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.
Session. 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 Q1 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 look forward to answering any specific questions that you may have. Now earlier this morning, we released our Q1 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 $3,736,000,000 which was up 3%. Net income was $161,000,000 which was up 2% and earnings per share were $1.05 this year compared to $1.02 in the Q1 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 Q1 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 did the deceleration in the oil and gas segment of the economy. So all in, we feel that our teams did a pretty good job in navigating their way through the quarter and we remain optimistic about the remainder of the year. Turning to the sales results by segment, I'll make a few comments on each of the 3 non automotive businesses and then Paul will give you an update on the automotive operations.
Starting with Office Products, S. P. Richards turned in another strong quarter at plus 17%. Acquisitions completed in 2014 certainly helped as did the enhanced first call relationship with one of the mega companies. But importantly, the underlying business performed well also with solid growth in both the mega and independent reseller channels.
And the e commerce and alternate channel customers performed well in the quarter as well. From a product category perspective, all 4 categories technology, facility and break room, furniture and core office products each showed nice growth in the quarter and we are pleased with the balance and the composition of our office products growth, both from a customer and a product category perspective. And we feel that the Office Products team is positioned to turn in a solid performance over the remainder of the year. Moving on to the Industrial segment. Motion Industries ended the quarter up 3%.
11 of our top 12 product categories generated positive results in the quarter and 9 of our top 12 customer groups grew nicely in the quarter. Our strongest results came from customers in automotive, coal aggregate and cement, lumber and wood products and rubber and plastic products. And this follows the relative strength of each of these segments in the overall economy. We had weaker results in oil and gas, pulp and paper and steel, again mirroring what we see happening in the overall economy. As we look ahead, we're mindful of the deceleration that we have seen in the industrial production, capacity utilization and Purchasing Managers Index over the course of the Q1 and each of these have been reliable leading demand indicators for our industrial business.
So we are watching them closely. But despite the modest deceleration, it's important to note that each remain at historically healthy levels. And at this point, our Industrial team remains optimistic about the remainder of the year, perhaps partly driven by the fact that our pending project work is up substantially over the same period last year, which is encouraging. Moving on to the 3rd of our non automotive businesses, EIS was up 1% in the quarter. Some of the same factors that impacted our Industrial business were headwinds for the Electrical segment as well, things like the deceleration in the oil and gas customer segment, the strength of the dollar impact on export related customers, lower defense spending this year versus last and the lower copper pricing again this year.
To one degree or another, each of these will continue to be factors in the quarters ahead. However, we were encouraged to close out the Q1 with a solid performance in March and then our team feels that they are starting to build a bit of momentum as we enter Q2. Additionally, they completed the acquisition of Connect Air into their wire and cable segment as of April 1 and this will add about $28,000,000 to their annual revenue. So that's a quick overview of the non automotive business and we'll now ask Paul to comment on the automotive segments. Paul?
Thank you, Tom. Good morning, everyone and let me add my welcome
to our Q1 conference call. I'm pleased to join you today and to have an opportunity to provide you an update on the Q1 performance of our automotive business. For the quarter ending March 31, 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 offset 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 against strong comps from 1 year ago, in part driven by the extreme cold winter weather. Unfortunately, Mother Nature did not cooperate this past winter. We saw little benefit as a result of the winter temps and in fact the heavy snow and ice experienced in places like Boston and a good portion of the Northeast created 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 it had on our overall supply chain. During the Q1, we saw our U.
S. Team post a 3% sales increase, while our international businesses, including Canada, Mexico, Australia and New Zealand, grew mid single digits in their local currencies. Overall, we are 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 of the country are positively contributing to our revenue growth with the exception of a few of the more energy dependent areas of the country.
As we saw in the Q4, we experienced continued strength in the Atlantic division, Midwest and Western divisions. In addition, our Southern division had a solid Q1. So now let's turn to our same store sales numbers. Our U. S.
Company owned store group grew comp same store sales in the Q1 by 3%. This 3% is on top of an 8% increase generated in a strong Q1 of 2014, which gives us a 2 year stack of 11%. This performance was not unexpected due to the tough comps we were up against, but we'd also like to point out that we expect this number to improve as the year progresses. Our 3% sales increase in Q1 was driven by a combination of solid sales on both our commercial wholesale side of the business and on our retail side of the business. So let's start with our retail business.
