GENUINE PARTS ATLANTA, Feb. 21, 2017 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today sales and earnings for the fourth quarter and twelve months ended December 31, 2016.
Sales for the fourth quarter ended December 31, 2016 were $3.78 billion, a 3% increase compared to $3.68 billion for the same period in 2015. Net income for the fourth quarter was $152.5 million compared to $161.3 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.02 compared to $1.07 for the fourth quarter last year.
Fourth quarter sales for the Automotive Group were up 2%, including an approximate 1% comparable sales increase. Sales at Motion Industries, our Industrial Group, were up 4%, sales at EIS, our Electrical/Electronic Group, were basically unchanged and sales for S. P. Richards, our Office Products Group, were up 4% for the quarter.
Paul Donahue, President and Chief Executive Officer, commented, "The fourth quarter was our strongest quarterly sales performance of the year, with acquisitions being the primary growth driver in each of our four business segments. With that said, we did see improvement in our comparable sales trends in the Automotive, Industrial and Electrical/Electronic businesses relative to the second and third quarters of 2016. Generally, we operated in more favorable market conditions as the fourth quarter progressed, and our teams were in position to benefit from that."
Sales for the twelve months ended December 31, 2016 were $15.34 billion, up 0.4% compared to $15.28 billion for the same period in 2015. Net income for the twelve months was $687.2 million, down 3% from 2015, and earnings per share on a diluted basis were $4.59, down 1% compared to $4.63 in 2015.
Mr. Donahue concluded, "We worked hard in every aspect of our business to overcome the challenging sales environment that persisted in our U.S. markets throughout most of 2016. We also enhanced our measures to control rising costs and manage our assets to further strengthen the balance sheet and generate strong cash flows. Due to these efforts, as well as the global growth initiatives across our operations and geographies, the Company enters 2017 well positioned for sustainable long-term growth."
2017 Outlook
The Company is establishing its full year 2017 sales guidance at up 3% to 4%. Diluted earnings per share is expected to be $4.70 to $4.80.
Conference Call
Genuine Parts Company will hold a conference call today at 11:00 a.m. EST 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 877-604-9665, conference ID 5619563. A replay will also be available on the Company's website or at 844-512-2921, conference ID 5619563, two hours after the completion of the call until 12:00 a.m. Eastern time on March 7, 2017.
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 legislation or government regulations or policies; changes in general economic conditions, including unemployment, inflation or deflation; changes in tax policies; 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 Dec. 31, Year Ended Dec.31,
2016 2015 2016 2015
---- ---- ---- ----
(in thousands, except per share data)
Net sales $3,780,065 $3,681,790 $15,339,713 $15,280,044
Cost of goods sold 2,648,982 2,586,312 10,740,106 10,724,192
--------- --------- ---------- ----------
Gross profit 1,131,083 1,095,478 4,599,607 4,555,852
Operating expenses:
Selling,
administrative &
other expenses 855,557 797,959 3,377,780 3,290,496
Depreciation and
amortization 39,240 35,911 147,487 141,675
------ ------ ------- -------
894,797 833,870 3,525,267 3,432,171
Income before
income taxes 236,286 261,608 1,074,340 1,123,681
Income taxes 83,766 100,335 387,100 418,009
------ ------- ------- -------
Net income $152,520 $161,273 $687,240 $705,672
======== ======== ======== ========
Basic net income
per common share $1.03 $1.07 $4.61 $4.65
Diluted net income
per common share $1.02 $1.07 $4.59 $4.63
Weighted average
common shares
outstanding 148,478 150,552 149,051 151,667
Dilutive effect of stock options and
non-vested
restricted stock
awards 699 803 753 829
--- --- --- ---
Weighted average
common shares
outstanding -
assuming dilution 149,177 151,355 149,804 152,496
======= ======= ======= =======
GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
--------------------------------------------
