- Sales of $5.8 billion, Up
2.6%
- Diluted EPS of $2.49, Up
13.2%, or Up 11.7% from Adjusted Diluted EPS in 2022
- Updates 2023 Outlook:
- Reaffirms Revenue Growth of 4% to 6%
- Updates Diluted EPS to $9.20
to $9.30 from $9.15 to $9.30
- Reaffirms Cash from Operations of $1.3 Billion to $1.4
Billion
ATLANTA, Oct. 19,
2023 /PRNewswire/ -- Genuine Parts Company
(NYSE: GPC), a leading global distributor of automotive and
industrial replacement parts, announced today its results for the
third quarter ended September 30,
2023.
"Our third quarter performance was highlighted by double digit
earnings growth, driven by benefits from the mix and geographic
diversity of our businesses as well continued progress on our
strategic initiatives," said Paul
Donahue, Chairman and Chief Executive Officer. "Through our
One GPC approach, we are simplifying our business while driving
productivity and efficiency across our operations. We would like to
thank our teams around the world for their continued dedication to
serving our customers and delivering solid quarterly results."
Third Quarter 2023 Results
Sales were $5.8 billion, a 2.6%
increase compared to $5.7 billion in
the same period of the prior year. The growth in sales is
attributable to a 0.5% increase in comparable sales, a 1.7% benefit
from acquisitions and a 0.4% net favorable impact of foreign
currency and other. The third quarter of 2023 had one less selling
day in the U.S. compared to the third quarter of 2022, which
negatively impacted third quarter sales growth by approximately
1.2%.
Net income was $351 million, an
increase of 12.4% compared to net income of $312 million in the prior year. Diluted EPS was
$2.49, an increase of 13.2% compared
to $2.20 in the prior year
period.
Net income of $351 million
compares to adjusted net income of $317
million for the same three-month period of the prior year,
an increase of 10.7%. On a per share diluted basis, net income was
$2.49, an increase of 11.7% compared
to adjusted diluted earnings per share of $2.23 last year. Refer to the reconciliation of
GAAP net income to adjusted net income and GAAP diluted earnings
per share and adjusted diluted earnings per share for more
information.
Third Quarter 2023 Segment Highlights
Automotive Parts Group ("Automotive")
Global Automotive sales were $3.6
billion, up 3.9% from the same period in 2022, with a 0.6%
increase in comparable sales, 2.4% benefit from acquisitions and a
net 0.9% favorable impact of foreign currency and other. Segment
profit of $322 million increased
4.1%, with segment profit margin of 8.9%, flat compared to last
year. The third quarter of 2023 had one less selling day in the
U.S. compared to the third quarter of 2022, which negatively
impacted third quarter Global Automotive sales growth by
approximately 1.0%.
Industrial Parts Group ("Industrial")
Industrial sales were $2.2
billion, up 0.6% from the same period in 2022, reflecting a
0.3% increase in comparable sales and a 0.6% benefit from
acquisitions, slightly offset by a 0.3% unfavorable impact of
foreign currency. Segment profit of $283
million increased 16.6%, with segment profit margin of 12.9%
up 180 basis points from the same period of the prior year. The
third quarter of 2023 had one less selling day in the U.S. compared
to the third quarter of 2022, which negatively impacted third
quarter Industrial sales growth by approximately 1.6%.
"While our Industrial and international Automotive businesses
performed well during the third quarter, the results for our U.S.
Automotive business were below our expectations and negatively
impacted by one less selling day," said Will Stengel, President and Chief Operating
Officer. "Our third quarter results reflect continued improvement
in segment margins, driven by strong team operating discipline
despite the slower growth environment."
Nine Months 2023 Results
Sales for the nine months ended September
30, 2023 were $17.5 billion,
up 5.6% from the same period in 2022. Net income for the nine
months was $1.0 billion, or
$7.08 per diluted share, an increase
of 8.4% compared to $6.53 per diluted
share in 2022. Net income of $1.0
billion, or $7.08 per diluted
share, compares to adjusted net income of $896 million, or adjusted diluted earnings per
share of $6.29, in 2022, an increase
of 12.6%.
