CarParts.com, Inc 10-Q for FY2021 Q2

CarParts.com, Inc. (PRTS)

10-Q 2021-08-06 For: 2021-07-03

Added on April 07, 2026

About this 10-Q

CarParts.com, Inc filed this 10-Q on August 6, 2021, covering the quarter ended July 3, 2021 (FY2021 Q2).

Headline figures

Quarter ended July 3, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $157.54M; up 32.5% from $118.93M a year earlier
Net income: $2.07M; up 32.1% from net income of $1.57M a year earlier
Diluted EPS: $0.04; up 33.3% from $0.03 a year earlier

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Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	PRTS	The NASDAQ Stock Market LLC (NASDAQ Global Market)


Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller reporting company	☐
Emerging growth company	☐


		Page
	PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements	4
	Consolidated Balance Sheets (Unaudited) at July 3, 2021 and January 2, 2021	4
	Consolidated Statements of Operations and Comprehensive Operations (Unaudited) for the Thirteen and Twenty-six Weeks Ended July 3, 2021 and June 27, 2020	5
	Consolidated Statements of Stockholders’ Equity (Unaudited) for the Thirteen and Twenty-six Weeks Ended July 3, 2021 and June 27, 2020	6
	Consolidated Statements of Cash Flows (Unaudited) for the Twenty-six Weeks Ended July 3, 2021 and June 27, 2020	7
	Notes to Consolidated Financial Statements (Unaudited)	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	20
ITEM 4.	Controls and Procedures	20

	PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	21
ITEM 1A.	Risk Factors	21
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
ITEM 3.	Defaults Upon Senior Securities	42
ITEM 4.	Mine Safety Disclosures	42
ITEM 5.	Other Information	42
ITEM 6.	Exhibits	43


	July 3,		January 2,
	2021		2021
ASSETS
Current assets:
Cash and cash equivalents	$	33,149	$	35,802
Accounts receivable, net		6,994		6,318
Inventory		113,964		89,316
Other current assets		6,401		7,939
Total current assets		160,508		139,375
Property and equipment, net		17,602		14,742
Right-of-use - assets - operating leases, net		15,889		17,507
Right-of-use - assets - finance leases, net		14,890		12,457
Other non-current assets		2,278		2,892
Total assets	$	211,167	$	186,973
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	60,741	$	45,302
Accrued expenses		15,814		18,190
Customer deposits		400		630
Right-of-use - obligation - operating, current		2,729		2,527
Right-of-use - obligation - finance, current		2,255		1,583
Other current liabilities		4,018		3,747
Total current liabilities		85,957		71,979
Right-of-use - obligation - operating, non-current		14,359		16,046
Right-of-use - obligation - finance, non-current		13,005		11,428
Other non-current liabilities		3,826		4,031
Total liabilities		117,147		103,484
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 100,000 shares authorized; 52,184 and 48,091 shares issued and outstanding as of July 3, 2021 and January 2, 2021 (of which 2,525 are treasury stock)		55		51
Treasury stock		(7,146)		(7,146)
Additional paid-in capital		271,334		260,260
Accumulated other comprehensive loss		(112)		(215)
Accumulated deficit		(170,111)		(169,461)
Total stockholders’ equity		94,020		83,489
Total liabilities and stockholders' equity	$	211,167	$	186,973


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 3,		June 27,		July 3,		June 27,
	2021		2020		2021		2020
Net sales	$	157,536	$	118,930	$	302,338	$	206,748
Cost of sales ⁽¹⁾		104,187		78,101		199,815		136,140
Gross profit		53,349		40,829		102,523		70,608
Operating expense		51,013		38,653		102,685		68,785
Income (loss) from operations		2,336		2,176		(162)		1,823
Other income (expense):
Other, net		116		3		197		74
Interest expense		(267)		(493)		(517)		(1,153)
Total other expense, net		(151)		(490)		(320)		(1,079)
Income (loss) before income taxes		2,185		1,686		(482)		744
Income tax provision		113		118		168		154
Net income (loss)		2,072		1,568		(650)		590
Other comprehensive gain (loss):
Foreign currency translation adjustments		16		(29)		30		(35)
Unrealized gain (loss) on deferred compensation trust assets		38		58		73		(37)
Total other comprehensive gain (loss)		54		29		103		(72)
Comprehensive income (loss)	$	2,126	$	1,597	$	(547)	$	518
Net income (loss) per share:
Basic net income (loss) per share	$	0.04	$	0.04	$	(0.01)	$	0.01
Diluted net income (loss) income per share	$	0.04	$	0.03	$	(0.01)	$	0.01
Weighted-average common shares outstanding:
Shares used in computation of basic net income (loss) per share		51,684		39,386		50,222		38,124
Shares used in computation of diluted net income (loss) per share		57,122		47,329		50,222		42,058


