Genuine Parts Company Reports Sales And Earnings For The Third Quarter Ended September 30, 2016

- Company Reports Sales of $3.94 Billion and Earnings Per Share of $1.24 -

Oct 19, 2016

ATLANTA, Oct. 19, 2016 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today sales and earnings for the third quarter and nine months ended September 30, 2016.

GPC Logo.

Sales for the third quarter ended September 30, 2016 were $3.94 billion compared to $3.92 billion for the same period in 2015. Net income for the third quarter was $185.3 million compared to $188.0 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.24, equal to the earnings per share for the third quarter last year. 

Paul Donahue, President and Chief Executive Officer, commented, "Total sales in the third quarter were up 0.5% from the prior year, inclusive of a 3.5% contribution from acquisitions. Currency exchange was neutral to our overall results, with the slightly favorable Canadian and Australian currencies offsetting the ongoing weakness in the Mexican Peso. Sales for the Automotive Group were up 1.5%, consisting of a 2.5% contribution from acquisitions and a currency tailwind of 0.5%, offset by a 1.5% core sales decrease. Sales at Motion Industries, our Industrial Group, were down 0.7%, including a 2.5% underlying sales decrease and an approximate 2% benefit from acquisitions. Sales at EIS, our Electrical/Electronic Group, were down approximately 9%, and sales for S. P. Richards, our Office Products Group, were up 5%, consisting of an 11% contribution from acquisitions offset by a 6% underlying sales decrease."

Mr. Donahue stated, "Our third quarter results fell short of our expectations. We continue to operate in a tough sales environment, but our teams are working hard to overcome these challenges and generate growth. We recognize there is room for improvement and are working towards that in all aspects of our business. Our goal is to show improved results in the quarters ahead and better position the Company for sustainable growth well into the future. We have a strong balance sheet and excellent cash flows to support our efforts."

Sales for the nine months ended September 30, 2016 were $11.56 billion compared to $11.60 billion for the same period in 2015. Net income for the nine months was $534.7 million, down 2% from 2015, and earnings per share on a diluted basis were $3.56, equal to the same nine month period of the prior year.

2016 Outlook

For the full year 2016, the Company is updating its sales guidance to Flat to up 1% from up 1% to 2%. Diluted earnings per share is expected to be $4.55 to $4.60 as compared to prior guidance of $4.70 to $4.75 per share.

Conference Call

Genuine Parts Company will hold a conference call today at 11:00 a.m. EDT 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 "Investors", or by dialing 877-718-5098, conference ID 3577037. A replay will also be available on the Company's website or at 877-870-5176, conference ID 3577037, two hours after the completion of the call until 12:00 a.m. Eastern time on November 3, 2016.

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, the Company's ability to successfully implement its business initiatives in each of its four business segments; slowing demand for the Company's products; changes in general economic conditions, including, unemployment, inflation or deflation; volatile exchange rates; high energy costs; uncertain credit markets and other macro-economic conditions; competitive product, service and pricing pressures; the ability to maintain favorable vendor arrangements and relationships; disruptions in our vendors' operations; the Company's ability to successfully integrate its acquired businesses; the uncertainties and costs of litigation; disruptions caused by a failure or breach of the Company's information systems, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for 2015 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, Mexico and Australasia. 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 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,

   

2016

 

2015

 

2016

 

2015

   

(Unaudited)

   

(in thousands, except per share data)

                 

Net sales

 

$3,941,743

 

$3,921,802

 

$11,559,648

 

$11,598,254

Cost of goods sold

 

2,743,142

 

2,752,577

 

8,091,124

 

8,137,880

Gross profit

 

1,198,601

 

1,169,225

 

3,468,524

 

3,460,374

                 

Operating expenses:

               

Selling, administrative & other expenses

 

869,562

 

834,372

 

2,522,223

 

2,492,537

Depreciation and amortization

 

37,682

 

34,278

 

108,247

 

105,764

   

907,244

 

868,650

 

2,630,470

 

2,598,301

                 

Income before income taxes

 

291,357

 

300,575

 

838,054

 

862,073

Income taxes

 

106,031

 

112,559

 

303,334

 

317,674

                 

Net income

 

$   185,326

 

$   188,016

 

$    534,720

 

$    544,399

                 

Basic net income per common share

 

$1.24

 

$1.24

 

$3.58

 

$3.58

                 

Diluted net income per common share

 

$1.24

 

$1.24

 

$3.56

 

$3.56

                 

Weighted average common shares outstanding

 

148,899

 

151,354

 

149,243

 

152,043

                 

Dilutive effect of stock options and

               

   non-vested restricted stock awards

 

828

 

789

 

781

 

847

                 

Weighted average common shares outstanding – assuming dilution

 

149,727

 

152,143

 

150,024

 

152,890

 

 

GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS

             
   

Three Months Ended Sept. 30,

 

Nine Months Ended Sept. 30,

   

2016

 

2015

 

2016

 

2015

   

(Unaudited)

   

(in thousands)

                 

Net sales:

               

Automotive

 

$2,095,030

 

$2,064,099

 

$  6,115,186

 

$  6,065,733

Industrial

 

1,162,224

 

1,170,252

 

3,482,246

 

3,540,106

Office Products

 

535,175

 

510,825

 

1,493,434

 

1,478,878

Electrical/Electronic Materials

 

