Nutrastar International Inc. Announces First Quarter 2015 Results

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May 15, 2015, 08:30 ET

HARBIN, China, May 15, 2015 /PRNewswire/ -- Nutrastar International Inc. (OTC: 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 ended March 31, 2015.

Financial Highlights for the Three Months Ended March 31, 2015

Net revenue was $7.04 million, representing an increase of $0.17 million or 2.5% from $6.87 million in the comparable 2014 three month period.
Gross profit was $5.46 million, representing a gross margin of 77.5%.
Net income was $3.53 million, representing an increase of $0.30 million or 9.2% from $3.23 million in the comparable 2014 three month period.
Basic and diluted EPS were $0.21 and $0.20, respectively, with weighted average 16.96 million basic shares and 17.74 million diluted shares outstanding.

Management Commentary

"Nutrastar continued to operate at full production capacity during the first quarter 2015 and benefit from established economies of scale. Top line revenue grew by $0.17 million over the comparable 2014 quarter driven primarily by a $0.11 million increase in sales in our core premium Cordyceps consumer product. Gross margins remained robust – experiencing a slight 1.2% improvement from 76.3% in Q1 2014 to 77.5% in Q1 2015 as a result of economies of scale and increased sales of our higher margin core Cordyceps products," commented, Ms. Lianyun Han, CEO of Nutrastar.

Ms. Han continued, "Nutrastar's core Cordyceps business has grown significantly over the last several years. Cordyceps, our highest margin product, continues to be our strongest revenue producing product line with the greatest market demand here in China. We continue to be the largest single producer of Cordyceps Militaris in China according to the Market Survey of Cordyceps Militaris 2014, published by Qianinfo Consulting, an independent market research firm, and are currently exploring opportunities to expand internationally starting with our "on-the-go" soluble form.

As mentioned on our prior earnings announcement, we are gradually taking appropriate measures for overseas expansion and surveying various market opportunities. This includes conducting and prototyping new product formats for select international markets and gauging possible receptivity and viability in the U.S. market. It is our 2015 goal to complete some of these measures which may play a pivotal role in the success of our Cordyceps products abroad. We will provide updates on our progress in these areas as soon as we are able to."

Ms. Han added, "While it is not our policy to discuss fluctuations in Nutrastar's common stock, we would like to allay any concerns about the recent market activity. The Company knows of no reason for the recent decrease in share price or trading activity in our shares. To the knowledge of Nutrastar, there has been no material adverse development or circumstances with respect to the Company's business that would explain the decrease in share price or trading volumes. We believe the Company's financial position and business are fundamentally sound, and that we remain well positioned in the Cordyceps consumer market with multiple product line offerings. We are currently in compliance with SEC reporting and disclosure rules, and are committed to transparency, full and fair disclosure as dictated by SEC laws and regulations."

Outlook for the Year Ending December 31, 2015

Based on management's current expectations, full year 2015 revenue remains in the range of $43 million to $45 million.

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 three months ended March 31, 2015, please refer to the Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on or about May 15, 2015.

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 336 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: [email protected]

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:

Richard Hull
American Capital Ventures
Tel: +1-305-918-7000
Email: [email protected]

NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
(AMOUNTS EXPRESSED IN US DOLLARS)

		For the Three Months Ended March 31,
	2015		2014

REVENUE	$	7,042,327	$	6,866,681

Cost of goods sold		(1,584,260)		(1,628,254)

GROSS PROFIT		5,458,067		5,238,427

Selling expenses		(297,625)		(247,063)
General and administrative expenses		(491,283)		(673,015)

Income from operations		4,669,159		4,318,349

Other income (expenses):
Interest income		111,407		91,858
Foreign exchange differences		(8,071)		(18,089)
Total other income (expenses)		103,336		73,769

Income before income taxes		4,772,495		4,392,118

Provision for income taxes		(1,241,318)		(1,158,544)

NET INCOME		3,531,177		3,233,574

OTHER COMPREHENSIVE INCOME:

Foreign currency translation adjustments		(525,174)		(1,052,829)

COMPREHENSIVE INCOME	$	3,006,003	$	2,180,745

Earnings per share
Basic	$	0.21	$	0.19
Diluted	$	0.20	$	0.18

Weighted average number of shares outstanding
Basic		16,957,832		16,657,418
Diluted		17,737,437		17,645,322

NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS EXPRESSED IN US DOLLARS)

	March 31, 2015		December 31, 2014
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	127,914,281	$	126,542,564
Accounts receivable		49,495		93,066
Inventories		1,380,675		635,409
Prepayments and other receivables		1,141,526		1,489,800
Deferred tax asset (VAT)		247,761		-
Total current assets		130,733,738		128,760,839
OTHER ASSETS
Intangible assets, net		488,857		613,315
Property, plant and equipment, net		14,124,892		14,424,942

Total assets	$	145,347,487	$	143,799,096

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Other payables and accruals	$	955,592	$	990,290
Taxes payable		1,280,708		2,748,583
Due to a related party		515,631		511,054
Preferred stock dividend payable		700,606		690,662
Total current liabilities		3,452,537		4,940,589
Total liabilities		3,452,537		4,940,589
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred Stock, $0.001 par value, 1,000,000 shares authorized, 74,276 shares and 77,776 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively; aggregate liquidation preference amount: $2,079,728 and $ 2,177,728, plus accrued but unpaid dividend of $700,606 and $690,662, at March 31, 2015 and December 31, 2014, respectively		1,693,950		1,773,772
Common stock, $0.001 par value, 190,000,000 shares authorized, 17,039,951 shares issued and 16,996,396 shares outstanding at March 31, 2015; 16,953,541 shares issued and 16,909,986 shares outstanding at December 31, 2014		17,040		16,954

Additional paid-in capital		21,274,427		21,122,372
Statutory reserves		4,989,033		4,989,033
Treasury stock, at cost, 43,555 shares as of March 31, 2015 and December 31, 2014		(78,767)		(78,767)
Retained earnings		106,272,606		102,783,308
Accumulated other comprehensive income		7,726,661		8,251,835
Total stockholders' equity		141,894,950		138,858,507

Total liabilities and stockholders' equity	$	145,347,487	$	143,799,096

NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(AMOUNTS EXPRESSED IN US DOLLARS)

		For the Three Months Ended March 31,
		2015		2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,531,177	$	3,233,574
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		367,958		372,777
Share-based compensation expense		40,384		45,234
IR unregistered stock compensation expense		-		14,558
(Increase) decrease in assets:
Accounts receivable		43,249		(40,338)
Inventories		(748,178)		(1,046,809)
Prepayments and other receivables		342,881		526,815
Increase (decrease) in liabilities:
Other payables and accruals		(31,145)		(75,594)
Advance from related party		13,864		139,989
Taxes payable		(1,706,421)		(1,704,426)
Net cash provided by operating activities		1,853,769		1,465,780

Foreign currency translation adjustment		(482,052)		(930,431)

INCREASE IN CASH AND CASH EQUIVALENTS		1,371,717		535,349
CASH AND CASH EQUIVALENTS, at the beginning of the period		126,542,564		102,599,186

CASH AND CASH EQUIVALENTS, at the end of the period	$	127,914,281	$	103,134,535

NON-CASH TRANSACTIONS
Preferred stock and dividend converted into common stock	$	111,757	$	958,897
Preferred stock dividend payable		41,879		46,676
Share-based payment to officers and directors under equity incentive plan		40,384		45,234
Share-based payment – IR unregistered stock compensation expense		-		14,558
SUPPLEMENTAL DISCLOSURE INFORMATION
Income taxes paid	$	2,247,715	$	2, 355,699