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spk_0: the conference will begin shortly
spk_1: good afternoon at this time all participants will be analysts and only mode after the present a sure there will be a question and answer session please note this call is being recorded our knowledge the past the conference over to our hosts tina me or farsi vice president of communications and culture please go ahead
spk_2: hello everyone in thank you for joining us for the car parts dot com fourth quarter twenty a few conference call i like to start by welcoming the investors and other words ending the meeting remotely joining me today from the company or david many on chief executive officer ryan lockwood chief financial officer and michael half acre chief operating officer before you turn it over to david to start the meeting i have them important disclosures they're prepared remarks and responses your question 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 the forward looking statements you the risks and uncertainties associated with the business for a discussion of the material with and other important factor that could affect result please refer to the car parts are com annual report on form ten k and ten jews as filed with the fcc both of which can be found on the investor relations website on the call both gas and non gap financial measures will be discussed a reconciliation of gas to non gaap financial measures is provided in the hard parts are press release issued today and with that i would now like to turn the call over to david
spk_3: thank you enough good afternoon everyone and thank you for joining us as reported in today's relief for que for twenty twenty two we marked or twelve consecutive quarter of double digit year over year self rule of one hundred and fifty four point five million but eleven point eight percent from the prior year on it two years dark revenues for the quarter up twenty seven point two percent also for the full fiscal year twenty twenty two we're excited to be company records for both top line at six hundred and sixty one point six million and twenty six point one million for adjusted ebitda for those keeping score this is our third year in a row of posting record revenue a lot happened and twenty twenty two within the organization we refreshed or executive team open to buildings increase the size of our credit facility while extending it for five years and much more we did all of this while helping our customers navigate a much tougher economic environment or team outperformed and delivered record break he fails profitability and free cash flow were optimizing or him and boy position the key to our success lies in our culture and our commitment the shareholders we've built an incredible business center around positive unit economics repeat customers and a laser focus on financial discipline all with the intention of maximizing long term shareholder value at our dot com we are committed to empowering drivers along their journey and removing the stress from ottawa a pair and maintenance and the keep delivering on this or team has continued executing on ford focus areas outstanding customer service operational excellent financial discipline and innovation number one outstanding customer service delivering an outstanding customer experience is the most critical thing we do our customers are already seeing a more streamlined experience on the website as well as faster delivery time today we're closer to our customers and are click the delivery guy and are better than ever these tangible improvements are part of the cultural shift that started in twenty twenty two a car parts are gone in which every decision starts with the customer as a reminder repeat customers account for over one third of our ecommerce revenues and as we continue to improve our customer experience over time we see an opportunity to build a long term relationship with our customers one that puts carpark dot com pop of mine and makes us the go to destination for all their automotive me number two operational excellence since the management team transition last year we have doubled down on efficiency and continued our focus on profitable growth we are very excited to welcome michael half acre as our new chief operating officer he comes to us with extensive ecommerce and retail experience at some of the largest company the well most recently fifteen year that amazon michael shares both our cultural and business mindset and we look forward to him brain his best and cloth properties for vertically integrated supply chain and beyond michael would provide further details on the operational improvements the team has made shortly also we are pleased with the recent promotion of stephanie or bought the chief human resources officer stephanie twenty five years of age or experience and genuine care for employees i helped us establish a critical foundation for our business she has implemented significant changes within the hr function and align line or practices with our goals objectives she will now focus on developing existing dallas to drive performance globally number three financial discipline one important highlight is that our business is built on positive unit economics are adjusted ebitda was up over fifty percent and twenty twenty two and we're currently on drawn on our revolver the key is focusing on the profitability of every transaction and maximizing gross profit dollars while revenues and gross margin percentage may flood eight or overall goal with the always optimized for dollars internally we like to say you can't deposit percentages in the bank in the current environment we have been very intentional on how we deploy capital with a heightened focus on incremental spend related the headcount and by reallocating capital from discretionary spending such as upper photo marketing and branding campaign and the more customer centric initiatives
