General Automotive Announces Third Quarter 2008 Results - aftermarketNews

General Automotive Announces Third Quarter 2008 Results

The company's nine-month revenues top $10.2 million, up 25 percent.

ORLANDO, Fla. — General Automotive Co. has reported financial results for the third quarter ended Sept. 30.

Revenues for the 2008 third quarter totaled $3.6 million compared to $3.4 million in the third quarter of 2007. Gross profit for the 2008 third quarter was $321,187 compared to $421,377 in the corresponding 2007 period. The company recorded a net loss of $1.49 million, or 10 cents per diluted share, compared to a net loss of $446,812, or 91 cents per diluted share in the 2007 third quarter. The results for the three month period ended Sept. 30, included a non cash, non-recurring expense of $1,263,462 from certain discontinued operations or (8 cents) per diluted share.

For the nine months ended Sept. 30, the company reported a revenue increase of 24.9 percent, to $10.2 million compared to $8.17 million for the same period in 2007.

The company reported a net loss for this 2008 nine month period of $2.4 million or 20 cents per diluted share, compared to a net loss of $1.14 million, or $2.62 per diluted share, in the corresponding 2007 period. The results for the nine month period ended included a net loss from discontinued operations of $1.55 million or (13 cents) per diluted share.

In November 2008, the company’s board of directors agreed to discontinue the operations of Global Parts Direct Inc. through a sale of selected assets, which was closed on Nov. 14. This sale was fundamentally at liquidation value resulting in the need to record a loss on disposal of $1.228 million during the current quarter.

With declining demand for the type of electronic products provided by Global Parts Direct (GDP) during 2008 coupled with the subsidiaries’ lack of profitability and substantial reduction in revenues from 2007, company executives determined that not only did GDP not meet their strategic growth profile but that the sale of select assets of GDP would immediately strengthen General Automotive’s active pursuit of substantial growth by acquisition.

Reflecting the majority of the company’s stated revenues above and revenue percentage growth numbers through the third quarter ending Sept. 30, the company’s wholly-owned subsidiary OE Source (OES) is focused on increasing revenues through meeting the growing demand for automotive engine management replacement parts, generating larger customer orders and establishing new domestic dealer and Asian product sourcing, which should also further reductions in their operating expenses.

General Automotive CEO Joseph DeFrancisci commented, “We are very confident that the new Asian suppliers we have identified will provide the company’s OE Source subsidiary with significant cost savings and allows us to offer reduced prices to our current customer base for larger quantity orders and most importantly, greater profit margins as well.”

DeFrancisci continued, “Although shareholders should note our positive revenue growth during the first nine months of 2008, even before we eliminated our underperforming GDP subsidiary this month, I remind all shareholders that your management team at General Automotive remains highly focused on growth through multiple, potentially significant acquisition targets.”

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