ORLANDO, Fla., May 22, 2008 (PRIME NEWSWIRE) -- General Automotive Company (OTCBB:GNAU) ("GA"), a provider of original equipment and aftermarket automotive parts, mobile electronics and related products, today reported financial results for its first quarter ended March 31, 2008.
Revenue for the 2008 first quarter rose 51% to $4.07 million from $2.69 million in the 2007 first quarter. Gross profit for the 2008 first quarter was $345,000 compared to $482,000 in the prior-year period. The company recorded a net loss of $504,000, or $0.07 per diluted share, compared to a net loss of $443,000, or $1.15 per diluted share, in the 2007 first quarter.
President and CEO Joe DeFrancisci commented, "Since General Automotive became a public company on February 22, 2008, we've focused on building a platform for the company's future growth. We're pleased with our revenue increase, which was driven by initiatives such as working more closely with our major distributor customers to satisfy the growing demand for engine replacement parts. In tougher economic times, consumers tend to keep their cars longer, increasing the need for the parts General Automotive supplies. We also greatly strengthened our balance sheet, reducing total liabilities from $12.125 million to $4.4 million.
"To increase the efficiency of our operations going forward, we've been expanding our Asia sourcing activities and supplier quality programs. All of these actions are putting General Automotive in a good position to execute our growth strategy going forward. Our plan is to grow both organically and via acquisition within the auto parts and accessories product market. Our focus is on finding and acquiring market leaders with strong growth potential for revenue and profit improvement and outstanding management teams."
CFO Harry Christenson added, "Our selling, general and administrative expenses were consistent for the two comparative three-month periods ended March 31, 2008 and 2007. Although we achieved certain expense reductions in our day-to-day operations, they were offset by the new costs of being a public company of approximately $217,000. We recorded expenses of approximately $28,000 for the value of stock issued as compensation for services in the three months ended March 31, 2008 as compared to $312,000 in the same period of 2007. However, net loss improved by only approximately $148,000, due primarily to reduced gross profit margins."
About General Automotive
General Automotive Company ("GAC") is a provider of original equipment and aftermarket automotive parts, mobile electronics, and related automotive products at multiple levels of distribution throughout the United States and internationally. Through its two wholly owned subsidiaries, Global Parts Direct and OE Source, the company focuses its efforts on utilizing its relationships with manufacturers in China, Korea and Japan to bring state-of-the-art automotive parts, accessories and products to automobile manufacturers and major parts distributors in the U.S. For more information on GAC and its products, please visit: www.generalautomotive.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the company's current plans and expectations, as well as future results of operations and financial condition. A more extensive listing of risks and factors that may affect the company's business prospects and cause actual results to differ materially from those described in the forward-looking statements can be found in the reports and other documents filed by the company with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
GENERAL AUTOMOTIVE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited)
March 31, 2008
Assets
Current assets:
Cash and cash equivalents $ 18,301
Accounts receivable 2,378,246
Inventories 967,439
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Total current assets 3,363,986
Property and equipment, net 20,640
Customer relationship, net 1,219,126
Other assets, net 211,922
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$ 4,815,674
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Liabilities and Shareholder's Equity
Current liabilities:
Accounts payable $ 2,022,473
Lines of credit 1,425,426
Accrued expenses 582,065
Warrant liability 14,400
Notes payable to related parties 360,000
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Total current liabilities 4,404,364
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Commitments and contingencies --
Shareholder's equity:
Preferred stock, $0.001 par value; 10,000,000 shares
authorized, none issued and outstanding --
Common stock; $0.001 par value; 90,000,000 shares
authorized, 14,363,684 issued and outstanding 14,364
Additional paid-in capital 7,886,942
Accumulated deficit (7,489,996)
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Total shareholder's equity 411,310
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$ 4,815,674
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GENERAL AUTOMOTIVE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Three months ended
March 31,
2008 2007
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Revenues $ 4,068,187 $ 2,694,919
Costs of goods sold 3,723,275 2,212,756
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Gross profit 344,912 482,163
Expenses:
Selling, general and administrative 719,247 574,964
Stock-based compensation 28,125 311,813
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Loss from operations (402,460) (404,614)
Other income (expense):
Interest expense (102,032) (39,595)
Other, net 587 1,422
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Total other expense, net (101,445) (38,173)
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Net loss $ (503,905) $ (442,787)
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Loss per share
Basic and diluted $(0.07) $(1.15)
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Weighted average number of common shares
outstanding:
Basic and diluted 7,506,189 386,313
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