Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 10, 2017
 
 
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U.S. AUTO PARTS NETWORK, INC.
(Exact name of registrant as specified in its charter) 
 
 
 
 
 
 
Delaware
 
001-33264
 
68-0623433
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
16941 Keegan Avenue, Carson, CA 90746
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (310) 735-0085
 
N/A
(Former name or former address, if changed since last report)
  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02. Results of Operations and Financial Condition.
On August 10, 2017, U.S. Auto Parts Network, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended July 1, 2017. A copy of the press release is furnished herewith as Exhibit 99.1.
The information contained in Item 2.02 and in Item 9.01 and in Exhibit 99.1 attached to this report is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language contained in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
 
 
 
 
Exhibit No.
  
Description
 
 
99.1
  
Press Release, dated August 10, 2017, of U.S. Auto Parts Network, Inc.







SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
Dated: August 10, 2017
 
 
 
U.S. AUTO PARTS NETWORK, INC.
 
 
 
 
 
 
 
 
By:
 
/s/ Neil T. Watanabe
 
 
 
 
 
 
Neil T. Watanabe
 
 
 
 
 
 
Chief Financial Officer








EXHIBIT INDEX
 
 
 
 
Exhibit No.
  
Description
 
 
99.1
  
Press Release, dated August 10, 2017, of U.S. Auto Parts Network, Inc.


Exhibit
Exhibit 99.1



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U.S. Auto Parts Reports Second Quarter 2017 Results


CARSON, Calif. - August 10, 2017 - U.S. Auto Parts Network, Inc. (NASDAQ: PRTS), one of the largest online providers of aftermarket automotive parts and accessories, reported results for the second quarter ended July 1, 2017. All information and data are from continuing operations, which exclude the AutoMD operating segment unless specifically noted.

Second Quarter 2017 Financial Summary vs. Year-Ago Quarter
Net sales increased 3% to $80.2 million compared to $78.0 million.
Gross margin was 29.0% compared to 30.4%.
Net income was $26.9 million, or $0.67 per diluted share, compared to $1.2 million or $0.03 per diluted share.
Adjusted EBITDA (a non-GAAP measure defined below) was $3.8 million compared to $4.0 million.
Ended the quarter with no revolver debt.

Second Quarter 2017 Operational Highlights vs. Year-Ago Quarter
Total online orders increased by 11% to 954,000 orders.
Conversion rate increased 20 basis points to 2.0%.
Customer acquisition cost reduced by 7% to $6.99.


Management Commentary
“Our second quarter was highlighted by the return to double-digit growth in our private label business, largely driven by a 37% increase in online marketplace sales,” said Aaron Coleman, CEO of U.S. Auto Parts. “Despite lower sales in our e-commerce channel, we still increased overall sales and grew total online orders by 11%, while improving conversion and reducing customer acquisition cost.

“We are continuing to experience a shift in channel mix this year, with our lower-margin online marketplace channel gaining momentum and our e-commerce channel experiencing lower traffic. We are addressing these channel dynamics with various initiatives, including a new e-commerce traffic optimization strategy and prudent cost management across the entire organization, which is further reflected by the 130 basis point reduction of operating expenses.

“Looking ahead to the remainder of 2017, we expect the deployment of these initiatives to help drive improved results as we exit the year. But regardless of the sales channel, we plan to continue capitalizing on industry tailwinds as more and more consumers shop online for auto parts, be it through third-party sites like Amazon and eBay, or our e-commerce sites.”




Exhibit 99.1

Second Quarter 2017 Financial Results
Net sales in the second quarter of 2017 increased 3% to $80.2 million compared to $78.0 million in the year-ago quarter. The increase was largely driven by a 37% increase in online marketplace sales to $28.3 million, partially offset by a 13% decrease in e-commerce sales.

Gross profit in the second quarter of 2017 was $23.2 million compared to $23.7 million in the year-ago quarter. As a percentage of net sales, gross profit was 29.0% compared to 30.4% in the year ago quarter. The decrease in gross margin was primarily driven by lower-margin channel mix and higher freight costs. The company continues to expect gross margin to range between 29-30% going forward.

Total operating expenses in the second quarter were reduced to $21.7 million compared to $22.1 million in the second quarter of last year. As a percentage of net sales, operating expenses decreased 130 basis points to 27.1% compared to 28.4% in the year ago quarter as a result of lower call center and marketing expenses.

