Exhibit 99.1
National Dentex Corporation Announces Third Quarter 2004 Results
WAYLAND, Mass.--(BUSINESS WIRE)--Oct. 29, 2004--National Dentex Corporation
(NASDAQ: NADX), one of the largest owner/operators of dental laboratories in the
United States, today announced its results for the third quarter ended September
30, 2004. Sales for the quarter totaled $27,395,000 compared with $24,358,000 a
year earlier. Net income for the quarter was $980,000 or $.27 per share on a
diluted basis compared to $1,277,000 or $.37 per share on a diluted basis in
2003.
For the nine months ended September 30, 2004, sales were $84,154,000
compared to $73,505,000 for the same period in 2003. Net income was $4,742,000
or $1.31 per share on a diluted basis compared to $4,259,000 or $1.23 per share
on a diluted basis for the comparable period of 2003.
David L. Brown, President and CEO, stated: "Sales, while up 12.5% in the
current quarter, were below our expectations. Following the recent hurricanes
throughout the southeastern United States, our laboratories in those areas lost
a combined total of 24 operating days due to their closure for various amounts
of time. We did pay our employees during this difficult time and appreciate
their efforts and support they give us on a day to day basis. Additionally, as
one would expect, the amount of dentistry being done in those areas affected
slowed down during the period after the storms. We are now seeing a return to
normalcy at the laboratories that were involved. Fortunately we were spared any
additional costs since no major physical damage was incurred at any of our
locations as a result of those storms.
Mr. Brown further added: "In addition, we incurred expenses related to
compliance requirements with the Sarbanes-Oxley Act, specifically as it relates
to Section 404. Due to our structure of 40 locations spread across the country,
the levels of testing and documentation needed to satisfy these new requirements
will result in higher expenditures than if operations were concentrated in a
single or only a few locations. During the third quarter we expended
approximately $360,000 on this project. While we anticipate a similar level of
expense during the fourth quarter, we do not believe this level of financial
commitment will be required in subsequent years since we believe most of this
expense relates to the initial cost of documenting and testing these controls.
In the meantime we will continue our efforts to support and strengthen our
commitment to good corporate governance and the interests of our shareholders.
Mr. Brown continued: "On the positive side, in August we announced the
acquisition of D. H. Baker Dental Laboratory, of Traverse City, Michigan. D. H.
Baker had sales in excess of $4,000,000 in their last fiscal year ended December
31, 2003. We are pleased to add Doug Baker and his team to our family of
laboratories and look forward to contributions, both financially and technically
from them. We continue to have discussions with a number of potential
acquisition candidates. We remain firmly committed to our acquisition program
and its potential to create value for shareholders."
National Dentex Corporation serves an active customer base of over 20,000
dentists through dental laboratories located in 29 states. National Dentex's
dental laboratories provide a full range of custom-made dental prosthetic
appliances, including dentures, crowns and fixed bridges, and other dental
specialties.
This press release contains forward-looking statements within the meaning
of the federal securities laws, including statements regarding our future
financial performance, acquisition activity, and marketplace competitiveness,
that are based on our current expectations, beliefs, assumptions, estimates,
forecasts and projections about the industry and markets in which National
Dentex operates. The statements contained in this release are not guarantees of
future performance and involve certain risks, uncertainties and assumptions that
are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed in such forward-looking statements. Important
factors that may affect future operating and financial results include the
timing, duration and effects of adverse changes in overall economic conditions,
the Company's ability to acquire and successfully operate additional
laboratories, governmental regulation of health care, trends in the dental
industry towards managed care, increases in labor, benefits and material costs,
product development risks, technological innovations, and other risks indicated
from time to time in the Company's filings with the Securities and Exchange
Commission.
National Dentex Corporation
Earnings Results
(Unaudited)
(In Thousands, except per share data)
Quarter Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2003 2004 2003 2004
----------------- -----------------
Net Sales $24,358 $27,395 $73,505 $84,154
Cost of Goods Sold 14,789 16,734 44,075 49,894
----------------- -----------------
Gross Profit 9,569 10,661 29,430 34,260
Operating Expenses 7,580 8,905 22,452 26,041
----------------- -----------------
Operating Income 1,989 1,756 6,978 8,219
Other Expense 90 112 218 287
Interest (Income) Expense (6) 10 (21) 28
----------------- -----------------
Income Before Tax 1,905 1,634 6,781 7,904
Income Taxes 628 654 2,522 3,162
----------------- -----------------
Net Income $1,277 $980 $4,259 $4,742
================= =================
Weighted Average
Shares Outstanding:
- Basic 3,428 3,463 3,418 3,450
- Diluted 3,497 3,662 3,464 3,631
Net Income per Share:
- Basic $0.37 $0.28 $1.25 $1.37
- Diluted $0.37 $0.27 $1.23 $1.31
National Dentex Corporation
Selected Balance Sheet Data
(In thousands)
December 31, September 30,
2003 2004
---------------------------------------
(Unaudited)
Cash and Equivalents $1,835 $2,826
Accounts Receivable - net 11,914 12,562
Current Assets 21,930 23,667
Current Liabilities 9,678 11,222
Working Capital 12,252 12,445
Total Assets 72,233 79,174
Long Term Obligations 2,415 2,505
Stockholders' Equity $60,140 $65,447
CONTACT: National Dentex Corporation
Richard F. Becker, 508-358-4422