Genuine Parts Record Sales and Earnings for Third Quarter 2005
ATLANTA--Oct. 1, 20058, 2005--Genuine Parts Company reported record sales and earnings for the third quarter and nine months ended September 30, 2005. Tom Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.6 billion were up 9% compared to the third quarter of 2004. Net income was $110.9 million, an increase of 13%, compared to $97.9 million for the third quarter of 2004. On a per share diluted basis, net income was 63 cents, up 12.5% compared to 56 cents for the third quarter last year.For the nine months ended September 30, 2005, sales totaled $7.4 billion, up 8% compared to the same period in 2004. Net income for the nine months was $328.4 million, an increase of 10% over $299.2 million recorded in the previous year. Earnings per share on a diluted basis were $1.87, up 9% compared to $1.71 for the same period last year.
Mr. Gallagher stated: "The third quarter was our strongest quarter thus far in 2005, and it continues the positive growth pattern we have experienced in each of our business segments dating back to early 2004.
"Motion Industries, our Industrial Group, grew sales by 12%, the sixth consecutive quarter of double-digit revenue increases for this group. S.P. Richards, our Office Products Group, had an 8% increase in sales, and this follows a 6% increase in the first quarter and an 8% increase in the second quarter. We are encouraged by another period of steady growth for this group. The Automotive Group produced its strongest quarter of the year, with sales up 8% in the third quarter after reporting increases of 4% and 6% in the first and second quarters, respectively. EIS, our Electrical Group, also contributed to our growth this quarter, with sales up 2%. Excluding the impact of the sale of their Circuit Supply division earlier this year, the on-going operations at EIS improved 10% in the period."
Mr. Gallagher further commented: "Our financial position has strengthened in 2005 through improvements in working capital and strong earnings growth. The balance sheet at September 30, 2005 remains in excellent condition and we continue to generate strong cash flows."
Mr. Gallagher concluded: "As we look ahead to the fourth quarter, we continue to maintain a positive outlook on the growth opportunities for our businesses. Our initiatives in the Automotive Group are proving successful and the market conditions in the aftermarket remain favorable for us. In addition, the manufacturing indices for Industrial and Electrical/Electronic reflect continued expansion and the employment numbers for the service sector fit well with our initiatives in the Office Products Group. So, we feel good about the growth potential of the North American markets we serve and we will continue executing our strategies and initiatives to capitalize on this potential and finish the year strong."
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 Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Unaudited)
(in thousands, except per share data)
Net sales $2,555,503 $2,349,283 $7,373,361 $6,843,960
Cost of goods sold 1,777,001 1,649,890 5,097,122 4,764,591
----------- ----------- ----------- -----------
778,502 699,393 2,276,239 2,079,369
Selling, administrative
& other expenses 598,403 541,675 1,744,092 1,595,321
----------- ----------- ----------- -----------
Income before income
taxes 180,099 157,718 532,147 484,048
Income taxes 69,223 59,825 203,706 184,810
----------- ----------- ----------- -----------
Net income $110,876 $97,893 $328,441 $299,238
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Basic net income per
common share $.64 $.56 $1.88 $1.71
Diluted net income per
common share $.63 $.56 $1.87 $1.71
Weighted average common
shares outstanding 173,929 174,792 174,320 174,648
Dilutive effect of
stock options and non-
vested restricted
stock awards 956 1,021 968 842
Weighted average common
shares outstanding -
assuming dilution 174,885 175,813 175,288 175,490
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GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2005 2004 2005 2004
----------- ----------- ----------- ----------
(Unaudited)
(in thousands, except ratio analysis)
Net sales:
Automotive $1,329,083 $1,229,943 $3,792,821 $3,575,189
Industrial 711,201 636,693 2,100,532 1,874,599
Office Products 437,799 406,101 1,250,321 1,165,245
Electrical/Electronic
Materials 87,041 85,357 255,078 254,263
Other (1) (9,621) (8,811) (25,391) (25,336)
----------- ----------- ----------- ----------
Total net sales $2,555,503 $2,349,283 $7,373,361 $6,843,960
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Operating profit:
Automotive $108,551 $101,942 $314,638 $304,695
Industrial 53,680 40,851 152,288 125,149
Office Products 33,638 32,203 115,276 108,651
Electrical/Electronic
Materials 4,694 3,780 12,716 11,300
----------- ----------- ----------- ----------
Total operating profit 200,563 178,776 594,918 549,795
Interest expense (8,159) (9,307) (23,369) (29,154)
Other, net (12,305) (11,751) (39,402) (36,593)
----------- ----------- ----------- ----------
Income before
income taxes $180,099 $157,718 $532,147 $484,048
=========== =========== =========== ==========
Capital expenditures $18,986 $20,979 $59,310 $46,550
=========== =========== =========== ==========
Depreciation and
amortization $17,169 $16,584 $51,429 $49,775
=========== =========== =========== ==========
Current ratio 2.9/1 2.9/1
=========== ==========
Total debt to total
capitalization 15.9% 20.2%
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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
September September
30, 30,
2005 2004
----------- -----------
(Unaudited)
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $339,505 $284,704
Trade accounts receivable 1,227,836 1,146,965
Inventories 2,157,824 2,163,049
Prepaid expenses and other current assets 167,958 141,848
----------- -----------
TOTAL CURRENT ASSETS 3,893,123 3,736,566
Goodwill and other intangible assets 62,478 57,761
Other assets 430,400 339,077
Total property, plant and equipment, net 383,292 339,397
----------- -----------
TOTAL ASSETS $4,769,293 $4,472,801
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $1,041,335 $861,557
Current portion of long-term debt and other
borrowings 908 125,841
Income taxes payable 50,994 60,869
Dividends payable 54,357 52,425
Other current liabilities 183,822 167,426
----------- -----------
TOTAL CURRENT LIABILITIES 1,331,416 1,268,118
Long-term debt 500,000 500,000
Other long-term liabilities 109,888 60,739
Deferred income taxes 121,160 113,259
Minority interests in subsidiaries 56,362 52,091
Common stock 173,522 174,630
Retained earnings and other 2,476,945 2,303,964
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 2,650,467 2,478,594
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,769,293 $4,472,801
=========== ===========
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
Nine Months Ended
September 30,
2005 2004
--------- ---------
(Unaudited)
(in thousands)
OPERATING ACTIVITIES:
Net income $328,441 $299,238
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 51,429 49,775
Other 6,706 3,337
Changes in operating assets and liabilities 107,251 117,857
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 493,827 470,207
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (59,310) (46,550)
Other 11,428 --
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (47,882) (46,550)
FINANCING ACTIVITIES:
Net payments on credit facilities (59) (9,559)
Stock options exercised 16,021 31,649
Dividends paid (161,536) (156,150)
Purchase of stock (95,806) (20,286)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (241,380) (154,346)
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 204,565 269,311
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 134,940 15,393
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $339,505 $284,704
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