Genuine Parts Company Reports Fourth Quarter And Full Year Results For 2013 - FOX Carolina 21

Genuine Parts Company Reports Fourth Quarter And Full Year Results For 2013

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SOURCE Genuine Parts Company

- Record Sales and Earnings for 2013 -

ATLANTA, Feb. 18, 2014 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) reports fourth quarter results and record sales and earnings for the year ended December 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20081002/CLTH108LOGO )

Tom Gallagher, Chairman and Chief Executive Officer, announced today that sales in 2013 were $14.1 billion, up 8% compared to 2012.  Net income for the year was $685 million, an increase of 6% compared to $648 million in 2012.  Earnings per share on a diluted basis were $4.40, up 6% compared to $4.14 in 2012.

Included in the Company's full year 2013 results are the previously recognized one-time positive purchase accounting adjustments of $33 million, or $0.21 net of taxes on a per share diluted basis. These adjustments are associated with the April 1, 2013 acquisition of GPC Asia Pacific, formerly Exego. 

Additionally, the Company's pension plan was amended to freeze future benefit accruals for all participants as of December 31, 2013.  In connection with this amendment, effective in December 2012, the Company recorded a one-time noncash curtailment gain of $23.5 million, or $0.10 and $0.09 net of taxes on a per share diluted basis for the fourth quarter and full year 2012, respectively. 

Mr. Gallagher stated, "We are pleased to report that 2013 was another year of record sales and earnings for Genuine Parts Company. Our overall results reflect the good job that was done by the GPC Team in 2013, despite the challenging market conditions that were experienced by our non-automotive business segments. We further strengthened our financial condition with increased net income and a continued emphasis on effectively managing the balance sheet.  Our progress in these areas produced record cash flows for us in 2013, with cash from operations at $1.1 billion and free cash flow of approximately $600 million."

Mr. Gallagher added, "The Company's revenue growth in 2013 was driven by an 18.5% Automotive sales increase, offset by a combined 1% sales decrease for our non-automotive businesses. Acquisitions for the Automotive Group drove the high-teen revenue growth, while our underlying sales were up approximately 4% for the year.  Our strongest sales results came from our commercial business and, in particular, solid results in NAPA AutoCare and Major Accounts, our two primary commercial initiatives. Sales at Motion Industries, our Industrial Group, were down slightly for the year, our Electrical/Electronic Group was down 2% and our Office Group sales were down 3% in 2013. Weak demand patterns challenged these three industries throughout the year."

Fourth Quarter 2013

Sales increased 13% to $3.5 billion in the fourth quarter ended December 31, 2013, compared to sales of $3.1 billion for the same period in 2012.  Net income in the fourth quarter was $150 million, or $0.97 per share on a diluted basis, compared to $160 million, or $1.03 per diluted share, in 2012. The 2012 results include the $23.5 million one-time pension gain, or $0.10 per diluted share, previously disclosed. Excluding the gain, diluted earnings per share in the fourth quarter of 2013 were up 4% from 2012. 

In reviewing the quarter, Mr. Gallagher commented, "Revenue growth in the fourth quarter proved to be the strongest of the year, with acquisitions contributing 10% to our sales growth and our underlying sales were up 4%, which was offset by a 1% currency headwind. Automotive sales were up 25% in the quarter, including 7% underlying growth, offset by a 1% negative translation effect. Industrial Group sales were up 3% and sales for the Electrical/Electronic Group increased by 6%, which includes a 10% contribution from acquisitions. Sales for the Office business were down 4%."

Mr. Gallagher concluded, "We faced a number of challenges in each of our four business segments in 2013 and, as previously stated, our Automotive business fared the best with their 18.5% sales increase. In all four businesses, key decisions were made and actions taken that position each segment for solid performances in the year ahead, and we look forward to reporting on our progress. We remain committed to our core objectives of growing sales and earnings, showing continued operating margin improvement, generating solid cash flows and maintaining a strong balance sheet. Further progress in each of these areas will keep the Company moving ahead and help to ensure another successful year in 2014."

Conference Call

Genuine Parts Company will hold a conference call today at 11:00 a.m. EST to discuss the results of the quarter, the year and the future outlook.  Interested parties may listen to the call on the Company's website, www.genpt.com, by clicking "Investor Services", or by dialing 877-331-5106, conference ID 39491974.  A replay will also be available on the Company's website or at 855-859-2056, conference ID 39491974, two hours after the completion of the call until 12:00 a.m. Eastern Time on March 5, 2014.

Forward Looking Statements

Some statements in this report, 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 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 may include, among other things, slowing demand for the Company's products, changes in general economic conditions, including, unemployment, inflation or deflation, high energy costs, uncertain credit markets and other macro-economic conditions, the ability to maintain favorable vendor arrangements and relationships, disruptions in our vendors' operations, competitive product, service and pricing pressures, the Company's ability to successfully implement its business initiatives in each of its four business segments, the Company's ability to successfully integrate its acquired businesses, including GPC Asia Pacific, the uncertainties and costs of litigation, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for 2012 and from time to time in the Company's subsequent 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 subsequent Forms 10-K, 10-Q, 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, Mexico and Australasia.  The Company also distributes industrial replacement parts in the U.S., Canada and Mexico 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 Dec. 31,

Year Ended Dec. 31,


2013

2012

2013

2012


(in thousands, except per share data)






Net sales

$3,517,801

$3,118,966

$14,077,843

$13,013,868

Cost of goods sold

2,425,660

2,208,308

9,857,923

9,235,777

Gross profit

1,092,141

910,658

4,219,920

3,778,091






Operating expenses:





