SOURCE: UNR Holdings, Inc.

May 24, 2011 08:00 ET

UNR Holdings Announces First Quarter 2011 Financial Results, Highlighted by Strong Sales and Earnings

1Q10 Revenues Increased 103.6% YoY to $39.9M; 1Q10 Net Income Attributable to UNR Increased 339% YoY to $12.4M; 1Q10 EPS Increased 363% YoY to $0.51

ORLANDO, FL--(Marketwire - May 24, 2011) - UNR Holdings, Inc. (OTCBB: UNRH) ("UNR" or the "Company"), a housing and commercial construction and development company, today announced its financial results for the first fiscal quarter ended March 31, 2011. Summary financial data is provided below:

First Quarter 2011 Financial Highlights

   -- Revenues for the first quarter of 2011 increased by 103.6%
      year-over-year to $39.9 million, up from $19.5 million in the first
      quarter of 2010
         - Residential and commercial construction generated $33.6 million
           or 101.2% of total revenues
         - Road base materials generated $6.3 million or 125% of total
           revenues

   -- Net income attributable to the Company for the third quarter
      increased 339% year-over-year to $12.4 million, compared with $2.8
      million for the third quarter of 2010

   -- Income before provision for income taxes for the third quarter was
      increased 335.8% from $23.1 million, compared to 5.3 million in the
      same period last year

   -- Earnings per diluted share were $0.51 for the quarter, compared with
      diluted EPS of $0.11 achieved in the same period a year ago

Alexey Kim, Chief Executive Officer of UNR, stated, "I believe that the first quarter of 2011 record results are the further proof of the improving economic conditions in the Moscow real estate market and the testament to the correct strategy chosen by the company management in the recent years. We also have seen significant improvement in the sales of our patented proprietary material Prudon 494, that shows signs of the recovering infrastructure market and the increasing interest towards our product. We anticipate continued moderate growth in both the construction and infrastructure segments of our business as Russia continues to recover from the effects of the global economic downturn of the past two years. As one of Moscow's long-standing and stable construction companies, we believe we are very well positioned to benefit from the upturn in Russia's real estate market."

Results of Operations for the First Quarter of 2011

Revenues

Total revenues for the quarter ended March 31, 2011 increased to $39.9 million, or 103.6%, as compared to $19.6 million for the quarter ended March 31, 2010. The increase was a result of a gradual pickup we experienced mostly in our construction and development business in 2011 and substantially higher prices for apartments and commercial space; no assurance can be given that this trend is sustainable. Cost of sales increased by $1.6 million, or over 10.8%, to $16.1 million for the quarter ended March 31, 2011, from $14.6 million for the year ended March 31, 2010. We attribute this increase primarily to an increase in revenues in 2011from increasingly profitable projects located mainly in the city of Moscow.

Income from Operations

Income from operations increased by approximately $18.6 million, from $4.2 million for the quarter ended March 31, 2010 compared to $22.8 million for the quarter ended March 31, 2011, primarily due to the increase in sales. Other income decreased from $1.0 million for the quarter ended March 31, 2010 to $0.7 million for the quarter ended March 31, 2011, primarily due to a decrease in rental income.

Net Income

Net earnings increased to $12.3 million for the quarter ended March 31, 2011 as compared to $2.8 million for the quarter ended March 31, 2010. The Company contributes the increase in earnings primarily to the substantial increase in sales offset by a much lower increase in operating expenses. Earnings per diluted share were $0.51 for the quarter, as compared to diluted EPS of $0.11 for the same period a year ago.

Financial Tables:

                    UNR HOLDINGS, INC. AND SUBSIDIARY
                        CONSOLIDATED BALANCE SHEETS
                                (Unaudited)

                                                   March 31,   December 31,
                                                      2011         2010
                                                  -----------  -----------
ASSETS:
RESIDENTIAL AND COMMERCIAL CONSTRUCTION ASSETS:       ($)          ($)
  Cash and cash equivalents                        14,759,423   11,234,193
  Marketable securities                            16,000,000   26,000,000
  Inventories                                     140,614,259   95,855,194
  Trade and other receivables, net                 42,570,919   36,419,943
  Property, plant and equipment, net                1,689,993      983,283
  Other assets                                     11,233,940    1,793,418
                                                  -----------  -----------
Total Residential and Commercial Construction
 Assets                                           226,868,534  172,286,031

ROAD BASE MATERIALS ASSETS:
  Inventories                                         282,562      226,341
  Trade and other receivables, net                    510,352       71,178
                                                  -----------  -----------
Total Road Base Material Assets                       792,914      297,519
                                                  -----------  -----------

TOTAL ASSETS                                      227,661,448  172,583,550
                                                  ===========  ===========

LIABILITIES AND EQUITY:
RESIDENTIAL AND COMMERCIAL CONSTRUCTION
 LIABILITIES:
  Short-term debt                                      50,504       50,504
  Accounts payable and accrued expenses            77,494,756   54,169,698
  Advances from customers                          39,916,350   36,306,529
  Deferred income tax liabilities                  20,961,823   16,425,564
                                                  -----------  -----------
Total Residential and Commercial Construction
 Liabilities                                      138,423,433  106,952,295
                                                  -----------  -----------

ROAD BASE MATERIALS LIABILITIES:
  Accounts payable and accrued expenses             3,849,688    2,164,491
  Advances from customers                             626,262            -
                                                  -----------  -----------
Total Road Base Materials Liabilities               4,475,950    2,164,491
                                                  -----------  -----------
Total Liabilities                                 142,899,383  109,116,786
                                                  -----------  -----------

