ATLANTA, Oct. 19, 2016 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) announced today sales and earnings for the
third quarter and nine months ended September 30, 2016.
Sales for the third quarter ended September 30, 2016 were $3.94 billion compared to $3.92 billion for the same period in
2015. Net income for the third quarter was $185.3 million compared to $188.0 million recorded for the same period in
the previous year. Earnings per share on a diluted basis were
$1.24, equal to the earnings per
share for the third quarter last year.
Paul Donahue, President and Chief
Executive Officer, commented, "Total sales in the third quarter
were up 0.5% from the prior year, inclusive of a 3.5% contribution
from acquisitions. Currency exchange was neutral to our
overall results, with the slightly favorable Canadian and
Australian currencies offsetting the ongoing weakness in the
Mexican Peso. Sales for the Automotive Group were up 1.5%,
consisting of a 2.5% contribution from acquisitions and a currency
tailwind of 0.5%, offset by a 1.5% core sales decrease. Sales
at Motion Industries, our Industrial Group, were down 0.7%,
including a 2.5% underlying sales decrease and an approximate 2%
benefit from acquisitions. Sales at EIS, our
Electrical/Electronic Group, were down approximately 9%, and sales
for S. P. Richards, our Office
Products Group, were up 5%, consisting of an 11% contribution from
acquisitions offset by a 6% underlying sales decrease."
Mr. Donahue stated, "Our third quarter results fell short of our
expectations. We continue to operate in a tough sales
environment, but our teams are working hard to overcome these
challenges and generate growth. We recognize there is room for
improvement and are working towards that in all aspects of our
business. Our goal is to show improved results in the quarters
ahead and better position the Company for sustainable growth well
into the future. We have a strong balance sheet and excellent cash
flows to support our efforts."
Sales for the nine months ended September
30, 2016 were $11.56 billion
compared to $11.60 billion for the
same period in 2015. Net income for the nine months was
$534.7 million, down 2% from 2015,
and earnings per share on a diluted basis were $3.56, equal to the same nine month period of the
prior year.
2016 Outlook
For the full year 2016, the Company is updating its sales
guidance to Flat to up 1% from up 1% to 2%. Diluted earnings per
share is expected to be $4.55 to
$4.60 as compared to prior guidance of $4.70 to $4.75 per share.
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 877-718-5098, conference ID
3577037. A replay will also be available on the Company's
website or at 877-870-5176, conference ID 3577037, two hours after
the completion of the call until 12:00 a.m.
Eastern time on November 3,
2016.
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, the
Company's ability to successfully implement its business
initiatives in each of its four business segments; slowing demand
for the Company's products; changes in general economic conditions,
including, unemployment, inflation or deflation; volatile exchange
rates; high energy costs; uncertain credit markets and other
macro-economic conditions; competitive product, service and pricing
pressures; the ability to maintain favorable vendor arrangements
and relationships; disruptions in our vendors' operations; the
Company's ability to successfully integrate its 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 2015 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 and Australasia. 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 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,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$3,941,743
|
|
$3,921,802
|
|
$11,559,648
|
|
$11,598,254
|
Cost of goods
sold
|
|
2,743,142
|
|
2,752,577
|
|
8,091,124
|
|
8,137,880
|
Gross
profit
|
|
1,198,601
|
|
1,169,225
|
|
3,468,524
|
|
3,460,374
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
administrative & other expenses
|
|
869,562
|
|
834,372
|
|
2,522,223
|
|
2,492,537
|
Depreciation and
amortization
|
|
37,682
|
|
34,278
|
|
108,247
|
|
105,764
|
|
|
907,244
|
|
868,650
|
|
2,630,470
|
|
2,598,301
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
291,357
|
|
300,575
|
|
838,054
|
|
862,073
|
Income
taxes
|
|
106,031
|
|
112,559
|
|
303,334
|
|
317,674
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
185,326
|
|
$
188,016
|
|
$
534,720
|
|
$
544,399
|
|
|
|
|
|
|
|
|
|
Basic net income per
common share
|
|
$1.24
|
|
$1.24
|
|
$3.58
|
|
$3.58
|
|
|
|
|
|
|
|
|
|
Diluted net income
per common share
|
|
$1.24
|
|
$1.24
|
|
$3.56
|
|
$3.56
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
148,899
|
|
151,354
|
|
149,243
|
|
152,043
|
|
|
|
|
|
|
|
|
|
Dilutive effect of
stock options and
|
|
|
|
|
|
|
|
|
non-vested restricted stock awards
|
|
828
|
|
789
|
|
781
|
|
847
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding – assuming dilution
|
|
149,727
|
|
152,143
|
|
150,024
|
|
152,890
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
|
