Genuine Parts Company Reports Results for 2001 and Announces Increase in Dividends
ATLANTA--Feb. 19, 2002--Genuine Parts Company completed its 74th year of operations and reports sales and earnings for the year ended December 31, 2001.Sales in 2001 were $8.22 billion, a 2% decrease compared to 2000 sales of $8.37 billion. Net income excluding non-recurring items decreased 6% to $362 million, down from $385 million recorded in the prior year. Diluted earnings per share for 2001, excluding unusual items, were $2.08 versus $2.20 per share in 2000, a decrease of 5%. After unusual items, diluted earnings per share for 2001 were $1.71 per share, a decrease of 22%.
Larry Prince, Chairman of the Board of Directors, said: "Our largest segment, Automotive Parts, experienced modest growth in 2001 with sales increasing 2% and we believe fundamentals for continued improvement are in place for 2002. Our Office Products Group had sales growth of 3% in 2001 and we have confidence in their ability to maintain growth again this year. The Industrial Parts Group and the Electrical/Electronic Group reported sales decreases of 5% and 30%, respectively, resulting primarily from the economic slowdown in the industrial manufacturing and telecommunications sectors of the economy. Both companies are expected to improve in the course of the year."
Fourth Quarter 2001
Sales decreased 3.5% to $1.95 billion in the fourth quarter ended December 31, 2001, as compared to $2.02 billion for the same period in 2000. Diluted earnings per share in the fourth quarter, excluding unusual charges, were $.51 compared to the prior year of $.61 per share. After unusual items, diluted earnings per share for the quarter were $.14 per share, a decrease of 77%.
As previously announced, Genuine Parts recorded non-recurring charges in the fourth quarter of 2001 of $107.8 million pre-tax, or $64.4 million after tax, or $.37 per share. These charges include $24.6 million for expenses related to facilities consolidation and severance, $49.4 million for impairment of several technology investments, $17.4 million for inventory-related exit costs and $16.4 million for other unusual charges.
Dividends Increased 46 Consecutive Years
Genuine Parts Company also announced an increase of 2% in the regular quarterly cash dividend for 2002. On February 18, 2002, the Board of Directors increased the cash dividend payable to an annual rate of $1.16 per share compared with the previous dividend of $1.14 per share. The quarterly cash dividend of $.29 per share is payable April 1, 2002 to shareholders of record March 8, 2002.
Mr. Prince stated, "We are pleased to report that cash dividends to shareholders were increased for the 46th consecutive year, a record we are proud of."
Mr. Prince continued: "The Company's financial condition is excellent and our Balance Sheet remains strong. For the year, capital expenditures amounted to $42 million, current assets were 3.4 times current liabilities and long-term debt to equity ratio was 26%. We were able to generate approximately $440 million in free cash flow. We continue to focus our efforts on improving our return on assets and were pleased with the progress made in accounts receivable and inventory."
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 by dialing 800-482-5547, conference ID 1454237. A replay will also be available at 800-625-5288 until 6:00 p.m. EST on February 26, 2002.
Forward Looking Statements
Statements in this release constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company cautions that its forward-looking statements involve risks and uncertainties. The Company undertakes no duty to update its forward-looking statements, which reflect the Company's beliefs, expectations, and plans as of the present. 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, changes in general economic conditions, the growth rate of the market for the Company's products and services, the ability to maintain favorable supplier arrangements and relationships, competitive product and pricing pressures, 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 from time to time in the Company's filings with the Securities and Exchange Commission.
