Second Quarter 2016

Genuine Parts Company Reports Sales And Earnings For The Second Quarter Ended June 30, 2016

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

Jul 19, 2016
8:30am

ATLANTA, July 19, 2016 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today sales and earnings for the second quarter and six months ended June 30, 2016.

 GPC Logo.

Sales for the second quarter ended June 30, 2016 were $3.90 billion compared to $3.94 billion for the same period in 2015.  Net income for the second quarter was $191.4 million compared to $195.4 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. 

Paul Donahue, President and Chief Executive Officer, commented, "Total sales in the second quarter were down 1% from the prior year, inclusive of a 2% contribution from acquisitions less a currency headwind of 1%.  Sales for the Automotive Group were down 0.7%, consisting of a 1% core sales decline, a 1.5% currency headwind and an approximate 2% contribution from acquisitions.  Sales at Motion Industries, our Industrial Group, were down 1.7%, including a 3% underlying sales decrease and an approximate 0.5% currency headwind, offset by a 2% benefit from acquisitions.  Sales at EIS, our Electrical/Electronic Group, were down approximately 5%, including a 1% negative impact of copper pricing.  Sales for S. P. Richards, our Office Products Group, were up 1%, consisting of a 5% contribution from acquisitions offset by a 4% underlying sales decrease."

Mr. Donahue stated, "This quarter our automotive sales along with our other distribution businesses were all impacted by the challenging sales environment.  We offset some of this impact with key sales and gross margin initiatives as well as tight expense controls. Importantly, we also further improved the strength of our balance sheet and cash flows with effective working capital management.  We expect the combination of these efforts to support stronger growth for the Company over the long-term."

Sales for the six months ended June 30, 2016 were $7.62 billion compared to $7.68 billion for the same period in 2015.  Net income for the six months was $349.4 million, down 2% from 2015, and earnings per share on a diluted basis were $2.33, equal to the same six month period of the prior year.

2016 Outlook

For the full year 2016, the Company is maintaining its guidance for 1% to 2% total sales growth and is updating diluted earnings per share to $4.70 to $4.75 from $4.70 to $4.80.

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 888-471-3831, conference ID 2490635.  A replay will also be available on the Company's website or at 877-870-5176, conference ID 2490635, two hours after the completion of the call until 12:00 a.m. Eastern time on August 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, the Company's ability to successfully implement its business initiatives in each of its four business segments; slowing demand for the Company's products; changes in general economic conditions, including, unemployment, inflation or deflation; volatile exchange rates; high energy costs; uncertain credit markets and other macro-economic conditions; competitive product, service and pricing pressures; the ability to maintain favorable vendor arrangements and relationships; disruptions in our vendors' operations; the Company's ability to successfully integrate its acquired businesses; the uncertainties and costs of litigation; disruptions caused by a failure or breach of the Company's information systems, 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 June 30,

Six Months Ended June 30,


2016

2015

2016

2015


(Unaudited)


(in thousands, except per share data)






Net sales

$3,899,638

$3,940,401

$7,617,905

$7,676,452

Cost of goods sold

2,734,186

2,762,071

5,347,982

5,385,303

Gross profit

1,165,452

1,178,330

2,269,923

2,291,149






Operating expenses:





Selling, administrative & other expenses

829,489

832,610

1,652,661

1,658,164

Depreciation and amortization

35,911

35,603

70,565

71,487


865,400

868,213

1,723,226

1,729,651






Income before income taxes

300,052

310,117

546,697

561,498

Income taxes

108,683

114,744

197,303

205,115






Net income

$   191,369

$   195,373

$   349,394

$   356,383






Basic net income per common share

$1.28

$1.28

$2.34

$2.34






Diluted net income per common share

$1.28

$1.28

$2.33

$2.33






Weighted average common shares outstanding

149,241

152,134

149,417

152,394






Dilutive effect of stock options and





   non-vested restricted stock awards

788

855

761

880






Weighted average common shares outstanding – assuming dilution

150,029

152,989

150,178

153,274






 

GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS



Three Months Ended June 30,

Six Months Ended June 30,


2016

2015

2016

2015


(Unaudited)


(in thousands)






Net sales:





