The Greensheet Issue #07-21 (Full)

Quick Hits …
(A few short items to get us started this week)

Jefferies’ vehicle miles traveled (VMT) model predicts that December VMT was 246.60 billion miles (down 10% year over year), with an upper limit of 257.80 billion miles and a lower limit of 235.70 billion miles. Jefferies’ model predicts that January VMT was 238.00 billion miles (down 6% year over year), with an upper limit of 249.30 billion miles and a lower limit of 225.60 billion miles.

• The February 2021 Tune-Up report from Jefferies notes continued positive feedback regarding first-quarter 2021 retail demand from suppliers and service operators due, in part, to harsh winter weather and additional stimulus. “Conversely, more frequent mention of supply-chain challenges — including production disruption, higher material costs, shipping costs and a weaker U.S. dollar — leads us to believe retailers are focused on de-risking supply chains with broader sourcing while potentially raising retail prices in the second half of 2021,” analysts Bret Jordan, Mark Jordan and Ethan Huntley wrote.

• The Auto Care Association/Northwood University Automotive Aftermarket Business Confidence Index slipped from 24.44 in December 2020 to 18.87 in January 2021, indicating that — while aftermarket business leaders’ confidence for the industry over the next 12 months has slipped somewhat — they remain solidly in the “slightly more confident” range. Click here to view charts depicting the index’s movement over time.

AutoZone Inc. has promoted Eric Gould from vice president of supply chain replenishment to senior vice president of supply chain, replacing Mitchell Major, who died Jan. 29, 2021. In his new role, Gould, who joined the company in 1992, will serve on AutoZone’s executive committee.


O’Reilly Automotive Discusses Network Growth, Product Availability And More

2020 was a milestone year for O’Reilly Automotive, ending with record fourth-quarter revenue and earnings. Despite obstacles presented by the coronavirus pandemic, the company was able to open 156 net new stores in 2020, including its first greenfield new store in Mexico, which opened during the fourth quarter.

“We’ve been very pleased with our team’s ability to successfully open great new store locations in a very difficult year, and our 2020 stores are off to a great start,” COO and Co-President Jeff Shaw told analysts on the company’s Feb. 11 earnings call. “For 2021, we’re setting our capital expenditure guidance at $550 million to $650 million. We’ve also established a target of 165 to 175 new store openings.

“Our new store target is higher than our new store openings in 2020 but is still restrained by expected delays in regard to design and permitting approvals. We feel confident that we can achieve our target and open another strong class in new stores, but we will be dependent on local market conditions and municipal agencies for us to stay on our development schedule.”

After opening a new distribution facility in Lebanon, TN in 2020, O’Reilly has another major distribution project on the horizon for 2021. The company is working to complete and open a new DC in Horn Lake, MS — which is just south of Memphis — in the second quarter.

“This new DC will be approximately 580,000 square feet, and our initial plan is to build out capacity to service 250 stores — servicing over 220 stores at startup,” Shaw said. “The new DC will provide us with additional capacity for store growth in this region of the country and provide flexibility for the surrounding DCs while also accommodating a broader SKU capacity, increasing our breadth of hard-to-find parts and allowing us to provide an even higher level of service through the Memphis metropolitan area markets.”

Like many auto parts distributors, product availability was an issue for O’Reilly in 2020, but there is reason for optimism in 2021.

“One of the things that we elected to do years ago was to require our international suppliers to keep products stateside here in the U.S., and that helped us early in the pandemic. And, we were very aggressive with our ordering at the onset,” CEO and Co-President Greg Johnson said on the call. “That said, our supply chain was definitely pressured in 2020.

“We did have some suppliers that underperformed. We still have a handful of suppliers that are not performing at the level that we would like for them to, and we’re working very aggressively to ensure that they get back up to speed. Much of that is related to the pandemic, whether domestic or international.”

Johnson added that, generally, things have improved from a supply standpoint, and “we feel good about the very few suppliers that we have that are not performing well.”

Analysts with Jefferies LLC wrote in a Feb. 11 report that O’Reilly’s in-stocks appear intact.

“While the pandemic continues to stress many suppliers with manufacturing/distribution disruptions, we believe O’Reilly gained share during full-year 2020 at the expense of smaller WDs that lacked access to inventory,” Bret Jordan, Mark Jordan and Ethan Huntley noted in their report. “Despite some ongoing inventory challenges (we believe batteries are scarce), we expect O’Reilly will retain these recent share gains given the company’s best-in-class supply chain and priority position for inventory fill versus smaller peers.”        — Marc Vincent



O’Reilly Automotive Reports Record Q4 Sales;
Comp-Store Sales Rose 11.2%

O’Reilly Automotive wrapped up 2020 on a strong note, reporting a record $392.95 million in fourth-quarter net income (up 20.9% year-over-year) and $1.47 billion in fourth-quarter gross profit (up 11.1%).

Gross margin, however, decreased 131 basis points to 52.0%, attributable to a reduced LIFO benefit from the impact of merchandise purchased in 2019 before tariff-related cost increases, as well as an expected dilution from Mayasa, which operates distribution centers in Mexico. CEO and Co-President Greg Johnson told analysts on O’Reilly’s Feb. 11 earnings call that both impacts are consistent with pressure experienced in the third quarter and in line with management’s expectations.

