ATLANTA, July 19, 2016 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) announced today sales and earnings for the
second quarter and six months ended June 30,
2016.
Sales for the second quarter ended June
30, 2016 were $3.90 billion
compared to $3.94 billion for the
same period in 2015. Net income for the second quarter was
$191.4 million compared to
$195.4 million recorded for the same
period in the previous year. Earnings per share on a diluted
basis were $1.28, equal to the
earnings per share for the second quarter last year.
Paul Donahue, President and Chief
Executive Officer, commented, "Total sales in the second quarter
were down 1% from the prior year, inclusive of a 2% contribution
from acquisitions less a currency headwind of 1%. Sales for
the Automotive Group were down 0.7%, consisting of a 1% core sales
decline, a 1.5% currency headwind and an approximate 2%
contribution from acquisitions. Sales at Motion Industries,
our Industrial Group, were down 1.7%, including a 3% underlying
sales decrease and an approximate 0.5% currency headwind, offset by
a 2% benefit from acquisitions. Sales at EIS, our
Electrical/Electronic Group, were down approximately 5%, including
a 1% negative impact of copper pricing. Sales for
S. P. Richards, our Office Products
Group, were up 1%, consisting of a 5% contribution from
acquisitions offset by a 4% underlying sales decrease."
Mr. Donahue stated, "This quarter our automotive sales along
with our other distribution businesses were all impacted by the
challenging sales environment. We offset some of this impact
with key sales and gross margin initiatives as well as tight
expense controls. Importantly, we also further improved the
strength of our balance sheet and cash flows with effective working
capital management. We expect the combination of these
efforts to support stronger growth for the Company over the
long-term."
Sales for the six months ended June 30,
2016 were $7.62 billion
compared to $7.68 billion for the
same period in 2015. Net income for the six months was
$349.4 million, down 2% from 2015,
and earnings per share on a diluted basis were $2.33, equal to the same six month period of the
prior year.
2016 Outlook
For the full year 2016, the Company is maintaining its guidance
for 1% to 2% total sales growth and is updating diluted earnings
per share to $4.70 to $4.75 from
$4.70 to $4.80.
Conference Call
Genuine Parts Company will hold a conference call today at
11:00 a.m. EDT 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 "Investors", or by dialing 888-471-3831, conference ID
2490635. A replay will also be available on the Company's
website or at 877-870-5176, conference ID 2490635, two hours after
the completion of the call until 12:00 a.m.
Eastern time on August 3,
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, the
Company's ability to successfully implement its business
initiatives in each of its four business segments; slowing demand
for the Company's products; changes in general economic conditions,
including, unemployment, inflation or deflation; volatile exchange
rates; high energy costs; uncertain credit markets and other
macro-economic conditions; competitive product, service and pricing
pressures; the ability to maintain favorable vendor arrangements
and relationships; disruptions in our vendors' operations; the
Company's ability to successfully integrate its acquired
businesses; the uncertainties and costs of litigation; disruptions
caused by a failure or breach of the Company's information systems,
as well as other risks and uncertainties discussed in the Company's
Annual Report on Form 10-K for 2015 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 June
30,
|
Six Months Ended June
30,
|
|
2016
|
2015
|
2016
|
2015
|
|
(Unaudited)
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
Net sales
|
$3,899,638
|
$3,940,401
|
$7,617,905
|
$7,676,452
|
Cost of goods
sold
|
2,734,186
|
2,762,071
|
5,347,982
|
5,385,303
|
Gross
profit
|
1,165,452
|
1,178,330
|
2,269,923
|
2,291,149
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
administrative & other expenses
|
829,489
|
832,610
|
1,652,661
|
1,658,164
|
Depreciation and
amortization
|
35,911
|
35,603
|
70,565
|
71,487
|
|
865,400
|
868,213
|
1,723,226
|
1,729,651
|
|
|
|
|
|
Income before income
taxes
|
300,052
|
310,117
|
546,697
|
561,498
|
Income
taxes
|
108,683
|
114,744
|
197,303
|
205,115
|
|
|
|
|
|
Net income
|
$ 191,369
|
$ 195,373
|
$ 349,394
|
$ 356,383
|
|
|
|
|
|
Basic net income per
common share
|
$1.28
|
$1.28
|
$2.34
|
$2.34
|
|
|
|
|
|
Diluted net income
per common share
|
$1.28
|
$1.28
|
$2.33
|
$2.33
|
|
|
|
|
|
Weighted average
common shares outstanding
|
149,241
|
152,134
|
149,417
|
152,394
|
|
|
|
|
|
Dilutive effect of
stock options and
|
|
|
|
|
non-vested restricted stock awards
|
788
|
855
|
761
|
880
|
|
|
|
|
|
Weighted average
