Jerry W. Nix, Vice Chairman and CFO — (770) 612-2048 Sidney G. Jones, Vice President-Investor Relations — (770) 818-4628
GENUINE PARTS COMPANY REPORTS FIRST QUARTER 2011 RESULTS
Atlanta, Georgia, April 15, 2011 — Genuine Parts Company (NYSE: GPC) reports sales and earnings for the first quarter ended March 31, 2011.
Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that record sales totaling $3.0 billion were up 14% compared to the first quarter of 2010. Net income for the quarter was $126.5 million, an increase of 26% over $100.6 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 80 cents, up 27% compared to 63 cents for the first quarter last year.
Mr. Gallagher stated, “We are pleased to report another period of solid sales and earnings growth for the Company and are especially encouraged by the positive sales momentum in all four of our business units. Our Automotive Group produced a 9% sales increase for the second consecutive quarter, which reflects the solid execution of our sales initiatives combined with the positive fundamentals of the aftermarket. Our Industrial and Electrical businesses continue to turn in the strongest results among our four business segments. Sales for Motion Industries, our Industrial Group, were up 24% in the quarter, and EIS, our Electrical Group, generated a 39% increase. Both Motion Industries and EIS sell into the manufacturing sector of the economy, which began its recovery in 2010 and continues to perform well today. S.P. Richards, our Office Products Group, showed a 5% sales increase for the quarter, marking their second consecutive period of sales growth and up sequentially from a 3% increase in the fourth quarter of 2010.”
Mr. Gallagher concluded, “We feel good about the sales and earnings growth achieved in the first quarter and are optimistic that our businesses will show continued progress over the balance of the year. Our management team remains committed to sustaining good revenue growth, further improving operating margins, generating solid cash flows and maintaining a strong balance sheet.” 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 “Investor Services”, or by dialing 1-866-777-9139, conference ID 55843045. A replay will also be available on the Company’s website or at 1-800-642-1687, conference ID 55843045, two hours after the completion of the call until 12:00 a.m. EDT on April 30, 2011.
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, slowing demand for the Company’s products, changes in general economic conditions, including, unemployment, inflation or deflation, high energy costs, uncertain credit markets and other macro-economic conditions, the ability to maintain favorable vendor arrangements and relationships, disruptions in our vendors’ operations, competitive product, service and pricing pressures, the Company’s ability to successfully implement its business initiatives in each of its four business segments, the uncertainties and costs of litigation, as well as other risks and uncertainties discussed in the Company’s Annual Report on Form 10-K for 2010 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, Form 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 and Mexico. 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 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.
1
GENUINE PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31,
2011
2010
(Unaudited)
(in thousands, except per share data)
Net sales
$
2,974,198
$
2,602,115
Cost of goods sold
2,125,404
1,841,640
Gross profit
848,794
760,475
Operating expenses:
Selling, administrative & other expenses
634,269
576,217
Depreciation and amortization
22,545
22,143
656,814
598,360
Income before income taxes
191,980
162,115
Income taxes
65,465
61,506
Net income
$
126,515
$
100,609
Basic net income per common share
$
.80
$
.63
Diluted net income per common share
$
.80
$
.63
Weighted average common shares outstanding
157,633
158,771
Dilutive effect of stock options and non-vested restricted stock awards
1,023
408
Weighted average common shares outstanding – assuming dilution
158,656
159,179
2
GENUINE PARTS COMPANY and SUBSIDIARIES SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended March 31,
2011
2010
(Unaudited)
(in thousands)
Net sales:
Automotive
$
1,404,865
$
1,290,401
Industrial
999,771
803,302
Office Products
432,666
410,511
Electrical/Electronic Materials
139,814
100,298
Other (1)
(2,918
)
(2,397
)
Total net sales
$
2,974,198
$
2,602,115
Operating profit:
Automotive
$
97,899
$
88,905
Industrial
66,009
48,846
Office Products
37,404
36,559
Electrical/Electronic Materials
10,070
6,815
Total operating profit
211,382
181,125
Interest expense, net
(6,500
)
(6,733
)
Other, net
(12,902
)
(12,277
)
Income before income taxes
$
191,980
$
162,115
Capital expenditures
$
14,534
$
9,850
Depreciation and amortization
$
22,545
$
22,143
(1)
Represents the net effect of discounts, incentives and freight billed reported as a component of net sales.
3
GENUINE PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
March 31,
March 31,
2011
2010
(Unaudited)
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
465,882
$
333,537
Trade accounts receivable, net
1,490,744
1,323,980
Merchandise inventories, net
2,236,758
2,211,457
Prepaid expenses and other current assets
301,845
277,257
TOTAL CURRENT ASSETS
4,495,229
4,146,231
Goodwill and other intangible assets, less accumulated amortization
229,276
204,907
Deferred tax asset
155,543
167,632
Other assets
209,656
172,723
Net property, plant and equipment
479,816
477,269
TOTAL ASSETS
$
5,569,520
$
5,168,762
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable
$
1,369,542
$
1,185,177
Current portion of debt
250,000
—
Income taxes payable
74,661
78,609
Dividends payable
70,950
65,083
Other current liabilities
238,483
185,260
TOTAL CURRENT LIABILITIES
2,003,636
1,514,129
Long-term debt
250,000
500,000
Retirement and other post-retirement benefit liabilities
252,432
299,567
Other long-term liabilities
184,584
169,500
Common stock
157,543
158,792
Retained earnings and other
2,982,748
2,802,369
Accumulated other comprehensive loss
(270,029
)
(283,579
)
TOTAL PARENT EQUITY
2,870,262
2,677,582
Noncontrolling interests in subsidiaries
8,606
7,984
TOTAL EQUITY
2,878,868
2,685,566
TOTAL LIABILITIES AND EQUITY
$
5,569,520
$
5,168,762
4
GENUINE PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months
Ended March 31,
2011
2010
(Unaudited)
(in thousands)
OPERATING ACTIVITIES:
Net income
$
126,515
$
100,609
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
22,545
22,143
Share-based compensation
512
1,091
Excess tax benefits from share-based compensation
(529
)
—
Other
85
19
Changes in operating assets and liabilities
(95,717
)
15,783
NET CASH PROVIDED BY OPERATING ACTIVITIES
53,411
139,645
INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(14,534
)
(9,850
)
Acquisitions and other
(33,903
)
(65,772
)
NET CASH USED IN INVESTING ACTIVITIES
(48,437
)
(75,622
)
FINANCING ACTIVITIES:
Stock options exercised
609
2,581
Excess tax benefits from share-based compensation
529
—
Dividends paid
(64,600
)
(63,544
)
Purchase of stock
(9,095
)
(9,306
)
NET CASH USED IN FINANCING ACTIVITIES
(72,557
)
(70,269
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
3,497
2,980
NET DECREASE IN CASH AND CASH EQUIVALENTS
(64,086
)
(3,266
)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
529,968
336,803
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
465,882
$
333,537
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