Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 15, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-00255 | |
Entity Registrant Name | GRAYBAR ELECTRIC COMPANY, INC. | |
Entity Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 13-0794380 | |
Entity Address, Address Line One | 34 North Meramec Avenue | |
Entity Address, City or Town | St. Louis | |
Entity Address, State or Province | MO | |
Entity Address, Postal Zip Code | 63105 | |
City Area Code | 314 | |
Local Phone Number | 573 - 9200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,843,697 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Central Index Key | 0000205402 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Condensed Consolidated Statements Of Income [Abstract] | |||
Net Sales | $ 2,672.6 | $ 2,381.8 | |
Cost of merchandise sold | (2,125.7) | (1,902.5) | |
Gross Margin | 546.9 | 479.3 | |
Selling, general and administrative expenses | (361.7) | (324) | |
Depreciation and amortization | (14.3) | (13) | |
Other income, net | 0.8 | 0.9 | |
Income from Operations | 171.7 | 143.2 | |
Non-operating expenses | (2.8) | (5.5) | |
Income before Provision for Income Taxes | 168.9 | 137.7 | |
Provision for income taxes | (43.9) | (35.3) | |
Net Income | 125 | 102.4 | |
Net income attributable to noncontrolling interests | (0.2) | (0.2) | |
Net Income attributable to Graybar Electric Company, Inc. | $ 124.8 | $ 102.2 | |
Net Income attributable to Graybar Electric Company, Inc. per share of Common Stock | [1] | $ 4.64 | $ 3.85 |
Cash Dividends per share of Common Stock | $ 0.30 | $ 0.30 | |
Average common shares outstanding | [1] | 26.9 | 26.6 |
[1] Adjusted for the declaration of a 15 % stock dividend in 2022, shares related to which were issued in February 2023. Prior to the adjustment, the average common shares outstanding were 23.1 million for the three months ended March 31, 2022. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Income (Parenthetical) shares in Millions | 3 Months Ended | |
Mar. 31, 2022 shares | ||
Average common shares outstanding | 26.6 | [1] |
Previously Reported | ||
Average common shares outstanding | 23.1 | |
[1] Adjusted for the declaration of a 15 % stock dividend in 2022, shares related to which were issued in February 2023. Prior to the adjustment, the average common shares outstanding were 23.1 million for the three months ended March 31, 2022. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements Of Comprehensive Income [Abstract] | ||
Net Income | $ 125 | $ 102.4 |
Other Comprehensive Income | ||
Foreign currency translation | 0.1 | 2.2 |
Pension and postretirement benefits liability adjustments (net of tax of $(0.1), and $(1.4), respectively) | 0.2 | 4.4 |
Total Other Comprehensive Income | 0.3 | 6.6 |
Comprehensive Income | 125.3 | 109 |
Less: Comprehensive income attributable to noncontrolling interests, net of tax | 0.2 | 0.3 |
Comprehensive Income attributable to Graybar Electric Company, Inc. | $ 125.1 | $ 108.7 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements Of Comprehensive Income [Abstract] | ||
Pension and postretirement benefits liability adjustments, tax | $ (0.1) | $ (1.4) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 173 | $ 69.4 |
Trade receivables (less allowances of $12.7 and $13.4, respectively) | 1,679.6 | 1,673 |
Merchandise inventory | 962.9 | 1,026.3 |
Other current assets | 82.9 | 83.7 |
Total Current Assets | 2,898.4 | 2,852.4 |
Property, at cost | ||
Land | 97.3 | 97.3 |
Buildings | 572.9 | 562.1 |
Furniture and fixtures | 288.5 | 282.9 |
Software | 148.9 | 148 |
Finance leases | 12.8 | 12.8 |
Total Property, at cost | 1,120.4 | 1,103.1 |
Accumulated depreciation and amortization | (651.7) | (641.9) |
Net Property | 468.7 | 461.2 |
Operating Lease Right-of-use Assets | 172.8 | 175.3 |
Other Non-current Assets | 255.8 | 260.2 |
Total Assets | 3,795.7 | 3,749.1 |
Current Liabilities | ||
Short-term borrowings | 107.8 | 31.6 |
Current portion of long-term debt | 1.7 | 1.6 |
Trade accounts payable | 1,188.9 | 1,276.8 |
Accrued payroll and benefit costs | 157.9 | 219.2 |
Other accrued taxes | 32.7 | 34.3 |
Current operating lease liabilities | 45.1 | 43.9 |
Other current liabilities | 220.2 | 213.5 |
Total Current Liabilities | 1,754.3 | 1,820.9 |
Postretirement Benefits Liability | 55.5 | 55.5 |
Pension Liability | 133.6 | 140.8 |
Long-term Debt | 3.5 | 3.9 |
Non-current Operating Lease Liabilities | 143.2 | 147.1 |
Other Non-current Liabilities | 55.5 | 55.3 |
Total Liabilities | 2,145.6 | 2,223.5 |
SHAREHOLDERS’ EQUITY | ||
Outstanding Common Stock | 538 | 531.8 |
Advance Payments on Subscriptions to Common Stock | 1.2 | |
Retained Earnings | 1,257.8 | 1,141 |
Accumulated Other Comprehensive Loss | (152.5) | (152.8) |
Total Graybar Electric Company, Inc. Shareholders’ Equity | 1,644.5 | 1,520 |
Noncontrolling Interests | 5.6 | 5.6 |
Total Shareholders’ Equity | 1,650.1 | 1,525.6 |
Total Liabilities and Shareholders’ Equity | $ 3,795.7 | $ 3,749.1 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Trade receivables, allowances | $ 12.7 | $ 13.4 |
Common stock, stated value per share | $ 20 | $ 20 |
Authorized | 50,000,000 | 50,000,000 |
Issued to voting trustees | 22,588,092 | 22,085,481 |
Issued to shareholders | 4,645,980 | 4,568,288 |
In treasury, at cost | (335,700) | (63,563) |
Outstanding Common Stock | 26,898,372 | 26,590,206 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flows from Operating Activities | ||
