ATLANTA, Feb. 17, 2021 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) announced today its results for the fourth
quarter and twelve months ended December 31, 2020.
"Our fourth quarter results reflect the benefit of our ongoing
strategic actions, despite the continued challenges of
COVID-19. The GPC team was agile in adapting to dynamic
conditions and executed on our initiatives to deliver customer
value, operational efficiencies and strong financial results.
We are grateful to our 50,000 associates for their unwavering
commitment to excellence while responding to unprecedented business
and economic conditions," said Paul
Donahue, Chairman and Chief Executive Officer of Genuine
Parts Company.
Fourth Quarter 2020 Results
Sales from continuing operations were $4.3 billion, a 0.7% decrease from the same
period in 2019. The decrease in sales was primarily
attributable to a 2.8% decline in comparable sales, partially
offset by a 0.8% benefit from acquisitions and a 1.3% net benefit
of foreign currency and other.
Net income from continuing operations was $171.6 million, or a diluted earnings per share
of $1.18. This compares to net income
from continuing operations of $79.0
million, or $0.54 per diluted
share in the prior year period. Excluding the impact of
restructuring, an inventory adjustment, and transaction and other
costs, adjusted net income from continuing operations was
$221.0 million compared to
$185.7 million a year ago. Adjusted
net income per diluted share from continuing operations was
$1.52, a 19.7% increase compared to
$1.27 per diluted share last
year1.
Mr. Donahue continued, "Automotive sales were led by strong
growth in Australasia, while the pace of recovery slowed in
Europe and North America relative to the previous
quarter. In response, our team was focused on our strategic
priorities to strengthen our supply chain, improve our inventory
availability and enable our sales team to build positive sales
momentum. Industrial sales were much improved from the prior
quarter and grew progressively stronger through the last three
months of the year. These top line results, combined with
further gross margin improvement and lower operating expenses,
drove expanded operating margins in both our automotive and
industrial businesses and strong earnings growth. We also finished
the year with a strong balance sheet, ample liquidity and robust
cash flow."
Fourth Quarter 2020 Segment Results
Automotive Parts Group
Automotive sales were $2.8 billion
in the fourth quarter, up 0.7% from 2019 and representing 66% of
total Company revenues. The increase consisted of a 0.9%
contribution from acquisitions and a 1.8% net benefit of foreign
currency, offset by a 2.0% decrease in comparable sales.
Segment profit of $240.1 million
increased 19.4%, with profit margin of 8.5%, up 130 basis points
from 2019.
Industrial Parts Group
Industrial sales were $1.4 billion
in the fourth quarter, down 3.3% from 2019 and representing 34% of
total Company revenues. The decrease in sales was comprised
of a 4.4% decrease in comparable sales, partially offset by a 0.6%
contribution from acquisitions and a 0.5% net benefit of foreign
currency. Segment profit of $133.4
million increased 5.1%, with profit margin of 9.3%, up 70
basis points from 2019.
Full Year 2020 Results
Sales from continuing operations for the twelve months ended
December 31, 2020 were $16.5
billion, a 5.6% decrease compared to $17.5 billion in 2019. Excluding
divestitures, net sales from continuing operations were down 2.3%
for the twelve months. Net income from continuing operations was
$163.4 million and diluted earnings
per share were $1.13 for the twelve
months, compared to $646.5 million,
or $4.42 per share in 2019.
Excluding items which impact comparability with prior periods, the
Company's adjusted net income from continuing operations was
$765.0 million, or $5.27 per share, compared to $776.8 million, or $5.31 per share in 2019.
Balance Sheet, Cash Flow and Capital Allocation
The Company generated operating cash flow from continuing
operations of $2.0 billion in
2020, an increase from $833 million
in 2019, driven primarily by working capital initiatives, including
the sale of accounts receivable that increased operating cash flows
by $800 million. Free cash flow was
$1.9 billion, an increase from
$555 million in 2019. The
Company also generated $183 million
in cash flow from investing activities and used $1.5 billion of cash flow in financing
activities.
The Company improved its debt position in the fourth quarter by
issuing $500 million in public debt
and refinancing its revolving credit facility. The Company ended
the year with $2.9 billion in total
liquidity, consisting of $1.9 billion
in unused credit capacity and $1.0
billion in cash and cash equivalents. For the year, the
Company reduced debt by $749 million,
or 22%, and is in compliance with all its debt covenants.
