BEIJING, February 1, 2013 /PRNewswire/ -- General Steel Holdings, Inc. ("General Steel" or the "Company") (NYSE: GSI), one of China's leading non-state-owned producers of steel products and aggregators of domestic steel companies, today announced financial results for the second quarter ended June 30, 2011 and the third quarter ended September 30, 2011. In conjunction with this announcement, the Company has filed the corresponding Quarterly Reports on Form 10-Q with the U.S. Securities & Exchange Commission ("SEC").
"The completion of these financial reports marks an important step forward for General Steel. Our finance team and audit partners continue to work diligently to complete the additional quarterly and annual filings to bring the Company current in its reporting obligations and to regain compliance with NYSE continued listing requirements," said Henry Yu, Chairman and Chief Executive Officer of General Steel. "We have made a great deal of operational progress. I believe that our business is markedly stronger as a result of favorable trends in our core market of Western China, as well as internal measures we have taken to improve our business at the manufacturing level and elsewhere. I would like to thank our team for their tireless efforts to complete these filings and our shareholders for their continued support of the Company."
General Steel is currently preparing its Annual Report on Form 10-K for the year ended December 31, 2011 and expects to file it around February 15, 2013. General Steel is also preparing its Quarterly Reports on Form 10-Q for the first, second and third quarters of 2012, and plans to file these reports with the SEC as soon as practicable.
Second Quarter 2011 Financial Summary
Third Quarter 2011 Financial Summary
Balance Sheet
As of September 30, 2011, General Steel had cash and restricted cash of approximately $282.4 million, compared to $263.1 million as of December 31, 2010. The Company had an inventory balance of approximately $432.1 million as of September 30, 2011 compared to $453.6 million as of December 31, 2010. As of September 30, 2011, the Company had total liabilities of approximately $2.8 billion.
About General Steel Holdings, Inc.
General Steel Holdings, Inc., (NYSE: GSI), headquartered in Beijing, China, operates a diverse portfolio of Chinese steel companies. With 7 million metric tons of crude steel production capacity under management, its subsidiaries serve various industries and produce a variety of steel products including rebar, high-speed wire and spiral-weld pipe. General Steel Holdings, Inc. has steel operations in Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin municipality. For more information, please visit www.gshi-steel.com.
To be added to the General Steel email list to receive Company news, please send your request to generalsteel@tpg-ir.com.
Forward-Looking Statements
This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs about future events and financial, political and social trends and assumptions it has made based on information currently available to it. The Company cannot assure that any expectations, forecasts or assumptions made by management in preparing these forward-looking statements will prove accurate, or that any projections will be realized. Actual results could differ materially from those projected in the forward-looking statements as a result of inaccurate assumptions or a number of risks and uncertainties. These risks and uncertainties are set forth in the Company's filings under the Securities Act of 1933 and the Securities Exchange Act of 1934 under "Risk Factors" and elsewhere, and include: (a) those risks and uncertainties related to general economic conditions in China, including regulatory factors that may affect such economic conditions; (b) whether the Company is able to manage its planned growth efficiently and operate profitable operations, including whether its management will be able to identify, hire, train, retain, motivate and manage required personnel or that management will be able to successfully manage and exploit existing and potential market opportunities; (c) whether the Company is able to generate sufficient revenues or obtain financing to sustain and grow its operations; (d) whether the Company is able to successfully fulfill our primary requirements for cash; and (e) other risks, including those disclosed in the Company's Form 10-K, filed with the SEC. Forward-looking statements contained herein speak only as of the date of this release. The Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether to reflect new information, future events or otherwise.
Contact Us
In China:
Jenny Wang
General Steel Holdings, Inc.
Tel: +86-10-5775-7691
Email: jenny.wang@gshi-steel.com
In the US:
Joyce Sung
General Steel Holdings, Inc.
Tel: (347) 534-1435
Email: joyce.sung@gshi-steel.com
The Piacente Group, Inc.