178,448

 

196,837

 

538,803

 

573,584

Other (1)

 

(29,134)

 

(20,211)

 

(70,021)

 

(60,047)

Total net sales

 

$3,941,743

 

$3,921,802

 

$11,559,648

 

$11,598,254

                 

Operating profit:

               

Automotive

 

$   197,874

 

$   201,986

 

$     555,156

 

$     560,070

Industrial

 

85,608

 

90,081

 

255,704

 

266,726

Office Products

 

30,257

 

36,406

 

97,101

 

107,431

Electrical/Electronic Materials

 

14,277

 

19,988

 

45,105

 

54,019

Total operating profit

 

328,016

 

348,461

 

953,066

 

988,246

Interest expense, net

 

(5,244)

 

(5,055)

 

(14,731)

 

(16,056)

Intangible amortization

 

(10,339)

 

(8,545)

 

(28,324)

 

(25,945)

Other, net

 

(21,076)

 

(34,286)

 

(71,957)

 

(84,172)

Income before income taxes

 

$   291,357

 

$   300,575

 

$     838,054

 

$     862,073

                 

Capital expenditures

 

$     36,939

 

$     24,531

 

$       86,650

 

$       61,994

                 

Depreciation and amortization

 

$     37,682

 

$     34,278

 

$     108,247

 

$     105,764

                 

(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,

   

2016

 

2015

   

(Unaudited)

   

(in thousands)

ASSETS

       

CURRENT ASSETS

       

Cash and cash equivalents

 

$   225,177

 

$   199,294

Trade accounts receivable, net

 

2,032,548

 

1,963,158

Merchandise inventories, net

 

3,146,157

 

2,967,724

Prepaid expenses and other current assets

 

504,600

 

493,306

         

TOTAL CURRENT ASSETS

 

5,908,482

 

5,623,482

         

Goodwill and other intangible assets, less accumulated amortization

 

 

1,550,435

 

 

1,328,431

Deferred tax assets

 

109,679

 

136,618

Other assets

 

491,925

 

486,136

Net property, plant and equipment

 

688,851

 

628,461

         

TOTAL ASSETS

 

$8,749,372

 

$8,203,128

         

LIABILITIES AND EQUITY

       

CURRENT LIABILITIES

       

Trade accounts payable

 

$3,099,438

 

$2,851,022

Current portion of debt

 

475,000

 

125,000

Income taxes payable

 

32,594

 

6,643

Dividends payable

 

97,955

 

92,905

Other current liabilities

 

696,544

 

688,498

         

TOTAL CURRENT LIABILITIES

 

4,401,531

 

3,764,068

         
         

Long-term debt

 

300,000

 

500,000

Pension and other post-retirement benefit liabilities

 

202,131

 

248,709

Deferred tax liabilities

 

51,472

 

62,419

Other long-term liabilities

 

458,944

 

456,908

         

Common stock

 

148,737

 

150,763

Retained earnings

 

4,038,985

 

3,922,609

Accumulated other comprehensive loss

 

(865,510)

 

(914,586)

         

TOTAL  PARENT EQUITY

 

3,322,212

 

3,158,786

         

Noncontrolling interests in subsidiaries

 

13,082

 

12,238

         

TOTAL  EQUITY

 

3,335,294

 

3,171,024

         

TOTAL LIABILITIES AND EQUITY

 

$8,749,372

 

$8,203,128

 

 

GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

       
   

Nine Months Ended Sept. 30,

   

2016

 

2015

   

(Unaudited)

   

(in thousands)

         

OPERATING ACTIVITIES:

       

Net income

 

$534,720

 

$544,399

Adjustments to reconcile net income to net cash provided by
operating activities:

       

Depreciation and amortization

 

108,247

 

105,764

Share-based compensation

 

15,362

 

13,582

Excess tax benefits from share-based compensation

 

(10,475)

 

(5,381)

Changes in operating assets and liabilities

 

93,498

 

237,623

         
         

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

741,352

 

895,987

         

INVESTING ACTIVITIES:

       

Purchases of property, plant and equipment

 

(86,650)

 

(61,994)

Acquisitions and other investing activities

 

(365,545)

 

(115,414)

         

NET CASH USED IN INVESTING ACTIVITIES

 

(452,195)

 

(177,408)

         

FINANCING ACTIVITIES:

       

Proceeds from debt

 

3,020,000

 

2,537,224

Payments on debt

 

(2,870,000)

 

(2,680,191)

Share-based awards exercised, net of taxes paid

 

(11,942)

 

(6,030)

Excess tax benefits from share-based compensation

 

10,475

 

5,381

Dividends paid

 

(288,909)

 

(275,379)

Purchase of stock

 

(143,810)

 

(225,175)

         

NET CASH USED IN FINANCING ACTIVITIES

 

(284,186)

 

(644,170)

         

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

8,575

 

(12,845)

         

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

13,546

 

61,564

         

CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD

 

211,631

 

137,730

         

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$225,177

 

$199,294

 

 

Logo - http://photos.prnewswire.com/prnh/20081002/CLTH108LOGO  

SOURCE Genuine Parts Company

For further information: Carol B. Yancey, Executive Vice President and CFO - (678) 934-5044 or Sidney G. Jones, Vice President - Investor Relations - (678) 934-5628


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