Fourth Quarter and End of Year 2016

Genuine Parts Company Reports 2016 Sales And Earnings For The Fourth Quarter And Full Year

- Company Reports Fourth Quarter Sales of $3.78 Billion and Earnings Per Share of $1.02 -

Feb 21, 2017
8:33am

ATLANTA, Feb. 21, 2017 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today sales and earnings for the fourth quarter and twelve months ended December 31, 2016.

Sales for the fourth quarter ended December 31, 2016 were $3.78 billion, a 3% increase compared to $3.68 billion for the same period in 2015.  Net income for the fourth quarter was $152.5 million compared to $161.3 million recorded for the same period in the previous year.  Earnings per share on a diluted basis were $1.02 compared to $1.07 for the fourth quarter last year. 

Fourth quarter sales for the Automotive Group were up 2%, including an approximate 1% comparable sales increase.  Sales at Motion Industries, our Industrial Group, were up 4%, sales at EIS, our Electrical/Electronic Group, were basically unchanged and sales for S. P. Richards, our Office Products Group, were up 4% for the quarter.

Paul Donahue, President and Chief Executive Officer, commented, "The fourth quarter was our strongest quarterly sales performance of the year, with acquisitions being the primary growth driver in each of our four business segments.  With that said, we did see improvement in our comparable sales trends in the Automotive, Industrial and Electrical/Electronic businesses relative to the second and third quarters of 2016.  Generally, we operated in more favorable market conditions as the fourth quarter progressed, and our teams were in position to benefit from that."

Sales for the twelve months ended December 31, 2016 were $15.34 billion, up 0.4% compared to $15.28 billion for the same period in 2015.  Net income for the twelve months was $687.2 million, down 3% from 2015, and earnings per share on a diluted basis were $4.59, down 1% compared to $4.63 in 2015.

Mr. Donahue concluded, "We worked hard in every aspect of our business to overcome the challenging sales environment that persisted in our U.S. markets throughout most of 2016.  We also enhanced our measures to control rising costs and manage our assets to further strengthen the balance sheet and generate strong cash flows.  Due to these efforts, as well as the global growth initiatives across our operations and geographies, the Company enters 2017 well positioned for sustainable long-term growth."

2017 Outlook

The Company is establishing its full year 2017 sales guidance at up 3% to 4%. Diluted earnings per share is expected to be $4.70 to $4.80.

Conference Call

Genuine Parts Company will hold a conference call today at 11:00 a.m. EST 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 877-604-9665, conference ID 5619563.  A replay will also be available on the Company's website or at 844-512-2921, conference ID 5619563, two hours after the completion of the call until 12:00 a.m. Eastern time on March 7, 2017.

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 legislation or government regulations or policies; changes in general economic conditions, including unemployment, inflation or deflation; changes in tax policies; 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 Dec. 31,


Year Ended Dec.31,



2016


2015


2016


2015









(in thousands, except per share data)










Net sales

$3,780,065


$3,681,790


$15,339,713


$15,280,044


Cost of goods sold

2,648,982


2,586,312


10,740,106


10,724,192


Gross profit

1,131,083


1,095,478


4,599,607


4,555,852











Operating expenses:









Selling, administrative & other expenses

855,557


797,959


3,377,780


3,290,496


Depreciation and amortization

39,240


35,911


147,487


141,675



894,797


833,870


3,525,267


3,432,171











Income before income taxes

236,286


261,608


1,074,340


1,123,681


Income taxes

83,766


100,335


387,100


418,009











Net income

$   152,520


$   161,273


$    687,240


$     705,672











Basic net income per common share

$1.03


$1.07


$4.61


$4.65











Diluted net income per common share

$1.02


$1.07


$4.59


$4.63











Weighted average common shares outstanding

148,478


150,552


149,051


151,667











Dilutive effect of stock options and









   non-vested restricted stock awards

699


803


753


829











Weighted average common shares outstanding – assuming dilution

149,177


151,355


149,804


152,496











 

 

 

GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS



Three Months Ended Dec. 31,

Year Ended Dec. 31,


2016


2015


2016


2015




(in thousands)









Net sales:








