GSI
General Steel Holdings Announces Record Third Quarter 2007 Financial Results
Last update: 11/14/2007 4:01:00 PM
BEIJING, Nov 14, 2007 /Xinhua-PRNewswire-FirstCall via COMTEX/ -- General Steel Holdings, Inc. ("General Steel") (''The Company'') (GSI), one of China's leading non-state owned steel products producer; today announced its results for the third quarter which ended September 30, 2007.
Financial Highlights -- Revenue increased 636% to $345.4 million -- Net Income increased to $8.0 million, or $0.25 in EPS -- YTD Revenues reached $504 million, Net Income of $10.4 million and $0.33 in EPS Achievements -- Approved for listing on American Stock Exchange -- Received tax rate reduction for Longmen Joint Venture -- Longmen Joint Venture acquired controlling interest in two companies
''As the first full quarter of reporting for all three of our subsidiaries, we are indeed happy to deliver to our shareholders record revenue and profit results. This is a strong confirmation to us that our aggregation strategy in the China steel industry is yielding significant fruit'' state Henry Yu, CEO and Chairman of General Steel. He further commented, ''We were also pleased this quarter to receive qualification approval from the National Development Reform Commission (NDRC) for the ''Go West'' special tax treatment lowering our effective tax rate at the Longmen Joint Venture from 33% to 15%. A capstone event of the quarter was our approval to list on the American Stock Exchange. All-in-all, we are very pleased to offer our shareholders the results of this quarter.''
Third Quarter Financial Results
Note: This is the first full quarter of reporting for the Longmen Joint Venture and the Baotou Steel Pipe Joint Venture.
Net sales for the third quarter of 2007 increased 636% to $345.4 million compared to $47.0 million for the same quarter in 2006. The Company produced and shipped 814,456 tons in aggregate, representing a 641% increase compared to 109,912 tons during the third quarter of 2006. Cost of sales for the three months ended September 30, 2007 increased 604% to $319.5 million compared to $45.4 for the same period in 2006.
Quarterly gross profit for the third quarter of 2007 was $25.9 million, an increase of approximately 1566% or $24.3 million from $1.6 million for the same period last year. Gross margins increased to 7.5% from 3.3% for the third quarter of 2007 and 2006 respectively. Selling, general and administrative expenses were $6.8 million for the three months ended September 30, 2007, compared to $0.61 million for the same period of 2006. Net income for the 2007 third quarter increased significantly to $8.0 million, representing earnings per share of $.25, from $0.18 million in net income, or $.01 per share during the third quarter of 2006.
Nine Month Financial Results
Net sales increased approximately 420% to $504.2 million for nine months ended September 30, 2007, as compared to $97 million for the same period last year. Gross profit for the nine months ended September 30, 2007 was approximately $35.7 million, an increase of 692% or $31.2 million from $4.5 million for the same period last year. Gross profit margin increased to 7.1 percent from 4.7 percent for the nine months ended September 30, 2007 and 2006. Operating income for the nine months ended September 30, 2007 was $25.4 million, increased more than ten-fold from the $2.3 million reported in the same period of 2006. Net income was $10.4 million for the nine months that ended September 30, 2007, compared with $0.52 million in the same period last year, an increase of $9.9 million, or approximately 1899%. This equated to earnings of $.33 per share compared to $.02 per share for the first nine months of 2006.
"We have reached a true inflection point in our business, which is the culmination of hard work, prudent planning and solid execution on behalf of our entire organization. ''The underlying growth dynamics and fundamentals in the steel industry provide further confirmation that our business model, of finding solid cash constrained steel companies with strong management, is not only sustainable, but scalable. We have confidence in our ability to deliver significant growth on a go forward basis as we identify and capitalize on these accretive transactions and continue to derive the economic benefits of full integration on our completed joint ventures,'' Mr. Yu concluded.
Conference Call
Management will host a conference call to discuss its third quarter 2007 financial results at 9:00 a.m. EST on Thursday, November 15, 2007. To access the conference call, dial 800-860-2442, pass code for ALL callers: General Steel Earnings Call. This call is being webcast by MultiVu a PR Newswire Company and can be accessed by clicking on this link .
About General Steel Holdings, Inc.
AI