For the full year, O’Reilly’s gross margin was 52.4%.

SALES … Fourth-quarter sales came in at a record $2.83 billion — up 13.9% compared to the same period a year ago. Comparable-store sales growth was 11.2% on top of 4.4% growth a year ago, giving O’Reilly a two-year stack of +15.6%.

“From a cadence perspective, after starting the quarter on a strong trend — as noted on our last conference call — we saw sales moderate somewhat in November but finished December with the strongest performance of the quarter, as we saw our robust underlying sales trends supplemented by a benefit from cold-weather categories,” Johnson told analysts on the call. “The composition of our strong sales performance in the fourth quarter continued the trends we’ve experienced in the past two quarters with our DIY business being a stronger contributor during the quarter, driven by robust increases in both ticket count comps and average ticket comps. However, our professional business also performed well and strengthened as we progressed through the quarter.

“Our average ticket growth in the quarter and full-year 2020 exceeded our expectations despite a limited benefit from inflation, indicating a continued ability and willingness of our customers to work on larger projects. From a category standpoint, we continue to see broad-based, robust sales trends across all categories with very strong performance in our DIY out-front categories and batteries. Even in an environment of pressure on total miles driven as a result of the pandemic, we saw continued brisk sales in our undercar hard parts categories.”

PANDEMIC IMPACT … “In the early stages of the pandemic, government stimulus payments and enhanced unemployment benefits under the CARES Act provided immediate demand in our markets and helped shore up the U.S. consumer, even in the face of increased unemployment. However, the strength of demand in our industry stayed very strong throughout 2020,” Johnson said. “It is also clear that we’ve benefited from an increased willingness by DIY consumers to invest in repairing and maintaining their vehicles for a number of reasons.

“As we’ve seen repeatedly in previous economic cycles, the current economic uncertainty drives consumers to defer new car purchases and invest in keeping their existing vehicles on the road. The trend in 2020 for DIYers to take on larger jobs reflects this renewed focus on addressing underperformed maintenance. We also believe the strength we’ve seen in what has typically been more discretionary appearance and accessory categories reflects a shift in consumers allocating more of their time and spend to their vehicles.”

While acknowledging that some of these tailwinds to aftermarket demand may soften as the disruptions brought about by the pandemic abate, Johnson said management is encouraged by how resilient sales have been in the face of declines in miles driven, decreased employment and increased work-from-home arrangements.

GAINING SHARE … Johnson also told analysts that the company’s strong results in 2020 were driven, in part, by significant share gains. He pointed to the strength of O’Reilly’s business model and its employees’ efforts to keep stores open, stocked and supplied as an advantage that “differentiates us from the experience offered by some of our competitors and big box stores.”

“When you look at where we feel like we made the most progress from a share gain perspective in 2020, we feel like it was from some of the smaller WD players out there that maybe didn’t have the supply chain strength we did and the product availability that we had,” he stated, adding that management hopes that some of that business is sticky. “Hopefully, some of those customers — on both the professional and the retail side — continue to come into our stores.”

In terms of big-box retailers, Johnson pointed to the easier experience customers had shopping in an O’Reilly Auto Parts store. “I think some of the [big box] consumers — rather than walk to the back of the store to pick up a battery or wiper blades or what have you, fight that crowd, take that risk and then go home and install those products themselves — they came to O’Reilly, and what they saw is ‘Hey, we’ve got quality products; we’ve got competitive pricing; and, guess what? we’ll install those products for you there in the parking lot,” he told analysts on the call. “So, those customers that experienced that shift in 2020, we certainly hope a lot of that carries over in 2021 and beyond.”

INVENTORY … Inventory per store at the end of the fourth quarter stood at $650,000 — up 2.8% from the end of 2019. “We came into 2020 and had developed a plan to further enhance our store-level inventory position and build on our industry-leading parts availability and had targeted per-store inventory growth of 5%,” said Executive Vice President and CFO Tom McFall.

However, as O’Reilly moved through 2020, McFall said the company needed to refocus its priorities to support the strong sales volume and replenishment needs of its stores. “We had to delay some of the inventory initiatives we had planned and finished the year below our original plan at an inventory increase of 2.8%,” he told analysts on the call. “For 2021, we plan to complete our 2020 inventory expansion plan and expect per-store inventory to increase approximately 4%.”

Meanwhile, the company’s AP-to-inventory ratio ended the year at 114.5%, which was significantly higher than O’Reilly’s normal ratio. McFall said this was heavily influenced by extremely strong sales volumes and inventory turns over the last nine months of 2020. “We anticipate our AP-to-inventory ratio to come back off of these historic highs as we complete our inventory initiatives and our sales growth moderates,” he stated. “Our current expectation is to finish 2021 at a ratio of approximately 109%.”

GUIDANCE … Johnson said O’Reilly has experienced a strong start of 2021, with the continuation of “robust” sales volumes through January, implying that the current quarter’s comps are tracking at or above the 11.2% gain the company recorded for the full fourth quarter of 2020.

