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OFFON

CHINA INDUSTRIAL STEEL INC.

(CDNN)
Delayed Quote. Delayed OTC Markets - 09/20 01:15:47 pm
0.0021 USD   -25.00%
2013CHINA INDUSTRIAL STEEL INC : China Industrial Steel, Inc. Reports Third Quarter 2013 Financial Result
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China Industrial Steel Inc : China Industrial Steel, Inc. Reports Third Quarter 2013 Financial Result

11/15/2013 | 11:58am EDT

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,                                                             7,362                     7,362
                                          73,620,391 and 73,620,391 issued and outstanding at
                                          September 30, 2013 and December 31, 2012, respectively

                                           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.


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