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 product nationwide in the U.S. and in Canada. The Electrical/Electronic Group, EIS, Inc., distributes electrical and electronic components throughout the U.S. and Mexico. --
GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Quarter Ended For the Year Ended
December 31 December 31
2001 2000 2001 2000
---- ---- ---- ----
(in thousands, except per share data)
Net Sales $1,947,529 $2,018,916 $8,220,668 $8,369,857
Cost of goods sold (1) 1,322,483 1,338,939 5,699,174 5,764,360
---------- ---------- ---------- ---------
625,046 679,977 2,521,494 2,605,497
Selling, administrative
& other expenses (1) 508,739 500,177 1,951,559 1,958,747
Facility consolidation
and impairment charges (1) 73,922 -- 73,922 --
---------- ---------- ---------- ---------
Income before income
taxes 42,385 179,800 496,013 646,750
Income taxes 17,415 74,528 198,866 261,427
---------- ---------- ---------- ---------
NET INCOME $24,970 $105,272 $297,147 $385,323
========== ========== ========== =========
Basic net income per
common share $.14 $.61 $1.72 $2.20
==== ==== ===== =====
Diluted net income per
common share $.14 $.61 $1.71 $2.20
==== ==== ===== =====
Basic net income, excluding
unusual charges, per
common share $.52 $.61 $2.09 $2.20
==== ==== ===== =====
Diluted net income, excluding
unusual charges, per
common share $.51 $.61 $2.08 $2.20
==== ==== ===== =====
Average common shares
outstanding 173,389 172,762 172,765 175,009
Dilutive effect of stock
options and non-vested
restricted stock awards 1,006 263 868 318
---------- ---------- ---------- ---------
Average common shares
outstanding - Assuming
dilution 174,395 173,025 173,633 175,327
========== ========== ========== =========
Note (1): Non-recurring charges totaled $107.8 million pre-tax in
the fourth quarter of 2001, and $64.4 million after-tax. These charges
include $17.4 million classified in cost of goods sold and $16.4
million classified in selling, administrative and other expenses.
GENUINE PARTS COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Year ended December 31,
2001 2000
-------------------------
(In thousands)
Net sales:
Automotive $4,252,913 $4,163,814
Industrial 2,234,241 2,342,686
Office Products 1,379,859 1,336,500
Electrical/Electronic Materials 387,771 557,866
Other (1) (34,116) (31,009)
------------ ----------
Total net sales $8,220,668 $8,369,857
============ ==========
Operating profit:
Automotive $378,162 $ 381,250
Industrial 172,208 206,193
Office Products 141,762 134,343
Electrical/Electronic Materials 3,229 28,010
------------ ----------
Total operating profit 695,361 749,796
Interest expense (59,416) (63,496)
Other, net (45,080) (39,550)
Facility consolidation and impairment (2) (94,852) --
------------ ----------
Income before income taxes $496,013 $ 646,750
============ ==========
Capital expenditures $ 41,944 $ 71,129
============ ==========
Depreciation and amortization $ 85,793 $ 92,303
============ ==========
EBITDA (3) $749,022 $ 802,549
============ ==========
Current ratio 3.4 3.1
============ ==========
Long-term debt to equity ratio 26.3% 25.4%
============ ==========
Return on beginning equity (3) 16.0% 17.7%
============ ==========
(1) Represents the net effect of discounts, incentives and freight
billed reported as a component of net sales.
(2) Represents unusual charges reported in the fourth quarter 2001
related to facilities consolidation, technology impairment and
inventory related exit costs.
(3) 2001 excludes effect of non-recurring charges.
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
Dec. 31, Dec. 31,
2001 2000
------------ ------------
(in thousands)
CURRENT ASSETS
Cash and cash equivalents $ 85,770 $ 27,738
Accounts receivable 1,010,728 1,031,662
Inventories 1,890,037 1,864,334
Prepaid expenses and other current assets 159,677 95,747
------------ ------------
TOTAL CURRENT ASSETS 3,146,212 3,019,481
Goodwill 442,078 451,435
Other assets 273,224 275,938
Total property, plant and equipment, net 345,132 395,260
------------ ------------
TOTAL ASSETS $ 4,206,646 $ 4,142,114
============ ============
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $ 644,084 $ 635,499
Current portion of long-term debt and
other borrowings 57,190 151,452
Income taxes -- 37,043
Dividends payable 49,413 47,494
Other current liabilities 168,494 116,825
------------ ------------
TOTAL CURRENT LIABILITIES 919,181 988,313
Long-term debt 835,580 770,581
Deferred income taxes 60,985 77,814
Minority interests in subsidiaries 45,777 44,600
Common stock 173,474 172,390
Retained earnings and other 2,171,649 2,088,416
------------ ------------
SHAREHOLDERS’ EQUITY 2,345,123 2,260,806
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY $ 4,206,646 $ 4,142,114
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