SEC Form 10-Q filed by Genuine Parts Company

10/22/24 1:20:28 PM ET

$GPC

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gpc-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-5690

__________________________________________

GENUINE PARTS COMPANY

(Exact name of registrant as specified in its charter)

__________________________________________


GA						58-0254510
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

2999 WILDWOOD PARKWAY,

30339

ATLANTA,

(Address of principal executive offices)

(Zip Code)

678-934-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of each exchange on which registered

Common Stock, $1.00 par value per share

GPC

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 139,036,487 shares of common stock outstanding as of October 17, 2024.


Table of Contents

PART I		Page

Item 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Income	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Statements of Equity	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

PART II

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
	Signatures	31


(in thousands, except share and per share data)	September 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	1,078,118	$	1,102,007
Trade accounts receivable, less allowance for doubtful accounts (2024 – $64,138; 2023 – $56,608)	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
Goodwill	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 – $1,783,163; 2023 – $1,592,658)	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 – $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 – 2024 – 139,078,065 shares; 2023 – 139,567,071 shares	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


	Three Months Ended September 30,				Nine Months Ended September 30,
(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	$	1.00	$	0.95	$	3.00	$	2.85
Basic earnings per share	$	1.63	$	2.50	$	5.53	$	7.11
Diluted earnings per share	$	1.62	$	2.49	$	5.51	$	7.08


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Net income	$	226,582	$	351,198	$	771,020	$	999,649
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	90,001		(77,314)		25,359		(63,027)
Cash flow hedge, net of income taxes in 2023 — $0 and $951 respectively	—		—		—		2,572
Pension and postretirement benefit adjustments, net of income taxes in 2024 — $1,062 and $3,188; 2023 — $703 and $2,108 respectively	2,886		1,909		8,661		5,735
Other comprehensive income (loss), net of income taxes	92,887		(75,405)		34,020		(54,720)
Comprehensive income	$	319,469	$	275,793	$	805,040	$	944,929


	Three Months Ended September 30, 2024
(in thousands, except share and per share data)	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Parent Equity		Non-controlling Interests in Subsidiaries		Total Equity
July 1, 2024	139,346,018	$	139,346	$	180,527	$	(1,035,739)	$	5,256,514	$	4,540,648	$	15,475	$	4,556,123
Net income	—	—		—		—		226,582		226,582		—		226,582
Other comprehensive income, net of tax	—	—		—		92,887		—		92,887		—		92,887
Cash dividend declared, $1.00 per share	—	—		—		—		(139,111)		(139,111)		—		(139,111)
Shares issued from employee incentive plans	1,693	2		2,254		—		—		2,256		—		2,256
Share-based compensation	—	—		10,710		—		—		10,710		—		10,710
Purchase of stock	(269,646)	(270)		—		—		(37,230)		(37,500)		—		(37,500)
Noncontrolling interest activities	—	—		—		—		—		—		(1,793)		(1,793)
September 30, 2024	139,078,065	$	139,078	$	193,491	$	(942,852)	$	5,306,755	$	4,696,472	$	13,682	$	4,710,154


	Nine Months Ended September 30, 2024
(in thousands, except share and per share data)	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Parent Equity		Non-controlling Interests in Subsidiaries		Total Equity
January 1, 2024	139,567,071	$	139,567	$	173,025	$	(976,872)	$	5,065,327	$	4,401,047	$	15,938	$	4,416,985
Net income	—	—		—		—		771,020		771,020		—		771,020
Other comprehensive income, net of tax	—	—		—		34,020		—		34,020		—		34,020
Cash dividend declared, $3.00 per share	—	—		—		—		(417,872)		(417,872)		—		(417,872)
Shares issued from employee incentive plans	290,206	290		(16,814)		—		—		(16,524)		—		(16,524)
Share-based compensation	—	—		37,280		—		—		37,280		—		37,280
Purchase of stock	(779,212)	(779)		—		—		(111,720)		(112,499)		—		(112,499)
Noncontrolling interest activities	—	—		—		—		—		—		(2,256)		(2,256)
September 30, 2024	139,078,065	$	139,078	$	193,491	$	(942,852)	$	5,306,755	$	4,696,472	$	13,682	$	4,710,154


	Three Months Ended September 30, 2023
(in thousands, except share and per share data)	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Parent Equity		Non-controlling Interests in Subsidiaries		Total Equity
July 1, 2023	140,467,550	$	140,468	$	153,748	$	(1,011,857)	$	4,788,852	$	4,071,211	$	14,583	$	4,085,794
Net income	—	—		—		—		351,198		351,198		—		351,198
Other comprehensive loss, net of tax	—	—		—		(75,405)		—		(75,405)		—		(75,405)
Cash dividend declared, $0.95 per share	—	—		—		—		(133,254)		(133,254)		—		(133,254)
Shares issued from employee incentive plans	5,991	6		(541)		—		—		(535)		—		(535)
Share-based compensation	—	—		10,395		—		—		10,395		—		10,395
Purchase of stock	(238,755)	(239)		—		—		(37,258)		(37,497)		—		(37,497)
Noncontrolling interest activities	—	—		—		—		—		—		579		579
September 30, 2023	140,234,786	$	140,235	$	163,602	$	(1,087,262)	$	4,969,538	$	4,186,113	$	15,162	$	4,201,275


