-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U3pNeW/aJ1BwUHWJldYYSDhY7wL3F4mDufW8KzuQbmhht478DdWAGVKFzcj6kUq0 /YpyvTHu8sXo0DdDALOFbw== 0000950144-98-008921.txt : 19980803 0000950144-98-008921.hdr.sgml : 19980803 ACCESSION NUMBER: 0000950144-98-008921 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980730 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENUINE PARTS CO CENTRAL INDEX KEY: 0000040987 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MOTOR VEHICLE SUPPLIES & NEW PARTS [5013] IRS NUMBER: 580254510 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05690 FILM NUMBER: 98674020 BUSINESS ADDRESS: STREET 1: 2999 CIRCLE 75 PARKWAY CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 4049531700 MAIL ADDRESS: STREET 1: 2999 CIRCLE 75 PARKWAY CITY: ATLANTA STATE: GA ZIP: 30339 10-Q 1 GENUINE PARTS COMPANY 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 June 30, 1998 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). 178,688,612 ----------- (Shares of Common Stock) ================================================================================ 2 PART 1 - FINANCIAL INFORMATION Item 1 - Financial Statements GENUINE PARTS COMPANY and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS June 30, Dec. 31, 1998 1997 ---------- ---------- (Unaudited) (in thousands) CURRENT ASSETS Cash and cash equivalents................................................. $ 64,840 $ 72,823 Trade accounts receivable, net of allowance for doubtful accounts......... 781,848 686,551 Inventories - at lower of cost (substantially last-in, first-out method) or market............................................... 1,331,442 1,321,597 Prepaid and other current accounts........................................ 30,267 12,580 ---------- ---------- TOTAL CURRENT ASSETS............................................. 2,208,397 2,093,551 Investments and other assets.............................................. 289,357 288,298 Total property, plant and equipment, less allowance for depreciation (1998 - $276,681; 1997 - $251,929)....................... 375,278 372,514 ---------- ---------- $2,873,032 $2,754,363 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable ......................................................... $ 457,906 $ 405,141 Revolving line of credit.................................................. 20,000 36,000 Income taxes.............................................................. 23,082 14,372 Dividends payable......................................................... 44,717 43,436 Other current liabilities................................................. 55,105 57,989 ---------- ---------- TOTAL CURRENT LIABILITIES........................................ 600,810 556,938 Long-term debt............................................................ 209,428 209,490 Deferred income taxes..................................................... 89,049 89,049 Minority interests in subsidiaries........................................ 50,374 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 - 178,688,612; 1997 - 178,947,976.................... 178,689 178,948 Retained earnings......................................................... 1,744,682 1,680,520 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY....................................... 1,923,371 1,859,468 ---------- ---------- $2,873,032 $2,754,363 ========== ==========
See notes to condensed consolidated financial statements. 2 3 GENUINE PARTS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended June 30, Six Months Ended June 30, ------------------------------ ------------------------------ 1998 1997 1998 1997 ---------- ---------- ---------- ---------- (000 omitted except per share data) Net sales....................................... $1,619,383 $1,510,456 $3,152,521 $2,968,102 Cost of goods sold.............................. 1,141,980 1,065,336 2,228,382 2,093,715 ---------- ---------- ---------- ---------- 477,403 445,120 924,139 874,387 Selling, administrative & other expenses........ 335,446 306,705 649,954 609,410 ---------- ---------- ---------- ---------- Income before income taxes...................... 141,957 138,415 274,185 264,977 Income taxes.................................... 56,073 54,674 108,303 104,641 ---------- ---------- ---------- ---------- NET INCOME...................................... $ 85,884 $ 83,741 $ 165,882 $ 160,336 ========== ========== ========== ========== Basic net income per common share............... $ .48 $ .47 $ .93 $ .89 ========== ========== ========== ========== Diluted net income per common share............. $ .48 $ .46 $ .92 $ .89 ========== ========== ========== ========== Dividends declared per common share............. $ .25 $ .24 $ .50 $ .48 ========== ========== ========== ========== Average common shares outstanding............... 178,859 180,018 178,840 179,980 Dilutive effect of stock options and non-vested restricted stock awards........... 588 734 624 724 ---------- ---------- ---------- ---------- Average common shares outstanding, assuming dilution............................ 179,447 180,752 179,464 180,704 ========== ========== ========== ==========
