FOR IMMEDIATE RELEASE
Contact: | Jerry W. Nix, Vice Chairman and Chief Financial Officer (770) 612-2048 |
GENUINE PARTS COMPANY
REPORTS RECORD RESULTS FOR 2005
SALES INCREASED 8%, EPS INCREASED 11%
Atlanta, Georgia, February 21, 2006 — Genuine Parts Company (NYSE: GPC) completed its 78th year of operations and reports record sales and earnings for the year ended December 31, 2005.
Tom Gallagher, Chairman, President and Chief Executive Officer, announced today that sales in 2005 were $9.8 billion, up 8% compared to 2004. Net income for the year was $437.4 million, an increase of 11% compared to $395.6 million in 2004. Earnings per share on a diluted basis were $2.50, up 11% compared to $2.25 in 2004.
Mr. Gallagher stated, “We are pleased to report that 2005 was another record year for the Company. With these results, we have now increased sales in 55 of the last 56 years and increased profits in 43 of the last 45 years. This is a record that we are proud of and we feel that it shows the stability and consistency of Genuine Parts Company.”
Mr. Gallagher added, “It is also important to note that through continued focus on asset management and the generation of strong cash flows, our financial condition was further strengthened in 2005.”
Fourth Quarter 2005
Sales increased 7% to $2.41 billion in the fourth quarter ended December 31, 2005, compared to $2.25 billion for the same period in 2004. Diluted earnings per share in the fourth quarter were 63 cents, up 15% compared to 55 cents per share for the fourth quarter of 2004.
Mr. Gallagher commented, “For the quarter, revenues in our Automotive Group were up 5%. Motion Industries, our Industrial Group, increased sales by 9%, and EIS, our Electrical/Electronics Group, was up 6%. Sales for S.P. Richards, our Office Products Group, improved by 10%, their strongest quarter for revenue growth in 2005.”
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Mr. Gallagher concluded, “As we look back over 2005, we are pleased with the progress that was made throughout our Company. We enter 2006 with optimism and enthusiasm and with a commitment throughout our organization to strive for further improvement in the year ahead. Our focus, across all of our business segments, is to maintain our level of revenue growth, further improve our operating margins, and continue to enhance our asset management and working capital efficiencies.”
Conference Call
Genuine Parts Company will hold a conference call today at 11:00 a.m. EST to discuss the results of the quarter, the year and the future outlook. Interested parties may listen by dialing 877-422-4780, conference ID 4921359. A replay will also be available at 800-642-1687, conference ID 4921359, until 12:00 a.m. EST on March 7, 2006.
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 time. 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 Canada 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.
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GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Dec. 31, | Year Ended Dec. 31, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(Unaudited) | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Net sales | $ | 2,409,689 | $ | 2,253,307 | $ | 9,783,050 | $ | 9,097,267 | ||||||||
Cost of goods sold | 1,621,842 | 1,502,953 | 6,718,964 | 6,267,544 | ||||||||||||
787,847 | 750,354 | 3,064,086 | 2,829,723 | |||||||||||||
Selling, administrative & other expenses | 610,930 | 598,483 | 2,355,022 | 2,193,804 | ||||||||||||
Income before income taxes | 176,917 | 151,871 | 709,064 | 635,919 | ||||||||||||
Income taxes | 67,924 | 55,557 | 271,630 | 240,367 | ||||||||||||
Net income | $ | 108,993 | $ | 96,314 | $ | 437,434 | $ | 395,552 | ||||||||
Basic net income per common share | $ | .63 | $ | .55 | $ | 2.51 | $ | 2.26 | ||||||||
Diluted net income per common share | $ | .63 | $ | .55 | $ | 2.50 | $ | 2.25 | ||||||||
Weighted average common shares outstanding | 173,263 | 174,804 | 174,054 | 174,687 | ||||||||||||
Dilutive effect of stock options and | ||||||||||||||||
non-vested restricted stock awards | 843 | 1,281 | 953 | 973 | ||||||||||||
Weighted average common shares outstanding – | ||||||||||||||||
assuming dilution | 174,106 | 176,085 | 175,007 | 175,660 | ||||||||||||
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GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended Dec. 31, | Year Ended Dec. 31, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(Unaudited) | ||||||||||||||||
