ATLANTA, July 20, 2017 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) announced today sales and earnings for the
second quarter and six months ended June 30,
2017.
Sales for the second quarter ended June
30, 2017 were $4.1 billion, a
new record and a 5% increase compared to $3.9 billion for the same period in 2016.
Net income for the second quarter was $190.0
million compared to $191.4
million recorded for the same period in the previous year.
Earnings per share on a diluted basis were $1.29, up 1% from $1.28 for the second quarter last year.
Paul Donahue, President and Chief
Executive Officer, commented, "We are encouraged by the steady and
consistent total sales increase thus far in 2017, which reflects
the diversified aspects of our Company combined with an ongoing
strategy to drive both organic and acquisitive growth. This
represents our second consecutive quarter of 5% total sales growth
for the Company and includes sales increases in each of our four
distribution businesses, with our strongest performances in the
Industrial and Electrical segments."
Second quarter sales for the Automotive Group were up 4%,
including an approximate 1.5% comparable sales increase.
Sales at Motion Industries, our Industrial Group, were up 7%,
including a 5% comparable sales increase, and sales at EIS, our
Electrical/Electronic Group, grew 11%, with comparable sales down
1%. Sales for S.P. Richards,
our Office Products Group, were up 5% for the quarter, including a
4% decrease in comparable sales.
Sales for the six months ended June 30,
2017 were $8.0 billion, also a
new record and a 5% increase compared to $7.6 billion for the same period in 2016.
Net income for the six months was $350.1
million compared to $349.4
million in 2016, and earnings per share on a diluted basis
were $2.36, up 1% compared to
$2.33 in 2016.
Mr. Donahue concluded, "Our teams are committed to generating
sustainable sales growth, while also streamlining our cost
structure to improve profitability. We believe our focus in
these areas, along with a strong balance sheet, solid cash flows
and effective capital allocation, will drive long-term growth for
the Company and serve to maximize shareholder value."
2017 Outlook
For the full year 2017, the Company continues to expect total
sales to be up 3% to 4%. The Company expects diluted earnings
per share to range from $4.70 to
$4.75 compared to the prior outlook of $4.75 to $4.85.
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 877-741-4245, conference ID
6054876. A replay will also be available on the Company's
website or at 844-512-2921, conference ID 6054876, two hours after
the completion of the call until 12:00 a.m.
Eastern time on August 4,
2017.
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 legislation or government
regulations or policies; changes in general economic conditions,
including unemployment, inflation or deflation; changes in tax
policies; 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 2016 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
June 30,
|
|
Six Months Ended June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
Net sales
|
$4,100,178
|
|
$3,899,638
|
|
$8,005,819
|
|
$7,617,905
|
Cost of goods
sold
|
2,860,466
|
|
2,734,186
|
|
5,610,386
|
|
5,347,982
|
Gross
profit
|
1,239,712
|
|
1,165,452
|
|
2,395,433
|
|
2,269,923
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Selling,
administrative & other expenses
|
903,343
|
|
829,489
|
|
1,777,157
|
|
1,652,661
|
Depreciation and
amortization
|
39,232
|
|
35,911
|
|
77,364
|
|
70,565
|
|
942,575
|
|
865,400
|
|
1,854,521
|
|
1,723,226
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
297,137
|
|
300,052
|
|
540,912
|
|
546,697
|
Income
taxes
|
107,165
|
|
108,683
|
|
190,780
|
|
197,303
|
|
|
|
|
|
|
|
|
Net income
|
$
189,972
|
|
$
191,369
|
|
$
350,132
|
|
$
349,394
|
|
|
|
|
|
|
|
|
Basic net income per
common share
|
$1.29
|
|
$1.28
|
|
$2.37
|
|
$2.34
|
|
|
|
|
|
|
|
|
Diluted net income
per common share
|
$1.29
|
|
$1.28
|
|
$2.36
|
|
$2.33
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
147,079
|
|
149,241
|
|
147,613
|
|
149,417
|
|
|
|
|
|
|
|
|
Dilutive effect of
stock options and
|
|
|
|
|
|
|
|
non-vested restricted stock awards
|
571
|
|
788
|
|
598
|
|
761
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding –
assuming dilution
|
147,650
|
|
150,029
|
|
148,211
|
|
150,178
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
|
SEGMENT
INFORMATION AND FINANCIAL HIGHLIGHTS
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
Automotive
|
$2,164,104
|
|
$2,087,978
|
|
$4,162,487
|
|
$4,020,156
|
Industrial
|
1,252,867
|
|
1,167,395
|
|
2,484,949
|
|
2,320,022
|
Office
Products
|
