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| 8-K - LIVE FILING - GENUINE PARTS CO | htm_43234.htm |
FOR IMMEDIATE RELEASE
| Contacts: | Jerry W. Nix, Vice Chairman and CFO – (770) 612-2048 Sidney G. Jones, Vice President-Investor Relations – (770) 818-4628 |
GENUINE PARTS COMPANY
REPORTS RECORD SALES AND EARNINGS
FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2011
- Sales Up 11% and EPS Up 17% -
Atlanta, Georgia, October 18, 2011 — Genuine Parts Company (NYSE: GPC) reported record sales and earnings for the third quarter and nine months ended September 30, 2011. Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $3.3 billion were up 11% compared to the third quarter of 2010. Net income for the quarter was $151.8 million, an increase of 15% from $131.8 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 97 cents, up 17% compared to 83 cents for the third quarter last year.
For the nine months ended September 30, 2011, sales totaled $9.4 billion, up 12% compared to the same period in 2010. Net income for the nine months was $430.2 million, an increase of 21% from $356.9 million recorded in the previous year. Earnings per share on a diluted basis were $2.72, up 21% compared to $2.25 for the same period last year.
In review of the quarter, Mr. Gallagher commented, “We are pleased to report another period of record sales and earnings for Genuine Parts Company. The Automotive Group posted its fourth consecutive quarter of 9% sales growth. Automotive’s strong and consistent growth reflects the positive impact of our sales initiatives and the sound fundamentals that continue to be evident in the automotive aftermarket. Our Industrial and Electrical businesses once again produced the strongest growth among our four business segments. Sales for Motion Industries, our Industrial Group, reached over $1 billion for the second straight quarter and were up 18%. EIS, our Electrical Group, generated a 22% sales increase. Both Motion Industries and EIS sell into the manufacturing sector of the economy, which has performed well over the last seven quarters and current customer demand continues to be encouraging. S.P. Richards, our Office Products Group, showed a 3% sales increase for the quarter, marking their fourth consecutive period of sales growth. This positive sales trend is encouraging and reflects the ongoing benefits of their internal growth initiatives, as demand across the office products industry remains relatively weak.”
Mr. Gallagher added, “Our balance sheet as of September 30, 2011 remains in excellent condition.
We ended the period with cash of $535 million and we continue to generate strong cash flows as a
result of our working capital, asset management and cost reduction initiatives. Our strong cash
position offers us tremendous opportunities and we continue to use our cash in several key areas to
maximize the total return to shareholders. Our priorities for cash remain the dividends paid to
shareholders, the ongoing reinvestment back into each of our four businesses, strategic
acquisitions and share repurchases.”
Mr. Gallagher concluded, “We are pleased with the record level of sales and earnings achieved in
the third quarter and for the first nine months in 2011. Turning to the last quarter of the year,
we remain optimistic that our businesses will show continued progress. While we are aware of the
general economic factors that could lead to more challenging market conditions, our management team
remains committed to sustaining good revenue growth, further improving operating margins,
generating solid cash flows and maintaining a strong balance sheet.”
Conference Call
Genuine Parts Company will hold a conference call today at 11:00 a.m. Eastern time to discuss the results of the quarter and the future outlook. Interested parties may listen to the call on the Company’s website, www.genpt.com, by clicking “Investor Services”, or by dialing toll-free at 877-331-5106, conference ID 14714880. A replay will also be available on the Company’s website or by dialing toll-free at 855-859-2056, conference ID 14714880, two hours after the completion of the conference call until 12:00 a.m. Eastern time on November 1, 2011.
Forward Looking Statements
Some statements in this report, as well as in other materials we file with the Securities and Exchange Commission (SEC) or otherwise release to the public and in materials that we 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. Senior officers may also make verbal statements to analysts, investors, the media and others that are forward-looking. Forward-looking statements may relate, for example, to future operations, prospects, strategies, financial condition, economic performance (including growth and earnings), industry conditions and demand for our products and services. The Company cautions that its 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, slowing demand for the Company’s products, changes in general economic conditions, including, unemployment, inflation or deflation, high energy costs, uncertain credit markets and other macro-economic conditions, the ability to maintain favorable vendor arrangements and relationships, disruptions in our vendors’ operations, competitive product, service and pricing pressures, the Company’s ability to successfully implement its business initiatives in each of its four business segments, the uncertainties and costs of litigation, as well as other risks and uncertainties discussed in the Company’s Annual Report on Form 10-K for 2010 and from time to time in the Company’s subsequent filings with the SEC.
Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its 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, Form 8-K and other reports to the SEC.
About Genuine Parts Company
Genuine Parts Company is a distributor of automotive replacement parts in the U.S., Canada and Mexico. The Company also distributes industrial replacement parts in the U.S., Canada and Mexico through its Motion Industries subsidiary. S.P. Richards Company, the Office Products Group, distributes business products nationwide in the U.S. and Canada. The Electrical/Electronic Group, EIS, Inc., distributes electrical and electronic components throughout the U.S., Canada and Mexico.
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (Unaudited) | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
Net sales |
$ | 3,285,560 | $ | 2,950,560 | $ | 9,444,742 | $ | 8,399,861 | ||||||||
Cost of goods sold |
2,337,028 | 2,097,529 | 6,731,302 | 5,964,045 | ||||||||||||
Gross profit |
948,532 | 853,031 | 2,713,440 | 2,435,816 | ||||||||||||
Operating expenses: |
||||||||||||||||
Selling, administrative & other expenses |
679,967 | 618,449 | 1,965,871 | 1,792,997 | ||||||||||||
Depreciation and amortization |
21,465 | 22,093 | 66,938 | 67,422 | ||||||||||||
| 701,432 | 640,542 | 2,032,809 | 1,860,419 | |||||||||||||
Income before income taxes |
247,100 | 212,489 | 680,631 | 575,397 | ||||||||||||
Income taxes |
95,268 | 80,704 | 250,472 | 218,536 | ||||||||||||
Net income |
$ | 151,832 | $ | 131,785 | $ | 430,159 | $ | 356,861 | ||||||||
Basic net income per common share |
$ | .97 | $ | .84 | $ | 2.74 | $ | 2.26 | ||||||||
Diluted net income per common share |
$ | .97 | $ | .83 | $ | 2.72 | $ | 2.25 | ||||||||
Weighted average common shares outstanding |
156,206 | 157,573 | 157,024 | 158,197 | ||||||||||||
Dilutive effect of stock options and |
||||||||||||||||
non-vested restricted stock awards |
942 | 407 | 965 | 398 | ||||||||||||
Weighted average common shares outstanding – |
||||||||||||||||
assuming dilution |
157,148 | 157,980 | 157,989 | 158,595 | ||||||||||||
GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
| Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (Unaudited) | ||||||||||||||||
| (in thousands) | ||||||||||||||||
Net sales: |
||||||||||||||||
Automotive |
$ | 1,611,333 | $ | 1,481,294 | $ | 4,601,272 | $ | 4,231,367 | ||||||||
Industrial |
1,089,826 | 921,162 | 3,140,855 | 2,606,697 | ||||||||||||
Office Products |
447,310 | 434,513 | 1,297,965 | 1,246,984 | ||||||||||||
Electrical/Electronic Materials |
143,342 | 117,290 | 419,936 | 324,167 | ||||||||||||
Other (1) |
(6,251 | ) | (3,699 | ) | (15,286 | ) | (9,354 | ) | ||||||||
Total net sales |
$ | 3,285,560 | $ | 2,950,560 | $ | 9,444,742 | $ | 8,399,861 | ||||||||
Operating profit: |
||||||||||||||||
Automotive |
$ | 141,233 | $ | 124,059 | $ | 377,927 | $ | 338,986 | ||||||||
Industrial |
97,191 | 72,856 | 248,489 | 181,820 | ||||||||||||
Office Products |
27,204 | 26,657 | 95,975 | 93,670 | ||||||||||||
Electrical/Electronic Materials |
11,138 | 8,393 | 30,380 | 22,156 | ||||||||||||
Total operating profit |
276,766 | 231,965 | 752,771 | 636,632 | ||||||||||||
Interest expense, net |
(6,244 | ) | (6,562 | ) | (18,980 | ) | (19,988 | ) | ||||||||
Other, net |
(23,422 | ) | (12,914 | ) | (53,160 | ) | (41,247 | ) | ||||||||
Income before income taxes |
$ | 247,100 | $ | 212,489 | $ | 680,631 | $ | 575,397 | ||||||||
Capital expenditures |
$ | 22,184 | $ | 31,019 | $ | 63,932 | $ | 58,931 | ||||||||
Depreciation and amortization |
