GENUINE PARTS 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.
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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. Nine Months Ended Sept.
30, 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
