Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 02, 2021 | Mar. 09, 2021 | Jun. 26, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Jan. 2, 2021 | ||
Entity Registrant Name | CARPARTS.COM, INC. | ||
Title of 12(g) Security | Common Stock, $0.001 par value per share | ||
Trading Symbol | PRTS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Interactive Data Current | Yes | ||
Smaller Reporting Company | true | ||
Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 48,092,549 | ||
Entity Public Float | $ 229.9 | ||
Current Fiscal Year End Date | --01-02 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001378950 | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 35,802 | $ 2,273 |
Accounts receivable, net | 6,318 | 2,669 |
Inventory | 89,316 | 52,500 |
Other current assets | 7,939 | 4,931 |
Total current assets | 139,375 | 62,373 |
Property and equipment, net | 14,742 | 9,650 |
Right-of-use - assets - operating leases, net | 17,507 | 4,544 |
Right-of-use - assets - finance leases, net | 12,457 | 9,011 |
Other non-current assets | 2,892 | 2,368 |
Total assets | 186,973 | 87,946 |
Current liabilities: | ||
Accounts payable | 45,302 | 44,433 |
Accrued expenses | 18,190 | 9,519 |
Customer deposits | 630 | 652 |
Notes payable, current | 729 | |
Right-of-use - obligation - operating, current | 2,527 | 1,368 |
Right-of-use - obligation - finance, current | 1,583 | 640 |
Other current liabilities | 3,747 | 2,605 |
Total current liabilities | 71,979 | 59,946 |
Notes payable, non-current | 1,060 | |
Right-of-use - obligation - operating, non-current | 16,046 | 3,419 |
Right-of-use - obligation - finance, non-current | 11,428 | 8,627 |
Other non-current liabilities | 4,031 | 2,514 |
Total liabilities | 103,484 | 75,566 |
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; 0 and 2,771 shares issued and outstanding as of January 2, 2021 and December 28, 2019 | 0 | 3 |
Common stock, $0.001 par value; 100,000 shares authorized; 48,091 and 36,167 shares issued and outstanding as of January 2, 2021 and December 28, 2019 (of which 2,525 are treasury stock) | 51 | 38 |
Treasury stock | (7,146) | (7,146) |
Additional paid-in capital | 260,260 | 187,147 |
Accumulated other comprehensive (loss) income | (215) | 214 |
Accumulated deficit | (169,461) | (167,876) |
Total stockholders’ equity | 83,489 | 12,380 |
Total liabilities and stockholders’ equity | $ 186,973 | $ 87,946 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
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) | 48,091 | 36,167 |
Common stock, shares outstanding (in shares) | 48,091 | 36,167 |
Treasury stock (in shares) | 2,525 | 2,525 |
Series A Convertible Preferred Stock | ||
Series A convertible preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Share liquidation value (in USD per share) | $ 1.45 | $ 1.45 |
Share aggregate value | $ 6,017 | $ 6,017 |
Series A convertible preferred stock, shares authorized (in shares) | 4,150 | 4,150 |
Series A convertible preferred stock, shares issued (in shares) | 0 | 2,771 |
Series A convertible preferred stock, shares outstanding (in shares) | 0 | 2,771 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | ||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE OPERATIONS | |||
Net sales | $ 443,884 | $ 280,657 | |
Cost of sales (1) | [1] | 288,518 | 196,434 |
Gross profit | 155,366 | 84,223 | |
Operating expenses | |||
Operating expense | 155,071 | 92,473 | |
Income (loss) from operations | 295 | (8,250) | |
Other income (expense): | |||
Other, net | 213 | 36 | |
Interest expense | (1,714) | (1,897) | |
Total other expense, net | (1,501) | (1,861) | |
Loss before income taxes | (1,206) | (10,111) | |
Income tax provision | 307 | 21,437 | |
Net loss | (1,513) | (31,548) | |
Other comprehensive (loss) gain: | |||
Foreign currency translation adjustments | (86) | (52) | |
Actuarial loss on defined benefit plan | (400) | (313) | |
Unrealized gain on deferred compensation trust assets | 57 | ||
Total other comprehensive loss | (429) | (365) | |
Comprehensive loss | $ (1,942) | $ (31,913) | |
Net loss per share: | |||
Basic and diluted net loss per share | $ (0.04) | $ (0.89) | |
Weighted-average common shares outstanding: | |||
Shares used in computation of basis and diluted net loss per share | 42,333 | 35,720 | |
[1] | Excludes depreciation and amortization expense which is included in operating expense as described in “Note 1 - Summary of Significant Accounting Policies and Nature of Operations”. |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Preferred StockCumulative Effect Period of Adoption Adjusted Balance | Preferred Stock | Common StockCumulative Effect Period of Adoption Adjusted Balance | Common Stock | Additional Paid-in- CapitalCumulative Effect Period of Adoption Adjusted Balance | Additional Paid-in- Capital | Treasury StockCumulative Effect Period of Adoption Adjusted Balance | Treasury Stock | Accumulated Other Comprehensive Income (Loss)Cumulative Effect Period of Adoption Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Accumulated DeficitCumulative Effect Period of Adoption Adjustment | Accumulated DeficitCumulative Effect Period of Adoption Adjusted Balance | Accumulated Deficit | Cumulative Effect Period of Adoption Adjustment | Cumulative Effect Period of Adoption Adjusted Balance | Total |
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Effect of new accounting adoption | $ 3 | $ 3 | $ 38 | $ 38 | $ 183,139 | $ 183,139 | $ (7,146) | $ (7,146) | $ 579 | $ 579 | $ 1,623 | $ (136,168) | $ (137,791) | $ 1,623 | $ 40,445 | $ 38,822 |
Beginning balance (in shares) at Dec. 29, 2018 | 2,771 | 2,771 | 34,992 | 34,992 | ||||||||||||
Beginning balance at Dec. 29, 2018 | $ 3 | $ 3 | $ 38 | $ 38 | 183,139 | 183,139 | (7,146) | (7,146) | 579 | 579 | 1,623 | (136,168) | (137,791) | 1,623 | 40,445 | 38,822 |
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Effect of new accounting adoption | $ 3 | $ 3 | $ 38 | $ 38 | $ 183,139 | 187,147 | $ (7,146) | (7,146) | $ 579 | 214 | $ 1,623 | $ (136,168) | (167,876) | $ 1,623 | $ 40,445 | 12,380 |
Net loss | (31,548) | (31,548) | ||||||||||||||
Issuance of shares in connection with stock option exercises | 460 | $ 460 | ||||||||||||||
Issuance of shares in connection with stock option exercises (in shares) | 305 | 304 | ||||||||||||||
Issuance of shares in connection with restricted stock units vesting | (302) | $ (302) | ||||||||||||||
Issuance of shares in connection with restricted stock units vesting (in shares) | 795 | |||||||||||||||
Issuance of shares in connection with BOD Fees | 19 | 19 | ||||||||||||||
Issuance of shares in connection with BOD Fees (in shares) | 16 | |||||||||||||||
Share-based compensation | 3,710 | 3,710 | ||||||||||||||
Dividends on preferred stock | 121 | (313) | (160) | (352) | ||||||||||||
Dividends on preferred stock (in shares) | 59 | |||||||||||||||
Effect of changes in foreign currencies | (52) | (52) | ||||||||||||||
Ending balance (in shares) at Dec. 28, 2019 | 2,771 | 36,167 | ||||||||||||||
Ending balance at Dec. 28, 2019 | $ 3 | $ 38 | 187,147 | (7,146) | 214 | (167,876) | 12,380 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Effect of new accounting adoption | 3 | 38 | 187,147 | (7,146) | 214 | (167,876) | 12,380 | |||||||||
Effect of new accounting adoption | 3 | 51 | 260,260 | (7,146) | (215) | (169,461) | 83,489 | |||||||||
Net loss | (1,513) | (1,513) | ||||||||||||||
Issuance of common stock, net of underwriters' offering expenses and commissions | $ 5 | 60,456 | 60,461 | |||||||||||||
Issuance of common stock, net of underwriters' offering expenses and commissions (in shares) | 4,900 | |||||||||||||||
Issuance of shares in connection with stock option exercises | $ 3 | 3,703 | $ 3,706 | |||||||||||||
Issuance of shares in connection with stock option exercises (in shares) | 2,200 | 2,200 | ||||||||||||||
Issuance of shares in connection with restricted stock units vesting | $ 2 | 457 | $ 459 | |||||||||||||
Issuance of shares in connection with restricted stock units vesting (in shares) | 2,000 | |||||||||||||||
Issuance of shares in connection with BOD Fees | 22 | 22 | ||||||||||||||
Issuance of shares in connection with BOD Fees (in shares) | 8 | |||||||||||||||
Share-based compensation | 8,437 | 8,437 | ||||||||||||||
Dividends on preferred stock | 38 | (72) | (34) | |||||||||||||
Dividends on preferred stock (in shares) | 45 | |||||||||||||||
Conversion of preferred stock | $ (3) | $ 3 | ||||||||||||||
Conversion of preferred stock (in shares) | (2,771) | 2,771 | ||||||||||||||
Actuarial loss on defined benefit plan | (400) | (400) | ||||||||||||||
Unrealized gain on investments | 57 | 57 | ||||||||||||||
Effect of changes in foreign currencies | (86) | (86) | ||||||||||||||
Ending balance (in shares) at Jan. 02, 2021 | 48,091 | |||||||||||||||
Ending balance at Jan. 02, 2021 | $ 51 | 260,260 | (7,146) | (215) | (169,461) | 83,489 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Effect of new accounting adoption | $ 51 | $ 260,260 | $ (7,146) | $ (215) | $ (169,461) | $ 83,489 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Operating activities | ||
Net loss | $ (1,513) | $ (31,548) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization expense | 7,657 | 6,252 |
Amortization of intangible assets | 102 | 100 |
Deferred income taxes | 21,287 | |
Share-based compensation expense | 7,778 | 3,656 |
Stock awards issued for non-employee director service | 24 | 19 |
Amortization of deferred financing costs | 18 | 1 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,650) | 1,058 |
Inventory | (36,815) | (2,874) |
Other current assets | (2,983) | (1,527) |
Other non-current assets | (1,056) | 166 |
Accounts payable and accrued expenses | 8,398 | 9,953 |
Other current liabilities | 1,120 | (99) |
Right-of-use obligation - operating leases - current | 1,143 | 1,364 |
Right-of-use obligation - operating leases - long-term | (321) | (1,121) |
Other non-current liabilities | 1,030 | 190 |
Net cash (used in) provided by operating activities | (19,068) | 6,877 |
Investing activities | ||
Additions to property and equipment | (9,657) | (6,160) |
Payment for intangible assets | (101) | |
Net cash used in investing activities | (9,758) | (6,160) |
Financing activities | ||
Borrowings from revolving loan payable | 1,415 | 14,626 |
Payments made on revolving loan payable | (1,415) | (14,626) |
Proceeds from notes payable | 4,107 | 257 |
Payments of notes payable | (5,333) | (130) |
Payments on finance leases | (1,005) | (670) |
Net proceeds from issuance of common stock | 60,461 | |
Statutory tax withholding payment for share-based compensation | (93) | (302) |
Proceeds from exercise of stock options | 4,257 | 460 |
Preferred stock dividends paid | (33) | (80) |
Net cash provided by (used in) financing activities | 62,361 | (465) |
Effect of exchange rate changes on cash | (6) | (10) |
Net change in cash and cash equivalents | 33,529 | 242 |
Cash and cash equivalents, beginning of period | 2,273 | 2,031 |
Cash and cash equivalents, end of period | 35,802 | 2,273 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Right-of-use operating asset acquired | 15,508 | 1,098 |
Right-of-use finance asset acquired | 4,766 | 947 |
Accrued asset purchases | 1,822 | 720 |
Share-based compensation expense capitalized in property and equipment | 659 | 55 |
Fixed asset purchased through note payable | 1,919 | |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for income taxes | 135 | 95 |
Cash paid during the period for interest | $ 1,834 | $ 1,896 |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Nature of Operations | 12 Months Ended |
Jan. 02, 2021 | |
Summary of Significant Accounting Policies and Nature of Operations | |
Summary of Significant Accounting Policies and Nature of Operations | CARPARTS.COM, INC. AND SUBSIDIARIES (In Thousands, Except Per Share Data) Note 1 – Summary of Significant Accounting Policies and Nature of Operations CarParts.com, Inc. (including its subsidiaries) is a leading online provider of aftermarket auto parts and accessories. The Company primarily sells its products to individual consumers through its flagship website located at www.carparts.com and online marketplaces, and offline to wholesale distributors. Our corporate website is located at www.carparts.com/investor . References to the “Company,” “we,” “us,” or “our” refer to CarParts.com, Inc. and its consolidated subsidiaries. The Company’s products consist of replacement parts (formerly referred to as collision) serving the wear and tear and body repair market, hard parts (formerly referred to as engine) 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. The majority of these products are sold through our websites. In addition, we sell an extensive line of mirror products, including one of our own house brands (formerly referred to as private label) called Kool-Vue ® , which are marketed and sold as aftermarket replacement parts and as upgrades to existing parts. The hard parts category is primarily comprised of engine components and other mechanical and electrical parts including one of our house brands of catalytic converters called Evan Fischer ® . These hard parts serve as replacement parts that are generally used by professionals and do-it-yourselfers for engine and mechanical maintenance and repair. We also offer performance versions of many parts sold in each of the above categories. Performance parts and accessories generally consist of parts that enhance the performance of the automobile, upgrade existing functionality of a specific part or improve the physical appearance or comfort of the automobile. 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. Fiscal Year The Company’s fiscal year is based on a 52/53 week fiscal year ending on the Saturday closest to December 31. The fiscal year ended January 2, 2021 (fiscal year 2020) is a 53 week period and December 28, 2019 (fiscal year 2019) is a 52 week period. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation In fiscal year 2020, the Company incurred a net loss of $1,513, compared to net loss of $31,548 in fiscal year 2019. $2 3,015 of the net loss for fiscal year 2019 was related to a valuation allowance recorded on the Company’s deferred tax assets. Based on our current operating plan, we believe that our existing cash, cash equivalents, investments, cash flows from operations and available debt or equity financing will be sufficient to finance our operational cash needs through at least the next twelve months. Prior period operating expense amounts have been classified to conform to the current period presentation of operating expense in the consolidated statements of operations. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Key estimates made by management relate primarily to determining the net realizable value of inventory and the valuation of deferred tax assets and liabilities, in addition to the valuation and assumptions underlying share-based compensation expense. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers all money market funds and short-term investments purchased with original maturities of ninety days or less to be cash equivalents. Fair Value of Financial Instruments Financial instruments that are not measured at fair value include accounts receivable, accounts payable and debt. Refer to “ Note 2 – Fair Value Measurements ” for additional fair value information. