General Bearing Reports Record Third Quarter Results
15 October 1998
General Bearing Reports Record Third Quarter Results; Company Achieves 19% Increase in Pre-Tax Income on 8% Sales Growth
WEST NYACK, N.Y., Oct. 15 -- General Bearing Corporation
, a leading manufacturer and distributor of industrial bearings,
today announced operating results for the third quarter and nine-months ended
September 26, 1998.
Sales for the third quarter ended September 26, 1998 totaled
$11.4 million, versus $10.5 million for the same period one year ago. The
Company reported third quarter pre-tax income of $1.2 million, or $0.32 per
share, a 19% increase over pre-tax income of $1.0 million, or $0.27 per share
for the same period in 1997. Pre-tax income for the nine-month period ended
September 26, 1998 increased 30%, to $3.4 million, from $2.6 million in 1997.
Commenting on the quarter, General Bearing President David L. Gussack
stated, "We are pleased to announce record pre-tax income results for the
third quarter. Pre-tax income has increased in each quarter of 1998 as we
continue to make strides in both financial performance and efficiency. These
strong results follow the recent announcement of our new joint venture in
Ningbo, China."
Mr. Gussack continued, "Our increased sales volume reflects strength in
many of our product lines. We've had a significant increase in sales of
freight car bearings and industrial ball bearings, and have increased our
market share in the truck and trailer sector. Increased automotive ball
bearing production at Ningbo General Bearing Co., Ltd. has also contributed to
making our September 1998 the best single month revenue rate achieved since
1989."
"Our outlook is positive. We expect continued market penetration in the
truck/trailer and freight car sectors as well as shipment of full contract
volumes to Ford."
Commenting on the nine-month results, Mr. Gussack stated, "Pre-tax
earnings increased 30%, a rate well in excess of the sales growth. Our
consistent focus on manufacturing flexibility and sourcing coupled with our
commitment to cost-efficiency continues to drive our outstanding performance.
Our team has consistently demonstrated outstanding capabilities and our
flourishing vendor relationships, worldwide, support our position as a leading
supplier to niche and other markets."
Net income for the third quarter ended September 26, 1998, after income
tax expense of $471,000, totaled $767,595, or $0.20 per share, versus net
income, including a $375,000 tax benefit, of $1,417,624, or $0.36 per share in
the comparable period one year ago. Net income for the nine-month period
ended September 26, 1998 was $2,063,674, or $0.53 per share, including a tax
expense of $1,323,000, compared to $3,737,268, or $0.99 per share, including a
tax benefit of $1,131,000, for the corresponding period in 1997.
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: 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.
FINANCIAL STATEMENTS OF GENERAL BEARING CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Thirty-nine weeks ended Thirteen weeks ended
September 27, September 26,September 27, September 26,
1997 1998 1997 1998
Sales $31,596,090 $32,730,084 $10,527,246 $11,382,341
Cost of sales 21,741,573 22,308,353 7,163,000 7,818,243
Gross Profit 9,854,517 10,421,731 3,364,246 3,564,098
Selling, general
and administrative
expenses 6,494,541 6,821,896 2,065,420 2,170,861
Other income 0 350,165 0 54,925
Operating income 3,359,976 3,950,000 1,298,826 1,448,162
Interest expense, net 753,708 563,326 256,202 209,567
Income before
income taxes 2,606,268 3,386,674 1,042,624 1,238,595
Income tax (Benefit)(1,131,000) 1,323,000 (375,000) 471,000
Net income $3,737,268 $2,063,674 $1,417,624 $767,595
Net income per
common share $0.99 $0.53 $0.36 $0.20
Weighted average number
of common shares 3,764,835 3,913,376 3,900,000 3,918,950