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Winner Medical Reports Third Quarter Fiscal 2011 Results
Date:8/10/2011

ction cost caused by increasing labor costs and strict labor protection. Net sales in this reporting period were steady, but were not as robust as expected due to the fact that sales to the United States market decreased $0.8 million or 14%, as compared with the same period last year. We believe the decrease is due to the fact that customers in the United States market are more price-sensitive than those in other areas due to the pegged revaluation of the RMB to the US Dollar, and are therefore reducing inventory or switching to low-cost cotton alternatives when faced with raising prices.

Net sales from medical products to the China market reached $3.7 million, from $3.3 million in the reporting quarter, or a 9% increase, due to the Company's continuing effort to broaden and expand its sales channels in China.

PurCotton® Business Update

PurCotton® sales increased 107% during the third quarter of 2011 to $5.4 million as a result of robust jumbo roll orders and growth in the Chinese domestic retail business, including the sale of consumer products in self-operated chain stores, online and in supermarkets in China.

Net sales attributable to the PurCotton® jumbo roll-supply business increased to $4.0 million in the three months ended June 30, 2011 from $2.3 million in the same period last year, an increase of 74%. This large increase was due to increased demand from Chinese customers that use it as a component in hygiene products.

Net sales attributable to the PurCotton® retail business increased approximately $1.1 million to $1.4 million in this reporting period, compared to $0.3 million the same period last year. This growth is attributable to the growth in online and offline PurCotton® retail business, which, as of June 30, 2010, had opened 17 retail stores at that time and had no online sales during that period.

As of August 10, 2011, Winner Medical operates 37 retail chain stores, wit
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SOURCE Winner Medical Group Inc.
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