spk_4: number for innovation
spk_3: the path to disrupting or industry and by removing the friction from a notoriously burdensome profit last year we launched a new do it for me capability get it installed on our website where customers and select markets can see installation pricing and book an appointment at a certified repair shop more excited to announce that we have doubled our booking since our last on november and we are expanding are offering with additional categories
spk_5: and with that i would like to turn over the michael michael were excited to have you and walk him to the t
spk_6: thank you david
spk_7: i joined about ninety days ago and i've had the opportunity to visit our distribution centers walk the floor and here from our front line team members i've also had the pleasure of visiting our manila philippines corporate office one thing that has been clear it during my time here so far is that i'm directly line with our business objectives in our focus on creating an unparalleled customer experience twenty twenty do with the year of expansion for us we now how over one million square feet of built up distribution space for siddiqui position close to our customer base allowing us to cover now
spk_3: ninety eight percent of the country with a to date her that time and twenty twenty three we will remain laser focused on execution process improvements and operational efficiency to get more out of our existing network i'm super excited to be here and i look forward to our team delivering value for customers and shareholders next i'd like to turn it over the rhine thank you michael into for we generate revenue of one hundred and fifty four point five million up eleven point eight percent from the prior year period on a to your stack revenues increased twenty seven point two percent for the full your twenty twenty two revenues were six hundred and sixty one point six million up thirty nine point six percent from twenty twenty one and up forty four point eight percent on a to you're stuck for the first eight weeks of fiscal year two twenty twenty three we produced high single digit year over year revenue growth combined with sequential gross margin expansion we remain committed to balance and growth profitability and freak out
spk_7: for generation for the full year twenty twenty three
spk_3: gross profit for the quarter was fifty one point six million up eight point nine percent from the prior year period with gross margin of thirty three point four versus thirty four point three for the full year gross profit was two hundred and thirty point nine million bucks seventeen percent with gross margins improving to thirty four point nine priests a compared to thirty three point nine percent in twenty twenty one both driven by changes in free charges
spk_7: net loss for the quarter and full year was six point two million and one million respectively the fourth quarter gap loss was predominantly driven by noncash expenses and seasonally higher free charges
spk_3: for the fourth quarter we reported adjusted he because of two point one million down from two point six million the change in adjusted ebitda in the quarter with predominately driven by seasonal free charges which were higher the and started earlier in the prior year
spk_5: for the full year twenty twenty two we reported adjusted ebitda of twenty six point one million up fifty five point five percent from twenty twenty one reflecting our commitment to financial discipline positive union economics as well the unyielding focus on bouncing profit growth with free cash flow generation turn into the balance
spk_3: he we enter the quarter with cash and equivalent of eighteen point eight million and no bounds and remodeling we ended the year with inventory at one hundred and thirty six million compared to one hundred and three point nine million in a prayer the we we have ample liquidity and we have no intention or need to raise capital akron valuations we continue focus on self funded growth and at the end of que or we were under honorable revolving credit facility with an option to expand to one hundred fifty million depending on our inventory levels and certain terms and conditions
spk_7: and now i'd like to turn it back to david for some closing remarks
spk_3: thank you i am and everyone who made the time to join to these costs twenty twenty two with our best year ever and we are proud of the company we continue to build each and every day it's amazing to watch a twenty five year old company go through a full transformation continue to reinvent itself and deliver incredible results twenty twenty two marked our third consecutive year of double digit growth and since twenty nineteen we have more than doubled our revenues and return the company to profitability all while building a robust balance sheet for twenty twenty three and beyond we continue to put our customers and key members at the center of our strategy and you're prepared for tackle the future with intention focus and discipline as we gain market share weren't a strong position to thrive and continue delivering profitable growth amid whatever changes the market brings us by leveraging or vertically integrated supply chain proprietary catalog and other advanced capabilities like data science our goal is to continue balancing or investments to be more streamlined without compromising on building and extraordinary business regardless of what is happening in the economy we believe that by doing this will benefit our shareholders in the years to come and draw the intrinsic value of our company we will remain focused on positive unit economics free cash flow generation operational efficiency and delivering an outstanding customer experience now none of this would be possible without the incredible work and commitment from every one and are gullible team you come to work each day to feed each new opportunity that comes your way we're grateful and honor to leave such an amazing organization and as we said carpark dot com get after it well now turn it over to the operator to open up for question
