General Bearing Reports Net Income Rise of 348% for Third Quarter General Motors Contract Expanded to $80 Million Over 5 Years
20 October 1997
General Bearing Reports Net Income Rise of 348% for Third Quarter General Motors Contract Expanded to $80 Million Over 5 Years
WEST NYACK, N.Y., Oct. 20 -- General Bearing Corporation
today reported sales of $10,527,000 for the thirteen weeks
ended September 30, 1997, a 20% increase compared to sales of $8,794,000 for
the year earlier period. The Company said net income rose 348% to $1,418,000,
or $0.36 per share, from $408,000, or $0.14 per share, reported for the same
period in 1996. Additionally, the Company's recently announced contract with
General Motors to supply certain wheel and axle bearings has been expanded
from a 3-year, $54 million agreement to an approximate 4-1/2 year,
$80.6 million contract. The Company expects to begin shipping product early
in the second half of 1998.
General Bearing President David L. Gussack said, "In the third quarter we
experienced double-digit revenue increases for both our O.E.M. (Up 25%) and
high margin Distribution (Up 11%) divisions. In particular, the O.E.M.
division enjoyed a 106% sales increase of tapered roller bearings, benefitting
from a partial recovery of the over-the-road trailer industry. Additionally,
savings from the consolidation of manufacturing facilities started to be
reflected in our gross margins in September." Because the consolidation will
be completed in November, he explained, "We should benefit from significant
reductions in overhead expenses going forward."
For the nine months ended September 30, 1997, General Bearing reported
sales of $31,596,000, compared to sales of $29,800,000 the year before. Net
income was $3,737,000, or $0.99 per share, versus net income of $925,000, or
$0.31 per share, for the same period of 1996.
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 Nine Months Ended
9/27/97 9/28/96 9/27/97 9/28/96
Sales $10,527 $8,794 $31,596 $29,800
Cost of sales 7,163 6,194 21,742 21,939
Gross profit 3,364 2,600 9,854 7,861
SG&A 2,065 1,817 6,494 5,568
Other Income -- (101) -- (101)
Operating Income 1,299 884 3,360 2,394
Interest, expense (256) (294) (754) (969)
Income before income tax benefit
& extraordinary income 1,043 590 2,606 1,425
Income tax (benefit) (375) 182 (1,131) 500
Net Income $1,418 $408 $3,737 $925
Income Per Share $0.36 $0.14 $0.99 $0.31
Weighted Average
Shares Outstanding 3,900,000 3,000,000 3,764,835 3,000,000
SOURCE General Bearing Corporation