China Industrial Steel, Inc. Reports Second Quarter 2013 Financial Results

NEW YORK, Aug. 16, 2013 /PRNewswire/ -- China Industrial Steel, Inc. (the "Company") today announced its earnings for the three months ended June 30, 2013. The Company filed its Form 10-Q with the Securities and Exchange Commission on August 14, 2013.

Liu Shenghong, Chief Executive Officer and Chairman of the Company commented on the Company's performance, "The Company's continued revenue growth is a reflection of a solid growth plan and strong customer relationships. Our renovated manufacturing facility not only provides us with the additional capacity to satisfy customer demand, higher production levels also strengthen our ability to negotiate preferable raw material prices. These actions have helped us remain profitable despite the market pressure on selling prices, and we anticipate they will have a positive impact on our financial performance once pricing returns to normal levels."

Highlights of 2013 Second Quarter Financials

• Revenues increased 24% to $181 million in the three months ended June 30, 2013 from $146 million for the same period in 2012.
• Steel products tonnage sales up 45% for the quarter ended June 30, 2013, to 368,311 metric tons as compared to 253,490 metric tons in the same period of 2012.
• Net Income decreased 42%, to $1.07 million for the three months ended June 30, 2013, as compared to $1.85 million for the prior year.

Total revenue in the three months ended June 30, 2013 were $180,726,434, an increase of $35,154,065, or 24% compared to $145,572,369 in the second quarter of 2012. The Company sold 368,311 metric tons steel products in the three months ended June 30, 2013, an increase of 114,821 metric tons, or 45%, compared to 253,490 metric tons in the same period of 2012. The average unit sales price was $481 per ton, a decrease of $84, or 15%, compared to $565 per ton in the same period of 2012.

The increase in revenue was reflects the increase in the sale of steel wires which resulted from the Company's new 600,000 ton steel wire production line which commenced production in January 2013.  The Company sold 165,843 metric tons of steel wires, an increase of 94,907 metric tons, or 134%, in the three months ended June 30, 2013, compared to 70,936 in the comparable period of 2012. This was partially offset by the decrease in revenue generated from the sale of steel plate, which was primarily the result of the decline in the average unit sales price for steel plate. The Company sold 202,468 tons of steel plates in the three months ended June 30, 2013, an increase of 19,914 tons, or 11%, compared to 182,554 tons in the comparable period of 2012. However, the average unit sales price of steel plates decreased $68 per ton, or 12% to $487 per ton in the three months ended June 30, 2013 from $555 per ton in the same period of 2012. The decrease in unit sales price offset the increase in sales quantities and caused a decrease in revenue generated from steel plates. Revenue from steel plates was $98,527,863 in 2013, a decrease of $2,768,307, or 3% compared to $101,296,170 in 2012.

Net income for the three months ended June 30, 2013 was $1,068,480 a decrease of $780,037, or 42%, compared to $1,848,517 in the comparable period of 2012. This decline was primarily the result of an unparalleled decrease in unit selling price of steel products (15%) and unit purchase price of raw material (14%).

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.

Contact:

China Industrial Steel, Inc.
Delong Zhou - Chief Financial Officer
Phone +1-917-825-2997

SOURCE China Industrial Steel, Inc.