CarParts.com, Inc.

Good afternoon and welcome to the carparts.com third quarter 2022 conference call. At this time, all participants will be in a listen-only mode. After the presentation, there will be a question and answer session. Please note this call is being recorded. I would now like to pass the conference over to our host, Tina Mir-Farsi, Vice President of Communications and Culture. Please go ahead.

Hello, everyone. Thank you for joining the call today to discuss our third quarter 2022 results. Joining me today from the company are David Mignon, Chief Executive Officer, and Ryan Lockwood, Chief Financial Officer. Their prepared remarks and responses to your questions could contain certain forward-looking statements related to the business under the federal securities laws. Actual results may differ materially from those contained in or implied by these forward-looking statements due to the risks and uncertainties associated with the business. For a discussion of a material risk and other important factors that could affect results, please refer to the carparts.com annual report on Form 10-K and 10-Q as filed with the SEC, both of which can be found on the Investor Relations website. On the call, both GAAP and non-GAAP financial measures will be discussed. A reconciliation of GAAP to non-GAAP financial measures is provided in the carparts.com press release issued today. With that, I would now like to turn the call over to David.

Thank you, Tina, and good afternoon, everyone. As reported in today's release, for Q3 2022, our team achieved our best third quarter sales on record of $165 million, up 16% versus the same period last year, and marking our 11th quarter in a row of double-digit year-over-year self-growth. On the two-year stack, revenues are up 37%. Like many throughout the United States, our customers are not immune from the inflationary pressures causing them to tighten their belts. However, we have two things working in our favor. First, many of our items are less discretionary as consumers push to keep their vehicles on the road longer, And second, we believe that as wallets continue to be pressured by high interest rates and inflation, some customers who were previously do-it-for-me customers will step into the do-it-yourself space in order to save money. Regardless of the circumstances that bring customers to carparts.com, we remain committed to simplifying their journey and removing the stress from auto repair and maintenance. Towards this endeavor, our team has continued executing on our four areas of focus, outstanding customer service, operational excellence financial discipline and innovation number one outstanding customer service whether it is placing an order over the phone with one of our trained agents or helping connect the customer to a certified mechanic simplifying and removing the friction of auto repair is at the forefront of everything we do we're excited to announce that we have successfully upgraded to a new customer service platform on carparts.com that allows shoppers to get better support in real time with email and chat right from their mobile device. As a reminder, over one third of our e-commerce revenues come from repeat customers, and we will continue to focus on improving our experience to get that number higher over the long term. Number two, operational excellence. Aligning people, process, and strategy with the needs of our customers is in our DNA. We continue to optimize our supply chain and invest in new tools to find operational efficiencies in our distribution centers. Whether it is with inventory placement strategies or smarter technologies, we're striving to get more out of our current network to deliver constantly improving customer experience while making our operation more efficient. On the technology front, we're happy to report that we have officially completed our ERP upgrades. As many of you know, our legacy system was over 15 years old and we're extremely thankful for the amazing work of our technology and business teams over the last two years to get us to a best in class platform. Number three, financial discipline. Our business is built on positive unit economics. We focus on optimizing the profitability of every transaction and maximizing gross profit dollars. While revenues and gross margin percentage may fluctuate, our overall goal is to always optimize for dollars. Internally, we like to say you can't deposit percentages in the bank. As reported in today's release, we generated another quarter of strong adjusted EBITDA of $6.3 million, up 173% from a year ago. In times of market uncertainty, profitable growth and free cash flow generation are more important than ever and where we continue to focus our energy and resources. Number four, innovation. The path to disrupting our industry is by growing our addressable markets and getting our customers to come back to carparts.com for all their repair and maintenance needs. Last quarter, we launched a new do it for me capability on our website where customers in select markets can see installation pricing and book an appointment for certain part names at a certified repair shop in their area. We recently surpassed 1,500 bookings with this service and are finding from our customers that this is a compelling value proposition. Of course, it's still very early for this new solution, but we believe that continued momentum will allow us to refine and optimize the technology and logistics to provide a seamless customer experience. From a pricing standpoint, in some cases, shopping on our website may offer customers an opportunity to pay less for parts and labor than they would for just the parts at a brick and mortar or dealership. We believe this is a highly compelling offering, especially in times when consumers are trying to be mindful of their spend and we are working on the messaging and test markets. Ryan will now discuss our financial results.