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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 June 30, 1996 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
- ---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770)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 X No
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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).
121,207,364
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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
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS June 30, Dec. 31,
------ 1996 1995
---- ----
(Unaudited)
(in thousands)
<S> <C> <C>
CURRENT ASSETS
- --------------
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,522 $ 44,254
Trade accounts receivable, less allowance
for doubtful accounts (1996 - $6,163; 1995 - $2,104) . . . . . . . . . . . . . . . . . 647,506 565,305
Inventories - at lower of cost (substantially last-in,
first-out method) or market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,139,583 1,127,456
Prepaid and other current accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 22,662 26,946
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TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,870,273 1,763,961
Investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212,013 206,932
Total property, plant and equipment, less allowance
for depreciation (1996 - $224,570; 1995 - $209,797) . . . . . . . . . . . . . . . . . . 317,624 303,239
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$ 2,399,910 $2,274,132
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LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
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Accounts payable and notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . $ 448,715 $ 376,704
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,808 1,807
Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,636 38,401
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,655 58,612
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TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560,814 475,524
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,540 60,607
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,691 58,690
Minority interests in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 30,513 28,429
SHAREHOLDERS' EQUITY
- --------------------
Stated capital:
Preferred Stock, par value - $1 per share
Authorized - 10,000,000 shares - None Issued . . . . . . . . . . . . . . . . . . -0- -0-
Common Stock, par value - $1 per share
Authorized - 450,000,000 shares
Issued - 1996 - 121,207,364; 1995 - 121,913,040 . . . . . . . . . . . . . . . . . 121,207 121,913
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,179 -0-
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,561,966 1,528,969
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TOTAL SHAREHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . 1,689,352 1,650,882
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$ 2,399,910 $2,274,132
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</TABLE>
See notes to condensed consolidated financial statements.
2
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FORM 10-Q
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
(000 omitted except per share data)
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . $ 1,444,873 $ 1,308,712 $ 2,844,795 $2,589,942
Cost of goods sold . . . . . . . . . . . . . . . . . . 1,020,932 917,756 2,011,234 1,816,432
--------- --------- --------- ---------
423,941 390,956 833,561 773,510
Selling, administrative & other expenses . . . . . . . 290,366 267,307 577,880 536,315
--------- --------- --------- ---------
Income before income taxes . . . . . . . . . . . . . . 133,575 123,649 255,681 237,195
Income taxes . . . . . . . . . . . . . . . . . . . . . 52,762 48,718 100,994 93,228
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NET INCOME . . . . . . . . . . . . . . . . . . . . . . $ 80,813 $ 74,931 $ 154,687 $ 143,967
========= ========= ========= =========
Average common shares outstanding . . . . . . . . . . . 121,402 122,758 121,604 122,715
========= ========= ========= =========
Net income per common share . . . . . . . . . . . . . . $ .67 $ .61 $ 1.27 $ 1.17
========= ========= ========= =========
Dividends declared per common share . . . . . . . . . . $ .335 $ .315 $ .67 $ .63
========= ========= ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
FORM 10-Q
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended June 30,
--------------
(000 omitted)
<S> <C> <C>
Cash Provided By:
1996 1995
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OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $154,687 $ 143,967
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,559 20,634
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,084 1,585
Changes in operating assets and liabilities:
Trade accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82,201) (81,816)
Merchandise inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,127) (21,196)
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,011 (36,480)
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,001 2,639
Other operating assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,720) (11,441)
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NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213,294 17,892
INVESTING ACTIVITIES:
Purchase of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . (41,473) (43,256)
Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,551) (13,566)
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NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43,024) (56,822)
FINANCING ACTIVITIES:
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79,189) (73,905)
Purchase of stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40,266) -0-
Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34,547) 63,130
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NET CASH USED IN FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (154,002) (10,775)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . 16,268 (49,705)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . 44,254 82,410
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CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,522 $ 32,705
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</TABLE>
See notes to condensed consolidated financial statements.
