CarParts.com, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment, Net

Property and Equipment, Net

9 Months Ended

Sep. 29, 2012

Property and Equipment, Net [Abstract]

Note 4 – Property and Equipment, Net

The Company’s fixed assets consisted of computer software (purchased and internally developed), machinery and equipment, furniture and fixtures, and vehicles, and are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense are provided for in amounts sufficient to relate the cost of depreciable and amortizable assets to operations over their estimated service lives. Depreciation and amortization expense for the thirteen weeks ended September 29, 2012 and October 1, 2011 was $3.8 million and $3.1 million, respectively. Depreciation and amortization expense for the thirty-nine weeks ended September 29, 2012 and October 1, 2011 was $11.5 million and $9.2 million, respectively. The cost and related accumulated depreciation of assets retired or otherwise disposed of are removed from the accounts and the resultant gain or loss is reflected in earnings.

Property and equipment consisted of the following at September 29, 2012 and December 31, 2011 (in thousands):


	September 29, 2012			December 31, 2011
Land	$	630		$	630
Building		10,680			10,680
Machinery and equipment		14,263			13,429
Computer software (purchased and developed) and equipment		44,474			37,880
Vehicles		250			221
Leasehold improvements		2,444			2,122
Furniture and fixtures		1,365			1,244
Construction in process		3,740			2,467

		77,846			68,673
Less accumulated depreciation and amortization		(45,655	)		(34,046	)

Property and equipment, net	$	32,191		$	34,627

Construction in process primarily relates to the Company’s internally developed software (refer to caption “Website and Software Development Costs” in “Note 1 – Summary of Significant Accounting Policies and Nature of Operations”). Certain of the Company’s net property and equipment were located in the Philippines as of September 29, 2012 and December 31, 2011, in the amount of $1.2 million and $1.6 million, respectively.

Depreciation and amortization of property and equipment is provided using the straight-line method for financial reporting purposes, based on the following estimated useful lives:


		Years
Building		21
Machinery and equipment		2 - 5
Computer software (purchased and developed)		2 - 3
Computer equipment		2 - 5
Vehicles		3 - 5
Leasehold improvements*		3 - 5
Furniture and fixtures		3 - 7

*	The estimated useful life is the lesser of 3-5 years or the lease term.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details