Genuine Parts Company Reports Third Quarter 2024 Results and Revises Full-Year Outlook
-
Sales of
$6.0 billion -
Diluted EPS of
$1.62 -
Adjusted Diluted EPS of
$1.88 -
Revises 2024 Outlook:
- Revenue Growth of 1% to 2% from 1% to 3%
-
Adjusted Diluted EPS of
$8.00 to$8.20 from$9.30 to$9.50
"I would like to thank our global GPC teammates for their hard work in serving our customers during the third quarter," said
Third Quarter 2024 Results
Sales were
Net income was
Adjusted net income was $263 million which excludes a net expense of $36 million after tax adjustments, or
Third Quarter 2024 Segment Highlights
Global Industrial sales were $2.2 billion, down 1.2% from the same period in 2023, with a 1.3% benefit from acquisitions, offset by a 2.4% decrease in comparable sales and 0.1% unfavorable impact of foreign currency. The additional selling day in the
Nine Months 2024 Results
Sales for the nine months ended
Balance Sheet, Cash Flow and Capital Allocation
The company generated cash flow from operations of
The company ended the quarter with $2.6 billion of total liquidity. Total liquidity consists of
2024 Outlook
The company is revising full-year 2024 guidance previously provided in its earnings release on
|
|
For the Year Ending |
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|
|
Previous Outlook |
|
Updated Outlook |
Total sales growth |
|
1% to 3% |
|
1% to 2% |
Automotive sales growth |
|
1% to 3% |
|
3% to 4% |
Industrial sales growth |
|
0% to 2% |
|
-2% to -1% |
Diluted earnings per share |
|
|
|
|
Adjusted diluted earnings per share |
|
|
|
|
Effective tax rate |
|
Approximately 24% |
|
Approximately 24% |
Net cash provided by operating activities |
|
|
|
|
Free cash flow |
|
|
|
|
Non-GAAP Information
This release contains certain financial information not derived in accordance with
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. Our calculation of comparable sales is computed using total business days for the period. The company considers this metric useful to investors because it provides greater transparency into management's view and assessment of the company's 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
About
Established in 1928,
Forward-Looking Statements
Some statements in this release, as well as in other materials we file with the
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
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
GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
||||||||
|
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||
(in thousands, except per share data) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net sales |
|
$ 5,970,198 |
|
$ 5,824,602 |
|
$ 17,716,396 |
|
$ 17,504,726 |
Cost of goods sold |
|
3,771,757 |
|
3,715,361 |
|
11,262,997 |
|
11,247,341 |
Gross profit |
|
2,198,441 |
|
2,109,241 |
|
6,453,399 |
|
6,257,385 |
Operating expenses: |
|
|
|
|
|
|
|
|
Selling, administrative and other expenses |
|
1,722,400 |
|
1,551,799 |
|
4,944,783 |
|
4,644,696 |
Depreciation and amortization |
|
106,036 |
|
83,860 |
|
295,848 |
|
261,948 |
Provision for doubtful accounts |
|
7,119 |
|
8,417 |
|
19,008 |
|
22,378 |
Restructuring and other costs |
|
41,023 |
|
— |
|
153,825 |
|
— |
Total operating expenses |
|
1,876,578 |
|
1,644,076 |
|
5,413,464 |
|
4,929,022 |
Non-operating (income) expense: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
27,818 |
|
15,827 |
|
67,429 |
|
49,146 |
Other |
|
