Meanwhile, gross profit increased by 37% over the first quarter of fiscal 2008 to $6.6 million. The increase in gross margin was mainly due to the unit product cost decrease as a result of better economies of scale and the improvement of cost control, equipment technical improvement and lean production management that increased production efficiency and reduced production waste.
At $1.74 million, operating income was up 38% over last year's first quarter. Net income jumped to $1.48 million, a rise of 26.9% over 2008's first quarter. The increase was mainly attributed to decreased export transportation fees, economies of scale related to higher sales revenue and improved production management to reduce manufacture cost.
Jianquan Li, chairman and CEO of Winner Medical, commented, Ô'We are pleased to announce another quarter of strong sales growth, driven by increased orders of our traditional products, including medical care, wound care and home care products, particularly from customers in the U.S. and Europe. Despite the negative effect of the appreciation of the RMB and the global economic crisis, we are able to maintain a stable gross margin and net margin through implementing cost control measures and equipment technical improvements that optimize production efficiency.''
Mr. Li added that the company's PurCotton products performed solidly, with total sales of $0.84 million in the first quarter of fiscal 2009. "We will further strengthen marketing efforts for PurCotton and we believe the growing sales of this new product will be a complementary growth driver to our traditional products over the mid- to long-term."