“On the professional side of our business, we expect solid performance throughout the year as we anticipate our current momentum to continue as miles driven continues to rebound. However, on the DIY side of the business, we face extremely difficult comparisons beginning in April, as we lap the biggest surge in demand in a short period of time in our company’s history,” he forecast. “As a result, we are guiding to a [full-year 2021] comparable-store sales range of -2% to flat, versus comparable-store sales growth of +10.9% in 2020, with the most significant pressure in that outlook expected for the second and third quarters as we lap the record volumes.”

For 2021, management expects O’Reilly to come through with total sales between $11.50 billion and $11.80 billion and gross margin of between 52.2% and 52.7%.

“Our outlook for 2021 for sales and gross margin includes a muted expectation for same-SKU inflation of 1%,” McFall said. “The pricing environment remains rational, and we expect that to continue.”

Analysts with Jefferies LLC wrote in a Feb. 11 report that, while O’Reilly’s record 2020 comps are a high bar, the team foresees a return to growth for O’Reilly in 2022.

“Given strong first-quarter trends, significant recent share gains and our belief that inflation could exceed O’Reilly’s 1% forecast, we expect full-year comps to be slightly above the guided range,” analysts Bret Jordan, Mark Jordan and Ethan Huntley wrote.

“We expect DIFM demand will continue to improve as mobility recovers, with second-half 2021 as a likely inflection point for more material demand recovery,” the Jefferies team stated in its report. “We also note that management’s guidance does not take into account additional government stimulus, which contributed to strong DIY demand through much of full-year 2020, while the ongoing economic uncertainty remains a tailwind for maintenance spend and challenging 2021 comps ultimately become a ‘low bar’ for 2022.”

BUYBACKS … During the fourth quarter ended Dec. 31, 2020, O’Reilly repurchased 2.20 million shares of its common stock at an average price per share of $451.90 for a total investment of $993 million.

O’Reilly has repurchased a total of 81.70 million shares of its common stock under its share repurchase program since the inception of the program in 2011 at an average price of $178.33 for a total aggregate investment of $14.57 billion.

The board of directors has increased the authorization amount under O’Reilly’s share repurchase program by an additional $1.00 billion, raising the aggregate authorization under the program to $15.75 billion. The additional $1.00-billion authorization is effective for a three-year period, beginning Feb. 10, 2021.

As of Feb. 11, 2021, the company had approximately $1.18 billion remaining under its current share repurchase authorizations.        — Marc Vincent



Valvoline Quick Lubes Reports Strong Profit Growth Despite Cost Increases

For the fiscal first quarter ended Dec. 31, 2020, Valvoline’s Quick Lubes segment generated $43 million in operating income — an increase of 13.2% compared to the same period a year ago, attributable to 6.0% system-wide organic same-store sales growth as well as the addition of new service centers. Adjusted EBITDA increased 21% to $58 million, driven by same-store sales growth and unit additions with favorable channel and product mix helping to offset modest volume declines.

Segment gross profit margin decreased 2.3%, primarily related to higher costs associated with adding new and acquired shops to Quick Lubes’ company-owned system, particularly those within the early phases of their operation. Gross profit margin also was unfavorably impacted by unproductive labor and other costs related to COVID-19 protocols designed to protect employees and customers.

Total system-wide Quick Lubes sales rose 16.5% to $254 million, with company-owned locations coming through with $178 million in sales (up 25.4%) and franchised shops generating $76 million in sales (essentially flat year over year).

On a same-store basis, company-owned shops reported 6.1% sales growth on top of 6.3% growth a year ago for a two-year stack of +12.4%. Franchised locations generated 6.0% in same-store sales growth on top of 9.9% growth a year ago for a two-year stack of +15.9%.

According to management, same-store sales growth varied, with softer results in the middle of the quarter tied to increased COVID-19 pandemic restrictions and a related dip in miles driven, as well as what CEO Sam Mitchell called “an echo effect.”

During Valvoline’s Feb. 4 earnings call, Mitchell explained: “When we saw that dip back in the spring from the initial COVID-19 restrictions, those customers that would have delayed service, you would have expected them in that November time period. So, because it did happen in that April/May time period, we felt that impact in November. What was really encouraging is that we just bounced back very strong at the close of the quarter in December, and that strength has carried through into January.

“Now January has seen same-store sales in the low double-digit range, so we’re really feeling good about the Quick Lube business and how we’re continuing to take share. As far as where we’re taking share from, we believe we’re taking it from, not just competing Quick Lubes, but the broader DIFM market because of the convenient service model and the effectiveness of our marketing.”

During the three months ended Dec. 31, 2020, Valvoline acquired 81 service centers in single and multi-unit transactions — 27 former franchise locations converted to company-owned shops and 12 franchise-operated service center stores. The acquisitions included …
• 14 company-owned locations in Texas from Kent Lubrication Centers (doing business as Avis Lube) on Oct. 1.
• 21 former franchise shops converted to company-owned service centers in Kansas and Missouri from Westco Lube on Oct. 15.
• 12 company-owned locations in Idaho acquired from L&F Enterprises (doing business as Einstein’s Oilery) on Oct. 30.
• 27 Mister Oil Change Express shops across seven states (15 company-owned and 12 franchise-operated) acquired from Car Wash Partners on Dec. 11.

