<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
<TABLE>
<S> <C>
For the Quarterly Period Ended September 30, 2000 Commission File Number 1-5690
------------------ ------
</TABLE>
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).
173,076,735
-----------
(Shares of Common Stock)
================================================================================
<PAGE> 2
FORM 10-Q
PART I - Financial Information
Item 1 - Financial Statements
GENUINE PARTS COMPANY and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30, Dec. 31,
2000 1999
------------ ------------
(Unaudited)
(in thousands)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents ...................................................... $ 40,928 $ 45,735
Trade accounts receivable, less allowance
for doubtful accounts (2000 - $15,301; 1999 - $6,929) .......................... 1,087,834 1,006,663
Inventories - at lower of cost (substantially last-in,
first-out method) or market .................................................... 1,758,566 1,771,789
Prepaid and other current accounts ............................................. 51,391 71,016
------------ ------------
TOTAL CURRENT ASSETS .................................................. 2,938,719 2,895,203
Goodwill, less accumulated amortization (2000 - $35,528; 1999 - $25,286) ....... 430,277 440,299
Other assets ................................................................... 230,598 180,627
Total property, plant and equipment, less allowance
for depreciation (2000 - $431,929; 1999 - $403,021) ............................ 404,518 413,543
------------ ------------
$ 4,004,112 $ 3,929,672
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ............................................................... $ 650,894 $ 581,010
Current portion of long-term debt and other borrowings ......................... 158,650 133,056
Income taxes ................................................................... 22,428 28,032
Dividends payable .............................................................. 47,823 45,355
Other current liabilities ...................................................... 99,839 128,559
------------ ------------
TOTAL CURRENT LIABILITIES ............................................. 979,634 916,012
Long-term debt ................................................................. 676,438 702,417
Deferred income taxes .......................................................... 87,466 87,466
Minority interests in subsidiaries ............................................. 44,282 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 - 173,076,735; 1999 - 177,275,602 ......................... 173,077 177,276
Additional paid-in capital ..................................................... -0- -0-
Accumulated other comprehensive income ......................................... (13,086) (6,857)
Retained earnings .............................................................. 2,056,301 2,007,098
------------ ------------
TOTAL SHAREHOLDERS' EQUITY ............................................ 2,216,292 2,177,517
------------ ------------
$ 4,004,112 $ 3,929,672
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 3
FORM 10-Q
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
---------------------------- ---------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
(000 omitted except per share data)
<S> <C> <C> <C> <C>
Net sales ................................... $2,159,940 $2,082,229 $6,373,446 $6,006,480
Cost of goods sold .......................... 1,535,799 1,479,065 4,544,448 4,262,369
---------- ---------- ---------- ----------
624,141 603,164 1,828,998 1,744,111
Selling, administrative & other expenses .... 470,747 453,103 1,362,048 1,298,297
---------- ---------- ---------- ----------
Income before income taxes .................. 153,394 150,061 466,950 445,814
Income taxes ................................ 61,665 59,424 186,899 176,542
---------- ---------- ---------- ----------
NET INCOME .................................. $ 91,729 $ 90,637 $ 280,051 $ 269,272
========== ========== ========== ==========
Basic net income per common share ........... $ .53 $ .51 $ 1.59 $ 1.50
========== ========== ========== ==========
Diluted net income per common share ......... $ .53 $ .51 $ 1.59 $ 1.50
========== ========== ========== ==========
Dividends declared per common share ......... $ .275 $ .26 $ .825 $ .78
========== ========== ========== ==========
Average common shares outstanding ........... 174,192 178,546 175,763 179,143
Dilutive effect of stock options and
non-vested restricted stock awards ....... 267 480 331 534
---------- ---------- ---------- ----------
Average common shares outstanding,
assuming dilution ........................ 174,459 179,026 176,094 179,677
========== ========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
FORM 10-Q
GENUINE PARTS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended Sept. 30,
---------------
(000 omitted)
2000 1999
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income ............................................................................ $ 280,051 $ 269,272
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ....................................................... 69,760 67,634
Other ............................................................................... 4,418 1,016
Changes in operating assets and liabilities ......................................... (11,113) (11,792)
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES ................................................ 343,116 326,130
INVESTING ACTIVITIES:
Purchase of property, plant and equipment ............................................. (52,043) (59,010)
Acquisitions of businesses and other investing activities ............................. (43,468) (116,320)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES .................................................... (95,511) (175,330)
FINANCING ACTIVITIES:
Proceeds from credit facilities, net of payments ...................................... (4,757) 67,621
Dividends paid ........................................................................ (143,210) (138,125)
Purchase of stock ..................................................................... (104,445) (88,773)
---------- ----------
NET CASH USED IN FINANCING ACTIVITIES .................................................... (252,412) (159,277)
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS ................................................ (4,807) (8,477)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ......................................... 45,735 84,972
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................................... $ 40,928 $ 76,495
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
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 nine months ended September 30, 2000, are not
necessarily indicative of results for the entire year.
