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Nutrastar Announces Third Quarter 2012 Results

Scheduled Maintenance on Facilities Results in Lower Sales for Q3 2012; Nine Month 2012 Sales Up 6.2% Year-Over-Year

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HARBIN, China, Nov. 13, 2012 /PRNewswire-FirstCall/-- Nutrastar International Inc. (OTCQB: NUIN; "Nutrastar" or the "Company"), a leading producer and supplier of premium branded consumer products, including commercially cultivated Cordyceps Militaris ("Cordyceps"), functional health beverages and organic and specialty foods, today announced its results for the three months and nine months ended September 30, 2012.

Financial Highlights for the Three Months Ended September 30, 2012
 

  • Net revenue was $7.57 million, a decrease of 20.8% from the year ago quarter.
  • Gross margin was 79.4%, an increase of 2.4% from third quarter 2011.
  • Net income was $3.74 million, a decrease 24.8% from 2011 third quarter.
  • Basic and diluted EPS were $0.24 and $0.23, respectively, with 15.40 million basic shares and 16.53 million diluted shares outstanding.

Financial Highlights for the Nine Months Ended September 30, 2012
 

  • Net revenue was $24.47 million, an increase of 6.2% from the nine months ended September 30, 2011.
  • Gross margin was 76.3%, a decrease of 0.7% from the first nine months of 2011.
  • Net income was $11.60 million, a decrease of 2.5% from the nine months of 2011.
  • Basic and diluted EPS were $0.74 and $0.70, respectively, with 15.38 million basic shares and 16.52 million diluted shares outstanding.

Management Commentary

"Although demand remained strong, we experienced a supply shortage due to the scheduled operational maintenance within our facilities which began in July 2012. For the nine months and for the three months ended September 30, 2012, our sales were up approximately 6.2% and down roughly 20.8%, respectively. The maintenance shutdown of our facilities temporarily reduced production of our finished core product Cordyceps as well as the raw materials required for our beverage products by approximately 23%, thus causing a decline in sales during the third quarter. The operational maintenance was completed at the end of September and production has since returned to normal levels. As a result of the temporary shutdown and resource limitations which impacted the timing of bringing on additional production facilities, we will not meet our previously anticipated full year 2012 revenue guidance of $40 million to $44 million," Ms. Lianyun Han, CEO of Nutrastar, commented.

As for the remainder of the year, Ms. Han stated, "Fourth quarter demand is remaining robust and with the completion of required maintenance, sales are expected to be stronger than in the previous quarter. Our Cordyceps expansion project is expected to stay on track and we forecast meeting our goal of 100 tons production capacity by 2013, an increase of 14.9% from current levels. We believe that 2013 will be an even greater year for the company in terms of growth, sales and production."

Ms. Han added, "Regarding our financial position, we continue to have a significant cash balance, roughly $4.08 per diluted share, which is being managed conservatively. Having been seen and verified by our independent auditor, we have ear-marked this cash to go towards boosting our business development efforts across all consumer product lines, furthering our business expansion projects and branding strategies, as well as looking at inorganic growth opportunities - only those we see as being complementary to our business and products, and accretive to our shareholders."

Request for Call with Management

Investors are invited to request a call with Nutrastar's management team. For those investors who are interested in speaking with management, please contact American Capital Ventures at +1-305-918-7000 to schedule.

For more information regarding Nutrastar's financial performance during the quarter and nine months ended September 30, 2012, please refer to the Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on or about November 13, 2012.

About Nutrastar International Inc.

Nutrastar is a China based leading producer and supplier of premium branded consumer products including commercially cultivated Cordyceps Militaris, functional health beverages as well as specialty and organic foods. Cordyceps Militaris is one of the most highly regarded herbal nutrients in Traditional Chinese Medicine. The Company is headquartered in Harbin, capital of Heilongjiang Province, with 332 employees, including 21 in R&D, and 149 in sales and marketing. The products of Nutrastar are sold throughout China via a sales and distribution network that covers more than 10 provinces. More information may be found at http://www.nutrastarintl.com/ or e-mail: ir@nutrastarintl.com

Make sure you are first to receive timely up-to-date information on Nutrastar. Sign up for Nutrastar's email news alert system today at: http://www.nutrastarintl.com/alerts

Safe Harbor Statement

This news release contains "forward-looking statements" relating to the business of Nutrastar International Inc., its subsidiaries and other affiliate companies.  All statements, other than statements of historical fact included herein are "forward-looking statements" including statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts.  These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions.  These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the Company with the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors.  You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, the Company does not assume a duty to update any forward-looking statements to reflect events or circumstances after the date hereof.

For more information, please contact:
 

Howard Gostfrand
American Capital Ventures
Tel:  +1-305-918-7000
Email: info@amcapventures.com

 

 

NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)

(AMOUNTS EXPRESSED IN US DOLLARS)










For the Three Months



For the Nine Months




Ended September 30,



Ended September 30,




2012



2011



2012



2011















NET REVENUE

$

7,572,443


$

9,558,282


$

24,468,889


$

23,037,815















Cost of goods sold


(1,559,180)



(2,193,504)



(5,809,842)



(5,299,920)















GROSS PROFIT


6,013,263



7,364,778



18,659,047



17,737,895















Selling expenses


(350,426)



(336,876)



(1,198,434)



(1,210,687)


General and administrative expenses


(551,348)



(595,599)



(1,880,591)



(1,931,016)















Income from operations


5,111,489



6,432,303



15,580,022



14,596,192















Other income (expenses):













   Interest income


59,957



23,995



193,839



130,590


   Foreign exchange differences


(3,440)



(12,504)



(14,607)



39,281


   Change in fair value of warrants


(25,915)



