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Nutrastar International, Inc. Announces Third Quarter 2014 Results

2014-11-13 21:30 6648

HARBIN, China, November 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 nine months ended September 30, 2014.

Financial Highlights for the Three Months Ended September 30, 2014

  • Net revenue was $11.16 million, representing an increase of $0.22 million or 2.1% from $10.94 million in the comparable 2013 three month period.
  • Gross profit was $8.99 million, representing a gross margin of 80.5%.
  • Net income was $6.06 million, representing a net margin of 54.3%.
  • Basic and diluted EPS were $0.36 and $0.34, respectively, with 16.88 million basic shares and 17.70 million diluted shares outstanding.

Financial Highlights for the Nine Months Ended September 30, 2014

  • Net revenue was $31.04 million, representing an increase of $0.82 million or 2.7% from $30.22 million in the comparable 2013 nine month period.
  • Gross profit was $24.28 million, representing a gross margin of 78.2%.
  • Net income was $16.09 million, representing a net margin of 51.8%.
  • Basic and diluted EPS were $0.95 and $0.91, respectively, with 16.80 million basic shares and 17.68 million diluted shares outstanding.

Management Commentary

Ms. Lianyun Han, CEO of Nutrastar, commented, "Nutrastar's results for the third quarter and nine months ended September 30, 2014 came in solid and in line with our expectations: an increase in top line revenue coupled with continued strong margins. Third quarter revenue benefited from an increase of 8.1% or $0.73 million in sales of our core premium consumer product Cordyceps, which includes sales of our new soluble, on-the-go Cordyceps powder solution, and an increase of 3.1% or $0.17 million in sales of our Organic and Specialty Foods product line. As expected, sales growth seen in our first two product lines was partially offset by $0.52 million decrease in sales of our third product line, Functional Health Beverages, resulting from the strategic product realignment conducted earlier in the year. Gross margins increased 0.2% to 80.5% from 80.3% in the comparable 2013 quarter."

Ms. Han continued, "We remained conservative in terms of expansion, and laser-focused on entering the international arena. In September, we announced the receipt of initial approval from China's Ministry of Commerce and achievement of Foreign Trade Operator status, which will allow for the export of our unique products to selected international markets. We are now in the midst of the second and final step in the approval process. Once received, we anticipate our new on-the-go soluble Cordyceps powder solution will be the first product to launch, followed by our other premium consumer products once demand in selected markets has been validated.

As for the remainder of 2014, we expect majority of revenue to continue to come from our core consumer product, Cordyceps, and gross margins to remain robust. Due to the introduction of our soluble Cordyceps powder product and the realignment of our beverage product line earlier in the year, however, we are adjusting our full year 2014 revenue guidance to a more conservative estimate - coming in between $45 million and $47 million. Gross margins are expected to stay at current levels. We will update our shareholders and the investment community on our development progress as it relates to our international expansion and in all other areas of our business as we are able to."

Ms. Han concluded, "Nutrastar's future looks very bright given our consistent product demand and revenue growth, strong and steady margins, robust and growing balance sheet, expanding consumer product portfolio, and defined strategy for international expansion. We're very excited about what 2015 and beyond holds for us in all of our initiatives and we look forward to the time when our goals are brought to fruition."

Outlook for the Year Ending December 31, 2014

Based on management's current expectations, full year 2014 revenue should be in the range of $45 million to $47 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 and nine months ended September 30, 2014, please refer to the Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on or about November 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

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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 Nine Months



Ended September 30,



Ended September 30,



2014



2013



2014



2013

NET REVENUE

$

11,164,809


$

10,935,950


$

31,036,052


$

30,221,420

Cost of goods sold


(2,172,840)



(2,159,255)



(6,754,154)



(6,662,959)

GROSS PROFIT


8,991,969



8,776,695



24,281,898



23,558,461

Selling expenses


(326,760)



(435,920)



(1,052,655)



(1,340,176)

General and administrative expenses


(575,352)



(588,375)



(1,781,985)



(1,877,642)

Income from operations


8,089,857



7,752,400



21,447,258



20,340,643

Other income (expenses):












Interest income


102,481



72,633



291,565



235,122

Foreign exchange differences


(7,899)



21,517



(27,627)



47,974

Change in fair value of warrants


-



-



-



173

Total other income


94,582



94,150



263,938



283,269

Income before income taxes


8,184,439



7,846,550



21,711,196



20,623,912

Provision for income taxes


(2,124,781)