Net income in the second quarter was $26.9 million, or $0.67 per diluted share, compared to $1.2 million or $0.03 per diluted share in the year-ago period. The significant increase was driven by the release of a valuation allowance from the company's cumulative net operating losses, which resulted in a $25.9 million tax credit.

Adjusted EBITDA in the second quarter of 2017 was $3.8 million compared to $4.0 million in the year-ago quarter.

At July 1, 2017, cash and cash equivalents totaled $9.9 million compared to $2.7 million at December 31, 2016. The company also continued to have no revolver debt at July 1, 2017.

Key Operating Metrics
 
Q2 2017
 
Q2 2016
 
Q1 2017
Conversion Rate 1
2.0
%
 
1.8
%
 
1.8
%
Customer Acquisition Cost 1
$
6.99

 
$
7.54

 
$
7.43

Unique Visitors (millions) 1
24.7

 
30.2

 
28.9

Number of Orders - E-commerce only (thousands) 
494

 
544

 
518

Number of Orders - Online Marketplace (thousands) 
460

 
315

 
431

Total Number of Internet Orders (thousands) 
954

 
859

 
949

Revenue Capture (% Sales) 2
85.3
%
 
84.0
%
 
85.2
%
Average Order Value - E-commerce only
$
103

 
$
109

 
$
104

Average Order Value - Online Marketplace
$
67

 
$
71

 
$
67

Average Order Value - Total Internet Orders
$
85

 
$
95

 
$
87


1.
Excludes online marketplaces and media properties (e.g. AutoMD).
2.
Revenue capture is the amount of actual dollars retained after taking into consideration returns, credit card declines and product fulfillment and excludes online marketplaces and media properties (e.g. AutoMD).


2017 Outlook
U.S. Auto Parts continues to expect net sales to be up low to mid-single digits on a percentage basis compared to 2016.
However, due to the aforementioned tax credit and channel mix issues, the company now expects net income to range between $27.0 million and $29.0 million, which compares to the company’s previously issued guidance of $4.8 million to $7.8 million. U.S. Auto Parts also now expects adjusted EBITDA to range between $13.0 million and $15.0 million, which compares to its previously issued guidance of $15.0 million to $18.0 million. The reduced outlook for adjusted EBIDTA reflects the company’s year-to-date performance, recent channel mix trends and additional projected freight-related expenses, as well as an increase in compliance costs related to its upcoming accelerated filer status.




Exhibit 99.1

Conference Call
U.S. Auto Parts will conduct a conference call today at 8:30 a.m. Eastern time (5:30 a.m. Pacific time) to discuss its financial results for the second quarter ended July 1, 2017.

The Company’s CEO Aaron Coleman and CFO Neil Watanabe will host the conference call, followed by a question and answer period.

Date: Thursday, August 10, 2017
Time: 8:30 a.m. Eastern time (5:30 a.m. Pacific time)
Toll-free dial-in number: 877-407-9039
International dial-in number: 201-689-8470
Conference ID: 13664701

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 1-949-574-3860.

The conference call will be broadcast live and available for replay via the investor relations section of the Company’s website at www.usautoparts.net.

A telephone replay of the conference call will also be available on the same day through August 24, 2017.

Toll-free replay number: 844-512-2921
International replay number: 412-317-6671
Replay ID: 13664701

About U.S. Auto Parts Network, Inc.
Established in 1995, U.S. Auto Parts is a leading online provider of automotive aftermarket parts, including collision, engine, and performance parts and accessories. Through the Company’s network of websites, U.S. Auto Parts provides consumers with a broad selection of competitively priced products, all mapped by a proprietary database with applications based on vehicle makes, models and years. U.S. Auto Parts’ flagship websites include www.autopartswarehouse.com, www.carparts.com, www.jcwhitney.com, and www.AutoMD.com, as well as the Company’s corporate website at www.usautoparts.net.
U.S. Auto Parts is headquartered in Carson, California.







Exhibit 99.1

Non-GAAP Financial Measures

Regulation G, and other provisions of the Securities Exchange Act of 1934, as amended, define and prescribe the conditions for use of certain non-GAAP financial information. We provide “Adjusted EBITDA,” which is a non-GAAP financial measure. Adjusted EBITDA consists of net income before (a) interest expense, net; (b) income tax provision; (c) depreciation and amortization expense; (d) amortization of intangible assets; and (e) share-based compensation expense.

