Fourth Quarter and End of Year 2015

Genuine Parts Company Reports Fourth Quarter and Full Year Results for 2015

- Company Reports Fourth Quarter Sales of $3.7 Billion and Earnings Per Share of $1.07 -

- Record Earnings per Share and Cash Flows for 2015 -

Feb 16, 2016
8:35am

ATLANTA, Feb. 16, 2016 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today fourth quarter and full year results as well as record earnings per share and cash flows for the year ended December 31, 2015.

GPC Logo.

Sales in the fourth quarter ended December 31, 2015 were $3.68 billion, and this compares to sales of $3.82 billion for the same period in 2014.  Net income in the fourth quarter was $161.3 million compared to $165.6 million recorded for the same period in the previous year.  Earnings per share on a diluted basis were $1.07, equal to the earnings per share for the fourth quarter in 2014.  Currency negatively impacted revenue growth by approximately 3% and earnings per share by $0.03 in the fourth quarter.

Tom Gallagher, Chairman and Chief Executive Officer, commented, "As we entered the fourth quarter we had anticipated a challenging sales environment.  That said, we are pleased with the positive underlying sales growth in our automotive business as well as the solid industry fundamentals supporting our growth initiatives.  Our non-automotive businesses, however, and in particular the industrial and electrical distribution segments, were further challenged by the difficult macro-economic environment.  Despite the mixed results, our ongoing focus on key sales and cost initiatives across our businesses drove overall margin expansion for the quarter."

The Company's 4% sales decline in the fourth quarter included an underlying sales decrease of 2% and a currency headwind of 3%, while acquisitions contributed 1% to sales.  Sales for the automotive group were down 2%, consisting of core automotive growth of 2.5% and a slight benefit from acquisitions, less a currency headwind of approximately 5%.  Sales for the industrial business were down 8%, representing an 8% underlying sales decrease and a 1% currency headwind, offset by a 1% positive contribution from acquisitions.  At EIS, sales were approximately equal with the prior year period and include a 2.5% decrease in core sales and a 1.5% negative impact of copper pricing, offset by 4% growth from acquisitions.  Sales for the office products business were down 2%, and this reflects the net impact of a 3.5% decline in underlying sales, a 0.5% currency headwind and a 2% benefit from acquisitions.

Sales for the year ended December 31, 2015 were $15.28 billion compared to $15.34 billion in 2014.  Net income for the year was $705.7 million, a 1% decrease compared to $711.3 million in 2014.  Earnings per share on a diluted basis were $4.63, a new record and up slightly compared to $4.61 in 2014. Currency negatively impacted revenue growth by approximately 3% and earnings per share by $0.14 for the full year.

Mr. Gallagher added, "When we adjust our 2015 results for the impact of currency translation, the Company produced increased sales and net income.  In addition, the positive impact of our sales initiatives and cost control measures produced an expanded operating margin and, combined with our reduced investment in net working capital, generated record levels of cash from operations and free cash flows.  These are meaningful accomplishments and our progress in 2015 supports the ongoing investment in growth opportunities such as acquisitions and the return of capital to shareholders via a strong dividend and share repurchases."

Mr. Gallagher concluded, "We enter 2016 with a cautious outlook on the overall economy.  However, we remain committed to growing sales and earnings, showing continued operating margin improvement, generating solid cash flows and maintaining a strong balance sheet.  We have strategic plans in place to support additional improvement in each of these areas in the year ahead."

Conference Call

Genuine Parts Company will hold a conference call today at 11:00 a.m. EST to discuss the results of the quarter, the year 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 888-312-9865, conference ID 273389.  A replay will also be available on the Company's website or at 877-870-5176, conference ID 273389, two hours after the completion of the call until 12:00 a.m. Eastern time on March 1, 2016.

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 Dec. 31,

Year Ended Dec. 31,


2015

2014

2015

2014


 (in thousands, except per share data)






Net sales

$3,681,790

$3,822,454

$15,280,044

$15,341,647

Cost of goods sold

2,586,312

2,675,913

10,724,192

10,747,886

Gross profit

1,095,478

1,146,541

4,555,852

4,593,761






Operating expenses:





Selling, administrative & other expenses

797,959

841,546

3,290,496

3,327,709

Depreciation and amortization

35,911

39,691

141,675

148,313


833,870

881,237

3,432,171

3,476,022






Income before income taxes

261,608

265,304

1,123,681

1,117,739

Income taxes

100,335

99,745

418,009

406,453






Net income

$   161,273

$   165,559

$     705,672

$     711,286






Basic net income per common share

$1.07

$1.08

$4.65

$4.64






Diluted net income per common share

$1.07

$1.07

$4.63

$4.61






Weighted average common shares outstanding

150,552

152,996

151,667

153,299






Dilutive effect of stock options and





   non-vested restricted stock awards

803

1,088

829

1,076






Weighted average common shares outstanding –





   assuming dilution

151,355

154,084

152,496

154,375

 

