EX-99.1 2 exhibit99-1.htm PRESS RELEASE - Q211 RESULTS exhibit99-1.htm
Exhibit 99.1
 
 
 
U.S. AUTO PARTS NETWORK, INC. REPORTS SECOND QUARTER RESULTS
 
•  
Net sales $84.3 million.
 
•  
Adjusted EBITDA $4.6 million.
 
•  
Gross Margin 33.7%
 
 
CARSON, California, August 9, 2011— U.S. Auto Parts Network, Inc. (NASDAQ: PRTS), one of the largest online providers of automotive aftermarket parts and accessories, today reported net sales for the second  quarter ended July  2, 2011 of $84.3 million compared with Q2 2010 net sales of $53.2 million. Excluding $24.8 million of revenues from the acquisition of J.C. Whitney, Legacy net sales were $59.5 million, an increase of 11.8% over Q2 2010 net sales. Q2 2010 net sales includes the impact of a $2.0 million non-cash reduction of reported sales from a change in the Company’s revenue recognition. Excluding the impact of the change in revenue recognition on Q2 2010 sales, Legacy net sales for Q2 2011 increased 7.8%. Q2 2011 net loss was $2.6 million or $0.08 per share, compared with Q2 2010 net income of $0.5 million or $0.01 per diluted share. Q2 2011’s net loss includes a net loss of $4.1 million or $0.13 per share related to J.C. Whitney of which $1.5 million of the loss, net of tax was attributable to restructuring and integration expenses. The Company generated Adjusted EBITDA of $4.6 million for the quarter compared to $5.0 million for Q2 2010. Excluding J.C. Whitney’s Adjusted EBITDA of $(0.6) million and related $1.5 million of restructuring and acquisition expenses as well as $0.2 million of legal fees to protect intellectual property; Adjusted EBITDA was $5.2 million, an increase of 3.8% over Q2 2010. For further information regarding Adjusted EBITDA, including a reconciliation of Adjusted EBITDA to net income (loss), see non-GAAP Financial Measures below.
 
“Our business faced some difficult headwinds in the quarter and while we did not achieve the top line growth we would like or expect, we did manage to grow both sales and Adjusted EBITDA for our legacy business in the quarter.” stated Shane Evangelist. “We also made considerable progress integrating J.C. Whitney and anticipate the technology integration being completed by the end of this quarter.”
 
Q2 2011 Financial Highlights
 
•  
Net sales for Q2 2011 increased by 58.4% from Q2 2010. Excluding the acquisition of J.C. Whitney and the change in the Company’s revenue recognition in Q2 2010, Q2 2011 Legacy net sales increased 7.8% primarily from a 6.0% increase in e-commerce sales and an 8.2% increase in online marketplace sales. The increase in e-commerce sales resulted from a 9% increase in unique visitors, a 1% increase in revenue capture, a 2% decline in average order value, and a 3% decline in conversion.

•  
Gross profit for Q2 2011 increased 54.5% from Q2 2010. Excluding the acquisition of J.C. Whitney, gross profit was $20.2 million, an increase of 9.9%. Gross margin decreased 0.9% to 33.7% of net sales compared with Q2 last year. Excluding the acquisition of J.C. Whitney, gross margin was 34.0% down from 34.6% in Q2 2010 but up from 33.4% in Q4 2010. Gross margin was unfavorably impacted by a mix shift from body to engine parts partially offset by price increases in both body and engine parts.
 
•  
Online advertising expense, which includes catalog costs, was $7.6 million or 9.8% of Internet and catalog net sales for the second quarter of 2011. Excluding J.C. Whitney, online advertising expense was 7.0% of Internet net sales, up 0.7% from the prior year. Marketing expense, excluding advertising expense, was $6.8 million or 8.0% of net sales for the second quarter of 2011 compared to 7.5% in the prior year period. Excluding J.C. Whitney, marketing expense without advertising was $4.7 million or 7.9% of Q2 2011 net sales, up 0.4% from the prior year. The increase is primarily due to higher amortization from software deployments this year and additional marketing services.
 
•  
General and administrative expense was $8.4 million or 10.0% of net sales for the second quarter 2011 which includes $1.5 million of integration expenses for Whitney. Excluding the acquisition of J.C. Whitney and the legal fees to protect our intellectual property Q2 2011 G&A expense was 8.0% of net sales, down 1.7% from Q2 2010. This decrease reflects fixed cost leverage from higher sales.
 
