Genuine Parts Company Reports Fourth Quarter Results and Record Sales and Earnings per Share for the Year Ended December 31, 2010
PR Newswire
ATLANTA

ATLANTA, Feb. 22, 2011 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) reports fourth quarter results and record sales and earnings per share for the year ended December 31, 2010.

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Tom Gallagher, Chairman, President and Chief Executive Officer, announced today that sales in 2010 were $11.2 billion, up 11% compared to 2009. Net income for the year was $476 million, an increase of 19% compared to $400 million in 2009. Earnings per share on a diluted basis were $3.00, up 20% compared to $2.50 in 2009.

Mr. Gallagher stated, "We are pleased to report record sales and earnings per share in 2010.   The improving market conditions in the industries that we serve, which we began to see in the latter part of 2009, continued throughout the year and they further supported our internal growth initiatives, resulting in the strong performance for the year."

Mr. Gallagher added, "Our 11% sales increase for the Company was driven by positive sales growth in all four of our businesses.  The Automotive Group reported a 7% sales increase for the year and we were encouraged to see our automotive sales momentum strengthen as the year progressed.  Motion Industries, our Industrial Group, generated a 22% sales increase for the year and they benefited from the combination of good internal growth initiatives and the strong rebound that occurred across the manufacturing sector of the economy this past year.  Likewise, EIS, our Electrical Group, had a fine year as well, with sales up 30%.  Finally, revenues at S.P. Richards, our Office Products Group, were up just slightly over 2009."

Fourth Quarter 2010

Sales increased 14% to $2.81 billion in the fourth quarter ended December 31, 2010, compared to $2.47 billion for the same period in 2009.  Diluted earnings per share in the fourth quarter were 75 cents, up 21% compared to 62 cents per share for the fourth quarter of 2009.

In reviewing the quarter, Mr. Gallagher commented, "We are encouraged by the strength in sales across all of our business segments in the fourth quarter.  Our Automotive sales were up 9%, our Industrial Group sales were up 24%, our Electrical Group sales were up 40% and our Office Products Group sales were up 3%."

Mr. Gallagher concluded, "We enter 2011 with a degree of optimism in each of our four businesses, and with a continued corporate-wide commitment to sustaining good revenue growth, further improving operating margins, generating solid cash flows and maintaining a strong balance sheet."

Conference Call

Genuine Parts Company will hold a conference call today at 11:00 a.m. EST to discuss the results of the quarter, the year 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 41289008.  A replay will also be available on the Company's website or at 800-642-1687, conference ID 41289008, two hours after the completion of the call until 12:00 a.m. EST on March 8, 2011.

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 with which we do business, 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 Dec. 31,

Year Ended Dec. 31,


2010

2009

2010

2009


(Unaudited)









(in thousands, except per share data)






Net sales

$2,807,728

$2,471,214

$11,207,589

$10,057,512

Cost of goods sold

1,990,600

1,703,754

7,954,645

7,047,750

Gross profit

817,128

767,460

3,252,944

3,009,762






Operating expenses:





Selling, administrative & other expenses

608,832

581,802

2,401,829

2,275,186

Depreciation and amortization

21,910

22,917

89,332

90,411


630,742

604,719

2,491,161

2,365,597






Income before income taxes

186,386

162,741

761,783

644,165

Income taxes

67,736

63,574

286,272

244,590






Net income

$118,650

$ 99,167

$475,511

$399,575






Basic net income per common share

$ .75

$ .62

$3.01

$2.51






Diluted net income per common share

$ .75

$ .62

$3.00

$2.50






Weighted average common shares outstanding

157,543

159,144

158,032

159,410






Dilutive effect of stock options and





  non-vested restricted stock awards

775

376

429

297






Weighted average common shares outstanding –





  Assuming dilution

158,318

159,520

158,461

159,707




GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS



Three Months Ended Dec. 31,

Year Ended Dec. 31,


2010

2009

2010

2009


(Unaudited)









(in thousands)






Net sales:





