EX-99.1 2 v217716_ex99-1.htm Unassociated Document
China Ruitai International Holdings Co., Ltd. Reports 2010 Financial Results

Company to host conference call on April 4, 10:00am ET

Increased production capacity and selling prices boosts sales by 20.8% to $43.2 million; net income by 22% to $6.9 million with EPS of $0.26

Shifting product portfolio to higher margin industries; Pharmaceutical sales contributed to 46.1% of total revenue

FEICHENG, China, April 1, 2011 /PRNewswire-Asia/ -- China Ruitai International Holdings Co., Ltd. ("China Ruitai", or  "the Company") (OTC Bulletin Board: CRUI), a manufacturer and distributor of cellulose ether additives for use in the production of pharmaceuticals, construction materials, PVC products, foods and beverages and cosmetics, today announced its 2010 results for the three and twelve months ended December 31, 2010.
Three and Twelve months 2010 Results
(ended December 31, 2010)
    Q4 2010     Q4 2009    
Net Sales
$43.2 million
$35.7 million
      +20.8 %  
      +19.6 %
Gross Profit
$12.8 million
$11.9 million
      +7.8 %  
      +26.1 %
Net Income
$6.9 million
$5.6 million
      +22.2 %  
      +32.8 %
EPS (Diluted)
  $0.26     $0.22       +18.2 %   $0.06     $0.05       + 20 %
"We have seen another year of consistent growth as we the top line and bottom line increased by 20%, " began Chairman Dianmin Ma of China Ruitai. "With escalating demand for our product from pharmaceutical, food and cosmetics customers and a dedicated sales team catering to their needs, we anticipate further margin improvements as we move into 2011. We are well positioned to capture further market share by leveraging our recognized brand to win business. As the competitive landscape narrows due to smaller non-compliant facilities closing, we are optimistic about enhanced pricing power and leading position in the marketplace."

For the 3 months ended December 31, 2010

Total revenue for the three months ended December 31, 2010 was $10.6 million, a 19.6% increase compared to $8.9 million in 2009. The increase in sales was mainly attributed by sales of Ethyl Cellulose ("EC") added by the additional 500 tons of EC production line in the second half of 2010 and pharmaceutical Hydroxypropyl Methyl Cellulose (HPMC).


Cost of sales during the three months ended December 31, 2010 increased by 17.2% to $7.6 million compared to $6.5 million in 2009.

Gross profit for the period was $3.0 million compared to $2.3 million in 2009, a 26.1% increase year-over-year. Increases in gross margins were attributed to greater sales revenues and increased sales of Company's higher margin, EC-based product line for pharmaceutical uses.

Net income in fourth quarter of 2010 increased 32.8% to $1.6 million versus the same period in 2009. Earnings per share were $0.06 per share, a 20% increase in EPS for the quarter compared to the fourth quarter, 2009.

For the 12 months ended December 31, 2010

Total revenue for the twelve months ended December 31, 2010 was $43.2 million, a 20.8% increase compared to $35.7 million in 2009. The increase in revenues was primarily a result of increased production capacity of Ethyl Cellulose (EC) and sales of the Company's EC-based products for the pharmaceutical industry. In July 2010, the Company added an additional 500 tons of new production for ethyl cellulose, which is mainly used as a chemical additive in the production and manufacturing of medicine tablets. Total capacity on December 31st was 8500 tons annually and during 2010 the company operated at 86% capacity utilization. In the last two quarters of the year, the Company was also able to increase the average per ton selling price of the products by $250, or 8%, which also contributed to the increase.

Cost of sales during for the year ended December 31, 2010 increased by 27.3% to $30.4 million compared to $23.9 million in the same period of 2009. The increase was consistent with the increase in revenues and increase in the market pricing of ginned cotton, the key raw material used in the manufacturing of cellulose ether. Cotton pricing increases was mitigated by processing an alternative raw material, wood pulp, to extract cellulose for the production of ether cellulose.

Gross profit still increased by 7.8% to $12.8 million for the fiscal year 2010 compared to $11.9 million in the prior responding fiscal year.

Selling and marketing expenses which consist of sales commissions, freight charges, and advertising and promotion expenses increased to 15.1% to $1.8 million compared to $1.5 million in 2009.  General and administrative ("G&A") expenses decreased by 47.1% to $1.4 million compared to $2.6 million in 2009. The decrease in G&A expenses was related to costs reductions in sales staff overhead after the Company consolidated their Beijing sales teams in one office. China Ruitai's dedicated sales department is servicing existing and potential clients across the pharmaceutical, packaged food, personal care and cosmetics industries.

Operating expenses for the year ended December 31, 2010 were $3.2 million, compared to $4.2 million in the prior year's corresponding period, a 24.0% decrease year-over-year.

Operating income advanced 25.0% to $9.6 million, with operating margin of 22.3%.

