First Quarter 2016

Genuine Parts Company Reports Sales And Earnings For The First Quarter Ended March 31, 2016

- Company Reports Sales of $3.7 Billion and Earnings Per Share of $1.05 -

Apr 19, 2016
8:45am

ATLANTA, April 19, 2016 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today first quarter sales and earnings for the quarter ended March 31, 2016.

GPC Logo.

Sales for the first quarter ended March 31, 2016 were $3.72 billion, compared to sales of $3.74 billion for the same period in 2015.  Net income for the first quarter was $158.0 million compared to $161.0 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.05, equal to the earnings per share for the first quarter last year.  Currency negatively impacted total revenue growth by approximately 1.5% and earnings per share by an approximate $0.01 in the first quarter.

Tom Gallagher, Chairman and Chief Executive Officer, commented, "We are pleased to report that our first quarter performance was in-line with our expectations.  Our growth initiatives for the automotive business along with consistently strong industry fundamentals continue to drive our positive automotive performance.  Our non-automotive businesses continue to operate in a difficult economic environment."  

Total sales in the first quarter were down 0.5% from the prior year, inclusive of the 1.5% currency headwind, which was partially offset by acquisitions.  Sales for the Automotive Group were up 2%, consisting of an approximate 3.5% core sales increase, a 1% benefit from acquisitions, and a reduction of 2.5% from currency translation.  Sales at Motion Industries, our Industrial Group, were down 2.5%, including a 3% underlying sales decrease and a 1% currency headwind, offset by a 1.5% contribution from acquisitions.  Sales at EIS, our Electrical/Electronic Group, and S. P. Richards, our Office Products Group, were each down approximately 3%. 

Mr. Gallagher concluded, "Despite the fragile industrial economic conditions which continue to pressure our near term growth outlook, our teams remain focused on key sales and cost initiatives necessary to drive long term growth for the Company. We will continue to support our sales and earnings growth with a strong balance sheet, solid cash flows and effective capital allocation intended to maximize shareholder value."   

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 800-263-8506, conference ID 4915825.  A replay will also be available on the Company's website or at 877-870-5176, conference ID 4915825, two hours after the completion of the call until 12:00 a.m. Eastern time on May 3, 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 2015 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 March 31,


2016

2015


(Unaudited)


(in thousands, except per share data)




Net sales

$3,718,267

$3,736,051

Cost of goods sold

2,613,796

2,623,232

Gross profit

1,104,471

1,112,819




Operating expenses:



Selling, administrative & other expenses

823,172

825,554

Depreciation and amortization

34,654

35,884


857,826

861,438




Income before income taxes

246,645

251,381

Income taxes

88,620

90,371




Net income

$  158,025

$  161,010




Basic net income per common share

$1.06

$1.05




Diluted net income per common share

$1.05

$1.05




Weighted average common shares outstanding

149,593

152,656




Dilutive effect of stock options and



   non-vested restricted stock awards

749

918




Weighted average common shares outstanding – assuming dilution

150,342

153,574




 


GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS




Three Months Ended March 31,


2016

2015


(Unaudited)


(in thousands)




Net sales:



Automotive

$1,932,178

$1,898,508

Industrial

1,152,627

1,181,823

Office Products

476,654

490,298

Electrical/Electronic Materials

175,847

182,046

Other (1)

(19,039)

(16,624)

Total net sales

$3,718,267

$3,736,051




Operating profit:



Automotive

$   153,710

$   150,641

Industrial

81,833

87,769

Office Products

34,204

36,524

Electrical/Electronic Materials

14,841

15,463

Total operating profit

284,588

290,397

Interest expense, net

(4,822)

(5,327)

Intangible amortization

(8,760)

(8,604)

Other, net

(24,361)

(25,085)

Income before income taxes

$   246,645

$   251,381




Capital expenditures

$     11,670

$     16,427




Depreciation and amortization

$     34,654

$     35,884




(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,


2016

2015


(Unaudited)


 (in thousands)

ASSETS



CURRENT ASSETS



Cash and cash equivalents

$  205,135

$  166,495

Trade accounts receivable, net

1,981,651

1,978,233

Merchandise inventories, net

3,074,641

3,007,295

Prepaid expenses and other current assets

508,841

482,676




TOTAL CURRENT ASSETS

5,770,268

5,634,699




Goodwill and other intangible assets, less accumulated amortization

1,412,985

1,346,336

Deferred tax assets

114,917

144,112

Other assets

504,153

467,092

Net property, plant and equipment

648,204

646,116




TOTAL ASSETS

$8,450,527

$8,238,355


LIABILITIES AND EQUITY



CURRENT LIABILITIES



Trade accounts payable

$2,961,318

$2,608,491

Current portion of debt

450,000

393,697

Income taxes payable

46,137

26,479

Dividends payable

98,339

93,844

Other current liabilities

656,132

636,850




TOTAL CURRENT LIABILITIES

4,211,926

3,759,361







Long-term debt

250,000

500,000

Pension and other post-retirement benefit liabilities

231,652

275,470

Deferred tax liabilities

50,736

67,672

Other long-term liabilities

462,501

444,810




Common stock

149,623

152,325

Retained earnings

3,944,626

3,855,295

Accumulated other comprehensive loss

(862,519)

(827,682)




TOTAL  PARENT EQUITY

3,231,730

3,179,938




Noncontrolling interests in subsidiaries

11,982

11,104




TOTAL  EQUITY

3,243,712

3,191,042




TOTAL LIABILITIES AND EQUITY

$8,450,527

$8,238,355








 

GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




Three Months Ended March 31,


2016

2015


(Unaudited)


(in thousands)

OPERATING ACTIVITIES:



Net income

$158,025

$161,010

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



Depreciation and amortization

34,654

35,884

Share-based compensation

4,249

3,316

Excess tax benefits from share-based compensation

(5,144)

(3,734)

Changes in operating assets and liabilities

(56,739)

(73,964)




NET CASH PROVIDED BY OPERATING ACTIVITIES

135,045

122,512




INVESTING ACTIVITIES:



Purchases of property, plant and equipment

(11,670)

(16,427)

Acquisitions and other investing activities

(73,625)

(30,129)




NET CASH USED IN INVESTING ACTIVITIES

(85,295)

(46,556)




FINANCING ACTIVITIES:



Proceeds from debt

975,000

779,910

Payments on debt

(900,000)

(650,000)

Share-based awards exercised, net of taxes paid

(5,586)

(3,804)

Excess tax benefits from share-based compensation

5,144

3,734

Dividends paid

(92,596)

(88,039)

Purchases of stock

(46,431)

(84,252)




NET CASH USED IN FINANCING ACTIVITIES

(64,469)

(42,451)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

8,223

(4,740)




NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

(6,496)

28,765




CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

211,631

137,730




CASH AND CASH EQUIVALENTS AT END OF PERIOD

$205,135

$166,495

 

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

 

SOURCE Genuine Parts Company

For further information: Carol B. Yancey, Executive Vice President and CFO - (678) 934-5044, Sidney G. Jones, Vice President - Investor Relations - (678) 934-5628


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