504,401
|
|
481,605
|
|
1,023,406
|
|
958,259
|
Electrical/Electronic
Materials
|
204,628
|
|
184,508
|
|
389,045
|
|
360,355
|
Other (1)
|
(25,822)
|
|
(21,848)
|
|
(54,068)
|
|
(40,887)
|
Total net
sales
|
$4,100,178
|
|
$3,899,638
|
|
$8,005,819
|
|
$7,617,905
|
|
|
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
|
|
|
Automotive
|
$
207,332
|
|
$
203,572
|
|
$
359,089
|
|
$
357,282
|
Industrial
|
96,300
|
|
88,263
|
|
186,674
|
|
170,096
|
Office
Products
|
30,091
|
|
32,640
|
|
61,210
|
|
66,844
|
Electrical/Electronic
Materials
|
15,533
|
|
15,987
|
|
29,168
|
|
30,828
|
Total operating
profit
|
349,256
|
|
340,462
|
|
636,141
|
|
625,050
|
Interest expense,
net
|
(6,878)
|
|
(4,665)
|
|
(13,052)
|
|
(9,487)
|
Intangible
amortization
|
(11,434)
|
|
(9,225)
|
|
(22,240)
|
|
(17,985)
|
Other, net
|
(33,807)
|
|
(26,520)
|
|
(59,937)
|
|
(50,881)
|
Income before income
taxes
|
$
297,137
|
|
$
300,052
|
|
$
540,912
|
|
$
546,697
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
29,289
|
|
$
38,041
|
|
$
54,095
|
|
$
49,711
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
39,232
|
|
$
35,911
|
|
$
77,364
|
|
$
70,565
|
|
|
(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
|
|
|
June 30,
|
|
June 30,
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(in
thousands)
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
203,145
|
|
$
233,627
|
Trade accounts
receivable, net
|
2,169,970
|
|
2,031,094
|
Merchandise
inventories, net
|
3,330,189
|
|
3,062,673
|
Prepaid expenses and
other current assets
|
598,112
|
|
538,748
|
|
|
|
|
TOTAL CURRENT
ASSETS
|
6,301,416
|
|
5,866,142
|
|
|
|
|
Goodwill and other
intangible assets, less accumulated
amortization
|
1,677,748
|
|
1,478,298
|
Deferred tax
assets
|
126,299
|
|
112,316
|
Other
assets
|
565,905
|
|
491,968
|
Net property, plant
and equipment
|
740,776
|
|
685,385
|
|
|
|
|
TOTAL
ASSETS
|
$9,412,144
|
|
$8,634,109
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Trade accounts
payable
|
$3,302,969
|
|
$3,075,769
|
Current portion of
debt
|
580,000
|
|
525,000
|
Income taxes
payable
|
28,300
|
|
28,451
|
Dividends
payable
|
99,109
|
|
97,975
|
Other current
liabilities
|
790,789
|
|
678,975
|
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
4,801,167
|
|
4,406,170
|
|
|
|
|
|
|
|
|
Long-term
debt
|
550,000
|
|
250,000
|
Pension and other
post-retirement benefit liabilities
|
272,394
|
|
217,052
|
Deferred tax
liabilities
|
48,256
|
|
51,708
|
Other long-term
liabilities
|
438,984
|
|
458,950
|
|
|
|
|
Common
stock
|
146,831
|
|
148,914
|
Retained
earnings
|
4,062,682
|
|
3,970,870
|
Accumulated other
comprehensive loss
|
(921,389)
|
|
(882,165)
|
|
|
|
|
TOTAL PARENT
EQUITY
|
3,288,124
|
|
3,237,619
|
|
|
|
|
Noncontrolling
interests in subsidiaries
|
13,219
|
|
12,610
|
|
|
|
|
TOTAL
EQUITY
|
3,301,343
|
|
3,250,229
|
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
$9,412,144
|
|
$8,634,109
|
GENUINE PARTS
COMPANY and SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Six Months Ended June
30,
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(in
thousands)
|
|
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
Net income
|
$350,132
|
|
$349,394
|
Adjustments to
reconcile net income to net cash provided by
operating activities:
|
|
|
|
Depreciation and
amortization
|
77,364
|
|
70,565
|
Share-based
compensation
|
8,086
|
|
10,002
|
Excess tax benefits
from share-based compensation
|
(2,245)
|
|
(7,540)
|
Changes in operating
assets and liabilities
|
(88,053)
|
|
108,071
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
345,284
|
|
530,492
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
Purchases of property,
plant and equipment
|
(54,095)
|
|
(49,711)
|
Acquisitions and other
investing activities
|
(240,216)
|
|
(305,435)
|
|
|
|
|
NET CASH USED IN
INVESTING ACTIVITIES
|
(294,311)
|
|
(355,146)
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
Proceeds from
debt
|
2,250,000
|
|
1,950,000
|
Payments on
debt
|
(1,995,000)
|
|
(1,800,000)
|
Share-based awards
exercised, net of taxes paid
|
(3,014)
|
|
(8,627)
|
Excess tax benefits
from share-based compensation
|
—
|
|
7,540
|
Dividends
paid
|
(197,408)
|
|
(190,934)
|
Purchase of
stock
|
(153,508)
|
|
(119,397)
|
|
|
|
|
NET CASH USED IN
FINANCING ACTIVITIES
|
(98,930)
|
|
(161,418)
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH
|
8,223
|
|
8,068
|
|
|
|
|
NET (DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS
|
(39,734)
|
|
21,996
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
242,879
|
|
211,631
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$203,145
|
|
$233,627
|
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SOURCE Genuine Parts Company