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term maturities. Accounts Receivable and Concentration of Credit Risk Accounts receivable are stated net of allowance for doubtful accounts. The allowance for doubtful accounts is determined primarily on the basis of past collection experience and general economic conditions. The Company determines terms and conditions for its customers primarily based on the volume purchased by the customer, customer creditworthiness and past transaction history. Concentrations of credit risk are primarily limited to the offline sales customer base to which the Company’s products are sold, which is related to trade receivables that are approximately 28% of total accounts receivable, net, balance as of the year ended January 2, 2021. The Company does not believe significant concentrations of credit risk exist as a significant portion of the outstanding trade receivables balance is insured by a third-party credit insurance company. Inventory Inventories consist of finished goods available-for-sale and are stated at the lower of cost or net realizable value, determined using the first-in first-out (“FIFO”) method. The Company purchases inventory from suppliers both domestically and internationally, and routinely enters into supply agreements with Asia-Pacific based suppliers in China and Taiwan and also U.S. based suppliers who are primarily drop-ship vendors. The Company believes that its products are generally available from more than one supplier and seeks to maintain multiple sources for its products, both internationally and domestically. The Company primarily purchases products in bulk quantities to take advantage of quantity discounts and to ensure inventory availability. Inventory is reported at the lower of cost or net realizable value. We recognize provisions for obsolete and slow-moving inventory primarily based on judgments about expected disposition of inventory, generally, through sales, or liquidations of obsolete inventory, and expected recoverable values per SKU based on currently available or historical information. Inventory as of January 2, 2021 and December 28, 2019 included items in-transit to our distribution centers, in the amounts of $ 26,542 and $14,502, respectively. Website and Software Development Costs The Company capitalizes certain costs associated with website and software developed for internal use according to ASC 350‑50 - Intangibles – Goodwill and Other – Website Development Costs and ASC 350‑40 Intangibles – Goodwill and Other – Internal-Use Software , when both the preliminary project design and testing stage are completed and management has authorized further funding for the project, which it deems probable of completion and to be used for the function intended. Capitalized costs include amounts directly related to website and software development such as payroll and payroll-related costs for employees who are directly associated with, and who devote time to, the internal-use software project. Capitalization of such costs ceases when the project is substantially complete and ready for its intended use. These amounts are amortized on a straight-line basis over two to three years once the software is placed into service. The Company capitalized website and software development costs of $ 4,769 and $4,907 during fiscal year 2020 and 2019, respectively. As of January 2, 2021 and December 28, 2019, our internally developed website and software costs amounted to $ 22,099 and $24 ,142 , respectively, and the related accumulated amortization amounted to $18,779 and $20,740, respectively. Long-Lived Assets and Intangibles Subject to Amortization The Company accounts for the impairment and disposition of long-lived assets, including intangibles subject to amortization, in accordance with ASC - 360 Property, Plant and Equipment (“ASC 360”) . Management assesses potential impairments whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. An impairment loss will result when the carrying value exceeds the undiscounted cash flows estimated to result from the use and eventual disposition of the asset or asset group. Impairment losses will be recognized in operating results to the extent that the carrying value exceeds the undiscounted future cash flows estimated to result from the use and eventual disposition of the asset or asset group. As of January 2, 2021 the Company’s long-lived assets did not indicate a potential impairment under the provisions of ASC 360, therefore no impairment charges were recorded for fiscal 2020. Deferred Financing Costs Deferred financing costs are being amortized over the life of the loan using the straight-line method as it is not significantly different from the effective interest method. Revenue Recognition The Company recognizes revenue from product sales and shipping revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized when it is shipped to the customer. Return allowances, which reduce product revenue by the Company’s best estimate of expected product returns, are estimated using historical experience. The Company evaluates the criteria of ASC 606 - Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise to provide a specified good or service, the Company is subject to inventory risk before the good or service has been transferred to a customer and the Company has discretion in establishing the price, revenue is recorded at gross. Payments received prior to the delivery of goods to customers are recorded as deferred revenue in customer deposits in the consolidated balance sheets. The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers. Current discount offers, when accepted by the Company’s customers, are treated as a reduction to the purchase price of the related transaction. Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are estimated based on historical amounts and are recorded upon recognizing the related sales. Credits are issued to customers for returned products. Credits for returned products amounted to $24, 396 and $18,436 for fiscal year 2020 and 2019, respectively. No customer accounted for more than 10% of the Company’s net sales. The following table provides an analysis of the allowance for sales returns and the allowance for doubtful accounts (in thousands): Charged to Balance at Revenue, Balance at Beginning Cost or End of of Period Expenses Deductions Period Fifty-Two Weeks Ended January 2, 2021 Allowance for sales returns $ 1,194 $ 24,396 $ (22,977) $ 2,613 Allowance for doubtful accounts 6 — (5) 1 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 Cost of Sales Cost of sales consists of the direct costs associated with procuring parts from suppliers and delivering products to customers. These costs include direct product costs, outbound freight and shipping costs, warehouse supplies and warranty costs, partially offset by purchase discounts. Total freight and shipping expense included in cost of sales for fiscal year 2020 and 2019 was $69 ,925 , and $47,140, respectively. Depreciation and amortization expenses are excluded from cost of sales and included in operating expense. Warranty Costs The Company or the vendors supplying its products provide the Company’s customers limited warranties on certain products that range from 30 days to lifetime. Historically, the Company’s vendors have been the party primarily responsible for warranty claims. Standard product warranties sold separately by the Company are recorded as deferred revenue and recognized ratably over the life of the warranty, ranging from one to five years. The Company also offers extended warranties that are imbedded in the price of selected private label products sold. The product brands that include the extended warranty coverage are offered at three different service levels: (a) a five year unlimited product replacement, (b) a five year one-time product replacement, and (c) a three year one-time product replacement. Warranty costs relating to merchandise sold under warranty not covered by vendors are estimated and recorded as warranty obligations at the time of sale based on each product’s historical return rate and historical warranty cost. The standard and extended warranty obligations are recorded as warranty liabilities and included in other current liabilities in the consolidated balance sheets. For the fiscal year 2020 and 2019, the activity in the aggregate warranty liabilities was as follows (in thousands): January 2, 2021 December 28, 2019 Warranty liabilities, beginning of period $ 1,412 $ 1,420 Additions to warranty liabilities 445 690 Reductions to warranty liabilities (723) (698) Warranty liabilities, end of period $ 1,134 $ 1,412 Operating Expense Operating expense consists of marketing, general and administrative, fulfillment, and technology expense. The Company also includes share-based compensation expense in the applicable operating expense category based on the respective equity award recipient’s function. Marketing costs, including advertising, are expensed as incurred. The majority of advertising expense is paid to internet search engine service providers, television advertising, and internet commerce facilitators. For fiscal year 2020 and 2019, the Company recognized advertising costs of $54,588 and $25,691, respectively. Marketing expense also includes payroll and related expenses associated with our customer service and marketing personnel. General and administrative expense consists primarily of administrative payroll and related expenses, merchant processing fees, legal and professional fees and other administrative costs. Fulfillment expense consists primarily of payroll and related costs associated with warehouse employees and the Company’s purchasing group, facilities rent, building maintenance, depreciation and other costs associated with inventory management and wholesale operations. Technology expense consists primarily of payroll and related expenses of the Company’s information technology personnel, the cost of hosting the Company’s servers, communications expenses and internet connectivity costs, computer support and software development amortization expense. Marketing expense, general and administrative expense, and fulfillment expense also includes depreciation and amortization expense. Share-Based Compensation The Company accounts for share-based compensation in accordance with ASC 718 - Compensation – Stock Compensation (“ASC 718”). All share-based payment awards issued to employees are recognized as share-based compensation expense in the statements of operations based on their respective grant date fair values. Compensation expense for service-based restricted stock units is based on the closing stock price of our common stock on the date of grant, and is recognized on a straight-line basis over the requisite service period. Compensation expense for performance-based awards is measured based on the amount of shares ultimately expected to vest, estimated at each reporting date based on management’s expectations regarding the relevant performance criteria. Compensation expense for stock options is based on the fair value estimated on the date of grant using an option pricing model, and is recognized over the vesting period of three to four years. The Company currently uses the Black-Scholes option pricing model to estimate the fair value of share-based payment awards for such stock options, which is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. Expected volatility is based on the historical volatility of the Company’s stock price for a period approximating the expected life. The expected life of an award is based on combining historical exercise data with expected weighted time outstanding. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues for the expected life of awards. The expected dividend yield assumption is based on the Company’s expectation of paying no dividends on its common stock. The Company accounts for equity awards to non-employees in accordance with ASC 505‑50, Equity-Based Payments to Non-Employees, which requires the fair value of an award to non-employees be remeasured at fair value as the award vests. Under ASC 718, we recognize forfeitures as they occur. Other Income, net Other income, net consists of miscellaneous income or expense and interest income comprised primarily of interest income on investments. Interest Expense Interest expense consists primarily of interest expense on our revolving loan and letters of credit balances, deferred financing cost amortization, and finance lease interest. Income Taxes The Company accounts for income taxes in accordance with ASC 740 - Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. When appropriate, a valuation allowance is established to reduce deferred tax assets, which include tax credits and loss carry forwards, to the amount that is more likely than not to be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in prior carryback years, tax planning strategies and recent financial operations. The Company utilizes a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely to be realized upon ultimate settlement. The Company considers many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. As of January 2, 2021, the Company had no material unrecognized tax benefits, interest or penalties related to federal and state income tax matters. The Company’s policy is to record interest and penalties as income tax expense. Taxes Collected from Customers and Remitted to Governmental Authorities We present taxes collected from customers and remitted to governmental authorities on a net basis in accordance with the guidance on ASC 606‑10‑32‑2 - Taxes Collected from Customers and Remitted to Governmental Authorities. Leases On January 1, 2019, the Company adopted ASC 842 – Leases (“ASC 842”), which requires lessees to record right-of-use assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements. The Company adopted the standard by applying the modified retrospective method without the restatement of comparative periods. Adoption of the standard resulted in the recognition of $1,623 to the opening balance of retained earnings as of the adoption date and the recognition of ROU assets and related lease obligations as of January 1, 2019. The standard did not have a significant impact on the Company's operating results or cash flows. The Company elected the package of practical expedients, which permits a lessee to not reassess under the new standard its prior conclusions regarding lease identification, lease classification and initial direct costs. The Company did not elect the practical expedient which permits the use of hindsight when determining the lease term and assessing right-of-use assets for impairment. As permitted by the transition guidance, the Company used the remaining lease term as of the date of adoption of the standard to estimate discount rates. As permitted by the standard, the Company elected, for all asset classes, the short-term lease exemption. A short-term lease is a lease that, at the commencement date, has a term of twelve months or less and does not include an option to purchase the underlying asset. The Company determines if an arrangement contains a lease at inception. The Company elected the practical expedient, for all asset classes, to account for each lease component of a contract and its associated non-lease components as a single lease component, rather than allocating a standalone value to each component of a lease. For purposes of calculating operating lease obligations under the standard, the Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company's leases do not contain material residual value guarantees or material restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease terms. The discount rate used to measure a lease obligation should be the rate implicit in the lease; however, the Company’s operating leases generally do not provide an implicit rate. Accordingly, the Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate is an entity-specific rate which represents the rate of interest a lessee would pay to borrow on a collateralized basis over a similar term with similar payments. Foreign Currency Translation For each the Company’s foreign subsidiaries, the functional currency is its local currency. Assets and liabilities of foreign operations are translated into U.S. dollars using the current exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates. The effects of the foreign currency translation adjustments are included as a component of accumulated other comprehensive (loss) income in the Company’s consolidated balance sheets. Comprehensive Loss The Company reports comprehensive loss in accordance with ASC 220 - Comprehensive Income (“ASC 220”). Accumulated other comprehensive (loss) income , included in the Company’s consolidated balance sheets, includes foreign currency translation adjustments related to the Company’s foreign operations, unrealized gain on deferred compensation trust assets, and actuarial loss on the Company’s defined benefit plan in the Philippines. The Company presents the components of net loss and other comprehensive loss in its consolidated statements of comprehensive operations. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU’) No. 2018-15, “Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40)” (“ASU 2018-15”). The objective of this update is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted the standard on December 29, 2019 and the adoption did not have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and other subsequent amendments including ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , collectively referred to as (“ASC 326”), which provides a new impairment model that require measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to accounts receivable, contract assets, available for sale securities and certain financial guarantees. The Company adopted the standard on December 29, 2019 and the adoption did not have a material impact on the consolidated financial statements. Recently Early Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes. The update is intended to simplify the current rules regarding the accounting for income taxes and addresses several technical topics including accounting for franchise taxes, allocating income taxes between a loss in continuing operations and in other categories such as discontinued operations, reporting income taxes for legal entities that are not subject to income taxes, and interim accounting for enacted changes in tax laws. The new standard is effective for fiscal years beginning after December 15, 2020; however, early adoption is permitted. The Company early adopted the standard on December 29, 2019 and the adoption did not have a material impact on the consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 02, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | Note 2 – Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Provisions of ASC 820 establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1 – Observable inputs such as quoted prices in active markets; Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 – Unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions. Financial Assets Valued on a Recurring Basis As of January 2, 2021 and December 28, 2019, the Company held certain assets that are required to be measured at fair value on a recurring basis. These included the Company’s cash and cash equivalents which consist primarily of money market funds and short-term investments with original maturity dates of three months or less at the date of purchase. The Company determines fair value of these assets through quoted market prices and as such they are considered Level 1 assets. Level 1 cash and cash equivalents were valued at $35,802 and $2,273 as of January 2, 2021 and December 28, 2019, respectively. During fiscal year 2020 and 2019 there were no transfers into or out of Level 1 and Level 2 assets. Non-Financial Assets Valued on a Non-Recurring Basis The Company’s long-lived assets, including intangible assets subject to amortization, are measured at fair value on a non-recurring basis. These assets are measured at cost but are written-down to fair value, if necessary, as a result of impairment. As of January 2, 2021 the Company determined long-lived assets, including intangible assets, were not impaired, as such, they were not measured at fair value. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Jan. 02, 2021 | |
