UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): May 15, 2014
General Steel Holdings, Inc.
(Exact name of registrant as specified
in its charter)
Nevada |
|
001-33717 |
|
41-2079252 |
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification Number) |
Level 21, Tower B, Jia Ming Center
No. 27 Dong San Huan North Road
Chaoyang District, Beijing, China 100020
(Address of principal
executive offices)
Registrant’s telephone number,
including area code:
+ 86 (10) 57757691
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On May 15, 2014, General Steel Holdings, Inc. (the “Company”)
issued a press release relating to its financial results for its first quarter ended March 31, 2014. The press release contains
statements intended as “forward-looking statements,” all of which are subject to the cautionary statement about forward-looking
statements set forth therein. A copy of that press release is furnished as Exhibit 99.1 hereto and incorporated into this Item
2.02 by reference.
In accordance with General Instruction B.2 of Form 8-K, the
information included or incorporated in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes
of Section 18 of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall such
information and exhibit be deemed incorporated by reference in any filing under the United States Securities Act of 1933, as amended
(the “Securities Act”), except as shall be expressly set forth by specific reference in such a filing.
ITEM 7.01 REGULATION FD DISCLOSURE.
On May 15, 2014, in connection with its conference call pertaining
to its financial results for its first quarter ended March 31, 2014, the Company posted a slide show presentation on its website
at http://www.gshi-steel.com, which is also furnished as Exhibit 99.2 hereto and incorporated into this Item 7.01 by reference.
In accordance with General Instruction B.2 of Form 8-K, the
information included or incorporated in this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes
of Section 18 of the Exchange Act, nor shall such information and exhibit be deemed incorporated by reference in any filing under
the Securities Act, except as shall be expressly set forth by specific reference in such a filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit
No. |
|
Description |
|
|
99.1 |
|
Press Release issued on May 15, 2014. |
99.2 |
|
Presentation of General Steel Holdings, Inc. |
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
|
General Steel Holdings, Inc. |
|
|
|
|
By: |
/s/ John Chen |
|
Name: |
John Chen |
|
Title: |
Chief Financial Officer |
Dated: May 15, 2014
Exhibit 99.1
![](tex99-1logo.jpg)
General Steel Reports First Quarter 2014
Financial Results
Quarterly Sales Volume Improves 14.2%
Sequentially
Quarterly Gross Margin Improves by 220
Basis Points Sequentially
Company to File Quarterly Report for
the First Quarter 2014 after Market Closes May 15, 2014
BEIJING – May 15, 2014 –
General Steel Holdings, Inc. (“General Steel” or the “Company”) (NYSE: GSI), a leading non-state-controlled
steel producer in China, today announced its financial results for the first quarter ended March 31, 2014. The Company will file
its Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 with the United States Securities and Exchange Commission
following market close on Thursday, May 15, 2014.
“The first quarter of 2014 was widely
viewed as the ‘coldest winter’ for China's iron and steel industry since 2010, which caused a sharp drop in the market
price,” said Henry Yu, Chairman and Chief Executive Officer of General Steel, “Despite the challenging industry dynamics,
demand of our rebar products in Western China remained solid, as our sales volume grew by 14.2% sequentially during the quarter.
At the same time, our fully-ramped continuous rolling capacity and enhanced operating efficiencies combined to improve gross margin
by 220 basis points compared with the prior quarter.”
“We remain confident in our roadmap
to regain healthier profits in the second half of 2014. We are seeing a leveling of the average selling price for rebar and a lower
average cost for iron ore thus far in the second quarter. Additionally, this April, we signed our first direct supply agreement
with Rio Tinto, which we believe will further lower our sourcing costs and ensure timely delivery of the highest quality imported
iron ore. In view of the improved pricing environment and the central government’s ongoing efforts to reduce pollution and
balance steel supply in China, we remain optimistic of a turnaround in our marketplace and thereby our business fundamentals.”
Mr. Yu concluded.
