Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 01, 2022 | Nov. 03, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Oct. 01, 2022 | |
Entity File Number | 001-33264 | |
Entity Registrant Name | CARPARTS.COM, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 68-0623433 | |
Entity Address, Address Line One | 2050 W. 190th Street | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Torrance | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90504 | |
City Area Code | 424 | |
Local Phone Number | 702-1455 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | PRTS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Smaller Reporting Company | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,559,500 | |
Current Fiscal Year End Date | --01-01 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001378950 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 16,654 | $ 18,144 |
Accounts receivable, net | 9,501 | 5,015 |
Inventory, net | 154,751 | 138,851 |
Other current assets | 6,703 | 6,592 |
Total current assets | 187,609 | 168,602 |
Property and equipment, net | 25,021 | 20,736 |
Right-of-use - assets - operating leases, net | 25,042 | 28,680 |
Right-of-use - assets - finance leases, net | 19,705 | 15,130 |
Other non-current assets | 2,612 | 2,188 |
Total assets | 259,989 | 235,336 |
Current liabilities: | ||
Accounts payable | 68,208 | 67,372 |
Accrued expenses | 19,997 | 17,517 |
Customer deposits | 250 | 826 |
Right-of-use - obligation - operating, current | 4,429 | 4,201 |
Right-of-use - obligation - finance, current | 4,614 | 2,953 |
Other current liabilities | 4,186 | 3,925 |
Total current liabilities | 101,684 | 96,794 |
Revolving loan payable, non-current | 5,000 | |
Right-of-use - obligation - operating, non-current | 22,402 | 26,367 |
Right-of-use - obligation - finance, non-current | 15,997 | 12,868 |
Other non-current liabilities | 3,323 | 3,739 |
Total liabilities | 148,406 | 139,768 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 100,000 shares authorized; 54,558 and 52,960 shares issued and outstanding as of October 1, 2022 and January 1, 2022 (of which 2,565 are treasury stock) | 57 | 56 |
Treasury stock | (7,625) | (7,625) |
Additional paid-in capital | 293,450 | 282,663 |
Accumulated other comprehensive gain | 228 | 274 |
Accumulated deficit | (174,527) | (179,800) |
Total stockholders' equity | 111,583 | 95,568 |
Total liabilities and stockholders' equity | $ 259,989 | $ 235,336 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Oct. 01, 2022 | Jan. 01, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000 | 100,000 |
Common stock, shares issued (in shares) | 54,558 | 52,960 |
Common stock, shares outstanding (in shares) | 54,558 | 52,960 |
Treasury stock (in shares) | 2,565 | 2,565 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | ||
Income Statement [Abstract] | |||||
Net sales | $ 164,807 | $ 141,846 | $ 507,080 | $ 444,184 | |
Cost of sales (1) | [1] | 108,659 | 94,513 | 327,835 | 294,328 |
Gross profit | 56,148 | 47,333 | 179,245 | 149,856 | |
Operating expenses | |||||
Operating expense | 56,729 | 51,668 | 173,144 | 154,353 | |
(Loss) income from operations | (581) | (4,335) | 6,101 | (4,497) | |
Other income (expense): | |||||
Other, net | 117 | 24 | 363 | 221 | |
Interest expense | (435) | (309) | (1,073) | (826) | |
Total other expense, net | (318) | (285) | (710) | (605) | |
(Loss) income before income taxes | (899) | (4,620) | 5,391 | (5,102) | |
Income tax provision | 49 | 39 | 118 | 207 | |
Net (loss) income | (948) | (4,659) | 5,273 | (5,309) | |
Other comprehensive (loss) gain: | |||||
Foreign currency translation adjustments | 60 | 124 | 90 | ||
Unrealized (loss) gain on deferred compensation trust assets | (36) | (5) | (170) | 68 | |
Total other comprehensive (loss) gain | (36) | 55 | (46) | 158 | |
Comprehensive (loss) income | $ (984) | $ (4,604) | $ 5,227 | $ (5,151) | |
Net (loss) income per share: | |||||
Basic net (loss) income per share | $ (0.02) | $ (0.09) | $ 0.10 | $ (0.10) | |
Diluted net (loss) income per share | $ (0.02) | $ (0.09) | $ 0.09 | $ (0.10) | |
Weighted-average common shares outstanding: | |||||
Shares used in computation of basic net (loss) income per share | 54,481 | 52,264 | 54,009 | 50,903 | |
Shares used in computation of diluted net (loss) income per share | 54,481 | 52,264 | 57,283 | 50,903 | |
