Second Quarter 2009

Genuine Parts Company Reports Sales and Earnings for the Second Quarter and Six Months Ended June 30, 2009

PRNewswire-FirstCall
ATLANTA
Jul 16, 2009
9:05am

Genuine Parts Company reported sales and earnings for the second quarter and six months ended June 30, 2009. Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.5 billion were down 12% compared to the second quarter of 2008. Net income for the quarter was $103.6 million, a decrease of 22% from $133.1 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 65 cents, down 20% compared to 81 cents for the second quarter last year.

(Logo: http://www.newscom.com/cgi-bin/prnh/20081002/CLTH108LOGO)

For the six months ended June 30, 2009, sales totaled $5.0 billion, down 11% compared to the same period in 2008. Net income for the six months was $192.8 million, a decrease of 25% from the previous year. Earnings per share on a diluted basis were $1.21, down 22% compared to $1.56 for the same period last year.

In reviewing the quarter, Mr. Gallagher commented, "The Automotive Group reported a 5% decrease in sales for the quarter and S.P. Richards, our Office Products Group, was down 6%. These results reflect a slight improvement from the 7% sales decreases reported for the Automotive and Office Products groups in the first quarter of 2009. The Industrial and Electrical Groups, however, showed further sales declines relative to the first quarter of 2009 due to worsening conditions in the manufacturing segment of the economy. Motion Industries, our Industrial Group, had a 22% sales decrease in the quarter, and EIS, our Electrical Group, had a 34% decrease."

Mr. Gallagher added, "The Balance Sheet at June 30, 2009 remains in excellent condition and we continue to strengthen our financial position through working capital and asset management initiatives, significant cost reduction efforts and steady and strong cash flows. Cash from operations has improved significantly from 2008 and our sound cash position provides us with significant financial flexibility. Our priorities for cash remain the dividend, opportunistic share repurchases, the ongoing reinvestment in each of our businesses and strategic complementary types of acquisitions. We continue to believe that the use of cash in these key areas serves to maximize the total return to shareholders."

Mr. Gallagher concluded, "We are not satisfied with our results for the second quarter and first half of 2009, but feel that they reflect the realities of a difficult economy. As we approach the second half of the year, we will remain focused on those areas of our business that are within our control and we will support our growth initiatives and cost reduction efforts with a strong and healthy balance sheet. We remain confident in the long-term positive fundamentals of each of our businesses and we believe that we will be a stronger company when the economy begins to turn."

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 877-316-2549, conference ID 85292457. A replay will also be available on the Company's website or at 800-642-1687, conference ID 85292457, two hours after the completion of the conference call until 12:00 a.m. Eastern time on July 31, 2009.

Forward Looking Statements

Some statements in this release, 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 our 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 include, but are not limited to, the ability to maintain favorable supplier arrangements and relationships, changes in general economic conditions, the growth rate of the market for the Company's products and services, competitive product, service and pricing pressures, including internet related initiatives, the effectiveness of the Company's promotional, marketing and advertising programs, changes in financial markets, including particularly the capital and credit markets, changes in laws and regulations, including changes in accounting and taxation guidance, the uncertainties of litigation, as well as other risks and uncertainties discussed from time to time in the Company's 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 Form 10-Q, 10-K, 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. and Canada 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,
                          2009          2008          2009          2008
                          ----          ----          ----          ----
                                           (Unaudited)

                                (in thousands, except per share data)

  Net sales             $2,535,045    $2,873,485    $4,979,541    $5,612,958
  Cost of goods sold     1,790,190     2,021,272     3,502,485     3,941,262
                         ---------     ---------     ---------     ---------
                           744,855       852,213     1,477,056     1,671,696
  Selling,
   administrative &
   other expenses          578,805       636,502     1,166,338     1,264,304
                           -------       -------     ---------     ---------

  Income before  income
   taxes                   166,050       215,711       310,718       407,392
  Income taxes              62,440        82,638       117,949       150,776
                            ------        ------       -------       -------

  Net income              $103,610      $133,073      $192,769      $256,616
                          ========      ========      ========      ========

  Basic net income
   per common share           $.65          $.81         $1.21         $1.56

  Diluted net income
   per common share           $.65          $.81         $1.21         $1.56

  Weighted average
   common shares
   outstanding             159,513       163,411       159,479       164,194

  Dilutive effect of
   stock options and
   non-vested restricted
   stock awards                253           716           225           705
                               ---           ---           ---           ---

  Weighted average
   common shares
   outstanding -
     assuming dilution     159,766       164,127       159,704       164,899
                           =======       =======       =======       =======
                          GENUINE PARTS COMPANY and SUBSIDIARIES
                       SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS

                     Three Months Ended June 30,   Six Months Ended June 30,
                             2009         2008           2009         2008
                             ----         ----           ----         ----
                                             (Unaudited)

                                           (in thousands)