Valvoline’s Quick Lubes segment ended the quarter with 1,533 total company-owned and franchised shops — up 126 compared to the prior year.

For fiscal 2021, management expects to add 140 to 160 new shops, both company-owned, franchise and acquisitions. System-wide, same-store sales growth is forecast at 12% to 14%.          — Marc Vincent


Supply Chain Issues Held Back Motorcar Parts’ Q3 Performance

For the fiscal third quarter ended Dec. 31, 2020, Motorcar Parts of America (MPA) reported strong bottom-line improvement, as net income rose from $865,000 a year ago to $8.47 million. However, net sales decreased by $3.01 million (or 2.4%) to $122.57 million because of a number of factors related to the coronavirus pandemic. This includes disruptions in supply chain and logistics services, which resulted in order delays of approximately $17 million.

Before we exit our discussion of the company’s topline performance, it’s worth noting that MPA’s products — which are sold predominantly in the United States — accounted for the following percentage of net sales …
• Rotating electrical products: 72% (down from 75% a year ago).
• Wheel hub products: 14% (unchanged).
• Brake-related products: 12% (up from 9% a year ago).
• Other products: 2% (unchanged)

MPA’s gross profit declined 12.4% to $24.24 million in the fiscal third quarter, while its gross margin slipped from 22.0% to 19.8% on a year-over-year basis, attributable to supply chain disruptions, logistics issues, higher freight costs, and pandemic-related costs for wages and personal protective equipment.

On the company’s Feb. 9 earnings call, Chairman, President and CEO Selwyn Joffe told analysts that MPA experienced solid product demand during the quarter and continues to experience solid product demand. “Even though challenges due to the pandemic, including global supply chain disruptions, resulted in order delays of approximately $17 million in the quarter, we believe these sales will be realized in the current fourth quarter and the first quarter of the new fiscal year,” Joffe said. “I might add that we have already experienced record January shipments.”

Among the items he cited as outside of the company’s immediate control are problems obtaining shipping containers, delays in products leaving ports and problems offloading boats, both in the United States and Mexico.

Joffe also discussed another issue MPA experienced during the quarter that — like supply chain disruptions — was not related to product demand. Joffe noted that December is the end of the year for a lot of MPA’s customers, which led to some inventory reductions, pushing orders from December into January.

“Our expectation is that the fourth quarter will benefit from some of the order delays of product shipments from the fiscal third quarter, with the remaining orders to be shipped in the new fiscal year beginning in April,” he told analysts on the call. “This is based on factors beyond our immediate control related to the pandemic.

“In short, while sales growth has been restrained by global supply chain challenges, our bottom-line performance is expected to continue to benefit from enhanced operating efficiencies as the pandemic situation improves, including increased caliper production volume along with lower interest rates and reduced net debt.”        — Marc Vincent


New CEO Announced For Sylvania Automotive North America

Osram Sylvania has named Mark Savoy as the U.S. and Canada CEO for the Sylvania Automotive North American business. Savoy succeeds Joe Verbanic, who is retiring after 30 years with the company. Verbanic has held various leadership roles within the automotive business, including in finance, product marketing, OEM lighting system sales, and aftermarket sales and marketing.

Savoy has spent 22 of his 26 years with the company in a variety of roles in the U.S. automotive business. He has held positions in plant accounting, forecast and business planning, sales, and marketing. Most recently, Savoy was CFO.

In related news, Marko Haas has been appointed CFO, and Ben Soucy has been named director of plant operations for the Sylvania North American business.

As CFO, Haas is responsible for managing the financial activities for Sylvania. He has held various leadership positions with the company, including project lead for global efficiency, head of sales operations for pricing and contracts, and project manager for the formation of a joint venture in the automotive industry.

As the director of plant operations, Soucy oversees the daily operations of Sylvania’s Hillsboro, NH manufacturing facilities.



Energizer’s Auto Care Sales Rose 29.4%;
Formulations Business Acquired

Energizer Holdings’ auto care sales rose 29.4% to $101.80 million in the fiscal first quarter ended Dec. 31, 2020. Global organic auto care sales growth was 27.0%.

According to management, U.S. auto care sales grew more than 10% as a result of changes in consumer behavior, including a heightened focus on cleaning and disinfecting, as well as an increase in DIY activities. Of note, Energizer experienced strong auto care sales growth from the e-commerce, home center and international markets during the quarter.

In related news, Energizer in December acquired a small, North Carolina-based formulations business for $51.20 million that, to date, has primarily commercialized household disinfectants. The seller was Green Global Holdings.

“The robust portfolio of innovative cleaning, disinfecting and odor-eliminating formulations we have acquired is an extremely attractive addition to our R&D pipeline and is expected to enhance our leadership in auto care,” President and CEO Mark LaVigne told analysts on Energizer’s Feb. 8 earnings call.

“Our interest is taking their technology, infusing it into our auto care portfolio, and helping us lead and shape that into the future,” LaVigne said. “A lot of exciting opportunities there.”

Energizer’s auto care business specializes in automotive appearance, performance and freshener products, as well as refrigerants, that are sold under the Refresh Your Car!, California Scents, Driven, Bahama & Co., Lexol, Eagle One, Armor All, STP and A/C Pro brands.


