ATLANTA, Oct. 20, 2014 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) reports sales and earnings for the third
quarter and nine months ended September
30, 2014.
Thomas C. Gallagher, Chairman and
Chief Executive Officer, announced today that record sales totaling
$4.0 billion were up 8% compared to
the third quarter of 2013. Net income for the quarter was
$190.5 million compared to
$173.7 million recorded in the same
period of the previous year. Earnings per share on a diluted
basis were $1.24 compared to
$1.12 for the third quarter last
year, up 11%.
For the nine months ended September 30,
2014, sales totaled $11.5
billion, up 9% compared to the same period in 2013.
Net income for the nine months was $545.7
million compared to $534.5
million recorded in the previous year. Earnings per
share on a diluted basis were $3.53
compared to $3.43 for the same period
last year.
As previously disclosed, in association with the April 1, 2013 acquisition of GPC Asia Pacific,
the Company's initial investment was remeasured and, net of certain
one-time purchase accounting costs, amounted to a pre-tax income
adjustment of approximately $36
million, or $0.22 diluted
earnings per share, in the second quarter of 2013.
Additionally, a pre-tax expense adjustment of $3 million, or $0.01 diluted earnings per share, was recorded in
the third quarter of 2013.
Before the one-time adjustment in 2013, net income for the nine
months of $545.7 million was up 9%
compared to the previous year. Earnings per share on a
diluted basis of $3.53 were up 10%
compared to the same period in 2013 excluding the adjustment.
In review of the third quarter, Mr. Gallagher commented, "We are
pleased to report another quarter of record sales as well as a
solid 10% comparative earnings increase. Our 8% total sales
increase includes approximately 5.4% underlying sales growth and a
3.3% contribution from acquisitions offset by a currency headwind
of approximately 0.5%. Our overall sales growth was also
supported by increases in each of our four business segments, with
sales for the Automotive Group up 4%, which essentially represents
our core automotive growth for the quarter. Sales at Motion
Industries, our Industrial Group, were up 10% including 8%
underlying growth and 3% from acquisitions offset by a currency
headwind of approximately 1%. Sales at EIS, our
Electrical/Electronic Group, increased by 35% due to
acquisitions. Sales for S. P.
Richards, our Office Products Group, were up 15% and include
8% underlying growth and 7% from acquisitions."
Mr. Gallagher concluded, "In the third quarter, we achieved
sales and earnings growth, produced operating margin improvement,
generated solid cash flows and maintained a strong balance
sheet. These are important and ongoing core objectives for us
and the Company is well positioned to show continued improvement in
these areas in the periods 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 12374803. A replay of the call
will also be available on the Company's website or at 855-859-2056,
conference ID 12374803, after the completion of the conference call
until 12:00 a.m. Eastern time on
November 3, 2014.
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 2013 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
Sept. 30,
|
Nine Months Ended
Sept. 30,
|
|
2014
|
2013
|
2014
|
2013
|
|
(Unaudited)
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
Net sales
|
$3,985,909
|
$3,685,243
|
$11,519,193
|
$10,560,042
|
Cost of goods
sold
|
2,802,487
|
2,584,320
|
8,071,973
|
7,432,263
|
Gross
profit
|
1,183,422
|
1,100,923
|
3,447,220
|
3,127,779
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
administrative & other expenses
|
850,156
|
793,957
|
2,486,162
|
2,221,096
|
Depreciation and
amortization
|
34,983
|
35,220
|
108,623
|
98,072
|
|
885,139
|
829,177
|
2,594,785
|
2,319,168
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
298,283
|
271,746
|
852,435
|
808,611
|
Income
taxes
|
107,767
|
98,000
|
306,708
|
274,119
|
Net income
|
$
190,516
|
$
173,746
|
$
545,727
|
$
534,492
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
common share
|
$1.25
|
$1.12
|
$3.56
|
$3.45
|
Diluted net income
per common share
|
$1.24
|
$1.12
|
$3.53
|
$3.43
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
153,018
|
154,567
|
153,401
|
154,835
|
Dilutive effect of
stock options and
|
|
|
|
|
non-vested restricted stock awards
|
1,080
|
1,096
|
1,062
|
1,082
|
Weighted average
common shares outstanding –
|
|
|
|
|
assuming
dilution
|
154,098
|
155,663
|
154,463
|
155,917
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
SEGMENT
INFORMATION AND FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
Three Months Ended