Property and Equipment, Net | |
Property and Equipment, Net | Note 3 – Property and Equipment, Net The Company’s property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense for fiscal year 2020 and 2019 was $ 7,657 and $6,252, respectively. The cost and related accumulated depreciation of assets retired or otherwise disposed of are removed from the accounts and the resultant gain or loss is reflected in earnings. Repairs and maintenance are expensed as incurred. Property and equipment consisted of the following as of January 2, 2021 and December 28, 2019: January 2, 2021 December 28, 2019 Machinery and equipment 11,547 12,766 Computer software (purchased and developed) and equipment 23,225 28,437 Vehicles 190 95 Leasehold improvements 1,515 1,161 Furniture and fixtures 297 744 Construction in process 5,780 3,091 42,554 46,294 Less accumulated depreciation and amortization (27,812) (36,644) Property and equipment, net $ 14,742 $ 9,650 Construction in process primarily relates to the Company’s internally developed software. Depreciation and amortization of property and equipment is calculated by using the straight-line method for financial reporting purposes, at rates based on the following estimated useful lives: 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 * Refer to “ Note 8 - Commitments and Contingencies ” for additional lease information. |
Borrowings
Borrowings | 12 Months Ended |
Jan. 02, 2021 | |
Borrowings | |
Borrowings | Note 4 – Borrowings The Company maintains an asset-based revolving credit facility that provides for, among other things a revolving commitment in an aggregate principal amount of up to $30,000, which is subject to a borrowing base derived from certain receivables, inventory and property and equipment. Our Credit Facility also provides for an option to increase the aggregate principal amount from $30,000 to $40,000 subject to lender approval. As of January 2, 2021, the Company’s outstanding revolving loan balance was $0. On December 18, 2019, the Company and JPMorgan Chase Bank, N.A. (“JPMorgan”) entered into the Eleventh Amendment (the “Amendment”) which amended the Credit Agreement previously entered into by the Company, certain of its domestic subsidiaries and JPMorgan on April 26, 2012 (as amended, the “Credit Agreement”) and the Pledge and Security Agreement previously entered into by the Company, certain of its domestic subsidiaries and JPMorgan on April 26, 2012. Pursuant to the Amendment, among other changes, the maturity date of the Credit Agreement was extended from April 26, 2020 to December 16, 2022, the net orderly liquidation value inventory advance rate was increased from 90% to 95% for a six-month period following the effective date of the Amendment, and the Company’s $5,000 basket for sales and dispositions of property in connection with Permitted Acquisitions (as defined in the Credit Agreement) was made available in full following the effective date of the Amendment. On January 17, 2020, the Company and JPMorgan entered into the Twelfth Amendment to Credit Agreement and Fifth Amendment to Pledge and Security Agreement (the “Twelfth Amendment”). Pursuant to the Twelfth Amendment, letters of credit will be made available to the Company, subject to certain customary restrictions and conditions, in an aggregate amount not to exceed $25,000, an increase from $20,000. Loans drawn under the Credit Facility bear interest, at the Company’s option, at a per annum rate equal to either (a) LIBOR plus an applicable margin of 1.25% to 1.75% per annum based on the Company’s fixed charge coverage ratio, or (b) a “an alternate prime base rate” subject to a reduction by 0.25% to 0.75% per annum based on the Company’s fixed charge coverage ratio. As of January 2, 2021, the Company’s LIBOR based interest rate was 1.44% (on $0 principal) and the Company’s prime based rate was 3.00% (on $0 principal). A commitment fee, based upon undrawn availability under the Credit Facility bearing interest at a rate of 0.25% per annum, is payable monthly. Under the terms of the terms of the agreement with JPMorgan, 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 the $3,600 for three consecutive business days, and will continue until, during the preceding 45 consecutive days, no event of default existed and excess availability has been greater than $3,600 at all times (with the trigger subject to adjustment based on the Company’s revolving commitment). The Company’s required excess availability related to the “Covenant Testing Trigger Period” (as defined under the Credit Agreement) under the revolving commitment under the Credit Agreement is less than $3,000 for the period commencing on any day that excess availability is less than $3,000 for three consecutive business days, and continuing until excess availability has been greater than or equal to $ 3,000 at all times for 45 consecutive days (with the trigger subject to adjustment based on the Company’s revolving commitment). As of January 2, 2021, our outstanding standby letters of credit balance was $1,550, and we had $0 of our trade letters of credit outstanding in accounts payable in our consolidated balance sheet. Certain of the Company’s domestic subsidiaries are co-borrowers (together with the Company, the “Borrowers”) under the Credit Agreement, and certain other domestic subsidiaries are guarantors (the “Guarantors” and, together with the Borrowers, the “Loan Parties”) under the Credit Agreement. The Borrowers and the Guarantors are jointly and severally liable for the Borrowers’ obligations under the Credit Agreement. The Loan Parties’ obligations under the Credit Agreement are secured, subject to customary permitted liens and certain exclusions, by a perfected security interest in (a) all tangible and intangible assets and (b) all of the capital stock owned by the Loan Parties (limited, in the case of foreign subsidiaries, to 65% of the capital stock of such foreign subsidiaries). The Borrowers may voluntarily prepay the loans at any time. The Borrowers are required to make mandatory prepayments of the loans (without payment of a premium) with net cash proceeds received upon the occurrence of certain “prepayment events,” which include certain sales or other dispositions of collateral, certain casualty or condemnation events, certain equity issuances or capital contributions, and the incurrence of certain debt. The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on indebtedness, liens, fundamental changes, investments, dispositions, prepayment of other indebtedness, mergers, and dividends and other distributions. The Credit Agreement requires us to obtain a prior written consent from JPMorgan when we determine to pay any dividends on or make any distribution with respect to our common stock. The credit facility matures on December 16, 2022. Events of default under the Credit Agreement include: failure to timely make payments due under the Credit Agreement; material misrepresentations or misstatements under the Credit Agreement and other related agreements; failure to comply with covenants under the Credit Agreement and other related agreements; certain defaults in respect of other material indebtedness; insolvency or other related events; certain defaulted judgments; certain ERISA-related events; certain security interests or liens under the loan documents cease to be, or are challenged by the Company or any of its subsidiaries as not being, in full force and effect; any loan document or any material provision of the same ceases to be in full force and effect; and certain criminal indictments or convictions of any Loan Party. Under the Twelfth Amendment, if JPMorgan determines that LIBOR is unavailable or that the syndicated loan market is using a different standard, it can at its discretion amend the loan agreement to utilize a different rate. The new rate may be the facility’s existing ABR rate or a new SOFR-based rate, and will incorporate a spread determined by market conditions and agreement between JPMorgan and the Company. On August 8, 2019, the Company entered into a financing arrangement with a third-party financial institution related to the development of the Company’s third warehouse which is located in Las Vegas, Nevada. The financing arrangement matures in April 2022 and has an effective interest rate of approximately 7.70% per annum. The Company paid off the outstanding notes payable balance during fiscal year 2020 and as of January 2, 2021, the total outstanding balance was $0. As of December 28, 2019, the total outstanding balance of the note payable was $1,790, of which $729 is recorded as current liability and $1,060 is recorded as non-current liability in the consolidated balance sheet. |
Stockholders' Equity and Share-
Stockholders' Equity and Share-Based Compensation | 12 Months Ended |
Jan. 02, 2021 | |
Stockholders' Equity and Share-Based Compensation | |
Stockholders' Equity and Share-Based Compensation | Note 5 – Stockholders’ Equity and Share-Based Compensation Public Equity Offering On August 18, 2020, the Company completed an underwritten public equity offering of 4,000 shares of its common stock at a public offering price of $13.00 per share, resulting in net proceeds of $48,831 after deducting underwriters’ offering expenses and commissions. As part of the public equity offering, the Company granted the underwriters a 30-day option to purchase up to 900 shares of its common stock at the public offering price. The underwriters subsequently exercised their option in full within 30 days to purchase 900 shares of the Company’s common stock resulting in additional net proceeds of $11,700. The Company intends to use the net proceeds from the public equity offering for working capital and other general corporate purposes. Series A Convertible Preferred Stock On March 25, 2013, the Company authorized the issuance of 4,150 shares of Series A Preferred and entered into a Securities Purchase Agreement pursuant to which the Company agreed to sell up to an aggregate of 4,150 shares of our Series A Preferred, $0.001 par value per share at a purchase price per share of $1.45 for aggregate proceeds to the Company of approximately $6,017. On March 25, 2013, the Company sold 4,000 shares of Series A Preferred for aggregate proceeds of $5,800. On April 5, 2013, the Company sold the remaining 150 shares of Series A Preferred for aggregate proceeds of $217. The Company incurred issuance costs of $847 and used the net proceeds from the sale of the Series A Preferred to reduce its revolving loan payable. Dividends on the Series A Preferred are payable quarterly at a rate of $0.058 per share per annum in cash, in shares of common stock or in any combination of cash and common stock as determined by the Company’s Board of Directors. Certain conditions are required to be satisfied in order for the Company to pay dividends on the Series A Preferred in shares of common stock, including (i) the common stock being registered pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934, as amended, (ii) the common stock being issued having been approved for listing on a trading market and (iii) the common stock being issued either being covered by an effective registration statement or being freely tradable without restriction under Rule 144 (subject to certain exceptions). The Series A Preferred shall each be entitled to one vote per share for each share of common stock issuable upon conversion thereof (excluding from any such calculation any dividends accrued on such shares) and shall vote together with the holders of common stock as a single class on any matter on which the holders of common stock are entitled to vote. Concurrent with the Company’s issuance of Series A Preferred, the Company, certain of its domestic subsidiaries and JPMorgan entered into a Second Amended Credit Agreement to allow the Company to pay cash dividends on the Series A Preferred in an aggregate amount of up to $400 per year and pay cash in lieu of issuing fractional shares upon conversion of or in payment of dividends on the Series A Preferred. For the fiscal year ended January 2, 2021, the Company recorded dividends of $7 1 . The Company issued 45 shares of common stock in payment of the fiscal year 2020 dividends. There were $0 dividends accrued as of January 2, 2021. For the fiscal year ended December 28, 2019, the Company recorded dividends of $16 0 . The Company issued 59 shares of common stock in payment of the fiscal year 2019 dividends. There were $41 dividends accrued as of December 28, 2019. Each share of Series A Preferred is convertible into shares of our common stock at the initial conversion rate of one share of common stock for each share of Series A Preferred. On June 19, 2020, each outstanding share of Series A Preferred automatically converted to one share of the Company’s common stock. This automatic conversion was required pursuant to Section 4 of the Series A Preferred Stock purchase agreement (dated March 25, 2013) because the volume weighted average price for the common stock price was equal to, or exceeded, $4.35 for 30 consecutive trading days. The Company issued an aggregate of 2,620,687 shares of common stock in connection with the automatic conversion. Because of this automatic conversion, 0 shares of Series A Preferred shares were outstanding as of January 2, 2021. Share-Based Compensation Plan Information The Company adopted the 2016 Equity Incentive Plan ("2016 Equity Plan") on March 9, 2016, which became effective on May 31, 2016, following stockholder approval. Subject to adjustment for certain changes in the Company’s capitalization, the aggregate number of shares of the Company’s common stock that may be issued under the 2016 Equity Plan will not exceed the sum of (i) two million five hundred thousand (2,500) new shares, (ii) the number of unallocated shares remaining available for the grant of new awards under the Company’s prior equity plans described below (the “Prior Equity Plans”) as of the effective date of the 2016 Plan (which was equal to 3,894 shares as of May 31, 2016) and (iii) any shares subject to a stock award under the Prior Equity Plans that are not issued because such stock award expires or otherwise terminates without all of the shares covered by such stock award having been issued, that are not issued because such stock award is settled in cash, that are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares, or that are reacquired, withheld (or not issued) to satisfy a tax withholding obligation in connection with an award or to satisfy the purchase price or exercise price of a stock award. In addition, the share reserve will automatically increase on January 1st of each year, for a period of nine years, commencing on January 1, 2017 and ending on (and including) January 1, 2026, in an amount equal to one million five hundred thousand (1,500) shares per year; however the Board of Directors of the Company may act prior to January 1st of a given year to provide that there will be no January 1st increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of common stock than would otherwise occur pursuant the automatic increase. Options granted under the 2016 Equity Plan generally expire no later than ten years from the date of grant and generally vest over a period of four years. The exercise price of all option grants must be equal to 100% of the fair market value on the date of grant. As of January 2, 2021, 1,399 shares were available for future grants under the 2016 Equity Plan. The following tables summarizes the Company’s stock option activity for the fiscal years ended, and details regarding the options outstanding and exercisable as of January 2, 2021 and December 28, 2019: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (in years) Value (1) Options outstanding, December 28, 2019 7,223 $ 2.76 Granted 2,558 $ 3.21 Exercised (2,200) $ 1.94 Cancelled: Forfeited (73) $ 4.82 Expired (576) $ 3.69 Options outstanding, January 2, 2021 6,932 $ 2.09 8.10 $ 71,404 Vested and expected to vest at January 2, 2021 6,932 $ 2.09 8.10 $ 71,404 Options exercisable, January 2, 2021 2,591 $ 1.73 7.04 $ 27,630 Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (in years) Value (1) Options outstanding, December 29, 2018 6,067 $ 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 (1) These amounts represent the difference between the exercise price and the closing price of CarParts.com, Inc. common stock at the end of the respective fiscal year as reported on the NASDAQ Stock Market, for all options outstanding that have an exercise price currently below the closing price. The weighted-average fair value of options granted during fiscal year 2020 and 2019 was $1. 