ATLANTA, July 18, 2013 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) reports sales and earnings for the second
quarter and six months ended June 30,
2013.
(Logo:
http://photos.prnewswire.com/prnh/20081002/CLTH108LOGO)
Thomas C. Gallagher, Chairman and
Chief Executive Officer, announced today that record sales totaling
$3.68 billion were up 10% compared to
the second quarter of 2012. Net income for the quarter was
$216.4 million, an increase of 28%
from $168.6 million recorded in the
same period of the previous year. Earnings per share on a
diluted basis were $1.39, up 29%
compared to $1.08 for the second
quarter last year.
On April 1, 2013, the Company
acquired the remaining 70% interest in GPC Asia Pacific (formerly
Exego). The Company's 30% investment, originated on January 1, 2012, was remeasured and, net of
certain one-time purchase accounting costs, amounted to a positive
pre-tax adjustment of approximately $36
million recorded in the second quarter. This
adjustment, combined with a lower tax rate for the remeasurement,
favorably impacted diluted earnings per share by $0.22.
For the six months ended June 30,
2013, sales totaled $6.87
billion, up 5% compared to the same period in 2012.
Net income for the six months was $360.7
million, an increase of 15% from $314.9 million recorded in the previous
year. Earnings per share on a diluted basis were $2.31, up 15% compared to $2.01 for the same period last year.
In review of the quarter, Mr. Gallagher commented, "We are
pleased to report record levels of sales and earnings for the
second quarter. The progress in our operations was driven by
the improved results in our automotive business. Sales for
the Automotive Group were up 22%, consisting of core North American
growth of approximately 6% and the positive impact of the
Australasian acquisition. We were encouraged by the
sequential improvement in our core sales growth in the
quarter. Likewise, GPC Asia Pacific performed as planned for
the quarter and we continue to be excited about the growth
opportunities we see in the Australasian aftermarket."
Mr. Gallagher added, "Our non-automotive businesses remain our
most challenging, as their end markets were relatively weak
throughout the second quarter. Sales for Motion Industries,
our Industrial Group, were down approximately 1%, and EIS, our
Electrical/Electronic Group, showed sales down 4%.
S.P. Richards, our Office Products
Group, had a 3% decrease in sales. We continue to expect a
stronger second half of the year for these businesses, but likely
at a slower rate of growth than previously anticipated."
Mr. Gallagher concluded, "As always, we remain committed to our
core objectives of growing sales and earnings, showing continued
operating margin improvement, generating solid cash flows and
maintaining a strong balance sheet. Our cash flows are
proving very strong again this year and the Company is in excellent
financial condition. We look forward to reporting our
continued progress in the quarters ahead."
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
877-331-5106, conference ID 10933272. A replay of the call
will also be available on the Company's website or at 855-859-2056,
conference ID 10933272, after the completion of the conference call
until 12:00 a.m. Eastern time on
August 2, 2013.
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,
slowing demand for the Company's products, changes in general
economic conditions, including, unemployment, inflation or
deflation, high energy costs, uncertain credit markets and other
macro-economic conditions, the ability to maintain favorable vendor
arrangements and relationships, disruptions in our vendors'
operations, competitive product, service and pricing pressures, the
Company's ability to successfully implement its business
initiatives in each of its four business segments, the Company's
ability to successfully integrate its acquired businesses, the
uncertainties and costs of litigation, as well as other risks and
uncertainties discussed in the Company's Annual Report on Form 10-K
for 2012 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 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,
|
|
2013
|
2012
|
2013
|
2012
|
|
(Unaudited)
|
|
|
|
|
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
Net sales
|
$3,675,997
|
$3,337,836
|
$6,874,799
|
$6,519,124
|
Cost of goods
sold
|
2,570,889
|
2,365,550
|
4,847,943
|
4,627,727
|
Gross
profit
|
1,105,108
|
972,286
|
2,026,856
|
1,891,397
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
administrative & other expenses
|
753,527
|
680,246
|
1,427,139
|
1,348,204
|
Depreciation and
amortization
|
36,853
|
24,735
|
62,852
|
47,720
|
|
790,380
|
704,981
|
1,489,991
|
1,395,924
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
314,728
|
267,305
|
536,865
|
495,473
|
Income
taxes
|
98,371
|
98,687
|
176,119
|
180,600
|
Net income
|
$
216,357
|
$
168,618
|
$
360,746
|
$
314,873
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
common share
|
$1.40
|
$1.08
|
