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CARSON, Calif., Aug. 8, 2018 /PRNewswire/ -- U.S. Auto Parts Network, Inc. (NASDAQ: PRTS), one of the largest online providers of aftermarket automotive parts and accessories, is reporting results for the second quarter ended June 30, 2018. All information and data are from continuing operations, which exclude the AutoMD operating segment unless specifically noted. Second Quarter 2018 Financial Summary vs. Year-Ago Quarter Net sales were $77.0 million compared to $80.2 million. Gross margin was 27.9% compared to 29.0%. Net loss was $(0.5) million, or $(0.02) per share, compared to $26.9 million or $0.67 per share (Q2'17 includes a $25.9 million tax credit). Adjusted EBITDA (a non-GAAP measure defined below) was $2.8 million compared to $3.8 million. Ended the quarter with no revolver debt. Second Quarter 2018 Operational Highlights vs. Year-Ago Quarter Conversion rate increased 70 basis points to 2.7%. Average order value increased 4% to $88. Revenue capture increased 240 basis points to 87.7%. https://www.prnewswire.com/news-releases/us-auto-parts-reports-second-quarter-2018-results-300694251.html

Parts Authority, one of the largest U.S. distributors of automotive and truck parts to the automotive aftermarket, has acquired Quality Automotive Warehouse, which operates 10 locations in the Mid-Atlantic region (seven in Maryland and three in Virginia). For more than 50 years Quality Automotive has been known for their extensive inventory of quality, name brand parts coupled with a reliable service commitment to all of its customers. “We are excited to add Quality Automotive to the Parts Authority family. The team at Quality Automotive has built a great business over the years and has developed a strong reputation in the industry. This acquisition strengthens our position in the Baltimore, Maryland and District of Columbia area and expands our footprint into the Virginia market” said Randy Buller President & CEO of Parts Authority. “We look forward to providing our Quality Automotive customers with access to even more products and services. Equally as important, we look forward to working with our new team members at Quality Automotive and providing them with a great place to continue their careers.” “We look forward to building upon the many years of successes we have achieved as we move forward under the Parts Authority ownership. Parts Authority shares the three most important criteria we were looking for in a partner - a common culture, an opportunity for our employees to continue to have an employer who values its team members, and the ability to continue to grow faster and with more resources” said Mark Bond, President & CEO of Quality Automotive. “Over the course of our conversations we got to know the Parts Authority team better as a company and as individuals. Every interaction has reinforced that we share a common vision. It became clear they were the right partner and that now was the right time.” About Parts Authority Parts Authority, founded in 1972, is one of the largest distributors of automotive and truck parts to the aftermarket auto parts industry in the United States serving customers in the commercial channel, including installers, dealerships, fleets and national accounts as well as in the e-commerce channel. Headquartered in Lake Success, NY, Parts Authority has over 150 locations across the Northeast, Mid-Atlantic, Ohio, Georgia, Florida, Texas, Arizona, California and the Pacific Northwest. Parts Authority is led by President & CEO Randy Buller and a management team with long-tenured industry experience. Parts Authority has grown through both organic initiatives as well as through acquisitions. Over the past several years Parts Authority has acquired over a dozen companies as part of its geographical expansion initiative. About Quality Automotive Quality Automotive Warehouse, Inc. is one of the largest distributors of automotive parts in the Mid-Atlantic region and is known for their extensive inventory of quality, name brand premium parts. Quality Automotive Warehouse, Inc was founded in 1960 and operates 10 locations throughout Maryland and Virginia with its main distribution center located in Baltimore, Maryland. https://www.searchautoparts.com/aftermarket-business/news-distribution/parts-authority-acquires-quality-automotive-warehouse?_hsenc=p2ANqtz--MJxSsbsaswoSvZo4ry7Uuu7rtSI9zcfKLBSLERZeHxQwNYqobKos2Y3ARwihCPAkdKxlY9Qze_aKX-NtDjfsam3IJXw&_hsmi=64979630

It's only manufacturers that submit to them.

