Genuine Parts Company (Form: 8-K)

GENUINE PARTS COMPANY
REPORTS SALES AND EARNINGS
FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2013

Atlanta, Georgia, October 18, 2013 — Genuine Parts Company (NYSE: GPC) reported sales and earnings for the third quarter and nine months ended September 30, 2013.

Thomas C. Gallagher, Chairman and Chief Executive Officer, announced today that sales totaling $3.69 billion were up 9% compared to the third quarter of 2012. Net income for the quarter was $173.7 million, up slightly from $172.9 million recorded in the same period of the previous year. Earnings per share on a diluted basis were $1.12, up 1% compared to $1.11 for the third quarter last year.

For the nine months ended September 30, 2013, sales totaled $10.56 billion, up 7% compared to the same period in 2012. Net income for the nine months was $534.5 million, an increase of 10% from $487.8 million recorded in the previous year. Earnings per share on a diluted basis were $3.43, up 10% compared to $3.11 for the same period last year.

In review of the quarter, Mr. Gallagher commented, “While we achieved another quarter of record sales for the Company, the third quarter proved to be challenging for us. This was especially true in our non-automotive businesses, as the demand patterns across these segments decelerated in the quarter. Fortunately, our Automotive Group performed reasonably well for us and continues to report solid progress in their operations.”

Mr. Gallagher added, “In the third quarter, sales for the Automotive Group were up 22% for the second consecutive period. This increase includes core North American growth of approximately 5% and the positive impact of the Australasian acquisition. We were pleased by the ongoing positive sales trends in both North America and at GPC Asia Pacific. Sales for Motion Industries, our Industrial Group, were down by 2.5%; and EIS, our Electrical/Electronic Group, showed sales down approximately 5%. S. P. Richards, our Office Products Group, had a 3% sales decrease for the quarter.”

Mr. Gallagher concluded, “In these challenging times, we are especially focused on our sales initiatives and expense controls across all of our businesses. For the long-term we remain committed to our core objectives of growing sales and earnings, showing operating margin improvement, generating solid cash flows and maintaining a strong balance sheet. Our cash flows are very strong again this year and the Company is in excellent financial condition.”

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 toll-free at 877-331-5106, conference ID 72999067. A replay of the call will also be available on the Company’s website or by dialing toll-free at 855-859-2056, conference ID 72999067, after the completion of the conference call until 12:00 a.m. Eastern time on November 2, 2013.

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, 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.

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 Sept. 30,				Nine Months Ended Sept. 30,
	2013		2012		2013		2012
	(Unaudited)
	(in thousands, except per share data)
Net sales	$	3,685,243	$	3,375,778	$	10,560,042	$	9,894,902
Cost of goods sold		2,584,320		2,399,742		7,432,263		7,027,469

Gross profit		1,100,923		976,036		3,127,779		2,867,433
Operating expenses:
Selling, administrative & other expenses		793,957		678,894		2,221,096		2,027,098
Depreciation and amortization		35,220		25,609		98,072		73,329

		829,177		704,503		2,319,168		2,100,427
Income before income taxes		271,746		271,533		808,611		767,006
Income taxes		98,000		98,590		274,119		279,190

Net income	$	173,746	$	172,943	$	534,492	$	487,816

Basic net income per common share	$	1.12	$	1.11	$	3.45	$	3.14
Diluted net income per common share	$	1.12	$	1.11	$	3.43	$	3.11
Weighted average common shares outstanding		154,567		155,147		154,835		155,568
Dilutive effect of stock options and
non-vested restricted stock awards		1,096		988		1,082		1,038

Weighted average common shares outstanding –
assuming dilution		155,663		156,135		155,917		156,606

GENUINE PARTS COMPANY and SUBSIDIARIES
SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS


	Three Months Ended Sept. 30,						Nine Months Ended Sept. 30,
	2013			2012			2013			2012
	(Unaudited)
	(in thousands)
Net sales:
Automotive	$	2,016,076		$	1,650,857		$	5,572,415		$	4,789,258
Industrial		1,110,309			1,138,854			3,344,421			3,398,801
Office Products		430,457			444,255			1,252,857			1,283,748
Electrical/Electronic Materials		142,818			150,877			424,973			447,433
Other (1)		(14,417	)		(9,065	)		(34,624	)		(24,338	)