Net Income | $ 125 | $ 102.4 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 14.3 | 13 |
Non-cash operating lease expense | 11.7 | 9.1 |
Deferred income taxes | 1.9 | (2.9) |
Net gain on disposal of property | (0.1) | |
Net income attributable to noncontrolling interests | (0.2) | (0.2) |
Changes in assets and liabilities: | ||
Trade receivables | (6.4) | (90.5) |
Merchandise inventory | 63.4 | (57.7) |
Other current assets | 0.8 | (10.9) |
Other non-current assets | (0.9) | (1.5) |
Trade accounts payable | (87.9) | 134 |
Accrued payroll and benefit costs | (61.3) | (44.7) |
Other current liabilities | 5.4 | 18 |
Other non-current liabilities | (18.8) | (9.8) |
Total adjustments to net income | (78) | (44.2) |
Net cash provided by operating activities | 47 | 58.2 |
Cash Flows from Investing Activities | ||
Proceeds from disposal of property | 0.2 | 0.2 |
Capital expenditures for property | (18.6) | (8.2) |
Net cash used by investing activities | (18.4) | (8) |
Cash Flows from Financing Activities | ||
Net increase (decrease) in short-term borrowings | 76.2 | (54.2) |
Principal payments under finance arrangements | (0.4) | (0.6) |
Sales of common stock | 12.8 | 11.5 |
Purchases of common stock | (5.4) | (4.1) |
Purchases of noncontrolling interests’ common stock | (0.2) | (0.3) |
Dividends paid | (8) | (7) |
Net cash provided (used) by financing activities | 75 | (54.7) |
Net Increase (Decrease) in Cash | 103.6 | (4.5) |
Cash, Beginning of Year | 69.4 | 48.5 |
Cash, End of Period | 173 | 44 |
Non-cash Investing and Financing Activities | ||
Acquisitions of equipment under finance leases | 0.1 | 0.2 |
Acquisitions of assets under operating leases | $ 9.2 | $ 5.9 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements Of Changes In Shareholders’ Equity - USD ($) $ in Millions | Common Stock | Common Stock Subscribed, Unissued | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total |
Balance at Dec. 31, 2021 | $ 456.7 | $ 850.3 | $ (180.5) | $ 5.4 | $ 1,131.9 | |
Net income | 102.2 | 0.2 | 102.4 | |||
Other comprehensive income | 6.5 | 0.1 | 6.6 | |||
Stock issued | 10.4 | 10.4 | ||||
Stock purchased | (4.1) | (0.3) | (4.4) | |||
Advance payments | $ 1.1 | 1.1 | ||||
Dividends declared | (7) | (7) | ||||
Balance at Mar. 31, 2022 | 463 | 1.1 | 945.5 | (174) | 5.4 | 1,241 |
Balance at Dec. 31, 2022 | 531.8 | 1,141 | (152.8) | 5.6 | 1,525.6 | |
Net income | 124.8 | 0.2 | 125 | |||
Other comprehensive income | 0.3 | 0.3 | ||||
Stock issued | 11.6 | 11.6 | ||||
Stock purchased | (5.4) | (0.2) | (5.6) | |||
Advance payments | 1.2 | 1.2 | ||||
Dividends declared | (8) | (8) | ||||
Balance at Mar. 31, 2023 | $ 538 | $ 1.2 | $ 1,257.8 | $ (152.5) | $ 5.6 | $ 1,650.1 |
Description Of The Business
Description Of The Business | 3 Months Ended |
Mar. 31, 2023 | |
Description Of The Business [Abstract] | |
Description Of The Business | 1. DESCRIPTION OF THE BUSINESS Graybar Electric Company, Inc. (“Graybar”, “Company”, "we", "our", or "us") is a New York corporation, incorporated in 1925. We are engaged in the distribution of electrical and communications and data networking products and are a provider of related supply chain management and logistics services. We primarily serve customers in the construction, commercial, institutional and government ("CIG"), and industrial & utility vertical markets, with products and services that support new construction, infrastructure updates, building renovation, facility maintenance, repair and operations ("MRO"), and original equipment manufacturers ("OEM"). In our primary role as third-party wholesale distributor, we neither manufacture nor contract to manufacture the products that we sell; however, one of our subsidiaries may contract to manufacture some of its private label lighting fixtures. Our business activity is primarily based in the United States (“U.S.”). We also have subsidiary operations with distribution facilities in Canada and Puerto Rico. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our accounting policies conform to generally accepted accounting principles in the U.S. ("GAAP”) and are applied on a consistent basis among all years presented. The full summary of our significant accounting policies is included in our latest Annual Report on Form 10-K for the year ended December 31 , 2022. Basis of Presentation The unaudited condensed consolidated financial statements included herein have been prepared by Graybar pursuant to the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although we believe that our disclosures are adequate to make the information presented not misleading. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect reported amounts. Our condensed consolidated financial statements include amounts that are based on management’s best estimates and judgments. Actual results could differ from those estimates. