Nutrastar International Inc. Announces Second Quarter 2014 Results - WNEM TV 5

Nutrastar International Inc. Announces Second Quarter 2014 Results

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SOURCE Nutrastar International Inc.

Revenue of $13.0 Million; Gross Margin at 77.3%; Company Maintains Forecasts for 2014 Revenue of Between $47 Million and $50 Million

HARBIN, China, Aug. 13, 2014 /PRNewswire/ -- 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 six months ended June 30, 2014.

Financial Highlights for the Three Months Ended June 30, 2014

  • Net revenue was $13.0 million, representing an increase of $1.13 million or 9.5% from $11.87 million in the comparable 2013 three month period.
  • Gross profit was $10.05 million, representing a gross margin of 77.3%.
  • Net income was $6.80 million, representing a net margin of 52.2%.
  • Basic and diluted EPS were $0.40 and $0.38, respectively, with 16.86 million basic shares and 17.69 million diluted shares outstanding.

Financial Highlights for the Six Months Ended June 30, 2014

  • Net revenue was $19.87 million, representing an increase of $0.59 million or 3% from $19.29 million in the comparable 2013 six month period.
  • Gross profit was $15.29 million, representing a gross margin of 76.9%.
  • Net income was $10.03 million, representing a net margin of 50.4%.
  • Basic and diluted EPS were $0.59 and $0.57, respectively, with 16.76 million basic shares and 17.66 million diluted shares outstanding.

Management Commentary

Ms. Lianyun Han, CEO of Nutrastar, commented, "Our entire consumer product portfolio performed in line with expectations in the three month period ended June 30, 2014. Sales of our core premium consumer product Cordyceps came in at an impressive $10.69 million, up 21.5% year-over-year. This included approximately $1.0 million in sales of our new Cordyceps powder solution product, which was initially distributed within our current specialty nutraceuticals stores channels located in Harbin as a part of its testing phase. Sales of our 210ml and 310ml beverage offerings closed at $1.75 million, down 31.0% year-over-year due to the product line realignment to meet the market demand. Organic and specialty foods segment, our third consumer product category, experienced sales growth of 4.1%, contributing $0.56 million to revenues."

Ms. Han continued, "Overall, we're delighted with the outcome of the second quarter and first six months of the year – both periods marked by continued strong margins and an overall increase in revenue thanks to continued Cordyceps demand and the introduction of our new soluble, powder solution product. This synergistic soluble on-the-go Cordyceps product we believe has the potential to take Nutrastar to the next level - the international market – which we are extremely excited about. In terms of strategy, we were fortunate to bring on Beijing Meilitianhe Fortune Investment Management Co., Ltd. ("MLTH") as a strategic investor through a private share transaction in late June. This development not only further diversified management's holdings, but also aided us in expanding our reach and opportunity in China. MLTH has been instrumental in introducing and helping us secure our first distributor in Hubei for the new Cordyceps powder solution product, and are confident there will be more opportunities like this coming our way."

"As it stands now, we remain the single largest producer of commercially cultivated Cordyceps Militaris. Continued Cordyceps demand coupled with the introduction of exciting products and a broadening in our geographical reach will facilitate future expansion and allow us to achieve key milestones set forth in our long-term growth plan including extending our market presence well-beyond China. We will keep the public and shareholders apprised of our development progress with these initiatives and in all other areas of our business as we are able to, and encourage any interested party to reach out directly for more information on the Company and our innovative, premium consumer product portfolio," added Ms. Han.

Outlook for the Year Ending December 31, 2014

Based on management's current expectations, full year 2014 revenue should fall in the range of $47 million to $50 million, representing an approximate 8% to 15% year-over-year top line growth.

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 and six months ended June 30, 2014, please refer to the Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on or about August 13, 2014.

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 330 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:

Richard Hull
American Capital Ventures
Tel:  +1-305-918-7000
Email: rh@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 Six Months




Ended June 30,



Ended June 30,




2014



2013



2014



2013


NET REVENUE

$

13,004,562


$

11,874,334


$

19,871,243


$

19,285,470


Cost of goods sold


(2,953,060)



(2,731,416)



(4,581,314)



(4,503,704)


GROSS PROFIT


10,051,502



9,142,918



15,289,929



14,781,766


Selling expenses


(478,832)



(473,793)



(725,895)



(904,256)


General and administrative expenses


(533,618)



(696,752)



(1,206,633)



(1,289,267)


Income from operations


9,039,052



7,972,373



13,357,401



12,588,243


Other income (expenses):













   Interest income


97,226



78,748



189,084



162,489


   Foreign exchange differences


(1,639)



31,644



(19,728)



26,457


   Change in fair value of warrants


-



173



-



173


   Total other income


95,587



110,565



169,356



189,119


Income before income taxes


9,134,639



8,082,938



13,526,757



12,777,362


Provision for income taxes


(2,338,917)



