Genuine Parts Company Reports Record Sales and Earnings for the Second Quarter Ended June 30, 2013 - Sales Up 10% and EPS Up 29% - PR Newswire ATLANTA, July 18, 2013 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 753,527 680,246 1,427,139 1,348,204 & other expenses Depreciation and 36,853 24,735 62,852 47,720 amortization 790,380 704,981 1,489,991 1,395,924 Income before income 314,728 267,305 536,865 495,473 taxes Income taxes 98,371 98,687 176,119 180,600 Net income $ 216,357 $ 168,618 $ 360,746 $ 314,873 Basic net income per $1.40 $1.08 $2.33 $2.02 common share Diluted net income per $1.39 $1.08 $2.31 $2.01 common share Weighted average common 155,050 155,753 154,971 155,781 shares outstanding Dilutive effect of stock options and non-vested restricted 1,094 1,019 1,075 1,073 stock awards 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 Six Months Ended June 30, 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 142,970 149,440 282,155 296,556 Materials Other (1) (13,079) (8,570) (20,207) (15,273) Total net $3,675,997 $3,337,836 $6,874,799 $6,519,124 sales 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 12,221 12,933 22,672 24,899 Materials 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 $ 314,728 $ 267,305 $ 536,865 $ 495,473 income taxes Capital expenditures $ 37,883 $ 34,478 $ 50,807 $ 51,368 Depreciation and $ 36,853 $ 24,735 $ 62,852 $ 47,720 amortization (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 1,270,447 498,288 amortization 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 494,572 485,317 liabilities 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 Website: http://www.genpt.com Contact: Carol B. Yancey, Executive Vice President and CFO - (770) 612-2044; Sidney G. Jones, Vice President - Investor Relations - (770) 818-4628
Genuine Parts Company Reports Record Sales and Earnings for the Second Quarter Ended June 30, 2013
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