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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 March 31, 1998 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).
178,980,690
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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 Mar. 31, Dec. 31,
1998 1997
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(Unaudited)
(in thousands)
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents..........................................................................$ 98,810 $ 72,823
Trade accounts receivable, less allowance
for doubtful accounts (1998 - $4,404; 1997 - $1,849)............................................... 746,522 686,551
Inventories - at lower of cost (substantially last-in,
first-out method) or market........................................................................ 1,315,065 1,321,597
Prepaid and other current accounts................................................................. 30,043 12,580
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TOTAL CURRENT ASSETS...................................................................... 2,190,440 2,093,551
Investments and other assets....................................................................... 288,728 288,298
Total property, plant and equipment, less allowance
for depreciation (1998 - $269,092; 1997 - $258,634 )............................................... 372,846 372,514
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$ 2,852,014 $ 2,754,363
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable...................................................................................$ 412,162 $ 405,141
Revolving line of credit........................................................................... 41,000 36,000
Income taxes....................................................................................... 59,351 14,372
Dividends payable.................................................................................. 44,720 43,436
Other current liabilities.......................................................................... 54,920 57,989
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TOTAL CURRENT LIABILITIES................................................................. 612,153 556,938
Long-term debt..................................................................................... 209,440 209,490
Deferred income taxes.............................................................................. 89,049 89,049
Minority interests in subsidiaries................................................................. 48,466 39,418
SHAREHOLDERS' EQUITY
Stated capital:
Preferred Stock, par value - $1 per share
Authorized - 10,000,000 shares - None Issued................................................ -0- -0-
Common Stock, par value - $1 per share
Authorized - 450,000,000 shares
Issued - 1998 - 178,980,690; 1997 - 178,947,976............................................. 178,981 178,948
Retained earnings.................................................................................. 1,713,925 1,680,520
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TOTAL SHAREHOLDERS' EQUITY................................................................ 1,892,906 1,859,468
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$ 2,852,014 $ 2,754,363
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</TABLE>
See notes to condensed consolidated financial statements.
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FORM 10-Q
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
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1998 1997
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(000 omitted except per share data)
<S> <C> <C>
Net sales............................................................................. $1,533,138 $1,457,646
Cost of goods sold.................................................................... 1,086,402 1,028,379
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446,736 429,267
Selling, administrative & other expenses.............................................. 314,508 302,705
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Income before income taxes............................................................ 132,228 126,562
Income taxes.......................................................................... 52,230 49,967
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NET INCOME............................................................................ $ 79,998 $ 76,595
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Basic net income per common share..................................................... $ .45 $ .43
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Diluted net income per common share................................................... $ .45 $ .42
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Dividends declared per common share................................................... $ .25 $ .24
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Average common shares outstanding..................................................... 178,822 179,942
Dilutive effect of stock options and non-vested restricted stock awards............... 733 715
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Average common shares outstanding - assuming dilution................................. 179,555 180,657
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</TABLE>
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FORM 10-Q
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended Mar. 31,
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(000 omitted)
Cash Provided By:
1998 1997
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<S> <C> <C>
OPERATING ACTIVITIES:
Net income........................................................................................ $ 79,998 $ 76,595
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation.................................................................................... 15,993 14,996
Other........................................................................................... 974 1,707
Changes in operating assets and liabilities:
Trade accounts receivable..................................................................... (59,971) (57,840)
Merchandise inventories....................................................................... 6,532 (2,866)
Trade accounts payable........................................................................ 7,021 (22,453)
Income taxes payable.......................................................................... 44,979 37,436
Other operating assets and liabilities........................................................ (20,532) (15,458)
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NET CASH PROVIDED BY OPERATING ACTIVITIES............................................................ 74,994 32,117
INVESTING ACTIVITIES:
Purchase of property, plant and equipment......................................................... (20,035) (23,029)
Other investing activities........................................................................ 11,354 5,161
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NET CASH USED IN INVESTING ACTIVITIES................................................................ (8,681) (17,868)
FINANCING ACTIVITIES:
Proceeds from revolving line of credit, net....................................................... 5,000 38,000
Dividends paid.................................................................................... (43,436) (40,258)
Purchase of stock................................................................................. 8,789) (7,761)
Other financing activities........................................................................ 6,899 4,400
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NET CASH USED IN FINANCING ACTIVITIES................................................................ (40,326) (5,619)
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NET INCREASE IN CASH AND CASH EQUIVALENTS............................................................ 25,987 8,630
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD..................................................... 72,823 67,373
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CASH AND CASH EQUIVALENTS AT END OF PERIOD........................................................... $ 98,810 $ 76,003
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</TABLE>
See notes to condensed consolidated financial statements.
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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 three months ended March 31, 1998 are not
necessarily indicative of results for the entire year. Comprehensive income is
not materially different from net income.
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 1998. Sales for the quarter were $1.5 billion, up 5% over the
same period in 1997. Net income in the quarter advanced 4% to $80 million. On a
per-share diluted basis, net income in the quarter was 45 cents versus 42 cents
in the same quarter of the prior year, an increase of 7%.
Sales for the Automotive Parts Group advanced 2% for the quarter, reflecting the
effects of extremely slow growth in the automotive aftermarket. Sales for the
Industrial Parts Group increased 12% for the quarter, as industry across the
country is continuing to operate at high levels of capacity. The Office Products
Group was up 4% for the quarter reflecting excellent service and sound programs.
Cost of goods sold increased slightly as a percentage of net sales compared to
the same quarter the prior year. Selling, administrative and other expenses
increased 4% for the quarter and the percentage of selling, administrative and
other expenses to net sales decreased slightly, reflecting improved expense
control.
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 March 31, 1998.
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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 30, 1998 /s/ Jerry 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)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GENUINE PARTS COMPANY FOR THE THREE MONTHS ENDED MARCH
31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 98,810
<SECURITIES> 0
<RECEIVABLES> 746,522
<ALLOWANCES> 4,404
<INVENTORY> 1,315,065
<CURRENT-ASSETS> 2,190,440
<PP&E> 372,846
<DEPRECIATION> 269,092
<TOTAL-ASSETS> 2,852,014
<CURRENT-LIABILITIES> 612,153
<BONDS> 209,440
0
0
<COMMON> 178,981
<OTHER-SE> 1,713,925
<TOTAL-LIABILITY-AND-EQUITY> 2,852,014
<SALES> 1,533,138
<TOTAL-REVENUES> 1,533,138
<CGS> 1,086,402
<TOTAL-COSTS> 314,508
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 132,228
<INCOME-TAX> 52,230
<INCOME-CONTINUING> 79,998
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 79,998
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
