U.S. Auto Parts Network has reported results for the fourth quarter and fiscal year ended Jan. 2, 2016. The fourth quarter included 13 weeks, versus 14 weeks in the fourth quarter ended Jan. 3, 2015. The fiscal year included 52 weeks, versus 53 weeks in the fiscal year ended Jan. 3, 2015.
Net sales in the fourth quarter of 2015 decreased 4 percent to $67.5 million compared to $70.5 million in the year-ago quarter. Comparable net sales, which exclude an extra week in the fourth quarter of 2014, as well as sales related to the company’s discontinued West Coast wholesale operations, increased 2 percent. The company said the comparable sales increase was largely driven by a 1.6 percent increase in online marketplace sales to $15.8 million, and an 11 percent increase in private label sales, partially offset by expected declines in the company’s lower-margin branded business.
Gross profit in the fourth quarter of 2015 increased 6 percent to $20 million compared to $18.8 million in the year-ago quarter (up 12 percent excluding the extra week in 2014). As a percentage of net sales, gross profit increased 290 basis points to 29.6 percent compared to 26.7 percent. The increase in gross profit margin was primarily driven by a higher mix of private label sales, which were 63 percent of net sales compared to 58 percent in the year-ago quarter. The increase also was driven by strategic pricing initiatives and freight efficiencies.
Net loss in the fourth quarter was $0.1 million, compared to a net loss of $2 million in the year-ago quarter. As of Jan. 2, 2016, cash and cash equivalents totaled $1.5 million compared to $0.8 million at Jan. 3, 2015. Total debt was $11.8 million compared to $11 million at Jan. 3, 2015.
“Q4 marked the eighth consecutive quarter of double-digit, year-over-year comp sales growth in our private label business” said Shane Evangelist, CEO of U.S. Auto Parts. “Our continued emphasis on private label, as well as our focus on cost and pricing efficiencies, drove a 89 percent increase in adjusted EBITDA to $2.6 million. We expect to continue shifting the revenue mix to our higher-margin private label business and leverage our cost infrastructure to expand margins and accelerate bottom-line growth in 2016.”
Full Year Financial Results
Net sales in 2015 increased 3 percent to $290.8 million compared to $283.2 million in 2014. Comparable net sales increased 6 percent compared to the prior year.
Gross profit in 2015 increased 6 percent to $83.2 million compared to $78.2 million in 2014. As a percentage of net sales, gross profit increased 100 basis points to 28.6 percent compared to 27.6 percent.
Net loss in 2015 was $0.1 million, compared to a net loss of $4.9 million in 2014.
2016 Outlook
U.S. Auto Parts expects net sales to be up, in the low-to-mid-single digits on a percentage basis compared to 2015 and Adjusted EBITDA to range between $11.5 million and $14 million, a 15 to 40 percent increase from the prior year. The company also continues to expect gross margin expansion and double-digit private label sales growth in 2016.
