- Record Sales of $5.7 billion,
Up 17.8%
- Diluted EPS of $2.20, Up
38.4%
- Adjusted Diluted EPS of $2.23,
Up 18.6%
- Significant Progress on Integration of Kaman Distribution
Group
- Raising 2022 Outlook for Revenue Growth and Diluted and
Adjusted Diluted EPS
ATLANTA, Oct. 20,
2022 /PRNewswire/ -- Genuine Parts Company (NYSE:
GPC) announced today its results for the third quarter ended
September 30, 2022.
"The GPC team delivered record results, with double-digit sales
and earnings growth driven by the execution of effective strategies
and continued resilience of our Automotive and Industrial
businesses," said Paul Donahue,
Chairman and Chief Executive Officer. "We are pleased with the
continued strength of our results for 2022 and are proud of the
great work by all our 53,000 teammates who are at the core of our
success."
Third Quarter 2022 Results
Sales were $5.7 billion, a 17.8%
increase compared to $4.8 billion in
the same period of the prior year. The sales growth reflects a
12.7% increase in comparable sales and a 9.1% benefit from
acquisitions, partially offset by a 4.0% net unfavorable impact of
foreign currency and other.
Net income was $312 million, or
$2.20 per diluted earnings per share.
This compares to net income of $229
million, or $1.59 per diluted
share, in the prior year period.
Adjusted net income, which excludes a net expense of
$5 million, or $0.03 per diluted share, in non-recurring costs
related to the integration of Kaman Distribution Group (KDG), was
$317 million, an increase of 17.3%
compared to adjusted net income of $270
million for the same period of the prior year. On a per
share diluted basis, adjusted net income was $2.23, an increase of 18.6% compared to
$1.88 per diluted share last year.
Refer to the reconciliation of GAAP net income to adjusted net
income for more information.
Third Quarter 2022 Segment Highlights
Automotive Parts Group
Automotive sales were $3.5
billion, up 8.9% from the same period in 2021, consisting of
a 9.2% increase in global comparable sales and a 5.3% contribution
from acquisitions, net of a 5.6% unfavorable impact of foreign
currency and other. Segment profit of $309
million increased 10.0%, with a segment profit margin of
8.9%, up 10 basis points from the same period of the prior
year.
Industrial Parts Group
Industrial sales were $2.2
billion, up 35.3% from the same period in 2021, and
reflecting a 19.6% increase in comparable sales and a 16.6%
contribution from the acquisition of KDG, slightly offset by a 0.9%
unfavorable impact of foreign currency. Segment profit of
$243 million increased 46.3%, with
profit margin of 11.1%, up 80 basis points from the same period of
the prior year.
Will Stengel, President, stated,
"Our third quarter results were driven by sound industry
fundamentals and execution of our key strategic initiatives to
deliver accelerated sales growth and margin expansion in both
segments. We were also pleased to further strengthen our balance
sheet and generate continued strong cash flow.
"The solid growth in Automotive was broad-based, with
double-digit total sales growth in local currency in each of our
global operations. Likewise, the continued strength in Industrial
led to its sixth consecutive quarter of double-digit sales comps,"
said Mr. Stengel.
Nine Months 2022 Results
Sales for the nine months ended September
30, 2022 were $16.6 billion, a 17.8% increase from
$14.1 billion for the same
period in 2021. Net income for the nine months was
$931 million, or $6.53 per
diluted share. The Company's adjusted net income was
$896 million, or $6.29 per
diluted share, an increase of 22.9% compared to $5.12 per diluted share last year.
Balance Sheet, Cash Flow and Capital Allocation
The Company generated operating cash flow from operations of
$1.2 billion for the nine months
ended September 30, 2022, an increase
from $1.0 billion in the same period
last year driven primarily by higher net income and effective
management of our working capital. We used $1.7 billion in cash for investing activities,
primarily in connection with the acquisition of KDG, in addition to
$244 million for capital
expenditures. We also had $386
million in cash provided by financing activities, which
includes $961 million of net proceeds from debt, primarily
related to the KDG acquisition. This was partially offset by
quarterly dividends of $369 million paid to shareholders and
$173 million of share repurchases. Free cash flow was
$1.0 billion for the nine months
ended September 30, 2022, a 15%
increase from $870 million for the nine months in 2021.
The Company ended the quarter with $2.1 billion in total liquidity, consisting
of $1.5 billion availability on the
revolving credit facility and $629
million in cash and cash equivalents.