Investor Relations
Brandi Floberg or Lee Roth
Tel: (212) 481-2050
Email: generalsteel@tpg-ir.com
GENERAL STEEL HOLDINGS INC. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(UNAUDITED) | |||||||
(In thousands) | |||||||
ASSETS | |||||||
September 30, | December 31, | ||||||
2011 | 2010 | ||||||
CURRENT ASSETS: | |||||||
Cash | $ | 91,713 | $ | 65,271 | |||
Restricted cash | 190,681 | 197,797 | |||||
Notes receivable | 30,907 | 49,147 | |||||
Restricted notes receivable | 516,662 | 240,298 | |||||
Accounts receivable, net | 38,362 | 18,500 | |||||
Accounts receivable - related parties | 10,594 | 4,160 | |||||
Other receivables, net | 20,132 | 11,150 | |||||
Other receivables - related parties | 87,748 | 10,938 | |||||
Inventories | 432,144 | 453,636 | |||||
Advances on inventory purchase | 108,031 | 24,577 | |||||
Advances on inventory purchase - related parties | 79,893 | 6,187 | |||||
Prepaid expense | 898 | 5,018 | |||||
Prepaid value added tax | 15,170 | 37,323 | |||||
Short term investment | 2,660 | - | |||||
Deferred tax assets | 166 | 15,301 | |||||
TOTAL CURRENT ASSETS | 1,625,761 | 1,139,303 | |||||
PLANT AND EQUIPMENT, net | 1,213,799 | 602,612 | |||||
OTHER ASSETS: | |||||||
Advances on equipment purchase | 11,268 | 14,898 | |||||
Investment in unconsolidated subsidiaries | 10,522 | 17,456 | |||||
Long-term deferred expense | 679 | 1,439 | |||||
Intangible assets, net of accumulated amortization | 23,824 | 23,672 | |||||
TOTAL OTHER ASSETS | 46,293 | 57,465 | |||||
TOTAL ASSETS | $ | 2,885,853 | $ | 1,799,380 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Short term notes payable | $ | 554,931 | $ | 480,152 | |||
Accounts payable | 404,960 | 241,367 | |||||
Accounts payable - related parties | 114,309 | 79,694 | |||||
Short term loans - bank | 402,428 | 285,198 | |||||
Short term loans - others | 227,198 | 127,712 | |||||
Short term loans - related parties | 15,650 | 14,548 | |||||
Other payables and accrued liabilities | 37,962 | 30,087 | |||||
Other payable - related parties | 14,905 | 18,214 | |||||
Customer deposit | 192,153 | 133,464 | |||||
Customer deposit - related parties | 54,385 | 54,922 | |||||
Deposit due to sales representatives | 21,488 | 52,079 | |||||
Taxes payable | 12,020 | 6,237 | |||||
Deferred lease income, current | 2,091 | 1,971 | |||||
Capital lease obligations, current | 18,505 | - | |||||
TOTAL CURRENT LIABILITIES | 2,072,985 | 1,525,645 | |||||
NON-CURRENT LIABILITIES: | |||||||
Long-term loans - related party | 107,695 | 91,020 | |||||
Deferred lease income, noncurrent | 76,358 | 55,620 | |||||
Capital lease obligations, noncurrent | 281,510 | - | |||||
Profit sharing liability, noncurrent | 296,723 | - | |||||
TOTAL NON-CURRENT LIABILITIES | 762,286 | 146,640 | |||||
DERIVATIVE LIABILITIES | 48 | 5,573 | |||||
TOTAL LIABILITIES | 2,835,319 | 1,677,858 | |||||
COMMITMENT AND CONTINGENCIES | |||||||
EQUITY: | |||||||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares | |||||||
issued and outstanding as of September 30, 2011 and December 31, 2010 | 3 | 3 | |||||
Common Stock, $0.001 par value, 200,000,000 shares authorized, 56,435,838 | |||||||
and 54,678,803 issued, 55,344,860 and 54,522,973 outstanding as of | |||||||
September 30, 2011 and December 31, 2010, respectively | 55 | 55 | |||||
Treasury stock, at cost, 1,090,978 and 316,760 shares as of September 30, 2011 | |||||||
and December 31, 2010, respectively. | (2,795) | (871) | |||||