Net income for the 12 months ended December 31, 2010 was $6.9 million compared to $5.7 million in the prior year's corresponding period, a 22.2% increase over the prior year. Earnings per share increased 18.2% to $0.26 in the 12 months period based on 26.0 million basic and diluted shares outstanding.

Financial Condition

As of December 31, 2010, the Company had $25.3 million in cash and cash equivalents, up from $10.2 million as of December 31, 2009. The Company had $42.3 million in short term loans and $18.1 million in notes payable from several large financial institutions, including Bank of China, China Agriculture Bank and China Citic Bank, Cooperative as of December 31, 2010. China Ruitai reduced notes payable by approximately $31.9 million compared to the end of year 2009. Shareholder's equity was $29.9 million, a 35.7% increase from $22.0 million reported on December 31, 2009.


Conference Call

Ms. Dianmin Ma, Chairwoman and CEO, Mr. Gang Ma, CFO and Ms. Crystal Tang, VP of Investor Relations will host the conference call. To attend the call, please use the information below for either dial-in access or webcast access. When prompted on dial-in, ask for the "China Ruitai Call" and/or be prepared to provide the conference ID.

Friday, April 4, 2011
10:00 am Eastern Time US
Conference Line Dial-In (U.S.):
International Dial-In:
Conference ID:
4430994  "China Ruitai"

Please dial in at least 10-minutes before the call to ensure timely participation.

A playback of the call will be available from 12:00 Noon Eastern Time on April 4 until 11:59 pm Eastern Time on April 11, 2011. To listen, call 1-877-870-5176 within the United States or 1-858-384-5517 when calling internationally. Please use the replay pin number 4430994.

This call is also being webcast by ViaVid Broadcasting and can be accessed by clicking on this link http://viavid.net/dce.aspx?sid=00007D7B or at ViaVid's website at http://www.viavid.net, where the webcast can be accessed through April 4, 2012.

About China Ruitai International Holdings Co.

China Ruitai is engaged in the production and sales of processed chemicals, with a primary focus on non-ionic cellulose ether products. Cellulose ether is an organic chemical that dissolves in water and other organic solvents. Due to the surface-active properties of cellulose ether, it acts as a thickener and stabilizer in aqueous solutions, making it a beneficial additive in a wide variety of commercial industries and products, including, but not limited to the pharmaceutical industry, the construction industry, PVC products, food and beverage products, petroleum, and cosmetics. Specific examples of applications in which cellulose ether products are used include: as a stabilizer and thickener in latex paint; in mortar dry mix for building materials; to improve the performance of resin in PVC production; as a membrane reagent, stabilizer, and thickener in pharmaceuticals; and to improve jam, ice cream, toothpaste and lipsticks in the food and cosmetic industries. China Ruitai is one of the largest non-ionic cellulose ether producers in China.

Forward-Looking Statements

This press release contains certain "forward-looking statements" 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 obtain the necessary financing to continue and expand operations, to market its products in new markets and to offer products at competitive pricing, to attract and retain management, and to integrate and maintain technical information and management information systems, political and economic factors in the PRC, compliance requirement of laws and regulations of the PRC, the effects of currency policies and fluctuations, general economic conditions 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.


For more information, please contact:

Ms. Crystal Tang, VP of Finance
China RuiTai International Holdings Co, Ltd
1221 Avenue of Americas Suite 4200
New York, NY 10020
Web: http://www.rutocel.com
Phone: +1 212-899-5131  
E-mail: tmqcrui@gmail.com
Mr.  John Mattio, Senior Vice President
HC International, Inc.
Phone: +1 203-616-5144
Email: john.mattio@hcinternational.net
Web:   http://www.hcinternational.net

- Financial Statements Follow –


December 31,
Current Assets:
Cash and cash equivalents
  $ 25,286,619     $ 10,174,528  
Restricted cash
    10,254,394       33,054,466  
Accounts receivable, net
    4,896,665       4,098,729  
Notes receivable
    2,736,496       7,153,450  
Advance to suppliers, net
    1,171,477       1,649,685  
    9,468,211       8,132,681  
Other receivables, net
    1,023,337       126,657  
Total current assets
    54,837,199       64,390,196  
Property and equipment, net
    14,014,923       13,204,825  
Commercial leasing assets, net
    37,079,584       36,710,934  
Land use rights, net
    5,045,883       4,988,817  
Long-term investment
    -       888,960  
  $ 110,977,589     $ 120,183,732  
Current liabilities:
Short-term bank loans
  $ 42,339,454     $ 27,195,342  
Accounts payable
    7,691,017       6,175,266  
Notes payable
    18,149,369       50,020,476  
Advance from customers
    687,408       127,419  
Due to related party- current portion
    2,526,474       2,979,171  
Income tax payable
    4,336,457       5,277,239  
Other payables
    3,872,549       2,900,942  
Loan from employees
    1,470,138       1,476,292  
Total current liabilities
    81,072,866       96,152,147  
Due to related party- long-term portion
    -       1,986,114  
Total Liabilities
    81,072,866       98,138,261  
Commitments and contingencies
Shareholders' Equity
    -       -  
Common stock ($.001 par value; 50,000,000 shares authorized, 26,000,000 shares issued and outstanding as of December 31, 2010 and 2009, respectively)
    26,000       26,000  
Additional paid-in capital
    2,908,171       2,908,171  
Statutory reserves
    1,369,652       1,369,652  
Retained earnings
    23,043,387       16,179,230  
Accumulated other comprehensive income
    2,264,049       1,347,371  
Total China Ruitai shareholders' equity
    29,611,259       21,830,424  
Non-controlling interests
    293,464       215,047  
Total Equity
    29,904,723       22,045,471  
  $ 110,977,589     $ 120,183,732  