67 and $0.63, respectively. The intrinsic value of stock options at the date of the exercise is the difference between the fair value of the stock at the date of exercise and the exercise price. During fiscal year 2020 and 2019, the total intrinsic value of the exercised options was $1 2,563 and $96, respectively. The Company had $ 4,193 of unrecognized share-based compensation expense related to stock options outstanding as of January 2, 2021, which expense is expected to be recognized over a weighted-average period of 2.90 years. Options exercised under all share-based compensation plans are granted net of the minimum statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. For those employees who do not receive shares net of the minimum statutory withholding requirements, the appropriate taxes are paid directly by the employee. During fiscal year 2020 and 2019, we withheld 0 shares to satisfy $0 of employees’ tax obligations related to the net settlement of the stock options. Restricted Stock Units During 2020 and 2019 the Company granted an aggregate of 3,566 and 1,867 RSUs, respectively, to certain employees of the Company. The restricted stock units ("RSUs") were granted under the 2016 Equity Incentive Plan and reduced the pool of equity instruments available under that plan. The vesting of each RSU is subject to the employee’s continued employment through applicable vesting dates. Some RSUs granted to certain executives may vest on an accelerated basis in part or in full upon the occurrence of certain events. The RSUs are accounted for as equity awards and are measured at fair value based upon the grant date price of the Company’s common stock. The closing price of the Company’s common stock on each grant date during 2020 ranged from $0.91 to $16.45. The closing price of the Company’s common stock on each grant during 2019 ranged from $0.97 to $2.41. Compensation expense is recognized on a straight-line basis over the requisite service period of one-to-three years. Compensation expense for performance-based RSUs (“PSUs”) is measured based on the amount of shares ultimately expected to vest, estimated at each reporting date based on management’s expectations regarding the relevant performance criteria. During 2020 there were 155 RSUs granted that were time-based and 3,411 granted that were performance-based. As of January 2, 2021, the performance criteria established to trigger vesting of PSUs was met, but still subject to certification by the Compensation Committee. During 2019 there were 315 RSUs granted that were time-based and 1,552 granted that were performance-based. As of December 28, 2019, the performance criteria established to trigger vesting of the PSU’s granted in 2019 was met, but still subject to certification by the Compensation Committee. For the fiscal year ended January 2, 2021, we recorded compensation expense of $6,095 related to RSU’s. As of January 2, 2021, there was unrecognized compensation expense of $ 2,275 related to unvested RSUs based on awards that are expected to vest. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 1.50 years. Share-Based Compensation Expense The fair value of each option grant, excluding those options issued from the stock option exchange program as discussed above, was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions for each of the periods ended: Fiscal Year Ended January 2, 2021 December 28, 2019 Expected life 5.37 - 5.69 years 5.65 - 5.74 years Risk-free interest rate 0.3% - 1.7% 1.5% - 2.5% Expected volatility 55.1% - 63.5% 54.2% - 58.3% Expected dividend yield —% —% For the fiscal year 2020 and 2019, the Company recorded share-based compensation expense related to stock options and RSUs of $7,778 and $3,656, respectively. The share-based compensation expense is net of amounts capitalized to internally-developed software of $ 659 and $ 55 during the fiscal year 2020 and 2019, respectively. No tax benefit was recognized for fiscal year 2020 and 2019 due to the valuation allowance position. Under ASC 718, we recognize forfeitures as they occur. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Jan. 02, 2021 | |
Net Loss Per Share | |
Net Loss Per Share | Note 6 – Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share: Fiscal Year Ended January 2, 2021 December 28, 2019 Net loss per share: Numerator: Net loss $ (1,513) $ (31,548) Dividends on Series A Convertible Preferred Stock (71) (161) Net loss allocable to common shares $ (1,584) $ (31,709) Denominator: Weighted-average common shares outstanding (basic and diluted) 42,333 35,720 Basic and diluted net loss per share $ (0.04) $ (0.89) The anti-dilutive securities, which are excluded from the calculation of diluted earnings per share due to their anti-dilutive effect are as follows (in thousands): Fiscal Year Ended January 2, 2021 December 28, 2019 Performance stock units — 1 Restricted stock units 42 43 Series A Convertible Preferred Stock (a) 1,251 2,771 Options to purchase common stock 166 6,532 Total 1,459 9,347 (a) On June 19, 2020, each outstanding share of the Series A Convertible Preferred Stock (“Preferred Stock”) automatically converted to one share of the Company’s common stock. This automatic conversion was required pursuant to Section 4 of the Preferred Stock purchase agreement (dated March 25, 2013) because the volume weighted average price for the common stock price was equal to, or exceeded, $4.35 for 30 consecutive trading days. The Company issued an aggregate of 2,620,687 shares of common stock in connection with the automatic conversion. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 02, 2021 | |
Income Taxes | |
Income Taxes | Note 7 – Income Taxes The components of loss from operations before income tax provision consist of the following: Fiscal Year Ended January 2, 2021 December 28, 2019 Domestic operations $ (1,738) $ (10,618) Foreign operations 532 507 Total loss before income taxes $ (1,206) $ (10,111) Income tax provision for fiscal year 2020 and 2019 consists of the following: Fiscal Year Ended January 2, 2021 December 28, 2019 Current: Federal tax $ 50 $ — State tax 80 6 Foreign tax 177 144 Total current taxes 307 150 Deferred: Federal tax (453) (1,311) State tax (225) (417) Total deferred taxes (678) (1,728) Valuation allowance 678 23,015 Income tax provision $ 307 $ 21,437 Income tax provision differs from the amount that would result from applying the federal statutory rate as follows: January 2, 2021 December 28, 2019 Income tax at U.S. federal statutory rate $ (253) $ (2,123) Tax attributes written off 50 — Share-based compensation (318) 729 State income tax, net of federal tax effect (115) (325) Foreign tax 144 106 Other 121 35 Change in valuation allowance 678 23,015 Effective tax provision $ 307 $ 21,437 For fiscal year 2020 and 2019, the effective tax rate for the Company was (25.4)% and (212.0)%, respectively. The Company’s effective tax rate for fiscal year 2020 and 2019 differs from the U.S. federal rate primarily as a result of non-deductible share-based compensation, the write-off of expired state net operating loss carryforwards, and the change in the valuation allowance maintained against the Company’s deferred tax assets. Deferred tax assets and deferred tax liabilities consisted of the following: January 2, 2021 December 28, 2019 Deferred tax assets: Inventory and inventory related allowance $ 1,082 $ 529 Lease liabilities 7,311 3,663 Share-based compensation 2,102 1,836 Book over tax depreciation 468 — Intangibles 660 1,577 Sales and bad debt allowances 1,044 712 Accrued compensation 436 200 Net operating loss 24,131 25,322 Other 186 1 Total deferred tax assets 37,420 33,840 Valuation allowance (30,516) (29,731) Net deferred tax assets 6,904 4,109 Deferred tax liabilities: Right-of-use assets 6,879 3,572 Tax over book depreciation — 489 Other 25 48 Total deferred tax liabilities 6,904 4,109 Net deferred tax assets $ — $ — As of January 2, 2021, federal and state net operating loss (“NOL”) carryforwards were $83,386 and $76,120, respectively. Federal NOL carryforwards of $1,295 were acquired in the acquisition of WAG which are subject to Internal Revenue Code section 382 and limited to an annual usage limitation of $135. Federal NOL carryforwards begin to expire in 2029. The state NOL carryforwards expire in the respective tax years as follows: 2021 $ 5,345 2022 975 2023 3,013 2024 2,370 2025 3,281 Thereafter 61,136 $ 76,120 Under the provisions of ASC 740, management is required to evaluate whether a valuation allowance should be established against its deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. Realization of deferred tax assets is dependent upon taxable income in prior carryback years, estimates of future taxable income, tax planning strategies, and reversal of existing taxable temporary differences. ASC 740 provides that forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years or losses expected in early future years. As of January 2, 2021, mainly due to cumulative losses in recent years, the Company maintained a valuation allowance in the amount of $30,516 against deferred tax assets that were not more likely than not of being realized. We are subject to U.S. federal income tax as well as income tax of foreign and state tax jurisdictions. The tax years 2016‑2020 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 2017‑2020 remain open. The Company does not anticipate a significant change to the amount of unrecognized tax benefits within the next twelve months. Included in accrued expenses are income taxes payable of $ 119 and $33 as of January 2, 2021 and December 28, 2019, respectively, consisting primarily of current state and foreign taxes. Included in other non-current liabilities are income taxes payable of $ 702 and $662 as of January 2, 2021 and December 28, 2019, respectively, relating to accrued future foreign withholding taxes. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act contains numerous income tax provisions, such as relaxing limitations on the deductibility of interest and the use of net operating losses arising in taxable years beginning after December 31, 2017. Due to the existence of previously incurred losses, the NOL carryback provisions of the CARES Act did not result in a cash benefit to the Company, however, we do anticipate increased interest expense deductions for tax purposes in 2020 and 2021 as a result of the relaxation of the limitations on the deductibility of interest. On December 27, 2020, the Consolidated Appropriations Act (“CAA”) was enacted in further response to the COVID-19 pandemic, in combination with omnibus spending for the 2021 federal fiscal year. The CAA extended many of the provisions enacted by the CARES Act, the extension of which likewise did not have a material impact on the Company’s consolidated financial statements for the fiscal year ended January 2, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 02, 2021 | |
Commitments and Contingencies Disclosure | |
Commitments and Contingencies | Note 8 – Commitments and Contingencies Facilities Leases The Company moved the corporate headquarters from Carson, California to Torrance, California in April 2020 and entered into the new office space lease on April 13, 2020. The lease between the Company and Preylock Gramercy, LLC is for approximately 25,200 square feet. The initial seventy-month lease term is set to expire in March of 2026. The Company is obligated to pay approximately $73 in monthly base rent (rent abatement for five months in the first two years), which shall increase by 3% each year beginning on the second-year anniversary of the lease term. In accordance with ASU 842 – Leases (“ASC 842”), the Company recorded $4,338 in Right-of-use assets – operating, non-current, and $3,916 in Right-of-use obligation – operating, non-current, with $422 recorded in Right-of-use obligation – operating, current, on the consolidated balance sheet at the commencement of the lease. The Company is also obligated to pay certain operating expenses set forth in the lease. The Company also leases warehouse space in LaSalle, Illinois, Chesapeake, Virginia, Las Vegas, Nevada, and Grand Prairie, Texas, in addition to leasing office space for the Philippines subsidiary. On March 15, 2020, the Company entered into a lease for new office space for its Philippines subsidiary. The lease between the Company and Mendrez Reality Development Corporation is for approximately 15,800 square feet. The initial ten-year lease term is set to expire in March of 2030. The Company is obligated to pay approximately $500 in annual base rent, which shall increase by 5% each year beginning on the second year of the lease term and then increase by 4% each year beginning on the sixth year of the lease term. In accordance with ASU 842, the Company recorded $5,325 in Right-of-use assets – operating, non-current, and $4,981 in Right-of-use obligation – operating, non-current, with $344 recorded in Right-of-use obligation – operating, current, on the consolidated balance sheet at the commencement of the lease. On July 1, 2020, the Company entered into a lease for its distribution center located in Grand Prairie, Texas. The lease between the Company and Morris Truman Associates LLC is for approximately 210,000 square feet. The initial ninety-month lease term is set to expire in December of 2027. The Company is obligated to pay approximately $48 in monthly base rent (rent abatement for the first six months of the lease term), which shall increase to $71 in monthly base rent beginning on the second-year anniversary of the lease term and then shall increase by 3% each year beginning on the third-year anniversary. In accordance with ASU 842, the Company recorded $5,469 in Right-of-use assets – operating, non-current, and $5,231 in Right-of-use obligation – operating, non-current, with $238 recorded in Right-of-use obligation – operating, current, on the consolidated balance sheet at the commencement of the lease. On April 25, 2019, the Company entered into a lease for its distribution center located in Las Vegas, Nevada. The Lease between the Company and Prologis Sunrise Industrial Park is for approximately 124,546 square feet. The initial sixty three-month term of the Lease commenced on July 1, 2019 and is set to expire in September of 2024. The Company is obligated to pay approximately $687 in annual base rent, which shall increase by approximately 3.0% each year. The Company is also obligated to pay certain operating expenses set forth in the Lease. On February 4, 2016, the Company entered into a lease for its distribution center located in Chesapeake, Virginia. The Lease between the Company and Liberty Property Limited Partnership is for approximately 159,294 square feet. The initial three-year term of the Lease commenced on July 1, 2016 and expired in June of 2019. The extended three-year term of the Lease commenced on July 1, 2019 and is set to expire in June of 2022. The Company is obligated to pay approximately $640 in annual base rent, which shall increase by approximately 2.5% each year. The Company is also obligated to pay certain operating expenses set forth in the Lease. Pursuant to the Lease, the Company has the option to extend the Lease for an additional three-year term, with certain increases in base rent. During 2019, the Company reduced the square footage rented from 159,294 square feet to approximately 116,000 square feet which reduced the annual base rent to $574. On April 17, 2013, the Company’s wholly-owned subsidiary, Whitney Automotive Group, Inc. (“WAG”) entered into a sales leaseback for its facility in LaSalle, Illinois, receiving $9,750 pursuant to a purchase and sale agreement dated April 17, 2013 between WAG and STORE Capital Acquisitions, LLC. The Company used the net proceeds of $9,507 from this sale to reduce its revolving loan payable. Simultaneously with the execution of the purchase and sale agreement and the closing of the sale of the property, the Company entered into a lease agreement with STORE Master Funding III, LLC (“STORE”) whereby we leased back the property for our continued use as an office, retail and warehouse facility for storage, sale and distribution of automotive parts, accessories and related items for 20 years, terminating on April 30, 2033. The Company’s initial base annual rent is $853 for the first year (“Base Rent Amount”), after which the rental amount will increase annually on May 1 by the lesser of 1.5% or 1.25 times the change in the Consumer Price Index as published by the U.S. Department of Labor’s Bureau of Labor Statistics, except that in no event will the adjusted annual rental amount fall below the Base Rent Amount. We were not required to pay any security deposit. Under the terms of the lease, we are required to pay all taxes associated with the lease, pay for any required maintenance on the property, maintain certain levels of insurance and indemnify STORE for losses incurred that are related to our use or occupancy of the property. The lease was initially accounted for as a capital lease and the $376 excess of the net proceeds over the net carrying amount of the property is amortized in interest expense on a straight-line basis over the lease term of 20 years. Upon the adoption of ASC 842 in the beginning of fiscal year 2019, this lease was revalued and reclassified in Right-of-use-assets-finance leases, on the balance sheet. Facility rent expense for fiscal year 2020 and 2019 was $ 4,058 , and $2,275, respectively. Quantitative