National Dentex (NADX) 8-K/A Completion of Acquisition or Disposition of Assets

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

March 1, 2005

Date of Report (date of earliest event reported)

NATIONAL DENTEX CORPORATION

(Exact name of registrant as specified in its charter)

Commission file number000-23092

MASSACHUSETTS	04-2762050
(State or Other Jurisdiction of Incorporation	(I.R.S. Employer Identification No.)
or Organization)

526 Boston Post Road, Wayland, MA	01778
(Address of Principal Executive Offices)	(Zip Code)

(508) 358-4422

(Registrant’s Telephone No., including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Ex-10.1 Stock Purchase Agreement dated as of March 1, 2005

Ex-23.1 Consent of Hudson, Cisne & Co. LLP

Item 2.01. Completion of Acquisition or Disposition of Assets

As reported on our Current Report on Form 8-K filed under Item 8.01 and Item 9.01(c) on March 2, 2005, National Dentex Corporation (“National Dentex”) issued a press release announcing its acquisition of Green Dental Laboratories, Inc., of Heber Springs, Arkansas (“Green Dental”).

This Form 8-K/A amends the Current Report on Form 8-K filed on March 2, 2005 to include a discussion of the terms of the transaction under this Item 2.01 (Completion of Acquisition or Disposition of Assets), as well as to include Item 9.01(a) (Financial Statements of Businesses Acquired), Item 9.01(b) (Pro Forma Financial Information) and Item 9.01(d) (Exhibits).

National Dentex acquired all of the outstanding capital stock of Green Dental, an Arkansas corporation, from its two shareholders, John W. Green IV and Richard M. Nordskog, effective March 1, 2005. The assets of Green Dental acquired by National Dentex as a result of this transaction included accounts receivable, intangible assets in the form of goodwill, customer relationships, trade names, and non-competition agreements, and the property, plant and equipment located at 1099 Wilburn Road in Heber Springs, Arkansas, consisting of six major buildings approximating 27,200 square feet and located on two contiguous parcels of land totaling approximately 10.7 acres. The acquisition was completed subject to the various terms and conditions contained in the Stock Purchase Agreement among the parties, filed as Exhibit 10.1 of this Form 8-K/A.

The cost of the acquisition, net of cash acquired, was approximately $22,325,000. National Dentex borrowed against the majority of its then-existing acquisition facility with Bank of America, N.A. in March 2005 to finance the acquisition. In August 2005 National Dentex paid down this acquisition facility with the proceeds of a $20 million term loan with Bank of America, N.A.

As previously reported on our Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, the final allocation of the total purchase price based on a valuation analysis performed by a third party was as follows:

Green Dental Laboratories, Inc.	Final Value
Total Purchase Price	$	23,443,000
Less Fair Market Values Assigned to Tangible Assets and Liabilities:
Cash		1,118,000
Accounts receivable		1,488,000
Inventories		595,000
Property, plant and equipment		3,592,000
Other assets		36,000
Accounts payable		(496,000	)
Accrued liabilities and other		(3,742,000	)
Assumed Long-term Debt		(96,000	)
Less Fair Market Values Assigned to Intangible Assets:
Customer relationships		2,900,000
Trade names		2,400,000
Non-compete agreements		618,000
Goodwill	$	15,030,000

Item 9.01. Financial Statements and Exhibits.

(a)	Financial Statements of Businesses Acquired
	The following financial statements of the acquired business, Green Dental Laboratories, Inc., are submitted at the end of this Amendment to Current Report on Form 8-K/A, and are filed herewith and incorporated herein by reference.

Financial Statements	Page
Audited Financial Statements of Green Dental Laboratories, Inc.		F-1

(b)	Pro Forma Financial Information
	The following pro forma financial information of National Dentex Corporation and the acquired business, Green Dental Laboratories, Inc., is submitted at the end of this Amendment to Current Report on Form 8-K/A, and is filed herewith and incorporated herein by reference.

