Longhai Steel Inc.

CIK:0001296286|SEC Filings

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue
From unrelated party	$ 93,758,058	$ 115,898,892	$ 386,858,763	$ 404,417,179
From related party	1,057,131	2,861,763	4,219,045	6,358,114
Revenues	94,815,189	118,760,655	391,077,808	410,775,293
Cost of revenue	(93,041,038)	(115,899,850)	(378,987,459)	(400,408,290)
Gross profit	1,774,151	2,860,805	12,090,349	10,367,003
General and administrative expenses	(610,521)	(133,552)	(2,118,953)	(1,243,942)
Selling expense	0	0	(400,741)	(5,599)
Impairment on inventory valuation	0	(674,282)	0	(674,282)
Other operation expenses	(993,193)	0	(1,493,530)	0
Income from operations	170,437	2,052,971	8,077,125	8,443,180
Interest income	94,448	2,078	99,203	5,332
Interest expense	(424,281)	(748,113)	(1,312,671)	(2,148,980)
Other income/(expenses)	(2,442)	(1,935)	11,541	(11,340)
Total other income and expenses	(332,275)	(747,970)	(1,201,927)	(2,154,988)
Income before income taxes	(161,838)	1,305,001	6,875,198	6,288,192
Income tax expense	(22,697)	(325,853)	(1,997,573)	(1,608,807)
Net income/(Loss)	(184,535)	979,148	4,877,625	4,679,385
Earnings/(Loss) per share - basic	$ (0.02)	$ 0.1	$ 0.45	$ 0.47
Earnings/(Loss) per share - diluted	$ (0.02)	$ 0.1	$ 0.44	$ 0.47
Weighted average shares outstanding - basic	12,105,421	10,000,000	10,936,830	10,000,000
Weighted average shares outstanding - diluted	12,105,421	10,000,000	10,985,783	10,000,000
Net income/(loss)	(184,535)	979,148	4,877,625	4,679,385
Other comprehensive income/(loss)	(119,447)	468,874	282,798	1,536,979
Comprehensive income/(loss)	$ (303,982)	$ 1,448,022	$ 5,160,423	$ 6,216,364

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income	$ 4,877,625	$ 4,679,385
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation	2,467,854	2,380,390
Deferred tax assets / liabilities	(89,673)	(211,467)
Amortization of intangible assets	3,082	0
Share-based payment expenses	249,736	145,322
Impairment for inventory obsolescence	0	674,282
Changes in operating assets and liabilities:
Accounts receivable	(73,070)	923,072
Notes receivable	(458,389)	(258,216)
Inventory	571,096	(21,307,130)
Advance to suppliers	(49,821,826)	(1,761,003)
Prepaid expenses and other current assets	725,298	6,437,432
Tax receivable	3,271,421	117,183
Due to / from related parties	35,701,398	1,519,935
Accounts payable	4,432,460	127,520
Accrued liabilities	687,341	272,685
Advance from customers	(6,883,039)	11,850,261
Income tax payable	1,391,810	(1,335,609)
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(2,946,876)	4,254,042
Cash flows from investing activities:
Cash paid for fixed assets purchased by related party	(70,275)	(615,092)
Cash repaid by related parties	0	3,842,500
Cash paid for software	0	(38,906)
Cash lending to related parties	0	(3,842,500)
Purchase of property and equipment	(7,059)	(65,928)
CASH USED IN INVESTING ACTIVITIES	(77,334)	(719,926)
Cash flows from financing activities:
Cash advance from related parties	0	16,766,878
Cash repayment to related parties	0	(19,232,898)
Proceeds from common stock issued in private placement	1,200,000	0
Borrowing from bank	4,700,063	0
Repayment to bank	(4,700,063)	0
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	1,200,000	(2,466,020)
Effect of exchange rate changes on cash	2,960	31,733
Net increase/(decrease) in cash and cash equivalents	(1,821,250)	1,099,829
Cash and cash equivalents, beginning balance	2,765,153	293,445
Cash and cash equivalents, ending balance	943,903	1,393,274
SUPPLEMENTARY DISCLOSURE:
Interest paid	1,276,308	2,143,710
Income tax paid	$ 692,608	$ 3,155,819

CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2012	Dec. 31, 2011
Current Assets
Cash and cash equivalents	$ 943,903	$ 2,765,153
Accounts receivable	982,881	905,232
Inventory	2,954,852	3,633,190
Advance to suppliers	77,142,658	27,183,336
Tax receivable	370,099	3,643,142
Prepaid expenses	98,895	10,881
Notes receivable	474,196	15,727
Other current assets	1,575,632	2,376,867
Current deferred tax assets	90,915	65,964
Due from related parties	0	32,844,632
Total current assets	84,634,031	73,444,124
Property, plant and equipment, net	20,300,193	22,514,658
Intangible assets, net	35,906	42,463
Non-current deferred tax assets	119,192	53,864
TOTAL ASSETS	105,089,322	96,055,109
Current Liabilities
Accounts payable	12,566,650	8,093,254
Advance from customers	16,126,894	19,269,063
Income tax payable	7,891,782	6,467,260
Accrued liabilities	1,138,077	518,295
Tax payable	577,274	594,317
Loan from third party	0	3,625,069
Due to related party	2,690,635	0
Total current liabilities	40,991,312	38,567,258
TOTAL LIABILITIES	40,991,312	38,567,258
STOCKHOLDERS' EQUITY
Common Stock, .001 par value, 100,000,000 shares authorized, 12,105,421 and 10,050,418 shares issued and outstanding, respectively	12,105	10,050
Additional paid-in capital	4,642,339	3,194,658
Statutory reserve	1,475,198	1,475,198
Accumulated other comprehensive income	4,402,694	4,119,896
Retained earnings	53,565,674	48,688,049
TOTAL STOCKHOLDERS' EQUITY	64,098,010	57,487,851
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 105,089,322	$ 96,055,109