Balance Sheet, Cash Flow and Capital Allocation
The company generated cash flow from operations of $1.1 billion for the first nine months of 2023.
We used $473 million in cash for
investing activities, including $350 million for capital
expenditures and $211 million for acquisitions, net of
$80 million in proceeds from the sale of our remaining
investment in S.P. Richards and other investments. We also used
$599 million in cash for financing activities, including
$393 million for quarterly dividends paid to shareholders and
$172 million for stock repurchases.
Free cash flow was $733 million for
the first nine months of 2023. Refer to the reconciliation of GAAP
net cash provided by operating activities to free cash flow for
more information.
The company ended the quarter with $2.2 billion in total liquidity, consisting
of $1.5 billion availability on the
revolving credit facility and $655
million in cash and cash equivalents.
2023 Outlook
The company is updating full-year 2023 guidance previously
provided in its earnings release on July 20,
2023. The company considered its recent business trends and
financial results, current growth plans, strategic initiatives,
global economic outlook, geopolitical conflicts and the potential
impact on results in updating its guidance, which is outlined in
the table below.
|
|
For the Year Ending
December 31, 2023
|
|
|
Previous
Outlook
|
|
Updated
Outlook
|
Total sales
growth
|
|
4% to 6%
|
|
4% to 6%
|
Automotive sales
growth
|
|
4% to 6%
|
|
4% to 6%
|
Industrial sales
growth
|
|
4% to 6%
|
|
4% to 6%
|
Diluted earnings per
share
|
|
$9.15 to
$9.30
|
|
$9.20 to
$9.30
|
Adjusted diluted
earnings per share
|
|
$9.15 to
$9.30
|
|
$9.20 to
$9.30
|
Effective tax
rate
|
|
Approximately
25%
|
|
24.5% to
25.0%
|
Net cash provided by
operating activities
|
|
$1.3 billion to $1.4
billion
|
|
$1.3 billion to $1.4
billion
|
Free cash
flow
|
|
$900 million to $1.0
billion
|
|
$900 million to $1.0
billion
|
Non-GAAP Information
This release contains certain financial information not derived
in accordance with United States
("U.S.") generally accepted accounting principles ("GAAP"). These
items include adjusted net income, adjusted diluted earnings per
share and free cash flow. We believe that the presentation of
adjusted net income, adjusted diluted earnings per share and free
cash flow, when considered together with the corresponding
GAAP financial measures and the reconciliations to those measures,
provide meaningful supplemental information to both management and
investors that is indicative of our core operations. We
considered these metrics useful to investors because they provide
greater transparency into management's view and assessment of our
ongoing operating performance by removing items management believes
are not representative of our operations and may distort our
longer-term operating trends. We believe these measures are useful
and enhance the comparability of our results from period to period
and with our competitors, as well as show ongoing results from
operations distinct from items that are infrequent or not
associated with our core operations. We do not, nor do we
suggest investors should, consider such non-GAAP financial measures
as superior to, in isolation from, or as a substitute for, GAAP
financial information. We have included a reconciliation of this
additional information to the most comparable GAAP measure
following the financial statements below. We do not provide
forward-looking guidance for certain financial measures on a GAAP
basis because we are unable to predict certain items contained in
the GAAP measures without unreasonable efforts. These items may
include acquisition-related costs, litigation charges or
settlements, impairment charges, and certain other unusual
adjustments.
Comparable Sales
Comparable sales is a key metric that refers to
period-over-period comparisons of our sales excluding the impact of
acquisitions, foreign currency and other. We consider this metric
useful to investors because it provides greater transparency into
management's view and assessment of the our core ongoing
operations. This is a metric that is widely used by analysts,
investors and competitors in our industry, although our calculation
of the metric may not be comparable to similar measures disclosed
by other companies, because not all companies and analysts
calculate this metric in the same manner.
Conference Call
We will hold a conference call today at 11:00 a.m. Eastern time to discuss the results of
the quarter. A supplemental earnings deck will also be available
for reference. Interested parties may listen to the call and view
the supplemental earnings deck on our website at
http://genuineparts.investorroom.com. The call is also
available by dialing 888-317-6003, conference ID 9754822. A replay
will be available on our website or at 877-344-7529, conference ID
7086770, two hours after the completion of the call.
