SHENZHEN CITY, China, Dec. 20 /Xinhua-PRNewswire/ -- Winner Medical Group
Inc. (OTC Bulletin Board: WMDG), today reported financial results for the
fourth quarter and fiscal year ended September 30, 2006.
Revenues for the fourth fiscal quarter were $16.64 million compared to
$18.56 million reported in the fourth quarter of fiscal 2005, a decrease of
approximately 10%. Net income for the fourth quarter was $1.29 million, or
$0.03 per basic and diluted share, compared to net income of $2.41 million, or
$0.06 per basic and diluted share, reported in the fourth fiscal quarter last
year.
The decrease in revenue in the fourth quarter is primarily attributable to
increased competition for our traditional products, particularly in the North
American and the European markets. The decrease in net income was attributable
to the increased investments in R&D, increases in the cost of labor,
electricity, freight and fuel and expenses of approximately $0.3 million
associated with maintaining the Company's U.S. public reporting company
status.
Revenues for fiscal year 2006 were $63.87 million compared to $58.36
million reported in fiscal year 2005, an increase of approximately 9%. Net
income for the full fiscal year 2006 was $5.83 million, or $0.14 per basic and
diluted share, compared to net income of $7.89 million, or $0.21 per basic and
diluted share, reported for the full fiscal year 2005.
The following table illustrates the sales revenues generated in fiscal
year 2006 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)
Fiscal Year Percentage of Fiscal Year Percentage of
2006 Total Revenues 2005 Total Revenues
Europe $25.01 39.16 % $22.39 38.37 %
Japan $16.65 26.06 % $15.12 25.91 %
North America $7.62 11.93 % $7.50 12.85 %
China $7.78 12.18 % $6.94 11.89 %
Other $6.81 10.67 % $6.41 10.98 %
TOTAL $63.87 100.00 % $58.36 100.00 %
As of September 30, 2006, Winner Medical had cash and cash equivalents of
$4.3 million compared to $2.7 million reported in fiscal year 2005. As of the
fiscal year end, Winner Medical had working capital of $15.1 million and
stockholders' equity improved to $52.3 million.
Jianquan Li, Winner Medical's chairman and chief executive officer,
commented, "Winner Medical continued to grow its business in fiscal 2006.
Existing products produced solid sales throughout the year; however, we
experienced intense competition for these products in the latter half of the
year, particularly in North America and Europe. Our new products, including
our technology driven self-adhesive bandage, were well received and we
continue to see increased demand for them in all markets. Our product mix
continues to shift to higher margin products, with sterilized products now
representing approximately 40% of total revenues. We also continued to report
positive bottom line results, despite a significant investment in R&D, higher
overall operational costs and added expenses associated with our listing in
the U.S. capital markets.
"Looking forward to fiscal year 2007, Winner Medical plans to continue to
leverage its innovative technology to introduce new products into the market.
Our first new product introduction will be the new PurCotton(TM) line of
products, which are expected to officially enter the market after the first of
the year. This product line has similar advantages as cotton gauze products --
absorbent, non-allergenic and biodegradable, but does not have the
disadvantages -- microorganism attachment, fiber loss, shredding, and raw
edges, etc. We are very excited about the PurCotton(TM) line of products, and
believe it has the potential to be a true 'category killer'.
"In fiscal year 2007, we also plan to leverage several programs, including
the implementation of our SAP ERP system, to optimize our operations and
internal systems to maximize our efficiency and profitability. Another goal is
to expand new business opportunities in North America and considerably
increase the revenue contribution from that region," concluded Mr. Li.
