GENUINE PARTS ATLANTA, July 20, 2017 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today sales and earnings for the second quarter and six months ended June 30, 2017.
Sales for the second quarter ended June 30, 2017 were $4.1 billion, a new record and a 5% increase compared to $3.9 billion for the same period in 2016. Net income for the second quarter was $190.0 million compared to $191.4 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.29, up 1% from $1.28 for the second quarter last year.
Paul Donahue, President and Chief Executive Officer, commented, "We are encouraged by the steady and consistent total sales increase thus far in 2017, which reflects the diversified aspects of our Company combined with an ongoing strategy to drive both organic and acquisitive growth. This represents our second consecutive quarter of 5% total sales growth for the Company and includes sales increases in each of our four distribution businesses, with our strongest performances in the Industrial and Electrical segments."
Second quarter sales for the Automotive Group were up 4%, including an approximate 1.5% comparable sales increase. Sales at Motion Industries, our Industrial Group, were up 7%, including a 5% comparable sales increase, and sales at EIS, our Electrical/Electronic Group, grew 11%, with comparable sales down 1%. Sales for S.P. Richards, our Office Products Group, were up 5% for the quarter, including a 4% decrease in comparable sales.
Sales for the six months ended June 30, 2017 were $8.0 billion, also a new record and a 5% increase compared to $7.6 billion for the same period in 2016. Net income for the six months was $350.1 million compared to $349.4 million in 2016, and earnings per share on a diluted basis were $2.36, up 1% compared to $2.33 in 2016.
Mr. Donahue concluded, "Our teams are committed to generating sustainable sales growth, while also streamlining our cost structure to improve profitability. We believe our focus in these areas, along with a strong balance sheet, solid cash flows and effective capital allocation, will drive long-term growth for the Company and serve to maximize shareholder value."
2017 Outlook
For the full year 2017, the Company continues to expect total sales to be up 3% to 4%. The Company expects diluted earnings per share to range from $4.70 to $4.75 compared to the prior outlook of $4.75 to $4.85.
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 877-741-4245, conference ID 6054876. A replay will also be available on the Company's website or at 844-512-2921, conference ID 6054876, two hours after the completion of the call until 12:00 a.m. Eastern time on August 4, 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 2016 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,
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited)
(in thousands, except per share data)
Net sales $4,100,178 $3,899,638 $8,005,819 $7,617,905
Cost of goods sold 2,860,466 2,734,186 5,610,386 5,347,982
--------- --------- --------- ---------
Gross profit 1,239,712 1,165,452 2,395,433 2,269,923
Operating expenses:
Selling, administrative & other expenses 903,343 829,489 1,777,157 1,652,661
Depreciation and amortization 39,232 35,911 77,364 70,565
------ ------ ------ ------
942,575 865,400 1,854,521 1,723,226
Income before income taxes 297,137 300,052 540,912 546,697
Income taxes 107,165 108,683 190,780 197,303
------- ------- ------- -------
Net income $189,972 $191,369 $350,132 $349,394
======== ======== ======== ========
Basic net income per common share $1.29 $1.28 $2.37 $2.34
Diluted net income per common share $1.29 $1.28 $2.36 $2.33
Weighted average common shares outstanding 147,079 149,241 147,613 149,417
Dilutive effect of stock options and
non-vested restricted stock awards 571 788 598 761
--- --- --- ---
Weighted average common shares outstanding - 147,650 150,029 148,211 150,178
assuming dilution
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GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
--------------------------------------------
Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
---- ---- ---- ----
(Unaudited)
(in thousands)
Net sales:
Automotive $2,164,104 $2,087,978 $4,162,487 $4,020,156
Industrial 1,252,867 1,167,395 2,484,949 2,320,022
Office Products 504,401 481,605 1,023,406 958,259
Electrical/Electronic Materials 204,628 184,508 389,045 360,355
Other (1) (25,822) (21,848) (54,068) (40,887)
------- ------- ------- -------
Total net sales $4,100,178 $3,899,638 $8,005,819 $7,617,905
========== ========== ========== ==========
Operating profit:
Automotive $207,332 $203,572 $359,089 $357,282
Industrial 96,300 88,263 186,674 170,096
Office Products 30,091 32,640 61,210 66,844
Electrical/Electronic Materials 15,533 15,987 29,168 30,828
------ ------ ------ ------
Total operating profit 349,256 340,462 636,141 625,050
Interest expense, net (6,878) (4,665) (13,052) (9,487)
Intangible amortization (11,434) (9,225) (22,240) (17,985)
Other, net (33,807) (26,520) (59,937) (50,881)
------- ------- ------- -------
Income before income taxes $297,137 $300,052 $540,912 $546,697
======== ======== ======== ========
Capital expenditures $29,289 $38,041 $54,095 $49,711
======= ======= ======= =======
Depreciation and amortization $39,232 $35,911 $77,364 $70,565
======= ======= ======= =======
(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,
2017 2016
---- ----
(Unaudited)
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $203,145 $233,627
Trade accounts receivable, net 2,169,970 2,031,094
Merchandise inventories, net 3,330,189 3,062,673
Prepaid expenses and other current assets 598,112 538,748
------- -------
TOTAL CURRENT ASSETS 6,301,416 5,866,142
Goodwill and other intangible assets, less accumulated 1,677,748 1,478,298
amortization
Deferred tax assets 126,299 112,316
Other assets 565,905 491,968
Net property, plant and equipment 740,776 685,385
------- -------
TOTAL ASSETS $9,412,144 $8,634,109
========== ==========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable $3,302,969 $3,075,769
Current portion of debt 580,000 525,000
Income taxes payable 28,300 28,451
Dividends payable 99,109 97,975
Other current liabilities 790,789 678,975
------- -------
TOTAL CURRENT LIABILITIES 4,801,167 4,406,170
Long-term debt 550,000 250,000
Pension and other post-retirement benefit liabilities 272,394 217,052
Deferred tax liabilities 48,256 51,708
Other long-term liabilities 438,984 458,950
Common stock 146,831 148,914
Retained earnings 4,062,682 3,970,870
Accumulated other comprehensive loss (921,389) (882,165)
-------- --------
TOTAL PARENT EQUITY 3,288,124 3,237,619
Noncontrolling interests in subsidiaries 13,219 12,610
------ ------
TOTAL EQUITY 3,301,343 3,250,229
--------- ---------
TOTAL LIABILITIES AND EQUITY $9,412,144 $8,634,109
========== ==========
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
Six Months Ended June 30,
2017 2016
---- ----
(Unaudited)
(in thousands)
OPERATING ACTIVITIES:
Net income $350,132 $349,394
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 77,364 70,565
Share-based compensation 8,086 10,002
Excess tax benefits from share-based compensation (2,245) (7,540)
Changes in operating assets and liabilities (88,053) 108,071
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 345,284 530,492
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (54,095) (49,711)
Acquisitions and other investing activities (240,216) (305,435)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (294,311) (355,146)
FINANCING ACTIVITIES:
Proceeds from debt 2,250,000 1,950,000
Payments on debt (1,995,000) (1,800,000)
Share-based awards exercised, net of taxes paid (3,014) (8,627)
Excess tax benefits from share-based compensation - 7,540
Dividends paid (197,408) (190,934)
Purchase of stock (153,508) (119,397)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (98,930) (161,418)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 8,223 8,068
----- -----
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (39,734) 21,996
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 242,879 211,631
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $203,145 $233,627
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SOURCE Genuine Parts Company
