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Winner Medical Announces Preliminary Fiscal Fourth Quarter 2010 Results
Date:11/12/2010

ely 5.4% versus the fourth quarter of fiscal 2009. Orders in Europe slowed for the entire industry as the debt crisis hit and clients located in Greece and Spain in particular postponed or cancelled orders. Export sales to North and South America remained robust, growing by approximately 20.7%. The growth was driven by increased orders from American and Brazilian clients, since Winner Medical's quality and delivery punctuality is well recognized.

Cotton prices spiked during the summer, rising over 23% from June 30, 2010 to September 30, 2010. Manufacturers such as Winner Medical raised prices to offset these unprecedented levels of commodity inflation, and customers in China and Japan postponed orders. A positive benefit from soaring cotton prices for Winner Medical in the long-run is that many small competitors without sufficient scale are reducing output and shutting down their manufacturing facilities as they start to lose money.

Approximately 81% of Winner Medical's sales come from export sales denominated in currencies other than the RMB. During the fourth quarter, the RMB appreciated relative to the U.S. dollar.

Under these pressures, Winner Medical is increasing its selling prices to its customers to pass along raw material cost increases. While this will benefit operating results, there is a time lag for these increases to be passed on which will impact net income in the near term.

PurCotton® Business Update

Preliminary PurCotton® sales grew 35.4% during the fourth quarter to $3.1 million and benefitted from increased sales at the Company's PurCotton chain stores and from jumbo rolls sales to customers in China and Japan.

As of November 12, 2010, Winner Medical owned and operated 23 PurCotton chain stores in major cities in Guangdong Province, including Shenzhen where the corporate headquarters are located. PurCotton stores are primarily located in downtown shopping malls. The stores range in si
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SOURCE Winner Medical Group Inc.
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