Quick Hits …
(A few short items to get us started this week)
• Mike Creedon Jr. is now president – U.S. stores at Advance Auto Parts. Creedon has been with the company since 2013, when he was hired as president of Autopart International, a wholly owned subsidiary of Advance. In 2017, Creedon was appointed president for the company’s north division, which includes Autopart International.
• Walmart plans to close 106 Tire, Lube & Express shops across Canada, according to the CBC. However, some Canadian Walmart stores will continue their partnership with Mr. Lube.
• According to SEMA eNews, 28% of specialty equipment industry professionals were experiencing “mostly business as usual” in late May — up from 17% in early April. Additionally, nearly 90% of companies were either “mostly business as usual” or “impacted short term but will get through it.” This is based on a SEMA survey of more than 1,800 industry professionals conducted May 20-29.
• The Auto Care Association’s May 29 Market Insights with Mike report shared the results of a May 18 survey of aftermarket companies indicating that two-thirds of the 183 respondents reported product or service demand reductions in excess of 10% in the first quarter of 2020 when compared to the same period in 2019. Additionally, the level of supply chain or sourcing-related disruptions was mixed, with 54% of the 208 respondents reporting either “not at all disruptive” or “slightly disruptive.” Only 1% indicated “extremely disruptive,” while 45% responded with “somewhat disruptive” or “very disruptive.”
• In its June 2020 Monthly Tune-Up report, analysts with Jefferies LLC wrote that conversations in late May with CEOs from 11 leading auto retail and aftermarket companies were universally positive with the trajectory of sales since early April. Also, all 11 chief executives forecasted that their 2021 sales would be above 2019 levels.
• According to Jefferies’ modeling, April vehicle miles traveled (VMT) was 178.40 billion miles (down 37% year-over-year), with an upper limit of 200.10 billion miles and a lower limit of 156.10 billion miles. Its modeling predicts that May VMT was 233.30 billion miles (down 19% year-over-year), with an upper limit of 259.20 billion miles and a lower limit of 207.60 billion miles.
Total U.S. Aftermarket Sales To Decline 8.8% In 2020
Total U.S. automotive aftermarket sales will decrease 8.8% this year because of the effects of the coronavirus pandemic and related factors, according to the Joint Channel Forecast Model produced by AASA and the Auto Care Association. However, the associations expect total light-duty aftermarket sales to increase from $281 billion in 2020 to $314 billion in 2021 — a year-over-year increase of 11.7%.
IHS Markit conducts the market sizing and forecast on behalf of AASA and the Auto Care Association. The forecast is based on the U.S. Census Bureau’s Economic Census, IMR Inc., and proprietary economic analysis and forecasting models from IHS Markit.
Perspective: Now Is The Time For Our Message To Be Heard
At this point in the coronavirus pandemic, the United States is moving from a shelter-in-place “mitigation at all costs” mentality to more of a “we have to live with this” perspective, with businesses reopening and some restrictions being relaxed.
We’ve been able to show that the auto care industry is essential to keeping healthcare professionals and first responders working and essential to keeping food and medicine flowing. Now that more and more people are getting back to work and back on the road, it’s time for us to speak up to protect consumers and keep America moving — both now and well into the future.
WHAT YOU CAN DO … During the Auto Care Association’s 2020 virtual Spring Leadership Days, President and CEO Bill Hanvey emphasized our industry’s role as an essential part of the U.S. economy, both during the pandemic and in our recovery from the impacts of the virus.
“Now, more than ever, we need to work with one another to preserve our industry, to make our voices heard and to ensure that all of us provide our unique, essential services,” Hanvey said.
He also emphasized the need for data to drive our decision-making process. Realtime, bidirectional vehicle data is a key part of the data puzzle.
Without the ability to repair and maintain all of the vehicles on America’s roads, our industry cannot truly recover and the U.S. economy cannot adequately move forward. Car dealers simply can’t fix all of the vehicles in the U.S. fleet, and consumers need to be able to get their cars repaired wherever they feel most comfortable and in a manner that’s convenient for them.
As an industry, we need to keep the fight for “Right to Repair” measures moving forward, and this includes playing our part in educating the driving public about the key issues addressed by the “Your Car. Your Data. Your Choice” campaign.
To find out more about what the Auto Care Association is doing today regarding vehicle data access, check out Hanvey’s presentation, visit autocare.org/telematics or contact Senior Vice President of Regulatory and Government Affairs Aaron Lowe at aaron.lowe@autocare.org.
WHAT WASHINGTON NEEDS TO DO … Throughout the pandemic, Amazon has been the focus of a great deal of media attention — from shipping delays to keeping its workers safe to its role in providing supplies to hospitals and nursing homes. But one important story may not have caught your attention.
The Wall Street Journal in late April ran a story claiming that some Amazon employees have been accessing data from third-party sellers to help Amazon develop and build its own private-label product lines. To me, the story is short on some vital information, such as the data gleaned from the alleged activities, senior executives’ acceptance of these efforts and more.
But it’s worth further investigation, which will likely come as these alleged practices fly in the face of statements Amazon’s executives have made, including before Congress. The story struck a chord in Washington, D.C., leading to demands for criminal antitrust investigations into the company.
The legality of Amazon looking over the fence to see what its sellers are doing is questionable, if true. And it adds fuel to the fire for those arguing that Amazon has become an unlawful monopoly.
We should support a detailed and fair investigation into this third-party sellers issue, as it has a direct impact on how our industry does business with — and at the same time competes with — Amazon. It’s also timely since the company has stated it wants to have 10% of its retail sales come from private-label products by 2022.
WHAT’S ALREADY HAPPENING … In May, NHTSA announced that states can apply for funding to help drivers learn about and repair open-safety recalls on their vehicles. The program provides a total of $1.50 million for as many as six states to notify consumers of open recalls during the vehicle registration process.
Participating states would notify owners and lessees of vehicles about open recalls at the time they receive their registration notices. The states in the program would implement the notification initiative for a two-year period and evaluate the results. The program builds on an effort already underway in Maryland.
Between April 2018 and January 2020, Maryland renewed 4.60 million vehicle registrations, with 456,000 of those vehicles having 943,000 open recalls. Of those, 371,000 individual recalls were repaired, according to state regulators.
This seems like a practical way to address a widespread problem. Let’s hope that states are quick to sign up for this program and find it beneficial. I love the idea of a one-two punch: periodic vehicle inspections to address wear-and-tear issues, along with making motorists aware of open recalls. These are cost-effective measures that can keep Americans on the move safely.
If you see a benefit to programs like this and if you have good contacts in your state capital, reach out and advocate for your state to take part in this initiative. It could benefit us all in the long run.
We all need the U.S. economy to regain its lost momentum and keeping Americans on the road will be a critical part of that endeavor.
We’ve proven that the auto care industry is essential. Now, we may find that we have a more receptive audience at all levels of government. There are a lot of ways we can deliver our message to our customers. These are just a few examples.
— Marc Vincent,
Editor
APC Automotive Technologies Files For Chapter 11; Negotiates Restructuring Support Pact
APC Automotive Technologies and certain of its subsidiaries on June 3 filed for Chapter-11 bankruptcy protection in order to restructure APC’s balance sheet by means of an agreement with key stakeholders, including its asset-backed lenders, the majority of its term loan lenders and various financial sponsors.