About Genuine Parts Company
Founded in 1928, Genuine Parts Company is a global service
organization engaged in the distribution of automotive and
industrial replacement parts. The company's Automotive Parts Group
distributes automotive replacement parts in the U.S., Canada, Mexico, Australasia, France, the United
Kingdom, Ireland,
Germany, Poland, the
Netherlands, Belgium,
Spain and Portugal. The company's Industrial Parts Group
distributes industrial replacement parts in the U.S., Canada, Mexico and Australasia. In total, the company
serves its global customers from an extensive network of more than
10,000 locations in 17 countries and has approximately 58,000
employees. Further information is available at
www.genpt.com.
Forward-Looking Statements
Some statements in this release, as well as in other materials
we file with the Securities and Exchange Commission (SEC), release
to the public, or make available on our website, constitute
forward-looking statements that are subject to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
All statements in the future tense and all statements accompanied
by words such as "expect," "likely," "outlook," "forecast,"
"preliminary," "would," "could," "should," "position," "will,"
"project," "intend," "plan," "on track," "anticipate," "to come,"
"may," "possible," "assume," or similar expressions are intended to
identify such forward-looking statements. These forward-looking
statements include our view of business and economic trends for the
remainder of the year, our expectations regarding our ability to
capitalize on these business and economic trends and to execute our
strategic priorities, and the updated full-year 2023 financial
guidance provided above. Senior officers may also make verbal
statements to analysts, investors, the media and others that are
forward-looking.
We caution you that all forward-looking statements involve risks
and uncertainties, and while we believe that our expectations for
the future are reasonable in view of currently available
information, you are cautioned not to place undue reliance on our
forward-looking statements. Actual results or events may differ
materially from those indicated as a result of various important
factors. Such factors may include, among other things, changes in
general economic conditions, including unemployment, inflation
(including the impact of tariffs) or deflation, financial
institution disruptions and geopolitical conflicts such as the
conflict between Russia and
Ukraine and the conflict in the
Gaza strip; volatility in oil
prices; significant cost increases, such as rising fuel and freight
expenses; public health emergencies, including the effects on the
financial health of our business partners and customers, on supply
chains and our suppliers, on vehicle miles driven as well as other
metrics that affect our business, and on access to capital and
liquidity provided by the financial and capital markets; our
ability to maintain compliance with our debt covenants; our ability
to successfully integrate acquired businesses into our operations
and to realize the anticipated synergies and benefits; our ability
to successfully implement our business initiatives in our two
business segments; slowing demand for our products; the ability to
maintain favorable supplier arrangements and relationships; changes
in national and international legislation or government regulations
or policies, including changes to import tariffs, environmental and
social policy, infrastructure programs and privacy legislation, and
their impact to us, our suppliers and customers; changes in tax
policies; volatile exchange rates; our ability to successfully
attract and retain employees in the current labor market; uncertain
credit markets and other macroeconomic conditions; competitive
product, service and pricing pressures; failure or weakness in our
disclosure controls and procedures and internal controls over
financial reporting, including as a result of the work from home
environment; the uncertainties and costs of litigation; disruptions
caused by a failure or breach of our information systems, as well
as other risks and uncertainties discussed in our Annual Report on
Form 10-K for 2022 and from time to time in our subsequent filings
with the SEC.
Forward-looking statements speak only as of the date they are
made, and we undertake no duty to update any forward-looking
statements except as required by law. You are advised, however, to
review any further disclosures we make on related subjects in our
subsequent Forms 10-K, 10-Q, 8-K and other reports filed with the
SEC.
