Exhibit 99.1
National Dentex Corporation Announces
Sales and Earnings for the Third Quarter 2006
WAYLAND, Mass.--(BUSINESS WIRE)--Nov. 6, 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 third quarter ended September 30, 2006. Sales for the
quarter totaled $34,613,000 compared with $33,343,000 a year earlier,
an increase of 3.8%. Net income for the quarter was $925,000 or $.16
per share on a diluted basis, decreasing from $1,379,000 or $.25 per
share on a diluted basis in 2005.
For the nine months ended September 30, 2006, sales were
$109,518,000 compared to $101,504,000 for the same period in 2005, an
increase of 7.9%. Sales during the nine month period increased 4.4%
from 2005 on a same laboratory basis. Net income for the nine month
period of $5,394,000 or $.94 per diluted share was down from
$5,745,000 or $1.03 per share on a diluted basis in 2005.
David Brown, President and CEO stated: "We were disappointed by
our third quarter results but are somewhat more optimistic going
forward about the near-term economic outlook now that energy and
commodity costs seem to be stabilizing. Sales during the quarter grew
at a measured but modest rate during a period in which we experienced
increased material and operating expenses, negatively impacting our
margins. Our materials costs, particularly precious metals and other
energy-related operating costs, reached relatively high historical
rates this year and have continued at or near those levels, with some
leveling off noticeable more recently. The modest sales growth and
increased cost pressures we have been experiencing have come at a time
in which competitive pricing pressures from other laboratories
operating or entering our marketplaces, including offshore facilities
in China and elsewhere, have made it more difficult for us and others
in our industry to raise prices. We continue to monitor competitive
trends in the industry and we continue to review our pricing options
by laboratory and product line as we consider the remainder of the
year and plan ahead for 2007."
Mr. Brown continued, "Despite the challenging environment, we
continue to invest in and expand our CAD-CAM production capabilities
with a goal of being able to service all of our existing laboratories
for this product line out of an efficient, central processing facility
located in Manchester, New Hampshire. While in the short-term this
continued CAD-CAM investment has added additional expense pressures,
we continue to believe that we will be able to realize long-term
benefits in the future as we refocus and redeploy our labor resources
throughout our laboratories and process more units on a more
cost-effective basis."
Mr. Brown concluded, "We are also excited and very pleased to have
completed and announced the acquisitions of the Keller Group and
Impact Dental subsequent to the end of our third quarter in early
October bringing to the Company, based on their last fiscal years
ended December 31, 2005, in excess of $20,500,000 of annualized sales.
Keller, our largest acquisition to date, and Impact, our first venture
into Canada, both promise to bring many opportunities to our family of
laboratories. We look forward to working with and utilizing the
talents of their outstanding laboratories to help further improve our
operations and further enhance our position in the marketplace."
About National Dentex
National Dentex Corporation serves an active customer base of over
24,000 dentists through 47 dental laboratories located in 31 U.S.
states and one Canadian province. 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 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 results and acquisition activity 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 on terms and
conditions acceptable to it 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 Nine Months Ended
September 30, September 30,
---------------- ------------------
2005 2006 2005 2006
---------------- ------------------
Net Sales $33,343 $34,613 $101,504 $109,518
Cost of Goods Sold 19,800 21,145 58,055 63,831
---------------- ------------------
Gross Profit 13,543 13,468 43,449 45,687
Operating Expenses 11,037 11,543 33,129 35,456
---------------- ------------------
Operating Income 2,506 1,925 10,320 10,231
Other Expense 73 158 362 596
Interest (Income) Expense 191 278 540 848
---------------- ------------------
Income Before Tax 2,242 1,489 9,418 8,787
Income Taxes 863 564 3,673 3,393
---------------- ------------------
Net Income $1,379 $925 $5,745 $5,394
================ ==================
Weighted Average
Shares Outstanding:
- Basic 5,334 5,509 5,310 5,477
- Diluted 5,578 5,755 5,564 5,752
Net Income per Share:
- Basic $0.26 $0.17 $1.08 $0.98
- Diluted $0.25 $0.16 $1.03 $0.94
National Dentex Corporation
Selected Balance Sheet Data
(Unaudited)
(In thousands)
December September
31, 30,
2005 2006
-------- ---------
Cash and Equivalents $401 $3,968
Accounts Receivable - net 15,064 14,975
Current Assets 25,810 29,154
Current Liabilities 14,684 15,798
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Working Capital 11,126 13,356
Total Assets 117,119 121,987
Long Term Obligations 26,361 23,204
Stockholders' Equity $76,074 $82,985
CONTACT: National Dentex Corporation
Richard F. Becker, 508-358-4422
Executive Vice President, Treasurer & CFO