Sales Increased 3%, EPS Increased 7% ATLANTA, Oct. 17
/PRNewswire-FirstCall/ -- Genuine Parts Company (NYSE: GPC)
reported increased sales and earnings for the third quarter and
nine months ended September 30, 2008. Thomas C. Gallagher,
Chairman, President and Chief Executive Officer, announced today
that sales totaling $2.9 billion were up 3% compared to the third
quarter of 2007. Net income for the quarter was $131.0 million, an
increase of 2% over $128.6 million recorded in the same period of
the previous year. Earnings per share on a diluted basis were 81
cents, up 7% compared to 76 cents for the third quarter last year.
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For the nine months ended September 30, 2008, sales totaled $8.5
billion, up 3% compared to the same period in 2007. Net income for
the nine months was $387.6 million, an increase of 2% over $380.3
million recorded in the previous year. Earnings per share on a
diluted basis were $2.36, up 6% compared to $2.23 for the same
period last year. In review of the quarter, Mr. Gallagher
commented, "We are pleased to report that the 3rd Quarter of 2008
was another period of steady and consistent sales and earnings
growth for Genuine Parts Company. EIS, our Electrical Group,
reported another excellent quarter and, once again, generated the
strongest sales growth among our four business segments. They were
up 13% in the quarter, following a 7% increase in the first quarter
and 11% growth in the second quarter. Motion Industries, our
Industrial Group, is also performing well, with their sales
increasing 7% for the second consecutive quarter, following a 6%
sales increase in the first quarter. We expect to see both EIS and
Motion continue their positive sales trends in the fourth quarter.
Our two most challenging businesses currently are Automotive and
Office Products. The Automotive Group reported a 1% sales increase
in the quarter and S.P. Richards, our Office Products Group, ended
the quarter even with the prior year. Our results in each of these
segments are reflective of the overall slowdown in their respective
industries and, while we do not anticipate a quick recovery in
either case, we do remain optimistic about our prospects in each of
these businesses in the quarters ahead." Mr. Gallagher added, "The
Balance Sheet at September 30, 2008 remains in excellent condition
and we continue to strengthen our financial position through steady
and consistent earnings growth as well as working capital and asset
management initiatives. The Company also continues to generate
strong cash flows and our cash position remains sound. We have used
cash in several key areas to maximize the total return to
shareholders, including the dividends paid to shareholders, which
we have increased for 52 consecutive years. Another priority for
cash has been opportunistic share repurchases and as part of our
share repurchase program, we have purchased approximately 6.7
million shares of our Company stock thus far in 2008. Other key
uses for cash remain the ongoing reinvestment in our four business
segments and strategic complimentary types of acquisitions in each
of the businesses." Mr. Gallagher concluded, "As we enter the last
quarter of 2008, we are witnessing heightened levels of economic
uncertainty, which are having an impact on all businesses, GPC
included. Our Company remains in sound condition, however, and we
believe that our continued focus on the consistent execution of our
short and long term growth plans, as well as our ongoing
initiatives to further strengthen our balance sheet, will pull our
Company through the difficult economy. This proven strategy has
allowed us to show steady and consistent progress over our 80-year
history and we look forward to reporting another year of record
sales and earnings in 2008." Conference Call Genuine Parts Company
will hold a conference call today at 11:00 a.m. Eastern time to
discuss the results of the quarter and the future outlook.
Interested parties may listen to the call on the Company's website,
http://www.genpt.com/ , by clicking "Investor Services", or by
dialing 877-422- 4780, conference ID 67330418. A replay will also
be available on the Company's website or at 800-642-1687,
conference ID 67330418, two hours after the completion of the
conference call until 12:00 a.m. Eastern time on November 1, 2008.
Forward Looking Statements Some statements in this release, as well
as in other materials we file with the Securities and Exchange
Commission ("SEC") or otherwise release to the public and in
materials that we make available on our website, constitute
forward-looking statements that are subject to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Senior officers may also make verbal statements to analysts,
investors, the media and others that are forward-looking.
