	630
Building		—		8,877
Machinery and equipment		12,766		12,683
Computer software (purchased and developed) and equipment		28,437		23,596
Vehicles		95		121
Leasehold improvements		1,161		996
Furniture and fixtures		744		723
Construction in process		3,091		3,211
		46,294		50,837
Less accumulated depreciation and amortization		(36,644)		(35,653)
Property and equipment, net	$	9,650	$	15,184


	Years
Machinery and equipment	2	-	5
Computer software (purchased and developed)	2	-	3
Computer equipment	2	-	5
Vehicles	3	-	5
Leasehold improvements*	3	-	5
Furniture and fixtures	3	-	7


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Shares	Price		Term (in years)	Value(1)
Options outstanding, December 29, 2018	6,097	$	2.69
Granted	4,460	$	1.19
Exercised	(304)	$	1.51
Cancelled:
Forfeited	(1,613)	$	2.48
Expired	(1,417)	$	3.08
Options outstanding, December 28, 2019	7,223	$	2.76	6.57	$	4,494
Vested and expected to vest at December 28, 2019	7,223	$	1.78	6.57	$	4,494
Options exercisable, December 28, 2019	3,080	$	2.51	2.97	$	747


	December 28, 2019		December 29, 2018
Income tax at U.S. federal statutory rate	$	(2,123)	$	(1,096)
Tax attributes written off		—		522
Share-based compensation		729		727
State income tax, net of federal tax effect		(325)		(66)
Foreign tax		106		68
Other		35		9
Change in valuation allowance		23,015		(493)
Effective tax (benefit) provision	$	21,437	$	(329)


	December 28, 2019		December 29, 2018
Deferred tax assets:
Inventory and inventory related allowance	$	529	$	639
Share-based compensation		1,836		2,119
Intangibles		1,577		2,415
Sales and bad debt allowances		712		718
Vacation accrual		200		202
Book over tax amortization on property and equipment		—		193
Net operating loss		25,322		21,345
Other		1		86
Total deferred tax assets		30,177		27,717
Valuation Allowance		(29,731)		(5,816)
Net deferred tax assets		446		21,901
Deferred tax liabilities:
Tax over book depreciation		398		—
Prepaid catalog expenses		48		68
Total deferred tax liabilities		446		68
Net deferred tax assets	$	—	$	21,833


2020	$	539
2021		5,345
2022		975
2023		3,028
2024		2,358
Thereafter		67,399
	$	79,644


	Fiscal Year ended
	December 28, 2019
Components of lease cost
Finance lease cost components
Amortization of finance lease assets	$	1,007
Interest on finance lease liabilities		692
Total finance lease costs	$	1,699
Operating lease components
Operating lease cost	$	1,409
Short-term lease cost		—
Total operating lease costs	$	1,409

Total lease cost	$	3,108

Supplemental cash flow information related to our operating leases is as follows for the period ended December 28, 2019:

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	1,297
Operating cash outflow from financing leases		692
Financing cash outflow from financing leases		654

Weighted-average remaining lease term-finance leases (in years)		12.3
Weighted-average remaining lease term-operating leases (in years)		3.7
Weighted-average discount rate-finance leases		7.69
Weighted-average discount rate-operating leases		5.59


	Finance Leases		Operating Leases		Total
2020	$	1,334	$	1,609	$	2,943
2021		1,166		1,339		2,505
2022		1,175		1,045		2,220
2023		1,189		763		1,952
2024		1,121		586		1,707
Thereafter		8,767		—		8,767
Total minimum payments required		14,752		5,342		20,094
Less portion representing interest		5,485		555		6,040
Present value of lease obligations	$	9,267	$	4,787	$	14,054
Less current portion of lease obligations		640		1,368		2,008
Long-term portion of lease obligations	$	8,627	$	3,419	$	12,046


	Quarter Ended
	March 30, 2019		June 29, 2019		Sept. 28, 2019		Dec. 28, 2019
Consolidated Statement of Income Data:
Net sales	$	74,739	$	73,687	$	69,273	$	62,958
Gross profit		20,129		21,763		21,143		21,188
Income (loss) from operations		(3,446)		(1,205)		(1,458)		(2,141)
Income (loss) before income taxes		(3,861)		(1,643)		(1,976)		(2,631)
Net income (loss)	$	(3,581)	$	(1,457)	$	(1,424)	$	(25,086)
Basic income (loss) from continuing operations per share	$	(0.10)	$	(0.04)	$	(0.04)	$	(0.70)
Diluted income (loss) from continuing operations per share	$	(0.10)	$	(0.04)	$	(0.04)	$	(0.70)
Shares used in computation of basic income (loss) from continuing operations per share		35,365		35,632		35,856		36,013
Shares used in computation of diluted income (loss) from continuing operations per share		35,365		35,632		35,856		36,013