As mentioned in previous calls, we have put a renewed focus on this segment of our business. We are pleased to report these initiatives are continuing to pay dividends. Our team did a good job in the quarter driving a 6% increase in our retail business, which was on top of a 9% increase 1 year ago. Retail basics such as extended store hours, proper staffing, dedicated retail associates, planogram compliance and increased training have all had a hand in our recent improved performance. We continue to push for increases with both the size of our average ticket and the number of tickets flowing through our stores.
In the Q1, we experienced an increase in our average retail ticket and an increase in the number of retail tickets. This performance was consistent with our 4th quarter metrics, so it's encouraging to see our efforts taking hold. We'd like to complement both our retail team at headquarters as well as all of our associates and our stores for stepping up and embracing our retail initiatives. We still have a great deal of heavy lifting yet to do, but it's clear we are on the right track and the opportunity for growth is there. So now let's turn to our commercial wholesale business or our Do It For Me segment.
This segment turned into 3% increase in the Q1. Highlights for the quarter include solid performances by our 2 major wholesale initiatives, NAPA Auto Care and Major Accounts. Starting with our Major Account business, this strategic segment delivered its 7th consecutive quarter of low double digit growth, a terrific accomplishment by our entire Major Accounts team. And our NAPA Auto Care Centers now totaling over 15,000 nationwide posted strong single digit sales increases in the quarter. We'd also like to report on our fleet business.
After reporting a solid increase in this important segment in 2014, we posted a mid single digit increase in the Q1 of 2015. So we're pleased to see the continued growth in this important segment of our business. We can also report solid trends in our average wholesale ticket value, which registered positive growth in the month with no inflation support. We also saw a positive year over year growth in the average number of tickets flowing through our stores.
So now let's take a look
at a few of our key product categories and review some of the trends we experienced in the Q1. We are pleased to report continued growth in both our brakes business as well as our 2 in 1 equipment business. In addition, our NAPA import parts business was up low double digits once again this quarter. One additional product category worth noting is our all important electrical business, including our rotating electrical product lines and our battery business. Despite double digit growth in the month of March, we were up just over 1% for the quarter.
It's a clear illustration of the strong prior year comps that we faced in the January February timeframe. It is worth noting that we experienced supply chain interruptions with 1 of our key undercar lines in the Q1 that has now carried over into the Q2. This interruption had an impact on our operations and our customers' business in the quarter. We are diligently working toward a solution and anticipate improvement in the weeks ahead. Despite the slower start to the year, we continue to be encouraged by the automotive aftermarket fundamentals.
The average age of the fleet remains in excess of 11 years. The size of the fleet continues to grow. And not surprisingly, the all important miles driven metric recorded its largest growth in the past 5 years. As we reported last quarter, miles driven was up 1.4% through 11 months of 2014. And then in the month of December, miles driven increased by 5% and most recent figures for January show a 4.9% gain.
This growth is a direct result of the lowest fuel prices in almost a decade and bodes well for future demand. So in summary, our Q1 was pretty much in line with where we thought we would end up. Foreign currency, as expected, was a significant headwind, and we expect this to continue for several more quarters. That said, our business in our international markets continues to perform well in their respective local currencies. And as expected, we experienced some softness in areas of the U.
S. That are more energy dependent. And lastly, we knew going into the New Year that we'd be up against strong comps in the Q1 and we would need to weather the storm. We feel we did just that. We are encouraged with our same store sales and we remain optimistic with the outlook for the balance of the year.
So in closing, we want to thank our management teams in North America as well as our team on the ground in Australasia for a solid Q1 for the GPC Automotive business. So that completes our overview of the GPC Automotive business. And at this time, I'll hand the call over to Carol to get us started with a review of our financial results. Carol?
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 of $3,700,000,000 for the Q1, 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 of 2.2%.
Our gross profit for the Q1 was 29.8% and this compares to 29.9 percent gross 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, the slight decline in our Q1 gross margin directly relates 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, but 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 0.4% in automotive, up 0.4% in industrial, up 0.6% in office products and up 0.2% in electrical. Turning to our SG and A. Our total expenses were $861,000,000 in the 1st quarter, which is up 2.5% from 2014. This represents 23.1% of sales, which is slightly improved from the 23.2% last year and encouraging giving the underlying sales growth of approximately 4% for the quarter.