John Chen, Chief Financial Officer of General
Steel, commented, “As we anticipate an imminent rebound in the marketplace, we continue to focus on enhancing our supply
chain, production planning and inventory management. We also continue to control operating expenses, manage finance expenses, and
enhance funding flexibility. With our improved operational efficiencies, we are confident General Steel is well positioned for
sustainable growth and profitability when the industry turns around.”
First Quarter 2014 Financial Information
| · | Sales volume increased by 1.1% year-over-year to approximately 1.32 million metric tons, compared
with 1.30 million metric tons in the first quarter of 2013. |
| · | Sales totaled $594.2 million, compared with $651.3 million in the first quarter of 2013. |
| · | Gross loss was $(22.6) million, compared with a gross profit of $4.1 million in the first quarter
of 2013. |
| · | Operating loss was $(43.7) million, compared with an operating income of $31.9 million in the first
quarter of 2013. |
| · | Net loss attributable to the Company was approximately $(43.6), or $(0.78) per diluted share, compared
with a net income of $3.1 million, or $0.06 per diluted share in the first quarter of 2013. |
| · | As of March 31, 2014, the Company had cash and restricted cash of $465.0 million. |
General Steel Holdings, Inc. Page 2 of 10 | |
First Quarter 2014 Financial and Operating
Results
Total Sales
Total sales for the first quarter of 2014
decreased by 8.8% year-over-year to $594.2 million, compared with $651.3 million in the first quarter of 2013, and increased by
8.3% quarter-over-quarter compared with $548.7 million in the fourth quarter of 2013. The year-over-year sales decreases were due
to a decrease in average selling price of rebar, offset by increased sales volume.
| · | Total sales volume in the first quarter of 2014 was 1.32 million metric tons, an increase of 1.1%
compared with 1.30 million metric tons in the first quarter of 2013, and an increase of 14.2%, compared with 1.15 million metric
tons in the fourth quarter of 2013. |
| · | The average selling price of rebar at Longmen Joint Venture in the first quarter of 2014 decreased
to approximately $450.9 per metric ton, down by 12.5% from $515.3 per metric ton in the first quarter of 2013, and by 4.9% from
$474.3 per metric ton in the fourth quarter of 2013. |
Gross Loss
Gross loss for the first quarter of 2014
was $(22.6) million, compared with a gross profit of $4.1 million in the first quarter of 2013, and gross loss of $(32.7) million
in the fourth quarter of 2013. The gross loss was mainly due to a steeper decrease in average selling price than the average cost
for rebar.
Operating Expenses and Operating Loss
Selling, general and administrative expenses
for the first quarter of 2014 was $21.1 million, an increase of 11.1% from $19.0 million in the first quarter of 2013, and a decrease
of 15.0% from $24.8 million in the fourth quarter of 2013. General and administrative expenses totaled $12.7 million in the first
quarter of 2014, compared with $10.9 million in the first quarter of 2013, and $15.2 million in the fourth quarter of 2013. The
annual increase in general and administrative expense was mainly due to higher employee benefit expenses and increased investment
in waste management and environmental protection. Selling expenses was $8.3 million in the first quarter of 2014, compared with
$8.1 million in the same period of 2013, and $9.5 million in the prior quarter. The annual increase in selling expenses was mainly
due to increased freight expenses from higher sales volume.
Other operating loss from change in the
fair value of profit sharing liability during the first quarter of 2014 was $(49,000), compared with gains of $46.8 million in
the same period of last year, and $79.1 million in the prior quarter. The loss recognized from change in the fair value of profit
sharing liability was primarily due to the amortization of the present value discount. The fair value of the profit sharing liability
at March 31, 2014 was not materially different from the previous reporting period.
General Steel Holdings, Inc. Page 3 of 10 | |
Correspondingly, loss from operations for
the first quarter of 2014 was $(43.7) million, compared with income from operations of $31.9 million for the first quarter of 2013,
and $9.2 million for the fourth quarter of 2013.
Finance Expense
Finance and interest expense in the first
quarter of 2014 increased to $28.7 million, from $24.9 million in the first quarter of 2013, and $23.0 million in the fourth quarter
of 2013. The increase in finance and interest expense was mainly due to higher expense in notes receivable early redemption, and
more non-cash financing cost on capital lease during the quarter.
