Good morning. My name is Jackie and I will be your conference operator today. At this time, I would like to welcome everyone to the Genuine Parts Company First Quarter 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to Sid Jones, Vice President of Investor Relations. Please go ahead, sir.

Good morning and thank you for joining us today for the Genuine Parts' first quarter 2015 conference call to discuss our earnings results and outlook for the full year. Before we begin this morning, please be advised that this call may involve forward-looking statements regarding the Company and its businesses. The Company’s actual results could differ materially from any forward-looking statements due to several important factors described in the Company’s latest SEC filings. The Company assumes no obligation to update any forward-looking statements made during this call. We’ll begin this morning with comments from Tom Gallagher, our Chairman and CEO. Tom?

Thank you, Sid. And I would like to add my welcome to each of you on the call today and to say that we appreciate you taking the time to be with us this morning. Paul Donahue, our President; and Carol Yancey, our Executive Vice President and Chief Financial Officer are both on the call as well, and each of us has a few prepared remarks and once completed, we’ll look forward to answering any specific questions that you may have. Earlier this morning, we released our first quarter 2015 results and hopefully you've had an opportunity to review them. But for those who may not have seen the numbers as yet, a quick recap shows that sales for the quarter were $3.736 billion, which was up 3%, net income was $161 million, which was up 2%, and earnings per share were $1.05 this year compared to $1.02 in the first quarter last year, and the EPS increase was 3%. And although these sales and earnings growth rates have moderated from the results in recent quarters, they are pretty much in line with what we anticipated for the quarter and as such we feel that we came through the quarter in pretty good shape. We knew at the beginning of the quarter that we were facing tough comparisons with first quarter 2014 revenues up 13% and earnings per share up 10%. Additionally, we felt that the strength of the U.S. dollar would be a significant headwind for us and as it turned out, this cost us 2% on the revenue line in the quarter and $0.02 in earnings per share. And then weather had a bit of a negative impact as that did a deceleration in the oil and gas segment of the economy. So all in, we feel that…

Thank you, Tom. Good morning everyone and let me add my welcome to our first quarter conference call. I’m pleased to join here today and have an opportunity to provide you an update on the first quarter performance of our automotive business. For the quarter ending March 31st, our global automotive business sales were flat year-over-year. This performance consists of approximately 3% core automotive growth. The benefit of just less than 1% from recent acquisitions, which are offsets by approximately 4% of currency adjustments. The currency adjustment was in line with our expectations for the quarter. When reviewing our quarterly performance, we knew going into the quarter, we were up again strong comps from one year ago and part driven by the extreme cold winter weather. Unfortunately, Mother Nature did not cooperate this past winter. We saw a little benefit as a result of the winter temps and in fact a heavy snow and ice experienced in places like Boston and a good portion of the Northeast create challenges for our operations and our customers. In addition, like many businesses, we felt the impact of the West Coast port slowdown and the effect that had on our overall supply chain. During the first quarter, we saw our U.S. team posted 3% sales increase, while our international businesses including Canada, Mexico, Australia and New Zealand grew mid single-digits in their local currencies. Overall, we’re pleased to see steady growth in all of our markets and expect to see steady growth for the balance of 2015. In the U.S., all regions within country are positive contributing to our revenue growth with the exception for the – few of the more energy dependent areas of the country. As we saw in the fourth quarter, we experienced continued strength in the Atlantic division, Midwest,…