Paid-in-capital | 107,698 | 104,970 | |||||
Statutory reserves | 6,475 | 6,202 | |||||
Accumulated deficits | (97,455) | (51,793) | |||||
Accumulated other comprehensive income | 13,071 | 10,987 | |||||
TOTAL GENERAL STEEL HOLDINGS, INC. EQUITY | 27,052 | 69,553 | |||||
NONCONTROLLING INTERESTS | 23,482 | 51,969 | |||||
TOTAL EQUITY | 50,534 | 121,522 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 2,885,853 | $ | 1,799,380 | |||
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010 | ||||||||
(UNAUDITED) | ||||||||
(In thousands, except per share data) | ||||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||
2011 | 2010 | 2011 | 2010 | |||||
SALES | $ | 814,599 | $ | 383,173 | $ | 1,316,078 | $ | 700,801 |
SALES - RELATED PARTIES | 247,132 | 118,506 | 456,117 | 253,901 | ||||
TOTAL SALES | 1,061,731 | 501,679 | 1,772,195 | 954,702 | ||||
COST OF GOODS SOLD | 793,298 | 369,433 | 1,291,213 | 686,996 | ||||
COST OF GOODS SOLD - RELATED PARTIES | 245,093 | 124,882 | 452,593 | 254,596 | ||||
TOTAL COST OF GOODS SOLD | 1,038,391 | 494,315 | 1,743,806 | 941,592 | ||||
GROSS PROFIT | 23,340 | 7,364 | 28,389 | 13,110 | ||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 27,033 | 13,677 | 41,534 | 25,813 | ||||
LOSS FROM OPERATIONS | (3,693) | (6,313) | (13,145) | (12,703) | ||||
OTHER INCOME (EXPENSE) | ||||||||
Interest income | 816 | 617 | 1,879 | 1,737 | ||||
Finance/interest expense | (23,117) | (16,464) | (37,236) | (27,427) | ||||
Change in fair value of derivative liabilities | 1,839 | 10,729 | 5,391 | 14,668 | ||||
Gain on debt settlement | 3,430 | - | 3,430 | - | ||||
Gain (loss) on disposal of equipments | 387 | (227) | (10) | (343) | ||||
Income from equity investments | 1,856 | 3,074 | 3,511 | 3,229 | ||||
Foreign currency transaction gain | 1,030 | - | 1,649 | - | ||||
Lease income | 512 | 184 | 964 | 320 | ||||
Other non-operating income (expense), net | (455) | 855 | (150) | 1,014 | ||||
Other expense, net | (13,702) | (1,232) | (20,572) | (6,802) | ||||
LOSS BEFORE PROVISION FOR INCOME TAXES | ||||||||
AND NONCONTROLLING INTEREST | (17,395) | (7,545) | (33,717) | (19,505) | ||||
PROVISION FOR INCOME TAXES | ||||||||
Current | - | 170 | 207 | 584 | ||||
Deferred | 18,198 | (2,973) | 15,240 | (5,324) | ||||
Provision (benefit) for income taxes | 18,198 | (2,803) | 15,447 | (4,740) | ||||
NET LOSS | (35,593) | (4,742) | (49,164) | (14,765) | ||||
Less: Net loss attributable to noncontrolling interest | (12,678) | (2,738) | (17,332) | (7,149) | ||||
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC. | $ | (22,915) | $ | (2,004) | $ | (31,832) | $ | (7,616) |
NET LOSS | $ | (35,593) | $ | (4,742) | $ | (49,164) | $ | (14,765) |
OTHER COMPREHENSIVE LOSS | ||||||||
Foreign currency translation adjustments | (287) | 312 | 1,400 | 151 | ||||
COMPREHENSIVE LOSS | (35,880) | (4,430) | (47,764) | (14,614) | ||||
Less: Comprehensive loss attributable to noncontrolling interest | (12,858) | (2,740) | (17,270) | (7,032) | ||||
COMPREHENSIVE LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC. | $ | (23,022) | $ | (1,690) | $ | (30,494) | $ | (7,582) |
WEIGHTED AVERAGE NUMBER OF SHARES | ||||||||
Basic and Diluted | 54,318 | 52,112 | 54,233 | 51,883 | ||||
LOSS PER SHARE | ||||||||
Basic and Diluted | $ | (0.42) | $ | (0.04) | $ | (0.59) | $ | (0.15) |
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010 | ||||||||
(UNAUDITED) | ||||||||
(In thousands) | ||||||||
For the three months ended | For the nine months ended | |||||||
