Genuine Parts pany(GPC) - 2025 Q1 - Quarterly Report

Financial Performance - For the first quarter of 2025, net sales reached $5.9 billion, reflecting a 1.4% year-over-year increase despite one less selling day in the U.S. compared to the prior year[81]. - The Automotive segment generated$ 3.7 billion in net sales, a 2.5% increase from the previous year, driven by a 4.1% benefit from acquisitions[87]. - The Industrial segment reported net sales of $2.2 billion, a decrease of 0.4% year-over-year, impacted by a 0.7% decrease in comparable sales and a 1.0% unfavorable foreign currency impact[88]. - First quarter net income declined by 21.9% year-over-year to$ 194.4 million, influenced by higher depreciation, interest expenses, and lower pension income[82]. - Total adjusted EBITDA for the first quarter was $473.1 million, down 8.4% from the previous year, with a total adjusted EBITDA margin of 8.1%[85]. - Q1 2025 net income was$ 194 million, a decrease of 21.9% from $249 million in the same period last year, with diluted earnings per share at$ 1.40, down 21.3% from $1.78[97]. - Adjusted net income for Q1 2025 was$ 243 million, a decrease of 21.8% compared to the prior year, with adjusted diluted earnings per share at $1.75, down 21.2% from$ 2.22[98]. Expenses and Costs - Gross profit increased by $99 million, or 4.8%, with gross margin improving by 120 basis points to 37.1% due to acquired businesses and pricing initiatives[90]. - SG&A expenses rose by$ 135 million, or 8.6%, primarily due to acquisitions and increased personnel costs, with SG&A as a percentage of sales increasing to 29.1%[91]. - Depreciation and amortization expenses increased by $25 million due to planned investments in technology and supply chain initiatives[94]. - Net non-operating expenses for Q1 2025 were$ 36 million, a $42 million change from$ 5 million in net non-operating income in the prior year, primarily due to increased borrowings and lower pension income[95]. - Restructuring and other costs totaled $54.8 million, a decrease from$ 83 million in the prior year, reflecting ongoing efficiency improvements[82]. - In Q1 2025, the company incurred $55 million in restructuring and other costs, a decrease of$ 28 million compared to the prior year period[93]. Debt and Cash Management - Total debt increased to $4.6 billion, up$ 305 million, or 7.1%, from December 31, 2024[115]. - Cash and cash equivalents were $420 million as of March 31, 2025, a decrease of$ 60 million from December 31, 2024, with net cash used in operating activities at $41 million[113]. - The company amended its Unsecured Revolving Credit Facility to expand borrowing capacity to$ 2.0 billion and extended the maturity date to March 20, 2030[118]. Strategic Initiatives - The company plans to pursue strategic growth opportunities through disciplined capital deployment, including investments in businesses, mergers, and acquisitions[120]. - The company announced a 3% increase in the regular quarterly cash dividend for 2025, raising it to an annual rate of $4.12 per share from$ 4.00 per share in the prior year[123]. - 2025 will mark the 69th consecutive year of increased dividends paid to shareholders, demonstrating a strong commitment to returning value to investors[123]. Market Conditions - The Purchasing Managers' Index (PMI) showed sequential improvement in early 2025, indicating potential market recovery, although it contracted in March[89]. - The company's exposure to market risk has not changed materially since December 31, 2024, indicating stability in its risk management practices[124].