TAI’AN, Shandong, China, April 16 /Xinhua-PRNewswire-FirstCall/ -- China RuiTai International Holdings Co., Ltd. (OTC Bulletin Board: CRUI) (“China RuiTai” or “the Company”), a leading producer and distributor of cellulose ether products in the People’s Republic of China (“PRC”), today announced its financial results for the fiscal year ended December 31, 2007.
Fiscal Year 2007 Highlights
-- Sales increased 36.7% to $38.4 million
-- Gross profit increased 33.4% to $11.9 million
-- Gross profit margin was 31.0%
-- Operating income increased 52.3% to $8.1 million
-- Operating margin improved 216 basis points to 21.1%
-- Net income increased 62.2% to $4.9 million, or $0.23 per basic and
fully diluted share
-- Completed a production line to increase production capacity to 10,000
metric ton per year
-- Became a public company through a share exchange transaction in August
2007
“We are pleased to see continuous strong growth as our cellulose ether products continue to receive wide acceptance while meeting the worldwide expanding demand,” commented Dianmin Ma, Chief Executive Officer and Chairman of China RuiTai. “In 2007, we exported about 2,400 metric tons of cellulose ether products to foreign markets in the United States, Europe, India, the Middle East, and South East Asia. Our sales in the domestic market were about twice that of our international market. We expect further growth in the domestic and international markets in 2008 and beyond.”
Full Year 2007 Results
During the year ended December 31, 2007, sales were $38.4 million, an increase of 36.7% from $28.2 million for 2006. This was primarily due to increased order volumes from the Company’s existing customers. Hydroxypropyl Methyl Cellulose (HPMC) remained the Company’s top-selling product, accounting for 68.4% in 2007, compared to 66.0% in 2006.
Gross profit in 2007 was $11.9 million, an increase of 33.4% from $8.9 million in 2006. Gross margin was 31.0% in 2007, down slightly from 31.8% in 2006 due to slight increase in raw material cost, which management expects to be stable or experience a potential decrease in 2008.
Operating expenses were $3.8 million, up 9.9% from $3.6 million a year ago. This increase was primarily due to higher selling expenses and general and administrative expenses resulting from growth and expansion. As a percentage of sales, operating expenses were 4.2% in 2007, compared to 5.3% in 2006.
Operating income increased 52.3% to $8.1 million in 2007 from $5.3 million in 2006. Operating margin during 2007 was 21.1%, up from 18.9% a year ago.
Net income for 2007 was $4.9 million, or $0.23 per basic and fully diluted share, up 62.2% from $3.1 million, or $0.14 per basic and fully diluted share in 2006.
Financial Condition
As of December 31, 2007, the Company had cash and cash equivalents of $4.2 million, accounts receivable were $3.1 million and total assets of $28.4 million. At December 31, 2007, the Company had short-term debt of $19.2 million, bank checks payable of $22.1 million and shareholders’ equity of $9.7 million. For the full year 2007, the Company generated $8.5 million in cash flow from operating activities. The Company had capital expenditures of $4.6 million, due to an additional production line introduced in May of 2007, which increased capacity by 1,500 metric tons for a total annual capacity of 10,000 metric tons.
Business Outlook
“In 2008, we plan to further increase our production volume to meet the growing international demand for cellulose ether products in both the domestic and international market. We intend to increase production at our existing facility, which is currently operating at about 70% capacity, and plan to expand our total production capacity to 15,000 metric tons with our new facility. We believe by increasing our capacity 150%, the increased production volume will further reduce our cost per metric ton which in turn will improve gross profit margin.
“The outlook for our cellulose ether demand is excellent. Our close and strong alliances with research institutes enable us to offer products based on the most advanced technology and to enhance the many applications of our existing products. We look forward to leveraging our advantages in raw material sourcing, and local labor cost competitiveness to continue to capture the expanding business opportunities available to us,” Mr. Ma concluded.
About China RuiTai International Holdings Co., Ltd.
