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Letter to the Editor

Parts.com Reports One Cent a Share Loss for First Quarter Before EBITDA

SANFORD, Fla. -- Parts.com, Inc. has announced its results for the quarter ended March 31, 2001.

The net loss reported for the quarter ended March 31, 2001 was $392,299 or $0.01 per share, excluding $293,067 in stock-based compensation expense, $297,845 in amortization and depreciation expense and $230,988 in non-cash interest expense. This compares to a net loss of $1,892,617 or $0.8 per share for the three-month period ended March 31, 2000.

For the three-month period ended March 31, 2001, the company reported net sales of $134,128, a 196 percent increase compared to net sales of $45,244 for the quarter ended March 31, 2000 and a decrease of $45,985 or 27 percent compared to the fourth quarter, 2000. As stated in the company's 10Q report, it records only its net transaction fees on parts sales.

For the quarter ended March 31, 2001, Parts.com reduced its monthly burn rate seventy percent to approximately $130,000, as compared to an approximate average of $394,424 per month for the 12 months ended December 31, 2000.

The loss for the three months ended March 31, 2001 was attributable mainly to non-cash expenses, which include stock-based compensation, interest, depreciation and amortization, accounting for 68 percent of total expenses for the period and more than two thirds of the total net loss.

"We have made significant strides in reducing our operating expenses," stated Shawn D. Lucas President and Chairman. "Our cash position has always been light, as in previous quarters, but we continue to raise capital from our angel investors. Although we are disappointed with our revenue for the quarter, we look to our recently formed partnerships to impact revenues going forward, and thus improve our liquidity from a cash flow standpoint.

"We have positioned the Company and our TradeMotion Software for growth," continued Mr. Lucas. "It appears that industry analysts have recently embraced the 'private trading network' model and those companies that provide the software and services needed to automate existing and new private marketplaces. We realized in late January of 2000 that manufacturers, wholesale distributors and car dealerships wanted their own private trading networks, which would protect their brand name and their existing relationships with their own supply chain partners. Considering that most technology budgets have been slashed, corporations are now seeking affordable, proven and rapidly deployable private marketplace software,'' concluded Mr. Lucas.

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