Second Quarter 2012

Genuine Parts Company Reports Record Sales And Earnings For The Second Quarter Ended June 30, 2012

- Sales Up 5% and EPS Up 12% -

PR Newswire
ATLANTA
Jul 19, 2012
4:53am

ATLANTA, July 19, 2012 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) reports sales and earnings for the second quarter and six months ended June 30, 2012. 

(Logo:  http://photos.prnewswire.com/prnh/20081002/CLTH108LOGO )

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."

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.


 

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


 

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.

 


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


 

 


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




 

SOURCE Genuine Parts Company


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