[1] Excludes depreciation and amortization expense which is included in operating expense. |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in- Capital | Treasury Stock | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total |
Beginning balance at Jan. 02, 2021 | $ 51 | $ 260,260 | $ (7,146) | $ (215) | $ (169,461) | $ 83,489 |
Beginning balance (in shares) at Jan. 02, 2021 | 48,091 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (2,722) | (2,722) | ||||
Issuance of shares in connection with stock option exercise | 163 | 163 | ||||
Issuance of shares in connection with stock option exercise (in shares) | 130 | |||||
Issuance of shares in connection with restricted stock units vesting | $ 2 | (6) | (4) | |||
Issuance of shares in connection with restricted stock units vesting (in shares) | 2,382 | |||||
Share-based compensation | 4,080 | 4,080 | ||||
Issuance of shares in connection with BOD Fees | 6 | 6 | ||||
Unrealized gain (loss) on deferred compensation trust assets | 35 | 35 | ||||
Effect of changes in foreign currencies | 14 | 14 | ||||
Ending balance at Apr. 03, 2021 | $ 53 | 264,503 | (7,146) | (166) | (172,183) | 85,061 |
Ending balance (in shares) at Apr. 03, 2021 | 50,603 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 2,072 | 2,072 | ||||
Issuance of shares in connection with stock option exercise | $ 2 | 2,615 | 2,617 | |||
Issuance of shares in connection with stock option exercise (in shares) | 1,463 | |||||
Share-based compensation | 3,821 | 3,821 | ||||
Issuance of shares in connection with BOD Fees | 6 | 6 | ||||
Issuance of stock awards | 389 | 389 | ||||
Issuance of stock awards (in shares) | 118 | |||||
Unrealized gain (loss) on deferred compensation trust assets | 38 | 38 | ||||
Effect of changes in foreign currencies | 16 | 16 | ||||
Ending balance at Jul. 03, 2021 | $ 55 | 271,334 | (7,146) | (112) | (170,111) | 94,020 |
Ending balance (in shares) at Jul. 03, 2021 | 52,184 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (4,659) | (4,659) | ||||
Issuance of shares in connection with stock option exercise | 451 | 451 | ||||
Issuance of shares in connection with stock option exercise (in shares) | 108 | |||||
Issuance of shares in connection with restricted stock units vesting (in shares) | 109 | |||||
Share-based compensation | 4,364 | 4,364 | ||||
Issuance of shares in connection with BOD Fees | 6 | 6 | ||||
Issuance of stock awards | 233 | 233 | ||||
Issuance of stock awards (in shares) | 14 | |||||
Unrealized gain (loss) on deferred compensation trust assets | (5) | (5) | ||||
Effect of changes in foreign currencies | 60 | 60 | ||||
Ending balance at Oct. 02, 2021 | $ 55 | 276,388 | (7,146) | (57) | (174,770) | 94,470 |
Ending balance (in shares) at Oct. 02, 2021 | 52,415 | |||||
Beginning balance at Jan. 01, 2022 | $ 56 | 282,663 | (7,625) | 274 | (179,800) | 95,568 |
Beginning balance (in shares) at Jan. 01, 2022 | 52,960 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 2,103 | 2,103 | ||||
Issuance of shares in connection with stock option exercise | 792 | 792 | ||||
Issuance of shares in connection with stock option exercise (in shares) | 533 | |||||
Issuance of shares in connection with restricted stock units vesting | $ 1 | (1) | ||||
Issuance of shares in connection with restricted stock units vesting (in shares) | 519 | |||||
Issuance of stock awards to consultants | 81 | 81 | ||||
Issuance of stock awards to consultants (in shares) | 10 | |||||
Share-based compensation | 4,225 | 4,225 | ||||
Issuance of shares in connection with BOD Fees | 6 | 6 | ||||
Issuance of shares in connection with ESPP | 431 | 431 | ||||
Issuance of shares in connection with ESPP (in shares) | 45 | |||||
Officers and directors stock purchase plan | 23 | 23 | ||||
Officers and directors stock purchase plan (in shares) | 3 | |||||
Unrealized gain (loss) on deferred compensation trust assets | (34) | (34) | ||||
Effect of changes in foreign currencies | 20 | 20 | ||||
Ending balance at Apr. 02, 2022 | $ 57 | 288,220 | (7,625) | 260 | (177,697) | 103,215 |
Ending balance (in shares) at Apr. 02, 2022 | 54,070 | |||||
Beginning balance at Jan. 01, 2022 | $ 56 | 282,663 | (7,625) | 274 | (179,800) | $ 95,568 |
