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Genuine Parts Company Reports Record Sales And Earnings For The Third Quarter Ended September 30, 2012 - Sales Up 3% and EPS Up 14% -

ATLANTA, Oct. 18, 2012 /PRNewswire/ -- Genuine Parts Company (NYSE:  GPC) reported record sales and earnings for the third quarter and nine months ended September 30, 2012.  Thomas C. Gallagher, Chairman and Chief Executive Officer, announced today that sales totaling $3.4 billion were up 3% compared to the third quarter of 2011.  Net income for the quarter was $172.9 million, an increase of 14% from $151.8 million recorded in the same period of the previous year.  Earnings per share on a diluted basis were $1.11, up 14% compared to 97 cents for the third quarter last year.

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For the nine months ended September 30, 2012, sales totaled $9.9 billion, up 5% compared to the same period in 2011.  Net income for the nine months was $487.8 million, an increase of 13% from $430.2 million recorded in the previous year.  Earnings per share on a diluted basis were $3.11, up 14% compared to $2.72 for the same period last year.

In review of the quarter, Mr. Gallagher commented, "We are pleased to report another quarter of record sales and earnings for Genuine Parts Company.  After adjusting our sales results for one less selling day in the current quarter, total sales increased 4% from the third quarter of 2011.  The Automotive Group reported a 2.5% sales increase and adjusted for the selling days, automotive sales were up 4%.  Motion Industries, our Industrial Group, posted a 4.5% sales increase for the quarter and this reflects a 6% increase in sales on a daily basis.  EIS, our Electrical Group, reported the strongest growth among our business segments, up 5%, or a 7% comparable sales increase.  S. P. Richards, our Office Products Group, showed a 1% sales decrease for the quarter, which translates to a 1% increase in sales on a daily basis."

Mr. Gallagher added, "Our balance sheet as of September 30, 2012, remains in excellent condition and we continue to generate strong cash flows from increased earnings and working capital, asset management and cost reduction initiatives.  Our cash position offers us tremendous opportunities, and we continue to use our cash in several key areas to maximize the total return to shareholders.  Our priorities for cash include the dividends paid to shareholders, the ongoing reinvestment back into each of our four businesses, strategic acquisitions and share repurchases."

Mr. Gallagher concluded, "We are encouraged by the record level of sales and earnings achieved for the quarter.  While disappointed with the slower sales growth over the past two quarters, we are performing in-line or better than the current growth in our respective industries.  The Company is well positioned to show continued growth in our businesses and we remain optimistic in our outlook for the fourth quarter of 2012 and beyond.  Our management team remains committed to sustaining good revenue growth, further improving operating margins, generating solid cash flows and maintaining a strong balance sheet."

Conference Call

Genuine Parts Company will hold a conference call today at 11:00 a.m. Eastern Time 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 toll-free at 877-331-5106, conference ID 94840651.  A replay will also be available on the Company's website or by dialing toll-free at 855-859-2056, conference ID 94840651, after the completion of the conference call until 12:00 a.m. Eastern Time on November 2, 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 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 2011 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 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 Sept. 30,

Nine Months Ended Sept. 30,


2012

2011

2012

2011


(Unaudited)


(in thousands, except per share data)






Net sales

$3,375,778

$3,285,560

$9,894,902

$9,444,742

Cost of goods sold

2,399,742

2,337,028

7,027,469

6,731,302

Gross profit

976,036

948,532

2,867,433

2,713,440











Operating expenses:





Selling, administrative & other expenses

678,894

679,967

2,027,098

1,965,871

Depreciation and amortization

25,609

21,465

73,329

66,938


704,503

701,432

2,100,427

2,032,809











Income before income taxes

271,533

247,100

767,006

680,631

Income taxes

98,590

95,268

279,190

250,472

Net income

$172,943

$151,832

$487,816

$430,159











Basic net income per common share

$1.11

$ .97

$3.14

$ 2.74

Diluted net income per common share

$1.11

$ .97

$3.11

$ 2.72











Weighted average common shares outstanding

155,147

156,206

155,568

157,024

Dilutive effect of stock options and





   non-vested restricted stock awards

988

942

1,038

965

Weighted average common shares outstanding –





   assuming dilution

156,135

157,148

156,606

157,989



GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS





Three Months Ended Sept. 30,

Nine Months Ended Sept. 30,


2012

2011

2012

2011


(Unaudited)


(in thousands)






Net sales:





