Fourth Quarter 2022 Highlights
- Sales of $5.5 billion, Up
15.0%
- Diluted EPS of $1.77
- Adjusted Diluted EPS of $2.05,
Up 14.5%
Full Year 2022 Highlights
- Record sales of $22.1 billion,
Up 17.1%
- Segment Profit Margin of 9.4%, Up 60 basis points
- Diluted EPS of $8.31
- Adjusted Diluted EPS of $8.34,
Up 20.7% and a New Record
- Cash From Operations of $1.5
billion, Up 16.6%; Free Cash Flow of $1.1 billion, Up 13.6%
- Returned $719 million to
Shareholders via Cash Dividends and Share Repurchases
2023 Outlook
- Revenue Growth of 4% to 6%
- Diluted EPS of $8.80 to
$8.95
ATLANTA, Feb. 23,
2023 /PRNewswire/ -- Genuine Parts Company (NYSE:
GPC) announced today its results for the fourth quarter and twelve
months ended December 31, 2022.
"The GPC team capped off a record-setting year with a strong
fourth quarter highlighted by double-digit sales and earnings
growth and continued margin expansion. We are incredibly proud of
our progress throughout the year and thankful to our teammates
across the globe for their ongoing commitment to excellence," said
Paul Donahue, Chairman and Chief
Executive Officer of Genuine Parts Company. "Working together, we
have been agile in navigating the dynamics of the macro-economy and
continue to deliver market share gains and drive positive momentum
in our top and bottom-line results."
Fourth Quarter 2022 Results
Sales were $5.5 billion, a 15.0%
increase compared to $4.8 billion in
the same period of the prior year. The improvement is attributable
to an 11.1% increase in comparable sales and an 8.0% benefit from
acquisitions, partially offset by a 4.1% unfavorable impact of
foreign currency and other.
Net income was $252 million, or a diluted EPS of
$1.77. This compares to net income of
$256 million, or $1.79 per diluted share in the prior year
period.
Adjusted net income, which excludes an expense of $40 million, or $0.28 per diluted share, in non-recurring items
primarily associated with a remeasurement of the company's product
liability reserve, costs related to the integration of Kaman
Distribution Group (KDG) and a loss related to an investment in
S.P. Richards, was $292 million, an
increase of 13.8% compared to adjusted net income of $256 million for the same period of the prior
year. On a per share diluted basis, adjusted net income was
$2.05, an increase of 14.5% compared
to $1.79 per diluted share in the
prior year. Refer to the reconciliation of GAAP net income to
adjusted net income for more information.
Fourth Quarter 2022 Segment Highlights
Automotive Parts Group ("Automotive")
Global Automotive sales were $3.4
billion in the fourth quarter, up 7.6% from the same period
in 2021, consisting of an 8.2% increase in comparable sales and a
4.8% benefit from acquisitions, net of a 5.4% unfavorable impact of
foreign currency and other. Segment profit of $295 million increased 11.0%, with profit margin
of 8.6% up 30 basis points from the same period of the prior
year.
Industrial Parts Group ("Industrial")
Industrial sales were $2.1
billion, up 29.6% from the same period in 2021, and
reflecting a 16.7% increase in comparable sales and a 14.3%
contribution from the KDG acquisition, slightly offset by a 1.4%
unfavorable impact of foreign currency. Segment profit of
$230 million increased 49.8%, with
profit margin of 11.0% up 150 basis points from the same period of
the prior year.
"The strength in Automotive sales was broad-based, with
double-digit total sales growth in local currency in each of our
global operations," said Will
Stengel, President and Chief Operating Officer. "In
addition, Industrial generated its seventh consecutive quarter of
double-digit sales comps and tenth consecutive quarter of margin
expansion, while continuing to execute well and create value with
the accelerated integration of KDG. Our strong fourth quarter and
record financial performance in 2022 are testaments to our teams'
hard work and dedication to serve our customers."
