Genuine Parts Company Reports Sales up 12% and Earnings up 20% for the Second Quarter Ended June 30, 2010
PRNewswire-FirstCall
ATLANTA

Genuine Parts Company reported sales and earnings for the second quarter and six months ended June 30, 2010. Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.8 billion were up 12% compared to the second quarter of 2009. Net income for the quarter was $124.5 million, an increase of 20% from $103.6 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 78 cents, up 20% compared to 65 cents for the second quarter last year.

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For the six months ended June 30, 2010, sales totaled $5.4 billion, up 9% compared to the same period in 2009. Net income for the six months was $225.1 million, an increase of 17% from the same period in 2009. Earnings per share on a diluted basis were $1.42, up 17% compared to $1.21 for the same period last year.

In reviewing the quarter, Mr. Gallagher commented, "We are pleased to report another quarter of solid sales and earnings growth in 2010. In looking at the results by segment, our Industrial and Electrical businesses turned in the strongest results. Sales for Motion Industries, our Industrial Group, were up 26% in the quarter and EIS, our Electrical Group, generated a 32% increase. Both Motion and EIS sell into the manufacturing sector of the economy, which is performing well at this time. Our Automotive Group produced another solid quarter. Sales for this group were up 7%, following a 6% increase in the first quarter and we are encouraged by the sequential improvement that we have seen in our Automotive results over the past several quarters. S.P. Richards, our Office Products Group, ended the quarter down 1%. This is in line with overall office products industry trends and it is reflective of the reduction in office employment over the past two years."

Mr. Gallagher added, "Our balance sheet as of June 30, 2010 also remains in excellent condition. We ended the period with a sound cash position and we continue to generate strong cash flows as a result of our working capital, asset management and cost reduction initiatives."

Mr. Gallagher concluded, "We are encouraged by our sales and earnings growth in the second quarter and through the first six months in 2010. As we look forward, we are optimistic that we can show continued progress over the balance of the year."

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 84340470. A replay will also be available on the Company's website or at 800-642-1687, conference ID 84340470, after the completion of the conference call until 12:00 a.m. Eastern time on July 31, 2010.

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 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 demand for the Company's products and services, competitive product, service and pricing pressures, including internet related initiatives, changes in financial markets, including particularly the capital and credit markets, impairment of financial institutions, the effectiveness of the Company's promotional, marketing and advertising programs, changes in laws and regulations, including changes in accounting and taxation guidance, the uncertainties of litigation, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for 2009 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, Form 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., Canada and Mexico 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        Six Months Ended June
                              30,                         30,
                         2010          2009          2010          2009
                         ----          ----          ----          ----
                                        (Unaudited)

                           (in thousands, except per share data)

  Net sales        $2,847,186    $2,535,045    $5,449,301    $4,979,541
  Cost of goods
   sold             2,024,876     1,790,190     3,866,516     3,502,485
                    ---------     ---------     ---------     ---------
  Gross profit        822,310       744,855     1,582,785     1,477,056


  Operating
   Expenses:
  Selling,
   administrative
   & other
   expenses           598,331       556,394     1,174,548     1,121,406
  Depreciation and
   amortization        23,186        22,411        45,329        44,932
                       ------        ------        ------        ------
                      621,517       578,805     1,219,877     1,166,338


  Income before
   income taxes       200,793       166,050       362,908       310,718
  Income taxes         76,326        62,440       137,832       117,949
                       ------        ------       -------       -------
  Net income         $124,467      $103,610      $225,076      $192,769
                     ========      ========      ========      ========


  Basic net income
   per common
   share                 $.79          $.65         $1.42         $1.21
  Diluted net
   income per
   common share          $.78          $.65         $1.42         $1.21


  Weighted average
   common shares
   outstanding        158,260       159,513       158,514       159,479
  Dilutive effect
   of stock
   options and
     non-vested
      restricted
      stock awards        402           253           403           225
                          ---           ---           ---           ---
  Weighted average
   common shares
   outstanding -
     assuming
      dilution        158,662       159,766       158,917       159,704
                      =======       =======       =======       =======





                         GENUINE PARTS COMPANY and SUBSIDIARIES
                      SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS

                  Three Months Ended June 30,      Six Months Ended June 30,
                         2010           2009           2010           2009
                         ----           ----           ----           ----
                                         (Unaudited)
                                       (in thousands)

  Net sales:
     Automotive    $1,459,672     $1,360,037     $2,750,073     $2,579,165
     Industrial       882,233        701,228      1,685,535      1,437,729
     Office
      Products        401,960        406,134        812,471        818,882
     Electrical/
      Electronic
      Materials       106,579         80,609        206,877        166,742
     Other (1)         (3,258)       (12,963)        (5,655)       (22,977)
                       ------        -------         ------        -------
        Total net
         sales     $2,847,186     $2,535,045     $5,449,301     $4,979,541
                   ==========     ==========     ==========     ==========