Thank you Paul and good morning. We’ll begin this morning with a review of our income statement and the segment information and then we’ll review some balance sheet and other financial items. Tom will come back up to wrap it up and then we’ll take your questions. As Tom mentioned our total revenues at $3.7 billion for the first quarter, an increase of 3.1% consisted of our underlying sales growth of 3.8% and a 1.5% increase from acquisitions. These items were offset by a strong currency headwind at 2.2%. Our gross profit for the first quarter was 29.8% and this compares to 29.9% growth margin last year. This was in line with our expectations for a relatively constant gross margin in 2015, as the margin initiatives across all of our businesses are intended to offset the ongoing customer and product mix shifts that continue to pressure our gross margins. With that said, there’s slight decline in our first quarter gross margin directly related to the customer mix shift that we are facing in our Office Product segments. Looking ahead, we continue to expect a relatively constant gross margin in 2015 that this area has our full attention and we’re committed to making progress towards an enhanced gross margin for the long-term. Our gross margin initiatives are also critical in offsetting the low inflationary environment that has persisted across all of our businesses for several years now especially in automotive. Our supplier pricing thus far in 2015 indicates that we should expect more of the same lack of deflation again this year. Our cumulative supplier price increases through March were down four tenths of 1% in Automotive, up four tenths of 1% in Industrial, up six tenths of 1% in Office Products and up two tenths of 1% in Electrical. Turning…

Thank you, Carol, and thanks to you and Paul for your comprehensive updates. So that will conclude our prepared comments on the quarter, and as mentioned earlier, we ended the quarter pretty much inline with what we thought we would be. With that in mind we would like to reaffirm our full year guidance that we provided back in February and just as a reminder at that time we guided for Automotive revenues to be up 2% to 3%, which includes an estimated 4% negative impact from currency exchange. We guided Office Products to up 6% to 7%, Industrial and Electrical to each be up 5% to 6%. And based up on the current trends and the external indices, as well as softness in the energy and export sectors, our current bias will be towards the bottom end of the range for both Industrial and Electrical. Putting all of this together would give us an overall GPC sales increase of 3% to 4%, which includes 2.5% to 3% negative currency impact. On the earning side our guidance remains for EPS to come in between $4.77 and $4.80. And as a reminder this includes approximately $0.15 per share impact from unfavorable exchange rates and the related increase in our overall tax rate. So that would conclude our remarks at this point and we’ll turn the call back to Jackie to take your questions. Jackie?

[Operator Instruction] Our first question comes from the line of Seth Basham with Wedbush Securities.

Good morning.

Good morning, Seth.

Good morning.

My question is on the Auto business, I’m trying to get a sense of your view of the slowdown in the comp sequentially from the last quarter given the miles driven strength. Do you think its industry wide phenomena or do you think it’s only a supply chains issues are the primary factor hurting you this quarter?

So, Seth, I’ve taken and may be in a couple of buckets. Certainly we are up against some really tough comps, we knew that going in. First quarter was our strongest of the year, last year. So I’d certainly say that had an impact. Two, I’d say, some of the key product line disruptions that we experienced along with the West Coast port issues cost us in the first quarter. And I don’t think that will be strictly relegated to GPC and NAPA, I think, that will be felt by others, as well. The energy sector had an impact for sure, Seth. Some of the – certainly Texas which is what everybody thinks about when they think about the energy sector, but parts of the Mountain Division for us, as well as some parts of Canada, certainly Alberta, Canada were impacted, as well. And then last but not least, the one that we always chat about and that’s the weather, the weather was of no help at all to us, we don’t think in the first quarter.

That’s helpful. So do you quantify those three buckets in a Asia perform [ph]?

I don’t think we’re prepared to do that at this point of time, Seth.

All right, no problem. Thank you very much.

Thank you.

Our next question comes from the line of Greg Melich with Evercore ISI.

Hi thanks. I want a follow-up a little bit about the Auto trends and tie it through to margins and working capital. Given that retail is driving a lot of growth, I would sort of expect gross margin that maybe be better given that there’s basically the deflation in the buy. Could you help us understand why margins are not expanding in Auto? And then the tide in the working capital, there were this increase in payables. Should we assume that this is a good run rate is there a steady point of an AP ratio that you target Carol?