We attribute this progress to the benefits of our ongoing emphasis on effective cost management, and we expect to show continued progress on our SG and A line in the periods ahead. Now we'll review our results by segment. Our automotive revenue for the Q1 was $1,900,000,000 which was flat with the prior year and 51% of total sales. Our operating profit of $151,000,000 is up 4 tenths of 1%, so their margin held constant with 2014 at 7.9%. This is in line with what we would expect on a 3% comparative sales increase.
Our industrial sales were $1,180,000,000 in the first quarter, which is up 3.4% for 2014 and 31% of our total revenues. Our operating profit of 88,000,000 dollars is up 6% and our operating margin improved 10 basis points to 7.4%. We're pleased to see the expanded margin given a 3% sales increase to see the expanded margin given a 3% sales increase, and we would add that this was driven by a slightly improved gross margin for the quarter as well as an improvement in their SG and A. Our office product revenues were $490,300,000 in the quarter, up a strong 17% and represents 13% of our total revenues. Our operating profit of $36,500,000 is up 8%, so their margin was down 70 basis points to 7.4% as the customer mix shift pressuring our gross margins continues to impact the net margin for this business.
The Electrical Electronics Group has sales in the Q1 of $182,000,000 a 1% increase and 5% of our total revenue. Our operating profit of 15,500,000 is down 0.4 percent, so their margin was down 10 basis points, but remained strong at 8.5%. So in total, our operating profit increased 3% in the Q1, which is in line with our sales growth. Our operating profit margin held constant with last year at 7.8%. And this follows a 30 basis point expansion in our operating margin for the full year in 2014, and we remain focused on our initiatives to show further expansion in the periods ahead.
We had net interest expense of $5,300,000 in the Q1, which is down from $6,200,000 last year. We continue to expect net interest expense of approximately $22,000,000 to $24,000,000 for the full year. Our total amortization expense was $8,600,000 for the Q1, which is fairly consistent with last year. We currently estimate $40,000,000 to $42,000,000 in total amortization expense for the full year. The other line, which reflects our corporate expense, was $25,000,000 expense for the Q1, which is up slightly from the $23,600,000 in the Q1 last year.
We continue to expect corporate expense to be in the $85,000,000 to $95,000,000 range for the full year. Our tax rate was approximately 36% for the Q1, which is up slightly from the 35.5% last year. For the full year, we now expect our tax rate to trend in the 36.7% to 37.0 percent range. Our net income for the quarter of $161,000,000 compared to the $157,500,000 or a 2% improvement. And as Tom mentioned, our EPS was $1.05 compared to last year's $1.02 Now we'll discuss a few key balance sheet items.
Our cash at March 31 was $166,000,000 an increase of approximately an increase from the approximately $103,000,000 at March of last year. We continue to use our cash to support the growth initiatives in each of our businesses, and we remain comfortable with our cash position. Our accounts receivable of $2,000,000,000 at March 31, increased 8% from the prior year on a 4% core sales increase for the Q1. We remain focused on our goal of growing receivables at a rate less than the revenue growth and we'll be working hard to achieve this objective in the periods ahead. We continue to be satisfied with the quality of our receivables at this time.
Our inventory at the end of the quarter was $3,000,000,000 which is up approximately 1% from March of 2014 and actually down 1% from year end. Our team continues to do a very good job of managing our inventory levels and we'll remain focused on maintaining this key investment at the appropriate levels in the periods ahead. Our accounts payable balance at March 31 was $2,600,000,000 up 12% from the prior year due to the positive impact of improved payment terms and other payable initiatives established with our vendors. We've shown continued improvement in this area for several periods now, and we're encouraged by its positive impact on our working capital and our days in payables. Our working capital of $1,900,000,000 is down 3% from last year and effectively managing our working capital and in particular accounts receivable inventory and accounts payable is a very high priority for our company.
Our ongoing efforts with these key accounts have resulted in solid improvement in our working capital position and cash flow for the last several years and our balance sheet remains in excellent condition at March 31, 2015. Our total debt of $894,000,000 at March 31 is basically unchanged from the prior year And this represents approximately 22% of our total capitalization. Our total debt includes $250,000,000 term notes as well as another $394,000,000 in borrowings under our multicurrency syndicated credit facility agreement. We're comfortable with our capital structure at this time. We continue to generate solid cash flows and we're well positioned for the balance of 2015.