•  
Fulfillment expense was $4.6 million or 5.4% of net sales in the second quarter of 2011. Excluding the acquisition of J.C. Whitney, Q2 2011 fulfillment expense was 6.2% of net sales, up from 5.5% last year. The increase is primarily due to higher depreciation and amortization expense from software deployments.

•  
Technology expense was $1.9 million or 2.3% of net sales in the second quarter of 2011. Excluding the acquisition of J.C. Whitney, technology expense for Q2 2011 was 2.0% of net sales, down 0.2% reflecting higher telephone and web hosting expenses from sales growth
 
•  
Capital expenditures, inclusive of non-cash accrued asset purchases and property acquired under capital leases for the second quarter of 2011 were $3.4 million, of which $0.7 million consisted of J.C. Whitney expenditures. Included in capital expenditures were $3.1 million of internally developed software and website development costs.
 
Cash, cash equivalents and investments were $21.1 million and debt was $21.0 million at July 2, 2011. The Company includes $3.8 million of auction rate preferred securities in long-term assets, in investments. Cash, cash equivalents and investments decreased by $3.0 million over the previous quarter primarily due to integration expenses and capital expenditures related to J.C. Whitney and a $1.0 million pay down of long-term debt.
 
 
 
 
 
Q2 2011 Operating Metrics
 
Consolidated
 
                         
   
  
Q2 2011
    
Q2 2010
    
Q1 2011
  
Conversion Rate
  
  
  1.60
% 
    
1.58
% 
    
1.71
% 
Customer Acquisition Cost
  
$
10.11
  
  
$
5.93
  
  
$
9.63
  
Marketing Spend (% Internet Sales)
  
  
9.8
% 
    
6.3
% 
    
8.9
% 
Visitors (millions)1
  
  
41.8
  
    
27.8
  
    
41.1
  
Orders (thousands)
  
  
669
  
    
440
  
    
702
  
Revenue Capture (% Sales)2
  
  
83.6
% 
    
83.9
% 
    
85.9
% 
Average Order Value
  
$
125
  
  
$
120
  
  
$
125
  
 
US Auto Parts excluding J.C. Whitney
 
                         
 
  
Q2 2011
    
Q2 2010
    
Q1 2011
  
Conversion Rate
  
     1.53
% 
    
1.58
% 
    
1.64
% 
Customer Acquisition Cost
  
$
6.55
  
  
$
5.93
  
  
$
5.95
  
Marketing Spend (% Internet Sales)
  
  
7.0
% 
    
6.3
% 
    
6.6
% 
Visitors (millions)1
  
  
  30.3
  
    
27.8
  
    
30.9
  
Orders (thousands)
  
  
464
  
    
440
  
    
507
  
Revenue Capture (% Sales)2
  
  
84.5
% 
    
83.9
% 
    
87.2
% 
Average Order Value
  
$
117
  
  
$
120
  
  
$
115
  
 
1
Visitors do not include traffic from media properties (e.g. AutoMD).
2
Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment.
 
Non-GAAP Financial Measures
 
Regulation G, “Conditions for Use of Non-GAAP Financial Measures,” and other provisions of the Securities Exchange Act of 1934, as amended, define and prescribe the conditions for use of certain non-GAAP financial information. We provide “Adjusted EBITDA,” which is a non-GAAP financial measure. Adjusted EBITDA consists of net income before (a) interest income (expense), net; (b) income tax provision (benefit); (c) amortization of intangibles; (d) depreciation and amortization; (e) share-based compensation expense; (f) legal cost to enforce intellectual property rights and (g) restructuring costs related to the JCW acquisition.
 
The Company believes that this non-GAAP financial measure provides important supplemental information to management and investors. This non-GAAP financial measure reflects an additional way of viewing aspects of the Company’s operations that, when viewed with the GAAP results and the accompanying reconciliation to corresponding GAAP financial measures, provides a more complete understanding of factors and trends affecting the Company’s business and results of operations.
 