Selling, administrative & other expenses

820,563

633,678

3,041,659

2,660,776

Depreciation and amortization

35,885

25,054

133,957

98,383


856,448

658,732

3,175,616

2,759,159






Income before income taxes

235,693

251,926

1,044,304

1,018,932

Income taxes

85,226

91,701

359,345

370,891






Net income

$   150,467

$   160,225

$     684,959

$     648,041






Basic net income per common share

$0.98

$1.03

$4.43

$4.17






Diluted net income per common share

$0.97

$1.03

$4.40

$4.14






Weighted average common shares outstanding

154,047

154,952

154,636

155,413






Dilutive effect of stock options and





   non-vested restricted stock awards

1,075

943

1,078

1,007






Weighted average common shares outstanding –





   assuming dilution

155,122

155,895

155,714

156,420

 

GENUINE PARTS COMPANY and SUBSIDIARIES

SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS



Three Months Ended Dec. 31,

Year Ended Dec. 31,


2013

2012

2013

2012


(in thousands)






Net sales:





      Automotive

$1,916,771

$1,531,624

$  7,489,186

$  6,320,882

      Industrial

1,085,555

1,054,773

4,429,976

4,453,574

      Office Products

385,761

402,942

1,638,618

1,686,690

      Electrical/Electronic Materials

143,899

135,387

568,872

582,820

      Other (1)

(14,185)

(5,760)

(48,809)

(30,098)

            Total net sales

$3,517,801

$3,118,966

$14,077,843

$13,013,868






Operating profit:





      Automotive

$   153,901

$   122,491

$     641,492

$     540,678

      Industrial

73,338

78,117

320,720

352,119

      Office Products

31,438

36,373

122,492

134,441

      Electrical/Electronic Materials

12,287

12,456

47,584

50,910

      Total operating profit

270,964

249,437

1,132,288

1,078,148

      Interest expense, net

(6,094)

(4,914)

(24,330)

(19,619)

      Intangible amortization

(8,500)

(3,811)

(28,987)

(12,991)

      Other, net

(20,677)

11,214

(34,667)

(26,606)

            Income before income taxes

$   235,693

$   251,926

$  1,044,304

$  1,018,932






Capital expenditures

$     39,917

$     30,360

$     124,063

$     101,987






Depreciation and amortization

$     35,885

$     25,054

$     133,957

$       98,383











(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,


2013

2012


(in thousands)

ASSETS



CURRENT ASSETS



Cash and cash equivalents

$   196,893

$   403,095

Trade accounts receivable, net

1,664,819

1,490,028

Merchandise inventories, net

2,946,021

2,602,560

Prepaid expenses and other current assets

413,758

324,448




      TOTAL CURRENT ASSETS

5,221,491

4,820,131




Goodwill and other intangible assets, less accumulated amortization

1,289,356

497,839

Deferred tax assets

97,555

279,463

Other assets

401,834

643,263

Net property, plant and equipment

670,061

566,365




TOTAL ASSETS

$7,680,297

$6,807,061


LIABILITIES AND EQUITY



CURRENT LIABILITIES



Trade accounts payable

$2,269,671

$1,681,900

Current portion of debt

264,658

250,000

Income taxes payable

9,237

4,354

Dividends payable

82,746

76,641

Other current liabilities

556,732

474,743




      TOTAL CURRENT LIABILITIES

3,183,044

2,487,638







Long-term debt

500,000

250,000

Retirement and other post-retirement benefit liabilities

140,171

572,988

Deferred tax liabilities

83,316

Other long-term liabilities

414,998

488,256




Common stock

153,773

154,841

Retained earnings and other

3,592,956

3,344,538

Accumulated other comprehensive loss

(397,655)

(501,492)




      TOTAL  PARENT EQUITY

3,349,074

2,997,887




Noncontrolling interests in subsidiaries

9,694

10,292




      TOTAL  EQUITY

3,358,768

3,008,179




TOTAL LIABILITIES AND EQUITY

$7,680,297

$6,807,061








 

GENUINE PARTS COMPANY and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



Year Ended Dec. 31,


2013

2012


(in thousands)




OPERATING ACTIVITIES:



      Net income

$684,959

$648,041

      Adjustments to reconcile net income to net cash provided by operating activities:



      Depreciation and amortization

133,957

98,383

      Share-based compensation

12,648

10,747

      Excess tax benefits from share-based compensation

(12,905)

(11,018)

      Gain on GPC Asia Pacific equity investment

(59,000)

      Other

(26,351)

10,808

      Changes in operating assets and liabilities

323,423

149,477




NET CASH PROVIDED BY OPERATING ACTIVITIES

1,056,731

906,438




INVESTING ACTIVITIES:



      Purchases of property, plant and equipment

(124,063)

(101,987)

      Acquisitions and other investing activities

(701,516)

(549,880)




NET CASH USED IN INVESTING ACTIVITIES

(825,579)

(651,867)




FINANCING ACTIVITIES:



      Proceeds from debt

3,019,931

750,000

      Payments on debt

(2,995,335)

(750,000)

      Share-based awards exercised, net of taxes paid

(15,728)

(7,043)

      Excess tax benefits from share-based compensation

12,905

11,018

      Dividends paid

(326,217)

(300,983)

      Purchase of stock

(120,673)

(81,826)




NET CASH USED IN FINANCING ACTIVITIES

(425,117)

(378,834)




EFFECT OF EXCHANGE RATE CHANGES ON CASH

(12,237)

2,304




NET  DECREASE IN CASH AND CASH EQUIVALENTS

(206,202)

(121,959)




CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

403,095

525,054




CASH AND CASH EQUIVALENTS AT END OF YEAR

$196,893

$403,095

 

 

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