THE PARTS AUTHORITY EST. 1973MEMA PRESENTATIONSEPTEMBER 22, 2016PRESENTED BY RANDY BULLER, PRESIDENT/CEO

COMPANY OVERVIEW

1980 1990 2000 2004 2010 2016

COMPANY HISTORY

Converted to our 1st computer system Customer ‘bat phones’ direct to our

sales counter Separate foreign store- mainly VW, and

British Picking up and Receiving daily stock

orders from WD’s Bought at Jobber less 10 on most lines Parts Authority has 2 locations only

Change is in the air! Bought most lines directly Dawn of "eordering” Import parts became mainstream for domestic market Japanese parts invasion Parts Authority is now 4 locations

Computerized and experimenting with all kinds of new technology, which was restrained by loadstar- triad-activant- epicor

Customer connectivity was shaky as auto repair shops were late adopters of computers and the internet at best-ex. No emails

Parts proliferation in full swing with generic brands coming front and center

Import parts continue to climb Parts Authority is now 8 locations

Switched from proprietary closed system to IBM relational database open platform system. The switch allowed us to adapt to the ever changing needs of the business on our own terms.

Technology roadblocks are scarce and and we are able to create our tagline: “The answer is Yes!”

Our most versatile & flexible tool: the first original homegrown Parts Authority intranet

Customers are still not embracing technology, but octogenarians are!

We are now 10 locations and hypergrowth is on the horizon

Performing our own acquisition computer changeovers

Self-developed, self-owned homegrown software in conjunction with our ERP system

Ability to integrate with all customers

Parts Authority becomes the go toguy if you want out

We are now 20 locations

Huge tech dept as manual tasks become automated.

Dispatch, Skype, fax, email, our own cataloging, etc.

Parts proliferation is a feature now.

Evil dual line situations are working for us with multiple avenues of distribution besides our bread and butter hot shot delivery business to our installers

Jobbers, fleets, import specialists, national accounts, internet fulfillment, etc.

We are now 85 locations across6 states and still growing!

PARTS AUTHORITY ACQUISITION HISTORY

20074 Stores

•Queens, NYAustin Automotive

20092 Stores

•DC, MDSouthern Distributors

20103 Stores

•DC, MDEarl’s Auto Parts

•MDBrakes, Etc.

20114 Stores

•MDOlympic Auto Parts

20124 Stores

•AZPro Parts Scottsdale

201322 Stores

•NJMr. Bargain

•NY, NJ, LIWoodbury

•AZBAP

•LISwift

201410 Stores

•LICastle Auto PartsParts World

•GAJohnson Industries

20151 Store

•LIOntime

201613 Stores

•Yonkers, NYMiele Auto Parts

•CaliforniaMetro Auto Parts

Parts Authority has grown primarily through

acquisitions over the last 10 years.

Additionally, Parts Authority has grown by

opening greenfield stores to expand coverage in all

of our regions.

PARTS AUTHORITY GROWTH HISTORY

PARTS AUTHORITY LOCATIONS TODAYNew York New Jersey Washington DC

Maryland Arizona Georgia

California

THE JORDAN COMPANY

“The Jordan Company is a private equity firm that specializes in buying and building companies, most often in partnership with

the existing owners and management teams of those companies. Our transactions provide liquidity for owners, raise

capital for corporate growth and create significant equity opportunities for key management. We are long-term investors

who seek to build value over time.”

• The quote above is directly from Jordan’s website.• The deal was consummated on June 30th of this year.• Allowed company to continue to grow at accelerated rate with more

resources while retaining all management and current employees.

ACCOUNTS PAYABLE PROCESSING

Each statement needs to signed off by statement preparer Each statement needs to be signed off by statement supervisor

(this means you are sure at that time or you ask randy until you are sure on procedure)

If there is a pricing issue ( which is common) then pricing is notified immediately and resolution must occur. Please note that “pricing has been fixed” on statement

Make sure that short forms are filled out!!! Whether dollars or units All credits and rebates ( especially large ones must be scrutinized) Any large credits should be placed at top of statement All dating should come through the same way—same template (

see Sammy)

Make sure you get non computerized statements in excel with po’s!!!!

Scrutinize changeovers!!!! Make sure to see blitz when having run tapes to jibe with po’s Dealer parts put into stock is a no no ( sometimes) Put notes on the statements to indicate that you solved a

problem like a defectgoing back to a rebuilder

Please try to indicate which vendors are doing a good job or poor job on their billing

Receive all Monthly Invoices and Monthly statements and manually figure out which invoices need to be paid that month. We have approx. 50 diff terms.

Manually key all invoices into the computer system Physically match every invoice and every detail line to a

receiving Document Manually double check Invoice dollar

and total amount are the same. Do this for 5 invoices or a thousand

invoices Process Payment

The manual system often led to situationswhere we would deploy Sparby

We were left with a choice. We either had to hire more and more people to deal with the mountains of paper or use technology to ease the pain.

We chose corcentric as a 3rd party middleware to electronically process our orders going to our suppliers and the invoices coming back to us from our suppliers.

Some Vendors are fully integrated and all Invoices go through EDI … Red indicates they were posted with no reject code (“00”). There are many

rejection codes. In this case code “32” indicates an invoice outside the pay period. Other codes indicate outside the tolerance, pieces not matching, etc.Below is a sample of a fully integrated Vendor after the invoices are matched.

