Genuine Parts Company Reports Record Results for 2005
ATLANTA--Feb. 21, 2006--Genuine Parts Company completed its 78th year of operations and reports record sales and earnings for the year ended December 31, 2005.Tom Gallagher, Chairman, President and Chief Executive Officer, announced today that sales in 2005 were $9.8 billion, up 8% compared to 2004. Net income for the year was $437.4 million, an increase of 11% compared to $395.6 million in 2004. Earnings per share on a diluted basis were $2.50, up 11% compared to $2.25 in 2004.
Mr. Gallagher stated, "We are pleased to report that 2005 was another record year for the Company. With these results, we have now increased sales in 55 of the last 56 years and increased profits in 43 of the last 45 years. This is a record that we are proud of and we feel that it shows the stability and consistency of Genuine Parts Company."
Mr. Gallagher added, "It is also important to note that through continued focus on asset management and the generation of strong cash flows, our financial condition was further strengthened in 2005."
Fourth Quarter 2005
Sales increased 7% to $2.41 billion in the fourth quarter ended December 31, 2005, compared to $2.25 billion for the same period in 2004. Diluted earnings per share in the fourth quarter were 63 cents, up 15% compared to 55 cents per share for the fourth quarter of 2004.
Mr. Gallagher commented, "For the quarter, revenues in our Automotive Group were up 5%. Motion Industries, our Industrial Group, increased sales by 9%, and EIS, our Electrical/Electronics Group, was up 6%. Sales for S.P. Richards, our Office Products Group, improved by 10%, their strongest quarter for revenue growth in 2005."
Mr. Gallagher concluded, "As we look back over 2005, we are pleased with the progress that was made throughout our Company. We enter 2006 with optimism and enthusiasm and with a commitment throughout our organization to strive for further improvement in the year ahead. Our focus, across all of our business segments, is to maintain our level of revenue growth, further improve our operating margins, and continue to enhance our asset management and working capital efficiencies."
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 Year Ended
Dec. 31, Dec. 31,
2005 2004 2005 2004
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(Unaudited)
(in thousands, except per share data)
Net sales $2,409,689 $2,253,307 $9,783,050 $9,097,267
Cost of goods sold 1,621,842 1,502,953 6,718,964 6,267,544
----------- ----------- ----------- -----------
787,847 750,354 3,064,086 2,829,723
Selling, administrative
& other expenses 610,930 598,483 2,355,022 2,193,804
----------- ----------- ----------- -----------
Income before income
taxes 176,917 151,871 709,064 635,919
Income taxes 67,924 55,557 271,630 240,367
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Net income $108,993 $96,314 $437,434 $395,552
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Basic net income per
common share $.63 $.55 $2.51 $2.26
Diluted net income per
common share $.63 $.55 $2.50 $2.25
Weighted average common
shares outstanding 173,263 174,804 174,054 174,687
Dilutive effect of
stock options and non-
vested restricted
stock awards 843 1,281 953 973
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Weighted average common
shares outstanding -
assuming dilution 174,106 176,085 175,007 175,660
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GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended Year Ended
Dec. 31, Dec. 31,
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Unaudited)
(in thousands, except ratio analysis)
Net sales:
Automotive $1,220,639 $1,164,072 $5,013,460 $4,739,261
Industrial 695,167 636,998 2,795,699 2,511,597
Office Products 412,072 375,633 1,662,393 1,540,878
Electrical/
Electronic
Materials 86,435 81,342 341,513 335,605
Other (1) (4,624) (4,738) (30,015) (30,074)
----------- ----------- ----------- -----------
Total net sales $2,409,689 $2,253,307 $9,783,050 $9,097,267
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Operating profit:
Automotive $83,856 $91,320 $398,494 $396,015
Industrial 61,934 48,611 214,222 173,760
Office Products 42,132 42,166 157,408 150,817
Electrical/
Electronic
Materials 4,754 3,311 17,470 14,611
----------- ----------- ----------- -----------
Total operating
profit 192,676 185,408 787,594 735,203
Interest expense (6,195) (8,106) (29,564) (37,260)
Other, net (9,564) (25,431) (48,966) (62,024)
----------- ----------- ----------- -----------
Income before
income taxes $176,917 $151,871 $709,064 $635,919
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Capital expenditures $26,404 $25,526 $85,714 $72,077
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Depreciation and
amortization $14,100 $12,432 $65,529 $62,207
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Current ratio 3.0/1 3.2/1
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Total debt to total
capitalization 15.7% 16.5%
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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
Dec. 31, Dec. 31,
2005 2004
----------- -----------
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $188,911 $134,940
Trade accounts receivable 1,186,865 1,123,900
Inventories 2,216,542 2,198,957
Prepaid expenses and other current assets 214,564 175,687
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TOTAL CURRENT ASSETS 3,806,882 3,633,484
Goodwill and other intangible assets 62,717 57,672
Other assets 509,644 384,703
Total property, plant and equipment, net 392,295 379,388
----------- -----------
TOTAL ASSETS $4,771,538 $4,455,247
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $973,615 $856,653
Other borrowings 881 968
Income taxes payable 36,296 42,932
Dividends payable 54,150 52,495
Other current liabilities 184,162 179,667
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TOTAL CURRENT LIABILITIES 1,249,104 1,132,715
Long-term debt 500,000 500,000
Other long-term liabilities 114,623 110,078
Deferred income taxes 156,807 115,683
Minority interests in subsidiaries 57,047 52,394
Common stock 173,033 174,965
Retained earnings and other 2,520,924 2,369,412
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 2,693,957 2,544,377
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,771,538 $4,455,247
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GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended Dec. 31,
2005 2004
---------- ----------
(in thousands)
OPERATING ACTIVITIES:
Net income $437,434 $395,552
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 65,529 62,207
Other 3,271 2,688
Changes in operating assets and liabilities (65,717) 94,789
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 440,517 555,236
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (85,714) (72,077)
Other 15,540 4,122
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (70,174) (67,955)
FINANCING ACTIVITIES:
Net payments on credit facilities (87) (176,801)
Stock options exercised 17,725 37,523
Dividends paid (215,868) (208,575)
Purchase of stock (119,239) (21,475)
---------- ----------
NET CASH USED IN FINANCING ACTIVITIES (317,469) (369,328)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,097 1,594
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 53,971 119,547
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 134,940 15,393
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $188,911 $134,940
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