Auto parts retailers have been spared from sharing the same fate as Barnes & Noble, Toys R Us and so many other companies rendered redundant by Amazon. About 80 percent of AutoZone's business comes from people repairing their own cars with the other 20 percent coming from professional mechanics. Amazon's gaining traction in stealing away some of the consumer market. Daniel Acker | Bloomberg | Getty Images An employee, right, helps a customer change a license plate bulb outside an AutoZone store in Princeton, Illinois. Amazon has crushed many iconic American companies, but auto parts retailers like O'Reilly and AutoZone have managed to fend them off. For now. Stores that sell car batteries, mufflers and other parts are facing new pressure since Amazon started selling auto parts. Big retailers like Walmart have also jumped into the fray, in part, to compete against Amazon. So far, auto parts retailers have been spared from sharing the same fate as Barnes & Noble, Toys R Us and so many other companies rendered redundant by Amazon. For years, the $130 billion business selling aftermarket auto parts was one of the steadiest segments in retail, with mild cyclical fluctuations and slow trend of consolidation, MoffettNathanson analyst Greg Melich told CNBC. The segment even managed to make it through the recession reasonably well, as drivers repaired instead of upgrading their cars. But pair of warm winters and a variety of other factors in 2016 and 2017 took a toll on the segment, just as Amazon and Walmart stepped up their efforts to grab market share. Now there is an oversupply of sellers in a market that has been experiencing slower demand, and may see slower growth in the next few years, Melich said. "The battle of the titans between Walmart and Amazon is only just starting," Melich said. "The smart companies are doing what they should do, which is lean into the more service oriented part of the business on the commercial side." Amazon pulls in about $6 billion in annual sales from "do-it-yourself" auto parts customers and is partnering with Sears to sell tires. Walmart has also stepped up its game in the segment over the last three years, even at the expense of profit margins, Melich said. In 2018, MoffettNathanson expects Amazon and Walmart to have a combined share of about 23 percent of the "do-it-yourself" market — with Amazon at about 8 percent and Walmart around 15 percent. Just 5 years ago, the two retailers had up to 17 percent of that market. The more a retailer serves consumers, the tougher it will be for them to compete against Amazon. About 80 percent of AutoZone's business comes from people repairing their own cars with the other 20 percent coming from professional mechanics. About 60 percent of O'Reilly's sales comes from the do-it-yourself consumer market with mechanics making up the rest. The split is reversed at Advance Auto Parts with 40 percent of its revenue coming from consumers. Just 25 percent of the sales at Genuine Parts, which owns NAPA, comes from people popping their own hoods to fix that troublesome rattle. "Amazon is obviously more of a risk to an AutoZone which does a majority of their business in DIY," Jordan said. He added that AutoZone is making a big push into serving commercial customers where there's more potential growth. The increasing technical complexity of cars means it is ever more difficult for ordinary customers to service what they own. That bodes well for sales of parts on the commercial side. More sophisticated parts cost more money. A halogen headlight for a 2005 Jeep Wrangler might cost $15, but a new headlamp on a luxury vehicle — the sort that can swivel to follow the shape of the road — might cost hundreds of dollars, Jordan said. So far, Amazon has not been able to crack the code of the commercial auto parts business. Parts sellers need a mind-boggling degree of inventory — enough parts for the wide array of cars on the road, Jordan said. It also does not yet have enough points of distribution around the country to replicate what auto parts stores do for commercial customers, and it might not be the best use of their resources right now to invest in that, Melich said. Of course, he added, that could change in just a few years. Amazon didn't have a strong grocery distribution network, that is, until it bought Wholefoods Market. Source: https://www.cnbc.com/2018/07/16/auto-parts-retailers-are-caught-in-battle-between-walmart-and-amazon.html

Cabin air filters may not be the most exciting part of today’s vehicles, but their role in cleaning up the interior air can be vital to your customers’ health. Air pollution is becoming a bigger concern, even as cars are producing fewer emissions. Since the 1990s, automakers have included cabin air filters as a standard feature on vehicles, to remove dust, pollen, allergens and soot from the air in the interior of the car. Much like an air filter for your home’s HVAC system, the cabin air filter improves the quality of the air entering the vehicle through the heating and cooling system. It also keeps dirt, debris, bugs and leaves out of the evaporator and heater core. How often should these filters be changed? That depends on the filter’s service life and operating conditions. However, most manufacturers recommend replacing them once a year. Cabin air filters are very efficient and can filter up to 100,000 liters of outside air through the vehicle’s interior – which is one reason that it’s a good idea to change these filter elements regularly. Your customers may not even realize they have one of these filters, because it’s not as commonly known as an air filter or oil filter. They sit behind the glovebox or in some other out-of-the-way location where most vehicle owners never see them. And being out of sight can lead to lack of maintenance. There are two different types of cabin air filters available from the aftermarket: particle filters and activated carbon filters. While particle filters retain airborne particles, activated carbon filters have the added benefit of converting unpleasant or hazardous gases into breathable air and preventing these substances from entering the car. Regular replacement of the cabin air filter is particularly important for owners or passengers suffering from allergies, and may require more frequent changes in these cases. Changing a cabin air filter requires minimal tools, if any at all. Most can be removed with a screwdriver and by lifting a couple of tabs. You can find the location from the owner’s manual or look it up online or in your service manual. The location of the filter in many vehicles is near the glovebox or under the hood by the windshield cowling where air enters. Counterman, along with filter manufacturers, continues to point out the need to replace these filters at proper service intervals. But most vehicle owners don’t change their cabin air filter often enough (if ever) because it typically doesn’t affect the performance of the vehicle. However, when mold or other bacteria attach to the pleated paper filter element, it can affect the air quality inside the car. A plugged-up filter also restricts airflow through the HVAC system and can create heating and cooling issues. When customers are replacing other filters, it’s a good idea to ask them if they’ve replaced their cabin air filter lately. If a customer complains that there’s a strange smell coming from the vents, chances are the cabin air filter is long overdue for a replacement. With a fresh cabin air filter installed, at least the air on the interior will be clean and free of hazardous particles at a time when the environment around us is getting more unhealthy. Source: http://www.counterman.com/replacing-cabin-air-filters-for-the-health-of-it/

Axalta has released a new set of chromatically sorted fan decks to help automotive enthusiasts easily find and select the right color for custom or overall refinishing projects. The set, which is called SpectraMaster Color Family Effects, includes 80 fan decks with more than 3,000 colors for automotive projects that require a quality finish, according to Axalta. Colors range from vibrant whites to deep blacks with color families in between, including blues, greens, reds and more. “Color selection is critical to automotive builders, restoration experts and others who are finishing an entire vehicle,” said Troy Weaver, vice president of Axalta Refinish North America. “Most often, they know which color family they want but need visual assistance to select the exact hue they’ve dreamed about. Our new SpectraMaster fan deck system can help by grouping like colors into fan decks that consumers can view and compare, indoors and out.” To view SpectraMaster Color Family Fan Decks, automotive enthusiasts can visit their local paint distributor, who can help with color selection and mix the paint needed to complete the project. Colors from the SpectraMaster set are available in several of Axalta’s leading waterborne and solventborne basecoats, including Cromax and Spies Hecker. Find an Axalta automotive paint distributor near you by visiting axalta.us. Distributors who would like to order a SpectraMaster set can do so with part No. M-6624. Source: http://www.counterman.com/axalta-introduces-chromatic-fan-decks-to-help-automotive-enthusiasts-select-paint-color/