Net Loss and Net Loss per Share
Net loss attributable to General Steel
for the first quarter of 2014 was $(43.6) million, or $(0.78) per diluted share, based on 55.8 million weighted average shares
outstanding. This compares to a net income of $3.1 million, or $0.06 per diluted share, based on 54.8 million weighted average
shares outstanding in the first quarter of 2013, and net loss of approximately $(102,000), or $(0.002) per diluted share, based
on 55.6 million weighted average shares outstanding in the fourth quarter of 2013.
Balance Sheet
As of March 31, 2014, the Company had cash
and restricted cash of approximately $465.0 million, compared to $431.3 million as of December 31, 2013. The Company had an inventory
balance of $210.8 million as of March 31, 2014, compared to $212.9 million as of December 31, 2013.
Conference Call and Webcast:
General Steel will hold a corresponding
conference call and live Webcast at 8:00 a.m. EDT on Thursday, May 15, 2014 (which corresponds to 8:00 p.m. Beijing/Hong Kong Time
on Thursday, May 15, 2014) to discuss the results and answer questions from investors. Listeners may access the call by dialing
1-877-870-4263 in the U.S., and 1-412-317-0790 internationally.
The call will also be available as a live,
listen-only Webcast under the "Events and Presentations" page on the "Investor Relations" section of the Company's
Website at http://www.corpasia.net/us/GSI/irwebsite/index.php?mod=event. Following the
live Webcast, an online archive of the Webcast will be available for 90 days.
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.
General Steel Holdings, Inc. Page 4 of 10 | |
To be added to the General Steel email
list to receive Company news, or to request a hard copy of the Company’s Annual Report on Form 10-K, please send your request
to generalsteel@asiabridgegroup.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 Annual Report on Form 10-K, filed
with the United States Securities and Exchange Commission. 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
General Steel Holdings, Inc.
In China:
Jenny Wang
Tel: +86-10-5775-7691
Email: jenny.wang@gshi-steel.com
In the US:
Joyce Sung
Tel: +1-347-534-1435
Email: joyce.sung@gshi-steel.com
Asia Bridge Capital Limited
Carene Toh
Tel: +1-888-957-3362
Email: generalsteel@asiabridgegroup.com
General Steel Holdings, Inc. Page 5 of 10 | |
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (In thousands)
| |
March 31, | | |
December 31, | |
ASSETS | |
2014 | | |
2013 | |
CURRENT ASSETS: | |
| | | |
| | |
Cash | |
$ | 36,378 | | |
$ | 31,967 | |
Restricted cash | |
| 428,615 | | |
| 399,333 | |
Notes receivable | |
| 81,998 | | |
| 60,054 | |
Restricted notes receivable | |
| 261,220 | | |
| 395,589 | |
Loans receivable - related parties | |
| 4,540 | | |
| 4,540 | |
Accounts receivable, net | |
| 4,388 | | |
| 4,078 | |
Accounts receivable - related parties | |
| 4,474 | | |
| 2,942 | |
Other receivables, net | |
| 54,078 | | |
| 54,716 | |
Other receivables - related parties | |
| 57,854 | | |
| 54,106 | |
Inventories | |
| 210,761 | | |
| 212,921 | |
Advances on inventory purchase | |
| 44,338 | | |
| 44,897 | |
Advances on inventory purchase - related parties | |
| 120,426 | | |
| 83,003 | |
Prepaid expense and other | |
| 1,890 | | |
| 1,388 | |
Prepaid taxes | |
| 23,238 | | |
| 28,407 | |
Short-term investment | |
| 2,597 | | |
| 2,783 | |
TOTAL CURRENT ASSETS | |
| 1,336,795 | | |
| 1,380,724 | |
| |
| | | |
| | |
PLANT AND EQUIPMENT, net | |
