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During the six months ended June 30, 2002, sales totaled $4.1 billion, down slightly as compared to the same period in 2001. Net income for the six months, before the cumulative effect of a change in accounting principle related to goodwill, was $183 million compared to $184 million for the same period in the prior year. On a per share diluted basis, net income for the period before the cumulative effect of a change in accounting principle equaled $1.05.
Larry Prince, Chairman of the Board of Directors, stated: "Our results by business segment were also very much in line with our expectations and each showed improvement for the quarter. Automotive sales were up approximately 2.5%, which represents five consecutive quarters of sales growth following a few periods of being down a bit. We believe this trend of improvement will continue and possibly strengthen further in the third quarter. Fundamentals driving the business remain sound and we are selectively adding a number of both company owned and independently owned NAPA stores as industry consolidation continues. We believe that S. P. Richards, our Office Products Group, had their toughest period in the first quarter and we felt they would bounce back. They were able to accomplish this and were up 1% for the second quarter, which shows real strength in a tough economic environment for their industry. We believe they will do even better in the third quarter."
Mr. Prince further commented: "Our Industrial Group, Motion Industries, was slightly ahead for the quarter following five quarters of decline. This is a significant change for us since the Industrial Group is such a major part of our company representing 27% of GPC's revenues. Some of Motion's improvement can be attributed to share gain in a highly fragmented market. In addition, industrial production has started to show improvement, which is beneficial to Motion's activity. Their marketplace remains a fragile one but we expect Motion to show additional gains in the periods ahead. EIS, our Electrical/Electronics Group, was down 17% in the quarter, a decline but not as steep as in previous periods."
Mr. Prince concluded: "We begin the second half of 2002 in excellent financial condition and with tight expense controls in place. We are extremely pleased to have reduced our debt by $173 million since year-end and our cash flow is strong. Our challenge is to generate sales growth over the coming months in a marketplace that remains less than vibrant. We have confidence that our GPC team can accomplish this with our goal being steady and gradual improvement for the balance of 2002."