ATLANTA, Feb. 17, 2015 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) announced today fourth quarter results and
record sales and earnings for the year ended December 31, 2014.
Sales in the fourth quarter ended December 31, 2014 increased 9% to $3.8 billion, compared to sales of $3.5 billion for the same period in 2013.
Net income in the fourth quarter was $166
million, or $1.07 per share on
a diluted basis, compared to $150
million, or $0.97 per diluted
share, in 2013, up 10%.
In review of the fourth quarter, Tom
Gallagher, Chairman and Chief Executive Officer, commented,
"We are pleased to report another solid quarter of sales and
earnings growth for Genuine Parts Company. Our 9% total sales
increase includes approximately 7.6% underlying sales growth and a
2.7% contribution from acquisitions, offset by a currency headwind
of approximately 1.6%. Our overall sales growth was supported
by increases in each of our four business segments. Sales for
the Automotive Group were up 4%, consisting of core automotive
growth of 6% and a 0.5% contribution from acquisitions. These
items were offset by a 2.5% negative impact of currency.
Sales at Motion Industries, our Industrial Group, were up 10%,
including 9% underlying growth and 2% from acquisitions offset by a
currency headwind of approximately 1%. Sales at EIS, our
Electrical/Electronic Group, increased by 23% and include a 20%
contribution from acquisitions and 3% underlying growth.
Sales for S. P. Richards, our Office
Products Group, were up 22%, consisting of 14% underlying growth
and 8% from acquisitions."
Sales for the year ended December 31,
2014 were $15.3 billion, up 9%
compared to 2013. Net income for the year was $711 million, an increase of 4% compared to
$685 million in 2013. Earnings
per share on a diluted basis were $4.61, up 5% compared to $4.40 in 2013.
As previously disclosed, in association with the April 1, 2013 acquisition of GPC Asia Pacific,
the Company's initial investment was remeasured and, net of certain
one-time purchase accounting costs, amounted to a pre-tax income
adjustment of approximately $36
million, or $0.22 diluted
earnings per share, in the second quarter of 2013.
Additionally, a pre-tax expense adjustment of $3 million, or $0.01 diluted earnings per share, was recorded in
the third quarter of 2013.
Before the one-time adjustment in 2013, net income for the full
year in 2014 of $711 million, was up
9% compared to the previous year. Earnings per share on a
diluted basis of $4.61 were up 10%
compared to the same period in 2013 excluding the adjustment.
Mr. Gallagher stated, "2014 was another year of record sales and
earnings, and we are especially pleased that each of our four
business segments contributed to these records. We also
improved our operating margin for the year and further improved our
financial strength with effective asset management and solid cash
flows."
Mr. Gallagher added, "Industry fundamentals were favorable in
the automotive aftermarket during 2014, and we also experienced
improving industry conditions across our non-automotive businesses
during the year. These factors, combined with our internal
sales initiatives, drove sales growth of approximately 5% for the
year, while acquisitions also contributed approximately 5% to
sales. These items were offset by a currency headwind of
approximately 1%. Automotive sales were up 8% for the year,
including approximately 6% underlying sales growth and a 4%
contribution from acquisitions, offset by a currency headwind of
approximately 2%. Industrial Group sales increased by
8%, consisting of 6% underlying growth and 3% from acquisitions,
offset by the negative impact of currency of approximately
1%. Electrical/Electronic sales increased by 30% for the
year, primarily due to acquisitions. Sales for the Office
Products business were up 10%, with approximately 5% coming from
underlying growth and another 5% from acquisitions."
Mr. Gallagher concluded, "The Company showed progress in a
number of key areas in 2014 and we are proud of the GPC Team's
accomplishments. With that said, we recognize there is still
room for further improvement in our operations as we move
forward. To this end, we remain committed to our core
objectives of growing sales and earnings, showing continued
operating margin improvement, generating solid cash flows and
maintaining a strong balance sheet. Progress in each of these
important areas will keep the Company moving ahead and will help to
ensure another successful year in 2015."
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 to the call on the Company's website,
www.genpt.com, by clicking "Investors", or by dialing 844-857-1770,
conference ID 66755202. A replay will also be available on
the Company's website or at 855-859-2056, conference ID 66755202,
two hours after the completion of the call until 12:00 a.m. Eastern time on March 4, 2015.
