UNR Holdings Announces Third Quarter 2012 Financial Results

UNR Holdings Announces Third Quarter 2012 Financial Results 
ORLANDO, FL -- (Marketwire) -- 12/05/12 --  UNR Holdings, Inc.
(OTCQB: UNRH), ("UNR" or the "Company"), a leading commercial and
residential real estate development and construction company
operating principally in the city of Moscow and its suburban
communities, and also a provider of infrastructure construction
services for government oil and gas projects in the Russian
Federation, today announced its financial results for the three and
nine months ended September 30, 2012. 
UNR Holdings CEO Alexey Kim stated, "Our third quarter revenues were
disappointing due to what we believe are temporary issues related to
our sales channel, but we are very pleased to report another strong
quarter of earnings due to favorable pricing and margin trends and
the recognition of interest recovered on the Marshal Rybalk
o
project." CEO Kim continued, "Based on current market conditions, we
expect to see improved sales momentum in the fourth quarter and we go
into 2013 with a very sizable portfolio of completed projects. Our
focus will be on converting this inventory to revenues so as to take
advantage of continued favorable pricing trends for real estate in
Moscow and its environs." 
Results of Operations for the Three Months Ended September 30, 2012 
Revenues 
Total revenues for the three months ended September 30, 2012
decreased to $18.6 million, or 70%, as compared to $62.6 million for
the three months ended September 30, 2011. The decrease was a result
of a decline we experienced mostly in our construction and
development business in 2012 in connection with the Marshal Rybalko
project, offset by an increase in prices for apartments and
commercial space. 
Cost of Sales 
Cost of sales decreased by $37.2 million, or 83%, to $7.7 million for
the three months ended September 30, 2012, from $44.9 million for the
three months ended September 30, 2011. Cost of sales decreased
substantially during the third quarter of 2012 as compared to the
comparable quarter in 2011 primarily due to a decrease in revenues
from our construction and development business. Cost of Sales
percentage decreased primarily due to the increase in prices for
apartments and commercial space while costs remained constant.  
Selling, General an
d Administrative Expenses 
Selling, general and administrative costs decreased by $0.4 million
to approximately $0.8 million for the three months ended September
30, 2012, as compared to approximately $1.1 million for the three
months ended September 30, 2011. This was primarily due to decreases
in professional fees and administrative overhead. 
Income from Operations 
Income from operations decreased to approximately $10.0 million for
the three months ended September 30, 2012, compared to approximately
$16.5 million for the comparable period in 2011, primarily due to
decreases in sales offset by decreases in cost of sales percentage
during the three month period ended September 30, 2012. 
Other Income  
Other income was approximately $5.5 million for the three months
ended September 30, 2012, as compared with $0.7 million for the three
months ended September 30, 2011, primarily due to an increase in
interest income of approximately $4.6 million paid by the Russian
Ministry of Defense. 
Provision for Income Taxes  
Provision for income taxes decreased to $3.1 million for the three
months ended September 30, 2012 as compared to $3.5 million for the
three months ended September 30, 2011. The decrease is primarily due
to lower net income during the three months ended September 30, 2012. 
Net Earnings 
Net earnings decreased to $12.4 million for the three months ended
September 30, 2012 as compared to $13.9 million for the three months
ended September 30, 2011. The Company attributes the decrease in
earnings primarily to a decrease in sales offset by an increase in
interest income paid by the Russian Ministry of Defense during the
three month period ended September 30, 2012. 
Results of Operations for the Nine Months Ended September 30, 2012 
Revenues 
Total revenues for the nine months ended September 30, 2012 decreased
to $69.4 million, or 50%, as compared to $138.0 million for the nine
months ended September 30, 2011. The decrease was a result of a
decline we experienced mostly in our construction and development
business in 2012 due to delayed profit recognition from the Marshal
Rybalko project resulting from prolonged litigation with the Russian
Ministry of Defense, offset by an increase in prices for apartments
and commercial space. 
Cost of Sales  
Cost of sales decreased by $63.9 million, or 68%, to $30.0 million
for the nine months ended September 30, 2012, from $93.9 million for
the nine months ended September 30, 2011. Cost of sales decreased
substantially during the first three quarters of 2012 as compared to
2011 primarily due to a decrease in revenues from our construction
and development business. Cost of sales percentage decreased
primarily due to the increase in prices for apartments and commercial
space while costs remained constant, confirming the Company's view
that the Russian Real estate market is on track for a sustainable
recovery.  
Selling, General and Administrative Expenses 
Selling, general and administrative costs decreased by $3.2 million
to approximately $2.8 million for the nine months ended September 30,
2012, as compared to approximately $6.0 million for the nine months
ended September 30, 2011. This was primarily due to decreases in
professional fees, administrative overhead and approximately $2.0
million of costs incurred in 2011 in connection with expenses
incurred in the Middle East project that was discontinued during
2011. 
Income from Operations 
Income from operations decreased to approximately $36.6 million for
