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8-K - LIVE FILING - GENUINE PARTS COhtm_45562.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 SECOND QUARTER ENDED JUNE 30, 2012

- Sales Up 5% and EPS Up 12% -

Atlanta, Georgia, July 19, 2012 — Genuine Parts Company (NYSE: GPC) reports sales and earnings for the second quarter and six months ended June 30, 2012.

Thomas C. Gallagher, Chairman and Chief Executive Officer, announced today that record sales totaling $3.3 billion were up 5% compared to the second quarter of 2011. Net income for the quarter was $168.6 million, an increase of 11% from $151.8 million recorded in the same period of the previous year. Record earnings per share on a diluted basis were $1.08, up 12.5% compared to 96 cents for the second quarter last year.

For the six months ended June 30, 2012, sales totaled $6.5 billion, up 6% compared to the same period in 2011. Net income for the six months was $314.9 million, an increase of 13% from $278.3 million recorded in the previous year. Earnings per share on a diluted basis were $2.01, up 14% compared to $1.76 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 reported a 4% sales increase in the second quarter and, although this business slowed some during the period due to the softer sales environment across the industry, we believe our sales initiatives and the sound underlying fundamentals in the automotive aftermarket will support continued growth for this group in the quarters ahead. Sales for Motion Industries, our Industrial Group, and EIS, our Electrical Group, remain the strongest among our four business segments. Motion posted an 8% sales increase for the quarter, and EIS was up 9%. We remain encouraged by the ongoing sales opportunities for these two groups. S. P. Richards, our Office Products Group, showed a 1% sales decrease for the quarter, which reflects the ongoing challenging conditions in the office products industry. We do not expect much change in these conditions over the balance of the year, but expect our internal sales initiatives to produce modest improvement in the results for this business.”

Mr. Gallagher added, “Our balance sheet as of June 30, 2012 remains in excellent condition and we continue to generate strong cash flows as a result of our increased earnings and working capital, asset management and cost reduction initiatives. Our 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 include 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 encouraged by the record level of sales and earnings achieved in the second quarter and for the first six months in 2012. Despite the potential for softer macro-economic conditions over the last half of the year, we remain optimistic that our businesses will show continued progress in the quarters ahead. Our management team remains committed to sustaining good revenue growth, further improving operating margins, generating solid cash flows and maintaining a strong balance sheet.”

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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 877-331-5106, conference ID 94569224. A replay of the call will also be available on the Company’s website or at 855-859-2056, conference ID 94569224, after the completion of the conference call until 12:00 a.m. Eastern time on August 2, 2012.

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 Company’s ability to successfully integrate its acquired businesses, 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 2011 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, 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.

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GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                                 
    Three Months Ended June 30,   Six Months Ended June 30,
    2012   2011   2012   2011
    (Unaudited)
    (in thousands, except per share data)
Net sales
  $ 3,337,836   $ 3,184,984   $ 6,519,124   $ 6,159,182
Cost of goods sold
  2,365,550   2,268,870   4,627,727   4,394,274
 
                               
Gross profit
  972,286   916,114   1,891,397   1,764,908
Operating expenses:
                               
Selling, administrative & other expenses
  680,246   651,635   1,348,204   1,285,904
Depreciation and amortization
  24,735   22,928   47,720   45,473
 
                               
 
  704,981   674,563   1,395,924   1,331,377
Income before income taxes
  267,305   241,551   495,473   433,531
Income taxes
  98,687   89,739   180,600   155,204
 
                               
Net income
  $ 168,618   $ 151,812   $ 314,873   $ 278,327
 
                               
Basic net income per common share
  $ 1.08   $ .97   $ 2.02   $ 1.77
Diluted net income per common share
  $ 1.08   $ .96   $ 2.01   $ 1.76
Weighted average common shares outstanding
  155,753   157,248   155,781   157,439
Dilutive effect of stock options and
                               
non-vested restricted stock awards
  1,019   995   1,073   988
 
                               
Weighted average common shares outstanding –
                               
assuming dilution
  156,772   158,243   156,854   158,427
 
                               

   

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GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS

                                 
    Three Months Ended June 30,   Six Months Ended June 30,
    2012   2011   2012   2011
    (Unaudited)
    (in thousands)
Net sales:
                               
Automotive
  $ 1,644,902   $ 1,585,074   $ 3,138,401   $ 2,989,939
Industrial
  1,138,724   1,051,258   2,259,947   2,051,029
Office Products
  413,340   417,989   839,493   850,655
Electrical/Electronic Materials
  149,440   136,780   296,556   276,594
Other (1)
  (8,570 )   (6,117 )   (15,273 )   (9,035 )
 
