China Industrial Steel Inc.

CIK:0001510871|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 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	0	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 (in Dollars per share)	$ 0.04	$ (0.05)	$ 0.07	$ 0.04
Weighted Average Shares Outstanding - Basic and Diluted (in Shares)	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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash Flows from Operating Activities:
Net Income	$ 5,185,941	$ 2,806,281
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Provision (reduction) for allowance for doubtful accounts receivable	811,654	(225,900)
Allowance for doubtful advances to suppliers	1,052,818	860,201
Depreciation	21,558,680	18,870,122
Amortization of land use rights and buildings under capital leases	518,427	505,063
Common stock issued for services	0	117,499
Deferred income tax	(611,254)	0
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivables	(4,648,850)	14,929,348
Increase in accounts receivables - related parties	(4,745,103)	0
(Increase) decrease in bank notes receivable	(1,264,815)	2,104,142
(Increase) decrease in inventories	(6,344,797)	6,325,459
Increase in advances to suppliers	(13,841,277)	(281,797)
Decrease (increase) in VAT recoverable	2,835,794	(8,048,709)
Decrease in other current assets	3,761,880	0
Decrease (increase) in advances to related parties	62,308,461	(140,477,692)
(Decrease) increase in accounts payable	(37,656,845)	73,122,036
Increase in accounts payable - related parties	1,866,835	474,397
Decrease in accrued liabilities	(393,419)	(205,294)
Increase in advances from customers	8,666,291	72,227,077
Increase (decrease) in taxes payables	1,550,559	(1,840,346)
Net Cash Provided by Operating Activities	40,610,980	41,261,887
Cash Flows from Investing Activities:
Capital expenditures	(21,780,372)	(11,493,538)
Net Cash Used in Investing Activities	(21,780,372)	(11,493,538)
Cash Flows from Financing Activities:
Proceeds from bank loans	40,148,340	68,701,153
Repayment of bank loans	(44,072,370)	(83,092,220)
Proceeds from customer financing	19,117,800	0
Repayment of customer financing	(31,620,470)	0
Proceeds from short term loan - related parties	0	2,663,374
Repayment of short term loan - related parties	(648,600)	(3,611,194)
Repayment of equipment loan - related parties	0	(16,487,701)
Payment of obligation under capital lease - related parties	(491,643)	(445,322)
Deposit of restricted cash	0	1,895,640
Net Cash Used in Financing Activities	(17,566,943)	(30,376,270)
Effect of Exchange Rate Changes on Cash	(593,881)	(29,135)
Net Increase (Decrease) in Cash and Cash Equivalents	669,784	(637,056)
Cash - Beginning of the Period	1,710,887	1,737,495
Cash - End of the Period	2,380,671	1,100,439
Supplemental Cash Flow Information:
Interest Paid	3,715,585	3,880,343
Income taxes	1,074,723	2,986,552
Repayment of Equipment Loan Payable by Offsetting Previous Advances to Related Parties [Member]
Supplemental Schedule of Non-Cash Investing Activities:
Non-Cash Transaction, Value of Consideration Received	0	(41,892,031)
Construction in Progress Paid by Related Party [Member]
Supplemental Schedule of Non-Cash Investing Activities:
Non-Cash Transaction, Value of Consideration Received	$ 0	$ 9,450,961

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $)	Sep. 30, 2013	Dec. 31, 2012
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	0
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	0
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
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:
Common stock, $0.0001 par value, 980,000,000 authorized, 73,620,391 and 73,620,391 issued and outstanding at September 30, 2013 and December 31, 2012, respectively	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
Series A Preferred Stock [Member]
Stockholders' Equity:
Preferred stock, value, issued	0	0
Blank Check Preferred Stock [Member]
Stockholders' Equity:
Preferred stock, value, issued	$ 0	$ 0