Second Quarter 2015

Genuine Parts Company Reports Sales and Earnings for the Second Quarter Ended June 30, 2015

- Company Reports Sales of $3.9 Billion and Earnings Per Share of $1.28 -

Jul 20, 2015
8:41am

ATLANTA, July 20, 2015 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today sales and earnings for the second quarter and six months ended June 30, 2015.

GPC Logo

Sales for the second quarter ended June 30, 2015, increased 1% to $3.94 billion compared to sales of $3.91 billion for the same period in 2014.  Net income for the second quarter was $195.4 million compared to $197.7 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.28, equal to the earnings per share for the second quarter last year. 

Tom Gallagher, Chairman and Chief Executive Officer, commented, "Our results reflect the moderation in our sales and earnings growth rates in the second quarter, primarily due to the ongoing choppiness in the economy.  This is especially the case for our Industrial business.  Overall, our 1% second quarter sales increase included underlying sales growth of 2.2% and a 1.3% contribution from acquisitions, offset by an expected currency headwind of 2.7%.  Sales for the Automotive Group were essentially flat with the prior year and consisted of core automotive growth of approximately 4% offset by the impact of currency.  Sales at Motion Industries, our Industrial Group, decreased by approximately 2%, which basically represents the underlying growth for this business, as a 1% contribution from acquisitions was offset by an equal currency headwind.  Sales at EIS, our Electrical/Electronic Group, increased by 3.5% and included approximately 6% growth from acquisitions, net of a 2% decrease in core sales and a 0.5% negative impact of copper pricing.  Sales for S. P. Richards, our Office Products Group, were up 14%, consisting of 9% underlying growth and approximately 5% from acquisitions."

Sales for the six months ended June 30, 2015 were $7.68 billion, up 2% compared to 2014.  Net income for the six months was $356.4 million, basically unchanged from 2014, and earnings per share on a diluted basis were $2.33, up 1% compared to $2.30 in 2014.

Mr. Gallagher concluded, "In the midst of the challenging sales environment, two important highlights thus far in 2015 include the further strengthening of our balance sheet and improved cash flows, which position us well for future growth.  Our teams are very focused on driving improved results over the balance of the year.    We believe the initiatives we have put in place should contribute to our growth in each of our four distribution businesses as we move ahead."   

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 "Investors", or by dialing 844-857-1770, conference ID 77046416.  A replay will also be available on the Company's website or at 855-859-2056, conference ID 77046416, two hours after the completion of the call until 12:00 a.m. Eastern time on August 4, 2015.

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 2014 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, Mexico and Australasia.  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 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,


2015

2014

2015

2014


(Unaudited)


(in thousands, except per share data)






Net sales

$3,940,401

$3,908,387

$7,676,452

$7,533,284

Cost of goods sold

2,762,071

2,729,219

5,385,303

5,269,486

Gross profit

1,178,330

1,179,168

2,291,149

2,263,798






Operating expenses:





Selling, administrative & other expenses

832,610

832,205

1,658,164

1,636,006

Depreciation and amortization

35,603

36,783

71,487

73,640


868,213

868,988

1,729,651

1,709,646






Income before income taxes

310,117

310,180

561,498

554,152

Income taxes

114,744

112,453

205,115

198,941






Net income

$   195,373

$   197,727

$   356,383

$   355,211






Basic net income per common share

$1.28

$1.29

$2.34

$2.31






Diluted net income per common share

$1.28

$1.28

$2.33

$2.30






Weighted average common shares outstanding

152,134

153,463

152,394

153,595






Dilutive effect of stock options and





   non-vested restricted stock awards

855

1,069

880

1,063






Weighted average common shares outstanding – assuming dilution

152,989

154,532

153,274

154,658






 

GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS

 


Three Months Ended June 30,

Six Months Ended June 30,


2015

2014

2015

2014


(Unaudited)


(in thousands)






Net sales:





Automotive

$2,103,126

$2,110,396

$4,001,634

$4,008,911

Industrial

1,188,031

1,209,235

2,369,854

2,352,509

Office Products

477,755

418,785

968,053

836,883

Electrical/Electronic Materials

194,701

188,034

376,747

368,365

Other (1)

(23,212)

(18,063)

(39,836)

(33,384)