Forward-looking statements may relate, for example, to our future
operations, prospects, strategies, financial condition, economic
performance (including growth and earnings), industry conditions
and demand for our products and services. The Company cautions that
its forward-looking statements involve risks and uncertainties, and
while we believe that our expectations for the future are
reasonable in view of currently available information, you are
cautioned not to place undue reliance on our forward- looking
statements. Actual results or events may differ materially from
those indicated as a result of various important factors. Such
factors include, but are not limited to, changes in general
economic conditions, the growth rate of the market for the
Company's products and services, the ability to maintain favorable
supplier arrangements and relationships, competitive product and
pricing pressures, including internet related initiatives, the
effectiveness of the Company's promotional, marketing and
advertising programs, changes in laws and regulations, including
changes in accounting and taxation guidance, the uncertainties of
litigation, as well as other risks and uncertainties discussed from
time to time in the Company's filings with the SEC. Forward-looking
statements are only as of the date they are made, and the Company
undertakes no duty to update its forward-looking statements except
as required by law. You are advised, however, to review any further
disclosures we make on related subjects in our Form 10-Q, 10-K, 8-K
and other reports to the SEC. 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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Nine
Months Ended Sept. 30, Sept. 30, 2008 2007 2008 2007 (Unaudited)
(in thousands, except per share data) Net sales $2,882,115
$2,797,556 $8,495,073 $8,215,926 Cost of goods sold 2,033,110
1,973,068 5,974,372 5,776,909 849,005 824,488 2,520,701 2,439,017
Selling, administrative & other expenses 638,163 617,101
1,902,467 1,825,704 Income before income taxes 210,842 207,387
618,234 613,313 Income taxes 79,825 78,807 230,601 233,059 Net
income $131,017 $128,580 $387,633 $380,254 Basic net income per
common share $.81 $.76 $2.37 $2.24 Diluted net income per common
share $.81 $.76 $2.36 $2.23 Weighted average common shares
outstanding 161,603 168,819 163,324 169,862 Dilutive effect of
stock options and non-vested restricted stock awards 673 1,006 689
1,022 Weighted average common shares outstanding - assuming
dilution 162,276 169,825 164,013 170,884 GENUINE PARTS COMPANY and
SUBSIDIARIES SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS Three
Months Ended Nine Months Ended Sept. 30, Sept. 30, 2008 2007 2008
2007 (Unaudited) (in thousands) Net sales: Automotive $1,393,118
$1,381,007 $4,127,518 $4,037,568 Industrial 907,015 849,631
2,686,297 2,522,675 Office Products 458,968 460,425 1,332,167
1,342,932 Electrical/Electronic Materials 126,827 111,863 363,712
329,416 Other (1) (3,813) (5,370) (14,621) (16,665) Total net sales
$2,882,115 $2,797,556 $8,495,073 $8,215,926 Operating profit:
Automotive $111,730 $115,023 $317,888 $325,690 Industrial 77,220
69,669 222,781 204,330 Office Products 33,426 33,183 114,721
119,052 Electrical/Electronic Materials 10,272 7,685 29,175 23,224
Total operating profit 232,648 225,560 684,565 672,296 Interest
expense, net (7,391) (4,706) (21,877) (16,550) Other, net (14,415)
(13,467) (44,454) (42,433) Income before income taxes $210,842
$207,387 $618,234 $613,313 Capital expenditures $15,761 $31,015
$60,091 $83,781 Depreciation and amortization $21,768 $21,994
$66,469 $64,014 (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 Sept. 30, Sept. 30, 2008 2007 (Unaudited) (in
thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $124,428
$330,052 Trade accounts receivable, net 1,350,568 1,334,309
Merchandise inventories, net 2,318,215 2,225,718 Prepaid expenses
and other current assets 279,932 243,296 TOTAL CURRENT ASSETS
4,073,143 4,133,375 Goodwill and other intangible assets, less
accumulated amortization 147,940 70,539 Other assets 185,420
172,583 Net property, plant and equipment 412,755 458,597 TOTAL
ASSETS $4,819,258 $4,835,094 LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES Trade accounts payable $1,070,513 $1,088,201
Current portion of debt 250,000 - Income taxes payable 18,506
19,559 Dividends payable 63,003 61,318 Other current liabilities
223,634 199,529 TOTAL CURRENT LIABILITIES 1,625,656 1,368,607
Long-term debt 250,000 500,000 Other long-term liabilities 206,058
191,750 Minority interests in subsidiaries 68,439 64,774 Common
stock 160,557 167,900 Retained earnings and other 2,508,548
2,542,063 TOTAL SHAREHOLDERS' EQUITY 2,669,105 2,709,963 TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY $4,819,258 $4,835,094 GENUINE
PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS Nine Months Ended Sept. 30, 2008 2007 (Unaudited) (in
thousands) OPERATING ACTIVITIES: Net income $387,633 $380,254
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 66,469 64,014
Other 11,470 19,435 Changes in operating assets and liabilities
1,836 154,249 NET CASH PROVIDED BY OPERATING ACTIVITIES 467,408
617,952 INVESTING ACTIVITIES: Purchases of property, plant and
equipment (60,091) (83,781) Acquisitions and other (98,735)
(20,316) NET CASH USED IN INVESTING ACTIVITIES (158,826) (104,097)
FINANCING ACTIVITIES: Stock options exercised 1,364 10,134 Excess
tax benefits from share-based compensation 313 4,176 Dividends paid
(188,805) (181,925) Purchase of stock (228,863) (152,161) NET CASH
USED IN FINANCING ACTIVITIES (415,991) (319,776) NET (DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS (107,409) 194,079 CASH AND
CASH EQUIVALENTS AT BEGINNING OF PERIOD 231,837 135,973 CASH AND
CASH EQUIVALENTS AT END OF PERIOD $124,428 $330,052
http://www.newscom.com/cgi-bin/prnh/20081002/CLTH108LOGO
http://photoarchive.ap.org/ DATASOURCE: Genuine Parts Company
CONTACT: Jerry W. Nix, Vice Chairman and CFO of Genuine Parts
Company, +1-770-612-2048 Web site: http://www.genpt.com/
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