10-Q 1 e300746_10q-gbc.txt QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) |X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter ended September 27, 2003 OR |_| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _______________ Commission file Number 0-22053 GENERAL BEARING CORPORATION --------------------------- (Exact name of registrant as specified in its charter) Delaware 13-2796245 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 44 High Street, West Nyack, New York 10994 ------------------------------------ ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (845) 358-6000 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock $.01 par value per share ------------------------------------- (Title of class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. |X| Yes |_| No Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). |_| Yes |X| No At November 1, 2003, the Registrant had issued 7,114,200 shares of common stock, $.01 par value per share, and had outstanding 3,753,972 shares. CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements, which are statements other than those of historical fact, including, without limitation, ones identified by the use of the words: "anticipates," "estimates," "believes," "expects," "intends," "plans," "predicts," and similar expressions. In this Quarterly Report, such statements may relate, among other things, to the recoverability of deferred taxes, likely industry trends, the continued availability of credit lines, the suitability of facilities, access to suppliers and implementation of joint ventures and marketing programs. Such forward-looking statements involve important risks and uncertainties that could cause actual results to differ materially from those expected by the Company, and such statements should be read along with the cautionary statements accompanying them and mindful of the following additional risks and uncertainties possibly affecting the Company: the possibility of a general economic downturn, which is likely to have an important impact on historically cyclical industries such as manufacturing; significant price, quality or marketing efforts from domestic or overseas competitors; the loss of, or substantial reduction in, orders from a major customer; the loss of, or failure to attain additional quality certifications; changes in U.S. or foreign government regulations and policies, including the imposition of antidumping orders on the Company or any of its suppliers; a significant judgment or order against the Company in a legal or administrative proceeding; and potential delays in implementing planned sales and marketing expansion efforts and the failure of their effectiveness upon implementation. GENERAL BEARING CORPORATION QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 27, 2003 TABLE OF CONTENTS

1 FINANCIAL STATEMENTS OF GENERAL BEARING CORPORATION AND SUBSIDIARIES Item 1. CONSOLIDATED BALANCE SHEETS (In Thousands - Except for Shares and Per Share Data)

See accompanying notes to condensed consolidated financial statements 2 FINANCIAL STATEMENTS OF GENERAL BEARING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands - Except for Shares and Per Share Data) (Unaudited)

See accompanying notes to condensed consolidated financial statements 3 FINANCIAL STATEMENTS OF GENERAL BEARING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands) (Unaudited)

See accompanying notes to condensed consolidated financial statements 4 FINANCIAL STATEMENTS OF GENERAL BEARING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited)

See accompanying notes to condensed consolidated financial statements 5 GENERAL BEARING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of The accompanying unaudited condensed consolidated Presentation financial statements for General Bearing Corporation and subsidiaries ("the Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the thirty-nine weeks ended September 27, 2003 are not necessarily indicative of the results that may be expected for the year ending January 3, 2004. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 28, 2002. 2. Discontinued In December 2002, the Company's Board of Directors and Operations management resolved to discontinue the operations of the machine tool segment by disposing of the net assets by sale during 2003. In accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long Lived Assets", prior year statements of operations of the Company have been reclassified to segregate discontinued operations from continuing operations. A detail of the major classes of the assets and liabilities of the discontinued operations is as follows: (In thousands) Sept. 27, Dec. 28, 2003 2002 --------- -------- Assets: Cash $ 267 $ 52 Accounts receivable 1,328 1,475 Inventory 4,118 3,394 Prepaid expenses & other current assets 733 360 Fixed assets 2,626 2,297 ------ ------ Total assets $9,072 $7,578 ====== ====== Liabilities: Accounts payable $2,304 $1,866 Accrued expenses & other current liabilities 3,808 1,998 Notes payable - bank 2,102 2,369 Current maturities of long-term debt 4 11 Minority interest 854 1,334 ------ ------ Total liabilities $9,072 $7,578 ====== ====== 6 GENERAL BEARING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Inventories Inventories consist of the following: (In Thousands)

