General Bearing Announces Fiscal 1997 Results; Net Income for the Year Increases 143%
2 March 1998
General Bearing Announces Fiscal 1997 Results; Net Income for the Year Increases 143%
Company Signs 2-Year, $14 Million Agreement With Ford Motor Company
WEST NYACK, N.Y., March 2 -- General Bearing Corporation
today reported sales of $10,557,000 for the fourth quarter
ended December 27, 1997, a 23% increase compared to sales of $8,561,000 for
the year earlier period. The Company said that net income rose 26% to
$1,609,000 or $0.41 per share, from $1,274,000 or $0.42 per share, based on
900,000 more shares outstanding in the fourth quarter 1997. Operating income,
excluding a one-time extraordinary gain of $300,000 in the fourth quarter of
1996, increased 41% to $713,000 from $507,000 recorded in the same period in
1996. Also during the quarter, the Company reached a two-year, $14 million
agreement to supply various ball bearings to Ford Motor Company .
General Bearing President David L. Gussack said, "Fiscal 1997 proved to be
a tremendous year, both financially and strategically. We increased revenues
while decreasing costs, highlighted by our plant consolidation, which enabled
us to achieve a 4% year-over-year increase in gross margins, from 27% to 31%.
In addition, significant advances were made as we expanded our presence within
the automotive industry by signing supply agreements with General Motors and
Ford Motor Company." He added, during 1997 the Company experienced
substantial revenue increases in many of its railroad products, ball bearings
and large tapered roller bearings for the truck trailer industry. Also very
important was the 12% revenue increase in the Company's higher margin
Distribution Division.
For the year ended December 27, 1997, the Company reported net income
increased 143% to $5,346,000, or $1.41 per share, on sales of $42,153,000.
This compares with net income of $2,198,000, or $0.73 per share, on sales of
$38,362,000 for the corresponding period of 1996.
At December 30, 1995, the Company had net operating loss carry forwards
"NOLS" aggregating approximately $13.2 million. In general, accounting
regulations allow companies to recognize, as an asset, the tax effect of
remaining NOLS expected to be utilized. As of December 27, 1997, the Company
fully realized its future benefit of the remaining NOLS. Commencing in FY
1998, the Company's earnings will be tax affected and record an "Income Tax
Expense" on its Statement of Operations. It should be noted that, while tax
affected normally for 1998 onwards, approximately $2,780,000 of the Company's
tax liability will be a non-cash expense.
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. Under "The General" and the "Hyatt" trademarks, the Company
supplies Original Equipment Manufacturers (OEMs) in the automobile,
truck/trailer, railcar, office equipment, machinery and appliance industries,
as well as the Industrial Aftermarket.
"Safe Harbor" statement under the Private Securities Litigation Reform Act
of 1995: This press release contains forward-looking statements that are
subject to risks and uncertainties, including, but not limited to, the impact
of competitive products, product demand and market acceptance risks, reliance
on key strategic alliances, fluctuations in operating results and other risks
detailed from time to time in the Company's filings with the Securities and
Exchange Commission. These risks could cause the Company's actual results for
the current FY and beyond to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company.
GENERAL BEARING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Quarter Ended Year Ended
December 28, December 27, December 28, December 27,
1996 1997 1996 1997
Sales $ 8,561,790 $10,556,676 $38,362,128 $42,152,766
Cost of
sales 5,986,950 7,347,943 27,926,232 29,089,516
Gross profit 2,574,840 3,208,733 10,435,896 13,063,250
Selling, general
and administrative
expenses 2,067,426 2,112,486 7,635,824 8,607,027
Provision
(recovery)-
customer
damage
claims (300,000) -- (400,959) --
Plant closing
costs, net -- 383,735 -- 383,735
Operating
income 807,414 712,512 3,201,031 4,072,488
Other (income)
expense:
Interest, net 253,830 98,170 1,223,143 851,878
Equity in
income of
affiliate (20,200) (25,261) -- (25,261)
Other -- -- (20,200) --
233,630 72,909 1,202,943 826,617
Income (loss)
before income
tax benefit: 573,784 639,603 1,998,088 3,245,871
Income tax
benefit (700,000) (969,000) (200,000) (2,100,000)
Net Income
(loss) $ 1,273,784 $ 1,608,603 $ 2,198,088 $ 5,345,871
Income (loss)
per common
share:
Basic $ .42 $ .41 $ 0.73 $ 1.41
Diluted $ .42 $ .39 $ 0.73 $ 1.38
Weighted average
number of
common shares
Basic 3,000,000 3,900,000 3,000,000 3,798,904
Diluted 3,000,000 4,092,803 3,000,000 3,868,610
SOURCE General Bearing Corporation