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By Counterman
Your customers may be using air tools in a variety of circumstances for an even wider variety of jobs. Here’s how to help them understand why they need to buy the right fitting for the application.
link hidden, please login to view There are multiple different sizes and styles, and what one shop uses may not be the same as another. The size and style affect the volume of air they can deliver, a critical point because air tools require a specific pressure and volume for proper operation, and restrictive fittings can limit their performance. Here’s a look at the most common sizes and styles found in most automotive shops, and how you can identify them.
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By NAPA
ATLANTA, April 18, 2024 /
link hidden, please login to view/ -- Genuine Parts Company (NYSE: GPC), a leading global distributor of automotive and industrial replacement parts, announced today its results for the first quarter ended March 31, 2024. "Our performance in the quarter highlights the value of our business mix paired with our geographic diversity as our teams delivered profits that were ahead of our expectations," said Paul Donahue, Chairman and Chief Executive Officer. "We did this by staying focused on both our near- and long-term strategic initiatives to improve our business and drive profitable growth. I want to take a moment to thank our GPC teammates across the globe for their hard work and dedication to delivering value for our customers."
First Quarter 2024 Results
Sales were $5.8 billion, a 0.3% increase compared to $5.8 billion in the same period of the prior year. The sales result is attributable to a 1.9% benefit from acquisitions, offset by a 0.9% decrease in comparable sales and 0.7% unfavorable impact of foreign currency and other.
Net income was $249 million, or $1.78 per diluted earnings per share. This compares to net income of $304 million, or $2.14 per diluted share in the prior year period.
Adjusted net income, which excludes a net expense of $62 million after tax adjustments, or $0.44 per diluted share, in non-recurring costs related to our global restructuring, was $311 million. This compares to net income of $304 million for the same three-month period of the prior year, an increase of 2.3%. On a per share diluted basis, adjusted net income was $2.22, an increase of 3.7% compared to diluted earnings per share of $2.14 last year. Refer to the reconciliation of GAAP net income to adjusted net income and GAAP diluted earnings per share to adjusted diluted earnings per share for more information.
First Quarter 2024 Segment Highlights
Automotive Parts Group ("Automotive")
Global Automotive sales were $3.6 billion, up 1.9% from the same period in 2023, reflecting a 0.2% increase in comparable sales and a 2.8% benefit from acquisitions, partially offset by 1.1% unfavorable impact of foreign currency and other. Segment profit of $273 million increased 3.2%, with segment profit margin of 7.6%, up 10 basis points from last year.
Industrial Parts Group ("Industrial")
Industrial sales were $2.2 billion, down 2.2% from the same period in 2023, with a 0.5% benefit from acquisitions, offset by a 2.6% decrease in comparable sales and 0.1% unfavorable impact of foreign currency. Segment profit of $271 million increased 3.4%, with segment profit margin of 12.3%, up 70 basis points from the same period of the prior year.
"We are pleased with the start to 2024, which was highlighted by operating discipline that delivered improved overall earnings against a backdrop of low sales growth," said Will Stengel, President and Chief Operating Officer. "In Industrial, sales decreased low-single-digits, in-line with our expectations, as we were up against our most difficult comparative period for the year. In Automotive, the actions taken in our U.S. Automotive business are gaining traction, and we are encouraged by the sequential improvement in performance. This improvement, coupled with the solid performance of our other businesses, is reflected in our reaffirmed sales growth and improved earnings outlook for 2024."
Balance Sheet, Cash Flow and Capital Allocation
The company generated cash flow from operations of $318 million for the first three months of 2024. We used $178 million in cash for investing activities, including $116 million for capital expenditures and $135 million for M&A. We also used $175 million in cash for financing activities, including $133 million for quarterly dividends paid to shareholders and $38 million for stock repurchases. Free cash flow was $203 million for the first three months of 2024. Refer to the reconciliation of GAAP net cash provided by operating activities to free cash flow for more information.
The company ended the quarter with $2.5 billion in total liquidity, consisting of $1.5 billion availability on the revolving credit facility and $1.0 billion in cash and cash equivalents.
2024 Outlook
The company is updating full-year 2024 guidance previously provided in its earnings release on February 15, 2024. The company considered its recent business trends and financial results, current growth plans, strategic initiatives, global economic outlook, geopolitical conflicts and the potential impact on results in updating its guidance, which is outlined in the table below.