spk_1: thank you as a reminder to ask a question your need to press star one one on your telephone and wait for your name to be announced to withdraw your question please press star one one again please stand by will we compile the q and a roster our first question comes to the line of thomas forte from the a davidson
spk_8: great them to quote in one question one follow up and then david a ride java the
spk_9: eleven years
spk_10: partners
spk_8: limited a given the cows macro environment when i watched that you could provide a league high level thought i'd revenue growth for twenty twenty three
spk_3: sir i'm liking me start by saying that the company's it really is in better shape than it's ever been i think we have a lot of condition conviction and our ability to execute yield i'll be i'm and balance transparency with the liability but you know right now there's a lot of sense you at the natural environment we feel good about our ability to grow mit single digits to high single digits and i think of the economy turns more positive we can grow double digits so really the take away his that you know we feel good about being able to leverage all the improvements we made over the last few years we plan to continue growing or even if the environments out
spk_8: great for my second question can you talk about how improving supply chain i may have possibly affected your fourth quarter sales and profitability and how it might impact you enjoy twenty three
spk_3: sure so you're wanting to keep in mind is where fight both not like those know when the supply chain improves that improvement goes into landed cost so unfortunately unlike some of the life of people you're not going to see the benefit until probably the back up
spk_11: this
spk_1: thank you one moment for next question
spk_12: our next question comes on the line of ryan myers from lake street capital markets
spk_3: your bag i think for take my question on first one to me to start taking a step backwards and are you guys talked about the double digit growth and the month of october looks like that obviously flowed through for the rest of the quarter on the curious what you guys on the last two months ah maybe from a demand perspective and kind of how man of looking for your car customers yeah so bad half of last year here we are did cap like on the demand i think the way to categorize consumers right now is that they're being i think veritas discerning about how they spend money to be cautious and as i had a mention to harm you know we have a great ability to execute with
spk_12: done a lot of things right and i think no matter what happens we're in a good position to capitalize you were significantly cheaper than the competition so as people look to save money versus a traditional because brick and mortar i think will be will account for customers there and then the obvious asked that is that here and there are some consumers may choose to differ some space ben and then that's what's going to lead to the actual on balance revenue growth
spk_3: got it and then just kind of looking at the do it for me offering sound like you double the number of bookings from i think was fifteen hundred by a quarter on know now that you have couple corners on the about with that know what sort of feedback have you guys gotten from customers the mechanics and we know what that will get you excited about that for the future it so the feedback is really good i actually go through and read all the comments individually of a predominately every comment if you know is something along the lines of i'm amazed that exists this is helping me out this made my life much easier the
spk_12: art than the in that could me confidence in the offering that makes compelling is that someone can in many cases go by apart and get it installed and solve their problem for cheaper than just find the part alone from a brick and mortar store so especially in a recession i think that that's a great way we're helping consumers fluid difficult economic period
spk_1: got it thanks a take my question thank you one moment far next question
spk_12: our next question comes from the line of their and off car he from roth m k m the guy that i see my questions and then and shoveled the quarter to five a for can you talk about through the strange weather going on across country that's a major impact on your own business here they are the banner differ and then second one arm with it your inventory felt when slowly again mckenna curious given kind of the size of your business and brian the comment you made about our
spk_3: growth whether you know for times you better times what's the right inventory level of you guys should should have the are and is david i guess i'll take the first part of the question and then all or ended up the wind you know i think the weather when are significant disruption kind of slowed down the demand in certain regions but then usually we see if pick up the following week so we usually see some ups and down during a changes in temperature but over the long time and at least over the course of a year at least historically we haven't seen a huge impact on fails of if anything it's the wild swings and temperature that create a potential demand in the future
spk_11: not a the game and a level so where we ended the year for him and tory is probably where you're gonna see us and inventory levels at the end of fiscal year twenty twenty three obviously quarter by you'll see some fluctuations up and down the we go pretty good about them into a position and it