(3,548) |
|
(15,722) |
|
(36,469) |
|
(44,338) |
Total non-operating (income) expense |
|
24,270 |
|
105 |
|
30,960 |
|
4,808 |
Income before income taxes |
|
297,593 |
|
465,060 |
|
1,008,975 |
|
1,323,555 |
Income taxes |
|
71,011 |
|
113,862 |
|
237,955 |
|
323,906 |
Net income |
|
$ 226,582 |
|
$ 351,198 |
|
$ 771,020 |
|
$ 999,649 |
Dividends declared per common share |
|
$ 1.000 |
|
$ 0.950 |
|
$ 3.000 |
|
$ 2.850 |
Basic earnings per share |
|
$ 1.63 |
|
$ 2.50 |
|
$ 5.53 |
|
$ 7.11 |
Diluted earnings per share |
|
$ 1.62 |
|
$ 2.49 |
|
$ 5.51 |
|
$ 7.08 |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
139,193 |
|
140,335 |
|
139,326 |
|
140,569 |
Dilutive effect of stock options and non-vested restricted stock awards |
|
406 |
|
599 |
|
500 |
|
716 |
Weighted average common shares outstanding – assuming dilution |
|
139,599 |
|
140,934 |
|
139,826 |
|
141,285 |
GENUINE PARTS COMPANY AND SUBSIDIARIES SEGMENT INFORMATION (UNAUDITED) |
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||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net sales: |
|
|
|
|
|
|
|
|
Automotive |
|
$ 3,799,789 |
|
$ 3,626,943 |
|
$ 11,100,800 |
|
$ 10,787,769 |
Industrial |
|
2,170,409 |
|
2,197,659 |
|
6,615,596 |
|
6,716,957 |
Total net sales |
|
$ 5,970,198 |
|
$ 5,824,602 |
|
$ 17,716,396 |
|
$ 17,504,726 |
Segment profit: |
|
|
|
|
|
|
|
|
Automotive |
|
$ 262,195 |
|
$ 322,004 |
|
$ 849,106 |
|
$ 915,771 |
Industrial |
|
258,753 |
|
282,807 |
|
806,433 |
|
828,166 |
Interest expense, net |
|
(27,818) |
|
(15,827) |
|
(67,429) |
|
(49,146) |
Intangible asset amortization |
|
(36,292) |
|
(33,667) |
|
(105,077) |
|
(113,414) |
Corporate expense |
|
(113,949) |
|
(90,257) |
|
(283,695) |
|
(257,822) |
Other unallocated costs (1) |
|
(45,296) |
|
— |
|
(190,363) |
|
— |
Income before income taxes |
|
$ 297,593 |
|
$ 465,060 |
|
$ 1,008,975 |
|
$ 1,323,555 |
|
||||||||
(1) The following table presents a summary of the other unallocated costs: |
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|
|
Three Months Ended |
|
Nine Months Ended |
||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Other unallocated costs: |
|
|
|
|
|
|
|
|
Restructuring and other costs (2) |
|
$ (41,023) |
|
$ — |
|
$ (161,312) |
|
$ — |
Acquisition and integration related costs and other (3) |
|
(4,273) |
|
— |
|
(29,051) |
|
— |
Total other unallocated costs |
|
$ (45,296) |
|
$ — |
|
$ (190,363) |
|
$ — |
|
|
(2) |
Amount reflects the global restructuring initiative which includes a voluntary retirement offer in the |
(3) |
Amount primarily reflects integration costs related to the completion of the acquisitions of |
GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
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|
||||
(in thousands, except share and per share data) |
|
|
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ 1,078,118 |
|
$ 1,102,007 |
Trade accounts receivable, less allowance for doubtful accounts (2024 – |
|
2,380,518 |
|
2,223,431 |
Merchandise inventories, net |
|
5,527,034 |
|
4,676,686 |
Prepaid expenses and other current assets |
|
1,723,832 |
|
1,603,728 |
Total current assets |
|
10,709,502 |
|
9,605,852 |
|
|
3,034,339 |
|
2,734,681 |
Other intangible assets, less accumulated amortization |
|
1,915,832 |
|
1,792,913 |
Property, plant and equipment, less accumulated depreciation (2024 – |
|
1,909,522 |
|
1,616,785 |
Operating lease assets |
|
1,665,818 |
|
1,268,742 |
