Genuine Parts Company
(Logo: http://www.newscom.com/cgi-bin/prnh/20081002/CLTH108LOGO)
For the six months ended June 30, 2009, sales totaled $5.0 billion, down 11% compared to the same period in 2008. Net income for the six months was $192.8 million, a decrease of 25% from the previous year. Earnings per share on a diluted basis were $1.21, down 22% compared to $1.56 for the same period last year.
In reviewing the quarter, Mr. Gallagher commented, "The Automotive Group reported a 5% decrease in sales for the quarter and S.P. Richards, our Office Products Group, was down 6%. These results reflect a slight improvement from the 7% sales decreases reported for the Automotive and Office Products groups in the first quarter of 2009. The Industrial and Electrical Groups, however, showed further sales declines relative to the first quarter of 2009 due to worsening conditions in the manufacturing segment of the economy. Motion Industries, our Industrial Group, had a 22% sales decrease in the quarter, and EIS, our Electrical Group, had a 34% decrease."
Mr. Gallagher added, "The Balance Sheet at June 30, 2009 remains in excellent condition and we continue to strengthen our financial position through working capital and asset management initiatives, significant cost reduction efforts and steady and strong cash flows. Cash from operations has improved significantly from 2008 and our sound cash position provides us with significant financial flexibility. Our priorities for cash remain the dividend, opportunistic share repurchases, the ongoing reinvestment in each of our businesses and strategic complementary types of acquisitions. We continue to believe that the use of cash in these key areas serves to maximize the total return to shareholders."
Mr. Gallagher concluded, "We are not satisfied with our results for the second quarter and first half of 2009, but feel that they reflect the realities of a difficult economy. As we approach the second half of the year, we will remain focused on those areas of our business that are within our control and we will support our growth initiatives and cost reduction efforts with a strong and healthy balance sheet. We remain confident in the long-term positive fundamentals of each of our businesses and we believe that we will be a stronger company when the economy begins to turn."
Conference Call
Genuine Parts Company will hold a conference call today at 11:00 a.m. Eastern time 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 "Investor Services", or by dialing 877-316-2549, conference ID 85292457. A replay will also be available on the Company's website or at 800-642-1687, conference ID 85292457, two hours after the completion of the conference call until 12:00 a.m. Eastern time on July 31, 2009.
Forward Looking Statements
Some statements in this release, 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 our 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 include, but are not limited to, the ability to maintain favorable supplier arrangements and relationships, changes in general economic conditions, the growth rate of the market for the Company's products and services, competitive product, service and pricing pressures, including internet related initiatives, the effectiveness of the Company's promotional, marketing and advertising programs, changes in financial markets, including particularly the capital and credit markets, changes in laws and regulations, including changes in accounting and taxation guidance, the uncertainties of litigation, as well as other risks and uncertainties discussed from time to time in the Company's 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 Form 10-Q, 10-K, 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 and Mexico. The Company also distributes industrial replacement parts in the U.S. and Canada through its Motion Industries subsidiary. S.P. Richards Company, the Office Products Group, distributes business products nationwide 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,
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited)
(in thousands, except per share data)
Net sales $2,535,045 $2,873,485 $4,979,541 $5,612,958
Cost of goods sold 1,790,190 2,021,272 3,502,485 3,941,262
--------- --------- --------- ---------
744,855 852,213 1,477,056 1,671,696
Selling,
administrative &
other expenses 578,805 636,502 1,166,338 1,264,304
------- ------- --------- ---------
Income before income
taxes 166,050 215,711 310,718 407,392
