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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
_________________________
For The Quarter Ended June 30, 1994 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 (404) 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 * No
____ ____
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.
124,503,897
________________________
(Shares of Common Stock)
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FORM 10-Q
PART 1 - Financial Information
Item 1 - Financial Statements
<TABLE>
<CAPTION>
GENUINE PARTS COMPANY and SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS June 30, Dec. 31,
------ 1994 1993
-------- --------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS (dollars in thousands)
- - --------------
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . $ 117,970 $ 123,231
Short-term investments . . . . . . . . . . . . . . . . . . . . 64,452 64,599
Trade accounts and notes receivable, less allowance
for doubtful accounts (1994-$5,881; 1993-$1,582) . . . . . . 498,807 428,911
Inventories - at lower of cost (substantially last-in,
first-out method) or market . . . . . . . . . . . . . . . . 893,271 879,154
Prepaid and other current items . . . . . . . . . . . . . . . . 12,427 10,299
-------- -----------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . 1,586,927 1,506,194
Investments and other assets . . . . . . . . . . . . . . . . . 134,431 133,364
Total property, plant and equipment, less allowance
for depreciation (1994-$191,513; 1993-$185,101) . . . . . . 241,401 231,198
----------- -----------
$ 1,962,759 $ 1,870,756
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
- - -------------------
Accounts payable. . . . . . . . . . . . . . . . . . . . . . $ 281,045 $ 258,949
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . 10,722 11,688
Other current liabilities . . . . . . . . . . . . . . . . . 85,257 82,835
----------- ----------
TOTAL CURRENT LIABILITIES. . . . . . . . . . 377,024 353,472
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . 13,148 12,265
Deferred income taxes . . . . . . . . . . . . . . . . . . . 37,980 37,980
Minority interests in subsidiaries. . . . . . . . . . . . . 23,600 21,776
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 - 1994: 124,503,897; 1993: 124,282,289 . . . . . 124,504 124,282
Additional paid-in capital. . . . . . . . . . . . . . . . . 3,754 2,566
Retained earnings . . . . . . . . . . . . . . . . . . . . . 1,382,749 1,318,415
----------- -----------
TOTAL SHAREHOLDERS' EQUITY . . . . . . . . . 1,511,007 1,445,263
----------- -----------
$ 1,962,759 $ 1,870,756
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
2
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FORM 10-Q
<TABLE>
<CAPTION>
GENUINE PARTS COMPANY and SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
1994 1993 1994 1993
---- ---- ---- ----
(000 omitted except per share data)
<S> <C> <C> <C> <C>
Net Sales..................................... $1,219,801 $1,106,176 $2,381,876 $2,144,090
Cost of goods sold............................ 856,984 779,894 1,672,602 1,507,387
--------- --------- --------- ---------
362,817 326,282 709,274 636,703
Selling, administrative & other expenses...... 246,406 219,984 489,762 439,598
--------- --------- --------- ---------
Income before income taxes and cumulative
effect of changes in accounting principles.. 116,411 106,298 219,512 197,105
Income taxes.................................. 45,400 40,393 85,610 74,809
--------- --------- --------- ---------
Income before cumulative effect of changes
in accounting principles.................... 71,011 65,905 133,902 122,296
Cumulative effect of changes in accounting
principles, net of tax - Note B............. -- -- -- (1,055)
--------- --------- --------- ---------
NET INCOME.................................... $ 71,011 $ 65,905 $ 133,902 $ 121,241
========= ========= ========= =========
Average common shares outstanding............. 124,501 124,207 124,485 124,193
========= ========= ========= =========
Net income per common share................... $ .57 $ .53 $ 1.08 $ .98
========= ========= ========= =========
Dividends declared per common share........... $ .2875 $ .265 $ .575 $ .53
========= ========= ========= =========
*****************************************************************************************************************************
</TABLE>
See notes to consolidated condensed financial statements.