China RuiTai International Holdings Co., Ltd. (OTC BB: CRUI), through its operating subsidiary, is engaged in the production, sales, and exportation of deeply processed chemicals, with a primary focus on non-ionic cellulose ether products. Cellulose ether is an organic chemical that acts as a thickener and dissolves in water and other organic solvents. The Company is one of the largest non-ionic cellulose ether producers in China delivering products for the pharmaceutical, PVC manufacturing, construction industry, the personal care market and oil field exploration and recovery industries. China RuiTai exports to United States, Europe, India, the Middle East, and South East Asia.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management’s current expectations. Such factors include, but are not limited to the company’s ability to complete product orders, coordinate product design with its customers, ability to expand and grow its distribution channels, political and economic factors in the People’s Republic of China, the company’s ability to find attractive acquisition candidates, dependence on a limited number of larger customers and other factors detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission and other regulatory authorities. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
-- Financial Tables to Follow --
CHINA RUITAI INTERNATIONAL HOLDINGS CO., LTD. AND SUBSIDIARIES
F/K/A SHANDONG RUITAI CHEMICAL CO., LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(AUDITED)
For the Year Ended December 31,
2007 2006
REVENUE $ 38,407,800 $ 28,090,238
COST OF SALES 26,489,964 19,153,553
GROSS PROFIT 11,917,836 8,936,685
EXPENSES
Selling expenses
Sales commission 670,364 738,526
Freight-out 893,530 856,850
Adverting 188,761 30,093
Travel and entertainment 250,230 385,360
Other selling expenses 186,603 117,270
TOTAL SALES EXPENSE 2,189,488 2,128,099
General and administrative expenses
Payroll and employees benefits 267,673 209,242
Insurance 151,437 139,989
Professional fees 86,303 105,206
Consultant fees 134,011 --
Bad debt expenses -- 88,176
Office expenses 364,906 195,843
Repair and maintenance 167,014 525,176
Travel and entertainment 206,675 148,569
Other general and administrative 249,486 78,917
TOTAL OPERATING EXPENSE 1,627,505 1,491,118
TOTAL EXPENSE 3,816,993 3,619,217
OPERATING INCOME (LOSS) 8,100,843 5,317,468
OTHER INCOME
Interest income 267,989 331,259
Interest expense (1,996,479) (1,159,076)
Government subsidy 556,627 --
Other income (expense) 106,855 (151,992)
TOTAL OTHER INCOME (1,065,008) (979,809)
INCOME TAX AND MINORITY INTEREST 7,035,835 4,337,659
PROVISION FOR TAXATION 2,110,750 1,301,297
INCOME BEFORE MINORITY INTEREST 4,925,085 3,036,362
MINORITY INTEREST (49,251) (30,364)
NET INCOME 4,875,834 3,005,998
OTHER COMPREHENSIVE INCOME (LOSS)
Effects of Foreign Currency
Conversion 490,336 104,608
COMPREHENSIVE INCOME (LOSS) $ 5,366,170 $ 3,110,606
BASIC AND FULLY DILUTED
EARNINGS PER SHARE $ 0.23 $ 0.14
WEIGHTED AVERAGE SHARES
OUTSTANDING 23,204,457 22,645,348
CHINA RUITAI INTERNATIONAL HOLDINGS CO., LTD. AND SUBSIDIARIES
F/K/A SHANDONG RUITAI CHEMICAL CO., LTD.
