Genuine Parts Company Reports First Quarter Results
ATLANTA--April 15, 2004--Genuine Parts Company reported sales and earnings for the first quarter ended March 31, 2004. Larry Prince, Chairman of the Board of Directors, announced today that sales totaling $2.2 billion were up 9% compared to the first quarter of 2003. Net income for the quarter was $100.2 million, an increase of 13% over $88.4 million recorded in the previous year before the cumulative effect of an accounting change adopted January 1, 2003. Earnings per share on a diluted basis were 57 cents, up 12% compared to 51 cents for the first quarter last year before the accounting change. In accordance with the Financial Accounting Standards Board's EITF 02-16 affecting the accounting treatment of cash consideration received from vendors, a non-cash charge of $20 million was recorded as of January 1, 2003, representing the cumulative effect of a change in accounting principle. After the cumulative effect adjustment in 2003, net income for the quarter ended March 31, 2004 was up 45% and diluted earnings per share were up 46% compared to the first quarter of 2003.Mr. Prince commented: "Our 9% sales gain is very encouraging and we like the fact that each of our four business segments had a successful first quarter. The Automotive Group reported strong results with a 10% increase in revenues for the quarter. Motion Industries, our Industrial Group, continued their trend of improvement with a 7% increase and EIS, our Electrical/Electronics Group, was strong with a 10% improvement. S. P. Richards, our Office Products Group, produced another steady performance with sales up 6% for the quarter."
Mr. Prince concluded: "We believe the stronger pace of sales is being driven by our internal efforts and initiatives across all our businesses and we also sense that market conditions are making a turn for the better. Our operating margins and net earnings benefit from the additional revenue and our balance sheet also reflects this improvement."
Conference Call
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
2004 2003
---- ----
(in thousands, except
per share data)
Net Sales $2,196,991 $2,021,858
Cost of goods sold 1,510,080 1,383,518
---------- ----------
686,911 638,340
Selling, administrative & other expenses 524,514 493,145
---------- ----------
Income before income taxes and cumulative effect
of a change in accounting principle 162,397 145,195
Income taxes 62,198 56,771
---------- ----------
Net income before cumulative effect of a change
in accounting principle 100,199 88,424
Cumulative effect of a change in accounting
principle (1) - (19,541)
----------- ----------
Net income $ 100,199 $ 68,883
========== ==========
Basic net income per common share:
Before cumulative effect of a change in
accounting principle $ .57 $ .51
Cumulative effect of a change in accounting
principle (1) - (.11)
----------- ----------
Basic net income $ .57 $ .40
========== ==========
Diluted net income per common share:
Before cumulative effect of a change in
accounting principle $ .57 $ .51
Cumulative effect of a change in accounting
principle (1) - (.12)
----------- ----------
Diluted net income $ .57 $ .39
Weighted average common shares outstanding 174,320 174,146
Dilutive effect of stock options and non-vested
restricted stock awards 580 456
---------- ----------
Weighted average common shares outstanding -
assuming dilution 174,900 174,602
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(1) On January 1, 2003 the Company recorded a non-cash charge related to the capitalization of certain vendor consideration in connection with the Financial Accounting Standards Board's EITF No. 02-16, "Accounting by a Customer for Cash Consideration Received from a Vendor."
GENUINE PARTS COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
(Unaudited)
Three month period
ended March 31,
2004 2003
----------------------
(In thousands)
Net sales:
Automotive $1,126,551 $1,022,471
Industrial 608,504 569,630
Office Products 386,790 363,826
Electrical/Electronic 83,079 75,417
Other (1) (7,933) (9,486)
---------- ----------
Total net sales $2,196,991 $2,021,858
========== ==========
Operating profit:
Automotive $ 93,261 $ 83,430
Industrial 46,119 43,187
Office Products 43,754 41,556
Electrical/Electronic 3,220 1,597
---------- ----------
Total operating profit 186,354 169,770
Interest expense (9,977) (13,694)
Other, net (13,980) (10,881)
---------- ----------
Income before income taxes and accounting
change $ 162,397 $ 145,195
========== ==========
Capital expenditures $ 12,057 $ 25,659
========== ==========
Depreciation and amortization $ 16,193 $ 17,031
========== ==========
Current ratio 3.4/1 3.2/1
========== ==========
Total debt to total capitalization 21.9% 28.3%
========== ==========
(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
-------------------------------------
ASSETS
March 31, March 31,
2004 2003
----------------------
(Unaudited)
(in thousands)
CURRENT ASSETS
Cash and cash equivalents $ 28,088 $ 25,030
Trade accounts receivable 1,154,981 1,110,334
Inventories 2,129,236 2,057,917
Prepaid and other current accounts 134,683 119,093
---------- ----------
TOTAL CURRENT ASSETS 3,446,988 3,312,374
Goodwill and other intangible assets 57,939 58,932
Other assets 324,284 300,944
Total property, plant and equipment, net 337,960 346,520
---------- ----------
TOTAL ASSETS $4,167,171 $4,018,770
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 668,442 $ 596,255
Current portion long-term debt and other
borrowings 36,900 172,540
Income taxes 70,627 54,096
Dividends payable 52,336 51,360
Other current liabilities 182,298 171,395
---------- ----------
TOTAL CURRENT LIABILITIES 1,010,603 1,045,646
Long-term debt 625,000 674,733
Deferred income taxes 114,409 99,441
Minority interests in subsidiaries 51,129 47,967
SHAREHOLDERS' EQUITY
Common stock 174,442 173,848
Retained earnings and other 2,191,588 1,977,135
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 2,366,030 2,150,983
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,167,171 $4,018,770
========== ==========
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months
Ended March 31,
------------------
(in thousands)
2004 2003
-------- --------
OPERATING ACTIVITIES:
Net income $100,199 $ 68,883
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of a change in accounting
principle - 19,541
Depreciation and amortization 16,193 17,031
Other 2,517 (462)
Changes in operating assets and liabilities (37,782) (62,565)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 81,127 42,428
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (12,057) (25,659)
Other -0- (863)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (12,057) (26,522)
FINANCING ACTIVITIES:
Payments on credit facilities, net of proceeds (15,733) 55,998
Stock options exercised 11,119 628
Dividends paid (51,331) (51,126)
Purchase of stock (430) (16,371)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (56,375) (10,871)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 12,695 5,035
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 15,393 19,995
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 28,088 $ 25,030
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