Total net sales	$	3,685,243		$	3,375,778		$	10,560,042		$	9,894,902

Operating profit:
Automotive	$	180,166		$	150,648		$	487,591		$	418,187
Industrial		79,596			94,621			247,382			274,002
Office Products		28,094			29,942			91,054			98,068
Electrical/Electronic Materials		12,625			13,555			35,297			38,454

Total operating profit		300,481			288,766			861,324			828,711
Interest expense, net		(7,031	)		(4,971	)		(18,236	)		(14,705	)
Intangible amortization		(7,726	)		(3,428	)		(20,487	)		(9,180	)
Other, net		(13,978	)		(8,834	)		(13,990	)		(37,820	)

Income before income taxes	$	271,746		$	271,533		$	808,611		$	767,006

Capital expenditures	$	33,338		$	20,259		$	84,146		$	71,627

Depreciation and amortization	$	35,220		$	25,609		$	98,072		$	73,329

GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS


	Sept. 30,			Sept. 30,
	2013			2012
	(Unaudited)
	(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	320,870		$	398,118
Trade accounts receivable, net		1,759,517			1,606,297
Merchandise inventories, net		2,832,108			2,529,435
Prepaid expenses and other current assets		382,980			308,839

TOTAL CURRENT ASSETS		5,295,475			4,842,689
Goodwill and other intangible assets, less accumulated amortization		1,280,182			504,192
Deferred tax asset		257,571			243,547
Other assets		462,172			617,737
Net property, plant and equipment		648,503			560,900

TOTAL ASSETS	$	7,943,903		$	6,769,065


LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable	$	2,213,190		$	1,754,253
Current portion of debt		583,896			—
Income taxes payable		19,176			12,496
Dividends payable		82,982			76,814
Other current liabilities		554,850			458,529

TOTAL CURRENT LIABILITIES		3,454,094			2,302,092
Long-term debt		250,000			500,000
Retirement and other post-retirement benefit liabilities		481,333			476,108
Deferred tax liability		90,584			—
Other long-term liabilities		514,717			463,924
Common stock		154,357			155,131
Retained earnings and other		3,570,356			3,282,289
Accumulated other comprehensive loss		(581,652	)		(420,845	)

TOTAL PARENT EQUITY		3,143,061			3,016,575
Noncontrolling interests in subsidiaries		10,114			10,366

TOTAL EQUITY		3,153,175			3,026,941

TOTAL LIABILITIES AND EQUITY	$	7,943,903		$	6,769,065

GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended Sept. 30,
	2013			2012
	(Unaudited)
	(in thousands)
OPERATING ACTIVITIES:
Net income	$	534,492		$	487,816
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		98,072			73,329
Share-based compensation		8,932			8,098
Excess tax benefits from share-based compensation		(12,020	)		(9,239	)
Other		(50,608	)		(1,011	)
Changes in operating assets and liabilities		258,617			205,827

NET CASH PROVIDED BY OPERATING ACTIVITIES		837,485			764,820
INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(84,146	)		(71,627	)
Acquisitions and other investing activities		(614,109	)		(545,378	)

NET CASH USED IN INVESTING ACTIVITIES		(698,255	)		(617,005	)
FINANCING ACTIVITIES:
Proceeds from debt		2,094,550			750,000
Payments on debt		(1,990,204	)		(750,000	)
Share-based awards exercised, net of taxes paid		(14,313	)		(4,008	)
Excess tax benefits from share-based compensation		12,020			9,239
Dividends paid		(243,262	)		(224,170	)
Purchase of stock		(71,738	)		(58,808	)

NET CASH USED IN FINANCING ACTIVITIES		(212,947	)		(277,747	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(8,508	)		2,996

NET DECREASE IN CASH AND CASH EQUIVALENTS		(82,225	)		(126,936	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		403,095			525,054

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	320,870		$	398,118


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

October 18, 2013	By:	Carol B. Yancey

		Name: Carol B. Yancey
		Title: Executive Vice President and CFO


Exhibit No.		Description

99.1		Press Release dated October 18, 2013


Date of Report (Date of Earliest Event Reported):		October 18, 2013


Registrant’s telephone number, including area code:		770.953.1700


Contacts:		Carol B. Yancey, Executive Vice President and CFO – (770) 612-2044 Sidney G. Jones, Vice President-Investor Relations – (770) 818-4628