Nutrastar Intl (OTC BB:NUIN)

Financial Highlights for the Quarter Ended March 31, 2012


• Net revenue increased 18.4% to $6.86 million, as compared to $5.80 million in the quarter ended March 31, 2011.
• Gross profit increased 14.8% to $5.08 million, up from $4.43 million in the comparable 2011 quarter, representing a gross margin of 74.1%.
• Net income was $2.95 million, as compared to $3.01 million in Q1 2011.
• Basic and diluted EPS were $0.19 and $0.18, respectively, with 15.36 million basic shares and 16.51 million diluted shares outstanding.

Ms. Lianyun Han, CEO of Nutrastar, commented, "We are pleased with our performance in the first quarter, ending it with improved sales across all of our product lines, a strong bottom line and a very robust balance sheet. Demand grew across all of our premium consumer product lines. Sales of Cordyceps increased 7.4%, beverages grew 271.5% and organic and specialty foods rose 13.4%, as over the comparable 2011 period. As expected, we saw a slight decline in the gross margin to 74.1% from 76.4% in the first quarter of 2011 due to an increase in sales from our beverage products which have a higher cost of production than our other consumer products."

Ms. Han continued, "Throughout Q1, we made progress further broadening our market presence via marketing initiatives, and expanding our production capacity. We also made headway growing our premium consumer product portfolio with the upcoming addition of a new Cordyceps instant soluble drink powder and an infused alcohol product. We expect to see revenue from these products upon their introduction to the market and are very excited about the potential opportunities these products will afford us and our shareholders down the road."

As for Q2 and remainder of 2012, Ms. Han stated, "Expansion in both capacity and product offering is expected to stay on track and at the forefront of our operational and business development initiatives." Ms. Han added, "We look forward to launching new premium products to the market which we expect, like our entire existing product lines, will be well received within China's growing mass consumer market."

Outlook for the Year Ending December 31, 2012


Based on management's current expectations, it is believed that revenue will be in the range of $40 million to $44 million, representing an approximate top line increase of 17% to 29% year over year.

For more information regarding Nutrastar's financial performance during the quarter ended March 31, 2012, please refer to the Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission on or about May 15, 2012. Management is available to discuss the financial results with investors should they have any questions. To arrange a call with the management team, please contact Investor Relations at 305-918-7000.

Full Year 2011 Results

• Revenues increased 41.1% to $34.21 million compared to $24.24 million in the year ended December 31, 2010. 
• Gross profit increased 32.4% to $25.96 million, up from $19.6 million in the comparable 2010 year, representing a gross margin of 75.9%. 
• Net income rose 26.3% to $17.00 million, up from $13.44 million in 2010, representing a net margin of 49.7%. 
• Basic and diluted EPS were $1.12 and $1.04, respectively with 14.78 million basic shares and 16.34 million diluted shares outstanding. 

Ms. Lianyun Han, CEO of Nutrastar, commented, "2011 marked another year of record sales for Nutrastar. With Chinese consumer demand for our premium products remaining strong, we met our revenue guidance for the year with total revenues reaching $34.21 million, up 41% year-over-year. Orders for our core consumer product, Cordyceps remained robust, contributing $25.34 million to our top line, while our organic and specialty food business contributed roughly $2.02 million. As a result of our marketing and branding efforts, our functional health beverages saw sales grow to $6.85 million for 2011 with $3.38 million in sales recorded in the fourth quarter alone, up 60% from third quarter sales of $2.11 million. While still high, gross margins declined to 75.9% from 80.9% in 2010 due to the increased contribution of our beverage products which incur a higher cost of production than our core consumer product, Cordyceps."

"In addition to sales growth, Nutrastar was active in corporate and product development initiatives. In 2011, we adopted a share repurchase program in August and grew our internal Cordyceps production capacity to 72 tons representing an increase of 30%," stated Ms. Han. "We are also in the process of strategically diversifying our product offerings with the addition of an instant soluble drink powder as well as a forthcoming variety of organic products stemming from the sizeable expansion of our organic & specialty foods business that is currently underway. We expect to see a revenue stream from these products in the near future."

Commenting on 2012, Ms. Han stated, "We foresee a continuation of our production capacity expansion, solid sales of our core consumer product, Cordyceps, growing sales of both our functional health beverages and organic & specialty foods, and the introduction of new premium consumer products to the market such as our Cordyceps-infused alcohol product. We also expect, with market and regulatory conditions permitting, to continue to purchase additional shares under our share repurchase program. Armed with augmented capacity, in-demand consumer products and the expectation of new premium consumer products being introduced to the market, we are confident that 2012 will be an even better year for Nutrastar than the previous."

