Genuine Parts 10-Q 2024-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended September 30, 2024

OR

For the transition period from to

Commission file number: 1-5690

GENUINE PARTS COMPANY

(Exact name of registrant as specified in its charter)

678-934-5000

(Registrant’s telephone number, including area code)

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

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.

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.

PART I – FINANCIAL INFORMATION

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

See accompanying Notes to Condensed Consolidated Financial Statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

See accompanying Notes to Condensed Consolidated Financial Statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

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The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and accompanying notes contained herein and with the audited Consolidated Financial Statements, accompanying notes, related information and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of results for the year ended December 31, 2024.

Forward-Looking Statements

Some statements in this report, as well as in other materials we file with the Securities and Exchange Commission (“SEC”), release to the public, or 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,” or similar expressions are intended to identify such forward-looking statements. These forward-looking statements include our view of business and economic trends for the remainder of the year and our expectations regarding our ability to capitalize on these business and economic trends and to execute our strategic priorities. Senior officers may also make verbal statements to analysts, investors, the media and others that are forward-looking.

We caution you that all 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, changes in general economic conditions, including unemployment, inflation (including the impact of tariffs) or deflation, financial institution disruptions and geopolitical conflicts such as the conflict between Russia and Ukraine, the conflict in the Gaza strip and other unrest in the Middle East; volatility in oil prices; significant cost increases, such as rising fuel and freight expenses; natural disasters or adverse weather conditions, such as recent severe hurricanes; public health emergencies, 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; our ability to maintain compliance with our debt covenants; our ability to successfully integrate acquired businesses into our operations and to realize the anticipated synergies and benefits; our ability to successfully implement our business initiatives in our two business segments; slowing demand for our products; the ability to maintain favorable supplier arrangements and relationships; changes in national and international legislation or government regulations or policies, including changes to import tariffs, environmental and social policy, infrastructure programs and privacy legislation, and their impact to us, our suppliers and customers; changes in tax policies; volatile exchange rates; our 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; the uncertainties and costs of litigation; disruptions caused by a failure or breach of our information systems, as well as other risks and uncertainties discussed in our 2023 Annual Report on Form 10-K and from time to time in our subsequent filings with the SEC.

Forward-looking statements speak only as of the date they are made, and we undertake no duty to update any 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.

Overview

Genuine Parts Company is a service organization engaged in the global distribution of automotive and industrial replacement parts. We have a long tradition of growth dating back to 1928, the year we were founded in Atlanta, Georgia. We conduct business in North America, Europe and Australasia from a network of more than 10,700 locations.

Our Automotive Parts Group ("Automotive") operates in the U.S., Canada, Mexico, France, the U.K., Ireland, Germany, Poland, the Netherlands, Belgium, Spain, Portugal, Australia and New Zealand, and accounted for approximately 63% of total revenues for the nine months ended September 30, 2024. Our Industrial Parts Group ("Industrial") operates in the U.S., Canada, Mexico, Australia, New Zealand, Indonesia and Singapore, and accounted for approximately 37% of our total revenues for the nine months ended September 30, 2024.

Key Performance Indicators

We consider a variety of performance and financial measures in assessing our business, and the key performance indicators used to measure our results are Comparable Sales, Gross Profit and Gross Margin, Selling, Administrative and Other Expenses ("SG&A"), Segment Profit and Segment Margin, and Net Income and EBITDA along with their adjusted measures. For more information regarding our key performance indicators please reference the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Results of Operations

Our third quarter net sales were $6.0 billion, up 2.5% year-over-year, and net income was $227 million, down 35.5%. Acquired businesses contributed 3.2% of net sales growth, of which 1.5% was from acquired stores in our U.S. Automotive business, including Motor Parts Equipment Corporation ("MPEC") and Walker Automotive Supply, Inc. ("Walker"). An extra selling day contributed to an additional 1.1% of net sales growth. These benefits were partially offset by essentially flat comparable sales in Automotive and declines in Industrial comparable sales of 2.4%, primarily driven by ongoing weak market conditions across our geographies. We also estimate the disruption from hurricanes and the CrowdStrike technology outage in the U.S negatively impacted comparable sales in both segments by a total of 0.7%. Our gross margin improved 0.6% primarily due to the benefits of acquired stores in our U.S. Automotive business. Net income declined 35.5% primarily due to fixed cost deleveraging from declines in comparable sales and increased costs related to: personnel, rent, acquisitions, technology investments, depreciation, restructuring, and interest expense.