(2,066,105)



(5,622,242)



(5,465,974)

NET INCOME


6,059,658



5,780,445



16,088,954



15,157,938

OTHER COMPREHENSIVE INCOME:












Foreign currency translation adjustments


9,378



521,176



(1,061,364)



2,150,468

COMPREHENSIVE INCOME

$

6,069,036


$

6,301,621


$

15,027,590


$

17,308,406

Earnings per share:












Basic

$

0.36


$

0.36


$

0.95


$

0.94

Diluted

$

0.34


$

0.34


$

0.91


$

0.89

Weighted average number of shares outstanding:












Basic


16,878,627



15,919,261



16,799,048



15,882,507

Diluted


17,702,788



17,060,119



17,684,076



17,018,122

NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS EXPRESSED IN US DOLLARS)









September 30, 2014



December 31, 2013



(Unaudited)










ASSETS


CURRENT ASSETS






Cash and cash equivalents

$

118,570,679


$

102,599,186

Accounts receivable


95,745



56,922

Inventories


1,311,948



691,847

Prepayments and other receivables


844,211



1,300,012

Total current assets


120,822,583



104,647,967

OTHER ASSETS






Intangible assets, net


731,913



1,107,737

Property, plant and equipment, net


14,595,098



15,481,249







Total assets

$

136,149,594


$

121,236,953







LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES






Other payables and accruals

$

1,078,043


$

1,167,957

Taxes payable


2,411,915



2,879,172

Due to a related party


510,649



265,223

Preferred stock dividend payable


647,337



738,903

Total current liabilities


4,647,944



5,051,255

Total liabilities


4,647,944



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 September 30, 2014 and December 31, 2013, respectively; aggregate liquidation preference amount: $2,177,728 and $3,081,848, plus accrued but unpaid dividend of $647,337 and $738,903, at September 30, 2014 and December 31, 2013, respectively


1,773,772



2,510,183







Common stock, $0.001 par value, 190,000,000 shares authorized, 16,953,541 shares issued and 16,909,986 shares outstanding at September 30, 2014; 16,421,161 shares issued and 16,377,606 shares outstanding at December 31, 2013


16,954



16,422







Additional paid-in capital


21,089,712



19,934,551

Statutory reserves


4,989,031



4,983,935

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


(78,767)



(78,767)

Retained earnings


96,195,815



80,242,877

Accumulated other comprehensive income


7,515,133



8,576,497

Total stockholders' equity


131,501,650



116,185,698







Total liabilities and stockholders' equity

$

136,149,594


$

121,236,953

NUTRASTAR INTERNATIONAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(AMOUNTS EXPRESSED IN US DOLLARS)






For the Nine Months Ended September 30,



2014



2013

CASH FLOWS FROM OPERATING ACTIVITIES:






Net income

$

16,088,954


$

15,157,938

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






Change in fair value of warrants


-



(173)

Depreciation and amortization


1,113,418



1,101,320

Share-based compensation expense


104,425



142,653

IR unregistered stock compensation expense


92,371



4,767

(Increase) decrease in assets:






Accounts receivable


(39,386)



(6,347)

Inventories


(627,118)



(645,094)

Prepayments and other receivables


444,593



127,818

Increase (decrease) in liabilities:






Other payables and accruals


(80,074)



421,181

Advance from related party


237,956



-

Taxes payable


(441,777)



(489,557)

Net cash provided by operating activities


16,893,362



15,814,506







CASH FLOWS FROM FINANCING ACTIVITIES:






Advance from/(repayment to) related party


29,620



(36,106)

Net cash provided by/(used in) financing activities


29,620



(36,106)







Foreign currency translation adjustment


(951,489)



1,855,165







INCREASE IN CASH AND CASH EQUIVALENTS


15,971,493



17,633,565

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

$

118,570,679


$

93,160,098







NON-CASH TRANSACTIONS






Preferred stock and dividend converted into common stock

$

958,897


$

-

Preferred stock dividend payable


130,920



170,601

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


104,425



142,653

Share-based payment - IR unregistered stock compensation expense


92,371



4,767

SUPPLEMENTAL DISCLOSURE INFORMATION






Income taxes paid

$

5,839,167


$

5,605,361

Source: Nutrastar International Inc.
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