"While we chose to prudently conserve cash and carefully monitor
our capital deployment through much of 2020 due to COVID-19, we
reinvested in our businesses via essential capital expenditures and
a few bolt-on acquisitions. The Company also returned
$549 million to shareholders, including $453 million in dividends and $96 million in share repurchases," said
Carol Yancey, Executive Vice
President and Chief Financial Officer. "We enter 2021 with an
excellent balance sheet, including a strong cash position and ample
liquidity, to support our growth plans and provide for disciplined,
value creating capital allocation. As we gain greater visibility
into the macro environment, we expect to resume more normal levels
of capital allocation, including the reinvestment in our
business."
"The year 2020 was extraordinary in every respect," Mr. Donahue
concluded. "The COVID-19 pandemic has been incredibly
challenging, but the global GPC team proved resilient and up to the
challenge. Despite economic and market uncertainties, we
remained focused on our strategic growth initiatives and cost
actions. Notably, we further streamlined our operations with
the divestiture of our Business Products segment, which helped
optimize our portfolio and strengthened our focus on the global
automotive and industrial businesses. We are extremely proud
of our team for their many accomplishments in a difficult year and
excited to move forward into 2021 as a stronger, more agile Company
well-positioned to drive strong sales growth, earnings and cash
flow."
2021 Outlook
The Company is reinstating its practice of providing full-year
guidance. The Company considered its current growth plans,
strategic initiatives, recent business trends, global economic
outlook and the continued uncertainty of COVID-19 and its potential
impact on our results, in establishing its full-year 2021 guidance
as outlined in the table below. The Company will update
full-year guidance during 2021, as appropriate.
|
|
Year Ended
12/31/2021
|
Total sales
growth
|
|
4% to 6%
|
Automotive sales
growth
|
|
4% to 6%
|
Industrial sales
growth
|
|
3% to 5%
|
Diluted earnings per
share
|
|
$5.55 to
$5.75
|
Effective tax
rate
|
|
24.5% to
25.5%
|
Net cash provided by
operating activities
|
|
$1.0 billion to $1.2
billion
|
Capital
expenditures
|
|
$275 million to $325
million
|
Certain Non-GAAP Information
This release contains certain financial information not derived
in accordance with the United
States ("U.S.") generally accepted accounting principles
("GAAP"). These items include changes in sales excluding
divestitures, adjusted net (loss) income from continuing
operations, adjusted diluted net (loss) income from continuing
operations per common share and free cash flow. The Company
believes that the presentation of changes in sales excluding
divestitures, adjusted net (loss) income from continuing
operations, adjusted diluted net (loss) income from continuing
operations per common share and free cash flow, which are not
calculated in accordance with GAAP, 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 that 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, divestitures and foreign currency. 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 metric 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.
Daily Sales
Daily sales is a key metric that represents the amounts invoiced
to the Company's customers each day. Daily sales do not represent
GAAP-based sales because, among other things, invoices are not
always generated at the same time goods and services are delivered
to customers and the amounts do not include adjustments for
estimates of returns, rebates or other forms of variable
consideration. Management uses this metric to monitor demand trends
at each of its subsidiaries throughout each month for the purposes
of monitoring performance against forecasts and to make operational
decisions. The Company considers this metric useful to investors
because it provides greater transparency into management's view and
assessment of the Company's ongoing operations. The calculation of
this 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 and future outlook. 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 website at
http://genuineparts.investorroom.com. The call is also available by
dialing 877-407-0789, conference ID 13715052. A replay will also be
available on the Company's website or at 844-512-2921, conference
ID 13715052, two hours after the completion of the call until
12:00 a.m. Eastern time on
March 3, 2021.
Forward Looking Statements
Some statements in this press release, as well as in other
materials we file with the Securities and Exchange Commission (SEC)
or otherwise release to the public and in materials that we 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,"
and variations of such words and similar expressions are intended
to identify such forward-looking statements. Senior officers may
also make verbal statements to analysts, investors, the media and
others that are forward-looking. These forward-looking statements
include, without limitation, statements regarding our growth plans,
capital allocations and reinvestment in our business during the
coming year, as well as statements under the heading "2021 Outlook"
above.