Lucas Oil Announces Key Leadership Appointments

Lucas Oil Products has announced three key changes to its leadership team. Katie Lucas is now vice president of strategy and philanthropy, Megan Burakiewicz is now director of people operations and Dan Robinson is now vice president of motorsports operations.

Robinson is responsible for all operational aspects of three large-scale motorsports operations, including financial performance, operations, marketing, sponsorships, staffing, human resources, safety, scheduling and event planning. Over the course of more than a decade within Lucas Oil’s racing division, Robinson has overseen the growth of Lucas Oil Speedway as well as helped to raise the profile of both the Lucas Oil Pro Pulling League and the Lucas Oil Midwest Latemodel Racing Association.

Lucas oversees company strategy and business development initiatives, in addition to designing and implementing corporate social responsibility strategies with a concentration on philanthropy and employee engagement. Additionally, she handles internal and external communications with an eye toward ensuring alignment with corporate culture and business objectives.

Lucas brings more than 15 years of leadership, business development and strategic communication experience to the position. She started her career with the Indianapolis Colts in corporate sales and moved to Creative Marketing Solutions as director of business development before joining Lucas Oil.

Burakiewicz brings 14 years of business operations experience to the position, most recently as COO of NEI, a full-service environmental waste management company.


The Wheel Group Buys Tuff Stuff Overland

The Wheel Group (TWG), a new portfolio company of Wynnchurch Capital, has acquired Tuff Stuff Overland, a direct-to-consumer e-commerce platform for outdoor accessory products. Santa Ana, CA-based Tuff Stuff offers a variety of overland adventure gear, including rooftop tents, truck bed racks and awnings. “This acquisition will give our combined company the products to help continue our growth in the truck, SUV and car enthusiast markets,” said David Williams, CEO of TWG.

Based in Ontario, CA, TWG is a designer and distributor of branded aftermarket wheels, specialty tires and related accessories serving the truck, SUV and car markets.

Stifel advised the sellers. Financial terms of the Tuff Stuff transaction were not disclosed.


Racing Winning Brands Retains Latin America Rep Firm

Race Winning Brands (Mentor, OH) has retained ASAP Trading USA — a sales and marketing agency with offices in San Diego, CA and Lima Peru — to represent and promote three of its brands: Wiseco, Boostline and K1. ASAP Trading will serve as Racing Winning Brands’ exclusive authorized representative company for Mexico, Central America and South America.

Juan-Jose Rebaza established ASAP Trading with the sole purpose of serving the Latin American region. Rebaza, a racing and off-road enthusiast with an MBA in marketing, is based in San Diego, CA. He has more than 15 years of logistics expertise and experience developing business in the United States, Latin America, Europe, Australia and New Zealand.

Rebaza’s brother, Ricardo, manages ASAP Trading’s office in Lima, Peru. Ricardo Rebaza is a car and truck enthusiast, industrial engineer, and an off-road leader with more than 20 years of experience in logistics, customer service and technical support.


Spanesi Opens Mexico City Office, Appoints Area Manager For Mexico

Spanesi Americas, a collision repair equipment provider, has added Santiago Kneeland as area manager for Mexico, a newly created role that calls for Kneeland to lead the company’s business operations in-country. This comes as Spanesi’s offices in Mexico City have opened, with all sales, service and technical support initiatives coordinated locally.

“Recent changes in the [United States-Mexico-Canada Agreement (USMCA)] trade agreements went into effect on July 1, 2020. They have given Spanesi Americas strategic economic advantages in Mexico and provided us significant incentives to open offices,” said COO Timothy Morgan. “We look forward to continuing to expand business operations throughout the country.

“Santiago brings a broad understanding of automotive equipment offerings to his new role within the Spanesi family. I value his enthusiasm for our industry and look forward to supporting him as he represents the Spanesi brand in Mexico.”

Kneeland most recently was managing director of TecGo, an automotive aftermarket distribution company in Mexico that specialized in body shop tools and equipment. His industry background also includes time as director of sales – automotive for Dreyfus Global Trade, representing automotive and industrial tool and equipment companies.



Auto Care Association Announces More South America Product Catalog Data

The Auto Care Association has announced that two more countries are now available in its Vehicle Configuration Database (VCdb): Brazil and Argentina, adding to the already available Colombia and Chile data. The addition creates a “VCdb South America” database subscription that subscribers can load into their product information management system.

“North American companies can use this data to extend their business reach and access new markets,” said Bill Hanvey, president and CEO of the Auto Care Association. “Doing business in the Americas requires ACES and PIES and their related databases. Leveraging our infrastructure in the ACES and PIES universe will enable auto care industry companies to communicate effectively and consistently.”

Also available as a subscription are Spanish translations for the VCdb, Qdb, PCdb and PAdb databases. To subscribe to the Spanish translations, users must have a subscription to one of the VCdbs as well as the PAdb.