Years ended December 31,
  $ 43,183,319     $ 35,736,104  
Cost of sales (see note below)
    30,382,960       23,865,156  
Gross margin
    12,800,359       11,870,948  
Operating expenses:
General and administrative expenses
    1,380,869       2,611,721  
Selling expenses
    1,780,940       1,547,688  
Total operating expense
    3,161,809       4,159,409  
Income from operations
    9,638,550       7,711,539  
Other income/(expense)
Interest income
    985,386       2,370,482  
Interest expense
    (2,347,235 )     (2,473,370 )
Commercial leasing income
    1,334,515       -  
Cost of commercial leasing
    (861,104 )     -  
Other income/(expense)
    255,775       (40,835 )
Other expense, net
    (632,663 )     (143,723 )
Income before income tax expense
    9,005,887       7,567,816  
Income tax expense
    2,072,593       1,891,955  
Net income before allocation to non-controlling interests
    6,933,294       5,675,861  
Less: Net income attributable to non-controlling interests
    69,137       56,759  
Net income attributable to China Ruitai
    6,864,157       5,619,102  
Other comprehensive income
Net Income before allocation to non-controlling interest
    6,933,294       5,675,861  
Foreign Currency Translation Adjustment
    925,958       43,448  
Comprehensive income
  $ 7,859,252     $ 5,719,309  
Less: Comprehensive income attributable to non-controlling interests
    78,417       57,193  
Comprehensive income attributable to China Ruitai
  $ 7,780,835     $ 5,662,116  
Earnings per share – Basic and diluted
  $ 0.26     $ 0.22  
Weighted average number of common shares outstanding
 - Basic and diluted
    26,000,000       26,000,000  



Years ended December 31,
Cash flows from operating activities:
Net income before allocation to non-controlling interests
  $ 6,933,294     $ 5,675,861  
Adjustments to reconcile net income before non-controlling interests to net cash provided by operation activities
    2,311,067       1,301,926  
Amortization of land use rights
    110,223       107,112  
Bad debt provision
    (488,831 )     34,261  
Stock based compensation
    -       165,978  
Changes in operating assets and liabilities:
Restricted cash
    23,337,636       (13,887,102 )
Accounts receivable
    (494,961 )     (829,120 )
Notes receivable
    4,546,011       1,110,428  
Advance to suppliers
    754,734       686,574  
    (1,032,220 )     44,943  
Other receivables
    (762,035 )     371,635  
Accounts payable
    1,273,087       383,304  
Notes payable
    (32,749,401 )     20,757,563  
Advance from customers
    541,960       (292,229 )
Income tax payable
    (1,093,085 )     1,369,430  
Other payables
    851,162       (61,936 )
Net cash provided by operating activities
    4,038,641       16,938,628  
Cash flows from investing activities:
Purchase of property and equipment
    (1,801,126 )     (1,536,365 )
Loans to a related party
    -       (15,443,828 )
Net cash used in investing activities
    (1,801,126 )     (16,980,193 )
Cash flows from financing activities:
Net proceeds from bank loans
    13,866,863       5,116,300  
Repayment in amount due to related party
    (1,647,222 )     -  
Loan from employees
    (55,083 )     (235,162 )
Net cash provided by financing activities
    12,164,558       4,881,138  
Effect of exchange rate fluctuation on cash and cash equivalent
    710,018       15,499  
Net increase in cash and cash equivalent
    14,402,073       4,839,573  
Cash and cash equivalent- beginning of year
    10,714,528       5,319,456  
Cash and cash equivalent-end of year
Supplemental disclosure of cash flow information:
  $ 25,286,619     $ 10,174,528  
Cash paid for interest expense
  $ 2,347,235     $ 2,473,370  
Cash paid for income tax
  $ 3,165,678     $ 515,890  
Supplemental disclosure of noncash investing and financing activities
Repayment in amount due to related party by transferring out long-term investment
at cost (see Note 9)
  $ 888,960     $ -  
Collection in amount due from related party by receiving the ownership in real estate
property at fair value (see Note 8)
  $ -     $ 36,710,934