$2.33
|
$2.02
|
Diluted net income
per common share
|
$1.39
|
$1.08
|
$2.31
|
$2.01
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
155,050
|
155,753
|
154,971
|
155,781
|
Dilutive effect of
stock options and
|
|
|
|
|
non-vested restricted stock awards
|
1,094
|
1,019
|
1,075
|
1,073
|
Weighted average
common shares outstanding –
|
|
|
|
|
assuming
dilution
|
156,144
|
156,772
|
156,046
|
156,854
|
|
|
|
|
|
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
SEGMENT
INFORMATION AND FINANCIAL HIGHLIGHTS
|
|
|
Three Months Ended
June 30,
|
Six Months Ended June
30,
|
|
2013
|
2012
|
2013
|
2012
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
|
|
Net sales:
|
|
|
|
|
Automotive
|
$2,011,802
|
$1,644,902
|
$3,556,339
|
$3,138,401
|
Industrial
|
1,132,032
|
1,138,724
|
2,234,112
|
2,259,947
|
Office
Products
|
402,272
|
413,340
|
822,400
|
839,493
|
Electrical/Electronic
Materials
|
142,970
|
149,440
|
282,155
|
296,556
|
Other (1)
|
(13,079)
|
(8,570)
|
(20,207)
|
(15,273)
|
Total net sales
|
$3,675,997
|
$3,337,836
|
$6,874,799
|
$6,519,124
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
Automotive
|
$ 186,382
|
$ 152,978
|
$ 307,425
|
$ 267,539
|
Industrial
|
88,891
|
95,053
|
167,786
|
179,381
|
Office
Products
|
29,768
|
30,611
|
62,960
|
68,126
|
Electrical/Electronic
Materials
|
12,221
|
12,933
|
22,672
|
24,899
|
Total operating
profit
|
317,262
|
291,575
|
560,843
|
539,945
|
Interest expense,
net
|
(7,852)
|
(5,019)
|
(11,205)
|
(9,734)
|
Intangible
amortization
|
(8,986)
|
(3,641)
|
(12,761)
|
(5,752)
|
Other, net
|
14,304
|
(15,610)
|
(12)
|
(28,986)
|
Income before income taxes
|
$
314,728
|
$
267,305
|
$
536,865
|
$
495,473
|
|
|
|
|
|
Capital
expenditures
|
$
37,883
|
$
34,478
|
$
50,807
|
$
51,368
|
|
|
|
|
|
Depreciation and
amortization
|
$
36,853
|
$
24,735
|
$
62,852
|
$
47,720
|
|
|
|
|
|
|
(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,
|
|
2013
|
2012
|
|
(Unaudited)
|
|
(in
thousands)
|
ASSETS
|
|
|
CURRENT
ASSETS
|
|
|
Cash and cash
equivalents
|
$
196,770
|
$
171,577
|
Trade accounts
receivable, net
|
1,759,176
|
1,605,696
|
Merchandise
inventories, net
|
2,799,150
|
2,511,706
|
Prepaid expenses and
other current assets
|
352,645
|
312,510
|
|
|
|
TOTAL CURRENT
ASSETS
|
5,107,741
|
4,601,489
|
|
|
|
Goodwill and other
intangible assets, less accumulated amortization
|
1,270,447
|
498,288
|
Deferred tax
asset
|
179,850
|
250,963
|
Other
assets
|
459,320
|
590,359
|
Net property, plant
and equipment
|
642,955
|
567,013
|
|
|
|
TOTAL
ASSETS
|
$7,660,313
|
$6,508,112
|
|
LIABILITIES AND
EQUITY
|
|
|
CURRENT
LIABILITIES
|
|
|
Trade accounts
payable
|
$2,064,878
|
$1,599,695
|
Current portion of
debt
|
650,102
|
-
|
Income taxes
payable
|
10,865
|
18,603
|
Dividends
payable
|
83,407
|
77,081
|
Other current
liabilities
|
513,695
|
483,352
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
3,322,947
|
2,178,731
|
|
|
|
Long-term
debt
|
250,000
|
500,000
|
Retirement and other
post-retirement benefit liabilities
|
494,572
|
485,317
|
Other long-term
liabilities
|
506,655
|
451,470
|
|
|
|
Common
stock
|
154,859
|
155,101
|
Retained earnings and
other
|
3,521,735
|
3,185,924
|
Accumulated other
comprehensive loss
|
(600,223)
|
(458,444)
|
TOTAL PARENT
EQUITY
|
3,076,371
|
2,882,581
|
|
|
|
Noncontrolling
interests in subsidiaries
|
9,768
|
10,013
|
TOTAL
EQUITY
|
3,086,139
|
2,892,594
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
$7,660,313
|
$6,508,112
|
|
|
|
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Six Months Ended June
30,
|
|
2013
|
2012
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
Net income
|
$360,746
|
$314,873
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
62,852
|
47,720
|
Share-based
compensation
|
5,455
|
5,099
|
Excess tax benefits
from share-based compensation
|
(9,410)
|
(7,174)
|
Other
|
(51,051)
|
(703)
|
Changes in operating
assets and liabilities
|
98,486
|
61,498
|
|
|
|
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
467,078
|
421,313
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
Purchases of
property, plant and equipment
|
(50,807)
|
(51,368)
|
Acquisitions and
other investing activities
|
(596,105)
|
(525,901)
|
|
|
|
NET CASH USED IN
INVESTING ACTIVITIES
|
(646,912)
|
(577,269)
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
Proceeds from
debt
|
1,269,550
|
550,000
|
Payments on
debt
|
(1,098,998)
|
(550,000)
|
Share-based awards
exercised, net of taxes paid
|
(10,948)
|
(2,903)
|
Excess tax benefits
from share-based compensation
|
9,410
|
7,174
|
Dividends
paid
|
(159,908)
|
(147,187)
|
Purchase of
stock
|
(26,318)
|
(55,015)
|
|
|
|
NET CASH USED IN
FINANCING ACTIVITIES
|
(17,212)
|
(197,931)
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
(9,279)
|
410
|
|
|
|
NET DECREASE IN CASH
AND CASH EQUIVALENTS
|
(206,325)
|
(353,477)
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
403,095
|
525,054
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$196,770
|
$171,577
|
|
|
|
SOURCE Genuine Parts Company