common shares outstanding – assuming dilution
|
150,029
|
152,989
|
150,178
|
153,274
|
|
|
|
|
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
|
SEGMENT
INFORMATION AND FINANCIAL HIGHLIGHTS
|
|
|
Three Months Ended
June 30,
|
Six Months Ended June
30,
|
|
2016
|
2015
|
2016
|
2015
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
|
|
Net sales:
|
|
|
|
|
Automotive
|
$2,087,978
|
$2,103,126
|
$4,020,156
|
$4,001,634
|
Industrial
|
1,167,395
|
1,188,031
|
2,320,022
|
2,369,854
|
Office
Products
|
481,605
|
477,755
|
958,259
|
968,053
|
Electrical/Electronic
Materials
|
184,508
|
194,701
|
360,355
|
376,747
|
Other (1)
|
(21,848)
|
(23,212)
|
(40,887)
|
(39,836)
|
Total net
sales
|
$3,899,638
|
$3,940,401
|
$7,617,905
|
$7,676,452
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
Automotive
|
$
203,572
|
$
207,443
|
$
357,282
|
$
358,084
|
Industrial
|
88,263
|
88,876
|
170,096
|
176,645
|
Office
Products
|
32,640
|
34,501
|
66,844
|
71,025
|
Electrical/Electronic
Materials
|
15,987
|
18,568
|
30,828
|
34,031
|
Total operating
profit
|
340,462
|
349,388
|
625,050
|
639,785
|
Interest expense,
net
|
(4,665)
|
(5,674)
|
(9,487)
|
(11,001)
|
Intangible
amortization
|
(9,225)
|
(8,796)
|
(17,985)
|
(17,400)
|
Other, net
|
(26,520)
|
(24,801)
|
(50,881)
|
(49,886)
|
Income before income
taxes
|
$
300,052
|
$
310,117
|
$
546,697
|
$
561,498
|
|
|
|
|
|
Capital
expenditures
|
$
38,041
|
$
21,037
|
$
49,711
|
$
37,464
|
|
|
|
|
|
Depreciation and
amortization
|
$
35,911
|
$
35,603
|
$
70,565
|
$
71,487
|
(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,
|
|
|
2016
|
2015
|
|
|
(Unaudited)
|
|
|
(in
thousands)
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
233,627
|
$
223,840
|
|
Trade accounts
receivable, net
|
2,031,094
|
2,008,445
|
|
Merchandise
inventories, net
|
3,062,673
|
3,025,165
|
|
Prepaid expenses and
other current assets
|
538,748
|
506,070
|
|
|
|
|
|
TOTAL CURRENT
ASSETS
|
5,866,142
|
5,763,520
|
|
|
|
|
|
Goodwill and other
intangible assets, less accumulated amortization
|
1,478,298
|
1,382,766
|
|
Deferred tax
assets
|
112,316
|
139,928
|
|
Other
assets
|
491,968
|
486,885
|
|
Net property, plant
and equipment
|
685,385
|
640,534
|
|
|
|
|
|
TOTAL
ASSETS
|
$8,634,109
|
$8,413,633
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Trade accounts
payable
|
$3,075,769
|
$2,743,444
|
|
Current portion of
debt
|
525,000
|
350,000
|
|
Income taxes
payable
|
28,451
|
1,069
|
|
Dividends
payable
|
97,975
|
93,496
|
|
Other current
liabilities
|
678,975
|
679,613
|
|
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
4,406,170
|
3,867,622
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
250,000
|
500,000
|
|
Pension and other
post-retirement benefit liabilities
|
217,052
|
261,783
|
|
Deferred tax
liabilities
|
51,708
|
68,428
|
|
Other long-term
liabilities
|
458,950
|
460,302
|
|
|
|
|
|
Common
stock
|
148,914
|
151,709
|
|
Retained
earnings
|
3,970,870
|
3,901,607
|
|
Accumulated other
comprehensive loss
|
(882,165)
|
(809,501)
|
|
|
|
|
|
TOTAL PARENT
EQUITY
|
3,237,619
|
3,243,815
|
|
|
|
|
|
Noncontrolling
interests in subsidiaries
|
12,610
|
11,683
|
|
|
|
|
|
TOTAL
EQUITY
|
3,250,229
|
3,255,498
|
|
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
$8,634,109
|
$8,413,633
|
|
|
|
|
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Six Months Ended June
30,
|
|
2016
|
2015
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
Net income
|
$349,394
|
$356,383
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
70,565
|
71,487
|
Share-based
compensation
|
10,002
|
8,646
|
Excess tax benefits
from share-based compensation
|
(7,540)
|
(5,300)
|
Changes in operating
assets and liabilities
|
111,077
|
22,892
|
|
|
|
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
533,498
|
454,108
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
Purchases of property,
plant and equipment
|
(49,711)
|
(37,464)
|
Acquisitions and other
investing activities
|
(308,441)
|
(80,140)
|
|
|
|
NET CASH USED IN
INVESTING ACTIVITIES
|
(358,152)
|
(117,604)
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
Proceeds from
debt
|
1,950,000
|
1,634,587
|
Payments on
debt
|
(1,800,000)
|
(1,552,554)
|
Share-based awards
exercised, net of taxes paid
|
(8,627)
|
(5,914)
|
Excess tax benefits
from share-based compensation
|
7,540
|
5,300
|
Dividends
paid
|
(190,934)
|
(181,883)
|
Purchase of
stock
|
(119,397)
|
(145,219)
|
|
|
|
NET CASH USED IN
FINANCING ACTIVITIES
|
(161,418)
|
(245,683)
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
8,068
|
(4,711)
|
|
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
21,996
|
86,110
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
211,631
|
137,730
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$233,627
|
$223,840
|
|
|
|
|
|
|
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SOURCE Genuine Parts Company