Beginning balance (in shares) at Jan. 01, 2022 | 52,960 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of shares in connection with stock option exercise (in shares) | 665 | |||||
Ending balance at Oct. 01, 2022 | $ 57 | 293,450 | (7,625) | 228 | (174,527) | $ 111,583 |
Ending balance (in shares) at Oct. 01, 2022 | 54,558 | |||||
Beginning balance at Apr. 02, 2022 | $ 57 | 288,220 | (7,625) | 260 | (177,697) | 103,215 |
Beginning balance (in shares) at Apr. 02, 2022 | 54,070 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 4,118 | 4,118 | ||||
Issuance of shares in connection with stock option exercise | 136 | 136 | ||||
Issuance of shares in connection with stock option exercise (in shares) | 70 | |||||
Issuance of shares in connection with restricted stock units vesting (in shares) | 220 | |||||
Share-based compensation | 771 | 771 | ||||
Issuance of shares in connection with BOD Fees | 6 | 6 | ||||
Officers and directors stock purchase plan | 4 | 4 | ||||
Unrealized gain (loss) on deferred compensation trust assets | (100) | (100) | ||||
Effect of changes in foreign currencies | 104 | 104 | ||||
Ending balance at Jul. 02, 2022 | $ 57 | 289,137 | (7,625) | 264 | (173,579) | 108,254 |
Ending balance (in shares) at Jul. 02, 2022 | 54,360 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (948) | (948) | ||||
Issuance of shares in connection with stock option exercise | 184 | 184 | ||||
Issuance of shares in connection with stock option exercise (in shares) | 63 | |||||
Issuance of shares in connection with restricted stock units vesting (in shares) | 72 | |||||
Share-based compensation | 3,760 | 3,760 | ||||
Issuance of shares in connection with BOD Fees | 6 | 6 | ||||
Issuance of shares in connection with BOD Fees (in shares) | 1 | |||||
Issuance of shares in connection with ESPP | 363 | 363 | ||||
Issuance of shares in connection with ESPP (in shares) | 62 | |||||
Unrealized gain (loss) on deferred compensation trust assets | (36) | (36) | ||||
Ending balance at Oct. 01, 2022 | $ 57 | $ 293,450 | $ (7,625) | $ 228 | $ (174,527) | $ 111,583 |
Ending balance (in shares) at Oct. 01, 2022 | 54,558 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2022 | Oct. 02, 2021 | |
Operating activities | ||
Net income (loss) | $ 5,273 | $ (5,309) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | 9,671 | 7,123 |
Amortization of intangible assets | 81 | 83 |
Share-based compensation expense | 7,786 | 11,277 |
Stock awards issued for non-employee director service | 17 | 17 |
Stock awards related to officers and directors stock purchase plan from payroll deferral | 27 | |
(Gain) loss from disposition of assets | (41) | 15 |
Amortization of deferred financing costs | 37 | 13 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,624) | (1,737) |
Inventory | (15,900) | (42,453) |
Other current assets | (124) | 1,580 |
Other non-current assets | (745) | 556 |
Accounts payable and accrued expenses | 4,524 | 19,477 |
Other current liabilities | (315) | 266 |
Right-of-use obligation - operating leases - current | 279 | 960 |
Right-of-use obligation - operating leases - long-term | (108) | (331) |
Other non-current liabilities | (136) | 114 |
Net cash provided by (used in) operating activities | 5,702 | (8,349) |
Investing activities | ||
Additions to property and equipment | (10,546) | (8,434) |
Proceeds from sale of property and equipment | 44 | 27 |
Net cash used in investing activities | (10,502) | (8,407) |
Financing activities | ||
Borrowings from revolving loan payable | 10,351 | 105 |
Payments made on revolving loan payable | (5,351) | (105) |
Payments on finance leases | (3,099) | (1,566) |
Net proceeds from issuance of common stock for ESPP | 794 | |
Statutory tax withholding payment for share-based compensation | (3) | |
Proceeds from exercise of stock options | 1,113 | 3,230 |
Net cash provided by financing activities | 3,808 | 1,661 |
Effect of exchange rate changes on cash | (498) | (27) |
Net change in cash and cash equivalents | (1,490) | (15,122) |
Cash and cash equivalents, beginning of period | 18,144 | 35,802 |
Cash and cash equivalents, end of period | 16,654 | 20,680 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Right-of-use operating asset acquired | 4,075 | |
Right-of-use finance asset acquired | 7,889 | 4,257 |
Accrued asset purchases | 859 | 1,727 |
Share-based compensation expense capitalized in property and equipment | 1,051 | 1,610 |