Pro Forma Financial Information
National Dentex Corporation and Green Dental Laboratories, Inc. Unaudited Pro Forma Condensed Consolidated Financial Statements	F-12

(d) Exhibits

10.1	Stock Purchase Agreement dated as of March 1, 2005, by and among John W. Green IV, Richard M. Nordskog, as shareholders of Green Dental Laboratories, Inc., an Arkansas corporation, and National Dentex Corporation, a Massachusetts corporation.
23.1	Consent of Hudson, Cisne & Co. LLP
99.1	Press release of National Dentex Corporation dated March 2, 2005 (previously filed).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		NATIONAL DENTEX CORPORATION
		Registrant
January 26, 2006	By:	/s/ Richard F. Becker, Jr.
		Richard F. Becker, Jr.
		Executive Vice President, Treasurer and Chief Financial Officer

GREEN DENTAL LABORATORIES, INC.

FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

DECEMBER 31, 2004 AND 2003

with

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

F-1

CONTENTS

	PAGE
Report of independent certified public accountants	F-3
Financial statements:
Consolidated balance sheets	F-4
Consolidated statements of income	F-5
Consolidated statements of changes in stockholders’ equity	F-6
Consolidated statements of cash flows	F-7
Notes to consolidated financial statements	F-8
Supplementary information:
Schedules of selling, general and administrative expenses	F-11

F-2

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Stockholders
Green Dental Laboratories, Inc.

We have audited the accompanying consolidated balance sheets of Green Dental Laboratories, Inc., as of December 31, 2004 and 2003, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Green Dental Laboratories, Inc., as of December 31, 2004 and 2003, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information on page F-11 is presented for purposes of further analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements, and in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Hudson, Cisne & Co. LLP

February 23, 2005

F-3

GREEN DENTAL LABORATORIES, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2004 AND 2003

	2004			2003
ASSETS
Current assets:
Cash	$	339,248		$	451,221
Trade accounts receivable, net of allowance for doubtful accounts of $24,000		1,562,492			1,295,495
Accounts receivable  — employees		3,467			1,219
— related party		—			2,215
Marketable securities		67,118			54,066
Inventories		457,266			477,995
Prepaid expenses		32,872			105,444
Total current assets		2,462,463			2,387,655
Net property, plant and equipment		1,721,518			1,876,010
Other assets:
Investment in Professional Dental Arts, LLC		338,238			334,562
Assets not used in operations, net		149,608			149,626
Intangible assets		108,858			122,901
Other		2,433			2,432
Total other assets		599,137			609,521
	$	4,783,118		$	4,873,186
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	225,923		$	217,826
Note payable		250,611			410,912
Trade accounts payable		140,129			63,521
Accrued liabilities		402,323			289,176
Total current liabilities		1,018,986			981,435
Long-term debt, less current maturities		636,397			856,201
Stockholders’ equity:
Common stock, $0.01 par value; 235,500 shares authorized, issued and outstanding		2,504			2,504
Additional paid in capital		310,051			310,051
Retained earnings		2,931,218			2,893,266
Accumulated other comprehensive income:
Unrealized loss on securities available-for-sale		(20,538	)		(74,771	)
		3,223,235			3,131,050
Less treasury stock, at cost, 14,900 shares		(95,500	)		(95,500	)
Total stockholders’ equity		3,127,735			3,035,550
	$	4,783,118		$	4,873,186

See accompanying notes.

F-4

GREEN DENTAL LABORATORIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2004 AND 2003

	2004			2003
Sales	$	16,672,888		$	15,755,652
Cost of sales		8,993,849			8,344,807
Gross profit		7,679,039			7,410,845
Selling, general and administrative expenses		7,455,539			6,981,107
Income from operations		223,500			429,738
Other income (expense):
Interest income		10,765			2,887
Miscellaneous		8,267			10,835
(Loss) gain on sale of assets		(2,324	)		3,837
Loss on disposal of investments		(42,690	)		(23,566	)
Gain (loss) from subsidiary		53,615			(165,438	)
Total other income (expense)		27,633			(171,445	)
Income before income taxes		251,133			258,293
Income taxes		2,493			2,461
Net income		248,640			255,832
Unrealized gain on securities available-for-sale		54,233			19,754
Comprehensive income	$	302,873		$	275,586

See accompanying notes.

