SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1996 Commission file number 0-6215
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Republic Automotive Parts, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 38-1455545
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 Wilson Pike Circle, Suite 115, Brentwood, Tennessee 37027
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(Address of principal executive offices) (Zip code)
(615) 373-2050
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since
last report.)
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 short 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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Number of shares (common) outstanding at March 31, 1996: 3,387,818
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<PAGE>
Republic Automotive Parts, Inc.
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of
March 31, 1996 and December 31, 1995 3
Consolidated Statements of Income and
Retained Earnings for the three months
ending March 31, 1996 and 1995. 4
Consolidated Statements of Cash Flows
for the three months ending March 31, 1996
and 1995. 5
Notes to Consolidated Financial Statements. 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation. 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. 7
SIGNATURES 8
<PAGE> Page 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Republic Automotive Parts, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands) March 31, December 31,
ASSETS 1996 1995
CURRENT ASSETS
Cash and cash equivalents $ 3,670 $ 2,798
Accounts and notes receivable, less
allowance for doubtful accounts of
$590,000 and $490,000 15,903 14,063
Inventories 52,661 52,732
Deferred income taxes 3,081 2,972
Income taxes recoverable 135 1,452
Prepaid expenses and other current assets 2,282 1,031
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Total current assets 77,732 75,048
PROPERTY, PLANT AND EQUIPMENT, NET 9,355 9,266
LONG-TERM NOTES RECEIVABLE 644 693
DEFERRED PENSION ASSET 3,334 3,298
GOODWILL AND OTHER INTANGIBLES, less accumulated
amortization of $1,821,000 and $1,802,000 11,178 11,483
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$ 102,243 $ 99,788
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable and long-term debt
due within one year $ 810 $ 1,964
Accounts payable 17,256 15,800
Accrued compensation and employee benefits 1,743 2,467
Accrued taxes and other liabilities 3,897 3,076
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Total current liabilities 23,706 23,307
LONG-TERM DEBT 31,374 30,094
DEFERRED INCOME TAXES 1,667 1,682
OTHER LONG-TERM LIABILITIES 1,684 1,707
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock of $1.00 par value:
Authorized - 150,000; Issued - none
Junior Participating Cumulative
Preferred Stock at $1.00 par value
Authorized - 50,000 shares; Issued - none
Common stock of $.50 par value:
Authorized - 5,000,000 shares
Issued - 3,460,983 shares 1,730 1,730
Additional paid-in capital 24,913 24,913
Retained earnings 17,974 17,160
Treasury stock, at cost: 73,165 shares (805) (805)
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43,812 42,998
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$ 102,243 $ 99,788
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The accompanying notes are an integral part of these financial statements.
<PAGE> Page 3
Republic Automotive Parts, Inc.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
Three months ended
March 31,
(in thousands, except per share data)(Unaudited) 1996 1995
NET SALES $ 44,296 $ 32,908
COSTS AND EXPENSES
Cost of products sold 27,387 20,529
Selling, general and administrative expenses 15,050 11,085
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OPERATING INCOME 1,859 1,294
INTEREST INCOME 99 104
INTEREST EXPENSE (587) (373)
OTHER INCOME AND EXPENSE 31 12
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INCOME BEFORE INCOME TAXES 1,402 1,037
PROVISION FOR INCOME TAXES 588 410
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NET INCOME 814 627
RETAINED EARNINGS at beginning of year 17,160 15,276
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RETAINED EARNINGS at end of quarter $ 17,974 $ 15,903
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EARNINGS PER COMMON SHARE:
Net income $ 0.23 $ 0.18
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 3,552 3,497
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The accompanying notes are an integral part of these financial statements.
<PAGE> Page 4
Republic Automotive Parts, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the three
months ended
March 31,
(in thousands) 1996 1995
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 814 $ 627
Adjustments to reconcile net income to
net cash provided (used) by operations:
Depreciation 637 437
Amortization of intangibles 305 210
Provision for losses on accounts receivable 104 22
Provision for deferred pension income (36) (45)
Gain on disposal of property, plant and equipment 2 10
Deferred income taxes (107) (112)
Change in assets and liabilities:
Accounts and notes receivable (1,944) (904)
Income taxes recoverable 1,317
Inventories 71 (631)
Prepaid expenses and other current assets (1,251) (1,189)
Accounts payable 1,456 (242)
Accrued compensation and employee benefits (724) (1,170)
Accrued taxes and other liabilities 821 795
Other long-term liabilities (40) 3
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Net cash provided (used) by operating activities 1,425 (2,189)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of property, plant
and equipment 54 38
Capital expenditures (782) (356)
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Net cash used in investing activities (728) (318)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowing on revolving
credit agreement 2,900 2,700
Payments under revolving credit agreement (1,600) (1,000)
Payments on long-term debt and notes payable (1,174) (23)
Decrease (increase) in long-term notes receivable 49 (9)
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Net cash provided by financing activities 175 1,668
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 872 (839)
Cash and cash equivalents at beginning of year 2,798 2,675
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Cash and cash equivalents at end of period $ 3,670 $ 1,836
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Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense $ 509 $ 391
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Income taxes $ (771) $ 88
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The accompanying notes are an integral part of these financial statements.
