Pre-Tax Income Up from First Quarter and Year Ago Period
West Nyack, NY-July 22, 1998-General Bearing Corporation (Nasdaq: GNRL) today reported sales of $11, 011,000 for the second quarter, ended June 27, 1998, versus sales of $11,476,000 for the year earlier period. The Company said that pre-tax income rose to $1,138,000, or $0.28 per share compared with $1,086,000 or $0.27 per share reported for the same period last year. Net income was $670,000, or $0.17 per share, up from the first quarter results of $627,000, or $0.16 per share. In 1997, the Company posted second quarter net income of $1,453,000, or $0.37 a share. In the second quarter, ended June 28, 1997, the Company realized a tax benefit of $367,000, versus this year's second quarter, when the Company booked a $468,000 provision for taxes.
General Bearing President David L. Gussack noted, "We've continued to make substantial progress in reducing costs. Our cost of sales was 65%, down from 68% a year ago. We anticipate continued progress in this respect." He explained that progress in pre-tax earnings as well as the gain in after-tax income compared to the first quarter is indicative of the Company's continuing excellent financial performance.
Gussack said that the rate of new orders indicates rising sales in the second half of the year. For example, the Company will initiate shipments to Great Dane Trailers, the second largest producer in the truck/trailer industry. The new agreement with Great Dane calls for shipments of more than $3 million of wheel bearings annually.
In addition, the Company initiated partial shipments in May under its $14 million agreement with Ford Motor Company. "By the end of the quarter, we were approaching projected normal shipping volumes and expect to ship $3 million of product to Ford by year end," said Gussack.
For the six-month period, sales rose to $21,348,000 from $21,068,000 a year ago, while operating income was $2,207,000, up from $2,061,000 in the year earlier period. Net income was $1,296,000, or $0.33 a share, versus $2,320,000, or $0.63 a share, a year ago.