<PAGE> 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, 2000 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).
176,857,299
------------------------
(Shares of Common Stock)
================================================================================
<PAGE> 2
PART 1 - Financial Information
Item 1 - Financial Statements
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS Mar. 31, Dec. 31,
2000 1999
----------- -----------
(Unaudited)
(in thousands)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents ................................................... $ 80,459 $ 45,735
Trade accounts receivable, less allowance
for doubtful accounts (2000 - $9,546; 1999 - $6,929) ........................ 1,108,076 1,006,663
Inventories - at lower of cost (substantially last-in,
first-out method) or market ................................................. 1,743,235 1,771,789
Prepaid and other current accounts .......................................... 55,532 71,016
----------- -----------
TOTAL CURRENT ASSETS ............................................... 2,987,302 2,895,203
Goodwill, less accumulated amortization (2000 - $29,100; 1999 - $25,286) .... 436,957 440,299
Other assets ................................................................ 228,644 180,627
Total property, plant and equipment, less allowance
for depreciation (2000 - $409,648; 1999 - $403,021) ......................... 411,092 413,543
----------- -----------
$ 4,063,995 $ 3,929,672
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ............................................................ $ 626,063 $ 581,010
Current portion long-term debt and other borrowings ......................... 168,345 133,056
Income taxes ................................................................ 54,039 28,032
Dividends payable ........................................................... 48,410 45,355
Other current liabilities ................................................... 92,722 128,559
----------- -----------
TOTAL CURRENT LIABILITIES .......................................... 989,579 916,012
Long-term debt .............................................................. 723,995 702,417
Deferred income taxes ....................................................... 96,931 87,466
Minority interests in subsidiaries .......................................... 44,358 46,260
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 - 2000 - 176,857,299; 1999 - 177,275,602 ...................... 176,857 177,276
Additional paid-in capital .................................................. -0-
Accumulated other comprehensive income ...................................... (10,386) (6,857)
Retained earnings ........................................................... 2,042,661 2,007,098
----------- -----------
TOTAL SHAREHOLDERS' EQUITY ......................................... 2,209,132 2,177,517
----------- -----------
$ 4,063,995 $ 3,929,672
=========== ===========
</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 March 31,
-------------------------------
2000 1999
---------- ----------
(000 omitted except per share data)
<S> <C> <C>
Net sales ............................................................. $2,078,004 $1,901,357
Cost of goods sold .................................................... 1,490,050 1,350,467
---------- ----------
587,954 550,890
Selling, administrative & other expenses .............................. 435,225 408,396
---------- ----------
Income before income taxes ............................................ 152,729 142,494
Income taxes .......................................................... 61,000 56,428
---------- ----------
NET INCOME ............................................................ $ 91,729 $ 86,066
========== ==========
Basic net income per common share ..................................... $ .52 $ .48
========== ==========
Diluted net income per common share ................................... $ .52 $ .48
========== ==========
Dividends declared per common share ................................... $ .275 $ .26
========== ==========
Average common shares outstanding ..................................... 176,774 179,784
Dilutive effect of stock options and non-vested restricted stock awards 300 508
---------- ----------
Average common shares outstanding - assuming dilution ................. 177,074 180,292
========== ==========
</TABLE>
3
<PAGE> 4
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended Mar. 31,
---------------------------
(000 omitted)
2000 1999
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income .............................................. $ 91,729 $ 86,066
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ......................... 23,824 22,740
Other ................................................. 2,424 2,534
Changes in operating assets and liabilities ........... (22,923) (36,142)
-------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES .................. 95,054 75,198
INVESTING ACTIVITIES:
Purchase of property, plant and equipment ............... (19,897) (20,376)
Acquisitions of businesses and other investing activities (29,484) (85,669)
-------- ---------
NET CASH USED IN INVESTING ACTIVITIES ...................... (49,381) (106,045)
FINANCING ACTIVITIES:
Proceeds from credit facilities, net of payments ........ 56,866 186,141
Dividends paid .......................................... (45,489) (44,776)
Purchase of stock ....................................... (22,326) (46,693)
-------- ---------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES ........ (10,949) 94,672
-------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS .................. 34,724 63,825
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ........... 45,735 84,972
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ................. $ 80,459 $ 148,797
======== =========
</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 three months ended March 31, 2000 are not
necessarily indicative of results for the entire year.