  Net sales:
    Automotive             $1,360,037  $1,428,513  $2,579,165  $2,734,400
    Industrial                701,228     898,069   1,437,729   1,779,282
    Office Products           406,134     430,807     818,882     873,199
    Electrical/Electronic
     Materials                 80,609     122,584     166,742     236,885
    Other (1)                 (12,963)     (6,488)    (22,977)    (10,808)
                              --------     -------    --------    --------
       Total net sales     $2,535,045  $2,873,485  $4,979,541  $5,612,958
                           ==========  ==========  ==========  ==========

  Operating profit:
    Automotive               $117,777    $115,514    $205,184    $206,158
    Industrial                 31,443      76,569      65,618     145,561
    Office Products            33,661      37,363      72,389      81,295
    Electrical/Electronic
     Materials                  5,090       9,893      10,758      18,903
                                -----       -----      ------      ------
    Total operating profit    187,971     239,339     353,949     451,917
    Interest expense, net      (6,752)     (7,332)    (13,848)    (14,486)
    Other, net                (15,169)    (16,296)    (29,383)    (30,039)
                             --------    --------    --------    --------
             Income before
              income taxes   $166,050    $215,711    $310,718    $407,392
                             ========    ========    ========    ========

  Capital expenditures        $22,858     $22,568     $36,955     $44,330
                              =======     =======     =======     =======

  Depreciation and
   amortization               $22,411     $22,017     $44,932     $44,701
                              =======     =======     =======     =======

  (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,
                                                2009           2008
                                                ----           ----
                                                    (Unaudited)
                                                  (in thousands)

  ASSETS
  CURRENT ASSETS
  Cash and cash equivalents                    $238,589       $135,844
  Trade accounts receivable, net              1,239,318      1,342,635
  Merchandise inventories, net                2,215,709      2,319,485
  Prepaid expenses and other current assets     222,399        264,804
                                                -------        -------

    TOTAL CURRENT ASSETS                      3,916,015      4,062,768

  Goodwill and intangible assets, less
   accumulated amortization                     166,683        126,010
  Other assets                                  339,905        186,414
  Net property, plant and equipment             487,307        422,151
                                                -------        -------

  TOTAL ASSETS                               $4,909,910     $4,797,343
                                             ==========     ==========

  LIABILITIES AND SHAREHOLDERS' EQUITY
  CURRENT LIABILITIES
  Trade accounts payable                     $1,063,260     $1,064,882
  Current portion of debt                             -        250,000
  Income taxes payable                           44,687         15,059
  Dividends payable                              63,813         63,798
  Other current liabilities                     240,807        187,653
                                                -------        -------

    TOTAL CURRENT LIABILITIES                 1,412,567      1,581,392

  Long-term debt                                500,000        250,000
  Other long-term liabilities                   121,168        110,852
  Retirement and other post-retirement
   benefit liabilities                          442,940         90,560

  Noncontrolling interests in subsidiaries        7,822         67,298
  Common stock                                  159,531        162,477
  Retained earnings and other                 2,265,882      2,534,764
                                              ---------      ---------

    TOTAL EQUITY                              2,433,235      2,764,539

  TOTAL LIABILITIES AND EQUITY               $4,909,910     $4,797,343

  NOTE:  Certain prior period amounts have been reclassified to conform
         to current year presentation.

                           GENUINE PARTS COMPANY and SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                   Six Months Ended June 30,
                                                          2009       2008
                                                          ----       ----
                                                            (Unaudited)
                                                          (in thousands)

  OPERATING ACTIVITIES:
    Net income                                          $192,769   $256,616
    Adjustments to reconcile net income to net cash
     provided by operating activities:
    Depreciation and amortization                         44,932     44,701
    Other                                                  8,639      6,385
    Changes in operating assets and liabilities          244,734    (31,193)
                                                         -------    --------


  NET CASH PROVIDED BY OPERATING ACTIVITIES              491,074    276,509

  INVESTING ACTIVITIES:
    Purchases of property, plant and equipment           (36,955)   (44,330)
    Acquisitions and other                              (107,405)   (53,656)
                                                        ---------   --------

  NET CASH USED IN INVESTING ACTIVITIES                 (144,360)   (97,986)

  FINANCING ACTIVITIES:
    Stock options exercised                                2,160      1,355
    Excess tax benefits from share-based compensation          -        287
    Dividends paid                                      (125,926)  (125,054)
    Changes in cash overdraft position                   (52,000)         -
    Purchase of stock                                       (136)  (151,104)
                                                            -----  ---------

  NET CASH USED IN FINANCING ACTIVITIES                 (175,902)  (274,516)
                                                       ---------  ---------

  NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                           170,812    (95,993)

  CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        67,777    231,837
                                                          ------    -------

  CASH AND CASH EQUIVALENTS AT END OF PERIOD            $238,589   $135,844
                                                        ========   ========

First Call Analyst:
FCMN Contact:

Photo: http://www.newscom.com/cgi-bin/prnh/20081002/CLTH108LOGO
http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com

SOURCE: Genuine Parts Company

CONTACT: Jerry W. Nix, Vice Chairman and CFO, +1-770-612-2048, or Sidney
G. Jones, Vice President-Investor Relations, +1-770-818-4628, both of Genuine
Parts Company


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