It’s been more than a decade since the federal government first mandated that new vehicles feature tire-pressure monitoring systems to warn drivers against underinflation. Direct TPMS sensors and their service kits are a common stocking item for parts stores, tire shops and even general repair shops nationwide, but while these sensors are now well-known and widely available, there is another system that provides tire-pressure monitoring without sensor service and replacement. In the case of direct TPMS, radio frequency signals from each tire-mounted sensor are transmitted to a central receiver, where the individual air-pressure readings are compared to the manufacturer’s recommended inflation pressure. If the actual pressure in any tire drops below 75 percent of this recommended calibration, the warning light will illuminate. Some manufacturers also display the actual pressure of each tire in their driver information center (usually found in the gauge cluster) during startup. Indirect TPMS, as its name implies, does not use a direct “PSI” reference to calculate tire pressure. Instead, this system estimates any pressure differentials based on vehicle and wheel speed, as well as tire size. Indirect TPMS piggybacks on the ABS and traction-control system, using the information from these sensors to determine if an individual tire is underinflated. The theory behind indirect TPMS is that the circumference of a tire decreases slightly as it deflates, and the rolling resistance of the tire increases. By using individual wheel-speed sensor information, the system can detect the difference between an underinflated tire and a properly inflated tire. Onboard software can calculate just how much difference exists between wheels, and based on the manufacturer’s recommended tire size, make a determination on the percentage of underinflation, and trigger the warning light at the same 75 percent threshold. It is a cost-effective system for manufacturers, with no additional hardware in terms of sensors and receivers. It can represent a long-term savings to consumers who otherwise would periodically replace battery-operated sensors and service kits, and for drivers who have multiple sets of tires for their vehicle. Many Northern drivers maintain a full set of “winter wheels” with snow tires, rather than dismounting tires each season. Sports car enthusiasts may also maintain a set of “track wheels” for weekend racing, with some sanctioning bodies requiring functional TPMS as part of their safety inspection. Finally, any “tire buster” tasked with mounting and dismounting tires at the local tire shop can tell you that with indirect TPMS, it’s a relief not to have to worry about breaking off a sensor during tire service. Of course, indirect TPMS has limitations, as seen in the first crop of indirect TPMS-equipped vehicles in the late 1990s and early 2000s. These systems could only sense if a single wheel was underinflated, as it compared the individual tires to each other. If all four tires were uniformly underinflated, all four speed sensors would have the same values. No warning would be given, even if the tires were severely low. These systems also required a four-channel, four-wheel anti-lock brake system to operate, which was not widely used with light trucks or rear-wheel-drive passenger cars at the time. Indirect TPMS also requires recalibration any time tire pressures are adjusted, or when tires are rotated or replaced. These systems also may give false warnings in wet or icy conditions, as the rotation of slipping or spinning tires will differ when they break traction. It also relies on all of the monitored tires being the same size, with accuracy being compromised when larger- or smaller-than-stock tires are fitted to the vehicle. Finally, indirect systems cannot function while the vehicle is stationary, leaving the driver unaware of a potential problem until after the vehicle is already in motion. While older systems also lacked the ability to identify which tire was underinflated, advancements in wheel-speed sensor technology have made this an available feature on many newer vehicles equipped with indirect TPMS. They are considerably more accurate than previous designs and can be found on several modern import nameplates, including various Audi, Honda, Mazda and Toyota models. Although indirect TPMS is a less expensive option for the manufacturers, and it does have a simplicity of design, direct TPMS is still a more widely used and accurate system, with the added benefit of requiring us to provide a steady supply of replacement parts to our customer base. Source: http://www.counterman.com/indirect-tire-pressure-monitoring-system-the-other-tpms/

Parts proliferation. Amazon. Access to data. Consolidation. Technology. These are all issues that weigh heavily on the minds of leaders in distribution today. However, when Counterman spoke with Bobby Segal, CEO of Sanel Auto Parts, and current chairman of the Automotive Warehouse Distributors Association (AWDA), to get his thoughts on the most pressing issues in distribution today, it wasn’t any of these issues that worried him. His biggest concern for distribution? It’s not what you think. Segal reflected on the massive consolidation that has taken place in distribution over the past several decades, visually exemplified by the shrinking – and eventual disappearance – of the old printed member directories AWDA used to produce annually. Over the years, outright consolidation morphed into member rollups and buyouts or attempting to take a company public, followed by a growing interest from private equity and of course, the introduction of new online players like Amazon and RockAuto. Regardless of these external changes over the years, the focus for his Concord, New Hampshire-based family business always has been on being the best. “From our perspective at our company, we’re not about being the largest,” Segal says. “We’re about being profitable, sustainable. That’s what we’re focused on.” Outside of his own business, as chairman of AWDA, Segal says AWDA members have the opportunity to truly learn from one another if they stay open, and pay attention. “The smaller entities, the ones who are active, are running sustainable models and doing some really unique things in their marketplaces. Because a lot of them are smaller, they’re nimble and they have the relationships. That’s one of the benefits of AWDA; these are the best of the best who are participating. I’m always learning something new from other AWDA members who are doing some really neat things.” Stay Involved Segal is a passionate advocate for industry involvement in legislative issues, and he believes this should be at the top of the priority list for every distributor that wants to survive. This brings us to the million-dollar question: As chairman of AWDA, what is Segal’s biggest concern for the industry today? Apathy. “My concern is the people who don’t realize they are going out of business because they don’t feel that they have the time to participate,” says Segal. “They can participate. Thinking that they are so small that they aren’t relevant, that apathy is a threat. People don’t realize how powerful one business can be. Our elected officials are interested.” Even with all of the major legislative issues at stake today – China, steel and auto parts tariffs and a potential trade war – Segal says access to repair information is still this industry’s No. 1 issue. “It’s making sure our customers are not locked out of the ability to service cars and we are able to supply the technicians with the parts they need,” Segal adds. When asked about his outlook for the distribution business for the second half of 2018, Segal had a bigger, more widespread concern. “You hear people all around the country [saying]that their business is up or down, depending on the macroeconomic events that impact their local economies, but I guess the concern would be the price of gasoline and how that would impact miles driven,” Segal says. “Cars don’t break if they sit. For the second half of the year, that is what I see as the biggest threat.” Editor’s note: This is the cover story in the June 2018 issue of Counterman. Source: http://www.counterman.com/state-distribution-staying-involved/

