EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Jerry W. Nix, Executive Vice President - Finance
(770) 612-2048
GENUINE PARTS COMPANY
REPORTS SALES AND EARNINGS FOR
SECOND QUARTER AND FIRST HALF OF 2004
Atlanta, Georgia, July 15, 2004 -- Genuine Parts Company (NYSE: GPC) reported
sales and earnings for the second quarter and six months ended June 30, 2004.
Larry Prince, Chairman of the Board of Directors, announced today that sales
totaling $2.3 billion were up 7% compared to the second quarter of 2003. Net
income was $101.1 million, an increase of 12%, compared to $90.1 million for the
second quarter of 2003. On a per share diluted basis, net income was 58 cents,
up 12% compared to 52 cents for the second quarter last year.
For the six months ended June 30, 2004, sales totaled $4.5 billion, up 8%
compared to the same period in 2003. Net income for the six months was $201.3
million, an increase of 13% over $178.6 million recorded in the previous year
before the cumulative effect of an accounting change adopted January 1, 2003.
Earnings per share on a diluted basis were $1.15, up 13% compared to $1.02 for
the same period last year before the accounting change. In accordance with the
Financial Accounting Standards Board's EITF 02-16 affecting the accounting
treatment of cash consideration received from vendors, a non-cash charge of $20
million was recorded as of January 1, 2003, representing the cumulative effect
of a change in accounting principle. After the cumulative effect adjustment in
2003, net income for the six months ended June 30, 2004 was up 27% and diluted
earnings per share were up 26% compared to the six months ended June 30, 2003.
Mr. Prince stated: "Our second quarter results continued the positive direction
established in the first quarter with both sales and earnings reaching record
levels. We were again pleased to see each of our four business segments
contribute to our success in the quarter."
(Cont.)
Page 2
Mr. Prince further commented: "Sales for Motion Industries, our Industrial
Group, and EIS, our Electrical/Electronics Group, were especially strong. Both
of these companies serve the manufacturing sector, which is currently
experiencing a strong recovery from earlier periods. Motion's sales grew by 11%
for the quarter and EIS was up 17%. Automotive sales were up 4% for the period
and S.P. Richards, our Office Products Group, improved by 5%. It is interesting
to note over a period of time how the diversity of our various businesses brings
us strength and balance. The splendid performance we are now seeing at Motion
and EIS is a clear statement to this idea."
Mr. Prince concluded: "We have a number of positives working for us as we move
into the second half of 2004. The diversity of our Company in four sound
industries gives us great balance and we expect to see continued improvement.
Our Balance Sheet remains in excellent shape to support the continued growth
ahead of us and we believe the final half of 2004 will be a good one for Genuine
Parts Company."
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 8306890. A replay will also be
available at 800-642-1687, conference ID 8306890, until 12:00 a.m. EDT on July
29, 2004.
FORWARD LOOKING STATEMENTS
Various statements in this release may constitute forward-looking statements.
Actual results 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, 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., Canada and Mexico 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/Electronics Group, EIS,
Inc., distributes electrical and electronic components throughout the U.S. and
Mexico.
(Cont.)
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- -----------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
(in thousands, except per share data)
Net sales ............................................ $ 2,297,686 $ 2,152,794 $ 4,494,677 $ 4,174,652
Cost of goods sold ................................... 1,604,621 1,501,411 3,114,701 2,884,929
----------- ----------- ----------- -----------
693,065 651,383 1,379,976 1,289,723
Selling, administrative & other expenses ............. 529,132 503,356 1,053,646 996,501
----------- ----------- ----------- -----------
Income before income taxes and cumulative
effect of a change in accounting principle ........ 163,933 148,027 326,330 293,222
Income taxes ......................................... 62,787 57,879 124,985 114,650
----------- ----------- ----------- -----------
Net income before cumulative effect of
a change in accounting principle .................. 101,146 90,148 201,345 178,572
Cumulative effect of a change in
accounting principle (1) .......................... -- -- -- (19,541)
----------- ----------- ----------- -----------
Net income ........................................... $ 101,146 $ 90,148 $ 201,345 $ 159,031
=========== =========== =========== ===========
Basic net income per common share:
Before cumulative effect of a change in
accounting principle .............................. $ .58 $ .52 $ 1.15 $ 1.03
Cumulative effect of a change in accounting principle -- -- -- (.12)
----------- ----------- ----------- -----------
Basic net income ..................................... $ .58 $ .52 $ 1.15 $ 91
=========== =========== =========== ===========
Diluted net income per common share:
Before cumulative effect of a change in
accounting principle .............................. $ .58 $ .52 $ 1.15 $ 1.02
Cumulative effect of a change in accounting principle -- -- -- (.11)
----------- ----------- ----------- -----------
Diluted net income ................................... $ .58 $ .52 $ 1.15 $ 91
=========== =========== =========== ===========
Weighted average common shares outstanding ........... 174,829 173,895 174,575 174,019
Dilutive effect of stock options and
non-vested restricted stock awards ................ 815 565 694 498
----------- ----------- ----------- -----------
Weighted average common shares outstanding
assuming dilution ................................. 175,644 174,460 175,269 174,517
=========== =========== =========== ===========
(1) On January 1, 2003 the Company recorded a non-cash charge related to
the capitalization of certain vendor consideration in connection with
the Financial Accounting Standards Board's EITF No. 02-16, "Accounting
by a Customer (Including a Reseller) for Certain Consideration Received
from a Vendor".
