Forward Looking Statements
The discussion contained herein is for the three and six months endedSeptember 30, 2020 andSeptember 30, 2019 . The following discussion should be read in conjunction with the Company's consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for the quarterly period endedSeptember 30, 2020 . In addition to historical information, this section contains "forward-looking" statements, including statements regarding the growth of product lines, optimism regarding the business, expanding sales and other statements. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including continued market acceptance of our products. In addition, actual results could vary materially based on changes or slower growth in the oral care and cosmetic dentistry products market; the potential inability to realize expected benefits and synergies; domestic and international business and economic conditions; changes in the dental industry; unexpected difficulties in penetrating the oral care and cosmetic dentistry products market; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufacturing capacity; future production variables impacting excess inventory and other risk factors. Factors that could cause or contribute to any differences are discussed in "Risk Factors" and elsewhere in the Company's annual report on Form 10-K filed onJune 29, 2020 with theSecurities and Exchange Commission . Except as required by applicable law or regulation, the Company undertakes no obligation to revise or update any forward-looking statements contained in this Quarterly Report on Form 10-Q for the quarterly period endedSeptember 30, 2020 . The information contained in this Quarterly Report on Form 10-Q for the quarterly period endedSeptember 30, 2020 is not a complete description of the Company's business or the risks associated with an investment in the Company's common stock. Each reader should carefully review and consider the various disclosures made by the Company in this Quarterly Report on Form 10-Q and in the Company's other filings with theSecurities and Exchange Commission . Overview
We specialize in the research, development, and manufacturing of oral care and cosmetic dentistry products. We are one of the leading manufacturers of cosmetic dentistry products inEurope . Leveraging our knowledge of regulatory requirements regarding dental products and management's experience in the needs of the professional dental community, we design, develop, manufacture and distribute our cosmetic dentistry products, including a full line of professional dental products that are distributed inEurope ,Asia andthe United States . We distribute our products using both our own internal sales force and through the use of third party distributors. 18 Result of Operations
Comparative detail of results as a percentage of sales is as follows:
For the three months ended For the six months ended September 30, September 30, 2020 2019 2020 2019 NET SALES 100.00 % 100.00 % 100.00 % 100.00 % COST OF SALES 35.12 % 28.03 % 33.19 % 26.24 % GROSS PROFIT 64.88 % 71.97 % 66.81 % 73.76 % OPERATING EXPENSES Sales and marketing 8.25 % 38.65 % 6.95 % 36.28 %
General and administrative 34.83 % 65.29 % 42.97 % 59.60 % Depreciation and amortization 2.75 % 7.90 % 3.61 % 7.53 % TOTAL OPERATING EXPENSES 45.83 % 111,84 % 53.53 % 103.41 % INCOME (LOSS) FROM OPERATIONS 19.05 % (39.87 )%
13.28 % (29.65 )% Other income (18.35 )% (30.04 )% (11.52 )% (31.04 )% NET INCOME 0.70 % (69.91 )% 1.76 % (60.69 )% NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST 0.54 % 3.99 % (0.81 )% (2.84 )% NET INCOME (LOSS) ATTRIBUTABLE TO REMEDENT INC. COMMON SHAREHOLDERS 1.24 % (65.92 )%
0.95 % (63.53 )%Net Sales Net sales increased by approximately 33% to$321,922 for the three months endedSeptember 30, 2020 as compared to$242,070 for the three months endedSeptember 30, 2019 . The increase in sales is primarily due to increased sales in our GlamSmile Division during the quarter endingSeptember 30, 2020 . Net sales decreased by approximately 2% to$541,051 for the six months endedSeptember 30, 2020 as compared to$552,034 for the six months endedSeptember 30, 2019 . Net sales decreased in the six months endedSeptember 30, 2020 mainly because of the impact of the coronavirus (now commonly known as COVID-19).