Our results of operations are summarized below for the three and nine months ended September 30, 2024 and 2023.

Net Sales

For the three months ended September 30, 2024 our net sales increased 2.5% compared to 2023. We experienced a 3.2% benefit from acquisitions and favorable impact of foreign currency and other of 0.1%, partially offset by a 0.8% decrease in comparable sales.

For the nine months ended September 30, 2024 our net sales increased 1.2% compared to 2023. We experienced a 2.4% benefit from acquisitions, partially offset by a 0.9% decrease in comparable sales and a net unfavorable impact of foreign currency and other of 0.3%.

The decreases in comparable sales for the three and nine months ended September 30, 2024 are primarily driven by a sales decline in Industrial due to the impact of weaker macro-economic conditions on certain customers as discussed further below. Third quarter comparable sales across both segments were disrupted by Hurricanes Beryl and Helene and the CrowdStrike outage, with an estimated total negative impact of 0.7%.

Automotive

Automotive sales for the three months ended September 30, 2024 were $3.8 billion, an increase of 4.8% from 2023. The increase reflects a 4.4% benefit from acquisitions which was primarily driven by acquired stores in our U.S. Automotive business, including MPEC and Walker. We also experienced a 0.2% increase in comparable sales and a 0.2% favorable impact of foreign currency and other. We faced the effects of persistent soft demand in our U.S. businesses, inclusive of sales disruption from Hurricanes Beryl and Helene and the CrowdStrike outage, and adverse economic conditions in our European automotive businesses.

Automotive sales for the nine months ended September 30, 2024 were $11.1 billion, an increase of 2.9% from 2023. The increase reflects a 3.4% benefit from acquisitions, partially offset by a 0.1% decrease in comparable sales and a 0.4% unfavorable impact of foreign currency and other. Year-over-year comparable sales also were impacted by persistent soft demand in the U.S., the hurricanes and CrowdStrike outage, and adverse economic conditions in Europe.

Industrial

Net sales for the three months ended September 30, 2024 were $2.2 billion, a decrease of 1.2% compared to 2023. The decrease reflects a 2.4% decrease in comparable sales and a 0.1% unfavorable impact of foreign currency, slightly offset by a 1.3% benefit from acquisitions.

Net sales for the nine months ended September 30, 2024 were $6.6 billion, a decrease of 1.5% compared to 2023. The decrease reflects a 2.2% decrease in comparable sales and a 0.1% unfavorable impact of foreign currency, slightly offset by a 0.8% benefit from acquisitions.

The decrease in comparable sales for the three and nine months ended September 30, 2024 reflects continued softness in industrial production and the ongoing moderation in demand in several customer sectors. In particular, we believe certain customers that are sensitive to the interest rate environment and political uncertainty are delaying capital expenditures. We continue to experience an adverse macro-economic environment when compared to 2023, which caused slowing global industrial demand. In addition, sales disruption from Hurricanes Beryl and Helene and the CrowdStrike outage had a negative impact on third quarter net sales.

Gross Profit and Gross Margin

Gross profit for the three months ended September 30, 2024 increased $89 million, or 4.2%, compared to the same period of the previous year, and gross margin increased 0.6% to 36.8%. The improvements are primarily driven by acquired stores in our U.S. Automotive business.

Gross profit for the nine months ended September 30, 2024 increased $196 million, or 3.1% compared to the same period in the prior year, and gross margin improved 0.7% to 36.4%. Approximately 50% of these improvements are due to acquired businesses. The remainder of the improvements primarily reflect the positive contributions of our strategic category management and sourcing initiatives. We continue to invest in enhancing technology to generate better pricing data and analytics which allows us to shift pricing dynamics across each market we serve.

Selling, Administrative and Other Expenses

SG&A expenses represent 28.8% of sales for the three months ended September 30, 2024, an increase of 2.2% from the prior year. For the nine months ended September 30, 2024, SG&A expenses represent 27.9% of sales, an increase of 1.4% from the prior year. We estimate operating cost inflation, including personnel costs and rent, caused approximately 40% and 70% of the increase for the three and nine month periods, respectively. Increased operating costs from owning more U.S. automotive stores contributed approximately 25% of the increase in each period. We also incurred acquisition and integration costs and costs related to increased investments in technology, among other things.