F-5

GREEN DENTAL LABORATORIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 2004 AND 2003

								Accumulated
			Additional					other						Total
	Common		paid in		Retained			comprehensive			Treasury			stockholders’
	stock		capital		earnings			income			stock			equity
Balance — January 1, 2003	$	2,504	$	310,051	$	2,787,434		$	(94,525	)	$	(95,500	)	$	2,909,964
Dividends		—		—		(150,000	)		—			—			(150,000	)
Net income		—		—		255,832			—			—			255,832
Unrealized gain on securities available-for-sale		—		—		—			19,754			—			19,754
Balance — December 31, 2003		2,504		310,051		2,893,266			(74,771	)		(95,500	)		3,035,550
Dividends		—		—		(210,688	)		—			—			(210,688	)
Net income		—		—		248,640			—			—			248,640
Unrealized gain on securities available-for-sale		—		—		—			54,233			—			54,233
Balance — December 31, 2004	$	2,504	$	310,051	$	2,931,218		$	(20,538	)	$	(95,500	)	$	3,127,735

See accompanying notes.

F-6

GREEN DENTAL LABORATORIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2004 AND 2003

	2004			2003
Cash flows from operating activities:
Net income	$	248,640		$	255,832
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		396,140			424,814
Loss (gain) on sale of assets		2,324			(3,837	)
Loss on disposal of investments		42,690			23,566
(Gain) loss from investment in subsidiaries		(53,615	)		165,438
Changes in assets and liabilities:
Trade accounts receivable		(266,997	)		52,039
Accounts receivable — employees		(2,248	)		1,381
— related party		2,215			(2,215	)
Inventories		20,729			7,642
Prepaid expenses		72,572			(7,568	)
Trade accounts payable		76,608			(94,787	)
Accrued liabilities		113,147			(12,340	)
Net cash provided by operating activities		652,205			809,965
Cash flows from investing activities:
Purchase of property and equipment		(231,111	)		(175,325	)
Proceeds from sale of assets		351,139			14,479
Purchase of marketable securities		(1,509	)		(1,414	)
Investment in subsidiaries		(300,000	)		(500,000	)
Net cash used in investing activities		(181,481	)		(662,260	)
Cash flows from financing activities:
Proceeds from borrowings		—			500,000
Repayment of borrowings		(372,009	)		(338,378	)
Dividend distributions		(210,688	)		(150,000	)
Net cash (used in) provided by financing activities		(582,697	)		11,622
Net change in cash		(111,973	)		159,327
Cash — beginning of year		451,221			291,894
Cash — end of year	$	339,248		$	451,221

See accompanying notes.

F-7

GREEN DENTAL LABORATORIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of significant accounting policies

     Nature of operations

Green Dental Laboratories, Inc., incorporated in 1983, produces dentistry products. The Company’s customers are located primarily in the southern United States.

     Principles of consolidation

The consolidated financial statements include the Company’s investment in Professional Dental Arts, LLC (PDA), a Colorado limited liability company that they have the ability to control operating and financial policies. The Company accounts for its investment in PDA on the equity method. Under the equity method, the Company recognizes its share in the net income or losses which increase or reduces its investment in the subsidiary.

     Concentration of credit risk — cash

At December 31, 2004, and periodically throughout the year, the Company had cash balances at Arkansas banks in excess of federally insured limits. However, the Company does not believe that it is subject to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

     Inventories

Inventories consist of raw materials and are stated at cost which approximates market. Cost is determined by the average cost method.

     Depreciation

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed by straight-line and accelerated methods. The estimated useful lives by major asset classifications are as follows:

	Years
Building	15 - 39
Equipment	5 - 7
Vehicles	5 - 7

Depreciation expense was $382,097 in 2004 and $410,771 in 2003.

     Cash flow information

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Cash payments for income taxes were $2,493 in 2004 and $2,461 in 2003. Cash paid for interest amounted to $77,184 in 2004 and $82,283 in 2003.

     Income taxes

The Company, with the consent of the stockholders, filed an election to be treated as an S Corporation under Section 1362(a) of the Internal Revenue Code effective for the year beginning October 1, 1995. Under such election, the income of the Company is taxable to the stockholders of the Corporation.

F-8

GREEN DENTAL LABORATORIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of significant accounting policies (continued)

     Use of estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.

     Reclassifications

Certain reclassifications have been made to the 2003 financial statements to conform to the 2004 presentation.

