Contact Information: Contacts: Company Joseph L. DeFrancisci President & CEO 407-363-5633 Investor Relations Jay Pfeiffer Pfeiffer High Investor Relations, Inc. 303-393-7044
General Automotive Reports Increase in Operating Margins in First Quarter 2009 Over First Quarter 2008
| Source: General Automotive
ORLANDO, FL--(Marketwire - May 15, 2009) - General Automotive Company (OTCBB : GNAU ), a
North American provider of aftermarket parts and advanced technology for
the automotive industry, today announced financial results for its first
quarter ended March 31, 2009.
General Automotive achieved 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. The
Company also reduced its operating expenses, lowering its total expense to
$501,800 from $589,600. Finally, interest expense decreased by $81,000 --
from $97,000 to $16,000 -- year over year due to the conversion of debt to
equity at the end of the first quarter of 2008.
Based on a combination of improved gross margins and lower operating
expenses, the Company reported 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 in the first quarter declined by 13.8% to $3.1 million from $3.6
million due to a temporary decline in orders from a major customer in the
first two months of the quarter. 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 base," 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. 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."
General Automotive has engaged New York-based investment banker Jesup &
Lamont Securities Corp. to assist the Company in raising growth capital.
Jesup & Lamont is one of Wall Street's oldest investment banks and has a
solid track record of helping emerging growth companies with their capital
requirements.
About General Automotive Company
General Automotive Company ("GAC") is focused on expanding its operating
growth platform through multiple and ongoing acquisitions of successful
niche manufacturing companies in the automotive industry. General
Automotive's wholly owned subsidiary, OE Source ("OES"), imports and sells
hard-to-get auto parts from proprietary sources domestically and abroad,
fulfilling critical portions of its customers' supply chain. These
customers include large, multi-national distributors. OES specializes in
engine management products such as O2 sensors, which is a rapidly growing
and government mandated segment of the auto supply industry. General
Automotive is also a partner in the Advanced Composite Technology joint
venture with SenCer Inc., the advanced ceramics research laboratory whose
proprietary "Ultra-Temp" technology is a potential game changer in the
fields of oxygen sensors and SOFC fuel cells for powering automobiles.
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 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. Specifically, the Company's ability to raise
additional capital, execute its business plan and strategy, sustain or
increase gross margins, achieve profitability, and build shareholder value
are forward looking statements. 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.