Sept. 30,
|
Nine Months Ended
Sept. 30,
|
|
2014
|
2013
|
2014
|
2013
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
|
|
Net sales:
|
|
|
|
|
Automotive
|
$2,099,518
|
$2,016,076
|
$ 6,108,429
|
$ 5,572,415
|
Industrial
|
1,220,539
|
1,110,309
|
3,573,048
|
3,344,421
|
Office
Products
|
496,572
|
430,457
|
1,333,455
|
1,252,857
|
Electrical/Electronic
Materials
|
193,321
|
142,818
|
561,686
|
424,973
|
Other (1)
|
(24,041)
|
(14,417)
|
(57,425)
|
(34,624)
|
Total net
sales
|
$3,985,909
|
$3,685,243
|
$11,519,193
|
$10,560,042
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
Automotive
|
$ 193,258
|
$ 180,166
|
$ 550,051
|
$ 487,591
|
Industrial
|
95,262
|
79,596
|
273,740
|
247,382
|
Office
Products
|
33,318
|
28,094
|
98,447
|
91,054
|
Electrical/Electronic
Materials
|
17,766
|
12,625
|
49,758
|
35,297
|
Total operating
profit
|
339,604
|
300,481
|
971,996
|
861,324
|
Interest expense,
net
|
(6,283)
|
(7,031)
|
(18,713)
|
(18,236)
|
Intangible
amortization
|
(8,947)
|
(7,726)
|
(26,321)
|
(20,487)
|
Other, net
|
(26,091)
|
(13,978)
|
(74,527)
|
(13,990)
|
Income before income
taxes
|
$
298,283
|
$
271,746
|
$
852,435
|
$
808,611
|
|
|
|
|
|
Capital
expenditures
|
$
33,862
|
$
33,338
|
$
73,785
|
$
84,146
|
|
|
|
|
|
Depreciation and
amortization
|
$
34,983
|
$
35,220
|
$
108,623
|
$
98,072
|
|
|
|
|
|
(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
|
|
|
|
|
|
|
Sept. 30,
|
Sept. 30,
|
|
|
2014
|
2013
|
|
|
(Unaudited)
|
|
|
(in
thousands)
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$ 135,537
|
$ 320,870
|
|
Trade accounts
receivable, net
|
1,976,056
|
1,759,517
|
|
Merchandise
inventories, net
|
3,014,102
|
2,832,108
|
|
Prepaid expenses and
other current assets
|
459,682
|
382,980
|
|
|
|
|
|
TOTAL CURRENT
ASSETS
|
5,585,377
|
5,295,475
|
|
|
|
|
|
Goodwill and other
intangible assets, less accumulated amortization
|
1,444,356
|
1,280,182
|
|
Deferred tax
assets
|
90,539
|
257,571
|
|
Other
assets
|
558,932
|
462,172
|
|
Net property, plant
and equipment
|
662,253
|
648,503
|
|
|
|
|
|
TOTAL
ASSETS
|
$8,341,457
|
$7,943,903
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Trade accounts
payable
|
$2,549,193
|
$2,213,190
|
|
Current portion of
debt
|
335,394
|
583,896
|
|
Income taxes
payable
|
24,481
|
19,176
|
|
Dividends
payable
|
87,906
|
82,982
|
|
Other current
liabilities
|
638,808
|
554,850
|
|
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
3,635,782
|
3,454,094
|
|
|
|
|
|
Long-term
debt
|
500,000
|
250,000
|
|
Retirement and other
post-retirement benefit liabilities
|
135,407
|
481,333
|
|
Deferred tax
liabilities
|
79,690
|
90,584
|
|
Other long-term
liabilities
|
482,430
|
514,717
|
|
|
|
|
|
Common
stock
|
152,857
|
154,357
|
|
Retained earnings and
other
|
3,791,172
|
3,570,356
|
|
Accumulated other
comprehensive loss
|
(446,854)
|
(581,652)
|
|
TOTAL PARENT
EQUITY
|
3,497,175
|
3,143,061
|
|
|
|
|
|
Noncontrolling
interests in subsidiaries
|
10,973
|
10,114
|
|
|
|
|
|
TOTAL
EQUITY
|
3,508,148
|
3,153,175
|
|
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
$8,341,457
|
$7,943,903
|
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
Nine Months Ended
Sept. 30,
|
|
2014
|
2013
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
Net income
|
$545,727
|
$534,492
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
108,623
|
98,072
|
Share-based
compensation
|
12,641
|
8,932
|
Excess tax benefits
from share-based compensation
|
(7,269)
|
(12,020)
|
Other
|
1,267
|
(50,608)
|
Changes in operating
assets and liabilities
|
(71,666)
|
258,617
|
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
589,323
|
837,485
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
Purchases of property,
plant and equipment
|
(73,785)
|
(84,146)
|
Acquisitions and other
investing activities
|
(275,295)
|
(614,109)
|
|
|
|
NET CASH USED IN
INVESTING ACTIVITIES
|
(349,080)
|
(698,255)
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
Proceeds from
debt
|
2,032,550
|
2,094,550
|
Payments on
debt
|
(1,974,581)
|
(1,990,204)
|
Share-based awards
exercised, net of taxes paid
|
(8,266)
|
(14,313)
|
Excess tax benefits
from share-based compensation
|
7,269
|
12,020
|
Dividends
paid
|
(259,365)
|
(243,262)
|
Purchase of
stock
|
(95,546)
|
(71,738)
|
|
|
|
NET CASH USED IN
FINANCING ACTIVITIES
|
(297,939)
|
(212,947)
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
(3,660)
|
(8,508)
|
|
|
|
NET DECREASE IN CASH
AND CASH EQUIVALENTS
|
(61,356)
|
(82,225)
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
196,893
|
403,095
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$135,537
|
$320,870
|
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SOURCE Genuine Parts Company