200,754



114,845



1,029,879


   Total other income


30,602



212,245



294,077



1,199,750















Income before income taxes


5,142,091



6,644,548



15,874,099



15,795,942















Provision for income taxes


(1,397,501)



(1,664,065)



(4,278,897)



(3,906,071)















NET INCOME


3,744,590



4,980,483



11,595,202



11,889,871















OTHER COMPREHENSIVE INCOME:













 Foreign currency translation adjustments


(199,602)



1,121,422



(486,711)



2,348,153















COMPREHENSIVE INCOME

$

3,544,988


$

6,101,905


$

11,108,491


$

14,238,024















Earnings per share:













   Basic

$

0.24


$

0.33


$

0.74


$

0.79


   Diluted

$

0.23


$

0.30


$

0.70


$

0.73















Weighted average number of shares outstanding:













   Basic


15,402,196



14,915,588



15,376,476



14,732,517


   Diluted


16,532,296



16,516,910



16,515,212



16,322,356




 

NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS EXPRESSED IN US DOLLARS)












September 30,


December 31,





2012


2011





(Unaudited)



ASSETS


CURRENT ASSETS






Cash and cash equivalents

$

67,474,486

$

54,556,329


Restricted cash


-


4,170


Accounts receivable


83,100


82,516


Inventories


1,213,583


898,871


Prepayments and other receivables


1,077,702


1,194,466



Total current assets


69,848,871


56,736,352

OTHER ASSETS






Intangible assets, net


1,656,776


2,024,593


Property, plant and equipment, net


11,749,428


12,395,567


Construction in process


3,992,484


5,271,609










Total assets

$

87,247,559

$

76,428,121


LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES






Accounts payable

$

-

$

6,339


Other payables and accruals


1,334,322


1,064,045


Taxes payable


1,834,780


2,585,738


Due to a related party


149,412


80,648


Preferred stock dividend payable


546,831


529,851


Warrants liabilities


29,566


144,411



Total current liabilities


3,894,911


4,411,032








Total liabilities


3,894,911


4,411,032








COMMITMENTS AND CONTINGENCIES (Note 19)












STOCKHOLDERS' EQUITY











Preferred Stock, $0.001 par value, (1,000,000 shares authorized,






113,010 shares and 147,820 shares issued and outstanding,

respectively; aggregate liquidation preference amount:






$3,164,280 and $4,138,960, plus accrued but unpaid dividend of






$546,831 and $529,851, at September 30, 2012 and


2,577,324


3,371,206


December 31, 2011, respectively)






Common stock, $0.001 par value, 190,000,000 shares authorized






15,462,381 shares issued and 15,418,826 shares outstanding at


15,463


14,963


    September 30, 2012; 14,962,631 shares issued and 14,957,970 shares

    outstanding at December 31, 2011






Additional paid-in capital


18,488,629


17,180,280


Treasury stock, at cost, 43,555 shares and 4,661 shares of common stock






 as of September 30, 2012 and December 31, 2011


(78,767)


(9,553)


Statutory reserves


4,325,493


3,076,552


Retained earnings


53,294,650


43,167,074


Accumulated other comprehensive income


4,729,856


5,216,567



Total stockholders' equity


83,352,648


72,017,089










Total liabilities and stockholders' equity

$

87,247,559

$

76,428,121



 

NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(AMOUNTS EXPRESSED IN US DOLLARS)







For the Nine Months Ended

September 30,




2012



2011


CASH FLOWS FROM OPERATING ACTIVITIES:







Net income

$

11,595,202


$

11,889,871


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







   Change in fair value of warrants


(114,845)



(1,029,879)


   Warrants and consultant restricted stock expense


-



58,340


   Depreciation and amortization


926,272



842,198


   Share-based compensation expense


313,262



351,515


 (Increase) decrease in assets:







       Accounts receivable


(1,110)



72,686


       Inventories


(321,613)



(753,612)


       Prepayments and other receivables


109,625



(762,258)


 Increase (decrease) in liabilities:







       Accounts payable


(6,323)



(122,121)


       Other payables and accruals


277,756



139,029


       Taxes payable


(737,396)



1,413,299


     Net cash provided by operating activities


12,040,830



12,099,068









CASH FLOWS FROM INVESTING ACTIVITIES:







Refund of prepayments for cold studios


1,266,424



-


Addition to construction in progress


-



(4,716,169)


Purchase of property, plant and equipment and construction in progress


(15,903)



(2,019,305)


Net cash provided by (used in) investing activities


1,250,521



(6,735,474)









CASH FLOWS FROM FINANCING ACTIVITIES:







Purchase common stocks


(69,214)



-


Advance from related party


82,674



-


Decrease in restricted cash


4,170



140,860


     Net cash provided by financing activities


17,630



140,860









Foreign currency translation adjustment


(390,824)



1,712,354









INCREASE IN CASH AND CASH EQUIVALENTS


12,918,157



7,216,808


CASH AND CASH EQUIVALENTS, at the beginning of the period


54,556,329



40,758,848









CASH AND CASH EQUIVALENTS, at the end of the period

$

67,474,486


$

47,975,656









NON-CASH TRANSACTIONS







Preferred stock and dividend converted into common stock

$

995,587


$

1,203,346


Share-based payment – IR warrants


-



58,340


Preferred stock dividend payable


218,685



293,010


Share-based payment to officers and directors under equity incentive plan


313,262



351,515


SUPPLEMENTAL DISCLOSURE INFORMATION







Income taxes paid

$

4,773,432


$

2,475,207


 

SOURCE Nutrastar International Inc.



RELATED LINKS
http://www.nutrastarintl.com/
http://www.nutrastarintl.com/alerts

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