Management uses Adjusted EBITDA as a measure of the Company’s operating performance because it assists in comparing the Company’s operating performance on a consistent basis by removing the impact of items not directly resulting from core operations. Internally, this non-GAAP measure is also used by management for planning purposes, including the preparation of internal budgets; for allocating resources to enhance financial performance; for evaluating the effectiveness of operational strategies; and for evaluating the Company’s capacity to fund capital expenditures and expand its business. The Company also believes that analysts and investors use adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies in our industry. Additionally, lenders or potential lenders use Adjusted EBITDA to evaluate the Company’s ability to repay loans.
 
This non-GAAP financial measure is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the Company’s consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items from the Company’s non-GAAP measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.
 
 
 
 
The tables below reconcile net (loss) income to consolidated Adjusted EBITDA and US Auto Parts excluding the J.C. Whitney acquisition for the periods presented (in thousands):
 
Consolidated
 
                                 
 
  
Thirteen
Weeks Ended
July 2,
    
Thirteen
Weeks Ended
July 3,
    
Twenty-Six Weeks Ended
July 2,
    
Twenty-Six
Weeks Ended
July 3,
  
 
  
2011
    
2010
    
2011
    
2010
  
Net (loss) income
  
$
(2,564
) 
  
$
462
  
  
$
(2,810
) 
  
$
2,009
  
Interest expense (income), net
  
  
172
  
    
(34
) 
    
437
  
    
(55
) 
Income tax provision
  
  
195
  
    
225
  
    
213
  
    
1,175
  
Amortization of intangibles
  
  
1,363
  
    
124
  
    
2,990
  
    
245
  
Depreciation and amortization
  
  
3,072
  
    
1,950
  
    
6,075
  
    
3,934
  
EBITDA
  
  
2,238
  
    
2,727
  
    
6,905
  
    
7,308
  
Share-based compensation
  
  
643
  
    
612
  
    
1,324
  
    
1,472
  
Legal costs to enforce intellectual property rights
  
  
161
  
    
1,246
  
    
232
  
    
1,886
  
Charge for change in revenue recognition
  
  
—
  
    
411
  
    
—
  
    
411
  
Addback legal restructuring
  
  
4
  
    
—  
  
    
26
  
    
—  
  
Addback other restructuring
  
  
1,538
  
    
—  
  
    
2,749
  
    
—  
  
Adjusted EBITDA
  
$
4,584
  
  
$
4,996
  
  
$
11,236
  
  
$
11,077
  
 
  
                              
 
U.S. Auto Parts, Excluding J.C. Whitney
 
                                 
 
  
Thirteen
Weeks Ended
July 2,
    
Thirteen
Weeks Ended
July 3,
    
Twenty-Six Weeks Ended
July 2,
    
Twenty-Six
Weeks Ended
July 3,
  
 
  
2011
    
2010
    
2011
    
2010
  
Net income
  
$
1,486
    
$
462
  
  
$
4,403
    
$
2,009
  
Interest expense (income), net
  
  
173
  
    
(34
) 
    
439
  
    
(55
) 
Income tax provision
  
  
140
  
    
225
  
    
158
  
    
1,175
  
Amortization of intangibles
  
  
125
  
    
124
  
    
249
  
    
245
  
Depreciation and amortization
  
  
2,459
  
    
1,950
  
    
4,851
  
    
3,934
  
EBITDA
  
  
4,383
  
    
2,727
  
    
10,100
  
    
7,308
  
Share-based compensation
  
  
643
  
    
612
  
    
1,324
  
    
1,472
  
Legal costs to enforce intellectual property rights
  
  
161
  
    
1,246
  
    
232
  
    
1,886
  
Charge for change in revenue recognition
  
  
—  
  
    
411 
  
    
—
  
    
411
  
Adjusted EBITDA
  
$
5,187
  
  
$
4,996
  
  
$
11,656
  
  
$
11,077
  
 
Conference Call
 
As previously announced, the Company will conduct a conference call with analysts and investors to discuss the results today, Tuesday, August 9, 2011 at 2:00 pm Pacific Time (5:00 pm Eastern Time). The conference call will be conducted by Shane Evangelist, Chief Executive Officer and Ted Sanders, Chief Financial Officer. Participants may access the call by dialing 1-877-941-1428 (domestic) or 1-480-629-9856 (international). In addition, the call will be broadcast live over the Internet and accessible through the Investor Relations section of the Company’s website at www.usautoparts.net where the call will be archived for two weeks. A telephone replay will be available through August 23, 2011. To access the replay, please dial 1-877-870-5176 (domestic) or 1-858-384-5517 (international), passcode 4460593. To view the press release or the financial or other statistical information required by SEC Regulation G, please visit the Investor Relations section of the U.S. Auto Parts website at investor.usautoparts.net.
 