2022 Outlook
In consideration of several factors, the Company is updating
full-year 2022 guidance previously provided in its earnings release
on July 27, 2022. 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 establishing its updated guidance, which is outlined in the
table below.
|
|
For the Year Ending
December 31, 2022
|
|
|
Previous
Outlook
|
|
Updated
Outlook
|
Total sales
growth
|
|
12% to 14%
|
|
15% to
16%
|
Automotive sales
growth
|
|
6% to 8%
|
|
7% to
8%
|
Industrial sales
growth
|
|
26% to 28%
|
|
31% to
32%
|
Diluted earnings per
share
|
|
$8.08 to
$8.23
|
|
$8.29 to
$8.39
|
Adjusted diluted
earnings per share
|
|
$7.80 to
$7.95
|
|
$8.05 to
$8.15
|
Effective tax
rate
|
|
Approximately
25%
|
|
Approximately
25%
|
Net cash provided by
operating activities
|
|
$1.5 billion to $1.7
billion
|
|
$1.5 billion to $1.7
billion
|
Free cash
flow
|
|
$1.2 billion to $1.4
billion
|
|
$1.2 billion to $1.4
billion
|
"Our teams continue to operate well in a challenging
environment, and going forward, we will remain energized and
focused on our strategic initiatives in our day-to-day operations.
Our outlook for the full-year reflects the continued confidence in
our businesses to deliver market share gains and drive ongoing
momentum in our top and bottom-line results," Mr. Donahue
concluded.
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 from operations, adjusted diluted
net income from operations per common share and free cash flow. We
believe that the presentation of adjusted net income from
operations, adjusted diluted net income from operations per common
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.
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 9205347. A replay will also be
available on our website or at 877-344-7529, conference ID 7447739,
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 U.K., 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 53,000
employees. Further information is available at www.genpt.com.
Forward-Looking Statements
Some statements in this report, 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 and our expectations regarding our ability to
capitalize on these business and economic trends and to execute our
strategic priorities, and the updated full-year 2022 financial
guidance provided. 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 and geopolitical
conflicts such as the conflict between Russia and Ukraine; volatility in oil prices; significant
cost increases, such as rising fuel and freight expenses; the
extent and duration of the disruption to our business operations
caused by the global health crisis associated with the COVID-19
pandemic, 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 2021 Annual
Report on Form 10-K and Item 1A, Risk Factors, in our report on
Form 10-Q for the quarters ended March 31,
2022 and June 30, 2022 (all of
which may be amplified by the COVID-19 pandemic and geopolitical
conflicts, such as the current conflict between Russia and Ukraine) 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)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales
|
|
$
5,675,274
|
|
$
4,818,849
|
|
$ 16,572,323
|
|
$ 14,067,301
|
Cost of goods
sold
|
|
3,695,607
|
|
3,108,082
|
|
10,805,910
|
|
9,126,614
|
Gross profit
|
|
1,979,667
|
|
1,710,767
|
|
5,766,413
|
|
4,940,687
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
administrative and other
expenses
|
|
1,458,418
|
|
1,338,768
|
|
4,226,412
|
|
3,883,241
|
Depreciation and
amortization
|
|
86,563
|
|
72,121
|
|
259,822
|
|
218,377
|
Provision for doubtful
accounts
|
|
6,146
|
|
4,284
|
|
13,539
|
|
14,230
|
Total operating
expenses
|
|
1,551,127
|
|
1,415,173
|
|
4,499,773
|
|
4,115,848