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2022, included in our latest Annual Report on Form 10-K. In the opinion of management, this quarterly report includes all adjustments, consisting of normal recurring accruals and adjustments, necessary for the fair presentation of the condensed consolidated financial statements presented. Results for interim periods are not necessarily indicative of results to be expected for the full year. Principles of Consolidation The condensed consolidated financial statements include the accounts of Graybar and our subsidiary companies. All material intercompany balances and transactions have been eliminated. The ownership interests that are held by owners other than the Company are in subsidiaries owned by the Company and are accounted for and reported as noncontrolling interests. New Accounting Standards In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU” or “Update”) 2022-04, “Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”, which requires entities to disclose the key terms of supplier finance programs used in connection with the purchase of goods and services along with information about their obligations under these programs, including a rollforward of those obligations. This Update does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The Update is effective for all entities for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023. The guidance would be applied retrospectively, other than the rollforward requirement, which would be applied prospectively. While we do not have a supplier finance program currently in place, we are considering introducing a supplier finance program in 2023 and, therefore, are simultaneously evaluating the impact of adopting the Update on our consolidated financial statements. In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848” which provides final guidance that defers the sunset date for applying the reference rate reform relief in ASC 848 to December 31, 2024, from December 31, 2022. The guidance is effective upon issuance. We have transitioned to the Secured Overnight Financing Rate (“SOFR”) as our reference rate effective March 29, 2023, as described in Note 5, “Debt”. The adoption of this Update did not have a material impact on our consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue [Abstract] | |
Revenue | 3. REVENUE The following table summarizes the percentages of our net sales attributable to each of our vertical markets for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Construction 56.2 % 57.6 % CIG 25.1 25.1 Industrial & Utility 18.7 17.3 Total net sales 100.0 % 100.0 % Certain reclassifications have been made to the vertical market assigned to customers in the prior year’s information to conform to the March 31, 2023 presentation. We had no material contract assets, contract liabilities, or deferred contract costs recorded on the condensed consolidated balance sheet as of March 31, 2023 and December 31, 2022. In addition, for the three months ended March 31, 2023 and 2022, revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period was not material. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | 4. INCOME TAXES Our total provision for income taxes was $ 43.9 million and $ 35.3 million for the three months ended March 31, 2023, and 2022, respectively. We record our income tax provision using a full-year forecasted methodology, including discrete items in the period in which they occur. Our year-to-date effective tax rate was 26.0 % for the three months ended March 31, 2023 compared to 25.6 % for the three months ended March 31, 2022. Our federal income tax returns for the tax years 2019 and forward are available for examination by the U.S. Internal Revenue Service (“IRS”). The statute of limitations for the 2019 federal return will expire on October 15, 2023, unless extended by consent. Our state income tax returns for 2018 through 2022 remain subject to examination by various state authorities with the latest period closing on December 31, 2027. We have not extended the statutes of limitations in any state jurisdictions with respect to years prior to 2018. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt [Abstract] | |
Debt | 5. DEBT Revolving Credit Facility At December 31, 2022, we, along with Graybar Canada Limited, our Canadian operating subsidiary ("Graybar Canada"), had an unsecured, five-year , $ 750.0 million committed revolving credit agreement maturing in August 2026 with Bank of America, N.A. and the other lenders named therein (the "Revolving Credit Facility "), which included a combined letter of credit sub-facility of up to $ 25.0 million, a U.S. swing-line loan facility of up to $ 75.0 million, and a Canadian swing-line loan facility of up to $ 20.0 million. The Revolving Credit Facility included a $ 100.0 million sublimit (in U.S. or Canadian dollars) available for borrowings by Graybar Canada. Our borrowing availability under the facility is reduced by the amount of borrowings by Graybar Canada, but we may use the sublimit amount to increase our borrowings, to the extent available. If we were to use available borrowings under the Revolving Credit Facility that included the sublimit amount, then Graybar Canada’s available capacity would be reduced by our use of such amount. The Revolving Credit Facility contained an accordion feature, which allowed us to request increases in the aggregate borrowing commitments of up to $ 375.0 million. On March 29, 2023, we, along with Graybar Canada, amended the Revolving Credit Facility, pursuant to the terms and conditions of a Fifth Amendment to Credit Agreement, dated as of March 29, 2023 (the “Amended Credit Agreement”), by and among Graybar, as parent borrower, Graybar Canada Limited, as a borrower, the lenders party thereto, Bank of America, N.A. as Domestic Administrative Agent, Domestic Swing