The Company cautions that its 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, the extent
and duration of the disruption to our business operations caused by
the global health crisis associated with the COVID-19 outbreak,
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; the Company's ability to maintain
compliance with its debt covenants; the Company's ability to
successfully integrate acquired businesses into the Company and to
realize the anticipated synergies and benefits; the Company's
ability to successfully divest businesses and realize the expected
benefits of those divestitures; the Company's ability to
successfully implement its business initiatives in its two business
segments; changes in demand for the Company's products; the ability
to maintain favorable supplier arrangements and relationships;
disruptions in our suppliers' operations, including the impact of
COVID-19 on our suppliers as well as our supply chain; changes in
national and international legislation or government regulations or
policies, including changes to import tariffs, short term
government subsidies, and the unpredictability of such changes and
their impact to the Company and its suppliers and customers, data
security policies and requirements as well as privacy legislation;
changes in general economic conditions, including unemployment,
inflation (including the impact of tariffs) or deflation and the
United Kingdom's (U.K.) exit from
the European Union and the unpredictability of the impact of such
exit; changes in tax laws, regulations, treaties and policies,
including the interpretation and enforcement of any of the
foregoing; volatile exchange rates; volatility in oil prices;
significant cost increases, such as rising fuel and freight
expenses; the Company's 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 the Company's information systems; and the
other risks and uncertainties discussed in the Company's Annual
Report on Form 10-K for 2020 (all of which risks may be amplified
by the COVID-19 outbreak) and from time to time in the Company's
subsequent filings with the SEC.
Forward-looking statements are only as of the date they are
made, and the Company undertakes no duty to update its
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.
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., Germany, Poland, the
Netherlands and Belgium. 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 14 countries. Further information is
available at www.genpt.com.
1 Adjusted net income from continuing
operations, adjusted diluted net income from continuing operations
per common share, sales excluding divestitures and free cash flow
referred in this press release are non-GAAP financial measures.
Please refer to the supplemental information presented below for
reconciliations of the non-GAAP financial measures used in this
release to the most comparable GAAP financial measure and related
disclosures.
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME
(UNAUDITED)
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in thousands, except
per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales
|
|
$
|
4,251,594
|
|
|
$
|
4,279,890
|
|
|
$
|
16,537,433
|
|
|
$
|
17,522,234
|
|
Cost of goods
sold
|
|
2,803,484
|
|
|
2,800,942
|
|
|
10,882,592
|
|
|
11,662,551
|
|
Gross
profit
|
|
1,448,110
|
|
|
1,478,948
|
|
|
5,654,841
|
|
|
5,859,683
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
administrative and other expenses
|
|
1,132,297
|
|
|
1,163,196
|
|
|
4,386,739
|
|
|
4,577,610
|
|
Depreciation and
amortization
|
|
69,758
|
|
|
70,295
|
|
|
272,842
|
|
|
257,263
|
|
