Genuine Parts Company Reports Fourth Quarter and Full Year Results for 2011
ATLANTA, Feb. 21, 2012 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) reports fourth quarter results and record sales and earnings for the year ended December 31, 2011.
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Tom Gallagher, Chairman and Chief Executive Officer, announced today that sales in 2011 were $12.5 billion, up 11% compared to 2010. Net income for the year was $565 million, an increase of 19% compared to $476 million in 2010. Earnings per share on a diluted basis were $3.58, up 19% compared to $3.00 in 2010.
Mr. Gallagher stated, "Genuine Parts Company had another excellent year in 2011, highlighted by double-digit sales and earnings growth and record sales and earnings per share for the second consecutive year. We further strengthened our financial condition with increased net income, an expanded operating margin and a continued emphasis on effectively managing the balance sheet. We are very proud of the job that was done throughout our organization."
Mr. Gallagher added, "All four of our business segments produced top line growth for the year. The Automotive Group reported an 8% sales increase for the year, and the positive sales trends for this segment in 2011 reflect the ongoing solid fundamentals in the automotive aftermarket, including the overall aging of the vehicle population. Motion Industries, our industrial distribution company, generated a 19% sales increase with the strong double-digit sales growth at Motion driven by the combination of good internal growth initiatives and the strength in the manufacturing sector of the economy. EIS, our Electrical distribution company, had another outstanding year as well, and sales were up 24%. S.P. Richards, our Office Products Group, reported a 3% increase in revenues in 2011. We were pleased to show some growth in such a difficult environment for the office products industry."
Fourth Quarter 2011
Sales increased 7% to $3.0 billion in the fourth quarter ended December 31, 2011, compared to sales of $2.8 billion for the same period in 2010. Net income in the fourth quarter was $135 million, an increase of 14% compared to $119 million in 2010. Diluted earnings per share in the fourth quarter were 86 cents, up 15% compared to 75 cents per share for the fourth quarter of 2010.
In reviewing the quarter, Mr. Gallagher commented, "Overall, our businesses continued to perform well in the fourth quarter. Our Automotive sales were up 6%, our Industrial Group sales were up 13%, our Electrical Group sales were up 10% and our Office Products Group sales were down slightly for the quarter."
Mr. Gallagher concluded, "We enter 2012 with a continued commitment to growing sales and earnings, generating solid cash flows and maintaining a strong balance sheet. Further progress in each of these important areas will keep the Company moving ahead and they will help to insure another successful year in 2012."
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 "Investor Services", or by dialing 877-331-5106, conference ID 46254235. A replay will also be available on the Company's website or at 855-859-2056, conference ID 46254235, two hours after the completion of the call until 12:00 a.m. EST on March 6, 2012.
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 with which we do business, 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 2010 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 Dec. 31, | Year Ended Dec. 31, | ||||
2011 | 2010 | 2011 | 2010 | ||
(Unaudited) | |||||
(in thousands, except per share data) | |||||
Net sales | $3,014,135 | $2,807,728 | $12,458,877 | $11,207,589 | |
Cost of goods sold | 2,121,535 | 1,990,600 | 8,852,837 | 7,954,645 | |
Gross profit | 892,600 | 817,128 | 3,606,040 | 3,252,944 | |
Operating expenses: | |||||
Selling, administrative & other expenses | 660,428 | 608,832 | 2,626,298 | 2,401,829 | |
Depreciation and amortization | 21,997 | 21,910 | 88,936 | 89,332 | |
682,425 | 630,742 | 2,715,234 | 2,491,161 | ||
Income before income taxes | 210,175 | 186,386 | 890,806 | 761,783 | |
Income taxes | 75,218 | 67,736 | 325,690 | 286,272 | |
Net income | $134,957 | $118,650 | $565,116 | $475,511 | |
Basic net income per common share | $.87 | $.75 | $3.61 | $3.01 | |
Diluted net income per common share | $.86 | $.75 | $3.58 | $3.00 | |
Weighted average common shares outstanding | 155,567 | 157,543 | 156,656 | 158,032 | |
Dilutive effect of stock options and | |||||