CONSOLIDATED BALANCE SHEETS
(AUDITED)
December December
2007 2006
ASSETS
Current Assets:
Cash and cash equivalents $ 4,166,713 $ 6,286,289
Bank checks and
commercial paper 621,204 1,191,451
Accounts receivable, net 3,053,295 3,364,632
Due from unaffiliated suppliers 1,112,948 930,213
Prepaid expenses 2,876,820 2,360,481
Inventory 6,656,028 5,209,747
Advance to employees 113,297 56,735
Total current assets 18,600,305 19,399,548
Property and Equipment, net 11,306,271 6,592,796
Land use right, net 4,859,620 4,650,814
Long-term investment 830,984 779,200
Due from a related party 14,829,593 8,804,112
Restricted cash 14,738,564 12,244,750
Total Assets $ 65,165,337 $ 52,471,220
LIABILITIES AND OWNERS’ EQUITY
Current Liabilities:
Bank loan $ 19,269,317 $ 16,209,608
Bank checks payable 22,059,772 22,050,400
Accounts payable and accrued
expenses 7,657,437 5,542,712
Taxes payable 3,560,918 2,221,970
Deferred revenue 737,027 493,807
Due to employees 1,265,898 890,984
Employee security deposit 810,802 677,949
Total Current
Liabilities 55,361,171 48,087,430
Minority Interest 98,053 43,847
Owners’ Equity:
Preferred stock, par value $0.001,
10,000,000 shares authorized,
authorized, no shares outstanding -- --
Common stock, par value $0.001,
50,000,000 shares authorized,
22,645,348 shares issued and
outstanding as of December 31,
2006
26,000,000 shares issued and
outstanding as of December 31,
2007 26,000 22,745
Additional paid-in capital 2,366,171 2,369,426
Statutory Reserves 1,042,355 272,979
Retained earnings 5,700,875 1,594,417
Accumulated other comprehensive
income 570,712 80,376
Owners’ Equity 9,706,113 4,339,943
Total Liabilities and Owners’ Equity $ 65,165,337 $ 52,471,220
CHINA RUITAI INTERNATIONAL HOLDINGS CO., LTD. AND SUBSIDIARIES
F/K/A SHANDONG RUITAI CHEMICAL CO., LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AUDITED)
For the Year Ended
December 31,
2007 2006
Operating Activities
Net income (loss) $ 4,875,834 $ 3,005,998
Adjustments to reconcile
net income (loss) to
net cash provided (used)
by operating activities:
Minority interest 49,251 30,364
Depreciation 726,969 584,801
Amortization 95,940 27,673
Changes in operating assets
and liabilities:
(Increase)/Decrease in bank
checks and commercial paper 623,589 335,215
(Increase)/Decrease in
accounts receivable 513,661 (1,437,788)
(Increase)/Decrease in
prepaid expenses (345,162) (1,271,877)
(Increase)/Decrease in
inventory (1,056,278) (21,340)
(Increase)/Decrease in
advance to employees (50,691) 64,672
Increase/(Decrease) in
accounts payable and
accrued expenses 1,676,877 (416,997)
Increase/(Decrease) in
taxes payable 1,143,879 1,293,536
Increase/(Decrease) in
deferred revenue 202,030 69,992
Increase/(Decrease) in
employee security deposit 84,304 152,471
Net cash provided (used) by
operating activities 8,540,203 2,416,720
Investing Activities
Purchase of fixed assets (4,649,895) (1,698,011)
Purchase of land use rights -- (3,376,077)
Loans to unaffiliated suppliers (116,103) (414,451)
Loans to a related party (5,223,903) (3,381,395)
Net cash (used) by investing
activities (9,989,901) (8,869,934)
Financing Activities
Bank loans 1,903,560 4,623,048
Proceeds from banks checks
and commercial paper -- 9,055,200
Payback of banks checks
commercial paper (1,398,132) --
Decrease (Increase) in
restricted cash to secure bank
checks (1,613,196) (5,114,130)
Loans from employees 303,139 16,763
Net cash provided (used) by
financing activities (804,629) 8,580,881
Increase (decrease) in cash (2,254,327) 2,127,667
Effects of exchange rates
on cash 134,751 128,352
Cash at beginning of period 6,286,289 4,030,270
Cash at end of period $ 4,166,713 $ 6,286,289
Supplemental Disclosures of
Cash Flow Information:
Cash paid (received)
during year for:
Interest $ 1,996,479 $ 824,897
Income taxes $ 1,004,871 $ 503,447
For more information, please contact:
China RuiTai International Holdings Co., Ltd.
Mr. Gang Ma, CFO
Tel: +86-538-385-0703
Email: fcmagang@163.com
CCG Elite Investor Relations
Crocker Coulson, President
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