(in thousands, except ratio analysis) | ||||||||||||||||
Net sales: | ||||||||||||||||
Automotive | $ | 1,220,639 | $ | 1,164,072 | $ | 5,013,460 | $ | 4,739,261 | ||||||||
Industrial | 695,167 | 636,998 | 2,795,699 | 2,511,597 | ||||||||||||
Office Products | 412,072 | 375,633 | 1,662,393 | 1,540,878 | ||||||||||||
Electrical/Electronic Materials | 86,435 | 81,342 | 341,513 | 335,605 | ||||||||||||
Other (1) | (4,624 | ) | (4,738 | ) | (30,015 | ) | (30,074 | ) | ||||||||
Total net sales | $ | 2,409,689 | $ | 2,253,307 | $ | 9,783,050 | $ | 9,097,267 | ||||||||
Operating profit: | ||||||||||||||||
Automotive | $ | 83,856 | $ | 91,320 | $ | 398,494 | $ | 396,015 | ||||||||
Industrial | 61,934 | 48,611 | 214,222 | 173,760 | ||||||||||||
Office Products | 42,132 | 42,166 | 157,408 | 150,817 | ||||||||||||
Electrical/Electronic Materials | 4,754 | 3,311 | 17,470 | 14,611 | ||||||||||||
Total operating profit | 192,676 | 185,408 | 787,594 | 735,203 | ||||||||||||
Interest expense | (6,195 | ) | (8,106 | ) | (29,564 | ) | (37,260 | ) | ||||||||
Other, net | (9,564 | ) | (25,431 | ) | (48,966 | ) | (62,024 | ) | ||||||||
Income before income taxes | $ | 176,917 | $ | 151,871 | $ | 709,064 | $ | 635,919 | ||||||||
Capital expenditures | $ | 26,404 | $ | 25,526 | $ | 85,714 | $ | 72,077 | ||||||||
Depreciation and amortization | $ | 14,100 | $ | 12,432 | $ | 65,529 | $ | 62,207 | ||||||||
Current ratio | 3.0/1 | 3.2/1 | ||||||||||||||
Total debt to total capitalization | 15.7 | % | 16.5 | % | ||||||||||||
(1) | Represents the net effect of discounts, incentives and freight billed reported as a component of net sales. |
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GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Dec. 31, | Dec. 31, | |||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 188,911 | $ | 134,940 | ||||
Trade accounts receivable | 1,186,865 | 1,123,900 | ||||||
Inventories | 2,216,542 | 2,198,957 | ||||||
Prepaid expenses and other current assets | 214,564 | 175,687 | ||||||
TOTAL CURRENT ASSETS | 3,806,882 | 3,633,484 | ||||||
Goodwill and other intangible assets | 62,717 | 57,672 | ||||||
Other assets | 509,644 | 384,703 | ||||||
Total property, plant and equipment, net | 392,295 | 379,388 | ||||||
TOTAL ASSETS | $ | 4,771,538 | $ | 4,455,247 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Trade accounts payable | $ | 973,615 | $ | 856,653 | ||||
Other borrowings | 881 | 968 | ||||||
Income taxes payable | 36,296 | 42,932 | ||||||
Dividends payable | 54,150 | 52,495 | ||||||
Other current liabilities | 184,162 | 179,667 | ||||||
TOTAL CURRENT LIABILITIES | 1,249,104 | 1,132,715 | ||||||
Long-term debt | 500,000 | 500,000 | ||||||
Other long-term liabilities | 114,623 | 110,078 | ||||||
Deferred income taxes | 156,807 | 115,683 | ||||||
Minority interests in subsidiaries | 57,047 | 52,394 | ||||||
Common stock | 173,033 | 174,965 | ||||||
Retained earnings and other | 2,520,924 | 2,369,412 | ||||||
TOTAL SHAREHOLDERS’ EQUITY | 2,693,957 | 2,544,377 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 4,771,538 | $ | 4,455,247 | ||||
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GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended Dec. 31, | ||||||||
2005 | 2004 | |||||||
(in thousands) | ||||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 437,434 | $ | 395,552 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 65,529 | 62,207 | ||||||
Other | 3,271 | 2,688 | ||||||
Changes in operating assets and liabilities | (65,717 | ) | 94,789 | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 440,517 | 555,236 | ||||||
INVESTING ACTIVITIES: | ||||||||
Purchase of property, plant and equipment | (85,714 | ) | (72,077 | ) | ||||
Other | 15,540 | 4,122 | ||||||
NET CASH USED IN INVESTING ACTIVITIES | (70,174 | ) | (67,955 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Net payments on credit facilities | (87 | ) | (176,801 | ) | ||||
Stock options exercised | 17,725 | 37,523 | ||||||
Dividends paid | (215,868 | ) | (208,575 | ) | ||||
Purchase of stock | (119,239 | ) | (21,475 | ) | ||||
NET CASH USED IN FINANCING ACTIVITIES | (317,469 | ) | (369,328 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 1,097 | 1,594 | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 53,971 | 119,547 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 134,940 | 15,393 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 188,911 | $ | 134,940 | ||||
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