Note 2: Net property, plant and equipment

The costs by major categories of property, plant and equipment are summarized below:

	2004		2003
Land	$	101,925	$	99,125
Buildings		2,116,062		2,084,649
Equipment		2,375,818		2,272,197
Vehicles		350,398		322,607
Computer software		190,426		185,986
Computer hardware		192,332		178,607
		5,326,961		5,143,171
Less accumulated depreciation		3,605,443		3,267,161
	$	1,721,518	$	1,876,010

Note 3: Assets not used in operations

Assets not used in operations consist of:
Rental property — building	$	217,242	$	206,451
Less accumulated depreciation		67,634		56,825
	$	149,608	$	149,626

Note 4: Profit sharing plan

The Company has a defined contribution retirement plan covering substantially all employees. Company contributions to the plan are determined by the Board of Directors. Contributions of $258,246 and $231,759 have been charged to income during 2004 and 2003, respectively.

F-9

GREEN DENTAL LABORATORIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5: Line of credit

The Company has a 4.25% line of credit with Heber Springs State Bank which is secured by accounts receivable and inventory, and is due on demand. The outstanding balances at December 31, 2004 and 2003, were $250,611 and $410,912, respectively.

Note 6: Long term debt

	2004		2003
6.35% bank note, due $13,255 monthly including interest, balance due June 2008, secured by real estate, equipment, inventories, and accounts receivable, due on demand	$	500,133	$	621,792
6.35% bank note, due $9,745 monthly including interest, balance due June 2008, secured by real estate, equipment, inventories, and accounts receivable, due on demand		362,187		452,235
		862,320		1,074,027
Less current maturities		225,923		217,826
Total long term debt	$	636,397	$	856,201

Scheduled maturities of long-term debt at December 31, 2004, follow:

2005	$	225,923
2006		240,694
2007		256,431
2008		139,272
	$	862,320

Note 7: Subsequent events

Subsequent to December 31, 2004, the stockholders of the Company entered into a sales agreement with National Dentex Corporation (NDC) whereby NDC will acquire all of the outstanding shares of the Company’s stock. The sales transaction is expected to be completed in March 2005.

F-10

SUPPLEMENTARY INFORMATION

GREEN DENTAL LABORATORIES, INC.

SCHEDULES OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

YEARS ENDED DECEMBER 31, 2004 AND 2003

	2004		2003
Selling expenses:
Marketing and seminar expenses	$	81,172	$	54,766
Promotional items		264		248
Travel and entertainment		285,856		252,968
Total selling expenses		367,292		307,982
General and administrative expenses:
Donations		119,652		93,362
Dues and subscriptions		44,010		44,941
Officer salaries		660,827		618,574
Office salaries		1,030,446		964,622
Management fees		2,795,573		2,550,000
Auto		102,506		89,561
Employee relations		48,635		43,754
Training		33,086		22,499
Insurance — group		430,064		449,915
— other		143,700		161,072
Payroll taxes		150,297		132,194
Profit sharing		258,246		231,759
Professional fees		109,304		96,018
Repairs and maintenance		138,187		153,355
Building rent		30,010		29,061
Equipment rent		38		856
Depreciation and amortization		396,140		424,814
Interest		77,184		82,283
Office supplies		43,461		46,165
Supplies		3,212		2,712
Janitorial		66,911		65,276
Utilities		138,779		145,750
Bad debts		68,889		5,254
Freight		90,403		79,006
Linen and laundry		28,884		24,170
Postage		15,681		14,095
Taxes — other		26,251		26,015
— sales and use		33,833		33,492
Miscellaneous		4,038		42,550
Total general and administrative expenses		7,088,247		6,673,125
Total selling, general and administrative expenses	$	7,455,539	$	6,981,107

F-11

NATIONAL DENTEX CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2004

The following unaudited pro forma statement of income for the year ended December 31, 2004 has been prepared in accordance with principles generally accepted in the United States to give effect to the March 1, 2005 acquisition of Green Dental Laboratories, Inc. as if the transaction occurred on January 1, 2004. The pro forma statement of income combines the results of operations of National Dentex Corporation for the year ended December 31, 2004 with the results of operations of Green Dental Laboratories, Inc. for the year ended December 31, 2004.

