General Automotive Co. (GNAU.OB) Recognizes Increase in Operating Margins, Significantly Reduces Net Loss
Today, General Automotive Company, a North American provider of aftermarket parts and advanced technology for the automotive industry, announced its financial results for the first quarter ended March 31, 2009.
The company recognized year-over-year improvements in most profitability metrics in the first quarter. Gross margin improved 5.5 percentage points to 14.0% of revenue in the first quarter from 8.5% of revenue in the same quarter last year due to increased efficiencies in purchasing practices and product sourcing at its OE Source business. Operating expenses were also reduced, lowering total expenses to $501,800 from $589,600.
As a result of improved gross margins and lower operating expenses, General Automotive Company achieved a sharply reduced net loss of $87,500, or $0.01 per basic and diluted share, versus a net loss of $503,900, or $0.07 per basic and diluted share, in the first quarter of 2008. The year-ago net loss included $119,800, or $0.02 per basic and diluted share, related to discontinued operations.
Revenue for the first quarter totaled $3.1 million, a 13.8% decline from the same period a year earlier due to a temporary decline in orders from a major customer in the first two months of the quarter. However, the company noted that orders from this customer returned to historical levels in March.
“Despite the temporary decline in revenue from a major customer, we achieved solid improvement in our gross margin and bottom line through a combination of improved product sourcing and the right sizing of our expense basestated said Joseph DeFrancisci, president and CEO of General Automotive. “It’s important to note that our OE Source subsidiary is nearly carrying the cost of corporate overhead, which includes the costs of maintaining the public company.”
He continued, “As we execute our growth strategy — which calls for the selective acquisition of profitable companies and/or companies with near-term profit potential in the rapidly growing automotive aftermarket parts industry — we believe we can steadily ramp General Automotive’s bottom line and build shareholder value.”
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