1
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997 Commission File Number 1-5690
-------------- ------
GENUINE PARTS COMPANY
---------------------
(Exact name of registrant as specified in its charter)
GEORGIA 58-0254510
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2999 CIRCLE 75 PARKWAY, ATLANTA, GEORGIA 30339
- ---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 953-1700
--------------
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 X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date (the close of the period
covered by this report).
180,016,317
-----------
(Shares of Common Stock)
==============================================================================
2
FORM 10-Q
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
Mar. 31, Dec. 31,
1997 1996
------------ -----------
(Unaudited)
(in thousands)
CURRENT ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 76,003 $ 67,373
Trade accounts receivable, less allowance
for doubtful accounts (1997 - $3,951; 1996 - $1,771) . . . . . . . . . . . . . . . . . . . . 680,676 622,836
Inventories - at lower of cost (substantially last-in,
first-out method) or market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,236,686 1,233,820
Prepaid and other current accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,605 13,613
------------ -----------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,010,970 1,937,642
Investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235,686 237,994
Total property, plant and equipment, less allowance
for depreciation (1997 - $242,787; 1996 - $234,791 ) . . . . . . . . . . . . . . . . . . . . 351,175 345,995
------------ -----------
$ 2,597,831 $ 2,521,631
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 379,389 $ 401,842
Revolving line of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000 47,000
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,201 15,765
Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,192 40,258
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,048 63,514
------------ -----------
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612,830 568,379
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,287 110,241
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,388 75,388
Minority interests in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,276 35,569
SHAREHOLDERS' EQUITY
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 - 450,000,000 shares
Issued - 1997 - 180,016,317; 1996 - 180,048,435 . . . . . . . . . . . . . . . . . . . 180,016 180,048
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,582,034 1,552,006
------------ -----------
TOTAL SHAREHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,762,050 1,732,054
------------ -----------
$ 2,597,831 $ 2,521,631
============ ===========
See notes to condensed consolidated financial statements.
3
FORM 10-Q
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended March 31,
----------------------------
1997 1996
------------ ----------
(000 omitted except per share data)
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,457,646 $1,399,922
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,028,379 990,302
------------ ----------
429,267 409,620
Selling, administrative & other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 302,705 287,514
------------ ----------
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,562 122,106
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,967 48,232
------------ ----------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 76,595 $ 73,874
============ ==========
Average common shares outstanding - Note B . . . . . . . . . . . . . . . . . . . . . . . . . 179,942 182,714
============ ==========
Net income per common share - Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .43 $ .40
============ ==========
Dividends declared per common share - Note B . . . . . . . . . . . . . . . . . . . . . . . . $ .24 $ .22
============ ==========
See notes to condensed consolidated financial statements.
3
4
FORM 10-Q
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months
Ended Mar. 31,
---------------------
(000 omitted)
Cash Provided By:
1997 1996
---------- --------
OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 76,595 $ 73,874
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,996 11,740
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,707 848
Changes in operating assets and liabilities:
Trade accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (57,840) (66,079)
Merchandise inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,866) 7,141
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22,453) 40,700
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,436 46,688
Other operating assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . (15,458) 2,154
---------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,117 117,066
INVESTING ACTIVITIES:
Purchase of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . (23,029) (20,550)
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,161 633
---------- --------
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,868) (19,917)
FINANCING ACTIVITIES:
Proceeds from revolving line of credit, net . . . . . . . . . . . . . . . . . . . . . . . . 38,000 (20,000)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40,258) (38,401)
Purchase of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,761) (14,342)
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,400 5,019
---------- --------
NET CASH USED IN FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,619) (67,724)
---------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,630 29,425
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . 67,373 44,254
---------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . $ 76,003 $ 73,679
========== ========
See notes to condensed consolidated financial statements.
4
5
FORM 10-Q
NOTES TO FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated 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, 1997
are not necessarily indicative of results for the entire year.
Note B - Stock Split
The retroactive effect of a March 1997 three-for-two stock split effected in
the form of a 50% stock dividend has been accounted for in the reported figures
for the preceding year.
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Genuine Parts Company (the "Company") reported record sales and earnings in the
first quarter of 1997. Sales for the quarter were $1.5 billion, up 4% over the
same period in 1996. Net income in the quarter advanced 4% to $76.6 million.
On a per-share basis, net income in the quarter was 43c. versus 40c. in the
same quarter of the prior year, an increase of 7.5%.
Sales for the Automotive Parts Group advanced 3% for the quarter, reflecting
primarily unit improvement in a very competitive environment. Sales for the
Industrial Parts Group increased 8% for the quarter, reflecting continued
market share gain. The Office Products Group was up 2% for the quarter. Cost
of goods sold decreased slightly as a percentage of net sales compared to the
same quarter the prior year. Selling, administrative and other expenses
increased 5% for the quarter and the percentage of selling, administrative and
other expenses to net sales increased slightly.
The ratio of current assets to current liabilities remains very good at 3.3 to
1 and the Company's cash position is good.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
Exhibit 3.1 Restated Articles of Incorporation of the Company
(incorporated herein by reference from the Company's
Annual Report on Form 10-K, dated March 3, 1995).
Exhibit 3.2 Bylaws of the Company, as amended (incorporated
herein by reference from the Company's Annual Report
on Form 10-K, dated March 5, 1993).
Exhibit 27 Financial Data Schedule (for SEC use only).
(b) No reports on Form 8-K were filed by the registrant during the quarter
ended March 31, 1997.
5
6
FORM 10-Q
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
(Registrant)
Date April 29, 1997 /s/ Jerry W. Nix
---------------------------------------
Jerry W. Nix
Senior Vice President - Finance
/s/ George W. Kalafut
---------------------------------------
George W. Kalafut
Executive Vice President - Finance and
Administration (Principal Financial and
Accounting Officer)
6