Stock issued for services | 81 | 622 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for income taxes | 175 | 77 |
Cash paid during the period for interest | $ 1,011 | $ 811 |
Basis of Presentation and Descr
Basis of Presentation and Description of Company | 9 Months Ended |
Oct. 01, 2022 | |
Basis of Presentation and Description of Company | |
Basis of Presentation and Description of Company | Note 1 – Basis of Presentation and Description of Company CarParts.com, Inc. (including its subsidiaries) is a leading online provider of aftermarket auto parts and accessories. The Company sells its products primarily to individual consumers through its flagship website located at www.carparts.com www.carparts.com/investor The Company’s products consist of replacement parts serving the wear and tear and body repair market, hard parts to serve the maintenance and repair market, and performance parts and accessories. The replacement parts category is primarily comprised of body parts for the exterior of an automobile as well as certain other mechanical or electrical parts that are not related to the functioning of the engine or drivetrain. Our parts in this category typically replace original body parts that have been damaged as a result of general wear and tear or a collision. In addition, we sell an extensive line of mirror products, including parts from our own house brand called Kool-Vue ® ® ® The Company is a Delaware C corporation and is headquartered in Torrance, California. The Company has employees located in both the United States and the Philippines. Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to U.S. Securities and Exchange Commission (“SEC”) Form 10-Q and Article 10 of SEC Regulation S-X. In the opinion of management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the consolidated financial position of the Company as of October 1, 2022 and the consolidated results of operations and cash flows for the thirteen and thirty-nine weeks ended October 1, 2022 and October 2, 2021. The Company’s results for the interim periods are not necessarily indicative of the results that may be expected for any other interim period, or for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended January 1, 2022, which was filed with the SEC on March 2, 2022 and all our other periodic filings, including Current Reports on Form 8-K, filed with the SEC after the end of our 2021 fiscal year, and throughout the date of this report. Effective July 3, 2022, management reassessed our functional currency determination for our Philippines subsidiary in accordance with ASC 830, Foreign Currency Matters Based on our current operating plan, we believe that our existing cash, cash equivalents, investments, cash flows from operations and available debt financing will be sufficient to finance our operational cash needs through at least the next twelve months. |
Borrowings
Borrowings | 9 Months Ended |
Oct. 01, 2022 | |
Borrowings | |
Borrowings | Note 2 – Borrowings The Company maintains an asset-based revolving credit facility ("Credit Facility") that provides for, among other things, a revolving commitment, which is subject to a borrowing base derived from certain receivables, inventory, and property and equipment. On June 17, 2022, the Company and JPMorgan Chase Bank entered into an Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) amending and restating in its entirety that certain Credit Agreement dated April 26, 2012, as amended through the Fourteenth Amendment (the “Amendment”). The Amendment provides for the revolving commitment in an aggregated principal amount of $75,000 (formerly $30,000) and allows for an uncommitted ability to increase the aggregate principal amount by an additional $75,000 to $150,000 (formerly $40,000 maximum), subject to certain terms and conditions. As of October 1, 2022, our outstanding revolving loan balance was $5,000. The outstanding standby letters of credit balance as of October 1, 2022 was $620, and we had $0 of our trade letters of credit outstanding in accounts payable in our consolidated balance sheet. Loans drawn under the Credit Facility bear interest, at the Company’s option, at a per annum rate equal to either (a) Adjusted Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 1.50% to 2.00% per annum based