Full Year 2022 Results
Sales in 2022 were $22.1 billion,
a 17.1% increase from $18.9 billion
in 2021. Net income for the twelve months was $1.2 billion, or $8.31 per diluted share. Adjusted net income,
which excludes an expense of $5
million, or $0.03 per diluted
share, in non-recurring items as described above as well as
transaction and other costs related to the acquisition of KDG and a
gain on the sale of certain real estate recorded in the prior
quarters of 2022, was $1.2 billion,
or $8.34 per diluted share, an
increase of 20.7% compared to $6.91
per diluted share in the prior year. Refer to the reconciliation of
GAAP net income to adjusted net income for more information.
Balance Sheet, Cash Flow and Capital Allocation
The company generated cash flow from operations of $1.5 billion in 2022, a 16.6% increase from
$1.3 billion in 2021 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 $340
million for capital expenditures. We also had $205 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 $496 million paid to shareholders
and $223 million of share
repurchases. Free cash flow was $1.1
billion, a 13.6% increase from $992 million for the
twelve months in 2021.
The company ended the quarter and year with $2.2 billion in total liquidity, consisting of
$1.5 billion availability on the
revolving credit facility and $653
million in cash and cash equivalents.
2023 Outlook
In consideration of several factors, the company is establishing
full-year 2023 guidance. 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 guidance, which
is outlined in the table below.
|
|
Year Ended
12/31/2023
|
Total sales
growth
|
|
4% to 6%
|
Automotive sales
growth
|
|
4% to 6%
|
Industrial sales
growth
|
|
4% to 6%
|
Diluted earnings per
share
|
|
$8.80 to
$8.95
|
Adjusted diluted
earnings per share
|
|
$8.80 to
$8.95
|
Effective tax
rate
|
|
Approx. 25%
|
Net cash provided by
operating activities
|
|
$1.2 billion to $1.4
billion
|
Free cash
flow
|
|
$800 million to $1.0
billion
|
"We had an exceptional 2022 which included celebrating our 95th
year of operations. We have quickly turned our attention to the
year ahead and, while the macro-environment remains uncertain, we
are confident in our strategic plans to drive sustained sales and
earnings growth, continued margin expansion and strong cash flow.
We believe our progress in these key areas, combined with a strong
balance sheet, position GPC with the financial strength and
flexibility to pursue strategic growth opportunities while also
returning capital to shareholders," 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, adjusted diluted net income per
common share and free cash flow. The company believes that the
presentation of adjusted net income, adjusted diluted net income
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
the company's core operations. The company considers these
metrics useful to investors because they provide greater
transparency into management's view and assessment of the company's
ongoing operating performance by removing items management believes
are not representative of our continuing 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 the company's core operations. The company
does not, nor does it suggest investors should, consider such
non-GAAP financial measures as superior to, in isolation from, or
as a substitute for, GAAP financial information. The company has
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. 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
Genuine Parts Company 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 the company's
investor relations website. The call is also available by dialing
888-317-6003, conference ID 0079869. A replay will also be
available on the company's website or at 877-344-7529 conference ID
1162108, 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 materials the
company files with the Securities and Exchange Commission (SEC),
release to the public or make available on the company's 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 the company's view of business
and economic trends for the coming year, the company's ability to
execute our strategic priorities and capitalize in light of these
business and economic trends, and the established
full-year 2023 financial guidance for the company provided
above. Senior officers may also make verbal statements to analysts,
investors, the media and others that are forward-looking.
The company cautions that all forward-looking statements involve
risks and uncertainties, and while the company believes that its
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; public
health emergencies such as 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 the company's Annual
Report on Form 10-K for 2022 and from time to time in the company's
subsequent filings with the SEC.
