Press Releases

ATLANTA, July 19, 2018 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today sales and earnings for the second quarter and six months ended June 30, 2018.

Sales for the second quarter ended June 30, 2018 were a record $4.8 billion, a 17.6% increase compared to $4.1 billion for the same period in 2017.  Net income for the second quarter was $227.0 million and earnings per share on a diluted basis were $1.54, also a new record.  Before the impact of certain transaction and other costs incurred related to the Company's fourth quarter 2017 acquisition of Alliance Automotive Group (AAG) in Europe and the pending transaction to spin-off the Company's Business Products Group, S.P. Richards, adjusted net income was $233.6 million, or $1.59 per diluted share.  Total sales for the second quarter included 3% comparable growth, 14% from acquisitions, including AAG, and a 0.5% benefit from foreign currency translation.

Second quarter sales for the Automotive Group were up 27.7%, including a 2.1% comparable sales increase as well as the benefit of acquisitions and a slightly favorable foreign currency translation.  Sales for the Industrial Group were up 8.7%, including a 6.5% comparable sales increase, and sales for the Business Products Group were flat with the prior year quarter in both total and comparable sales.

Paul Donahue, President and Chief Executive Officer, commented, "We are pleased to report another quarter of record sales, driven by the favorable impact of strategic acquisitions and improved organic sales trends across our business segments.  The positive shift in the underlying sales environment in the automotive business is especially encouraging and, combined with the execution of our plans to drive operating improvement, including plans to address our automotive margin, we are optimistic for improved margin trends as we move ahead."

Sales for the six months ended June 30, 2018 were $9.4 billion, a 17.5% increase compared to $8.0 billion for the same period in 2017.  Net income for the six months was $403.5 million and earnings per share on a diluted basis were $2.74.  Before the transaction and other costs discussed above, adjusted net income was $420.0 million, or $2.85 per diluted share, for the six months.

Mr. Donahue concluded, "We enter the second half of 2018 excited for the opportunities ahead at GPC.  As we move forward with the planned spin-off of our Business Products Group, we remain committed to our core growth and higher-margin global automotive and industrial businesses.  To this end, we are focused on the further strengthening of our core sales growth, maximizing the benefits of our acquisitions and effectively reducing our cost structure to improve our operating results and enhance our long-term sales and profit outlook."

2018 Outlook

The Company is raising its sales guidance to be up 13% to 14%, an increase from the prior guidance of up 12% to 13%.  The Company expects diluted earnings per share to range from $5.49 to $5.64 and is reiterating its earnings guidance for adjusted diluted earnings per share, which excludes any transaction-related costs, of $5.60 to $5.75. The Company currently expects a tax rate of  approximately 25.0%, which is down slightly from the prior guidance of approximately 26.0% for 2018.

Non-GAAP Information

This release contains certain financial information not derived in accordance with United States generally accepted accounting principles ("GAAP"). These items include adjusted net income and adjusted diluted earnings per share. The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. The Company believes that the presentation of adjusted net income and adjusted diluted earnings per share provides meaningful supplemental information to both management and investors that is indicative of the Company's core operations. The Company has included a reconciliation of this additional information to the most comparable GAAP measure following the financial statements below.

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 877-407-0789, conference ID 13681125.  A replay will also be available on the Company's website or at 844-512-2921, conference ID 13681125, two hours after the completion of the call until 12:00 a.m. EDT on August 3, 2018.

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 the proposed business combination transaction between the Company and Essendant, Inc. ("Essendant") in which the Company will spin-off its Business Products Group and combine this business with Essendant or the acquisition of Alliance Automotive Group (AAG) and the anticipated strategic benefits, synergies and other attributes of these transactions, as well as 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, the Company's ability to successfully integrate AAG into the Company and to realize the anticipated synergies and benefits; changes in the European aftermarket; the  Company's ability to complete the transaction to spin-off its Business Products Group and combine it with Essendant, particularly in light of Staples, Inc.'s announced offer to acquire Essendant; the Company's ability to successfully implement its business initiatives in each of its three business segments; slowing demand for the Company's products; changes in national and international legislation or government regulations or policies, including potential import tariffs and data security policies and requirements; changes in general economic conditions, including unemployment, inflation (including the impact of potential tariffs) or deflation; changes in tax policies; volatile exchange rates; significant cost increases, such as rising fuel and freight expenses; labor shortages; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; the ability to maintain favorable vendor arrangements and relationships; disruptions in our vendors' operations, including the impact of potential tariffs and trade considerations on their operations and output, as required to meet product demand; the Company's ability to successfully integrate its other acquired businesses; the uncertainties and costs of litigation; disruptions caused by a failure or breach of the Company's information systems, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for 2017 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, Australasia, France, the U.K., Germany and Poland.  The Company also distributes industrial replacement parts and electrical and electronic materials in the U.S., Canada and Mexico through its Industrial Products Group, comprised of Motion Industries and EIS, Inc.  S.P. Richards Company, the Business Products Group, distributes a variety of business products in the U.S. and Canada.

SOURCE Genuine Parts Company