General Bearing Reports Q2 Results
24 July 1997
General Bearing Reports Second Quarter Results; Record Net Income from Operations
WEST NYACK, N.Y., July 24 -- General Bearing Corporation
today reported sales of $11,476,000 for the second quarter
ended June 30, 1997, compared to sales of $11,088,000 for the same quarter in
the previous year. The Company said net income increased 339% to $1,453,000,
or $0.37 per share, from $331,000, or $0.11 per share, reported for the same
quarter in 1996.
General Bearing President David L. Gussack said the large increase in net
income -- record net income from operations -- resulted from increased
manufacturing efficiencies and the Company's successful initiative to sell
higher margin bearings while de-emphasizing low-margin commodity-type
bearings. Gussack cited the specific example of locomotive bearing parts
where revenues were up 36% for the first six months of 1997 compared to the
same period in 1996. He explained that as a result of this type of
improvement, for the quarter, gross profit as a percentage of sales increased
to 31.6% compared to 25.3% in the same period of 1996.
"We are particularly delighted with second quarter results because they
reflect the success of our long-term strategies aimed at increasing
profitability and sales, and we believe that the wisdom of our strategy will
continue to be evidenced in the coming quarters," Gussack said, pointing out
that the Company recently announced a 3-year, $54 million General Motors
contract, "which is the culmination of 4 years of effort and is a testament of
our growing position within the bearing industry."
General Bearing manufactures, sources, assembles and distributes a variety
of bearing components and products. The company manufactures ball bearings,
tapered roller bearings, spherical roller bearings and cylindrical roller
bearings. The products are marketed under the Hyatt and The General
trademarks. The company's two divisions supply more than 200 Original
Equipment Manufacturers (OEMs) in the automobile, railcar, office equipment,
machinery and appliance industries, and about 2,000 bearing distributors.
"Safe Harbor" statement under the Private Securities litigation Reform Act
of 1995: Except for historical information, the matters discussed in this
news release that may be considered forward-looking statements may be subject
to certain risks and uncertainties that could cause the actual results to
differ materially from those projected, including uncertainties in the market,
pricing competition, procurement, and manufacturing efficiencies, and other
risks detailed from time to time in the Company's SEC reports. The Company
assumes no obligation to update the information in this release.
General Bearing Corporation
Consolidated Statements of Operations
(In thousands, except per share figures)
Thirteen Weeks Ended, Six Months Ended,
6/28/97 6/29/96 6/28/97 6/29/96
Sales $11,476 $11,088 $21,068 $21,007
Cost of sales 7,843 8,285 14,578 15,746
Gross profit 3,633 2,803 6,490 5,261
SG&A 2,331 1,924 4,429 3,752
Operating Income 1,302 879 2,061 1,509
Interest, net , including
$5,639, $37,500, $11,353
$75,000 to parent 216 344 497 674
Income before income
tax benefit &
extraordinary
income 1,086 535 1,564 835
Income tax
(benefit) (a) (367) 204 (756) 318
Net Income $ 1,453 $ 331 $ 2,320 $ 517
Income Per Share $ 0.37 $ 0.11 $ 0.63 $ 0.17
Weighted Average Shares
Outstanding 3,900,000 3,000,000 3,697,252 3,000,000
(a) For the second quarter 1997, the Company accrued an additional
$401,000 benefit as compared to a tax provision recorded in the second quarter
1996 of $204,000, relating to the anticipated use of net operating loss carry-
forwards.
SOURCE General Bearing Corporation