Genuine Parts Reports Slight Decline in Sales and Earnings, but Automotive Up

Genuine Parts Company, the U.S.-based owner of Canadian distribution company UAP Inc., reports that sales in 2001 dropped 2%, with net income dropping 6%.
Sales and earnings for the year ended December 31, 2001 were $8.22 billion U.S., a 2% decrease compared to 2000 sales of $8.37 billion. Net income excluding non-recurring items decreased 6% to $362 million, down from $385 million recorded in the prior year. Diluted earnings per share for 2001, excluding unusual items, were $2.08 versus $2.20 per share in 2000, a decrease of 5%. After unusual items, diluted earnings per share for 2001 were $1.71 per share, a decrease of 22%. All figures in U.S. dollars.
Larry Prince, chairman of the board of directors, said: “Our largest segment, Automotive Parts, experienced modest growth in 2001 with sales increasing 2% and we believe fundamentals for continued improvement are in place for 2002. Our Office Products Group had sales growth of 3% in 2001 and we have confidence in their ability to maintain growth again this year. The Industrial Parts Group and the Electrical/Electronic Group reported sales decreases of 5% and 30%, respectively, resulting primarily from the economic slowdown in the industrial manufacturing and telecommunications sectors of the economy. Both companies are expected to improve in the course of the year.”
For the fourth quarter of 2001, sales decreased 3.5% to $1.95 billion in the fourth quarter ended December 31, 2001, as compared to $2.02 billion for the same period in 2000. Diluted earnings per share in the fourth quarter, excluding unusual charges, were $.51 compared to the prior year of $.61 per share. After unusual items, diluted earnings per share for the quarter were $.14 per share, a decrease of 77%.
As previously announced, Genuine Parts recorded non-recurring charges in the fourth quarter of 2001 of $107.8 million pre-tax, or $64.4 million after tax, or $.37 per share. These charges include $24.6 million for expenses related to facilities consolidation and severance, $49.4 million for impairment of several technology investments, $17.4 million for inventory-related exit costs and $16.4 million for other unusual charges.