September 30, | September 30, | |||||||
2011 | 2010 | 2011 | 2010 | |||||
SALES | $ | 662,437 | $ | 340,703 | $ | 1,978,515 | $ | 1,041,504 |
SALES - RELATED PARTIES | 335,724 | 119,574 | 791,841 | 373,475 | ||||
TOTAL SALES | 998,161 | 460,277 | 2,770,356 | 1,414,979 | ||||
COST OF GOODS SOLD | 639,239 | 334,856 | 1,930,452 | 1,021,852 | ||||
COST OF GOODS SOLD - RELATED PARTIES | 324,872 | 111,832 | 777,465 | 366,428 | ||||
TOTAL COST OF GOODS SOLD | 964,111 | 446,688 | 2,707,917 | 1,388,280 | ||||
GROSS PROFIT | 34,050 | 13,589 | 62,439 | 26,699 | ||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 24,309 | 9,560 | 65,843 | 35,373 | ||||
INCOME (LOSS) FROM OPERATIONS | 9,741 | 4,029 | (3,404) | (8,674) | ||||
OTHER INCOME (EXPENSE) | ||||||||
Interest income | 1,201 | 1,739 | 3,080 | 3,476 | ||||
Finance/interest expense | (35,081) | (10,190) | (72,317) | (37,617) | ||||
Change in fair value of derivative liabilities | 135 | (1,089) | 5,526 | 13,579 | ||||
Gain on debt settlement | - | - | 3,430 | - | ||||
Gain (loss) on disposal of equipment | 689 | (2,781) | 679 | (3,124) | ||||
Government grant | - | 1,381 | - | 1,381 | ||||
Income from equity investments | 790 | 838 | 4,301 | 4,067 | ||||
Foreign currency transaction gain | 1,271 | - | 2,920 | - | ||||
Lease income | 525 | 277 | 1,489 | 598 | ||||
Other non-operating expense, net | (1,047) | 1,141 | (1,197) | 2,154 | ||||
Other expense, net | (31,517) | (8,684) | (52,089) | (15,486) | ||||
LOSS BEFORE PROVISION FOR INCOME TAXES | ||||||||
AND NONCONTROLLING INTEREST | (21,776) | (4,655) | (55,493) | (24,160) | ||||
PROVISION FOR INCOME TAXES | ||||||||
Current | 410 | 5,332 | 617 | 860 | ||||
Deferred | 144 | (5,676) | 15,384 | (5,944) | ||||
Provision (benefit) for income taxes | 554 | (344) | 16,001 | (5,084) | ||||
NET LOSS | (22,330) | (4,311) | (71,494) | (19,076) | ||||
Less: Net loss attributable to noncontrolling interest | (8,500) | (527) | (25,832) | (7,676) | ||||
NET LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC. | $ | (13,830) | $ | (3,784) | $ | (45,662) | $ | (11,400) |
NET LOSS | $ | (22,330) | $ | (4,311) | $ | (71,494) | $ | (19,076) |
OTHER COMPREHENSIVE LOSS | ||||||||
Foreign currency translation adjustments | 999 | 3,295 | 2,399 | 3,446 | ||||
COMPREHENSIVE LOSS | (21,331) | (1,016) | (69,095) | (15,630) | ||||
Less: Comprehensive loss income attributable to noncontrolling interest | (8,247) | 553 | (25,517) | (6,479) | ||||
COMPREHENSIVE LOSS ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC. | $ | (13,084) | $ | (1,569) | $ | (43,578) | $ | (9,151) |
WEIGHTED AVERAGE NUMBER OF SHARES | ||||||||
Basic and Diluted | 55,166 | 53,941 | 54,547 | 52,577 | ||||
LOSS PER SHARE | ||||||||
Basic and Diluted | $ | (0.25) | $ | (0.07) | $ | (0.84) | $ | (0.22) |
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010 | ||||||||
(UNAUDITED) | ||||||||
(In thousands) | ||||||||
Nine months ended September 30, | ||||||||
2011 | 2010 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (71,494) | $ | (19,076) | ||||
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 40,385 | 31,175 | ||||||
Impairment of plant and equipment | 5,412 | 1,737 | ||||||
Bad debt allowance | 127 | - | ||||||
Stock issued for services and compensation | 1,288 | 2,018 | ||||||
Make whole shares interest expense on notes conversion | - | 1,130 | ||||||
Change in fair value of derivative liabilities | (5,526) | (13,579) | ||||||