											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, December 28, 2019	2,771	$	3	36,167	$	38	$	187,147	$	(7,146)	$	214	$	(167,876)	$	12,380
Net loss	—		—	—		—		—		—		—		(978)		(978)
Issuance of shares in connection with stock option exercise	—		—	523		1		1,119		—		—		—		1,120
Issuance of shares in connection with restricted stock units vesting	—		—	1,809		2		(86)		—		—		—		(84)
Issuance of shares in connection with BOD fees	—		—	3		—		6		—		—		—		6
Share-based compensation	—		—	—		—		2,819		—		—		—		2,819
Common stock dividend on preferred stock	—		—	20		—		38		—		—		(39)		(1)
Conversion of preferred stock	(150)		—	150		—		—		—		—		—		—
Unrealized loss on deferred compensation trust assets	—		—	—		—		—		—		(95)		—		(95)
Effect of changes in foreign currencies	—		—	—		—		—		—		(6)		—		(6)
Balance, March 28, 2020	2,621		3	38,672		41		191,043		(7,146)		113		(168,893)		15,161
Net income	—		—	—		—		—		—		—		1,568		1,568
Issuance of shares in connection with stock option exercise	—		—	907		1		1,772		—		—		—		1,773
Issuance of shares in connection with restricted stock units vesting	—		—	183		—		(2)		—		—		—		(2)
Issuance of shares in connection with BOD fees	—		—	3		—		6		—		—		—		6
Share-based compensation	—		—	—		—		1,874		—		—		—		1,874
Dividend on preferred stock	—		—	25		—		—		—		—		(33)		(33)
Conversion of preferred stock	(2,621)		(3)	2,621		3		—		—		—		—		—
Unrealized gain on deferred compensation trust assets	—		—	—		—		—		—		58		—		58
Effect of changes in foreign currencies	—		—	—		—		—		—		(29)		—		(29)
Balance, June 27, 2020	—		—	42,411		45		194,693		(7,146)		142		(167,358)		20,376

Balance, January 2, 2021	—		—	48,091		51		260,260		(7,146)		(215)		(169,461)		83,489
Net loss	—		—	—		—		—		—		—		(2,722)		(2,722)
Issuance of shares in connection with stock option exercise	—		—	130		—		163		—		—		—		163
Issuance of shares in connection with restricted stock units vesting	—		—	2,382		2		(6)		—		—		—		(4)
Issuance of shares in connection with BOD fees	—		—	—		—		6		—		—		—		6
Share-based compensation	—		—	—		—		4,080		—		—		—		4,080
Unrealized gain on deferred compensation trust assets	—		—	—		—		—		—		35		—		35
Effect of changes in foreign currencies	—		—	—		—		—		—		14		—		14
Balance, April 3, 2021	—		—	50,603		53		264,503		(7,146)		(166)		(172,183)		85,061
Net income	—		—	—		—		—		—		—		2,072		2,072
Issuance of shares in connection with stock option exercise	—		—	1,463		2		2,615		—		—		—		2,617
Issuance of stock awards	—		—	118		—		389		—		—		—		389
Issuance of shares in connection with BOD fees	—		—	—		—		6		—		—		—		6
Share-based compensation	—		—	—		—		3,821		—		—		—		3,821
Unrealized gain on deferred compensation trust assets	—		—	—		—		—		—		38		—		38
Effect of changes in foreign currencies	—		—	—		—		—		—		16		—		16
Balance, July 3, 2021	—	$	—	52,184	$	55	$	271,334	$	(7,146)	$	(112)	$	(170,111)	$	94,020