4. Earnings per Basic earnings per share includes no dilution and is Share computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the dilution which would occur upon the exercise of stock options. A reconciliation of the shares used in calculating basic and diluted earnings per share follows: Thirty-nine weeks ended ------------------------------- Sept. 27, 2003 Sept. 28, 2002 -------------------------------------------------------------------------------- Diluted earnings per share computation: Basic weighted average common shares outstanding 3,847,021 3,962,466 Incremental shares from assumed exercise of dilutive options 6,946 10,040 -------------------------------------------------------------------------------- 3,853,967 3,972,506 -------------------------------------------------------------------------------- Thirteen weeks ended ------------------------------- Sept. 27, 2003 Sept. 28, 2002 -------------------------------------------------------------------------------- Diluted earnings per share computation: Basic weighted average common shares outstanding 3,809,969 3,883,880 Incremental shares from assumed exercise of dilutive options 14,543 11,910 -------------------------------------------------------------------------------- 3,824,512 3,895,790 -------------------------------------------------------------------------------- 7 GENERAL BEARING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the thirty-nine weeks ended September 27, 2003 and September 28, 2002, 245,800 and 287,800 options and warrants outstanding, respectively, were anti-dilutive. For the thirteen weeks ended September 27, 2003 and September 28, 2002, 245,800 and 287,800 options and warrants outstanding, respectively, were anti-dilutive. 5. Derivative The Company follows Statement of Financial Accounting Financial Standards No. 133 ("SFAS 133") "Accounting for Instruments Derivative Instruments and Hedging Activities", as amended, and interpreted, which requires that all derivative instruments be recorded on the balance sheet at their fair value. In order to manage it's exposure to changes in interest rates, the Company has entered into an interest rate swap agreement to hedge a portion of its total debt that is subject to variable interest rates. This agreement is considered to be a hedge against changes in the amount of future cash flows associated with the interest payments on variable rate debt obligations. For the thirty-nine weeks ended September 27, 2003 and September 28, 2002, expenses recognized in earnings relating to the interest rate swap totaled $311,000 and $318,000, respectively and are included in the Statement of Operations in "Other expenses, net". Any amounts reported in "Comprehensive Income" will be reclassified to earnings over the term of the agreement, through 2007. 6. Litigation Except as explained in Part II of this report, there has been no material change in litigation since the events reported in the Company's 10-Q for the fiscal quarter ended June 28, 2003. 8 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition Business Overview General Bearing Corporation and subsidiaries (collectively, the "Company") operates in two business segments: Bearings ("Continuing Operations") and Machine Tools ("Discontinued Operations"). In December 2002, the Company's Board of Directors and management resolved to discontinue the operations of the machine tool segment by disposing of the net assets by sale during 2003. During 2002, the Company reduced the net carrying amounts of the assets and liabilities of the machine tools segment to zero and recorded an impairment write-down associated with discontinued operations of approximately $2,242,000. Pursuant to Statement of Financial Accounting Standards No. 144, the financial statements of the Company have been reclassified to segregate discontinued operations from continuing operations. Continuing Operations The Company manufactures and distributes a variety of bearings and bearing components under the Hyatt(R) and The General(R) trademarks. The Company supplies original equipment manufacturers ("OEMs") and distributors. The Company's products, sold principally in the United States ("U.S.") and Asia, are used in a broad range of applications, including automobiles, railroad cars, locomotives, trucks, heavy duty trailers, office equipment, machinery and appliances. General has entered into six joint ventures (5 with manufacturers in the Peoples Republic of China ("PRC")) to enable it to manufacture high quality, low cost bearings and bearing components. General obtains a majority of its bearing and component requirements from its manufacturing plants in the PRC. Results of Operations Sales. Sales for the third fiscal quarter ended September 27, 2003 ("Q-3 2003") of $14,582,000 represents a 4.2% decrease compared to the third fiscal quarter ended September 28, 2002 ("Q-3 2002"). Decreased sales of radial ball bearings, drive line components to the automotive industry and sales to distributors due to the general downturn in U.S. manufacturing were partially offset by increased sales in precision balls produced by Jiangsu General Bearing Company, Ltd. which the Company began to sell in 2002. Sales for the thirty-nine weeks ended September 27, 2003 ("2003") of $46,855,000 represents a 2.5% increase compared to the thirty-nine weeks ended September 28, 2002 ("2002"). Increased sales of steering and drive line components to the automotive industry, tapered roller bearings for heavy duty truck trailers and tapered journal bearings to the railroad industry were partially offset by lower sales volume in the heavy duty aftermarket as well as lower sales volume to distributors. The reductions in sales to the heavy duty aftermarket and distributors are believed to be related to the general downturn in U.S. manufacturing. Gross Profit. Gross profit for Q-3 2003 of $3,784,000 represents a 17.0% decrease compared to Q-3 2002. As a percentage of sales, gross profit (GP%) was 25.9% for Q-3 2003 compared to 30.0% for Q-3 2002. This decrease was mainly due to reduction in sales volume as well as product mix. 9 Gross profit for 2003 of $13,630,000 represents a 1.0% increase compared to 2002. As a percentage of sales, GP% was 29.1% for 2003 compared to 29.5% for 2002. This decrease was mainly due to product mix. Selling, General and Administrative Expenses. Selling, general and administrative expenses (S,G&A) as a percentage of sales were 21.5% in Q-3 2003 compared to 20.2% in Q-3 2002. S,G&A increased by $61,000 mainly due to increases in salaries and professional fees, partially offset by reduced freight, travel and entertainment and promotion expenses. S,G&A as a percentage of sales were 20.2% in 2003 compared to 19.5% in 2002. S,G&A increased by $534,000 mainly due to increases in salaries, insurance, professional fees and depreciation, partially offset by reduced promotion, travel, freight and telephone expenses. Operating Income. Operating income for Q-3 2003 of $652,000 represents a 56.2% decrease compared to Q-3 2002 due to the lower sales volume, lower GP% and higher S,G&A. Operating income for 2003 of $4,167,000 represents an 8.8% decrease compared to 2002 due to the lower GP% and higher S,G&A, partially offset by increased sales. Other Expense, net. Other expense, net was $264,000 in Q-3 2003 compared to $417,000 in Q-3 2002 and is comprised of