A Carson company is trying to position itself at the perfect intersection of online DIY and the nation's aging fleet of personal vehicles.
U.S. Auto Parts Network Inc. caters to do-it-yourselfers. It sells to people whose idea of the perfect weekend morning is getting some grease under the fingernails while working on their cars, trucks and SUVs.
The company does this by offering 1.5 million parts and products and a kind of "Car Talk" level of automotive problem diagnoses, minus the folksy radio humor.
U.S. Auto Parts Network operates online, without traditional stores. It has a core customer base of well-educated and financially secure married men with families, 45 to 65 years old.
Shane Evangelist, the company's chief executive, described the average customer as "a family kind of guy who might be escaping for a little bit of private time, getting out of the house and into the garage." With drivers holding on to their cars longer, the do-it-yourself repair market has been growing.
Evangelist said one part of the business "is for people who have damaged their cars in a collision. Another is replacing parts no longer under warranty. The third provides accessories and performance parts."
But the company, established in 1995 and public since 2007, has had problems.
Nasdaq said the company didn't have enough independent members on the board, a problem since fixed. In 2013, the stock fell below $1 a share, another Nasdaq no-no.
In 2014, it has stayed above that key threshold. Still, the stock's performance remains far short of its high of $12.61, reaching only $4.09 in the last year.
Profitability also has been elusive. In 2013, the company had a net loss of $15.6 million.
U.S. Auto Parts Network grew through acquisitions, including AutoMD.com in 2008. Evangelist said the related AutoMD Insta-Quotes, launched in 2013, is the key to making inroads with the DIFM, or do-it-for-me, customer.
"We are building a network of auto repair shops within easy range of our customers with diagnostic advice and cost estimates," Evangelist said.
In August 2010, the company bought Whitney Automotive Group Inc. for $27.5 million, which added parts and accessories for all-terrain vehicles, recreational vehicles, motorcycles and more.
Now it's paring down. It has gone from several websites to three core sites: http://www.autopartswarehouse.com, http://www.jcwhitney.com and http://www.AutoMD.com.
One cost-saving casualty was the company's Carson distribution facility, which closed in July.
Last week, U.S. Auto Parts Network released third-quarter earnings that showed revenue rising to $68 million, compared with $61.7 million a year earlier. But the net loss widened to $2.5 million, from $1.4 million a year earlier.
Last month, AutoMD Inc. entered into an agreement in which Muzzy-Lyon Auto Parts Inc., Manheim Investments Inc., Oak Investment Partners XI L.P. and the Sol Khazani Living Trust bought a total of 7 million shares of AutoMD common stock for $7 million.
The transaction allowed AutoMD to receive some important investment backing while leaving parent U.S. Auto Parts Network in control of nearly two-thirds of the shares.
The company, one of the nation's largest online suppliers of aftermarket automotive parts, is the biggest "pure play" in the online DIY segment, ahead of rivals like Rock Auto, Summit and Jegs.
U.S. Auto Parts Network is poised to take a bigger share of the $47 billion online DIY automotive business.
In filings with the
The company also noted the competitive landscape in its 2013 annual report: "Barriers to entry in the automotive aftermarket industry are low, and current and new competitors can launch websites at a relatively low cost."
The competition includes big players such as EBay Motors,
The company is regularly followed by two Wall Street analysts, both of whom consider the stock undervalued and rate it as a buy.