For the full year, we expect cash from operations to be in the $800,000,000 to $850,000,000 range and free cash flow, which deducts capital expenditures and dividends to be in the $350,000,000 range. We remain committed to several ongoing priorities for the use of our cash, which we believe serve to maximize shareholder value. Our first priority for the cash is the dividend, which we paid every year since going public in 1948, and we have now raised for 59 consecutive years, a record that continues to distinguish genuine parts from other companies. The 2015 annual dividend of $2.46 per share represents a 7% increase from the $2.30 per share paid in 2014 and it's approximately 53% of our 20 14 earnings per share, which is well within our goal of a payout of 50% to 55% payout ratio. Our goal would be to maintain this level of payout ratio going forward.
Our other priorities for cash include the ongoing reinvestment in each of our 4 businesses, strategic acquisitions and share repurchases. Our investment in capital expenditures was $16,000,000 for the Q1, which is down slightly from the $18,000,000 in the Q1 of 2014. We expect our expenditures to increase as the year progresses and we continue to look for CapEx spending to be in the range of $125,000,000 to $145,000,000 for the full year. As usual, the vast majority of our investments will continue to be weighted towards productivity enhancing projects, primarily in technology. Our depreciation and amortization was $36,000,000 in the Q1.
And looking ahead, we are projecting depreciation and amortization to be approximately $155,000,000 to $165,000,000 for the full year in 2015. Our strategic acquisitions continue to be an ongoing and important use of cash for us, and they're integral to the growth plans for our company. As reported in our year end call in February, we made a few small acquisitions in the industrial and office business early in the Q1, and these are performing well for us. Effective April 1, we closed on 2 additional acquisitions, one for automotive and one for electrical, and we expect these two operations to contribute annual revenues of $35,000,000 or approximately $25,000,000 in 2015. We will continue to seek new acquisitions across our business segments to further enhance our prospects for future growth, generally targeting those bolt on types of acquisitions with annual revenues in the $25,000,000 to $125,000,000 range.
Finally, during the quarter, we used our cash to repurchase approximately 870,000 shares of our common stock under the company's share repurchase program. Today, we have 8,700,000 shares authorized and available for purchase. We have no set pattern for these repurchases, but we expect to remain active in the program in the periods ahead as we continue to believe that our stock is an attractive investment and combined with the dividend provides the best return to our shareholders. So that concludes our financial update on the Q1 of 2015. Overall solid results and in line with our expectations.
So we're pleased with the 1st 3 months of the year and encouraged by the opportunities before us. We look forward to updating you on our future progress when we report again in July. And in closing, I'd like to thank all of our GPC associates for the outstanding job that they do each day. That concludes our financial review, and I'll now turn it back over to Tom.
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 in line with where 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 be up 6% to 7%, industrial and electrical to each be up 5% to 6%. And based upon the current trends in the external indices as well as the softness in the energy and export sectors, our current bias would be toward 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 earnings side, our guidance remains for EPS to come in between $4.70 $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 will conclude our remarks at this point and we'll turn the call back to Jackie to take your questions.
Jackie?
Our first question comes from the line of Seth Basham with Wedbush Securities.
Good morning.
Good morning, Seth.
My question is on the auto business. I'm trying to get a sense of your view of the slowdown in comp sequentially from last quarter given the miles driven strength. Do you think it's an industry wide phenomenon? Do you think some of your supply chain issues were the primary factor hurting you this quarter?
So, Seth, I'd taken in maybe in a couple of buckets. Certainly, we're up against some really tough comps. We knew that going in. Q1 was our strongest quarter of the year last year. So I'd certainly say that was had an impact.
2, I'd say, some of the key product line disruptions that we experienced along with the West Coast port issues cost us in the Q1. 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 shares, 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 really was of no help at all to us, we don't think in the Q1.
That's helpful. Could you quantify those 3 buckets in any way shape or form?
I don't think we're prepared to do this at do that at this point in 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 to 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 the growth, is and I would sort of expect gross margin to maybe be better given that there's basically 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, we had this nice 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?
Yes. 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 we you saw in their operating margin. So what 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 the 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 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 Q1. So if we can continue to do the job with payables and inventory, I think you'll see continued improvement.
And then on the receivables, is there any particular thing driving the growth there? Was it a certain category or new terms to certain customers?
Really nothing specific. I think, again, as we look towards what we're seeing in receivables, we just try to make sure that, again, if it's customers or certain programs that we are getting the corresponding offset on the payable side with our vendors.