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(UNAUDITED)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in thousands, except per share data)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
|
$ 5,824,602
|
|
$ 5,675,274
|
|
$
17,504,726
|
|
$
16,572,323
|
Cost of goods
sold
|
|
3,715,361
|
|
3,695,607
|
|
11,247,341
|
|
10,805,910
|
Gross profit
|
|
2,109,241
|
|
1,979,667
|
|
6,257,385
|
|
5,766,413
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
administrative and other expenses
|
|
1,551,799
|
|
1,458,418
|
|
4,644,696
|
|
4,226,412
|
Depreciation and
amortization
|
|
83,860
|
|
86,563
|
|
261,948
|
|
259,822
|
Provision for doubtful
accounts
|
|
8,417
|
|
6,146
|
|
22,378
|
|
13,539
|
Total operating
expenses
|
|
1,644,076
|
|
1,551,127
|
|
4,929,022
|
|
4,499,773
|
Non-operating expense
(income):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
15,827
|
|
18,220
|
|
49,146
|
|
58,318
|
Other
|
|
(15,722)
|
|
(7,616)
|
|
(44,338)
|
|
(26,897)
|
Total non-operating
expense (income)
|
|
105
|
|
10,604
|
|
4,808
|
|
31,421
|
Income before income
taxes
|
|
465,060
|
|
417,936
|
|
1,323,555
|
|
1,235,219
|
Income taxes
|
|
113,862
|
|
105,578
|
|
323,906
|
|
304,494
|
Net income
|
|
$
351,198
|
|
$
312,358
|
|
$
999,649
|
|
$
930,725
|
Dividends declared per
common share
|
|
$
0.9500
|
|
$
0.8950
|
|
$
2.8500
|
|
$
2.6850
|
Basic earnings per
share
|
|
$
2.50
|
|
$
2.21
|
|
$
7.11
|
|
$
6.57
|
Diluted earnings per
share
|
|
$
2.49
|
|
$
2.20
|
|
$
7.08
|
|
$
6.53
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding
|
|
140,335
|
|
141,336
|
|
140,569
|
|
141,609
|
Dilutive effect of
stock options and non-vested restricted stock awards
|
|
599
|
|
773
|
|
716
|
|
819
|
Weighted average common
shares outstanding – assuming dilution
|
|
140,934
|
|
142,109
|
|
141,285
|
|
142,428
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
SEGMENT
INFORMATION
(UNAUDITED)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$ 3,626,943
|
|
$ 3,490,462
|
|
$
10,787,769
|
|
$
10,233,577
|
Industrial
|
|
2,197,659
|
|
2,184,812
|
|
6,716,957
|
|
6,338,746
|
Total net
sales
|
|
$ 5,824,602
|
|
$ 5,675,274
|
|
$
17,504,726
|
|
$
16,572,323
|
Segment
profit:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$
322,004
|
|
$
309,349
|
|
$
915,771
|
|
$
896,475
|
Industrial
|
|
282,807
|
|
242,505
|
|
828,166
|
|
656,330
|
Total segment
profit
|
|
604,811
|
|
551,854
|
|
1,743,937
|
|
1,552,805
|
Interest expense,
net
|
|
(15,827)
|
|
(18,220)
|
|
(49,146)
|
|
(58,318)
|
Intangible asset
amortization
|
|
(33,667)
|
|
(39,416)
|
|
(113,414)
|
|
(118,740)
|
Corporate
expense
|
|
(90,257)
|
|
(72,820)
|
|
(257,822)
|
|
(187,883)
|
Other unallocated
income, net (1)
|
|
—
|
|
(3,462)
|
|
—
|
|
47,355
|
Income before income
taxes
|
|
$
465,060
|
|
$
417,936
|
|
$ 1,323,555
|
|
$ 1,235,219
|
|
(1) The following
table presents a summary of the other unallocated income,
net:
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Other unallocated
income, net:
|
|
|
|
|
|
|
|
|
Gain on sale of real
estate (2)
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
102,803
|
Gain on insurance
proceeds (3)
|
|
—
|
|
—
|
|
—
|
|
1,507
|
Transaction and other
costs (4)
|
|
—
|
|
(3,462)
|
|
—
|
|
(56,955)
|
Total other unallocated
income, net
|
|
$
—
|
|
$
(3,462)
|
|
$
—
|
|
$
47,355
|
|
|
(2)
|
Adjustment reflects a
gain on the sale of real estate that had been leased to S.P.
Richards.
|
(3)
|
Adjustment reflects
insurance recoveries in excess of losses incurred on inventory,
property, plant and equipment and other fire-related
costs.
|
(4)
|
Adjustment primarily
reflects costs associated with the January 3, 2022 acquisition of
Kaman Distribution Group.