SEGMENT
INFORMATION AND FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Three Months Ended
Sept. 30,
|
|
Nine Months Ended
Sept. 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$2,095,030
|
|
$2,064,099
|
|
$
6,115,186
|
|
$
6,065,733
|
Industrial
|
|
1,162,224
|
|
1,170,252
|
|
3,482,246
|
|
3,540,106
|
Office
Products
|
|
535,175
|
|
510,825
|
|
1,493,434
|
|
1,478,878
|
Electrical/Electronic
Materials
|
|
178,448
|
|
196,837
|
|
538,803
|
|
573,584
|
Other (1)
|
|
(29,134)
|
|
(20,211)
|
|
(70,021)
|
|
(60,047)
|
Total net
sales
|
|
$3,941,743
|
|
$3,921,802
|
|
$11,559,648
|
|
$11,598,254
|
|
|
|
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
|
|
|
|
Automotive
|
|
$
197,874
|
|
$
201,986
|
|
$
555,156
|
|
$
560,070
|
Industrial
|
|
85,608
|
|
90,081
|
|
255,704
|
|
266,726
|
Office
Products
|
|
30,257
|
|
36,406
|
|
97,101
|
|
107,431
|
Electrical/Electronic
Materials
|
|
14,277
|
|
19,988
|
|
45,105
|
|
54,019
|
Total operating
profit
|
|
328,016
|
|
348,461
|
|
953,066
|
|
988,246
|
Interest expense,
net
|
|
(5,244)
|
|
(5,055)
|
|
(14,731)
|
|
(16,056)
|
Intangible
amortization
|
|
(10,339)
|
|
(8,545)
|
|
(28,324)
|
|
(25,945)
|
Other, net
|
|
(21,076)
|
|
(34,286)
|
|
(71,957)
|
|
(84,172)
|
Income before income
taxes
|
|
$
291,357
|
|
$
300,575
|
|
$
838,054
|
|
$
862,073
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
36,939
|
|
$
24,531
|
|
$
86,650
|
|
$
61,994
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
37,682
|
|
$
34,278
|
|
$
108,247
|
|
$
105,764
|
|
|
|
|
|
|
|
|
|
(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,
|
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
|
(in
thousands)
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
225,177
|
|
$
199,294
|
Trade accounts
receivable, net
|
|
2,032,548
|
|
1,963,158
|
Merchandise
inventories, net
|
|
3,146,157
|
|
2,967,724
|
Prepaid expenses and
other current assets
|
|
504,600
|
|
493,306
|
|
|
|
|
|
TOTAL CURRENT
ASSETS
|
|
5,908,482
|
|
5,623,482
|
|
|
|
|
|
Goodwill and other
intangible assets, less accumulated amortization
|
|
1,550,435
|
|
1,328,431
|
Deferred tax
assets
|
|
109,679
|
|
136,618
|
Other
assets
|
|
491,925
|
|
486,136
|
Net property, plant
and equipment
|
|
688,851
|
|
628,461
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$8,749,372
|
|
$8,203,128
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Trade accounts
payable
|
|
$3,099,438
|
|
$2,851,022
|
Current portion of
debt
|
|
475,000
|
|
125,000
|
Income taxes
payable
|
|
32,594
|
|
6,643
|
Dividends
payable
|
|
97,955
|
|
92,905
|
Other current
liabilities
|
|
696,544
|
|
688,498
|
|
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
|
4,401,531
|
|
3,764,068
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
300,000
|
|
500,000
|
Pension and other
post-retirement benefit liabilities
|
|
202,131
|
|
248,709
|
Deferred tax
liabilities
|
|
51,472
|
|
62,419
|
Other long-term
liabilities
|
|
458,944
|
|
456,908
|
|
|
|
|
|
Common
stock
|
|
148,737
|
|
150,763
|
Retained
earnings
|
|
4,038,985
|
|
3,922,609
|
Accumulated other
comprehensive loss
|
|
(865,510)
|
|
(914,586)
|
|
|
|
|
|
TOTAL PARENT
EQUITY
|
|
3,322,212
|
|
3,158,786
|
|
|
|
|
|
Noncontrolling
interests in subsidiaries
|
|
13,082
|
|
12,238
|
|
|
|
|
|
TOTAL
EQUITY
|
|
3,335,294
|
|
3,171,024
|
|
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
|
$8,749,372
|
|
$8,203,128
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
Nine Months Ended
Sept. 30,
|
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
|
(in
thousands)
|
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net income
|
|
$534,720
|
|
$544,399
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
108,247
|
|
105,764
|
Share-based
compensation
|
|
15,362
|
|
13,582
|
Excess tax benefits
from share-based compensation
|
|
(10,475)
|
|
(5,381)
|
Changes in operating
assets and liabilities
|
|
93,498
|
|
237,623
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
|
741,352
|
|
895,987
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(86,650)
|
|
(61,994)
|
Acquisitions and other
investing activities
|
|
(365,545)
|
|
(115,414)
|
|
|
|
|
|
NET CASH USED IN
INVESTING ACTIVITIES
|
|
(452,195)
|
|
(177,408)
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Proceeds from
debt
|
|
3,020,000
|
|
2,537,224
|
Payments on
debt
|
|
(2,870,000)
|
|
(2,680,191)
|
Share-based awards
exercised, net of taxes paid
|
|
(11,942)
|
|
(6,030)
|
Excess tax benefits
from share-based compensation
|
|
10,475
|
|
5,381
|
Dividends
paid
|
|
(288,909)
|
|
(275,379)
|
Purchase of
stock
|
|
(143,810)
|
|
(225,175)
|
|
|
|
|
|
NET CASH USED IN
FINANCING ACTIVITIES
|
|
(284,186)
|
|
(644,170)
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
|
8,575
|
|
(12,845)
|
|
|
|
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
|
13,546
|
|
61,564
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF
PERIOD
|
|
211,631
|
|
137,730
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$225,177
|
|
$199,294
|
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SOURCE Genuine Parts Company