And Greg, I'll let someone else 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 toward 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, it's industrial and electrical. Could you could you point us to why specifically that is other than just maybe energy a little bit? Is there industrial production or other things that you think will 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 referenced steel in my comments earlier.
None of those pipes are being purchased to go down in the wells and it 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'll work their way through the income statement in the months ahead.
Great. Thanks a lot.
Thank you. Thanks, Craig.
Our next question comes from the line of Aram Robinson with Wolfe Research.
Hi. This is actually Chris Bottiglieri on for Aram Robinson.
Good morning. Hi, Chris.
Good morning. I just had a quick question on the automotive business. Can you give us an update on the independents, if you're seeing any kind of pickup in the number of tenants switching on to the Napa brand or if you're just seeing any increased number of conversations being held?
Yes, Chris, this is Paul for sure. Look, we've got a good deal of activity that's continuing on that our team is involved in, in the field. 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 the Q1 of this year. And I would tell you that we don't see that activity slowing down at all. Matter of fact, we're optimistic with what we see ahead of us in 2015.
Got it. Thanks. So one longer term question I have. Can you just give us like an overall sense on your kind of long term view of the independent business as some of these business owners begin to retire? Are you seeing them kind of test down their businesses within the family to selling to other independents?
Or do you think like ultimately this could become a pipeline for GBC Company on stores down the road?
I'll 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 a 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's suitable 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.
Our next question comes from the line of Mark Bex with JPMorgan.
Hi. Can you talk about the cadence in automotive over the quarter and perhaps into April if you're willing to address it? I know March was last year was strong, but just interested in the trend and trying to get a better understanding of why you're expecting that business to accelerate from here.
Yes, Mark. This is Paul. I would tell you that throughout the Q1, it was pretty consistent from January to February to March. But we did see a little bit of a lift in the final 2 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 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 the Northeast 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 pickup 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 Q1 was transitory. If you think about the comps, the comps get a little bit easier. They were strong all year long, but they get a 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 this year 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 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 we gave you the number for the quarter.
We also gave you the guidance for the year And the guidance for the year suggests 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, if 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 MI exposure to oil and gas is?
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 go into the steel side of things, the bulk of the demand for new piping to go downhole, that's gone. Some of the pumps and motor demand that would be there normally, 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 into other areas, but that takes the demand out of the areas that they were in and it doesn't get replaced one for 1 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.
Our next question comes from the line of Chandni Luthra with Goldman Sachs.
Hi, this is Chandni Luthra on behalf of Matt Foster. 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 your 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 rocket science. 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.
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 it in the Q1 of 2015.
I'd 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 days 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.
Ladies and gentlemen, we have one more caller on the line. Your final question comes from the line of Bret Jordan with BB and T Capital Market.
Hey, good morning.
Good morning, Bret.
Hey, Carol, if we looked at accounts payable to inventory for the auto segment alone, where would that number be?
Good question, Brett. I would we don't give it out by segment. I would tell you that, as you know, it's more prevalent in the automotive industry with the extended terms and the programs with the suppliers. So a lot of our improvement is coming by way of 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 of 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 theirs would certainly be higher than that.
Okay. And then a 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 Q1's weather will be positive in that undercar and ride control and some of the categories that might benefit in the Q2 will pull through? Or do you think it's just a net negative in weather for 2015?
Well, Brett, 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 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 granular, I guess, if you look at things that might be seasonally positive, how are we looking nationally on things like temperature control right now? Are we setting up, I guess, we've had some warmer weather on the West Coast for a favorable year over year comparison in some of those summer categories or it's just too early to know?
Too early to tell. Brett, I would tell you that, that category was down slightly in the Q1. And again, we all keep an eye on the weather charts 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'd mentioned that pending projects were up substantially I think for Motion. Could you give us a little color on maybe what's driving that?
Well, I think our customer base let me back up first, Brett. 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 try 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 over time. We've seen some that were planned get deferred. But with the increase that we see right now, it would lead us to believe that over the next quarter or 2, we're going to see some nice project work flow through the revenue line. And what's driving that is, we've got an aging base of 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 being driven by the business demands that they see with their end markets and wanting to be sure that they're 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 in the call today, and we thank you for your continued support of Genuine Parts Company. We look forward to reporting back out in July with our 2nd quarter numbers. Thank you.
Thank you. This concludes today's conference call. You may now disconnect.