Shop-Ware Integrates With Mitchell 1 ProDemand

The Shop-Ware shop management system has announced a systems integration with Mitchell 1ProDemand. This allows shop owners who subscribe to ProDemand to access and use their Mitchell 1 services directly from the Shop-Ware platform. Additionally, subscribers to both systems will receive the following …
• Direct access to the ProDemand platform with automatic vehicle lookup from Shop-Ware RO, including interactive wiring diagrams, OEM repair information and “real world” fixes from one search.
• Population of Shop-Ware estimates and recommendations based on Mitchell 1 labor times, parts and fluids, using the latest Estimate Guide interface.
• Population of itemized inspections to Shop-Ware’s vehicle-specific checklists from Mitchell 1 factory maintenance.
• Support for both ProDemand and ShopKey Pro subscribers.


Shop Boss Debuts New Business Intelligence Dashboard

Shop Boss, provider of shop management technology for independent auto repair shops, has launched a business intelligence dashboard called Boss Board. The dashboard continuously updates so users can measure success and spot opportunities for growth quickly.

“Customers told us they want an easy, intuitive way to understand how their business is doing without sifting through metrics they don’t care about or spending lots of time pulling reports,” said Chris Boshaw, Shop Boss CEO and founder.

Key features of Boss Board include …
• Capability to create both detailed and summary reports.
• Customizable organization and reporting.
• Real-time monitoring.
• Charts and graphs.


ASA National Touts New Mobile App Benefit For Member Shops

ASA National has announced a partnership with AppFueled to provide member shops with the ability to build their own apps. Incentives being offering through the ASA partnership include …
• AppFueled will initially waive the $599 fee the company charges for app creation during its launch.
• AppFueled is offering $100 off its “White Glove Service” fee.
• AppFueled is offering free in-app, text-to-pay integration.
• AppFueled is waiving its first-month payment.

For more information on the AppFueled member benefit, visit ASA member shops that previously worked with MobileSoft will be able to continue with AppFueled, according to the association.


Federated Car Care Scholarships Now Available

Federated Auto Parts is once again awarding scholarships to the employees or children of Federated Car Care Centers purchasing from any Federated member. The scholarships are funded by Fisher Auto Parts in memory of Art Fisher, founder of Federated Auto Parts and the Federated Car Care program.

Administered by the University of the Aftermarket Foundation, the scholarships will be awarded for the 2021-‘22 academic year to the sons, daughters or employees of active Federated Car Care Centers attending two- and four-year accredited colleges; ASE/NATEF-certified post-secondary automotive, heavy-duty or collision technician training programs; and licensed and accredited vocational schools. Students graduating from high school in 2021 and heading to any of these post-secondary programs also are eligible.

The deadline to apply is March 31. Qualified candidates should specify Federated on their application when applying online at


Lithia Motors Reports Double-Digit Customer-Pay Growth In December

Fortune 500 auto retailer Lithia Motors & Driveway (Medford, OR) saw its service, body and parts revenue rise 15.7% to $383.90 million in the fourth quarter of 2020. However, on a same-store basis, revenue decreased 2.8% to $310.90 million, attributable to a 2% increase in customer-pay work that was offset by a 7% decrease in warranty, 10% decline in wholesale parts and a 13% drop in body shop revenue.

“In December, these negative trends reversed course, and we saw single-digit increases in our service, body and parts, which was driven by double-digit growth in our highest-margin customer-pay work,” COO Chris Holzshu told analysts on the company’s Feb. 3 earnings call.

For the full quarter, service, body and parts gross margin grew 410 basis points to 50.2%.


Asbury Reports Choppy Service, Parts Business In Q4, Early Q1

For the fourth quarter of 2020, the Asbury Automotive Group saw its parts and service revenue rise 14.0% to $261.80 million, while gross profit increased 14.5% to $162.50 million and gross margin grew 30 basis points to 62.1%. However, on a same-store basis, parts and service revenue decreased 3.6% to $207.70 million and gross profit declined 4.2% to $133.10 million. A closer look shows that …
• Same-store customer-pay gross profit decreased 3.3% to $73.50 million.
• Same-store warranty gross profit declined 4.7% to $20.30 million.
• Same-store wholesale parts gross profit fell 5.3% to $5.40 million.

“Although our parts and service revenue decreased in the quarter, our business has improved from the lows in April,” Dan Clara, senior vice president of operations, said during Asbury’s Feb. 2 earnings call. “But, the recovery continues to be choppy due to the pandemic.”

President and CEO David Hult told analysts that the volatility varied by month and by market. “In the fourth quarter, we went negative in parts and service in November, and we came back positive in December,” Hult said on the call. “And, we started January off with a little bit more volatility.”

Duluth, GA-based Asbury operates 91 dealerships, consisting of 112 franchises representing 31 domestic and foreign vehicle brands. The company also has 25 collision repair centers.


Group 1 Automotive’s U.S. Customer-Pay Gross Profit Increased In Q4

Group 1 Automotive reported $361.20 million in consolidated parts and service revenue for the fourth quarter of 2020 — a decrease of 4.8% compared to the same period a year ago, attributable to the effects of coronavirus pandemic restrictions on business in certain markets as well as lower overall vehicle miles traveled. On a same-store basis, the company’s consolidated parts and service revenue slid 4.7%.