The screenshot below shows a match at the invoice level.289 pieces billed, 286 pieces received, $6,247.89 billed, $6,387.35

received. Pieces and dollars are within tolerance. Pricing still needs to be reviewed, but bill will be processed automatically.

The screenshot below shows a match at the part detail level.97 pieces billed, 96 pieces received, $284.00 billed, $ 284.00 received.

Pieces and dollars are within tolerance. Pieces are off by 1, dollars match perfectly and this invoice will be processed automatically.

General Ledger allocation to proper accounts for Stock Orders.

General Ledger allocation to proper accounts for DropShip or Internet Orders. The basic difference is freight charges.

EDI Invoices posted in the General Ledger have a source code of ED. We are posting approximately 1/2 of all of our A/P invoices through EDI

automatically.

Custom in house report developed to run after stock orders are posted in GL.

Report compares our cost per PO from the vendor to the cost in our ERP system.If prices differ our pricing team is notified to evaluate and correct.

Custom in house report we developed to compare our cost from Vendor to sale price on customer we drop shipped to in order to ensure

we made the correct margin or worse did not sell at a loss.

Establishing connectivity between Suppliers and Corcentric. PA has to act as liaison between Suppliers, Corcentric, and our ERP developers.

Coordinating our buyers to order through corcentric. Working with our ERP Developers to fine tune the functionality with

respect to allocation to ledger accounts, closing of PO’s, and variance tolerances.

Branch setup and Supplier setup for every branch seems easy but 80 suppliers setup for 85 branches results in a table of 6800 records and certain lines require multiple records for different parts of the lines further increasing the number of records that needs to be maintained

Parts data needs to be “scrubbed” before sending orders. Special characters need to be removed. Not like the old days when you fax or call in an order and the person who receives it at the supplier keys it in.

METRO ACQUISITION

Pros Cons3 fully conveyered, state of the art warehouses and 10 2-step locations on the west Coast

Business was down 70% and would be a challenge to get back.

Will Give us CA presence and enhance our fulfillment presence.

30% of the business we did not want back.

Strong relationship with jobbers and installers forged over 60 years

Key Employees and nervous employees had already started to leave.

Bankruptcy enables us to get in at an appealing price point

Doing business in California is always a challenge

PA had vast experience in all 3 channels that Metro services: 2-step, 3-step, internet fulfillment

Affforded PA an opportunity to expand in another major city (CA has over 25 mil cars)

March 15th took over Metro.

April 1st complete changeover to all PA computer systems

13 mil inventory put back in system from March 15th to current

Extremely pleased with transition of former Metro personnel. They are auto parts experts and we are very excited about the future.

All 3 channels (2-step, 3-step, internet fulfillment growing steadily and are on target with management expectations.

PARTS AUTHORITY AND THE FUTURE

Brick and Mortar Locations need to carry more selections and more inventory as customers are exposed to more brands.

Efficient handling of product

Efficient warehousing and transportation logistics a must

Continued investment in technology as consumers are going to want options from their local vendors that they get from their online vendors Discounts for no returns

Volume discounts

Shipping options

1=Excellent 2=Good3=Average 4=Fair 5=Poor

2016 Average

2016 Best

2016 Worst

2015Vendor

2016 Vendor

Ease of doing business 2.49 1.50 3.25 1.75 1.63Performance 2.70 1.43 3.71 1.86 2.00Technology ease 2.72 1.25 4.50 2.25 2.00PA growth 2.82 1.00 4.00 1.75 1.50Internet growth 3.13 1.80 4.20 1.80 2.00Internet fulfillment partnership 2.81 1.75 4.75 2.00 2.00Overall Score 2.78 1.45 4.07 1.90 1.85

PARTS AUTHORITY INTRANET HOME GROWN TOOLS

THE REBATE KING

PARTS AUTHORITY INTRANET HOME GROWN TOOLS

THE RETURN RATE REPORT

PARTS AUTHORITY INTRANET

OE INTERCHANGE

WHAT THE SUPPLIERS CAN DO FOR PA

Statements that are easy to read and understand are easy to pay.

Used to have 1 store, 1 statement now that we have 90 stores we still want 1 statement.

Bill the product the way it is shipped. Instead of multiple packing slips to 1 bill we prefer 1 packing slip to 1 bill.

Piece counts on every invoice would save a lot of time

Programs and deals unintentionally seem to obfuscate rather than streamline the bill paying process, while also undermining the ability for distributors to accurately charge the correct price for your products.

Some Vendors do a poor job of communicating Price changes. This can hold up Invoices and entire Statements

The A/P department should be treated like a customer, not like a deadbeat.

Compare Vendor A vs Vendor B for same product – Water pumpsSimilar quality, similar manpower

Price Sheet ChangeCost Flow down 4.76%Sales Forecast Flow up 5.44%

Vendor A vs Vendor A2 different prices to 2 different customers. 1 gets 2% overall on every single Part #.

Nightmare Scenario of epic proportions.

Vendor A sells to Customer A and Customer B at an overall 2% but every part # is priced differently

Next Slide

2 Different Prices on Every Part for 2 different Customers Cont’d