the nine months ended September 30, 2012, from income of
approximately $38.1 million for the comparable period in 2011,
primarily due to decreases in sales offset by decreases in the cost
of sales percentage and a decrease in overhead during the nine month
period ended September 30, 2012. 
Other Income  
Other income was approximately $6.3 million for the nine months ended
September 30, 2012, as compared with $1.7 million for the nine months
ended September 30, 2011, primarily due to an increase in interest
income of approximately $4.6 million paid by the Russian Ministry of
Defense ordered by the appeal court in connection with the court
ordered settlement. 
Provision for Income Taxes  
Provision for income taxes increased to $8.6 million for the nine
months ended September 30, 2012 as compared to $7.9 million for the
nine months ended September 30, 2011. The increase is primarily due
to a higher net income during the nine months ended September 30,
2012. 
Net Earnings 
Net earnings increased to $34.3 million for the nine months ended
September 30, 2012 as compared to net earnings of $31.8 million for
the nine months ended September 30, 2011. The Company attributes the
increase in earnings primarily to an increase in gross profit during
the nine month period ended September 30, 2012, a decrease in
operating overhead and interest earned from the settlement with the
Russian Ministry of Defense. 
Liquidity and Capital Requirements 
We had a working capital surplus of approximately $126.2 million and
stockholders' equity of approximately $88.3 million as of September
30, 2012. Cash and cash equivalents decreased by approximately $32.8
million for the nine months ended September 30, 2012 from fiscal year
end 
2011. The decrease is primarily attributable to an increase in
inventories of approximately $172.5 million offset by an approximate
$97.4 million in accounts payable and $11.2 million from marketable
securities. 
Trade and other receivables, net of allowances, were $23.8 million at
September 30, 2012, compared to approximately $10.2 million at
December 31, 2011. The increase is primarily due to a majority of
sales of residential units during the first nine months of 2012
having occurred in March 2012 and payments not expected to be
received until the fourth quarter. Inventories were $638.1 million at
September 30, 2012, as compared to $466.0 million at December 31,
2011, due primarily to the increase in construction during the nine
months ended September 30, 2012 to keep up with the increased real
estate sales activity in Russia. 
Accounts payable were $456.4 million at September 30, 2012, compared
to $359.0 million at December 31, 2011. The Company attributes the
increase primarily to the increase in inventory to support the
Company's increased construction activity offset by payments to
creditors made by the Company. Advances from customers were $71.5
million at September 30, 2012 compared to $64.0 million at December
31, 2011. We attribute the increase to an increase in sales activity
during the latter part of 2012. 
About UNR Holdings, Inc. 
UNR Holdings is a holding company that has a 68% owne
rship in its
subsidiary, 494 UNR. 494 UNR is a diverse construction company with
more than 40 years of success serving the Russian construction
market. The Company specializes in general and infrastructure
construction services, such as designing and building multi-story
apartment buildings for middle and upper middle class families,
office buildings, highways, bridges, and production of a road base
infrastructure construction product. While UNRH is involved in
complex construction projects, the Company also assists the Russian
government with infrastructure projects for oil and gas corporations,
such as GAZPROM and TRANSNEFT. 494 UNR is one of the oldest and most
established construction companies located and operating in Moscow
and the Moscow area of the Russian Federation. 
More detailed information on the housing projects is available at the
UNR Holdings corporate website: http://www.unrholdings.com. 
Forward-looking statements 
The above news release contains forward-looking statements. The
statements contained in this document that are not statements of
historical fact, including but not limited to, statements identified
by the use of terms such as "anticipate," "appear," "believe,"
"could," "estimate," "expect," "hope," "indicate," "intend,"
"likely," "may," "might," "plan," "potential," "project," "seek,"
"should," "will," "would," and other variations or negative
expressions of these terms, including statements related to expected
market trends and the Company's performance, are all "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 and involve a number of risks and uncertainties.
These statements are based on assumptions that management believes
are reasonable based on currently available information, and include
statements regarding the intent, belief or current expectations of
the Company and its management. Prospective investors are cautioned
t
hat any such forward-looking statements are not guarantees of future
performances, and are subject to a wide range of external factors,
uncertainties, business risks, and other risks identified in filings
made by the company with the Securities and Exchange Commission.
Actual results may differ materially from those indicated by such
forward-looking statements. The Company expressly disclaims any
obligation or undertaking to update or revise any forward-looking
statement contained herein to reflect any change in the company's
expectations with regard thereto or any change in events, conditions
or circumstances upon which any statement is based. 
- Financial Tables Follow - 


 
                                                                            
