Genuine Parts Co. (GPC) has announced fourth quarter and full year results as well as record earnings per share and cash flows for the year ended Dec. 31, 2015.
Sales in the fourth quarter were $3.68 billion, compared to sales of $3.82 billion for the same period in 2014. Net income in the fourth quarter was $161.3 million compared to $165.6 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.07, equal to the earnings per share for the fourth quarter in 2014.
Tom Gallagher, chairman and CEO, commented, “As we entered the fourth quarter we had anticipated a challenging sales environment. That said, we are pleased with the positive underlying sales growth in our automotive business as well as the solid industry fundamentals supporting our growth initiatives. Our non-automotive businesses, however, and in particular the industrial and electrical distribution segments, were further challenged by the difficult macro-economic environment. Despite the mixed results, our ongoing focus on key sales and cost initiatives across our businesses drove overall margin expansion for the quarter.”
The company’s 4 percent sales decline in the fourth quarter included an underlying sales decrease of 2 percent and a currency headwind of 3 percent, while acquisitions contributed 1 percent to sales. Sales for the automotive group were down 2 percent, consisting of core automotive growth of 2.5 percent and a slight benefit from acquisitions, less a currency headwind of approximately 5 percent.
Sales for the year ended Dec. 31, 2015, were $15.28 billion compared to $15.34 billion in 2014. Net income for the year was $705.7 million, a 1 percent decrease compared to $711.3 million in 2014. Earnings per share on a diluted basis were $4.63, a new record and up slightly compared to $4.61 in 2014. Currency negatively impacted revenue growth by approximately 3 percent and earnings per share by 14 cents for the full year.
Gallagher added, “When we adjust our 2015 results for the impact of currency translation, the company produced increased sales and net income. In addition, the positive impact of our sales initiatives and cost control measures produced an expanded operating margin and, combined with our reduced investment in net working capital, generated record levels of cash from operations and free cash flows. These are meaningful accomplishments and our progress in 2015 supports the ongoing investment in growth opportunities such as acquisitions and the return of capital to shareholders via a strong dividend and share repurchases.”
Gallagher concluded, “We enter 2016 with a cautious outlook on the overall economy. However, we remain committed to growing sales and earnings, showing continued operating margin improvement, generating solid cash flows and maintaining a strong balance sheet. We have strategic plans in place to support additional improvement in each of these areas in the year ahead.”
GPC also announced that its board of directors has elected two new corporate officers. Scott LeProhon was named executive vice president of global procurement and Gregory Miller was named senior vice president and chief information officer. In addition, the board elected Charles Chesnutt to the position of senior vice president and treasurer, replacing Frank Howard, who is retiring from the company following a successful 38-year career. The GPC board also has approved Lee Maher as president and chief operating officer of the U.S. Automotive Parts Group.
LeProhon brings with him 28 years of experience in a variety of key management roles with the company, most recently serving as executive vice president of merchandising and product strategy for the U.S. Automotive Parts Group. Miller was previously senior vice president and chief financial officer for the U.S. Automotive Parts Group, and has been with the company since 2010. Chesnutt has been with the company since 2002, and has held a variety of senior management positions, most recently serving as senior vice president of technology and chief information officer. Maher, a 38-year veteran of the company’s automotive business, was previously executive vice president and chief operating officer of the U.S. Automotive Parts Group.
“We want to thank Frank Howard for his significant contributions to the company throughout his long career,” said Gallagher. “He has been an excellent financial executive for us and we wish him the very best in his retirement.
“As EVP of Global Procurement, Scott will manage the global vendor relationships across the GPC automotive platform as well as the company’s automotive supply businesses,” he added. “Greg will lead our corporate-wide IT initiatives and Charlie will head the company’s treasury functions, including its important financing relationships. All three of these talented individuals bring valuable experience and expertise to their new positions. We look forward to their many future contributions.
“As president of the U.S. Automotive Parts Group, Lee will have responsibility for the U.S. Automotive network of 59 distribution centers and 1,100 company-owned stores, and he will lead our ongoing efforts to maximize the growth opportunities across the entire NAPA network,” Gallagher concluded. “We are pleased to have a proven executive like Lee so uniquely qualified for this important leadership position in our company. Lee is surrounded by a very talented and capable management team, and we are excited for the growth prospects for this business.”