ATLANTA, July 20, 2015 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) announced today sales and earnings for the
second quarter and six months ended June 30,
2015.
Sales for the second quarter ended June
30, 2015, increased 1% to $3.94
billion compared to sales of $3.91
billion for the same period in 2014. Net income for
the second quarter was $195.4 million
compared to $197.7 million recorded
for the same period in the previous year. Earnings per share on a
diluted basis were $1.28, equal to
the earnings per share for the second quarter last year.
Tom Gallagher, Chairman and Chief
Executive Officer, commented, "Our results reflect the moderation
in our sales and earnings growth rates in the second quarter,
primarily due to the ongoing choppiness in the economy. This
is especially the case for our Industrial business. Overall,
our 1% second quarter sales increase included underlying sales
growth of 2.2% and a 1.3% contribution from acquisitions, offset by
an expected currency headwind of 2.7%. Sales for the
Automotive Group were essentially flat with the prior year and
consisted of core automotive growth of approximately 4% offset by
the impact of currency. Sales at Motion Industries, our
Industrial Group, decreased by approximately 2%, which basically
represents the underlying growth for this business, as a 1%
contribution from acquisitions was offset by an equal currency
headwind. Sales at EIS, our Electrical/Electronic Group,
increased by 3.5% and included approximately 6% growth from
acquisitions, net of a 2% decrease in core sales and a 0.5%
negative impact of copper pricing. Sales for S. P. Richards, our Office Products Group, were
up 14%, consisting of 9% underlying growth and approximately 5%
from acquisitions."
Sales for the six months ended June 30,
2015 were $7.68 billion, up 2%
compared to 2014. Net income for the six months was
$356.4 million, basically unchanged
from 2014, and earnings per share on a diluted basis were
$2.33, up 1% compared to $2.30 in 2014.
Mr. Gallagher concluded, "In the midst of the challenging sales
environment, two important highlights thus far in 2015 include the
further strengthening of our balance sheet and improved cash flows,
which position us well for future growth. Our teams are very
focused on driving improved results over the balance of the
year. We believe the initiatives we have put in
place should contribute to our growth in each of our four
distribution businesses as we move ahead."
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 "Investors", or by dialing 844-857-1770, conference ID
77046416. A replay will also be available on the Company's
website or at 855-859-2056, conference ID 77046416, two hours after
the completion of the call until 12:00 a.m.
Eastern time on August 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 2014 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 June
30,
|
Six months Ended June
30,
|
|
2015
|
2014
|
2015
|
2014
|
|
(Unaudited)
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
Net sales
|
$3,940,401
|
$3,908,387
|
$7,676,452
|
$7,533,284
|
Cost of goods
sold
|
2,762,071
|
2,729,219
|
5,385,303
|
5,269,486
|
Gross
profit
|
1,178,330
|
1,179,168
|
2,291,149
|
2,263,798
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
administrative & other expenses
|
832,610
|
832,205
|
1,658,164
|
1,636,006
|
Depreciation and
amortization
|
35,603
|
36,783
|
71,487
|
73,640
|
|
868,213
|
868,988
|
1,729,651
|
1,709,646
|
|
|
|
|
|
Income before income
taxes
|
310,117
|
310,180
|
561,498
|
554,152
|
Income
taxes
|
114,744
|
112,453
|
205,115
|
198,941
|
|
|
|
|
|
Net income
|
$
195,373
|
$
197,727
|
$
356,383
|
$
355,211
|
|
|
|
|
|
Basic net income per
common share
|
$1.28
|
$1.29
|
$2.34
|
$2.31
|
|
|
|
|
|
Diluted net income
per common share
|
$1.28
|
$1.28
|
$2.33
|
$2.30
|
|
|
|
|
|
Weighted average
common shares outstanding
|
152,134
|
153,463
|
152,394
|
153,595
|
|
|
|
|
|
Dilutive effect of
stock options and
|
|
|
|
|
non-vested restricted stock awards
|
855
|
1,069
|
880
|
1,063
|
|
|
|
|
|
Weighted average
common shares outstanding – assuming dilution
|
152,989
|
154,532
|
153,274
|
154,658
|
|
|
|
|
|
GENUINE PARTS COMPANY and
SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL
HIGHLIGHTS
|
Three Months Ended
June 30,
|
Six Months Ended June
30,
|
|
2015
|
2014
|
2015
|
2014
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
|
|
Net sales:
|
|
|
|
|
Automotive
|
$2,103,126
|
$2,110,396
|
$4,001,634
|
$4,008,911
