Welcome!

.NET Authors: Pat Romanski, Elizabeth White, ChandraShekar Dattatreya, Trevor Parsons, Peter Silva

News Feed Item

China Precision Steel Announces Second Quarter Fiscal 2013 Results

SHANGHAI, Feb. 19, 2013 /PRNewswire/ -- China Precision Steel, Inc. (NASDAQ: CPSL) ("China Precision Steel" or the "Company"), a niche precision steel processing Company principally engaged in producing and selling high precision, cold-rolled steel products, announced today its fiscal year 2013 second quarter results for the period ended December 31, 2012.

Second Quarter Highlights

  • Revenue was $8.2 million
  • Gross loss was $1.3 million
  • Net loss was $10.9 million
  • Fully diluted loss per shares was $2.80
  • International sales were $0.8 million, or 10% of total sales

"During the quarter, we continued to focus on our strategy to reduce production of negative margin products including many of our low carbon steel products which resulted in a decline of revenue period-over-period, However, compared with the immediate preceding quarter ended September 30, 2012, our revenue increased 37.1% as selling prices showed signs of stabilizing during the quarter and our sales volume increased 38.1%," commented Mr. Hai Sheng Chen, CEO of China Precision Steel. "While we continue to remain cautious about the near-term as the Chinese steel industry works through its overcapacity, we believe that the Chinese economy and steel industry will continue to gradually improve throughout the calendar year 2013 as the new government implements its policies for economic growth."

Revenue for the second quarter of fiscal year 2013 was $8.2 million, down from revenue of $33.7 million in the second quarter of fiscal year 2012. The decrease in revenue was mainly attributable to the decrease in production and sales of low-carbon cold-rolled products in response to the company's strategy to reduce its loss-making products. Sequentially, revenue increased 37.1% from revenue of $6.0 million in the first quarter of fiscal year 2013. Total sales volume in the second quarter of fiscal year 2013 was 10,705 tons, down from total sales volume of 39,907 tons in the prior period and up from total sales volume of 7,753 tons in the first quarter of 2013. High carbon and low carbon sales accounted for 32.4% and 65.6% of total sales, respectively, compared to 21.2% and 77.2%, respectively, period-on-period. Exports represented 10% of total sales for the current period, compared to 14% in the same period a year ago. 

Gross loss in the second quarter was $1.3 million, compared to gross loss of $1.8 million in the same period a year ago. Gross loss margin for the current period was 15.9%, compared to a gross loss margin of 5.3% in the second quarter of fiscal 2012. The increase in gross loss margin is due to a 9.6% period-on-period decrease in average selling prices while the average cost per unit sold declined 0.9% period-on-period. Average selling price for the quarter was $763 per ton, down from $844 per ton in the second quarter of fiscal 2012, and the average cost per unit sold was $884 per ton, down slightly from $889 per ton in the same period a year ago.

Selling expenses for the second quarter of fiscal year 2013 were $25,063, compared to $40,185 in the second quarter of fiscal year 2012. The decline in selling expenses was primarily attributable to lower transportation costs and traveling expenses period-on-period. Administrative expenses were $401,797, or 4.9% of revenue, compared to $932,480, or 2.8% of revenue period-on-period. The decrease in administrative expenses was primarily due to a decrease in traveling expenses and legal and professional fees period-on-period.

Operating loss for the current quarter was $10.6 million, compared to an operating loss of $2.8 million in the second quarter of fiscal year 2012.

Net loss for the second quarter of fiscal year 2013 was $10.9 million, compared to net loss of $3.5 million for the second quarter of fiscal year 2012. Fully diluted loss per share was $2.80, compared to fully diluted loss per share of $0.91 in the same period a year ago.