	Quarter Ended
	March 31, 2018		June 30, 2018		Sept. 29, 2018		Dec. 29, 2018
Consolidated Statement of Income Data:
Net sales	$	78,385	$	76,973	$	69,463	$	64,646
Gross profit		23,459		21,485		19,045		16,566
Income (loss) from operations		1,609		487		(579)		(4,689)
Income (loss) before income taxes		1,177		59		459		(5,078)
Net income (loss)	$	735	$	(485)	$	438	$	(4,480)
Basic income (loss) from continuing operations per share	$	0.02	$	(0.02)	$	0.01	$	(0.13)
Diluted income (loss) from continuing operations per share	$	0.02	$	(0.02)	$	0.01	$	(0.13)
Shares used in computation of basic income (loss) from continuing operations per share		34,821		34,972		34,983		34,989
Shares used in computation of diluted income (loss) from continuing operations per share		38,066		34,972		35,201		34,989


	2019		2018
Private Label
Collision	62	%	57	%
Engine	20	%	18	%
Performance	1	%	1	%

Branded
Collision	1	%	1	%
Engine	9	%	11	%
Performance	7	%	12	%

Total	100	%	100	%


Date: March 9, 2020	U.S. AUTO PARTS NETWORK, INC.


	By:	/s/ Lev Peker
		Lev Peker
		Chief Executive Officer


Signature	Title	Date
/s/ Lev Peker	Chief Executive Officer and Director	March 9, 2020
Lev Peker	(principal executive officer)
/s/ David Meniane	Chief Financial Officer and Chief Operating Officer	March 9, 2020
David Meniane	(principal financial and accounting officer)
/s/ Warren B. Phelps III	Chairman of the Board	March 9, 2020
Warren B. Phelps III
/s/ Joshua L. Berman	Director	March 9, 2020
Joshua L. Berman
/s/ Jay K. Greyson	Director	March 9, 2020
Jay K. Greyson
/s/ David Kanen	Director	March 9, 2020
David Kanen
/s/ Sol Khazani	Director	March 9, 2020
Sol Khazani
/s/ Mehran Nia	Director	March 9, 2020
Mehran Nia
/s/ Jim Barnes	Director	March 9, 2020
Jim Barnes


To the Company:		U.S. Auto Parts Network, Inc.
		16941 Keegan Avenue
		Carson, California 90746
		Attn: General Counsel

To Executive:		At Executive’s last residence as provided by
		Executive to the Company for payroll records.


	U.S. AUTO PARTS NETWORK, INC.

	By:	/s/ Neil Watanabe
	Print Name:	Neil Watanabe
	Title:	Chief Financial Officer
	Address:	16941 Keegan Avenue
		Carson, CA 90746

	EXECUTIVE

	/s/ Houman Akhavan
	HOUMAN AKHAVAN

	BORROWERS:


	U.S. AUTO PARTS NETWORK, INC.,
	a Delaware corporation


	By /s/ Alfredo Gomez
	Name: Alfredo Gomez
	Title: General Counsel


	PARTSBIN, INC.,
	a Delaware corporation


	By /s/ Alfredo Gomez
	Name: Alfredo Gomez
	Title: General Counsel


	LOCAL BODY SHOPS, INC.,
	a Delaware corporation


	By /s/ Alfredo Gomez
	Name: Alfredo Gomez
	Title: General Counsel


	PRIVATE LABEL PARTS, INC.,
	a Delaware corporation


	By /s/ Alfredo Gomez
	Name: Alfredo Gomez
	Title: General Counsel


	WHITNEY AUTOMOTIVE GROUP, INC.,
	a Delaware corporation


	By /s/ Alfredo Gomez
	Name: Alfredo Gomez
	Title: General Counsel


	OTHER LOAN PARTIES:

	LOBO MARKETING, INC.,
	a Texas corporation


	By /s/ Alfredo Gomez
	Name: Alfredo Gomez
	Title: General Counsel


	PACIFIC 3PL, INC.,
	a Delaware corporation


	By /s/ Alfredo Gomez
	Name: Alfredo Gomez
	Title: General Counsel


	GO FIDO, INC.,
	a Delaware corporation


	By /s/ Alfredo Gomez
	Name: Alfredo Gomez
	Title: General Counsel


	AUTOMOTIVE SPECIALTY ACCESSORIES AND PARTS, INC.,
	a Delaware corporation


	By /s/ Alfredo Gomez
	Name: Alfredo Gomez
	Title: General Counsel

	ADMINISTRATIVE AGENT AND LENDER

	JPMORGAN CHASE BANK, N.A.,
	individually as a Lender and as Administrative Agent


	By /s/Nathan Shay
	Name: /s/ Nathan Shay
	Title: Authorized Officer

Name	Jurisdiction	DBA

PartsBin, Inc.	Delaware
U.S. Auto Parts Network (Philippines) Corporation	Philippines
Lobo Marketing, Inc.	Texas
Go Fido, Inc.	Delaware
Private Label Parts, Inc.	Delaware	Kool-Vue
Pacific 3PL, Inc.	Delaware
Local Body Shops, Inc.	Delaware	Perfect Fit
Automotive Specialty Accessories and Parts, Inc. (1)	Delaware
Whitney Automotive Group, Inc. (2)	Delaware