Genuine Parts Company Reports Increased Sales and Earnings for Third Quarter and Nine Months Ended September 30, 2008

Sales Increased 3%, EPS Increased 7% 


ATLANTA, Oct. 17  /PRNewswire-FirstCall/ -- Genuine Parts Company (NYSE: GPC) reported increased sales and earnings for the third quarter and nine months ended September 30, 2008.  Thomas C. Gallagher, Chairman, President and Chief Executive Officer, announced today that sales totaling $2.9 billion were up 3% compared to the third quarter of 2007.  Net income for the quarter was $131.0 million, an increase of 2% over $128.6 million recorded in the same period of the previous year.  Earnings per share on a diluted basis were 81 cents, up 7% compared to 76 cents for the third quarter last year.

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For the nine months ended September 30, 2008, sales totaled $8.5 billion, up 3% compared to the same period in 2007.  Net income for the nine months was $387.6 million, an increase of 2% over $380.3 million recorded in the previous year.  Earnings per share on a diluted basis were $2.36, up 6% compared to $2.23 for the same period last year.

In review of the quarter, Mr. Gallagher commented, "We are pleased to report that the 3rd Quarter of 2008 was another period of steady and consistent sales and earnings growth for Genuine Parts Company.  EIS, our Electrical Group, reported another excellent quarter and, once again, generated the strongest sales growth among our four business segments.  They were up 13% in the quarter, following a 7% increase in the first quarter and 11% growth in the second quarter.  Motion Industries, our Industrial Group, is also performing well, with their sales increasing 7% for the second consecutive quarter, following a 6% sales increase in the first quarter.  We expect to see both EIS and Motion continue their positive sales trends in the fourth quarter.  Our two most challenging businesses currently are Automotive and Office Products.  The Automotive Group reported a 1% sales increase in the quarter and S.P. Richards, our Office Products Group, ended the quarter even with the prior year.  Our results in each of these segments are reflective of the overall slowdown in their respective industries and, while we do not anticipate a quick recovery in either case, we do remain optimistic about our prospects in each of these businesses in the quarters ahead."

Mr. Gallagher added, "The Balance Sheet at September 30, 2008 remains in excellent condition and we continue to strengthen our financial position through steady and consistent earnings growth as well as working capital and asset management initiatives.  The Company also continues to generate strong cash flows and our cash position remains sound.  We have used cash in several key areas to maximize the total return to shareholders, including the dividends paid to shareholders, which we have increased for 52 consecutive years.  Another priority for cash has been opportunistic share repurchases and as part of our share repurchase program, we have purchased approximately 6.7 million shares of our Company stock thus far in 2008.  Other key uses for cash remain the ongoing reinvestment in our four business segments and strategic complimentary types of acquisitions in each of the businesses."

Mr. Gallagher concluded, "As we enter the last quarter of 2008, we are witnessing heightened levels of economic uncertainty, which are having an impact on all businesses, GPC included.  Our Company remains in sound condition, however, and we believe that our continued focus on the consistent execution of our short and long term growth plans, as well as our ongoing initiatives to further strengthen our balance sheet, will pull our Company through the difficult economy.  This proven strategy has allowed us to show steady and consistent progress over our 80-year history and we look forward to reporting another year of record sales and earnings in 2008."

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, http://www.genpt.com/ , by clicking "Investor Services", or by dialing 877-422- 4780, conference ID 67330418.  A replay will also be available on the Company's website or at 800-642-1687, conference ID 67330418, two hours after the completion of the conference call until 12:00 a.m. Eastern time on November 1, 2008.

Forward Looking Statements

Some statements in this 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 our 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 include, but are not limited to, changes in general economic conditions, the growth rate of the market for the Company's products and services, the ability to maintain favorable supplier arrangements and relationships, competitive product and pricing pressures, including internet related initiatives, the effectiveness of the Company's promotional, marketing and advertising programs, changes in laws and regulations, including changes in accounting and taxation guidance, the uncertainties of litigation, as well as other risks and uncertainties discussed from time to time in the Company's 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 Form 10-Q, 10-K, 8-K and other reports to the SEC.

About Genuine Parts Company

Genuine Parts Company is a distributor of automotive replacement parts in the U.S., Canada and Mexico. The Company also distributes industrial replacement parts in the U.S. and Canada through its Motion Industries subsidiary.  S. P. Richards Company, the Office Products Group, distributes business products nationwide in the U.S. and Canada. The Electrical/Electronic Group, EIS, Inc., distributes electrical and electronic components throughout the U.S., Canada and Mexico.

