Delays in the construction of a new production facility in China are being blamed for a 41% drop in Remedent's net sales for the first fiscal quarter of 2009.
For the period (end-June 30), the company reported net sales of $2.2 million, compared to $3.6 million in the same quarter a year ago.
Net loss for the quarter was $549,000, compared to income of $331,000 in the same quarter of 2008.
The decrease in revenue is attributed to delays in establishing a new state-of-the-art manufacturing and production facility in Beijing, which in turn resulted in delays in fulfilling certain orders from the company's international distributors, according to the company. Management said it expects the new facility will be fully operational by the third fiscal quarter.
"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 CEO Guy De Vreese in a press release. "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."
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