non-vested restricted stock awards | 1,095 | 775 | 1,004 | 429 | |
Weighted average common shares outstanding – | |||||
assuming dilution | 156,662 | 158,318 | 157,660 | 158,461 | |
GENUINE PARTS COMPANY and SUBSIDIARIES SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS | |||||
Three Months Ended Dec. 31, | Year Ended Dec. 31, | ||||
2011 | 2010 | 2011 | 2010 | ||
(Unaudited) | |||||
(in thousands) | |||||
Net sales: | |||||
Automotive | $1,460,152 | $1,376,734 | $6,061,424 | $5,608,101 | |
Industrial | 1,032,719 | 915,166 | 4,173,574 | 3,521,863 | |
Office Products | 391,403 | 394,979 | 1,689,368 | 1,641,963 | |
Electrical/Electronic Materials | 137,601 | 125,603 | 557,537 | 449,770 | |
Other (1) | (7,740) | (4,754) | (23,026) | (14,108) | |
Total net sales | $3,014,135 | $2,807,728 | $12,458,877 | $11,207,589 | |
Operating profit: | |||||
Automotive | $89,879 | $82,123 | $467,806 | $421,109 | |
Industrial | 89,139 | 73,796 | 337,628 | 255,616 | |
Office Products | 38,149 | 38,076 | 134,124 | 131,746 | |
Electrical/Electronic Materials | 10,283 | 8,754 | 40,663 | 30,910 | |
Total operating profit | 227,450 | 202,749 | 980,221 | 839,381 | |
Interest expense, net | (5,628) | (6,610) | (24,608) | (26,598) | |
Other, net | (11,647) | (9,753) | (64,807) | (51,000) | |
Income before income taxes | $210,175 | $186,386 | $890,806 | $761,783 | |
Capital expenditures | $39,537 | $26,448 | $103,469 | $85,379 | |
Depreciation and amortization | $21,997 | $21,910 | $88,936 | $89,332 | |
(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, | ||
2011 | 2010 | ||
(in thousands) | |||
ASSETS | |||
CURRENT ASSETS | |||
Cash and cash equivalents | $525,054 | $529,968 | |
Trade accounts receivable, net | 1,461,011 | 1,364,406 | |
Merchandise inventories, net | 2,261,997 | 2,224,717 | |
Prepaid expenses and other current assets | 328,534 | 295,796 | |
TOTAL CURRENT ASSETS | 4,576,596 | 4,414,887 | |
Goodwill and other intangible assets, less accumulated amortization | 279,775 | 209,548 | |
Deferred tax asset | 250,906 | 157,392 | |
Other assets | 272,110 | 199,087 | |
Net property, plant and equipment | 500,204 | 484,130 | |
TOTAL ASSETS | $5,879,591 | $5,465,044 | |
LIABILITIES AND EQUITY | |||
CURRENT LIABILITIES | |||
Trade accounts payable | $1,440,762 | $1,374,930 | |
Current portion of debt | - | 250,000 | |
Income taxes payable | 35,267 | 23,145 | |
Dividends payable | 70,021 | 64,600 | |
Other current liabilities | 266,023 | 259,139 | |
TOTAL CURRENT LIABILITIES | 1,812,073 | 1,971,814 | |
Long-term debt | 500,000 | 250,000 | |
Retirement and other post-retirement benefit liabilities | 493,721 | 258,807 | |
Other long-term liabilities | 280,978 | 181,709 | |
Common stock | 155,651 | 157,636 | |
Retained earnings and other | 3,109,622 | 2,934,535 | |
Accumulated other comprehensive loss | (482,038) | (298,352) | |
TOTAL PARENT EQUITY | 2,783,235 | 2,793,819 | |
Noncontrolling interests in subsidiaries | 9,584 | 8,895 | |
TOTAL EQUITY | 2,792,819 | 2,802,714 | |
TOTAL LIABILITIES AND EQUITY | $5,879,591 | $5,465,044 | |
GENUINE PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
Year Ended Dec. 31, | |||
2011 | 2010 | ||
(in thousands) | |||
OPERATING ACTIVITIES: | |||
Net income | $565,116 | $475,511 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 88,936 | 89,332 | |
Share-based compensation | 7,547 | 7,016 | |
Excess tax benefits from share-based compensation | (5,356) | (3,251) | |
Other | (5,349) | 10,309 | |
Changes in operating assets and liabilities | (25,967) | 99,746 | |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 624,927 | 678,663 | |
INVESTING ACTIVITIES: | |||
Purchases of property, plant and equipment | (103,469) | (85,379) | |
Acquisitions and other | (128,028) | (86,969) | |
NET CASH USED IN INVESTING ACTIVITIES | (231,497) | (172,348) | |
FINANCING ACTIVITIES: | |||
Proceeds from debt | 250,000 | - | |
Payments on debt | (250,000) | - | |
Stock options exercised | (1,049) | 9,085 | |
Excess tax benefits from share-based compensation | 5,356 | 3,251 | |
Dividends paid | (276,369) | (257,898) | |
Purchase of stock | (122,078) | (75,007) | |
NET CASH USED IN FINANCING ACTIVITIES | (394,140) | (320,569) | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (4,204) | 7,419 | |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (4,914) | 193,165 | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 529,968 | 336,803 | |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $525,054 | $529,968 | |
SOURCE Genuine Parts Company
