Napa Auto Parts 2008 Annual Report Download - page 7

e Automotive Parts Group, our largest segment, reported a slight sales
increase in 2008, following a 2% increase in 2007. During the first quarter of
2008, we sold our Johnson Industries business, which had a negative impact
on reported sales for the year. Exclusive of that, our Automotive operations
were up 2% in 2008. Several factors, including higher fuel costs resulting in
reduced miles driven and lower consumer spending on vehicle maintenance
and repairs, contributed to lower demand across the automotive aftermarket
throughout the year, but particularly in the fourth quarter.
S.P. Richards, our Office Products Group, reported a 2% decrease in sales
for the year. is follows a 1% sales decrease in 2007 and is indicative of the
continued industry-wide slowdown in office products consumption. e on-
going reduction in white-collar employment, which accelerated in the fourth
quarter, will cause further moderation in demand for several more quarters,
and our near term strategies are focused on capturing additional marketshare.
GPC directors Two of our long-serving Directors, Lawrence G.
Steiner and Richard W. Courts, II, will retire from our Board of Directors,
effective April 2009. Mr. Steiner is the retired Chairman of the Board of
Directors of Ameripride Services Inc. and has served on our Board since
1972. Mr. Courts is the Chairman of the Board of Directors of Atlantic
Investment Company and has served as a Director of the Company since
1998. Larry and Richard have helped us immensely as GPC Directors and
we want to thank them for their wisdom and counsel over the years. eir
presence on our Board will be missed, but we will always be mindful and
grateful for their time with us.
management In September 2008, Richard T. Toppin joined S.P.
Richards as Executive Vice President of Sales and Marketing. Rick has an
impressive background in sales and marketing and has held a variety of
executive roles in the print and office supplies industries, both in the U.S.
and Canada. In his new position at S.P. Richards, Rick will be responsible
for sales, marketing and the Canadian operations. Rick provides additional
depth and strength to our Office Products Group management team and we
look forward to his many future contributions.
conclusion As mentioned earlier, the fourth quarter of 2008 proved to
be the most challenging quarter of the year for each of our business segments.
e negative GDP growth and further slowdown in the overall economy
during the quarter resulted in demand moderation across all four of our
businesses and we anticipate these market conditions to continue for several
more quarters. As a result, each of our GPC Management Teams is taking
the necessary actions to adjust the cost side of our business, while at the same
time, continuing to pursue all revenue opportunities.
Due to all of the current economic uncertainties, our outlook for the near
term is a bit more cautious than it might be in more normal times. However,
we continue to be quite optimistic about the longer-term prospects for GPC
and for each of our businesses. We believe the underlying fundamentals and
demographics in all four business segments remain long term positive and
each industry should return to historical growth levels as we work our way
through the current economic downturn. Additionally, our Balance Sheet is
strong and our Cash Flow remains sound.
Despite the current challenges, our Management Team is energized by
the opportunities that lie ahead and you can read about a number of their
initiatives in the pages that follow.
In closing, we want to express our appreciation to our employees, customers,
vendors and shareholders for your commitment to and ongoing support of
Genuine Parts Company.
Respectfully submitted,
omas C. Gallagher Jerry W. Nix
Chairman, President and Vice Chairman and
Chief Executive Officer Chief Financial Officer
February 27, 2009
dividends per share
in dollars
99 00 01 02 03 04 05 06 07 08
1.04 1.10
1.14 1.16 1.18 1.20 1.25
1.35
1.46
1.56
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