Welcome to U.S. Auto Parts Fourth Quarter 2016 Conference Call. On the call from the company are Shane Evangelist, Chief Executive Officer; and Neil Watanabe, Chief Financial Officer. By now, everyone should have access to the fourth quarter 2016 earnings release, which went out today at approximately 4:00 PM 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 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 March 20, 2017. Before we begin, we would like to remind everyone that the prepared remarks contain certain forward-looking statements within the meaning of the federal securities laws, and management may make additional forward-looking statements in response to your questions. The forward-looking statements include but are not limited to statements regarding future events, our future operating and financial results, financial expectations, expected growth and strategies, key operating metrics, and current business indicators, capital needs and deployment, liquidity, product offerings, customers and suppliers, and competition. The forward-looking statements are based on current information and expectations are subject to uncertainties and changes in circumstances and do not constitute guaranties of future performance. The forward-looking statements involve a number of factors that could cause actual results to differ materially from those statements. 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 detailed discussion on the factors that can cause actual results to differ materially from those projected in any forward-looking statement. U.S. Auto Parts assumes no obligation to nor does it intend to update or revise any forward-looking…

Thank you, operator. Good morning everyone, and thank you for joining us to discuss our fourth quarter and full year results. I would like to provide a summary on the financials reported in the press release today, as well as an overview of key business metrics. I would like to remind listeners that all metrics discussed exclude AutoMD unless specifically noted. Over the last year we’ve emphasized our focus to drive profitability instead of low margin revenue growth. And during the fourth quarter we continue to execute on this initiative with another strong quarter of private label sales growth and increase margin dollars, while leveraging our expenses to grow our net cash position. Moving on to our fourth quarter results, net sales increased 5% to $71.1 million compared to $67.5 million in the year ago quarter, in line with our mid single-digit growth expectations. To raise sales down further, online sales were up 4%, driven by strong growth in our online marketplace sales, which increased 23%. E-commerce sales were down slightly to $43.8 million versus $44.9 million last year, primarily driven by lower average order value, and partially offset with a 5% increase in conversation rate and a 1% increase in traffic. The decline in average order value was expected, given our continued focus on shifting sales to higher margin private label products, which carry lower price points. Total online orders increased 14%, a clear sign of our market share growth and offline sales increased to 16% to $6.7 million compared to $5.8 million the prior year. Taking a look at our sales by product category, the private label business was up approximately 14%, offset by an expected single-digit decrease in our branded business. The branded business decline continues to reflect our strategy to maintain minimum margin targets. As such,…

Thank you, Neil. I want to take a second to reflect on the growth U.S. Auto Parts team has delivered over the last four years by focusing on a fully vertically integrated e-commerce business. It became clear to us that we needed to control our supply chain and not be depended on other suppliers drop shipping product in our behalf. It also became clear to us that we needed to control our customer traffic and not be depended on free traffic from Google organic search. And we have two objectives in mind; we put more resources behind our private label teams, develop the broader searching network in Asia and built systems to better mind demand data. The results have generated significant improvements in profitability with net income increasing over the last four years from $13.6 million loss to $4.9 million loss to $100,000 loss and this year up $3 million, and adjusted EBITDA increases over the last four years from $4.6 million to $8.4 million to $10 million and this year at $14 million. It has certainly taken time to implement our strategy fully as it needs to be done in a SKU-by-SKU basis. However, the TDS and time consuming nature of doing this SKU-by-SKU has resulted in what we believe is a significant competitive advantage. Our mission four years ago, to squarely focus on good quality, low cost product that saves the U.S. consumer $100 per job as paying dividends. For consumers who simply want to get their vehicle back on the road for as little cost as possible, we believe we have a clear competitive advantage. Those advantages are the results of the hardworking and talented team in U.S. Auto Parts. I want to recognize tremendous team in U.S. Auto Parts who believe four years ago that we…

Thank you all for joining the call today. Please note we’ll be presenting at the ROTH Conference on March 13 and hope to see some of you there. If not, we look forward to speaking with you next when we report our first quarter results in May.

This concludes today’s teleconference. Thank you for your participation. You may disconnect your lines at this time.