spk_1: the a fifth
spk_0: thank you
spk_1: this concludes today's conference call thank you for participating you may now disconnect the conference will begin shortly to raise and lower your hand during una you can dial star one one
spk_2: good afternoon at the time all participants will be analysts and only mode after the presentation there will be a question and answer session please note this call is being recorded our knowledge the past the conference over to our hosts tina me or farsi vice president of communications and culture please go ahead hello everyone in thank you for joining us for the car parts dot com fourth quarter twenty twenty two conference call i like to start by welcoming the investors and other words ending the meeting remotely joining me today from the company or david many on chief executive officer ryan lochte chief financial officer and michael half acre chief operating officer before he turn it over to david to start the meeting i have them important disclosures they're prepared remarks and responses your question 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 the forward looking statements you the risks and uncertainties associated with the business for a discussion of the material with and other important factor that could affect result please refer to the car parts are com annual report on form ten k and ten jews as filed with the fcc both of which can be found on the investor relations website on the call both gap and non gap financial measures will be discussed a reconciliation of gas to non gaap financial measures is provided in the
spk_3: car parts are compress release issued today and with that i would now like to turn the call over to david
spk_5: thank you enough good afternoon everyone and thank you for joining us as reported in today's release for que for twenty twenty two we marked or twelve consecutive quarter of double digit year over year self rule of one hundred and fifty four point five million of eleven point eight percent from the prior year on it
spk_3: two years dark revenues for the quarter up twenty seven point two percent also for the full fiscal year twenty twenty two we're excited to be company records for both top line at six hundred and sixty one point six million and twenty six point one million for adjusted ebitda for those keeping score this is our third year in a row of bring record revenue a lot happen and twenty twenty two within the organization we refreshed are executive team open to buildings increase the size of our credit facility while extending it for five years and much more we did all of this while helping our customers navigate a much tougher economic environment our team outperformed and delivered record breaking sales profitability and free cash flow while optimizing i'm in a position the key to our success lived in our culture and our commitment to shareholders we've built an incredible business center around positive unit economics repeat customers and a laser focused on financial discipline all with the intention of maximizing long term shareholder value at top are dot com we are committed to empowering drivers along their journey and removing the stress from ottawa a pair and maintenance and to keep delivering on this our team has continued executing on ford focus areas outstanding customer service operational excellent financial discipline and innovation number one outstanding customer service delivering an outstanding customer experience is the most critical thing we do our customers are already seeing a more streamlined experience on the website as well as faster delivery time today we're closer to our customers and our click the delivery times are better than ever these tangible improvements are part of the cultural shift that started in twenty twenty two a car dot com in which every decision starts with the customer as a reminder repeat customers account for over one third of our ecommerce revenues and as we continue to improve our customer experience over time we see an opportunity to build a long term relationship with our customers one that puts carpark dot com pop of mine and makes the go to destination for all their automotive me number two operational excellence since the management team transition last year we have doubled down on efficiency and continued our focus on profitable growth we are very excited to welcome michael half acre as our new chief operating officer he comes to us with extensive ecommerce and retail experience at some of the largest companies in the well most recently fifteen year that amazon michael shares both our cultural and business mindset and we look forward to him bring his best and cloth properties for vertically integrated supply chain and beyond michael would provide further details on the operational improvements the team has made shortly also we are pleased with a recent promotion of stephanie or bought the chief human resources officer stephen is twenty five years of age or experience and genuine care for employees i helped us establish a critical foundation for our business she has implemented significant changes within the hr function and align our practices with our goals objectives she will now focus on developing existing talent to drive performance globally number three financial discipline one important highlight is that our business is built on positive unit economics are adjusted ebitda was up over fifty percent and twenty twenty two and we're currently on drawn on our revolver the key is focusing on the profitability of every transaction and maximizing gross profit dollars while revenues and gross margin percentage may fly actually our overall goal if the always optimized for dollars internally we like to say you can't deposit percentages in the bank in the current environment we have been very intentional on how we deploy capital with a heightened focus on incremental spend related the headcount and by reallocating capital from discretionary spending such as up photo marketing and branding campaign and more customer centric initiatives number for innovation the path to disrupting or industry is by removing the friction from a notoriously burdensome profit