3
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FORM 10-Q
<TABLE>
<CAPTION>
GENUINE PARTS COMPANY and SUBSIDIARIES
--------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
----------------------------------------------
PART I (Unaudited)
- - ------
Six Months
Ended June 30,
--------------
(000 omitted)
<S> <C> <C>
Cash Provided By:
- - -----------------
1994 1993
---- ----
OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 133,902 $ 121,241
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . 18,125 17,287
Other . . . . . . . . . . . . . . . . . . . . . . . . . 1,824 1,191
Changes in operating assets and liabilities:
Trade accounts receivable (69,896) (50,986)
Merchandise inventories (14,117) (9,505)
Trade accounts payable 22,096 14,802
Income taxes payable (966) (7,931)
Other operating assets and liabilities (2,334) 1,231
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . 88,634 87,330
INVESTING ACTIVITIES:
Purchases of short-term investments, net
of proceeds from sale and maturity 147 (41,448)
Purchase of property, plant and equipment (29,056) (26,816)
Other investing activities 1,680 (5,567)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . (27,229) (73,831)
FINANCING ACTIVITIES:
Dividends paid (68,724) (64,009)
Other financing activities 2,058 1,396
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES . . . . . . . . . . . . (66,666) (62,613)
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . (5,261) (49,114)
--------- ---------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD. . . . . . . 123,231 168,019
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . . $ 117,970 $ 118,905
========= =========
</TABLE>
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 six months ended June 30, 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 impact of adopting 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 second quarter and for
the first six months of 1994. Sales for the quarter were $1.2 billion, up 10%
over the same period in 1993. Net income in the quarter advanced 8% to $71.0
million. On a per-share basis, net income for the quarter was $.57 versus $.53
in the same quarter of the prior year.
For the six months ended June 30, 1994, sales totaled $2.4 billion, up 11% over
the first half of 1993, while net income was $133.9 million, an increase of
10%. Earnings per share were $1.08 for the first six months of 1994 and $.98
for the same period in 1993.
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FORM 10-Q
Sales for the Automotive Parts Group advanced 8% for the quarter and 9% for the
first six months, reflecting the strength of NAPA programs in the marketplace
and increased market penetration. Sales for the Industrial Parts Group
increased 13% for the quarter and 12% for the six months ended June 30, 1994,
as industrial production continues to increase. The Office Products Group was
up 15% for the quarter and 17% for the six month period, reflecting innovative
marketing programs, an outstanding level of service and geographic expansion.
Each of these groups continue to outpace growth in their respective industries
and to improve market share. 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 12% for the quarter and the
percentage to net sales increased slightly, due mostly to increased salaries,
employee benefits and expenses associated with the automotive total growth
strategy.
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 4.2,
and the Company's cash position is excellent.
PART II
Item 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1994 Annual Meeting of Shareholders of the Company was held on April 18,
1994, pursuant to notice given to shareholders of record on February 18, 1994,
at which date there were 124,464,667 shares of Common Stock outstanding. At
the Annual Meeting, the shareholders elected four Class II directors with terms
to expire at the 1997 Annual Meeting. As to the following named individuals,
the holders of 106,117,237 shares of the Company's Common Stock voted in favor
of their election, the holders of 42,146 shares voted against, the holders of
1,781,319 shares abstained, and there were no broker non-votes:
Class II
--------
John B. Ellis
William A. Parker, Jr.
John J. Scalley
James B. Williams
The following individuals' term of office as a director continued after the
Annual Meeting:
Class I Class III
------- ---------
James R. Courim Jean Douville
Bradley Currey, Jr. E. Reginald Hancock
Thomas C. Gallagher Larry L. Prince
Gardner E. Larned Alana S. Shepherd
Lawrence G.Steiner
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FORM 10-Q
The shareholders adopted an amendment to the Company's Restated Articles of
Incorporation increasing the aggregate number of authorized shares of $1.00 par
value Common Stock of the Company from 150,000,000 shares to 450,000,000
shares. The holders of 84,657,566 shares of Common Stock voted in favor of the
amendment, holders of 22,780,394 voted against, holders of 502,742 abstained,
and there were no broker non-votes.
The shareholders also ratified the selection of Ernst & Young as independent
auditors of the Company for 1994. The holders of 107,276,892 shares of Common
Stock voted in favor of the ratification, holders of 222,857 shares voted
against, holders of 440,953 shares abstained, and there were no broker
non-votes.
Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed by the registrant during the quarter ended
June 30, 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
--------------------------------------
(Registrant)
Date August 1, 1994 /s/ Jerry Nix
------------------------- --------------------------------------
Senior Vice President - Finance
/s/ George Kalafut
--------------------------------------
Executive Vice President - Finance and
Administration (Principal Financial
and Accounting Officer)
7