Restructuring and Other Costs

For the three and nine months ended September 30, 2024, we incurred $41 million and $161 million, respectively, of costs related to the global restructuring initiative that was approved in February 2024. We recognized approximately $25 million of benefits related to this global restructuring initiative for the nine months ended September 30, 2024. Refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements for more information on our global restructuring initiative.

Depreciation and Amortization

Depreciation and amortization expenses increased $22 million related to ongoing investments in technology and supply chain initiatives.

Interest Expense

Interest expense for the three months ended September 30, 2024 increased $12 million, or 75.8%, compared to the same period of the previous year, due to increased borrowing to fund acquisitions, including the senior notes issued in August 2024.

Segment Profit

Automotive

For the three months ended September 30, 2024, Automotive segment profit decreased 18.6% compared to the same period in 2023, and Automotive segment profit margin decreased to 6.9% compared to 8.9% in the same period last year. We estimate that 40% of these declines relates to persistent segment operating cost pressures from ongoing inflation, particularly personnel costs and rent. The remainder primarily reflects the effects of rising freight costs, technology investments and changes in sales mix. Partially offsetting the declines was a 20 basis point segment profit margin benefit related to acquisitions, particularly acquired stores in U.S. Automotive such as MPEC and Walker. For the nine months ended September 30, 2024, Automotive segment profit decreased 7.3% compared to the same period in 2023, and Automotive segment profit margin decreased to 7.6% compared to 8.5% for the same period last year, based on similar inflationary and other segment operating cost pressures and sales mix changes.

Industrial

For the three months ended September 30, 2024, Industrial segment profit decreased 8.5% compared to the same period in 2023 and Industrial segment profit margin was 11.9%, down 1.0% from the prior year. These declines primarily relate to persistent segment operating cost pressures from inflation, particularly personnel costs and rent. For the nine months ended September 30, 2024, Industrial segment profit decreased 2.6% compared to the same period last year and Industrial segment profit margin decreased to 12.2% compared to 12.3% in the same period in the previous year, based on similar inflationary segment operating cost pressures.

Income Taxes

Our effective income tax rate for the three and nine months ended September 30, 2024 was 23.9% and 23.6%, respectively, as compared to 24.5% for the same periods in 2023. The rate decrease is primarily due to expanded investment and domestic credit benefits.

Net Income, Diluted Earnings Per Share and Adjusted EBITDA

For the three months ended September 30, 2024, net income was $227 million, a decrease of 35.5% compared to net income of $351 million for the same three month period of the prior year. On a per share diluted basis, net income was $1.62, a decrease of 34.9% compared to $2.49 in 2023. These decreases are primarily due to $41 million of costs related to the global restructuring initiative, $4 million of acquisition and integration costs, persistent cost pressures from personnel costs and rent inflation, increased costs and depreciation from ongoing technology investments and increased interest costs from borrowings to fund acquisitions. For the nine months

ended September 30, 2024, net income was $771 million, a decrease of 22.9% compared to net income of $1.0 billion for the same nine month period of the prior year. On a per share diluted basis, net income was $5.51, a decrease of 22.2% compared to $7.08 in 2023. These decreases are primarily due to $161 million of costs related to the global restructuring initiative, $29 million of acquisition and integration costs, persistent cost pressures from personnel costs and rent inflation, increased costs and depreciation from ongoing technology investments and increased interest costs from borrowings to fund acquisitions.

Adjusted net income for the three months ended September 30, 2024, which excludes the effects of restructuring and other costs and acquisition and integration costs, was $263 million, a decrease of 25.1% compared to net income of $351 million for the same period of 2023. On a per share diluted basis, adjusted net income was $1.88, a decrease compared to diluted earnings per share of $2.49 last year. Third quarter 2024 adjusted EBITDA was $477 million, a decrease of 15.6% from $565 million in 2023. Adjusted net income, which excludes the effects of restructuring and other costs and acquisition and integration costs, for the nine months ended September 30, 2024 was $915 million, a decrease of 8.4% compared to net income of $1.0 billion in 2023. On a per share diluted basis, adjusted net income was $6.55, a decrease of 7.5% compared to diluted earnings per share of $7.08 last year. Third quarter 2024 adjusted EBITDA was $1.6 billion, a decrease of 4.4% from EBITDA of $1.6 billion from 2023. The decreases in these adjusted measures reflect the negative effects of lost expense leverage on comparable sales declines combined with increased costs, as discussed more fully in the commentary above.

