NEW YORK, November 16, 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
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, | - | - | |||||
Blank Check Preferred Stock, $0.0001 par value, 10,000,000 | - | - | |||||
Common stock, $0.0001 par value, 980,000,000 authorized, | 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
