Genuine Parts Company (Form: 8-K)

GENUINE PARTS COMPANY
REPORTS SALES AND EARNINGS
FOR THE SECOND QUARTER AND SIX MONTHS
ENDED JUNE 30, 2009

Atlanta, Georgia, July 16, 2009 — Genuine Parts Company (NYSE: GPC) reported sales and earnings for the second quarter and six months ended June 30, 2009. Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.5 billion were down 12% compared to the second quarter of 2008. Net income for the quarter was $103.6 million, a decrease of 22% from $133.1 million recorded in the same period of the previous year. Earnings per share on a diluted basis were 65 cents, down 20% compared to 81 cents for the second quarter last year.

For the six months ended June 30, 2009, sales totaled $5.0 billion, down 11% compared to the same period in 2008. Net income for the six months was $192.8 million, a decrease of 25% from the previous year. Earnings per share on a diluted basis were $1.21, down 22% compared to $1.56 for the same period last year.

In reviewing the quarter, Mr. Gallagher commented, “The Automotive Group reported a 5% decrease in sales for the quarter and S.P. Richards, our Office Products Group, was down 6%. These results reflect a slight improvement from the 7% sales decreases reported for the Automotive and Office Products groups in the first quarter of 2009. The Industrial and Electrical Groups, however, showed further sales declines relative to the first quarter of 2009 due to worsening conditions in the manufacturing segment of the economy. Motion Industries, our Industrial Group, had a 22% sales decrease in the quarter, and EIS, our Electrical Group, had a 34% decrease.”

Mr. Gallagher added, “The Balance Sheet at June 30, 2009 remains in excellent condition and we continue to strengthen our financial position through working capital and asset management initiatives, significant cost reduction efforts and steady and strong cash flows. Cash from operations has improved significantly from 2008 and our sound cash position provides us with significant financial flexibility. Our priorities for cash remain the dividend, opportunistic share repurchases, the ongoing reinvestment in each of our businesses and strategic complementary types of acquisitions. We continue to believe that the use of cash in these key areas serves to maximize the total return to shareholders.”

Mr. Gallagher concluded, “We are not satisfied with our results for the second quarter and first half of 2009, but feel that they reflect the realities of a difficult economy. As we approach the second half of the year, we will remain focused on those areas of our business that are within our control and we will support our growth initiatives and cost reduction efforts with a strong and healthy balance sheet. We remain confident in the long-term positive fundamentals of each of our businesses and we believe that we will be a stronger company when the economy begins to turn.”

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, www.genpt.com, by clicking “Investor Services”, or by dialing 877-316-2549, conference ID 85292457. A replay will also be available on the Company’s website or at 800-642-1687, conference ID 85292457, two hours after the completion of the conference call until 12:00 a.m. Eastern time on July 31, 2009.

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, the ability to maintain favorable supplier arrangements and relationships, changes in general economic conditions, the growth rate of the market for the Company’s products and services, competitive product, service and pricing pressures, including internet related initiatives, the effectiveness of the Company’s promotional, marketing and advertising programs, changes in financial markets, including particularly the capital and credit markets, 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.

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 June 30,				Six Months Ended June 30,
	2009		2008		2009		2008
	(Unaudited)
	(in thousands, except per share data)
Net sales	$	2,535,045	$	2,873,485	$	4,979,541	$	5,612,958
Cost of goods sold		1,790,190		2,021,272		3,502,485		3,941,262

		744,855		852,213		1,477,056		1,671,696
Selling, administrative & other expenses		578,805		636,502		1,166,338		1,264,304

Income before income taxes		166,050		215,711		310,718		407,392
Income taxes		62,440		82,638		117,949		150,776

Net income	$	103,610	$	133,073	$	192,769	$	256,616

Basic net income per common share	$	.65	$	.81	$	1.21	$	1.56
Diluted net income per common share	$	.65	$	.81	$	1.21	$	1.56
Weighted average common shares outstanding		159,513		163,411		159,479		164,194
Dilutive effect of stock options and
non-vested restricted stock awards		253		716		225		705

Weighted average common shares outstanding –
assuming dilution		159,766		164,127		159,704		164,899

GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS


	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
	(Unaudited)
	(in thousands)
Net sales:
Automotive	$	1,360,037		$	1,428,513		$	2,579,165		$	2,734,400
Industrial		701,228			898,069			1,437,729			1,779,282
Office Products		406,134			430,807			818,882			873,199
Electrical/Electronic Materials		80,609			122,584			166,742			236,885
Other (1)		(12,963	)		(6,488	)		(22,977	)		(10,808	)

Total net sales	$	2,535,045		$	2,873,485		$	4,979,541		$	5,612,958

Operating profit:
Automotive	$	117,777		$	115,514		$	205,184		$	206,158
Industrial		31,443			76,569			65,618			145,561
Office Products		33,661			37,363			72,389			81,295
Electrical/Electronic Materials		5,090			9,893			10,758			18,903

Total operating profit		187,971			239,339			353,949			451,917
Interest expense, net		(6,752	)		(7,332	)		(13,848	)		(14,486	)
Other, net		(15,169	)		(16,296	)		(29,383	)		(30,039	)

Income before income taxes	$	166,050		$	215,711		$	310,718		$	407,392

Capital expenditures	$	22,858		$	22,568		$	36,955		$	44,330

Depreciation and amortization	$	22,411		$	22,017		$	44,932		$	44,701

(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


	June 30,		June 30,
	2009		2008
	(Unaudited)
	(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	238,589	$	135,844
Trade accounts receivable, net		1,239,318		1,342,635
Merchandise inventories, net		2,215,709		2,319,485
Prepaid expenses and other current assets		222,399		264,804

TOTAL CURRENT ASSETS		3,916,015		4,062,768
Goodwill and intangible assets, less accumulated amortization		166,683		126,010
Other assets		339,905		186,414
Net property, plant and equipment		487,307		422,151

TOTAL ASSETS	$	4,909,910	$	4,797,343


LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade accounts payable	$	1,063,260	$	1,064,882
Current portion of debt		—		250,000
Income taxes payable		44,687		15,059
Dividends payable		63,813		63,798
Other current liabilities		240,807		187,653

TOTAL CURRENT LIABILITIES		1,412,567		1,581,392
Long-term debt		500,000		250,000
Other long-term liabilities		121,168		110,852
Retirement and other post-retirement benefit liabilities		442,940		90,560
Noncontrolling interests in subsidiaries		7,822		67,298
Common stock		159,531		162,477
Retained earnings and other		2,265,882		2,534,764

TOTAL EQUITY		2,433,235		2,764,539

TOTAL LIABILITIES AND EQUITY	$	4,909,910	$	4,797,343

NOTE: Certain prior period amounts have been reclassified to conform to current year presentation.

GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended June
	30,
	2009			2008
	(Unaudited)
	(in thousands)
OPERATING ACTIVITIES:
Net income	$	192,769		$	256,616
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		44,932			44,701
Other		8,639			6,385
Changes in operating assets and liabilities		244,734			(31,193	)

NET CASH PROVIDED BY OPERATING ACTIVITIES		491,074			276,509
INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(36,955	)		(44,330	)
Acquisitions and other		(107,405	)		(53,656	)

NET CASH USED IN INVESTING ACTIVITIES		(144,360	)		(97,986	)
FINANCING ACTIVITIES:
Stock options exercised		2,160			1,355
Excess tax benefits from share-based compensation		—			287
Dividends paid		(125,926	)		(125,054	)
Changes in cash overdraft position		(52,000	)		—
Purchase of stock		(136	)		(151,104	)

NET CASH USED IN FINANCING ACTIVITIES		(175,902	)		(274,516	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		170,812			(95,993	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		67,777			231,837

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	238,589		$	135,844


Georgia	001-05690	58-0254510
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

2999 Circle 75 Pkwy, Atlanta, Georgia		30339
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


	Genuine Parts Company

July 16, 2009	By:	Jerry W. Nix

		Name: Jerry W. Nix
		Title: Vice Chairman and CFO


Exhibit No.		Description

99.1		Press Release dated July 16, 2009


Date of Report (Date of Earliest Event Reported):		July 16, 2009


Registrant’s telephone number, including area code:		770.953.1700


Contacts:		Jerry W. Nix, Vice Chairman and CFO – (770) 612-2048 Sidney G. Jones, Vice President-Investor Relations – (770) 818-4628