	Nine Months Ended September 30, 2023
(in thousands, except share and per share data)	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Parent Equity		Non-controlling Interests in Subsidiaries		Total Equity
January 1, 2023	140,941,649	$	140,941	$	140,324	$	(1,032,542)	$	4,541,640	$	3,790,363	$	14,084	$	3,804,447
Net income	—	—		—		—		999,649		999,649		—		999,649
Other comprehensive loss, net of tax	—	—		—		(54,720)		—		(54,720)		—		(54,720)
Cash dividend declared, $2.85 per share	—	—		—		—		(400,483)		(400,483)		—		(400,483)
Shares issued from employee incentive plans	372,471	373		(24,062)		—		—		(23,689)		—		(23,689)
Share-based compensation	—	—		47,340		—		—		47,340		—		47,340
Purchase of stock	(1,079,334)	(1,079)		—		—		(171,268)		(172,347)		—		(172,347)
Noncontrolling interest activities	—	—		—		—		—		—		1,078		1,078
September 30, 2023	140,234,786	$	140,235	$	163,602	$	(1,087,262)	$	4,969,538	$	4,186,113	$	15,162	$	4,201,275


		September 30, 2024				December 31, 2023
Instrument	Balance Sheet Location	Notional		Balance		Notional		Balance
Net investment hedges:
Forward contracts	Prepaid expenses and other current assets	$	481,140	$	23,809	$	606,950	$	37,676
Forward contracts	Other current liabilities	$	1,020,460	$	24,928	$	106,800	$	4,383
Foreign currency debt	Long-term debt	€	700,000	$	781,480	€	700,000	$	772,660


	Gain (Loss) Recognized in AOCL before Reclassifications				Gain Recognized in Interest Expense for Excluded Components
(in thousands)	2024		2023		2024		2023
Three Months Ended September 30,
Net investment hedges:
Forward contracts	$	(52,429)	$	19,217	$	4,731	$	3,158
Foreign currency debt	(31,570)		20,300		—		—
Total	$	(83,999)	$	39,517	$	4,731	$	3,158


(in thousands)	September 30, 2024
Obligations outstanding at the beginning of the year	$	3,054,586
Invoices confirmed during the year	3,207,893
Confirmed invoices paid during the year	(2,980,121)
Confirmed obligations outstanding at the end of period	$	3,282,358


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
North America:
Automotive	$	2,390,463	$	2,315,733	$	6,939,607	$	6,865,819
Industrial	2,026,759		2,066,284		6,208,696		6,325,746
Total North America	$	4,417,222	$	4,382,017	$	13,148,303	$	13,191,565
Australasia:
Automotive	$	449,296	$	411,422	$	1,262,527	$	1,226,037
Industrial	143,650		131,375		406,900		391,211
Total Australasia	$	592,946	$	542,797	$	1,669,427	$	1,617,248
Europe – Automotive	$	960,030	$	899,788	$	2,898,666	$	2,695,913
Total net sales	$	5,970,198	$	5,824,602	$	17,716,396	$	17,504,726


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Service cost	$	1,718	$	1,504	$	5,156	$	4,501
Interest cost	25,335		26,141		76,024		78,394
Expected return on plan assets	(44,352)		(41,270)		(133,095)		(123,773)
Amortization of prior service cost	281		173		843		519
Amortization of actuarial loss	3,564		2,340		10,698		7,021
Net periodic benefit income	$	(13,454)	$	(11,112)	$	(40,374)	$	(33,338)


	Three Months Ended September 30,
(in thousands, except per share data)	2024			2023			$ Change		% Change
Diluted EPS	$	1.62		$	2.49		$	(0.87)	(34.9)	%
Adjusted diluted EPS	$	1.88		$	2.49		$	(0.61)	(24.5)	%
Total adjusted EBITDA	$	476,743		$	564,747		$	(88,004)	(15.6)	%
Automotive segment profit	$	262,195		$	322,004		$	(59,809)	(18.6)	%
Industrial segment profit	$	258,753		$	282,807		$	(24,054)	(8.5)	%
Automotive segment margin	6.9		%	8.9		%
Industrial segment margin	11.9		%	12.9		%


	Nine Months Ended September 30,
(in thousands, except per share data)	2024			2023			$ Change		% Change
Diluted EPS	$	5.51		$	7.08		$	(1.57)	(22.2)	%
Adjusted diluted EPS	$	6.55		$	7.08		$	(0.53)	(7.5)	%
Total adjusted EBITDA	$	1,562,615		$	1,634,649		$	(72,034)	(4.4)	%
Automotive segment profit	$	849,106		$	915,771		$	(66,665)	(7.3)	%
Industrial segment profit	$	806,433		$	828,166		$	(21,733)	(2.6)	%
Automotive segment margin	7.6		%	8.5		%
Industrial segment margin	12.2		%	12.3		%