|
Non-operating expense
(income):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
18,220
|
|
14,167
|
|
58,318
|
|
47,853
|
Other
|
|
(7,616)
|
|
(17,547)
|
|
(26,897)
|
|
(77,454)
|
Total non-operating
expense (income)
|
|
10,604
|
|
(3,380)
|
|
31,421
|
|
(29,601)
|
Income before income
taxes
|
|
417,936
|
|
298,974
|
|
1,235,219
|
|
854,440
|
Income taxes
|
|
105,578
|
|
70,389
|
|
304,494
|
|
211,649
|
Net income
|
|
$
312,358
|
|
$
228,585
|
|
$
930,725
|
|
$
642,791
|
Dividends declared per
common
share
|
|
$
0.8950
|
|
$
0.8150
|
|
$
2.6850
|
|
$
2.4450
|
Basic earnings per
share
|
|
$
2.21
|
|
$
1.60
|
|
$
6.57
|
|
$
4.47
|
Diluted earnings per
share
|
|
$
2.20
|
|
$
1.59
|
|
$
6.53
|
|
$
4.44
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares
outstanding
|
|
141,336
|
|
142,871
|
|
141,609
|
|
143,826
|
Dilutive effect of
stock options and
non-vested restricted stock awards
|
|
773
|
|
718
|
|
819
|
|
796
|
Weighted average common
shares
outstanding – assuming dilution
|
|
142,109
|
|
143,589
|
|
142,428
|
|
144,622
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
SEGMENT
INFORMATION
(UNAUDITED)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$
3,490,462
|
|
$
3,204,534
|
|
$ 10,233,577
|
|
$
9,353,998
|
Industrial
|
|
2,184,812
|
|
1,614,315
|
|
6,338,746
|
|
4,713,303
|
Total net
sales
|
|
$
5,675,274
|
|
$
4,818,849
|
|
$ 16,572,323
|
|
$ 14,067,301
|
Segment
profit:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$
309,349
|
|
$
281,150
|
|
$
896,475
|
|
$
807,586
|
Industrial
|
|
242,505
|
|
165,754
|
|
656,330
|
|
441,459
|
Total segment
profit
|
|
551,854
|
|
446,904
|
|
1,552,805
|
|
1,249,045
|
Interest expense,
net
|
|
(18,220)
|
|
(14,167)
|
|
(58,318)
|
|
(47,853)
|
Intangible asset
amortization
|
|
(39,416)
|
|
(25,311)
|
|
(118,740)
|
|
(78,239)
|
Corporate
expense
|
|
(72,820)
|
|
(47,389)
|
|
(187,883)
|
|
(130,029)
|
Other unallocated
(expenses) income (1)
|
|
(3,462)
|
|
(61,063)
|
|
47,355
|
|
(138,484)
|
Income before income
taxes
|
|
$
417,936
|
|
$
298,974
|
|
$
1,235,219
|
|
$
854,440
|
(1)
|
The following
table presents a summary of other unallocated (expenses)
income:
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Other unallocated
(expenses) income:
|
|
|
|
|
|
|
|
|
Gain on sale of real
estate (2)
|
|
$
—
|
|
$
—
|
|
$ 102,803
|
|
$
—
|
Gain on insurance
proceeds (3)
|
|
—
|
|
—
|
|
1,507
|
|
—
|
Product liability
damages award (4)
|
|
—
|
|
—
|
|
—
|
|
(77,421)
|
Loss on software
disposal (5)
|
|
—
|
|
(61,063)
|
|
—
|
|
(61,063)
|
Transaction and other
costs (6)
|
|
(3,462)
|
|
—
|
|
(56,955)
|
|
—
|
Total other unallocated
(expenses) income
|
|
$
(3,462)
|
|
$ (61,063)
|
|
$
47,355
|
|
$
(138,484)
|
|
|
(2)
|
Amount reflects a gain
on the sale of real estate that had been leased to S.P.
Richards.
|
|
|
(3)
|
Amount reflects
insurance recoveries in excess of losses incurred on inventory,
property, plant and equipment and other fire-related
costs.
|
|
|
(4)
|
Amount reflects damages
reinstated by the Washington Supreme Court order on July 8, 2021 in
connection with a 2017 automotive product liability
claim.
|
|
|
(5)
|
Amount reflects a loss
on an internally developed software project that was disposed of
due to a change in management strategy related to advances in
alternative technologies.
|
|
|
(6)
|
Amount primarily
reflects costs associated with the January 3, 2022 acquisition and
integration of KDG. These costs also include a $17 million
impairment charge driven by a decision to retire certain legacy
trade names, classified as other intangible assets, prior to the
end of their estimated useful lives as part of executing our KDG
integration and rebranding strategy.