Provision for doubtful
accounts
|
|
125
|
|
|
3,446
|
|
|
23,577
|
|
|
13,876
|
|
Restructuring
costs
|
|
11,010
|
|
|
100,023
|
|
|
50,019
|
|
|
100,023
|
|
Goodwill impairment
charge
|
|
—
|
|
|
—
|
|
|
506,721
|
|
|
—
|
|
Total operating
expenses
|
|
1,213,190
|
|
|
1,336,960
|
|
|
5,239,898
|
|
|
4,948,772
|
|
Non-operating
expenses (income):
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
21,495
|
|
|
22,016
|
|
|
93,713
|
|
|
95,583
|
|
Other
|
|
(12,121)
|
|
|
(23,975)
|
|
|
(58,138)
|
|
|
(86,712)
|
|
Special termination
costs
|
|
—
|
|
|
42,757
|
|
|
—
|
|
|
42,757
|
|
Total non-operating
expenses (income)
|
|
9,374
|
|
|
40,798
|
|
|
35,575
|
|
|
51,628
|
|
Income before income
taxes
|
|
225,546
|
|
|
101,190
|
|
|
379,368
|
|
|
859,283
|
|
Income
taxes
|
|
53,914
|
|
|
22,174
|
|
|
215,973
|
|
|
212,808
|
|
Net income from
continuing operations
|
|
171,632
|
|
|
79,016
|
|
|
163,395
|
|
|
646,475
|
|
Net loss from
discontinued operations
|
|
(428)
|
|
|
(70,098)
|
|
|
(192,497)
|
|
|
(25,390)
|
|
Net income
(loss)
|
|
$
|
171,204
|
|
|
$
|
8,918
|
|
|
$
|
(29,102)
|
|
|
$
|
621,085
|
|
Basic earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
1.19
|
|
|
$
|
0.54
|
|
|
$
|
1.13
|
|
|
$
|
4.44
|
|
Discontinued
operations
|
|
—
|
|
|
(0.48)
|
|
|
(1.33)
|
|
|
(0.18)
|
|
Basic earnings (loss)
per share
|
|
$
|
1.19
|
|
|
$
|
0.06
|
|
|
$
|
(0.20)
|
|
|
$
|
4.26
|
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
1.18
|
|
|
$
|
0.54
|
|
|
$
|
1.13
|
|
|
$
|
4.42
|
|
Discontinued
operations
|
|
—
|
|
|
(0.48)
|
|
|
(1.33)
|
|
|
(0.18)
|
|
Diluted earnings
(loss) per share
|
|
$
|
1.18
|
|
|
$
|
0.06
|
|
|
$
|
(0.20)
|
|
|
$
|
4.24
|
|
Weighted average
common shares outstanding
|
|
144,313
|
|
|
145,325
|
|
|
144,474
|
|
|
145,736
|
|
Dilutive effect of
stock options and non-vested restricted stock awards
|
|
847
|
|
|
780
|
|
|
641
|
|
|
681
|
|
Weighted average
common shares outstanding — assuming dilution
|
|
145,160
|
|
|
146,105
|
|
|
145,115
|
|
|
146,417
|
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
SEGMENT
INFORMATION
(UNAUDITED)
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in
thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$
|
2,821,832
|
|
|
$
|
2,801,533
|
|
|
$
|
10,860,695
|
|
|
$
|
10,993,902
|
|
Industrial
|
|
1,429,762
|
|
|
1,478,357
|
|
|
5,676,738
|
|
|
6,528,332
|
|
Total net
sales
|
|
$
|
4,251,594
|
|
|
$
|
4,279,890
|
|
|
$
|
16,537,433
|
|
|
$
|
17,522,234
|
|
Segment
profit:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$
|
240,135
|
|
|
$
|
201,086
|
|
|
$
|
867,743
|
|
|
$
|
831,951
|
|
Industrial
|
|
133,373
|
|
|
126,943
|
|
|
481,854
|
|
|
521,830
|
|
Total segment
profit
|
|
373,508
|
|
|
328,029
|
|
|
1,349,597
|
|
|
1,353,781
|
|
Interest expense,
net
|
|
(21,083)
|
|
|
(20,922)
|
|
|
(91,048)
|
|
|
(91,405)
|
|
Corporate
expense
|
|
(32,701)
|
|
|
(37,233)
|
|
|
(149,754)
|
|
|
(140,815)
|
|
Intangible asset
amortization
|
|
(24,743)
|
|
|
(23,421)
|
|
|
(94,962)
|
|
|
(92,206)
|
|
Other unallocated
costs (1)
|
|
(69,435)
|
|
|
(145,263)
|
|
|
(634,465)
|
|
|
(170,072)
|
|
Income before
income taxes from continuing operations
|
|
$
|
225,546
|
|
|
$
|
101,190
|
|
|
$
|
379,368
|
|
|
$
|
859,283
|
|
|
|
(1) The following
table presents a summary of the other unallocated costs:
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in
thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Other unallocated
costs:
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(506,721)
|
|
|
$
|
—
|
|
Restructuring
costs
|
|
(11,010)
|
|
|
(100,023)
|
|
|
(50,019)
|
|
|
(100,023)
|
|
Special termination
