Exhibit 99.1
National Dentex Corporation Announces Sales and Earnings
for the Second Quarter 2006
WAYLAND, Mass.--(BUSINESS WIRE)--Aug. 4, 2006--National Dentex
Corporation (NASDAQ: NADX), one of the largest owner/operators of
dental laboratories in the United States, today announced sales and
earnings for the six months and second quarter ended June 30, 2006.
Sales for the quarter totaled $38,116,000 compared with $36,215,000 a
year earlier, an increase of 5.2%. Net income for the quarter
decreased to $2,320,000 or $.40 per share on a diluted basis from
$2,587,000 or $.47 per share on a diluted basis in 2005.
For the six months ended June 30, 2006, sales were $74,905,000
compared to $68,161,000 for the same period in 2005, an increase of
9.9%. Net income for the six months of 2006 increased to $4,469,000
from $4,366,000 in the year-ago period but decreased to $.78 per
diluted share in 2006 from $.79 per share on a diluted basis in 2005.
David Brown, President and CEO stated: "We are encouraged that our
sales continued to grow at the moderate rate of 5.2% in total and 3.9%
on a same lab basis during the second quarter increasing our sales
growth through six months to 9.9% in total and 3.8% on a same lab
basis. However, the second quarter presented a more difficult
operating environment than we had expected, as higher material, energy
and benefits costs negatively impacted our gross profit and operating
margins, leading to a reduction in net income. Material costs in
general and precious metals in particular increased, with gold,
platinum and palladium costs all increasing in the second quarter of
2006. Gold, which impacts our operations the most, rose approximately
47% over average costs in the second quarter of 2005. Operating costs
also increased during the quarter compared to the prior year as a
result of higher freight, delivery services and fuel costs and their
impact on other facilities costs in general. We continue to generate
very positive cash flow and believe we are well positioned to take
advantage of our financial position when market conditions improve. In
addition we remain committed to our acquisition strategy, and are
currently evaluating transactions involving additional laboratories."
About National Dentex
National Dentex Corporation serves an active customer base of over
22,000 dentists through 45 dental laboratories located in 30 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.
Safe Harbor Statement
This press release contains forward-looking statements within the
meaning of the federal securities laws, including statements regarding
our future financial performance, acquisition activity, marketplace
competitiveness, opportunities, and expected courses of action, 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 and other developments that directly or indirectly affect
consumer decisions as to whether and when to have dental procedures
performed; National Dentex's ability to acquire new laboratories and
its capacity to integrate and successfully operate previously acquired
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;
competition from other dental laboratories, including increased
competition from dental laboratories located in foreign countries with
lower labor and benefit costs, such as China: National Dentex's
ability to attract, retain and motivate qualified personnel; changes
in the cost or availability of raw materials, particularly precious
metals like gold, platinum and palladium; any impairment in the
carrying value of goodwill or other acquired intangibles; compliance
with evolving federal securities, accounting, and marketplace rules
and regulations applicable to publicly-traded companies on the Nasdaq
National Market; and other risks indicated from time to time in
National Dentex's filings with the Securities and Exchange Commission,
particularly under Item 1A, "Risk Factors" of National Dentex's most
recently filed Annual Report on Form 10-K and the most recently filed
Quarterly Report on Form 10-Q.
National Dentex Corporation
Earnings Results
(Unaudited)
(In Thousands, except per share data)
Quarter Ended Six Months Ended
June 30, June 30,
-------- --------
2005 2006 2005 2006
-------- -------- -------- --------
Net Sales $ 36,215 $ 38,116 $ 68,161 $ 74,905
Cost of Goods Sold 20,237 21,825 38,255 42,686
-------- -------- -------- --------
Gross Profit 15,978 16,291 29,906 32,219
Operating Expenses 11,328 11,946 22,092 23,913
-------- -------- -------- --------
Operating Income 4,650 4,345 7,814 8,306
Other Expense 161 227 289 438
Interest (Income) Expense 278 281 349 570
-------- -------- -------- --------
Income Before Tax 4,211 3,837 7,176 7,298
Income Taxes 1,624 1,517 2,810 2,829
-------- -------- -------- --------
Net Income $ 2,587 $ 2,320 $ 4,366 $ 4,469
======== ======== ======== ========
Weighted Average
Shares Outstanding:
- Basic 5,322 5,493 5,297 5,462
- Diluted 5,558 5,774 5,557 5,750
Net Income per Share:
- Basic $ 0.49 $ 0.42 $ 0.82 $ 0.82
- Diluted $ 0.47 $ 0.40 $ 0.79 $ 0.78
National Dentex Corporation
Selected Balance Sheet Data
(Unaudited)
(In thousands)
December 31, June 30,
2005 2006
------------------------------
Cash and Equivalents $ 401 $ 2,927
Accounts Receivable - net 15,064 16,726
Current Assets 25,810 28,907
Current Liabilities 14,684 14,187
------------------------------
Working Capital 11,126 14,720
Total Assets 117,119 120,121
Long Term Obligations 26,361 23,965
Stockholders' Equity $ 76,074 $ 81,969
CONTACT: National Dentex Corporation
Richard F. Becker, 508-358-4422
Executive Vice President, Treasurer & CFO