|
|
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
BALANCE SHEETS
(UNAUDITED)
|
|
(in thousands, except
share and per share data)
|
|
September 30,
2022
|
|
September
30,
2021
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
629,198
|
|
$
919,097
|
Trade accounts
receivable, less allowance for doubtful accounts
(2022 – $47,262; 2021 – $44,807)
|
|
2,215,032
|
|
1,888,253
|
Merchandise
inventories, net
|
|
4,300,709
|
|
3,748,418
|
Prepaid expenses and
other current assets
|
|
1,678,259
|
|
1,226,416
|
Total current
assets
|
|
8,823,198
|
|
7,782,184
|
Goodwill
|
|
2,460,911
|
|
1,890,821
|
Other intangible
assets, less accumulated amortization
|
|
1,748,274
|
|
1,409,886
|
Property, plant and
equipment, less accumulated depreciation
(2022 – $1,369,770; 2021 –
$1,315,825)
|
|
1,241,567
|
|
1,107,374
|
Operating lease
assets
|
|
1,073,858
|
|
1,040,724
|
Other assets
|
|
1,029,272
|
|
743,949
|
Total assets
|
|
$ 16,377,080
|
|
$ 13,974,938
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
5,531,253
|
|
$
4,819,084
|
Current portion of
debt
|
|
1,629
|
|
—
|
Dividends
payable
|
|
126,434
|
|
116,356
|
Other current
liabilities
|
|
1,835,803
|
|
1,601,883
|
Total current
liabilities
|
|
7,495,119
|
|
6,537,323
|
Long-term
debt
|
|
3,231,668
|
|
2,432,539
|
Operating lease
liabilities
|
|
809,495
|
|
781,750
|
Pension and other
post–retirement benefit liabilities
|
|
262,820
|
|
254,727
|
Deferred tax
liabilities
|
|
398,797
|
|
222,467
|
Other long-term
liabilities
|
|
500,989
|
|
549,574
|
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 –
2022 –
140,962,009 shares; 2021 – 142,503,493
shares
|
|
140,962
|
|
142,503
|
Additional paid-in
capital
|
|
132,240
|
|
118,223
|
Accumulated other
comprehensive loss
|
|
(1,074,316)
|
|
(1,073,086)
|
Retained
earnings
|
|
4,465,565
|
|
3,995,537
|
Total parent
equity
|
|
3,664,451
|
|
3,183,177
|
Noncontrolling
interests in subsidiaries
|
|
13,741
|
|
13,381
|
Total equity
|
|
3,678,192
|
|
3,196,558
|
Total liabilities and
equity
|
|
$ 16,377,080
|
|
$ 13,974,938
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
|
Nine Months Ended
September 30,
|
(in
thousands)
|
|
2022
|
|
2021
|
Operating
activities:
|
|
|
|
|
Net income
|
|
$
930,725
|
|
$
642,791
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
259,822
|
|
218,377
|
Loss on software
disposal
|
|
—
|
|
61,063
|
Share-based
compensation
|
|
27,773
|
|
20,841
|
Gain on sale of real
estate
|
|
(102,803)
|
|
—
|
Intangible asset
impairment
|
|
17,461
|
|
—
|
Excess tax benefits
from share-based compensation
|
|
(3,868)
|
|
(6,667)
|
Changes in operating
assets and liabilities
|
|
115,481
|
|
71,791
|
Net cash provided by
operating activities
|
|
1,244,591
|
|
1,008,196
|
Investing
activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(243,998)
|
|
(138,206)
|
Proceeds from sale of
property, plant and equipment
|
|
141,228
|
|
24,184
|
Proceeds from
divestitures of businesses
|
|
32,620
|
|
16,687
|
Acquisitions of
businesses and other investing activities
|
|
(1,586,812)
|
|
(142,567)
|
Net cash used in
investing activities
|
|
(1,656,962)
|
|
(239,902)
|
Financing
activities:
|
|
|
|
|
Proceeds from
debt
|
|
4,547,511
|
|
242,332
|
Payments on
debt
|
|
(3,586,954)
|
|
(403,126)
|
Share-based awards
exercised
|
|
(15,444)
|
|
(19,398)
|
Dividends
paid
|
|
(369,483)
|
|
(349,293)
|
Purchases of
stock
|
|
(172,727)
|
|
(283,886)
|
Other financing
activities
|
|
(16,869)
|
|
(5,353)
|
Net cash provided by
(used in) financing activities
|
|
386,034
|
|
(818,724)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(59,166)
|
|
(20,639)
|
Net decrease in cash
and cash equivalents
|
|
(85,503)
|
|
(71,069)
|
Cash and cash
equivalents at beginning of period
|
|
714,701
|
|
990,166
|
Cash and cash
equivalents at end of period
|
|
$
629,198
|
|
$
919,097
|
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)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP net
income
|
|
$
312,358
|
|
$ 228,585
|
|
$ 930,725
|
|
$ 642,791
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Gain on sale of real
estate (1)
|
|
—
|