Yeah, I guess I’ll start with the margin first. So we mentioned that decline in gross margin on a consolidated basis was solely related to the Office Products decline that you saw in the operating margin. So that would lead you to assume and while we don’t disclose it separately is that the non-office businesses were either flat to up slightly. So we actually were pleased with the automotive gross margins this quarter and the progress we’ve made. So, I would say that a lot of our initiatives and some of the impact that we talked about earlier with transactional FX headwinds that we had in Q4. Our teams did a lot of hard work in that area. We continue to have the usual customer product mix, but I think a lot of our initiatives are helping us to show that improvement. But honestly, where we – when we only have a 3% sales increase, it’s hard for us to get that operating margin up 10 or 20 basis points. So, we would still look for that on balance for the rest of the year. But I think we were pleased to keep the margins flat in automotive in light of what the comp sales increase was. And then the second question on the working capital, we were pleased with the progress that we made. And I think when we’re looking at the rest of the year; we would say that there would be improvement. We’ve reiterated our guidance on the working capital and the cash flow, but I think we saw some better results coming through on the first quarter. So, if we can continue to do the job with payables and inventory, I think you’ll see a continued improvement.

And then on the receivables, is there any particular thing driving the growth with a certain category or new terms of certain customers?

Really, that’s been specific. I think again as we look towards what we’re seeing in receivables, we just try to make sure that again if its customers are certain programs that we’re getting the corresponding offset on the payable side with our vendors.

And Greg I would…

And then last one if I could and then I’ll let someone else. Yes…

Greg, I would just add to that. I think we would expect that the receivables will improve sequentially and be more in line with the overall revenue growth as we get towards the second half of the year.

And then, Tom, you mentioned if there’s one area where you think it’s on the lower end and it’s Industrial and Electrical. Could you point us to why specifically that is other than just may be energy a little bit, is there industrial production or other things that you think look a little softer? Thank you.

Yes in fact we do think oil and gas will continue to be a headwind. And that’s got a fairly long tail, it’s not just the number of rigs that are running. When you think about that it also extends into steel, for instance, I’ll referenced steel in my comments earlier, none of those pipes are being purchased to go down in the wells and extends into some of the other customer segments additionally. So that would be one thing. And then with industrial production and capacity utilization and the Purchasing Managers Index, we did see some moderation. As the quarter progressed, we were pleased to see a slight uptick in the March industrial production from the revised February industrial production, but we just want to be a bit cautious. And as I mentioned in my comments, we do track to the best of our ability what we would refer to as project work. And we are a bit encouraged by the fact that both the number of projects in-house and the dollar amount are showing nice increases and hopefully they worked their way through the income statement in the months ahead.

Great, thanks a lot.

Thank you.

Thanks, Greg.

Our next question comes from the line of Aram Rubinson with Wolfe Research.

Hi, this is actually Chris Bottiglieri on for Aram Rubinson.

Good morning.

Hi, Chris. Q – Chris Bottiglieri: Good morning. I just had a quick question on the Automotive business, can you give us a update on the independence if you’re seeing any kind of pick up in [indiscernible] switching on the NAPA brand, or if you’re just seeing any increased number of conversations being held?

Yes, Chris, this is Paul. For sure the – what we’ve got a good deal of activity that’s continuing on that our team has involved in and the field that. And honestly, we’re quite pleased with the progress that we’ve seen both really in the second half of last year as well as in the first quarter of this year. And I would tell you that we don’t see that activity slowing down at all. As a matter of fact, we’re optimistic with what we see ahead of us in 2015. Q – Chris Bottiglieri: Got it, thanks. And one longer term question I have. You see this is like an overall sense on your kind of long-term view of the independent business as some of these businesses owners are getting retired. Are you seeing them kind of pass down their businesses within the family to selling to other independent? Or do you think like [indiscernible] this could become a pipeline for GPC Company on service down the road?

I will try to answer that, Chris this is Tom. I think it’s a combination of all of the things you referenced. The way we work with our independent owners is that we try to stay very close to them not just operationally, but also with their succession planning. And if they don’t have someone in mind to pass the business down to another family member perhaps or good long-term employee then, we’ll work with them to identify another independent that might have an interest in buying their business and we’d have several different programs available to help facilitate that. And then if in fact we don’t come up with someone that should have opt to buy the business, we’ll certainly step in and buy it, and in many cases we’ll run it for a period of time, until we find a good locally based independent to run the business from that point on.