Today, the Supreme Court of The United States ruled that states can charge online sellers sales tax even if they don't have a physical presence in their state. For years, online retailers have been able to sell without charging their customers sales tax, which gave them a leg up over traditional brick and mortar stores. This is a big win for retailers that have a store front and could never avoid charging sales tax, it evens the playing field. How states enact this on a state by state level is still to be determined. Many states today have put into legislation affiliate nexus laws, and the states that haven't will soon change to collect tax revenue. Small online retailers stand to take the most hit on this. From small website sellers to Amazon and eBay marketplace sellers, they'll soon have to charge sales tax. This will affect all kinds of sellers, including those that sell auto parts and don't currently charge sales tax. States will be able to charge sales tax on online purchases thanks to the Supreme Court

CORDOVA, Ill. – Cordova International Raceway is proud to announce that O’Reilly Auto Parts has signed a multi-year partnership extension beginning with the 65th annual World Series of Drag Racing August 24-26, 2018 in Cordova, Ill. O’Reilly Auto Parts, one of the nation’s largest specialty retailers of automotive aftermarket parts, continues its long-standing partnership with the world’s longest continually-running drag racing event and obtains title-rights sponsorship to the iconic event through this multi-year agreement. The historic event will be known as “The O’Reilly Auto Parts World Series of Drag Racing.” General admission tickets for The O’Reilly Auto Parts World Series of Drag Racing start at $30 for Friday, $40 Saturday and $15 Sunday. Tickets for children ages 6-12 are $10 for Friday, $10 for Saturday, and $5 Sunday. A three-day “Super Pass” ticket for the entire weekend is $75 for adults and $20 for children 6-12. Discounted admission tickets to The O’Reilly Auto Parts World Series of Drag Racing are available for fans to purchase starting Thursday, July 12 at all 5,097 O’Reilly Auto Parts stores throughout the country. “These two brands are iconic in the Midwest and are household names amongst racers and automotive enthusiasts,” Cordova International Raceway President Dominic Blasco said. “We are proud to continue our long-standing partnership with O’Reilly Auto Parts at The O’Reilly Auto Parts World Series of Drag Racing.” Started in Lawrenceville, Ill., in 1953, The O’Reilly Auto Parts World Series of Drag Racing has featured many of the world’s best drag racers driving Top Fuel Dragsters, Nitro Funny Cars, Nostalgia Funny Cars, Nostalgia Pro Stocks, Jet Cars and Pro Mods in this exciting family-friendly event. To purchase tickets for The O’Reilly Auto Parts World Series of Drag Racing call Cordova International Raceway at 309-654-2110 or visit one of the participating O’Reilly Auto Parts stores. Source: http://www.racecir.com/news/oreilly-auto-parts-signs-multi-year-partnership-extension-with-cordova-international-raceway/

When selecting parts for a car repair, it pays to know the differences between original and aftermarket parts. Whenever possible, get estimates for both. Choosing between original and aftermarket car parts — and even used parts of either type — is all about squaring your priorities with your budget. You’ll have different options depending on the part and the shop. And the best choice will depend on whether you’re trying to keep repairs cheap, restore your car’s appearance after a wreck or soup up your ride. » SIGN UP: Find savings on your car expenses Before we get into that, here are the key differences: Original equipment manufacturer (OEM) parts match those that came with your car, and are of the same quality as its original parts. They’re also the most expensive. Aftermarket parts are cheaper, and made by other manufacturers — often several, giving you more options. Used parts may have a bit of wear and tear, but should be inspected or rebuilt to ensure they’ll work. These are the cheapest option. Choosing between aftermarket and OEM parts Your decision will depend on the type of repair and the quality and price of the parts. Always look for parts that come with a warranty, even if they’re OEM, so you’ll be protected in case they fail. Auto body repairs Some aftermarket parts may be OK for auto body repair, but others won’t be as good, says Michael Calkins, manager of technical services at AAA. “There’s a lot of variation in quality.” For example, he says, aftermarket parts often don’t have the same level of rustproofing as original parts, fit and finish don’t match, or panels don’t align properly. If OEM parts are used in auto body repair, the car should look and work exactly as it did before the damage, because everything will match up. OEM parts are also crash-tested, unlike many aftermarket parts. Aftermarket parts come at varying price points and levels of quality, but because they are cheaper, insurance companies often prefer them. If you want OEM parts but are dealing with an insurer that wants the shop to use aftermarket parts, ask to pay the difference. “There’s also the option of used parts, depending on the age of the vehicle,” Calkins says. “It may be cheaper than an aftermarket part but still have all of the original quality.” Mechanical repairs A used part, whether it’s OEM or aftermarket, can really save money on repairs under the hood, so long as it’s inspected first and warrantied. And some aftermarket companies reverse-engineer their products to be even better than OEM versions. For example, many car buffs will tell you that you can get heavy-duty shocks and struts or brake pads that are made of stronger materials. Scan some reviews online, or talk with your mechanic if you’re not sure whether an aftermarket part could be an upgrade. Adding some extras If you’d like to modify your ride by adding something like a backup camera or back-seat TV screen, you’ll probably be looking for aftermarket parts. Certain aftermarket upgrades could increase your car’s resale value. This is especially true for improvements like a better sound system or alloy wheels, rather than mechanical repairs. Who provides OEM or aftermarket parts? The options you’ll have for parts depends on the nature of the repairs and what type of shop you take your car to: Dealership repair shops will offer only OEM parts — they have no reason to offer a cheaper product from a competitor Independent mechanics may be able to offer you a choice between OEM and aftermarket parts Independent garages that specialize in your type of vehicle will likely have both, but with quicker access to OEM parts, including used OEM parts, which can really save you Auto body shops can offer both, but if your collision repair is part of an insurance claim, the insurer will likely prefer aftermarket parts to save money Depending on the job, the cost of OEM versus aftermarket parts varies. Whenever you’re given the choice, ask to see estimates for both so you can weigh your options. Source: https://www.nerdwallet.com/blog/loans/auto-loans/oem-vs-aftermarket-parts-car-choose/