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
BALANCE SHEETS
(UNAUDITED)
|
|
(in thousands, except
share and per share data)
|
|
September 30,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
654,637
|
|
$
653,463
|
Trade accounts
receivable, less allowance for doubtful accounts
(2023 – $61,499; 2022 – $53,872)
|
|
2,394,787
|
|
2,188,868
|
Merchandise
inventories, net
|
|
4,482,773
|
|
4,441,649
|
Prepaid expenses and
other current assets
|
|
1,497,677
|
|
1,532,759
|
Total current
assets
|
|
9,029,874
|
|
8,816,739
|
Goodwill
|
|
2,637,150
|
|
2,588,113
|
Other intangible
assets, less accumulated amortization
|
|
1,754,977
|
|
1,812,510
|
Property, plant and
equipment, less accumulated depreciation
(2023 – $1,532,480; 2022 – $1,435,677)
|
|
1,513,822
|
|
1,326,014
|
Operating lease
assets
|
|
1,197,244
|
|
1,104,678
|
Other assets
|
|
888,831
|
|
847,325
|
Total assets
|
|
$ 17,021,898
|
|
$ 16,495,379
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
5,486,379
|
|
$
5,456,550
|
Current portion of
debt
|
|
354,017
|
|
252,029
|
Dividends
payable
|
|
133,254
|
|
126,191
|
Other current
liabilities
|
|
1,826,709
|
|
1,851,340
|
Total current
liabilities
|
|
7,800,359
|
|
7,686,110
|
Long-term
debt
|
|
2,963,448
|
|
3,076,794
|
Operating lease
liabilities
|
|
919,470
|
|
836,019
|
Pension and other
post–retirement benefit liabilities
|
|
198,180
|
|
197,879
|
Deferred tax
liabilities
|
|
411,350
|
|
391,163
|
Other long-term
liabilities
|
|
527,816
|
|
502,967
|
Equity:
|
|
|
|
|
Preferred stock, par
value – $1 per share; authorized –
10,000,000 shares; none issued
|
|
—
|
|
—
|
Common stock, par value
– $1 per share; authorized –
450,000,000 shares; issued and outstanding – 2023
–
140,234,786 shares; 2022 – 140,941,649
shares
|
|
140,235
|
|
140,941
|
Additional paid-in
capital
|
|
163,602
|
|
140,324
|
Accumulated other
comprehensive loss
|
|
(1,087,262)
|
|
(1,032,542)
|
Retained
earnings
|
|
4,969,538
|
|
4,541,640
|
Total parent
equity
|
|
4,186,113
|
|
3,790,363
|
Noncontrolling
interests in subsidiaries
|
|
15,162
|
|
14,084
|
Total equity
|
|
4,201,275
|
|
3,804,447
|
Total liabilities and
equity
|
|
$ 17,021,898
|
|
$ 16,495,379
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
Operating
activities:
|
|
|
|
|
Net income
|
|
$
999,649
|
|
$
930,725
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
261,948
|
|
259,822
|
Share-based
compensation
|
|
47,340
|
|
27,773
|
Excess tax benefits
from share-based compensation
|
|
(6,770)
|
|
(3,868)
|
Gain on sale of real
estate
|
|
—
|
|
(102,803)
|
Changes in operating
assets and liabilities
|
|
(219,721)
|
|
132,942
|
Net cash provided by
operating activities
|
|
1,082,446
|
|
1,244,591
|
Investing
activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(349,858)
|
|
(243,998)
|
Proceeds from sale of
property, plant and equipment
|
|
7,339
|
|
141,228
|
Proceeds from sale of
investments
|
|
80,482
|
|
—
|
Acquisitions and other
investing activities
|
|
(211,392)
|
|
(1,554,192)
|
Net cash used in
investing activities
|
|
(473,429)
|
|
(1,656,962)
|
Financing
activities:
|
|
|
|
|
Proceeds from
debt
|
|
2,543,882
|
|
4,547,511
|
Payments on
debt
|
|
(2,544,619)
|
|
(3,586,954)
|
Shares issued from
employee incentive plans
|
|
(23,689)
|
|
(15,444)
|
Dividends
paid
|
|
(393,420)
|
|
(369,483)
|
Purchases of
stock
|
|
(172,347)
|
|
(172,727)
|
Other financing
activities
|
|
(8,826)
|
|
(16,869)
|
Net cash provided by
(used in) financing activities
|
|
(599,019)
|
|
386,034