Okay, very helpful. Thanks for your time.

Thank you.

Okay, Chris.

Our next question comes from the line of Mark Becks with JP Morgan.

Hi, can you talk about the cadence in Automotive over the quarter and perhaps in the April if you’re willing to address, I know March was – last year was strong. But just interested in the trend, trying to get a better understanding of why you’re expecting that business to accelerate from here?

All right, yes, Mark, this is Paul. I would tell you that throughout the first quarter it was pretty consistent, from January, to February to March, but we did see a little bit of a lift in the final two weeks of March for sure, which really that along with the extra selling day that we had in the month of March, gave us a record sales month. So I'm not prepared to talk about April, but we would hope to see that performance move into Q2.

And then as a quick follow-up to that, can you talk about the trend in North East business, and did that experience a similar rebound to the overall business, or is that still tracking pretty softly?

I think most of our regions showed some pick up in the second half of March as Paul referenced. And also as he referenced, we continue to see headwinds in the energy related areas. But much of what we experienced in the first quarter was transitory. If you think about the comps, the comps get a little bit easier, they were strong all year along, but they get little bit easier as we work our way through the year. Certainly the impact of the weather will moderate as we work our way through the year and the impact, just for clarification, the impact issue is that we did not have the extreme temperatures over the period of time that we had in the early part of Q1 last year. What we did have is there is a lot of ice and a lot of snow that had a negative impact on all of our businesses frankly because we had a number of closures, both our own facilities, as well as customers’ facilities. So we’re through that at this point and some of the supply chain disruption that Paul referenced will moderate as we work our way over the next couple of months. So you know, we gave you the number for the quarter we also gave you the guidance for the year, and the guidance for the year suggest that we expect our Automotive business to pick up in the remaining three quarters of the year.

Yes, so just to be clear it seems like the port shutdown and the supplier issues, while still not completely gone there at the margin improving?

They are improving somewhat, that’s right.

Okay, and then just last housekeeping, can you remind us what the Texas exposure in NAPA, and then the overall any MI exposure to oil and gases?

Yes, we don’t give that out, but we have said in the past that the direct exposure for Motion industries is low single-digit, but the hard number to really get to is the indirect exposure. And what I mean by that, I referenced earlier that certainly the rig operators, our business with them is down, but then if you went to the steel side of things, all of the demand for new piping to go down hole that’s gone. Some of the pumps and motor demand that would be the anomaly that’s diminished and then what we don’t and can’t quantify is that when you have the massive number of layoffs specific to that segment, you have all of those workers that are for the most part moving in other areas, but that takes the demand out of the areas that they were in and it doesn’t get replaced one-for-one into the areas that they move to, so you see the ripple effect of that. And we see that back up on other manufacturing customers. So it’s hard to get a true number, but the direct absolute impact we know is in the low single-digit. And then it ripples beyond that.

Okay, thanks for those comments and good luck.

Thank you very much.

Thank you very much.

Our next question comes from the line of Chandni Luthra with Goldman Sachs.

Hi, this is Chandni Luthra on behalf of Matt Fassler. Very quickly guys, could you contextualize if there was any impact from shift of Easter?

Well certainly, we’ll see that impact in April, but not really much in Q1.

Got it. And the 3% growth that you talked about on comps that’s inclusive of the extra selling day in the month of March, right?

Yes, it is.

Perfect. And then lastly, could you throw some color on you DIY initiatives that kind of helped your margins to hold their own? Thank you.

I think Paul might reiterate the comments he made earlier about some of the things we’re doing.

Yes, thanks for the question. Basically, some of the things that we’re doing on the retail side, really it’s not right at the time we’re focused on the basics and the basics as I mentioned in my opening comments, simply are to ensure our stores are well stocked, ensure our planograms are up to-date, ensure our people are well trained on the floor and ensure our stores are open when customers want to shop them. And so it’s many of those basics that we have reinforced with our team and our company-owned stores and we’re pleased with the progress that we’re seeing, we saw it throughout last year and we continue to see in the first quarter of 2015.