From left to right: Lee Maher, president, GPC/APG; David Segal, president, Sanel NAPA; Bobby Segal, CEO, Sanel NAPA; Todd McMurtrie, senior vice president, GPC/APG; and Gregg Sargent, vice president, Eastern Division, GPC/APG. CONCORD, New Hampshire – Sanel Auto Parts, a chain of 44 stores in the Northeast, announced that the company is joining NAPA Auto Parts. The Segal family will continue to own and operate the company, which will be called Sanel NAPA. Sanel NAPA said it will be purchasing eight additional NAPA stores: three in New Hampshire, four in Maine and one in Massachusetts. “By joining NAPA, Sanel will be able to provide increased inventory in stores, enhanced access to more products and parts, and faster supply chain logistics to deliver more efficiently at competitive prices,” the company said in a news release. Sanel NAPA now will be a single source for more than 525,000 parts, sourcing products and services from more than 1,600 manufacturers from multiple distribution centers, “with improved retail and wholesale merchandising programs to meet the multiple needs of customers,” according to the company. Founded in 1920, Sanel NAPA carries auto parts, heavy-duty truck parts and collision repair and refinish supplies. The company also holds training sessions and technical clinics for heavy-duty technicians, paint and body service providers and automotive professionals. “It’s a natural fit for Sanel and NAPA to come together,” said Gregg Sargent, Eastern Division vice president for Genuine Parts Company’s U.S. Automotive Parts Group. “Each are strong brands with an over 90-year legacy of quality, excellence and service. Customers will benefit from NAPA’s breadth and depth while continuing to enjoy the local service and attention they have come to expect from Sanel.” Sanel NAPA is a member of NAPA, HDA Truck Pride and the Refinish Distributors Alliance. “Partnering with NAPA will launch us into the future, creating unity, strength and a collective focus on our family’s philosophy of having a positive culture, strong work ethic and passion for providing auto parts, heavy-duty truck parts, paint and body shop supplies and now tools, equipment and farm and marine supplies to our customers,” said Bobby Segal, CEO of Sanel NAPA. Source: http://www.counterman.com/sanel-auto-parts-joins-napa-adds-eight-locations-in-northeast/ Sanel Auto Parts: http://sanelautoparts.net/

Installation space in a car is a rare commodity. Comfort functions, turbocharging, and much more have significantly reduced the available space in the engine compartment over the past decades. In response to this, the leading global filtration expert MANN+HUMMEL has developed new air filters with flexible external contours that make more efficient use of the available installation space. For the independent automotive aftermarket, they are available as MANN-FILTER Flexline C 26 017 and C 30 030 for the Mercedes-Benz A and B Class. The C 26 017 air filter is for gasoline engines and the C 30 030 is for diesel models. The use of further elements with flexible contours for other automotive manufacturers is planned. Whereas flat air filters based on rectangular, trapezoidal, and polygonal forms with straight lateral edges were once the dominant design, the MANN-FILTER Flexline also makes efficient use of installation spaces with curved external contours. “We can accommodate a larger filtration area compared with conventional designs, and thus achieve higher separation efficiency and dust holding capacity,” says Daniel Schmid, product developer for Automotive Aftermarket Air Filter Elements at MANN+HUMMEL. “With Flexline, we produce the air filter contours using state-of-the-art laser technology. This means that we can produce almost any shape that was not possible with the conventional method. With this laser technology, we are setting new standards in filter manufacturing,” emphasizes Schmid. Compared with filters with limited geometries and straight lateral edges, the C 26 017 air filter impresses with features such as 11% more filter surface area, 22% higher dust holding capacity, and 16% lower pressure loss. At the same time, the new Flexline air filters are also flatter than standard products, which means that can be used in particularly low installation spaces. Mercedes-Benz was the first vehicle manufacturer to use the innovative solution, and is now using it as standard for its MFA2 (Modular Front Architecture) platform. The air filter will therefore be used in almost all four-cylinder gasoline and diesel engines from the A and B Class as well as their derivatives in the future. MANN+HUMMEL has filed several patents for the manufacturing method and the design of the Flexline air filter with the German Patent and Trademark Office as well as in other countries. Source: http://www.counterman.com/mannhummel-develops-new-flexible-air-filters-for-tight-engine-compartments/

A deal to place Dallas-based Interstate Batteries products in Advance Auto Parts stores is dead. The "value envisioned by both parties was compelling, but circumstances changed," Interstate Batteries noted in a statement Tuesday. The collaboration would have allowed Interstate Batteries, which has a strong reputation among mechanics, to significantly increase its retail presence. Now available in about 200 stores, its products would have expanded to 5,000 Advance Auto Parts locations. "Challenges arose throughout the process, but Interstate believed those could be resolved. Simply put, the two parties could not reach an agreement where all stakeholders involved benefitted," the statement said. The company did not elaborate on what sunk the deal. Financial details had not been released publicly. In an earnings call Tuesday, Advance Auto Parts president and CEO Tom Greco said: "We still believe Interstate Batteries provides a leading brand, quality products and an exceptional service model and we wish them continued success." As part of the deal, Advance Auto Parts would have dropped its AutoCraft private label car batteries and stocked Interstate Batteries exclusively. The plan was announced in December. The announcement Tuesday came shortly after Advance Auto Parts released its first quarter earnings. The company's profits were down about $600 million from a year earlier and "comparable" store sales were down by nearly 1 percent. The company's stock price was down more than 3 percent from Monday's close. Scott Miller, president and CEO of the privately-owned Interstate Batteries, said in December that the company had about $1.8 billion in annual revenue. The Advance Auto Parts deal, he said, had the potential to pushed Interstate Batteries sales from 18 million batteries to 26 million, or nearly one quarter of the market. Source: https://www.dallasnews.com/business/autos/2018/05/22/interstate-batteries-plan-expand-advance-auto-parts-stores-falls-apart Original announcement:

