U.S. Auto Parts Network reported results for the fourth quarter and fiscal year ended January 2, 2016.
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Net sales in the fourth quarter of 2015 decreased 4% 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%.
The comparable sales increase was largely driven by a 1.6% increase in online marketplace sales to $15.8 million, and an 11% 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% to $20.0 million compared to $18.8 million in the year-ago quarter (up 12% excluding the extra week in 2014).
As a percentage of net sales, gross profit increased 290 basis points to 29.6% compared to 26.7%. The increase in gross profit margin was primarily driven by a higher mix of private label sales, which were 63% of net sales compared to 58% in the year-ago quarter. The increase was also driven by strategic pricing initiatives and freight efficiencies.
Total operating expenses in the fourth quarter decreased 4% to $19.7 million compared to $20.5 million in the year-ago quarter (up less than 1% excluding the extra week in 2014). As a percentage of net sales, operating expenses increased slightly to 29.2% compared to 29.1% in the year-ago quarter.
Adjusted EBITDA in the fourth quarter of 2015 increased 89% to $2.6 million compared to $1.4 million in the year-ago quarter (up 107% excluding extra week in 2014).
As a percentage of net sales, adjusted EBITDA increased 190 basis points to 3.9% compared to 2.0%. The significant increase was driven by the aforementioned improvements in gross margin and operating efficiencies.
Net loss in the fourth quarter was $0.1 million, compared to a net loss of $2.0 million in the year-ago quarter.
At January 2, 2016, cash and cash equivalents totaled $1.5 million compared to $0.8 million at January 3, 2015. Total debt was $11.8 million compared to $11.0 million at January 3, 2015.
Full year financial results
Net sales in 2015 increased 3% to $290.8 million compared to $283.2 million in 2014. Comparable net sales increased 6% compared to the prior year.
Gross profit in 2015 increased 6% 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% compared to 27.6%.
Total operating expenses in 2015 increased to $82.0 million compared to $81.9 million in 2014. As a percentage of net sales, operating expenses decreased 70 basis points to 28.2% compared to 28.9%.
Adjusted EBITDA in 2015 increased 20% to $10.0 million compared to $8.4 million in 2014. As a percentage of net sales, adjusted EBITDA increased 40 basis points to 3.4% compared to 3.0%.
Net loss in 2015 was $0.1 million, compared to a net loss of $4.9 million in 2014.
U.S. Auto Parts expects net sales to be up low to mid-single digits on a percentage basis compared to 2015, and Adjusted EBITDA to range between $11.5 and $14.0 million, a 15% to 40% increase from the prior year.
The company also continues to expect gross margin expansion and double-digit private label sales growth in 2016. ■