Other assets |
|
1,024,165 |
|
949,481 |
Total assets |
|
$ 20,259,178 |
|
$ 17,968,454 |
|
|
|
|
|
Liabilities and equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Trade accounts payable |
|
$ 6,100,534 |
|
$ 5,499,536 |
Current portion of debt |
|
810,982 |
|
355,298 |
Dividends payable |
|
139,111 |
|
132,635 |
Other current liabilities |
|
2,072,781 |
|
1,839,640 |
Total current liabilities |
|
9,123,408 |
|
7,827,109 |
Long-term debt |
|
3,806,950 |
|
3,550,930 |
Operating lease liabilities |
|
1,372,283 |
|
979,938 |
Pension and other post–retirement benefit liabilities |
|
224,019 |
|
219,644 |
Deferred tax liabilities |
|
483,262 |
|
437,674 |
Other long-term liabilities |
|
539,102 |
|
536,174 |
Equity: |
|
|
|
|
Preferred stock, par value – |
|
— |
|
— |
Common stock, par value – |
|
139,078 |
|
139,567 |
Additional paid-in capital |
|
193,491 |
|
173,025 |
Accumulated other comprehensive loss |
|
(942,852) |
|
(976,872) |
Retained earnings |
|
5,306,755 |
|
5,065,327 |
Total parent equity |
|
4,696,472 |
|
4,401,047 |
Noncontrolling interests in subsidiaries |
|
13,682 |
|
15,938 |
Total equity |
|
4,710,154 |
|
4,416,985 |
Total liabilities and equity |
|
$ 20,259,178 |
|
$ 17,968,454 |
GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
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|
||||
|
|
Nine Months Ended |
||
(in thousands) |
|
2024 |
|
2023 |
Operating activities: |
|
|
|
|
Net income |
|
$ 771,020 |
|
$ 999,649 |
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
295,848 |
|
261,948 |
Share-based compensation |
|
37,280 |
|
47,340 |
Excess tax benefits from share-based compensation |
|
(8,301) |
|
(6,770) |
Other operating activities, including changes in operating assets and liabilities |
|
378 |
|
— |
Net cash provided by operating activities |
|
1,096,225 |
|
1,082,446 |
Investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
(385,590) |
|
(349,858) |
Proceeds from sale of property, plant and equipment |
|
74,215 |
|
7,339 |
Acquisitions of businesses |
|
(954,207) |
|
(218,177) |
Proceeds from divestitures of businesses |
|
3,401 |
|
— |
Proceeds from sale of investments |
|
— |
|
80,482 |
Other investing activities |
|
16,989 |
|
6,785 |
Net cash used in investing activities |
|
(1,245,192) |
|
(473,429) |
Financing activities: |
|
|
|
|
Proceeds from debt |
|
797,602 |
|
2,543,882 |
Payments on debt |
|
(124,337) |
|
(2,544,619) |
Shares issued from employee incentive plans |
|
(16,524) |
|
(23,689) |
Dividends paid |
|
(411,396) |
|
(393,420) |
Purchases of stock |
|
(112,499) |
|
(172,347) |
Other financing activities |
|
(8,018) |
|
(8,826) |
Net cash used in financing activities |
|
124,828 |
|
(599,019) |
Effect of exchange rate changes on cash and cash equivalents |
|
250 |
|
(8,824) |
Net decrease in cash and cash equivalents |
|
(23,889) |
|
1,174 |
Cash and cash equivalents at beginning of period |
|
1,102,007 |
|
653,463 |
Cash and cash equivalents at end of period |
|
$ 1,078,118 |
|
$ 654,637 |
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) |
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|
|
|||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
GAAP net income |
|
$ 226,582 |
|
$ 351,198 |
|
$ 771,020 |
|
$ 999,649 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Restructuring and other costs (1) |
|
41,023 |
|
— |
|
161,312 |
|
— |
Acquisition and integration related costs and other (2) |
|