(Cont.)
GENUINE PARTS COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
(Unaudited)
Three month period ended June 30, Six month period ended June 30,
2004 2003 2004 2003
----------- ----------- ----------- -----------
(in thousands)
Net sales:
Automotive ...................... $ 1,218,695 $ 1,167,797 $ 2,345,246 $ 2,190,268
Industrial ...................... 629,402 565,912 1,237,906 1,135,542
Office Products ................. 372,354 355,448 759,144 719,274
Electrical/Electronic Materials . 85,827 73,283 168,906 148,700
Other (1) ....................... (8,592) (9,646) (16,525) (19,132)
----------- ----------- ----------- -----------
Total net sales ............. $ 2,297,686 $ 2,152,794 $ 4,494,677 $ 4,174,652
=========== =========== =========== ===========
Operating profit:
Automotive ...................... $ 109,492 $ 103,832 $ 202,753 $ 187,262
Industrial ...................... 38,179 33,232 84,298 76,419
Office Products ................. 32,694 31,333 76,448 72,889
Electrical/Electronic Materials . 4,300 1,916 7,520 3,513
----------- ----------- ----------- -----------
Total operating profit ...... 184,665 170,313 371,019 340,083
Interest expense ................ (9,870) (13,350) (19,847) (27,044)
Other, net ...................... (10,862) (8,936) (24,842) (19,817)
----------- ----------- ----------- -----------
Income before income taxes
and accounting change ..... $ 163,933 $ 148,027 $ 326,330 $ 293,222
=========== =========== =========== ===========
Capital expenditures ................. $ 13,514 $ 11,529 $ 25,571 $ 37,188
=========== =========== =========== ===========
Depreciation and amortization ........ $ 16,998 $ 18,740 $ 33,191 $ 35,771
=========== =========== =========== ===========
Current ratio ........................ 3.0/1 3.4/1
=========== ===========
Total debt to total capitalization ... 20.5% 26.6%
=========== ===========
(1) Represents the net effect of discounts, incentives and freight billed
reported as a component of net sales.
(Cont.)
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, June 30,
2004 2003
---------- ----------
(Unaudited)
(in thousands)
CURRENT ASSETS
Cash and cash equivalents ................................................. $ 127,732 $ 21,942
Trade accounts receivable ................................................. 1,173,766 1,138,389
Inventories ............................................................... 2,139,207 2,044,336
Prepaid and other current accounts ........................................ 110,937 84,776
---------- ----------
TOTAL CURRENT ASSETS ............................................. 3,551,642 3,289,443
Goodwill and other intangible assets ...................................... 57,850 58,297
Other assets .............................................................. 319,735 334,771
Total property, plant and equipment, net .................................. 332,863 338,982
---------- ----------
TOTAL ASSETS .............................................................. $4,262,090 $4,021,493
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable .......................................................... $ 772,563 $ 624,476
Current portion long-term debt and other borrowings ....................... 127,172 130,818
Income taxes .............................................................. 45,386 24,105
Dividends payable ......................................................... 52,483 51,297
Other current liabilities ................................................. 173,897 150,392
---------- ----------
TOTAL CURRENT LIABILITIES ........................................ 1,171,501 981,088
Long-term debt ............................................................ 500,000 671,682
Deferred income taxes ..................................................... 113,254 100,597
Minority interests in subsidiaries ........................................ 51,514 48,559
Common stock .............................................................. 174,993 173,936
Retained earnings and other ............................................... 2,250,828 2,045,631
---------- ----------
TOTAL SHAREHOLDERS' EQUITY ....................................... 2,425,821 2,219,567
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ................................ $4,262,090 4,021,493
========== ==========
(Cont.)
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months
Ended June 30,
--------------
(in thousands)
2004 2003
--------- ---------
OPERATING ACTIVITIES:
Net income .................................................................. $ 201,345 $ 159,031
Adjustments to reconcile net income to net cash provided by operating
activities:
Cumulative effect of a change in accounting principle ..................... -- 19,541
Depreciation and amortization ............................................. 33,191 35,771
Other ..................................................................... 1,656 (2,242)
Changes in operating assets and liabilities ............................... 1,483 (66,186)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES ...................................... 237,675 145,915
INVESTING ACTIVITIES:
Purchase of property, plant and equipment ................................... (25,571) (37,188)
Other ....................................................................... -- (863)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES .......................................... (25,571) (38,051)
FINANCING ACTIVITIES:
Net (payments) proceeds on credit facilities ................................ (21,900) 10,999
Stock options exercised ..................................................... 28,918 1,401
Dividends paid .............................................................. (103,667) (101,946)
Purchase of stock ........................................................... (3,116) (16,371)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES .......................................... (99,765) (105,917)
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS ...................................... 112,339 1,947
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............................... 15,393 19,995
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..................................... $ 127,732 $ 21,942
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