Note B - Segment Information
<TABLE>
<CAPTION>
Three month period ended Sept. 30, Nine month period ended Sept. 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales:
Automotive ............................. $ 1,078,221 $ 1,091,015 $ 3,169,367 $ 3,090,847
Industrial ............................. 594,589 541,622 1,779,353 1,607,917
Office Products ........................ 345,893 316,156 1,002,927 916,650
Electrical/Electronic Materials ........ 141,237 133,436 421,799 391,066
------------ ------------ ------------ ------------
Total net sales .................... $ 2,159,940 $ 2,082,229 $ 6,373,446 $ 6,006,480
============ ============ ============ ============
Operating profit:
Automotive ............................. $ 104,611 $ 104,258 $ 300,593 $ 295,798
Industrial ............................. 41,105 38,929 138,947 126,581
Office Products ........................ 29,979 27,560 96,092 87,411
Electrical/Electronic Materials ........ 7,426 6,107 20,697 17,487
------------ ------------ ------------ ------------
Total operating profit ............. 183,121 176,854 556,329 527,277
Interest expense ....................... (16,123) (13,683) (47,305) (39,501)
Other, net ............................. (13,604) (13,110) (42,074) (41,962)
------------ ------------ ------------ ------------
Income before income taxes ......... $ 153,394 $ 150,061 $ 466,950 $ 445,814
============ ============ ============ ============
</TABLE>
Note C - Comprehensive Income
Total comprehensive income was $273,822,000 and $275,872,000 for the nine month
periods ended September 30, 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
third quarter of 2000. Sales for the quarter were $2.2 billion, up 4% over the
same period in 1999. Net income in the quarter advanced 1% to $91.7 million. On
a per-share diluted basis, net income in the quarter was $.53 versus $.51 in the
same quarter of the prior year, an increase of 4%.
For the nine months ended September 30, 2000, sales totaled $6.4 billion, up 6%
over the first nine months of 1999, while net income was $280 million, an
increase of 4%. Diluted earnings per share were $1.59 for the first nine months
of 2000 and $1.50 for the same period in 1999, an increase of 6%.
Sales for the Automotive Parts Group decreased 1% for the quarter. The sales
decrease is reflective of the general softness in the automotive aftermarket.
Sales for the Industrial Parts Group increased 10% for the quarter reflecting
continued improvement in the overall industrial market and industrial production
as well as geographical expansion. The Office Products Group was up 9% for the
quarter reflecting steady sales progress in a competitive market due to
increased product offerings
5
<PAGE> 6
FORM 10-Q
and enhanced marketing programs. The Electrical/Electronic Materials Group
increased sales by 6%, reflecting increased market share and continued emphasis
on sales growth. Cost of goods sold increased slightly as a percentage of net
sales compared to the same quarter of the prior year. Selling, administrative
and other expenses increased 4% for the quarter and 5% for the nine months, and
the percentage of selling, administrative and other expenses to net sales
decreased slightly for the nine months, reflecting improved operating
efficiencies. The effective tax rate increased as a percentage of pre-tax profit
in the quarter and nine months due to goodwill on acquisitions and foreign
operations.
The ratio of current assets to current liabilities remains very good at 3.0 to 1
and the Company's cash position is good.
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,
electronic marketing, 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 September 30, 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 October 30, 2000 /s/ Jerry W. Nix
---------------- --------------------------------------------
Jerry W. Nix
Executive Vice President - Finance
(Principal Financial and Accounting Officer)
6
