Medical products' net sales increased to $36.2 million from $28.3 million, or a 28% increase from the same reporting quarter of fiscal 2010. The increase in net sales was mainly attributable to: (1) significant continuing demand from Japan and the addition of new customers in Europe; and (2) steadily increasing sales orders from North and South America, particularly Brazil and the United States.

Net sales generated from Europe increased 30% during the three months ended June 30, 2011, to $16.1 million from $12.4 million during the three months ended June 30, 2010, due to increased sales to existing customers in Europe that were satisfy with our product quality and timely delivery service, as well as the addition of new customers in that region.

Net sales from the Japanese market increased 47% in the third quarter this year, to $6.2 million from $4.2 million during the same quarter last year. The increase was mainly driven by higher selling prices due to an increase in raw material cost and customers increasing their inventory of medical products, especially during and after the earthquake that occurred in mid-March of this year. Modest future growth in the Japanese market is projected to be driven by larger orders and higher selling prices.