costs
|
|
—
|
|
|
(42,757)
|
|
|
—
|
|
|
(42,757)
|
|
Realized currency and
other divestiture losses
|
|
—
|
|
|
—
|
|
|
(11,356)
|
|
|
(34,701)
|
|
Gain on insurance
proceeds related to SPR fire
|
|
—
|
|
|
—
|
|
|
13,448
|
|
|
—
|
|
Inventory
adjustment
|
|
(40,000)
|
|
|
—
|
|
|
(40,000)
|
|
|
—
|
|
Gain on equity
investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,663
|
|
Transaction and other
costs
|
|
(18,425)
|
|
|
(2,483)
|
|
|
(39,817)
|
|
|
(31,254)
|
|
Total other
unallocated costs
|
|
$
|
(69,435)
|
|
|
$
|
(145,263)
|
|
|
$
|
(634,465)
|
|
|
$
|
(170,072)
|
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
|
|
|
|
As of December
31,
|
(in
thousands)
|
|
2020
|
|
2019
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
990,166
|
|
|
$
|
276,992
|
|
Trade accounts
receivable, less allowance for doubtful accounts (2020 - $36,622;
2019 - $35,047)
|
|
1,556,966
|
|
|
2,440,252
|
|
Merchandise
inventories, net
|
|
3,506,271
|
|
|
3,443,876
|
|
Prepaid expenses and
other current assets
|
|
1,060,360
|
|
|
1,063,245
|
|
Current assets of
discontinued operations
|
|
—
|
|
|
714,251
|
|
Total current
assets
|
|
7,113,763
|
|
|
7,938,616
|
|
Goodwill
|
|
1,917,477
|
|
|
2,293,519
|
|
Other intangible
assets, net
|
|
1,498,257
|
|
|
1,492,097
|
|
Deferred tax
assets
|
|
65,658
|
|
|
45,921
|
|
Property, plant and
equipment, less accumulated depreciation (2020 - $1,398,095; 2019 -
$1,200,688)
|
|
1,162,043
|
|
|
1,173,688
|
|
Operating lease
assets
|
|
1,038,877
|
|
|
995,667
|
|
Other
assets
|
|
644,140
|
|
|
457,350
|
|
Noncurrent assets of
discontinued operations
|
|
—
|
|
|
248,771
|
|
Total
assets
|
|
$
|
13,440,215
|
|
|
$
|
14,645,629
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
|
4,128,084
|
|
|
$
|
3,948,000
|
|
Current portion of
debt
|
|
160,531
|
|
|
624,043
|
|
Dividends
payable
|
|
114,043
|
|
|
110,851
|
|
Other current
liabilities
|
|
1,491,426
|
|
|
1,493,109
|
|
Current liabilities of
discontinued operations
|
|
—
|
|
|
218,117
|
|
Total current
liabilities
|
|
5,894,084
|
|
|
6,394,120
|
|
Long-term
debt
|
|
2,516,614
|
|
|
2,802,056
|
|
Operating lease
liabilities
|
|
789,294
|
|
|
756,519
|
|
Pension and other
post-retirement benefit liabilities
|
|
265,687
|
|
|
249,832
|
|
Deferred tax
liabilities
|
|
212,910
|
|
|
233,044
|
|
Other long-term
liabilities
|
|
543,623
|
|
|
445,652
|
|
Noncurrent
liabilities of discontinued operations
|
|
—
|
|
|
68,906
|
|
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 - 2020 - 144,354,335 shares and 2019 - 145,378,158
shares
|
|
144,354
|
|
|
145,378
|
|
Additional paid-in
capital
|
|
117,165
|
|
|
98,777
|
|
Accumulated other
comprehensive loss
|
|
(1,036,502)
|
|
|
(1,141,308)
|
|
Retained
earnings
|
|
3,979,779
|
|
|
4,571,860
|
|
Total parent
equity
|
|
3,204,796
|
|
|
3,674,707
|
|
Noncontrolling
interests in subsidiaries
|
|
13,207
|
|
|
20,793
|
|
Total
equity
|
|
3,218,003
|
|
|
3,695,500
|
|
Total liabilities and
equity
|
|
$
|
13,440,215
|
|
|
$
|
14,645,629
|
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
|
Year Ended
December 31
|
(in
thousands)
|
|
2020
|
|
2019
|
|
2018
|
Operating
activities:
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(29,102)
|
|
|
$
|
621,085
|
|
|
$
|
810,474
|
|
Net (loss) income
from discontinued operations
|
|
(192,497)
|
|
|
(25,390)
|
|
|
60,940
|
|
Net income from
continuing operations
|
|
163,395
|
|
|
646,475
|
|
|
749,534
|
|
Adjustments to
reconcile net income from continuing operations to net cash
provided by operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
272,842
|
|
|
257,263
|
|
|
227,584
|
|
