<PAGE> 1
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 September 30, 1997 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 (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).
178,693,967
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(Shares of Common Stock)
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PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS Sept. 30, Dec. 31,
1997 1996
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(Unaudited)
(in thousands)
CURRENT ASSETS
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<S> <C> <C>
Cash and cash equivalents ............................. $ 53,987 $ 67,373
Trade accounts receivable, less allowance
for doubtful accounts (1997 - $9,905; 1996 - $1,771) .. 709,597 622,836
Inventories - at lower of cost (substantially last-in,
first-out method) or market ........................... 1,249,165 1,233,820
Prepaid and other current accounts .................... 19,360 13,613
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TOTAL CURRENT ASSETS .............................. 2,032,109 1,937,642
Investments and other assets .......................... 240,938 237,994
Total property, plant and equipment, less allowance
for depreciation (1997 - $258,783; 1996 - $234,791) ... 367,741 345,995
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$ 2,640,788 $2,521,631
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable .................................... $ 430,621 $ 401,842
Revolving line of credit ............................ 20,000 47,000
Income taxes ........................................ 16,127 15,765
Dividends payable ................................... 43,030 40,258
Other current liabilities ........................... 61,050 63,514
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TOTAL CURRENT LIABILITIES ...................... 570,828 568,379
Long-term debt ...................................... 159,942 110,241
Deferred income taxes ............................... 75,388 75,388
Minority interests in subsidiaries .................. 40,287 35,569
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 - $1 per share
Authorized - 450,000,000 shares
Issued - 1997 - 178,693,967; 1996 - 180,048,435 . 178,694 180,048
Retained earnings ................................... 1,615,649 1,552,006
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TOTAL SHAREHOLDERS' EQUITY ..................... 1,794,343 1,732,054
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$ 2,640,788 $2,521,631
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</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 3
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
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1997 1996 1997 1996
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(000 omitted except per share data)
<S> <C> <C> <C> <C>
Net sales ..................................... $1,555,776 $1,474,836 $4,523,878 $4,319,631
Cost of goods sold ............................ 1,091,809 1,039,564 3,185,524 3,050,798
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463,967 435,272 1,338,354 1,268,833
Selling, administrative & other expenses ...... 325,601 300,476 935,011 878,356
---------- ---------- ---------- ----------
Income before income taxes .................... 138,366 134,796 403,343 390,477
Income taxes .................................. 54,654 53,244 159,295 154,238
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NET INCOME .................................... $ 83,712 $ 81,552 $ 244,048 $ 236,239
========== ========== ========== ==========
Average common shares outstanding - Note B .... 179,447 181,172 179,800 181,991
========== ========== ========== ==========
Net income per common share - Note B .......... $ .47 $ .45 $ 1.36 $ 1.30
========== ========== ========== ==========
Dividends declared per common share - Note B .. $ .24 $ .22 $ .72 $ .67
========== ========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended Sept. 30,
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(000 omitted)
Cash Provided By:
1997 1996
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<S> <C> <C>
OPERATING ACTIVITIES:
Net income ...................................................................... $ 244,048 $ 236,239
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation .................................................................. 43,882 39,171
Other ......................................................................... 4,718 5,587
Changes in operating assets and liabilities:
Trade accounts receivable ................................................... (86,761) (75,662)
Merchandise inventories ..................................................... (15,345) (60,600)
Trade accounts payable ...................................................... 28,779 90,116
Income taxes payable ........................................................ 362 21,020
Other operating assets and liabilities ...................................... (8,211) 4,414
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NET CASH PROVIDED BY OPERATING ACTIVITIES ........................................ 211,472 260,285
INVESTING ACTIVITIES:
Purchase of property, plant and equipment ....................................... (73,451) (77,818)
Other investing activities ...................................................... 4,879 623
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NET CASH USED IN INVESTING ACTIVITIES ............................................ (68,572) (77,195)
FINANCING ACTIVITIES:
Proceeds from revolving line of credit and long-term debt, net .................. 23,000 35,000
Dividends paid .................................................................. (126,664) (119,825)
Purchase of stock ............................................................... (65,020) (68,729)
Other financing activities ...................................................... 12,398 429
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NET CASH USED IN FINANCING ACTIVITIES ............................................ (156,286) (153,125)
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ............................. (13,386) 29,965
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ................................. 67,373 44,254
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CASH AND CASH EQUIVALENTS AT END OF PERIOD ....................................... $ 53,987 $ 74,219
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
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 nine months ended September 30,
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
third quarter of 1997. Sales for the quarter were $1.56 billion, up 5% over
the same period in 1996. Net income in the quarter advanced 3% to $84 million.
On a per-share basis, net income in the quarter was $.47 versus $.45 in the
same quarter of the prior year.
For the nine months ended September 30, 1997, sales totaled $4.5 billion, up 5%
over the same period in 1996, while net income was $244 million, an increase of
3%. Earnings per share were $1.36 for the first nine months of 1997 and $1.30
for the same period in 1996.
The Automotive Parts Group had a sales increase of 4% for the quarter. This
improving trend moved sales up 3% for the nine months. These results, while
modest, provided market share gain as the automotive aftermarket remained
relatively flat. Marketing programs designed for the professional installer
and the do-it-yourself customer should provide continued progress. Sales for
the Industrial Parts Group increased 10% for the quarter and 9% for the nine
months ended September 30, 1997, reflecting continued geographic expansion,
increased market share and outstanding customer service to a growing customer
base. The Office Products Group was up 5% for the quarter and 3% for the nine
month period as S. P. Richards continues to expand and improve its geographic
coverage and service level. Cost of goods sold decreased slightly as a
percentage of net sales over the same quarter the prior year and the nine month
period. Selling, administrative and other expenses increased 8% for the
quarter and 6% for the nine months. The percentage of selling, administrative
and other expenses to net sales increased slightly, due mostly to increased
salaries, employee benefit expenses and store upgrade expenses.
The ratio of current assets to current liabilities remains very good at 3.6 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 September 30, 1997.
5
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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 October 30, 1997 /s/ Jerry W. Nix
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Jerry W. Nix
Senior Vice President - Finance
Date October 30, 1997 /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 NINE MONTHS ENDED
SEPTEMBER 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 53,987
<SECURITIES> 0
<RECEIVABLES> 709,597
<ALLOWANCES> 9,905
<INVENTORY> 1,249,165
<CURRENT-ASSETS> 2,032,109
<PP&E> 367,741
<DEPRECIATION> 258,783
<TOTAL-ASSETS> 2,640,788
<CURRENT-LIABILITIES> 570,828
<BONDS> 159,942
0
0
<COMMON> 178,694
<OTHER-SE> 1,615,649
<TOTAL-LIABILITY-AND-EQUITY> 2,640,788
<SALES> 4,523,878
<TOTAL-REVENUES> 4,523,878
<CGS> 3,185,524
<TOTAL-COSTS> 935,011
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 403,343
<INCOME-TAX> 159,295
<INCOME-CONTINUING> 244,048
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 244,048
<EPS-PRIMARY> 1.36
<EPS-DILUTED> 1.36
</TABLE>
