U.S. Auto Parts Network reported results for the second quarter ended June 30, 2018.
Article continues below
Net sales in the second quarter of 2018 were $77.0 million compared to $80.2 million in the year-ago quarter.
The decrease was largely driven by a 9% decrease in e-commerce sales attributable to a decrease in e-commerce traffic and lower in-stock rates resulting from the company's previously disclosed customs issue.
Gross profit in the second quarter of 2018 was $21.5 million compared to $23.2 million in the year-ago quarter. As a percentage of net sales, gross profit was 27.9% compared to 29.0%.
The decrease was driven by higher freight costs, as well as factors associated with the customs issue, including lower in-stock rates on higher-margin products and port and carrier fees.
As a result of the amortization treatment of port and carrier fees, the company expects gross margin to range between 27% to 28% over the next three quarters compared to the 29% to 30% range the company expected prior to the customs issue.
Total operating expenses in the second quarter were $21.0 million compared to $21.7 million in the second quarter of last year.
As a percentage of net sales, operating expenses increased to 27.3% compared to 27.1% in the year ago quarter, with the increase driven by higher legal costs resulting from the customs issue.
Net loss in the second quarter was $0.5 million, or $(0.02) per diluted share, compared to net income of $26.9 million or $0.67 per diluted share in the year-ago period.
The 2017 period included a $25.9 million tax credit resulting from the release of a valuation allowance from the company's cumulative net operating losses.
Adjusted EBITDA in the second quarter of 2018 was $2.8 million compared to $3.8 million in the year-ago quarter, with the decrease driven by the aforementioned lower net sales and profitability resulting from the customs issue and a decline in e-commerce traffic.
At June 30, 2018, cash and cash equivalents totaled $6.8 million compared to $2.9 million at December 30, 2017.
The increase was driven by timing of payments with one of the company's shipping vendors. U.S. Auto Parts also continued to carry no revolver debt at June 30, 2018. ■