Parts Authority, one of the largest distributors of automotive and truck parts to the aftermarket auto parts industry throughout the United States, has entered into a definitive agreement to purchase FAST Undercar Inc. and FAST Undercar Franchise Corp. FAST operates 32 locations throughout California and the Pacific Northwest, of which 27 are franchise-owned locations and five are corporate-owned locations. For more than 20 years FAST has been committed to offering its customers unmatched availability to the products they demand with unparalleled service at competitive prices, says the company. The transaction is expected to close in the coming weeks. “We are excited to add FAST to the Parts Authority platform. This acquisition is an expansion of our customer touch points and geographies as we continue to build size and scale,” said Randy Buller, president and CEO of Parts Authority. “We believe in the model that FAST Undercar has built in collaborating with individual entrepreneurs to build successful businesses. In addition, the FAST footprint continues our expansion in California and the Pacific Northwest. Through this model, we will also look to expand into other geographies.” “Parts Authority shares our vision and will help us achieve our goals of opening new locations, expand our geographies, bring larger inventories with more selections of branded products closer to our franchisees and ultimately to the professional installer in the shortest time frame,” said Victor Davis, FAST’s president and CEO. “I am particularly excited for all of our FAST team members and the opportunities this provides them under the new ownership.” Schwartz Advisors served as the sell-side adviser to FAST Undercar. Source: http://www.aftermarketnews.com/parts-authority-to-acquire-fast-undercar/

Summary This is the second part of U.S. Auto Parts Network analysis. Recent M&A activities hot up in the aftersales market. U.S. Auto Parts Network provides an established online channel for pure bricks-and-mortar competitors. The company trading at a fantastically cheap price for a buy-out. Although with operation inefficiencies, in better hands, this could be a great acquisition target. This is the second part of the analysis of U.S. Auto Parts Network Inc. (PRTS), it lays out a more speculative scenario where PRTS is proposed as a potential acquisition target. Please, read Part I for the background and fundamental analysis of the company. PRTS as a potential acquisition target Evaluating PRTS and the industry revealed to us that the company is, in fact, a great acquisition candidate. The main reasons are thanks to the highly active M&A activities in recent years, especially from a particular billionaire - Carl Icahn, and what PRTS can bring to the table. However, we need to remind investors that the opportunity that PRTS can be sold for a premium is purely speculative. Recent M&A activities As we have alluded to you in the first part of the analysis that even though new cars are coming in slower to the market, we must not forget that older cars are on the road for longer, and these owners are also spending more than ever to maximize the lifetime value of their vehicles. This rising demand for aftermarket parts and services is spurring new growth and revenue opportunities for a wide range of businesses operating in the automotive aftermarket industry. The last few years saw many M&A activities. Most recently, Parts Authority, the US automotive and truck parts company agreed to acquire Interamerican Motor Corporation, a leader in European and Asian branded replacement parts, from AutoZone (NYSE:AZO) in February 2018. The deal allows Parts Authority to expand product offerings, customer touch points, and geographies. Source: https://seekingalpha.com/article/4168025-u-s-auto-parts-network-potential-acquisition-target

In a push to add alternative-fuel vehicles to its global product offerings, General Motors Co. announced on Tuesday that it will be using 3D-printed parts to achieve its goals, according to Reuters. GM's 3D Auto Parts Initiative The leading U.S.-based automobile manufacturer said it is working closely with the leading design software company Autodesk Inc. to print lightweight auto parts using 3D printing technology. This week, company executives demonstrated a 3D-printed seat bracket made of stainless steel and developed with the Autodesk technology. Using regular manufacturing methods, the seat bracket would need around eight different components and several suppliers. When designed with the help of the new technology, it consisted of a single part. It also turned out to be 20 percent stronger and 40 percent lighter. It looked like “a mix between abstract art and science fiction movie.” Along with reducing tooling cost and material waste, it will also help reduce the number of suppliers required by GM. GM has used 3D printers for prototyping parts for last many years. Over the next year, it believes that the new 3D-printed parts will appear in high-end motorsports applications, and over the next five years it plans to scale up to produce “tens of thousands of parts at scale as the technology improves,” Kevin Quinn, the automaker’s director of additive design and manufacturing, told Reuters. The 3D-printing based manufacturing industry is working toward mass production and trying to address issues with “repeatability and robustness,” said Bob Yancey, Autodesk’s director of manufacturing. Autodesk has expertise in exploring different variations of a part design using the cloud computing and artificial intelligence (AI)-based algorithms. The leading automaker announced last year it plans to launch 20 new electric and fuel cell models globally by the year 2023. Though electric and battery operated vehicles have seen increasing interest, their mass adoption has been restricted due to their limited range. Lightweight parts could help keep the vehicles lighter and thereby more fuel efficient. Promising 3D Printing Technology 3D printing, also called additive manufacturing, works by piling up only the required amount of liquefied material, tier by tier. It helps in drastically reducing waste as only the required amount is added, and is in contrast with the conventional subtractive approach where the process involves starting with a large block of material and chipping it away till required shape and size is achieved. (See also, How the 3D-Printing Industry Evolved in 2016.) GM is not alone in adapting to the promising technology initiative. Earlier, General Electric Co said it would increase the use of 3D printers in its manufacturing processes, while Ford Motor Co. has been testing the 3D printing technology since last year. (For more, see Ford Tests 3D Printing for Parts.) Source: https://www.investopedia.com/news/gm-bets-big-3d-printed-car-parts/