 
 
 
 
About U.S. Auto Parts Network, Inc.
 
Established in 1995, U.S. Auto Parts is a leading online provider of automotive aftermarket parts, including body parts, engine parts, performance parts and accessories. Through the Company’s network of websites, U.S. Auto Parts provides individual consumers with a broad selection of competitively priced products that are mapped by a proprietary product database to product applications based on vehicle makes, models and years. U.S. Auto Parts’ flagship websites are located at www.autopartswarehouse.com , www.jcwhitney.com , www.partstrain.com and www.AutoMD.com and the Company’s corporate website is located at www.usautoparts.net .
 
U.S. Auto Parts is headquartered in Carson, California.
 
Safe Harbor Statement
 
This press release contains statements which are based on management’s current expectations, estimates and projections about the Company’s business and its industry, as well as certain assumptions made by the Company. These statements are forward looking statements for the purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended and Section 27A of the Securities Act of 1933, as amended. Words such as “anticipates,” “could,” “expects,” “intends,” “plans,” “potential,” “believes,” “predicts,” “projects,” “seeks,” “estimates,” “may,” “will,” ”would,” “will likely continue” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, the Company’s expectations regarding its future operating results and financial condition, impact of changes in our key operating metrics, our potential growth, our liquidity requirements, and the status of our auction rate preferred securities. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors.
 
Important factors that may cause such a difference include, but are not limited to, the Company’s ability to integrate and achieve efficiencies of acquisitions, economic downturn that could adversely impact retail sales; marketplace illiquidity; demand for the Company’s products; increases in commodity and component pricing that would increase the Company’s per unit cost and reduce margins; the competitive and volatile environment in the Company’s industry; the Company’s ability to expand and price its product offerings, control costs and expenses, and provide superior customer service; the mix of products sold by the Company; the effect and timing of technological changes and the Company’s ability to integrate such changes and maintain, update and expand its infrastructure and improve its unified product catalog; the Company’s ability to improve customer satisfaction and retain, recruit and hire key executives, technical personnel and other employees in the positions and numbers, with the experience and capabilities, and at the compensation levels needed to implement the Company’s business plans both domestically and internationally; the Company’s cash needs, including requirements to amortize debt; regulatory restrictions that could limit the products sold in a particular market or the cost to produce, store or ship the Company’s products; any changes in the search algorithms by leading Internet search companies; the Company’s need to assess impairment of intangible assets and goodwill; and the Company’s ability to comply with Section 404 of the Sarbanes-Oxley Act and maintain an adequate system of internal controls; any remediation costs or other factors discussed in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Risk Factors contained in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available at www.usautoparts.net and the SEC’s website at www.sec.gov.  You are urged to consider these factors carefully in evaluating the forward-looking statements in this release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. Unless otherwise required by law, the Company expressly disclaims any obligation to update publicly any forward-looking statements, whether as result of new information, future events or otherwise.

 
 
 
 
 
U.S. AUTO PARTS NETWORK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
                 
 
  
July 2, 2011
    
January 1, 2011
  
 
  
(unaudited)
        
ASSETS
  
              
Current assets:
  
              
Cash and cash equivalents
  
$
16,249
  
  
$
17,595
  
Short-term investments
  
  
1,112
  
    
1,062
  
Accounts receivable, net of allowance of $200 and $372, respectively
  
  
8,839
  
    
6,849
  
Inventory
  
  
45,804
  
    
48,100
  
Deferred income taxes
  
  
360
  
    
359
  
Other current assets
  
  
4,448
  
    
5,646
  
 
  
              
Total current assets
  
  
76,812
  
    
79,611
  
Property and equipment, net
  
  
34,346
  
    
33,140
  
Intangible assets, net
  
  
15,781
  
    
18,718
  
Goodwill
  
  
17,344
  
    
17,137
  
Investments
  
  
3,766
  
    
4,141
  
Other non-current assets
  
  
1,073
  
    
790
  
 
  
              
Total assets
  
$
149,122
  
  
$
153,537
  
 
  