miscellaneous non-operating income and expenses, interest expense and equity in income of affiliates ("equity income") as follows: (In thousands) Third Quarter 2003 2002 ----------------------- Other non-operating (income) expenses, net $ 8 $ 23 Interest expense, net 392 459 Equity (income) in affiliates (136) (65) ------- ------- $ 264 $ 417 Other expense, net was $600,000 in 2003 compared to $1,232,000 in 2002 as follows: (in thousands) Nine Months 2003 2002 ----------------------- Other non-operating (income) expenses, net $ (33) $ 78 Interest expense, net 954 1,287 Equity (income) in affiliates (321) (133) ------- ------- $ 600 $ 1,232 Pursuant to requirements imposed in 1993 by the United States Office of Foreign Assets Control ("OFAC"), at the end of 2002 the Company carried a net payable ("IKL payable") to General IKL Corp., an affiliate. The requirement arose out of sanctions imposed by the U.S. government on the countries comprising the former Republic of Yugoslavia, "freezing" certain assets in the United States. In February 2003, OFAC "unfroze" assets affected by the sanctions and the Company reduced a significant portion of the IKL payable which the Company disputed, resulting in a $238,000 reduction in interest expense. 10 Income Tax. The Company's effective income tax rate was 36.9% in Q-3 2003 compared to 19.0% in Q-3 2002. The Q-3 2002 rate is reflective of income taxes not being provided for on certain foreign income that was originally intended to be permanently reinvested. The Company's effective income tax rate was 34.8% in 2003 compared to 22.2% in 2002. The 2003 effective tax rate reflects a normal rate of taxation. The 2002 effective tax rate is reflective of income taxes not being provided for on certain foreign income that was originally intended to be permanently reinvested. Discontinued Operations. In the Machine Tools segment, the Company produces and distributes a variety of machine tools used for boring, turning, milling and grinding metal work pieces. The Company's product lines include horizontal boring mills, bridge and gantry mills, vertical turning lathes, heavy duty lathes, roll grinders, belt grinders and vertical grinders. Machine tool sales of $2,171,000 in Q-3 2003 were 31.0% lower than Q-3 2002 primarily due to lower sales in the United States due to softness in the machine tool market. GP% for machine tools was 40.9% in Q-3 2003 compared to 24.9% in Q-3 2002. Q-3 2003 gross profit includes a benefit of $522,000 due to the reduction of inventory reserves. S,G&A for machine tools increased by $14,000 in Q-3 2003 compared to Q-3 2002. Operating loss in Q-3 2003 for machine tools was $94,000 compared to an operating loss of $185,000 in Q-3 2002 due to the reduction in inventory reserves, partially offset by lower sales and increased S,G&A. Other expense, net was $30,000 in Q-3 2003 compared to $85,000 in Q-3 2002. The reduction in other expense, net in Q-3 2003 is primarily due to reduced interest expense in Romania. The net loss for machine tools was $215,000 in Q-3 2003 compared to a net loss of $26,000 in Q-3 2002 due to the factors mentioned above. Machine tool sales of $5,042,000 in 2003 were 27.7% lower than 2002 due to softness in the machine tool market. GP% for machine tools was 22.3% in 2003 compared to 32.2% in 2002 mainly due to lower sales volume and product mix. S,G&A for machine tools increased by $35,000 in 2003 compared to 2002 mainly due to an increase in insurance expense. Operating loss for machine tools was $1,666,000 in 2003 compared to an operating loss of $506,000 in 2002 primarily due to lower sales volume and lower GP%. Other income, net was $212,000 in 2003 compared to other expense, net of $310,000 in 2002. The increase in other income, net in 2003 is mainly due to income generated from the sale of an unused parcel of land by World Machinery Works in the second quarter. The net loss for machine tools was $929,000 in 2003 compared to a net loss of $233,000 in 2002 mainly due to reduced sales and lower GP%, partially offset by the gain recognized from the sale of land and the reduction in inventory reserves. Net Income. Net income for Q-3 2003 decreased by 56.8% to $236,000 or $.06 per basic and diluted share, from $546,000 or $.14 per basic and diluted share in Q-3 2002. The decrease is primarily due to the lower sales volume, lower GP% and an increase in the effective tax rate, partially offset by reduced Other expenses, net. Net income for 2003 increased 14.1% from 2002 to $1,836,000 or $.48 per basic and diluted share, from $1,609,000 or $.41 per basic and diluted share in 2002 mainly due to the higher sales volume and reduction in Other expense, net. Financial Condition, Liquidity and Capital Resources During the periods presented, the Company's primary sources of capital have been short term loans and a revolving credit facility. At September 27, 2003 and December 28, 2002, the Company had working capital of $25,789,000 and $14,201,000, respectively. The increase in working capital as of September 27, 2003 is attributable to the revolving credit facility being 11 classified as long-term debt since the Company renewed and amended its existing revolving credit facility (see exhibit 10.25). The revolving credit facility expires on July 31, 2006. Cash provided by operating activities in 2003 was $3,780,000. Cash provided by net income before depreciation and amortization, inventory reductions, and higher accounts payable and accrued expenses was partially offset by increased accounts receivable and due from affiliates. Cash used in investing activities in 2003 was $2,344,000. The Company invested $281,000 in Shanghai General Bearing Company, Ltd., one of it's existing unconsolidated joint ventures in China. Cash used in investing activities in 2003 also includes $2,063,000 for capital expenditures compared to $2,748,000 in 2002. Cash used in financing activities in 2003 was $2,411,000. During 2003, net decreases in debt under its Revolving Credit Facility of $2,374,000, stock repurchases of $476,000 under the Company's Stock Repurchase Program ("the Program"), and $158,000 in payments under its capital lease facility were partially offset by a $597,000 increase in Notes Payable - Banks. The majority of the increase in Notes Payable - Banks was used to finance capital equipment purchases. At September 27, 2003, the Company had outstanding debt of $12,084,000 under its Revolving Credit Facility and had further availability of approximately $8.6 million. During 2003, the Company repurchased 125,408 shares of its common stock for a cost of $476,000 under its Program. The Company has purchased 410,228 shares for a cost of $1,472,000 since the inception of the Program on January 11, 2000. The Company believes that funds generated from continuing operations, capital lease financing and borrowing under the existing and any future revolving credit facilities will be sufficient to finance the Company's investment commitments, anticipated working capital and capital expenditure requirements for at least the next 24 months. The Company's operating cash flow could be adversely affected if there was a decrease in demand for the Company's products or if the Company was unable to continue to reduce its inventory. 12 The table and notes below describe the Company's contractual obligations related to its liquidity. (In Thousands)

