ORLANDO, Fla. — General Automotive Co. (GA), a global provider of parts, accessories and advanced technology for the automotive industry, has reported financial results for its second quarter ended June 30.
Revenues for the 2008 second quarter totaled $3.2 million compared to $3.8 million in the 2007 second quarter. Gross profit for the 2008 second quarter was $285,100 compared to $498,700 in the prior-year period. The company recorded a net loss of $420,000, or 3 cents per diluted share, compared to a net loss of $259,100, or 59 cents per diluted share, in the 2007 second quarter. The results for the 2008 and 2007 period include expenses of $20,600 and $311,800, respectively, for stock-based compensation.
For the six months ended June 30, GA reported revenues of $7.3 million compared to $6.4 million for the first half of 2007, an increase of 14.5 percent. The company reported a net loss for the 2008 period of $924,000, or 9 cents per diluted share, compared to a net loss of $701,900, or $1.70 per diluted share, in the first half of 2007. The results for the first six months of 2008 and 2007 include expenses of $48,750 and $623,600, respectively, for stock-based compensation.
President and CEO Joe DeFrancisci commented, “Our OE Source (OES) business unit continued the strong performance it demonstrated in the first quarter of 2008, increasing both sales and margins due to high demand for engine replacement parts. OES’ growth was offset in the second quarter by the slowdown in the domestic new car market that our Global Parts Direct (GPD) unit serves, as well as by lower pricing for GPD’s 10-inch DVD players.
“We have implemented a series of cost reductions to respond to the weakness in new car sales. At the same time, we are working to increase revenues and margins through a variety of initiatives, including introducing new products and broadening our suppliers, both domestically and overseas. We expect the new suppliers to enable us to realize significant cost savings, allowing us to offer reduced prices to our existing customer base for large-quantity orders while increasing GA’s gross profit margins.
“The placement we recently closed, as well as the conversion of notes payable into common stock in February 2008, have strengthened our balance sheet and better position us to implement our business plan in the coming months.”
CFO Harry Christenson added, “During the 2008 second quarter, our cost of goods sold stabilized to historical levels with no extraordinary items compared to the prior-year period. While the company benefited from the reduced expense of stock-based compensation of approximately $291,200, this benefit was offset by the loss of gross profits at GPD and approximately $173,000 in additional expenses as a result of being a public company.”
For more information about General Automotive, visit: www.generalautomotive.com.