Cost of Sales
Cost of sales increased approximately 66.6% to
Cost of sales increased approximately 24% to$179,600 for the six months endedSeptember 30, 2020 as compared to$144,870 for the six months endedSeptember 30, 2019 . Cost of sales increased mainly because of increased sales in our GlamSmile division offset by reduced sales in our other divisions, mainly due to the impact of the coronavirus since the beginning of the current fiscal year startingApril 2020 . Gross Profit Our gross profit increased by$34,643 or 19.9% to$208,850 for the three months endedSeptember 30, 2020 as compared to$174,207 for the three months endedSeptember 30, 2019 due to increased sales in our GlamSmile Division as described above. Our gross profit as a percentage of sales decreased to 64.88% in the three months endedSeptember 30, 2020 as compared to 71.97% for the three months endedSeptember 30, 2019 . Our gross profit decreased by$45,713 or 11.2%, to$361,451 for the six months endedSeptember 30, 2020 as compared to$407,164 for the six months endedSeptember 30, 2019 primarily because of reduced sales in our Implant Division, known for its higher margins. These reduced sales are mainly due to the impact of the coronavirus during the first quarter of the current fiscal year, startingApril 2020 . 19 Operating Expenses Research and Development. Our research and development costs were nil for each of the three months endedSeptember 30, 2020 and 2019 and for the six months endedSeptember 30, 2020 , and$120 for the six months endedSeptember 30, 2019 . Our research and development expenses have decreased because of the finalization of our Software program the "Smile me Mirror". Sales and marketing costs. Our sales and marketing costs for the three months endedSeptember 30, 2020 and 2019 were$26,554 and$93,560 respectively, representing a decrease of$67,006 or 71.6%. The decrease is largely due to decreased attendance at trade shows and reduced travelling due to our reduced active approach in the US market and in general due to the COVID-19 mandatory restrictions.
Our sales and marketing costs decreased by$162,689 or 81.2% to$37,609 for the six months endedSeptember 30, 2020 as compared to$200,298 for the six months endedSeptember 30, 2019 mainly because of our reduced advertising and marketing costs in reference to the new and additional Condor 3D Scanner tool and in general due to the COVID-19 mandatory restrictions. General and administrative costs. Our general and administrative costs for the three months endedSeptember 30, 2020 and 2019 were$112,116 and$158,039 respectively, representing a decrease of$45,923 or 29.1%. The decrease in general and administrative costs is largely due to increased synergy between our internal divisions as a result of ongoing internal reorganization. Our general and administrative costs for the six months endedSeptember 30, 2020 and 2019 were$232,482 and$328,995 respectively, representing a decrease of$96,513 or 29.3%. The decrease in general and administration costs is largely due to increased synergy between our internal divisions as a result of ongoing internal reorganization and in general due to the COVID-19 mandatory restrictions.
Depreciation and amortization. Our depreciation and amortization decreased
Our depreciation and amortization was
Other income (expense). Our other income / (expense) was ($59,064 ) for the three months endedSeptember 30, 2020 as compared to$(72,721) for the three months endedSeptember 30, 2019 , a decrease in expense of$13,657 . The decrease in other expense was primarily as a result of decreased equity losses and other expenses.
Our net other (expense) decreased by
Internal and External Sources of Liquidity
As ofSeptember 30, 2020 , we had current assets of$745,452 compared to$681,064 atMarch 31, 2020 . This increase of$64,388 was primarily due to an increase in cash of$13,432 , an increase in accounts receivable of$71,547 , and an increase in inventories of$22,238 offset by a decrease in prepaid expense and other current assets of$42,829 . As ofSeptember 30, 2020 , we had cash and cash equivalents of$128,066 . We anticipate that we will need to raise additional funds to satisfy our working capital requirements and implement our business strategy to expand our direct to consumer business model. We intend to continue to look for opportunities to expand the number ofGlamSmile Studios inEurope . We will continue to review our expected cash requirements, make all efforts to collect any aged receivables, and take appropriate cost reduction measures to ensure that we have sufficient working capital to fund our operations. In the event additional needs for cash arise, we may seek to raise additional funds from a combination of sources including issuance of debt or equity securities. Additional financing may not be available on terms favorable to us, or at all. Any additional financing activity could be dilutive to our current stockholders. If adequate funds are not available or are not available on acceptable terms, our ability to take advantage of unanticipated opportunities or respond to competitive pressures could be limited. Cash and Cash equivalents
Our balance sheet at
Operations Net cash provided (used) by operations was$115,608 for the six months endedSeptember 30, 2020 as compared to ($21,074 ) the six months endedSeptember 30, 2019 . The increase in net cash provided by operations for the six months endedSeptember 30, 2020 as compared to the six months endedSeptember 30, 2019 is primarily as a result of decreased losses resulting from the Company's reduction in costs. 20 Investing activities
Net cash provided by investing activities totaled $nil for the three months
ended
Financing activities
Net cash provided by financing activities totaled $nil for the three months
ended
During the three months endedSeptember 30, 2020 andSeptember 30, 2019 , we recognized an increase / (decrease) in cash and cash equivalents of ($102,176 ) and$39,345 , respectively, from the effect of exchange rates between the Euro and the US Dollar.
Off-Balance Sheet Arrangements
At
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