4
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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 six months ended June 30, 1996, are
not necessarily indicative of results for the entire 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
second quarter of 1996. Sales for the quarter were $1.4 billion, up 10% over
the same period in 1995. Net income in the quarter advanced 8% to $80.8
million. On a per-share basis, net income in the quarter was $.67 versus $.61
in the same quarter of the prior year.
For the six months ended, June 30, 1996, sales totaled $2.8 billion, up 10%
over the first half of 1995, while net income was $155 million, an increase of
7.5%. Earnings per share were $1.27 for the first six months of 1996 and $1.17
for the same period in 1995.
Sales for the Automotive Parts Group advanced 8% for the quarter and 7% for the
first six months, reflecting increased demand attributed to ongoing NAPA
marketing programs and favorable fundamentals such as vehicle age and usage
levels. Sales for the Industrial Parts Group increased 13% for the quarter and
12% for the six months ended June 30, 1996, as industrial production continues
at a healthy level with high capacity utilization in many industries. The
Office Products Group was up 15% for the quarter and 14% for the six month
period, reflecting a response to innovative marketing programs, outstanding
service levels and geographic expansion. Cost of goods sold increased slightly
as a percentage of net sales over the same quarter the prior year. Selling,
administrative and other expenses increased 9% for the quarter and 8% for the
six months. The percentage of selling, administrative and other expenses to
net sales decreased slightly, due mostly to improved expense control.
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 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1996 Annual Meeting of Shareholders of the Company was held on April 15,
1996, pursuant to notice given to shareholders of record on February 9, 1996,
at which date there were 121,869,968 shares of Common Stock outstanding. At
the Annual Meeting, the shareholders elected four Class I directors with terms
to expire at the 1999 Annual Meeting. As to the following named individuals,
the holders of 103,842,640 shares of the Company's Common Stock voted in favor
of their election, the holders of 1,383,767 shares withheld authority for their
election.
Class I
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Bradley Currey, Jr.
Robert P. Forrestal
Thomas C. Gallagher
Lawrence G. Steiner
The following individual's term of office as a director continued after the
Annual Meeting:
Class II Class III
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William A. Parker, Jr. Jean Douville
John J. Scalley J. Hicks Lanier
James B. Williams Larry L. Prince
Alana S. Shepherd
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FORM 10-Q
The shareholders also ratified the selection of Ernst & Young LLP as
independent auditors of the Company for 1996. The holders of 105,033,097
shares of Common Stock voted in favor of the ratification, holders of 48,824
shares voted against, holders of 144,486 shares abstained, and there were no
broker non-votes.
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 June 30, 1996.
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 July 30, 1996 /s/ Jerry W. Nix
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Jerry W. Nix
Senior Vice President - Finance
/s/ George W. Kalafut
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George W. Kalafut
Executive Vice President - Finance and
Administration (Principal Financial and
Accounting Officer)
6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GENUINE PARTS COMPANY FOR THE QUARTER ENDED JUNE 30,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 60,522
<SECURITIES> 0
<RECEIVABLES> 647,506
<ALLOWANCES> 6,163
<INVENTORY> 1,139,583
<CURRENT-ASSETS> 1,870,273
<PP&E> 317,624
<DEPRECIATION> 224,570
<TOTAL-ASSETS> 2,399,910
<CURRENT-LIABILITIES> 560,814
<BONDS> 60,540
0
0
<COMMON> 121,207
<OTHER-SE> 1,568,145
<TOTAL-LIABILITY-AND-EQUITY> 2,399,910
<SALES> 2,844,795
<TOTAL-REVENUES> 2,844,795
<CGS> 2,011,234
<TOTAL-COSTS> 2,011,234
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 255,681
<INCOME-TAX> 100,994
<INCOME-CONTINUING> 154,687
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 154,687
<EPS-PRIMARY> 1.27
<EPS-DILUTED> 1.27
</TABLE>