Forward-looking statements speak only as of the date they are
made, and the company undertakes 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
|
CONSOLIDATED STATEMENTS
OF INCOME (LOSS)
|
(UNAUDITED)
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(in thousands, except per share data)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales
|
|
$
5,523,650
|
|
$
4,803,209
|
|
$ 22,095,973
|
|
$ 18,870,510
|
Cost of goods
sold
|
|
3,549,959
|
|
3,109,760
|
|
14,355,869
|
|
12,236,374
|
Gross profit
|
|
1,973,691
|
|
1,693,449
|
|
7,740,104
|
|
6,634,136
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
administrative and other expenses
|
|
1,531,883
|
|
1,279,265
|
|
5,758,295
|
|
5,162,506
|
Depreciation and
amortization
|
|
87,997
|
|
72,594
|
|
347,819
|
|
290,971
|
Provision for doubtful
accounts
|
|
6,252
|
|
3,509
|
|
19,791
|
|
17,739
|
Total operating
expenses
|
|
1,626,132
|
|
1,355,368
|
|
6,125,905
|
|
5,471,216
|
Non-operating expenses
(income):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
15,569
|
|
14,297
|
|
73,887
|
|
62,150
|
Other
|
|
(5,393)
|
|
(22,122)
|
|
(32,290)
|
|
(99,576)
|
Total non-operating
expenses (income)
|
|
10,176
|
|
(7,825)
|
|
41,597
|
|
(37,426)
|
Income before income
taxes
|
|
337,383
|
|
345,906
|
|
1,572,602
|
|
1,200,346
|
Income taxes
|
|
85,407
|
|
89,907
|
|
389,901
|
|
301,556
|
Net income
(loss)
|
|
$ 251,976
|
|
$ 255,999
|
|
$
1,182,701
|
|
$ 898,790
|
Dividends declared per
common share
|
|
$
0.895
|
|
$
0.815
|
|
$
3.580
|
|
$
3.260
|
Basic earnings per
share
|
|
$
1.79
|
|
$
1.80
|
|
$
8.36
|
|
$
6.27
|
Diluted earnings per
share
|
|
$
1.77
|
|
$
1.79
|
|
$
8.31
|
|
$
6.23
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding
|
|
141,049
|
|
142,275
|
|
141,468
|
|
143,435
|
Dilutive effect of
stock options and non-vested restricted
stock awards
|
|
923
|
|
778
|
|
854
|
|
786
|
Weighted average common
shares outstanding —
assuming dilution
|
|
141,972
|
|
143,053
|
|
142,322
|
|
144,221
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
|
SEGMENT
INFORMATION
|
(UNAUDITED)
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$
3,433,057
|
|
$
3,190,133
|
|
$ 13,666,634
|
|
$ 12,544,131
|
Industrial
|
|
2,090,593
|
|
1,613,076
|
|
8,429,339
|
|
6,326,379
|
Total net
sales
|
|
$
5,523,650
|
|
$
4,803,209
|
|
$ 22,095,973
|
|
$ 18,870,510
|
Segment
profit:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$ 295,199
|
|
$ 265,841
|
|
$
1,191,674
|
|
$
1,073,427
|
Industrial
|
|
230,306
|
|
153,773
|
|
886,636
|
|
595,232
|
Total segment
profit
|
|
525,505
|
|
419,614
|
|
2,078,310
|
|
1,668,659
|
Interest expense,
net
|
|
(15,568)
|
|
(14,297)
|
|
(73,886)
|
|
(62,150)
|
Corporate
expense
|
|
(81,481)
|
|
(44,813)
|
|
(269,364)
|
|
(174,842)
|
Intangible asset
amortization
|
|
(38,697)
|
|
(25,034)
|
|
(157,437)
|
|
(103,273)
|
Other unallocated
costs
|
|
(52,376)
|
|
10,436
|
|
(5,021)
|
|
(128,048)
|
Income before
income taxes
|
|
$ 337,383
|
|
$ 345,906
|
|
$
1,572,602
|
|
$
1,200,346
|
|
The following table
presents a summary of the other unallocated costs:
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Other unallocated
costs:
|
|
|
|
|
|
|
|
|
Gain on sales of real
estate
|
|
$
—
|
|
$
—
|
|
$ 102,803
|
|
$
—
|
Gain on insurance
proceeds
|
|
—
|
|
3,862
|
|
1,507
|
|
3,862
|
Product liability
adjustment
|
|
(28,730)
|
|
—
|
|
(28,730)
|
|
—
|
Product liability
damages award
|
|
—
|
|
—
|
|
—
|
|
(77,421)
|
Loss on software
disposal
|
|
—
|
|
—
|
|
—
|
|
(61,063)
|
Gain on equity
investment
|
|
—
|
|
10,229
|
|
—
|
|
10,229
|
Transaction and other
costs
|
|
(23,646)
|
|
(3,655)
|
|
(80,601)
|
|
(3,655)
|
Total other unallocated
costs (1)
|
|
$ (52,376)
|
|
$
10,436
|
|
$
(5,021)
|
|
$
(128,048)
|
|
(1) Refer to the
reconciliation of GAAP net income to adjusted net income for
explanation of adjustments.