on the Company's fixed charge coverage ratio, or (b) an “alternate prime base rate” subject to an increase from 0.00% to 0.50% per annum based on the Company’s fixed charge coverage ratio. As of October 1, 2022, the Company’s SOFR based interest rate was 4.70% and the Company’s prime based rate was 6.25%. A commitment fee, based upon undrawn availability under the Credit Facility bearing interest at a rate of either 0.20% or 0.25% per annum based on the amount of undrawn availability, is payable monthly. Under the terms of the Credit Agreement, cash receipts are deposited into a lock-box, which are at the Company’s discretion unless the “cash dominion period” is in effect, during which cash receipts will be used to reduce amounts owing under the Credit Agreement. The cash dominion period is triggered in an event of default or if excess availability is less than $9,000 (12% of the aggregate revolving commitment) for three |
Stockholders' Equity and Share-
Stockholders' Equity and Share-Based Compensation | 9 Months Ended |
Oct. 01, 2022 | |
Stockholders' Equity and Share-Based Compensation | |
Stockholders' Equity and Share-Based Compensation | Note 3 – Stockholders’ Equity and Share-Based Compensation Options and Restricted Stock Units The Company had the following common stock option activity during the thirty-nine weeks ended October 1, 2022: ● Granted options to purchase 0 common shares. ● Exercise of 665 options to purchase common shares. ● Forfeiture of 538 options to purchase common shares. ● Expiration of 15 options to purchase common shares. The following table summarizes the Company’s restricted stock unit ("RSU") activity for the thirty-nine weeks ended October 1, 2022, and details regarding the awards outstanding and exercisable as of October 1, 2022 (in thousands): Weighted Weighted Average Average Grant Date Aggregate Shares Exercise Price Fair Value Intrinsic Value Vested and expected to vest as of January 1, 2022 3,023 $ — Awarded 2,209 $ — Vested (808) $ — Forfeited (1,255) $ — Awards outstanding, October 1, 2022 3,169 $ — $ 10.66 $ 16,382 Vested and expected to vest as of October 1, 2022 3,169 $ — $ 10.66 $ 16,382 During the thirty-nine weeks ended October 1, 2022, 273 RSUs that vested were time-based and 535 were performance-based. For the thirteen and thirty-nine weeks ended October 1, 2022, we recorded compensation costs related to stock options and RSUs of $3,760 and $8,837, respectively, of which $0 and $81 related to common shares issued to consultants as part of their compensation for services provided during those respective periods. For the thirteen and thirty-nine weeks ended October 2, 2021, we recorded compensation costs related to stock options and RSUs of $4,597 and $12,887, respectively, of which $233 and $622, respectively, related to common shares issued to consultants as part of their compensation for services provided during the periods. As of October 1, 2022, there was unrecognized compensation expense related to stock options and RSUs of $24,422 that will be expensed through September 2026. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Oct. 01, 2022 | |
Net Income (Loss) Per Share | |
Net Income (Loss) Per Share | Note 4 – Net (Loss) Income Per Share The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except per share data): Thirteen Weeks Ended Thirty-Nine Weeks Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 Net (loss) income per share: Numerator: Net (loss) income allocable to common shares $ (948) $ (4,659) 5,273 (5,309) Denominator: Weighted-average common shares outstanding (basic) 54,481 52,264 54,009 50,903 Common equivalent shares from common stock options and restricted stock — — 3,274 — Weighted-average common shares outstanding (diluted) 54,481 52,264 57,283 50,903 Basic net (loss) income per share $ (0.02) $ (0.09) $ 0.10 $ (0.10) Diluted net (loss) income per share $ (0.02) $ (0.09) $ 0.09 $ (0.10) Options and RSUs that were antidilutive and not included in the dilutive earnings per share calculation for the thirty-nine weeks ended October 1, 2022 amounted to 1,590. For the thirteen weeks ended October 1, 2022 and October 2, 2021, and the thirty-nine weeks ended October 2, 2021, all outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per share as the effect of including such securities would have been anti-dilutive. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 01, 2022 | |