(2,120,129)



(3,497,461)



(3,399,869)


NET INCOME


6,795,722



5,962,809



10,029,296



9,377,493


OTHER COMPREHENSIVE INCOME:













   Foreign currency translation adjustments


(17,913)



1,389,545



(1,070,742)



1,629,292


COMPREHENSIVE INCOME

$

6,777,809


$

7,352,354


$

8,958,554


$

11,006,785


Earnings per share:













   Basic

$

0.40


$

0.37


$

0.59


$

0.58


   Diluted

$

0.38


$

0.35


$

0.57


$

0.55


Weighted average number of shares outstanding:        













   Basic


16,858,667



15,863,826



16,758,599



15,863,826


   Diluted


17,694,270



16,993,926



17,657,471



16,993,926


NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS EXPRESSED IN US DOLLARS)



June 30, 2014



December 31, 2013




(Unaudited)





ASSETS  







CURRENT ASSETS







 Cash and cash equivalents

$

112,323,274


$

102,599,186


 Accounts receivable


93,688



56,922


 Inventories


821,897



691,847


 Prepayments and other receivables


1,356,424



1,300,012


   Total current assets


114,595,283



104,647,967


OTHER ASSETS







 Intangible assets, net


853,809



1,107,737


 Property, plant and equipment, net


14,843,123



15,481,249









   Total assets

$

130,292,215


$

121,236,953









LIABILITIES AND STOCKHOLDERS' EQUITY 







CURRENT LIABILITIES







 Other payables and accruals

$

1,030,344


$

1,167,957


 Taxes payable


2,806,214



2,879,172


 Due to a related party


452,668



265,223


 Preferred stock dividend payable


604,666



738,903


   Total current liabilities


4,893,892



5,051,255


   Total liabilities


4,893,892



5,051,255


COMMITMENTS AND CONTINGENCIES







STOCKHOLDERS' EQUITY







 Preferred Stock, $0.001 par value,1,000,000 shares authorized, 77,776 
       shares and 110,066 shares issued and outstanding at June 30, 2014 and 
       December 31, 2013, respectively; aggregate liquidation preference 
       amount:$2,177,728 and $3,081,848, plus accrued but unpaid dividend of 
       $604,666and $738,903, at June 30, 2014 and December 31, 2013, 
       respectively


1,773,772



2,510,183









 Common stock, $0.001 par value, 190,000,000 shares authorized, 16,908,541   
       shares issued and 16,864,986 shares outstanding at 
       June 30, 2014; 16,421,161 shares issued and 16,377,606 shares 
       outstanding at December 31, 2013


16,909



16,422









 Additional paid-in capital


21,012,795



19,934,551


 Statutory reserves


4,989,036



4,983,935


 Treasury stock, at cost, 43,555 shares 
       as of June 30, 2014 and December 31,2013


(78,767)



(78,767)


 Retained earnings


90,178,823



80,242,877


 Accumulated other comprehensive income


7,505,755



8,576,497


   Total stockholders' equity


125,398,323



116,185,698









   Total liabilities and stockholders' equity

$

130,292,215


$

121,236,953





NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(AMOUNTS EXPRESSED IN US DOLLARS)



For the Six Months Ended
June 30,




2014



2013


CASH FLOWS FROM OPERATING ACTIVITIES:







Net income

$

10,029,296


$

9,377,493


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







   Change in fair value of warrants


-



(173)


Consultant restricted stock expense


53,371



-


   Depreciation and amortization


743,052



731,128


   Share-based compensation expense


66,463



108,613


(Increase) decrease in assets:







         Accounts receivable


(37,370)



(8,537)


         Inventories


(136,651)



(265,896)


         Prepayments and other receivables


(68,381)



885,634


Increase (decrease) in liabilities:







         Other payables and accruals


(127,833)



305,355


         Advance from related party


179,980



-


         Taxes payable


(46,908)



(197,651)


     Net cash provided by operating activities


10,655,019



10,935,966









CASH FLOWS FROM FINANCING ACTIVITIES:







   Advance from/(Repayment to) related party


29,704



(27,009)


     Net cash provided by/(used in) financing activities


29,704



(27,009)









Foreign currency translation adjustment


(960,635)



1,412,437









INCREASE IN CASH AND CASH EQUIVALENTS


9,724,088



12,321,394


CASH AND CASH EQUIVALENTS, at the beginning of the period


102,599,186



75,526,533









CASH AND CASH EQUIVALENTS, at the end of the period

$

112,323,274


$

87,847,927









NON-CASH TRANSACTIONS







Preferred stock and dividend converted into common stock

$

958,897


$

-


Preferred stock dividend payable


88,249



112,246


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


66,463



108,613


Share-based payment – IR warrants


53,371



-


SUPPLEMENTAL DISCLOSURE INFORMATION







Income taxes paid

$

3,502,450


$

3,468,821


 

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