ATLANTA, Feb. 21, 2017 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today sales and earnings for the fourth quarter and twelve months ended December 31, 2016.
Sales for the fourth quarter ended December 31, 2016 were $3.78 billion, a 3% increase compared to $3.68 billion for the same period in 2015. Net income for the fourth quarter was $152.5 million compared to $161.3 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.02 compared to $1.07 for the fourth quarter last year.
Fourth quarter sales for the Automotive Group were up 2%, including an approximate 1% comparable sales increase. Sales at Motion Industries, our Industrial Group, were up 4%, sales at EIS, our Electrical/Electronic Group, were basically unchanged and sales for S. P. Richards, our Office Products Group, were up 4% for the quarter.
Paul Donahue, President and Chief Executive Officer, commented, "The fourth quarter was our strongest quarterly sales performance of the year, with acquisitions being the primary growth driver in each of our four business segments. With that said, we did see improvement in our comparable sales trends in the Automotive, Industrial and Electrical/Electronic businesses relative to the second and third quarters of 2016. Generally, we operated in more favorable market conditions as the fourth quarter progressed, and our teams were in position to benefit from that."
Sales for the twelve months ended December 31, 2016 were $15.34 billion, up 0.4% compared to $15.28 billion for the same period in 2015. Net income for the twelve months was $687.2 million, down 3% from 2015, and earnings per share on a diluted basis were $4.59, down 1% compared to $4.63 in 2015.
Mr. Donahue concluded, "We worked hard in every aspect of our business to overcome the challenging sales environment that persisted in our U.S. markets throughout most of 2016. We also enhanced our measures to control rising costs and manage our assets to further strengthen the balance sheet and generate strong cash flows. Due to these efforts, as well as the global growth initiatives across our operations and geographies, the Company enters 2017 well positioned for sustainable long-term growth."
2017 Outlook
The Company is establishing its full year 2017 sales guidance at up 3% to 4%. Diluted earnings per share is expected to be $4.70 to $4.80.
Conference Call
Genuine Parts Company will hold a conference call today at 11:00 a.m. EST to discuss the results of the quarter and the future outlook. Interested parties may listen to the call on the Company's website, www.genpt.com, by clicking "Investors", or by dialing 877-604-9665, conference ID 5619563. A replay will also be available on the Company's website or at 844-512-2921, conference ID 5619563, two hours after the completion of the call until 12:00 a.m. Eastern time on March 7, 2017.
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, the Company's ability to successfully implement its business initiatives in each of its four business segments; slowing demand for the Company's products; changes in legislation or government regulations or policies; changes in general economic conditions, including unemployment, inflation or deflation; changes in tax policies; volatile exchange rates; high energy costs; uncertain credit markets and other macro-economic conditions; competitive product, service and pricing pressures; the ability to maintain favorable vendor arrangements and relationships; disruptions in our vendors' operations; the Company's ability to successfully integrate its acquired businesses; the uncertainties and costs of litigation; disruptions caused by a failure or breach of the Company's information systems, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for 2015 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 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, 2016 2015 2016 2015 ---- ---- ---- ---- (in thousands, except per share data) Net sales $3,780,065 $3,681,790 $15,339,713 $15,280,044 Cost of goods sold 2,648,982 2,586,312 10,740,106 10,724,192 --------- --------- ---------- ---------- Gross profit 1,131,083 1,095,478 4,599,607 4,555,852 Operating expenses: Selling, administrative & other expenses 855,557 797,959 3,377,780 3,290,496 Depreciation and amortization 39,240 35,911 147,487 141,675 ------ ------ ------- ------- 894,797 833,870 3,525,267 3,432,171 Income before income taxes 236,286 261,608 1,074,340 1,123,681 Income taxes 83,766 100,335 387,100 418,009 ------ ------- ------- ------- Net income $152,520 $161,273 $687,240 $705,672 ======== ======== ======== ======== Basic net income per common share $1.03 $1.07 $4.61 $4.65 Diluted net income per common share $1.02 $1.07 $4.59 $4.63 Weighted average common shares outstanding 148,478 150,552 149,051 151,667 Dilutive effect of stock options and non-vested restricted stock awards 699 803 753 829 --- --- --- --- Weighted average common shares outstanding - assuming dilution 149,177 151,355 149,804 152,496 ======= ======= ======= =======
