<DOCUMENT> <TYPE>EX-99.1 <SEQUENCE>2 <FILENAME>a5203271ex99_1.txt <DESCRIPTION>EXHIBIT 99.1 <TEXT> 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 </TEXT> </DOCUMENT>