CarParts.com, one of the leading e-commerce providers of automotive parts and accessories, is reporting results for the third quarter ended September 26, 2020.

Q3 2020 Highlights vs. Q3 2019                                                           

• Net sales increased 69% to $117.4 million compared to $69.3 million. 
• Gross profit more than doubled to a company record $43.1 million compared to $21.1 million. 
• Gross margin expanded 620 basis points to a company record 36.7% compared to 30.5%. 
• Net income improved significantly to $1.4 million or $0.03 per diluted share, compared to a net loss of $(1.4) million or $(0.04) per share. 
• Adjusted EBITDA increased almost 4x to $5.1 million compared to $1.3 million. 
• Successfully completed a public equity offering of $60.5 million in net proceeds, which closed on August 18, 2020and was 3 times oversubscribed.

“The investments we made in our technology, marketing and supply chain starting in 2019 enabled us to return to growth and margin expansion beginning in the first quarter of this year and continuing through the third quarter, driving exceptional growth across our business,” said Lev Peker, CEO of CarParts.com. “In fact, gross profit and gross margin reached record highs, and we have continued to generate significant year-over-year increases to our bottom line thanks to our focus on positive unit economics, even on the first purchase. Our team has done an incredible job of maintaining our strong performance while addressing the elevated and evolving e-commerce demand.

“Currently there are three major consumer behavior changes that are helping to propel our growth: a shift from Do It For Me to DIY, a secular shift from offline to online, and more recently, a shift away from public transportation which is combined with the oldest car fleet the country has ever seen. To capitalize on these improvements, we are continuously investing in our business. 

“Across our organization, we have made exceptional progress in establishing CarParts.com as a modern and scalable e-commerce company. As we look to the fourth quarter and our trajectory into 2021, we will work to further optimize both our back-end and our customer-facing operations. We will continue to focus on expanding our inventory and fulfillment network capabilities, and remain financially disciplined when deploying capital to the areas of our business that generate the strongest returns. We are proud of the strong foundation we have built and will remain focused on building a long-lasting, exceptional company.” 

Third Quarter 2020 Financial Results

Net sales in the third quarter increased 69% to $117.4 million compared to $69.3 million in the year-ago quarter. The increase was primarily driven by triple-digit revenue growth from CarParts.com, the company’s primary sales channel.

Gross profit in the third quarter more than doubled to a record $43.1 million compared to $21.1 million in the third quarter of last year, with gross margin up 620 basis points to 36.7% compared to 30.5%. These increases were mainly driven by favorable product and channel mix, as well as efficiencies in logistics operations.

Net income in the third quarter improved significantly to $1.4 million or $0.03 per diluted share, compared to a net loss of $(1.4) million or $(0.04) per share in the third quarter of last year. 

Adjusted EBITDA in the third quarter increased significantly to $5.1 million compared to $1.3 million in the year-ago quarter. The increase was driven by the significant net sales growth and continued benefit of long-term operational improvements implemented across all areas of the business. 

On Sept. 26, 2020, the company’s cash balance increased significantly to $59 million compared to a $2.3 million cash balance at Dec. 28, 2019. The increase was primarily driven by the company’s successful completion of its underwritten public equity offering of $60.5 million in net proceeds, which closed on August 18, 2020 and was 3x oversubscribed. The company also paid down $12 million of liabilities tied to our credit facility and has the ability to flex its facility with JP Morgan Chase up to $40.0 million. These initiatives significantly expand the company’s available liquidity.