The Company believes that this non-GAAP financial measure provides important supplemental information to management and investors. This non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with the GAAP results and the accompanying reconciliation to corresponding GAAP financial measures, provides a more complete understanding of factors and trends affecting the Company’s business and results of operations.

Management uses Adjusted EBITDA as one measure of the Company’s operating performance because it assists in comparing the Company’s operating performance on a consistent basis by removing the impact of stock compensation expense, as well as items that are not expected to be recurring. Internally, this non-GAAP measure is also used by management for planning purposes, including the preparation of internal budgets; for allocating resources to enhance financial performance; and for evaluating the effectiveness of operational strategies. The Company also believes that analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate the ongoing operations of companies in our industry.

This non-GAAP financial measure is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the Company’s consolidated financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. In addition, the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items from the Company’s non-GAAP measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring.






Exhibit 99.1

Safe Harbor Statement
This press release contains statements which are based on management’s current expectations, estimates and projections about the Company’s business and its industry, as well as certain assumptions made by the Company. These statements are forward looking statements for the purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended and Section 27A of the Securities Act of 1933, as amended. Words such as “anticipates,” “could,” “expects,” “intends,” “plans,” “potential,” “believes,” “predicts,” “projects,” “seeks,” “estimates,” “may,” “will,” “would,” “will likely continue” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, the Company’s expectations regarding its future operating results and financial condition, impact of changes in our key operating metrics, our potential growth and our liquidity requirements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors.

Important factors that may cause such a difference include, but are not limited to, competitive pressures, our dependence on search engines to attract customers, demand for the Company’s products, the online market and channel mix for aftermarket auto parts, the economy in general, increases in commodity and component pricing that would increase the Company’s product costs, the operating restrictions in our credit agreement, the weather, and any other factors discussed in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Risk Factors contained in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available at www.usautoparts.net and the SEC’s website at www.sec.gov.  You are urged to consider these factors carefully in evaluating the forward-looking statements in this release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. Unless otherwise required by law, the Company expressly disclaims any obligation to update publicly any forward-looking statements, whether as result of new information, future events or otherwise.

Company Contact:
Neil T. Watanabe, Chief Financial Officer
U.S. Auto Parts Network, Inc.
(424) 702-1455 x421
nwatanabe@usautoparts.com


Investor Relations:
Cody Slach or Sean Mansouri
Liolios
949-574-3860
PRTS@liolios.com





Exhibit 99.1

Summarized information for our continuing operations for the periods presented is as follows (in millions):
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
July 1, 2017
 
July 2, 2016
 
July 1, 2017
 
July 2, 2016
Net sales
 
$
80.21

 
$
78.00

 
$
161.04

 
$
158.75

Gross profit
 
$
23.24

 
$
23.70

 
$
47.03

 
$
48.23

 
 
29.0
%

30.4
%

29.2
%

30.4
%
Operating expenses
 
$
21.74

 
$
22.13

 
$
44.32

 
$
44.75

 
 
27.1
%
 
28.4
%
 
27.5
%
 
28.2
%
Income from operations
 
$
1.51

 
$
1.57

 
$
2.71

 
$
3.48

 
 
1.9
%
 
2.0
%
 
1.7
%
 
2.2
%
Income from continuing operations
 
$
26.92

 
$
1.22

 
$
27.73

 
$
2.75

 
 
33.6
%
 
1.6
%
 
17.2
%
 
1.7
%
Adjusted EBITDA
 
$
3.82

 
$
4.03

 
$
7.85

 
$
8.37

 
 
4.8
%
 
5.2
%
 
4.9
%
 
5.3
%

The table below reconciles income from continuing operations to Adjusted EBITDA for the periods presented (in thousands):
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
July 1, 2017
 
July 2, 2016
 
July 1, 2017
 
July 2, 2016
Income from continuing operations
$
26,918

 
$
1,216

 
$
27,734

 
$
2,753

Depreciation & amortization
1,637

 
1,556

 
3,270

 
3,100

Amortization of intangible assets
112

 
113

 
224

 
225

Interest expense, net
466

 
242

 
842

 
588

Taxes
(25,859
)
 