Note B - Segment Information
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED MARCH 31
2000 1999
---------------------------------
(In thousands)
<S> <C> <C>
Net sales:
Automotive $1,005,310 $941,350
Industrial 594,348 522,503
Office products 337,584 310,003
Electrical/electronic materials 140,762 127,501
---------------------------------
Total net sales $2,078,004 $1,901,357
=================================
Operating profit:
Automotive $88,270 $83,593
Industrial 49,814 43,855
Office products 38,073 34,983
Electrical/electronic materials 6,333 5,640
---------------------------------
Total operating profit 182,490 168,071
Interest expense (15,160) (12,443)
Other, net (14,601) (13,134)
---------------------------------
Income before income taxes $152,729 $142,494
=================================
</TABLE>
Note C - Comprehensive Income
Total comprehensive income was $88,200,000 and $86,848,000 for the three month
periods ended March 31, 2000 and 1999, respectively.
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 2000. Sales for the quarter were $2.1 billion, up 9% over the
same period in 1999. Net income in the quarter advanced 7% to $91.7 million. On
a per-share diluted basis, net income in the quarter was 52 cents versus 48
cents in the same quarter of the prior year, an increase of 8%.
Sales for the Automotive Parts Group increased 7% for the quarter. The sales
increase is attributed to unit share gain, improved market conditions and the
impact of acquisitions. Sales for the Industrial Parts Group increased 14% for
the quarter reflecting continued geographic expansion through acquisitions and
opening new branches. The Office Products Group was up 9% for the quarter
reflecting increased product offerings, new marketing programs and an expanded
customer base. Sales for EIS, the Electrical/Electronic Materials Group,
increased 10% for the quarter due to the impact of acquisitions and moderate
improvement in the electronic industry. Cost of goods sold increased slightly as
a percentage of net sales compared to the same quarter of the prior year as a
result of the Company's recent acquisitions that have lower gross margins due to
industry or geographic differences. Selling, administrative and other expenses
increased 7% for the quarter and the percentage of selling, administrative and
other expenses to net sales decreased slightly, reflecting increased focus on
operating margin efficiencies.
The ratio of current assets to current liabilities is 3.0 to 1 and the Company's
cash position is good.
5
<PAGE> 6
Forward-Looking Statements:
The Private Securities Litigation Reform Act of 1995 (the Act) provides a safe
harbor for forward-looking statements made by or on behalf of the Company. The
Company and its representatives may from time to time make written or verbal
forward-looking statements, including statements contained in our Company's
filings with the Securities and Exchange Commission and in our reports to
shareholders. All statements which address operating performance, events or
developments that we expect or anticipate will occur in the future, including
statements relating to revenue, market share and net income growth, or
statements expressing general optimism about future operating results, are
forward-looking statements within the meaning of the Act. The forward-looking
statements are and will be based on management's then current views and
assumptions regarding future events and operating performance. There are many
factors which could cause actual results to differ materially from those
anticipated by statements made herein. Such factors include, but are not limited
to, changes in general economic conditions, the growth rate of the market for
the Company's products and services, the ability to maintain favorable supplier
arrangements and relationships, competitive product and pricing pressures, the
effectiveness of the Company's promotional, marketing and advertising programs,
changes in laws and regulations, including changes in accounting and taxation
guidance, the uncertainties of litigation, as well as other risks and
uncertainties discussed from time to time in the Company's filings with the
Securities and Exchange Commission.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report:
<TABLE>
<S> <C>
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).
</TABLE>
(b) No reports on Form 8-K were filed by the registrant during the quarter
ended March 31, 2000.
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 28, 2000 /s/ Jerry Nix
-------------- -----------------------------------
Jerry W. Nix
Executive Vice President - Finance
(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 THREE MONTHS ENDED MARCH
31, 2000, 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-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 80,459
<SECURITIES> 0
<RECEIVABLES> 1,108,076
<ALLOWANCES> 9,546
<INVENTORY> 1,743,235
<CURRENT-ASSETS> 2,987,302
<PP&E> 411,092
<DEPRECIATION> 409,648
<TOTAL-ASSETS> 4,063,995
<CURRENT-LIABILITIES> 989,579
<BONDS> 723,995
0
0
<COMMON> 176,857
<OTHER-SE> 2,032,275
<TOTAL-LIABILITY-AND-EQUITY> 4,063,995
<SALES> 2,078,004
<TOTAL-REVENUES> 2,078,004
<CGS> 1,490,050
<TOTAL-COSTS> 1,490,050
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,160
<INCOME-PRETAX> 152,729
<INCOME-TAX> 61,000
<INCOME-CONTINUING> 91,729
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 91,729
<EPS-BASIC> .52
<EPS-DILUTED> .52
</TABLE>
