Genuine Parts 10-Q 2025-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended March 31, 2025

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 138,789,637 shares of common stock outstanding as of April 17, 2025.

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)

See accompanying Notes to Condensed Consolidated Financial Statements.

GENUINE PARTS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(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, 2024. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of results for the year ended December 31, 2025.

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 direct and indirect impact of tariffs and other similar measures, as well as the potential impact of retaliatory tariffs and other actions) 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; 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 direct and indirect 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 2024 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 ("GPC") is a global service organization with a long history of growth and innovation dating back to our founding in Atlanta, Georgia, in 1928. Over nearly a century, we’ve built a reputation for delivering excellent customer service, profitable growth, leading distribution capabilities and strong cash flow.

For the three months ended March 31, 2025, we conducted business in North America, Europe and Australasia from more than 10,700 locations. Our Automotive business operated 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 62% of total revenues for the three months ended March 31, 2025. Our Industrial business operated in the U.S., Canada, Mexico, Australia, New Zealand, Indonesia and Singapore and accounted for 38% of total revenues during this period.

Our mission is to be the employer, supplier, and investment of choice, while also being a valued corporate citizen in the communities we serve. This mission drives our strategic financial objectives: outpacing market revenue growth, improving operating margins, maintaining a strong balance sheet and cash flows, and allocating capital effectively. As we look to the future, we are leaning into modernizing our supply chain and technology through digital innovation, and data-driven strategies to enhance our competitive edge. By leveraging technology and optimizing supply chains, we are empowering our teams with cutting-edge tools to focus on delivering exceptional customer service and driving sustainable growth. At the heart of it all is our commitment to excellence, supported by a culture of continuous improvement and a legacy of strong leadership that has guided us for nearly 100 years.

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 EBITDA and Segment EBITDA 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, 2024.

Results of Operations

Our performance in the first quarter of 2025 reflects continued sales growth while navigating a challenging operating environment. Our first quarter net sales of $5.9 billion increased 1.4% year-over-year, despite having one less selling day in the U.S. compared to the prior year quarter. Automotive segment sales increased primarily due to the benefit of prior year acquisitions. Industrial segment sales declined due primarily to one less selling day in the U.S., partially offset by modest improvements in market conditions. The Purchasing Managers’ Index ("PMI"), a measure of U.S. manufacturing trends, showed sequential improvement in the early stages of the first quarter of 2025 compared to the contractionary levels we experienced during most of 2024. PMI contracted in March, indicative that the overall operating environment remains uncertain.

First quarter net income declined 21.9% year over year, primarily due to lost profit from one less selling day in the U.S., higher depreciation and interest expenses from planned investments, lower pension income due to a change in our investing strategy related to our planned U.S. pension plan termination, and certain foreign currency headwinds. These factors were partially offset by a 120 basis point gross margin improvement year-over-year, driven by the continued execution of our strategic pricing and sourcing initiatives as well as contributions from prior-year acquisitions. These factors were also offset by $27 million in benefits in the quarter from the ongoing execution of our global restructuring to improve business efficiency. First quarter restructuring and other costs totaled $55 million, a decrease from $83 million in the prior year period, which included a voluntary retirement program.

The U.S. tariffs implemented in March 2025 did not materially impact our first quarter results. While the long-term effects remain uncertain, we continue to closely monitor the evolving tariff policy environment which presents a mix of impacts, with the potential for higher pricing, as well as higher product and operating costs. We have not updated our outlook for 2025 given the lack of clarity in the external environment with respect to the implementation of tariffs globally. See Item 1A. Risk Factors for a discussion regarding tariff-related risks.

Our first quarter results of operations are summarized below for the three months ended March 31, 2025 and 2024.

Net Sales

Our first quarter 2025 net sales increased 1.4% compared to the first quarter of 2024. We experienced a 3.0% benefit from acquisitions, partially offset by a 0.8% decrease in comparable sales and a net unfavorable impact of foreign currency and other of 0.8%. The overall decrease in comparable sales was primarily driven by one less selling day in the U.S. compared to the first quarter of 2024.

Automotive

First quarter net sales for Automotive were $3.7 billion, an increase of 2.5% from 2024. The increase consisted of a 4.1% benefit from acquisitions, partially offset by a 0.8% decrease in comparable sales and 0.8% net unfavorable impact of foreign currency and other, primarily due to the stronger U.S. dollar. Our comparable sales decrease was primarily driven by one less selling day in the U.S. compared to the first quarter of 2024. We experienced a strong contribution from our prior year U.S. acquisitions in Automotive, which enhanced our ability to serve customers.

