Demand for PurCotton to grow steadily, Winner Medical
Winner Medical Group Inc reported unaudited financial results for the first quarter ended December 31, 2008. The Company's results are detailed in its form 10-Q, filed with the United States Securities and Exchange Commission.
Jianquan Li, Chairman and Chief Executive Officer of Winner Medical, commented, ''we are pleased to announce another quarter of strong sales growth, driven by increased orders of our traditional products, including medical care, wound care and home care products, particularly from customers in the US and Europe. Despite the negative effect of the appreciation of the RMB and the global economic crisis, we are able to maintain a stable gross margin and net margin through implementing cost control measures and equipment technical improvements that optimize production efficiency.''
Mr. Li continued, ''Our PurCotton products performed solidly, with total sales of $0.84 million in the first quarter of fiscal 2009. We will further strengthen marketing efforts for PurCotton and we believe the growing sales of this new product will be a complementary growth driver to our traditional products over the mid- to long-term.
First Quarter 2009 Unaudited Financial Results:
Revenue: Winner Medical reported net sales revenue of $25.73 million, a 33.14% increase over the first quarter of fiscal 2008. Healthy revenue growth was mainly due to strong demand, particularly in North and South America; revenue from North and South America was approximately $4.96 million for the first quarter of fiscal 2009, an increase of 105.94% compared to the same period in 2008. The North and South American market accounted for 19.28% of total revenue for the quarter ended December 31, 2008.
Gross Profit: For the first quarter of fiscal 2009, gross profit was $6.60 million, an increase of 37.56% over $4.80 million in the same period of fiscal 2008. Gross margin was 25.66%, versus 24.84% achieved in the first quarter of fiscal 2008. The increase in gross margin was mainly due to the unit product cost decrease as a result of better economies of scale, and the improvement of our cost control, equipment technical improvement and lean production management that increased production efficiency and reduced production waste.
Operating Expenses: Selling, general and administrative expenses increased by 24.41% to $4.46 million in the first quarter of fiscal 2009, from $3.58 million in the first quarter of fiscal 2008. During this quarter, the increase in the operating expenses was mainly due to the increased provision for decline in value of inventory, increase in salary and welfare for the management and administrative staff, and the increase in related administrative expenses such as depreciation and amortization for Winner Medical (Huanggang) Co., Ltd.
Operating Income: During the period, operating income was $1.75 million, an increase of 37.73% compared with $1.27 million in the same quarter of 2008. The increase was mainly attributed to decreased export transportation fees, economies of scale related to higher sales revenue, and improved production management to reduce manufacture cost.