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 September 30, 1995 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). 122,834,816 ----------- (Shares of Common Stock)
2 PART 1 - FINANCIAL INFORMATION Item 1 - Financial Statements GENUINE PARTS COMPANY and SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS <TABLE> <CAPTION> ASSETS Sept. 30, Dec. 31, ------ 1995 1994 ---- ---- (Unaudited) (in thousands) <S> <C> <C> CURRENT ASSETS - -------------- Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,923 $ 82,410 Trade accounts receivable, less allowance for doubtful accounts (1995 - $8,655; 1994 - $1,600) . . . . . . . . . . . . . . . . . . . . 581,037 487,395 Inventories - at lower of cost (substantially last-in, first-out method) or market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,050,025 1,004,580 Prepaid and other current accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,090 21,396 --------- --------- TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,696,075 1,595,781 Investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,456 175,658 Total property, plant and equipment, less allowance for depreciation (1995 - $206,245; 1994 - $192,081) . . . . . . . . . . . . . . . . . . . . . 295,095 258,032 --------- --------- $2,181,626 $2,029,471 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES - ------------------- Accounts payable and notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 340,545 $ 316,589 Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,051 11,482 Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,135 94,337 --------- --------- TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456,731 422,408 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,875 11,431 Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,540 44,540 Minority interests in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,566 24,927 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 - 1995 - 122,834,816; 1994 - 122,627,303 . . . . . . . . . . . . . . . . . . . 122,835 122,627 Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,633 -0- Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,508,446 1,403,538 --------- --------- TOTAL SHAREHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,641,914 1,526,165 --------- --------- $2,181,626 $2,029,471 ========= ========= </TABLE> See notes to consolidated condensed financial statements. 2
3 GENUINE PARTS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) <TABLE> <CAPTION> Three Months Ended Sept. 30, Nine Months Ended Sept. 30, ---------------------------- --------------------------- 1995 1994 1995 1994 ---- ---- ---- ---- (000 omitted except per share data) <S> <C> <C> <C> <C> Net sales . . . . . . . . . . . . . . . . . . . . . . . $ 1,362,481 $ 1,268,417 $ 3,952,423 $3,650,293 Cost of goods sold . . . . . . . . . . . . . . . . . . 953,986 886,137 2,770,418 2,558,739 ------- ------- --------- --------- 408,495 382,280 1,182,005 1,091,554 Selling, administrative & other expenses . . . . . . . 281,302 262,732 817,617 752,494 ------- ------- --------- --------- Income before income taxes . . . . . . . . . . . . . . 127,193 119,548 364,388 339,060 Income taxes . . . . . . . . . . . . . . . . . . . . . 50,241 46,624 143,469 132,234 ------- ------- --------- --------- NET INCOME . . . . . . . . . . . . . . . . . . . . . . $ 76,952 $ 72,924 $ 220,919 $ 206,826 ======= ======= ========= ========= Average common shares outstanding . . . . . . . . . . . 122,779 124,257 122,736 124,408 ======= ======= ========= ========= Net income per common share . . . . . . . . . . . . . . $ .63 $ .59 $ 1.80 $ 1.66 ======= ======= ========= ========= Dividends declared per common share . . . . . . . . . . $ .315 $ .2875 $ .945 $ .8625 ======= ======= ========= ========= </TABLE> See notes to consolidated condensed financial statements. 3
4 GENUINE PARTS COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) <TABLE> <CAPTION> Nine Months Ended Sept. 30, --------------- (000 omitted) Cash Provided By: 1995 1994 ---- ---- <S> <C> <C> OPERATING ACTIVITIES: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 220,919 $ 206,826 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,634 27,466 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,639 2,425 Changes in operating assets and liabilities: Trade accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93,642) (88,390) Merchandise inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (45,445) (15,241) Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,890) 27,600 Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,569 3,460 Other operating assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . (8,982) 4,167 ------- ------ NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . 100,802 168,313 INVESTING ACTIVITIES: Purchase of short-term investments, net of proceeds from sale and maturity . . . . . . -0- 29,221 Purchase of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . (70,441) (45,238) Other investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,054) (20,063) ------- ------ NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . (83,495) (36,080) FINANCING ACTIVITIES: Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (112,577) (104,520) Purchase of stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0- (42,633) Other financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,783 2,641 ------- ------ NET CASH USED IN FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . (69,794) (144,512) ------- ------ NET DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . . . (52,487) (12,279) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . 82,410 123,231 ------- ------ CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . $ 29,923 $110,952 ======= ======= </TABLE> See notes to consolidated condensed financial statements. 4
5 NOTES TO FINANCIAL STATEMENTS Note A - Basis of Presentation The accompanying unaudited consolidated condensed 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, 1995, are not necessarily indicative of results for the entire 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 1995. Sales for the quarter were $1.4 billion, up 7% over the same period in 1994. Net income in the quarter advanced 6% to $77 million. On a per-share basis, net income in the quarter was $.63 versus $.59 in the same quarter of the prior year. For the nine months ended September 30, 1995, sales totaled $4.0 billion, up 8% over the same period in 1994, while net income was $221 million, an increase of 7%. Earnings per share were $1.80 for the first nine months of 1995 and $1.66 for the same period in 1994. Sales for the Automotive Parts Group advanced 4% for the quarter and 5% for the first nine months, reflecting moderate sales growth in the automotive aftermarket. Sales for the Industrial Parts Group increased 12% for the quarter and 15% for the nine months ended September 30, 1995, as industrial production remains strong in many industries. The Office Products Group was up 13% for the quarter and 11% for the nine month period, reflecting the success of innovative marketing programs, outstanding service levels and geographic expansion. Cost of goods sold increased slightly as a percentage of net sales over the same quarter the prior year. Selling, administrative and other expenses increased 7% for the quarter and 9% for the nine months. The percentage of selling, administrative and other expenses to net sales remained approximately the same for the quarter and the nine months. The ratio of current assets to current liabilities remains very good at 3.7 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 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 September 30, 1995. 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 31, 1995 /s/ Jerry W. Nix ---------------- ----------------------------- Jerry W. Nix Senior Vice President - Finance /s/ George W. Kalafut ------------------------------- George W. Kalafut Executive Vice President - Finance and Administration (Principal Financial and Accounting Officer) 5