SPRINGFIELD, Mo., April 25, 2018 (GLOBE NEWSWIRE) -- O’Reilly Automotive, Inc. (the “Company” or “O’Reilly”) (Nasdaq:ORLY), a leading retailer in the automotive aftermarket industry, today announced record revenues and earnings for its first quarter ended March 31, 2018. 1st Quarter Financial Results Greg Henslee, O’Reilly’s CEO, commented, “Our Team’s dedication to excellent customer service drove a 3.4% increase in comparable store sales, which was above the mid-point of our guidance for the first quarter, and our relentless focus on profitable growth translated this top-line performance into a 5% increase in operating profit dollars and a 28% increase in diluted earnings per share for the first quarter. I would like to thank Team O’Reilly for their hard work and unwavering commitment to providing unsurpassed levels of service to our customers every day and for their contributions to our ongoing success.” Sales for the first quarter ended March 31, 2018, increased $126 million, or 6%, to $2.28 billion from $2.16 billion for the same period one year ago. Gross profit for the first quarter increased to $1.20 billion (or 52.6% of sales) from $1.13 billion (or 52.5% of sales) for the same period one year ago, representing an increase of 6%. Selling, general and administrative expenses for the first quarter increased to $778 million (or 34.1% of sales) from $728 million (or 33.8% of sales) for the same period one year ago, representing an increase of 7%. Operating income for the first quarter increased to $423 million (or 18.5% of sales) from $403 million (or 18.7% of sales) for the same period one year ago, representing an increase of 5%. Net income for the first quarter ended March 31, 2018, increased $40 million, or 15%, to $305 million (or 13.4% of sales) from $265 million (or 12.3% of sales) for the same period one year ago. Diluted earnings per common share for the first quarter increased 28% to $3.61 on 85 million shares versus $2.83 on 93 million shares for the same period one year ago. Mr. Henslee concluded, “We believe the long-term drivers for demand in our industry remain intact, including a growing and aging vehicle fleet that is driven over three trillion miles each year; but more importantly, we are very confident in our ability to continue to gain market share by providing consistently high levels of service to our customers, and we are well positioned to build on the improved trends we drove in the first quarter.” Share Repurchase Program During the first quarter ended March 31, 2018, the Company repurchased 2.2 million shares of its common stock, at an average price per share of $251.08, for a total investment of $549 million. Subsequent to the end of the first quarter and through the date of this release, the Company repurchased an additional 0.4 million shares of its common stock, at an average price per share of $235.25, for a total investment of $87 million. The Company has repurchased a total of 68.8 million shares of its common stock under its share repurchase program since the inception of the program in January of 2011 and through the date of this release, at an average price of $140.55, for a total aggregate investment of $9.67 billion. As of the date of this release, the Company had approximately $1.08 billion remaining under its current share repurchase authorizations. 1st Quarter Comparable Store Sales Results Comparable store sales are calculated based on the change in sales for stores open at least one year and exclude sales of specialty machinery, sales to independent parts stores and sales to Team Members. Comparable store sales increased 3.4% for the first quarter ended March 31, 2018, on top of 0.8% for the same period one year ago. 2nd Quarter and Updated Full-Year 2018 Guidance The table below outlines the Company’s guidance for selected second quarter and updated full-year 2018 financial data: For the Three Months Ending June 30, 2018 For the Year Ending December 31, 2018 Comparable store sales 2% to 4% 2% to 4% Total revenue $9.4 billion to $9.6 billion Gross profit as a percentage of sales 52.5% to 53.0% Operating income as a percentage of sales 18.5% to 19.0% Effective income tax rate 23% to 24% Diluted earnings per share (1) $3.95 to $4.05 $15.30 to $15.40 Capital expenditures $490 million to $520 million Free cash flow (2) $1.1 billion to $1.2 billion (1) Weighted-average shares outstanding, assuming dilution, used in the denominator of this calculation, includes share repurchases made by the Company through the date of this release. (2) Calculated as net cash provided by operating activities, less capital expenditures and excess tax benefit from share-based compensation payments for the period. Non-GAAP Information This release contains certain financial information not derived in accordance with United States generally accepted accounting principles (“GAAP”). These items include adjusted debt to earnings before interest, taxes, depreciation, amortization, share-based compensation and rent (“EBITDAR”) and free cash flow. The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. The Company believes that the presentation of adjusted debt to EBITDAR and free cash flow provide meaningful supplemental information to both management and investors that is indicative of the Company’s core operations. The Company has included a reconciliation of this additional information to the most comparable GAAP measure in the selected financial information below. Earnings Conference Call Information The Company will host a conference call on Thursday, April 26, 2018, at 10:00 a.m. Central Time to discuss its results as well as future expectations. Investors may listen to the conference call live on the Company’s website at www.oreillyauto.com by clicking on “Investor Relations” and then “News Room.” Interested analysts are invited to join the call. The dial-in number for the call is (847) 619-6397; the conference call identification number is 46648810. A replay of the conference call will be available on the Company’s website through Thursday, April 25, 2019. About O’Reilly Automotive, Inc. O’Reilly Automotive, Inc. was founded in 1957 by the O’Reilly family and is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional service provider markets. Visit the Company’s website at www.oreillyauto.com for additional information about O’Reilly, including access to online shopping and current promotions, store locations, hours and services, employment opportunities and other programs. As of March 31, 2018, the Company operated 5,097 stores in 47 states. Source: https://globenewswire.com/news-release/2018/04/25/1487571/0/en/O-Reilly-Automotive-Inc-Reports-First-Quarter-2018-Results.html