Line Lender and Domestic L/C Issuer and Bank of America, N.A., acting through its Canada Branch, as Canadian Administrative Agent, Canadian Swing Line Lender and Canadian L/C Issuer. The Amended Credit Agreement replaced the LIBOR-based Eurodollar reference interest rate with a reference interest rate based on Term SOFR and introduced transition language for the Canadian Dealer Offered Rate (“CDOR”), in anticipation of the eventual discontinuation of CDOR, which is expected to be on or before June 28, 2024. Our borrowing availability remains unchanged under the Amended Credit Agreement. The Amended Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations on us and all but certain of our subsidiaries with respect to indebtedness (with specified, limited exceptions), liens, changes in the nature of our business, investments, mergers and acquisitions, issuance of equity securities, dispositions of assets and dissolution of certain subsidiaries, transactions with affiliates, as well as securitizations, factoring transactions, and transactions with sanctioned parties or in violation of certain US or Canadian anti-corruption and anti-money laundering laws. There are also maximum leverage ratio and minimum interest coverage ratio financial covenants to which we will be subject during the term of the Amended Credit Agreement. We were in compliance with all covenants under the Amended Credit Agreement and Revolving Credit Facility, respectively, as of March 31, 2023 and December 31, 2022. There were $ 107.8 million in short-term borrowings as of March 31, 2023, of which $ 107.4 million were under the Amended Credit Agreement. There were $ 31.6 million in short-term borrowings as of December 31, 2022, of which $ 30.0 million were under the Revolving Credit Facility. Short-term borrowings outstanding during the three months ended March 31, 2023 ranged from no short-term borrowings to a maximum of $ 107.8 million. Short-term borrowings outstanding during the three months ended March 31, 2022 ranged from a minimum of $ 33.1 million to a maximum of $ 173.1 million. At March 31, 2023, we had unused lines of credit under the Amended Credit Agreement amounting to $ 640.7 million available, compared to $ 718.1 million at December 31, 2022 under the Revolving Credit Facility. These lines are available to meet our short-term cash requirements and are subject to annual fees of up to 40 basis points ( 0.40 %). Interest expense, net was $ 0.9 million and $ 0.8 million for the three months ended March 31, 2023 and 2022, respectively. Private Placement Shelf Agreements We have an uncommitted, unsecured $ 100.0 million private placement shelf agreement (the “Prudential Shelf Agreement”) with PGIM, Inc., which is expected to allow us to issue senior promissory notes to affiliates of PGIM, Inc. at fixed rate terms to be agreed upon at the time of any issuance during a three-year issuance period ending in August 2023 . We also have an uncommitted, unsecured $ 150.0 million private placement shelf agreement (the "MetLife Shelf Agreement") with MetLife Investment Management, LLC (formerly known as MetLife Investment Advisors, LLC), and MetLife Investment Management Limited (collectively, “MetLife”) and each other MetLife affiliate that becomes a party to the agreement. The MetLife Shelf Agreement is expected to allow us to issue senior promissory notes to MetLife at fixed or floating rate economic terms to be agreed upon at the time of issuance during a three-year issuance period ending in June 2024 . We remain obligated under a most favored lender clause which is designed to ensure that any notes in the future under the Prudential Shelf Agreement and MetLife Shelf Agreement will continue to be of equal ranking with indebtedness under our Amended Credit Agreement. No notes have been issued under either the Prudential Shelf Agreement or the MetLife Shelf Agreement as of March 31, 2023 and December 31, 2022. Each shelf agreement contains representations and warranties of the Company and the applicable lender, events of default and affirmative and negative covenants, customary for agreements of this type. These covenants are substantially similar to those contained in the Amended Credit Agreement, subject to a number of exceptions and qualifications set forth in the applicable shelf agreement. All outstanding obligations of Graybar under one or both of these agreements may be declared immediately due and payable upon the occurrence of an event of default. We were in compliance with all covenants under the Prudential Shelf Agreement and the MetLife Shelf Agreement as of March 31, 2023 and December 31, 2022. Letters of Credit We had total letters of credit of $ 7.8 million outstanding at March 31, 2023, of which $ 1.9 million were issued under the Amended Credit Agreement. We had total letters of credit of $ 7.8 million outstanding at December 31, 2022, of which $ 1.9 million were issued under the Revolving Credit Facility. The letters of credit are issued primarily to support certain workers' compensation insurance policies and support performance under certain customer contracts. |
Pension And Other Postretiremen
Pension And Other Postretirement Benefits | 3 Months Ended |
Mar. 31, 2023 | |
Pension And Other Postretirement Benefits [Abstract] | |