GENUINE PARTS COMPANY and SUBSIDIARIES SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS -------------------------------------------- Three Months Ended Dec. 31, Year Ended Dec. 31, 2016 2015 2016 2015 ---- ---- ---- ---- (in thousands) Net sales: Automotive $1,996,325 $1,949,365 $8,111,511 $8,015,098 Industrial 1,151,966 1,106,583 4,634,212 4,646,689 Office Products 475,971 458,751 1,969,405 1,937,629 Electrical/Electronic Materials 176,847 177,186 715,650 750,770 Other (1) (21,044) (10,095) (91,065) (70,142) ------- ------- ------- ------- Total net sales $3,780,065 $3,681,790 $15,339,713 $15,280,044 ========== ========== =========== =========== Operating profit: Automotive $159,998 $169,082 $715,154 $729,152 Industrial 80,904 72,454 336,608 339,180 Office Products 19,934 33,435 117,035 140,866 Electrical/Electronic Materials 15,434 16,132 60,539 70,151 ------ ------ ------ ------ Total operating profit 276,270 291,103 1,229,336 1,279,349 Interest expense, net (4,794) (4,298) (19,525) (20,354) Intangible amortization (12,546) (8,933) (40,870) (34,878) Other, net (22,644) (16,264) (94,601) (100,436) ------- ------- ------- -------- Income before income taxes $236,286 $261,608 $1,074,340 $1,123,681 ======== ======== ========== ========== Capital expenditures $73,993 $47,550 $160,643 $109,544 ======= ======= ======== ======== Depreciation and amortization $39,240 $35,911 $147,487 $141,675 ======= ======= ======== ======== (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, 2016 2015 ---- ---- (in thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $242,879 $211,631 Trade accounts receivable, net 1,938,562 1,822,419 Merchandise inventories, net 3,210,320 2,999,966 Prepaid expenses and other current assets 556,670 521,300 ------- ------- TOTAL CURRENT ASSETS 5,948,431 5,555,316 Goodwill and other intangible assets, less accumulated amortization 1,574,663 1,361,795 Deferred tax assets 132,652 118,525 Other assets 475,530 460,918 Net property, plant and equipment 728,124 648,217 ------- ------- TOTAL ASSETS $8,859,400 $8,144,771 ========== ========== LIABILITIES AND EQUITY CURRENT LIABILITIES Trade accounts payable $3,081,111 $2,821,526 Current portion of debt 325,000 375,000 Dividends payable 97,584 92,595 Other current liabilities 740,455 651,533 ------- ------- TOTAL CURRENT LIABILITIES 4,244,150 3,940,654 Long-term debt 550,000 250,000 Pension and other post- retirement benefit liabilities 341,510 284,235 Deferred tax liabilities 48,326 50,684 Other long- term liabilities 468,058 459,956 Common stock 148,410 150,081 Retained earnings 4,058,339 3,927,104 Accumulated other comprehensive loss (1,013,021) (930,618) ---------- -------- TOTAL PARENT EQUITY 3,193,728 3,146,567 Noncontrolling interests in subsidiaries 13,628 12,675 TOTAL EQUITY 3,207,356 3,159,242 --------- --------- TOTAL LIABILITIES AND EQUITY $8,859,400 $8,144,771 ========== ==========
GENUINE PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- Year Ended Dec. 31, 2016 2015 ---- ---- (in thousands) OPERATING ACTIVITIES: Net income $687,240 $705,672 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 147,487 141,675 Share- based compensation 19,719 17,717 Excess tax benefits from share- based compensation (12,021) (7,024) Changes in operating assets and liabilities 103,653 301,333 ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES 946,078 1,159,373 INVESTING ACTIVITIES: Purchases of property, plant and equipment (160,643) (109,544) Acquisitions and other investing activities (433,356) (154,083) -------- -------- NET CASH USED IN INVESTING ACTIVITIES (593,999) (263,627) FINANCING ACTIVITIES: Proceeds from debt 4,350,000 3,862,224 Payments on debt (4,100,000) (4,005,191) Share- based awards exercised, net of taxes paid (16,147) (9,572) Excess tax benefits from share- based compensation 12,021 7,024 Dividends paid (386,863) (368,284) Purchase of stock (181,417) (292,275) -------- -------- NET CASH USED IN FINANCING ACTIVITIES (322,406) (806,074) EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,575 (15,771) ----- ------- NET INCREASE IN CASH AND CASH EQUIVALENTS 31,248 73,901 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 211,631 137,730 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $242,879 $211,631 ======== ========
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SOURCE Genuine Parts Company