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Net sales in the first quarter totaled $2.2 million, a decrease of 41% from $3.6 million in the same year-ago quarter. The decrease in revenue is attributed to delays in establishing a new, state-of-the-art manufacturing and production facility in Beijing, China, which in turn resulted in delays in fulfilling certain orders from the company's international distributors. The new facility is designed to address increasing demand and improve gross margins, while sustaining the high quality of GlamSmile dental veneers. Management expects the new facility will be in full operation by the third fiscal quarter.
Loss from operations in the first quarter was $529,000, as compared to income from operations of $348,000 in the same year-ago quarter, and was attributable to the decrease in year-over-year net sales.
Net loss for the first quarter totaled $549,000 or $(0.03) per share (after minority interest and based on 20.0 million weighted average basic shares outstanding), as compared to income of $331,000 or $0.02 per share (based on 18.6 million weighted average basic shares outstanding) in the same year-ago quarter.
Net comprehensive loss in the first quarter after foreign currency translation adjustment was $492,000 or $(0.02) per share, compared to net comprehensive income of $358,000 or $0.02 per share in the same year-ago quarter.
Cash and cash equivalents totaled $1.6 million at June 30, 2009, a decrease of 12% from $1.8 million at March 31, 2009.
Management Commentary
"This first quarter of our fiscal year represents a transitional quarter as we took more control over our future by establishing a new worldwide production facility in China," said Guy De Vreese, CEO of Remedent. "Our goal was to prepare for increasing demand and improve margins, but still maintain or even improve the quality of our dental veneers. We achieved this during the quarter, and are now able to deliver veneers at exceptional thinness and durability which are second to none in the industry. However, delays in ramping up production resulted in loss or delays in shipping international orders during the quarter. We are now effectively bringing this new facility up to speed and we expect to be producing timely shipments at higher capacity by the third fiscal quarter.
"During the first quarter, we were also focused on advancing the development and market introduction of our revolutionary, patent-pending FirstFit(TM) system for crowns and bridges, which we announced to the world in June. Our FirstFit development effort culminated with the expansion of our distribution agreement with Den-Mat Holdings to include FirstFit. As the world's largest producer of dental veneers, Den-Mat's complete adoption of our GlamSmile technology in August of 2008 has solidified our position as a world leader in the dental veneer space. Den-Mat will now champion the market introduction of FirstFit in the United States through their network of more than 10,000 dentists.
"As I mentioned last quarter, we are beginning to emerge from a pivotal stage in our development, with a new operational structure designed to leverage the proven potential of our unique veneer technology. In addition to Den-Mat in the United States, we are also realizing increasing demand from our markets in China and Australia. We are also finding ways to reduce our costs and improve margins, like our new 'in-house' production facility, while preparing for strong growth. We believe our wide-ranging progress throughout the year, while at times facing setbacks, has kept us on course for continued market expansion in fiscal 2010."
Teleconference Information
Remedent will host a conference call on Friday, August 14, 2009 at 9:00 a.m. Eastern time to discuss these results. A question and answer session will follow management's presentation. To participate in the call, dial the appropriate number 5-10 minutes prior to the start time, request the Remedent conference call and provide the conference ID.
Date: Friday, August 14, 2009 Time: 9:00 a.m. Eastern time (6:00 a.m. Pacific time) Dial-In Number: 1-800-862-9098 International: 1-785-424-1051 Conference ID#: 7REMEDENT
A simultaneous webcast and replay of the call will be accessible via this link: http://viavid.net/dce.aspx?sid=000068A3.
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization and ask you to wait until the call begins. If you have any difficulty connecting with the conference call, please contact the Liolios Group at 1-949-574-3860.
A telephone replay of the call will be available from 12:00 p.m. Eastern time on the same day until September 14, 2009.
Toll-free replay number: 1-800-727-6189 International replay number: 1-402-220-2671 (No passcode required)
About Remedent
Remedent, Inc. specializes in the research, development, manufacturing and marketing of oral care and cosmetic dentistry products. The company serves professional dental industry with breakthrough technology for dental veneers, bridges and crowns that are recognized worldwide for their technological superiority and ease-of-application. These products are supported by a line of professional veneer whitening and teeth sensitivity solutions. Headquartered in Belgium, Remedent distributes its products to more than 35 countries worldwide. For more information, go to www.remedent.com.
Statement under the Private Securities Litigation Reform Act of 1995
Statements in this press release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause Remedent's actual operating results to be materially different from any historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements that explicitly describe these risks and uncertainties, readers are urged to consider statements that contain terms such as "believes," "belief," "expects," "expect," "intends," "intend," "anticipate," "anticipates," "plans," "plan," "projects," "project," to be uncertain and forward-looking. Actual results could differ materially because of factors such as Remedent's ability to achieve the synergies and value creation contemplated by our distribution and licensing agreements. For further information regarding risks and uncertainties associated with Remedent's business, please refer to the risk factors described in Remedent's filings with the Securities and Exchange Commission, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q.
REMEDENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, March 31,
2009 2009
------------ ------------
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,598,294 $ 1,807,271
Accounts receivable, net of allowance for
doubtful accounts of $36,188 at June 30, 2009
and $33,966 at March 31, 2009 3,373,343 3,208,120
Inventories, net 2,056,141 1,937,946
Prepaid expense 1,321,700 1,310,900
------------ ------------
Total current assets 8,349,478 8,264,237
------------ ------------
PROPERTY AND EQUIPMENT, NET 1,001,394 1,024,999
OTHER ASSETS
Long term investments and advances 750,000 750,000
Patents, net 75,092 163,106
------------ ------------
Total assets $ 10,175,964 $ 10,202,342
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Current portion, long term debt $ 59,414 $ 78,798
Line of Credit 1,477,140 660,200
Accounts payable 1,508,368 1,398,420
Accrued liabilities 987,286 1,590,360
Income taxes payable 37,107 39,339
------------ ------------
Total current liabilities 4,069,315 3,767,117
Long term debt less current portion 100,542 100,542
------------ ------------
Total liabilities 4,169,857 3,867,659
------------ ------------
EQUITY:
REMEDENT, INC. STOCKHOLDERS' EQUITY
Preferred Stock $0.001 par value (10,000,000
shares authorized, none issued and
outstanding) -- --
Common stock, $0.001 par value; (50,000,000
shares authorized, 19,995,969 shares issued
and outstanding at June 30, 2009 and March
31, 2009) 19,996 19,996
Treasury stock, at cost;
723,000 at June 30, 2009 and March 31,
2009 (831,450) (831,450)
Additional paid-in capital 24,207,505 24,106,055
Accumulated deficit (17,765,460) (17,216,028)
Accumulated other comprehensive income (loss)
(foreign currency translation adjustment) (583,027) (640,595)
------------ ------------
Total Remedent, Inc. stockholders' equity 5,047,564 5,437,978
Non-controlling interest 958,543 896,705
------------ ------------
Total stockholders' equity 6,006,107 6,334,683
------------ ------------
Total liabilities and equity $ 10,175,964 $ 10,202,342
============ ============
REMEDENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the three months ended
June 30,
2009 2008
----------- -----------
Net sales $ 2,160,803 $ 3,635,479
Cost of sales 1,096,007 1,269,424
----------- -----------
Gross profit 1,064,796 2,366,055
----------- -----------
Operating Expenses
Research and development 26,598 124,948
Sales and marketing 350,935 671,299
General and administrative 1,042,764 1,130,313
Depreciation and amortization 173,444 91,261
----------- -----------
TOTAL OPERATING EXPENSES 1,593,741 2,017,831
----------- -----------
INCOME (LOSS) FROM OPERATIONS (528,945) 348,224
----------- -----------
OTHER INCOME (EXPENSES)
Interest expense (24,647) (35,343)
Other income 65,998 17,621
----------- -----------
TOTAL OTHER INCOME (EXPENSES) 41,351 (17,723)
----------- -----------
NET (LOSS) INCOME (487,594) 330,501
LESS: NET INCOME ATTRIBUTABLE TO THE
NON-CONTROLLING INTEREST 61,838 --
----------- -----------
NET (LOSS) INCOME ATTRIBUTABLE TO
REMEDENT, INC. Common Stockholders $ (549,432) $ 330,501
=========== ===========
INCOME (LOSS) PER SHARE
Basic $ (0.03) $ 0.02
=========== ===========
Fully diluted $ (0.03) $ 0.01
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 19,995,969 18,637,803
=========== ===========
Fully diluted 32,702,274 27,000,995
=========== ===========
NET (LOSS) INCOME $ (487,594) $ 330,501
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment 57,568 27,592
----------- -----------
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME (491,864) 358,093
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO
NON-CONTROLLING INTEREST 42,248 --
=========== ===========
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO
REMEDENT INC., Common Stockholders $ (534,112) $ 358,093
=========== ===========
Company Contacts: Stephen Ross Chief Financial Officer Remedent, Inc. Tel 310-922-5685 Email Contact Investor Relations: Scott Liolios Ron Both Managing Director Liolios Group, Inc. Tel 949-574-3860 Email Contact
SOURCE: Remedent, Inc.
http://www2.marketwire.com/mw/emailprcntct?id=999CDCB2367584EA http://www2.marketwire.com/mw/emailprcntct?id=BDBC0E1FF0C7890C
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