Genuine Parts Company Reports First Quarter Results and Declares Regular Quarterly Dividend
ATLANTA--April 16, 2002--Genuine Parts Company reported sales and earnings for the first quarter ended March 31, 2002.Larry Prince, Chairman of the Board of Directors, announced today that sales totaling $1.98 billion were down 4% compared to the first quarter of 2001. Net income, before the effect of a change in accounting principle discussed below, was $87 million, a decrease of 2.5% over $89.3 million for the first quarter of 2001 and, on a per share diluted basis, net income equaled 50 cents, down 4% compared to 52 cents reported in the comparable quarter of the prior year. After the cumulative effect of a change in accounting principle, the net loss for the quarter was $308.1 million, or $1.76 on a per share diluted basis.
Mr. Prince stated: "The Automotive Parts Group continued to show improvement with sales up 2% compared to the previous year. Fundamentals for the automotive aftermarket are sound and we were pleased to see our Automotive Parts operations report their fourth consecutive quarter of sales growth. Motion Industries, our Industrial Group, was down 6%, which is a slight improvement over their results for the past two quarters. Industrial production is starting to show small gains and this will have a positive impact for Motion as we look ahead. EIS, our Electrical/Electronic Group, was down 35% and even at this depressed level is showing a bit of improvement.
"S. P. Richards, our Office Products Group, was down 5% for the period and we anticipated a tough one for them. Last year their revenues were at record levels in the first quarter and they first started to feel the impact of the economy in the second half of the year."
Mr. Prince further commented: "The Company has completed its impairment testing for goodwill in conjunction with the new Statement of Financial Accounting Standards No. 142 `Goodwill and Other Intangible Assets.' As a result, a non-cash charge of $395 million was recorded as of January 1, 2002 representing the cumulative effect of a change in accounting. Most of the goodwill written down is in connection with acquisitions made in 1998 and 1999 and under prior accounting standards would have been amortized over an extended period of time. Our outlook on the development of these operations remains positive, and at the same time our core NAPA operations in the U.S. as well as our U.S. Industrial operations and S. P. Richards were not affected by the change."
Mr. Prince also announced: "The Board of Directors of the Company declared a regular quarterly dividend of 29 cents per share on the Company's common stock. The dividend is payable July 1, 2002 to shareholders of record June 7, 2002."
Mr. Prince concluded: "We expect to move our sales and earnings back into a positive growth position in 2002. We can't be certain what the economy holds for us over the remainder of 2002. Our strategy will be to continue tight expense controls while maintaining an aggressive sales posture. The financial condition of the Company continues to be strong and cash flow remains sound."
Conference Call
Genuine Parts Company will hold a conference call today at 2:00 p.m. EDT to discuss the results of the quarter and the future outlook. Interested parties may listen by dialing 800-482-5567, conference ID 1706507. A replay will also be available at 800-625-5288 until 6:00 p.m. EDT on April 23, 2002.
Forward Looking Statements
Various statements in this release may constitute forward-looking statements. Actual results 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
---------------------------------
(Unaudited)
Three Months Ended March 31,
---------------------------
2002 2001
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(in thousands, except per share data)
Net Sales $1,977,743 $2,054,972
Cost of goods sold 1,373,774 1,431,813
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603,969 623,159
Selling, administrative & other expenses 461,067 474,370
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Income before income taxes 142,902 148,789
Income taxes 55,875 59,516
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Net income before cumulative effect of a
change in accounting principle 87,027 89,273
Cumulative effect of a change in
accounting principle (395,090) -0-
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Net (loss) income $ (308,063) $ 89,273
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Basic and diluted net income per common share
before cumulative effect of a change in
accounting principle $ .50 $ .52
Cumulative effect of a change in accounting
principle, basic $ (2.27) -0-
Cumulative effect of a change in accounting
principle, diluted $ (2.26) -0-
Basic net (loss) income per common share $ (1.77) $ .52
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Diluted net (loss) income per common share$ (1.76) $ .52
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Average common shares outstanding 173,877 172,087
Dilutive effect of stock options and non-vested
restricted stock awards 1,005 739
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Average common shares outstanding -
assuming dilution 174,882 172,826
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GENUINE PARTS COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
--------------------------------------------
(Unaudited)
Three month period ended March 31,
2002 2001
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(In thousands)
Net sales:
Automotive $ 998,659 $ 982,824
Industrial 551,169 583,929
Office Products 352,757 370,719
Electrical/Electronic Materials 81,620 124,685
Other (1) (6,462) (7,185)
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Total net sales $1,977,743 $2,054,972
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Operating profit (loss):
Automotive $ 83,988 $ 81,967
Industrial 42,644 45,222
Office Products 41,266 43,632
Electrical/Electronic Materials (680) 5,205
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Total operating profit 167,218 176,026
Interest expense (16,449) (15,685)
Other, net (7,867) (11,552)
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Income before income taxes $ 142,902 $ 148,789
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Capital expenditures $ 11,442 $ 12,114
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Depreciation and amortization $ 18,417 $ 23,038
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EBITDA $ 177,768 $ 187,512
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Current ratio 3.4 3.2
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Total debt to total capitalization 28.1% 30.3%
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(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
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ASSETS
------
Mar. 31, Mar. 31,
2002 2001
-------------------
(Unaudited)
(in thousands)
CURRENT ASSETS
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Cash and cash equivalents $ 56,358 $ 49,186
Trade accounts receivable 1,088,018 1,094,723
Inventories 1,864,095 1,865,894
Prepaid and other current accounts 59,565 71,219
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TOTAL CURRENT ASSETS 3,068,036 3,081,022
Goodwill and other intangible assets 60,052 444,955
Other assets 289,502 284,375
Total property, plant and equipment, net 337,435 380,327
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TOTAL ASSETS $3,755,025 $4,190,679
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LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
-------------------
Accounts payable $ 613,392 $ 603,420
Current portion long-term debt and other
borrowings 50,750 166,936
Income taxes 43,751 58,263
Dividends payable 50,468 49,082
Other current liabilities 144,623 95,075
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TOTAL CURRENT LIABILITIES 902,984 972,776
Long-term debt 735,461 822,606
Deferred income taxes 60,985 77,814
Minority interests in subsidiaries 46,110 45,074
SHAREHOLDERS' EQUITY
--------------------
Common stock 174,247 172,009
Retained earnings and other 1,835,238 2,100,400
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TOTAL SHAREHOLDERS' EQUITY 2,009,485 2,272,409
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,755,025 $4,190,679
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