FOR IMMEDIATE RELEASE
Contact: | 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 | ||||||
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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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