China RuiTai Reports Fiscal Year 2007 Financi...(ion an increase of 33.4% from $8.9millio...),Health

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 in
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