Corporate Expense and other Segment Reconciling items

This section explains the material reconciling items displayed in the Segment Footnote in the Notes to Condensed Consolidated Financial Statements, that are not discussed above including corporate expense and other unallocated costs.

Corporate expense reflects costs related to headquarter's broad based support to our business units and other costs that are managed centrally and not allocated to business segments. These include personnel and other costs for company-wide functions such as executive leadership, human resources, technology, cybersecurity, legal, corporate finance, internal audit, and risk management, as well as product liability costs and A/R Sales Agreement fees. Our operational objective is to maintain Corporate expenses within a range of 1.5% to 2.0% of net sales. Corporate expense amounted to $114 million and $90 million in the third quarter of 2024 and 2023, respectively. For the nine months ended September 30, 2024 corporate expense amounted to $284 million, or 1.6% of net sales, in 2024, compared to $258 million, or 1.5% of net sales, in 2023.

Corporate expenses increased in both periods primarily due to the effects of persistent inflation on personnel costs and ongoing investments in technology.

Other unallocated costs represent restructuring and other costs and acquisition and integration related costs and other. These increased year-over-year due to the global restructuring initiative that was approved in February 2024 and significantly increased acquisition activity in 2024.

Non-GAAP Financial Measures

Adjusted net income, adjusted diluted EPS, adjusted EBITDA, and adjusted EBITDA for each segment and Corporate are non-GAAP measures (see table below for reconciliations to the most directly comparable GAAP measures).

The following tables set forth reconciliations of net income and diluted EPS to adjusted net income and adjusted diluted EPS, respectively, to account for the impact of adjustments. We also include reconciliations from net income to adjusted EBITDA, segment profit to segment EBITDA and adjusted EBITDA for each segment and Corporate. We believe that the presentation of adjusted net income, adjusted diluted EPS, and adjusted EBITDA, 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 our core operations. We consider these metrics useful to investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance by removing items management believes are not representative of our operations and may distort our longer-term operating trends. In the case of adjusted EBITDA by segment and Corporate, we believe this additional metric is useful to investors as it provides further insight into the performance of our segments and Corporate. We believe the non-GAAP metrics included herein also enhance the comparability of our results from period to period and with our competitors, as well as to show ongoing results from operations distinct from items that are infrequent or not associated with our core operations. For example, for the three and nine months ended September 30, 2024, adjusted net income, adjusted EBITDA and adjusted diluted earnings per share exclude costs relating to our global

restructuring initiative and acquisitions of MPEC and Walker. We do not, nor do we suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information.

The table below represents amounts per common share assuming dilution:

(1) Amount reflects costs related to the global restructuring initiative which includes a voluntary retirement offer in the U.S., inventory liquidation costs, and rationalization and optimization of certain distribution centers, stores and other facilities.

(2) Amount primarily reflects integration costs related to the completion of the acquisitions of MPEC in April 2024 and Walker in July 2024, including professional services costs, personnel costs, and lease and other exit costs.

(3) We determine the tax effect of non-GAAP adjustments by considering the tax laws and statutory income tax rates applicable in the tax jurisdictions of the underlying non-GAAP adjustments, including any related valuation allowances. For the three and nine months ended September 30, 2024, we applied the statutory income tax rates to the taxable portion of all of our adjustments, which resulted in a tax impact of $9 million and $46 million.

The table below represents a reconciliation from GAAP net income to adjusted EBITDA:

(1) Amounts are the same as adjustments included within the adjusted net income table above.

The table below clarifies where the adjusted items are presented in the Condensed Consolidated Statements of Income:

The table below represents a reconciliation from segment profit to segment EBITDA and adjusted EBITDA:

(1) Amounts are the same as adjustments included within the adjusted net income table above.

Financial Condition

Our cash balance was $1.1 billion as of September 30, 2024, a decrease of $24 million from December 31, 2023. For the nine months ended September 30, 2024, we had net cash provided by operating activities of $1.1 billion, net cash used in investing activities of $1.2 billion and net cash used in financing activities of $125 million.

The cash provided by operating activities increased as compared to prior year primarily driven by changes in working capital. We had $1.2 billion in net cash used for investing activities, consisting of capital expenditures and acquisitions and other investing activities of $1.3 billion, partially offset by proceeds from the sale of property, plant and equipment and the divestiture of businesses. The financing activities consisted primarily of $411 million for dividends paid to our shareholders and $112 million of stock repurchases.

