Winner Medical Total net sales revenue grows by 29.83%

12 Aug '08

5 min read

Other Operating Income: Other operating income decreased $121,000 to a loss of $169,000 for the third quarter of fiscal 2008, from a loss of $48,000 during the third quarter of fiscal 2007. The increased loss in Other operating income was largely due to the higher foreign currency exchange losses plus the mixed effect of income from sales of unused raw materials such as cotton and packing materials, sales of leftover materials, tax refunds for reinvestment of profit, and government subsidies.

Operating Expenses: Selling, general and administrative expenses increased by 35.76% to $3.66 million in the third quarter of fiscal 2008, from $2.69 million in the third quarter of fiscal 2007. During this quarter, the increase of the administrative expenses was mainly due to expenses related to grants of 1 million shares of restricted stock to our management and employees, increased administrative expenses for the Winner Huanggang factory, salary increases and the administrative expenses related to the Sarbanes-Oxley 404 compliance project that began in January 2008.

Income Taxes: The Company's income tax provision for the three months ended June 30, 2008 was $375,000, up from $93,000 for the same period in 2007. The increase of tax provision was mainly due to a change in the tax rate in our subsidiaries in China as the result of Chinese Income Tax reform effective from January 1, 2008.

Net income: Net income increased by 19.63% to $1.74 million, or $0.04 per basic and diluted share, compared to net income of $1.45 million, or $0.03 per basic and diluted share, for the third quarter of last fiscal year. This increase can be attributed to: an increase of sales revenue during the three months ended June 30, 2008, as compared with the same period last year, product price increases, better economies of scale and improved production management.

This is despite the sequential loss of approximately $0.62 million in the third quarter of fiscal 2008, as compared to $0.35 million in the second quarter of fiscal 2008 related to the commencement of trial production of PurCotton in the new Winner Huanggang factory.

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Winner Medical Group Inc

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