Genuine Parts Co. (GPC) announced today an acquisition for its U.S. Automotive Parts Group.
The company has entered into a definitive agreement to acquire Merle’s Automotive Supply, with an effective close date of May 1. Merle’s, founded in 1969 and based in Tucson, Arizona, is a 14-location automotive parts distributor serving both the commercial and retail markets in the greater Tucson and southern Arizona area. The addition of Merle’s will be consolidated into GPC’s U.S. automotive operations and is expected to generate approximate annual revenues of $45 million.
Paul Donahue, president and CEO, stated, “Merle’s is a leading automotive distributor in the greater Tucson area, and this strategic acquisition significantly enhances our automotive store footprint and competitiveness in the Arizona marketplace. We are excited to welcome the Merle’s team to the U.S. Automotive Parts and GPC family and look forward to working with them and continuing our shared tradition of providing quality parts and excellent service to our customers.”
First Quarter Sales and Earnings
Also today, GPC reported its sales and earnings for the first quarter ended March 31.
Sales for the first quarter were $3.91 billion, a 5 percent increase compared to $3.72 billion for the same period in 2016. Net income for the first quarter was $160.2 million compared to $158 million recorded for the same period in the previous year. Earnings per share on a diluted basis were $1.08, up 3 percent from $1.05 for the first quarter last year.
Donahue commented, “We are pleased that our total sales increase in the first quarter of 2017 represents positive sequential sales improvement and is our strongest quarterly growth since the fourth quarter of 2014. As a diversified global distributor, we benefited from strong total sales growth in our international automotive, industrial, electrical and office operations. The strength in these areas was partially offset by the headwinds in our U.S. automotive business, which we are working to overcome.”
First quarter sales for the Automotive Group were up 3 percent, including an approximate 0.5 percent comparable sales increase. Sales at Motion Industries, GPC’s Industrial Group, were up 7 percent, including a 3 percent comparable sales increase, and sales at EIS, the Electrical/Electronic Group, were up 5 percent, with comparable sales up 2.5 percent. Sales for S.P. Richards, the company’s Office Products Group, were up 9 percent for the quarter, including a 2.5 percent decrease in comparable sales.
Donahue concluded, “It is encouraging that our overall growth was driven by sales increases across all four of our businesses, with positive comparable sales in all but one segment. Our teams have worked hard to position the company for stronger growth and remain focused on key sales and cost initiatives to build on our first quarter performance as we move forward in the year. We are excited by the future growth prospects across our broad platform, and will continue to support this growth with a strong balance sheet, solid cash flows and effective capital allocation intended to maximize shareholder value.”
The company expects sales to be up 3 to 4 percent for the full year, which is unchanged from the initial guidance. GPC also is raising its outlook for diluted earnings per share to $4.75 to $4.85 compared to the initial outlook of $4.70 to $4.80.