Excess tax benefit
from share-based compensation
|
|
(677)
|
|
|
(4,920)
|
|
|
(4,232)
|
|
Deferred income
taxes
|
|
(27,722)
|
|
|
(55,939)
|
|
|
1,593
|
|
Share-based
compensation
|
|
22,621
|
|
|
28,703
|
|
|
17,737
|
|
Realized currency and
other divestiture losses
|
|
11,356
|
|
|
34,701
|
|
|
—
|
|
Gain on equity
investment
|
|
—
|
|
|
(38,663)
|
|
|
—
|
|
Goodwill impairment
charge
|
|
506,721
|
|
|
—
|
|
|
—
|
|
Other operating
activities
|
|
12,569
|
|
|
(17,589)
|
|
|
1,648
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Trade accounts
receivable, net
|
|
957,514
|
|
|
(134,163)
|
|
|
(62,103)
|
|
Merchandise
inventories, net
|
|
58,462
|
|
|
(54,765)
|
|
|
(74,148)
|
|
Trade accounts
payable
|
|
89,350
|
|
|
82,739
|
|
|
357,097
|
|
Other short-term
assets and liabilities
|
|
(109,812)
|
|
|
11,740
|
|
|
(100,616)
|
|
Other long-term assets
and liabilities
|
|
57,903
|
|
|
76,937
|
|
|
(57,372)
|
|
Net cash provided by
operating activities from continuing operations
|
|
2,014,522
|
|
|
832,519
|
|
|
1,056,722
|
|
Investing
activities:
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(153,502)
|
|
|
(277,873)
|
|
|
(226,506)
|
|
Proceeds from sale of
property, plant and equipment
|
|
18,064
|
|
|
24,387
|
|
|
14,391
|
|
Proceeds from
divestitures of businesses
|
|
387,379
|
|
|
434,609
|
|
|
—
|
|
Acquisitions of
businesses and other investing activities
|
|
(69,173)
|
|
|
(724,718)
|
|
|
(257,823)
|
|
Net cash provided by
(used in) investing activities from continuing
operations
|
|
182,768
|
|
|
(543,595)
|
|
|
(469,938)
|
|
Financing
activities:
|
|
|
|
|
|
|
Proceeds from
debt
|
|
2,638,014
|
|
|
5,037,168
|
|
|
5,064,291
|
|
Payments on
debt
|
|
(3,533,017)
|
|
|
(4,897,769)
|
|
|
(5,124,265)
|
|
Stock options
exercised
|
|
(4,120)
|
|
|
(11,413)
|
|
|
(10,227)
|
|
Dividends
paid
|
|
(453,277)
|
|
|
(438,890)
|
|
|
(415,983)
|
|
Purchase of
stock
|
|
(96,215)
|
|
|
(74,187)
|
|
|
(91,983)
|
|
Other financing
activities
|
|
(65,150)
|
|
|
(871)
|
|
|
(30,663)
|
|
Net cash used in
financing activities from continuing operations
|
|
(1,513,765)
|
|
|
(385,962)
|
|
|
(608,830)
|
|
Cash flows from
discontinued operations:
|
|
|
|
|
|
|
Net cash flows
provided by operating activities from discontinued
operations
|
|
5,039
|
|
|
59,491
|
|
|
88,442
|
|
Net cash used in
investing activities from discontinued operations
|
|
(11,131)
|
|
|
(19,611)
|
|
|
(26,186)
|
|
Net cash provided by
financing activities from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
Net cash (used in)
provided by discontinued operations
|
|
(6,092)
|
|
|
39,880
|
|
|
62,256
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
35,741
|
|
|
603
|
|
|
(21,562)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
713,174
|
|
|
(56,555)
|
|
|
18,648
|
|
Cash and cash
equivalents at beginning of year
|
|
276,992
|
|
|
333,547
|
|
|
314,899
|
|
Cash and cash
equivalents at end of year
|
|
$
|
990,166
|
|
|
$
|
276,992
|
|
|
$
|
333,547
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
|
|
Cash paid during the
year for:
|
|
|
|
|
|
|
Income
taxes
|
|
$
|
223,019
|
|
|
$
|
303,736
|
|
|
$
|
236,536
|
|
Interest
|
|
$
|
91,344
|
|
|
$
|
95,281
|
|
|
$
|
102,131
|
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
RECONCILIATION OF
GAAP NET INCOME FROM CONTINUING OPERATIONS TO ADJUSTED NET INCOME
FROM CONTINUING OPERATIONS AND GAAP DILUTED NET INCOME FROM
CONTINUING OPERATIONS PER COMMON SHARE TO ADJUSTED DILUTED NET
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE
(UNAUDITED)
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in thousands, except
