ATLANTA, Feb. 16, 2016 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) announced today fourth quarter and full year
results as well as record earnings per share and cash flows for the
year ended December 31, 2015.
Sales in the fourth quarter ended December 31, 2015 were $3.68 billion, and this compares to sales of
$3.82 billion for the same period in
2014. Net income in the fourth quarter was $161.3 million compared to $165.6 million recorded for the same period in
the previous year. Earnings per share on a diluted basis were
$1.07, equal to the earnings per
share for the fourth quarter in 2014. Currency negatively
impacted revenue growth by approximately 3% and earnings per share
by $0.03 in the fourth quarter.
Tom Gallagher, Chairman and Chief
Executive Officer, commented, "As we entered the fourth quarter we
had anticipated a challenging sales environment. That said,
we are pleased with the positive underlying sales growth in our
automotive business as well as the solid industry fundamentals
supporting our growth initiatives. Our non-automotive
businesses, however, and in particular the industrial and
electrical distribution segments, were further challenged by the
difficult macro-economic environment. Despite the mixed
results, our ongoing focus on key sales and cost initiatives across
our businesses drove overall margin expansion for the quarter."
The Company's 4% sales decline in the fourth quarter included an
underlying sales decrease of 2% and a currency headwind of 3%,
while acquisitions contributed 1% to sales. Sales for the
automotive group were down 2%, consisting of core automotive growth
of 2.5% and a slight benefit from acquisitions, less a currency
headwind of approximately 5%. Sales for the industrial
business were down 8%, representing an 8% underlying sales decrease
and a 1% currency headwind, offset by a 1% positive contribution
from acquisitions. At EIS, sales were approximately equal
with the prior year period and include a 2.5% decrease in core
sales and a 1.5% negative impact of copper pricing, offset by 4%
growth from acquisitions. Sales for the office products
business were down 2%, and this reflects the net impact of a 3.5%
decline in underlying sales, a 0.5% currency headwind and a 2%
benefit from acquisitions.
Sales for the year ended December 31,
2015 were $15.28 billion
compared to $15.34 billion in
2014. Net income for the year was $705.7 million, a 1% decrease compared to
$711.3 million in 2014.
Earnings per share on a diluted basis were $4.63, a new record and up slightly compared to
$4.61 in 2014. Currency negatively
impacted revenue growth by approximately 3% and earnings per share
by $0.14 for the full year.
Mr. Gallagher added, "When we adjust our 2015 results for the
impact of currency translation, the Company produced increased
sales and net income. In addition, the positive impact of our
sales initiatives and cost control measures produced an expanded
operating margin and, combined with our reduced investment in net
working capital, generated record levels of cash from operations
and free cash flows. These are meaningful accomplishments and
our progress in 2015 supports the ongoing investment in growth
opportunities such as acquisitions and the return of capital to
shareholders via a strong dividend and share repurchases."
Mr. Gallagher concluded, "We enter 2016 with a cautious outlook
on the overall economy. However, we remain committed to
growing sales and earnings, showing continued operating margin
improvement, generating solid cash flows and maintaining a strong
balance sheet. We have strategic plans in place to support
additional improvement in each of these areas in the year
ahead."
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 "Investors", or by dialing 888-312-9865,
conference ID 273389. A replay will also be available on the
Company's website or at 877-870-5176, conference ID 273389, two
hours after the completion of the call until 12:00 a.m. Eastern time on March 1, 2016.
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 2014 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 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,
|
|
2015
|
2014
|
2015
|
2014
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
Net sales
|
$3,681,790
|
$3,822,454
|
$15,280,044
|
$15,341,647
|
Cost of goods
sold
|
2,586,312
|
2,675,913
|
10,724,192
|
10,747,886
|
Gross
profit
|
1,095,478
|
1,146,541
|
4,555,852
|
4,593,761
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
administrative & other expenses
|
797,959
|
841,546
|
3,290,496
|
3,327,709
|
Depreciation and
amortization
|
35,911
|
39,691
|
141,675
|
148,313
|
|
833,870
|
881,237
|
3,432,171
|
3,476,022
|
|
|
|
|
|
Income before income
taxes
|
261,608
|
265,304
|
1,123,681
|
1,117,739
|
Income
taxes
|
100,335
|
99,745
|
418,009
|
406,453
|
|
|
|
|
|
Net income
|
$
161,273
|
$
165,559
|
$
705,672
|
$
711,286
|
|
|
|
|
|
Basic net income per
common share
|
$1.07
|
$1.08
|
$4.65
|
$4.64
|
|
|
|
|
|
Diluted net income
per common share
|
$1.07
|
$1.07
|
$4.63
|
$4.61
|
|
|
|
|
|
Weighted average
common shares outstanding
|
150,552
|
152,996
|
151,667
|
153,299
|
|
|
|
|
|
Dilutive effect of
stock options and
|
|
|
|
|
non-vested restricted stock awards
|
803
|
1,088
|
829
|
1,076
|
|
|
|
|
|
Weighted average
common shares outstanding –
|
|
|
|
|
assuming
dilution
|
151,355
|
154,084
|
152,496
|
154,375
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
SEGMENT
INFORMATION AND FINANCIAL HIGHLIGHTS
|
|
|
Three Months Ended
Dec. 31,
|
Year Ended Dec.