The factory-recommended replacement intervals for filters can vary quite a bit depending on the year, make and model of the vehicle, as well as how it is driven. As a rule, older vehicles (those more than 15 to 20 years old) typically have more frequent service intervals than newer vehicles. Why? Because late-model vehicles require less maintenance, thanks to improvements in motor oils, transmission fluids, engine design and filter media. Many long-life air and oil filters use synthetic fiber media or a blend of cellulose and synthetic fibers to extend filter life. Changing the oil and filter every 3,000 miles was standard practice decades ago. But it’s no longer necessary because most multi-viscosity oils today are a synthetic blend or a full synthetic that resist viscosity breakdown and oxidation for a much longer period of time. Late-model fuel-injected engines also run much cleaner than their carbureted ancestors, which reduces oil contamination in the crankcase. Oil and filter change intervals for most late-model vehicles range from 5,000 to 7,500 to 10,000 miles or more. Many vehicles don’t even have a time/mileage recommendation anymore but rely on a computer algorithm to turn on a “service reminder light” when an oil change is needed. A key point with today’s extended service intervals is that they depend on two things: using a top-quality motor oil that meets OEM service requirements, and a premium or long-life oil filter (brand name or private label) that has the storage capacity to go the distance without clogging. The most common mistake that’s made when recommending or choosing an oil filter is to go with the least expensive filter on the shelf. That can be a big mistake if a customer is not changing their oil for 5,000 miles or more. Many economy filters lack the storage capacity to go beyond 4,000 or 5,000 miles before they clog and go into bypass mode and route unfiltered oil to the engine. Our advice is to always recommend a premium or extended-life filter to every customer who is following extended service intervals, as well as customers who are buying synthetic motor oil because they want the best protection for their engine. Recommended replacement intervals for engine air filters can range from 30,000 to 50,000 miles or more, but it depends more on exposure to dirt than time or mileage. The dirtier the environment, the more often the air filter should be replaced. Inspecting the air filter when the oil is changed is the best way to tell if it is dirty. Cabin air filters that trap both dust and odors typically have a service life of about one year regardless of mileage because the charcoal particles that absorb odors degrade over time. Dust-only cabin air filters should be inspected and/or replaced every two years or 30,000 miles, or as needed depending on operating conditions. In-line fuel filters typically have a recommended replacement interval of 30,000 to 50,000 miles. But many of today’s fuel filters are part of the fuel pump module assembly inside the fuel tank and are “lifetime” filters with no recommended replacement interval. The filter should have enough capacity to last upward of 10 years or 150,000 miles – unless the fuel is somehow contaminated with a tank of dirty gas (it happens!). Most late-model automatic transmission filters also are “lifetime” filters with no specified replacement interval. Under “normal” use, the fluid and filter often can go upwards of 10 years or 150,000 miles. However, many transmission experts still recommend changing the fluid and filter every 50,000 miles for preventive maintenance. Fluid and filter life can be cut short if the transmission runs hot (towing can cause this), or as a result of hard use. Discolored fluid that smells like burned toast is a sign of overheating and should be changed without delay. Source: http://www.counterman.com/replacement-intervals-for-oil-and-air-filters-in-todays-vehicles/

STARFIRE’s Tec-A line of products for front-line maintenance and service is growing with the addition of three new offerings: STARFIRE TEC-A-Carb Carb/Choke Cleaner gets to hard-to-reach passages and sliding surfaces to eliminate carbon, gum, sludge, varnish or corrosive deposits that interfere with performance. It is safe for oxygen sensors and catalytic convertors. STARFIRE Tec-A-Nut Penetrating Oil cuts through grease and corrosion while dissolving rust to free seized components. It also is effective for water displacement, leaving a protective film in cracks and crevices to prevent rust or corrosion. STARFIRE Tec-A-Glass is ammonia-free and quick-drying. Its clinging foam formula quickly removes fingerprints, smudges, light grease, bugs, dirt and smoke residue from windows, mirrors and other glass surfaces without rinsing. It leaves a streak-free shine and a pleasant, fresh aroma. The new additions join STARFIRE Tec-A-Brake Low VOC Brake & Parts Cleaner and Tec-A-Start Starting Fluid in the company’s line of maintenance and service products. All STARFIRE lubricants and additives meet or exceed manufacturer requirements. For bulk orders or technical specifications, or to locate a local distributor, call 888-258-8723 or visit starfire1.com/contact.php. Source: http://www.aftermarketnews.com/starfire-extends-tec-a-line-with-3-new-products/

Auto parts maker Tenneco is buying Federal-Mogul from Carl Icahn's Icahn Enterprises in a deal worth $5.4 billion in cash and stock. Tenneco will then separate the combined companies into two separate stocks in a tax-free spinoff, one focusing on "aftermarket and ride performance," the other on "powertrain technology." "We expect to be meaningful stockholders of Tenneco going forward and are excited about the prospects for additional value creation," Icahn said in a statement. "This transaction is an excellent example of our general modus operandi at Icahn Enterprises, by which we seek to acquire undervalued assets, nurture, guide and improve their condition and operations, and ultimately develop them into more valuable businesses, which greatly enhances value for all shareholders." Icahn acquired control of Federal Mogul, a maker of wiper blades and spark plugs, in 2008. The activist investor then took it private in January 2017. Tenneco shares jumped more than 6 percent in premarket trading Tuesday. The sale to Icahn, made up of $800 million in cash and 29.5 million shares of Tenneco stock, is expected to close in the second half of the year. Source: https://www.cnbc.com/2018/04/10/icahn-selling-federal-mogul-to-tenneco-for-5-point-4-billion.html