Outlook for the Year Ending December 31, 2012

Based on management's current expectations, the Company maintains its belief that revenue will be in the range of $40 million to $44 million, representing an approximate 17% to 29% top line increase year over year.

HARBIN, China, February 13, 2012 /PRNewswire-Asia-FirstCall/ -- Nutrastar International Inc. (OTCBB: NUIN; "Nutrastar" or the "Company"), a leading China based producer and supplier of premium branded consumer products including commercially cultivated Cordyceps Militaris and functional health beverages, today announced that the Company has recently expanded its consumer product portfolio with the addition of an instant soluble powder version of their premium beverage.

Ms. Lianyun Han, Founder and Chief Executive Officer of Nutrastar commented, "We are excited to bring this instant soluble powder Cordyceps drink to market. Being a leading provider of premium Cordyceps consumer products, we must continue to innovate and find new ways to attract and meet the demands of Chinese consumers while growing both our top and bottom line. We believe this instant soluble powder version falls in line with our goals and will complement our existing high-margin, premium consumer product portfolio."

The new instant soluble powder Cordyceps drink dissolves quickly in either hot, tepid or cold water. The initial distribution plan for the new instant soluble powder drink product will be to the Company's existing high-end channels with new channels currently being developed.

The product has undergone multiple consumer trial tests in a variety of markets and has seen encouraging receptivity in the those markets. Moreover, the product received testing report certification for agro-product safety and environment quality in September 2011. The Company expects to officially launch the product in select Chinese cities by the second quarter of 2012.

Third Quarter 2011 Results

HARBIN, China, May 4, 2011 /PRNewswire-Asia-FirstCall/ -- Nutrastar International Inc. (OTCBB: NUIN; "Nutrastar" or the "Company"), a leading producer and supplier of premium branded Traditional Chinese Medicine ("TCM") consumer products, today announced that it has expanded its distribution, signing new distribution contract for its value-oriented "Ban Ke Chong Cao" health drink and new entry-level "Yang Yang Ba" health drink. Beginning in May 2011, the drinks will be available in twenty-seven convenience stores located in Yancheng City.

Yancheng is located in northern Jiangsu with a population of approximately 8 million. With the distributor in place, Nutrastar beverage products are now available in 4 cities in Jiangsu.

The Yancheng contract is a milestone for the company in that it represents the first step in the national rollout of the Company's value and entry-level beverage products. These products add to the Company's existing portfolio of mid-range and high-end products available through Nutrastar's distribution network. All drink variations are also available in the company's specialty store located in Daqing City, Heilongjiang Province.

Ms. Lianyun Han, CEO and Founder of Nutrastar, commented, "The addition of Yancheng to our distribution network is an important step in our expansion into China's consumer functional drink market. The new channel will further increase our company's brand visibility and we are excited to use it to debut our entry-level and mid-range drink at an affordable price point. We will continue to build our distribution networks within Jiangsu and in other regions of China, and keep the investment community updated when such arrangements are finalized."

Year End Results and Guidance:

• Total revenue generated from sales of Nutrastar's consumer products was $24.24 million, an increase of $8.91 million or 58.1% from approximately $15.33 million for the same period in 2009
• Overall gross profit was $19.6 million, an increase of $8.84 million or 82% from approximately $10.77 million during the same period in 2009
• Net income was $13.44 million, an increase of $5.7 million or 73.7% from $7.74 million in the full year 2009.
• Basic and diluted EPS for the year ended December 31, 2010 was $0.80 and $0.79, based on 14.33 million and 14.48 million shares outstanding, respectively, an increase of $0.21 per basic and diluted share from the same period in 2009 when there were approximately 13.13 million basic and 13.34 million diluted shares outstanding.

Commenting on the annual results, Ms. Han stated, "2010 was a year of great strides and accomplishments for our Company. Having successfully completed a significant portion of our capacity expansion plan, we've now brought our annual capacity to 72 tons going into 2011. Capacity expansion will continue through 2011 and 2012 and upon completion of the current plan, we expect capacity to reach over 100 tons going into year 2013. Nutrastar saw the highest recorded sales of our core Cordyceps products, hitting $22.04 million for the year. Cordyceps products, especially our high-margin, small packaged products, have continued to see strong sales growth and steady order flow. Earnings per share have continued to rise significantly, resulting in increased value to our shareholders."

For the year ending December 31, 2011, based on management's current expectations, revenue will be in the range of $32.0 million to $36.0 million.  The company intends to utilize its existing cash position for capacity expansion, marketing and distribution of its new beverage products and general corporate purposes.