information regarding the Company’s leases as of January 2, 2021 and December 28, 2019 are as follows (in thousands): Fiscal Year ended Fiscal Year Ended January 2, 2021 December 28, 2019 Components of lease cost Finance lease cost components Amortization of finance lease assets $ 1,246 $ 1,007 Interest on finance lease liabilities 735 692 Total finance lease costs $ 1,981 $ 1,699 Operating lease costs $ 1,890 $ 1,409 Total lease cost $ 3,871 $ 3,108 Supplemental cash flow information related to operating and finance leases is as follows for the fiscal years ended January 2, 2021 and December 28, 2019: Fiscal Year ended Fiscal Year Ended January 2, 2021 December 28, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 1,676 1,297 Operating cash outflow from finance leases 735 692 Financing cash outflow from finance leases 1,005 670 Weighted-average remaining lease term-finance leases (in years) 8.9 12.3 Weighted-average remaining lease term-operating leases (in years) 6.3 3.7 Weighted-average discount rate-finance leases 6.53 % 7.69 % Weighted-average discount rate-operating leases 4.13 % 5.59 % Lease commitments as of January 2, 2021 were as follows: Finance Leases Operating Leases Total 2021 $ 2,424 $ 3,166 $ 5,590 2022 2,465 3,519 5,984 2023 2,253 3,302 5,555 2024 1,706 3,150 4,856 2025 1,554 2,649 4,203 Thereafter 7,766 5,416 13,182 Total minimum payments required 18,168 21,202 39,370 Less portion representing interest 5,157 2,629 7,786 Present value of lease obligations $ 13,011 $ 18,573 $ 31,584 Less current portion of lease obligations 1,583 2,527 4,110 Long-term portion of lease obligations $ 11,428 $ 16,046 $ 27,474 Legal Matters Asbestos . A wholly-owned subsidiary of the Company, Automotive Specialty Accessories and Parts, Inc. and its wholly-owned subsidiary Whitney Automotive Group, Inc. ("WAG"), are named defendants in several lawsuits involving claims for damages caused by installation of brakes during the late 1960’s and early 1970’s that contained asbestos. WAG marketed certain brakes, but did not manufacture any brakes. WAG maintains liability insurance coverage to protect its and the Company’s assets from losses arising from the litigation and coverage is provided on an occurrence rather than a claims made basis, and the Company is not expected to incur significant out-of-pocket costs in connection with this matter that would be material to its consolidated financial statements. Customs Issues . On April 2, 2018, the Company filed a complaint against the United States of America, the United States Department of Homeland Security (“DHS”), in the United States Court of International Trade (the “Court”) (Case No. 1:18-cv-00068) seeking (i) relief from a single entry bonding requirement set by the United States Customs and Border Protection (“CBP”), at a level equivalent to three times the commercial invoice value of each shipment (the “Bonding Requirement”), (ii) a declaration that the Bonding Requirement is unlawful, (iii) an injunction prohibiting additional delayed entry for all of the Company’s currently-held goods being denied entry into the United States. The genesis for the action is CBP’s wrongful seizure of aftermarket vehicle grilles and associated parts being imported by the Company (“Repair Grilles”) on the basis that the Repair Grilles allegedly bear counterfeit trademarks of the original automobile manufacturers (i.e., original-equipment manufacturers, or “OEMs”). Generally, these trademarks, as applied against the Company, purport to cover the shape of the grilles themselves, or the OEM’s logo or name. However, the Repair Grilles are not counterfeit and do not cause a likelihood of confusion amongst purchasers or the relevant consuming public which are prerequisites for seizures under the pertinent provision of the Tariff Act being relied upon by CBP to seize the Repair Grilles. On May 25, 2018, the Court granted the Company’s motion for preliminary injunction and ordered, among other things, that the Defendants are restrained from enforcing the 3X Bonding Requirement. On July 24, 2019, the Company further reached confidential terms with CBP to settle these matters. As part of the settlement: (i) Customs will release to the Company certain inventory mistakenly seized, (ii) the Company and CBP enter into mutual releases, and (iii) without admitting liability, the Company will forfeit to CBP certain goods which CBP deems to be violative. All outstanding CBP enforcement issues are resolved, and the Company has no outstanding damage or duty claims from CBP. Ordinary course litigation . The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. As of the date hereof, the Company believes that the final disposition of such matters will not have a material adverse effect on the financial position, results of operations or cash flow of the Company. The Company maintains liability insurance coverage to protect the Company’s assets from losses arising out of or involving activities associated with ongoing and normal business operations. Related Party Matters The Company has entered into indemnification agreements with the Company’s directors and executive officers. These agreements require the Company to indemnify these individuals to the fullest extent permitted under law against liabilities that may arise by reason of their service to the Company, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. |
Employee Retirement Plan and De
Employee Retirement Plan and Deferred Compensation Plan | 12 Months Ended |
Jan. 02, 2021 | |
Employee Retirement Plan and Deferred Compensation Plan | |
Employee Retirement Plan and Deferred Compensation Plan | Note 9 – Employee Retirement Plan and Deferred Compensation Plan Effective February 17, 2006, the Company adopted a 401(k) defined contribution retirement plan covering all full time employees who have completed one month of service. The Company may, at its sole discretion, match fifty cents per dollar up to 6% of each participating employee’s salary. The Company’s contributions vest in annual installments over three years. Discretionary contributions made by the Company totaled $558 and $3 32 for fiscal years 2020 and 2019, respectively. In January 2010, the Company adopted the CarParts.com, Inc. Management Deferred Compensation Plan (the “Deferred Compensation Plan”), for the purpose of providing highly compensated employees a program to meet their financial planning needs. The Deferred Compensation Plan provides participants with the opportunity to defer up to 90% of their base salary and up to 100% of their annual earned bonus, all of which, together with the associated investment returns, are 100% vested from the outset. The Deferred Compensation Plan, which is designed to be exempt from most provisions of the Employee Retirement Security Act of 1974, is informally funded by the Company through the purchase of mutual funds, held by a rabbi trust. The deferred compensation liabilities (consisting of employer contributions, employee deferrals and associated earnings and losses) are general unsecured obligations of the Company. Liabilities under the Deferred Compensation Plan are recorded at amounts due to participants, based on the fair value of participants’ selected investments. The Company may at its discretion contribute certain amounts to eligible employee accounts. In January 2010, the Company began to contribute 50% of the first 2% of participants’ eligible contributions into their Deferred Compensation Plan accounts. As of January 2, 2021, the assets and associated liabilities of the Deferred Compensation Plan were $ 747 and $ 685 , respectively, and were $ 671 and $6 74 , respectively, as of December 28, 2019 and are included in other non-current assets, other current liabilities and other non-current liabilities in our consolidated balance sheets. The interest dividend and realized/unrealized gain/loss for fiscal year 2020 and 2019 was immaterial. |
Product Information
Product Information | 12 Months Ended |
Jan. 02, 2021 | |
Product Information | |
Product Information | Note 10 – Product Information As described in detail under “Note 1 – Summary of Significant Accounting Policies and Nature of Operations” , 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. 2020 2019 House Brands Replacement Parts 71 % 62 % Hard Parts 17 % 20 % Performance 1 % 1 % Branded Replacement Parts 1 % 1 % Hard Parts 6 % 9 % Performance 4 % 7 % Total 100 % 100 % |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Nature of Operations (Policies) | 12 Months Ended |
Jan. 02, 2021 | |
Summary of Significant Accounting Policies and Nature of Operations | |
Fiscal Year | Fiscal Year The Company’s fiscal year is based on a 52/53 week fiscal year ending on the Saturday closest to December 31. The fiscal year ended January 2, 2021 (fiscal year 2020) is a 53 week period and December 28, 2019 (fiscal year 2019) is a 52 week period. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation In fiscal year 2020, the Company incurred a net loss of $1,513, compared to net loss of $31,548 in fiscal year 2019. $2 3,015 of the net loss for fiscal year 2019 was related to a valuation allowance recorded on the Company’s deferred tax assets. Based on our current operating plan, we believe that our existing cash, cash equivalents, investments, cash flows from operations and available debt or equity financing will be sufficient to finance our operational cash needs through at least the next twelve months. Prior period operating expense amounts have been classified to conform to the current period presentation of operating expense in the consolidated statements of operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Key estimates made by management relate primarily to determining the net realizable value of inventory and the valuation of deferred tax assets and liabilities, in addition to the valuation and assumptions underlying share-based compensation expense. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all money market funds and short-term investments purchased with original maturities of ninety days or less to be cash equivalents. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments that are not measured at fair value include accounts receivable, accounts payable and debt. Refer to “ Note 2 – Fair Value Measurements ” for additional fair value information. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term maturities. |
Accounts Receivable and Concentration of Credit Risk | Accounts Receivable and Concentration of Credit Risk Accounts receivable are stated net of allowance for doubtful accounts. The allowance for doubtful accounts is determined primarily on the basis of past collection experience and general economic conditions. The Company determines terms and conditions for its customers primarily based on the volume purchased by the customer, customer creditworthiness and past transaction history. Concentrations of credit risk are primarily limited to the offline sales customer base to which the Company’s products are sold, which is related to trade receivables that are approximately 28% of total accounts receivable, net, balance as of the year ended January 2, 2021. The Company does not believe significant concentrations of credit risk exist as a significant portion of the outstanding trade receivables balance is insured by a third-party credit insurance company. |
Inventory | Inventory Inventories consist of finished goods available-for-sale and are stated at the lower of cost or net realizable value, determined using the first-in first-out (“FIFO”) method. The Company purchases inventory from suppliers both domestically and internationally, and routinely enters into supply agreements with Asia-Pacific based suppliers in China and Taiwan and also U.S. based suppliers who are primarily drop-ship vendors. The Company believes that its products are generally available from more than one supplier and seeks to maintain multiple sources for its products, both internationally and domestically. The Company primarily purchases products in bulk quantities to take advantage of quantity discounts and to ensure inventory availability. Inventory is reported at the lower of cost or net realizable value. We recognize provisions for obsolete and slow-moving inventory primarily based on judgments about expected disposition of inventory, generally, through sales, or liquidations of obsolete inventory, and expected recoverable values per SKU based on currently available or historical information. Inventory as of January 2, 2021 and December 28, 2019 included items in-transit to our distribution centers, in the amounts of $ 26,542 and $14,502, respectively. |
Website and Software Development Costs | Website and Software Development Costs The Company capitalizes certain costs associated with website and software developed for internal use according to ASC 350‑50 - Intangibles – Goodwill and Other – Website Development Costs and ASC 350‑40 Intangibles – Goodwill and Other – Internal-Use Software , when both the preliminary project design and testing stage are completed and management has authorized further funding for the project, which it deems probable of completion and to be used for the function intended. Capitalized costs include amounts directly related to website and software development such as payroll and payroll-related costs for employees who are directly associated with, and who devote time to, the internal-use software project. Capitalization of such costs ceases when the project is substantially complete and ready for its intended use. These amounts are amortized on a straight-line basis over two to three years once the software is placed into service. The Company capitalized website and software development costs of $ 4,769 and $4,907 during fiscal year 2020 and 2019, respectively. As of January 2, 2021 and December 28, 2019, our internally developed website and software costs amounted to $ 22,099 and $24 ,142 , respectively, and the related accumulated amortization amounted to $18,779 and $20,740, respectively. |
Long-Lived Assets and Intangibles Subject to Amortization | Long-Lived Assets and Intangibles Subject to Amortization The Company accounts for the impairment and disposition of long-lived assets, including intangibles subject to amortization, in accordance with ASC - 360 Property, Plant and Equipment (“ASC 360”) . Management assesses potential impairments whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. An impairment loss will result when the carrying value exceeds the undiscounted cash flows estimated to result from the use and eventual disposition of the asset or asset group. Impairment losses will be recognized in operating results to the extent that the carrying value exceeds the undiscounted future cash flows estimated to result from the use and eventual disposition of the asset or asset group. As of January 2, 2021 the Company’s long-lived assets did not indicate a potential impairment under the provisions of ASC 360, therefore no impairment charges were recorded for fiscal 2020. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are being amortized over the life of the loan using the straight-line method as it is not significantly different from the effective interest method. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from product sales and shipping revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized when it is shipped to the customer. Return allowances, which reduce product revenue by the Company’s best estimate of expected product returns, are estimated using historical experience. The Company evaluates the criteria of ASC 606 - Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise to provide a specified good or service, the Company is subject to inventory risk before the good or service has been transferred to a customer and the Company has discretion in establishing the price, revenue is recorded at gross. Payments received prior to the delivery of goods to customers are recorded as deferred revenue in customer deposits in the consolidated balance sheets. The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers. Current discount offers, when accepted by the Company’s customers, are treated as a reduction to the purchase price of the related transaction. Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are estimated based on historical amounts and are recorded upon recognizing the related sales. Credits are issued to customers for returned products. Credits for returned products amounted to $24, 396 and $18,436 for fiscal year 2020 and 2019, respectively. No customer accounted for more than 10% of the Company’s net sales. The following table provides an analysis of the allowance for sales returns and the allowance for doubtful accounts (in thousands): Charged to Balance at Revenue, Balance at Beginning Cost or End of of Period Expenses Deductions Period Fifty-Two Weeks Ended January 2, 2021 Allowance for sales returns $ 1,194 $ 24,396 $ (22,977) $ 2,613 Allowance for doubtful accounts 6 — (5) 1 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 |
Cost of Sales | Cost of Sales Cost of sales consists of the direct costs associated with procuring parts from suppliers and delivering products to customers. These costs include direct product costs, outbound freight and shipping costs, warehouse supplies and warranty costs, partially offset by purchase discounts. Total freight and shipping expense included in cost of sales for fiscal year 2020 and 2019 was $69 ,925 , and $47,140, respectively. Depreciation and amortization expenses are excluded from cost of sales and included in operating expense. |