According to the company, the restructuring support agreement, if successful, would reduce APC’s outstanding indebtedness by roughly $290 million on a net basis, strengthening the company’s balance sheet and enhancing its financial flexibility going forward.
CEO Tribby Warfield called the agreement a belief in APC’s business, as well as lenders’ and equity sponsors’ confidence in the company’s future success. “This restructuring was designed to ensure that our ongoing business and service to customers continues without interruption,” Warfield said in an announcement dated June 3, “and I am confident that the steps we are announcing today will enable the company to further enhance its ability to serve customers and invest in additional growth for years to come.”
WHAT HAPPENED … A declaration from Interim CFO Marc Weinsweig filed in U.S. Bankruptcy Court on June 3 details key events that led to APC’s Ch. 11 filing and restructuring support agreement. Weinsweig has been APC’s interim finance chief since July 2019. He also is the founder of WeinsweigAdvisors LLC, which is APC’s financial adviser. The firm specializes in business restructuring, performance improvement, due diligence and litigation support.
His declaration notes that, between 2017 and 2019, APC faced significant challenges, including historically high platinum group metals (PGM) and steel costs, a difficult international trade environment, increased import tariffs and a consolidating customer base — all of which negatively impacted the company’s revenue and profit margins.
According to Weinsweig’s court filing, AP Exhaust’s gross margin decreased from 27.1% in 2017 to 19.8% in 2018 and 15.5% in 2019. And, from 2017 to 2019, AP Exhaust’s segment EBITDA declined by approximately $23.20 million. Meanwhile, Centric’s gross margin declined from 23.8% in 2017 to 19.9% in 2019, primarily driven by customer consolidation and China tariffs. Over that same time period, Centric’s segment EBITDA declined by approximately $14 million.
APC’s liquidity position also became constrained, decreasing from $105 million in December 2017 to $50 million in December 2019, according to court records.
“These challenges, combined with an over-leveraged balance sheet, led to multiple ratings downgrades by credit ratings agencies,” Weinsweig’s declaration states. “Nonetheless, the debtors successfully navigated the last several years of headwinds through a combination of efforts, including optimizing operations, reducing expenses, maximizing liquidity and deleveraging their balance sheet.”
However, in September 2019 the declaration states that APC needed a more sustainable resolution for its capital structure and liquidity issues. The company, its sponsors and a group of first-lien term loan lenders negotiated and put into place a liability management transaction that reduced APC’s interest expense by roughly $14 million annually and increased liquidity by $40 million, according to Weinsweig.
“Yet, in October 2019 (shortly after completing the 2020 budget), market conditions began to further deteriorate and the debtors’ liquidity became severely strained,” he wrote. “Despite increasing prices, reducing costs and maximizing liquidity, the debtors could not fix the liquidity issue and began to focus on restructuring efforts and strategic alternatives.”
PANDEMIC IMPACT … According to Weinsweig’s declaration, APC’s revenue and profitability substantially depend on the price of PGM, and, while prices began to slowly stabilize, the coronavirus pandemic hit and caused even greater volatility. He notes that the pandemic caused a deepening liquidity crisis for APC, and the resulting decrease in sales and revenue made it clear that the company’s capital structure was unsustainable.
In April 2020, APC and an ad hoc group of term loan lenders began discussing a potential comprehensive restructuring transaction, according to court documents.
“To facilitate these discussions, several members of the term loan lender group became restricted under confidentiality agreements, and the debtors provided requested diligence to the term loan lender group and its advisers,” Weinsweig’s declaration states. “The debtors pursued various alternatives with the term loan lender group in an effort to provide a longer runway to determine a value-maximizing path forward.
“Following significant diligence and several weeks of negotiations, and with liquidity running out, on May 31, 2020, the debtors reached an agreement and executed the restructuring support agreement with their key stakeholders.”
AGREEMENT … The restructuring support agreement contemplates a prepackaged restructuring pursuant to a joint prepackaged Ch. 11 plan of reorganization of APC and its affiliates pursuant to U.S. bankruptcy code. According to Weinsweig’s declaration, the restructuring will result in a substantial deleveraging of the company’s balance sheet, reducing funded debt by over $290 million while paying all general unsecured claims “in the ordinary course.”
Because the plan has already received significant support from lenders, the management of APC expects to complete the confirmation process and emerge from bankruptcy within the next month. Additionally, the company has negotiated agreements with some of its existing term loan lenders for $50 million in debtor-in-possession (DIP) financing, which will roll into an exit term loan facility. According to management, this will ensure APC’s ability to operate on an uninterrupted basis.
“APC will continue to operate in the ordinary course during the restructuring process, with adequate liquidity to meet its financial obligations to vendors, suppliers and employees. The company expects to continue making payments to these parties without interruption,” APC announced on June 3. “Furthermore, the company will continue to both receive inventory as well as take and fulfill customer orders as usual. … .”
Littleton, CO-based APC is one of the largest North American aftermarket suppliers of brake, chassis, exhaust and emissions parts for passenger vehicles, trucks and commercial vehicles. The company was formed through the 2017 merger of AP Exhaust and Centric Parts.
Approximately 30% of the company’s revenue is generated from the AP Exhaust division’s roughly 900 customers, while 70% is generated from Centric’s approximately 500 customers. The company has roughly 1,200 employees with manufacturing, distribution and research and development locations spread across North America.
The debtors in this proceeding are …
• APC Automotive Technologies Intermediate Holdings LLC.
• AirTek LLC.
• AP Emissions Technologies LLC.
• AP Exhaust Product DISC Inc.
• APC Automotive Technologies LLC.
• Aristo LLC.
• CWD Acquisition LLC.
• CWD Holding Corp.
• CWD Intermediate Holding Corp.
• CWD LLC.
• Eastern Manufacturing LLC.
• Qualis Automotive LLC.
• Qualis Enterprises Inc.
Eastern Dorman LLC, a subsidiary of APC — which is a joint venture between Eastern Manufacturing and Dorman Products — has not commenced Ch.-11 cases.
APC’s assets are estimated to be between $100 million and $500 million, according to court filings, and its estimated liabilities are between $500 million and $1 billion. The estimated number of creditors is between 200 and 999. The creditors with the largest unsecured claims against APC (not insiders) are …
• The Longkou Qizheng Auto Parts Company of Longkuo City, China at $4.20 million.
• Posam/Posco America of Laurinburg, NC at $2.72 million.
• Qingdao Gihon Auto Parts of Qingdao, China at $2.14 million.
• Laizhou Sanli Auto of Laizhou, China at $1.64 million.
• The Zhejiang Lizhong Industrial Company of Charlotte, NC at $1.55 million.
Kirkland & Ellis LLP, Jefferies LLC and WeinsweigAdvisors are advising APC. The restructuring support agreement parties include the term loan lender group represented by King & Spalding LLP and FTI Consulting, as well as the financial sponsors, who are represented by White & Case LLP. — Marc Vincent
Obituary: Jim Shapiro, SRS Marketing President
Jim Shapiro, president of the SRS Marketing Company, died May 29 at the age of 65.
Jim Shapiro joined his father, Malcom Shapiro, as a manufacturers’ representative at Shapiro and Boehm at the age of 22 and took the company over when Malcom Shapiro died.