| 1,269,199 | | |
| 1,271,907 | |
| |
| | | |
| | |
OTHER ASSETS: | |
| | | |
| | |
Advances on equipment purchase | |
| 54,690 | | |
| 6,409 | |
Investment in unconsolidated entities | |
| 16,635 | | |
| 16,943 | |
Long-term deferred expense | |
| 606 | | |
| 668 | |
Intangible assets, net of accumulated amortization | |
| 23,587 | | |
| 23,707 | |
TOTAL OTHER ASSETS | |
| 95,518 | | |
| 47,727 | |
| |
| | | |
| | |
TOTAL ASSETS | |
$ | 2,701,512 | | |
$ | 2,700,358 | |
General Steel Holdings, Inc. Page 6 of 10 | |
| |
| | | |
| | |
LIABILITIES AND DEFICIENCY | |
| | | |
| | |
CURRENT LIABILITIES: | |
| | | |
| | |
Short term notes payable | |
$ | 963,357 | | |
$ | 1,017,830 | |
Accounts payable | |
| 513,397 | | |
| 434,979 | |
Accounts payable - related parties | |
| 282,540 | | |
| 235,692 | |
Short term loans - bank | |
| 230,118 | | |
| 301,917 | |
Short term loans - others | |
| 48,695 | | |
| 62,067 | |
Short term loans - related parties | |
| 105,080 | | |
| 126,693 | |
Current maturities of long-term loans - related party Other payables and accrued liabilities | |
| 57,428 60,795 | | |
| 53,013 45,653 | |
Other payable - related parties | |
| 80,694 | | |
| 94,079 | |
Customer deposits | |
| 107,002 | | |
| 87,860 | |
Customer deposits - related parties | |
| 145,366 | | |
| 64,881 | |
Deposit due to sales representatives | |
| 23,713 | | |
| 24,343 | |
Deposit due to sales representatives - related parties | |
| 1,980 | | |
| 1,997 | |
Taxes payable | |
| 7,276 | | |
| 4,628 | |
Deferred lease income, current | |
| 2,168 | | |
| 2,187 | |
Capital lease obligations, current | |
| 4,774 | | |
| 4,321 | |
TOTAL CURRENT LIABILITIES | |
| 2,634,383 | | |
| 2,562,140 | |
| |
| | | |
| | |
NON-CURRENT LIABILITIES: | |
| | | |
| | |
Long-term loans - related party | |
| 14,607 | | |
| 19,644 | |
Deferred lease income, noncurrent | |
| 74,072 | | |
| 75,257 | |
Capital lease obligations, noncurrent | |
| 376,025 | | |
| 375,019 | |
Profit sharing liability | |
| 160,956 | | |
| 162,295 | |
TOTAL NON-CURRENT LIABILITIES | |
| 625,660 | | |
| 632,215 | |
TOTAL LIABILITIES | |
| 3,260,043 | | |
| 3,194,355 | |
| |
| | | |
| | |
COMMITMENTS AND CONTINGENCIES | |
| | | |
| | |
| |
| | | |
| | |
DEFICIENCY: | |
| | | |
| | |
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares issued
and outstanding as of March 31, 2014 and December 31, 2013 | |
| 3 | | |
| 3 | |
Common stock, $0.001 par value, 200,000,000 shares authorized, 58,314,688 and 58,234,688 shares
issued, 55,842,382 and 55,762,382 shares outstanding as of March 31, 2014 and
December 31, 2013, respectively | |
| 58 | | |
| 58 | |
Treasury stock, at cost, 2,472,306 shares as of March 31, 2014 and December 31, 2013 | |
| (4,199 | ) | |
| (4,199 | ) |
Paid-in-capital | |
| 107,028 | | |
| 106,878 | |
Statutory reserves | |
| 6,387 | | |
| 6,243 | |
Accumulated deficits | |
| (458,362 | ) | |
| (414,798 | ) |
Accumulated other comprehensive income | |
| 3,593 | | |
| 729 | |
TOTAL GENERAL STEEL HOLDINGS, INC. DEFICIENCY | |
| (345,492 | ) | |
| (305,086 | ) |
| |
| | | |
| | |
NONCONTROLLING INTERESTS | |
| (213,039 | ) | |
| (188,911 | ) |
| |
| | | |
| | |
TOTAL DEFICIENCY | |
| (558,531 | ) | |
| (493,997 | ) |
| |
| | | |
| | |
TOTAL LIABILITIES AND DEFICIENCY | |
$ | 2,701,512 | | |
$ | 2,700,358 | |
General Steel Holdings, Inc. Page 7 of 10 | |
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013
(UNAUDITED)
(In thousands, except per share data)
| |
| |
| |
2014 | | |
2013 | |