									Pro Forma Adjustments
									Deduct:					Add:
	National			Green					Nonrecurring					Additional					Pro Forma
	Dentex			Dental		Combined			Charges					Charges					Results
Net Sales	$	111,752,547		$	16,672,888	$	128,425,435		$					$					$	128,425,435
Cost of goods sold		66,952,585			8,993,849		75,946,434			(125,000	)	(1	)		81,659		(7)			75,903,093
Gross profit		44,799,962			7,679,039		52,479,001			125,000					(81,659	)				52,522,342
Selling, general and administrative expenses		35,755,242			7,455,539		43,210,781			(3,302,429	)	(2	)		773,693		(7,8,9	)		40,682,045
Operating income		9,044.720			223,500		9,268,220			3,427,429					(855,352	)				11,840,297
Other income (expense)		(404,343	)		16,868		(387,475	)		66,260		(3	)		—					(321,215	)
Interest income (expense)		(42,324	)		10,765		(31,559	)		(10,765	)	(4	)		(1,140,000	)	(10)			(1,182,324	)
Income before provision for income taxes		8,598,053			251,133		8,849,186			3,482,924					(1,995,352	)				10,336,758
Provision for income taxes		3,439,221			2,493		3,441,714			1,390,677		(5	)		(798,141	)	(5)			4,034,250
Net income		5,158,832			248,640		5,407,472			2,092,247					(1,197,211	)				6,302,508
Unrealized gain on securities available for sale		—			54,233		54,233			(54,233	)	(6	)		—					—
Comprehensive income	$	5,158,832		$	302,873	$	5,461,705		$	2,038,014				$	(1,197,211	)			$	6,302,508
Net income per share:
Basic						$	1.05												$	1.22
Diluted						$	1.00												$	1.15
Weighted average shares O/S:
Basic							5,186,589													5,186,589
Diluted							5,465,106													5,465,106

F-12

NATIONAL DENTEX CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004

The following unaudited pro forma statement of income for the nine months ended September 31, 2004 has been prepared in accordance with principles generally accepted in the United States to give effect to the March 1, 2005 acquisition of Green Dental Laboratories, Inc. as if the transaction occurred on January 1, 2004. The pro forma statement of income combines the results of operations of National Dentex Corporation for the nine months ended September 30, 2004 with the results of operations of Green Dental Laboratories, Inc. for the nine months ended September 30, 2004.

										Pro Forma Adjustments
										Deduct:			Add:
	National			Green						Nonrecurring			Additional			Pro Forma
	Dentex			Dental			Combined			Charges			Charges			Results
Net Sales	$	84,154,006		$	12,686,868		$	96,840,874		$			$			$	96,840,874
Cost of goods sold		49,893,811			6,444,768			56,338,579			(93,750	) (1)		61,254	(7)		56,306,083
Gross profit		34,260,195			6,242,100			40,502,295			93,750			(61,254	)		40,534,791
Selling, general and administrative expenses		26,380,693			4,474,833			30,855,526			(1,368,473	) (2)		580,260	(7,8,9)		30,067,313
Operating income		7,879,502			1,767,267			9,646,769			1,462,223			(641,514	)		10,467,478
Other income (expense)		(287,192	)		(137,383	)		(424,575	)		18,902	(3)					(405,673	)
Interest income (expense)		(28,310	)		1,126			(27,184	)		(1,126	) (4)		(855,000	) (10)		(883,310	)
Income before provision for income taxes		7,564,000			1,631,010			9,195,010			1,479,999			(1,496,514	)		9,178,495
Provision for income taxes		3,025,600			2,493			3,028,093			589,507	(5)		(598,606	) (5)		3,018,994
Net income		4,538,400			1,628,517			6,166,917			890,492			(897,908	)		6,159,501
Unrealized gain on securities available for sale		—			—			—			—			—			—
Comprehensive income	$	4,538,400		$	1,628,517		$	6,166,917		$	890,492		$	(897,908	)	$	6,159,501
Net income per share:
Basic							$	1.19								$	1.19
Diluted							$	1.13								$	1.13
Weighted average shares O/S:
Basic								5,175,353									5,175,353
Diluted								5,446,958									5,446,958

F-13

NATIONAL DENTEX CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005

The following unaudited pro forma statement of income for the nine months ended September 31, 2005 has been prepared in accordance with principles generally accepted in the United States to give effect to the March 1, 2005 acquisition of Green Dental Laboratories, Inc. as if the transaction occurred on January 1, 2005. The pro forma statement of income combines the results of operations of National Dentex Corporation for the nine months ended September 30, 2005 with the results of operations of Green Dental Laboratories, Inc. for the nine months ended September 30, 2005.