HARBIN, China, Feb. 8, 2011 /PRNewswire-Asia-FirstCall/ -- Nutrastar International Inc. announced today that it has expanded distribution for its functional health drink to include numerous hotels and restaurants in Changzhou, Jiangsu Province.

"The hospitality and restaurant industry has the potential to be a very lucrative market for our premium beverage product. The addition of these new distribution channels to include select hotels and restaurants not only gives our Ban Ke Chong Cao product access to more consumers on a daily basis, but also lays the groundwork for building the Ban Ke Chong Cao brand among one of our key target customer segments. We look forward to continuing to explore the hospitality and restaurant market as we expand our distribution channels in Jiangsu and across China," commented Ms. Lianyun Han, Founder and Chief Executive Officer of Nutrastar.

The new channels expand Nutrastar's "Ban Ke Chong Cao" drink presence to now over 90 Points of Sale ("POS") withinChangzhou, including more than 50 supermarkets and convenience stores, 29 hotels and 10 restaurants. Changzhou, the site of the drink's initial rollout in Q4 2010, is situated in China's affluent Yangtze Delta region about 160 kilometers west ofShanghai and has a population of roughly 4.5 million people.

In December 2010, Nutrastar signed agreements with key distributors in Wuxi and Nantong, major cities in China's affluent Jiangsu province, with populations of 4.6 million and 7.7 million, respectively. Through the agreements, Nutrastar's new 210ml functional Golden Grass health drink products under its Chinese brand name "Ban Ke Chong Cao" will be available in Parkson and other retail locations in Wuxi and in wholesale markets in Nantong.

"Wuxi and Nantong are fast growing metropolitan areas with robust economies and brand-conscious consumers," commented Ms. Lianyun Han, Founder and Chief Executive Officer of Nutrastar. "With approximately 12 million people between the two cities, this is a natural extension of our initial rollout of Ban Ke Chong Cao in Jiangsu Province. We are excited to be entering these burgeoning new markets and look forward to expanding our distribution to additional key regions and cities in 2011."

/PRNewswire-Asia/ -- Nutrastar International Inc. today announced that it has completed its 2010 expansion plans, increasing annual production capacity from 55 tons to 72 tons.

As disclosed in August 2010, in order to expand the Company's branded Chinese Golden Grass product offerings and to meet the raw material demand needed to effectively launch new functional health drink products, the Company planned to increase production capacity to 72 tons by the end of 2010 and to over 100 tons by the end of 2012. The 2010 expansion plans were successfully completed by bringing online three additional production facilities at the Company's production base in Heilongjiang, China.

Ms. Lianyun Han, Founder and Chief Executive Officer of Nutrastar commented, "We are thrilled to have completed this significant expansion project, which increases our annual production capacity by over 30%. This will allow us to continue to expand our product pipeline and market share in the TCM consumer products market."  She added, "Our new functional health drinks containing Chinese Golden Grass are now in more than 50 supermarkets and convenience stores in the city of Changzhou, Jiangsu Province. We are looking forward to further expanding distribution of our beverage and other consumer products in 2011."

Financial Highlights for the Three Months Ended September 30, 2010:

• Recorded revenues of $6.46 million, an 81.2% increase Year-Over-Year
• Gross profit of $5.28 million, an increase of $2.51 million or 90.6% Year-Over-Year
• Net income rises 100.4% Year-Over-Year to $4.07 million, representing a net margin of 62.9%
• Basic earnings per share ("EPS") increases to $0.28; Diluted EPS increases to $0.25 vs. $0.15.

Ms. Lianyun Han, President and Chief Executive Officer of Nutrastar commented, "We are very pleased by Nutrastar's most recent three month and nine month financial performance, posting record sales of our golden grass products and earnings for our shareholders. Chinese Golden Grass products, especially our high margin, small packaged products, have seen steady, healthy sales volume and order flow."

Ms. Han continued, "In the third quarter not only did the Company outperform financially, but we have continued to make strides growing our manufacturing capabilities, expanding our TCM consumer product line and geographical reach, and improving our investor relations and corporate governance efforts. As announced early in the quarter, we are in the midst of expanding our production capacity to 72 tons by the end of 2010. We believe we are well on the way to meeting this goal. We announced in July 2010 the signing of a product purchase agreement with Century Brighton Holdings, which will further expand our TCM customer base and penetration into the wealthy Hong Kong market. We have been well received in this market and look forward to continued growth on both the product side and customer side. The development of our Golden Grass wine and oral liquids are on track and is expected to commence trial production in Q1 2011."

Ms. Han further commented, "So far in the fourth quarter, we began the initial rollout of our functional health drink with the signing of a key distributor in Changzhou city. We are very excited to be bringing this TCM based health beverage to the public market and look forward to further expanding its presence in other key areas and cities in China. With our new TCM functional health drink product line and the continued growth of our commercially cultivated Golden Grass product line, we expect to further expand our market position as a leading producer and supplier of premium TCM consumer products."