SALES | |
$ | 512,005 | | |
$ | 502,431 | |
| |
| | | |
| | |
SALES - RELATED PARTIES | |
| 82,206 | | |
| 148,860 | |
TOTAL SALES | |
| 594,211 | | |
| 651,291 | |
| |
| | | |
| | |
COST OF GOODS SOLD | |
| 530,744 | | |
| 498,626 | |
| |
| | | |
| | |
COST OF GOODS SOLD - RELATED PARTIES | |
| 86,028 | | |
| 148,598 | |
TOTAL COST OF GOODS SOLD | |
| 616,772 | | |
| 647,224 | |
| |
| | | |
| | |
GROSS (LOSS) PROFIT | |
| (22,561 | ) | |
| 4,067 | |
| |
| | | |
| | |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | |
| (21,053 | ) | |
| (18,955 | ) |
CHANGE IN FAIR VALUE OF PROFIT SHARING LIABILITY | |
| (49 | ) | |
| 46,779 | |
| |
| | | |
| | |
(LOSS) INCOME FROM OPERATIONS | |
| (43,663 | ) | |
| 31,891 | |
| |
| | | |
| | |
OTHER INCOME (EXPENSE) | |
| | | |
| | |
Interest income | |
| 3,192 | | |
| 2,439 | |
Finance/interest expense | |
| (28,695 | ) | |
| (24,857 | ) |
Gain on disposal of equipment and intangible assets | |
| 46 | | |
| 331 | |
Income from equity investments | |
| 13 | | |
| (42 | ) |
Foreign currency transaction (loss) gain | |
| (854 | ) | |
| 28 | |
Lease income | |
| 546 | | |
| 532 | |
Other non-operating (expense) income, net | |
| (176 | ) | |
| 269 | |
Other expense, net | |
| (25,928 | ) | |
| (21,300 | ) |
| |
| | | |
| | |
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST | |
| (69,591 | ) | |
| 10,591 | |
| |
| | | |
| | |
PROVISION FOR INCOME TAXES | |
| | | |
| | |
Current | |
| 5 | | |
| 71 | |
Deferred | |
| - | | |
| - | |
Provision for income taxes | |
| 5 | | |
| 71 | |
General Steel Holdings, Inc. Page 8 of 10 | |
| |
| | | |
| | |
NET (LOSS) INCOME | |
| (69,596 | ) | |
| 10,520 | |
| |
| | | |
| | |
Less: Net (loss) income attributable to noncontrolling interest | |
| (26,032 | ) | |
| 7,417 | |
| |
| | | |
| | |
NET (LOSS) INCOME ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC. | |
$ | (43,564 | ) | |
$ | 3,103 | |
| |
| | | |
| | |
NET (LOSS) INCOME | |
$ | (69,596 | ) | |
$ | 10,520 | |
OTHER COMPREHENSIVE LOSS | |
| | | |
| | |
Foreign currency translation adjustments | |
| 4,670 | | |
| (2,526 | ) |
| |
| | | |
| | |
COMPREHENSIVE (LOSS) INCOME | |
| (64,926 | ) | |
| 7,994 | |
| |
| | | |
| | |
Less: Comprehensive (loss) income attributable to noncontrolling interest | |
| (24,226 | ) | |
| 6,455 | |
| |
| | | |
| | |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO GENERAL STEEL HOLDINGS, INC. | |
$ | (40,700 | ) | |
$ | 1,539 | |
| |
| | | |
| | |
WEIGHTED AVERAGE NUMBER OF SHARES | |
| | | |
| | |
Basic and Diluted | |
| 55,813 | | |
| 54,805 | |
| |
| | | |
| | |
(LOSS) INCOME PER SHARE | |
| | | |
| | |
Basic and Diluted | |
$ | (0.78 | ) | |
$ | 0.06 | |
General Steel Holdings, Inc. Page 9 of 10 | |
GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (In thousands)
|
|
For the Three months ended March 31, |
|
|
2014 |
|
|
2013 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(69,596 |
) |
|
$ |
10,520 |
|
Adjustments to reconcile net loss to cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation, amortization and depletion |
|
|
24,346 |
|
|
|
21,358 |
|
Change in fair value of derivative liabilities |
|
|
- |
|
|
|
(1 |
) |
Gain loss on disposal of equipment and intangible assets |
|
|
(46 |
) |
|
|
(331 |
) |
Provision for doubtful accounts |
|
|
(251 |
) |
|
|
(42 |
) |
Reservation of mine maintenance fee |
|
|
242 |
|
|
|
45 |
|
Stock issued for services and compensation |
|
|
150 |
|
|
|
245 |
|
Amortization of deferred financing cost on capital lease |
