Genuine Parts Company Reports First Quarter 2010 Results
Genuine Parts Company
(Logo: http://www.newscom.com/cgi-bin/prnh/20081002/CLTH108LOGO )
Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.6 billion were up 6% compared to the first quarter of 2009. Net income for the quarter was $100.6 million, an increase of 13% over $89.2 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 63 cents, up 13% compared to 56 cents for the first quarter last year.
Mr. Gallagher stated, "We are pleased to report a good start to 2010 with three of our four business segments generating sales growth for the first quarter. The Automotive Group reported a 6% sales increase for the quarter, consistent with our results in the fourth quarter of 2009. We are the most encouraged by the sales results in our Industrial and Electrical Groups, which improved significantly from their trends in the fourth quarter and full year in 2009. Motion Industries, our Industrial Group, had a 9% sales increase in the quarter, and EIS, our Electrical Group, had a 16% increase. Both Motion and EIS are benefiting from their internal growth initiatives as well as improving end market conditions in their respective industries. Additionally, Motion completed the BC Bearing acquisition on March 1st and EIS acquired Fay Wire on January 1st. Results at S.P. Richards, our Office Products Group, were down only slightly and improved from the fourth quarter, ending the first quarter down 1%."
Mr. Gallagher concluded, "We are encouraged by this solid start to the year and we feel that each of our businesses is well positioned to contribute to our primary goals of producing solid sales results, improving operating margins, generating strong cash flows and maintaining the strength of our balance sheet. As a result, we feel confident in our ability to drive sales and earnings growth in 2010."
Conference Call
Genuine Parts Company will hold a conference call today at 11:00 a.m. ET 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 65675645. A replay will also be available on the Company's website or at 800-642-1687, conference ID 65675645, two hours after the completion of the call until 12:00 a.m. Eastern time on May 1, 2010.
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 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 demand for the Company's products and services, competitive product, service and pricing pressures, including internet related initiatives, changes in financial markets, including particularly the capital and credit markets, impairment of financial institutions, 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 in the Company's Annual Report on Form 10-K for 2009 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.
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March
31,
2010 2009
---- ----
(Unaudited)
(in thousands, except per
share data)
Net sales $2,602,115 $2,444,496
Cost of goods sold 1,841,640 1,712,295
--------- ---------
Gross profit 760,475 732,201
Operating Expenses:
Selling, administrative & other expenses 576,217 565,012
Depreciation and amortization 22,143 22,521
------ ------
598,360 587,533
Income before income taxes 162,115 144,668
Income taxes 61,506 55,509
------ ------
Net income $100,609 $89,159
======== =======
Basic net income per common share $.63 $.56
Diluted net income per common share $.63 $.56
Weighted average common shares
outstanding 158,771 159,444
Dilutive effect of stock options and
non-vested restricted stock awards 408 219
--- ---
Weighted average common shares
outstanding - assuming dilution 159,179 159,663
======= =======
GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended
March 31,
2010 2009
---- ----
(Unaudited)
(in thousands)
Net sales:
Automotive $1,290,401 $1,219,128
Industrial 803,302 736,501
Office Products 410,511 412,748
Electrical/Electronic Materials 100,298 86,133
Other (1) (2,397) (10,014)
------ -------
Total net sales $2,602,115 $2,444,496
========== ==========
Operating profit:
Automotive $88,905 $87,407
Industrial 48,846 34,175
Office Products 36,559 38,728
Electrical/Electronic Materials 6,815 5,668
----- -----
Total operating profit 181,125 165,978
Interest expense, net (6,733) (7,096)
Other, net (12,277) (14,214)
------- -------
Income before income taxes $162,115 $144,668
======== ========
Capital expenditures $9,850 $14,097
====== =======
Depreciation and amortization $22,143 $22,521
======= =======
(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,
2010 2009
---- ----
(Unaudited)
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $333,537 $133,281
Trade accounts receivable, net 1,323,980 1,211,337
Merchandise inventories, net 2,211,457 2,253,036
Prepaid expenses and other current assets 277,257 222,253
------- -------
TOTAL CURRENT ASSETS 4,146,231 3,819,907
Goodwill and other intangible assets, less
accumulated amortization 204,907 158,427
Deferred tax asset 167,632 216,653
Other assets 172,723 117,502
Net property, plant and equipment 477,269 412,366
------- -------
TOTAL ASSETS $5,168,762 $4,724,855
========== ==========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable $1,185,177 $964,267
Income taxes payable 78,609 70,883
Dividends payable 65,083 63,779
Other current liabilities 185,260 158,445
------- -------
TOTAL CURRENT LIABILITIES 1,514,129 1,257,374
Long-term debt 500,000 500,000
Other long-term liabilities 169,500 110,207
Retirement and other post-retirement
benefit liabilities 299,567 448,844
Common stock 158,792 159,446
Retained earnings and other 2,802,369 2,671,224
Accumulated other comprehensive loss (283,579) (491,917)
-------- --------
TOTAL PARENT EQUITY 2,677,582 2,338,753
Noncontrolling interests in subsidiaries 7,984 69,677
----- ------
TOTAL EQUITY 2,685,566 2,408,430
--------- ---------
TOTAL LIABILITIES AND EQUITY $5,168,762 $4,724,855
========== ==========
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
Three Months
Ended March 31,
2010 2009
---- ----
(Unaudited)
(in thousands)
OPERATING ACTIVITIES:
Net income $100,609 $89,159
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 22,143 22,521
Share-based compensation 1,091 2,370
Other 19 807
Changes in operating assets and liabilities 15,783 85,565
------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES 139,645 200,422
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (9,850) (14,097)
Acquisitions and other (65,772) (5,779)
------- ------
NET CASH USED IN INVESTING ACTIVITIES (75,622) (19,876)
FINANCING ACTIVITIES:
Stock options exercised 2,581 142
Dividends paid (63,544) (62,148)
Changes in cash overdraft position - (52,000)
Purchase of stock (9,306) (116)
------ ----
NET CASH USED IN FINANCING ACTIVITIES (70,269) (114,122)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 2,980 (920)
----- ----
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (3,266) 65,504
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 336,803 67,777
------- ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $333,537 $133,281
======== ========
First Call Analyst:
FCMN Contact:
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
Web Site: http://www.genpt.com/