Total net sales

$3,940,401

$3,908,387

$7,676,452

$7,533,284






Operating profit:





Automotive

$   207,443

$   206,683

$   358,084

$   356,793

Industrial

88,876

95,428

176,645

178,478

Office Products

34,501

31,183

71,025

65,129

Electrical/Electronic Materials

18,568

16,463

34,031

31,992

Total operating profit

349,388

349,757

639,785

632,392

Interest expense, net

(5,674)

(6,224)

(11,001)

(12,430)

Intangible amortization

(8,796)

(8,498)

(17,400)

(17,374)

Other, net

(24,801)

(24,855)

(49,886)

(48,436)

Income before income taxes

$   310,117

$   310,180

$   561,498

$   554,152






Capital expenditures

$     21,037

$     21,536

$     37,464

$     39,923






Depreciation and amortization

$     35,603

$     36,783

$     71,487

$     73,640

 

(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,



2015

2014



(Unaudited)



 (in thousands)


ASSETS




CURRENT ASSETS




Cash and cash equivalents

$   223,840

$   152,863


Trade accounts receivable, net

2,008,445

1,909,268


Merchandise inventories, net

3,025,165

2,987,143


Prepaid expenses and other current assets

506,070

463,087






TOTAL CURRENT ASSETS

5,763,520

5,512,361






Goodwill and other intangible assets, less accumulated amortization

1,382,766

1,432,862


Deferred tax assets

139,928

89,196


Other assets

486,885

555,825


Net property, plant and equipment

640,534

661,304






TOTAL ASSETS

$8,413,633

$8,251,548




LIABILITIES AND EQUITY




CURRENT LIABILITIES




Trade accounts payable

$2,743,444

$2,489,570


Current portion of debt

350,000

306,358


Income taxes payable

1,069

22,639


Dividends payable

93,496

88,211


Other accrued expenses

679,613

600,076






TOTAL CURRENT LIABILITIES

3,867,622

3,506,854










Long-term debt

500,000

500,000


Pension and other post-retirement benefit liabilities

261,783

137,616


Deferred tax liabilities

68,428

85,584


Other long-term liabilities

460,302

484,000






Common stock

151,709

153,306


Retained earnings

3,901,607

3,725,279


Accumulated other comprehensive loss

(809,501)

(351,415)






TOTAL  PARENT EQUITY

3,243,815

3,527,170






Noncontrolling interests in subsidiaries

11,683

10,324






TOTAL  EQUITY

3,255,498

3,537,494






TOTAL LIABILITIES AND EQUITY

$8,413,633

$8,251,548






 

GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


Six Months Ended June 30,


2015

2014


(Unaudited)


(in thousands)




OPERATING ACTIVITIES:



Net income

$356,383

$355,211

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



Depreciation and amortization

71,487

73,640

Share-based compensation

8,646

7,855

Excess tax benefits from share-based compensation

(5,300)

(5,948)

Changes in operating assets and liabilities

22,892

(63,656)







NET CASH PROVIDED BY OPERATING ACTIVITIES

454,108

367,102




INVESTING ACTIVITIES:



Purchases of property, plant and equipment

(37,464)

(39,923)

Acquisitions and other investing activities

(80,140)

(178,889)




NET CASH USED IN INVESTING ACTIVITIES

(117,604)

(218,812)




FINANCING ACTIVITIES:



Proceeds from debt

1,634,587

1,246,613

Payments on debt

(1,552,554)

(1,214,169)

Share-based awards exercised, net of taxes paid

(5,914)

(6,754)

Excess tax benefits from share-based compensation

5,300

5,948

Dividends paid

(181,883)

(171,171)

Purchase of stock

(145,219)

(53,769)




NET CASH USED IN FINANCING ACTIVITIES

(245,683)

(193,302)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

(4,711)

982




NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

86,110

(44,030)




CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

137,730

196,893




CASH AND CASH EQUIVALENTS AT END OF PERIOD

$223,840

$152,863







 

Logo - http://photos.prnewswire.com/prnh/20081002/CLTH108LOGO 

SOURCE Genuine Parts Company

For further information: Carol B. Yancey, Executive Vice President and CFO - (770) 612-2044 or Sidney G. Jones, Vice President - Investor Relations - (770) 818-4628


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