Pension And Other Postretirement Benefits | 6. PENSION AND OTHER POSTRETIREMENT BENEFITS We have a noncontributory defined benefit pension plan (the "Pension Plan") covering substantially all employees first hired prior to July 1, 2015 after the completion of one year of service and 1,000 hours of service . The Pension Plan provides retirement benefits based on an employee’s final average earnings and years of service. A supplemental benefit plan provides nonqualified pension benefits for compensation in excess of the IRS compensation limits applicable to the Pension Plan and eligible compensation deferred by a participant. Our funding policy is to make contributions to the Pension Plan, provided that the total annual contributions will not be less than the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Pension Protection Act of 2006 minimums or greater than the maximum tax-deductible amount, to review the contribution and funding strategy on a regular basis, and to allow discretionary contributions to be made by us from time to time. The assets of the Pension Plan are invested primarily in fixed income investments and equity securities. We pay nonqualified pension benefits when they are due according to the terms of the supplemental benefit plan. We provide certain postretirement healthcare and life insurance benefits to retired employees. Substantially all of our employees hired or rehired prior to 2014 may become eligible for postretirement medical benefits if they reach the age and service requirements of the retiree medical plan and retire on a pension (except a deferred pension) under the Pension Plan. Postretirement life insurance benefits are insured through an insurance company. We fund postretirement benefits as incurred, and accordingly, there were no assets held in the postretirement benefits plan at March 31, 2023 and December 31, 2022. The net periodic benefit cost for the three months ended March 31, 2023 and 2022 included the following components: Pension Benefits Postretirement Benefits Three Months Ended Three Months Ended March 31, March 31, Components of Net Periodic Benefit Cost 2023 2022 2023 2022 Selling, general and administrative expenses: Service cost $ 5.9 $ 7.1 $ 0.3 $ 0.5 Total selling, general and administrative expenses $ 5.9 $ 7.1 $ 0.3 $ 0.5 Non-operating expenses: Interest cost $ 8.0 $ 6.1 $ 0.9 $ 0.5 Expected return on plan assets ( 7.3 ) ( 7.7 ) — — Amortization of net actuarial loss 0.3 5.7 — 0.1 Total non-operating expenses $ 1.0 $ 4.1 $ 0.9 $ 0.6 Net periodic benefit cost $ 6.9 $ 11.2 $ 1.2 $ 1.1 We made qualified and nonqualified pension contributions totaling $ 13.9 million during the three-month period ended March 31, 2023 and contributions totaling $ 12.0 million during the three-month period ended March 31, 2022. Additional contributions of $ 30.0 million are expected to be paid during the remainder of 2023, but may change at our discretion. |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2023 | |
Capital Stock [Abstract] | |
Capital Stock | 7. CAPITAL STOCK Our common stock is 100 % owned by active and retired employees, and there is no public trading market for our common stock. Since 1928, substantially all of the issued and outstanding shares of common stock have been held of record by voting trustees under successive voting trust agreements. A new Voting Trust Agreement was established effective March 3, 2017, which expires by its terms on March 1, 2027 because under applicable New York law, a voting trust may not have a term greater than ten years. At March 31, 2023, approximately 83 % of our outstanding common stock was held in the voting trust. The participation of shareholders in the voting trust is voluntary at the time the voting trust is created, but is irrevocable during its term. Shareholders who elect not to participate in the voting trust hold their common stock as shareholders of record. Shareholders may elect to participate in the voting trust at any time during the term of the voting trust. No holder of our common stock or voting trust interests representing our common stock ("common stock", "common shares", or "shares") may sell, transfer or otherwise dispose of any shares without first offering us the option to purchase those shares at the price at which they were issued. We also have the option to purchase at the issue price the common shares of any shareholder who ceases to be an employee for any reason other than death or "retirement" (as defined in our amended restated certificate of incorporation), and on the first anniversary of any holder's death. In the past, we have always exercised these purchase options, and we expect to continue to do so in the foreseeable future. However, we can make no assurance that we will continue to exercise our purchase option in the future. All outstanding shares have been issued at $ 20.00 per share. Cash dividends paid were $ 8.0 million and $ 7.0 million for the three months ended March 31, 2023 and 2022, respectively. We also have authorized 10,000,000 shares of Delegated Authority Preferred Stock (“preferred stock”), par value one cent ($ 0.01 ). The preferred stock may be issued in one or more series, with the designations, relative rights, preferences, and limitations of shares of each such series being fixed by a resolution of our Board of Directors. There were no shares of preferred stock outstanding at March 31, 2023 and December 31, 2022. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2023 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | 8. ACCUMULATED OTHER COMPREHENSIVE LOSS The following table represents amounts reclassified from accumulated other comprehensive loss for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Amortization of Pension and Other Postretirement Benefits Items Amortization of Pension and Other Postretirement Benefits Items Actuarial Losses Recognized Actuarial Losses Recognized Affected Line in Condensed Consolidated Statement of Income: Non-operating expenses $ 0.3 $ 5.8 Tax benefit ( 0.1 ) ( 1.4 ) Total reclassifications for the period, net of tax $ 0.2 $ 4.4 The following table represents the activity included in accumulated other comprehensive loss for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Foreign Currency Pension and Other Postretirement Benefits Total Foreign Currency Pension and Other Postretirement Benefits Total Beginning balance January 1, $ ( 14.6 ) $ ( 138.2 ) $ ( 152.8 ) $ ( 5.0 ) $ ( 175.5 ) $ ( 180.5 ) Other comprehensive income before reclassifications 0.1 — 0.1 2.1 — 2.1 Amounts reclassified from accumulated other comprehensive income (net of tax $( 0.1 ) and $( 1.4 )) — 0.2 0.2 — 4.4 4.4 Net current-period other comprehensive income 0.1 0.2 0.3 2.1 4.4 6.5 Ending balance March 31, $ ( 14.5 ) $ ( 138.0 ) $ ( 152.5 ) $ ( 2.9 ) $ ( 171.1 ) $ ( 174.0 ) |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | 9. COMMITMENTS AND CONTINGENCIES We are subject to various claims, disputes, and administrative and legal matters incidental to our past and current business activities. As a result, contingencies arise resulting from an existing condition, situation, or set of circumstances involving an uncertainty as to the realization of a possible loss. We have in place insurance coverage for litigation defense and claim settlement costs incurred in connection with our asbestos claims. We estimate the value of probable insurance recoveries associated with our asbestos reserve based on management’s interpretations and estimates surrounding the available or applicable insurance coverage. We estimate the future payments for litigation defense and claim settlement costs based on our historical liabilities and current and projected caseloads. At March 31, 2023 and December 31, 2022, we had $ 2.5 million and $ 41.5 million of insurance receivables recorded in other current assets and other non-current assets, respectively, and $ 2.5 million and $ 41.5 million recorded in other current liabilities and other non-current liabilities, respectively, related to our asbestos litigation defense and claims settlement reserve. Estimated loss contingencies are accrued only if the loss is probable and the amount of the loss can be reasonably estimated. With respect to a particular loss contingency, it may be probable that a loss has occurred but the estimate of the loss is a wide range. If we deem an amount within the range to be a better estimate than any other amount within the range, that amount will be accrued. However, if no amount within the range is a better estimate than any other amount, the minimum amount of the range is accrued. While we believe that none of these claims, disputes, administrative, and legal matters will have a material adverse effect on our financial position, these matters are uncertain and we cannot at this time determine whether the financial impact, if any, of these matters will be material to our results of operations in the period in which such matters are resolved or a better estimate becomes available. |
Summary Of Significant Accoun_2
Summary Of Significant Accounting Policies (Policy) | 3 Months Ended |
Mar. 31, 2023 | |
Summary Of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements included herein have been prepared by Graybar pursuant to the rules and regulations of the U.S. Securities and Exchange Commission applicable to interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although we believe that our disclosures are adequate to make the information presented not misleading. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect reported amounts. Our condensed consolidated financial statements include amounts that are based on management’s best estimates and judgments. Actual results could differ from those estimates. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2022, included in our latest Annual Report on Form 10-K. In the opinion of management, this quarterly report includes all adjustments, consisting of normal recurring accruals and adjustments, necessary for the fair presentation of the condensed consolidated financial statements presented. Results for interim periods are not necessarily indicative of results to be expected for the full year. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Graybar and our subsidiary companies. All material intercompany balances and transactions have been eliminated. The ownership interests that are held by owners other than the Company are in subsidiaries owned by the Company and are accounted for and reported as noncontrolling interests. |