              
LIABILITIES AND STOCKHOLDERS’ EQUITY
  
              
Current liabilities:
  
              
Accounts payable
  
$
33,014
  
  
$
31,660
  
Accrued expenses
  
  
13,741
  
    
15,487
  
Notes Payable, current portion
  
  
6,250
  
    
6,125
  
Capital Leases payable, current portion
  
  
149
  
    
132
  
Other current liabilities
  
  
5,181
  
    
5,522
  
 
  
              
Total current liabilities
  
  
58,335
  
    
58,926
  
Non-current liabilities
  
              
Notes Payable, net of current portion
  
  
14,750
  
    
17,875
  
Capital Leases payable, net of current portion
  
  
94
  
    
185
  
Deferred tax liabilities
  
  
3,267
  
    
3,046
  
Other noncurrent liabilities
  
  
963
  
    
701
  
 
  
              
Total liabilities
  
  
77,409
  
    
80,733
  
Commitments and contingencies
  
  
—  
  
    
—  
  
Stockholders’ equity:
  
              
Common stock, $0.001 par value; 100,000,000 shares authorized at July 2, 2011 and January 1,2011; 30,559,985 and 30,429,376 shares issued and outstanding as of July 2, 2011 and January 1, 2011 respectively
  
  
31
  
    
30
  
Additional paid-in capital
  
  
155,620
  
    
153,962
  
Accumulated other comprehensive income
  
  
309
  
    
249
  
Accumulated deficit
  
  
(84,247
) 
    
(81,437
) 
 
  
              
Total stockholders’ equity
  
  
71,713
  
    
72,804
  
 
  
              
Total liabilities and stockholders’ equity
  
$
149,122
  
  
$
153,537
  
 
  
              

 
 
 
 
U.S. AUTO PARTS NETWORK, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)


   
Thirteen
Weeks Ended
    
Thirteen
Weeks Ended
    
Twenty-Six
Weeks Ended
    
Twenty-Six
Weeks Ended
  
   
July 2, 2011
    
July 3, 2010
    
July 2, 2011
    
July 3, 2010
  
Net sales
  
$
84,268
    
$
53,188
    
$
171,246
    
$
109,479
  
Cost of sales
    
55,854
      
34,791
      
112,416
      
71,275
  
                                 
Gross profit
    
28,414
      
18,397
      
58,830
      
38,204
  
Operating expenses:
                                
Marketing (1)
    
14,366
      
7,138
      
27,951
      
14,351
  
General and administrative (1)
    
8,407
      
6,395
      
16,643
      
12,132
  
Fulfillment (1)
    
4,592
      
2,924
      
9,599
      
6,167
  
Technology (1)
    
1,917
      
1,158
      
3,855
      
2,176
  
Amortization of intangibles
    
1,363
      
124
      
2,990
      
245
  
                                 
Total operating expenses
    
30,645
      
17,739
      
61,038
      
35,071
  
(Loss) income from operations
    
(2,231
 )     
658
      
(2,208
 )     
3,133
  
Other income (expense):
                                
Other income (expense)
    
34
      
(5
)
    
48
      
(4
)
Interest (expense) income, net
    
(172
) 
    
34
      
(437
) 
    
55
  
                                 
Other (expense) income, net
    
(138
) 
    
29
      
(389
) 
    
51
  
(Loss) income before income taxes
    
(2,369
) 
    
687
      
(2,597
) 
    
3,184
  
Income tax provision
    
195
      
225
      
213
      
1,175
  
                                 
Net (loss) income
  
$
(2,564
) 
  
$
462
    
$
(2,810
) 
  
$
2009
  
                                 
Basic net (loss) income per share
  
$
(0.08
) 
  
$
0.02
    
$
(0.09
) 
  
$
0.07
  
Diluted net (loss) income per share
  
$
(0.08
) 
  
$
0.01
    
$
(0.09
) 
  
$
0.06
  
Shares used in computation of basic net (loss) income per share
    
30,543,037
      
30,314,478
      
30,496,558
      
30,158,797
  
Shares used in computation of diluted net (loss) income per share
    
30,543,037
      
31,994,447
      
30,496,558
      
31,723,316
  
                                 
___________________________________
                          
   
Thirteen
Weeks Ended
    
Thirteen
 Weeks Ended
    
Twenty-Six
Weeks Ended
    
Twenty-Six
 Weeks Ended
  
   
July 2, 2011
    
July 3, 2010
    
July 2, 2011
    
July 3, 2010
  
(1)  Includes share-based compensation expense as follows:
                                
