EX-99.1 3 g88484exv99w1.txt EX-99.1 PRESS RELEASE DATED 4/15/04 EXHIBIT 99.1 FOR IMMEDIATE RELEASE Contact: Jerry W. Nix, Executive Vice President - Finance (770) 612-2048 GENUINE PARTS COMPANY REPORTS FIRST QUARTER RESULTS Atlanta, Georgia, April 15, 2004 -- Genuine Parts Company (NYSE: GPC) reported sales and earnings for the first quarter ended March 31, 2004. Larry Prince, Chairman of the Board of Directors, announced today that sales totaling $2.2 billion were up 9% compared to the first quarter of 2003. Net income for the quarter was $100.2 million, an increase of 13% over $88.4 million recorded in the previous year before the cumulative effect of an accounting change adopted January 1, 2003. Earnings per share on a diluted basis were 57 cents, up 12% compared to 51 cents for the first quarter last year before the accounting change. In accordance with the Financial Accounting Standards Board's EITF 02-16 affecting the accounting treatment of cash consideration received from vendors, a non-cash charge of $20 million was recorded as of January 1, 2003, representing the cumulative effect of a change in accounting principle. After the cumulative effect adjustment in 2003, net income for the quarter ended March 31, 2004 was up 45% and diluted earnings per share were up 46% compared to the first quarter of 2003. Mr. Prince commented: "Our 9% sales gain is very encouraging and we like the fact that each of our four business segments had a successful first quarter. The Automotive Group reported strong results with a 10% increase in revenues for the quarter. Motion Industries, our Industrial Group, continued their trend of improvement with a 7% increase and EIS, our Electrical/Electronics Group, was strong with a 10% improvement. S. P. Richards, our Office Products Group, produced another steady performance with sales up 6% for the quarter." Mr. Prince concluded: "We believe the stronger pace of sales is being driven by our internal efforts and initiatives across all our businesses and we also sense that market conditions are making a turn for the better. Our operating margins and net earnings benefit from the additional revenue and our balance sheet also reflects this improvement." (Cont.) Page 2 CONFERENCE CALL Genuine Parts Company will hold a conference call today at 11:00 a.m. EDT to discuss the results of the quarter and the future outlook. Interested parties may listen by dialing 877-422-4780, conference ID 6508011. A replay will also be available at 800-642-1687, conference ID 6508011, two hours after the completion of the conference call until 12:00 a.m. Eastern time on April 29, 2004. FORWARD LOOKING STATEMENTS Various statements in this release may constitute forward-looking statements. Actual results 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, 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 Securities and Exchange Commission. 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 Mexico. (Cont.) GENUINE PARTS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (Unaudited)
Three Months Ended March 31, ------------------------------------- 2004 2003 (in thousands, except per share data) Net Sales ................................................................. $ 2,196,991 $ 2,021,858 Cost of goods sold ........................................................ 1,510,080 1,383,518 ----------- ----------- 686,911 638,340 Selling, administrative & other expenses .................................. 524,514 493,145 ----------- ----------- Income before income taxes and cumulative effect of a change in accounting principle ................................................... 162,397 145,195 Income taxes .............................................................. 62,198 56,771 ----------- ----------- Net income before cumulative effect of a change in accounting principle ... 100,199 88,424 Cumulative effect of a change in accounting principle (1) ................. -- (19,541) ----------- ----------- Net income ................................................................ $ 100,199 $ 68,883 =========== =========== Basic net income per common share: Before cumulative effect of a change in accounting principle ........... $ .57 $ .51 Cumulative effect of a change in accounting principle (1) .............. -- (.11) ----------- ----------- Basic net income ....................................................... $ .57 $ .40 =========== =========== Diluted net income per common share: Before cumulative effect of a change in accounting principle ........... $ .57 $ .51 Cumulative effect of a change in accounting principle (1) .............. -- (.12) ----------- ----------- Diluted net income ..................................................... $ .57 $ .39 =========== =========== Weighted average common shares outstanding ................................ 174,320 174,146 Dilutive effect of stock options and non-vested restricted stock awards ... 580 456 ----------- ----------- Weighted average common shares outstanding - assuming dilution ............ 174,900 174,602 =========== ===========
(1) On January 1, 2003 the Company recorded a non-cash charge related to the capitalization of certain vendor consideration in connection with the Financial Accounting Standards Board's EITF No. 02-16, "Accounting by a Customer for Cash Consideration Received from a Vendor". (Cont.) GENUINE PARTS COMPANY AND SUBSIDIARIES SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS -------------------------------------------- (Unaudited)
