BEIJING, May 15 /Xinhua-PRNewswire/ -- General Steel Holdings, Inc. (OTC
Bulletin Board: GSHO), China's first publicly traded steel manufacturer in the
US, reports financial results for its 2007 fiscal year first quarter ending
March 31, 2007. Management will host a conference call and webcast on
Wednesday, May 16, 2007, 9:00 a.m. Eastern time to discuss these results.
2007 First Quarter Financial Results
Sales Revenue increased 82% to $37.6 million in the first quarter of 2007
compared to $20.6 million in the same period of 2006. Shipment volume
increased by 64% to 87,786 tons in the first three months of 2007 compared to
53,547 tons in the first three months of 2006. Overall Cost of Sales was
$35.9 million in the first quarter of 2007, an 85% increase over the same
period in the previous year. Gross Profit increased 36% to $1.73 million in
the first three months of 2007 from $1.27 million in the same period of 2006.
Selling, General and Administrative expenses decreased 2.2% to $630,200 in the
first quarter of 2007 in contrast to $644,795 in the first three months of
2006. Net Income was up 88% to $474,865 in the first quarter of 2007 as
opposed to $252,408 in the same period of 2006. EPS rose to 0.015 from 0.008.
The primary reasons for the Net Income result include strong demand for
General Steel's main product, hot-rolled carbon steel sheets, well controlled
costs and improving margins.
"We are very pleased with our 2007 first quarter results. In 2006, we
invested heavily in improving and expanding our operations: We added 4 new
production lines, increased our capacity by 150,000 tons, brought on 16 new
distributors, and increased our processing efficiency by 20%. Now, in the
first quarter of 2007, we can really see that these investments are beginning
to gain traction and generate positive results," said Henry Yu, General Steel
Holdings, Inc. Chairman and CEO.
He further elaborated, "We continue to see strong demand for our product
and are clearly the dominate market leader in our niche. We saw the price of
steel rise in the first quarter, our costs are managed and under control and
our gross margin is improving. We are very excited about the remaining
quarters of the year."
Conference Call and Webcast
Management will host a conference call at 9:00 A.M. U.S. Eastern time on
Wednesday, May 16, 2007, to discuss results for the first quarter. Joining
Henry Yu, General Steel Holdings Chairman and Chief Executive Officer, on the
call will be John Chen, the company's Chief Financial Officer and Ross Warner,
a Director with the company. To participate in the conference call, please
dial the following number five to ten minutes prior to the scheduled
conference call time: 1-800-860-2442. The pass code for the call is "General
Steel."
This conference call will be broadcast live over the Internet and can be
accessed by all interested parties through the following URL
http://www.videonewswire.com/event.asp?id=39795. To listen to the live
webcast, go to the URL at least fifteen minutes prior to the start of the call
to register, download, and install any necessary audio software. For those
unable to participate during the live broadcast, a replay will be available
shortly after the call on General Steel Holdings' website
http://www.gshi-steel.com for 90 days.
About General Steel Holdings, Inc.
General Steel Holdings, Inc. through its subsidiary, Tianjin Daqiuzhuang
Metal Sheet Co., Ltd., is a leading manufacturer of high quality hot-rolled
steel sheets used in the construction of small agricultural and specialty
vehicles. Since 1988, it has expanded its operations to ten production lines
capable of processing 400,000 tons of 0.7-2.0 mm hot-rolled carbon steel
sheets per year. It is now the largest producer in its product category in
China. For more information, visit www.gshi-steel.com.
Information Regarding 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. Such forward-looking statements may be affected
by inaccurate assumptions or by known or unknown risks or uncertainties.
Actual results may vary materially from those expressed or implied by the
statements herein. For factors that could cause actual results to vary,
perhaps materially, from these forward-looking statements, please refer to the
Company's Form 10-K, filed with the Securities and Exchange Commission, and
other subsequent filings. 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.
