Welcome to the U.S. Auto Parts Third Quarter 2013 Conference Call. On the call today from the company are Shane Evangelist, Chief Executive Officer; and David Robson, Chief Financial Officer. By now, everyone should have access to the third quarter 2013 earnings release, which went out today at approximately 4:00 p.m. Eastern time. If you have not received your release, it is available on the Investor Relations portion of the U.S. Auto Parts' website at www.usautoparts.net by clicking on the U.S. Auto Parts Investor Relations tab. This call is being webcast, and a replay will be available on the company's website through November 18, 2013. Before we begin, we would like to remind everyone that the prepared remarks contain certain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and speak only as of the date hereof. We refer all of you to the risk factors contained in U.S. Auto Parts' Annual Report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission for a more detailed discussion on the factors that can cause actual results to differ materially from those projected in any forward-looking statements. U.S. Auto Parts assumes no obligation to revise any forward-looking projections that may be made in today's release or call. Please note that on today's call, in addition to discussing the GAAP financial results and the outlook for the company, the following non-GAAP financial measures will be discussed: EBITDA and adjusted EBITDA, an explanation of the U.S. Auto Parts' use of these non-GAAP financial measures in this call and the reconciliation between GAAP and non-GAAP measures required by SEC Regulation G, as included in U.S. Auto Parts' press release today, which again, can be found on the Investor Relations section of the company's website. The non-GAAP information is not a substitute for any performance measure derived in accordance with GAAP, and the use of such non-GAAP measures have limitations, which are detailed in the company's press release. With that, I would now like to turn the conference over the Shane Evangelist. Please go ahead

Thank you, Kristine, and thank you, all, for joining the call. I am pleased to announce, we continue to see positive progress in both revenues and margins. I also realize that it may be difficult to see the positive results from the overall revenue numbers, so I will talk about the current year-over-year results, but also the results from our go-forward websites, marketplaces and off-line businesses that make up the rejuvenated U.S. Auto Parts. Our overall revenue for the quarter was down 15.5%. However, our go-forward sales channels were down 6.5%. In addition, quarter-to-date, the fourth -- for the fourth quarter, we continue to see progress as our overall comp trended now down 7%, and revenues from our go-forward sales channels are slightly positive, up 1.5%. To say it differently, the websites, marketplaces and off-line businesses that we plan to generate sales from going forward are currently comping positive year-over-year and the main reason our current fourth quarter-to-date is comping down 7% is because of the revenue loss year-over-year from the websites that we have retired as part of our long-term strategy to build strong flagship brands. It has taken us almost 2 years of hard work to get to this point again and we're encouraged. These are positive signs for our business. The concept of go-forward sales channels is new. Simply put, these are our online and off-line revenue streams that we expect operate going forward. And not to be redundant, but now that you have a better understanding of our go-forward sales channels, I want go over the revenue trends again. Overall revenue for the third quarter was down 15.5%. However, our go-forward sales channels were down 6.5% in the third quarter. We lost $6.9 million of sales during the quarter from websites we retired, which impacted the…

Thanks, Shane. Good afternoon to everybody on the call. Unless otherwise stated, this quarter refers to consolidated Q3 2013, and last year refers to Q3 2012. The comparisons are Q3 2013 compared with Q3 2012. Also, percentage and basis points discussed are calculated using net sales. However, for advertising, we'll discuss period-to-net internet sales. Adjusted EBITDA for the quarter was $1.8 million compared to adjusted EBITDA of $2.7 million last year. Adjusted EBITDA excludes noncash share-based compensation expense of $315,000 this quarter and $450,000 last year. This quarter's net sales were $61.7 million compared to $73 million last year, a decrease of 15.5%. Total online sales decreased by 16.1% this quarter, principally driven by a 22% decline in traffic, a 1.1% decline in AOV, offset by a 3% improvement in conversion and strong results from our online marketplace. Turning to margins. This quarter's gross margin was 29%, down 240 basis points from last year of 31.4%. Gross margins declined primarily due to higher freight and lower product margins. However, compared to Q2 of this year, we saw good margin improvement of 100 basis points, primarily driven by a higher penetration of private label sales, which yield a higher gross margin. Online advertising expense, which includes catalog costs, was 7.2% of net sales this quarter compared with 7.5% last year. The 30-basis-point decline was primarily driven by a reduction in print catalog spend. This quarter's marketing expense, excluding the online advertising, was 8.7% of net sales compared to last year of 10.9%. Decline in marketing expense was primarily due to lower depreciation and amortization expense, lower payroll and employee severance incurred last year. General and administrative expense declined $665,000, primarily due to lower merchant fees of $274,000, lower payroll of $214,000 and lower stock-based compensation of $74,000. Fulfillment expense was 6.8%…

[Operator Instructions] Our first question comes from the line of Jared Schramm with Roth Capital Partners.

Looking at marketing expense, it's down on an absolute basis and as a percentage of sales, but customer acquisition costs improved on the -- from the year ago period here. Do you think this is a good level of marketing spend going forward? And is some of that improvement driven by the fact that you're just gaining efficiencies, having been in this marketplace for a long time?

