SHENZHEN, China, May 15 /Xinhua-PRNewswire/ -- Winner Medical Group Inc.
(OTC Bulletin Board: WMDG), 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