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Winner Medical Reports First Quarter Fiscal 2011 Results
Date:2/10/2011

Cash and cash equivalents were $10.9 million as at December 31, 2010 compared to $14.8 million as at September 30, 2010. The Company's working capital as of December 31, 2010 was $45.6 million. Total assets were approximately $132.6 million compared to $119.0 million as of September 30, 2010, while total shareholder's equity was $110.8 million and $105.9 million in the respective periods.  

First Quarter 2011 Operational Highlights PurCotton® Business Update:

PurCotton® sales increased 78.08% during the first quarter of 2011 to $4.5 million as a result of steady wholesale sales of jumbo roll to foreign customers and robust growth of our domestic retail business, which distribution channels include chain stores, online sales and wholesales to large customers in China. Revenue generated from PurCotton jumbo rolls and retail sales were $3.6 million and $0.9 million in the first quarter of 2011, respectively.

Gross profit of Winner Medical's PurCotton retail business for the first quarter of fiscal 2011 was $0.48 million. Net loss for the retail segment was $0.5million in the first quarter of 2011 due to start up expenditures, including market research expenses, product development expenses, leasing fees, salary expenses, and expenditures relative to the Company's own B2C website development, expenses which were not incurred in the same period of fiscal 2010. PurCotton retail business losses combined with net income from the PurCotton wholesale business results in a net loss of $0.2 million for all PurCotton® product sales. We consider that the loss from PurCotton retail business was caused by the necessary cost of investment in building our retail business and our PurCotton brand.

As of February 10, 2011, the Company owns and operates 29 PurCotton chain stores in first-tier cities all over China, including four in Beijing, the capital of China, four in Shanghai and 21 stores in Guangdong province where
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SOURCE Winner Medical Group Inc.
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