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(UNAUDITED)
|
|
|
|
As of December
31,
|
(in thousands, except
share and per share data)
|
|
2022
|
|
2021
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 653,463
|
|
$ 714,701
|
Trade accounts
receivable, less allowance for doubtful accounts (2022 –
$53,872;
2021 – $44,425)
|
|
2,188,868
|
|
1,797,955
|
Merchandise
inventories, net
|
|
4,441,649
|
|
3,889,919
|
Prepaid expenses and
other current assets
|
|
1,532,759
|
|
1,353,847
|
Total current
assets
|
|
8,816,739
|
|
7,756,422
|
Goodwill
|
|
2,588,113
|
|
1,915,307
|
Other intangible
assets, net
|
|
1,812,510
|
|
1,406,401
|
Property, plant and
equipment, less accumulated depreciation (2022 – $1,435,677;
2021 – $1,339,706)
|
|
1,326,014
|
|
1,234,399
|
Operating lease
assets
|
|
1,104,678
|
|
1,053,689
|
Other assets
|
|
847,325
|
|
985,884
|
Total assets
|
|
$ 16,495,379
|
|
$ 14,352,102
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
5,456,550
|
|
$
4,804,939
|
Current portion of
debt
|
|
252,029
|
|
—
|
Other current
liabilities
|
|
1,851,340
|
|
1,660,768
|
Dividends
payable
|
|
126,191
|
|
115,876
|
Total current
liabilities
|
|
7,686,110
|
|
6,581,583
|
Long-term
debt
|
|
3,076,794
|
|
2,409,363
|
Operating lease
liabilities
|
|
836,019
|
|
789,175
|
Pension and other
post-retirement benefit liabilities
|
|
197,879
|
|
265,134
|
Deferred tax
liabilities
|
|
391,163
|
|
280,778
|
Other long-term
liabilities
|
|
502,967
|
|
522,779
|
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 - 140,941,649 shares and
2021 - 142,180,683 shares
|
|
140,941
|
|
142,181
|
Additional paid-in
capital
|
|
140,324
|
|
119,975
|
Accumulated other
comprehensive loss
|
|
(1,032,542)
|
|
(857,739)
|
Retained
earnings
|
|
4,541,640
|
|
4,086,325
|
Total parent
equity
|
|
3,790,363
|
|
3,490,742
|
Noncontrolling
interests in subsidiaries
|
|
14,084
|
|
12,548
|
Total equity
|
|
3,804,447
|
|
3,503,290
|
Total liabilities and
equity
|
|
$ 16,495,379
|
|
$ 14,352,102
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS
OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
Year Ended
December 31
|
(in
thousands)
|
|
2022
|
|
2021
|
Operating
activities:
|
|
|
|
|
Net income
|
|
$
1,182,701
|
|
$ 898,790
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
347,819
|
|
290,971
|
Deferred income
taxes
|
|
2,220
|
|
31,676
|
Share-based
compensation
|
|
38,058
|
|
25,597
|
Gain on sale of real
estate
|
|
(102,803)
|
|
—
|
Other operating
activities
|
|
18,377
|
|
22,575
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Trade accounts
receivable, net
|
|
(244,371)
|
|
(258,994)
|
Merchandise
inventories, net
|
|
(380,420)
|
|
(329,237)
|
Trade accounts
payable
|
|
676,406
|
|
777,318
|
Other assets and
liabilities
|
|
(71,016)
|
|
(200,411)
|
Net cash provided by
operating activities
|
|
1,466,971
|
|
1,258,285
|
Investing
activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(339,632)
|
|
(266,136)
|
Proceeds from sale of
property, plant and equipment
|
|
145,007
|
|
26,549
|
Proceeds from
divestitures of businesses
|
|
33,604
|
|
17,738
|
Proceeds from
settlement of net investment hedge
|
|
158,441
|
|
—
|
Acquisitions and other
investing activities