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 Company's
ability to successfully integrate its acquired businesses, 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 2013 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, 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,
Mexico and Australasia. 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 in the U.S. and Canada. The Electrical/Electronic Group, EIS,
Inc., distributes electrical and electronic components throughout
the U.S., Canada and Mexico.
GENUINE PARTS
COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
|
Three Months Ended
Dec. 31,
|
Year Ended Dec.
31,
|
|
2014
|
2013
|
2014
|
2013
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
Net sales
|
$3,822,454
|
$3,517,801
|
$15,341,647
|
$14,077,843
|
Cost of goods
sold
|
2,675,913
|
2,425,660
|
10,747,886
|
9,857,923
|
Gross
profit
|
1,146,541
|
1,092,141
|
4,593,761
|
4,219,920
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
administrative & other expenses
|
841,546
|
820,563
|
3,327,709
|
3,041,659
|
Depreciation and
amortization
|
39,691
|
35,885
|
148,313
|
133,957
|
|
881,237
|
856,448
|
3,476,022
|
3,175,616
|
|
|
|
|
|
Income before income
taxes
|
265,304
|
235,693
|
1,117,739
|
1,044,304
|
Income
taxes
|
99,745
|
85,226
|
406,453
|
359,345
|
|
|
|
|
|
Net income
|
$
165,559
|
$
150,467
|
$
711,286
|
$
684,959
|
|
|
|
|
|
Basic net income per
common share
|
$1.08
|
$0.98
|
$4.64
|
$4.43
|
|
|
|
|
|
Diluted net income
per common share
|
$1.07
|
$0.97
|
$4.61
|
$4.40
|
|
|
|
|
|
Weighted average
common shares outstanding
|
152,996
|
154,047
|
153,299
|
154,636
|
|
|
|
|
|
Dilutive effect of
stock options and
|
|
|
|
|
non-vested restricted stock awards
|
1,088
|
1,075
|
1,076
|
1,078
|
|
|
|
|
|
Weighted average
common shares outstanding –
|
|
|
|
|
assuming
dilution
|
154,084
|
155,122
|
154,375
|
155,714
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
|
|
|
Three Months Ended
Dec. 31,
|
Year Ended Dec.
31,
|
|
2014
|
2013
|
2014
|
2013
|
|
(in
thousands)
|
|
|
|
|
|
Net sales:
|
|
|
|
|
Automotive
|
$1,988,448
|
$1,916,771
|
$ 8,096,877
|
$ 7,489,186
|
Industrial
|
1,198,032
|
1,085,555
|
4,771,080
|
4,429,976
|
Office
Products
|
469,299
|
385,761
|
1,802,754
|
1,638,618
|
Electrical/Electronic
Materials
|
177,433
|
143,899
|
739,119
|
568,872
|
Other (1)
|
(10,758)
|
(14,185)
|
(68,183)
|
(48,809)
|
Total net
sales
|
$3,822,454
|
$3,517,801
|
$15,341,647
|
$14,077,843
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
Automotive
|
$ 150,335
|
$ 153,901
|
$ 700,386
|
$ 641,492
|
Industrial
|
96,303
|
73,338
|
370,043
|
320,720
|
Office
Products
|
35,280
|
31,438
|
133,727
|
122,492
|
Electrical/Electronic
Materials
|
15,126
|
12,287
|
64,884
|
47,584
|
Total operating
profit
|
297,044
|
270,964
|
1,269,040
|
1,132,288
|
Interest expense,
net
|
(5,479)
|
(6,094)
|
(24,192)
|
(24,330)
|
Intangible
amortization
|
(10,546)
|
(8,500)
|
(36,867)
|
(28,987)
|
Other, net
|
(15,715)
|
(20,677)
|
(90,242)
|
(34,667)
|
Income before income
taxes
|
$
265,304
|
$
235,693
|
$
1,117,739
|
$
1,044,304
|
|
|
|
|
|
Capital
expenditures
|
$
33,897
|
$
39,917
|
$
107,681
|
$
124,063
|
|
|
|
|
|
Depreciation and
amortization
|
$
39,691
|
$
35,885
|
$
148,313
|
$
133,957
|
|
|
|
|
|
|
|
|
|
|
(1) Represents the
net effect of discounts, incentives and freight billed reported as
a component of net sales.