(in thousands)	As of Acquisition Dates
Trade accounts receivable	$	130,000
Merchandise inventories	520,000
Prepaid expenses and other current assets	10,000
Other intangible assets	200,000
Property, plant and equipment	90,000
Operating lease assets	210,000
Other assets	10,000
Total identifiable assets acquired	1,170,000
Current liabilities	(90,000)
Operating lease liabilities	(210,000)
Deferred tax liabilities	(30,000)
Other long-term liabilities	(10,000)
Total liabilities assumed	(340,000)
Net identifiable assets acquired	830,000
Goodwill	270,000
Net assets acquired	$	1,100,000


	Changes in Accumulated Other Comprehensive Loss by Component
(in thousands)	Pension and Other Post-Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation		Total
Beginning balance, January 1, 2024	$	(517,941)	$	—	$	(458,931)	$	(976,872)
Other comprehensive income (loss) before reclassifications	—		—		25,359		25,359
Amounts reclassified from accumulated other comprehensive loss	8,661		—		—		8,661
Other comprehensive income (loss), net of income taxes	8,661		—		25,359		34,020
Ending balance, September 30, 2024	$	(509,280)	$	—	$	(433,572)	$	(942,852)


(in thousands)	Severance and other employee costs		Other restructuring costs (1)		Total (1)
Liability as of January 1, 2024	$	—	$	—	$	—
Restructuring and other costs	77,157		76,668		153,825
Cash payments	(55,832)		(59,715)		(115,547)
Non-cash charges	3,198		(15,619)		(12,421)
Translation	501		2		503
Liability as of September 30, 2024	$	25,024	$	1,336	$	26,360


Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
July 1, 2024 through July 31, 2024	102,784	$138.64	102,784	7,925,695
August 1, 2024 through August 31, 2024	119,661	$140.39	117,600	7,808,095
September 1, 2024 through September 30, 2024	49,262	$137.02	49,262	7,758,833
Totals	271,707	$139.12	269,646	7,758,833


Exhibit 3.1						Amended and Restated Articles of Incorporation of the Company, dated April 23, 2007 (incorporated herein by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K dated April 23, 2007)

Exhibit 3.2						By-Laws of the Company, as amended and restated November 19, 2018 (incorporated herein by reference from Exhibit 3.2 to the Company’s Current Report on Form 8-K dated November 19, 2018)

Exhibit 31.1						Certification pursuant to SEC Rule 13a-14(a) signed by the Chief Executive Officer – filed herewith

Exhibit 31.2						Certification pursuant to SEC Rule 13a-14(a) signed by the Chief Financial Officer – filed herewith

Exhibit 32						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by the Chief Executive Officer and Chief Financial Officer – furnished herewith

Exhibit 101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

Exhibit 101.SCH						XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 101.LAB						XBRL Taxonomy Extension Labels Linkbase Document

Exhibit 101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 104						The cover page from this Quarterly Report on Form 10-Q for the period ended September 30, 2024 formatted in Inline XBRL


						Genuine Parts Company (Registrant)

Date: October 22, 2024						/s/ Bert Nappier
						Bert Nappier
						Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer)

Date	Price Target	Rating	Analyst
10/12/2023	$160.00	Neutral	UBS
6/28/2023	$195.00	Buy	Northcoast
6/1/2023	$185.00 → $189.00	Neutral → Buy	BofA Securities
5/2/2023	$163.00 → $164.00	Sell → Neutral	Goldman
3/24/2023	$186.00	Hold → Buy	Truist
12/12/2022	$124.00 → $147.00	Neutral → Sell	Goldman
5/10/2022	$133.00	Underperform → Neutral	BofA Securities
1/13/2022	$142.00	Hold	Truist Securities

SEC Form 10-Q filed by Genuine Parts Company

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Amendment: Group President, GPC N.A. Breaux Randall P bought $85,238 worth of shares (750 units at $113.65), increasing direct ownership by 2% to 35,189 units (SEC Form 4)

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SEC Form SC 13G/A filed by Genuine Parts Company (Amendment)

SEC Form SC 13G/A filed by Genuine Parts Company (Amendment)

SEC Form SC 13G/A filed by Genuine Parts Company (Amendment)

Genuine Parts Company Announces CEO Leadership Transition

Genuine Parts Company Announces New Board Member

Genuine Parts Company Announces Executive Officer Changes

Genuine Parts Company Reports Third Quarter 2024 Results and Revises Full-Year Outlook

Genuine Parts Company to Report Third Quarter 2024 Results on October 22, 2024

Genuine Parts Company Declares Regular Quarterly Dividend

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