|
|
5,086 |
|
|
|
5,095 |
|
(Income) loss from equity investments |
|
|
(13 |
) |
|
|
42 |
|
Foreign currency transaction (gain) loss |
|
|
854 |
|
|
|
(28 |
) |
Deferred lease income |
|
|
(546 |
) |
|
|
(532 |
) |
Changes in fair value of profit sharing liability |
|
|
49 |
|
|
|
(46,779 |
) |
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
Notes receivable |
|
|
(70,354 |
) |
|
|
27,752 |
|
Accounts receivable |
|
|
(102 |
) |
|
|
(9,426 |
) |
Accounts receivable - related parties |
|
|
(1,569 |
) |
|
|
6,808 |
|
Other receivables |
|
|
355 |
|
|
|
(2,826 |
) |
Other receivables - related parties |
|
|
(4,219 |
) |
|
|
(20,212 |
) |
Inventories |
|
|
(730 |
) |
|
|
(37,526 |
) |
Advances on inventory purchases |
|
|
176 |
|
|
|
22,786 |
|
Advances on inventory purchases - related parties |
|
|
(38,419 |
) |
|
|
(46,883 |
) |
Prepaid expense and other |
|
|
(516 |
) |
|
|
(1,039 |
) |
Long-term deferred expense |
|
|
56 |
|
|
|
260 |
|
Prepaid taxes |
|
|
4,963 |
|
|
|
1,049 |
|
Accounts payable |
|
|
59,351 |
|
|
|
57,648 |
|
Accounts payable - related parties |
|
|
16,986 |
|
|
|
39,661 |
|
Other payables and accrued liabilities |
|
|
15,300 |
|
|
|
1,887 |
|
Other payables - related parties |
|
|
(12,676 |
) |
|
|
8,789 |
|
Customer deposits |
|
|
20,043 |
|
|
|
(21,956 |
) |
Customer deposits - related parties |
|
|
113,895 |
|
|
|
(9,457 |
) |
Taxes payable |
|
|
2,708 |
|
|
|
(4,427 |
) |
Other noncurrent liabilities |
|
|
- |
|
|
|
1,370 |
|
Net cash provided by operating activities |
|
|
65,523 |
|
|
|
3,850 |
|
General Steel Holdings, Inc. Page 10 of 10 | |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Restricted cash |
|
|
(32,943 |
) |
|
|
54,991 |
|
Cash proceeds from short term investment |
|
|
164 |
|
|
|
- |
|
Cash proceeds from sales of equipments and intangible assets |
|
|
24 |
|
|
|
4 |
|
Equipment purchase and intangible assets |
|
|
(56,861 |
) |
|
|
(24,093 |
) |
Net cash (used in) provided by investing activities |
|
|
(89,616 |
) |
|
|
30,902 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Restricted notes receivable |
|
|
131,971 |
|
|
|
99,224 |
|
Borrowings on short term notes payable |
|
|
439,342 |
|
|
|
289,548 |
|
Payments on short term notes payable |
|
|
(485,455 |
) |
|
|
(493,064 |
) |
Borrowings on short term loans - bank |
|
|
95,120 |
|
|
|
32,563 |
|
Payments on short term loans - bank |
|
|
(165,711 |
) |
|
|
(63,315 |
) |
Borrowings on short term loan - others |
|
|
9,853 |
|
|
|
21,296 |
|
Payments on short term loans - others |
|
|
(14,426 |
) |
|
|
(21,432 |
) |
Borrowings on short term loan - related parties |
|
|
24,528 |
|
|
|
142,999 |
|
Payments on short term loans - related parties |
|
|
(5,849 |
) |
|
|
(30,430 |
) |
Deposits due to sales representatives |
|
|
(425 |
) |
|
|
6,411 |
|
Deposit due to sales representatives - related parties |
|
|
- |
|
|
|
526 |
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
28,948 |
|
|
|
(15,674 |
) |
EFFECTS OF EXCHANGE RATE CHANGE IN CASH |
|
|
(444 |
) |
|
|
254 |
|
INCREASE IN CASH |
|
|
4,411 |
|
|
|
19,332 |
|
CASH, beginning of period |
|
|
31,967 |
|
|
|
46,467 |
|
CASH, end of period |
|
$ |
36,378 |
|
|
$ |
65,799 |
|
|
|
|
|
|
|
|
|
|
Exhibit 99.2
![](image_001.jpg)
1 This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings call. First Quarter 2014 Earnings Call Presentation May 15, 2014 ,
![](image_002.jpg)