Industrial

First quarter net sales for Industrial were $2.2 billion, a decrease of 0.4% compared to 2024. The decrease in sales reflects a 0.7% decrease in comparable sales, and a 1.0% unfavorable impact of foreign currency. These were partially offset by a 1.3% benefit from acquisitions. The decline in comparable sales was primarily due to one less selling day in the U.S. compared to the first quarter of 2024, which impacted sales by 150 basis points, and was partially offset by improvements in market conditions.

Although conditions in the industrial market remained challenging, the Purchasing Managers’ Index (PMI) data showed sequential improvement from the contractionary levels at the end of 2024 to a level approaching expansionary territory in the early stages of the first quarter of 2025 before declining in March. The impact of this shift on our sales results remains uncertain.

Gross Profit and Gross Margin

Gross profit increased $99 million, or 4.8%, during the first quarter of 2025 compared to last year, and gross margin increased 120 basis points to 37.1% compared to that same period of the previous year. These increases primarily reflect the benefit of acquired businesses and our ongoing pricing and sourcing initiatives.

Selling, Administrative and Other Expenses

SG&A expenses increased $135 million, or 8.6%, during the first quarter of 2025 compared to the first quarter of 2024. Of the 8.6% increase, 6.0% was from acquisitions and 2.6% was from other cost increases. We incurred higher SG&A expenses due to acquisitions, primarily increased personnel and rent costs from operating the U.S. automotive stores we acquired in 2024. Additionally, we incurred $14 million of lease and other exit costs related to the ongoing integration of those stores. We expect the SG&A impact of acquired stores to diminish over time as we realize the anticipated synergies from these acquisitions. The remaining SG&A increase is primarily due to planned salary and merit adjustments and increased rent from lease renewals in a higher rate environment, partially offset by $27 million in benefits from our global restructuring. We have taken extensive actions to adjust our cost structure through our global restructuring.

SG&A expenses as a percentage of sales increased to 29.1% of sales in the first quarter of 2025 compared to 27.2% last year, but improved sequentially from the fourth quarter of 2024. The 190 basis point increase was primarily driven by increased SG&A expenses from acquisitions and other items, as discussed above, and cost deleveraging from lower organic sales growth.

Restructuring and Other Costs

We incurred $55 million of restructuring and other costs during the first quarter of 2025 as part of our global restructuring which was approved and initiated in February 2024 and remains on track to deliver an improved overall cost structure. Restructuring and other costs decreased $28 million compared to the prior year period, reflecting the completion of certain initiatives in 2024, including a voluntary retirement program. For additional details, refer to the Restructuring Footnote in the Notes to Condensed Consolidated Financial Statements.

Depreciation and Amortization

Depreciation and amortization expenses increased $25 million related to planned investments in technology and supply chain initiatives.

Non-Operating Expenses and Income

We incurred $36 million in net non-operating expenses for the three months ended March 31, 2025, a $42 million change from $5 million in net non-operating income in the prior year period. This category primarily includes net interest expense, pension and investment income, foreign currency gains and losses, and fees associated with our Accounts Receivable Sales Agreement ("A/R Sales Agreement"). The $42 million expense increase includes the effects of a $20 million increase in net interest expense in 2025, due to increased borrowings, and a $13 million decrease in pension income as a result of changes in expected returns due to the planned termination of our U.S. pension plan.

Income Taxes

Our effective income tax rates were 22.7% and 23.5% for first quarter 2025 and 2024, respectively. The rate decrease from 2024 is primarily due to a shift in the mix of earnings across our businesses due to one-time U.S. pension transaction costs partially offset by routine tax position adjustments.

Net Income and Adjusted Net Income

First quarter 2025 net income was $194 million, a decrease of 21.9% compared to net income of $249 million for the same three month period of the prior year. On a per share diluted basis, net income was $1.40, a decrease of 21.3% compared to $1.78 in the prior year period. These decreases are primarily due to lost profit from one less selling day in the U.S. compared to the prior year period, higher depreciation and interest expenses from ongoing investments, lower pension income due to a change in our investing strategy related to our planned U.S. pension plan termination, and certain foreign currency headwinds. These factors were partially offset by a 120 basis point gross margin improvement year-over-year, driven by the continued execution of our strategic pricing and sourcing initiatives as well as contributions from prior-year acquisitions.

First quarter 2025 adjusted net income was $243 million, a decrease of 21.8% compared to the prior year period. On a per share basis, first quarter 2025 adjusted net income was $1.75, a decrease of 21.2% compared to $2.22 in the prior year period. First quarter 2025 adjusted EBITDA was $473 million, a decrease of 8.4% from the prior year period.

