Second Quarter 2011

Genuine Parts Company Reports Record Sales Up 12% and Record Earnings Per Share Up 23% for the Second Quarter Ended June 30, 2011

PR Newswire
ATLANTA
Jul 15, 2011
4:54am

ATLANTA, July 15, 2011 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) reported sales and earnings for the second quarter and six months ended June 30, 2011.  Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $3.2 billion were up 12% compared to the second quarter of 2010.  Net income for the quarter was $151.8 million, an increase of 22% from $124.5 million recorded in the same period of the previous year.  Earnings per share on a diluted basis were 96 cents, up 23% compared to 78 cents for the second quarter last year.

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

In reviewing the quarter, Mr. Gallagher commented, "We are especially pleased to report record sales and earnings for the second quarter.  The Automotive Group produced another period of solid growth, with sales up 9% for the third consecutive quarter.  We remain encouraged by the ongoing positive impact of our sales initiatives and the sound fundamentals of the aftermarket.  Our Industrial and Electrical businesses continue to produce the strongest growth among our four business segments.  Sales for Motion Industries, our Industrial Group, reached the $1 billion mark for the first time in their history and were up 19% in the quarter.  EIS, our Electrical Group, generated a 28% sales increase.  Both Motion Industries and EIS sell into the manufacturing sector of the economy, which continues to perform well today.  S.P. Richards, our Office Products Group, showed a 4% sales increase for the quarter, marking their third consecutive period of sales growth, despite the continued moderation in demand in the office products industry.  We believe this positive sales trend reflects the ongoing benefits of their internal growth initiatives."

For the six months ended June 30, 2011, sales totaled $6.2 billion, up 13% compared to the same period in 2010.  Net income for the six months was $278.3 million, an increase of 24% from the same period in 2010.  Earnings per share on a diluted basis were $1.76, up 24% compared to $1.42 for the same period last year.

Mr. Gallagher added, "In addition to these fine results for the quarter and six months, our balance sheet as of June 30, 2011 remains in excellent condition.  We ended the period with cash of $517 million and we continue to generate strong cash flows as a result of our working capital, asset management and cost reduction initiatives.  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 sales and earnings growth achieved in the second quarter and for the first six months in 2011.  We also remain optimistic that our businesses will show continued progress over the balance of the year.  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 78938316.  A replay of the call will also be available on the Company's website or at 800-642-1687, conference ID 78938316, after the completion of the conference call until 12:00 a.m. Eastern time on July 30, 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 June 30,

Six Months Ended June 30,


2011

2010

2011

2010


(Unaudited)







(in thousands, except per share data)






Net sales

$3,184,984

$2,847,186

$6,159,182

$5,449,301

Cost of goods sold

2,268,870

2,024,876

4,394,274

3,866,516

Gross profit

916,114

822,310

1,764,908

1,582,785











Operating expenses:





Selling, administrative & other expenses

651,635

598,331

1,285,904

1,174,548

Depreciation and amortization

22,928

23,186

45,473

45,329


674,563

621,517

1,331,377

1,219,877











Income before income taxes

241,551

200,793

433,531

362,908

Income taxes

89,739

76,326

155,204

137,832

Net income

$151,812

$124,467

$278,327

$225,076











Basic net income per common share

$ .97

$ .79

$1.77

$1.42

Diluted net income per common share

$ .96

$ .78

$1.76

$1.42











Weighted average common shares outstanding

157,248

158,260

157,439

158,514

Dilutive effect of stock options and





  non-vested restricted stock awards

995

402

988

403

Weighted average common shares outstanding –





  assuming dilution

158,243

158,662

158,427

158,917




GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS



Three Months Ended June 30,

Six Months Ended June 30,


2011

2010

2011

2010


(Unaudited)


(in thousands)






Net sales:





  Automotive

$1,585,074

$1,459,672

$2,989,939

$2,750,073

  Industrial

1,051,258

882,233

2,051,029

1,685,535

  Office Products

417,989

401,960

850,655

812,471

  Electrical/Electronic Materials

136,780

106,579

276,594

206,877

  Other (1)