Consolidated parts and service gross profit decreased 3.8% to $196.60 million in the fourth quarter of 2020, yet gross margin increased from 53.9% to 54.4% on a year-over-year basis.

U.S. parts and service revenue declined 4.8% to $297.40 million for the quarter, with same-store revenue down 4.9%. Same-store U.S. gross profit decreased 4.9% to $159.90 million because of a decline in warranty and collision work. However, customer-pay gross profit did increase versus the fourth quarter of last year. U.S. same-store parts and service gross margin came in at 54.1%, which was unchanged year-over-year.

Houston-based Group 1 owns and operates 182 automotive dealerships (236 franchises) and 49 collision centers in the United States, the United Kingdom and Brazil.



Seeking Senior Level Category Manager for Motor Oils, Chemicals, Functional Fluids, other

Location: Mid-Atlantic Region — Candidate will report to the Executive Vice President of Merchandising and will be responsible for increasing sales, maintaining and improving profitability and market share for assigned product lines and/or categories, and … (more) … Click here to find out more.

Seeking Senior Level Category Manager for Automotive Hard Parts

Location: Mid-Atlantic Region — Candidate will report to the Executive Vice President of Merchandising and will be responsible for increasing sales, maintaining and improving profitability and market share for assigned product lines and/or categories … (more) … Click here to find out more.

Hella Inc.: Director of Logistics, Planning and Warehouse

Direct, manage and coordinate a logistics operation incl. budget responsibility, focusing on all topics related to supplier logistics, intra-logistics and customer logistics. … (more) … Click here to find out more.

Hella Inc.: Product Management Specialist – Lighting – (IAM) V

Expert for the highly complex product portfolio (e.g. competition, trends, user needs, Contact Person for major customers and Work out possible strategic opportunities with them). … (more) … Click here to find out more.

Hella Inc.: ACES/PIES Catalog Manager – Data and Pricing

Working under the guidance of Director of Product Management will work to assure high level of ACES/PIES data quality, distribution and analysis of data to help company’s business profitably grow. … (more) … Click here to find out more.


FinditParts Adds Executive VP

FinditParts, a supplier of heavy-duty truck and trailer parts online, has added David Olsen as its executive vice president, where he will be involved in strategy development and deployment, sales, technical services, and supplier relationships. Olsen was the CEO of TransAxle LLC, a drive train components remanufacturer. He also has held C-level positions with Workhorse and UpTime Parts.


EnPro Realigns Its Business

EnPro Industries of Charlotte has realigned its reporting segments in an attempt to enhance transparency and collaboration across the company. The move is part of management’s ongoing portfolio reshaping strategy.

“Over the past year and a half, EnPro has executed several strategic initiatives on our journey to reshape the business in support of profitable growth,” CEO Marvin Riley said in an announcement dated Feb. 4. “Through the acquisitions of Alluxa Inc., LeanTeq Co. Ltd. and The Aseptic Group — and the divestitures of Stemco Air Springs, several Stemco heavy-duty truck product lines, GGB bushing blocks and Fairbanks Morse businesses — we are positioning the company for growth within the semiconductor, life sciences and other technology-enabled markets.”

The three new reportable segments and their mission statements are …
• Sealing Technologies — “safeguarding critical environments” — composed of the Garlock, Stemco and Technetics (excluding semiconductor).
• Advanced Surface Technologies — “advancing precision services and solutions” — composed of the LeanTeq, Alluxa and Technetics semiconductor businesses.
• Engineered Materials — “enabling high-performance polymer applications” — composed of the GGB and CPI businesses.

For more information about EnPro, its new segments and its brands, visit


MACS Elects 2021 Officers

The board of directors of the Mobile Air Climate Systems Association (MACS) has elected the following officers for 2021 …
• Chairman and CEO: Andy Fiffick of Rad Air Complete Car Care in Cleveland.
• Vice Chairman: Steve Sunday of Sunair in Fort Worth, TX.
• Treasurer: Caroline Marks Acebedo of Marks Air in Tampa.
• Secretary: Jim Atkinson of the Car Repair Company in Scottsdale, AZ.
• Past Chairman: Jim Hittman of Badger Truck Refrigeration in Eau Claire, WI.

The MACS board of directors has 13 members: four members representing service and repair shops, four members representing distribution, four members representing manufacturing and a past chairman.

Fiffick, Marks Acebedo, Atkinson and Tim Iezzi of Iezzi’s Auto Service in Reading, PA are the service and repair representatives.

Tray Carlisle of Carlisle Air & Automotive in San Antonio; Troy Farr of 1-800-Radiator in West Jordan, UT; Mark Schmitz of Global Parts Distributors in Macon, GA; and Sunday represent distributor members.

Ryan Baker of Kenway Engineering in Sherburn, MN; Charlie Roberts of T/CCI Manufacturing in Frisco, TX; Al Leupold of Bergstrom in Rockford, IL; and Tim Wagaman of Robinair in Warren, MI represent manufacturers.

Each year, half of the board is up for election on two-year terms.


People Watching 2/15/21

Dana Inc. has hired Chris Clark as its senior vice president of global operations. Clark joins Dana from Yanfeng Automotive Interiors, where he was vice president of operations, including leading manufacturing operations and quality. Prior to that, he was vice president of operations for Faurecia.