SRS Marketing got its start in 1996 when Shapiro and Boehm merged with Robert Riefberg Sales, where Jim Shapiro served as president until his passing alongside his partners Robert Riefberg and Bob Slemmer.
Riefberg met Jim Shapiro in 1990 and became close friends. “Jim has been a dear friend, confidant and business partner for the last 24 years and, amazingly, we have never had one disagreement,” Riefberg said. “Jim’s passion for the business and intellect has been a breath of fresh air along our journey together. He always wanted to do what was right for our customers, employees and our manufacturer partners.”
In 2014, Jim Shapiro brought his son, Dave Shapiro, into the fold as a fourth-generation member of the automotive aftermarket.
“My relationship with my father was beyond special. People who saw us together recognized this almost instantly,” Dave Shapiro said. “It is my professional mission to carry on the legacy of respect and admiration that he garnered from our clients, customers and peers in the industry. The six years we had been working together will be some of the greatest memories of my life. I know it’s cliche, but he really was my hero.”
Jim Shapiro served on committees with ASIA and APAA and, more recently, served on the Auto Care Association board of directors. Recognizing the need for a strong volunteer presence in the industry, he held numerous roles within the association, including Manufacturer’s Rep Council chairman from 2006-’08 and Auto Care Association Investment Committee chairman from 2010-’12.
“Jim was an active participant in the industry he loved and truly understood that, if we all collaborate, we all do well,” said Bill Hanvey, CEO of the Auto Care Association. “Jim was a careful observer of people and trends and was always quick to add a smile or a laugh during tense negotiations with his customers. As a rep, he was able to balance the need of the customer to the desires of the supplier and was a fantastic matchmaker. Countless companies in the aftermarket should be thankful to Jim for their success.”
In lieu of flowers, the Shapiro family has requested that donations be made to one of the charities that Jim Shapiro supported: the Automotive Aftermarket Charitable Foundation, Gary Sinise Foundation or American Society for the Prevention of Cruelty to Animals (ASPCA).
AutoZone’s Same-Store Sales Down Only 1%
For the fiscal third quarter ended May 9, 2020, AutoZone Inc. saw its net sales decrease by only $3.71 million (or 0.1%) to $2.78 billion. Domestic same-store sales decreased 1.0% up against a 3.9% increase a year ago. This easily beat analysts’ consensus estimate calling for the company to come through with a mid-single-digit, same-store sales decrease.
The company’s gross profit decreased 0.1% to $4.36 billion. As a percentage of sales, gross profit came in at 53.6%, which was unchanged year-over-year. AutoZone’s net income declined 15.5% to $342.90 million.
PANDEMIC IMPACT … “Since our last earnings release, the world has changed significantly and so has our business,” Chairman, President and CEO Bill Rhodes said on the company’s May 26 earnings call. “During our last call on March 3, we were focused on COVID-19 but more from a supply chain disruption perspective. Quickly thereafter, the unprecedented ramifications of the pandemic and its disruption of lives across the globe became a reality.”
He called the three months ended May 9, 2020 the most remarkable quarter he has ever experienced. “Our business is typically pretty predictable,” Rhodes noted. “As I’ve said many times, our sales fluctuate in a very tight band, but currently that has not been true.”
Rhodes broke down the quarter’s sales cadence into three time periods, each four weeks long. “Recall that we had a very mild winter and a disappointing sales performance in our fiscal second quarter. We shared that we were optimistic about the balance of the year and, in particular, the third quarter as we felt there was pent-up demand,” he told analysts on the call. “And unlike other mild winters, many of the maintenance categories had not been pulled forward and tax refunds were beginning on time and at normal levels.
“The first four weeks, our sales as expected were quite strong with same-store sales up over 6%. Both retail and commercial were performing quite well, with commercial sales growth returning comfortably to double digits.”
Then the world changed radically with the arrival of the coronavirus in North America and the rollout of stay-at-home orders. In the second four weeks, AutoZone’s sales performance declined, materially dropping to a one-week low of comps down more than 25%. However, the retail business began to bounce back at the end of the second four weeks.
“At the beginning of the third four-week period, federal stimulus checks began to arrive and flow through the U.S. economy. We experienced a significant change in trend, moving from negative double-digit comps to significantly positive comps almost immediately,” Rhodes said. “To put this in perspective, in two days, from a Monday to a Wednesday, our retail sales increased by roughly 50% … and we continued to experience extremely robust sales performance through the end of the quarter.”
Specifically, AutoZone’s overall same-store sales for each of the four-week periods were up more than 6%, then down more than 20%, then up in the low teens.
COMMERCIAL … Domestic commercial sales declined 6.7% to $573.79 million. Weekly sales per program came in at roughly $9,700 — down approximately 9% on a per-program basis.
Rhodes told analysts that, throughout the pandemic, AutoZone’s DIY business has been substantially stronger than DIFM. He added that retail began rebounding sooner and reacted stronger than commercial when stimulus money arrived. However, by the end of the quarter, the commercial business turned positive but had not returned to double-digit growth like before the pandemic.
At one point during the crisis, commercial sales were down roughly 30% and stayed there for three or four weeks, according to Rhodes. “Then it began to rebound. If you look at those last four weeks, it was negative the first two, and then it turned positive the second two, ending mid-single digits positive,” he said.
“Also, we saw a significant amount of [commercial] customers that just stopped purchasing from us altogether for some period of time. Our assumption — and we tried to reach many of them — is that they closed at the beginning of this,” Rhodes added. “As we got toward the latter part of the quarter, we saw that those non-purchasing customers had decreased substantially if not completely. So, it looks like some of them just closed their shops and went and did whatever they needed to do, stayed at home, and then began reopening and our business picked up.”
TRENDS … The company’s sales performance was worse in the regions most affected by the pandemic, especially the Northeast and Mid-Atlantic, as well as Puerto Rico and Brazil. Rhodes did note that certain markets have rebounded rather quickly, such as the Pacific Northwest, while others like New York have been slower to recover. He said AutoZone’s best performing areas have generally been in the middle of the country.
Rhodes also told analysts about trends in some of AutoZone’s merchandise categories, specifically on the retail side. “Certain categories have been quite challenged, like wipers and lighting, as people have stayed home more and have not been as active at night or during periods of inclement weather,” he pointed out. “Other categories have been strong, particularly post-stimulus.
“After a very mild winter, our battery sales have been strong, especially as people have parked their cars for extended periods after which the batteries fail or are discharged. We’ve also seen some surprisingly strong categories that I’ll call project categories. These are categories for hobbyists or people who want to upgrade something. People have more time on their hands, so they’re working on their project car, doing that enhancement job that they’ve been constantly putting off.”
He also noted that the company is seeing more work in paint and body than it’s seen in a long time.
“We expect that our sales growth will moderate as the stimulus money works its way through the economy,” Rhodes said on the call. “But, at the same time, the nation has reopened.”
Analysts with Jefferies LLC wrote in a May 26 report that they expect improving commercial trends toward quarter’s end associated with an uptick in driving to offset some likely moderation in retail growth following the perfect storm of federal stimulus checks and cooped up DIYers.
