Nutrastar profits up 27 percent

Nutrastar profits up 27 percent

CEO expects cordyceps expansion project to stay on track through 2012 to meet the goal of 100 tons production capacity by end of 2013, an increase of 14.9 percent.

Nutrastar International Inc. (OTCBB: 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, 2012.

Financial highlights for the three months ended June 30, 2012

  • Net revenue was $10.04 million, an increase of 30.6 percent from $7.68 million in the quarter ended June 30, 2011.
  • Gross profit increased 27.2 percent to $7.56 million, up from $5.95 million in the comparable 2011 quarter, representing a gross margin of 75.4 percent.
  • Net income was $4.90 million, up 25.6 percent from $3.90 million in Q2 2011.
  • Basic and diluted EPS were $0.31 and $0.30, respectively, with 15.38 million basic shares and 16.52 million diluted shares outstanding.

Financial highlights for the six months ended June 30, 2012

  • Net revenue was $16.90 million, an increase of 25.3 percent from $13.48 million in the six months ended June 30, 2011.
  • Gross profit increased 21.9 percent to $12.65 million, up from $10.37 million in the comparable 2011 six month period, representing a gross margin of 74.8 percent.
  • Net income was $7.85 million, up 13.6 percent from $6.91 million in the first six months of 2011.
  • Basic and diluted EPS were $0.50 and $0.48, respectively, with 15.37 million basic shares and 16.51 million diluted shares outstanding.

Management commentary                               
"We are quite pleased with our progress in the second quarter and first six months of 2012. While tough macroeconomic conditions remained steadfast, we continued to execute on our growth strategy and yield lucrative results," Ms. Lianyun Han, CEO of Nutrastar, commented. "By focusing on growing our sales volume through existing distribution channels, we saw revenue from product sales reach $10.04 million in second quarter, up 30.6 percent year-over-year and $16.9 million in the first six months, up 25.3 percent year over year. Demand for both our core consumer product Cordyceps and functional health drinks stayed strong with second quarter sales up 23.8 percent and 76.8 percent from the comparable 2011 period, respectively. Moreover, net income rose 25.6 percent in the second quarter and 13.6 percent in the first six months, while gross margin came in at a robust 75.4 percent, good indications of a strong and growing business."

Commenting on the company's cash position, Ms. Han stated, "As noted in our filings with the Securities & Exchange Commission and verified by our independent auditor, we've had and continue to have an extremely solid balance sheet, comprised of very little debt and a substantial cash position. Amidst volatile financial markets and an uncertain future, our strong balance sheet and large cash position, roughly $3.90 per diluted share, puts us in a powerful position as a company and opens the doors of opportunity that might not otherwise be present. It's important that we continue to manage this cash wisely and conservatively and use it towards growing the business organically and through acquisition if the right opportunities present themselves."

Ms. Han added, "Looking ahead, in terms of production capacity, our Cordyceps expansion project is expected to stay on track throughout the rest of 2012 to meet our goal of 100 tons production capacity by end of year 2013, an increase of 14.9 percent from current levels. We are eagerly awaiting and excited for the completion of this final stage which will allow us to better meet growing demand of our Cordyceps-related consumer products and further strengthen our top and bottom line."

Financial position as of June 30, 2012
The Company had cash and cash equivalents totaling $64.47 million or $3.90 per diluted share, total assets of approximately $83.98 million or $5.08 per diluted share, working capital of $62.03 million or $3.76 per diluted share, and stockholders' equity of $79.78 million. Net cash generated from operating activities during the six months ended June 30, 2012 was $8.88 million up from $6.00 million in the comparable 2011 period.

Outlook for the year ending December 31, 2012
Based on management's current expectations, it is still believed that revenue will be in the range of $40 million to $44 million, representing an approximate top line increase of 17 percent to 29 percent year over year.

 

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