<PAGE> Page 5
Republic Automotive Parts, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The accompanying unaudited 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 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, 1996 and 1995
are not necessarily indicative of the results expected for the full year.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS:
Results of Operations
Net sales increased 34.6% for the first three months of 1996 compared to the
same period in 1995. These sales increases are due principally to the
inclusion of sales from acquisitions made in July 1995 (one distribution
center and twenty-three jobber stores) and August 1995 (three distribution
centers). Sales for units owned continuously during 1996 and 1995 increased
4.1%. Cost of goods sold increased 33.4% in conjunction with the increase
in net sales. The overall increase in cost of goods sold was primarily a
result of the acquisitions described above.
Selling, general and administrative expenses increased by 35.8% for the
first three months in 1996 compared to the same period in 1995 due principally
to the above described acquisitions. Operating income increased 43.7% for
the first three months in 1996 compared to the same period in 1995.
Interest expense in 1996 increased 57.4% from the prior year due to higher
debt levels resulting from acquisitions and higher interest rates. As a
result of the above actions, income before income taxes increased by $365,000
for the first three months of 1996 over the same period last year. Earnings
of $0.23 cents per share were reported for the first three months of 1996
compared to $0.18 per share for the same period in 1995.
Financial Condition and Liquidity
The Company's ratio of current assets to current liabilities was 3.3 at the
end of the first quarter of 1996 compared to 3.2 at December 31, 1995.
Working capital at March 31, 1996 was $54,026,000 compared with $51,741,000
at December 31, 1995. Cash increased by $872,000 from $2,798,000 at
December 31, 1995 to $3,670,000 at March 31, 1996.
<PAGE> Page 6
Operating activities provided $1,425,000 of the Company's cash flows during
the first three months of 1996 compared to operating activities using
$2,189,000 of cash flows for the same period in 1995. Investing activities
used $728,000 of the Company's cash flows during the first three months of
1996 compared to $318,000 for the same period in 1995. Normal replacement
of equipment including additional delivery trucks to support increased sales
by Fenders & More, Inc. accounted for most of the increase in cash flows used
by investing activities.
The Company anticipates future growth through possible acquisitions and
openings of new distribution and jobber store locations. Three new
distribution centers for Fenders & More, Inc., the Company's distributor of
automotive crash parts, are scheduled to be opened in the second and third
quarters of 1996. Although no other definitive agreements have been reached,
it is expected that cash generated from operations, other changes in working
capital and existing credit facilities will be sufficient to support cash
outlays for anticipated acquisitions and openings, if any.
Financing activities provided $175,000 of the Company's cash flows during
the first three months of 1996 compared to $1,668,000 for the same period in
1995. At March 31, 1996, the company had available cash resources of
$35,000,000 under its revolving bank credit facility of which $29,300,000 was
being utilized.
Current financial resources (expected cash from operations, working capital
and short-term borrowings) available to the Company are expected to be
adequate to meet future cash requirements for capital expenditures and
anticipated debt reduction which are payable over the next several years for
various notes made in connection with acquisitions.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibit is filed as part of this report:
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, 1996.
<PAGE> Page 7
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
REPUBLIC AUTOMOTIVE PARTS, INC.
(Registrant)
By /S/ KEITH M. THOMPSON May 10, 1995
President, Chief Executive Date
Officer and Director
By /S/ DONALD B. HAUK May 9, 1995
Executive Vice President, Date
Chief Financial Officer
and Director
<PAGE> Page 8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF REPUBLIC AUTOMOTIVE PARTS, INC. FOR THE QUARTER
ENDED MARCH 31, 1996, 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-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,670
<SECURITIES> 0
<RECEIVABLES> 16,493
<ALLOWANCES> 590
<INVENTORY> 52,661
<CURRENT-ASSETS> 77,732
<PP&E> 19,905
<DEPRECIATION> 10,550
<TOTAL-ASSETS> 102,243
<CURRENT-LIABILITIES> 23,706
<BONDS> 31,374
0
0
<COMMON> 1,730
<OTHER-SE> 42,082
<TOTAL-LIABILITY-AND-EQUITY> 102,243
<SALES> 44,296
<TOTAL-REVENUES> 44,296
<CGS> 27,387
<TOTAL-COSTS> 27,387
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 587
<INCOME-PRETAX> 1,402
<INCOME-TAX> 588
<INCOME-CONTINUING> 814
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<EXTRAORDINARY> 0
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<NET-INCOME> 814
<EPS-PRIMARY> .23
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</TABLE>
