NEW YORK, Nov. 15, 2013 /PRNewswire/ -- China
Industrial Steel, Inc. (the "Company") today announced its earnings
for the three months ended September 30,
2013. The Company filed its Form 10-Q with the Securities
and Exchange Commission on November 14,
2013.
Liu Shenghong, Chief Executive Officer and Chairman of the
Company commented on the Company's performance, "China Industrial
Steel's continued growth stems from increasing market demand. Our
ability to generate improved revenue and net income despite the
lingering pressure on the average unit sales price of our steel
products, reflects the strength of our sales and marketing team as
well as the efficiency of our production and distribution channels.
I am confident that these efforts will continue to positively
impact our financial performance going forward, most notably as
pricing returns to prior levels."
Highlights of 2013 Third Quarter Financials
- Revenues increased 11% to $188
million in the three months ended September 30, 2013 from $169 million for the same period in 2012.
- Steel products tonnage sales up 12% for the quarter ended
September 30, 2013, to 390,234 metric
tons as compared to 346,977 metric tons in the same period of
2012.
- Net Income for the three months ended September 30, 2013, was $2,763,622, as compared to a loss of $3,748,289 for the same period in 2012.
- Earnings Per Share were $0.04 for
the third quarter 2013, versus a loss of $0.05 for the third quarter 2012.
Total revenue from sales in the three months ended September 30, 2013 were $188,594,415, an increase of $19,044,199, or 11% compared to $169,550,216 in the comparable period of 2012.
The increase in sales was mainly due to the increase in sales of
steel plates, offset by the decrease in sales of steel wires and
steel billets. The Company sold 390,234 metric tons steel products
in the three months ended September 30,
2013, an increase of 43,257 metric tons, or 12%, compared to
346,977 metric tons in the same period of 2012; the average unit
sales price was $472 per ton, a
decrease of $6, or 1%, compared to
$478 per ton in the comparable period
of 2012.
Net income for the three months ended September 30, 2013 was $2,763,622 as compared to a loss of $3,748,280 in the comparable period of 2012. The
increase in net income in the three months ended September 30, 2013 was mainly due to the
increases in the sales quantity and unit sales price of steel plate
and a decrease in unit cost.
|
CHINA INDUSTRIAL
STEEL INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (IN US DOLLARS)
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
September
30
|
|
December
31,
|
|
|
|
2013
|
|
2012
|
|
ASSETS
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
2,380,671
|
|
$
|
1,710,887
|
|
Bank notes receivable
|
|
|
2,271,305
|
|
|
979,111
|
|
Accounts receivables, net
|
|
|
13,677,181
|
|
|
9,639,396
|
|
Accounts receivables - related
parties
|
|
|
4,781,683
|
|
|
-
|
|
Inventories, net
|
|
|
18,187,580
|
|
|
11,585,277
|
|
Advances to suppliers, net
|
|
|
15,308,589
|
|
|
2,372,693
|
|
VAT recoverable
|
|
|
29,931,075
|
|
|
32,208,807
|
|
Advances to related parties
|
|
|
124,317,700
|
|
|
183,797,203
|
|
Deferred income tax assets
|
|
|
611,254
|
|
|
-
|
|
Other current asset
|
|
|
163,400
|
|
|
3,884,342
|
|
Total Current
Assets
|
|
|
211,630,438
|
|
|
246,177,716
|
|
|
|
|
|
|
|
|
|
Machinery and Equipment, Net
|
|
|
110,626,078
|
|
|
101,450,993
|
|
Machinery and Equipment - acquired from
related parties, Net
|
|
|
80,051,427
|
|
|
85,471,360
|
|
Total Machinery and
Equipment, Net
|
|
|
190,677,505
|
|
|
186,922,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
5,882,400
|
|
|
5,778,360
|
|
Land use rights and buildings under
capital leases
|
|
|
4,553,077
|
|
|
4,985,732
|
|
Total Other
Assets
|
|
|
10,435,477
|
|
|
10,764,092
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
412,743,420
|
|
$
|
443,864,161
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
55,941,601
|
|
$
|
92,228,161
|
|
Accounts payable - related
parties
|
|
|
3,747,798
|
|
|
1,833,558
|
|
Accrued liabilities
|
|
|
2,783,099
|
|
|
3,123,315
|
|
Taxes payables
|
|
|
1,564,983
|
|
|
2,427
|
|
Bank loans payable
|
|
|
22,549,200
|
|
|
26,034,722
|
|
Bank notes payable
|
|
|
5,392,200
|
|
|
5,296,830
|
|
Equipment loan payable - related parties
- current
|
|
|
2,936,862
|
|
|
2,884,919
|
|
Current obligations under capital leases
- related parties - current
|
|
|
698,029
|
|
|
648,893
|
|
Short term loan payable - related
party
|
|
|
163,400
|
|
|
802,550
|
|
Customer financing
|
|
|
19,117,800
|
|
|
31,620,470
|
|
Advances from customers
|
|
|
87,399,776
|
|
|
77,275,327
|
|
Total Current
Liabilities
|
|
|
202,294,748
|
|
|
241,751,172
|
|
|
|
|
|
|
|
|
|
Long Term Liabilities:
|
