General Steel Announces Preliminary First Quarter 2009 Results
2009-04-27 00:00

General Steel Announces Preliminary First Quarter 2009 Results

BEIJING, April 27, 2009 /PRNewswire-Asia-FirstCall via COMTEX News Network/ --
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 selected preliminary, unaudited results for the first quarter ended March 31, 2009.

Selected First Quarter 2009 Operating Results: -- General Steel expects revenues to be approximately US$320.0 million, an increase of 9.7% from US$291.6 million in the first quarter 2008 and an increase of 22.6% from US$261.1 million in the fourth quarter 2008 -- General Steel expects GAAP net income to be approximately US$7.0 million, compared to net income of US$2.2 million in the first quarter 2008 and a net loss of US$9.7 million in the fourth quarter 2008 -- General Steel expects non-GAAP(1) net income to be approximately US$2.9 million, compared to a net loss of US$0.5 million in the first quarter of 2008 and a net loss of US$17.7 million in the fourth quarter 2008 -- General Steel expects GAAP basic earnings per share to be approximately US$0.19, compared to US$0.06 in the first quarter 2008 and basic losses per share of US$0.27 in the fourth quarter 2008 -- General Steel expects non-GAAP basic earnings per share to be approximately US$0.08, compared to non-GAAP basic losses per share of US$0.01 in the first quarter 2008 and US$0.50 in the fourth quarter 2008 (1) Non-GAAP net income is calculated as GAAP net income before the impact of a derivative gain or loss. The derivative instrument gain or loss is a non-operating, non-cash gain or loss related to the convertible bond and related warrants issued in December 2007. Due to accounting rules, the derivative instrument value and associated gain or loss is linked to the Company's stock price.
"We are very pleased with our swing to profitability and the momentum we have built from the fourth quarter of last year to the first quarter of 2009," said Mr. Henry Yu, General Steel's chairman and chief executive officer. "Our strategic investment last year in two cost-efficient, state-of-the-art blast furnaces increased our capacity and ability to meet demand for construction-related steel created by stimulus- and earthquake-related projects in China's rural provinces. Couple this with our decision to sell-out of high priced inventory as quickly as possible to make way for lower-cost inventory, and our margins returned to positive territory. With utilization rates at healthy levels, higher regional steel prices in our addressable market and signs of an economic recovery in sight, we believe momentum has shifted and I'm confident in the company's ability to perform."

Scheduled Announcement of First Quarter 2009 Earnings

General Steel will report its financial results for the first quarter ended March 31, 2009 at a subsequent date and will provide earnings call dial-in information accordingly.

About General Steel Holdings, Inc.