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2007 AND DECEMBER 31, 2006
ASSETS
March 31, December 31,
2007 2006
(Unaudited)
CURRENT ASSETS:
Cash $ 4,797,815 $ 6,831,549
Restricted cash 4,274,434 4,231,523
Accounts receivable, net of allowance
for doubtful accounts of $138,522
and $137,132 as of March 31, 2007
and December 31, 2006, respectively 11,348,292 17,095,718
Notes receivable 2,066,340 537,946
Other receivables 188,256 268,784
Other receivables - related parties 517,400 850,400
Inventories 14,382,854 12,489,290
Advances on inventory purchases 13,725,067 2,318,344
Prepaid expenses - current 46,620 46,152
Total current assets 51,347,078 44,669,706
PLANT AND EQUIPMENT, net 26,439,964 26,606,594
OTHER ASSETS:
Prepaid expenses - non current 872,009 740,868
Intangible assets - land use right,
net of accumulated amortization
1,745,923 1,804,440
Total other assets 2,617,932 2,545,308
Total assets $80,404,974 $73,821,608
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $4,991,010 $3,001,775
Short term loans - bank 31,886,785 30,284,686
Short term notes payable 8,236,200 8,153,520
Other payables 81,198 355,142
Accrued liabilities 1,032,995 1,064,012
Customer deposits 2,742,278 1,093,602
Deposits due to sales representatives 1,658,895 2,051,200
Taxes payable 6,232,648 5,391,602
Shares subject to mandatory redemption 1,950,000 2,179,779
Total current liabilities 58,812,009 53,575,318
MINORITY INTEREST 6,465,791 6,185,797
SHAREHOLDERS' EQUITY:
Common Stock, $0.001 par value,
75,000,000 shares authorized,
32,444,665 and 32,426,665 shares issued
and outstanding (including 1,000,000 and
1,176,665 redeemable shares) as of
March 31, 2007 and December 31, 2006,
respectively 31,445 31,250
Paid-in-capital 7,239,428 6,871,358
Retained earnings 5,449,052 4,974,187
Statutory reserves 1,107,010 1,107,010
Accumulated other comprehensive income 1,300,239 1,076,688
Total shareholders' equity 15,127,174 14,060,493
Total liabilities and shareholders'
equity $80,404,974 $73,821,608
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
(Unaudited)
2007 2006
(Restated)
REVENUES $37,607,971 $20,642,503
COST OF SALES 35,874,966 19,371,587
GROSS PROFIT 1,733,005 1,270,916
SELLING, GENERAL ADMINISTRATIVE EXPENSES 630,200 644,795
INCOME FROM OPERATIONS 1,102,805 626,121
OTHER EXPENSE, NET 220,676 160,139
INCOME BEFORE PROVISION FOR INCOME TAXES 882,129 465,982
AND MINORITY INTEREST
PROVISION FOR INCOME TAXES 127,270 -
NET INCOME BEFORE MINORITY INTEREST 754,859 465,982
LESS MINORITY INTEREST 279,994 213,574
NET INCOME 474,865 252,408
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustments 223,551 121,405
COMPREHENSIVE INCOME $698,416 $373,813
WEIGHTED AVERAGE NUMBER OF SHARES 31,320,251 31,250,000
EARNING PER SHARE, BASIC AND DILUTED $0.015 $0.008
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
Common stock Paid-in
Shares Par value capital
BALANCE, January 1, 2006 31,250,000 $ 31,250 $ 6,871,358
Net income
Foreign currency
translation adjustments
BALANCE, March 31, 2006,
unaudited and restated 31,250,000 $ 31,250 $ 6,871,358
Net income
Adjustment to statutory
reserve
Foreign currency translation
adjustments
BALANCE, December 31, 2006 31,250,000 $ 31,250 $ 6,871,358
Net income
Common stock issued for
conversion of redeemable
stock, $1.95/share 176,665 177 344,328
Common stock issued for
service, $1.32/share 18,000 18 23,742
Foreign currency translation
adjustments
BALANCE, March 31, 2007,
unaudited 31,444,665 $ 31,445 $ 7,239,428
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
Retained earnings Accumulated
other
Statutory comprehensive
reserves Unrestricted income Totals
BALANCE,
January 1, 2006 $ 840,753 $ 4,207,236 $ 399,188 $ 12,349,785
Net income 252,408 252,408
Foreign currency
translation
121,405 121,405
BALANCE, March 31,
2006, unaudited
and restated 840,753 $ 4,459,644 $ 520,593 $ 12,723,598
Net income 780,800 780,800
Adjustment to
statutory reserve 266,257 (266,257)
Foreign currency
translation
adjustments
556,095 556,095
BALANCE, December 31,
2006 $ 1,107,010 $ 4,974,187 $ 1,076,688 $ 14,060,493
Net income 474,865 474,865
Common stock
issued for
conversion of
redeemable
stock, $1.95/share 344,505
Common stock
issued for
service,
$1.32/share 23,760
Foreign currency translation
adjustments
223,551 223,551
BALANCE, March 31,
2007, unaudited $ 1,107,010 $ 5,449,052 $ 1,300,239 $ 15,127,17
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
(Unaudited)
2007 2006
(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 474,865 $ 252,408
Adjustments to reconcile net income to
cash used in operating activities:
Minority interest 279,994 213,574
Depreciation 561,709 273,775
Amortization 76,524 73,718
Loss on disposal of equipment - 27,845
Stock issued for services 23,760 -
Interest expense accrued on
mandatory redeemable stock 114,726 114,724
(Increase) decrease in assets:
Accounts receivable 5,898,381 (1,577,243)
Other receivables 82,939 61,389
Other receivables - related parties 333,000 -
Inventories (1,760,231) (5,227,041)
Advances on inventory purchases (11,340,142) (3,598,499)
Prepaid expenses - current (123,161) (162,611)
Increase (decrease) in liabilities:
Accounts payable 1,951,381 (60,529)
Other payables (275,480) 90,567
Other payable - related party - (650,000)
Accrued liabilities (41,648) 279,506
Customer deposits 1,631,391 1,282,375
Taxes payable 783,398 260,995
Net cash used in operating
activities (1,328,594) (8,345,047)
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash (2) (18,968)
Notes receivable (1,517,176) (989,269)
Advances on equipment purchases - 1,055,547
Deposits due to sales representatives (411,542) 310,700
Purchase of equipment (126,928) (3,382,390)
Net cash used in investing activities (2,055,648) (3,024,380)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on short term loans - bank 8,785,581 7,220,668
Payments on short term loans - bank (7,495,481) (2,361,320)
Borrowings on short term notes payable 1,161,090 621,400
Payments on short term notes payable (1,161,090) (621,400)
Net cash provided by financing activities 1,290,100 4,859,348
EFFECTS OF EXCHANGE RATE CHANGE IN CASH 60,407 35,707
DECREASE IN CASH (2,033,735) (6,474,372)
CASH, beginning of period 6,831,550 8,648,373
CASH, end of period $ 4,797,815 $ 2,174,001
