Jerry W. Nix, Executive Vice President — Finance (770) 612-2048
GENUINE PARTS COMPANY REPORTS RECORD FIRST QUARTER RESULTS
Atlanta, Georgia, April 15, 2005 — Genuine Parts Company (NYSE: GPC) reported record sales and earnings for the first quarter ended March 31, 2005. Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.3 billion were up 7% compared to the first quarter of 2004. Net income for the quarter was $106.6 million, an increase of 6% over $100.2 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 61 cents, up 7% compared to 57 cents for the first quarter last year.
Mr. Gallagher commented: “We are pleased to report that we are off to a solid start to 2005. Motion Industries, our Industrial Group, reported the strongest results, ending the quarter with a 13% sales increase. The Automotive Group reported a 4% increase for the period and S. P. Richards, our Office Products Group, improved sales 6%. EIS, our Electrical/Electronics Group, was up 1% for the quarter. The EIS revenues were impacted by the sale of a division in the Electronic side of their business during the quarter.”
Mr. Gallagher concluded: “Our balance sheet remains in excellent condition and the combination of working capital initiatives and solid earnings growth has enabled us to continue to generate strong cash flows. As we look forward, we continue to feel that market conditions are favorable for each of our businesses and we are positioned to have another good year in 2005.”
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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 by dialing 877-422-4780, conference ID 5171608. A replay will also be available at 800-642-1687, conference ID 5171608, two hours after the completion of the conference call until 12:00 a.m. Eastern time on April 29, 2005.
Forward Looking Statements
Some statements in this release constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company cautions that its forward-looking statements involve risks and uncertainties. The Company undertakes no duty to update its forward-looking statements, which reflect the Company’s beliefs, expectations, and plans as of the present. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors include, but are not limited to, changes in general economic conditions, the growth rate of the market for the Company’s products and services, the ability to maintain favorable supplier arrangements and relationships, competitive product and pricing pressures, including internet-related initiatives, the effectiveness of the Company’s promotional, marketing and advertising programs, changes in laws and regulations, including changes in accounting and taxation guidance, the uncertainties of litigation, as well as other risks and uncertainties discussed from time to time in the Company’s filings with the Securities and Exchange Commission.
About Genuine Parts Company
Genuine Parts Company is a distributor of automotive replacement parts in the U.S., Canada and Mexico. The Company also distributes industrial replacement parts in the U.S. and in Canada through its Motion Industries subsidiary. S. P. Richards Company, the Office Products Group, distributes product nationwide in the U.S. and in Canada. The Electrical/Electronic Group, EIS, Inc., distributes electrical and electronic components throughout the U.S. and Mexico.
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GENUINE PARTS COMPANY and SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31,
2005
2004
(Unaudited)
(in thousands, except per share data)
Net sales
$
2,342,201
$
2,196,991
Cost of goods sold
1,605,721
1,510,080
736,480
686,911
Selling, administrative & other expenses
564,270
524,514
Income before income taxes
172,210
162,397
Income taxes
65,612
62,198
Net income
$
106,598
$
100,199
Basic net income per common share
$
.61
$
.57
Diluted net income per common share
$
.61
$
.57
Weighted average common shares outstanding
174,772
174,320
Dilutive effect of stock options and non-vested restricted stock awards
1,264
580
Weighted average common shares outstanding – assuming dilution
176,036
174,900
3
GENUINE PARTS COMPANY and SUBSIDIARIES SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended March 31,
2005
2004
(Unaudited)
(in thousands, except ratio analysis)
Net sales:
Automotive
$
1,168,955
$
1,126,551
Industrial
686,740
608,504
Office Products
410,929
386,790
Electrical/Electronic Materials
84,289
83,079
Other
(8,712
)
(7,933
)
Total net sales
$
2,342,201
$
2,196,991
Operating profit:
Automotive
$
95,307
$
93,261
Industrial
48,253
46,119
Office Products
46,027
43,754
Electrical/Electronic Materials
3,309
3,220
Total operating profit
192,896
186,354
Interest expense
(7,947
)
(9,977
)
Other, net
(12,739
)
(13,980
)
Income before income taxes
$
172,210
$
162,397
Capital expenditures
$
20,768
$
12,057
Depreciation and amortization
$
17,071
$
16,193
Current ratio
3.1/1
3.5/1
Total debt to total capitalization
16.3
%
21.9
%
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GENUINE PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
March 31,
2005
2004
(Unaudited)
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
157,817
$
28,088
Trade accounts receivable
1,195,034
1,135,227
Merchandise inventories
2,149,814
2,129,236
Prepaid expenses and other current assets
186,837
172,469
TOTAL CURRENT ASSETS
3,689,502
3,465,020
Goodwill and other intangible assets
57,583
57,939
Other assets
404,300
350,928
Total property, plant and equipment, net
379,587
337,960
TOTAL ASSETS
$
4,530,972
$
4,211,847
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade accounts payable
$
878,640
$
697,919
Current portion long-term debt and other borrowings
897
36,900
Income taxes payable
98,994
70,627
Dividends payable
54,630
52,336
Other current liabilities
147,165
131,716
TOTAL CURRENT LIABILITIES
1,180,326
989,498
Long-term debt
500,000
625,000
Other long-term liabilities
112,305
65,781
Deferred income taxes
116,689
114,409
Minority interests in subsidiaries
53,052
51,129
Common stock
174,450
174,442
Retained earnings and other
2,394,150
2,191,588
TOTAL SHAREHOLDERS’ EQUITY
2,568,600
2,366,030
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
4,530,972
$
4,211,847
Note: Certain balance sheet reclassifications have been made to prior year amounts to conform to current year presentation.
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GENUINE PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months
Ended March 31,
2005
2004
(Unaudited)
(in thousands)
OPERATING ACTIVITIES:
Net income
$
106,598
$
100,199
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
17,071
16,193
Other
2,525
2,517
Changes in operating assets and liabilities
(9,983
)
(37,782
)
NET CASH PROVIDED BY OPERATING ACTIVITIES
116,211
81,127
INVESTING ACTIVITIES:
Purchase of property, plant and equipment
(20,768
)
(12,057
)
Other
6,804
-0-
NET CASH USED IN INVESTING ACTIVITIES
(13,964
)
(12,057
)
FINANCING ACTIVITIES:
Net payments on credit facilities
(71
)
(15,733
)
Stock options exercised
4,162
11,119
Dividends paid
(52,495
)
(51,331
)
Purchase of stock
(30,966
)
(430
)
NET CASH USED IN FINANCING ACTIVITIES
(79,370
)
(56,375
)
NET INCREASE IN CASH AND CASH EQUIVALENTS
22,877
12,695
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
134,940
15,393
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
157,817
$
28,088
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