General Steel Holdings, Inc. (GSI)

[eastunder]

6/18/13 General Steel Files 2012 Annual Report on Form 10-K

Company Reports Third, Fourth Quarter and Full Year 2012 Financial Results
Achieves Positive Gross Profits for Full Year 2012

PR NewswirePress Release: General Steel Holdings, Inc. – Tue, Jun 18, 2013 8:00 AM EDT...

http://finance.yahoo.com/news/general-steel-files-2012-annual-120000680.html

BEIJING, June 18, 2013 /PRNewswire/ -- General Steel Holdings, Inc. ("General Steel" or the "Company") (GSI), a leading non-state-owned steel producer in China, today announced financial results for the third quarter ended September 30, 2012, fourth quarter of 2012 and full-year ended December 31, 2012. In conjunction with this announcement, the Company has filed the corresponding Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 and Annual Report on Form 10-K for year ended 2012 ("2012 Annual Report") with the U.S. Securities & Exchange Commission (the "SEC"). Upon the filing of the 2012 Annual Report, the Company has regained compliance with the New York Stock Exchange's ("NYSE") continued listing standards relating to the filing of its 2012 Annual Report.

"We are pleased to have completed the filing of our 2012 Annual Report, and thereby regaining compliance with the NYSE's continued listing requirement that we file our Annual Report," said Henry Yu, Chairman and Chief Executive Officer of General Steel. "Again, I would like to thank our finance team for their diligent efforts in completing these filings and we look forward to soon updating the investment community on our business strategy and development efforts for 2013 and beyond."

"According to the China Iron and Steel Association, 2012 was the most difficult year in the last decade for China's steel industry. Due to the economic slowdown and an oversupply of inventory, steel prices declined sharply in 2012, and, as a result, more Chinese steel companies suffered net losses in 2012[1]. Given the challenging macro environment, we strategically focused on optimizing and upgrading our production capability and on strengthening our market competitiveness via our geographic advantages in Western China and through cooperation with the government and state-owned enterprises. Our efforts helped us achieve positive gross profits and narrow net losses for the year. Looking ahead, we remain focused on further strengthening our geographic advantages in Western China, while forging ahead with upgrading our production capability and improving operating efficiency."

[1] Source: Press release distributed by China Iron and Steel Association on February 1, 2013.

Full Year 2012 Financial Review

•Revenue decreased 19.6% year-over-year to $2.9 billion, from $3.6 billion in 2011, mainly due to decreased sales volumes as well as a decrease in average selling price of rebar products.
•Sales volume totaled approximately 5.3 million metric tons, compared with 6.2 million metric tons in 2011.
•Gross profit totaled $32.1 million, or 1.1% of revenue, compared with gross loss of $(88.2) million, or gross margin of negative (2.5%) in 2011.
•Operating loss for the year improved to $(73.0) million, compared with an operating loss of $(180.0) million in 2011.
•Net loss attributable to the Company narrowed to $(152.7) million, or $(2.78) per diluted share based on 54.9 million weighted average shares outstanding, compared with a net loss of $(177.2) million, or $(3.24) per diluted share based on 54.8 million weighted average shares outstanding in 2011.

The decreased net loss in 2012 was primarily attributable to improved gross profit, a decrease in operating loss, offset by an increase of $70.5 million in other expenses as compared to the same period of 2012. The increase in other expenses are mainly due to increased finance expanse, which include an increase of $15.4 million in interest expense on capital lease, and $45.9 million in interest expense on bank borrowings, related parties borrowings, and discounted notes receivables.

Third Quarter 2012 Financial Review

•Revenue decreased 28.7% year-over-year to $711.4 million, from $998.2 million in the third quarter of 2011.
•Sales volume totaled approximately 1.4 million metric tons, down from 1.7 million metric tons in the third quarter of 2011.
•Gross loss was $(13.6) million, or negative (1.9%) of revenue, compared with gross profit of $34.1 million, or 3.4% of revenue in the third quarter of 2011.
•Operating loss for the quarter was $(36.4) million, compared with an operating income of $9.7 million in the third quarter of 2011.
•Net loss attributable to the Company was $(41.6) million, or $(0.76) per diluted share based on 54.5 million weighted average shares outstanding, compared with a net loss of $(13.8) million, or $(0.25) per diluted share based on 55.2 million weighted average shares outstanding in the third quarter of 2011.

Fourth Quarter 2012 Financial Review

•Revenue decreased 8.8% year-over-year to $723.4 million, from $793.5 million in the fourth quarter of 2011.
•Sales volume totaled approximately 1.4 million metric tons, compared with 1.6 million metric tons in the fourth quarter of 2011.
•Gross profit totaled $12.0 million, or 1.7% of revenue, compared with gross loss of $(150.7) million, or negative (19.0%) of revenue in the fourth quarter of 2011.
•Operating loss for the quarter decreased to $(31.5) million, compared with $(176.6) million in the fourth quarter of 2011.
•Net loss attributable to the Company was $(49.9) million, or $(0.91) per diluted share based on 54.9 million weighted average shares outstanding, compared with a net loss of $(131.5) million, or $(2.38) per diluted share based on 55.4 million weighted average shares outstanding in the fourth quarter of 2011.

Balance Sheet

As of December 31, 2012, the Company had cash and restricted cash of approximately $369.9 million, compared to $518.2 million as of December 31, 2011. The Company had an inventory balance of approximately $212.7 million as of December 31, 2012, compared to $297.7 million as of December 31, 2011. As of December 31, 2012, the Company had total liabilities of approximately $3.1 billion.

About General Steel Holdings, Inc.

General Steel Holdings, Inc., headquartered in Beijing, China, produces a variety of steel products including rebar, high-speed wire and spiral-weld pipe. The Company has operations in China's Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin municipality with seven million metric tons of crude steel production capacity under management. For more information, please visit www.gshi-steel.com.