China Ruitai International Holdings Co., Ltd. Reports Second Quarter 2011 Financial Results

FEICHENG, China, Aug. 16, 2011 /PRNewswire-Asia/ -- China Ruitai International Holdings Co., Ltd. ("China Ruitai" or "the Company") (OTC Bulletin Board: CRUI), a manufacturer and distributor of cellulose ether additives for use in the production of pharmaceuticals, construction materials, Polyvinyl chloride ("PVC") products, foods, beverages and cosmetics, today reported its quarterly financial results for the second quarter ended June 30, 2011.

Second Quarter 2011 Results

Revenue

Total revenue for the three month period ended June 30, 2011 was $11.72 million, an increase of 4.93% from $11.17 million during the three month period ended June 30, 2010. The increase in revenue was primarily attributable to: (i) the increase in the product prices; and (ii) the change in our sales strategy. In April 2011, we started to merge into the high-end pharmaceutical products and the PVC sector, focusing on the Hvdroxyethyl Cellulose ("HEC") market.

Cost of Sales

Cost of sales for the second quarter of 2011 decreased 2.68% to $8.00 million from $8.22 million for the same period of 2010. This decrease in cost of sales resulted in an improvement in energy savings.

Operating Expenses

• Selling expenses, which consist of sales commissions, freight charges, travel and other selling expenses, totaled $0.60 million for the three month period ended June 30, 2011, compared to selling expenses of $0.53 million for the three month period ended June 30, 2010, an increase of 14.06%. This increase resulted primarily from an increase of freight charges.

• General and administrative expenses totaled $0.66 million for the three month period ended June 30, 2011 compared to $0.22 million for the three month period ended June 30, 2010, an increase of 205.89%. The main reason for the increase can be attributed to (i) employees payroll increase according to China's inflation rate; and (ii) a $0.42 million increase in bad debt expense in the three month period ended June 30, 2011.

Operating income was $2.45 million and $2.20 million in the second quarter of 2011 and 2010, respectively, an increase of 11.48%. This was primarily attributable to higher sales and lower cost of sales net of increases in operating activities.

Net Income attributable to China Ruitai

The Company had net income of $1,369,869 for the three month period ended June 30, 2011 compared to $1,416,917 for the three month period ended June 30, 2010, a decrease of $47,048, or 3.32%. This decrease is primarily attributable to an increase in operating expenses.

Dianmin Ma, Chairman of China Ruitai, commented, "We are pleased to report our second quarter financial results reflected gradual improvement in our performance against a challenging economic environment. We had 4.7% growth in our sales in this quarter compared to the same period last year, driven by improved sales strategy. The high-end pharmaceutical products and the PVC products sector we have started to focus have allowed us to gain increased sales volume and higher margins. During the quarter, we have also continued to work hard on our energy saving system to reduce our costs."

Mr. Ma continued, "Looking ahead, we expect our sales to continue to grow at a healthy pace in the second half of 2011. We are confident that our diversified product lines and sales strategy will help us sustain the solid growth to deliver our company's strong financial performance for our stockholders, as well as continuing to be one of the largest companies in the industry."

About China Ruitai International Holdings Co.

China Ruitai is one of the largest manufacturers of non-ionic cellulose ether products in China with 9,000 tons of annual capacity. The Company's organic products are used as a thickener, stabilizer and binding agent for a wide variety of products used every day in a number of industries including; pharmaceuticals, construction and building products, and consumer goods, such as cosmetics and foods, including fruit preserves, ice cream, toothpaste and lipsticks. The Company produces nine categories of cellulose ether and 183 industry-specific products under its "RuiTai" brand, which are sold through a network of domestic and international distributors to Asia, Europe, the Middle East and North America.

China Ruitai is engaged in the production and sales of processed chemicals, with a primary focus on non-ionic cellulose ether products. Cellulose ether is an organic chemical that dissolves in water and other organic solvents. Due to the surface-active properties of cellulose ether, it acts as a thickener and stabilizer in aqueous solutions, making it a beneficial additive in a wide variety of commercial industries and products, including, but not limited to the pharmaceutical industry, the construction industry, PVC products, food and beverage products, petroleum, and cosmetics.

Forward-Looking Statements

This press release contains certain "forward-looking statements" 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 obtain the necessary financing to continue and expand operations, to market its products in new markets and to offer products at competitive pricing, to attract and retain management, and to integrate and maintain technical information and management information systems, political and economic factors in the PRC, compliance requirement of laws and regulations of the PRC, the effects of currency policies and fluctuations, general economic conditions 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.