SHENZHEN, China, May 15 /Xinhua-PRNewswire/ -- Winner Medical Group Inc. , today reported financial results for the second quarter of fiscal year 2007, ending March 31, 2007.
Consolidated sales for the second fiscal quarter were approximately $15.1 million compared to approximately $16.1 million reported in the second quarter of fiscal 2006, a decrease of approximately 6%. Consolidated gross profit for the second quarter of fiscal year 2007 was approximately $3.4 million, or 22% of net sales, compared to approximately $3.5 million, or 22% reported for the second quarter of fiscal year 2006.
Net income for the second quarter was approximately $1.2 million, or $0.03 per basic and diluted share, compared to net income of approximately $1.4 million, or $0.03 per basic and diluted share, reported in the second quarter of last fiscal year.
Jianquan Li, Chairman and Chief Executive Officer of Winner Medical, remarked, "The second fiscal quarter is typically our slowest quarter (from a revenue standpoint) because we shut down for approximately 20 days each February to enable employees to return to their families for the celebration of the Chinese New Year. In addition, revenues this quarter were hindered due to our decision to transfer or terminate the production of some lower margin products. As I noted last quarter, these production changes are consistent with our strategy to shift the product mix to higher margin, technology-driven products.
"Winner Medical remained profitable in the second quarter despite the changes in production. Moreover, regardless of the external environment, we have chosen to increase investment in the development of innovative new products, such as PurCotton and another new nonwoven product line that is 70% cotton and 30% polyester. We expect these products will gradually supersede our gauze products (PurCotton) and our traditional synthetic nonwoven products (70/30 product), and we believe these new products will give us leverage in market share, sales and profitability in the future."
Mr. Li concluded, "The second quarter performance, albeit less than we would like, reinforces our conviction that Winner Medical has the right strategy. Regardless of the business environment, we try to stay focused on our long-term goals: market and product expansion for long-term growth."
The following table illustrates the sales revenues generated in the second quarter of fiscal year 2007 in the major geographic areas in which Winner Medical sells its products. The table also provides the percentage of total revenues generated in each region.
Sales by Region (Sales in U.S. Dollars, in millions) Second Quarter Percentage of Second Quarter Percentage of FY 2007 Total Revenues FY 2006 Total Revenues Europe $5.29 million 35% $5.43 million 34% Japan $3.32 million 22% $4.07 million 25% North America $2.15 million 14% $1.08 million 7% China $1.96 million 13% $1.85 million 12% Other $2.40 million 16% $3.61 million 22% TOTAL $15.12 million 100% $16.04 million 100%
As of March 31, 2007, Winner Medical had cash and cash equivalents of approximately $4.2 million. As of the second quarter of this fiscal year, Winner Medical had working capital of approximately $13.3 million and stockholders' equity improved to approximately $56.2 million.
Six Month Results
Net sales for the six months ended March 31, 2007 totaled approximately $31.0 million, representing a 4% decrease over net sales of approximately $32.3 million reported in the comparable period of last year. Sales to customers in Europe and Japan represented more than 62% of total revenues.
Net income for the six months ended March 31, 2007 was approximately $2.7 million, or $0.06 per basic and diluted share, compared to net income of approximately $3.0 million, or $0.07 per basic and diluted share, recorded for the same period in fiscal 2006.
About Winner Medical
Winner Medical is a holding company comprised of eight wholly owned manufacturing and distribution facilities, two joint venture factories and one trading company. Winner Medical is primarily engaged in the development, manufacturing and distribution of high-quality cotton disposable medical dressings and disposable products. Winner Medical's products include surgical dressings, dressing packs, wound care dressings, protective products, medical instruments, dental products and hygiene products for the institutional and home care markets. Winner Medical products are manufactured in China and sold domestically and abroad, in countries and areas such as Japan, Germany, Italy, the Netherlands, Australia, France, the United States, South America, Africa and the Middle East. Winner Medical is one of few Chinese companies licensed by the U.S. Food and Drug Administration to ship finished, sterilized products directly to the U.S. market. To learn more about Winner Medical, visit Winner Medical's web site www.winnermedical.com.
Forward-Looking Statements
This press release contains certain statements that may include "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding Winner Medical and its subsidiary companies' business strategy, plans and objective and statements of non-historical information. These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although Winner Medical believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Winner Medical's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Winner Medical's periodic reports that are filed with and available from the Securities and Exchange Commission. All forward- looking statements attributable to Winner Medical or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, Winner Medical does not assume a duty to update these forward-looking statements.
