Genuine Parts Company Reports Record First Quarter Results
ATLANTA--April 17, 2006--Genuine Parts Company reported record sales and earnings for the first quarter ended March 31, 2006. Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.6 billion were up 9% compared to the first quarter of 2005. Net income for the quarter was $113.9 million, an increase of 7% over $106.6 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 66 cents, up 8% compared to 61 cents for the first quarter last year.Mr. Gallagher commented, "We are pleased to report good sales and earnings growth for the first quarter of 2006. As has been the pattern for the past few years, each of our four business segments contributed to our overall sales growth for the quarter. Motion Industries, our Industrial Group, grew sales by 12%. This follows double-digit sales increases in 2005 and 2004 and we anticipate another good year from our industrial operations. The Automotive Group reported a 5% sales increase for the quarter. Within this group, the core NAPA business was actually a bit stronger, posting a 7% sales increase. S.P. Richards, our Office Products Group, generated a 13% sales increase for the quarter and EIS, our Electrical Group, was up 13% also."
Mr. Gallagher added, "The balance sheet at March 31, 2006 remains in excellent condition and we continue to strengthen our financial position through strong earnings growth and initiatives to improve working capital. The Company also continues to generate consistent and strong cash flows and our cash position is quite strong."
Mr. Gallagher concluded, "We are encouraged by the opportunity to have another good year in 2006. The outlook for continued growth in each of our businesses remains positive. Favorable market conditions combined with the proper execution of our growth initiatives should enable us to produce another year of steady sales growth and, in turn, solid earnings results."
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 in Canada 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 in Canada and Mexico.
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
Three Months Ended
March 31,
2006 2005
---- ----
(Unaudited)
(in thousands, except
per share data)
Net sales $2,553,552 $2,342,201
Cost of goods sold 1,750,075 1,605,721
----------- -----------
803,477 736,480
Selling, administrative & other expenses 618,982 564,270
----------- -----------
Income before income taxes 184,495 172,210
Income taxes 70,570 65,612
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Net income $113,925 $106,598
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Basic net income per common share $.66 $.61
Diluted net income per common share $.66 $.61
Weighted average common shares outstanding 172,773 174,772
Dilutive effect of stock options and non-vested
restricted stock awards 912 1,264
----------- -----------
Weighted average common shares outstanding -
assuming dilution 173,685 176,036
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GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS
Three Months Ended
March 31,
2006 2005
----------- -----------
(Unaudited)
(in thousands, except
ratio analysis)
Net sales:
Automotive $1,227,789 $1,168,955
Industrial 771,227 686,740
Office Products 465,955 410,929
Electrical/Electronic Materials 95,469 84,289
Other (1) (6,888) (8,712)
----------- -----------
Total net sales $2,553,552 $2,342,201
=========== ===========
Operating profit:
Automotive $95,856 $95,307
Industrial 57,515 48,253
Office Products 47,696 46,027
Electrical/Electronic Materials 4,853 3,309
----------- -----------
Total operating profit 205,920 192,896
Interest expense, net (7,172) (7,947)
Other, net (14,253) (12,739)
----------- -----------
Income before income taxes $184,495 $172,210
=========== ===========
Capital expenditures $27,521 $20,768
=========== ===========
Depreciation and amortization $17,623 $17,071
=========== ===========
Current ratio 3.1/1 3.1/1
=========== ===========
Total debt to total capitalization 15.5% 16.3%
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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
-------------------------------------
March 31, March 31,
2006 2005
----------- -----------
(Unaudited)
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $150,171 $157,817
Trade accounts receivable 1,297,836 1,195,034
Merchandise inventories 2,184,823 2,149,814
Prepaid expenses and other current assets 198,591 186,837
----------- -----------
TOTAL CURRENT ASSETS 3,831,421 3,689,502
Goodwill and other intangible assets 62,611 57,583
Other assets 520,930 404,300
Total property, plant and equipment, net 400,444 379,587
----------- -----------
TOTAL ASSETS $4,815,406 $4,530,972
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $954,276 $878,640
Other borrowings -0- 897
Income taxes payable 83,517 98,994
Dividends payable 58,288 54,630
Other current liabilities 153,757 147,165
----------- -----------
TOTAL CURRENT LIABILITIES 1,249,838 1,180,326
Long-term debt 500,000 500,000
Other long-term liabilities 119,224 112,305
Deferred income taxes 156,814 116,689
Minority interests in subsidiaries 57,571 53,052
Common stock 172,678 174,450
Retained earnings and other 2,559,281 2,394,150
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 2,731,959 2,568,600
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,815,406 $4,530,972
=========== ===========
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
Three Months
Ended March 31,
2006 2005
--------- ---------
(Unaudited)
(in thousands)
OPERATING ACTIVITIES:
Net income $113,925 $106,598
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 17,623 17,071
Other 2,017 2,525
Changes in operating assets and liabilities (73,510) (9,983)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 60,055 116,211
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (27,521) (20,768)
Other 1,733 6,804
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (25,788) (13,964)
FINANCING ACTIVITIES:
Net payments on credit facilities (881) (71)
Stock options exercised 3,209 4,162
Excess tax benefits from share-based
compensation 1,349 -0-
Dividends paid (54,141) (52,495)
Purchase of stock (22,543) (30,966)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (73,007) (79,370)
--------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (38,740) 22,877
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 188,911 134,940
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $150,171 $157,817
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