                  GENUINE PARTS COMPANY and SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                             Three Months Ended          Nine Months Ended
                                 Sept. 30,                   Sept. 30,
                              2008        2007           2008        2007
                                             (Unaudited)

                                 (in thousands, except per share data)

  Net sales                $2,882,115   $2,797,556    $8,495,073  $8,215,926
  Cost of goods sold        2,033,110    1,973,068     5,974,372   5,776,909
                              849,005      824,488     2,520,701   2,439,017
  Selling, administrative &
   other expenses             638,163      617,101     1,902,467   1,825,704

  Income before income taxes  210,842      207,387       618,234     613,313
  Income taxes                 79,825       78,807       230,601     233,059

  Net income                 $131,017     $128,580      $387,633    $380,254

  Basic net income per
   common share                  $.81         $.76         $2.37       $2.24

  Diluted net income per
   common share                  $.81         $.76         $2.36       $2.23

  Weighted average common
   shares outstanding         161,603      168,819       163,324     169,862

  Dilutive effect of stock
   options and non-vested
    restricted stock awards       673        1,006           689       1,022

  Weighted average common
   shares outstanding -
   assuming dilution          162,276      169,825       164,013     170,884



                  GENUINE PARTS COMPANY and SUBSIDIARIES
               SEGMENT INFORMATION AND FINANCIAL HIGHLIGHTS

                             Three Months Ended        Nine Months Ended
                                 Sept. 30,                  Sept. 30,
                            2008         2007          2008         2007
                                            (Unaudited)

                                           (in thousands)

  Net sales:
      Automotive        $1,393,118    $1,381,007    $4,127,518   $4,037,568
      Industrial           907,015       849,631     2,686,297    2,522,675
      Office Products      458,968       460,425     1,332,167    1,342,932
      Electrical/Electronic
       Materials           126,827       111,863       363,712      329,416
      Other (1)             (3,813)       (5,370)      (14,621)     (16,665)
        Total net sales $2,882,115    $2,797,556    $8,495,073   $8,215,926

  Operating profit:
      Automotive          $111,730      $115,023      $317,888     $325,690
      Industrial            77,220        69,669       222,781      204,330
      Office Products       33,426        33,183       114,721      119,052
      Electrical/Electronic
       Materials            10,272         7,685        29,175       23,224
      Total operating
       profit              232,648       225,560       684,565      672,296
      Interest expense,
       net                  (7,391)       (4,706)      (21,877)     (16,550)
      Other, net           (14,415)      (13,467)      (44,454)     (42,433)
        Income before
         income taxes     $210,842      $207,387      $618,234     $613,313

  Capital expenditures     $15,761       $31,015       $60,091      $83,781

  Depreciation and
   amortization            $21,768       $21,994       $66,469      $64,014

  (1)  Represents the net effect of discounts, incentives and freight billed
       reported as a component of net sales.



                  GENUINE PARTS COMPANY and SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                                  Sept. 30,      Sept. 30,
                                                     2008           2007
                                                         (Unaudited)
                                                        (in thousands)
  ASSETS
  CURRENT ASSETS
  Cash and cash equivalents                        $124,428       $330,052
  Trade accounts receivable, net                  1,350,568      1,334,309
  Merchandise inventories, net                    2,318,215      2,225,718
  Prepaid expenses and other current assets         279,932        243,296

      TOTAL CURRENT ASSETS                        4,073,143      4,133,375

  Goodwill and other intangible assets,
   less accumulated amortization                    147,940         70,539
  Other assets                                      185,420        172,583
  Net property, plant and equipment                 412,755        458,597

  TOTAL ASSETS                                   $4,819,258     $4,835,094

  LIABILITIES AND SHAREHOLDERS' EQUITY
  CURRENT LIABILITIES
  Trade accounts payable                         $1,070,513     $1,088,201
  Current portion of debt                           250,000              -
  Income taxes payable                               18,506         19,559
  Dividends payable                                  63,003         61,318
  Other current liabilities                         223,634        199,529

      TOTAL CURRENT LIABILITIES                   1,625,656      1,368,607

  Long-term debt                                    250,000        500,000
  Other long-term liabilities                       206,058        191,750
  Minority interests in subsidiaries                 68,439         64,774

  Common stock                                      160,557        167,900
  Retained earnings and other                     2,508,548      2,542,063

      TOTAL SHAREHOLDERS' EQUITY                  2,669,105      2,709,963

  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $4,819,258     $4,835,094



                  GENUINE PARTS COMPANY and SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                         Nine Months Ended
                                                             Sept. 30,
                                                          2008      2007
                                                            (Unaudited)
                                                           (in thousands)

  OPERATING ACTIVITIES:
      Net income                                        $387,633  $380,254
      Adjustments to reconcile net income to net cash
       provided by operating activities:
      Depreciation and amortization                       66,469    64,014
      Other                                               11,470    19,435
      Changes in operating assets and liabilities          1,836   154,249


  NET CASH PROVIDED BY OPERATING ACTIVITIES              467,408   617,952

  INVESTING ACTIVITIES:
      Purchases of property, plant and equipment         (60,091)  (83,781)
      Acquisitions and other                             (98,735)  (20,316)

  NET CASH USED IN INVESTING ACTIVITIES                 (158,826) (104,097)

  FINANCING ACTIVITIES:
      Stock options exercised                              1,364    10,134
      Excess tax benefits from share-based compensation      313     4,176
      Dividends paid                                    (188,805) (181,925)
      Purchase of stock                                 (228,863) (152,161)

  NET CASH USED IN FINANCING ACTIVITIES                 (415,991) (319,776)

  NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS  (107,409)  194,079

  CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD       231,837   135,973

  CASH AND CASH EQUIVALENTS AT END OF PERIOD            $124,428  $330,052


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DATASOURCE: Genuine Parts Company



CONTACT:  Jerry W. Nix, Vice Chairman and CFO of Genuine Parts Company,

[phone]



Web site:  http://www.genpt.com/ 

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