Genuine Parts Company

Ladies and gentlemen, welcome to the Genuine Parts Company second quarter 2023 earnings conference call. Today's call is being recorded. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. At this time, I would like to turn the conference over to Sid Jones, Senior Vice President of Investor Relations. Please go ahead, sir.

Good morning, and thank you for joining us today for the Genuine Parts Company second quarter 2023 earnings conference call. With me today to share their remarks are Paul Donahue, our Chairman and Chief Executive Officer, Will Stangle, our President and Chief Operating Officer, and Bert Napier, Executive Vice President and Chief Financial Officer. Tim Walsh, our Senior Director, Investor Relations, has also joined us. In addition to this morning's press release, a supplemental slide presentation can be found on the Investors page of the Genuine Parts Company website. Please be advised this call may include certain non-GAAP financial measures which may be referred to during today's discussion of our results as reported under generally accepted accounting principles. A reconciliation of these measures is provided in the earnings press release. Today's call may also involve forward-looking statements regarding the company and its businesses. The company's actual results could differ materially from any forward-looking statements due to several important factors described in the company's latest SEC filings, including this morning's press release. The company assumes no obligation to update any forward-looking statements made during this call. Now, I'll turn the call over to Paul for his remarks.

Thank you, Sid, and good morning. Welcome to our second quarter 2023 earnings conference call. We are pleased to report another solid quarter with record sales and double-digit adjusted earnings growth. Our second quarter once again highlights the value and benefit of our global automotive and industrial businesses and the mix and geographic diversity of our company, which we believe are competitive advantages that differentiate TPC in the marketplace. A few highlights from our second quarter results include total sales of $5.9 billion, an increase of 5.6% from the prior year, total company segment margin of 10.4%, an increase of 60 basis points from the same quarter last year, earnings per share of $2.44, an increase of 10.9% from adjusted earnings per share last year, and our 12th consecutive quarter of double-digit adjusted earnings growth. And finally, we continue to maintain a strong balance sheet while generating solid cash flow to support our growth initiatives and capital allocation priorities. Our global team remains focused on the strategic initiatives we highlighted at our Investor Day in March. and we believe our one CPC approach is contributing to our strong financial performance. We compete in two very large and fragmented markets and see significant opportunities to grow our business, expand our margin profile, and generate strong cash flow to support our strategic investments while delivering returns to our shareholders. As we continue to navigate a dynamic macro environment, We believe our focused execution, investments in our business, and strong industry fundamentals position GPC for long-term success. Looking at our industrial segment, demand trends held solid through the second quarter, even as the rate of sales growth tempered a bit relative to the first quarter, as we expected. Motion's growth rate on a two-year basis continues to be exceptional. And while certain economic indicators have slowed, we believe our strong market share position, along with the diversity of our products, services, and end markets, bode well for our continued growth prospects. In addition, future reshoring opportunities and the growth of domestic manufacturing industries provide significant opportunity for motions. And as you will hear from Will, our team's focus on productivity and efficiency is driving significant margin expansion in the industrial segment. Our global automotive business continues to benefit from the broad geographic diversity of our markets. In addition, we believe our long history of supporting the DIFM customer segment, which is 80% of our global automotive sales, positions us well as sales growth to DIFM customers continues to outpace DIY sales growth. During the second quarter, our international automotive businesses delivered strong mid-single to double-digit growth while our U.S. automotive business experienced low single-digit growth. The fundamentals of the automotive aftermarket remain favorable with trends such as increasing miles driven, an aging and complex vehicle fleet, rising interest rates, and continued high prices for vehicles, all contributing to underlying demand. While the near-term environment remains dynamic, we are very pleased with our year-to-date performance. And with the strong earnings growth in the second quarter, we are once again raising our outlook for 2023 earnings per share, which Bert will discuss further. As we look forward, we remain confident in our strategic plans and will continue to invest to strengthen our business and achieve both our near and long-term financial targets while returning capital to shareholders through the dividend and share repurchases. So in closing, I'd be remiss if I didn't highlight the outstanding work of our HR and IT teams in Q2 around our implementation of Workday. In early July, we completed the first phase of our implementation of the Workday HR platform in North America, continuing to demonstrate the modernization of our system platforms and supporting our teams with the right tools and the right technology. Our HR and IT teams delivered an exceptional outcome well ahead of schedule, showcasing the benefits of our one GPC talent and technology initiatives. So before I turn it over to Will, we want to thank each of our 58,000 GPC teammates for their hard work and continued dedication to serving our customers around the world. So with that, I'll turn the call over to Will.