      Automotive

$1,650,857

$1,611,333

$4,789,258

$4,601,272

      Industrial

1,138,854

1,089,826

3,398,801

3,140,855

      Office Products

444,255

447,310

1,283,748

1,297,965

      Electrical/Electronic Materials

150,877

143,342

447,433

419,936

      Other (1)

(9,065)

(6,251)

(24,338)

(15,286)

            Total net sales

$3,375,778

$3,285,560

$9,894,902

$9,444,742






Operating profit:





      Automotive

$   150,648

$   141,233

$   418,187

$   377,927

      Industrial

94,621

97,191

274,002

248,489

      Office Products

29,942

27,204

98,068

95,975

      Electrical/Electronic Materials

13,555

11,138

38,454

30,380

      Total operating profit

288,766

276,766

828,711

752,771

      Interest expense, net

(4,971)

(6,244)

(14,705)

(18,980)

      Other, net

(12,262)

(23,422)

(47,000)

(53,160)

            Income before income taxes

$  271,533

$  247,100

$  767,006

$  680,631






Capital expenditures

$    20,259

$    22,184

$    71,627

$    63,932






Depreciation and amortization

$    25,609

$    21,465

$    73,329

$    66,938






(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



Sept. 30,

Sept. 30,


2012

2011


(Unaudited)


(in thousands)

ASSETS



CURRENT ASSETS



Cash and cash equivalents

$  398,118

$  534,801

Trade accounts receivable, net

1,606,297

1,531,046

Merchandise inventories, net

2,351,321

2,250,309

Prepaid expenses and other current assets

308,839

330,157




      TOTAL CURRENT ASSETS

4,664,575

4,646,313




Goodwill and other intangible assets, less accumulated amortization

504,192

277,924

Deferred tax asset

232,845

153,319

Other assets

483,370

227,615

Net property, plant and equipment

560,900

479,547




TOTAL ASSETS

$6,445,882

$5,784,718


LIABILITIES AND EQUITY



CURRENT LIABILITIES



Trade accounts payable

$1,754,253

$1,587,326

Current portion of debt

-

250,000

Income taxes payable

26,682

44,812

Dividends payable

76,814

70,134

Other current liabilities

243,868

288,388




      TOTAL CURRENT LIABILITIES

2,101,617

2,240,660




Long-term debt

500,000

250,000

Retirement and other post-retirement benefit liabilities

476,108

212,876

Other long-term liabilities

301,988

189,791




Common stock

155,131

155,653

Retained earnings and other

3,321,517

3,051,467

Accumulated other comprehensive loss

(420,845)

(325,392)

      TOTAL PARENT EQUITY

3,055,803

2,881,728




Noncontrolling interests in subsidiaries

10,366

9,663




      TOTAL EQUITY

3,066,169

2,891,391




TOTAL LIABILITIES AND EQUITY

$6,445,882

$5,784,718



GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




Nine Months Ended Sept. 30,


2012

2011


(Unaudited)


(in thousands)




OPERATING ACTIVITIES:



      Net income

$487,816

$430,159

      Adjustments to reconcile net income to net cash provided by operating activities:



      Depreciation and amortization

73,329

66,938

      Share-based compensation

8,098

5,835

      Excess tax benefits from share-based compensation

(9,239)

(2,446)

      Other

(1,011)

(952)

      Changes in operating assets and liabilities

205,827

(2,126)




NET CASH PROVIDED BY OPERATING ACTIVITIES

764,820

497,408




INVESTING ACTIVITIES:



      Purchases of property, plant and equipment

(71,627)

(63,932)

      Acquisitions and other

(545,378)

(105,129)




NET CASH USED IN INVESTING ACTIVITIES

(617,005)

(169,061)




FINANCING ACTIVITIES:



      Proceeds from line of credit

750,000

-

      Payments on line of credit

(750,000)

-

      Stock options exercised

(4,008)

1,638

      Excess tax benefits from share-based compensation

9,239

2,446

      Dividends paid

(224,170)

(206,236)

      Purchase of stock

(58,808)

(113,359)




NET CASH USED IN FINANCING ACTIVITIES

(277,747)

(315,511)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

2,996

(8,003)




NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

(126,936)

4,833




CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

525,054

529,968




CASH AND CASH EQUIVALENTS AT END OF PERIOD

$398,118

$534,801

 

SOURCE Genuine Parts Company



RELATED LINKS
http://www.genpt.com

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