$ | 21,465 | $ | 22,093 | $ | 66,938 | $ | 67,422 | ||||||||
(1) Represents the net effect of discounts, incentives and freight billed reported as a component of net sales. |
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| Sept. 30, | Sept. 30, | |||||||
| 2011 | 2010 | |||||||
| (Unaudited) | ||||||||
| (in thousands) | ||||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ | 534,801 | $ | 531,731 | ||||
Trade accounts receivable, net |
1,531,046 | 1,394,870 | ||||||
Merchandise inventories, net |
2,250,309 | 2,182,413 | ||||||
Prepaid expenses and other current assets |
330,157 | 282,287 | ||||||
TOTAL CURRENT ASSETS |
4,646,313 | 4,391,301 | ||||||
Goodwill and other intangible assets, less accumulated
amortization |
277,924 | 207,237 | ||||||
Deferred tax asset |
153,319 | 152,248 | ||||||
Other assets |
227,615 | 184,548 | ||||||
Net property, plant and equipment |
479,547 | 478,436 | ||||||
TOTAL ASSETS |
$ | 5,784,718 | $ | 5,413,770 | ||||
| |
||||||||
LIABILITIES AND EQUITY |
||||||||
CURRENT LIABILITIES |
||||||||
Trade accounts payable |
$ | 1,587,326 | $ | 1,371,718 | ||||
Current portion of debt |
250,000 | — | ||||||
Income taxes payable |
44,812 | 46,144 | ||||||
Dividends payable |
70,134 | 64,584 | ||||||
Other current liabilities |
288,388 | 238,439 | ||||||
TOTAL CURRENT LIABILITIES |
2,240,660 | 1,720,885 | ||||||
Long-term debt |
250,000 | 500,000 | ||||||
Retirement and other post-retirement benefit liabilities |
212,876 | 239,326 | ||||||
Other long-term liabilities |
189,791 | 175,777 | ||||||
Common stock |
155,653 | 157,535 | ||||||
Retained earnings and other |
3,051,467 | 2,880,155 | ||||||
Accumulated other comprehensive loss |
(325,392 | ) | (268,502 | ) | ||||
TOTAL PARENT EQUITY |
2,881,728 | 2,769,188 | ||||||
Noncontrolling interests in subsidiaries |
9,663 | 8,594 | ||||||
TOTAL EQUITY |
2,891,391 | 2,777,782 | ||||||
TOTAL LIABILITIES AND EQUITY |
$ | 5,784,718 | $ | 5,413,770 | ||||
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended | ||||||||
| Sept. 30, | ||||||||
| 2011 | 2010 | |||||||
| (Unaudited) | ||||||||
| (in thousands) | ||||||||
OPERATING ACTIVITIES: |
||||||||
Net income |
$ | 430,159 | $ | 356,861 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||
Depreciation and amortization |
66,938 | 67,422 | ||||||
Share-based compensation |
5,835 | 4,674 | ||||||
Excess tax benefits from share-based compensation |
(2,446 | ) | (1,500 | ) | ||||
Other |
(952 | ) | 663 | |||||
Changes in operating assets and liabilities |
(2,126 | ) | 140,302 | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES |
497,408 | 568,422 | ||||||
INVESTING ACTIVITIES: |
||||||||
Purchases of property, plant and equipment |
(63,932 | ) | (58,931 | ) | ||||
Acquisitions and other |
(105,129 | ) | (83,080 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES |
(169,061 | ) | (142,011 | ) | ||||
FINANCING ACTIVITIES: |
||||||||
Stock options exercised |
1,638 | 7,177 | ||||||
Excess tax benefits from share-based compensation |
2,446 | 1,500 | ||||||
Dividends paid |
(206,236 | ) | (193,313 | ) | ||||
Purchase of stock |
(113,359 | ) | (69,438 | ) | ||||
NET CASH USED IN FINANCING ACTIVITIES |
(315,511 | ) | (254,074 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
(8,003 | ) | 22,591 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS |
4,833 | 194,928 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
529,968 | 336,803 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ | 534,801 | $ | 531,731 | ||||