spk_5: last year we launched a new do it for me capability get it installed on a website where customers and select markets can see installation pricing and book an appointment at a certified repair shop
spk_6: we're excited to announce that we have doubled our bulking since our last on november and we are expanding are offering with additional category
spk_7: and with that i would like to turn it over the michael michael we're excited to have you and walk him to the t thank you david i joined about ninety days ago and i've had the opportunity to visit our distribution centers walk before and here from a frontline team members i've also had the pleasure of that they are manila philippines corporate office
spk_3: one thing that has been clear and during my time here so far is that i'm directly aligned with our business objectives in our focus on creating an unparalleled customer experience twenty twenty two with the year of expansion for us we now have over one million square feet of built up distribution space for steeply position close to our customer base allowing us to cover nine the eight percent of the country with the today date the time and twenty twenty three we will remain laser focused on execution process improvements and operational efficiency to get more out of our existing network i'm super excited to be here and i look forward to our team delivering value for customers and shareholders next i'd like to turn it over the rhine
spk_7: thank you michael and queue for we generate revenue of one hundred and fifty four point five million up eleven point eight percent from the prior year period on a two years tax revenues increased twenty seven point two percent for the full your twenty twenty two revenues were six hundred and sixty one point six million up thirteen
spk_3: point six percent from twenty twenty one and up forty four point eight percent on a to you're stuck for the first eight weeks or fiscal your twenty twenty three we produced hi single digit year over year revenue growth combined with sequential gross margin expansion we remain committed to balance and growth profitability and free cash flow generation for the full year twenty twenty three gross profit for the quarter was fifty one point six million up eight point nine percent from the prior year period with gross margin of thirty three point four versus thirty four point three for the full year gross profit was two hundred and thirty point nine million up seventeen percent with gross margins improving to thirty four point nine percent compared to thirty three point nine percent and twenty twenty one both driven by changes in free charges
spk_5: net loss for the quarter and full year was six point two million and one million respectively the fourth quarter gap loss which predominantly driven by noncash expenses and seasonally higher free charges
spk_3: for the fourth quarter we reported adjusted he began of two point one million down from two point six million the change in adjusted ebitda in the quarter with predominately driven by seasonal free charges which were higher and started earlier in the prior year for the full year twenty twenty two we reported adjusted ebitda of twenty six point one million up to fifty five point five percent from twenty twenty one reflecting our commitment to financial discipline positive unit economics as well the unyielding focus on balancing profit growth with free cash flow generation
spk_7: turn into the balance sheet we ended the quarter with cash and equivalent of eighteen point eight million and no balance and remodeling we ended the year with inventory at one hundred and thirty six million compared to one hundred and three point nine million in a prayer
spk_3: we believe we have ample liquidity and we have no intention or need to raise capital akron valuations we continue focus on self funded growth and at the end of que or we were undrawn a revolving credit facility with an option to expand to one hundred fifty million depending on our inventory levels and certain terms and conditions and now i'd like to turn it back to david for some closing remarks thank you i am and everyone who made the time to join to these costs twenty twenty two with our best year ever and we are proud of the company we continue to build each and every day it's amazing to watch at twenty five year old company go through a full transformation continue to reinvent itself and deliver incredible results twenty twenty two marked our third consecutive year of double digit growth and since twenty nineteen we have more than doubled our revenues and return the company to profitability all while building a robust balance sheet for twenty twenty three and beyond we continue to put our customers and key members at the center of our strategy and you're prepared to tackle the future with intention focus and discipline as we gain market share weren't a strong position to thrive and continue delivering profitable growth amid whatever changes the market brings us by leveraging or vertically integrated supply chain proprietary catalog and other advanced capabilities like data science our goal is to continue balancing or investments to be more streamlined without compromising on building and extraordinary business regardless of what is happening in the economy
