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PurCotton business is performing well at Winner Medical
11 Aug '10
5 min read
Gross Profit
Gross profit in the third quarter of 2010 increased 24.4% to $8.9 million from $7.2 million in the third quarter of 2009. Third quarter 2010 gross margin was 28.9%, compared to 29.5% in the third quarter of 2009. The slight decline in gross margin resulted from an increase in the price of cotton, our principal raw material. In order to reduce this risk, we have increased our selling price progressively, which was accepted by our customers.
Selling, General and Administrative Expenses
In the third quarter of 2010, selling, general and administrative expenses were $5.3 million, versus $3.6 million in the third quarter of 2009. Adjusted selling, general and administrative expenses (non-GAAP), which exclude share-based compensation expenses, for the third quarter were $5.5 million, versus $3.7 million for the same quarter of 2009. This increase was mainly due to increases in transportation expenses, growth in salaries to support higher sales growth, as well as an increase in leasing fees for PurCotton stores.
Income from Operations
Income from operations decreased by 2.1% to $3.6 million in the third quarter of 2010, from $3.7 million in the third quarter of 2009. Adjusted income from operations (non-GAAP), which excludes share-based compensation expenses, was $3.9 million in the third quarter of 2010, compared to $3.8 million in the same period of 2009.
Income Taxes
The Company's effective tax rate for the third quarter of 2010 was 9.3%, compared to 18.5% in the third quarter of 2009. The lower income tax rate was mainly due to the Company's subsidiary, Winner Industries (Shenzhen), obtaining a High and New Technology Enterprise Certificate, which reduced its income tax rate from 18% to 15%, as well as the Company's Research and Development expenses enjoying a 150% tax deductible preferential policy during the third quarter of 2010 compared with a lower deduction during the same quarter of 2009.
Net Income Attributable to Winner Medical Group Inc.
Net income attributable to Winner Medical Group Inc. increased by 10.1% to $3.4 million in the third quarter of 2010, as compared to approximately $3.1 million in the third quarter of 2009. Diluted earnings per share remained unchanged compared to the third quarter of 2009 at $0.14.
Adjusted net income attributable to Winner Medical Group Inc. (non-GAAP), which excludes share- based compensation expenses, was $3.6 million for the third quarter of 2010, an increase of 14.0% from the same period a year ago. Excluding share-based compensation expenses, adjusted diluted earnings per share (non-GAAP) was $0.15 in the third quarter, versus $0.14 per share in the comparable quarter of 2009.
This increase was primarily driven by rising cotton price and maritime transportation expenses. In response, the Company is increasing its selling prices to its customers to pass along these cost increases. However, there is some time lag for these increases to be passed on to consumers and reflected in the Company's net income.
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Gross profit in the third quarter of 2010 increased 24.4% to $8.9 million from $7.2 million in the third quarter of 2009. Third quarter 2010 gross margin was 28.9%, compared to 29.5% in the third quarter of 2009. The slight decline in gross margin resulted from an increase in the price of cotton, our principal raw material. In order to reduce this risk, we have increased our selling price progressively, which was accepted by our customers.
Selling, General and Administrative Expenses
In the third quarter of 2010, selling, general and administrative expenses were $5.3 million, versus $3.6 million in the third quarter of 2009. Adjusted selling, general and administrative expenses (non-GAAP), which exclude share-based compensation expenses, for the third quarter were $5.5 million, versus $3.7 million for the same quarter of 2009. This increase was mainly due to increases in transportation expenses, growth in salaries to support higher sales growth, as well as an increase in leasing fees for PurCotton stores.
Income from Operations
Income from operations decreased by 2.1% to $3.6 million in the third quarter of 2010, from $3.7 million in the third quarter of 2009. Adjusted income from operations (non-GAAP), which excludes share-based compensation expenses, was $3.9 million in the third quarter of 2010, compared to $3.8 million in the same period of 2009.
Income Taxes
The Company's effective tax rate for the third quarter of 2010 was 9.3%, compared to 18.5% in the third quarter of 2009. The lower income tax rate was mainly due to the Company's subsidiary, Winner Industries (Shenzhen), obtaining a High and New Technology Enterprise Certificate, which reduced its income tax rate from 18% to 15%, as well as the Company's Research and Development expenses enjoying a 150% tax deductible preferential policy during the third quarter of 2010 compared with a lower deduction during the same quarter of 2009.
Net Income Attributable to Winner Medical Group Inc.
Net income attributable to Winner Medical Group Inc. increased by 10.1% to $3.4 million in the third quarter of 2010, as compared to approximately $3.1 million in the third quarter of 2009. Diluted earnings per share remained unchanged compared to the third quarter of 2009 at $0.14.
Adjusted net income attributable to Winner Medical Group Inc. (non-GAAP), which excludes share- based compensation expenses, was $3.6 million for the third quarter of 2010, an increase of 14.0% from the same period a year ago. Excluding share-based compensation expenses, adjusted diluted earnings per share (non-GAAP) was $0.15 in the third quarter, versus $0.14 per share in the comparable quarter of 2009.
This increase was primarily driven by rising cotton price and maritime transportation expenses. In response, the Company is increasing its selling prices to its customers to pass along these cost increases. However, there is some time lag for these increases to be passed on to consumers and reflected in the Company's net income.
Click here for more details
Winner Medical Group Inc
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