Exhibit 99.1
National Dentex Corporation Announces Fourth Quarter
and Full Year 2006 Results
WAYLAND, Mass.--(BUSINESS WIRE)--March 16, 2007--National Dentex
Corporation (NASDAQ: NADX), one of the largest owner/operators of
dental laboratories in the United States, today announced its results
for the fourth quarter and year ended December 31, 2006. Sales for the
quarter totaled $40,589,000 compared to $34,339,000 a year earlier, an
increase of 18.2%. Net income for the quarter was $369,000 or $.06 per
share on a diluted basis compared to $1,344,000 or $.24 per share on a
diluted basis in 2005.
For the full year ended December 31, 2006, sales increased 10.5%
to $150,107,000 compared to $135,843,000 for the same period in 2005.
Net income for 2006 decreased by 18.7% to $5,763,000 or $1.01 per
share on a diluted basis from $7,089,000 or $1.27 per share on a
diluted basis for 2005.
Commenting on today's announcements, David Brown, President and
CEO, stated: "While we are disappointed by our fourth quarter and full
year results, we believe we are taking the steps necessary to better
address the challenges that we have been confronting. We have been
experiencing rising costs in a number of areas, including for
materials, precious metals, employee benefits, and energy. At the same
time, changes in our industry have restrained or limited our ability
to raise prices to maintain our margins. In particular, lower priced
products from offshore locations, such as China, while not directly
impacting our client base to any significant degree, have created an
increasingly price conscious marketplace, thereby exerting an indirect
influence on our ability to pass along cost increases. In addition,
computer aided designed and manufactured product (CAD/CAM) has begun
to change the traditional labor components in many dental laboratory
products, making them more capital-intensive. Given the nature of
these changes, we are committed to reassessing our cost components and
taking the steps necessary to better enhance our productivity. In
conjunction with this reassessment, we are reviewing our pricing
strategies in all of our various marketplaces.
"On a positive note, increased demand for newer technologies
creates what we believe is an opportunity for National Dentex. As we
strive to establish and maintain the standards for technological
leadership in our industry we remain firmly focused on increasing
units in a cost effective manner to better ensure that we realize full
value for the products and services we provide. As we move forward
with newer technologies, we believe that we also need to reevaluate
our ongoing labor requirements and to adjust them, as appropriate. We
are currently undertaking that review. Better leveraging our technical
strengths in our marketplaces, we believe, will afford us future
opportunities to enhance our competitive advantage in existing
products lines, as well as newer ones as they develop, and thus help
us lay the foundation for future growth.
"On another positive and encouraging note, 2006 was a year in
which we aggressively pursued and added quality laboratories to our
group. The past year saw us acquire Impact Dental, our first
laboratory in the Canadian marketplace, and Keller Dental Group, our
largest acquisition to date, with laboratories in St. Louis, Missouri
and Louisville, Kentucky. We believe that Keller and Impact will
together generate over $20 million in additional annual sales revenue
for us. In addition, these acquisitions, like others we have completed
in recent years, have helped bring talented individuals to National
Dentex. As a result, in January we announced a realignment of our
management to allow us to take better advantage of this new strength.
We believe this will enhance and improve decision making, increase
accountability, and provide for improved and better execution
throughout our system, helping to further differentiate us from our
competition going forward."
About National Dentex
National Dentex Corporation serves an active customer base of over
24,000 dentists through 48 dental laboratories located in 31 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 future sales revenues, 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
particularly at a time of corporate realignment; 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 Global 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 subsequently filed Quarterly Reports on
Form 10-Q.
National Dentex Corporation
Earnings Results
(Unaudited)
(In Thousands, except per share data)
Quarter Ended Twelve Months Ended
December 31, December 31,
------------------- ---------------------
2005 2006 2005 2006
--------- --------- ---------- ----------
Net Sales $ 34,339 $ 40,589 $135,843 $150,107
Cost of Goods Sold 20,325 24,439 78,380 88,270
--------- --------- ---------- ----------
Gross Profit 14,014 16,150 57,463 61,837
Operating Expenses 11,600 14,640 44,729 50,096
--------- --------- ---------- ----------
Operating Income 2,414 1,510 12,734 11,741
Other Expense 284 190 646 786
Interest (Income) Expense 125 675 665 1,523
--------- --------- ---------- ----------
Income Before Tax 2,005 645 11,423 9,432
Income Taxes 661 276 4,334 3,669
--------- --------- ---------- ----------
Net Income $ 1,344 $ 369 $ 7,089 $ 5,763
========= ========= ========== ==========
Weighted Average
Shares Outstanding:
- Basic 5,405 5,510 5,334 5,485
- Diluted 5,684 5,710 5,601 5,732
Net Income per Share:
- Basic $ .25 $ .07 $ 1.33 $ 1.05
- Diluted $ .24 $ .06 $ 1.27 $ 1.01
National Dentex Corporation
Selected Balance Sheet Data
(Unaudited)
(In thousands)
December 31, December 31,
2005 2006
-------------- --------------
Cash and Equivalents $ 401 $ 648
Accounts Receivable - net 15,064 17,938
Current Assets 25,810 29,052
Current Liabilities 14,684 22,820
Working Capital 11,126 6,232
Total Assets 117,119 148,490
Long Term Obligations 26,361 42,876
Stockholders' Equity $ 76,074 $ 82,794
CONTACT: NATIONAL DENTEX CORPORATION
Richard F. Becker, 508-358-4422
Executive Vice President, Treasurer