|
—
|
|
(102,803)
|
|
—
|
Gain on insurance
proceeds (2)
|
|
—
|
|
—
|
|
(1,507)
|
|
—
|
Product liability
damages award (3)
|
|
—
|
|
—
|
|
—
|
|
77,421
|
Loss on software
disposal (4)
|
|
—
|
|
61,063
|
|
—
|
|
61,063
|
Transaction and other
costs (5)
|
|
3,462
|
|
—
|
|
56,955
|
|
—
|
Total
adjustments
|
|
3,462
|
|
61,063
|
|
(47,355)
|
|
138,484
|
Tax impact of
adjustments
|
|
1,464
|
|
(19,167)
|
|
12,651
|
|
(40,489)
|
Adjusted net
income
|
|
$
317,284
|
|
$ 270,481
|
|
$ 896,021
|
|
$ 740,786
|
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)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP net
income
|
|
$
2.20
|
|
$
1.59
|
|
$
6.53
|
|
$
4.44
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Gain on sale of real
estate (1)
|
|
—
|
|
—
|
|
(0.72)
|
|
—
|
Gain on insurance
proceeds (2)
|
|
—
|
|
—
|
|
(0.01)
|
|
—
|
Product liability
damages award (3)
|
|
—
|
|
—
|
|
—
|
|
0.54
|
Loss on software
disposal (4)
|
|
—
|
|
0.42
|
|
—
|
|
0.42
|
Transaction and other
costs (5)
|
|
0.02
|
|
—
|
|
0.40
|
|
—
|
Total
adjustments
|
|
0.02
|
|
0.42
|
|
(0.33)
|
|
0.96
|
Tax impact of
adjustments
|
|
0.01
|
|
(0.13)
|
|
0.09
|
|
(0.28)
|
Adjusted net
income
|
|
$
2.23
|
|
$
1.88
|
|
$
6.29
|
|
$
5.12
|
Weighted average common
shares
outstanding – assuming dilution
|
|
142,109
|
|
143,589
|
|
142,428
|
|
144,622
|
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)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Line item:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
$
—
|
|
$
—
|
|
$
5,000
|
|
$
—
|
Selling,
administrative and other expenses
|
|
3,462
|
|
61,063
|
|
(50,848)
|
|
138,484
|
Non-operating expense
(income): Other
|
|
—
|
|
—
|
|
(1,507)
|
|
—
|
Total
adjustments
|
|
$
3,462
|
|
$
61,063
|
|
$
(47,355)
|
|
$ 138,484
|
|
|
(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 reflects
damages reinstated by the Washington Supreme Court order on July 8,
2021 in connection with a 2017 automotive product liability
claim.
|
|
|
(4)
|
Adjustment reflects
a loss on an internally developed software project that was
disposed of due to a change in management strategy related to
advances in alternative technologies.
|
|
|
(5)
|
Adjustment primarily
reflects costs associated with the January 3, 2022 acquisition
and
integration of KDG. These costs also include a $17 million
impairment charge driven by a
decision to retire certain legacy trade names, classified as other
intangible assets, prior to the end
of their estimated useful lives as part of executing our KDG
integration and rebranding strategy.
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CHANGE IN NET SALES
SUMMARY
(UNAUDITED)
|
|
|
|
Three Months Ended
September 30, 2022
|
|
|
Comparable
Sales
|
|
Acquisitions
|
|
Foreign
Currency
|
|
Other
|
|
GAAP Total
Net Sales
|
Automotive
|
|
9.2 %
|
|
5.3 %
|
|
(5.5) %
|
|
(0.1) %
|
|
8.9 %
|
Industrial
|
|
19.6 %
|
|
16.6 %
|
|
(0.9) %
|
|
— %
|
|
35.3 %
|
Total Net
Sales
|
|
12.7 %
|
|
9.1 %
|
|
(3.9) %
|
|
(0.1) %
|
|
17.8 %
|
|
|
|
Nine months ended
September 30, 2022
|
|
|
Comparable
Sales
|
|
Acquisitions
|
|
Foreign
Currency
|
|
Other
|
|
GAAP Total
Net Sales
|
Automotive
|
|
9.3 %
|
|
4.4 %
|
|
(4.2) %
|
|
(0.1) %
|
|
9.4 %
|
Industrial
|
|
17.9 %
|
|
17.4 %
|
|
(0.7) %
|
|
(0.1) %
|
|
34.5 %
|
Total Net
Sales
|
|
12.1 %
|
|
8.7 %
|
|
(3.0) %
|
|
— %
|
|
17.8 %
|
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)
|
|
2022
|
|
2021
|
Net cash provided by
operating activities
|
|
$
1,244,591
|
|
$
1,008,196
|
Purchases of property,
plant and equipment
|
|
(243,998)
|
|
(138,206)
|
Free Cash
Flow
|
|
$
1,000,593
|
|
$
869,990
|
|
|
|
|
For the Year Ending
December 31, 2022
|
|
|
Previous
Outlook
|
|
Updated
Outlook
|
Net cash provided by
operating activities
|
|
$1.5 billion to $1.7
billion
|
|
$1.5 billion to $1.7
billion
|
Purchases of property,
plant and equipment
|
|
$300 million to $350
million
|
|
Approximately $350
million
|
Free Cash
Flow
|
|
$1.2 billion to $1.4
billion
|
|
$1.2 billion to $1.4
billion
|
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SOURCE Genuine Parts Company