 

GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS



Three Months Ended Dec. 31,

Year Ended Dec. 31,


2015

2014

2015

2014


(in thousands)






Net sales:





Automotive

$1,949,365

$1,988,448

$  8,015,098

$  8,096,877

Industrial

1,106,583

1,198,032

4,646,689

4,771,080

Office Products

458,751

469,299

1,937,629

1,802,754

       Electrical/Electronic Materials

177,186

177,433

750,770

739,119

Other (1)

(10,095)

(10,758)

(70,142)

(68,183)

            Total net sales

$3,681,790

$3,822,454

$15,280,044

$15,341,647






Operating profit:





Automotive

$   169,082

$   150,335

$     729,152

$     700,386

Industrial

72,454

96,303

339,180

370,043

Office Products

33,435

35,280

140,866

133,727

Electrical/Electronic Materials

16,132

15,126

70,151

64,884

Total operating profit

291,103

297,044

1,279,349

1,269,040

Interest expense, net

(4,298)

(5,479)

(20,354)

(24,192)

Intangible amortization

(8,933)

(10,546)

(34,878)

(36,867)

Other, net

(16,264)

(15,715)

(100,436)

(90,242)

Income before income taxes

$   261,608

$   265,304

$  1,123,681

$  1,117,739






Capital expenditures

$     47,550

$     33,897

$     109,544

$     107,681






Depreciation and amortization

$     35,911

$     39,691

$     141,675

$     148,313






(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



Dec. 31,

Dec. 31,


2015

2014


 (in thousands)

ASSETS



CURRENT ASSETS



Cash and cash equivalents

$   211,631

$   137,730

Trade accounts receivable, net

1,822,419

1,872,365

Merchandise inventories, net

2,999,966

3,043,848

Prepaid expenses and other current assets

521,300

538,582




TOTAL CURRENT ASSETS

5,555,316

5,592,525




Goodwill and other intangible assets, less accumulated amortization

1,361,795

1,386,590

Deferred tax assets

118,525

145,331

Other assets

460,918

451,690

Net property, plant and equipment

648,217

670,102




TOTAL ASSETS

$8,144,771

$8,246,238


LIABILITIES AND EQUITY



CURRENT LIABILITIES



Trade accounts payable

$2,821,526

$2,554,759

Current portion of debt

375,000

265,466

Dividends payable

92,595

88,039

Other current liabilities

651,533

675,851




TOTAL CURRENT LIABILITIES

3,940,654

3,584,115







Long-term debt

250,000

500,000

Pension and other post-retirement benefit liabilities

284,235

329,531

Deferred tax liabilities

50,684

72,479

Other long-term liabilities

459,956

447,749




Common stock

150,081

153,113

Retained earnings

3,927,104

3,868,346

Accumulated other comprehensive loss

(930,618)

(720,211)




TOTAL  PARENT EQUITY

3,146,567

3,301,248




Noncontrolling interests in subsidiaries

12,675

11,116




TOTAL  EQUITY

3,159,242

3,312,364




TOTAL LIABILITIES AND EQUITY

$8,144,771

$8,246,238




 

 

GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



Year Ended Dec. 31,


2015

2014


 (in thousands)




OPERATING ACTIVITIES:



Net income

$705,672

$711,286

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



Depreciation and amortization

141,675

148,313

Share-based compensation

17,717

16,239

Excess tax benefits from share-based compensation

(7,024)

(17,766)

Changes in operating assets and liabilities

301,333

(67,927)




NET CASH PROVIDED BY OPERATING ACTIVITIES

1,159,373

790,145




INVESTING ACTIVITIES:



Purchases of property, plant and equipment

(109,544)

(107,681)

Acquisitions and other investing activities

(154,083)

(279,034)




NET CASH USED IN INVESTING ACTIVITIES

(263,627)

(386,715)




FINANCING ACTIVITIES:



Proceeds from debt

3,862,224

2,727,924

Payments on debt

(4,005,191)

(2,735,862)

Share-based awards exercised, net of taxes paid

(9,572)

(22,051)

Excess tax benefits from share-based compensation

7,024

17,766

Dividends paid

(368,284)

(347,271)

Purchase of stock

(292,275)

(95,946)




NET CASH USED IN FINANCING ACTIVITIES

(806,074)

(455,440)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

(15,771)

(7,153)




NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

73,901

(59,163)




CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

137,730

196,893




CASH AND CASH EQUIVALENTS AT END OF YEAR

$211,631

$137,730

 

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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