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China RuiTai Reports Fiscal Year 2007 Financial Results

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


''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 --





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


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


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)


PROVISION FOR TAXATION 2,110,750 1,301,297


MINORITY INTEREST (49,251) (30,364)

NET INCOME 4,875,834 3,005,998


Effects of Foreign Currency

Conversion 490,336 104,608

COMPREHENSIVE INCOME (LOSS) $ 5,366,170 $ 3,110,606


EARNINGS PER SHARE $ 0.23 $ 0.14


OUTSTANDING 23,204,457 22,645,348





December December

2007 2006


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


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,


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





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


CCG Elite Investor Relations

Crocker Coulson, President

Tel: +1-646-213-1915


SOURCE China RuiTai International Holdings Co., Ltd.
Copyright©2008 PR Newswire.
All rights reserved

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