“While we expect DIFM demand will continue to improve as driving increases and consumers return to work, we believe AutoZone could continue to see benefits from outsized DIY exposure in a likely post-COVID recession, as DIY tends to outperform in periods of high unemployment,” analysts Bret Jordan, Mark Jordan and Ethan Huntley wrote.
Jefferies is modeling same-store sales growth of 2.0% for the fiscal fourth quarter ending in August 2020.
STORES … Rhodes said that AutoZone paused its store development activities for about a month as the team assessed what was happening; however, the company has subsequently restarted development work in municipalities that allow it. “As a result, we will not meet our new store opening goals for the year,” he stated. “We’re pushing in an orderly fashion to get back to opening new stores as quickly as possible, but in this environment, arbitrary goals and dates are not terribly important. So, look for us to open less than 200 stores globally this fiscal year.”
During the quarter, AutoZone opened 21 new stores in the United States and two stores in Mexico. As of May 9, 2020, the company had 5,836 stores in the United States, 610 stores in Mexico and 38 stores in Brazil for a total store count of 6,484.
INVENTORY & SUPPLY CHAIN … AutoZone’s inventory increased 2.7% to $4.44 billion, attributable to new stores and increased product placement. Inventory per store came in at $685,000 — down slightly from $688,000 last year as well as $713,000 last quarter.
During the call, Rhodes talked about the need for greater country diversity in AutoZone’s supply chain.
“On last quarter’s conference call, we discussed impacts from the supply chain and goods we receive from China in particular. Today, we are in good shape and have no significant disruptions to report,” he noted. “While we created contingency plans for each merchandise category sourced from China, we ultimately did not have to implement them. … That said, that portion of this pandemic and the tariffs have made us think differently about supplier diversity. We need to consider country diversity as well going forward.”
Rhodes acknowledged that it will take a considerable amount of time to shift to other countries. “But, it’s one of those things – if you don’t ever start it, then you’ll never get there,” he said. “We’ve already begun some of that work.” According to Rhodes, countries under consideration or already supplying the company include Turkey, Vietnam, South Korea, India and Mexico.
MISCELLANEOUS … Other items of interest from AutoZone’s quarterly report and earnings call. …
• When asked about acquiring market share via acquisition during these troubling times, Executive Vice President and CFO Bill Giles said: “We’re going to continue to do what we’ve been doing in terms of organically growing and taking market share. … Given the current environment, I suspect that some players in the industry will continue to be challenged, and that may create opportunities or not. But, we’re going to continue to stick with our strategy, and a lot of that is organic growth.”
• Under its share repurchase program, AutoZone repurchased 156,000 shares of its common stock for $166.10 million during the quarter, at an average price of $1,064 per share.
• As previously reported, the company has temporarily suspended its share repurchase program.
• As of May 9, 2020, AutoZone had $796 million remaining under its current share repurchase authorization. — Marc Vincent
Uni-Select Canada Joins The Alliance
Uni-Select Canada, a wholly owned subsidiary of Uni-Select Inc. (Boucherville, Quebec), is now an Aftermarket Auto Parts Alliance shareholder owner. The addition brings The Alliance’s Canadian member count to six and its overall shareholder count to 48. It also aligns the Bumper to Bumper brands in North America.
In Canada, Uni-Select supports over 16,000 automotive repair and collision repair shops and more than 4,000 shops through its automotive repair and installer shop banners and automotive refinish banners. Its network includes over 1,000 independent customer locations and more than 75 company-owned stores, many of which operate under the Bumper To Bumper, Auto Parts Plus and FinishMaster banners.
“[Uni-Select Canada has] an extensive footprint and an even more impressive reputation, and we are delighted to welcome them to The Alliance,” said John R. Washbish, president and CEO of The Alliance. “We are confident this relationship will be mutually beneficial, and we look forward to working together and supporting our channel partners.”
“While both organizations and their respective brands will remain fully independent,” said Brent Windom, president and CEO of Uni- Select, “we expect that our collaboration will drive increased brand recognition for Bumper to Bumper in North America and will maximize the impact of our newly launched Bumper to Bumper Auto Service program.”
As a fully participatory member, Uni-Select will use The Alliance’s technology platforms, North American sweepstakes, the Certified Service Center program and more. “This association will enable Uni-Select to accelerate our technological development while reducing development time to deliver world-class data management metrics across our customer spectrum,” Windom said.
Uni-Select Increases Its Total Available Liquidity To $220 Million
Uni-Select Inc. on May 29 announced that it has secured new credit facilities, providing access to additional liquidity on more flexible financial terms and conditions. The new US$565-million secured credit facilities, which will mature June 30, 2023, consist of a US$350-million revolving credit facility and US$215-million term facilities. The new credit facilities can be used for general corporate purposes, according to the company.
“These new credit facilities increase our total available liquidity by an additional US$100 million to approximately US$220 million and complement the multiple measures implemented by our team over the past few months to weather the impact of the pandemic,” said Brent Windom, president and CEO. “Furthermore, the new credit facilities provide a more favorable covenant structure and more latitude to manage our business going forward.
“We are pleased to have the continued commitment from our existing banking syndicate, as well as the support of new financial partners with Export Development Canada and Investissement Quebec, on behalf of the government of Quebec. With this latest initiative — combined with the measures already put in place — we believe that we are well prepared to face the ongoing economic uncertainty.”
According to the company, the facilities are secured by a first-ranking lien on all of Uni-Select’s assets, with security also extended to secure the company’s vendor financing program and its U.K. revolving credit facility.
National Bank Financial and RBC Capital Markets acted as co-lead arrangers with National Bank Financial as sole bookrunner for the syndication of the credit facilities and National Bank of Canada acting as administrative agent for the credit facilities. Export Development Canada and Investissement Quebec, on behalf of the government of Quebec, committed US$75 million and US$25 million to the term facilities, respectively.
The US$565 million facilities are subject to a total repayment of 21.2% over the term of the facilities including a repayment of 17.7% on March 31, 2022.
Uni-Select will be subject to leverage or interest coverage tests starting Dec. 31, 2021. The facilities contain a minimum profitability requirement until the quarter ending Sept. 30, 2021, and a minimum liquidity requirement until the quarter ending March 31, 2022.
The new credit facilities also contain various limitations on distributions and on the use of the proceeds from the disposal of assets. All facilities are repayable without penalty with the remaining balance due at maturity on June 30, 2023.
Bestbuy Announces New Board, Holds Online Annual General Meeting
Douglas Squires of Colonial Auto Parts and APM Limited has been elected chairman of the Bestbuy Distributors board of directors. He is joined by fellow officers Gary Thibault of The Partsman as vice chair and Scott Anderson of Peterborough Automotive as treasurer. The other directors are …
• Doug Wilson of Fat Guys Auto Parts.
• Tony Racioppo of Fincham Automotive.
• Andre Dimopoulos of Dorval Auto Parts.
• Brad Nahorney of Sapphire Auto (IDL).
• Rob Dow of Jack Dow Auto Supplies.
Because of the coronavirus pandemic, Bestbuy on May 21 hosted its Annual General Meeting (AGM) online from its headquarters in Mississauga, Ontario. “The event was certainly different than normal, but our shareholders truly embraced the concept,” said Bestbuy President Bill Hay. “Overall, we were pleased with the new virtual format and are in hopes that next year we will once again return to our regular AGM meeting format.”