113

 
(25,832
)
 
146

EBITDA
$
3,274

 
$
3,240

 
$
6,238

 
$
6,812

Stock comp expense
$
544

 
$
785

 
$
1,608

 
$
1,557

Adjusted EBITDA
$
3,818

 
$
4,025

 
$
7,846

 
$
8,369


The table below reconciles the high and low ends of our projected range of net income to projected Adjusted EBITDA for the period presented (in thousands):
 
Low End
52 Weeks Ending
December 30, 2017
 
High End
52 Weeks Ending
December 30, 2017
 
 
 
 
Income from continuing operations
$
27,000

 
$
29,000

Depreciation & amortization
6,500

 
6,500

Amortization of intangible assets
400

 
400

Interest expense, net
1,900

 
1,900

Taxes
(25,700
)
 
(25,700
)
EBITDA
$
10,100

 
$
12,100

Stock comp expense
$
2,900

 
$
2,900

Adjusted EBITDA
$
13,000

 
$
15,000






Exhibit 99.1

U.S. AUTO PARTS NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
(Unaudited, in Thousands, Except Per Share Data)
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
July 1,
2017
 
July 2,
2016
 
July 1,
2017
 
July 2,
2016
Net sales
$
80,208

 
$
77,999

 
$
161,041

 
$
158,745

Cost of sales (1)
56,964

 
54,298

 
114,010

 
110,512

Gross profit
23,244

 
23,701

 
47,031

 
48,233

Operating expenses:
 
 
 
 
 
 
 
Marketing
10,248

 
10,424

 
20,562

 
21,218

General and administrative
4,310

 
4,540

 
9,111

 
8,973

Fulfillment
5,929

 
5,658

 
12,011

 
11,696

Technology
1,136

 
1,397

 
2,409

 
2,641

Amortization of intangible assets
112

 
113

 
224

 
225

Total operating expenses
21,735

 
22,132

 
44,317

 
44,753

Income from operations
1,509

 
1,569

 
2,714

 
3,480

Other income (expense):
 
 
 
 
 
 
 
Other income, net
19

 
11

 
35

 
17

Interest expense
(469
)
 
(251
)
 
(847
)
 
(598
)
Total other expense, net
(450
)
 
(240
)
 
(812
)
 
(581
)
Income from continuing operations before income taxes
1,059

 
1,329

 
1,902

 
2,899

Income tax (benefit) provision
(25,859
)
 
113

 
(25,832
)
 
146

Income from continuing operations
26,918

 
1,216

 
27,734

 
2,753

Discontinued operations (2)
 
 
 
 
 
 
 
Loss from operations and disposal of discontinued AutoMD operations

 
(704
)
 
(558
)
 
(1,433
)
Income tax (benefit) provision

 
(169
)
 
1

 
(351
)
Loss on discontinued operations

 
(535
)
 
(559
)
 
(1,082
)
Net income
26,918

 
681

 
27,175

 
1,671

Other comprehensive income (loss):
 
 
 
 
 
 
Foreign currency translation adjustments
(1
)
 
(8
)
 
(3
)
 
(13
)
Total other comprehensive loss
(1
)
 
(8
)
 
(3
)
 
(13
)
Comprehensive income
$
26,917

 
$
673

 
$
27,172

 
$
1,658

Income from continuing operations per share:
 
 
 
 
 
 
 
Basic income from continuing operations per share
$
0.76

 
$
0.03

 
$
0.79

 
$
0.08

Diluted income from continuing operations per share
$
0.67

 
$
0.03

 
$
0.69

 
$
0.07

Weighted average common shares outstanding:
 
 
 
 
 
 
 
Shares used in computation of basic income from continuing operations per share
35,332

 
34,753

 
34,921

 
34,625

Shares used in computation of diluted income from continuing operations per share
39,933

 
40,007

 
40,079

 
39,655

 
(1)
Excludes depreciation and amortization expense which is included in marketing, general and administrative and fulfillment expense.
(2)
During March, 2017 our AutoMD operations filed for dissolution and have been classified as discontinued operations.




