Napa Auto Parts 2003 Annual Report Download - page 5

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been in a leadership position with our NAPA Canada/UAP Inc.
subsidiary, most recently as President and Chief Executive Officer.
Before that, Larry had 25 years of experience with our U.S.
Automotive Parts Group and was responsible for the Group’s
largest division upon his promotion to NAPA Canada/UAP. Larry
is a highly regarded and proven executive and we are pleased to
have him lead our U.S. Automotive Parts Group. Robert Hattem
was named President and Chief Operating Officer at UAP and was
previously Executive Vice President responsible for their Heavy
Vehicle Parts Division.
In February 2004, George W. Kalafut, Executive Vice President,
retired from Genuine Parts after over 25 years of service with the
Company. George joined Motion Industries in 1979 and was a
member of their management team for 11 years prior to being
promoted to our GPC Headquarters team in 1990 as a member
of our Senior Officer Group. His innovative spirit and contributions
in the areas of finance, administration and logistics have benefited
us immeasurably. We certainly wish him the very best and extend
our sincere thanks for his many accomplishments at GPC.
DIRECTORS
One of our valued Directors, Robert P. Forrestal, has reached
mandatory retirement age and will retire in April 2004. Mr.
Forrestal is of counsel in the law firm of Smith, Gambrell and
Russell and was President and Chief Executive Officer of the
Federal Reserve Bank of Atlanta from 1983 to 1995. Bob has
served on our Board since 1996 and his guidance and advice
are much appreciated. We will miss him and wish him well in
the times ahead.
The GPC Board, at its scheduled meeting in November 2003, elected
Wendy Beale Needham to serve on our Board and invited her to
be a nominee for election by the shareholders at the April 19, 2004
Shareholders’ Meeting. Ms. Needham recently retired as Managing
Director, Global Automotive Research, Credit Suisse First Boston.
Ms. Needham’s knowledge of our business and experience in the
financial markets positions her to be a valuable member of our
Board. We look forward to the strength and talent she will
bring to us.
DEVELOPMENTS IN OPERATIONS
The Automotive Group produced a 3% sales increase for the year,
showing improvement in each period, and a strong finish in the
final quarter. In our third quarter comments we reported to you
that we were near the completion of our acquisition of NAPA
Hawaii and we were pleased to accomplish this on October 31st.
Their annual revenues are approximately $35 million and their
results since completing the acquisition have been very encouraging.
We believe that positive industry trends in the automotive after-
market combined with our growth initiatives and strengthened
management team position our Automotive segment for a higher
level of sales tempo in 2004.
Sales for the Industrial Products Group began to slip after a
moderate increase in the first quarter and were down in the
second and third quarters compared to 2002. In the fourth quarter,
this segment managed to rebound with a 2% sales increase. We
believe that Motion has maintained or even improved market
share during the soft period for the manufacturing sector in the
U.S. for many months now. We see indications of improvement
occurring gradually with Motion’s customer base and expect this to
impact Motion in a positive way for 2004. EIS, our Electrical/Electronic
segment, finished the year with a modest sales increase in the final
quarter, their first increase in quite some time. Much like Motion,
we are encouraged by the improving trends we see at EIS.
The Office Products Group led all our businesses in sales growth
in 2003 with solid increases in each period and up 4% for the year.
S.P. Richards also increased their operating profits, despite margin
pressures associated with competitive pricing issues and a slight
shift in product mix to lower margin products. We anticipate their
growth to continue in the 4% to 5% range for 2004.
LOOKING AHEAD
We are fortunate that the industries we serve provide Genuine
Parts Company with large and fragmented markets offering sub-
stantial growth potential. With this said, we recognize the need to
pick up the pace with our strategies and execution particularly in
our large Automotive and Industrial markets. GPC is in a position
of market leadership in all our businesses but we enter this year
with a determination and explicit plans to reach a higher level of
growth. Many of these ideas and plans are expressed in the pages
in the Annual Report covering all four business segments and we
hope you will take a look at them.
We thank each shareholder, as well as our employees, suppliers,
and especially our customers for your valuable support and we will
be pushing hard for a year in 2004 that we can all be proud of.
Respectfully submitted,
Larry L. Prince
Chairman of the Board
Thomas C. Gallagher
President
March 1, 2004
SUMMARY OF STOCK DIVIDENDS
Date Amount One Share Became
March 1959 100% 2 shares
April 1962 200% 6 shares
December 1967 50% 9 shares
May 1970 50% 13.5 shares
May 1972 100% 27 shares
April 1979 50% 40.5 shares
April 1984 50% 60.75 shares
May 1987 50% 91.125 shares
April 1992 50% 136.69 shares
April 1997 50% 205.04 shares
DIVIDENDS PER SHARE*
in dollars
*Restated to reflect stock splits.
94 95 96 97 98 99 00 01 02 03
0.77
0.84 0.89
0.96 1.00 1.04
1.10 1.14 1.16 1.18