Six Months Financial Results

Revenue for the first six months of fiscal year 2013 was $14.1 million compared to $75.8 million in the same period a year ago. Gross loss was $2.8 million, compared to a gross loss of $1.7 million for the six months of fiscal year 2012. Gross loss margin for the six months ended December 31, 2012 was 19.6% compared to 2.3% for the same period a year ago. Operating loss was $13.9 million compared to $3.2 million in the first six months of fiscal year 2012. Net loss was $15.1 million, compared to a net loss of $4.6 million in the same period a year ago. Fully diluted loss per share was $3.89, compared to fully diluted loss per share of $1.19 for the first six months of fiscal year 2012. 

Financial Condition

As of December 31, 2012, China Precision Steel had $0.8 million in cash and cash equivalents, $67.8 million in total liabilities and working capital of $39.1 million. Stockholders' equity stood at $106.0 million, compared to $118.9 million as of June 30, 2012. 

Business Outlook

China Precision Steel will continue to focus on improving its gross margin by being selective in accepting new orders as well as improving cash flow through reducing accounts receivables. As of December 31, 2012, China Precision Steel had a backlog of $6.4 million.

"The China Iron and Steel Association (CISA) has prioritized a strict control of steel production capacity in a move to reduce the excess capacity that has contributed to the pressure on steel prices. Furthermore, CISA has stated that it anticipates steel demand for 2013 to be better than 2012 as the industry recovers from the worst slump in the past decade," Mr. Chen continued. "As we expect market conditions will gradually improve during the calendar year, we will be focusing our efforts on improving our working capital and operating cash flow by implementing more aggressive policies to reduce our accounts receivables."

Forward-Looking Statements

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding The likelihood that the downturn in China's steel industry has halted and that the industry will experience a turnaround and increased demand; the significance of China's implementation of pro-growth measures and the likelihood that it will start benefitting the domestic steel industry in the fourth quarter; the Company's ability to reduce operating costs, improve working capital and increase profitability, and any other statements of non-historical information. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, such as business conditions in China, weather and natural disasters, changing interpretations of generally accepted accounting principles; outcomes of government reviews; inquiries and investigations and related litigation; continued compliance with government regulations; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which China Precision Steel is engaged; cyclicality of steel consumption including overcapacity and decline in steel prices, limited availability of raw material and energy may constrain operating levels and reduce profit margins, environmental compliance and remediation could result in increased cost of capital as well as other relevant risks not included herein. The information set forth herein should be read in light of such risks. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. 

Elite IR
Leslie J. Richardson, Partner
+852-3183 0283
[email protected]

-- Financial Tables Follow --


China Precision Steel, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)





December 31,


June 30,




2012


2012

Assets




Current assets





Cash and cash equivalents

$799,887


$1,602,805


Accounts receivable






Trade, net of allowances of $13,568,723 and $3,231,613






  at December 31, 2012 and June 30, 2012, respectively

47,789,399


59,116,931


Bills receivable

48,149


173,089


Other

1,027,119


1,117,243


Inventories

19,886,666


15,516,220


Prepaid expenses

262,943


668,867


Advances to suppliers, net of allowance of $4,715,706 and






$4,623,323 at December 31, 2012 and June 30, 2012, respectively

37,096,316


37,384,684

Total current assets

106,910,479


115,579,839

Property, plant and equipment





Property, plant and equipment, net

64,573,675


67,752,991


Construction-in-progress

243,167


233,512




64,816,842


67,986,503

Intangible assets, net

1,895,071


1,880,129

Goodwill

99,999


99,999

Total assets

$173,722,391


$185,546,470

Liabilities and Stockholders' Equity




Current liabilities





Short-term loans

$27,610,356


$27,246,477


Long-term loan - current portion

16,200,000


16,200,000


Accounts payable and accrued liabilities

6,763,808


6,772,892


Advances from customers

3,054,617


2,253,956


Other taxes payables

8,233,263


8,446,373


Current income taxes payable

5,904,112


5,756,178

Total current liabilities

67,766,156


66,675,876

Long-term loans

-


-

Stockholders' equity:





Preferred stock: $0.001 per value, 8,000,000 shares






authorized, no shares outstanding at December 31, 2012 and






June 30, 2012, respectively

-


-


Common stock: $0.001 par value, 62,000,000 shares






authorized, 3,880,866 issued and outstanding at






December 31, 2012 and June 30, 2012, respectively

3,880


3,880


Additional paid-in capital

75,685,066


75,685,066


Accumulated other comprehensive income

21,289,724


19,097,295


Retained earnings

8,977,565


24,084,353

Total stockholders' equity

105,956,235


118,870,594

 


China Precision Steel, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

For the Three and Six Months Ended December 31, 2012 and 2011

(Unaudited)




Three Months Ended


Six Months Ended



2012


2011


2012


2011

Sales revenues

$8,164,267


$33,662,335


$14,121,027


$75,829,178

Cost of goods sold

9,466,225


35,461,052


16,889,934


77,566,125

Gross (loss)

(1,301,958)


(1,798,717)


(2,768,907)


(1,736,947)

Operating expenses









Selling expenses

25,063


40,185


54,336


108,489


Administrative expenses

401,797


932,480


844,412


1,226,556


Allowance for bad and doubtful debts

8,786,214


-


10,159,214


-


Depreciation and amortization expense

52,050


53,993


104,011


108,437


Total operating expenses

9,265,124


1,026,658


11,161,973


1,443,482

(Loss) from operations

(10,567,082)


(2,825,375)


(13,930,880)


(3,180,429)

Other income/(expense)









Other revenues

607,654


68,872


607,757


69,071


Interest and finance costs

(925,077)


(808,650)


(1,783,665)


(1,478,578)


Total other (expense)

(317,423)


(739,778)


(1,175,908)


(1,409,507)

(Loss) from operations before income tax

(10,884,505)


(3,565,153)


(15,106,788)


(4,589,936)

Provision for income tax









Current

-


-27,231


-


27,081


Total income tax (benefit)/expense

-


-27,231


-


27,081

Net (loss)

(10,884,505)


(3,537,922)


(15,106,788)


(4,617,017)

Basic (loss) per share

($2.80)


($0.91)


($3.89)


($1.19)

Basic weighted average shares outstanding

3,880,866


3,880,866


3,880,866


3,880,866

Diluted (loss) per share

($2.80)


($0.91)


($3.89)


($1.19)

Diluted weighted average shares outstanding

3,880,866


3,880,866


3,880,866


3,880,866

 

China Precision Steel, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Six Months Ended December 31, 2012 and 2011

(Unaudited)




2012


2011

Cash flows from operating activities





Net (loss)

(15,106,788)


(4,617,017)


Adjustments to reconcile net income to net cash provided by operating activities





  Depreciation and amortization

4,561,331


4,457,774


  Gain on disposal of property, plant and equipment

-


(16,575)


  Allowance for bad and doubtful debts

10,159,214


-


  Inventory provision

-


442,383


Net changes in assets and liabilities:





  Accounts receivable, net

2,477,594


(4,945,225)


  Inventories

(4,060,401)


(1,104,504)


  Prepaid expenses

412,031


(299,326)


  Advances to suppliers

1,086,749


3,046,345


  Accounts payable and accrued expenses

(139,640)


1,400,057


  Advances from customers

755,623


3,601,384


  Other taxes payable

(381,886)


587,656


  Current income taxes

32,914


-

Net cash (used in)/provided by operating activities

(203,259)


2,552,952

Cash flows from investing activities





  Purchase of property, plant and equipment, including construction in progress

(111,583)


(298,802)


  Proceeds from disposal of property, plant and equipment

-


16,575

Net cash (used in) investing activities

(111,583)


(282,227)

Cash flows from financing activities





  Repayments of short-term loans

(504,269)


-


  Repayments of long-term loan

-


(2,845,699)

Net cash (used in) financing activities

(504,269)


(2,845,699)

Effect of exchange rate

16,193


63,865

Net (decrease) in cash

(802,918)


(511,109)

Cash and cash equivalents, beginning of period

1,602,805


2,707,754

Cash and cash equivalents, end of period

$799,887


$2,196,645

SOURCE China Precision Steel Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...