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(8,824)
|
|
(59,166)
|
Net increase (decrease)
in cash and cash equivalents
|
|
1,174
|
|
(85,503)
|
Cash and cash
equivalents at beginning of period
|
|
653,463
|
|
714,701
|
Cash and cash
equivalents at end of period
|
|
$
654,637
|
|
$
629,198
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
RECONCILIATION OF GAAP
NET INCOME TO ADJUSTED NET INCOME AND GAAP
DILUTED NET INCOME PER COMMON SHARE TO ADJUSTED DILUTED NET INCOME
PER
COMMON SHARE
(UNAUDITED)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP net
income
|
|
$
351,198
|
|
$
312,358
|
|
$
999,649
|
|
$
930,725
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Gain on sale of real
estate (1)
|
|
—
|
|
—
|
|
—
|
|
(102,803)
|
Gain on insurance
proceeds (2)
|
|
—
|
|
—
|
|
—
|
|
(1,507)
|
Transaction and other
costs (3)
|
|
—
|
|
3,462
|
|
—
|
|
56,955
|
Total
adjustments
|
|
—
|
|
3,462
|
|
—
|
|
(47,355)
|
Tax impact of
adjustments (4)
|
|
—
|
|
1,464
|
|
—
|
|
12,651
|
Adjusted net
income
|
|
$
351,198
|
|
$
317,284
|
|
$
999,649
|
|
$
896,021
|
|
The table below
represent amounts per common share assuming dilution:
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in thousands, except
per share data)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP net
income
|
|
$
2.49
|
|
$
2.20
|
|
$
7.08
|
|
$
6.53
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Gain on sale of real
estate (1)
|
|
—
|
|
—
|
|
—
|
|
(0.72)
|
Gain on insurance
proceeds (2)
|
|
—
|
|
—
|
|
—
|
|
(0.01)
|
Transaction and other
costs (3)
|
|
—
|
|
0.02
|
|
—
|
|
0.40
|
Total
adjustments
|
|
—
|
|
0.02
|
|
—
|
|
(0.33)
|
Tax impact of
adjustments (4)
|
|
—
|
|
0.01
|
|
—
|
|
0.09
|
Adjusted net
income
|
|
$
2.49
|
|
$
2.23
|
|
$
7.08
|
|
$
6.29
|
Weighted average common
shares outstanding – assuming dilution
|
|
140,934
|
|
142,109
|
|
141,285
|
|
142,428
|
|
The table below
clarifies where the items that have been adjusted above to improve
comparability of the financial information
from period to period are presented in the condensed consolidated
statements of income.
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Line item:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
5,000
|
Selling,
administrative and other expenses
|
|
—
|
|
3,462
|
|
—
|
|
(50,848)
|
Non-operating income:
Other
|
|
—
|
|
—
|
|
—
|
|
(1,507)
|
Total
adjustments
|
|
$
—
|
|
$
3,462
|
|
$
—
|
|
$
(47,355)
|
|
|
(1)
|
Adjustment reflects a gain on the sale of real estate
that had been leased to S.P. Richards.
|
(2)
|
Adjustment reflects insurance recoveries in excess of
losses incurred on inventory, property, plant and equipment and
other fire-related costs.
|
(3)
|
Adjustment primarily reflects costs associated with
the January 3, 2022 acquisition of Kaman Distribution
Group.
|
(4)
|
We determine the tax effect of non-GAAP adjustments
by considering the tax laws and statutory income tax rates
applicable in the tax jurisdictions of the underlying non-GAAP
adjustments, including any related valuation allowances. For the
three and nine months ended September 30, 2022, we applied the
statutory income tax rates to the taxable portion of all of our
adjustments, which resulted in a tax impact of $1.5 million and
$12.7 million respectively. A portion of our transaction costs
included in our non-GAAP adjustments for the three and nine months
ended September 30, 2022 were not deductible for income tax
purposes; therefore, no statutory income tax rate was applied to
such costs.
