gpc-20220630

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 June 30, 2022


☐			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 141,430,948 shares of common stock outstanding as of July 25, 2022.


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	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21

PART II

Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 6.	Exhibits	23
	Signatures	24

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


(in thousands, except share and per share data)	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	519,131	$	714,701
Trade accounts receivable, less allowance for doubtful accounts (2022 – $57,413; 2021 – $44,425)	2,235,453		1,797,955
Merchandise inventories, net	4,296,191		3,889,919
Prepaid expenses and other current assets	1,475,493		1,353,847
Total current assets	8,526,268		7,756,422
Goodwill	2,538,240		1,915,307
Other intangible assets, less accumulated amortization	1,853,222		1,406,401
Property, plant and equipment, less accumulated depreciation (2022 – $1,370,095; 2021 – $1,339,706)	1,236,859		1,234,399
Operating lease assets	1,067,614		1,053,689
Other assets	1,015,984		985,884
Total assets	$	16,238,187	$	14,352,102

Liabilities and equity
Current liabilities:
Trade accounts payable	$	5,409,587	$	4,804,939
Current portion of debt	14,118		—
Dividends payable	126,716		115,876
Other current liabilities	1,743,439		1,660,768
Total current liabilities	7,293,860		6,581,583
Long-term debt	3,304,223		2,409,363
Operating lease liabilities	800,672		789,175
Pension and other post–retirement benefit liabilities	263,314		265,134
Deferred tax liabilities	407,763		280,778
Other long-term liabilities	514,792		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 – 141,280,841 shares; 2021 – 142,180,683 shares	141,281		142,181
Additional paid-in capital	123,388		119,975
Accumulated other comprehensive loss	(953,228)		(857,739)
Retained earnings	4,329,115		4,086,325
Total parent equity	3,640,556		3,490,742
Noncontrolling interests in subsidiaries	13,007		12,548
Total equity	3,653,563		3,503,290
Total liabilities and equity	$	16,238,187	$	14,352,102

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2022		2021		2022		2021
Net sales	$	5,602,414	$	4,783,738	$	10,897,049	$	9,248,452
Cost of goods sold	3,641,615		3,094,633		7,110,303		6,018,532
Gross profit	1,960,799		1,689,105		3,786,746		3,229,920
Operating expenses:
Selling, administrative and other expenses	1,364,015		1,349,309		2,767,994		2,544,473
Depreciation and amortization	85,890		73,960		173,259		146,256
Provision for doubtful accounts	2,899		5,037		7,393		9,946
Total operating expenses	1,452,804		1,428,306		2,948,646		2,700,675
Non-operating expense (income):
Interest expense, net	20,248		15,362		40,098		33,686
Other	(3,820)		(24,170)		(19,281)		(59,907)
Total non-operating expense (income)	16,428		(8,808)		20,817		(26,221)
Income before income taxes	491,567		269,607		817,283		555,466
Income taxes	119,038		73,111		198,916		141,260
Net income	$	372,529	$	196,496	$	618,367	$	414,206
Dividends declared per common share	$	0.8950	$	0.8150	$	1.7900	$	1.6300
Basic earnings per share	$	2.63	$	1.36	$	4.36	$	2.87
Diluted earnings per share	$	2.62	$	1.36	$	4.34	$	2.85

Weighted average common shares outstanding	141,581		144,211		141,747		144,312
Dilutive effect of stock options and non-vested restricted stock awards	723		772		835		846
Weighted average common shares outstanding – assuming dilution	142,304		144,983		142,582		145,158

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Net income	$	372,529	$	196,496	$	618,367	$	414,206
Other comprehensive (loss) income, net of income taxes:
Foreign currency translation adjustments, net of income taxes in 2022 — $31,638 and $40,049; 2021 — $7,019 and $14,166, respectively	(159,078)		7,131		(116,946)		6,836
Cash flow hedge adjustments, net of income taxes in 2022 — $1,383 and $2,767 ; 2021 — $1,383 and $2,767, respectively	3,741		3,741		7,482		7,482
Pension and postretirement benefit adjustments, net of income taxes in 2022 — $2,580 and $5,160; 2021 — $3,434 and $6,855, respectively	6,986		9,334

SEC Form 10-Q filed by Genuine Parts Company