2 This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings call. Safe Harbor Statement This presentation (including the financial projections and any subsequent questions and answers) contains statements that are forward - looking within the meaning of Section 27 A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934 . Such forward - looking statements are only predictions and are not guarantees of future performance . Any such forward - looking statements are and will be, as the case may be, subject to many risks, uncertainties, certain assumptions and factors relating to the operations and business environments of General Steel Holdings, Inc . and its subsidiaries that may cause the actual results of the companies to be materially different from any future results expressed or implied in such forward - looking statements . These risk factors, include, but are not limited to, any comments relating to our financial performance, the competitive nature of the marketplace, the condition of the worldwide economy and other factors that have been or will be detailed in the Company’s periodic filings (including Forms 8 - K, 10 - K and 10 - Q) or other documents filed with the Securities and Exchange Commission . For more detailed information on the Company, please refer to the Company filings with the Securities and Exchange Commission, which are readily available at http : //www . sec . gov, or through the Company’s Investor Relations website at http : //www . gshi - steel . com . The Company undertakes no obligation to publicly update any forward - looking statement, whether as a result of new information, future events or otherwise . This presentation is intended to be viewed in conjunction with the General Steel Holding, Inc. fourth quarter and fiscal year 20 10 earnings call. This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings c all .
![](image_003.jpg)
3 This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings call. Review of Progress on Key Initiatives Agenda China Steel Industry Dynamics First Quarter 2014 Highlights Henry Yu, Chief Executive Officer John Chen, Chief Financial Officer Q&A Review of F inancials
![](image_004.jpg)
4 This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings call. First Quarter 2014 Highlights Modest Growth in Sales Volume Operational Highlights x Signed direct - supply agreement with Rio Tinto that significantly strengthened sourcing capability x Fully - ramped continuous rolling capacity to effectively cut unit production cost x Enhanced sales and distribution network with higher contribution from direct sales and high - priced region x Broadened implementation of our benchmarking program to further drive operational efficiency Declining ASP of Rebar at Longmen Joint Venture Solid Demand Despite Declining ASP of Rebar Thousand MTs USD
![](image_005.jpg)
5 This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings call. » Increasing demand in peak seasons in 2Q 2014 ▪ PMI for steel industry in April rebounded to 52.6%, (improvement of 8.4% MoM) » Stabilized steel pricing environment and decreasing purchasing price of iron ore » Government raised overcapacity reduction targets in China for 2014 » GSI’s sole election as qualified steel maker in Shaanxi province by MIIT » ASP of rebar at GSI’s Longmen Joint Venture of $450.9/ton (down 12.5% YoY and down 4.9% QoQ) » Crude steel production of 202.7 million metric tons (YoY growth rate of 2.4%) » Roughly 45% of steel companies running at loss Sharp Drop in ASP and Continued Over - capacity China Steel Industry Dynamics Depressed China Steel Sector in 1Q 2014 Potential Catalysts in 2H 2014 China Steel Production and Pricing Monthly Mln MT Rmb/t * Source: China Iron and Steel Association Downward Trend for Iron Ore in 2014 Rmb/t China Iron Ore Spot Price Hebei/Tangshan Source: Morgan Stanley Source: Bloomberg
