Genuine Parts Company Reports Sales And Earnings For The First Quarter Ended March 31, 2017

- Company Reports Sales of $3.9 Billion and Earnings Per Share of $1.08 -

- Raises 2017 Earnings Per Share Outlook -

Apr 19, 2017

ATLANTA, April 19, 2017 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today first quarter sales and earnings for the quarter ended March 31, 2017.

Sales for the first quarter ended March 31, 2017 were $3.91 billion, a 5% increase compared to $3.72 billion for the same period in 2016.  Net income for the first quarter was $160.2 million compared to $158.0 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.08, up 3% from $1.05 for the first quarter last year. 

Paul Donahue, President and Chief Executive Officer, commented, "We are pleased that our total sales increase in the first quarter of 2017 represents positive sequential sales improvement and is our strongest quarterly growth since the fourth quarter of 2014.  As a diversified global distributor, we benefited from strong total sales growth in our international automotive, industrial, electrical and office operations.  The strength in these areas was partially offset by the headwinds in our U.S. automotive business, which we are working to overcome."  

First quarter sales for the Automotive Group were up 3%, including an approximate 0.5% comparable sales increase.  Sales at Motion Industries, our Industrial Group, were up 7%, including a 3% comparable sales increase, and sales at EIS, our Electrical/Electronic Group, were up 5%, with comparable sales up 2.5%.  Sales for S.P. Richards, our Office Products Group, were up 9% for the quarter, including a 2.5% decrease in comparable sales. 

Mr. Donahue concluded, "It is encouraging that our overall growth was driven by sales increases across all four of our businesses, with positive comparable sales in all but one segment.  Our teams have worked hard to position the Company for stronger growth and remain focused on key sales and cost initiatives to build on our first quarter performance as we move forward in the year.  We are excited by the future growth prospects across our broad platform, and will continue to support this growth with a strong balance sheet, solid cash flows and effective capital allocation intended to maximize shareholder value."   

2017 Outlook

The Company expects sales to be up 3% to 4% for the full year, which is unchanged from the initial guidance, and is raising its outlook for diluted earnings per share to $4.75 to $4.85 compared to the initial outlook of $4.70 to $4.80.

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 800-949-2163, conference ID 2672294.  A replay will also be available on the Company's website or at 844-512-2921, conference ID 2672294, two hours after the completion of the call until 12:00 a.m. Eastern time on May 3, 2017.

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 legislation or government regulations or policies; changes in general economic conditions, including unemployment, inflation or deflation; changes in tax policies; 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 2016 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 March 31,


2017

2016


(Unaudited)


(in thousands, except per share data)




Net sales

$3,905,641

$3,718,267

Cost of goods sold

2,749,920

2,613,796

Gross profit

1,155,721

1,104,471




Operating expenses:



Selling, administrative & other expenses

873,814

823,172

Depreciation and amortization

38,132

34,654


911,946

857,826




Income before income taxes

243,775

246,645

Income taxes

83,615

88,620




Net income

$  160,160

$  158,025




Basic net income per common share

$1.08

$1.06




Diluted net income per common share

$1.08

$1.05




Weighted average common shares outstanding

148,154

149,593




Dilutive effect of stock options and



   non-vested restricted stock awards

634

749




Weighted average common shares outstanding – assuming dilution

148,788

150,342




 

 

 

GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS




Three Months Ended March 31,


2017

2016


(Unaudited)


(in thousands)




Net sales:



Automotive

$1,998,383

$1,932,178

Industrial

1,232,082

1,152,627

Office Products

519,005

476,654

      Electrical/Electronic Materials

184,417

175,847

Other (1)

(28,246)

(19,039)

Total net sales

$3,905,641

$3,718,267




Operating profit:



Automotive

$   151,757

$   153,710

Industrial

90,374

81,833

Office Products

31,119

34,204

Electrical/Electronic Materials

13,635

14,841

Total operating profit

286,885

284,588

Interest expense, net

(6,174)

(4,822)

Intangible amortization

(10,806)

(8,760)

Other, net

(26,130)

(24,361)

Income before income taxes

$   243,775

$   246,645




Capital expenditures

$     24,806

$     11,670




Depreciation and amortization

$     38,132

$     34,654




(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




March 31,

March 31,


2017

2016


(Unaudited)


 (in thousands)

ASSETS



CURRENT ASSETS



Cash and cash equivalents

$   177,917

$   205,135

Trade accounts receivable, net

2,084,871

1,981,651

Merchandise inventories, net

3,287,042

3,074,641

Prepaid expenses and other current assets

644,232

508,841




TOTAL CURRENT ASSETS

6,194,062

5,770,268




Goodwill and other intangible assets, less accumulated
amortization

1,608,466

1,412,985

Deferred tax assets

129,539

114,917

Other assets

497,553

504,153

Net property, plant and equipment

737,206

648,204




TOTAL ASSETS

$9,166,826

$8,450,527


LIABILITIES AND EQUITY



CURRENT LIABILITIES



Trade accounts payable

$3,230,985

$2,961,318

Current portion of debt

475,000

450,000

Income taxes payable

65,270

46,137

Dividends payable

99,824

98,339

Other current liabilities

708,754

656,132




TOTAL CURRENT LIABILITIES

4,579,833

4,211,926







Long-term debt

550,000

250,000

Pension and other post-retirement benefit liabilities

287,589

231,652

Deferred tax liabilities

49,328

50,736

Other long-term liabilities

467,732

462,501




Common stock

147,394

149,623

Retained earnings

4,021,848

3,944,626

Accumulated other comprehensive loss

(950,269)

(862,519)




TOTAL  PARENT EQUITY

3,218,973

3,231,730




Noncontrolling interests in subsidiaries

13,371

11,982




TOTAL  EQUITY

3,232,344

3,243,712




TOTAL LIABILITIES AND EQUITY

$9,166,826

$8,450,527








 

 

 

GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




Three Months Ended March 31,


2017

2016


(Unaudited)


(in thousands)

OPERATING ACTIVITIES:



Net income

$160,160

$158,025

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



Depreciation and amortization

38,132

34,654

Share-based compensation

2,717

4,249

Excess tax benefits from share-based compensation

(1,546)

(5,144)

Changes in operating assets and liabilities

(97,643)

(56,739)




NET CASH PROVIDED BY OPERATING ACTIVITIES

101,820

135,045




INVESTING ACTIVITIES:



Purchases of property, plant and equipment

(24,806)

(11,670)

Acquisitions and other investing activities

(106,236)

(73,625)




NET CASH USED IN INVESTING ACTIVITIES

(131,042)

(85,295)




FINANCING ACTIVITIES:



Proceeds from debt

1,005,000

975,000

Payments on debt

(855,000)

(900,000)

Share-based awards exercised, net of taxes paid

(1,624)

(5,586)

Excess tax benefits from share-based compensation

5,144

Dividends paid

(97,584)

(92,596)

Purchases of stock

(91,984)

(46,431)




NET CASH USED IN FINANCING ACTIVITIES

(41,192)

(64,469)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

5,452

8,223




NET DECREASE IN CASH AND CASH EQUIVALENTS

(64,962)

(6,496)




CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

242,879

211,631




CASH AND CASH EQUIVALENTS AT END OF PERIOD

$177,917

$205,135

 

SOURCE Genuine Parts Company

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


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