China Industrial Steel, Inc. Reports First Quarter Financial Results

NEW YORK, May 16, 2013 /PRNewswire/ -- China Industrial Steel, Inc. (the "Company") today announced its earnings for the three months ended March 31, 2013.  The Company, whose shares trade in the U.S. OTC market under the stock symbol "CDNN", filed its Form 10-Q with the Securities and Exchange Commission on May 15, 2013.

Commenting on the results, Liu Shenghong, Chief Executive Officer and Chairman of the Company stated, "I am pleased to report China Industrial Steel's financial results for the first quarter of 2013. Company revenues were up as a result of the rebound in China's demand for steel, and we remain profitable despite the industry wide decline in selling prices resulting from inventory stockpiles over the past year."

Chairman Liu went on to say, "Demand for our steel plate and wire increased during the quarter reflecting China's continued economic growth and the government's investment in infrastructure projects, such as roads, railways and bridges. We anticipate market prices will return to prior levels as steel manufacturers work through their backlog to supply these large scale projects and the forecast growth in other steel dependent industries, including the automotive and construction sectors."

Financial Discussion

China Industrial Steel reported revenue of $188,363,697 for the three months ended March 31, 2013 an increase of $11,335,049, or 6% compared to $177,028,648 in the same period of 2012. The increase in sales was mainly due to the increase in sales of steel plates and steel wires, offset by the decrease in sales of steel billets and the decrease in unit sales price in the three months ended March 31, 2013. The average unit sales price was $501 per ton, a decrease of $70, or 12%, compared to $571 per ton in the comparable period of 2012.

Revenue from steel plates was $94,496,510 in the three months ended March 31, 2013, an increase of $30,199,775, or 47% compared to $64,296,735 in the three months ended March 31, 2012. The increase in the sales of steel plates resulted from the rebound of steel market in the first quarter of 2013 which was somewhat offset by a decline in the selling price as compared to the same period in 2012.

In January of this year the Company commenced production on a new 600,000 ton steel wire production line. In the three months ended March 31, 2013, revenue from steel wires was $90,938,130, an increase of $27,991,309, or 44%, compared to $62,946,821 for the first three months of 2012. The Company did not sell any steel billet during the first quarter of 2013 and the sale of byproducts remained relatively flat as compared to the same period in 2012.

The following table illustrates the breakdown of the Company's revenue for the year ended March 31, 2013 and 2012.

The Company reported net income of $1,353,839 in the three months ended March 31, 2013, a decrease of $3,352,205, or 71%, compared to the net income of $4,706,044 for the same period of 2012. The decrease in net income is primarily the result of the decrease in steel product prices (12%) being sharper than the decrease in the prices of raw materials (10%).

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.

Company contact:

Delong Zhou, CFO
China Industrial Steel, Inc.
Phone: (917) 825-2997
Email: [email protected]

Frank Pena - Director
Phone: (732) 292-0322

SOURCE China Industrial Steel, Inc.