Income Taxes | |
Income Taxes | Note 5 – Income Taxes The Company is subject to U.S. federal income tax as well as income tax of foreign and state tax jurisdictions. The tax years 2017-2021 remain open to examination by the major taxing jurisdictions to which the Company is subject, except the Internal Revenue Service for which the tax years 2018-2021 remain open. For the thirteen and thirty-nine weeks ended October 1, 2022, the effective tax rate for the Company was (5.5)% and 2.2%, respectively. The effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, income of our Philippines subsidiary that is subject to different tax rates, share-based compensation that is either not deductible for tax purposes or for which the tax deductible amount is different than the financial reporting amount, and a change in the valuation allowance that offset the tax on the current period pre-tax (loss) income. For the thirteen and thirty-nine weeks ended October 2, 2021, the effective tax rate for the Company was (0.8)% and (4.1)%, respectively. The effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, income of our Philippines subsidiary that is subject to different tax rates, share-based compensation that is either not deductible for tax purposes or for which the tax deductible amount is different than the financial reporting amount, and a change in the valuation allowance that offset the tax of the current period pre-tax loss. The Company accounts for income taxes in accordance with ASC Topic 740 - Income Taxes (“ASC 740”). Under the provisions of ASC 740, management is required to evaluate whether a valuation allowance should be established against its deferred tax assets. We currently have a full valuation allowance against our deferred tax assets. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. For the thirty-nine weeks ended October 1, 2022, there was no material change from fiscal year ended January 1, 2022 in the amount of the Company's deferred tax assets that are not considered to be more likely than not to be realized in future years. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 01, 2022 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 6 – Commitments and Contingencies Legal Matters Asbestos . Ordinary course litigation. |
Product Information
Product Information | 9 Months Ended |
Oct. 01, 2022 | |
Product Information | |
Product Information | Note 7 – Product Information As described in Note 1 above, the Company’s products consist of replacement parts serving the wear and tear and body repair market, hard parts to serve the maintenance and repair market, and performance parts and accessories. The following table summarizes the approximate distribution of the Company’s revenue by product type. Thirteen Weeks Ended Thirty-Nine Weeks Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 House Brands Replacement Parts 68 % 67 % 67 % 68 % Hard Parts 18 % 18 % 20 % 18 % Performance 1 % — % 1 % — % Branded Replacement Parts 1 % 1 % 1 % 1 % Hard Parts 7 % 8 % 7 % 8 % Performance 5 % 6 % 4 % 5 % Total 100 % 100 % 100 % 100 % |
Basis of Presentation and Des_2
Basis of Presentation and Description of Company (Policies) | 9 Months Ended |
Oct. 01, 2022 | |
Basis of Presentation and Description of Company | |
Basis of Presentation | Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to U.S. Securities and Exchange Commission (“SEC”) Form 10-Q and Article 10 of SEC Regulation S-X. In the opinion of management, the accompanying consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the consolidated financial position of the Company as of October 1, 2022 and the consolidated results of operations and cash flows for the thirteen and thirty-nine weeks ended October 1, 2022 and October 2, 2021. The Company’s results for the interim periods are not necessarily indicative of the results that may be expected for any other interim period, or for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended January 1, 2022, which was filed with the SEC on March 2, 2022 and all our other periodic filings, including Current Reports on Form 8-K, filed with the SEC after the end of our 2021 fiscal year, and throughout the date of this report. Effective July 3, 2022, management reassessed our functional currency determination for our Philippines subsidiary in accordance with ASC 830, Foreign Currency Matters Based on our current operating plan, we believe that our existing cash, cash equivalents, investments, cash flows from operations and available debt financing will be sufficient to finance our operational cash needs through at least the next twelve months. |
