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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For The Quarter Ended March 31, 1994 Commission File Number 1-5690
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GENUINE PARTS COMPANY
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(Exact name of registrant as specified in its charter)
GEORGIA 58-0254510
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2999 CIRCLE 75 PARKWAY, ATLANTA, GEORGIA 30339
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 953-1700
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes * No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
124,496,011
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(Shares of Common Stock)
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FORM 10-Q
PART 1 - Financial Information
Item 1 - Financial Statements
GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
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Mar. 31, Dec. 31,
1994 1993
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(Unaudited)
(dollars in thousands)
CURRENT ASSETS
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Cash and cash equivalents . . . . . . . . . . . . . . . . . $ 150,117 $ 123,231
Short-term investments . . . . . . . . . . . . . . . . . . 57,962 64,599
Trade accounts and notes receivable, less allowance
for doubtful accounts (1994-$4,066; 1993-$1,582) . . . . 487,818 428,911
Inventories - at lower of cost (substantially last-in,
first-out method) or market. . . . . . . . . . . . . . . 870,751 879,154
Prepaid and other current items . . . . . . . . . . . . . . 13,672 10,299
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TOTAL CURRENT ASSETS . . . . . . . . . 1,580,320 1,506,194
Investments and other assets. . . . . . . . . . . . . . . . 132,932 133,364
Total property, plant and equipment, less allowance
for depreciation (1994-$188,224; 1993-$185,101). . . . . 234,351 231,198
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$1,947,603 $1,870,756
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES
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Accounts payable. . . . . . . . . . . . . . . . . . . . . . $ 276,648 $ 258,949
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . 43,354 11,688
Other current liabilities . . . . . . . . . . . . . . . . . 78,271 82,835
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TOTAL CURRENT LIABILITIES. . . . . . . 398,273 353,472
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . 13,148 12,265
Deferred income taxes . . . . . . . . . . . . . . . . . . . 37,980 37,980
Minority interests in subsidiaries. . . . . . . . . . . . . 22,574 21,776
SHAREHOLDERS' EQUITY
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Stated capital:
Preferred stock, par value - $1 per share
Authorized - 10,000,000 shares - None Issued . . . . . -0- -0-
Common stock, par value - $1 per share
Authorized - 150,000,000 shares
Issued - 1994: 124,496,011; 1993: 124,282,289. . . . . 124,496 124,282
Additional paid-in capital. . . . . . . . . . . . . . . . . 3,598 2,566
Retained earnings . . . . . . . . . . . . . . . . . . . . . 1,347,534 1,318,415
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TOTAL SHAREHOLDERS' EQUITY . . . . . . 1,475,628 1,445,263
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$1,947,603 $1,870,756
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See notes to consolidated condensed financial statements.
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FORM 10-Q
GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended March 31,
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1994 1993
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(000 omitted except per share data)
Net Sales . . . . . . . . . . . . . . . . . . . . . . . $1,162,075 $1,037,914
Cost of goods sold. . . . . . . . . . . . . . . . . . . 815,618 727,493
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346,457 310,421
Selling, administrative & other expenses. . . . . . . . 243,356 219,614
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Income before income taxes and cumulative
effect of changes in accounting principles 103,101 90,807
Income taxes. . . . . . . . . . . . . . . . . . . . . . 40,210 34,416
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Income before cumulative effect of changes
in accounting principles . . . . . . . . . . . . 62,891 56,391
Cumulative effect of changes in accounting
principles, net of tax - Note B. . . . . . . . . -- (1,055)
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NET INCOME. . . . . . . . . . . . . . . . . . . . . . . $ 62,891 $ 55,336
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Average common shares outstanding . . . . . . . . . . . 124,469 124,179
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Net income per common share . . . . . . . . . . . . . . $ .51 $ .45
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Dividends declared per common share . . . . . . . . . . $ .2875 $ .265
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See notes to consolidated condensed financial statements.