Accounts receivable increased $157 million, or 7.1%, from December 31, 2023. Inventory increased $850 million, or 18.2%. Accounts receivable and inventory were both impacted by third quarter increases in revenues and

related product demand. Inventory also increased approximately $520 million as a result of acquiring an approximate 150 net new stores, including stores acquired in the acquisitions of MPEC and Walker. Accounts payable increased approximately $600 million, or 10.9% from December 31, 2023, in line with the increase in inventory. Total debt of $4.6 billion at September 30, 2024 decreased $712 million, or 18.2%, from December 31, 2023.

Liquidity and Capital Resources

We ended the quarter with $2.6 billion of total liquidity. Total liquidity comprises of $1.1 billion of cash and cash equivalents and $1.5 billion available on our revolving credit facility. From time to time, we may enter into other credit facilities or financing arrangements to provide additional liquidity and to manage against foreign currency risk. We currently believe that the existing lines of credit, commercial paper program, and cash generated from operations will be sufficient to fund anticipated operations for the foreseeable future.

On April 29, 2024, our Board of Directors approved the termination of the frozen U.S. qualified defined benefit plan (pension plan), effective September 30, 2024. We intend to transfer the management and delivery of continuing benefits associated with the pension plan to a third-party insurance company. Upon settlement, we expect to recognize a non-cash, pre-tax pension settlement charge in 2025 equal to the actuarial losses accumulated in AOCI, which totaled approximately $620 million ($450 million, net of tax) as of September 30, 2024.

On August 7, 2024, we issued $750 million of unsecured 4.95% Senior Notes due 2029. Interest is payable on February 15 and August 15 of each year, beginning February 15, 2025. We intend to utilize the proceeds of this offering to repay the Series J Private Placement Notes and have utilized a portion of the proceeds to repay indebtedness under our commercial paper program that was outstanding as of June 30, 2024. Any remaining amounts will be utilized for general corporate purposes.

We have a strong cash position and solid financial strength to pursue strategic growth opportunities through disciplined, strategic capital deployment. Our key priorities include the reinvestment in our businesses through capital expenditures, mergers and acquisitions, the dividend and share repurchases. We have plans for additional investments in our businesses to drive growth, improve efficiencies and productivity, and drive shareholder value.

We expect to be able to continue to borrow funds at reasonable rates over the long term. At September 30, 2024, our total average cost of debt was 3.49%, and we remain in compliance with all covenants connected with our borrowings.

Any failure to comply with our debt covenants or restrictions could result in a default under our financing arrangements or could require us to obtain waivers from our lenders for failure to comply with these restrictions. The occurrence of a default that remains uncured or the inability to secure a necessary consent or waiver could create cross defaults under other debt arrangements and have a material adverse effect on our business, financial condition, results of operations and cash flows.

On February 15, 2024, we announced a 5.3% increase in the regular quarterly cash dividend for 2024. Our Board of Directors increased the cash dividend payable to an annual rate of $4.00 per share compared with the prior year dividend of $3.80 per share. We have paid a cash dividend every year since going public in 1948, and 2024 marks the 68th consecutive year of increased dividends paid to shareholders.

For quantitative and qualitative disclosures about market risk, refer to “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II of our 2023 Annual Report on Form 10-K. Our exposure to market risk has not changed materially since December 31, 2023.

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed by us in the reports that we file or furnish under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 of the SEC that occurred during our last quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Information with respect to our legal proceedings may be found in the Commitments and Contingencies Footnote in the Notes to Condensed Consolidated Financial Statements in Item 1 of Part I, which is incorporated herein by reference.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2023 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about the purchases of shares of our common stock during the three months ended September 30, 2024:

ISSUER PURCHASES OF EQUITY SECURITIES

(1)Includes shares surrendered by employees to satisfy tax withholding obligations in connection with the vesting of shares of restricted stock, the exercise of share appreciation rights and/or tax withholding obligations.

(2)On August 21, 2017, the Board of Directors announced that it had authorized the repurchase of 15 million shares. The authorization for the repurchase continues until all such shares have been repurchased or the repurchase plan is terminated by action of the Board of Directors. Approximately 7.8 million shares authorized remain available to be repurchased. There were no other repurchase plans announced as of September 30, 2024.

Rule 10b5-1 Trading Plans

During the fiscal quarter ended September 30, 2024, none of the Company’s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

(a) The following exhibits are filed or furnished as part of this report:

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.