UNR HOLDINGS, INC. AND SUBSIDIARY                                           
CONSOLIDATED BALANCE SHEETS                                                 
(IN US DOLLARS)                                                             
                                                                            
                                               September 30,   December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
                                                (Unaudited)                 
ASSETS                                      
                                
RESIDENTIAL AND COMMERCIAL CONSTRUCTION ASSETS                              
  Cash and cash equivalents                       10,023,217     42,795,147 
  Marketable Securities                           17,898,587     29,144,114 
  Inventories                                    637,982,386    465,525,786 
  Trade and other receivables, net                21,333,387      9,438,081 
  Property, plant and equipment, net               2,068,354      1,757,392 
  Other assets                                     2,508,758      1,417,115 
                                               -------------  ------------- 
Total Residential and Commercial Construction                               
 Assets                                          691,814,959    550,077,635 
                                                                            
ROAD BASE MATERIALS ASSETS:                                                 
  Inventories                                        113,806        430,171 
                                               -------------  ------------- 
  Trade and other receivables, net                 2,457,109        752,741 
                                               -------------  ------------- 
Total Road Base Material Assets                    2,570,915      1,182,912 
                                               -------------  ------------- 
                                                                            
TOTAL ASSETS                                     694,385,874    551,260,547 
                                               -------------  ------------- 
                                                                            
LIABILITIES AND EQUITY:                                                     
RESIDENTIAL AND COMMERCIAL CONSTRUCTION                                     
 LIABILITIES:                                                               
  Short-term debt                                  3,305,281      6,262,437 
  Accounts payable and accrued expenses          441,179,935    351,080,551 
  Advances from customers                         71,463,194     63,975,004 
  Deferred income tax liabilities                 32,444,485     24,557,523 
                                               -------------  ------------- 
Total Residential and Commercial Construction                               
 Liabilities                                     548,392,895    445,875,515 
                                               -------------  ------------- 
                                                                            
ROAD BASE MATERIALS LIABILITIES                                             
  Accounts payable and accrued expenses           15,194,397      7,898,548 
  Advances from customers                                  -              - 
                                               -------------  ------------- 
Total Road Base Materials Liabilities             15,194,397      7,898,548 
                                               -------------  ------------- 
Total Liabilities                                563,587,292    453,774,063 
                                               -------------  ------------- 
                                                                            
  Commitments and Contingencies                            -              - 
                                                                            
UNR Holdings, Inc. and Subsidiary                                           
 Stockholders' Equity:                                                      
  Common stock, $0.001 par value; authorized                                
   500,000,000 shares; issued and outstanding                               
   24,464,799 and 24,464,799 shares at                                      
   September 30, 2012 and December 31, 2011,                                
   respectively                                       24,465         24,465 
  Additional paid-in capital                          99,579         99,579 
  Retained earnings                               95,563,643     71,636,550 
  Accumulated other comprehensive loss            (7,351,186)    (6,658,061)
                                               -------------  ------------- 
  Total UNR Holdings, Inc. and Subsidiary                                   
   Stockholders' Equity                           88,336,501     65,102,533 
                                               -------------  ------------- 
                                                                            
  Noncontrolling interest                         42,462,081     32,383,951 
                                               -------------  ------------- 
  Total Equity                                   130,798,582     97,486,484 
                                               -------------  ------------- 
                                                                            
TOTAL LIABILITIES AND EQUITY                     694,385,874    551,260,547 
                                               -------------  ------------- 
                                                                            
                                                                            
                                                                            
UNR HOLDINGS, INC. AND SUBSIDIARY                                           
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                               
(IN US DOLLARS)                                                             
                                                                            
                                                      For the Three Months  
                        For the Nine Months Ended            Ended          
                              September 30,              September 30,      
                        -------------------------  -------------------------
                            2012         2011          2012         2011    
                             ($)          ($)           ($)          ($)    
Revenues:                                                                   
                                                                            
  Sales and other                                                           
   operating revenues     69,445,911  138,024,063    18,546,199   62,544,293
                                                                            
Costs and expenses:                                                         
  Cost of sales           29,984,956   93,849,218     7,745,631   44,934,122
  Selling, general and                                                      
   administrative                                                           
   expenses:               2,825,679    6,074,159       757,201    1,145,548
                        ------------ ------------  ------------ ------------
                          32,810,635   99,923,377     8,502,832   46,079,670
                        ------------ ------------  ------------ ------------
                                                                            
Income from operations    36,635,276   38,100,686    10,043,367   16,464,623
                                                                            
Other income (expense):                                                     
Foreign currency                                                            
 transaction loss                  -      (64,693)            -      192,011
Other income
 (loss)        6,319,069    1,674,860     5,502,919      731,827
                        ------------ ------------  ------------ ------------
                           6,319,069    1,610,167     5,502,919      923,838
                        ------------ ------------  ------------ ------------
                                                                            