per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP net income from
continuing operations
|
|
$
|
171,632
|
|
|
$
|
79,016
|
|
|
$
|
163,395
|
|
|
$
|
646,475
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge (1)
|
|
—
|
|
|
—
|
|
|
506,721
|
|
|
—
|
|
Restructuring
(2)
|
|
11,010
|
|
|
142,780
|
|
|
50,019
|
|
|
142,780
|
|
Realized currency loss
(3)
|
|
—
|
|
|
—
|
|
|
11,356
|
|
|
34,701
|
|
Gain on insurance
proceeds related to SPR Fire (4)
|
|
—
|
|
|
—
|
|
|
(13,448)
|
|
|
—
|
|
Gain on equity
investment (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,663)
|
|
Inventory adjustment
(6)
|
|
40,000
|
|
|
—
|
|
|
40,000
|
|
|
—
|
|
Transaction and other
costs (7)
|
|
18,425
|
|
|
2,483
|
|
|
39,817
|
|
|
31,254
|
|
Total
adjustments
|
|
69,435
|
|
|
145,263
|
|
|
634,465
|
|
|
170,072
|
|
Tax impact of
adjustments
|
|
(20,089)
|
|
|
(38,564)
|
|
|
(32,822)
|
|
|
(39,704)
|
|
Adjusted net income
from continuing operations
|
|
$
|
220,978
|
|
|
$
|
185,715
|
|
|
$
|
765,038
|
|
|
$
|
776,843
|
|
|
|
The table below
represents amounts per common share assuming dilution:
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in thousands, except
per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
GAAP net income from
continuing operations
|
|
$
|
1.18
|
|
|
$
|
0.54
|
|
|
$
|
1.13
|
|
|
$
|
4.42
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Goodwill impairment
charge (1)
|
|
—
|
|
|
—
|
|
|
3.49
|
|
|
—
|
|
Restructuring
(2)
|
|
0.08
|
|
|
0.98
|
|
|
0.34
|
|
|
0.98
|
|
Realized currency and
other divestiture losses (3)
|
|
—
|
|
|
—
|
|
|
0.08
|
|
|
0.24
|
|
Gain on insurance
proceeds related to SPR Fire (4)
|
|
—
|
|
|
—
|
|
|
(0.09)
|
|
|
—
|
|
Gain on equity
investment (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.26)
|
|
Inventory adjustment
(6)
|
|
0.28
|
|
|
—
|
|
|
0.28
|
|
|
—
|
|
Transaction and other
costs (7)
|
|
0.12
|
|
|
0.01
|
|
|
0.27
|
|
|
0.20
|
|
Total
adjustments
|
|
0.48
|
|
|
0.99
|
|
|
4.37
|
|
|
1.16
|
|
Tax impact of
adjustments
|
|
(0.14)
|
|
|
(0.26)
|
|
|
(0.23)
|
|
|
(0.27)
|
|
Adjusted net income
from continuing operations
|
|
$
|
1.52
|
|
|
$
|
1.27
|
|
|
$
|
5.27
|
|
|
$
|
5.31
|
|
Weighted average
common shares outstanding - assuming dilution
|
|
145,160
|
|
|
146,105
|
|
|
145,115
|
|
|
146,417
|
|
|
|
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.
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in
thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Line item:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
$
|
40,000
|
|
|
$
|
2,127
|
|
|
$
|
53,495
|
|
|
$
|
9,608
|
|
Selling,
administrative and other expenses
|
|
1,881
|
|
|
665
|
|
|
10,094
|
|
|
23,768
|
|
Goodwill impairment
charge
|
|
—
|
|
|
—
|
|
|
506,721
|
|
|
—
|
|
Restructuring
costs
|
|
11,010
|
|
|
100,023
|
|
|
50,019
|
|
|
100,023
|
|
Non-operating expenses
(income): Special termination costs
|
|
—
|
|
|
42,757
|
|
|
—
|
|
|
42,757
|
|
Non-operating expenses
(income): Other
|
|
16,544
|
|
|
(309)
|
|
|
14,136
|
|
|
(6,084)
|
|
Total
adjustments
|
|
$
|
69,435
|
|
|
$
|
145,263
|
|
|
$
|
634,465
|
|
|
$
|
170,072
|
|
|
(1) Adjustment reflects a second
quarter goodwill impairment charge related to our European
reporting unit.
|
(2) Adjustment
reflects restructuring and special termination costs related to the
2019 Cost Savings Plan announced in the fourth quarter of 2019. The
costs are primarily associated with severance and other employee
costs, including a voluntary retirement program, and facility and
closure costs related to the consolidation of
operations.
|
(3) Adjustment
reflects realized currency losses related to
divestitures.