The decreases in these measures are primarily the result of softer market conditions and one less sales day in the first quarter of 2025 compared to the same period last year.

Segment EBITDA

Automotive

Automotive EBITDA decreased $34 million, or 10.7%, in the first quarter compared to the prior year period, and Automotive EBITDA margin decreased to 7.8% compared to 8.9% in the prior year period, driven by the following factors. Automotive segment sales grew $91 million, or 2.5%, in the first quarter of 2025 due to contributions from prior year strategic acquisitions of independent stores in our U.S. business, partially offset by one less selling day. Gross profit increased $96 million, or 7%, and gross margin improved 160 basis points primarily due primarily to the acquisitions in our U.S. business and strategic sourcing initiatives. Our gross profit improvement was offset by rising operating expenses. Operating expenses increased $130 million, mainly driven by increased personnel and rent costs, which increased primarily from operating the U.S. stores we acquired in 2024. We expect the expense impact of acquired stores to diminish over time as we realize the anticipated synergies from these acquisitions. The increase in operating expenses was primarily due to acquisitions, however declines in Automotive EBITDA and EBITDA margin largely were driven by loss of expense leverage due to lower organic sales growth in our existing businesses.

Industrial

Industrial EBITDA and EBITDA margin both remained flat in the first quarter compared to 2024. Industrial segment sales declined $8 million, or 0.4%, primarily driven by a decline of 0.7% in comparable sales due to one less selling day in the U.S. compared to the prior year period, partially offset by a 1.3% benefit from acquisitions. Gross profit and operating expenses in our Industrial segment remained largely unchanged compared to the prior year. These results highlight continued benefits of our global restructuring efforts within the Industrial segment, enabling effective cost management in an uncertain economic environment.

Corporate EBITDA and Other Segment Reconciling items

Corporate EBITDA amounted to a loss of $91 million, or 1.6% of net sales, for the three months ended March 31, 2025, compared to a loss of $82 million, or 1.4% of net sales, in for the three months ended March 31, 2024. We continue to consolidate certain back-office functions at Corporate to streamline operations and drive improvements. Our operational objective is to maintain Corporate EBITDA within a range of 1.5% to 2.0% of net sales.

Corporate EBITDA loss increased primarily due to increased personnel costs and ongoing investments in technology.

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

EBITDA

EBITDA was $404 million for the three months ended March 31, 2025, a decrease of 6.7% from $433 million during the prior year period. Adjusted EBITDA was $473 million in the first quarter of 2025, a decrease of 8.4% from $517 million during the prior year period. Decreases in adjusted EBITDA were primarily driven by lost profit from one less selling day in the U.S. compared to the prior year period, higher depreciation and interest

expenses from planned investments, lower pension income due to a change in our investment strategy related to our planned U.S. pension plan termination, and certain foreign currency headwinds. These factors were partially offset by a 120 basis point gross margin improvement year-over-year, driven by the continued execution of our strategic pricing and sourcing initiatives as well as contributions from prior-year acquisitions.

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

Non-GAAP Financial 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 a reconciliation from net income to adjusted EBITDA. 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. For example, for the three months ended March 31, 2025, certain of the non-GAAP metrics contained herein exclude costs relating to our global restructuring initiative and acquisition of acquired independent automotive stores, which are one-time events that do not recur in the ordinary course of business. 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. 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. in 2024, and rationalization and optimization of certain distribution centers, stores and other facilities.

(2) Amount primarily reflects lease and other exit costs related to the ongoing integration of acquired independent automotive stores.

(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 months ended March 31, 2025, we applied the statutory income tax rates to the taxable portion of all of our adjustments, which resulted in a favorable tax impact of $20 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:

Financial Condition

Our cash and cash equivalents balance was $420 million as of March 31, 2025, a decrease of $60 million from December 31, 2024. For the three months ended March 31, 2025, we had net cash used in operating activities of $41 million, net cash used in investing activities of $155 million and net cash provided by financing activities of $129 million.

Cash from operations decreased mainly due to lower net income and working capital changes primarily driven by seasonal sales and purchasing trends. We had $155 million in net cash used for investing activities primarily consisting of capital expenditures and acquisitions of $194 million, partially offset by $23 million in cash inflows from settling net investment hedges. The financing activities consisted primarily of $772 million in net proceeds of commercial paper, partially offset by $500 million in commercial paper borrowings to repay the principal amount of our 1.75% Unsecured Senior Notes due February 1, 2025 and $134 million for dividends paid to our shareholders.