Stockholders' Equity and Shar_2
Stockholders' Equity and Share-Based Compensation (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Stockholders' Equity and Share-Based Compensation | |
Summary of Restricted Stock Unit Activity | The following table summarizes the Company’s restricted stock unit ("RSU") activity for the thirty-nine weeks ended October 1, 2022, and details regarding the awards outstanding and exercisable as of October 1, 2022 (in thousands): Weighted Weighted Average Average Grant Date Aggregate Shares Exercise Price Fair Value Intrinsic Value Vested and expected to vest as of January 1, 2022 3,023 $ — Awarded 2,209 $ — Vested (808) $ — Forfeited (1,255) $ — Awards outstanding, October 1, 2022 3,169 $ — $ 10.66 $ 16,382 Vested and expected to vest as of October 1, 2022 3,169 $ — $ 10.66 $ 16,382 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Net Income (Loss) Per Share | |
Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except per share data): Thirteen Weeks Ended Thirty-Nine Weeks Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 Net (loss) income per share: Numerator: Net (loss) income allocable to common shares $ (948) $ (4,659) 5,273 (5,309) Denominator: Weighted-average common shares outstanding (basic) 54,481 52,264 54,009 50,903 Common equivalent shares from common stock options and restricted stock — — 3,274 — Weighted-average common shares outstanding (diluted) 54,481 52,264 57,283 50,903 Basic net (loss) income per share $ (0.02) $ (0.09) $ 0.10 $ (0.10) Diluted net (loss) income per share $ (0.02) $ (0.09) $ 0.09 $ (0.10) |
Product Information (Tables)
Product Information (Tables) | 9 Months Ended |
Oct. 01, 2022 | |
Product Information | |
Summary of Revenue by Product Type | Thirteen Weeks Ended Thirty-Nine Weeks Ended October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021 House Brands Replacement Parts 68 % 67 % 67 % 68 % Hard Parts 18 % 18 % 20 % 18 % Performance 1 % — % 1 % — % Branded Replacement Parts 1 % 1 % 1 % 1 % Hard Parts 7 % 8 % 7 % 8 % Performance 5 % 6 % 4 % 5 % Total 100 % 100 % 100 % 100 % |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 01, 2022 | Jun. 17, 2022 | Jun. 16, 2022 | |
JP Morgan Chase Bank | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Current borrowing capacity | $ 75,000 | $ 30,000 | |
Maximum borrowing capacity | 150,000 | $ 40,000 | |
Increased aggregate borrowing capacity | $ 75,000 | ||
Revolving loan payable | $ 5,000 | ||
Credit facility trigger amount | $ 9,000 | ||
Credit facility trigger amount as a percent of aggregate revolving commitment (in percent) | 12% | ||
Consecutive business days below minimum excess availability | 3 days | ||
Number of consecutive days excess availability is above required amount | 45 days | ||
Event of default amount | $ 0 | ||
Minimum availability required under availability block | $ 7,500 | ||
Minimum availability required under availability block as a percentage of aggregate revolving commitment (in percent) | 10% | ||
Minimum fixed charge ratio if less than minimum excess availability | 1 | ||
JP Morgan Chase Bank | Revolving Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Unused credit commitment fee (percent) | 0.20% | ||
JP Morgan Chase Bank | Revolving Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Unused credit commitment fee (percent) | 0.25% | ||
JP Morgan Chase Bank | Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 620 | ||
Outstanding letters of credit amount | $ 0 | ||
Base Rate | JP Morgan Chase Bank | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Interest rate (percent) | 6.25% | ||
Prime rate | Revolving Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Applicable margin on the company's fixed charge coverage ratio (percent) | 0.50% | ||
Prime rate | Revolving Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Applicable margin on the company's fixed charge coverage ratio (percent) | 0% | ||