|
Industrial
|
1,188,031
|
1,209,235
|
2,369,854
|
2,352,509
|
Office
Products
|
477,755
|
418,785
|
968,053
|
836,883
|
Electrical/Electronic
Materials
|
194,701
|
188,034
|
376,747
|
368,365
|
Other (1)
|
(23,212)
|
(18,063)
|
(39,836)
|
(33,384)
|
Total net
sales
|
$3,940,401
|
$3,908,387
|
$7,676,452
|
$7,533,284
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
Automotive
|
$ 207,443
|
$ 206,683
|
$ 358,084
|
$ 356,793
|
Industrial
|
88,876
|
95,428
|
176,645
|
178,478
|
Office
Products
|
34,501
|
31,183
|
71,025
|
65,129
|
Electrical/Electronic
Materials
|
18,568
|
16,463
|
34,031
|
31,992
|
Total operating
profit
|
349,388
|
349,757
|
639,785
|
632,392
|
Interest expense,
net
|
(5,674)
|
(6,224)
|
(11,001)
|
(12,430)
|
Intangible
amortization
|
(8,796)
|
(8,498)
|
(17,400)
|
(17,374)
|
Other, net
|
(24,801)
|
(24,855)
|
(49,886)
|
(48,436)
|
Income before income
taxes
|
$
310,117
|
$
310,180
|
$
561,498
|
$
554,152
|
|
|
|
|
|
Capital
expenditures
|
$
21,037
|
$
21,536
|
$
37,464
|
$
39,923
|
|
|
|
|
|
Depreciation and
amortization
|
$
35,603
|
$
36,783
|
$
71,487
|
$
73,640
|
(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
|
|
|
June 30,
|
June 30,
|
|
|
2015
|
2014
|
|
|
(Unaudited)
|
|
|
(in
thousands)
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$ 223,840
|
$ 152,863
|
|
Trade accounts
receivable, net
|
2,008,445
|
1,909,268
|
|
Merchandise
inventories, net
|
3,025,165
|
2,987,143
|
|
Prepaid expenses and
other current assets
|
506,070
|
463,087
|
|
|
|
|
|
TOTAL CURRENT
ASSETS
|
5,763,520
|
5,512,361
|
|
|
|
|
|
Goodwill and other
intangible assets, less accumulated amortization
|
1,382,766
|
1,432,862
|
|
Deferred tax
assets
|
139,928
|
89,196
|
|
Other
assets
|
486,885
|
555,825
|
|
Net property, plant
and equipment
|
640,534
|
661,304
|
|
|
|
|
|
TOTAL
ASSETS
|
$8,413,633
|
$8,251,548
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Trade accounts
payable
|
$2,743,444
|
$2,489,570
|
|
Current portion of
debt
|
350,000
|
306,358
|
|
Income taxes
payable
|
1,069
|
22,639
|
|
Dividends
payable
|
93,496
|
88,211
|
|
Other accrued
expenses
|
679,613
|
600,076
|
|
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
3,867,622
|
3,506,854
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
500,000
|
500,000
|
|
Pension and other
post-retirement benefit liabilities
|
261,783
|
137,616
|
|
Deferred tax
liabilities
|
68,428
|
85,584
|
|
Other long-term
liabilities
|
460,302
|
484,000
|
|
|
|
|
|
Common
stock
|
151,709
|
153,306
|
|
Retained
earnings
|
3,901,607
|
3,725,279
|
|
Accumulated other
comprehensive loss
|
(809,501)
|
(351,415)
|
|
|
|
|
|
TOTAL PARENT
EQUITY
|
3,243,815
|
3,527,170
|
|
|
|
|
|
Noncontrolling
interests in subsidiaries
|
11,683
|
10,324
|
|
|
|
|
|
TOTAL
EQUITY
|
3,255,498
|
3,537,494
|
|
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
$8,413,633
|
$8,251,548
|
|
|
|
|
|
GENUINE PARTS COMPANY and
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
Six Months Ended June
30,
|
|
2015
|
2014
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
Net income
|
$356,383
|
$355,211
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
71,487
|
73,640
|
Share-based
compensation
|
8,646
|
7,855
|
Excess tax benefits
from share-based compensation
|
(5,300)
|
(5,948)
|
Changes in operating
assets and liabilities
|
22,892
|
(63,656)
|
|
|
|
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
454,108
|
367,102
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
Purchases of property,
plant and equipment
|
(37,464)
|
(39,923)
|
Acquisitions and other
investing activities
|
(80,140)
|
(178,889)
|
|
|
|
NET CASH USED IN
INVESTING ACTIVITIES
|
(117,604)
|
(218,812)
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
Proceeds from
debt
|
1,634,587
|
1,246,613
|
Payments on
debt
|
(1,552,554)
|
(1,214,169)
|
Share-based awards
exercised, net of taxes paid
|
(5,914)
|
(6,754)
|
Excess tax benefits
from share-based compensation
|
5,300
|
5,948
|
Dividends
paid
|
(181,883)
|
(171,171)
|
Purchase of
stock
|
(145,219)
|
(53,769)
|
|
|
|
NET CASH USED IN
FINANCING ACTIVITIES
|
(245,683)
|
(193,302)
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
(4,711)
|
982
|
|
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
86,110
|
(44,030)
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
137,730
|
196,893
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$223,840
|
$152,863
|
|
|
|
|
|
|
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SOURCE Genuine Parts Company