Automotive

$1,996,325


$1,949,365


$  8,111,511


$  8,015,098

Industrial

1,151,966


1,106,583


4,634,212


4,646,689

Office Products

475,971


458,751


1,969,405


1,937,629

Electrical/Electronic Materials

176,847


177,186


715,650


750,770

Other (1)

(21,044)


(10,095)


(91,065)


(70,142)

Total net sales

$3,780,065


$3,681,790


$15,339,713


$15,280,044









Operating profit:








Automotive

$   159,998


$   169,082


$     715,154


$     729,152

Industrial

80,904


72,454


336,608


339,180

Office Products

19,934


33,435


117,035


140,866

Electrical/Electronic Materials

15,434


16,132


60,539


70,151

Total operating profit

276,270


291,103


1,229,336


1,279,349

Interest expense, net

(4,794)


(4,298)


(19,525)


(20,354)

Intangible amortization

(12,546)


(8,933)


(40,870)


(34,878)

Other, net

(22,644)


(16,264)


(94,601)


(100,436)

Income before income taxes

$   236,286


$   261,608


$  1,074,340


$  1,123,681









Capital expenditures

$     73,993


$     47,550


$     160,643


$     109,544









Depreciation and amortization

$     39,240


$     35,911


$     147,487


$     141,675









(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,


2016


2015




(in thousands)

ASSETS




CURRENT ASSETS




Cash and cash equivalents

$   242,879


$   211,631

Trade accounts receivable, net

1,938,562


1,822,419

Merchandise inventories, net

3,210,320


2,999,966

Prepaid expenses and other current assets

556,670


521,300





TOTAL CURRENT ASSETS

5,948,431


5,555,316





Goodwill and other intangible assets, less accumulated amortization

1,574,663


1,361,795

Deferred tax assets

132,652


118,525

Other assets

475,530


460,918

Net property, plant and equipment

728,124


648,217





TOTAL ASSETS

$8,859,400


$8,144,771



LIABILITIES AND EQUITY




CURRENT LIABILITIES




Trade accounts payable

$3,081,111


$2,821,526

Current portion of debt

325,000


375,000

Dividends payable

97,584


92,595

Other current liabilities

740,455


651,533





TOTAL CURRENT LIABILITIES

4,244,150


3,940,654









Long-term debt

550,000


250,000

Pension and other post-retirement benefit liabilities

341,510


284,235

Deferred tax liabilities

48,326


50,684

Other long-term liabilities

468,058


459,956





Common stock

148,410


150,081

Retained earnings

4,058,339


3,927,104

Accumulated other comprehensive loss

(1,013,021)


(930,618)





TOTAL  PARENT EQUITY

3,193,728


3,146,567





Noncontrolling interests in subsidiaries

13,628


12,675





TOTAL  EQUITY

3,207,356


3,159,242





TOTAL LIABILITIES AND EQUITY

$8,859,400


$8,144,771





 

 

 

GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



Year Ended Dec. 31,


2016


2015




(in thousands)





OPERATING ACTIVITIES:




Net income

$687,240


$705,672

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




Depreciation and amortization

147,487


141,675

Share-based compensation

19,719


17,717

Excess tax benefits from share-based compensation

(12,021)


(7,024)

Changes in operating assets and liabilities

103,653


301,333





NET CASH PROVIDED BY OPERATING ACTIVITIES

946,078


1,159,373





INVESTING ACTIVITIES:




Purchases of property, plant and equipment

(160,643)


(109,544)

Acquisitions and other investing activities

(433,356)


(154,083)





NET CASH USED IN INVESTING ACTIVITIES

(593,999)


(263,627)





FINANCING ACTIVITIES:




Proceeds from debt

4,350,000


3,862,224

Payments on debt

(4,100,000)


(4,005,191)

Share-based awards exercised, net of taxes paid

(16,147)


(9,572)

Excess tax benefits from share-based compensation

12,021


7,024

Dividends paid

(386,863)


(368,284)

Purchase of stock

(181,417)


(292,275)





NET CASH USED IN FINANCING ACTIVITIES

(322,406)


(806,074)





EFFECT OF EXCHANGE RATE CHANGES ON CASH

1,575


(15,771)





NET INCREASE IN CASH AND CASH EQUIVALENTS

31,248


73,901





CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

211,631


137,730





CASH AND CASH EQUIVALENTS AT END OF PERIOD

$242,879


$211,631









 

 

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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