Recent Events

On October 5, 2010, the Company elected Mr. Henry Ngan, Ms. Virginia P'an and Mr. Jianbing Zhong as independent directors.  As a result, the majority of the Company's board members are now independent.  Each newly elected independent director was also appointed to the newly established Audit Committee, Compensation Committee and Governance and Nominating Committee of the board of directors of the Company.  Mr. Ngan was appointed as the Chair of the Audit Committee, Ms. P'an was appointed as the Chair of the Compensation Committee and Mr. Zhong was appointed as the Chair of the Governance and Nominating Committee.

Financial Highlights for the Three Months Ended June 30, 2010:

• Revenues increase 63.4%.
  
• Gross margin increases 19.1% to 83.7%.
  
• Net income was $3.42 million, an increase of $1.92 million, or 127.7%.
  
• Basic and diluted earnings per share for both quarters ended June 30, 2010 and 2009 was $0.12.

Ms. Lianyun Han, President and Chief Executive Officer of Nutrastar commented, "Nutrastar's performance in the second quarter was exceptional. We saw heightened consumer demand for our Golden Grass products, especially our high margin, small packaged products. This significant increase in sales suggests that consumer knowledge of the medicinal benefits of Chinese Golden Grass is gaining traction and the nutraceutical market in China is growing at a healthy rate. On a quarterly basis, revenues increased by roughly 63.4% and EPS reached $0.12, outstanding growth given the current volatile economic environment."

Ms. Han continued, "Since the second quarter ended, we announced a few important measures that will prepare the company for significant expansion and growth in the time ahead:

• We plan to expand our manufacturing capabilities by over 30%, increasing our production capacity to 72 tons by the end of 2010.
• In addition to expanding our production capacity, we are also continuously seeking to further our geographical footprint and diversify our Golden Grass product pipeline.
• We announced in July 2010 the signing of a product purchase agreement with Century Brighton Holdings, which will further expand our customer base and penetration into the lucrative Hong Kong market.
• We also announced the patent application of our Golden Grass wine and oral liquids which we anticipate will be in trial production in Q1 2011.

It's expected that with our increased production capabilities, continued efforts on the R&D side, as well as further expansion of distribution network, Nutrastar will show consistent growth on both the revenue side and product side going forward."

GeoTeam note:

It seems that the company may have inadvertently presented its EPS number incorrectly.  It appears that $0.12 is a GAAP number based on net income of $1,659,654, after subtracting a non-cash item (Beneficial conversion feature of convertible preferred stock 1,742,239.  $3.42 million is the cleaner number and would result in EPS of $0.24. Further, subtracting a warrant gain figure of $131 thousand equates to net income $3.3 million or EPS $0.23.

Also see message board note by Xantu.

During 2010, Nutrastar plans to further increase the percentage of total revenue generated through sales of Chinese Golden Grass, both through increased sales of product processed and packaged for the consumer marketplace as well as sales of raw material to the pharmaceutical industry. The Company expects that further product awareness, widespread availability and increased health awareness among Chinese consumers will drive consumer adoption and sales for the Company's Golden Grass.

A major initiative of Nutrastar's future growth strategy is the introduction of new, value-added products targeting multiple downstream markets, including mass consumer, nutraceutical and pharmaceutical markets. After successfully introducing the small package consumer cordyceps products, the Company's growth plan during 2010 will include introducing a new branded specialty beverage product known as "Golden Grass Energy Drink". Commercialization of Golden Grass Energy Drink is scheduled for the second quarter of 2010, targeting affluent, professional, athletic and elderly consumers.

In support of its growth strategies, Nutrastar plans to increase annual production capacity from its current capacity of 55 tons to 65 tons by the end of 2010. Nutrastar operates the world's largest Chinese Golden Grass planting base, and employs patented technology in the cultivation and commercialization of Chinese Golden Grass. The Company also has cutting edge research and development capabilities that drives technology innovation.

"Given our leadership position in a growing market with high barriers to entry, supported by a well known and certified product brand, we are very optimistic about our growth prospects for 2010 and beyond," added Mr. Daniel Lee, CFO. "We anticipate incremental revenue and earnings growth of our higher margin Chinese Golden Grass products. We are very pleased with our progress to grow sales through downstream market applications and look forward to the successful launch of our specialty consumer beverage. In addition, we will be expanding into new pharmaceutical, nutraceutical and mass consumer markets which will bring the Company additional distribution channels, technologies and licensing opportunities, as we aim to become a leading nutraceutical company in China."