During the online meeting, Bestbuy presented Service Recognition Awards to the following shareholders …
• A&A Discount Auto Parts (10 years).
• Cobrex Inc. (10 years).
• Distributions A.B.M. Inc. (20 years).
• Den-Paul Distributors Ltd. (20 years).
• Kendall’s Supply Ltd. (20 years).
• Pieces D’Auto Sources (25 years).
• Central Transport Refrigeration (35 years).
• Halton Automotive (35 years).
Vendor service awards were not presented because the virtual meeting was for shareholders only. Bestbuy intends to present its vendor awards in person later in 2020.
NAPA Raised Over $1.5 Million In 2019 For Intrepid Fallen Heroes Fund
NAPA Auto Parts’ annual “Get Back and Give Back” campaign raised more than $1.50 million for the Intrepid Fallen Heroes Fund (IFHF). Since 2012, NAPA Auto Parts has raised and donated over $13 million to build regional Intrepid Spirit Centers that diagnose and treat traumatic brain injury and post-traumatic stress in active duty service members.
NAPA Auto Parts Stores and NAPA AutoCare Centers partnered in various promotional programs in 2019 to raise money for IFHF. This included selling “We Believe in Heroes” T-shirts and a Hero Hat program, where proceeds from NAPA’s customers were contributed to the campaign. Additionally, NAPA suppliers participated in multiple programs to help raise funds.
NAPA Auto Parts will partner with IFHF again this year. The 2020 “We Believe in All Heroes” campaign will focus on the military as well as those who have served on the front lines of the coronavirus pandemic.
Activist Stockholder Resigns From U.S. Auto Parts Board
David Kanen has resigned from the U.S. Auto Parts Network board of directors. According to a June 2 company filing with the SEC, Kanen’s resignation was to pursue other opportunities and did not result from any disagreements with management or the board.
Kanen, managing member of Kanen Wealth Management, joined the board in early 2019. This was after Kanen Wealth Management contacted the U.S. Auto Parts board in October 2018 seeking a board observer position to monitor the search process for a new CEO.
At the time, Kanen Wealth Management stated: “Based on the company’s poor performance under the incumbent board, Kanen has significant concerns whether existing directors are capable of selecting a new CEO with the best mix of skills and experience to turn around the company. Kanen believes that its position as the company’s largest stockholder, its alignment with other stockholders and stakeholders, its track record of working collaboratively with companies and their boards of directors to create shareholder value, and its deep understanding of corporate governance would bring valuable insight to the CEO search process.”
In November 2018 — after Kanen Wealth Management went public about its desire to have a role in selecting a new CEO but before David Kanen joined the board of directors — U.S. Auto Parts named Lev Peker as its new chief executive.
U.S. Auto Parts Network Adding Texas Distribution Center
U.S. Auto Parts Network plans to open a 210,000-square-foot distribution center in Grand Prairie, TX, which is in the Dallas/Fort Worth metroplex. The facility is scheduled to begin operations later this year, delivering parts to customers across the South and Southwest. It also will include a “will call” window, where local customers can pick up their orders.
CEO Lev Peker said the company’s site, CarParts.com, has been experiencing exponential growth, necessitating the need for a new distribution center to stay ahead of demand.
“We expect this trend to accelerate as customers become ever more comfortable buying car parts online,” Peker said. “For so many of our customers, getting a part quickly is not optional; it is essential to keeping their vehicle on the road and helping them get to work. Thanks to this distribution center, we will be able to reach 64% of the country in one day or less.”
Kinderhook Buys Original One Parts
The private equity firm Kinderhook Industries has added Original One Parts to its portfolio. Headquartered in Dallas, Original One Parts is a provider of certified OEM auto parts for use in both collision and mechanical repairs. The company’s customers include independent collision repair shops, dealership service centers and multi-shop locations (MSOs).
Financial terms of the transaction have not been disclosed.
Original One Parts’ management team will continue to be led by Co-Founder and CEO Wade Hilburn and Jerry Sullivan, executive chairman and co-founder of QCSA Holdings, a national chain of salvage auctions sold by Kinderhook in 2014.
Kinderhook’s automotive portfolio also includes asTech, a provider of remote diagnostic solutions and services to the collision repair industry; ProCare Automotive & Collision, an auto body shop chain; Race Winning Brands, a manufacturer of racing and high-performance parts; and Bestop, a manufacturer of soft tops and fabric accessories for Jeeps.
AAM Group Recognizes Top WDs
The AAM Group has announced Competition Specialties as its 2020 Member of the Year. The group also has recognized the following WDs for their contributions …
• Active Participation: AllPro Distributing.
• Growth as a Percentage: Toys for Trucks.
• Marketing Participation: AllPro Distributing.
• Participation in Group Buys: Tri-State Enterprises.
• Product Line Compliance (tie): the Earl Owen Company.
• Product Line Compliance (tie): Tri-State Enterprises.
Keystone’s Big Show Goes Virtual
Keystone Automotive Operations held its annual Big Show online this year because of the coronavirus pandemic. The event took place June 1-5 on the company’s transactional website eKeystone.com. Participating jobbers were able to access deals and discounts that could be directly added to their online shopping carts, interact with supplier representatives and product specialists, as well as take part in virtual training sessions.
Monro/Amazon Partnership Grows
Monro Inc. has expanded its collaboration with Amazon to an additional 224 shops across both the western and eastern United States. This gives Amazon’s customers the option to have tires installed at more than 1,000 of Monro’s locations.
“We continue to receive solid feedback and strong customer satisfaction metrics in response to this initiative,” said Monro President and CEO Brett Ponton.
Ponton said on May 28 that Monro is on track to have this option available at all of its shops, which are spread across 32 states, by July.
Monro Reports 9.5% Decline In Comp-Store Sales
For the fiscal fourth quarter ended March 28, 2020, Monro Inc. reported $286.07 million in sales — a decrease of 0.4%, as sales from new shops were unable to offset a decrease in comparable-store sales.
Comp-store sales declined 9.5%, as mild winter weather conditions held back the company’s performance in January and February only to be followed by a sharp downturn in mid-March because of coronavirus stay-at-home orders.
The company’s southern markets outperformed its northern markets, which were more affected by the pandemic and mild weather. By category …
• Maintenance sales decreased 8%.
• Tire sales were down 9%.
• Front end/shock sales declined 10%.
• Brake and alignment sales fell 11%.
Monro’s gross profit decreased 7.3% to $102.09 million, while gross margin declined 260 basis points to 35.7%, attributable to lower comp-store sales and reduced vendor rebates tied to slower inventory turns.
The company reported a net loss of $3.78 million for the quarter — a downturn of $20.59 million (or 122.5%) when compared to the $16.82 million in net income Monro reported a year ago.
SALES TRENDS … Monro exited March comping down about 45%, and its sales have continued to be significantly impacted by the pandemic. For the first half of April, comps fell approximately 50%, but ended the month down 41% as business began to pick up in late April.
A recovery of sorts followed in May as states began to lift stay-at-home orders. May comp-store sales through May 28 were down 24%.
Regionally, the South and Midwest — where stay-at-home orders weren’t as strict and among the first to be eased — outperformed the Northeast and Mid-Atlantic, areas that have only recently begun to relax some restrictions.