|
(4) Adjustment
reflects insurance recoveries in excess of losses incurred on
inventory, property, plant and equipment and other fire-related
costs related to the S.P. Richards Headquarters and Distribution
Center.
|
(5) Adjustment
relates to the gain recognized upon remeasuring the Company's
preexisting 35% equity investment to fair value upon acquiring the
remaining equity of Motion Asia Pacific on July 1,
2019.
|
(6) Adjustment
reflects a $40 million increase to cost of goods sold recorded
during the quarter ended December 31, 2020 due to the correction of
an immaterial error related to the accounting in prior years for
consideration received from vendors.
|
(7) Adjustment
includes a $17 million loss on investment, $10 million of
incremental costs associated with COVID-19 and costs associated
with certain divestitures. COVID-19 related costs include
incremental costs incurred relating to fees to cancel marketing
events and increased cleaning and sanitization materials, among
other things. For the three and twelve months ended December 31,
2019, adjustment reflects transaction and other costs related to
acquisitions and divestitures.
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
RECONCILIATION OF
CHANGES IN GAAP TOTAL NET SALES TO NET SALES EXCLUDING
DIVESTITURES
(UNAUDITED)
|
|
|
Three Months Ended
December 31, 2020
|
|
GAAP Total Net
Sales
|
|
Divestitures
|
|
Net Sales
Excluding
Divestitures
|
Automotive
|
0.7
|
%
|
|
—
|
%
|
|
0.7
|
%
|
Industrial
|
(3.3)
|
%
|
|
—
|
%
|
|
(3.3)
|
%
|
Total Net
Sales
|
(0.7)
|
%
|
|
—
|
%
|
|
(0.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31, 2020
|
|
GAAP Total Net
Sales
|
|
Divestitures
|
|
Net Sales
Excluding
Divestitures
|
Automotive
|
(1.2)
|
%
|
|
(0.1)
|
%
|
|
(1.1)
|
%
|
Industrial
|
(13.0)
|
%
|
|
(8.5)
|
%
|
|
(4.5)
|
%
|
Total Net
Sales
|
(5.6)
|
%
|
|
(3.3)
|
%
|
|
(2.3)
|
%
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
CHANGE IN NET SALES
SUMMARY
(UNAUDITED)
|
|
|
|
Three Months Ended
December 31, 2020
|
|
|
Comparable
Sales
|
|
Acquisitions
|
|
Divestitures
|
|
Foreign
Currency
|
|
Other
|
|
Total Net
Sales
|
Automotive
|
|
(2.0)
|
%
|
|
0.9
|
%
|
|
—
|
%
|
|
2.3
|
%
|
|
(0.5)
|
%
|
|
0.7
|
%
|
Industrial
|
|
(4.4)
|
%
|
|
0.6
|
%
|
|
—
|
%
|
|
0.5
|
%
|
|
—
|
%
|
|
(3.3)
|
%
|
Total Net
Sales
|
|
(2.8)
|
%
|
|
0.8
|
%
|
|
—
|
%
|
|
1.7
|
%
|
|
(0.4)
|
%
|
|
(0.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31, 2020
|
|
|
Comparable
Sales
|
|
Acquisitions
|
|
Divestitures
|
|
Foreign
Currency
|
|
Other
|
|
Total Net
Sales
|
Automotive
|
|
(4.4)
|
%
|
|
2.7
|
%
|
|
(0.1)
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
(1.2)
|
%
|
Industrial
|
|
(8.4)
|
%
|
|
3.8
|
%
|
|
(8.5)
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
(13.0)
|
%
|
Total Net
Sales
|
|
(5.6)
|
%
|
|
3.0
|
%
|
|
(3.3)
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
(5.6)
|
%
|
GENUINE PARTS COMPANY
AND SUBSIDIARIES
RECONCILIATION OF
GAAP CASH PROVIDED BY OPERATING ACTIVITIES FROM CONTINUING
OPERATIONS TO FREE CASH FLOW
(UNAUDITED)
|
|
|
|
Twelve Months Ended
December 31,
|
(in
thousands)
|
|
2020
|
|
2019
|
Net cash provided by
operating activities from continuing operations
|
|
$
|
2,014,522
|
|
|
$
|
832,519
|
|
Purchases of
property, plant and equipment
|
|
(153,502)
|
|
|
(277,873)
|
|
Free Cash
Flow
|
|
$
|
1,861,020
|
|
|
$
|
554,646
|
|
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SOURCE Genuine Parts Company