New Accounting Standards | New Accounting Standards In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU” or “Update”) 2022-04, “Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”, which requires entities to disclose the key terms of supplier finance programs used in connection with the purchase of goods and services along with information about their obligations under these programs, including a rollforward of those obligations. This Update does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. The Update is effective for all entities for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023. The guidance would be applied retrospectively, other than the rollforward requirement, which would be applied prospectively. While we do not have a supplier finance program currently in place, we are considering introducing a supplier finance program in 2023 and, therefore, are simultaneously evaluating the impact of adopting the Update on our consolidated financial statements. In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848” which provides final guidance that defers the sunset date for applying the reference rate reform relief in ASC 848 to December 31, 2024, from December 31, 2022. The guidance is effective upon issuance. We have transitioned to the Secured Overnight Financing Rate (“SOFR”) as our reference rate effective March 29, 2023, as described in Note 5, “Debt”. The adoption of this Update did not have a material impact on our consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue [Abstract] | |
Disaggregation of Revenue | Three Months Ended March 31, 2023 2022 Construction 56.2 % 57.6 % CIG 25.1 25.1 Industrial & Utility 18.7 17.3 Total net sales 100.0 % 100.0 % |
Pension And Other Postretirem_2
Pension And Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Pension And Other Postretirement Benefits [Abstract] | |
Schedule Of Net Periodic Benefit Costs | Pension Benefits Postretirement Benefits Three Months Ended Three Months Ended March 31, March 31, Components of Net Periodic Benefit Cost 2023 2022 2023 2022 Selling, general and administrative expenses: Service cost $ 5.9 $ 7.1 $ 0.3 $ 0.5 Total selling, general and administrative expenses $ 5.9 $ 7.1 $ 0.3 $ 0.5 Non-operating expenses: Interest cost $ 8.0 $ 6.1 $ 0.9 $ 0.5 Expected return on plan assets ( 7.3 ) ( 7.7 ) — — Amortization of net actuarial loss 0.3 5.7 — 0.1 Total non-operating expenses $ 1.0 $ 4.1 $ 0.9 $ 0.6 Net periodic benefit cost $ 6.9 $ 11.2 $ 1.2 $ 1.1 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Reclassification Out Of Accumulated Other Comprehensive Income (Loss) | The following table represents amounts reclassified from accumulated other comprehensive loss for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Amortization of Pension and Other Postretirement Benefits Items Amortization of Pension and Other Postretirement Benefits Items Actuarial Losses Recognized Actuarial Losses Recognized Affected Line in Condensed Consolidated Statement of Income: Non-operating expenses $ 0.3 $ 5.8 Tax benefit ( 0.1 ) ( 1.4 ) Total reclassifications for the period, net of tax $ 0.2 $ 4.4 |
Changes In Accumulated Other Comprehensive Income (Loss) | The following table represents the activity included in accumulated other comprehensive loss for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Foreign Currency Pension and Other Postretirement Benefits Total Foreign Currency Pension and Other Postretirement Benefits Total Beginning balance January 1, $ ( 14.6 ) $ ( 138.2 ) $ ( 152.8 ) $ ( 5.0 ) $ ( 175.5 ) $ ( 180.5 ) Other comprehensive income before reclassifications 0.1 — 0.1 2.1 — 2.1 Amounts reclassified from accumulated other comprehensive income (net of tax $( 0.1 ) and $( 1.4 )) — 0.2 0.2 — 4.4 4.4 Net current-period other comprehensive income 0.1 0.2 0.3 2.1 4.4 6.5 Ending balance March 31, $ ( 14.5 ) $ ( 138.0 ) $ ( 152.5 ) $ ( 2.9 ) $ ( 171.1 ) $ ( 174.0 ) |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Revenue [Abstract] | ||
Contract assets, contract liabilities, or deferred contract costs recorded | $ 0 | $ 0 |
Revenue (Disaggregation Of Reve
Revenue (Disaggregation Of Revenue) (Details) - Product Concentration Risk - Revenue from Contract with Customer | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total net sales | 100% | 100% |
Construction | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 56.20% | 57.60% |
CIG | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 25.10% | 25.10% |
Industrial & Utility | ||
Disaggregation of Revenue [Line Items] | ||
Total net sales | 18.70% | 17.30% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Taxes [Abstract] | ||
Total income tax provision | $ 43.9 | $ 35.3 |
Effective tax rate | 26% | 25.60% |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | |||
Short-term borrowings | $ 107,800,000 | $ 31,600,000 | |
Interest expense, net | 900,000 | $ 800,000 | |
Letters of credit outstanding | 7,800,000 | 7,800,000 | |
Minimum | |||
Line of Credit Facility [Line Items] | |||
Short-term borrowings | 0 | 33,100,000 | |
Maximum | |||
Line of Credit Facility [Line Items] | |||
Short-term borrowings | 107,800,000 | $ 173,100,000 | |
Amended Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Remaining borrowing capacity | $ 640,700,000 | 718,100,000 | |
Credit agreement commitment fee percentage | 0.40% | ||
Short-term borrowings | $ 107,400,000 | 30,000,000 | |
Letters of credit outstanding | $ 1,900,000 | 1,900,000 | |
Prudential Private Placement Shelf Agreement | |||
Line of Credit Facility [Line Items] | |||
Debt maturity date | Aug. 01, 2023 | ||
Issuance period | 3 years | ||
Unused borrowing capacity, amount | $ 100,000,000 | ||
MetLife Private Placement Shelf Agreement | |||