Pursuant to requirements imposed in 1993 by OFAC, at the end of 2002 the Company also carried on its books a $619,000 net payable to General IKL Corp., an affiliate. The requirement arose out of sanctions imposed by the U.S. government on the countries comprising the former Republic of Yugoslavia, "freezing" certain assets in the United States. In February, 2003, OFAC "unfroze" assets affected by the sanctions and the Company reduced a significant portion of the IKL payable which the Company disputed. As a result, the Company now carries on its books a net payable in the amount of $180,000 to General IKL Corp. as of September 27, 2003. The Company uses letters of credit to support certain advance payments received from customers in the normal course of business. Inflation The effect of inflation on the Company has not been significant during the last two fiscal years. 13 Item 3. Quantitative and Qualitative Disclosure about Market Risk The Company is subject to market risk primarily associated with changes in interest rates and foreign currency exchange rates. In order to manage the volatility relating to interest rates, the Company has entered into an interest rate swap agreement. In order to manage the volatility relating to foreign currency exchange rates the Company denominates substantially all purchase and sale transactions in U.S. dollars. The Company does not anticipate any material changes in its primary market risk exposures in the near future. The Company does not execute transactions or hold derivative financial instruments for trading purposes. Interest Rate Risk The Company's primary market risks are fluctuations in interest rates and variability in interest rate spread relationships (i.e., prime to LIBOR spreads) on its bank debt and interest rate swap. As of September 27, 2003, the Company had $6,525,000 outstanding subject to an interest rate swap. This swap is used to convert floating rate debt relating to the Company's revolving credit agreement to fixed rate debt to reduce the Company's exposure to interest rate fluctuations. The net result was to substitute a fixed interest rate of 9.17% for the variable rate. The swap amortizes by $75,000 per month and terminates in December 2007. Under the interest rate environment during the thirty-nine weeks ended September 27, 2003, the Company's interest rate swap agreement resulted in additional expense of approximately $311,000. The following table provides information about the Company's interest rate swap agreement that is sensitive to changes in interest rates. The table presents average notional amounts and weighted average interest rates by fiscal year. Notional amounts are used to calculate the contractual cash flows to be exchanged under the swap contract.