Accounts receivable increased $324 million, or 14.9%, from December 31, 2024. Inventory increased $119 million, or 2.1%. Accounts receivable and inventory were both impacted by first quarter increase in revenues and related product demand. Accounts payable increased $88 million, or 1.5% from December 31, 2024, in line with the increase in inventory. Total debt of $4.6 billion at March 31, 2025 increased $305 million, or 7.1%, from December 31, 2024.

Liquidity and Capital Resources

As of March 31, 2025, we had $420 million of cash and cash equivalents, as well as $2 billion in undrawn capacity on our Revolving Credit Agreement, before giving effect to commercial paper borrowings. 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.

As announced in 2024, our Board of Directors approved the termination of the frozen U.S. qualified defined benefit pension plan, effective September 30, 2024. In the first quarter of 2025, the change in our investing strategy related to our planned U.S. pension plan termination resulted in lower pension income given the change in expected asset returns. Settlement is expected between late 2025 and early 2026.

On March 20, 2025, we amended our Unsecured Revolving Credit Facility to expand the borrowing capacity from $1.5 billion to $2.0 billion and extend the maturity date to March 20, 2030. We had no outstanding borrowings under the Unsecured Revolving Credit Facility as of March 31, 2025.

On March 27, 2025, we amended our commercial paper program to expand the borrowing capacity from $1.5 billion to $2.0 billion. We had $775 million outstanding under our commercial paper program as of March 31, 2025, of which $500 million was used to repay the principal amount of our 1.75% Unsecured Senior Notes with a maturity date of February 1, 2025. The net proceeds of issuances from the remaining outstanding amount have been and are expected to continue to be used 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 March 31, 2025, our total average cost of debt was 3.98%, 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 18, 2025, we announced a 3% increase in the regular quarterly cash dividend for 2025. Our Board of Directors increased the cash dividend payable to an annual rate of $4.12 per share compared with the prior year dividend of $4.00 per share. We have paid a cash dividend every year since going public in 1948, and 2025 will mark the 69th 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 2024 Annual Report on Form 10-K. Our exposure to market risk has not changed materially since December 31, 2024.

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 March 31, 2025 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.

The information presented below supplements the risk factors previously reported in Part 1, ITEM 1A, "Risk Factors", in our 2024 Annual Report on Form 10-K. 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.

Changes in legislation or government regulations or policies, particularly those relating to international trade and taxation, could have a significant impact on our results of operations.

Our business is global, and changes to existing international trade agreements, blocking of foreign trade, increased protectionism, or imposition of tariffs on foreign goods could, among other things, weaken consumer confidence, negatively impact employment rates in industries on which we are dependent, result in higher cost of goods sold and lower gross profit and margins, cause supply chain delays or disruptions or diminishing returns on capital investments, including with respect to our ongoing distribution center optimization initiative, and deter customers in our industrial segment from pursuing facilities and automation projects, all of which could have an adverse impact on our business, results of operations, financial condition and cash flows in future periods.

Additionally, in the first quarter of 2025, the United States imposed increased tariffs on foreign imports into the United States, including an additional 20% tariff on all product imports from China, an additional 25% tariff on all product imports from Mexico and Canada, as well as additional proposed tariffs on other countries. The tariff policy environment has been and is expected to continue to be dynamic, and we cannot predict what additional actions may ultimately be taken by the United States or other governments with respect to tariffs or trade relations, including retaliatory trade measures taken by other countries in response to existing or future United States tariffs or other measures. As a result, we may be required to, among other things, take steps to mitigate the impact of tariffs on our businesses, including by raising the prices on products subject to such tariffs to share these costs with our customers and/or by making changes to our supply chain practices, sources of supply, or manufacturing locations, which could also have significant impacts on our financial results.

In addition, as a global business, we are subject to taxation in each of the jurisdictions in which we operate. Changes in the tax laws of these jurisdictions, or in the interpretation or enforcement of existing tax laws, could subject our business to audits, inquiries and legal challenges from taxing authorities and could reduce the benefit of tax structures previously implemented for our operations. As a result, we may incur additional costs, including taxes and penalties for historical periods, that may have a material and adverse effect on our business, financial condition, results of operations and cash flows.

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 March 31, 2025:

ISSUER PURCHASES OF EQUITY SECURITIES

(1)Consists of 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 7.5 million shares authorized remain available to be repurchased. There were no other repurchase plans announced as of March 31, 2025.

Rule 10b5-1 Trading Plans

During the fiscal quarter ended March 31, 2025, 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.