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FORM 10-Q
GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
PART I (Unaudited)
Three Months
Ended Mar. 31,
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(000 omitted)
1994 1993
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Cash Provided By:
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OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 62,891 $ 55,336
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . 9,073 8,464
Other . . . . . . . . . . . . . . . . . . . . . . . . 798 646
Changes in operating assets and liabilities:
Trade accounts receivable (58,907) (43,821)
Merchandise inventories 8,403 (2,478)
Trade accounts payable 17,699 6,130
Income taxes payable 31,666 14,798
Other operating assets and liabilities (10,575) (6,091)
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NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . 61,048 32,984
INVESTING ACTIVITIES:
Purchases of short-term investments, net
of proceeds from sale and maturity 6,637 (66,956)
Purchase of property, plant and equipment (12,651) (12,174)
Other investing activities 2,876 (401)
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NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . (3,138) (79,531)
FINANCING ACTIVITIES:
Dividends paid (32,933) (31,098)
Other financing activities 1,909 1,065
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NET CASH USED IN FINANCING ACTIVITIES . . . . . . . . . . (31,024) (30,033)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . 26,886 (76,580)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . . 123,231 168,019
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CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . $150,117 $ 91,439
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See notes to consolidated condensed financial statements.
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FORM 10-Q
NOTES TO FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with the instructions to Form 10-Q and therefore do
not include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. However, in the opinion of
management, all adjustments necessary to a fair statement of the operations of
the interim period have been made. These adjustments are of a normal recurring
nature. The results of operations for the three months ended March 31, 1994,
are not necessarily indicative of results for the entire year.
Note B - Accounting Changes
During the quarter ended March 31, 1993, the Company adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" which requires the projected
future costs of providing postretirement benefits, such as health care and life
insurance, be recognized as an expense as employees render service instead of
when benefits are paid. The Company has applied the new rules using the
cumulative effect method, resulting in a charge of $5,055,000 (net of income
taxes of $3,095,000).
Also during the quarter ended March 31, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". The
cumulative effect as of January 1, 1993, of adopting Statement 109 increased
net income by $4,000,000. As permitted by the Statement, prior year financial
statements have not been restated to reflect the impact of the change in
accounting method.
The adoption of Statements 106 and 109 did not have a material impact on the
Company's financial statements or its results of operations.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The Company reported record sales and earnings in the first quarter of 1994.
Sales for the quarter were $1.16 billion, up 12% over the same period in 1993.
Net income in the quarter advanced 14% to $62.9 million. On a per-share basis,
net income for the quarter was $.51 versus $.45 in the same quarter of the
prior year.
During the quarter, all three industry segments registered sound growth. Sales
for the Automotive Parts Group increased 10%, reflecting the strength of NAPA
programs in the marketplace. The Industrial Parts Group increased 11%, as
industrial production and factory utilization improved. The Office Products
Group increased 19%, reflecting innovative marketing programs and an
outstanding level of service. Each of the three segments should continue to
show progress and provide steady sales growth in the future. The Company
continues to believe that its sales growth in all three segments outpaces
industry growth. Cost of goods sold decreased slightly as a percentage of net
sales over the same quarter the prior year. Selling, administrative and other
expenses increased 11% for the quarter and the percentage to net sales
decreased slightly due to expense controls.
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FORM 10-Q
The first quarter results for 1993 included the net effect of adoption of FAS
106, "Employers' Accounting for Postretirement Benefits Other Than Pension", of
a charge of $5,055,000 (net of income taxes of $3,095,000) and an increase in
net income of $4,000,000 for the adoption of FAS 109, "Accounting for Income
Taxes". The adoption of FAS 106 and 109 did not have a material impact on the
Company's financial statements or its results of operations.
The ratio of current assets to current liabilities remains very good at 3.97/1,
and the Company's cash position is excellent.
PART II
Item 4.
Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.10 * Restricted Stock Agreement dated March 31, 1994
between the Company and Larry L. Prince.
Exhibit 10.11 * Restricted Stock Agreement dated March 31, 1994
between the Company and Thomas C. Gallagher.
* Indicates executive compensation plans and arrangements.
(b) No reports on Form 8-K were filed by the registrant during the quarter
ended March 31, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Genuine Parts Company
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(Registrant)
Date May 6, 1994 /s/ Jerry Nix
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Senior Vice President - Finance
/s/ George Kalafut
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Executive Vice President - Finance and
Administration (Principal Financial
and Accounting Officer)
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