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By Counterman
In this aftermarketNews Executive Interview, Johannes Crepon, PDM Automotive Co-Founder & CEO, discusses the company’s platform, how it helps parts suppliers keep their product data up to date, how the use of AI technology makes e-commerce easier for suppliers and distributors, what the company has planned for this year, and more.
aftermarketNews: PDM Automotive provides commerce software for auto parts suppliers, manufacturers, resellers and distributors. Give us a brief overview of how aftermarket companies have found partnering with PDM most beneficial.
link hidden, please login to view Johannes Crepon: The genesis of PDM Automotive was rooted in my own experiences and challenges as the founder of Velocity Automotive, an ecommerce company that sells parts for American cars throughout Europe. At Velocity, we faced difficulties connecting with suppliers, managing product data, and ensuring brand visibility. Recognizing these industry-wide issues, I started PDM Automotive to increase efficiency in the automotive aftermarket through seamless connectivity between suppliers and retailers.
The PDM Automotive platform bridges the gap between auto parts suppliers, manufacturers, resellers and distributors. Manufacturers gain unprecedented transparency into where and how their brands are sold, enabling effective brand management and strategic decision-making. Resellers benefit from expedited access to up-to-date product data, reducing hurdles in acquiring and maintaining catalogs and allowing for agility in responding to market trends.
At its core, PDM Automotive fosters connections and streamlines information flow across the automotive aftermarket. By providing a platform that enhances transparency for manufacturers and accessibility for resellers, we’re creating an ecosystem that elevates the entire industry.
AMN: One of the hallmarks of PDM’s technology is allowing for a “seamless exchange of accurate and timely content across every facet of the automotive industry.” Tell us how PDM assists parts suppliers in keeping their product data up to date. How can the company help suppliers better adhere to ACES & PIES standards?
Crepon: While ACES & PIES has become the most relevant data standard in the Americas, its implementation across the industry has not been without challenges. The standard itself, although comprehensive, does not fully address the intricacies of data exchange, with many resellers interpreting and implementing the standard differently, leading to a fragmented array of data requirements.
Recognizing these challenges, our platform goes beyond merely supporting ACES & PIES standards; we enhance the standards with our proprietary connectors and algorithms, tailoring product data to meet the needs of every receiver. Suppliers can manage their data from a centralized platform, and we tailor this data to comply with the diverse interpretations and requirements of resellers across the industry. This process saves significant time and resources for suppliers and ensures that their product information is accurate, consistent, and easily accessible by resellers and end-users alike.
Our technology “puts ACES & PIES on steroids,” ensuring suppliers’ data is always optimized for every channel, leading to a more efficient supply chain, increased product visibility, and a better customer experience. is a testament to our commitment to innovation and efficiency in the automotive aftermarket.
Our ongoing development of proprietary connectors and algorithms signifies PDM’s dedication to continuous improvement. As the industry evolves, so do the standards and requirements for data exchange. PDM is at the forefront of these changes, ensuring our partners have the tools and support necessary to navigate the dynamic automotive aftermarket effectively.
AMN: PDM allows brands to sell parts anywhere—from Amazon to national retailers and local parts suppliers. How is the company creating sales opportunities for brands while minimizing channel conflict?
Crepon: Historically, brands struggled with over-distribution, diluting the brand image and causing inconsistent product presentation due to the lack of a cohesive strategy regarding distribution and authorized reselling partners. The rise of online marketplaces has further complicated this scenario, making it imperative for brands to actively manage how their products are represented across all channels.
PDM addresses these challenges by offering a platform that guarantees high-quality listings on marketplaces like Amazon, eBay, and Walmart, while adhering to Minimum Advertised Price (MAP) policies. This strategic approach allows brands to protect their interests across all channels, including traditional channels, which are often jeopardized by price dumping on online marketplaces. By ensuring that products listed on these platforms are presented in a manner that reflects the brand’s standards and pricing policies, PDM helps maintain the integrity of the brand across the digital landscape.
Additionally, our platform gives brands tools to actively manage their distribution, image, and product presentation, particularly important as consumer preference shifts towards online shopping. This allows brands to maintain control over their narrative and pricing.
With PDM’s technology, brands can navigate the complexities of modern retail, ensuring that their products are distributed in a way that supports their overall sales strategy while protecting the channels most valuable to them. This holistic approach to channel management is vital in today’s market, where visibility across a multitude of platforms is not just an advantage but a necessity.
