ATLANTA, Oct. 17, 2019 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC) announced today sales and earnings for the third quarter and nine months ended September 30, 2019.

Sales for the third quarter ended September 30, 2019 were a record $5.0 billion, a 6.2% increase compared to $4.7 billion for the same period in 2018. Total sales for the third quarter included the contribution of 1.2% comparable growth and 6.7% from acquisitions, offset by a 1.0% negative impact from foreign currency translation and 0.7% due primarily to the sale of Grupo Auto Todo in the first quarter of 2019. Net income for the third quarter was $227.5 million and earnings per share on a diluted basis were $1.56. Before the impact of certain transaction costs and other income primarily related to the acquisition of Inenco Group (Inenco) and the sale of EIS, Inc. (EIS), the Electrical Specialties Group of Motion Industries, adjusted net income was $219.0 million, or $1.50 per diluted share.

Third quarter sales for the Automotive Parts Group were up 5.3%, including a 1.8% comparable sales increase, a 6.5% benefit from acquisitions and an unfavorable foreign currency translation of 1.8%. In addition, automotive sales were impacted by 1.2% due primarily to the sale of Grupo Auto Todo. Sales for the Industrial Parts Group were up 9.9%, including a 0.9% comparable sales increase and 9.0% from acquisitions. Sales for the Business Products Group were down 0.9%, consisting primarily of the change in comparable sales growth.

Paul Donahue, Chairman and Chief Executive Officer, commented, "Our third quarter results were highlighted by several accomplishments, including our achieving the $5 billion sales mark for the first time in the history of the Company. In addition, we were pleased to report positive comparable sales in our U.S., Canadian and Australasian automotive businesses as well as our Industrial operations, and we further improved our gross margin. This translated to operating margin expansion in the Industrial and Business Products segments, an improved overall margin performance and strong cash flows for the quarter."

Mr. Donahue added, "Our team was also active executing on our strategy to further optimize our portfolio. We closed on the Inenco industrial acquisition and the Sparesbox ecommerce investment on July 1st, and we divested of Motion's Electrical Specialties Group on September 30th. We also made significant progress on our action plans to accelerate our ongoing cost savings efforts and develop expense reduction initiatives designed to more effectively address our cost structure, drive meaningful savings and deliver incremental value."

Sales for the nine months ended September 30, 2019 were $14.7 billion, a 3.9% increase compared to $14.1 billion for the same period in 2018. Net income for the nine months was $612.2 million and earnings per share on a diluted basis were $4.18. Before transaction costs and other income, adjusted net income was $636.5 million, or $4.34 per diluted share, for the nine months.

Mr. Donahue concluded, "We were pleased to perform in-line with our expectations for the quarter and are committed to our growth strategy and cost savings initiatives over the near and longer terms. We believe our focus in these areas will serve to deliver improved results and create significant long-term value for our shareholders."

2019 Outlook

In consideration of our results thus far in 2019, as well as the impact of the sale of EIS on September 30, 2019, the Company now expects sales to increase approximately 3.5%. This updated sales outlook represents a change from the Company's previous guidance for a 4.5% to 5.5% sales increase.

The Company expects diluted earnings per share to range from $5.44 to $5.52 and is updating its outlook for adjusted diluted earnings per share, which excludes any nine month and future transaction and other costs and income, to $5.60 to $5.68. This is a change from the Company's prior guidance of $5.65 to $5.75 and is primarily due to the sale of EIS. The Company continues to expect a tax rate of approximately 25% in 2019.

Non-GAAP Information

This release contains certain financial information not derived in accordance with United States generally accepted accounting principles ("GAAP"). These items include adjusted net income and adjusted diluted earnings per share. The Company believes that the presentation of adjusted net income and adjusted net income per common share, which are not calculated in accordance with GAAP, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to both management and investors that is indicative of the Company's core operations. The Company considers these metrics useful to investors because they provide greater transparency into management's view and assessment of the Company's ongoing operating performance by removing items management believes are not representative of our continuing operations and may distort our longer-term operating trends. We believe these measures to be useful to enhance the comparability of our results from period to period and with our competitors, as well as to show ongoing results from operations distinct from items that are infrequent or not associated with the Company's core operations. The Company does not, nor does it suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. The Company has included a reconciliation of this additional information to the most comparable GAAP measure following the financial statements below.

Conference Call

Genuine Parts Company will hold a conference call today at 11:00 a.m. Eastern time to discuss the results of the quarter and the future outlook. Interested parties may listen to the call on the Company's website, www.genpt.com, by clicking "Investors," or by dialing 877-407-0789, conference ID 13694686. A replay will also be available on the Company's website or at 844-512-2921, conference ID 13694686, two hours after the completion of the call until 12:00 a.m. Eastern time on November 1, 2019.

Forward Looking Statements

Some statements in this press release, as well as in other materials we file with the Securities and Exchange Commission ("SEC") or otherwise release to the public and in materials that we make available on our website, constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Senior officers may also make verbal statements to analysts, investors, the media and others that are forward-looking. Forward-looking statements may relate, for example, to the anticipated strategic benefits, synergies and other attributes resulting from acquisitions, as well as future operations, prospects, strategies, financial condition, economic performance (including growth and earnings), industry conditions and demand for our products and services.

The Company cautions that its forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, the Company's ability to successfully integrate acquired businesses into the Company, including the challenges associated with the integration of processes and systems to ensure the adequacy of our internal controls in regard to the Alliance Automotive Group business, and to realize the anticipated synergies and benefits; changes in the European aftermarket; the Company's ability to successfully implement its business initiatives in each of its three business segments; slowing demand for the Company's products; changes in national and international legislation or government regulations or policies, including new import tariffs and the unpredictability of additional tariffs and data security policies and requirements; changes in general economic conditions, including unemployment, inflation (including the impact of potential tariffs) or deflation and the United Kingdom's referendum to exit from the European Union, commonly known as Brexit; changes in tax policies; volatile exchange rates; volatility in oil prices; significant cost increases, such as rising fuel and freight expenses; labor shortages; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; the ability to maintain favorable vendor arrangements and relationships; disruptions in our vendors' operations, including the impact of tariffs and trade considerations on their operations and output, as required to meet product demand; failure or weakness in our disclosure controls and procedures and internal controls over financial reporting; the uncertainties and costs of litigation; disruptions caused by a failure or breach of the Company's information systems, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for 2018 and from time to time in the Company's subsequent filings with the SEC.

Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-K, 10-Q, 8-K and other reports filed with the SEC.

About Genuine Parts Company

Genuine Parts Company is a distributor of automotive replacement parts in the U.S., Canada, Mexico, Australasia, France, the U.K., Germany, Poland, the Netherlands and Belgium. The Company also distributes industrial replacement parts in the U.S., Canada, Mexico and Australasia through its Industrial Parts Group. S.P. Richards Company, the Business Products Group, distributes a variety of business products in the U.S. and in Canada. Further information is available at www.genpt.com.

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