Income taxes 62,440 82,638 117,949 150,776
------ ------ ------- -------
Net income $103,610 $133,073 $192,769 $256,616
======== ======== ======== ========
Basic net income
per common share $.65 $.81 $1.21 $1.56
Diluted net income
per common share $.65 $.81 $1.21 $1.56
Weighted average
common shares
outstanding 159,513 163,411 159,479 164,194
Dilutive effect of
stock options and
non-vested restricted
stock awards 253 716 225 705
--- --- --- ---
Weighted average
common shares
outstanding -
assuming dilution 159,766 164,127 159,704 164,899
======= ======= ======= =======
GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited)
(in thousands)
Net sales:
Automotive $1,360,037 $1,428,513 $2,579,165 $2,734,400
Industrial 701,228 898,069 1,437,729 1,779,282
Office Products 406,134 430,807 818,882 873,199
Electrical/Electronic
Materials 80,609 122,584 166,742 236,885
Other (1) (12,963) (6,488) (22,977) (10,808)
-------- ------- -------- --------
Total net sales $2,535,045 $2,873,485 $4,979,541 $5,612,958
========== ========== ========== ==========
Operating profit:
Automotive $117,777 $115,514 $205,184 $206,158
Industrial 31,443 76,569 65,618 145,561
Office Products 33,661 37,363 72,389 81,295
Electrical/Electronic
Materials 5,090 9,893 10,758 18,903
----- ----- ------ ------
Total operating profit 187,971 239,339 353,949 451,917
Interest expense, net (6,752) (7,332) (13,848) (14,486)
Other, net (15,169) (16,296) (29,383) (30,039)
-------- -------- -------- --------
Income before
income taxes $166,050 $215,711 $310,718 $407,392
======== ======== ======== ========
Capital expenditures $22,858 $22,568 $36,955 $44,330
======= ======= ======= =======
Depreciation and
amortization $22,411 $22,017 $44,932 $44,701
======= ======= ======= =======
(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,
2009 2008
---- ----
(Unaudited)
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $238,589 $135,844
Trade accounts receivable, net 1,239,318 1,342,635
Merchandise inventories, net 2,215,709 2,319,485
Prepaid expenses and other current assets 222,399 264,804
------- -------
TOTAL CURRENT ASSETS 3,916,015 4,062,768
Goodwill and intangible assets, less
accumulated amortization 166,683 126,010
Other assets 339,905 186,414
Net property, plant and equipment 487,307 422,151
------- -------
TOTAL ASSETS $4,909,910 $4,797,343
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $1,063,260 $1,064,882
Current portion of debt - 250,000
Income taxes payable 44,687 15,059
Dividends payable 63,813 63,798
Other current liabilities 240,807 187,653
------- -------
TOTAL CURRENT LIABILITIES 1,412,567 1,581,392
Long-term debt 500,000 250,000
Other long-term liabilities 121,168 110,852
Retirement and other post-retirement
benefit liabilities 442,940 90,560
Noncontrolling interests in subsidiaries 7,822 67,298
Common stock 159,531 162,477
Retained earnings and other 2,265,882 2,534,764
--------- ---------
TOTAL EQUITY 2,433,235 2,764,539
TOTAL LIABILITIES AND EQUITY $4,909,910 $4,797,343
NOTE: Certain prior period amounts have been reclassified to conform
to current year presentation.
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
2009 2008
---- ----
(Unaudited)
(in thousands)
OPERATING ACTIVITIES:
Net income $192,769 $256,616
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 44,932 44,701
Other 8,639 6,385
Changes in operating assets and liabilities 244,734 (31,193)
------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 491,074 276,509
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (36,955) (44,330)
Acquisitions and other (107,405) (53,656)
--------- --------
NET CASH USED IN INVESTING ACTIVITIES (144,360) (97,986)
FINANCING ACTIVITIES:
Stock options exercised 2,160 1,355
Excess tax benefits from share-based compensation - 287
Dividends paid (125,926) (125,054)
Changes in cash overdraft position (52,000) -
Purchase of stock (136) (151,104)
----- ---------
NET CASH USED IN FINANCING ACTIVITIES (175,902) (274,516)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 170,812 (95,993)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 67,777 231,837
------ -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $238,589 $135,844
======== ========
First Call Analyst:
FCMN Contact:
http://photoarchive.ap.org/
PRN Photo Desk,
SOURCE: Genuine Parts Company
CONTACT: Jerry W. Nix, Vice Chairman and CFO, +1-770-612-2048, or Sidney
G. Jones, Vice President-Investor Relations, +1-770-818-4628, both of Genuine
Parts Company
Web Site: http://www.genpt.com/