31,
|
|
2015
|
2014
|
2015
|
2014
|
|
(in
thousands)
|
|
|
|
|
|
Net sales:
|
|
|
|
|
Automotive
|
$1,949,365
|
$1,988,448
|
$ 8,015,098
|
$ 8,096,877
|
Industrial
|
1,106,583
|
1,198,032
|
4,646,689
|
4,771,080
|
Office
Products
|
458,751
|
469,299
|
1,937,629
|
1,802,754
|
Electrical/Electronic
Materials
|
177,186
|
177,433
|
750,770
|
739,119
|
Other (1)
|
(10,095)
|
(10,758)
|
(70,142)
|
(68,183)
|
Total net sales
|
$3,681,790
|
$3,822,454
|
$15,280,044
|
$15,341,647
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
Automotive
|
$ 169,082
|
$ 150,335
|
$ 729,152
|
$ 700,386
|
Industrial
|
72,454
|
96,303
|
339,180
|
370,043
|
Office
Products
|
33,435
|
35,280
|
140,866
|
133,727
|
Electrical/Electronic
Materials
|
16,132
|
15,126
|
70,151
|
64,884
|
Total operating
profit
|
291,103
|
297,044
|
1,279,349
|
1,269,040
|
Interest expense,
net
|
(4,298)
|
(5,479)
|
(20,354)
|
(24,192)
|
Intangible
amortization
|
(8,933)
|
(10,546)
|
(34,878)
|
(36,867)
|
Other, net
|
(16,264)
|
(15,715)
|
(100,436)
|
(90,242)
|
Income before income
taxes
|
$
261,608
|
$
265,304
|
$
1,123,681
|
$
1,117,739
|
|
|
|
|
|
Capital
expenditures
|
$
47,550
|
$
33,897
|
$
109,544
|
$
107,681
|
|
|
|
|
|
Depreciation and
amortization
|
$
35,911
|
$
39,691
|
$
141,675
|
$
148,313
|
|
|
|
|
|
(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,
|
|
2015
|
2014
|
|
(in
thousands)
|
ASSETS
|
|
|
CURRENT
ASSETS
|
|
|
Cash and cash
equivalents
|
$ 211,631
|
$ 137,730
|
Trade accounts
receivable, net
|
1,822,419
|
1,872,365
|
Merchandise
inventories, net
|
2,999,966
|
3,043,848
|
Prepaid expenses and
other current assets
|
521,300
|
538,582
|
|
|
|
TOTAL CURRENT
ASSETS
|
5,555,316
|
5,592,525
|
|
|
|
Goodwill and other
intangible assets, less accumulated amortization
|
1,361,795
|
1,386,590
|
Deferred tax
assets
|
118,525
|
145,331
|
Other
assets
|
460,918
|
451,690
|
Net property, plant
and equipment
|
648,217
|
670,102
|
|
|
|
TOTAL
ASSETS
|
$8,144,771
|
$8,246,238
|
|
LIABILITIES AND
EQUITY
|
|
|
CURRENT
LIABILITIES
|
|
|
Trade accounts
payable
|
$2,821,526
|
$2,554,759
|
Current portion of
debt
|
375,000
|
265,466
|
Dividends
payable
|
92,595
|
88,039
|
Other current
liabilities
|
651,533
|
675,851
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
3,940,654
|
3,584,115
|
|
|
|
|
|
|
Long-term
debt
|
250,000
|
500,000
|
Pension and other
post-retirement benefit liabilities
|
284,235
|
329,531
|
Deferred tax
liabilities
|
50,684
|
72,479
|
Other long-term
liabilities
|
459,956
|
447,749
|
|
|
|
Common
stock
|
150,081
|
153,113
|
Retained
earnings
|
3,927,104
|
3,868,346
|
Accumulated other
comprehensive loss
|
(930,618)
|
(720,211)
|
|
|
|
TOTAL PARENT
EQUITY
|
3,146,567
|
3,301,248
|
|
|
|
Noncontrolling
interests in subsidiaries
|
12,675
|
11,116
|
|
|
|
TOTAL
EQUITY
|
3,159,242
|
3,312,364
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
$8,144,771
|
$8,246,238
|
|
|
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Year Ended Dec.
31,
|
|
2015
|
2014
|
|
(in
thousands)
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
Net income
|
$705,672
|
$711,286
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
141,675
|
148,313
|
Share-based
compensation
|
17,717
|
16,239
|
Excess tax benefits
from share-based compensation
|
(7,024)
|
(17,766)
|
Changes in operating
assets and liabilities
|
301,333
|
(67,927)
|
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
1,159,373
|
790,145
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
Purchases of property,
plant and equipment
|
(109,544)
|
(107,681)
|
Acquisitions and other
investing activities
|
(154,083)
|
(279,034)
|
|
|
|
NET CASH USED IN
INVESTING ACTIVITIES
|
(263,627)
|
(386,715)
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
Proceeds from
debt
|
3,862,224
|
2,727,924
|
Payments on
debt
|
(4,005,191)
|
(2,735,862)
|
Share-based awards
exercised, net of taxes paid
|
(9,572)
|
(22,051)
|
Excess tax benefits
from share-based compensation
|
7,024
|
17,766
|
Dividends
paid
|
(368,284)
|
(347,271)
|
Purchase of
stock
|
(292,275)
|
(95,946)
|
|
|
|
NET CASH USED IN
FINANCING ACTIVITIES
|
(806,074)
|
(455,440)
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
(15,771)
|
(7,153)
|
|
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
73,901
|
(59,163)
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF YEAR
|
137,730
|
196,893
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF YEAR
|
$211,631
|
$137,730
|
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SOURCE Genuine Parts Company