U.S. Auto Parts Network (NASDAQ: PRTS) reported Q4 EPS of ($0.70), $0.64 worse than the analyst estimate of ($0.06). Revenue for the quarter came in at $63 million versus the consensus estimate of $64.53 million.

Fourth Quarter 2019 Summary vs. Year-Ago Quarter

• Private label sales increased 15% Y/Y.
• Gross profit increased 28% to $21.2 million, with gross margin up 800 basis points to 33.7%.
• Net sales declined as expected to $63.0 million compared to $64.7 million due to reduction of unprofitable business lines.
• Net loss was $(25.1) million or $(0.70) per share, compared to a net loss of $(4.5) million or $(0.13) per share. Q4 2019 includes a $(21.5) million deferred tax valuation allowance.
• Adjusted EBITDA increased 137% to $1.7 million.
• Ended the quarter with no revolver debt.

"The fourth quarter marked a key inflection point in our business, as the strategies and initiatives we deployed over the course of 2019 began to materialize in our results," said Lev Peker, CEO of U.S. Auto Parts. "Our elimination of unprofitable revenue and strict focus on private label sales led to our strongest level of gross margin in eight years. Further, our implementation of various cost reduction initiatives has created a leaner and more efficient operating model, which enabled us to more than double adjusted EBITDA to $1.7 million during the quarter. We began our turn-around strategy roughly one year ago, and these exceptional improvements tell us that our strategy is working.

"While we are very proud of our work last year and the improvements we have made. We view these recent results as a guidepost. They are proof we are moving in the right direction, but we do not for a minute think our work is done. There is still plenty we want to accomplish and improve upon, and we have taken concrete steps in 2019 to position U.S. Auto Parts to make further improvements in 2020. In fact, through the first two months of this year, we are currently on pace to generate more than 30% growth in private label sales compared to Q1 2019, resulting in double digit growth in the overall business, while maintaining our strong level of gross margin. We are still in the early innings of taking U.S. Auto Parts to its full potential."

For earnings history and earnings-related data on U.S. Auto Parts Network (PRTS) click here.