And also I want to go back on the question about did the comps include the extra day in March, yes they did, but in the quarter, we had the same number of dates for the quarter, we were short one day earlier in the quarter and we picked it up in the month of March. So the comps are comparable.

Got it, thank you.

Thank you.

Thank you.

Thank you.

Ladies and gentlemen we have one more caller on the line, your final question comes from the line of Bret Jordan with BB&T Capital Market.

Hi, good morning.

Good morning, Bret.

Good morning, Bret.

Hi, Carol if we looked that accounts payable to inventory for the Auto segment alone, where would that number be?

Good question Bret. I would – we don’t give it out by segment I would tell you that as you know it’s more prevalent in automotive industry with the extended terms programs with the supplier. So a lot of our improvement is coming by way the Automotive Segment, but I would tell you also that all of the segments have programs going on and we visited with our teams and each one is them be it Office, be it Industrial, all have programs going on with their suppliers. So we looked at our AP to inventory and it’s 87% at the end of the quarter, it was 84% at the end of the year and 79% a year-ago, and I would tell you again that we don’t give it out by Automotive, but they’ll certainly be higher than that.

Okay. And then the question for Paul, I guess as you look at the quarter and it didn’t have as much temperature-driven product sales as last year in Auto. I guess, if you look at the extreme weather and what we did to things like road condition, do you think that the net impact of the first quarter’s weather would be positive and that under-car and ride control and some of the categories that might benefit in the second quarter. We’ll pull through or do you think is just a net negative and weather for 2015?

Well, Bret great question, honestly we’re banking on some of that improvement coming in the second quarter. I think I mentioned to you we saw our battery business really take off in the month of March which we did not have in January and February. And we would hope for the same in some of the other key more weather related products as well.

Okay, getting a little more granule, I guess, if you look at things that might be seasonally positive, how we are looking nationally on things like temperature control right now are we setting up I guess we’ve had some normal weather on the West Coast for a favorable year-over-year comparison in some of those summer categories or just to where they are now?

Too early to tell Bret, I would tell you that that category was down slightly in the first quarter. And again we all keep an eye on the weather charge and we’re hoping for some warmer weather this summer. And if we get it, we think our owners and our stores will be well stocked with heating and air conditioning type products and we’ll take advantage of it.

Okay, and then one last question for Tom, I guess, you mentioned that pending projects were up substantially, I think for motion. Could you give us a little color and may be what’s driving that.

Well, I think, our customer base, let me back up first Bret. What we call project work is a lot of times our customers will have plans to do some major refurbishment on a piece of equipment or take a line down to refurbish the line. And they let us know in advance of what their plans are, so that they can be sure that we’ve got all of the product that they may need, when they get into the actual work. So we tried to track as best we can the number of those that we’ve been notified of and also the estimated value of the work. So, we see a nice increase both in terms of numbers, as well as in terms of the dollar value. Now not all of them come to fruition we have seen some overtime we’ve seen some that we’re plan get differed. But with the increase that we see right now we would lead us to believe that over the next quarter or two, we’re going to see some nice project work flow through the revenue line. And what’s driving that as you know we’ve got an aging base of the equipment that’s out there, you’ve got all customers are looking to be more efficient in what they do. So I think it’s been driven by the business demands that they see with their end markets and wanting to be sure that they are in a position to avoid any downtime going forward. Unplanned downtime.

Okay, thank you.

Thank you.

Thank you.

Thank you. I would now like to turn the floor back over to management for any additional or closing remarks.

We’d like to thank you for your participation on the call today, and we thank you for your continuous support of Genuine Parts Company. We look forward to reporting back out in July with our second quarter numbers. Thank you.

Thank you, this concludes today’s conference call. You may now disconnect.