spk_1: we believe that by doing this will benefit our shareholders in the years to come and draw the intrinsic value of our company we will remain focused on positive unit economics free cash flow generation operational efficiency and delivering an outstanding customer experience now none of this would be possible without the incredible work and commitment from every one and are gullible team you come to work each day to feed each new opportunity that comes your way we're grateful and honor to lead such an amazing organization and as we said carpark dot com get after it i'll now turn it over to the operator to open up for question thank you as a reminder to ask a question your need to press star one one on your telephone and wait for your name to be announced to withdraw your question please press star one one again
spk_8: damn bible with a while the q and a roster
spk_9: our first question comes to the line of calm his forte from the a davidson
spk_8: greater to quote in one course you would follow up and then they have the right job
spk_3: the year there are to the look at as is limited or given the tells macro environment when i watched that you could have provided league high level thought i'd revenue growth for twenty twenty three sure i'm liking let me start by saying that the company's it really is in better shape than it's ever been i think we have a lot of condition conviction in our ability to execute a yield i'll be honest i'm a balance transparency with the liability but you know right now there's a lot of sense you at the map environment
spk_8: we feel good about our ability to grow mit single digits to high single digits
spk_3: and i think if the economy turns more positive we can grow double digits so really the take away is that you know we don't good about being able to leverage all the improvements we made over the last few years we plan to continue growling or even if environments out
spk_1: great there for my second question can you talk about how improving supply chain i may have pathway affected your fourth quarter sales and profitability and how it might impact you enjoy twenty three sure so you're wanting to keep in mind is where fight both not like those know when the supply chain improves that improvement goes into landed cost so unfortunately unlike some of the life of people you know i can see the benefit until probably the back half
spk_12: this
spk_3: thank you one moment for next question our next question comes on the line of ryan myers from lake street capital markets
spk_12: your bag i think or take my question on first one to me to start taking a step backwards know you guys talked about the double digit growth in the month of october would like that obviously flowed through for the rest of the quarter on the curious what you guys on the last two months or maybe from a demand perspective and kind of how man of looking for your car customers yeah so back half of last year your we'll see good catholic on a demand i think the way to categorize consumers right now is that they're being i think veritas discerning about how they spend money to be cautious and as i had a mention to tom you know we have a great ability to execute we've done it
spk_3: lot of things right and i think no matter what happens we're at a good position to capitalize you were significantly cheaper than the competition so as people look to save money versus a traditional because brick and mortar i think we'll be all caps capture customers there and then the obvious off that do that here and there are some consumers may choose to differ some span and then that's what can lead to the actual on balance revenue growth got it and then just kind of looking at the do it for me offering sound like you double the number of bookings from i think was fifteen hundred by a quarter on know now that you have couple quarters under your belt with that you know what sort of feedback have you guys gotten from customers and mechanics and you know what that what could the excited about that for the future
spk_12: it's so the feedback is really good i actually go through and read all the comments individually as a predominantly every comment if you know it's something along the lines of i'm amazed that exists this is helping me out this made my legs much easier the
spk_1: art than the and that gives me confidence in the offering that makes compelling is that someone can in many cases go by apart and get it installed and solve their problem for cheaper than just find the park alone from a brick and mortar store so especially in a recession i think that that's a great way we're helping consumers fluid difficult economic period
spk_12: got it takes a take my question thank you one moment far next question our next question comes from the line of their and of car he from roth m k m
spk_3: the guy that actually my questions and then i struggled a quarter to five a for can you talk about
spk_12: through the strange weather going on across country
spk_3: that's a major impact on your own business year they are the better differ and then second one arm with it your inventory felt when fully again mckenna curious given kind of the size of your business and ryan the comments you made about power growth whether you know smarter times you better times what's the right inventory level that if if you guys should should have
spk_13: figure in is david i get think the first part of the question and then all are handed off to wine know i think the weather when are significant disruption kind of slowed down the demand and certain regions but then usually we see a pick up the following week so we usually he some ups and down during a changes in temperature but over the long time and at least over the course of
spk_1: the year at least historically we haven't seen a huge impact on fails of if anything it's the wild swings and temperature that create a potential demand in the future
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