Genuine Parts Company
(Logo: http://www.newscom.com/cgi-bin/prnh/20081002/CLTH108LOGO)
Mr. Gallagher stated, "It was a challenging quarter for us, as the effects of the slower economy impacted each of our four business segments. The Automotive Group and S. P. Richards, our Office Products Group, both reported a 7% sales decrease, while Motion Industries, our Industrial Group, reported a 16% sales decline in the quarter, and EIS, our Electrical Group, had a 25% decrease. Our Industrial and Electrical businesses sell to the manufacturing segment of the economy, which has experienced an overall slowdown in activity over the past several quarters."
Mr. Gallagher added, "While we are not pleased with our first quarter operating results, the balance sheet at March 31, 2009, remains in excellent condition and we continue to strengthen our financial position through working capital and asset management initiatives, as well as steady and strong cash flows. We believe the use of our cash in several key areas, such as the dividend, opportunistic share repurchases, the ongoing investment in each of our businesses and strategic complimentary types of acquisitions, serves to maximize the total return to shareholders."
Mr. Gallagher concluded, "The effects of the economic slowdown are likely to persist for several more quarters. Clearly, these are challenging times; however, our expectation is to show gradual improvement in our overall results as the year progresses. The management teams in each of our business segments are focused on the diligent execution of their respective growth and operating strategies, the prudent management of their cost structure and the continued emphasis on further strengthening our 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 877-316-2549, conference ID 85284172. A replay will also be available on the Company's website or at 800-642-1687, conference ID 85284172, two hours after the completion of the call until 12:00 a.m. Eastern time on May 1, 2009.
Forward Looking Statements
Some statements in this release, 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 our 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 include, but are not limited to, the ability to maintain favorable supplier arrangements and relationships, changes in general economic conditions, the growth rate of the market for the Company's products and services, competitive product and pricing pressures, including internet related initiatives, the effectiveness of the Company's promotional, marketing and advertising programs, changes in financial markets, including particularly the capital and credit markets, 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 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 Form 10-Q, 10-K, 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. 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.
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
Three Months Ended March 31,
2009 2008
---- ----
(Unaudited)
(in thousands, except per share data)
Net sales $2,444,496 $2,739,473
Cost of goods sold 1,712,295 1,919,990
--------- ---------
732,201 819,483
Selling, administrative & other expenses 587,533 627,802
------- -------
Income before income taxes 144,668 191,681
Income taxes 55,509 68,138
------ ------
Net income $89,159 $123,543
======= ========
Basic net income per common share $.56 $.75
Diluted net income per common share $.56 $.75
Weighted average common shares outstanding 159,444 164,977
Dilutive effect of stock options and
non-vested restricted stock awards 219 729
--- ---
Weighted average common shares outstanding
- assuming dilution 159,663 165,706
======= =======
GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended March 31,
2009 2008
---- ----
(Unaudited)
(in thousands)
Net sales:
Automotive $1,219,128 $1,305,887
Industrial 736,501 881,213
Office Products 412,748 442,392
Electrical/Electronic Materials 86,133 114,301
Other (1) (10,014) (4,320)
-------- -------
Total net sales $2,444,496 $2,739,473
========== ==========
Operating profit:
Automotive $87,407 $90,644
Industrial 34,175 68,992
Office Products 38,728 43,932
Electrical/Electronic Materials 5,668 9,010
----- -----
Total operating profit 165,978 212,578
Interest expense, net (7,096) (7,154)
Other, net (14,214) (13,743)
-------- --------
Income before income taxes $144,668 $191,681
======== ========
Capital expenditures $14,097 $21,762
======= =======
Depreciation and amortization $22,521 $22,684
======= =======
(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
-------------------------------------
March 31, March 31,
2009 2008
---- ----
(Unaudited)
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $133,281 $161,519
Trade accounts receivable, net 1,211,337 1,303,787
Merchandise inventories, net 2,253,036 2,314,536
Prepaid expenses and other current assets 222,253 245,891
------- -------
TOTAL CURRENT ASSETS 3,819,907 4,025,733
Goodwill and intangible assets, less
accumulated amortization 158,427 114,489
Other assets 334,155 195,371
Net property, plant and equipment 412,366 419,825
------- -------
TOTAL ASSETS $4,724,855 $4,755,418
========== ==========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable $964,267 $1,002,742
Current portion of debt 0 250,000
Income taxes payable 70,883 78,994
Dividends payable 63,779 64,283
Other current liabilities 158,445 173,433
------- -------
TOTAL CURRENT LIABILITIES 1,257,374 1,569,452
Long-term debt 500,000 250,000
Other long-term liabilities 110,207 111,064
Retirement benefits liabilities 448,844 89,766
Noncontrolling interests in subsidiaries 69,677 65,462
Common stock 159,446 163,818
Retained earnings and other 2,179,307 2,505,856
--------- ---------
TOTAL EQUITY 2,408,430 2,735,136
--------- ---------
TOTAL LIABILITIES AND EQUITY $4,724,855 $4,755,418
========== ==========
NOTE: Certain prior period amounts have been reclassified to conform to
current year presentation.
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
Three Months
Ended March 31,
2009 2008
---- ----
(Unaudited)
(in thousands)
OPERATING ACTIVITIES:
Net income $89,159 $123,543
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 22,521 22,684
Other 2,257 892
Changes in operating assets and
liabilities 33,565 (2,527)
------ -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 147,502 144,592
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment (14,097) (21,762)
Acquisitions and other (5,779) (39,003)
------- --------
NET CASH USED IN INVESTING ACTIVITIES (19,876) (60,765)
FINANCING ACTIVITIES:
Stock options exercised 142 752
Excess tax benefits from share-based
compensation - 217
Dividends paid (62,148) (60,789)
Purchase of stock (116) (94,325)
----- --------
NET CASH USED IN FINANCING ACTIVITIES (62,122) (154,145)
-------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 65,504 (70,318)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 67,777 231,837
------ -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $133,281 $161,519
======== ========
First Call Analyst:
FCMN Contact:
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk,
SOURCE: Genuine Parts Company
CONTACT: Jerry W. Nix, Vice Chairman and CFO, +1-770-612-2048, or Sidney
G. Jones, Vice President-Investor Relations, +1-770-818-4628, both of Genuine
Parts Company
Web Site: http://www.genpt.com/