![](image_006.jpg)
6 This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings call. Strengthened Direct Sales Yielded Positive Benchmarking Savings Ramped Up Continuous Rolling Capacity Continued Progress on Key Initiatives General Steel made continued progress in enhancing its own effectiveness and efficiency of management and operations. x Further eliminating intermediate re - heating costs, transportation, and outsourced - processing cost, thereby reducing overall unit production cost x Fully ramped up utilization x Saved overall production cost by over RMB 22 million in 1 Q 2014 by internal estimation x Enhanced sales to high - priced region x Strengthened direct sales to government and SOEs Statistics in 1Q 2014 based on GSI’s internal assessment: x Unit ferrous charges consumption per ton of rebar decreased to 1,014.40 kg/ton x Comprehensive energy consumption per ton of rebar decreased to 484.73 kgec/ton x Both metrics reached industry - leading level Top five Distributors , 20% Sales Channel Breakdown in 1Q 2014
![](image_007.jpg)
7 This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings call. 1,255 1,317 49 1 1Q 2013 1Q 2014 Other Subsidiaries Longmen Joint Venture Items 1Q 2014 1Q 2013 Y - o - Y% Total Sales Volume (Thousands MT) 1,318 1,304 +1.1% ASP of Rebar** (US$/per MT) 450.9 515.3 - 12.5% Revenue (US$ million) 594.2 651.3 - 8.8% Gross (Loss)/Profit (US$ million) - 22.6 4.1 N.A. Operating Income (Loss)* (US$ million) - 43.7 31.9 N.A. Finance Expense (US$ million) - 28.7 - 24.9 +15.4% Net (Loss)/Income Attributable to General Steel Holdings.* (US$ million) - 43.6 3.1 N.A. EPS* (US$) - 0.78 0.06 N.A. First Quarter 2014 Financial Summary Sales Volume Breakdown * Includes $(49,000) change in fair value of profit sharing liability for the first quarter of 2014; * ASP of rebar at Longme n J oint Venture Thousands MT Operating Expense Breakdown 8.1 8.3 10.9 12.7 1Q 2013 1Q 2014 Selling Expense G&A Expense USD Million
![](image_008.jpg)
8 This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings call. Balance Sheet Summary AS OF (USD 1,000) March 31, 2014 December 31, 2013 Assets: Cash and Restricted Cash $464,993 $431,300 Accounts Receivable $8,862 $7,020 Notes Receivable $81,998 $60,054 Inventories $210,761 $212,921 Advances on Inventory Purchases $164,764 $127,900 Total Current Assets $1,336,795 $1,380,724 Property Plant and Equipment $1,269,199 $1,271,907 Total Assets $2,701,512 $2,700,358 Liabilities: Short Term Notes Payable $963,357 $1,017,830 Accounts Payable $795,937 $670,671 Short Term Loan $383,893 $490,677 Customer Deposits $252,368 $152,741 Taxes Payable $7,276 $4,628 Total Current Liabilities $ 2,634,383 $ 2,562,140 Capital Lease Obligations, noncurrent $ 376,025 $ 375,019 Profit Sharing Liability $ 160,956 $ 162,295
![](image_009.jpg)
9 This presentation is intended to be viewed in conjunction with the General Steel Holdings, Inc. first quarter 2014 earnings call. 9 Q&A Jenny Wang Joyce Sung General Steel Holdings, Inc. General Steel Holdings, Inc. Tel: + 86 - 10 - 5775 - 7691 Tel: +1 - 347 - 534 - 1435 Email: jenny.wang@gshi - steel.com Email: joyce.sung@gshi - steel.com ,
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