Nutrastar International Inc. Announces Record Second Quarter 2010 Results

Tuesday, August 17, 2010 Corporate News
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HARBIN, China, Aug. 16 Nutrastar International Inc.(OTC Bulletin Board: NUIN; "Nutrastar" or the "Company"), a leadingnutraceutical company which produces and distributes Chinese Golden Grass("Cordyceps Militaris") and other specialty food products, today announcedfinancial results for their three and six months ended June 30, 2010.

Three Months Ended June 30, 2010

Revenues reached $5.46 million, an increase of approximately $2.12 million,or 63.4% from the same period in 2009. The increase was mainly attributableto the increase in sales of the company's core product, Chinese Golden Grass,as well as an increase in selling prices for their packaged Chinese GoldenGrass products.

Gross profit was $4.57 million, an increase of approximately $2.41 million,or 112.0% as compared to the same period in 2009. Gross margin was 83.7%, anincrease of 19.1% from 64.6% during the same period in 2009. The increase ingross margin was mainly due to continued product mix shift towards ChineseGolden Grass and increased sales of their higher margin small package ChineseGolden Grass products.

Operating income was approximately $3.79 million, an increase of $2.07million, or up 120.3% from the comparable period of 2009. Operating margin was69.4% for the second quarter 2010, an increase of 17.9% from 51.5% during thecomparable 2009 period.

Net income was $3.42 million, an increase of $1.92 million, or 127.7% fromthe same period of 2009. Basic and diluted earnings per share for bothquarters ended June 30, 2010 and 2009 was $0.12.

Six Months Ended June 30, 2010

Revenues were $10.23 million, an increase of 28.1% from approximately$7.98 million recorded for the same six month period in 2009. The increase wasprimarily as a result of an increase in sales of their Chinese Golden Grass,as well as an increase in selling prices for their packaged Chinese GoldenGrass products.

Gross profit was recorded as $8.28 million, an increase of 64.2% fromapproximately $5.04 million during the same period in 2009. Gross margin was81.0% for the six months ended June 30, 2010, an increase of 17.8% from 63.2%during the same period in 2009. As mentioned above, the increase was a resultof continued product mix shift towards Chinese Golden Grass and the increasedsales of their higher margin products.

Operating income was approximately $6.90 million, up 64.6% from $4.19million recorded in the same six month period of 2009. Operating margin was67.5% for the first six months of 2010, an increase of 15.0% from 52.5%recorded in the same six month period of 2009.

Net income was $6.14 million, up 67.2% from $3.67 million recorded in thefirst six months of 2009. Earnings per basic share was $0.31 and per dilutedshare was $0.30 as compared to $0.29 for the comparable 2009 period on a basicand diluted basis.

As of June 30, 2010, the Company had cash and cash equivalents in theamount of $32.26 million and total liabilities in the amount of $11.92 million.

Ms. Lianyun Han, President and Chief Executive Officer of Nutrastarcommented, "Nutrastar's performance in the second quarter was exceptional. Wesaw heightened consumer demand for our Golden Grass products, especially ourhigh margin, small packaged products. This significant increase in salessuggests that consumer knowledge of the medicinal benefits of Chinese GoldenGrass is gaining traction and the nutraceutical market in China is growing ata healthy rate. On a quarterly basis, revenues increased by roughly 63.4% andEPS reached $0.12, outstanding growth given the current volatile economicenvironment."

Ms. Han continued, "Since the second quarter ended, we announced a fewimportant measures that will prepare the company for significant expansion andgrowth in the time ahead. We plan to expand our manufacturing capabilities byover 30%, increasing our production capacity to 72 tons by the end of 2010. Inaddition to expanding our production capacity, we are also continuouslyseeking to further our geographical footprint and diversify our Golden Grassproduct pipeline. We announced in July 2010 the signing of a product purchaseagreement with Century Brighton Holdings, which will further expand ourcustomer base and penetration into the lucrative Hong Kong market. We alsoannounced the patent application of our Golden Grass wine and oral liquidswhich we anticipate will be in trial production in Q1 2011. It's expected thatwith our increased production capabilities, continued efforts on the R&D side,as well as further expansion of distribution network, Nutrastar will showconsistent growth on both the revenue side and product side going forward."

For more information regarding Nutrastar's financial performance duringthe second quarter of 2010, please refer to the Quarterly Report on Form 10-Qto be filed with the Securities and Exchange Commission on August 16, 2010.

About Nutrastar International Inc.

Nutrastar International Inc. is a China based nutraceutical company whichproduces and distributes Chinese Golden Grass ("Cordyceps Militaris"), organicand specialty food products in China. The Company's primary product is dryengineered Chinese Golden Grass, which is one of the most highly regardedherbal nutrients in Chinese culture. The Company believes it is the largestmanufacturer of engineered Chinese Golden Grass in China, ranked by volume,according to China Market Monitoring Center (CMMC), accounting for 19% marketshare in China. The Company is headquartered in Harbin, capital ofHeilongjiang province, with 302 employees, 21 in R&D, and 132 in sales andmarketing. The products of Nutrastar are sold throughout China via adistribution network that covers more than 10 provinces. More information maybe found at http://www.nutrastarintl.com or e-mail: ir@nutrastarintl.com.

Safe Harbor Statement

This news release contains "forward-looking statements" relating to thebusiness of Nutrastar International Inc. and its subsidiary companies. Allstatements, 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 assumptionsand 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 notlimited to, product and service demand and acceptance, changes in technology,economic conditions, the impact of competition and pricing, governmentregulation, and other risks contained in reports filed by the Company with theSecurities and Exchange Commission. All forward-looking statementsattributable to the Company or persons acting on its behalf are expresslyqualified in their entirety by these factors. . You should not place unduereliance on these forward-looking statements, which speak only as of the dateof this press release. Other than as required under the securities laws, theCompany does not assume a duty to update any forward-looking statements toreflect events or circumstances after the date hereof.Financial Highlights for the Three Months Ended June 30, 2010: -- Revenues increase 63.4%; -- Gross margin increases 19.1% to 83.7% -- EPS reaches $0.12

SOURCE Nutrastar International Inc.


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