|
|
|
|
|
|
|
Equipment loan payables - related
parties - non current
|
|
|
1,107,541
|
|
|
1,087,952
|
|
Obligation under capital leases -
related parties - non current
|
|
|
5,238,631
|
|
|
5,669,438
|
|
Total Long Term
Liabilities
|
|
|
6,346,172
|
|
|
6,757,390
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
208,640,920
|
|
|
248,508,562
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
|
Series A Convertible
Preferred Stock, $0.0001 par value,
10,000,000 shares authorized, none issued and
outstanding
|
|
|
-
|
|
|
-
|
|
Blank Check Preferred
Stock, $0.0001 par value, 10,000,000
shares authorized, none issued and outstanding
|
|
|
-
|
|
|
-
|
|
Common stock, $0.0001
par value, 980,000,000 authorized,
73,620,391 and 73,620,391 issued and outstanding at
September 30, 2013 and December 31, 2012, respectively
|
|
|
7,362
|
|
|
7,362
|
|
Paid-in capital
|
|
|
16,417,235
|
|
|
16,417,235
|
|
Statutory reserves
|
|
|
6,530,869
|
|
|
6,530,869
|
|
Retained earnings
|
|
|
161,310,448
|
|
|
156,124,507
|
|
Accumulated other comprehensive
income
|
|
|
19,836,586
|
|
|
16,275,626
|
|
Total Stockholders'
Equity
|
|
|
204,102,500
|
|
|
195,355,599
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$
|
412,743,420
|
|
$
|
443,864,161
|
|
CHINA INDUSTRIAL
STEEL INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (IN US
DOLLARS)
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales to
customers
|
$
|
182,482,721
|
|
$
|
162,539,814
|
|
$
|
530,297,073
|
|
$
|
475,334,300
|
|
Sales to related
parties
|
|
6,111,694
|
|
|
7,010,402
|
|
|
27,387,473
|
|
|
16,816,933
|
|
Total Revenues
|
|
188,594,415
|
|
|
169,550,216
|
|
|
557,684,546
|
|
|
492,151,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenue -
non-related parties
|
|
87,889,927
|
|
|
72,622,372
|
|
|
201,904,677
|
|
|
197,528,829
|
|
Cost of Revenue -
related parties
|
|
94,027,016
|
|
|
99,305,592
|
|
|
340,621,123
|
|
|
283,719,169
|
|
Total Cost of Revenue
|
|
181,916,943
|
|
|
171,927,964
|
|
|
542,525,800
|
|
|
481,247,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
6,677,472
|
|
|
(2,377,748)
|
|
|
15,158,746
|
|
|
10,903,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and General
and Administrative Expenses
|
|
|
|
|
|
|
|
Selling and General
and Administrative Expenses - non-related parties
|
|
1,598,783
|
|
|
579,364
|
|
|
3,230,720
|
|
|
1,940,420
|
|
Selling and General
and Administrative Expenses - related parties
|
|
257,757
|
|
|
165,787
|
|
|
772,282
|
|
|
1,048,696
|
|
Total Selling and
General and Administrative Expenses
|
|
1,856,540
|
|
|
745,151
|
|
|
4,003,002
|
|
|
2,989,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income From
Operations
|
|
4,820,932
|
|
|
(3,122,899)
|
|
|
11,155,744
|
|
|
7,914,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
(Expenses)
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income
|
|
55,592
|
|
|
137,276
|
|
|
109,265
|
|
|
191,885
|
|
Interest
expense
|
|
(847,765)
|
|
|
(584,983)
|
|
|
(3,334,508)
|
|
|
(2,451,068)
|
|
Interest expense -
related parties
|
|
(172,575)
|
|
|
(177,674)
|
|
|
(514,205)
|
|
|
(1,464,263)
|
|
Total Other Income
(Expenses)
|
|
(964,748)
|
|
|
(625,381)
|
|
|
(3,739,448)
|
|
|
(3,723,446)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operation
before income tax
|
|
3,856,184
|
|
|
(3,748,280)
|
|
|
7,416,296
|
|
|
4,190,673
|
|
Provision for income
tax
|
|
1,092,562
|
|
|
-
|
|
|
2,230,355
|
|
|
1,384,392
|
|
Net Income
|
|
2,763,622
|
|
|
(3,748,280)
|
|
|
5,185,941
|
|
|
2,806,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share -
Basic and Diluted
|
$
|
0.04
|
|
$
|
(0.05)
|
|
$
|
0.07
|
|
$
|
0.04
|
|
Weighted Average
Shares Outstanding - Basic and Diluted
|
|
73,620,391
|
|
|
73,620,391
|
|
|
73,620,391
|
|
|
73,585,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive
Income:
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation gain
|
|
570,656
|
|
|
2,042,302
|
|
|
3,560,960
|
|
|
243,850
|
|
Comprehensive
Income
|
$
|
3,334,278
|
|
$
|
(1,705,978)
|
|
$
|
8,746,901
|
|
$
|
3,050,131
|
About China Industrial Steel, Inc.
China Industrial Steel, Inc., ("CIS" or the "Company") through
its wholly owned subsidiary, Handan Hongri Metallurgy Co., Ltd.,
produces and sells steel plate and steel bar for domestic and
export customers. The Company currently operates three
production lines from its headquarters on approximately 1,000 acres
in Handan City in the Hebei Province, China, where steel production is a significant
component of the regional economy.
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.
China Industrial Steel, Inc.
www.chinaindustrialsteel.com
For more information, please contact:
Delong Zhou
Chief Financial Officer
Phone +1-917-825-2997
SOURCE China Industrial Steel, Inc.