Adjusted Secured Overnight Financing Rate (SOFR) | Revolving Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Applicable margin on the company's fixed charge coverage ratio (percent) | 2% | ||
Adjusted Secured Overnight Financing Rate (SOFR) | Revolving Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Applicable margin on the company's fixed charge coverage ratio (percent) | 1.50% | ||
Adjusted Secured Overnight Financing Rate (SOFR) | JP Morgan Chase Bank | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Interest rate (percent) | 4.70% |
Stockholders' Equity and Shar_3
Stockholders' Equity and Share-Based Compensation - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted (in shares) | 0 | |||
Number of options exercised (in shares) | 665 | |||
Number of stock options forfeited (in shares) | 538 | |||
Number of stock options expired (in shares) | 15 | |||
Time Based RSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested (in shares) | 273 | |||
Performance based RSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested (in shares) | 535 | |||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested (in shares) | 808 | |||
Stock options and Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation costs | $ 3,760 | $ 4,597 | $ 8,837 | $ 12,887 |
Unrecognized compensation expense | 24,422 | 24,422 | ||
Stock options and Restricted stock units | Consultant | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation costs | $ 0 | $ 233 | $ 81 | $ 622 |
Stockholders' Equity and Shar_4
Stockholders' Equity and Share-Based Compensation - Summary of Restricted Stock Unit Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Oct. 01, 2022 USD ($) $ / shares shares | |
Restricted stock units | |
Shares | |
Vested and expected to vest as of January 1, 2022 (in shares) | 3,023 |
Awarded (in shares) | 2,209 |
Vested (in shares) | (808) |
Forfeited (in shares) | (1,255) |
Awards outstanding, July 2, 2022 (in shares) | 3,169 |
Vested and expected to vest as of July 2, 2022 (in shares) | 3,169 |
Weighted Average Exercise Price | |
Awards outstanding, weighted average exercise price, ending balance (in usd per share) | $ / shares | $ 10.66 |
Vested and expected to vest, weighted average exercise price, ending balance (in usd per share) | $ / shares | 10.66 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Awards outstanding, Aggregate Intrinsic Value | $ | $ 16,382 |
Vested and expected to vest, Aggregate Intrinsic Value | $ | $ 16,382 |
Time Based RSU | |
Shares | |
Vested (in shares) | (273) |
Performance based RSU | |
Shares | |
Vested (in shares) | (535) |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | |
Numerator: | ||||
Net income (loss) allocable to common shares | $ (948) | $ (4,659) | $ 5,273 | $ (5,309) |
Denominator: | ||||
Weighted-average common shares outstanding (basic) | 54,481 | 52,264 | 54,009 | 50,903 |
Common equivalent shares from common stock options and restricted stock | 3,274 | |||
Weighted-average common shares outstanding (diluted) | 54,481 | 52,264 | 57,283 | 50,903 |
Basic net (loss) income per share | $ (0.02) | $ (0.09) | $ 0.10 | $ (0.10) |
Diluted net (loss) income per share | $ (0.02) | $ (0.09) | $ 0.09 | $ (0.10) |
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares) | 1,590 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | |
Income Taxes | ||||
Effective tax rate | (5.50%) | (0.80%) | 2.20% | (4.10%) |
Product Information - Summary o
Product Information - Summary of Segment Percentages (Details) - Sales Revenue, Product Line - Product Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2022 | Oct. 02, 2021 | Oct. 01, 2022 | Oct. 02, 2021 | |
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 100% | 100% | 100% | 100% |
House Brands, Replacement parts | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 68% | 67% | 67% | 68% |
House Brands, Hard parts | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 18% | 18% | 20% | 18% |
House Brands, Performance | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 1% | 1% | ||
Branded, Replacement parts | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 1% | 1% | 1% | 1% |
Branded, Hard parts | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 7% | 8% | 7% | 8% |
Branded, Performance | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 5% | 6% | 4% | 5% |