Warranty Costs | Warranty Costs The Company or the vendors supplying its products provide the Company’s customers limited warranties on certain products that range from 30 days to lifetime. Historically, the Company’s vendors have been the party primarily responsible for warranty claims. Standard product warranties sold separately by the Company are recorded as deferred revenue and recognized ratably over the life of the warranty, ranging from one to five years. The Company also offers extended warranties that are imbedded in the price of selected private label products sold. The product brands that include the extended warranty coverage are offered at three different service levels: (a) a five year unlimited product replacement, (b) a five year one-time product replacement, and (c) a three year one-time product replacement. Warranty costs relating to merchandise sold under warranty not covered by vendors are estimated and recorded as warranty obligations at the time of sale based on each product’s historical return rate and historical warranty cost. The standard and extended warranty obligations are recorded as warranty liabilities and included in other current liabilities in the consolidated balance sheets. For the fiscal year 2020 and 2019, the activity in the aggregate warranty liabilities was as follows (in thousands): January 2, 2021 December 28, 2019 Warranty liabilities, beginning of period $ 1,412 $ 1,420 Additions to warranty liabilities 445 690 Reductions to warranty liabilities (723) (698) Warranty liabilities, end of period $ 1,134 $ 1,412 |
Operating Expense | Operating Expense Operating expense consists of marketing, general and administrative, fulfillment, and technology expense. The Company also includes share-based compensation expense in the applicable operating expense category based on the respective equity award recipient’s function. Marketing costs, including advertising, are expensed as incurred. The majority of advertising expense is paid to internet search engine service providers, television advertising, and internet commerce facilitators. For fiscal year 2020 and 2019, the Company recognized advertising costs of $54,588 and $25,691, respectively. Marketing expense also includes payroll and related expenses associated with our customer service and marketing personnel. General and administrative expense consists primarily of administrative payroll and related expenses, merchant processing fees, legal and professional fees and other administrative costs. Fulfillment expense consists primarily of payroll and related costs associated with warehouse employees and the Company’s purchasing group, facilities rent, building maintenance, depreciation and other costs associated with inventory management and wholesale operations. Technology expense consists primarily of payroll and related expenses of the Company’s information technology personnel, the cost of hosting the Company’s servers, communications expenses and internet connectivity costs, computer support and software development amortization expense. Marketing expense, general and administrative expense, and fulfillment expense also includes depreciation and amortization expense. |
Share-Based Compensation | Share-Based Compensation The Company accounts for share-based compensation in accordance with ASC 718 - Compensation – Stock Compensation (“ASC 718”). All share-based payment awards issued to employees are recognized as share-based compensation expense in the statements of operations based on their respective grant date fair values. Compensation expense for service-based restricted stock units is based on the closing stock price of our common stock on the date of grant, and is recognized on a straight-line basis over the requisite service period. Compensation expense for performance-based awards is measured based on the amount of shares ultimately expected to vest, estimated at each reporting date based on management’s expectations regarding the relevant performance criteria. Compensation expense for stock options is based on the fair value estimated on the date of grant using an option pricing model, and is recognized over the vesting period of three to four years. The Company currently uses the Black-Scholes option pricing model to estimate the fair value of share-based payment awards for such stock options, which is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. Expected volatility is based on the historical volatility of the Company’s stock price for a period approximating the expected life. The expected life of an award is based on combining historical exercise data with expected weighted time outstanding. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues for the expected life of awards. The expected dividend yield assumption is based on the Company’s expectation of paying no dividends on its common stock. The Company accounts for equity awards to non-employees in accordance with ASC 505‑50, Equity-Based Payments to Non-Employees, which requires the fair value of an award to non-employees be remeasured at fair value as the award vests. Under ASC 718, we recognize forfeitures as they occur. |
Other Income, net | Other Income, net Other income, net consists of miscellaneous income or expense and interest income comprised primarily of interest income on investments. |
Interest Expense | Interest Expense Interest expense consists primarily of interest expense on our revolving loan and letters of credit balances, deferred financing cost amortization, and finance lease interest. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740 - Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. When appropriate, a valuation allowance is established to reduce deferred tax assets, which include tax credits and loss carry forwards, to the amount that is more likely than not to be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in prior carryback years, tax planning strategies and recent financial operations. The Company utilizes a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely to be realized upon ultimate settlement. The Company considers many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. As of January 2, 2021, the Company had no material unrecognized tax benefits, interest or penalties related to federal and state income tax matters. The Company’s policy is to record interest and penalties as income tax expense. |
Taxes Collected from Customers and Remitted to Governmental Authorities | Taxes Collected from Customers and Remitted to Governmental Authorities We present taxes collected from customers and remitted to governmental authorities on a net basis in accordance with the guidance on ASC 606‑10‑32‑2 - Taxes Collected from Customers and Remitted to Governmental Authorities. |
Leases | Leases On January 1, 2019, the Company adopted ASC 842 – Leases (“ASC 842”), which requires lessees to record right-of-use assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements. The Company adopted the standard by applying the modified retrospective method without the restatement of comparative periods. Adoption of the standard resulted in the recognition of $1,623 to the opening balance of retained earnings as of the adoption date and the recognition of ROU assets and related lease obligations as of January 1, 2019. The standard did not have a significant impact on the Company's operating results or cash flows. The Company elected the package of practical expedients, which permits a lessee to not reassess under the new standard its prior conclusions regarding lease identification, lease classification and initial direct costs. The Company did not elect the practical expedient which permits the use of hindsight when determining the lease term and assessing right-of-use assets for impairment. As permitted by the transition guidance, the Company used the remaining lease term as of the date of adoption of the standard to estimate discount rates. As permitted by the standard, the Company elected, for all asset classes, the short-term lease exemption. A short-term lease is a lease that, at the commencement date, has a term of twelve months or less and does not include an option to purchase the underlying asset. The Company determines if an arrangement contains a lease at inception. The Company elected the practical expedient, for all asset classes, to account for each lease component of a contract and its associated non-lease components as a single lease component, rather than allocating a standalone value to each component of a lease. For purposes of calculating operating lease obligations under the standard, the Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company's leases do not contain material residual value guarantees or material restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease terms. The discount rate used to measure a lease obligation should be the rate implicit in the lease; however, the Company’s operating leases generally do not provide an implicit rate. Accordingly, the Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate is an entity-specific rate which represents the rate of interest a lessee would pay to borrow on a collateralized basis over a similar term with similar payments. |
Foreign Currency Translation | Foreign Currency Translation For each the Company’s foreign subsidiaries, the functional currency is its local currency. Assets and liabilities of foreign operations are translated into U.S. dollars using the current exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates. The effects of the foreign currency translation adjustments are included as a component of accumulated other comprehensive (loss) income in the Company’s consolidated balance sheets. |
Comprehensive loss | Comprehensive Loss The Company reports comprehensive loss in accordance with ASC 220 - Comprehensive Income (“ASC 220”). Accumulated other comprehensive (loss) income , included in the Company’s consolidated balance sheets, includes foreign currency translation adjustments related to the Company’s foreign operations, unrealized gain on deferred compensation trust assets, and actuarial loss on the Company’s defined benefit plan in the Philippines. The Company presents the components of net loss and other comprehensive loss in its consolidated statements of comprehensive operations. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU’) No. 2018-15, “Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40)” (“ASU 2018-15”). The objective of this update is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted the standard on December 29, 2019 and the adoption did not have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and other subsequent amendments including ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , collectively referred to as (“ASC 326”), which provides a new impairment model that require measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to accounts receivable, contract assets, available for sale securities and certain financial guarantees. The Company adopted the standard on December 29, 2019 and the adoption did not have a material impact on the consolidated financial statements. Recently Early Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes. The update is intended to simplify the current rules regarding the accounting for income taxes and addresses several technical topics including accounting for franchise taxes, allocating income taxes between a loss in continuing operations and in other categories such as discontinued operations, reporting income taxes for legal entities that are not subject to income taxes, and interim accounting for enacted changes in tax laws. The new standard is effective for fiscal years beginning after December 15, 2020; however, early adoption is permitted. The Company early adopted the standard on December 29, 2019 and the adoption did not have a material impact on the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Nature of Operations (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Summary of Significant Accounting Policies and Nature of Operations | |
Allowance for Sales Returns and Allowance for Doubtful Accounts | The following table provides an analysis of the allowance for sales returns and the allowance for doubtful accounts (in thousands): Charged to Balance at Revenue, Balance at Beginning Cost or End of of Period Expenses Deductions Period Fifty-Two Weeks Ended January 2, 2021 Allowance for sales returns $ 1,194 $ 24,396 $ (22,977) $ 2,613 Allowance for doubtful accounts 6 — (5) 1 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 |
Aggregate Warranty Liabilities | For the fiscal year 2020 and 2019, the activity in the aggregate warranty liabilities was as follows (in thousands): January 2, 2021 December 28, 2019 Warranty liabilities, beginning of period $ 1,412 $ 1,420 Additions to warranty liabilities 445 690 Reductions to warranty liabilities (723) (698) Warranty liabilities, end of period $ 1,134 $ 1,412 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Property and Equipment, Net | |
Summary of Property and Equipment | Property and equipment consisted of the following as of January 2, 2021 and December 28, 2019: January 2, 2021 December 28, 2019 Machinery and equipment 11,547 12,766 Computer software (purchased and developed) and equipment 23,225 28,437 Vehicles 190 95 Leasehold improvements 1,515 1,161 Furniture and fixtures 297 744 Construction in process 5,780 3,091 42,554 46,294 Less accumulated depreciation and amortization (27,812) (36,644) Property and equipment, net $ 14,742 $ 9,650 |
Summary of Estimated Useful Lives of Property and Equipment | 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 * |
Stockholders' Equity and Shar_2
Stockholders' Equity and Share-Based Compensation (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Stockholders' Equity and Share-Based Compensation | |
Summary of Stock Option Activity | Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (in years) Value (1) Options outstanding, December 28, 2019 7,223 $ 2.76 Granted 2,558 $ 3.21 Exercised (2,200) $ 1.94 Cancelled: Forfeited (73) $ 4.82 Expired (576) $ 3.69 Options outstanding, January 2, 2021 6,932 $ 2.09 8.10 $ 71,404 Vested and expected to vest at January 2, 2021 6,932 $ 2.09 8.10 $ 71,404 Options exercisable, January 2, 2021 2,591 $ 1.73 7.04 $ 27,630 Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term (in years) Value (1) Options outstanding, December 29, 2018 6,067 $ 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 (1) These amounts represent the difference between the exercise price and the closing price of CarParts.com, Inc. common stock at the end of the respective fiscal year as reported on the NASDAQ Stock Market, for all options outstanding that have an exercise price currently below the closing price. |
Summary of Assumptions Used | The fair value of each option grant, excluding those options issued from the stock option exchange program as discussed above, was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions for each of the periods ended: Fiscal Year Ended January 2, 2021 December 28, 2019 Expected life 5.37 - 5.69 years 5.65 - 5.74 years Risk-free interest rate 0.3% - 1.7% 1.5% - 2.5% Expected volatility 55.1% - 63.5% 54.2% - 58.3% Expected dividend yield —% —% |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Net Loss Per Share | |
Computation of Basic and Diluted Net Income Per Share | The following table sets forth the computation of basic and diluted net loss per share: Fiscal Year Ended January 2, 2021 December 28, 2019 Net loss per share: Numerator: Net loss $ (1,513) $ (31,548) Dividends on Series A Convertible Preferred Stock (71) (161) Net loss allocable to common shares $ (1,584) $ (31,709) Denominator: Weighted-average common shares outstanding (basic and diluted) 42,333 35,720 Basic and diluted net loss per share $ (0.04) $ (0.89) |
Anti-Dilutive Securities Excluded from Calculation of Diluted Earnings Per Share | The anti-dilutive securities, which are excluded from the calculation of diluted earnings per share due to their anti-dilutive effect are as follows (in thousands): Fiscal Year Ended January 2, 2021 December 28, 2019 Performance stock units — 1 Restricted stock units 42 43 Series A Convertible Preferred Stock (a) 1,251 2,771 Options to purchase common stock 166 6,532 Total 1,459 9,347 On June 19, 2020, each outstanding share of the Series A Convertible Preferred Stock (“Preferred Stock”) automatically converted to one share of the Company’s common stock. This automatic conversion was required pursuant to Section 4 of the Preferred Stock purchase agreement (dated March 25, 2013) because the volume weighted average price for the common stock price was equal to, or exceeded, $4.35 for 30 consecutive trading days. The Company issued an aggregate of 2,620,687 shares of common stock in connection with the automatic conversion |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Income Taxes | |
Components of Loss Before Income Taxes | The components of loss from operations before income tax provision consist of the following: Fiscal Year Ended January 2, 2021 December 28, 2019 Domestic operations $ (1,738) $ (10,618) Foreign operations 532 507 Total loss before income taxes $ (1,206) $ (10,111) |
