First Quarter 2006

Genuine Parts Company Reports Record First Quarter Results

Apr 17, 2006
11:14am

Contact: Jerry W. Nix, Vice Chairman and CFO 
(770) 612-2048

Atlanta, Georgia, April 17, 2006 -- Genuine Parts Company (NYSE: GPC) reported record sales and earnings for the first quarter ended March 31, 2006. Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.6 billion were up 9% compared to the first quarter of 2005. Net income for the quarter was $113.9 million, an increase of 7% over $106.6 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 66 cents, up 8% compared to 61 cents for the first quarter last year.

Mr. Gallagher commented, “We are pleased to report good sales and earnings growth for the first quarter of 2006. As has been the pattern for the past few years, each of our four business segments contributed to our overall sales growth for the quarter. Motion Industries, our Industrial Group, grew sales by 12%. This follows double-digit sales increases in 2005 and 2004 and we anticipate another good year from our industrial operations. The Automotive Group reported a 5% sales increase for the quarter. Within this group, the core NAPA business was actually a bit stronger, posting a 7% sales increase. S.P. Richards, our Office Products Group, generated a 13% sales increase for the quarter and EIS, our Electrical Group, was up 13% also.”

Mr. Gallagher added, “The balance sheet at March 31, 2006 remains in excellent condition and we continue to strengthen our financial position through strong earnings growth and initiatives to improve working capital. The Company also continues to generate consistent and strong cash flows and our cash position is quite strong.”

Mr. Gallagher concluded, “We are encouraged by the opportunity to have another good year in 2006. The outlook for continued growth in each of our businesses remains positive. Favorable market conditions combined with the proper execution of our growth initiatives should enable us to produce another year of steady sales growth and, in turn, solid earnings results.”
 

Conference Call

Genuine Parts Company will hold a conference call today at 2:00 p.m. Eastern time to discuss the results of the quarter and the future outlook. Interested parties may listen by dialing 877-422-4780, conference ID 7017461. A replay will also be available at 800-642-1687, conference ID 7017461, two hours after the completion of the conference call until 12:00 a.m. Eastern time on May 1, 2006.

Forward Looking Statements

Some statements in this release constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company cautions that its forward-looking statements involve risks and uncertainties. The Company undertakes no duty to update its forward-looking statements, which reflect the Company's beliefs, expectations, and plans as of the present time. 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, changes in general economic conditions, the growth rate of the market for the Company's products and services, the ability to maintain favorable supplier arrangements and relationships, competitive product and pricing pressures, including internet-related initiatives, the effectiveness of the Company's promotional, marketing and advertising programs, 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 Securities and Exchange Commission. 

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 in Canada through its Motion Industries subsidiary. S. P. Richards Company, the Office Products Group, distributes product nationwide in the U.S. and in Canada. The Electrical/Electronic Group, EIS, Inc., distributes electrical and electronic components throughout the U.S. and in Canada and Mexico. 
 


 

GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

  Three Months Ended March 31,
  2006 2005
  (Unaudited)              
  (in thousands, except per share data)  
     
Net sales $2,553,552 $2,342,201
Cost of goods sold 1,750,075 1,605,721
  803,477 736,480
Selling, administrative & other expenses 618,982 564,270
Income before income taxes 184,495 172,210
Income taxes 70,570 65,612
Net income $113,925 $106,598
     
Basic net income per common share $.66 $.61
Diluted net income per common share $.66 $.61
     
Weighted average common shares outstanding 172,773 174,772
Dilutive effect of stock options and non-vested restricted stock awards 912 1,264
Weighted average common shares outstanding – assuming dilution 173,685 176,036
     
     
     
     
     
     
     
     
     
     
     
     
     
     
 
   
 
 
 

GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS

  Three Months Ended March 31,
  2006 2005
  (Unaudited)               
  (in thousands, except ratio analysis)       
Net sales:    
   Automotive $1,227,789 $1,168,955
   Industrial 771,227 686,740
   Office Products 465,955 410,929
   Electrical/Electronic Materials 95,469 84,289
   Other (1) (6,888) (8,712)
      Total net sales $2,553,552 $2,342,201
     
Operating profit:    
   Automotive 95,856 95,307
   Industrial 57,515 48,253
   Office Products 47,696 46,027
   Electrical/Electronic Materials 4,853 3,309
      Total operating profit 205,920 192,896
   Interest expense, net (7,172) (7,947)
   Other, net (14,253) (12,739)
     
      Income before income taxes $184,495 $172,210
     
Capital expenditures $27,521 $20,768
     
Depreciation and amortization $17,623 $17,071
     
Current ratio 3.1/1 3.1/1
     
Total debt to total capitalization 15.5% 16.3%
       
       
     
(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,
2006
March 31,
2005
 
              (Unaudited)
              (in thousands)
ASSETS    
CURRENT ASSETS    

Cash and cash equivalents

$150,171 $157,817

Trade accounts receivable

1,297,836 1,195,034

Merchandise inventories

2,184,823 2,149,814

Prepaid expenses and other current assets

198,591 186,837
     

TOTAL CURRENT ASSETS

3,831,421 3,689,502

Goodwill and other intangible assets

62,611 57,583

Other assets

520,930 404,300

Total property, plant and equipment, net

400,444 379,587

 

   

TOTAL ASSETS

$4,815,406 $4,530,972

 

   

LIABILITIES AND SHAREHOLDERS’ EQUITY

   

CURRENT LIABILITIES

   

Trade accounts payable

$954,276 $878,640

Other borrowings

-0- 897

Income taxes payable

83,517 98,994

Dividends payable

58,288 54,630

Other current liabilities

153,757 147,165
     

TOTAL CURRENT LIABILITIES

1,249,838 1,180,326

Long-term debt

500,000 500,000

Other long-term liabilities

119,224 112,305

Deferred income taxes

156,814 116,689

Minority interests in subsidiaries

57,571 53,052

 

   

Common stock

172,678 174,450

Retained earnings and other

2,559,281 2,394,150

 

   

TOTAL SHAREHOLDERS’ EQUITY

2,731,959 2,568,600

 

   

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$4,815,406 $4,530,972

 

   

 

   

 

   

 

   

 

   

 

   

 

   
     

 
 
 
 

GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

              Three Months
            Ended March 31,
              (Unaudited)
              (in thousands)
  2006 2005
     
OPERATING ACTIVITIES:    
Net income $113,925 $106,598
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 17,623 17,071
Other 2,017 2,525
Changes in operating assets and liabilities (73,510) (9,983)
     
NET CASH PROVIDED BY OPERATING ACTIVITIES 60,055 116,211
     
INVESTING ACTIVITIES:    
Purchase of property, plant and equipment (27,521) (20,768)
Other 1,733 6,804
     
NET CASH USED IN INVESTING ACTIVITIES (25,788) (13,964)
     
FINANCING ACTIVITIES:    
Net payments on credit facilities (881) (71)

Stock options exercised

3,209 4,162
Excess tax benefits from share-based compensation 1,349 -0-
Dividends paid (54,141) (52,495)
Purchase of stock (22,543) (30,966)
     
NET CASH USED IN FINANCING ACTIVITIES (73,007) (79,370)
     
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (38,740) 22,877
     
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 188,911 134,940
     
CASH AND CASH EQUIVALENTS AT END OF PERIOD $150,171 $157,817

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