  Automotive

$1,376,734

$1,264,646

$5,608,101

$5,225,389

  Industrial

915,166

736,582

3,521,863

2,885,782

  Office Products

394,979

383,849

1,641,963

1,639,018

  Electrical/Electronic Materials

125,603

89,702

449,770

345,808

  Other (1)

(4,754)

(3,565)

(14,108)

(38,485)

     Total net sales

$2,807,728

$2,471,214

$11,207,589

$10,057,512






Operating profit:





  Automotive

$82,123

$75,026

$421,109

$387,945

  Industrial

73,796

60,240

255,616

162,353

  Office Products

38,076

27,023

131,746

126,104

  Electrical/Electronic Materials

8,754

7,694

30,910

25,254

  Total operating profit

202,749

169,983

839,381

701,656

  Interest expense, net

(6,610)

(6,602)

(26,598)

(27,112)

  Other, net

(9,753)

(640)

(51,000)

(30,379)

     Income before income taxes

$186,386

$162,741

$761,783

$644,165






Capital expenditures

$26,448

$20,085

$85,379

$69,445






Depreciation and amortization

$21,910

$22,917

$89,332

$90,411






(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,


2010

2009


(in thousands)

ASSETS



CURRENT ASSETS



Cash and cash equivalents

$   529,968

$   336,803

Trade accounts receivable, net

1,364,406

1,187,075

Merchandise inventories, net

2,224,717

2,214,076

Prepaid expenses and other current assets

295,796

294,874




  TOTAL CURRENT ASSETS

4,414,887

4,032,828




Goodwill and other intangible assets, less accumulated amortization

209,548

171,532

Deferred tax asset

157,392

167,722

Other assets

199,087

147,583

Net property, plant and equipment

484,130

485,024




TOTAL ASSETS

$5,465,044

$5,004,689


LIABILITIES AND EQUITY



CURRENT LIABILITIES



Trade accounts payable

$1,374,930

$1,094,347

Current portion of debt

250,000

-

Income taxes payable

23,145

42,988

Dividends payable

64,600

63,586

Other current liabilities

259,139

207,363




  TOTAL CURRENT LIABILITIES

1,971,814

1,408,284







Long-term debt

250,000

500,000

Retirement and other post-retirement benefit liabilities

258,807

300,197

Other long-term liabilities

181,709

166,836




Common stock

157,636

158,918

Retained earnings and other

2,934,535

2,772,309

Accumulated other comprehensive loss

(298,352)

(309,897)




  TOTAL  PARENT EQUITY

2,793,819

2,621,330




Noncontrolling interests in subsidiaries

8,895

8,042




  TOTAL  EQUITY

2,802,714

2,629,372




TOTAL LIABILITIES AND EQUITY

$5,465,044

$5,004,689




GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



Year Ended Dec. 31,


2010

2009


(in thousands)




OPERATING ACTIVITIES:



  Net income

$475,511

$399,575

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



  Depreciation and amortization

89,332

90,411

  Share-based compensation

7,016

8,578

  Excess tax (benefits) expense from share-based compensation

(3,251)

684

  Other

10,309

24,142

  Changes in operating assets and liabilities

99,746

321,908




NET CASH PROVIDED BY OPERATING ACTIVITIES

678,663

845,298




INVESTING ACTIVITIES:



  Purchases of property, plant and equipment

(85,379)

(69,445)

  Acquisitions and other

(86,969)

(122,161)

  Purchase of properties under construction  and lease agreement

-

(72,814)




NET CASH USED IN INVESTING ACTIVITIES

(172,348)

(264,420)




FINANCING ACTIVITIES:



  Stock options exercised

9,085

1,878

  Excess tax benefits (expense) from share-based compensation

3,251

(684)

  Dividends paid

(257,898)

(253,558)

  Changes in cash overdraft position

-

(52,000)

  Purchase of stock

(75,007)

(26,019)




NET CASH USED IN FINANCING ACTIVITIES

(320,569)

(330,383)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

7,419

18,531




NET  INCREASE IN CASH AND CASH EQUIVALENTS

193,165

269,026




CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

336,803

67,777




CASH AND CASH EQUIVALENTS AT END OF YEAR

$529,968

$336,803




SOURCE Genuine Parts Company


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