Yes. A couple things on the marketing expense there Jared. One is we delayed some marketing expense to the fourth quarter on our catalog sends for our JC Whitney products. So I think that number will come up. The 30 bps that were down probably comes back in the fourth quarter. And then in general, we pulled back on overall expenses. And that's why you're seeing that reduction in overall marketing expense being down, as well as some severance expense that we had last year. Yes, this number is a much better number to look at in a go-forward basis, and it might be up 30 bps, maybe, based on some of the delay we did on the spend. John R. Lawrence - Morgan Keegan & Company, Inc., Research Division: Okay. And similarly, looking at G&A, is this a good number or do you think there's a little bit of room for improvement there over the next couple of quarters?

Yes. I mean, it's just probably -- you'll probably see a little bit of improvement in that number as well.

Okay. And then AutoMD, I realize may have got pushed aside with everything else going on, but where does that site stand today? And down the road, potential for the advertising revenue from it?

Yes. Well, we haven't really thought of MD's revenue numbers. It's not great today. It's not very large, but it does generate some revenue. Our real play with AutoMD is rolling out to shops and then getting paid for transactions that happen in the shops. And we like the progress we're making. It's been well-received by shop owners. It's well-received by consumers. Any market that you can bring some transparency to seems to be positive. And so we like where we're going with that direction. We'll keep pushing that.

Okay. And I guess, down the road, is that a property you ever look to divest should you get the right scale? Do you think that -- again, back to my prior, you probably neglected it a little bit, just focusing on the core parts of the business. Is that something you look to focus more efforts on? Maybe next year, 2015?

Yes. I think we haven't neglected it. And I think we'll see similar efforts on it going forward. And I certainly, wouldn't speculate on where that asset may or may not be.

Okay. And then the sites that are continuing, you mentioned they're comping up 1.5% currently. Do you think now this is a good bar to look at going forward with all the other sites being shut down? And is this 1.5%-something you've been looking to achieve for a while?

Yes. So I think what we said here is we probably hit a new baseline around $245 million on those go-forward sales channels. So I feel like we found bottom. And I say that only because these sales channels now are starting to comp positive. And I think if you look at the first half of the year, we still run into some of those headwinds that we're dealing with today. We're down 7% for this quarter. Hopefully, that improves a little bit in the first half of the year. But I think we'll probably be down overall business in the first half of the year and then certainly, we'll start to get positive the second half of the year as we get rid of those headwinds and our base operations start to grow again.

[Operator Instructions] Our next question comes from the line of Mitch Bartlett with Craig-Hallum.

I was kind of late, Shane, in getting on the call, at the very beginning. I heard your answers to the last question, but you would characterize the business overall as having stabilized now, and you see perhaps some positive growth. I mean, overall, from 60,000 [indiscernible], are you feeling good about business right now?

Yes. Mitch, I think the thing that we've been doing here is trying to figure out where that bottom is, and then setting a cost structure around that bottom that would allow us to operate profitably and begin to grow again. And we're not declaring victory here by any means, but what we can report back now is we believe we have found that bottom in a sense that the websites and the offline businesses that we continue to operate are starting to see some positive growth. Not much, but it's a beginning. And so, we think that's a positive sign for us, and we feel good about the fact that you're starting to see that positive growth in the business. And then I think if you were to say, "Well, where do we bench line? What do we benchmark that off of?" I think the number is probably around $245 million on our continued -- I'm sorry, on our continued sales channels going forward. And we feel good that we've hit that bottom. We feel good that we've got a cost structure in place to put up positive cash next year as it relates to sort of EBITDA less CapEx.

Good. And so the same question, if you could, maybe walk me through the gross margin. I see the sequential improvement, but just how you're feeling about the stability of the gross margin in the mix right now?

Yes. So on a year-over-year basis, we're down. That trend has been consistent where we had some increased competition in our need to lower some prices. On a quarter-over-basis, we are starting to see some progress. And that's the result of us using the revolver and leveraging that revolver to bring inventory in, to capture some sales that we probably weren't otherwise capturing previously. I think you'll also see that in some of the growth numbers. And we've seen an increase in gross margin as a result. Typically, the third quarter is one of our lowest gross margin quarters. We typically see a higher gross margin in the first quarter and the second quarter, so we feel good about the stabilization of the margin from a downward pressure perspective that we had previously. And then hopefully, there's some upside in that, which is why we think it's probably somewhere between 29% and 30% in 2014. And obviously, that will change by quarter, but overall, we think it will be somewhere in that range.

Okay, good. And again, I apologize if this is redundant since I was late for the call. But I did see the -- you did go into the revolver, obviously. You've just explained it was to get a little heavier into the private label. But from December to now, the inventory is down, the payables are down. Are you -- what's the philosophy behind the revolver right now, the fuel business?

Well, I mean, the philosophy on the revolver -- simply put is to leverage it where we think we can get a good return on that inventory, against the cost to borrow against it. And I think you're starting to see that up. I mean, year-over-year basis, we're down close to $8 million in inventory. On a quarter-over-quarter basis, we're up close to $6 million, and the cash position is, as a net of that, is up $4.8 million, right, when you back off the cash that we have. So I think we're leveraging the revolver as we should to capture the revenue that we think is out there, that we weren't taking previously. And -- but we're also being -- as you can see on a year-over-year basis, we're down 20% versus sales being down 15.5%. So clearly, we're getting more leverage out of that inventory.

I'm showing no further questions at this time. Please continue.

So thanks, all, for joining the call. We look forward to reporting back at the end of the year. Take care.

Ladies and gentlemen, that does conclude our conference for today. We'd like to thank you for your participation. You may now disconnect.