Contacts Company - China U.S. Investor Relations Annie Chen Kathy Price / Dixon Chen Secretary of the Board The Global Consulting Group Tel: +86 (755) 2806 6858 Tel: +1 (646) 284-9400 Email: annie.chen@winnermedical.com Email: kprice@hfgcg.com / dchen@hfgcg.com WINNER MEDICAL GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (U.S. Dollars, except per share amounts) Three months ended Six months ended March 31 March 31 2007 2006 2007 2006 (Unaudited) (Unaudited) US$ US$ US$ US$ Net sales 15,117,911 16,050,435 30,998,681 32,284,563 Cost of sales (11,745,435) (12,562,837) (23,689,561) (24,397,670) Gross profit 3,372,476 3,487,598 7,309,120 7,886,893 Other operating income, net 207,912 151,357 311,551 213,859 Selling, general and administrative expenses (2,527,498) (2,153,154) (5,029,124) (4,728,049) Income from operations 1,052,890 1,485,801 2,591,547 3,372,703 Interest income 4,647 6,966 10,308 11,420 Interest expense (105,102) (33,968) (177,361) (180,474) Equity in earnings of 50 percent or less owned persons 28,999 6,474 85,545 16,896 Income before income taxes and minority interests 981,434 1,465,273 2,510,039 3,220,545 Income taxes 224,551 (59,635) 196,152 (225,031) Income before minority interests 1,205,985 1,405,638 2,706,191 2,995,514 Minority interests (15,110) 3,752 (20,747) 26,183 Net income 1,190,875 1,409,390 2,685,444 3,021,697 Other comprehensive income Foreign currency translation difference 525,374 101,306 1,248,814 200,982 Comprehensive income 1,716,249 1,510,696 3,934,258 3,222,679 Net income per stock - basic 0.03 0.03 0.06 0.07 - diluted 0.03 0.03 0.06 0.07 Weighted average common stock outstanding - basic 44,677,171 44,636,371 44,677,171 41,401,835 - diluted 44,677,171 44,636,371 44,677,171 41,401,835 WINNER MEDICAL GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. Dollars) March 31 September 30 2007 2006 (Unaudited) US$ US$ ASSETS Current assets: Cash and cash equivalents 4,232,127 4,319,579 Accounts receivable, less allowances for doubtful accounts of US$15,118 and US$20,347 at March 31, 2007 and September 30, 2006, respectively 7,409,424 7,513,013 Amounts due from affiliated companies 347,475 480,900 Inventories 13,078,445 11,329,520 Prepaid expenses and other current assets 4,339,129 6,182,472 Income taxes recoverable 31,190 7,533 Total current assets 29,437,790 29,833,017 Property, plant and equipment, net 41,402,647 35,800,530 Investment in an equity investee 1,147,680 1,062,135 Intangible assets, net 36,905 38,731 Prepaid expenses and deposits 232,055 224,391 Deferred tax assets 200,023 195,610 Total assets 72,457,100 67,154,414 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term bank loans 8,404,231 5,437,050 Accounts payable 4,222,098 4,196,874 Accrued payroll and employee benefits 1,182,354 1,184,779 Customer deposits 200,355 269,965 Other accrued liabilities 1,656,324 2,379,849 Amount due to a stockholder - 1,556 Amounts due to affiliated companies 167,046 203,999 Dividend payable - 504,317 Income taxes payable 240,735 556,647 Total current liabilities 16,073,143 14,735,036 Deferred tax liabilities 4,510 4,410 Total liabilities 16,077,653 14,739,446 Commitments and contingencies Minority interests 159,817 149,496 Stockholders' equity: Common stock, par value $0.001 per share; authorized 495,000,000 stock, stock issued and outstanding March 31, 2007 - 44,677,171 shares; September 30, 2006 - 44,677,171 shares 44,677 44,677 Additional paid-in capital 30,257,097 30,237,197 Retained earnings 21,191,966 19,182,866 Statutory reserves 1,899,022 1,222,678 Accumulated other comprehensive income 2,826,868 1,578,054 Total stockholders' equity 56,219,630 52,265,472 Total liabilities and stockholders' equity 72,457,100 67,154,414
Winner Medical Group Inc.CONTACT: China: Annie Chen, Secretary of the Board of Winner Medical GroupInc., +86-755-2806-6858, annie.chen@winnermedical.com; or U.S. InvestorRelations: Kathy Price, kprice@hfgcg.com, or Dixon Chen, dchen@hfgcg.com,both of The Global Consulting Group, both for Winner Medical Group Inc.,+1-646-284-9400
Web site: http://www.winnermedical.com/