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
Dec. 31,
|
Dec. 31,
|
|
2014
|
2013
|
|
(in
thousands)
|
ASSETS
|
|
|
CURRENT
ASSETS
|
|
|
Cash and cash
equivalents
|
$ 137,730
|
$ 196,893
|
Trade accounts
receivable, net
|
1,872,365
|
1,664,819
|
Merchandise
inventories, net
|
3,043,848
|
2,946,021
|
Prepaid expenses and
other current assets
|
538,582
|
413,758
|
|
|
|
TOTAL CURRENT
ASSETS
|
5,592,525
|
5,221,491
|
|
|
|
Goodwill and other
intangible assets, less accumulated amortization
|
1,386,590
|
1,289,356
|
Deferred tax
assets
|
145,331
|
97,555
|
Other
assets
|
451,690
|
401,834
|
Net property, plant
and equipment
|
670,102
|
670,061
|
|
|
|
TOTAL
ASSETS
|
$8,246,238
|
$7,680,297
|
|
LIABILITIES AND
EQUITY
|
|
|
CURRENT
LIABILITIES
|
|
|
Trade accounts
payable
|
$2,554,759
|
$2,269,671
|
Current portion of
debt
|
265,466
|
264,658
|
Dividends
payable
|
88,039
|
82,746
|
Other accrued
expenses
|
675,851
|
565,969
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
3,584,115
|
3,183,044
|
|
|
|
|
|
|
Long-term
debt
|
500,000
|
500,000
|
Pension and other
post-retirement benefit liabilities
|
329,531
|
140,171
|
Deferred tax
liabilities
|
72,479
|
83,316
|
Other long-term
liabilities
|
447,749
|
414,998
|
|
|
|
Common
stock
|
153,113
|
153,773
|
Retained
earnings
|
3,868,346
|
3,592,956
|
Accumulated other
comprehensive loss
|
(720,211)
|
(397,655)
|
|
|
|
TOTAL PARENT
EQUITY
|
3,301,248
|
3,349,074
|
|
|
|
Noncontrolling
interests in subsidiaries
|
11,116
|
9,694
|
|
|
|
TOTAL
EQUITY
|
3,312,364
|
3,358,768
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
$8,246,238
|
$7,680,297
|
|
|
|
|
|
|
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Year Ended Dec.
31,
|
|
2014
|
2013
|
|
(in
thousands)
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
Net income
|
$711,286
|
$684,959
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
148,313
|
133,957
|
Share-based
compensation
|
16,239
|
12,648
|
Excess tax benefits
from share-based compensation
|
(17,766)
|
(12,905)
|
Gain on GPC Asia
Pacific equity investment
|
—
|
(59,000)
|
Other
|
50,600
|
(26,351)
|
Changes in operating
assets and liabilities
|
(118,527)
|
323,423
|
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
790,145
|
1,056,731
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
Purchases of property,
plant and equipment
|
(107,681)
|
(124,063)
|
Acquisitions and other
investing activities
|
(279,034)
|
(701,516)
|
|
|
|
NET CASH USED IN
INVESTING ACTIVITIES
|
(386,715)
|
(825,579)
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
Proceeds from
debt
|
2,727,924
|
3,019,931
|
Payments on
debt
|
(2,735,862)
|
(2,995,335)
|
Share-based awards
exercised, net of taxes paid
|
(22,051)
|
(15,728)
|
Excess tax benefits
from share-based compensation
|
17,766
|
12,905
|
Dividends
paid
|
(347,271)
|
(326,217)
|
Purchase of
stock
|
(95,946)
|
(120,673)
|
|
|
|
NET CASH USED IN
FINANCING ACTIVITIES
|
(455,440)
|
(425,117)
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
(7,153)
|
(12,237)
|
|
|
|
NET DECREASE IN
CASH AND CASH EQUIVALENTS
|
(59,163)
|
(206,202)
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF YEAR
|
196,893
|
403,095
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF YEAR
|
$137,730
|
$196,893
|
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SOURCE Genuine Parts Company