Exhibit 99.1

U.S. AUTO PARTS NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, In Thousands, Except Par and Liquidation Value)
 
July 1, 2017
 
December 31, 2016
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
9,928

 
$
6,643

Short-term investments
8

 
30

Accounts receivable, net of allowances of $46 and $36 at July 1, 2017 and December 31, 2016, respectively
2,698

 
3,266

Inventory
52,195

 
50,904

Other current assets
2,743

 
2,815

Total current assets
67,572

 
63,658

Deferred income taxes
25,881

 

Property and equipment, net
15,667

 
16,478

Intangible assets, net
745

 
969

Other non-current assets
853

 
1,029

Total assets
$
110,718

 
$
82,134

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
39,771

 
$
33,697

Accrued expenses
7,999

 
6,860

Current portion of capital leases payable
557

 
542

Customer deposits
2,765

 
3,718

Other current liabilities
2,100

 
1,972

Total current liabilities
53,192

 
46,789

Capital leases payable, net of current portion
9,477

 
9,770

Deferred income taxes

 
156

Other non-current liabilities
2,154

 
2,097

Total liabilities
64,823

 
58,812

Commitments and contingencies
 
 
 
Stockholders’ equity:
 
 
 
Series A convertible preferred stock, $0.001 par value; $1.45 per share liquidation value or aggregate of $6,017; 4,150 shares authorized; 2,771 and 4,150 shares issued and outstanding at July 1, 2017 and December 31, 2016, respectively
3

 
4

Common stock, $0.001 par value; 100,000 shares authorized; 36,056 and 34,623 shares issued and outstanding at July 1, 2017 and December 31, 2016
37

 
35

Treasury stock
(3,630
)
 
(1,376
)
Additional paid-in capital
178,651

 
180,153

Accumulated other comprehensive income
554

 
557

Accumulated deficit
(129,720
)
 
(156,520
)
Total stockholders’ equity
45,895

 
22,853

Noncontrolling interest

 
469

Total equity
45,895

 
23,322

Total liabilities and stockholders’ equity
$
110,718

 
$
82,134





Exhibit 99.1


U.S. AUTO PARTS NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, In Thousands)
 
Twenty-Six Weeks Ended
 
July 1,
2017
 
July 2,
2016
Operating activities
 
 
 
Net income
$
27,175

 
$
1,671

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization expense
3,270

 
3,704

Amortization of intangible assets
224

 
241

Deferred income taxes
(25,881
)
 
(257
)
Share-based compensation expense
1,633

 
1,668

Stock awards issued for non-employee director service
5

 
4

Amortization of deferred financing costs
30

 
41

Gain from disposition of assets
(8
)
 

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
568

 
265

Inventory
(1,291
)
 
6,795

Other current assets
(86
)
 
(1,038
)
Other non-current assets
166

 
81

Accounts payable and accrued expenses
7,261

 
1,308

Other current liabilities
(764
)
 
319

Other non-current liabilities
168

 
204

Net cash provided by operating activities
12,470

 
15,006

Investing activities
 
 
 
Additions to property and equipment
(2,494
)
 
(2,887
)
Proceeds from sale of property and equipment
39

 

Cash paid for intangible assets

 
(125
)
Net cash used in investing activities
(2,455
)
 
(3,012
)
Financing activities
 
 
 
Borrowings from revolving loan payable
3,645

 
9,297

Payments made on revolving loan payable
(3,645
)
 
(21,056
)
Proceeds from stock options
238

 
536

Minority shareholder redemption
(2,485
)
 

Payments on capital leases
(278
)
 
(313
)
Treasury stock repurchase
(2,272
)
 

Statutory tax withholding payment for share-based compensation
(1,644
)
 
(969
)
Payment of liabilities related to financing activities
(100
)
 
(100
)
Preferred stock dividends paid
(169
)
 

Net cash used in financing activities
(6,710
)
 
(12,605
)
Effect of exchange rate changes on cash
(20
)
 
(13
)
Net change in cash and cash equivalents
3,285

 
(624
)
Cash and cash equivalents, beginning of period
6,643

 
5,537

Cash and cash equivalents, end of period
$
9,928

 
$
4,913

Supplemental disclosure of non-cash investing and financing activities:
 
 
 
Accrued asset purchases
$
712

 
$
735

Property acquired under capital lease
$

 
$
211

Supplemental disclosure of cash flow information:
 
 
 
Cash paid during the period for income taxes
$
42

 
$
49

Cash paid during the period for interest
711

 
564