Three Months Ended Dec. 31, Year Ended Dec. 31,
2016 2015 2016 2015
---- ---- ---- ----
(in thousands)
Net sales:
Automotive $1,996,325 $1,949,365 $8,111,511 $8,015,098
Industrial 1,151,966 1,106,583 4,634,212 4,646,689
Office Products 475,971 458,751 1,969,405 1,937,629
Electrical/Electronic Materials 176,847 177,186 715,650 750,770
Other (1) (21,044) (10,095) (91,065) (70,142)
------- ------- ------- -------
Total net sales $3,780,065 $3,681,790 $15,339,713 $15,280,044
========== ========== =========== ===========
Operating profit:
Automotive $159,998 $169,082 $715,154 $729,152
Industrial 80,904 72,454 336,608 339,180
Office Products 19,934 33,435 117,035 140,866
Electrical/Electronic Materials 15,434 16,132 60,539 70,151
------ ------ ------ ------
Total operating profit 276,270 291,103 1,229,336 1,279,349
Interest expense, net (4,794) (4,298) (19,525) (20,354)
Intangible amortization (12,546) (8,933) (40,870) (34,878)
Other, net (22,644) (16,264) (94,601) (100,436)
------- ------- ------- --------
Income before income taxes $236,286 $261,608 $1,074,340 $1,123,681
======== ======== ========== ==========
Capital expenditures $73,993 $47,550 $160,643 $109,544
======= ======= ======== ========
Depreciation and amortization $39,240 $35,911 $147,487 $141,675
======= ======= ======== ========
(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,
2016 2015
---- ----
(in thousands)
ASSETS
CURRENT ASSETS
Cash and
cash
equivalents $242,879 $211,631
Trade
accounts
receivable,
net 1,938,562 1,822,419
Merchandise
inventories,
net 3,210,320 2,999,966
Prepaid
expenses
and other
current
assets 556,670 521,300
------- -------
TOTAL
CURRENT
ASSETS 5,948,431 5,555,316
Goodwill
and other
intangible
assets,
less
accumulated
amortization 1,574,663 1,361,795
Deferred
tax
assets 132,652 118,525
Other
assets 475,530 460,918
Net
property,
plant and
equipment 728,124 648,217
------- -------
TOTAL
ASSETS $8,859,400 $8,144,771
========== ==========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade
accounts
payable $3,081,111 $2,821,526
Current
portion
of debt 325,000 375,000
Dividends
payable 97,584 92,595
Other
current
liabilities 740,455 651,533
------- -------
TOTAL
CURRENT
LIABILITIES 4,244,150 3,940,654
Long-term
debt 550,000 250,000
Pension
and other
post-
retirement
benefit
liabilities 341,510 284,235
Deferred
tax
liabilities 48,326 50,684
Other
long-
term
liabilities 468,058 459,956
Common
stock 148,410 150,081
Retained
earnings 4,058,339 3,927,104
Accumulated
other
comprehensive
loss (1,013,021) (930,618)
---------- --------
TOTAL
PARENT
EQUITY 3,193,728 3,146,567
Noncontrolling
interests
in
subsidiaries 13,628 12,675
TOTAL
EQUITY 3,207,356 3,159,242
--------- ---------
TOTAL
LIABILITIES
AND
EQUITY $8,859,400 $8,144,771
========== ==========
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
Year Ended Dec. 31,
2016 2015
---- ----
(in thousands)
OPERATING ACTIVITIES:
Net
income $687,240 $705,672
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation
and
amortization 147,487 141,675
Share-
based
compensation 19,719 17,717
Excess
tax
benefits
from
share-
based
compensation (12,021) (7,024)
Changes
in
operating
assets
and
liabilities 103,653 301,333
------- -------
NET CASH
PROVIDED
BY
OPERATING
ACTIVITIES 946,078 1,159,373
INVESTING ACTIVITIES:
Purchases
of
property,
plant and
equipment (160,643) (109,544)
Acquisitions
and
other
investing
activities (433,356) (154,083)
-------- --------
NET CASH
USED IN
INVESTING
ACTIVITIES (593,999) (263,627)
FINANCING ACTIVITIES:
Proceeds
from
debt 4,350,000 3,862,224
Payments
on debt (4,100,000) (4,005,191)
Share-
based
awards
exercised,
net of
taxes
paid (16,147) (9,572)
Excess
tax
benefits
from
share-
based
compensation 12,021 7,024
Dividends
paid (386,863) (368,284)
Purchase
of stock (181,417) (292,275)
-------- --------
NET CASH
USED IN
FINANCING
ACTIVITIES (322,406) (806,074)
EFFECT OF
EXCHANGE
RATE
CHANGES
ON CASH 1,575 (15,771)
----- -------
NET
INCREASE
IN CASH
AND CASH
EQUIVALENTS 31,248 73,901
CASH AND
CASH
EQUIVALENTS
AT
BEGINNING
OF
PERIOD 211,631 137,730
------- -------
CASH AND
CASH
EQUIVALENTS
AT END
OF
PERIOD $242,879 $211,631
======== ========
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SOURCE Genuine Parts Company