“While we expect our first-quarter performance to be significantly impacted by COVID-19, we anticipate a recovery in demand as stay-at-home orders begin to abate and the environment normalizes,” President and CEO Brett Ponton said on the company’s May 28 earnings call. “Overall, we believe consumers will drive more, supported by low gas prices, as well as the fact that they may be less likely to fly or take public transportation given the circumstances. Additionally, in a recessionary environment, consumers will be less likely to buy new cars and more likely to repair the existing cars they own, making our industry quite resilient.”
Analysts with Jefferies LLC wrote in a May 28 report that they expect regional headwinds to remain during the current quarter, leading the team to model a comp-sales decline of 25% for Monro for the fiscal first quarter.
“Going forward, we expect demand will continue to improve as shelter-in-place and similar mobility restrictions are eased,” analysts Bret Jordan, Mark Jordan and Ethan Huntley wrote. “However, we note that comps could continue to face pressure if customers opt to defer service in the face of economic uncertainty or push out high-ticket tire purchases (approximately 45% of sales mix).”
PANDEMIC IMPACT … Ponton told analysts on the call that the company has been able to “quickly and thoughtfully” flex down its cost structure to protect Monro’s financial strength and adapt to a lower-demand environment.
“As part of this strategy, we have reduced store hours and are operating at appropriate labor capacity to match lower demand,” he noted. “We have also scaled down and strategically redirected our marketing spend to bolster our digital presence. Importantly, we continue to leverage our diversified supply chain without significant disruption and have put contingency plans in place to ensure we can meet current and future customer needs.”
In an attempt to maximize its financial flexibility, Monro drew down the remaining $350 million from its revolving credit facility at the end of March. Cash and cash equivalents were approximately $375 million as of May 26, 2020.
Ponton told analysts that Monro’s balance sheet and liquidity provides the company with significant financial flexibility to support business operations.
He added that management is being strategic and prudent about its capital allocation decisions. “While we remain committed to the execution of our ‘Monro Forward’ strategy, we have deferred our store reimage and rebrand initiative, as well as other non-essential investments, until we gain better visibility,” Ponton said. “Similarly, we have paused all M&A activity during this uncertain time.
“Overall, despite the challenges presented by lower demand in the current environment, the measures we have taken allow us to mitigate the near-term headwinds, and we expect to operate on a cashflow-positive basis during this crisis, which sets us up well for the future.”
Jefferies’ May 28 report noted that, despite the pause, acquisitions will likely remain the primary growth driver for Monro longer term. “The company is positioned to take advantage of market fragmentation and may have an attractive M&A pipeline post-COVID, as many independent service and tire operators may be more willing sellers in a post-pandemic market,” the analysts wrote.
“Additionally, we remain optimistic regarding the long-term potential of the company’s store rebrand and reimage programs, as the recently updated/completed locations appear to be comping ahead of the company average.”
FEWER SHOPS … With the assistance of a customer analytics firm, Monro has been evaluating its real estate portfolio in an attempt to identify underperforming locations for closure.
As part of this portfolio adjustment, the company closed six shops in the fourth quarter. And, management expects to close an additional 36 locations by the end of the current quarter.
On the call, Ponton emphasizes that these closures are in accordance with the analytics model and are not in response to the coronavirus pandemic. “This adjustment is an important step in optimizing our portfolio to drive a more efficient organization,” he explained. “And, we believe the closure of these 42 stores will improve operating income by approximately $5.10 million on an annualized basis.”
During the fourth quarter, Monro added three company-operated shops and substantially completed the transformation of 42 of its acquired shops in California.
As of March 28, 2020, Monro had 1,283 company-operated shops and 98 franchise locations — a decrease compared to 1,197 company-operated shops and 98 franchise locations as of March 30, 2019.
MISCELANNEOUS … A few other items of interest from Monro’s fourth-quarter report and conference call …
• A network infrastructure upgrade, including a new digital phone system, has been rolled out to more than 700 shops, according to Ponton, who said: “This initiative is progressing on schedule, and we expect to have it rolled out across our store base by the end of the first quarter.”
• During the quarter, the company began piloting a tire category management and pricing system in a number of Monro’s markets. The technology is designed to better understand elasticity points on tire pricing by SKU, by vehicle type and by brand with the goal of optimizing and driving maximum volume while protecting margins.
• The company also transitioned to a technology-based shop-staffing model during the quarter.
• The board of directors has declared a quarterly cash dividend of $0.22 per share on Monro’s outstanding shares of common stock. The dividend is payable June 22 to shareholders of record at the close of business on June 8. — Marc Vincent
Nine Weeks Of Sales Improvements For Valvoline Quick Lubes
Valvoline Inc. on June 4 reported mid-quarter financial results indicating that Quick Lubes’ systemwide same-store sales (SSS) improved each week in May and for the last nine straight weeks. While systemwide SSS declined 5.6% in May 2020 when compared to the prior year, systemwide SSS for last week of May were flat. Additionally, SSS for company-owned shops for last week of May were up 2.4%.
“I’m very encouraged by the rapid recovery in our Quick Lubes segment, driven by outstanding in-store execution of our stay-in-your-car customer service experience,” said CEO Sam Mitchell. “Looking forward, we are optimistic about continued improvements as we restore our marketing and advertising spending.”
BBB Buys Spanish Aftermarket Products Company
BBB Industries, a portfolio company of the private equity firm Genstar Capital, has acquired the equity interests of M&R Precision Parts/Grupo Metalcaucho, consisting of Industrial Metalcaucho, Servicio y Technologia del Caucho and Grupo Cautex. The transaction encompasses the entirety of the business.
The seller is Abac Solutions, a private equity fund comprised of institutional investors from Europe, the United States and the Asia/Pacific region. Financial terms of the transaction have not been disclosed.
Headquartered in Barcelona, Spain, Metalcaucho is an aftermarket supplier in the rubber and metal products segment, with a catalog of more than 22,000 SKUs and sales in over 60 countries.
“Metalcaucho’s expertise and market understanding across Europe, North Africa and more recently Latin America — along with its proven ability to provide high-quality products complementary to our own — is a natural fit across continents,” said BBB CEO Duncan Gillis. “I am excited about the opportunity to bring added value to each of our existing and new customer relationships around the world.”
Dapne, AL-based BBB is a remanufacturer of starters, alternators, hydraulic and air disc brake calipers, hydraulic and electronic power steering products, and turbochargers for OEMs, as well as the passenger and commercial vehicle aftermarket.
Rob Rutledge of Genstar commented: “The newly combined enterprise is well-positioned for continued growth as a leading diversified supplier to the automotive aftermarket.”
Skyward/SKP Appoints Senior Director Of Sales – Northeast
Skyward Automotive Products/SKP has announced the appointment of Mike Jacabacci to the position of senior director of sales – Northeast. Jacabacci is the past owner of Woodbury Automotive, a large replacement parts distributor in the Northeast that was one of the first members of Federated Auto Parts. Jacabacci was a longtime Federated board member.
“I have known and worked with Mike for over 35 years,” said Jim Murphey, president of Skyward Automotive Products. “Mike is well-known and respected in the aftermarket. His experience and knowledge of the industry from all aspects will be a great asset to the SKP management team.”
