Genuine Parts Company Reports Record Sales and Earnings for Second Quarter and First Half of 2005
ATLANTA--July 19, 2005--Genuine Parts Company reported record sales and earnings for the second quarter and six months ended June 30, 2005. Tom Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.5 billion were up 8% compared to the second quarter of 2004. Net income was $111.0 million, an increase of 10%, compared to $101.1 million for the second quarter of 2004. On a per share diluted basis, net income was 63 cents, up 9% compared to 58 cents for the second quarter last year.For the six months ended June 30, 2005, sales totaled $4.8 billion, up 7% compared to the same period in 2004. Net income for the six months was $217.6 million, an increase of 8% over $201.3 million recorded in the previous year. Earnings per share on a diluted basis were $1.24, up 8% compared to $1.15 for the same period last year.
Mr. Gallagher stated: "Our overall results reflect the positive direction established in each of our businesses over the past eighteen months and all four of our business segments continue to contribute to the Company's success.
The strongest sales performance in the quarter came from Motion Industries, our Industrial Group. They were up 12% and business conditions remain favorable for the industrial operations. S.P. Richards, our Office Products Group, reported another period of consistent results with sales up 8%. The Automotive Group produced a solid 6% increase and EIS, our Electrical Group, was down 2% in the quarter. The EIS results reflect the impact of the sale of certain Electronic operations in the first quarter and the ongoing EIS business was actually up 5% in the period."
Mr. Gallagher further commented: "Our balance sheet remains in excellent condition and we continue to generate strong cash flows. We expect our working capital initiatives and earnings growth to further strengthen our financial position in the periods ahead."
Mr. Gallagher concluded: "We continue to maintain a positive outlook for each of our businesses for 2005. The demographics for the Automotive Aftermarket appear positive for some time to come, the manufacturing indices for Industrial and Electrical/Electronic remain strong and the increasing employment figures bode well for the Office Products Group. Our strategy is to continue to consistently execute our growth initiatives, in each of our businesses, in order to capitalize on these favorable market conditions. At the same time, we will be maintaining our expense control and asset management initiatives to meet our Sales and Earnings targets for 2005."
Conference Call
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. and Canada through its Motion Industries subsidiary. S. P. Richards Company, the Office Products Group, distributes business products nationwide 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
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
---------- ---------- ---------- ----------
(Unaudited)
(in thousands, except per share data)
Net sales $2,475,657 $2,297,686 $4,817,858 $4,494,677
Cost of goods sold 1,714,400 1,604,621 3,320,121 3,114,701
---------- ---------- ---------- ----------
761,257 693,065 1,497,737 1,379,976
Selling, administrative &
other expenses 581,419 529,132 1,145,689 1,053,646
---------- ---------- ---------- ----------
Income before income taxes 179,838 163,933 352,048 326,330
Income taxes 68,871 62,787 134,483 124,985
---------- ---------- ---------- ----------
Net income $ 110,967 $ 101,146 $ 217,565 $ 201,345
========== ========== ========== ==========
Basic net income per
common share $ .64 $ .58 $ 1.25 $ 1.15
Diluted net income per
common share $ .63 $ .58 $ 1.24 $ 1.15
Weighted average common
shares outstanding 174,270 174,829 174,519 174,575
Dilutive effect of stock
options and
non-vested restricted
stock awards 962 815 971 694
---------- ---------- ---------- ----------
Weighted average common 175,232 175,644 175,490 175,269
shares outstanding - ========== ========== ========== ==========
assuming dilution
GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
---------- ---------- ---------- ----------
(Unaudited)
(in thousands, except ratio analysis)
Net sales:
Automotive $1,294,783 $1,218,695 $2,463,738 $2,345,246
Industrial 702,591 629,402 1,389,331 1,237,906
Office Products 401,593 372,354 812,522 759,144
Electrical/Electronic
Materials 83,748 85,827 168,037 168,906
Other (1) (7,058) (8,592) (15,770) (16,525)
---------- ---------- ---------- ----------
Total net sales $2,475,657 $2,297,686 $4,817,858 $4,494,677
========== ========== ========== ==========
Operating profit:
Automotive $ 110,780 $ 109,492 $ 206,087 $ 202,753
Industrial 50,355 38,179 98,608 84,298
Office Products 35,611 32,694 81,638 76,448
Electrical/Electronic
Materials 4,713 4,300 8,022 7,520
---------- ---------- ---------- ----------
Total operating profit 201,459 184,665 394,355 371,019
Interest expense (7,263) (9,870) (15,210) (19,847)
Other, net (14,358) (10,862) (27,097) (24,842)
---------- ---------- ---------- ----------
Income before
income taxes $ 179,838 $ 163,933 $ 352,048 $ 326,330
========== ========== ========== ==========
Capital expenditures $ 19,556 $ 13,514 $ 40,324 $ 25,571
========== ========== ========== ==========
Depreciation and
amortization $ 17,189 $ 16,998 $ 34,260 $ 33,191
========== ========== ========== ==========
Current ratio 3.1/1
==========
Total debt to total
capitalization 16.2%
==========
(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,
2005 2004
---------- ----------
(Unaudited)
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 260,538 $ 127,732
Trade accounts receivable 1,225,674 1,152,458
Inventories 2,125,366 2,139,207
Prepaid expenses and other current assets 152,571 131,485
---------- ----------
TOTAL CURRENT ASSETS 3,764,149 3,550,882
Goodwill and other intangible assets 62,615 57,850
Other assets 403,335 346,116
Total property, plant and equipment, net 380,692 332,863
---------- ----------
TOTAL ASSETS $4,610,791 $4,287,711
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 974,846 $ 779,492
Current portion of long-term debt and other
borrowings 929 127,172
Income taxes payable 43,606 45,386
Dividends payable 54,450 52,483
Other current liabilities 154,522 137,427
---------- ----------
TOTAL CURRENT LIABILITIES 1,228,353 1,141,960
Long-term debt 500,000 500,000
Other long-term liabilities 110,954 55,162
Deferred income taxes 116,809 113,254
Minority interests in subsidiaries 55,243 51,514
Common stock 174,061 174,993
Retained earnings and other 2,425,371 2,250,828
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 2,599,432 2,425,821
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,610,791 $4,287,711
========== ==========
Note: Certain balance sheet reclassifications have been made to prior
year amounts to conform to current year presentation.
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2005 2004
--------- ---------
(Unaudited)
(in thousands)
OPERATING ACTIVITIES:
Net income $ 217,565 $ 201,345
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 34,260 33,191
Other 2,188 1,656
Changes in operating assets and liabilities 63,214 1,483
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 317,227 237,675
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (40,324) (25,571)
Other 6,271 --
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (34,053) (25,571)
FINANCING ACTIVITIES:
Net payments on credit facilities (37) (21,900)
Stock options exercised 11,569 28,918
Dividends paid (107,125) (103,667)
Purchase of stock (61,983) (3,116)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (157,576) (99,765)
NET INCREASE IN CASH AND CASH EQUIVALENTS 125,598 112,339
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 134,940 15,393
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 260,538 $ 127,732
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