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
RECONCILIATION OF GAAP
NET INCOME & NET INCOME MARGIN TO TOTAL SEGMENT
PROFIT & TOTAL SEGMENT MARGIN
(UNAUDITED)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
GAAP net
income
|
|
$ 351,198
|
|
$ 312,358
|
|
$ 999,649
|
|
$ 930,725
|
Income taxes
|
|
113,862
|
|
105,578
|
|
323,906
|
|
304,494
|
Income before income
taxes
|
|
465,060
|
|
417,936
|
|
1,323,555
|
|
1,235,219
|
Interest expense,
net
|
|
15,827
|
|
18,220
|
|
49,146
|
|
58,318
|
Corporate
expense
|
|
90,257
|
|
72,820
|
|
257,822
|
|
187,883
|
Intangible asset
amortization
|
|
33,667
|
|
39,416
|
|
113,414
|
|
118,740
|
Other unallocated
(loss) income, net (1)
|
|
—
|
|
3,462
|
|
—
|
|
(47,355)
|
Total segment
profit
|
|
$ 604,811
|
|
$ 551,854
|
|
$
1,743,937
|
|
$
1,552,805
|
|
|
|
|
|
|
|
|
|
GAAP net
sales
|
|
$
5,824,602
|
|
$
5,675,274
|
|
$
17,504,726
|
|
$
16,572,323
|
GAAP net income margin
(2)
|
|
6.0 %
|
|
5.5 %
|
|
5.7 %
|
|
5.6 %
|
Total segment profit
margin (3)
|
|
10.4 %
|
|
9.7 %
|
|
10.0 %
|
|
9.4 %
|
|
|
(1)
|
Amounts are the same
as adjustments included within the adjusted net income table
above.
|
(2)
|
Represents GAAP net income as a percentage of GAAP
net sales.
|
(3)
|
Represents total segment profit as a percentage of
GAAP net sales.
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CHANGE IN NET SALES
SUMMARY
(UNAUDITED)
|
|
|
|
Three Months Ended
September 30, 2023
|
|
|
Comparable
Sales
|
|
Acquisitions
|
|
Foreign
Currency
|
|
Other
|
|
GAAP Total
Net Sales
|
Automotive
|
|
0.6 %
|
|
2.4 %
|
|
1.1 %
|
|
(0.2) %
|
|
3.9 %
|
Industrial
|
|
0.3 %
|
|
0.6 %
|
|
(0.3) %
|
|
— %
|
|
0.6 %
|
Total Net
Sales
|
|
0.5 %
|
|
1.7 %
|
|
0.5 %
|
|
(0.1) %
|
|
2.6 %
|
|
|
|
Nine Months Ended
September 30, 2023
|
|
|
Comparable
Sales
|
|
Acquisitions
|
|
Foreign
Currency
|
|
Other
|
|
GAAP Total
Net Sales
|
Automotive
|
|
3.7 %
|
|
2.8 %
|
|
(1.0) %
|
|
(0.1) %
|
|
5.4 %
|
Industrial
|
|
6.0 %
|
|
0.6 %
|
|
(0.6) %
|
|
— %
|
|
6.0 %
|
Total Net
Sales
|
|
4.6 %
|
|
2.0 %
|
|
(0.9) %
|
|
(0.1) %
|
|
5.6 %
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
RECONCILIATION OF GAAP
NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE
CASH FLOW
(UNAUDITED)
|
|
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
|
$
1,082,446
|
|
$
1,244,591
|
Purchases of property,
plant and equipment
|
|
(349,858)
|
|
(243,998)
|
Free Cash
Flow
|
|
$
732,588
|
|
$
1,000,593
|
|
|
|
For the Year Ending
December 31, 2023
|
|
|
Previous
Outlook
|
|
Updated
Outlook
|
Net cash provided by
operating activities
|
|
$1.3 billion to $1.4
billion
|
|
$1.3 billion to $1.4
billion
|
Purchases of property,
plant and equipment
|
|
$375 million to $400
million
|
|
$375 million to $400
million
|
Free Cash
Flow
|
|
$900 million to $1.0
billion
|
|
$900 million to $1.0
billion
|
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SOURCE Genuine Parts Company