First Quarter 2011

Genuine Parts Company Reports First Quarter 2011 Results

PR Newswire
ATLANTA
Apr 15, 2011
4:44am

ATLANTA, April 15, 2011 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) reports sales and earnings for the first quarter ended March 31, 2011.  

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

Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that record sales totaling $3.0 billion were up 14% compared to the first quarter of 2010. Net income for the quarter was $126.5 million, an increase of 26% over $100.6 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 80 cents, up 27% compared to 63 cents for the first quarter last year.

Mr. Gallagher stated, "We are pleased to report another period of solid sales and earnings growth for the Company and are especially encouraged by the positive sales momentum in all four of our business units.  Our Automotive Group produced a 9% sales increase for the second consecutive quarter, which reflects the solid execution of our sales initiatives combined with the positive fundamentals of the aftermarket.  Our Industrial and Electrical businesses continue to turn in the strongest results among our four business segments.  Sales for Motion Industries, our Industrial Group, were up 24% in the quarter, and EIS, our Electrical Group, generated a 39% increase.  Both Motion Industries and EIS sell into the manufacturing sector of the economy, which began its recovery in 2010 and continues to perform well today.  S.P. Richards, our Office Products Group, showed a 5% sales increase for the quarter, marking their second consecutive period of sales growth and up sequentially from a 3% increase in the fourth quarter of 2010."

Mr. Gallagher concluded, "We feel good about the sales and earnings growth achieved in the first quarter and are 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. 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 "Investor Services", or by dialing 1-866-777-9139, conference ID 55843045.  A replay will also be available on the Company's website or at 1-800-642-1687, conference ID 55843045, two hours after the completion of the call until 12:00 a.m. EDT on April 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 March 31,


2011

2010


(Unaudited)


(in thousands, except per share data)




Net sales

$2,974,198

$2,602,115

Cost of goods sold

2,125,404

1,841,640

Gross profit

848,794

760,475




Operating expenses:



Selling, administrative & other expenses

634,269

576,217

Depreciation and amortization

22,545

22,143


656,814

598,360




Income before income taxes

191,980

162,115

Income taxes

65,465

61,506

Net income

$  126,515

$  100,609




Basic net income per common share

$ .80

$ .63

Diluted net income per common share

$ .80

$ .63




Weighted average common shares outstanding

157,633

158,771

Dilutive effect of stock options and non-vested restricted stock awards

1,023

408

Weighted average common shares outstanding – assuming dilution

158,656

159,179




GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS


Three Months Ended March 31,


2011

2010


(Unaudited)


(in thousands)




Net sales:



  Automotive

$1,404,865

$1,290,401

  Industrial

999,771

803,302

  Office Products

432,666

410,511

  Electrical/Electronic Materials

139,814

100,298

  Other (1)

(2,918)

(2,397)

     Total net sales

$2,974,198

$2,602,115




Operating profit:



  Automotive

$    97,899

$    88,905

        Industrial

66,009

48,846

  Office Products

37,404

36,559

  Electrical/Electronic Materials

10,070

6,815

  Total operating profit

211,382

181,125

  Interest expense, net

(6,500)

(6,733)

  Other, net

(12,902)

(12,277)

     Income before income taxes

$  191,980

$ 162,115




Capital expenditures

$    14,534

$     9,850




Depreciation and amortization

$    22,545

$   22,143




(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,


2011

2010


(Unaudited)


(in thousands)

ASSETS



CURRENT ASSETS



Cash and cash equivalents

$   465,882

$  333,537

Trade accounts receivable, net

1,490,744

1,323,980

Merchandise inventories, net

2,236,758

2,211,457

Prepaid expenses and other current assets

301,845

277,257




  TOTAL CURRENT ASSETS

4,495,229

4,146,231




Goodwill and other intangible assets, less accumulated amortization

229,276

204,907

Deferred tax asset

155,543

167,632

Other assets

209,656

172,723

Net property, plant and equipment

479,816

477,269




TOTAL ASSETS

$5,569,520

$5,168,762


LIABILITIES AND EQUITY



CURRENT LIABILITIES



Trade accounts payable

$1,369,542

$1,185,177

Current portion of debt

250,000

-

Income taxes payable

74,661

78,609

Dividends payable

70,950

65,083

Other current liabilities

238,483

185,260




  TOTAL CURRENT LIABILITIES

2,003,636

1,514,129




Long-term debt

250,000

500,000

Retirement and other post-retirement benefit liabilities

252,432

299,567

Other long-term liabilities

184,584

169,500




Common stock

157,543

158,792

Retained earnings and other

2,982,748

2,802,369

Accumulated other comprehensive loss

(270,029)

(283,579)

  TOTAL PARENT EQUITY

2,870,262

2,677,582




Noncontrolling interests in subsidiaries

8,606

7,984

  TOTAL EQUITY

2,878,868

2,685,566




TOTAL LIABILITIES AND EQUITY

$5,569,520

$5,168,762




GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


Three Months

Ended March 31,


2011

2010


(Unaudited)


(in thousands)




OPERATING ACTIVITIES:



  Net income

$126,515

$100,609

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



  Depreciation and amortization

22,545

22,143

  Share-based compensation

512

1,091

  Excess tax benefits from share-based compensation

(529)

-

  Other

85

19

  Changes in operating assets and liabilities

(95,717)

15,783




NET CASH PROVIDED BY OPERATING ACTIVITIES

53,411

139,645




INVESTING ACTIVITIES:



  Purchases of property, plant and equipment

(14,534)

(9,850)

  Acquisitions and other

(33,903)

(65,772)




NET CASH USED IN INVESTING ACTIVITIES

(48,437)

(75,622)




FINANCING ACTIVITIES:



  Stock options exercised

609

2,581

  Excess tax benefits from share-based compensation

529

-

  Dividends paid

(64,600)

(63,544)

  Purchase of stock

(9,095)

(9,306)




NET CASH USED IN FINANCING ACTIVITIES

(72,557)

(70,269)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

3,497

2,980




NET DECREASE IN CASH AND CASH EQUIVALENTS

(64,086)

(3,266)




CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

529,968

336,803




CASH AND CASH EQUIVALENTS AT END OF PERIOD

$465,882

$333,537




SOURCE Genuine Parts Company


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