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 very 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
United States
Company Investor Relations
Richard Thomas Kathy Price / Dixon Chen
Vice President The Global Consulting Group
Tel: +1(843)682-5001 Tel: +1(646)284-9430 / +1(646)284-9400
Email: rthomas@winnermedical.com Email: kprice@hfgcg.com /
dchen@hfgcg.com
Hong Kong
Company Investor Relations
Annie Chen Henry Chow
Secretary of the Board Citigate Dewe Rogerson - Hong Kong
Email: annie.chen@winnermedical.com Tel: +852 2533 4639
WINNER MEDICAL GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(U.S. Dollars, except per share amounts)
Three months ended Fiscal year ended
September 30 September 30
(UNAUDITED) (AUDITED)
2006 2005 2006 2005
Net sales $16,636,783 $18,556,176 $63,873,058 $58,357,129
Cost of sales (11,341,625) (12,905,708) (46,335,354) (42,059,663)
Gross profit 5,295,158 5,650,468 17,537,704 16,297,466
Other operating income,
net 82,183 25,436 283,337 296,117
Selling, general and
administrative
expenses (3,973,494) (3,149,002) (11,335,006) (8,830,775)
Income from operations 1,403,847 2,526,902 6,486,035 7,762,808
Gain on disposal of a
subsidiary - - - 1,049,239
Interest income 27,858 9,951 54,772 12,009
Interest expense (51,631) (132,726) (266,934) (470,776)
Share of undistributed
earnings in an equity
investee 42,199 (1,750) 52,817 9,108
Income before income
taxes and minority
interests 1,422,273 2,402,376 6,326,690 8,362,388
Income taxes (135,453) (2,706) (516,635) (446,146)
Income before minority
interests 1,286,820 2,399,670 5,810,055 7,916,242
Minority interests 2,658 7,559 19,239 (23,572)
Net income $1,289,478 $2,407,229 $5,829,294 $7,892,670
Other comprehensive
income
Foreign currency
translation difference 530,980 720,741 857,313 720,741
Comprehensive income 1,820,458 3,127,970 6,686,607 8,613,411
Net income per stock
- basic $0.03 $0.06 $0.14 $0.21
- diluted $0.03 $0.06 $0.14 $0.21
Weighted average common stock
outstanding
- basic 44,677,171 36,991,105 43,053,212 36,991,105
- diluted 44,677,171 36,991,105 43,061,546 36,991,105
WINNER MEDICAL GROUP INC.
CONSOLIDATED BALANCE SHEETS
(U.S. Dollars)
September 30 September 30
2006 2005
(Audited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $4,319,579 $2,650,867
Accounts receivable, less allowances
for doubtful accounts of US$20,347 and
US$12,643 at September 30, 2006 and
2005, respectively 7,513,013 8,257,923
Amounts due from affiliated companies 480,900 116,804
Inventories 11,329,520 10,476,534
Prepaid expenses and other current
assets 6,182,472 4,268,072
Income taxes recoverable 7,533 57,649
Total current assets 29,833,017 25,827,849
Property, plant and equipment, net 35,800,530 26,834,824
Investment in an equity investee 1,062,135 1,009,318
Intangible assets, net 38,731 38,288
Prepaid expenses 224,391 219,125
Deferred tax assets 195,610 294,021
Total assets $67,154,414 $54,223,425
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank loans 5,437,050 8,773,881
Accounts payable 4,196,874 3,490,047
Accrued payroll and employee benefits 1,184,779 1,150,036
Customer deposits 269,965 99,994
Other accrued liabilities 2,379,849 2,279,845
Amount due to a stockholder 1,556 168,817
Amounts due to affiliated companies 203,999 255,611
Dividend payable 504,317 1,872,750
Income taxes payable 556,647 576,157
Total current liabilities 14,735,036 18,667,138
Deferred tax liabilities 4,410 37,271
Total liabilities $14,739,446 $18,704,409
Commitments and contingencies
Minority interests 149,496 1,164,186
Stockholders' equity:
Common stock, par value $0.001 per
share; authorized 495,000,000 stock,
stock issued and outstanding September 30,
2006 - 44,677,171 shares; September 30,
2005- 36,991,105 shares 44,677 36,991
Additional paid-in capital 30,237,197 19,020,848
Retained earnings 19,182,866 14,104,400
Statutory reserves 1,222,678 471,850
Accumulated other comprehensive income 1,578,054 720,741
Total stockholders'
equity $52,265,472 $34,354,830
Total liabilities and
stockholders' equity $67,154,414 $54,223,425