See notes to condensed consolidated financial statements. 3 4 GENUINE PARTS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, -------------- (000 omitted) Cash Provided By: 1998 1997 --------- --------- OPERATING ACTIVITIES: Net income............................................................................ $ 165,882 $ 160,336 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation........................................................................ 31,618 29,014 Other............................................................................... 2,859 2,967 Changes in operating assets and liabilities: Trade accounts receivable......................................................... (95,297) (68,802) Merchandise inventories........................................................... (9,845) 1,164 Trade accounts payable............................................................ 52,765 235 Income taxes payable.............................................................. 8,710 371 Other operating assets and liabilities............................................ (20,571) (24,768) --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES................................................ 136,121 100,517 INVESTING ACTIVITIES: Purchase of property, plant and equipment............................................. (40,124) (47,127) Other investing activities............................................................ 4,683 4,531 --------- --------- NET CASH USED IN INVESTING ACTIVITIES.................................................... (35,441) (42,596) FINANCING ACTIVITIES: Proceeds from revolving line of credit, net........................................... (16,000) 38,000 Dividends paid........................................................................ (88,156) (83,450) Purchase of stock..................................................................... (20,756) (12,693) Other financing activities............................................................ 16,249 7,930 --------- --------- NET CASH USED IN FINANCING ACTIVITIES.................................................... (108,663) (50,213) --------- -------- NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS..................................... (7,983) 7,708 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD......................................... 72,823 67,373 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD............................................... $ 64,840 $ 75,081 ========= =========
See notes to condensed consolidated financial statements. 4 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 six months ended June 30, 1998, are not necessarily indicative of results for the entire year. Comprehensive income is not materially different from net income. Note B - Subsequent Event On July 1, 1998, the Company completed the acquisition of EIS, Inc. ("EIS"). Genuine Parts acquired EIS in exchange for a combination of cash and Genuine Parts Company common stock totaling approximately $200 million. EIS, founded in 1950 in Atlanta, Georgia, is a leading wholesale distributor of materials and supplies to the electrical and electronic industries. 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 second quarter of 1998. Sales for the quarter were $1.6 billion, up 7% over the same period in 1997. Net income in the quarter advanced 3% to $86 million. On a per-share diluted basis, net income in the quarter was $.48 versus $.46 in the same quarter of the prior year, an increase of 4%. For the six months ended June 30, 1998, sales totaled $3.15 billion, up 6% over the first half of 1997, while net income was $166 million, an increase of 3%. Diluted earnings per share were $.92 for the first six months of 1998 and $.89 for the same period in 1997, an increase of 3%. Sales for the Automotive Parts Group advanced 7% for the quarter and 4% for the first six months, reflecting positive sales improvement in the automotive aftermarket. Sales for the Industrial Parts Group increased 11% for the quarter and for the six months ended June 30, 1998, reflecting excellent service and programs and continued geographic expansion. The Office Products Group was up 2.4% for the quarter and 3% for the six month period, reflecting an extremely competitive office products industry with sluggish industry growth. Cost of goods sold increased slightly as a percentage of net sales over the same periods the prior year. Selling, administrative and other expenses increased 9% for the quarter and 7% for the six months. The percentage of selling, administrative and other expenses to net sales for the quarter and for the six month period increased slightly, due mostly to increased salaries, employee benefits, and store upgrade expenses. The ratio of current assets to current liabilities remains very good at 3.7 to 1 and the Company's cash position is excellent. PART II - OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The 1998 Annual Meeting of Shareholders of the Company was held on April 20, 1998, pursuant to notice given to shareholders of record on February 12, 1998, at which date there were 178,803,145 shares of Common Stock outstanding. At the Annual Meeting, the shareholders elected three Class III directors with terms to expire at the 2001 Annual Meeting and two Class II directors with terms to expire at the 2000 Annual Meeting. As to the following named individuals, the holders of 153,096,026 shares of the Company's Common Stock voted in favor of their election, and the holders of 4,296,502 shares withheld authority for their election. Class II -------- Richard W. Courts, II Larry L. Prince 5 6 Class III ---------- Jean Douville J. Hicks Lanier Alana S. Shepherd The following individual's term of office as a director continued after the Annual Meeting:
Class I Class II ------- -------- Bradley Currey, Jr. James B. Williams Robert P. Forrestal Thomas C. Gallagher Lawrence G. Steiner
The shareholders also ratified the selection of Ernst & Young LLP as independent auditors of the Company for 1998. The holders of 156,799,540 shares of Common Stock voted in favor of the ratification, holders of 99,264 shares voted against, holders of 493,724 shares abstained, and there were no broker non-votes. 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 June 30, 1998. 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 July 30, 1998 /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) 6 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF GENUINE PARTS COMPANY FOR THE SIX MONTHS ENDED JUNE 30, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 64,840 0 781,848 7,375 1,331,442 2,208,397 375,278 276,681 2,873,032 600,810 209,428 0 0 178,689 1,744,682 2,873,032 3,152,521 3,152,521 2,228,382 649,954 0 0 0 274,185 108,303 165,882 0 0 0 165,882 .93 .92
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