  Operating
   profit:
     Automotive      $126,022       $117,777       $214,927       $205,184
     Industrial        60,118         31,443        108,964         65,618
     Office
      Products         30,454         33,661         67,013         72,389
     Electrical/
      Electronic
      Materials         6,948          5,090         13,763         10,758
                        -----          -----         ------         ------
     Total
      operating
      profit          223,542        187,971        404,667        353,949
     Interest
      expense,
      net              (6,693)        (6,752)       (13,426)       (13,848)
     Other, net       (16,056)       (15,169)       (28,333)       (29,383)
                      -------        -------        -------        -------
        Income
         before
         income
         taxes       $200,793       $166,050       $362,908       $310,718
                     ========       ========       ========       ========

  Capital
   expenditures       $18,062        $22,858        $27,912        $36,955
                      =======        =======        =======        =======

   Depreciation
   and
   amortization       $23,186        $22,411        $45,329        $44,932
                      =======        =======        =======        =======


    (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,
                                                      2010             2009
                                                      ----             ----
                                                       (Unaudited)
                                                     (in thousands)
  ASSETS
  CURRENT ASSETS
  Cash and cash equivalents                       $411,872         $238,589
  Trade accounts receivable, net                 1,353,918        1,239,318
  Merchandise inventories, net                   2,164,548        2,215,709
  Prepaid expenses and other current assets        280,159          222,399
                                                   -------          -------

     TOTAL CURRENT ASSETS                        4,210,497        3,916,015

  Goodwill and other intangible assets, less
   accumulated amortization                        201,326          166,683
  Deferred tax asset                               164,657          160,581
  Other assets                                     173,730          124,358
  Net property, plant and equipment                469,150          487,307
                                                   -------          -------

  TOTAL ASSETS                                  $5,219,360       $4,854,944
                                                ==========       ==========

  LIABILITIES AND EQUITY
  CURRENT LIABILITIES
  Trade accounts payable                        $1,286,681       $1,063,260
  Income taxes payable                              35,494           44,687
  Dividends payable                                 64,687           63,813
  Other current liabilities                        188,511          240,807
                                                   -------          -------

     TOTAL CURRENT LIABILITIES                   1,575,373        1,412,567

  Long-term debt                                   500,000          500,000
  Retirement and other post-retirement benefit
   liabilities                                     296,823          305,525
  Other long-term liabilities                      173,957          121,168

  Common stock                                     157,613          159,531
  Retained earnings and other                    2,815,427        2,715,304
  Accumulated other comprehensive loss            (308,540)        (366,973)
                                                  --------         --------
     TOTAL PARENT EQUITY                         2,664,500        2,507,862

  Noncontrolling interests in subsidiaries           8,707            7,822
                                                     -----            -----
     TOTAL EQUITY                                2,673,207        2,515,684
                                                 ---------        ---------

  TOTAL LIABILITIES AND EQUITY                  $5,219,360       $4,854,944
                                                ==========       ==========





                           GENUINE PARTS COMPANY and SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -----------------------------------------------

                                                     Six Months Ended June
                                                              30,
                                                          2010        2009
                                                          ----        ----
                                                          (Unaudited)
                                                        (in thousands)

  OPERATING ACTIVITIES:
     Net income                                       $225,076    $192,769
     Adjustments to reconcile net income to net cash
      provided by operating activities:
     Depreciation and amortization                      45,329      44,932
     Share-based compensation                            3,133       4,739
     Excess tax benefits from share-based
      compensation                                       1,085           -
     Other                                                (401)      1,657
     Changes in operating assets and liabilities        80,400     244,734
                                                        ------     -------


  NET CASH PROVIDED BY OPERATING ACTIVITIES            354,622     488,831

  INVESTING ACTIVITIES:
     Purchases of property, plant and equipment        (27,912)    (36,955)
     Acquisitions and other                            (67,693)   (107,405)
                                                       -------    --------

  NET CASH USED IN INVESTING ACTIVITIES                (95,605)   (144,360)

  FINANCING ACTIVITIES:
     Stock options exercised                             5,384       2,160
     Excess tax benefits from share-based
      compensation                                      (1,085)          -
     Dividends paid                                   (128,627)   (125,926)
     Changes in cash overdraft position                      -     (52,000)
     Purchase of stock                                 (63,137)       (136)
                                                       -------        ----

  NET CASH USED IN FINANCING ACTIVITIES               (187,465)   (175,902)

  EFFECT OF EXCHANGE RATE CHANGES ON CASH                3,517       2,243
                                                         -----       -----

  NET INCREASE IN CASH AND CASH EQUIVALENTS             75,069     170,812

  CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     336,803      67,777
                                                       -------      ------

  CASH AND CASH EQUIVALENTS AT END OF PERIOD          $411,872    $238,589
                                                      ========    ========

First Call Analyst:
FCMN Contact:

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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


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