(6,117)

(3,258)

(9,035)

(5,655)

     Total net sales

$3,184,984

$2,847,186

$6,159,182

$5,449,301






Operating profit:





  Automotive

$138,795

$126,022

$236,694

$214,927

  Industrial

85,289

60,118

151,298

108,964

  Office Products

31,367

30,454

68,771

67,013

  Electrical/Electronic Materials

9,172

6,948

19,242

13,763

  Total operating profit

264,623

223,542

476,005

404,667

  Interest expense, net

(6,236)

(6,693)

(12,736)

(13,426)

  Other, net

(16,836)

(16,056)

(29,738)

(28,333)

     Income before income taxes

$241,551

$200,793

$433,531

$362,908






Capital expenditures

$27,213

$18,062

$41,748

$27,912






Depreciation and amortization

$22,928

$23,186

$45,473

$45,329


(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,


2011

2010


(Unaudited)


(in thousands)

ASSETS



CURRENT ASSETS



Cash and cash equivalents

$  516,728

$  411,872

Trade accounts receivable, net

1,565,889

1,353,918

Merchandise inventories, net

2,251,595

2,164,548

Prepaid expenses and other current assets

299,079

280,159




  TOTAL CURRENT ASSETS

4,633,291

4,210,497




Goodwill and other intangible assets, less accumulated amortization

227,935

201,326

Deferred tax asset

151,042

164,657

Other assets

218,450

173,730

Net property, plant and equipment

486,283

469,150




TOTAL ASSETS

$5,717,001

$5,219,360


LIABILITIES AND EQUITY



CURRENT LIABILITIES



Trade accounts payable

$1,492,041

$1,286,681

Current portion of debt

250,000

-

Income taxes payable

33,520

35,494

Dividends payable

70,755

64,687

Other current liabilities

261,099

188,511




  TOTAL CURRENT LIABILITIES

2,107,415

1,575,373




Long-term debt

250,000

500,000

Retirement and other post-retirement benefit liabilities

243,928

296,823

Other long-term liabilities

184,362

173,957




Common stock

156,767

157,613

Retained earnings and other

3,023,737

2,815,427

Accumulated other comprehensive loss

(258,480)

(308,540)

  TOTAL PARENT EQUITY

2,922,024

2,664,500




Noncontrolling interests in subsidiaries

9,272

8,707

  TOTAL EQUITY

2,931,296

2,673,207




TOTAL LIABILITIES AND EQUITY

$5,717,001

$5,219,360




GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



Six Months Ended June 30,


2011

2010


(Unaudited)


(in thousands)




OPERATING ACTIVITIES:



  Net income

$278,327

$225,076

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



  Depreciation and amortization

45,473

45,329

  Share-based compensation

4,023

3,133

  Excess tax benefits from share-based compensation

(1,802)

(1,085)

  Other

(594)

(401)

  Changes in operating assets and liabilities

(75,476)

80,400







NET CASH PROVIDED BY OPERATING ACTIVITIES

249,951

352,452




INVESTING ACTIVITIES:



  Purchases of property, plant and equipment

(41,748)

(27,912)

  Acquisitions and other

(38,126)

(67,693)




NET CASH USED IN INVESTING ACTIVITIES

(79,874)

(95,605)




FINANCING ACTIVITIES:



  Stock options exercised

1,302

5,384

  Excess tax benefits from share-based compensation

1,802

1,085

  Dividends paid

(135,550)

(128,627)

  Purchase of stock

(55,416)

(63,137)




NET CASH USED IN FINANCING ACTIVITIES

(187,862)

(185,295)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

4,545

3,517




NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

(13,240)

75,069




CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

529,968

336,803




CASH AND CASH EQUIVALENTS AT END OF PERIOD

$516,728

$411,872







SOURCE Genuine Parts Company


print email
HOME | ABOUT US | COMPANIES | INVESTOR SERVICES | CAREERS | CONTACT