Summary of Income Tax (Benefit) Provision | Income tax provision for fiscal year 2020 and 2019 consists of the following: Fiscal Year Ended January 2, 2021 December 28, 2019 Current: Federal tax $ 50 $ — State tax 80 6 Foreign tax 177 144 Total current taxes 307 150 Deferred: Federal tax (453) (1,311) State tax (225) (417) Total deferred taxes (678) (1,728) Valuation allowance 678 23,015 Income tax provision $ 307 $ 21,437 |
Summary of Differences Between Income Tax Provision (Benefit) and Applied Federal Statutory Rate | Income tax provision differs from the amount that would result from applying the federal statutory rate as follows: January 2, 2021 December 28, 2019 Income tax at U.S. federal statutory rate $ (253) $ (2,123) Tax attributes written off 50 — Share-based compensation (318) 729 State income tax, net of federal tax effect (115) (325) Foreign tax 144 106 Other 121 35 Change in valuation allowance 678 23,015 Effective tax provision $ 307 $ 21,437 |
Summary of Deferred Tax Assets and Deferred Tax Liabilities | Deferred tax assets and deferred tax liabilities consisted of the following: January 2, 2021 December 28, 2019 Deferred tax assets: Inventory and inventory related allowance $ 1,082 $ 529 Lease liabilities 7,311 3,663 Share-based compensation 2,102 1,836 Book over tax depreciation 468 — Intangibles 660 1,577 Sales and bad debt allowances 1,044 712 Accrued compensation 436 200 Net operating loss 24,131 25,322 Other 186 1 Total deferred tax assets 37,420 33,840 Valuation allowance (30,516) (29,731) Net deferred tax assets 6,904 4,109 Deferred tax liabilities: Right-of-use assets 6,879 3,572 Tax over book depreciation — 489 Other 25 48 Total deferred tax liabilities 6,904 4,109 Net deferred tax assets $ — $ — |
Summary of State NOL Carryforwards Expiration Year | The state NOL carryforwards expire in the respective tax years as follows: 2021 $ 5,345 2022 975 2023 3,013 2024 2,370 2025 3,281 Thereafter 61,136 $ 76,120 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Commitments and Contingencies Disclosure | |
Schedule of lease commitments - Finance lease | Lease commitments as of January 2, 2021 were as follows: Finance Leases Operating Leases Total 2021 $ 2,424 $ 3,166 $ 5,590 2022 2,465 3,519 5,984 2023 2,253 3,302 5,555 2024 1,706 3,150 4,856 2025 1,554 2,649 4,203 Thereafter 7,766 5,416 13,182 Total minimum payments required 18,168 21,202 39,370 Less portion representing interest 5,157 2,629 7,786 Present value of lease obligations $ 13,011 $ 18,573 $ 31,584 Less current portion of lease obligations 1,583 2,527 4,110 Long-term portion of lease obligations $ 11,428 $ 16,046 $ 27,474 |
Schedule of quantitative information regarding the Company’s leases | Quantitative information regarding the Company’s leases as of January 2, 2021 and December 28, 2019 are as follows (in thousands): Fiscal Year ended Fiscal Year Ended January 2, 2021 December 28, 2019 Components of lease cost Finance lease cost components Amortization of finance lease assets $ 1,246 $ 1,007 Interest on finance lease liabilities 735 692 Total finance lease costs $ 1,981 $ 1,699 Operating lease costs $ 1,890 $ 1,409 Total lease cost $ 3,871 $ 3,108 Supplemental cash flow information related to operating and finance leases is as follows for the fiscal years ended January 2, 2021 and December 28, 2019: Fiscal Year ended Fiscal Year Ended January 2, 2021 December 28, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 1,676 1,297 Operating cash outflow from finance leases 735 692 Financing cash outflow from finance leases 1,005 670 Weighted-average remaining lease term-finance leases (in years) 8.9 12.3 Weighted-average remaining lease term-operating leases (in years) 6.3 3.7 Weighted-average discount rate-finance leases 6.53 % 7.69 % Weighted-average discount rate-operating leases 4.13 % 5.59 % |
Schedule of lease commitments | Finance Leases Operating Leases Total 2021 $ 2,424 $ 3,166 $ 5,590 2022 2,465 3,519 5,984 2023 2,253 3,302 5,555 2024 1,706 3,150 4,856 2025 1,554 2,649 4,203 Thereafter 7,766 5,416 13,182 Total minimum payments required 18,168 21,202 39,370 Less portion representing interest 5,157 2,629 7,786 Present value of lease obligations $ 13,011 $ 18,573 $ 31,584 Less current portion of lease obligations 1,583 2,527 4,110 Long-term portion of lease obligations $ 11,428 $ 16,046 $ 27,474 |
Product Information (Tables)
Product Information (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Product Information | |
Summary of Revenue by Product Type | The following table summarizes the approximate distribution of the Company’s revenue by product type. 2020 2019 House Brands Replacement Parts 71 % 62 % Hard Parts 17 % 20 % Performance 1 % 1 % Branded Replacement Parts 1 % 1 % Hard Parts 6 % 9 % Performance 4 % 7 % Total 100 % 100 % |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Nature of Operations - Additional Information (Details) $ in Thousands | 12 Months Ended | |||
Jan. 02, 2021USD ($)item | Dec. 28, 2019USD ($) | Jan. 01, 2019USD ($) | Dec. 29, 2018USD ($) | |
Property, Plant and Equipment [Line Items] | ||||
Net income (loss) | $ 1,513 | $ 31,548 | ||
Operating Loss Carryforwards, Valuation Allowance | $ 23,015 | |||
Trade receivable as percent of total accounts receivable, net | 28.00% | |||
Number of suppliers | item | 1 | |||
Inventory in-transit | $ 26,542 | 14,502 | ||
Capitalized website and software development costs | 659 | 55 | ||
Impairment loss on intangible assets | 0 | |||
Impairment loss on property and equipment | 0 | |||
Credits for returned products | $ 24,396 | 18,436 | ||
Number of customer accounted for 10 % | 0.00% | |||
Warranty, coverage period | 30 days | |||
Warranty, unlimited product replacement, coverage period | 5 years | |||
Warranty, one-time product replacement, coverage period, option one | 5 years | |||
Warranty, one-time product replacement, coverage period, option two | 3 years | |||
Advertising costs | $ 54,588 | 25,691 | ||
Unrecognized tax benefits, interest or penalties | 0 | |||
Effect of new accounting adoption | $ 83,489 | 12,380 | $ 38,822 | |
Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Length Of Fiscal Year | 364 days | |||
Standard product warranty, recognition period | 1 year | |||
Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Length Of Fiscal Year | 371 days | |||
Standard product warranty, recognition period | 5 years | |||
Website and Software Development | ||||
Property, Plant and Equipment [Line Items] | ||||
Capitalized website and software development costs | $ 4,769 | 4,907 | ||
Capitalized website and software development cost amount | 22,099 | 24,142 | ||
Capitalized website and software development costs accumulated amortization and impairment amount | $ 18,779 | 20,740 | ||
Website and Software Development | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Amortization on a straight-line basis, period | 2 years | |||
Website and Software Development | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Amortization on a straight-line basis, period | 3 years | |||
Cost of Sales | ||||
Property, Plant and Equipment [Line Items] | ||||
Freight and shipping expenses | $ 69,925 | 47,140 | ||
Stock Options | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Stock options vesting period | 3 years | |||
Stock Options | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Stock options vesting period | 4 years | |||
Accumulated Deficit | ||||
Property, Plant and Equipment [Line Items] | ||||
Net income (loss) | $ 1,513 | 31,548 | ||
Effect of new accounting adoption | $ (169,461) | $ (167,876) | (137,791) | |
Cumulative Effect Period of Adoption Adjustment | ||||
Property, Plant and Equipment [Line Items] | ||||
Effect of new accounting adoption | 1,623 | |||
Cumulative Effect Period of Adoption Adjustment | Accumulated Deficit | ||||
Property, Plant and Equipment [Line Items] | ||||
Effect of new accounting adoption | $ 1,623 | |||
ASU 2016-02 | Cumulative Effect Period of Adoption Adjustment | Accumulated Deficit | ||||
Property, Plant and Equipment [Line Items] | ||||
Effect of new accounting adoption | $ 1,623 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Nature of Operations - Allowance for Sales Returns and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Allowance for sales returns | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Period | $ 1,194 | $ 1,297 |
Charged to Revenue, Cost or Expenses | 24,396 | 18,436 |
Deductions | (22,977) | (18,539) |
Balance at End of Period | 2,613 | 1,194 |
Allowance for doubtful accounts | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at Beginning of Period | 6 | 21 |
Charged to Revenue, Cost or Expenses | 28 | |
Deductions | (5) | (43) |
Balance at End of Period | $ 1 | $ 6 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and Nature of Operations - Aggregate Warranty Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Warranty liabilities, beginning of period | $ 1,412 | $ 1,420 |
Additions to warranty liabilities | 445 | 690 |
Reductions to warranty liabilities | (723) | (698) |
Warranty liabilities, end of period | $ 1,134 | $ 1,412 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets Valued on Recurring Basis (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | $ 35,802 | $ 2,273 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Jan. 02, 2021 | Dec. 28, 2019 |
Fair Value Measurements | ||
Transfers into level 2 from level 1 assets | $ 0 | $ 0 |
Transfers into level 1 from level 2 assets | $ 0 | $ 0 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Property and Equipment, Net | ||
Depreciation and amortization expense | $ 7,657 | $ 6,252 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 42,554 | $ 46,294 |
Less accumulated depreciation and amortization | (27,812) | (36,644) |
Property, Plant and Equipment, Net, Total | 14,742 | 9,650 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,547 | 12,766 |
Computer software (purchased and developed) | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 23,225 | 28,437 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 190 | 95 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,515 | 1,161 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 297 | 744 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,780 | $ 3,091 |
Property and Equipment, Net -_2
Property and Equipment, Net - Summary of Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Jan. 02, 2021 | |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 2 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Computer software (purchased and developed) | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 2 years |
Computer software (purchased and developed) | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 3 years |
Computer equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 2 years |
Computer equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Vehicles | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 3 years |
Vehicles | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 3 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 3 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of property and equipment | 7 years |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) - USD ($) $ in Thousands | Dec. 18, 2019 | Jan. 02, 2021 | Jan. 17, 2020 | Jan. 16, 2020 | Dec. 28, 2019 | Aug. 08, 2019 |
Line of Credit Facility [Line Items] | ||||||
Notes payable, current | $ 729 | |||||
Notes payable, non-current portion | 1,060 | |||||
Financing arrangement - Las Vegas | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate (percent) | 7.70% | |||||
Notes payable, outstanding balance | $ 0 | 1,790 | ||||
Notes payable, current | 729 | |||||
Notes payable, non-current portion | $ 1,060 | |||||
Eleventh Amendment | ||||||
Line of Credit Facility [Line Items] | ||||||
Period of increase in liquidation value inventory advance rate | 6 months | |||||
Basket for sales and dispositions of property in connection with Permitted Acquisitions | $ 5,000 | |||||
Eleventh Amendment | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Net orderly liquidation value inventory advance rate | 90.00% | |||||
Eleventh Amendment | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Net orderly liquidation value inventory advance rate | 95.00% | |||||
Twelfth Amendment to Credit Agreement and Fifth Amendment to Pledge and Security Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 25,000 | |||||
Letter of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 20,000 | |||||
JP Morgan Chase Bank | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Current borrowing capacity | 30,000 | |||||
Maximum borrowing capacity | 40,000 | |||||
Outstanding letters of credit amount | $ 0 | |||||
Unused credit commitment fee (percent) | 0.25% | |||||
Credit facility trigger amount | $ 3,600 | |||||
Consecutive business days below minimum excess availability | 3 days | |||||
Number of consecutive days excess availability is above required amount | 45 days | |||||
Minimum availability required under availability block | $ 3,000 | |||||
Event of default amount | $ 0 | |||||
Limited security by foreign subsidiaries' capital stock percentage | 65.00% | |||||
JP Morgan Chase Bank | Letter of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 1,550 | |||||
Outstanding letters of credit amount | $ 0 | |||||
One-Month London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Applicable margin for LIBOR-based interest rate and applicable margin for alternate based rate (percent) | 1.25% | |||||
One-Month London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Applicable margin for LIBOR-based interest rate and applicable margin for alternate based rate (percent) | 1.75% | |||||
London Interbank Offered Rate (LIBOR) | JP Morgan Chase Bank | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate (percent) | 1.44% | |||||
LIBOR based interest rate, principal amount | $ 0 | |||||
Base Rate | JP Morgan Chase Bank | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate (percent) | 3.00% | |||||
Prime based rate, principal amount | $ 0 | |||||
Prime rate | Revolving Credit Facility | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Applicable margin for LIBOR-based interest rate and applicable margin for alternate based rate (percent) | 0.25% | |||||
Prime rate | Revolving Credit Facility | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Applicable margin for LIBOR-based interest rate and applicable margin for alternate based rate (percent) | 0.75% |
Stockholders' Equity and Shar_3
Stockholders' Equity and Share-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Aug. 18, 2020 | Jan. 02, 2021 | Dec. 28, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Net proceeds from issuance of common stock | $ 60,461 | ||
Compensation expense | 7,778 | $ 3,656 | |
Amounts capitalized to internally-developed software | 659 | 55 | |
Tax benefit valuation allowance recognized | 0 | $ 0 | |
Public equity offering | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Issuance of common stock, net of underwriters' offering expenses and commissions (in shares) | 4,000 | ||
Offering price (in dollars per share) | $ 13 | ||
Net proceeds from issuance of common stock | $ 48,831 | ||
Over-Allotment Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Issuance of common stock, net of underwriters' offering expenses and commissions (in shares) | 900 | ||
Net proceeds from issuance of common stock | $ 11,700 | ||
Period of underwriters option | 30 days | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 6,095 |
Stockholders' Equity and Shar_4
Stockholders' Equity and Share-Based Compensation - Series A Convertible Preferred Stock (Details) $ / shares in Units, $ in Thousands | Jun. 19, 2020$ / sharesshares | Apr. 05, 2013USD ($)shares | Mar. 25, 2013USD ($)Vote$ / sharesshares | Jan. 02, 2021USD ($)$ / sharesshares | Dec. 28, 2019USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock dividends during the period | $ | $ 0 | $ 41 | |||
Series A Convertible Preferred Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Series A convertible preferred stock, shares authorized (in shares) | shares | 4,150,000 | 4,150,000 | 4,150,000 | ||
Aggregate shares to be sold (in shares) | shares | 4,150,000 | ||||
Series A convertible preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock purchase price per share (in dollars per share) | $ / shares | $ 1.45 | ||||
Preferred stock purchase, amount | $ | $ 6,017 | ||||
Preferred stock sold (in shares) | shares | 2,620,687 | 150,000 | 4,000,000 | ||
Conversion of preferred stock | $ | $ 217 | $ 5,800 | |||
Issuance costs incurred to company | $ | $ 847 | ||||
Amount per share to series A preferred in case of liquidation (in dollars per share) | $ / shares | $ 1.45 | $ 1.45 | |||
Preferred stock annual dividend rate (in dollars per share) | $ / shares | $ 0.058 | ||||
Number of votes | Vote | 1 | ||||
Cash dividends on amended credit | $ | $ 400 | ||||
Cash dividends on preferred stock | $ | $ 71 | $ 160 | |||
Issuance of common stock in connection with preferred stock dividends (shares) | shares | 45,000 | 59,000 | |||
Conversion rate of common stock for each share of Series A preferred stock (in shares) | shares | 1 | 1 | |||
Consecutive trading days for calculating weighted average price for the common stock | 30 days | ||||
Minimum common stock price for consecutive thirty trading days for stock conversion (in dollars per share) | $ / shares | $ 4.35 | ||||
Series A convertible preferred stock, shares outstanding (in shares) | shares | 0 | 2,771,000 |
Stockholders' Equity and Shar_5