  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 March
       31, 2011 and December 31, 2010, respectively    24,465       24,465
      Additional paid-in capital                       99,579       99,579
      Retained earnings                            57,501,876   45,139,584
      Accumulated other comprehensive loss         (1,026,660)  (2,933,411)
                                                  -----------  -----------
      Total UNR Holdings, Inc. and Subsidiary
       Stockholders' Equity                        56,599,260   42,330,217
                                                  -----------  -----------

  Noncontrolling interest                          28,162,805   21,136,547
                                                  -----------  -----------
  Total Equity                                     84,762,065   63,466,764
                                                  -----------  -----------

TOTAL LIABILITIES AND EQUITY                      227,661,448  172,583,550
                                                  ===========  ===========





                    UNR HOLDINGS, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)

                                                     For the Three Months
                                                        Ended March 31,
                                                       2011        2010
                                                    ----------  -----------
                                                        ($)         ($)
Revenues:
  Sales and other operating revenues                39,858,780   19,549,532

Costs and expenses:
  Cost of sales                                     16,140,549   14,558,129
  Selling, general and administrative expenses         962,419      779,993
                                                    ----------  -----------
                                                    17,102,968   15,338,122
                                                    ----------  -----------

Income from operations                              22,755,812    4,211,410

Other income (expense):
Foreign currency transaction loss                     (256,704)           -
Other income                                           642,356    1,041,125
                                                    ----------  -----------
                                                       385,652    1,041,125
                                                    ----------  -----------

Earnings before income taxes                        23,141,464    5,252,535

Income taxes                                         4,643,346    1,058,812
                                                    ----------  -----------

Net earnings                                        18,498,118    4,193,723
                                                    ----------  -----------

Less: Net earnings attributable to the
 noncontrolling interest                             6,135,826    1,406,491
                                                    ----------  -----------

Net earnings attributable to UNR Holdings, Inc.
 and Subsidiary                                     12,362,292    2,787,232
                                                    ==========  ===========

Earnings per share - basic and diluted:
Earnings per common share attributable to UNR
 Holdings, Inc. and Subsidiary common shareholders        0.51         0.11
                                                    ----------  -----------

Weighted average common shares outstanding - basic
 and diluted                                        24,464,799   24,464,799
                                                    ----------  -----------





                    UNR HOLDINGS, INC. AND SUBSIDIARY
              CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                (Unaudited)

                                                       For the Three Months
                                                         Ended March 31,
                                                         2011       2010
                                                      ---------- ----------
                                                         ($)        ($)

Net earnings                                          18,498,118  4,193,723

Other comprehensive income (loss) - net of tax:
  Currency translation adjustment                      2,797,183  1,081,031
                                                      ---------- ----------

Comprehensive income                                  21,295,301  5,274,754

  Comprehensive income attributable to noncontrolling
   interest                                            7,026,258  1,765,069
                                                      ---------- ----------

  Comprehensive income attributable to UNR Holdings,
   Inc. and Subsidiary                                14,269,043  3,509,685
                                                      ========== ==========




                    UNR HOLDINGS, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)


                                                    For the Three Months
                                                       Ended March 31,
                                                     2011         2010
                                                  -----------  -----------
                                                      ($)          ($)
Cash flows from operating activities:
    Net earnings                                   18,498,118    4,193,723

Adjustments to reconcile net earnings to net cash
 used in operating activities:
    Depreciation                                       17,927       10,663
    Deferred income taxes                           4,536,259    1,127,665
    Change in operating assets and liabilities    (29,906,525)  21,371,531
                                                  -----------  -----------
       Net cash provided by (used in) operating
        activities                                 (6,854,221)  26,703,582
                                                  -----------  -----------

Cash flows from investing activities:
    Purchase of property, plant and equipment        (123,437)     (94,799)
    Proceeds from sale of marketable securities    10,000,000            -
                                                  -----------  -----------
       Net cash provided by (used in) investing
        activities                                  9,876,563      (94,799)
                                                  -----------  -----------

Cash flows from financing activities:
    Repayment of loans                                      -   (3,306,419)
                                                  -----------  -----------
       Net cash used in financing activities                -   (3,306,419)
                                                  -----------  -----------

Effect of exchange rate changes on cash               502,888      163,551
                                                  -----------  -----------

Net increase in cash                                3,525,230   23,465,915

Cash - beginning of period                         11,234,193   20,090,671
                                                  -----------  -----------

Cash - end of period                               14,759,423   43,556,586
                                                  ===========  ===========

Changes in operating assets and liabilities
 consist of:
    Decrease (increase) in accounts receivable     (6,290,858)  (8,949,778)
    (Increase) decrease in inventories            (44,276,604)  (2,675,452)
    (Increase) in other assets                     (9,440,522)           -
    Increase in customer advances                   4,513,997   16,982,801
    Increase in accounts payable and other
     liabilities                                   25,587,462   16,013,960
                                                  -----------  -----------
                                                  (29,906,525)  21,371,531
                                                  ===========  ===========

About UNR Holdings, Inc.

UNR Holdings is a holding company that has a 68% ownership 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 housing and commercial construction developments. UNR also supplies and oversees the installation of its proprietary road and slopes stabilization material Prudon to infrastructure projects in various parts of Russia. 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 that 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.

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