ORLANDO, FL--(Marketwire - Dec 5, 2012) - 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 Rybalko 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 and 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% 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 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 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.

- Financial Tables Follow -

UNR HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(IN US DOLLARS)
			September 30, 2012			December 31, 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 Nine Months Ended							For the Three Months 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