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China Ruitai International Holdings Co., Ltd. Reports Results for the First Quarter 2010
Date:5/19/2010

pan> over the same year ago period. This increase was driven by higher sales volumes accompanied by increased prices for specialty cotton, which doubled during the first quarter of 2010 to $1631 per ton compared to the year ago period. The two key raw materials required for the production of cellulose ether products are purified cotton and etherifying epoxy propane. The Company is based in Feicheng City, which is located in the Shandong Province, a region known for its cotton production, and also home to a number of large etherifying epoxy propane producers. Corresponding gross profits for the quarter were 32.3% compared to 39.5% for the first quarter of 2009. The fluctuation of the cotton price is primarily due to the severe drought in China which has led to decreased supply. While cotton prices during the first quarter reached historical highs, management decided to maintain selling prices, while the majority of our competitors increased selling prices to match costs. Several small competitors exited the market as result of the Company's strategy. As cotton prices have remained elevated during the second quarter, China Ruitai increased selling prices to more adequately reflect production costs, with the goal of achieving gross margins close to historical levels.

Selling expenses which consist of sales commissions, freight charges, and travel were $0.4 million for the three month period ended March 31, 2010 an increase of approximately 24.3% compared to the first quarter of 2009. This increase was due to increased transportation costs and increased sales commissions associated with increased sales.

General and administrative expenses totaled $0.3 million for the three month period ended
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SOURCE China Ruitai International Holdings Co., Ltd.
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