Line of Credit Facility [Line Items] | |||
Debt maturity date | Jun. 01, 2024 | ||
Issuance period | 3 years | ||
Unused borrowing capacity, amount | $ 150,000,000 | ||
Prudential Shelf Agreement Or MetLife Shelf Agreement | |||
Line of Credit Facility [Line Items] | |||
Notes issued face amount | $ 0 | 0 | |
Line of credit | Amended Credit Agreement | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 750,000,000 | ||
Accordion feature, increase limit | $ 375,000,000 | ||
Expiration date | Aug. 01, 2026 | ||
Debt instrument, term | 5 years | ||
Line of credit | Amended Credit Agreement | Letter of Credit Sub-Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 25,000,000 | ||
Line of credit | Amended Credit Agreement | Bridge Loan | Graybar Canada | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 100,000,000 | ||
Line of credit | Amended Credit Agreement | Bridge Loan | UNITED STATES | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 75,000,000 | ||
Line of credit | Amended Credit Agreement | Bridge Loan | CANADA | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 20,000,000 |
Pension And Other Postretirem_3
Pension And Other Postretirement Benefits (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Expected employer contributions remainder of year | $ 30,000,000 | ||
Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Required term of service to be eligible for plan match | one year of service and 1,000 hours of service | ||
Employer contributions | $ 13,900,000 | $ 12,000,000 | |
Postretirement Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | $ 0 | $ 0 |
Pension And Other Postretirem_4
Pension And Other Postretirement Benefits (Schedule Of Net Periodic Benefit Costs) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Total selling, general, and administrative expenses | $ 361.7 | $ 324 |
Total non-operating expenses | 2.8 | 5.5 |
Pension Benefits | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | 5.9 | 7.1 |
Total selling, general, and administrative expenses | 5.9 | 7.1 |
Interest cost | 8 | 6.1 |
Expected return on plan assets | (7.3) | (7.7) |
Amortization of net actuarial loss | 0.3 | 5.7 |
Total non-operating expenses | 1 | 4.1 |
Net periodic benefit cost | 6.9 | 11.2 |
Postretirement Benefits | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | 0.3 | 0.5 |
Total selling, general, and administrative expenses | 0.3 | 0.5 |
Interest cost | 0.9 | 0.5 |
Amortization of net actuarial loss | 0.1 | |
Total non-operating expenses | 0.9 | 0.6 |
Net periodic benefit cost | $ 1.2 | $ 1.1 |
Capital Stock (Narrative) (Deta
Capital Stock (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Capital Stock [Abstract] | |||
Percent of stock owned by active and retired employees | 100% | ||
Percent of shares held in voting trust | 83% | ||
Common stock, stated value per share | $ 20 | $ 20 | |
Cash dividends | $ 8 | $ 7 | |
Common stock dividend declared, percent | 15% | ||
Preferred stock shares authorized | 10,000,000 | ||
Preferred stock par or stated value per share (USD per share) | $ 0.01 | ||
Preferred stock outstanding (in shares) | 0 | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Reclassification Out Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Non-operating expenses | $ 2.8 | $ 5.5 |
Tax benefit | 43.9 | 35.3 |
Total reclassifications for the period, net of tax | (125) | (102.4) |
Reclassification out of AOCI | Actuarial Losses Recognized | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Non-operating expenses | 0.3 | 5.8 |
Tax benefit | (0.1) | (1.4) |
Total reclassifications for the period, net of tax | $ 0.2 | $ 4.4 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss (Changes In Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 1,520 | |
Ending balance | 1,644.5 | |
Amounts reclassified from accumulated other comprehensive loss, tax | (0.1) | $ (1.4) |
Foreign Currency | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (14.6) | (5) |
Other comprehensive income before reclassifications | 0.1 | 2.1 |
Amounts reclassified from accumulated other comprehensive income (net of tax $(0.1) and $(1.4)) | ||
Net current-period other comprehensive (loss) income | 0.1 | 2.1 |
Ending balance | (14.5) | (2.9) |
Pension and Other Postretirement Benefits | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (138.2) | (175.5) |
Other comprehensive income before reclassifications | ||
Amounts reclassified from accumulated other comprehensive income (net of tax $(0.1) and $(1.4)) | 0.2 | 4.4 |
Net current-period other comprehensive (loss) income | 0.2 | 4.4 |
Ending balance | (138) | (171.1) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (152.8) | (180.5) |
Other comprehensive income before reclassifications | 0.1 | 2.1 |
Amounts reclassified from accumulated other comprehensive income (net of tax $(0.1) and $(1.4)) | 0.2 | 4.4 |
Net current-period other comprehensive (loss) income | 0.3 | 6.5 |
Ending balance | $ (152.5) | $ (174) |
Commitments And Contingencies (
Commitments And Contingencies (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Insurance receivables current | $ 2.5 | $ 2.5 |
Insurance receivables non-current | 41.5 | 41.5 |
Other Current Liabilities | ||
Liability related to asbestos claims and related insurance receivables | 2.5 | 2.5 |
Other Noncurrent Liabilities | ||
Liability related to asbestos claims and related insurance receivables | $ 41.5 | $ 41.5 |