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GPC Reports 2013 Fourth Quarter, Full Year Results

Tom Gallagher, chairman and CEO, announced today that sales in 2013 were $14.1 billion, up 8 percent compared to 2012.

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ATLANTA – Genuine Parts Co. (GPC) has reported fourth quarter results and record sales and earnings for the year ended Dec. 31, 2013.
 
Tom Gallagher, chairman and CEO, announced today that sales in 2013 were $14.1 billion, up 8 percent compared to 2012. Net income for the year was $685 million, an increase of 6 percent compared to $648 million in 2012. Earnings per share on a diluted basis were $4.40, up 6 percent compared to $4.14 in 2012.
 
Included in the company’s full year 2013 results are the previously recognized one-time positive purchase accounting adjustments of $33 million, or 21 cents net of taxes on a per share diluted basis. These adjustments are associated with the April 1, 2013, acquisition of GPC Asia Pacific, formerly Exego.
 
In addition, the company’s pension plan was amended to freeze future benefit accruals for all participants as of Dec. 31, 2013. In connection with this amendment, effective in December 2012, the company recorded a one-time non-cash curtailment gain of $23.5 million, or 10 cents and 9 cents net of taxes on a per share diluted basis for the fourth quarter and full year 2012, respectively.
 
Gallagher stated, "We are pleased to report that 2013 was another year of record sales and earnings for Genuine Parts Co. Our overall results reflect the good job that was done by the GPC Team in 2013, despite the challenging market conditions that were experienced by our non-automotive business segments. We further strengthened our financial condition with increased net income and a continued emphasis on effectively managing the balance sheet. Our progress in these areas produced record cash flows for us in 2013, with cash from operations at $1.1 billion and free cash flow of approximately $600 million."
 
Gallagher added, "The company’s revenue growth in 2013 was driven by an 18.5 percent automotive sales increase, offset by a combined 1 percent sales decrease for our non-automotive businesses. Acquisitions for the automotive group drove the high-teen revenue growth, while our underlying sales were up approximately 4 percent for the year. Our strongest sales results came from our commercial business and, in particular, solid results in NAPA AutoCare and major accounts, our two primary commercial initiatives. Sales at Motion Industries, our industrial group, were down slightly for the year, our electrical/electronic group was down 2 percent and our office group sales were down 3 percent in 2013. Weak demand patterns challenged these three industries throughout the year."
 
Sales increased 13 percent to $3.5 billion in the fourth quarter ended Dec. 31, 2013, compared to sales of $3.1 billion for the same period in 2012. Net income in the fourth quarter was $150 million, or 97 cents per share on a diluted basis, compared to $160 million, or $1.03 per diluted share, in 2012. The 2012 results include the $23.5 million one-time pension gain, or 10 cents per diluted share, previously disclosed. Excluding the gain, diluted earnings per share in the fourth quarter of 2013 were up 4 percent from 2012.
 
In reviewing the quarter, Gallagher commented, "Revenue growth in the fourth quarter proved to be the strongest of the year, with acquisitions contributing 10 percent to our sales growth and our underlying sales were up 4 percent, which was offset by a 1 percent currency headwind. Automotive sales were up 25 percent in the quarter, including 7 percent underlying growth, offset by a 1 percent negative translation effect. Industrial group sales were up 3 percent and sales for the electrical/electronic group increased by 6 percent, which includes a 10 percent contribution from acquisitions. Sales for the office business were down 4 percent."
 
Gallagher concluded, "We faced a number of challenges in each of our four business segments in 2013 and, as previously stated, our automotive business fared the best with their 18.5 percent sales increase. In all four businesses, key decisions were made and actions taken that position each segment for solid performances in the year ahead, and we look forward to reporting on our progress. We remain committed to our core objectives of growing sales and earnings, showing continued operating margin improvement, generating solid cash flows and maintaining a strong balance sheet. Further progress in each of these areas will keep the company moving ahead and help to ensure another successful year in 2014."
 

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