				Weighted Average
		Weighted		Remaining
		Average		Contractual	Aggregate
	Shares	Exercise Price		Term (in years)	Intrinsic Value
Vested and expected to vest as of January 2, 2021	3,143	$	—
Awarded	2,517	$	—
Vested	(2,479)	$	—
Forfeited	(14)	$	—
Awards outstanding, July 3, 2021	3,167	$	—	10.34	$	60,454
Vested and expected to vest as of July 3, 2021	3,167	$	—	10.34	$	60,454


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 3, 2021		June 27, 2020		July 3, 2021		June 27, 2020
Net income (loss) per share:
Numerator:
Net income (loss)	$	2,072	$	1,568		(650)		590
Dividends on Series A Convertible Preferred Stock		—		33		—		71
Net income (loss) allocable to common shares	$	2,072	$	1,535	$	(650)	$	519
Denominator:
Weighted-average common shares outstanding (basic)		51,684		39,386		50,222		38,124
Common equivalent shares from common stock options, restricted stock and preferred stock		5,438		7,943		—		3,934
Weighted-average common shares outstanding (diluted)		57,122		47,329		50,222		42,058
Basic net income (loss) per share	$	0.04	$	0.04	$	(0.01)	$	0.01
Diluted net income (loss) per share	$	0.04	$	0.03	$	(0.01)	$	0.01


Exhibit No.	Description
10.1		CarParts.com, Inc. 2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 20, 2021)

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

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Date:	August 5, 2021	CARPARTS.COM, INC.

		By:	/s/ Lev Peker
			Lev Peker
			Chief Executive Officer
			(Principal Executive Officer)

		By:	/s/ David Meniane
			David Meniane
			Chief Financial Officer and Chief Operating Officer
			(Principal Financial Officer)

Ev Peker
	/s/ Lev Peker
	Lev Peker
	Chief Executive Officer
	(Principal Executive Officer)

Id meniane
	/s/ David Meniane
	David Meniane
	Chief Financial Officer
	(Principal Financial Officer)

Avid Meni
	/s/ David Meniane
	David Meniane
	Chief Financial Officer


	Twenty-Six Weeks Ended
	July 3,		June 27,
	2021		2020
Operating activities
Net (loss) income	$	(650)	$	590
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization expense		4,550		3,532
Amortization of intangible assets		55		50
Share-based compensation expense		7,272		4,385
Stock awards issued for non-employee director service		12		12
Loss from disposition of assets		—		1
Amortization of deferred financing costs		9		9
Changes in operating assets and liabilities:
Accounts receivable		(676)		(2,609)
Inventory		(24,649)		(12,883)
Other current assets		1,316		(1,597)
Other non-current assets		540		(296)
Accounts payable and accrued expenses		12,883		32,055
Other current liabilities		42		1,671
Right-of-use obligation - operating leases - current		430		483
Right-of-use obligation - operating leases - long-term		(76)		(383)
Other non-current liabilities		(77)		148
Net cash provided by operating activities		981		25,168
Investing activities
Additions to property and equipment		(5,398)		(3,840)
Net cash used in investing activities		(5,398)		(3,840)
Financing activities
Borrowings from revolving loan payable		90		1,273
Payments made on revolving loan payable		(90)		(1,273)
Proceeds from notes payable		—		4,107
Payments of notes payable		—		(5,333)
Payments on finance leases		(990)		(315)
Statutory tax withholding payment for share-based compensation		(3)		(85)
Proceeds from exercise of stock options		2,779		2,893
Net cash provided by financing activities		1,786		1,267
Effect of exchange rate changes on cash		(22)		(8)
Net change in cash and cash equivalents		(2,653)		22,587
Cash and cash equivalents, beginning of period		35,802		2,273
Cash and cash equivalents, end of period	$	33,149	$	24,860