AMN: The company uses AI to generate SEO titles, descriptions and marketing copy for products based on keywords and inputs in just seconds. In what other ways is PDM looking to use AI technology to make e-commerce easier for suppliers and distributors?
Crepon: While our use of AI to generate SEO-optimized titles, descriptions, and marketing copy in mere seconds showcases our commitment to leveraging technology for efficiency, it’s just the tip of the iceberg regarding our AI applications.
Our approach to AI technology is both strategic and discerning. Recognizing that AI’s strengths lie in its ability to process and optimize large sets of data quickly, we are mindful of its limitations, particularly when it comes to the precision required in our core data set—the richest automotive parts catalog in the industry. Accuracy is paramount, and while AI offers many opportunities, it is not inherently accurate. This understanding shapes how we integrate AI into our operations, ensuring that the reliability and accuracy of our core data are never compromised.
One key area where we leverage AI is in the normalization of complex, non-structured data that has accumulated in the industry over the last century. This task, daunting for human teams due to the sheer volume and variability of the data, is where AI shines. Our engineering team utilizes AI algorithms to sift through and organize this data into a coherent, structured format. This normalization process improves the quality of our catalog and enhances the efficiency and accuracy of data management for our customers.
Once we have perfected the data within the PDM catalog, we use AI to optimize it for specific channels. This optimization process involves adjusting product data to meet the unique requirements and standards of various e-commerce platforms, ensuring accurate presentations of our customers’ products, regardless of where they are sold. In doing this, we enable suppliers and distributors to maximize their online presence and sales potential across multiple channels.
We’re exploring other ways to integrate AI into our solutions to further simplify and enhance e-commerce operations. These include predictive analytics for demand forecasting, AI-driven recommendations for inventory management and automated customer service solutions to improve buyer engagement and satisfaction.
AMN: PDM was founded in 2017, and since it has grown exponentially. What does the company have in store for 2024? What can we expect from PDM in the next five years?
Crepon: In 2024, we’re set to expand our reach and capabilities. Our recent investment in upgrading our system’s underlying infrastructure has positioned us to take full advantage of the opportunities that lie ahead. This strategic enhancement ensures our platform is scalable, resilient and capable of supporting our future ambitions.
Our strategic priorities include developing more connectors, forging new partnerships, and expanding our catalog. Developing more connectors will broaden the scope of our network, making it easier for our customers to reach new markets and ensure accurate and up-to-date product information flows efficiently between manufacturers, suppliers, distributors, and retailers. We will add more partnerships; collaborating with other industry leaders and innovators is essential for driving collective progress and delivering comprehensive solutions to our clients.
Another key focus is the ongoing expansion of our catalog. Our goal is to offer the industry’s most comprehensive and detailed automotive parts catalog, serving as the single source for all our clients’ data needs. This growing catalog, enriched with accurate and detailed product information, will empower our clients to make informed decisions and optimize their operations like before.
Our vision for the next five years is to remain at the forefront of technology adoption in the industry, constantly exploring new ways to leverage technology to solve the unique challenges of our customers. Whether it’s through AI, machine learning, or other emerging technologies, our focus will be on providing solutions that make e-commerce easier, more efficient, and more profitable for suppliers and distributors.
AMN: What do you want the automotive aftermarket to know about PDM Automotive?
Crepon: PDM Automotive is not just about managing product data; it’s about increasing our customer’s market share in a $300 billion industry. While we are widely recognized for our Product Information Management (PIM) capabilities, our vision extends beyond managing rich catalog data; it includes a far-reaching ambition to connect every parts manufacturer with every buyer who needs or wants a part.
Our vision to connect every parts manufacturer with every buyer drives every innovation and decision at PDM Automotive. We aim to streamline buying and selling auto parts by facilitating connections and creating a more integrated and cohesive industry ecosystem. We are constantly exploring new technologies, developing new solutions, and forging strategic partnerships to enhance our platform’s ability to connect manufacturers and buyers in the most effective and meaningful ways possible.
We believe that achieving this goal will unlock the full potential of the aftermarket, creating opportunities for growth, innovation, and success for everyone. We invite you to join us on this journey, as we work to realize a future where every part finds its place effortlessly, benefiting manufacturers, buyers and the automotive community.
Read more AMN Executive Interviews
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By OReilly Auto Parts
Automotive Shock and Strut Overview | What do they do and why are they important?
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