For the past 18 months, Jacabacci has been responsible for building the distributor business for SKP in the Northeast. In his new position, Jacabacci takes on a larger role in sales and marketing strategy as Skyward Automotive Products works to expand the SKP brand and market share on a national basis.
Skyward Automotive Products is an importer and manufacturer of multiple replacement part product categories, which are sold under its trademarked brand, SKP. All of its products are sourced from a global supply chain. Skyward sells its products through a select number of stocking distributors and e-commerce retailers.
Dave Peace Joins Schwartz Advisors
David Peace has joined Schwartz Advisors. Peace is the former president and CEO of Airtex-ASC, president and COO of Wells Vehicle Electronics, president of Pylon Manufacturing and vice president and general manager – global aftermarket operations at Visteon Corp.
He also spent 20 years with Tenneco in a number of roles, including vice president of sales and marketing – Canada, vice president of OE sales and marketing – Walker and vice president of sales and marketing – aftermarket for Tenneco Automotive.
Peace also is a past member of the MEMA board of directors and served two terms on the AASA board.
KIAW’S Bill Garling Retires After 44 Years
After a longstanding and well-respected career serving the automotive aftermarket, Kentucky/Indiana Wholesalers (KIAW) COO Bill Garling retired May 31. Garling is a 44-year veteran of the industry who facilitated several association mergers that streamlined operations and better served members.
Kim Rominger, KIAW’s executive director, said Garling’s organizational skills and service-oriented approach to his work made him an invaluable team member who will be hard to replace.
“Bill is a very organized technical person with an outstanding association background,” Rominger said. “He served and advocated for members and had the interest of members at the heart of everything he did. He had an excellent perspective and was always prepared. He was never flustered and adapted quickly to a changing situation.”
During his tenure, Garling oversaw the consolidation of several associations into larger umbrella groups — an industry trend that emerged in the early 2000s to help streamline the administration of services provided by disparate aftermarket associations.
“Economically and functionally, it worked,” Rominger said of the consolidations. “There are fewer (business) owners to deal with who are operating on separate boards. In the past, there were separate conventions for each different group. It seemed more reasonable to manage one larger group instead of many separate, smaller ones.”
In addition to managing operations for the 60-member KIAW, Garling also managed the United Equipment Dealers Association (UEDA), the 450-member umbrella group that was formerly the Ohio-Michigan Equipment Dealers Association (OMEDA) and Mid-America Equipment Retailers Association (MAERA).
The search for Garling’s replacement is on hold, Rominger said, and the association is currently dividing his duties among longtime staff members. “We’re going to take our time and see if we can transition this way,” Rominger said. “If that doesn’t work, we will be searching for someone to step into this role. He’s a hard man to replace.” — Susan Pappas
Mevotech Appoints New Sales Director For A New Initiative
Mevotech has named Kenny Gross as its special markets sales director, reporting directly to Todd Hack, executive vice president of sales and marketing. Gross, who joined Mevotech a little more than a year ago, was a regional sales director in Indiana, Illinois, Ohio, Kentucky, Florida, Georgia and the Carolinas.
In his new role, Gross will focus on generating leads and building relationships with potential customers in special markets. “This is a new initiative for Mevotech as we work to sell into new channels, such as the medium- and heavy-duty markets, and specialty manufacturers, such as ATV and UTV,” Hack said.
New President Named For ATD Tools/ITEG
Darrel Reuss will take over as the president of ATD Tools and the International Tool & Equipment Group (ITEG) effective June 22. Reuss will assume this role from Bill Robinson, who will be retiring from the business later this year. Robinson will work with Reuss on the transition over the coming months.
Reuss will join ATD and ITEG from Milton Industries, where he has been vice president of sales, responsible for the automotive, automotive retail, heavy-duty, industrial, farm and agriculture, and hardware channels. His career also has included stints as an executive sales manager with NGK Spark Plug (U.S.A.) and as a sales manager for ThyssenKrupp Crankshaft.
AMP Hires North America Sales Director
Anand Motor Products (AMP) has announced Scott Austin as its sales director for North America, which includes leading business development goals and initiatives. Austin most recently was an aftermarket sales account manager – North America for SEG Automotive. His background also includes more than five years with Tenneco, including time as a key account manager, as well as three years with Sanluis Rassini as a national accounts manager – aftermarket.
Austin’s appointment comes as AMP is looking to accelerate its growth in North America. The Indian company is a supplier of NVH rubber-to-metal bonded components, including strut mounts, engine and transmission mounts, bushings and torque rods.
Garrett Reports 18% Decrease In Aftermarket Sales
For the first quarter of 2020, Garrett Motion reported $82 million in total aftermarket sales — a decrease of 18% when compared to the same period a year ago, attributable to volume decreases in North America and Europe as the downward trend in these regions accelerated in the quarter because of the coronavirus pandemic. Excluding foreign currency translation, total aftermarket sales were down 16%. U.S. aftermarket sales declined 11% to $40 million.
Aftermarket products constituted about 11% of the company’s net sales for the quarter, which was down from 12% of Garrett’s net sales in the 2019 first quarter.
Marelli Gets $1.2 Billion In Additional Funds
Marelli announced May 27 that it has secured roughly $1.20 billion in additional funding from its shareholder, KKR, and Japanese banks. According to the auto parts supplier, the additional capital provides greater long-term security and flexibility in the event of an extended market downturn.
“This funding demonstrates the strong support of our shareholder and our banks and their belief in the outlook for Marelli, its people and our overall strategy,” said CFO Christoph Hobo. “Access to this additional capital gives us the flexibility to withstand an extended market downturn and protects the long-term financial health of the business, allowing us to continue the execution of our strategy with greater certainty and confidence.”
2020 Automotive Communications Awards Competition Is Now Open
Women in Auto Care is now accepting entries for the 2020 Automotive Communications Awards competition. The deadline is Sept. 11. Award winners will be notified in October and will be recognized at AAPEX in November.
The awards are designed to recognize companies and agencies that provide automotive information to consumers and trade professionals through outstanding advertising, marketing, merchandising and public relations. A portion of the proceeds from the award submissions goes toward providing scholarships to women entering the automotive aftermarket.
ASE Extends Scheduling Window To Sept. 30
ASE has extended its scheduling window to Sept. 30 to give those who have registered additional time to schedule their tests. Spring registration will remain open until June 30 for more than 54 automotive, collision, medium- and heavy-duty, school bus, transit bus, and truck equipment repair certification tests.
ASE tests are conducted days, nights and weekends at nearly 500 test centers. The institute recommends that automotive professionals coordinate testing with their employers and review the social distancing and safety measures that the test centers have put in place. And before registering, check test center availability.
UTI Reopens Labs At Most Campuses
Universal Technical Institute (UTI) has reopened hands-on training labs at most of its campuses, having adapted its facilities, teaching methods and class schedules in alignment with U.S. Centers for Disease Control and Prevention (CDC) and local health department guidelines. The reopened labs are located in …
• Avondale, AZ.
• Phoenix, AZ.
• Orlando, FL.
• Long Beach, CA.
• Rancho Cucamonga, CA.
• Sacramento, CA.
• Houston, TX.
• Dallas, TX.
• Lisle, IL.
• Mooresville, NC (NASCAR Tech).