The following table provides information about the Company's variable rate debt.

The Company's management believes that fluctuations in interest rates in the near term would not materially affect the Company's consolidated operating results, financial position or cash flows as the Company has limited risks related to interest rate fluctuations. 14 Foreign Currency Risk The Company does not use foreign currency forward exchange contracts or purchased currency options to hedge local currency cash flows or for trading purposes. All sales arrangements from domestic companies with international customers are denominated in U.S. dollars. Only a small fraction of the Company's purchases are denominated in foreign currency. The Company purchases approximately $2,000,000 of product monthly from its Chinese joint ventures, which use proceeds thereof, to satisfy locally incurred liabilities in Renminbi (RMB). Had there been an adverse 10% fluctuation between the exchange rate of the U.S. dollar and the RMB, it would have resulted in a potential loss of earnings of approximately $1,800,000 for the thirty-nine weeks ended September 27, 2003. However, based upon minimal historical volatility between the RMB and the U.S. dollar, the Company believes the likelihood of a significant potential loss in future earnings from changes in the foreign currency exchange rate to be minimal. Item 4. Controls and Procedures (a) An evaluation was performed under the supervision and with the participation of the Company's management, including its President and Controller, of the effectiveness of the Company's disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of September 27, 2003. Based on the evaluation, the Company's management, including the President and Controller, concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported as specified in Securities and Exchange Commission rules and forms. (b) There were no significant changes in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. 15 PART II Item 1. Legal Proceedings Arbitration proceeding against World Machinery Company ("World") The Company's 10-K dated April 9, 2003, for fiscal year ending December 28, 2002, disclosed an arbitration proceeding filed against World, (a wholly owned subsidiary of the Company and parent of the companies comprising the machine tool segment) by the Romanian Authority for Privatization and Management of State Ownership ("APAPS"), arising out of the contract under which World acquired a majority interest in World Machinery Works (formerly "Masini Unelte, Bacau, S.A.") from the Romanian government in 1998. On October 13, 2003, World and APAPS agreed to a 6 month suspension of the arbitration proceedings in order to explore settlement of the matter. While the Company is confident that it will prevail in the arbitration, an adverse ruling could be materially adverse to World's operations and financial condition. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 31.1 Certification of the President required by Rule 13a - 14(a) or 15d - 14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002. 31.2 Certification of the Controller required by Rule 13a - 14(a) or 15d - 14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002. 32. Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. 10.25 Amendment number 3 to the Credit Agreement between KeyBank National Association and the Company (b) Current reports on Form 8-K The Company did not file any reports on Form 8-K for the quarter ended September 27, 2003. 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 11, 2003. GENERAL BEARING CORPORATION ------------------------------------ (Registrant) /s/ David L. Gussack ------------------------------------ David L. Gussack President /s/ Rocky Cambrea ------------------------------------ Rocky Cambrea Controller 17

GENERAL BEARING CORP 10-Q