Genuine Parts Company announced fourth quarter results and record sales and earnings for the year ended December 31, 2014.
Sales in the fourth quarter ended December 31, 2014 increased 9% to $3.8 billion, compared to sales of $3.5 billion for the same period in 2013. Net income in the fourth quarter was $166 million, or $1.07 per share on a diluted basis, compared to $150 million, or $0.97 per diluted share, in 2013, up 10%.
In review of the fourth quarter, Tom Gallagher, Chairman and Chief Executive Officer, commented, "We are pleased to report another solid quarter of sales and earnings growth for Genuine Parts Company. Our 9% total sales increase includes approximately 7.6% underlying sales growth and a 2.7% contribution from acquisitions, offset by a currency headwind of approximately 1.6%. Our overall sales growth was supported by increases in each of our four business segments. Sales for the Automotive Group were up 4%, consisting of core automotive growth of 6% and a 0.5% contribution from acquisitions. These items were offset by a 2.5% negative impact of currency. Sales at Motion Industries, our Industrial Group, were up 10%, including 9% underlying growth and 2% from acquisitions offset by a currency headwind of approximately 1%. Sales at EIS, our Electrical/Electronic Group, increased by 23% and include a 20% contribution from acquisitions and 3% underlying growth. Sales for S. P. Richards, our Office Products Group, were up 22%, consisting of 14% underlying growth and 8% from acquisitions."
Sales for the year ended December 31, 2014 were $15.3 billion, up 9% compared to 2013. Net income for the year was $711 million, an increase of 4% compared to $685 million in 2013. Earnings per share on a diluted basis were $4.61, up 5% compared to $4.40 in 2013.
As previously disclosed, in association with the April 1, 2013 acquisition of GPC Asia Pacific, the Company's initial investment was remeasured and, net of certain one-time purchase accounting costs, amounted to a pre-tax income adjustment of approximately $36 million, or $0.22 diluted earnings per share, in the second quarter of 2013. Additionally, a pre-tax expense adjustment of $3 million, or $0.01 diluted earnings per share, was recorded in the third quarter of 2013.
Before the one-time adjustment in 2013, net income for the full year in 2014 of $711 million, was up 9% compared to the previous year. Earnings per share on a diluted basis of $4.61 were up 10% compared to the same period in 2013 excluding the adjustment.
Gallagher stated, "2014 was another year of record sales and earnings, and we are especially pleased that each of our four business segments contributed to these records. We also improved our operating margin for the year and further improved our financial strength with effective asset management and solid cash flows."
Gallagher added, "Industry fundamentals were favorable in the automotive aftermarket during 2014, and we also experienced improving industry conditions across our non-automotive businesses during the year. These factors, combined with our internal sales initiatives, drove sales growth of approximately 5% for the year, while acquisitions also contributed approximately 5% to sales. These items were offset by a currency headwind of approximately 1%. Automotive sales were up 8% for the year, including approximately 6% underlying sales growth and a 4% contribution from acquisitions, offset by a currency headwind of approximately 2%. Industrial Group sales increased by 8%, consisting of 6% underlying growth and 3% from acquisitions, offset by the negative impact of currency of approximately 1%. Electrical/Electronic sales increased by 30% for the year, primarily due to acquisitions. Sales for the Office Products business were up 10%, with approximately 5% coming from underlying growth and another 5% from acquisitions."
Gallagher concluded, "The Company showed progress in a number of key areas in 2014 and we are proud of the GPC Team's accomplishments. With that said, we recognize there is still room for further improvement in our operations as we move forward. To this end, 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. Progress in each of these important areas will keep the Company moving ahead and will help to ensure another successful year in 2015."