• Shelbie Huffman has joined Kooks Headers & Exhaust as a marketing coordinator. Huffman previously was a marketing coordinator for cbdMD and a marketing specialist with Progressive Furniture.


News Briefs 2/15/21

• Beginning Feb. 15, Arity vehicle miles traveled (VMT) data will be accessible on a weekly basis to all Auto Care Association members via the association’s TrendLens platform at no charge during the “Market View” 60-day trial period. Arity’s VMT information is available eight weeks sooner than the U.S. Department of Transportation’s reporting schedule.

•’s new 210,000-square-foot distribution center in Grand Prairie, TX and has hired its 200th person. The facility has shipped more than 100,000 packages since it began operations in the fourth quarter of 2020, according to

• will be the presenting sponsor of season two of the Two Guys Garage Podcast, which debuted Jan. 19. Brenton Productions produces the podcast by separately from the Two Guys Garage TV series.

Mitchell 1 has integrated the Honda and Acura OEM parts catalog with its Manager SE shop management system, becoming the first OEM catalog to be integrated with the system. The integration makes Genuine Honda and Acura parts available direct from participating local dealerships and equips users to order these parts from within Manager SE.

• CRC Industries has joined the TechForce Foundation’s workforce development campaign, which is designed to inspire, connect and support the next generation of transportation technicians.

• New Ford Tech has transferred management of scholarships for its Automotive Student Service Education Training (ASSET) program to the TechForce Foundation.

• Line-X is partnering with Lucas Oil Products in sponsoring the Lucas Oil Late Model Dirt Series and Lucas Oil Pro Pulling League for the 2021 season. Line-X will be showcased at Team Lucas racing events across the country, on-site at the races, through digital channels, TV spots and more.

• Toth Automotive has joined HDA Truck Pride with its Lansing, IL location. Toth Automotive has provided heavy-duty parts to the Chicago area since 1963. In addition to parts sales, Toth Automotive rebuilds transmissions, differentials, fan clutches and more.

Alliance Parts, a brand of Daimler Trucks North America (DTNA), has added a new standalone store with Fyda Freightliner in Columbus, Ohio. Alliance retail locations primarily stock Alliance Parts and Detroit Reman products but can be used as order-pickup locations for the full offering of DTNA Genuine and Premier parts.

• Champion Oil has upgraded its distributor and enthusiast website,, to include SDS and data sheets, technical bulletins, a “where to buy” tool, and more.

• Lordco Auto Parts has revamped its website,


Financial Briefs 2/15/21

Illinois Tool Works’ automotive aftermarket business reported organic growth of 5% for the fourth quarter of 2020.

• Meritor’s Aftermarket & Industrial sales declined 14.9% to $234 million in the fiscal first quarter ended Dec. 31, 2020 (down 17.5 in the United States), primarily because of the termination of the WABCO distribution arrangement.

Worksport Ltd. announced on Feb. 10 that its “Regulation A” public offering has officially been over-subscribed, having fully raised its target $4 million. According to the company, the capital raised will be used to expedite the development and subsequent launch of Worksport’s TerraVis solar tonneau cover system and its TerraVis COR mobile energy storage system. Additionally, Worksport now can also expand its conventional tonneau cover products for light-duty trucks as well as consider acquisitions and partnerships as a means of future growth.


Event & Trade Show Briefs 2/15/21

• The Auto-Wares Group of Companies held its annual Tech Expo as a virtual event Feb. 11-13. The expo offers training and networking for automotive service and parts professionals. The 2021 event included 44 seminars and a digital exhibitor booth show with more than 100 suppliers. Training replays are available to attendees through May 10.

• GCommerce Inc. will host a webinar on Tuesday, Feb. 16 addressing current threats and intrusion methods that bad actors are employing to infiltrate computing environments and critical business data. Information security specialist Ben Hall of Pratum and GCommerce Chief Technology Officer Jason Popillion will present. Click here to register for this cybersecurity webinar.

• The Auto Care Association’s Manufacturers’ Representatives and Market Intelligence communities will host a webinar Wednesday, Feb. 17, to address key issues facing the industry in 2021 and what these issues mean for individual businesses. Topics that will be addressed include the global supply chain, consumer behavior and related repair trends, and “Right to Repair” and the road ahead as the issue moves to Congress. Click here to register for the Business Outlook webinar.

• Organizers of INA PAACE Automechanika Mexico City will host a free webinar Wednesday, Feb. 17 on the future of the automotive industry and the effects of the new U.S. presidency. Among the scheduled speakers is Bill Fraymoyer, vice president of public policy at MEMA. Click here to register for the Mexico & the New U.S. Government webinar.

• All of MEMA’s divisions plan to come together for a virtual conference March 5 on the importance of diversity, equity and inclusion (DEI) in the vehicle supplier industry. CEOs, business leaders, human resources professionals, talent acquisition and retention personnel, and others are encouraged to attend. Click here to register for the DEI online event.

• The Automotive Service Association (ASA) plans to host a virtual ASA United X50 Conference & Expo April 30 to May 1. The online event will include training, networking, panel discussions and breakout sessions.



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