|
|
(1,681,660)
|
|
(284,315)
|
Net cash used in
investing activities
|
|
(1,684,240)
|
|
(506,164)
|
Financing
activities:
|
|
|
|
|
Proceeds from
debt
|
|
5,108,641
|
|
892,694
|
Payments on
debt
|
|
(4,147,773)
|
|
(1,053,423)
|
Share-based awards
exercised
|
|
(17,377)
|
|
(22,346)
|
Dividends
paid
|
|
(495,917)
|
|
(465,649)
|
Purchase of
stock
|
|
(222,726)
|
|
(333,599)
|
Other financing
activities
|
|
(19,747)
|
|
(7,209)
|
Net cash provided by
(used in) financing activities
|
|
205,101
|
|
(989,532)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(49,070)
|
|
(38,054)
|
Net decrease in cash
and cash equivalents
|
|
(61,238)
|
|
(275,465)
|
Cash and cash
equivalents at beginning of year
|
|
714,701
|
|
990,166
|
Cash and cash
equivalents at end of year
|
|
$ 653,463
|
|
$ 714,701
|
|
|
|
|
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
Cash paid during the
year for:
|
|
|
|
|
Income taxes
|
|
$ 362,859
|
|
$ 305,326
|
Interest
|
|
$
73,368
|
|
$
65,732
|
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
December 31,
|
|
Twelve Months Ended
December 31,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP net
income
|
|
$
251,976
|
|
$
255,999
|
|
$ 1,182,701
|
|
$
898,790
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Gain on sales of real
estate (1)
|
|
—
|
|
—
|
|
(102,803)
|
|
—
|
Gain on insurance
proceeds (2)
|
|
—
|
|
(3,862)
|
|
(1,507)
|
|
(3,862)
|
Product liability
adjustment (3)
|
|
28,730
|
|
—
|
|
28,730
|
|
—
|
Product liability
damages award (4)
|
|
—
|
|
—
|
|
—
|
|
77,421
|
Loss on software
disposal (5)
|
|
—
|
|
—
|
|
—
|
|
61,063
|
Gain on equity
investment (6)
|
|
—
|
|
(10,229)
|
|
—
|
|
(10,229)
|
Transaction and other
costs (7)
|
|
23,646
|
|
3,655
|
|
80,601
|
|
3,655
|
Total
adjustments
|
|
52,376
|
|
(10,436)
|
|
5,021
|
|
128,048
|
Tax impact of
adjustments
|
|
(12,788)
|
|
10,661
|
|
(137)
|
|
(29,828)
|
Adjusted net
income
|
|
$
291,564
|
|
$
256,224
|
|
$ 1,187,585
|
|
$
997,010
|
The table below
represent amounts per common share assuming dilution:
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(in thousands, except
per share data)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP net income per
common share
|
|
$
1.77
|
|
$
1.79
|
|
$
8.31
|
|
$
6.23
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Gain on sales of real
estate (1)
|
|
—
|
|
—
|
|
(0.72)
|
|
—
|
Gain on insurance
proceeds (2)
|
|
—
|
|
(0.03)
|
|
(0.01)
|
|
(0.03)
|
Product liability
adjustment (3)
|
|
0.20
|
|
—
|
|
0.20
|
|
—
|
Product liability
damages award (4)
|
|
—
|
|
—
|
|
—
|
|
0.54
|
Loss on software
disposal (5)
|
|
—
|
|
—
|
|
—
|
|
0.42
|
Gain on equity
investment (6)
|
|
—
|
|
(0.07)
|
|
—
|
|
(0.07)
|
Transaction and other
costs (7)
|
|
0.17
|
|
0.03
|
|
0.56
|
|
0.03
|
Total
adjustments
|
|
0.37
|
|
(0.07)
|
|
0.03
|
|
0.89
|
Tax impact of
adjustments
|
|
(0.09)
|
|
0.07
|
|
—
|
|
(0.21)
|
Adjusted diluted net
income per common share
|
|
$
2.05
|
|
$
1.79
|
|
$
8.34
|
|
$
6.91
|
Weighted average common
shares outstanding - assuming
dilution
|
|
141,972
|
|
143,053
|
|
142,322
|
|
144,221
|
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 consolidated
statements of income (loss).