									Pro Forma Adjustments
									Deduct:			Add:
	National			Green					Nonrecurring			Additional			Pro Forma
	Dentex			Dental		Combined			Charges			Charges			Results
Net Sales	$	101,504,126		$	2,714,467	$	104,218,593		$			$				$	104,218,593
Cost of goods sold		58,054,516			1,357,115		59,411,631			(20,833	)   (1)		13,610	(7)			59,404,408
Gross profit		43,449,610			1,357,352		44,806,962			20,833			(13,610	)			44,814,185
Selling, general and administrative expenses		33,129,867			1,098,913		34,228,780			(437,208	)   (2)		128,949	(7,8,9)			33,920,521
Operating income		10,319,743			258,439		10,578,182			458,041			(142,559	)			10,893,664
Other income (expense)		(362,434	)		97,556		(264,878	)		24,394	(3)		—				(240,484	)
Interest income (expense)		(539,711	)		1,209		(538,502	)		(1,209	)   (4)		(190,000	)   (10)			(729,711	)
Income before provision for income taxes		9,417,598			357,204		9,774,802			481,226			(332,559	)			9,923,469
Provision for income taxes		3,672,863			—		3,672,863			192,490	(5)		(133,024	)   (5)			3,732,329
Net income		5,744,735			357,204		6,101,939			288,736			(199,535	)			6,191,140
Unrealized gain on securities available for sale		—			—		—			—			—				—
Comprehensive income	$	5,744,735		$	357,204	$	6,101,939		$	288,736		$	(199,535	)		$	6,191,140
Net income per share:
Basic						$	1.15									$	1.17
Diluted						$	1.10									$	1.11
Weighted average shares O/S:
Basic							5,309,621										5,309,621
Diluted							5,563,621										5,563,621

F-14

National Dentex Corporation
Notes to Unaudited Pro Forma Statements of Income

(1)	To record estimated material savings from National Dentex vendor arrangements.
(2)	To eliminate estimated non recurring expenses including labor and related benefits, management fees, contributions, professional fees and travel expenses.
(3)	To eliminate non recurring other expense including amortization, equity in subsidiary and losses on disposition of assets.
(4)	To eliminate interest income.
(5)	Represents the tax effects of the above adjustments at the marginal tax rate of 40%.
(6)	To eliminate unrealized gain on securities.
(7)	To reflect the estimated increase in depreciation arising from fair market value adjustments to Green’s property, plant and equipment:

						Nine Months			Nine Months
	Expected		Year Ended			Ended			Ended
	Useful		December			September			September
	Lives		2004			2004			2005
Cost of Goods Sold:
Building Improvements		25	$	44,688		$	33,525		$	7,448
Land Improvements		9		12,006			9,009			2,001
Leasehold Improvements		6		(193	)		(144	)		(32	)
Laboratory Equipment		10		24,135			18,099			4,023
Machinery and Equipment		10		1,023			765			170
Total			$	81,659		$	61,254		$	13,610
Selling, General and Administrative:
Computer Software		3	$	3,519		$	2,637		$	586
Computer Hardware		3		2,776			2,079			463
Furniture & Fixtures		5		5,561			4,167			927
Vehicles		3		34,104			25,578			5,684
Total			$	45,960		$	34,461		$	7,660

F-15

National Dentex Corporation
Notes to Unaudited Pro Forma Statements of Income (continued)

(8) To reflect the estimated increase in amortization of identifiable intangible assets:

			Nine Months		Nine Months
	Year Ended		Ended		Ended
	December		September		September
	2004		2004		2005
Non Competes	$	102,733	$	77,049	$	17,122
Customer Relationships		225,000		168,750		37,500
	$	327,733	$	245,799	$	54,622

(9) To record cost of consulting arrangement and related travel and expenses of former owner.

			Nine Months		Nine Months
	Year Ended		Ended		Ended
	December		September		September
	2004		2004		2005
Consulting, and Travel	$	400,000	$	300,000	$	66,667

(10) To record incremental interest expense associated with the debt financing used to pay for a portion of the acquisition of Green Dental. The interest rate is variable and is determined based upon LIBOR for the applicable borrowing period plus an applicable margin. For purposes of determining the adjustment to interest expense in the unaudited pro forma combined statements of income, the LIBOR rate at the date of acquisition of 4.25% was used with a margin of 1.75%, resulting in an interest rate of 6.0%. A change of¹/4 percent in the interest rate would result in an additional $47,500 in interest before tax on an annual basis and $28,500 net of tax.

F-16