                               
Total net sales
  $ 3,337,836   $ 3,184,984   $ 6,519,124   $ 6,159,182
 
                               
Operating profit:
                               
Automotive
  $ 152,978   $ 138,795   $ 267,539   $ 236,694
Industrial
  95,053   85,289   179,381   151,298
Office Products
  30,611   31,367   68,126   68,771
Electrical/Electronic Materials
  12,933   9,172   24,899   19,242
 
                               
Total operating profit
  291,575   264,623   539,945   476,005
Interest expense, net
  (5,019 )   (6,236 )   (9,734 )   (12,736 )
Other, net
  (19,251 )   (16,836 )   (34,738 )   (29,738 )
 
                               
Income before income taxes
  $ 267,305   $ 241,551   $ 495,473   $ 433,531
 
                               
Capital expenditures
  $ 34,478   $ 27,213   $ 51,368   $ 41,748
 
                               
Depreciation and amortization
  $ 24,735   $ 22,928   $ 47,720   $ 45,473
 
                               
 
(1) Represents the net effect of discounts, incentives and freight billed reported as a component of net
sales

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GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

                 
    June 30,   June 30,
    2012   2011
    (Unaudited)
    (in thousands)
ASSETS
               
CURRENT ASSETS
               
Cash and cash equivalents
  $ 171,577     $ 516,728  
Trade accounts receivable, net
    1,605,696       1,565,889  
Merchandise inventories, net
    2,333,592       2,251,595  
Prepaid expenses and other current assets
    312,510       299,079  
 
               
TOTAL CURRENT ASSETS
    4,423,375       4,633,291  
Goodwill and other intangible assets, less accumulated amortization
    498,288       227,935  
Deferred tax asset
    240,261       151,042  
Other assets
    455,992       218,450  
Net property, plant and equipment
    567,013       486,283  
 
               
TOTAL ASSETS
  $ 6,184,929     $ 5,717,001  
 
               
 
LIABILITIES AND EQUITY
               
CURRENT LIABILITIES
               
Trade accounts payable
  $ 1,599,695     $ 1,492,041  
Current portion of debt
          250,000  
Income taxes payable
    32,789       33,520  
Dividends payable
    77,081       70,755  
Other current liabilities
    268,691       261,099  
 
               
TOTAL CURRENT LIABILITIES
    1,978,256       2,107,415  
Long-term debt
    500,000       250,000  
Retirement and other post-retirement benefit liabilities
    485,317       243,928  
Other long-term liabilities
    289,534       184,362  
Common stock
    155,101       156,767  
Retained earnings and other
    3,225,152       3,023,737  
Accumulated other comprehensive loss
    (458,444 )     (258,480 )
 
               
TOTAL PARENT EQUITY
    2,921,809       2,922,024  
Noncontrolling interests in subsidiaries
    10,013       9,272  
 
               
TOTAL EQUITY
    2,931,822       2,931,296  
 
               
TOTAL LIABILITIES AND EQUITY
  $ 6,184,929     $ 5,717,001  
 
               

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GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                 
    Six Months Ended June 30,
    2012   2011
    (Unaudited)
    (in thousands)
OPERATING ACTIVITIES:
               
Net income
  $ 314,873     $ 278,327  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    47,720       45,473  
Share-based compensation
    5,099       4,023  
Excess tax benefits from share-based compensation
    (7,174 )     (1,802 )
Other
    (703 )     (594 )
Changes in operating assets and liabilities
    61,498       (75,476 )
 
               
NET CASH PROVIDED BY OPERATING ACTIVITIES
    421,313       249,951  
INVESTING ACTIVITIES:
               
Purchases of property, plant and equipment
    (51,368 )     (41,748 )
Acquisitions and other
    (525,901 )     (38,126 )
 
               
NET CASH USED IN INVESTING ACTIVITIES
    (577,269 )     (79,874 )
FINANCING ACTIVITIES:
               
Proceeds from line of credit
    550,000        
Payments on line of credit
    (550,000 )      
Stock options exercised
    (2,903 )     1,302  
Excess tax benefits from share-based compensation
    7,174       1,802  
Dividends paid
    (147,187 )     (135,550 )
Purchase of stock
    (55,015 )     (55,416 )
 
               
NET CASH USED IN FINANCING ACTIVITIES
    (197,931 )     (187,862 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    410       4,545  
 
               
NET DECREASE IN CASH AND CASH EQUIVALENTS
    (353,477 )     (13,240 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    525,054       529,968  
 
               
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 171,577     $ 516,728  
 
               

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