General Bearing Reports Q1 Results
20 April 1998
General Bearing Reports First Quarter Results; Pre-Tax Income Up 112% for the Period
WEST NYACK, N.Y., April 20 -- General Bearing Corporation
today reported sales of $10,336,000 for the first quarter ended
March 31, 1998, an 8% increase compared with sales of $9,592,000 for the year
earlier period. The Company said that pre-tax income rose 112% to
$1.011 million, or $0.26 per share compared with $478,000 or $0.14 cents per
share reported for the same period last year.
General Bearing President David Gussack stated his belief that the
substantial pre-tax earnings growth is the true measure of the Company's
performance, but because the Company in its latest quarter did not have the
tax benefits (NOLs) that effectively creates tax "income" rather than
expense, as it did in the year ago quarter, it is now reporting net income of
$627,000, or $0.16 per share compared with $867,000, or $0.25 per share for
the same period in 1997.
General Bearing President David L. Gussack said, "It is misleading to
compare first quarter 1998 to first quarter 1997 results on the basis of net
income per share as it masks the outstanding performance of the Company." He
explained that in the year ago quarter, General Bearing recorded a $389,000
tax benefit, elevating earnings from $478,000 to $867,000. However, having
used up its Net Operating Loss Benefits, the Company began recording tax
expense in its 1998 fiscal year that has resulted in a tax expense of $384,000
in the first quarter. Gussack continued, "The $384,000 tax expense recorded
in the first quarter of 1998 will reduce the Company's tax asset on its books,
but it is a non-cash, book-only transaction. Except for alternative minimum
taxes, the Company's first $2.9 million of tax expense in 1998 will be a
non-cash transaction." He concluded, "The results reflected in our sales and
pre-tax earnings indicate that our mission to accomplish higher pricing,
reduced costs and increased sales continues to succeed. We anticipate
continued progress in this respect."
In the first quarter General Bearing signed a two-year, $14 million
contract with Ford Motor Company to supply ball bearings. Initial shipments
should begin May 1, 1998. "The Ford Motor Company contract is indicative of
the type of business that we should continue to receive since we received
QS 9000 certification for our West Nyack plant," said Gussack.
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
(In Thousands, except for share figures)
First Quarter Ended
March 28, March 29,
1998 1997
Sales 10,336 9,592
Cost of sales 7,306 6,735
Gross Profit 3,030 2,857
Selling, general and
administrative expenses 2,157 2,098
Operating Income 873 759
Other (income) expense:
Interest, net 157 281
Other Income (295) 0
Income before income tax (benefit): 1,011 478
Income tax (benefit) 384 (389)
Net Income 627 867
Income per common share:
Basic $0.16 $0.25
Weighted average number of common shares
Basic 3,903,657 3,494,500
SOURCE General Bearing Corporation