Earnings before income                                                      
 taxes                    42,954,345   39,710,853    15,546,286   17,388,461
                                                                            
Provision for income                                                        
 taxes                     8,605,102    7,896,431     3,112,795    3,477,790
                        ------------ ------------  ------------ ------------
                                                                            
Net earnings              34,349,243   31,814,422    12,433,491   13,910,671
                        ------------ ------------  ------------ ------------
                                                                            
Less: Net earnings                                                          
 attributable to the                                                        
 noncontrolling                                                             
 interest                 10,422,150   10,476,985     3,134,959    4,614,332
                        ------------ ------------  ------------ ------------
                                                                            
Net earnings                                                                
 attributable to UNR                                                        
 Holdings, Inc. and                                                         
 Subsidiary               23,927,093   21,337,437     9,298,532    9,296,339
                        ------------ ------------  ------------ ------------
                                                                            
Earnings per share -                                                        
 basic and diluted:                                                         
Earnings per common                                                         
 share attributable to                                                      
 UNR Holdings, Inc. and                                                     
 Subsidiary common                                                          
 shareholders           $       0.97 $       0.87  $       0.38 $       0.38
                        ------------ ------------  ------------ ------------
                                                                            
Weighted average common                                                     
 shares outstanding -                                                       
 basic and diluted        24,464,799   24,464,799    24,464,799   24,464,799
                        ------------ ------------  ------------ ------------
                                                                            
                                                                            
                                                                            
UNR HOLDINGS, INC. AND SUBSIDIARY                                           
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)                           
(IN US DOLLARS)                                                             
                                                                            
                                                For The Nine Months Ended   
                                                      September 30,         
                                                  2012            2011      
                                             --------------  -------------- 
                                                   ($)             ($)      
                                                                            
Cash flows from operating activities:                                       
                                                                            
Net earnings                                     34,349,243      31,814,422 
                                                                            
Adjustments to reconcile net income to net                                  
 cash provided by operating activities:                                     
Depreciation                                        115,741          73,117 
Gain on sale of property, plant and                                         
 equipment                                          (53,578)              - 
Deferred income taxes                             7,886,962       4,056,178 
Change in operating assets and liabilities      (83,073,707)     (9,940,932)
                                             --------------  -------------- 
  Net cash provided by operating activities     (40,775,339)     26,002,785 
                                             --------------  -------------- 
                                                                            
Cash flows from investing activities:                                       
  Purchase of property, plant and equipment        (422,840)       (866,700)
  Proceeds from sale of equipment                   263,332               - 
  Purchase of marketable securities             (37,920,942)     (9,711,735)
  Purchase from sale of marketable                                          
   securities                                    49,166,199      10,000,000 
                                             --------------  -------------- 
  Net cash used in investing activities          11,085,749        (578,435)
                                             --------------  -------------- 
                                                                            
Cash flows from financing activities:                                       
  Proceeds from loans                            14,832,467               - 
  Repayment of loans                            (17,789,623)              - 
                                             --------------  -------------- 
  Net cash used in financing activities          (2,957,156)              - 
                                             --------------  -------------- 
                                                                            
Effect of exchange rate changes on cash            (125,184)       (306,226)
                                             --------------  -------------- 
                                                                            
Net increase (decrease) in cash                 (32,771,930)     25,118,124 
                                                                            
Cash - beginning of period                       42,795,147      11,234,193 
                                             --------------  -------------- 
                                                                            
Cash - end of period                             10,023,217      36,352,317 
                                             --------------  -------------- 
                                                                            
Changes in operating assets and liabilities                                 
 consist of:                                                                
  Decrease (increase) in accounts receivable    (13,599,674)     17,450,616 
  (Increase) decrease in inventories           (172,848,893)    (43,360,974)
  (Increase) in other assets                     (1,091,643)    (15,604,700)
  Increase (decrease) in customer advances        7,488,190      30,005,812 
  Increase in accounts payable and other                                    
   liabilities                                   96,978,313       1,568,314 
                                             --------------  -------------- 
                                               (83,073,707)      (9,940,932)
                                             --------------  -------------- 
Supplementary Information                                                   
  Cash paid during the period for                                           
    Interest                                 $      551,550  $              
                                             --------------  -------------- 
    Income taxes                             $       59,853  $       45,638 
                                             --------------  -------------- 

  
Company Contact:  
UNR Holdings, Inc. 
Serguei Melnik
VP 
Phone: 407-210-6541 
info@unrholdings.com  
Investor Relations Contact:  
CCG Investor Relations
David Rudnick
Account Manager
Phone: 1-646-626-4172
Email: david.rudnick@ccgir.com