This month, students will receive invitations to return to campus for in-person education in Exton, PA; Norwood, MA and Bloomfield, NJ, as state and local directives allow, which is expected to be by June 15.
Bolt On Technology Debuts Text To Pay, Financing Features
Bolt On Technology has launched SecondGear with Text To Pay functionality, a digital communications process that allows customers to make payments from their cell phones. SecondGear augments the company’s NextGear suite, which includes vehicle condition photographs and videos, vehicle health reports, two-way texting between customers and shops, speech-to-text note-taking, vehicle maintenance profiles and more.
In addition, the company has debuted Bolt On Pay, an updated and rebranded version of its Quick Charge Pro program, that pus all payment options under one umbrella.
In partnership with EasyPay Finance, Bolt On provides repair shops using its technology with the ability to offer consumers flexible payment options to afford unexpected repairs. Bolt On Pay includes the Text-To-Pay capability and is available to all customer shops whether they’re using Bolt On’s NextGear system or not.
SecondGear and Bolt On Pay are available at no additional up-front monthly subscription cost to current NextGear and Pro Pack users. Third-party processing fees may apply.
People Watching 6/8/20
• Ted Wentz III, CEO of Quadratec Inc., has been elected to the SEMA board of directors, replacing Greg Adler of Greg Adler Motorsports. Wentz was elected in the distributor/retailer category. Click here to see a list of the 2020-21 SEMA board of directors officers and members.
• Kim Pendergast, owner and CEO of Magnuson Products, has been selected to serve on the SEMA board of directors, replacing Jamie Meyer, who recently became the president of Performance Racing Industry and stepped down from the SEMA board. Pendergast will serve on the board until July 2021.
• SEMA has hired Nicole Bradle as its new council director. Bradle serves as the liaison for the Wheel & Tire Council, Emerging Trends & Technology Network and SEMA Businesswomen’s Network. Before joining SEMA, she was director of member relations for the American Academy of Physical Medicine & Rehabilitation.
• The 15 semifinalists have been announced for this year’s SEMA Young Executives Network (YEN) Launch Pad Competition.
• DMA Sales has added Doug Rupert as a technical support specialist. Rupert was an engineering coordinator at Honda’s production plant in Ohio, responsible for quality control, quality delivery and quality integrity. He specialized in engine parts, as well as brakes and calipers. He also has experience with suspensions, shocks and struts.
• John Rupert has joined ADD-USA Inc. as its vice president of sales for North America. He is the former North American vice president of performance chemicals at Irontite LLC. Rupert’s career also has included time as senior North American sales manager for EIKO LLC and aftermarket sales manager for Osram Sylvania.
• Steven Mason has joined Autologue Computer Systems as an outside sales representative. Mason was director of sales for DST Inc. His background also includes time as an outside sales rep and OE sales coordinator for XL Parts and as a purchasing director and data manager for the Continental Parts Company.
News Briefs 6/8/20
• In a June 5 letter to the U.S. Trade Representative (USTR), the Auto Care Association urged USTR to consider challenges the auto care industry is facing when evaluating requests to extend Section 301 tariff exclusions. The letter notes that efforts to evaluate alternate sources and modify supply chains have been delayed by the coronavirus pandemic, calling extending Section 301 tariff exclusions an effective way to provide immediate relief to businesses already struggling to stay afloat as a result of the pandemic.
• MEMA on June 3 sent a letter to the U.S. Senate Committee on Commerce, Science and Transportation, noting challenges the motor vehicle parts supplier industry faces in the wake of the coronavirus pandemic and subsequent plant shutdowns. The letter asks that programs be pursued to help parts suppliers through this difficult time.
• Parts Authority is donating $1.00 to the Automotive Aftermarket Charitable Foundation (AACF) for each battery sold by a Parts Authority location in May and June.
• The Automotive Aftermarket Charitable Foundation (AACF) reports that the Young Auto Care Network Group’s #YANGgive19 promotion — where YANG members and other industry professionals donated $19 to AACF and posted on social media about the campaign — raised more than $5,000 for the foundation.
• Nominations are being accepted for AWDA’s annual industry awards: Outstanding Leadership Award in Honor of Jack Creamer, Pursuit of Excellence Award, Art Fisher Award for Excellence in Education and Lifetime Achievement Award in Honor of Martin Fromm. Nominations are due July 17.
• The Auto Care Association is now accepting nominations for its 2020 awards focusing on education, innovation and the next generation: the Impact Award: Four for the Future, Auto Care Career and Education (ACE) Award and Mort Schwartz Excellence in Education Award. The deadline to submit nominations for these awards is July 10.
• Dana Inc. received the Epicor Receiver’s Choice Award at the Automotive Content Professionals Network (ACPN) 2020 Knowledge Exchange Conference.
• Turn 14 Distribution reports that it has hired several staff members from Motovicity Distribution following its recent acquisition of the Michigan-based WD. Hires reportedly have been made in sales, purchasing, customer support and marketing.
• Mitchell 1 has added the following parts catalogs to Manager SE: SSF EuroLink, SSF Imported Auto Parts’ European specialty catalog; Tireweb Connections, which allows regional Tireweb dealers to integrate their storefront into Manager SE; and Transend, a transmission and driveline specialty catalog.
• The SEMA Garage emissions lab is open and ready to help companies ensure that their products meet the criteria for CARB’s executive order process. For more information, read this article from SEMA eNews.
• Moreno Diesel S.A. de C.V. has joined the Vipar Heavy Duty Network. Headquartered in Nuevo Leon, Mexico, Moreno Diesel offers truck parts to end-users, fleets and redistributors for all makes. The company serves customers from multiple locations across northern and central Mexico.
Financial Briefs 6/8/20
• Automotive revenue from P&F Industries’ Florida Pneumatic business declined 16.4% to $3.23 million in the first quarter of 2020 due, in large part, to the loss of a large distribution customer and, to a lesser degree, negative effects on the business caused by the coronavirus pandemic.
• Illinois Tool Works (ITW) reported a 2.8% decrease in automotive aftermarket organic revenue for the first quarter of 2020, mainly attributable to decreases from its North American car care businesses.
• The Penske Automotive Group board of directors has suspended the company’s cash dividend — a move the company estimates will preserve roughly $34 million in cash during the second quarter.
Event & Trade Show Briefs 6/8/20
• Registration is now open for the 2020 SEMA Show taking placing Nov. 3-6 at the Las Vegas Convention Center.
• Because of the coronavirus pandemic, the Custom Automotive Network (CAN) has canceled its 2020 CAN Connect conference, which was scheduled for Sept. 13-16. The 2021 event is slated for Sept. 12-15 in Frisco, TX.
• The Aftermarket Auto Parts Alliance hosted a virtual Summer Shareholders Meeting last week. The event includes general sessions for Alliance shareholders, a joint general session for members and channel partners, roundtable discussions and more.
• NASTF will host a virtual general meeting at 7 p.m. (EDT) on June 9. The presentation will include a look at the task force’s partnership with General Motors and a discussion of vehicle privacy. The webinar is free, and registration is not required. For more information, visit nastf.org.
• The Association for Sustainable Manufacturing (MERA) will host Sustainable Manufacturing Days on the afternoons of June 15 and 16. The online event will include a town hall session on the core supply market, a member roundtable and more. Click here for more information.
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