Automotive

$2,087,978

$2,103,126

$4,020,156

$4,001,634

Industrial

1,167,395

1,188,031

2,320,022

2,369,854

Office Products

481,605

477,755

958,259

968,053

Electrical/Electronic Materials

184,508

194,701

360,355

376,747

Other (1)

(21,848)

(23,212)

(40,887)

(39,836)

Total net sales

$3,899,638

$3,940,401

$7,617,905

$7,676,452






Operating profit:





Automotive

$   203,572

$   207,443

$   357,282

$   358,084

Industrial

88,263

88,876

170,096

176,645

Office Products

32,640

34,501

66,844

71,025

Electrical/Electronic Materials

15,987

18,568

30,828

34,031

Total operating profit

340,462

349,388

625,050

639,785

Interest expense, net

(4,665)

(5,674)

(9,487)

(11,001)

Intangible amortization

(9,225)

(8,796)

(17,985)

(17,400)

Other, net

(26,520)

(24,801)

(50,881)

(49,886)

Income before income taxes

$   300,052

$   310,117

$   546,697

$   561,498






Capital expenditures

$     38,041

$     21,037

$     49,711

$     37,464






Depreciation and amortization

$     35,911

$     35,603

$     70,565

$     71,487

(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,



2016

2015



(Unaudited)



 (in thousands)


ASSETS




CURRENT ASSETS




Cash and cash equivalents

$   233,627

$   223,840


Trade accounts receivable, net

2,031,094

2,008,445


Merchandise inventories, net

3,062,673

3,025,165


Prepaid expenses and other current assets

538,748

506,070






TOTAL CURRENT ASSETS

5,866,142

5,763,520






Goodwill and other intangible assets, less accumulated amortization

1,478,298

1,382,766


Deferred tax assets

112,316

139,928


Other assets

491,968

486,885


Net property, plant and equipment

685,385

640,534






TOTAL ASSETS

$8,634,109

$8,413,633




LIABILITIES AND EQUITY




CURRENT LIABILITIES




Trade accounts payable

$3,075,769

$2,743,444


Current portion of debt

525,000

350,000


Income taxes payable

28,451

1,069


Dividends payable

97,975

93,496


Other current liabilities

678,975

679,613






TOTAL CURRENT LIABILITIES

4,406,170

3,867,622










Long-term debt

250,000

500,000


Pension and other post-retirement benefit liabilities

217,052

261,783


Deferred tax liabilities

51,708

68,428


Other long-term liabilities

458,950

460,302






Common stock

148,914

151,709


Retained earnings

3,970,870

3,901,607


Accumulated other comprehensive loss

(882,165)

(809,501)






TOTAL  PARENT EQUITY

3,237,619

3,243,815






Noncontrolling interests in subsidiaries

12,610

11,683






TOTAL  EQUITY

3,250,229

3,255,498






TOTAL LIABILITIES AND EQUITY

$8,634,109

$8,413,633






 

GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



Six Months Ended June 30,


2016

2015


(Unaudited)


(in thousands)




OPERATING ACTIVITIES:



Net income

$349,394

$356,383

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



Depreciation and amortization

70,565

71,487

Share-based compensation

10,002

8,646

Excess tax benefits from share-based compensation

(7,540)

(5,300)

Changes in operating assets and liabilities

111,077

22,892







NET CASH PROVIDED BY OPERATING ACTIVITIES

533,498

454,108




INVESTING ACTIVITIES:



Purchases of property, plant and equipment

(49,711)

(37,464)

Acquisitions and other investing activities

(308,441)

(80,140)




NET CASH USED IN INVESTING ACTIVITIES

(358,152)

(117,604)




FINANCING ACTIVITIES:



Proceeds from debt

1,950,000

1,634,587

Payments on debt

(1,800,000)

(1,552,554)

Share-based awards exercised, net of taxes paid

(8,627)

(5,914)

Excess tax benefits from share-based compensation

7,540

5,300

Dividends paid

(190,934)

(181,883)

Purchase of stock

(119,397)

(145,219)




NET CASH USED IN FINANCING ACTIVITIES

(161,418)

(245,683)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

8,068

(4,711)




NET INCREASE IN CASH AND CASH EQUIVALENTS

21,996

86,110




CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

211,631

137,730




CASH AND CASH EQUIVALENTS AT END OF PERIOD

$233,627

$223,840







 

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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