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cost of goods
sold
|
|
$
—
|
|
$
—
|
|
$
5,000
|
|
$
—
|
Selling, administrative
and other expenses
|
|
43,376
|
|
3,655
|
|
(7,472)
|
|
142,139
|
Restructuring
costs
|
|
—
|
|
—
|
|
—
|
|
—
|
Goodwill impairment
charge
|
|
—
|
|
—
|
|
—
|
|
—
|
Non-operating (income):
Other
|
|
9,000
|
|
(14,091)
|
|
7,493
|
|
(14,091)
|
Total
adjustments
|
|
$ 52,376
|
|
$
(10,436)
|
|
$
5,021
|
|
$
128,048
|
|
|
(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 to
remeasure the product liability reserve for a revised estimate of
the number of claims to be incurred in future periods, among other
assumptions.
|
|
|
(4)
|
Adjustment reflects
damages reinstated by the Washington Supreme Court order on July 8,
2021 in connection with a 2017 automotive product liability
claim.
|
|
|
(5)
|
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.
|
|
|
(6)
|
Adjustment relates
to gains recognized upon remeasurement of certain equity
investments to fair value upon acquiring the remaining equity of
those entities.
|
|
|
(7)
|
Adjustment for 2022
primarily includes costs of $67 million associated with the
January 3, 2022 acquisition and integration of KDG which includes a
$17 million impairment charge. The impairment charge was
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. Separately, this adjustment includes an
$11 million loss related to an investment. Adjustment for 2021
include transaction and other costs related to
acquisitions.
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
|
CHANGE IN NET SALES
SUMMARY
|
(UNAUDITED)
|
|
|
|
Three Months Ended
December 31, 2022
|
|
|
Comparable
Sales
|
|
Acquisitions
|
|
Foreign
Currency
|
|
Other
|
|
GAAP Total
Net Sales
|
Automotive
|
|
8.2 %
|
|
4.8 %
|
|
(5.5) %
|
|
0.1 %
|
|
7.6 %
|
Industrial
|
|
16.7 %
|
|
14.3 %
|
|
(1.4) %
|
|
— %
|
|
29.6 %
|
Total Net
Sales
|
|
11.1 %
|
|
8.0 %
|
|
(4.2) %
|
|
0.1 %
|
|
15.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31, 2022
|
|
|
Comparable
Sales
|
|
Acquisitions
|
|
Foreign
Currency
|
|
Other
|
|
GAAP Total
Net Sales
|
Automotive
|
|
9.0 %
|
|
4.5 %
|
|
(4.5) %
|
|
(0.1) %
|
|
8.9 %
|
Industrial
|
|
17.3 %
|
|
16.8 %
|
|
(0.9) %
|
|
— %
|
|
33.2 %
|
Total Net
Sales
|
|
11.8 %
|
|
8.6 %
|
|
(3.3) %
|
|
— %
|
|
17.1 %
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
|
RECONCILIATION OF GAAP
NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH
FLOW
|
(UNAUDITED)
|
|
|
|
Twelve Months Ended
December 31,
|
(in
thousands)
|
|
2022
|
|
2021
|
Net cash provided by
operating activities
|
|
$
1,466,971
|
|
$
1,258,285
|
Purchases of property,
plant and equipment
|
|
(339,632)
|
|
(266,136)
|
Free Cash
Flow
|
|
$
1,127,339
|
|
$
992,149
|
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SOURCE Genuine Parts Company