Three month period ended March 31, 2004 2003 ----------- ----------- (In thousands) Net sales: Automotive $ 1,126,551 $ 1,022,471 Industrial 608,504 569,630 Office Products 386,790 363,826 Electrical/Electronic 83,079 75,417 Other (1) (7,933) (9,486) ----------- ----------- Total net sales $ 2,196,991 $ 2,021,858 =========== =========== Operating profit: Automotive $ 93,261 $ 83,430 Industrial 46,119 43,187 Office Products 43,754 41,556 Electrical/Electronic 3,220 1,597 ----------- ----------- Total operating profit 186,354 169,770 Interest expense (9,977) (13,694) Other, net (13,980) (10,881) ----------- ----------- Income before income taxes and accounting change $ 162,397 $ 145,195 =========== =========== Capital expenditures $ 12,057 $ 25,659 =========== =========== Depreciation and amortization $ 16,193 $ 17,031 =========== =========== Current ratio 3.4/1 3.2/1 =========== =========== Total debt to total capitalization 21.9% 28.3% =========== ===========
(1) Represents the net effect of discounts, incentives and freight billed reported as a component of net sales. (Cont.) GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
March 31, March 31, 2004 2003 ---------- ---------- (Unaudited) (in thousands) CURRENT ASSETS -------------- Cash and cash equivalents .............................. $ 28,088 $ 25,030 Trade accounts receivable .............................. 1,154,981 1,110,334 Inventories ............................................ 2,129,236 2,057,917 Prepaid and other current accounts ..................... 134,683 119,093 ---------- ---------- TOTAL CURRENT ASSETS .......................... 3,446,988 3,312,374 Goodwill and other intangible assets ................... 57,939 58,932 Other assets ........................................... 324,284 300,944 Total property, plant and equipment, net ............... 337,960 346,520 ---------- ---------- TOTAL ASSETS ........................................... $4,167,171 $4,018,770 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES ------------------- Accounts payable ....................................... $ 668,442 $ 596,255 Current portion long-term debt and other borrowings .... 36,900 172,540 Income taxes ........................................... 70,627 54,096 Dividends payable ...................................... 52,336 51,360 Other current liabilities .............................. 182,298 171,395 ---------- ---------- TOTAL CURRENT LIABILITIES ..................... 1,010,603 1,045,646 Long-term debt ......................................... 625,000 674,733 Deferred income taxes .................................. 114,409 99,441 Minority interests in subsidiaries ..................... 51,129 47,967 SHAREHOLDERS' EQUITY -------------------- Common stock ........................................... 174,442 173,848 Retained earnings and other ............................ 2,191,588 1,977,135 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY .................... 2,366,030 2,150,983 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ............. $4,167,171 $4,018,770 ========== ==========
(Cont.) GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, --------------- (in thousands) 2004 2003 --------- --------- OPERATING ACTIVITIES: Net income .......................................................................... $ 100,199 $ 68,883 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of a change in accounting principle ............................. -- 19,541 Depreciation and amortization ..................................................... 16,193 17,031 Other ............................................................................. 2,517 (462) Changes in operating assets and liabilities ....................................... (37,782) (62,565) --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES .............................................. 81,127 42,428 INVESTING ACTIVITIES: Purchase of property, plant and equipment ........................................... (12,057) (25,659) Other ............................................................................... -0- (863) --------- --------- NET CASH USED IN INVESTING ACTIVITIES .................................................. (12,057) (26,522) FINANCING ACTIVITIES: Payments on credit facilities, net of proceeds ...................................... (15,733) 55,998 Stock options exercised ............................................................. 11,119 628 Dividends paid ...................................................................... (51,331) (51,126) Purchase of stock ................................................................... (430) (16,371) --------- --------- NET CASH USED IN FINANCING ACTIVITIES .................................................. (56,375) (10,871) --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS .............................................. 12,695 5,035 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ....................................... 15,393 19,995 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................................. $ 28,088 $ 25,030 ========= =========
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