      Marketing
  
$
88
    
$
72
    
$
248
    
$
192
  
      General and administrative
    
399
      
452
      
775
      
1,000
  
      Fulfillment
    
91
      
64
      
176
      
189
  
      Technology
    
65
      
24
      
125
      
91
  
           Total share-based compensation expense
  
$
643
    
$
612
    
$
1,324
    
$
1,472
  
 
 
 
 
 
 
U.S. AUTO PARTS NETWORK, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
                 
 
  
Twenty-Six
Weeks Ended
July 2, 2011
    
Twenty-Six 
Weeks Ended
July 3, 2010
  
Operating activities
  
              
Net (loss) income
  
$
(2,810
 )   
$
2,009
  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
  
              
Depreciation and amortization
  
  
6,075
  
    
3,934
  
Amortization of intangibles
  
  
2,990
  
    
245
  
Share-based compensation expense
  
  
1,324
  
    
1,472
  
Deferred income taxes
    
219
  
    
790
  
Amortization of deferred financing costs
  
  
61
  
    
—  
  
Excess tax benefits from share-based payment arrangements
  
  
— 
  
    
(237
) 
Changes in operating assets and liabilities:
  
              
Accounts receivable
  
  
(1,990
 )     
802
  
Inventory
  
  
2,296
  
    
(7,926
)  
Prepaid expenses and other current assets
  
  
(187
 )     
(865
) 
Other noncurrent assets
  
  
— 
      
(81
) 
Accounts payable and accrued expenses
  
  
(477
 )     
7,639
  
Other current liabilities
  
  
(338
)  
    
1,218
  
Other noncurrent liabilities
  
  
258
  
    
317
  
 
  
              
Net cash provided by operating activities
  
  
7,421
      
9,317
  
Investing activities
  
              
Additions to property and equipment
  
  
(7,221
 )     
(6,293
) 
Proceeds from purchase price adjustment
  
  
787 
  
    
—  
  
Changes in restricted cash
  
  
319 
  
    
—  
  
Proceeds from sale of investments
  
  
400 
      
4,236
  
Purchases of investments
  
  
(13
 )     
(17,984
) 
Purchases of intangible assets
  
  
(48
) 
    
(1,001
)  
Purchases of company-owned life insurance
  
  
(281
 )     
(250
)
 
  
              
Net cash used in investing activities
  
  
(6,057
 )     
(21,292
)
Financing activities
  
              
Payments made on long-term debt
  
  
(3,000
 )     
—  
  
Payments on capital leases
  
  
(74
 )     
—  
  
Payments of debt financing costs
  
  
(53
)  
    
—  
  
Changes in book overdraft
  
  
152
  
    
—  
  
Proceeds from exercise of stock options
  
  
255
  
    
658
  
Excess tax benefits from share-based payment arrangements
  
  
— 
  
    
237
  
 
  
              
Net cash (used in) provided by financing activities
  
  
(2,720
 )     
895
  
Effect of changes in foreign currencies
  
  
10
  
    
26
  
Net decrease in cash and cash equivalents
  
  
(1,346
)  
    
(11,054
) 
Cash and cash equivalents at beginning of period
  
  
17,595
  
    
26,251
  
 
  
              
Cash and cash equivalents at end of period
  
$
16,249
  
  
$
15,197
  
 
  
              
     
Supplemental disclosure of non-cash investing activities:
  
              
Accrued asset purchases
  
  
1,572
  
    
571
  
Unrealized gain on investments
  
  
27
  
    
66
  
Property acquired under capital lease
  
  
32
  
    
—  
  
Supplemental disclosure of cash flow information:
  
              
Cash paid during the period for income taxes
  
  
9
  
    
87
  
Cash paid during the period for interest
  
  
611
  
    
—  
  

 
 
 

Investor Contacts :
 
Ted Sanders, Chief Financial Officer
U.S. Auto Parts Network, Inc.
tsanders@usautoparts.com
(424) 702-1455
 
Budd Zuckerman, President
Genesis Select Corporation
bzuckerman@genesisselect.com
(303) 415-0200