4,273 |
|
— |
|
29,051 |
|
— |
Total adjustments |
|
45,296 |
|
— |
|
190,363 |
|
— |
Tax impact of adjustments (3) |
|
(8,865) |
|
— |
|
(45,911) |
|
— |
Adjusted net income |
|
$ 263,013 |
|
$ 351,198 |
|
$ 915,472 |
|
$ 999,649 |
|
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The table below represents amounts per common share assuming dilution: |
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|
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|
|
Three Months Ended |
|
Nine Months Ended |
||||
(in thousands, except per share data) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
GAAP diluted earnings per share |
|
$ 1.62 |
|
$ 2.49 |
|
$ 5.51 |
|
$ 7.08 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Restructuring and other costs (1) |
|
0.29 |
|
— |
|
1.15 |
|
— |
Acquisition and integration related costs and other (2) |
|
0.03 |
|
— |
|
0.22 |
|
— |
Total adjustments |
|
0.32 |
|
— |
|
1.37 |
|
— |
Tax impact of adjustments (3) |
|
(0.06) |
|
— |
|
(0.33) |
|
— |
Adjusted diluted earnings per share |
|
$ 1.88 |
|
$ 2.49 |
|
$ 6.55 |
|
$ 7.08 |
Weighted average common shares outstanding – assuming dilution |
|
139,599 |
|
140,934 |
|
139,826 |
|
141,285 |
|
|
(1) |
Amount reflects the global restructuring initiative which includes a voluntary retirement offer in the |
(2) |
Amount primarily reflects ongoing acquisition and integration costs related to the acquisitions of MPEC in |
(3) |
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 |
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. |
|
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|
Three Months Ended |
|
Nine Months Ended |
||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Line item: |
|
|
|
|
|
|
|
|
Cost of goods sold |
|
$ — |
|
$ — |
|
$ 7,487 |
|
$ — |
Selling, administrative and other expenses |
|
4,273 |
|
— |
|
29,051 |
|
— |
Restructuring and other costs |
|
41,023 |
|
— |
|
153,825 |
|
— |
Total adjustments |
|
$ 45,296 |
|
$ — |
|
$ 190,363 |
|
$ — |
GENUINE PARTS COMPANY AND SUBSIDIARIES CHANGE IN NET SALES SUMMARY (UNAUDITED) |
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|
|
Three Months Ended |
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|
|
Comparable |
|
Acquisitions |
|
Foreign |
|
Other |
|
GAAP Total |
Automotive |
|
0.2 % |
|
4.4 % |
|
0.5 % |
|
(0.3) % |
|
4.8 % |
Industrial |
|
(2.4) % |
|
1.3 % |
|
(0.1) % |
|
— % |
|
(1.2) % |
Total |
|
(0.8) % |
|
3.2 % |
|
0.3 % |
|
(0.2) % |
|
2.5 % |
|
|
|
||||||||
|
|
Nine Months Ended |
||||||||
|
|
Comparable |
|
Acquisitions |
|
Foreign |
|
Other |
|
GAAP Total |
Automotive |
|
(0.1) % |
|
3.4 % |
|
0.1 % |
|
(0.5) % |
|
2.9 % |
Industrial |
|
(2.2) % |
|
0.8 % |
|
(0.1) % |
|
— % |
|
(1.5) % |
Total |
|
(0.9) % |
|
2.4 % |
|
— % |
|
(0.3) % |
|
1.2 % |
GENUINE PARTS COMPANY AND SUBSIDIARIES
RECONCILIATION OF GAAP NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED) |
||||
|
||||
|
|
Nine Months Ended |
||
(in thousands) |
|
2024 |
|
2023 |
Net cash provided by operating activities |
|
$ 1,096,225 |
|
$ 1,082,446 |
Purchases of property, plant and equipment |
|
(385,590) |
|
(349,858) |
Free Cash Flow |
|
$ 710,635 |
|
$ 732,588 |
|
||||
|
|
For the Year Ending |
||
|
|
Previous Outlook |
|
Updated Outlook |
Net cash provided by operating activities |
|
|
|
|
Purchases of property, plant and equipment |
|
|
|
|
Free Cash Flow |
|
|
|
|
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