Gain on stock issued as loan repayment | (3,430) | - | ||||||
(Gain) loss on disposal of equipment | (679) | 3,124 | ||||||
Amortization of deferred note issuance cost and discount on convertible notes | - | 17 | ||||||
Amortization of deferred financing cost on capital lease | 17,282 | - | ||||||
Income from equity investments | (3,887) | (3,983) | ||||||
Deferred tax assets | 15,384 | (5,885) | ||||||
Deferred lease income | 5,286 | 2,265 | ||||||
Foreign currency transaction gain | (2,920) | - | ||||||
Changes in operating assets and liabilities | ||||||||
Notes receivable | 19,497 | (36,702) | ||||||
Notes receivable - restricted | (264,708) | (12,530) | ||||||
Accounts receivable | (18,986) | (12,190) | ||||||
Accounts receivable - related parties | (6,207) | - | ||||||
Other receivables | (8,626) | 1,323 | ||||||
Other receivables - related parties | (50,311) | (26,404) | ||||||
Inventories | 35,305 | (44,861) | ||||||
Advances on inventory purchases | (81,430) | (12,921) | ||||||
Advances on inventory purchases - related parties | (72,402) | (52,665) | ||||||
Prepaid expense | 4,214 | - | ||||||
Long-term deferred expense | 793 | - | ||||||
Prepaid value added tax | 22,982 | - | ||||||
Accounts payable | 153,604 | 12,513 | ||||||
Accounts payable - related parties | 31,609 | 30,294 | ||||||
Other payables and accrued liabilities | 6,819 | (3,542) | ||||||
Other payables - related parties | (3,827) | 18,510 | ||||||
Customer deposits | 53,645 | (19,283) | ||||||
Customer deposits - related parties | (2,241) | 43,045 | ||||||
Taxes payable | 5,501 | 811 | ||||||
Net cash used in operating activities | (177,541) | (115,659) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Restricted cash | 13,173 | 9,281 | ||||||
Acquired long term investment | - | (1,277) | ||||||
Proceeds from disposal of long-term investment | - | 3,678 | ||||||
Dividend receivable | - | 938 | ||||||
Cash made to short term investment | (2,620) | - | ||||||
Cash proceeds from sales of equipment | 1,271 | 306 | ||||||
Advance on equipment purchases | - | (12,698) | ||||||
Equipment purchase and intangible assets | (54,494) | (56,906) | ||||||
Net cash used in investing activities | (42,670) | (56,678) | ||||||
CASH FLOWS FINANCING ACTIVITIES: | ||||||||
Capital contributed by noncontrolling interest | - | 1,177 | ||||||
Dividend made to dividend distribution | - | (3,835) | ||||||
Payments made for treasury stock acquired | (1,925) | - | ||||||
Borrowings on short term loans - bank | 446,532 | 224,425 | ||||||
Payments on short term loans - bank | (337,038) | (198,770) | ||||||
Borrowings on short term loan - others | 245,381 | 128,115 | ||||||
Payments on short term loans - others | (151,375) | (137,413) | ||||||
Borrowings on short term loan - related parties | 15,414 | 91,202 | ||||||
Payments on short term loans - related parties | (9,912) | (11,783) | ||||||
Borrowings on short term notes payable | 859,561 | 573,413 | ||||||
Payments on short term notes payable | (800,873) | (531,850) | ||||||
Deposits due to sales representatives | (31,753) | (4,028) | ||||||
Borrowings on long term loans - related parties | 13,587 | - | ||||||
Net cash provided by financing activities | 247,599 | 130,653 | ||||||
EFFECTS OF EXCHANGE RATE CHANGE IN CASH | (946) | 1,344 | ||||||
INCREASE (DECREASE) IN CASH | 26,442 | (40,340) | ||||||
CASH, beginning of period | 65,271 | 82,118 | ||||||
CASH, end of period | $ | 91,713 | $ | 41,778 | ||||