Stockholders' Equity and Share-Based Compensation - Share-Based Compensation Plan Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | May 31, 2016 | Jan. 02, 2021 | Dec. 28, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value of options granted (in dollars per share) | $ 1.67 | $ 0.63 | |
Intrinsic value, options exercised | $ 12,563 | $ 96 | |
Unrecognized share-based compensation expense | $ 4,193 | ||
Weighted-average period of unrecognized compensation expense | 2 years 10 months 24 days | ||
Number of shares granted (in shares) | 2,558 | 4,460 | |
2016 Equity Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares authorized to issued under condition one (in shares) | 2,500 | ||
Shares available for future grants (in shares) | 3,894 | 1,399 | |
Period of share reserve increase | 9 years | ||
Share reserve (in shares) | 1,500 | ||
Expiration period | 10 years | ||
Option grant vesting period | 4 years | ||
Exercise price of option grants | 100.00% | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares withheld to satisfy employee tax obligations (in shares) | 0 | 0 | |
Adjustment related employee tax obligations | $ 0 | $ 0 |
Stockholders' Equity and Shar_6
Stockholders' Equity and Share-Based Compensation - Summary of Stock Option Activity for SB Comp Plan (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Shares | ||
Options outstanding, beginning (in shares) | 7,223 | 6,067 |
Granted (in shares) | 2,558 | 4,460 |
Exercised (in shares) | (2,200) | (304) |
Cancelled: | ||
Forfeited (in shares) | (73) | (1,613) |
Expired (in shares) | (576) | (1,417) |
Options outstanding, ending (in shares) | 6,932 | 7,223 |
Vested and expected to vest (in shares) | 6,932 | 7,223 |
Options exercisable (in shares) | 2,591 | 3,080 |
Weighted Average Exercise Price | ||
Options outstanding, beginning (in dollars per share) | $ 2.76 | $ 2.69 |
Granted (in dollars per share) | 3.21 | 1.19 |
Exercised (in dollars per share) | 1.94 | 1.51 |
Cancelled: | ||
Forfeited (in dollars per share) | 4.82 | 2.48 |
Expired (in dollars per share) | 3.69 | 3.08 |
Options outstanding, ending (in dollars per share) | 2.09 | 2.76 |
Vested and expected to vest (in dollars per share) | 2.09 | 1.78 |
Options exercisable (in dollars per share) | $ 1.73 | $ 2.51 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Options outstanding, weighted average remaining contractual term | 8 years 1 month 6 days | 6 years 6 months 26 days |
Vested and expected to vest, weighted average remaining contractual term | 8 years 1 month 6 days | 6 years 6 months 26 days |
Exercisable, weighted average remaining contractual term | 7 years 15 days | 2 years 11 months 19 days |
Options outstanding, aggregate intrinsic value | $ 71,404 | $ 4,494 |
Vested and expected to vest, aggregate intrinsic value | 71,404 | 4,494 |
Options exercisable, aggregate intrinsic value | $ 27,630 | $ 747 |
Stockholders' Equity and Shar_7
Stockholders' Equity and Share-Based Compensation - Restricted Stock Units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense | $ 7,778 | $ 3,656 |
Weighted-average period of unrecognized compensation expense | 2 years 10 months 24 days | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awarded (in shares) | 3,566 | 1,867 |
Compensation expense | $ 6,095 | |
Unrecognized compensation expense | $ 2,275 | |
Weighted-average period of unrecognized compensation expense | 1 year 6 months | |
Time Based RSU | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awarded (in shares) | 155 | 315 |
Performance based RSU | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awarded (in shares) | 3,411 | 1,552 |
Minimum | Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Closing price of grant (in dollars per share) | $ 0.91 | $ 0.97 |
Requisite service period | 1 year | |
Maximum | Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Closing price of grant (in dollars per share) | $ 16.45 | $ 2.41 |
Requisite service period | 3 years |
Stockholders' Equity and Shar_8
Stockholders' Equity and Share-Based Compensation - Summary of Assumptions Used for Fair Value of Option Grant (Details) - Option Grant | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life | 5 years 4 months 13 days | 5 years 7 months 24 days |
Risk-free interest rate | 0.30% | 1.50% |
Expected volatility | 55.10% | 54.20% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life | 5 years 8 months 9 days | 5 years 8 months 27 days |
Risk-free interest rate | 1.70% | 2.50% |
Expected volatility | 63.50% | 58.30% |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Numerator: | ||
Net loss | $ (1,513) | $ (31,548) |
Dividends on Series A Convertible Preferred Stock | (71) | (161) |
Net loss allocable to common shares | $ (1,584) | $ (31,709) |
Weighted-average common shares outstanding (basic and diluted) | 42,333 | 35,720 |
Basic and diluted net loss per share | $ (0.04) | $ (0.89) |
Net Loss Per Share - Anti-Dilut
Net Loss Per Share - Anti-Dilutive Securities Excluded from Calculation of Diluted Earnings Per Share (Detail) | Jun. 19, 2020$ / sharesshares | Jan. 02, 2021shares | Dec. 28, 2019shares |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares) | 1,459,000 | 9,347,000 | |
Performance stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares) | 1,000 | ||
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares) | 42,000 | 43,000 | |
Series A Convertible Preferred Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares) | 1,251,000 | 2,771,000 | |
Stock Conversion Ratio | 1 | ||
Minimum Weighted Average Common Stock Price | $ / shares | $ 4.35 | ||
Trading Days, Maintenance of Weighted Average Price, Automatic Conversion | 30 days | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 2,620,687 | ||
Options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares) | 166,000 | 6,532,000 |
Income Taxes - Components of Lo
Income Taxes - Components of Loss From Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Income Taxes | ||
Domestic operations | $ (1,738) | $ (10,618) |
Foreign operations | 532 | 507 |
Loss before income taxes | $ (1,206) | $ (10,111) |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Current: | ||
Federal tax | $ 50 | |
State tax | 80 | $ 6 |
Foreign tax | 177 | 144 |
Total current taxes | 307 | 150 |
Deferred: | ||
Federal tax | (453) | (1,311) |
State tax | (225) | (417) |
Total deferred taxes | (678) | (1,728) |
Valuation allowance | 678 | 23,015 |
Income tax provision | $ 307 | $ 21,437 |
Income Taxes - Summary of Diffe
Income Taxes - Summary of Differences Between Income Tax Provision and Applied Federal Statutory Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Income Taxes | ||
Income tax at U.S. federal statutory rate | $ (253) | $ (2,123) |
Tax attributes written off | 50 | |
Share-based compensation | (318) | 729 |
State income tax, net of federal tax effect | (115) | (325) |
Foreign tax | 144 | 106 |
Other | 121 | 35 |
Change in valuation allowance | 678 | 23,015 |
Income tax provision | $ 307 | $ 21,437 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Deferred tax assets: | ||
Inventory and inventory related allowance | $ 1,082 | $ 529 |
Lease liabilities | 7,311 | 3,663 |
Share-based compensation | 2,102 | 1,836 |
Book over tax depreciation | 468 | |
Intangibles | 660 | 1,577 |
Sales and bad debt allowances | 1,044 | 712 |
Accrued compensation | 436 | 200 |
Net operating loss | 24,131 | 25,322 |
Other | 186 | 1 |
Total deferred tax assets | 37,420 | 33,840 |
Valuation allowance | (30,516) | (29,731) |
Net deferred tax assets | 6,904 | 4,109 |
Deferred tax liabilities: | ||
Right-of-use assets | 6,879 | 3,572 |
Tax over book depreciation | 489 | |
Other | 25 | 48 |
Total deferred tax liabilities | 6,904 | 4,109 |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Summary of State
Income Taxes - Summary of State NOL Carryforwards Expiration Year (Details) - State $ in Thousands | Jan. 02, 2021USD ($) |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 76,120 |
2021 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 5,345 |
2022 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 975 |
2023 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 3,013 |
2024 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 2,370 |
2025 | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 3,281 |
Thereafter | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 61,136 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Tax Credit Carryforward [Line Items] | ||
Effective tax rate | (25.40%) | (212.00%) |
Annual usage limitation | $ 135 | |
Valuation allowance | 30,516 | $ 29,731 |
Accrued expenses related to income taxes payable | 119 | 33 |
Federal | ||
Tax Credit Carryforward [Line Items] | ||
Net operating loss carryforwards | 83,386 | |
State | ||
Tax Credit Carryforward [Line Items] | ||
Net operating loss carryforwards | 76,120 | |
Whitney Automotive Group (WAG) | Federal | ||
Tax Credit Carryforward [Line Items] | ||
Net operating loss carryforwards | 1,295 | |
Other non-current liabilities | Foreign Tax Authority | ||
Tax Credit Carryforward [Line Items] | ||
Income taxes payable | $ 702 | $ 662 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Jul. 01, 2020USD ($)ft² | Apr. 13, 2020USD ($)ft² | Mar. 15, 2020USD ($)ft² | Apr. 25, 2019USD ($) | Feb. 04, 2016USD ($)ft² | Apr. 17, 2013USD ($) | Jan. 02, 2021USD ($)ft² | Dec. 28, 2019USD ($)ft² | Apr. 25, 2018ft² |
Other Commitments [Line Items] | |||||||||
Area of real estate property | ft² | 124,546 | ||||||||
Term of lease | 63 months | ||||||||
Annual base rent commitment | $ 687 | ||||||||
Annual escalation, percentage | 3.00% | ||||||||
Right-of-use - assets - operating leases, net | $ 17,507 | $ 4,544 | |||||||
Right-of-use - obligation - operating, non-current | 16,046 | 3,419 | |||||||
Right-of-use - obligation - operating, current | 2,527 | 1,368 | |||||||
Facility rent expense | $ 4,058 | $ 2,275 | |||||||
Number of outstanding damage or duty claims from CBP | 0 | ||||||||
Facility subject to capital lease | |||||||||
Other Commitments [Line Items] | |||||||||
Excess of net proceeds over the net carrying value of capital leased asset under sale and leaseback | $ 376 | ||||||||
Estimated useful life of property and equipment | 20 years | ||||||||
LaSalle, Illinois Facility | |||||||||
Other Commitments [Line Items] | |||||||||
Period of lease under sale and lease back transaction | 20 years | ||||||||
Initial base annual rent for first year | $ 853 | ||||||||
Percentage of annual increase in base rent | 1.50% | ||||||||
Increased percentage in base rent with change in consumer price index | 1.25 | ||||||||
Chesapeake, Virginia | Warehouse | |||||||||
Other Commitments [Line Items] | |||||||||
Area of real estate property | ft² | 159,294 | 116,000 | 159,294 | ||||||
Term of lease | 3 years | ||||||||
Annual base rent commitment | $ 640 | ||||||||
Annual escalation, percentage | 2.50% | ||||||||
Lease renewal term | 3 years | ||||||||
Monthly base rent commitment | $ 574 | ||||||||
Philippines | |||||||||
Other Commitments [Line Items] | |||||||||
Area of real estate property | ft² | 15,800 | ||||||||
Term of lease | 10 years | ||||||||
Annual base rent commitment | $ 500 | ||||||||
Annual escalation, percentage | 5.00% | ||||||||
Annual escalation percentage after five year | 4 | ||||||||
Right-of-use - assets - operating leases, net | $ 5,325 | ||||||||
Right-of-use - obligation - operating, non-current | 4,981 | ||||||||
Right-of-use - obligation - operating, current | $ 344 | ||||||||
California | |||||||||
Other Commitments [Line Items] | |||||||||
Area of real estate property | ft² | 25,200 | ||||||||
Term of lease | 70 months | ||||||||
Annual base rent commitment | $ 73 | ||||||||
Rent Free Term in Initial Two Year | 5 months | ||||||||
Annual escalation, percentage | 3.00% | ||||||||
Right-of-use - assets - operating leases, net | $ 4,338 | ||||||||
Right-of-use - obligation - operating, non-current | 3,916 | ||||||||
Right-of-use - obligation - operating, current | $ 422 | ||||||||
TEXAS | |||||||||
Other Commitments [Line Items] | |||||||||
Area of real estate property | ft² | 210,000 | ||||||||
Term of lease | 90 months | ||||||||
Annual base rent commitment | $ 48 | ||||||||
Rent Free Term From Lease Initiation | 6 months | ||||||||
Operating Leases, Annual Base Rent From Year Two | $ 71 | ||||||||
Annual escalation, percentage | 3.00% | ||||||||
Right-of-use - assets - operating leases, net | $ 5,469 | ||||||||
Right-of-use - obligation - operating, non-current | 5,231 | ||||||||
Right-of-use - obligation - operating, current | $ 238 | ||||||||
Whitney Automotive Group (WAG) | LaSalle, Illinois Facility | |||||||||
Other Commitments [Line Items] | |||||||||
Gross proceeds from sale of La Salle, Illinois facility | $ 9,750 | ||||||||
Net proceeds from sale of La Salle, Illinois facility | $ 9,507 |
Commitments and Contingencies_2
Commitments and Contingencies - Quantitative Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Finance lease cost components | ||
Amortization of finance lease assets | $ 1,246 | $ 1,007 |
Interest on finance lease liabilities | 735 | 692 |
Total finance lease costs | 1,981 | 1,699 |
Operating lease components | ||
Operating lease cost | 1,890 | 1,409 |
Total lease cost | 3,871 | 3,108 |
Operating cash outflow from operating leases | 1,676 | 1,297 |
Operating cash outflow from financing leases | 735 | 692 |
Financing cash outflow from financing leases | $ 1,005 | $ 670 |
Weighted-average remaining lease term-finance leases (in years) | 8 years 10 months 24 days | 12 years 3 months 18 days |
Weighted-average remaining lease term-operating leases (in years) | 6 years 3 months 18 days | 3 years 8 months 12 days |
Weighted-average discount rate-finance leases | 6.53% | 7.69% |
Weighted-average discount rate-operating leases | 4.13% | 5.59% |
Commitments and Contingencies_3
Commitments and Contingencies - Lease Commitments (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Finance Leases | ||
2021 | $ 2,424 | |
2022 | 2,465 | |
2023 | 2,253 | |
2024 | 1,706 | |
2025 | 1,554 | |
Thereafter | 7,766 | |
Total minimum payments required | 18,168 | |
Less portion representing interest | 5,157 | |
Present value of lease obligations | 13,011 | |
Less current portion of lease obligations | 1,583 | $ 640 |
Long-term portion of lease obligations | 11,428 | 8,627 |
Operating Leases | ||
2021 | 3,166 | |
2022 | 3,519 | |
2023 | 3,302 | |
2024 | 3,150 | |
2025 | 2,649 | |
Thereafter | 5,416 | |
Total minimum payments required | 21,202 | |
Less portion representing interest | 2,629 | |
Present value of lease obligations | 18,573 | |
Less current portion of lease obligations | 2,527 | 1,368 |
Long-term portion of lease obligations | 16,046 | $ 3,419 |
Finance and Operating Leases | ||
2021 | 5,590 | |
2022 | 5,984 | |
2023 | 5,555 | |
2024 | 4,856 | |
2025 | 4,203 | |
Thereafter | 13,182 | |
Total minimum payments required | 39,370 | |
Less portion representing interest | 7,786 | |
Present value of lease obligations | 31,584 | |
Less current portion of lease obligations | 4,110 | |
Long-term portion of lease obligations | $ 27,474 |
Employee Retirement Plan and _2
Employee Retirement Plan and Deferred Compensation Plan - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2010 | Jan. 02, 2021 | Dec. 28, 2019 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Minimum service period required to cover under plan | 1 month | ||
Employer's match per dollar of participants salary | $ 0.50 | ||
Employer's match percentage of participants salary | 6.00% | ||
Contributions vest in annual installments | 3 years | ||
Discretionary contributions | $ 558,000 | $ 332,000 | |
Highly Compensated Employees | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Participant deferral of base salary, percentage (up to) | 90.00% | ||
Participant deferral of annual earned bonus, percentage (up to) | 100.00% | ||
Deferred compensation plan vested | 100.00% | ||
Employer contribution percentage of eligible participants eligible contribution | 50.00% | ||
Percentage of individual eligible contribution to Deferred Compensation Plan account | 2.00% | ||
Other non-current assets | Highly Compensated Employees | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Deferred compensation plan assets | 747,000 | 671,000 | |
Other non-current liabilities | Highly Compensated Employees | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Deferred compensation plan associated liabilities | $ 685,000 | $ 674,000 |
Product Information - Summary o
Product Information - Summary of Segment Percentages (Details) - Sales Revenue, Product Line - Product Concentration Risk - Base USAP | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Segment Reporting Information [Line Items] | ||
Concentration risk percentage | 100.00% | 100.00% |
House Brands, Replacement parts | ||
Segment Reporting Information [Line Items] | ||
Concentration risk percentage | 71.00% | 62.00% |
House Brands, Hard parts | ||
Segment Reporting Information [Line Items] | ||
Concentration risk percentage | 17.00% | 20.00% |
House Brands, Performance | ||
Segment Reporting Information [Line Items] | ||
Concentration risk percentage | 1.00% | 1.00% |
Branded, Replacement parts | ||
Segment Reporting Information [Line Items] | ||
Concentration risk percentage | 1.00% | 1.00% |
Branded, Hard parts | ||
Segment Reporting Information [Line Items] | ||
Concentration risk percentage | 6.00% | 9.00% |
Branded, Performance | ||
Segment Reporting Information [Line Items] | ||
Concentration risk percentage | 4.00% | 7.00% |