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, 2008. Sales for the quarter declined slightly to
$41,264,000 from $41,380,000 a year earlier. As a result of a
non-cash goodwill impairment charge of $6,950,000 taken in the
fourth quarter with respect to certain laboratories, the Company
had a net loss for the quarter of $5,286,000 or $.93 per share on a
diluted basis compared to net income of $656,000 or $.12 per share
on a diluted basis in 2007. This non-cash impairment charge was
taken in connection with management�s assessment of goodwill on its
balance sheet as of year end and does not affect the Company�s cash
flow. On a non-GAAP basis, the net income exclusive of the
impairment charge was $831,000 or $.15 per diluted share for the
fourth quarter of 2008 compared to $656,000 or $.12 per diluted
share for the same period in 2007.
For the full year ended December 31, 2008, sales increased
$1,313,000 to $171,674,000 from $170,361,000 for the same period in
2007. As a result of the goodwill charge taken in the fourth
quarter of 2008, the Company had a net loss for the full year of
$877,000 or $.16 per share on a diluted basis compared to net
income of $6,626,000 or $1.17 per share on a diluted basis for
2007. On a non-GAAP basis, the net income exclusive of the
impairment charge for 2008 was $5,240,000 or $.93 per diluted share
compared to $6,626,000 or $1.17 per diluted share for 2007.
Commenting on today�s announcement, David Brown, President and
CEO, stated: �Our sales in the fourth quarter were negatively
affected due to a decline in patient demand as the economic
recession deepened. This negative effect was mostly offset by the
Company�s successful acquisition of Dental Art Laboratories, Inc.
in Michigan in September 2008. During the fourth quarter and in
January 2009 we responded to this slowdown by reducing labor costs
and instituting other cost cutting measures throughout our
organization. We continue to review and implement technological
improvements which we believe will strengthen our relationships
with our dental clients. We believe, as these difficult times begin
to improve and our market cap begins to become more reflective of
our underlying financial fundamentals, it is these relationships
which will ultimately distinguish us as the leading operator of
high quality dental laboratories in North America.�
Use of Non-GAAP Financial
Measures
This press release contains non-GAAP financial measures,
specifically non-GAAP net income and non-GAAP net income per share,
which exclude the non-cash goodwill impairment charge in the fourth
quarter of 2008. We believe that the use of these non-GAAP
financial measures in this press release helps investors gain an
understanding of our underlying operating results without the
effect of these unusual charges, particularly when comparing to
prior periods. These non-GAAP financial measures are not meant to
be considered superior to or a substitute for the results of
operations prepared in accordance with GAAP. Reconciliations of
these non-GAAP financial measures to the most directly comparable
GAAP financial measures are included at the end of this press
release.
About National Dentex
National Dentex Corporation serves an active customer base of
over 24,000 dentists through 46 dental laboratories located in 30
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 Private Securities Litigation Reform Act of 1995
as contained in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. You can
identify these statements by the fact that they use words such as
"anticipate," "believe," "estimate," "expect," "intend," "project,"
"plan," "outlook," and other words and terms of similar meaning.
These forward-looking statements are based on our current
expectations, beliefs, assumptions, estimates, forecasts and
projections about the industry and markets in which National Dentex
operates. The forward-looking 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, including the current
economic slowdown and credit market disruptions; 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 and palladium; any impairment in the carrying value of
goodwill or other acquired intangibles; National Dentex�s ability
to access the credit markets on commercially reasonable terms;
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 our other periodic reports filed with the SEC. National Dentex
assumes no obligation to update the information included in this
press release, whether as a result of new information, future
events or otherwise.
National Dentex
Corporation
Earnings Results
(Unaudited)
(In Thousands, except per share
data)
� � � � � � Quarter Ended Twelve Months Ended
December
31, December 31, 2007 � �
2008 �
2007 � �
2008 � � Net
Sales $ 41,380 $ 41,264 $ 170,361 $ 171,674 Cost of Goods Sold �
24,870 �
25,202 � �
97,739 �
102,184 � Gross Profit 16,510 16,062 72,622 69,490 �
Operating Expenses �
14,880 �
21,544 � �
58,561 �
65,538 � Operating Income 1,630
(5,482 ) 14,061 3,952 � Other Expense 156 166 772 747 Interest
Expense - Net �
631 �
568 � �
2,803 �
2,110 � Income Before Tax 843
(6,216 ) 10,486 1,095 � Income Taxes �
187 �
(930 ) �
3,860 �
1,972 � Net Income
$ 656
$ (5,286 ) $
6,626 $ (877 )
� � Weighted Average
Shares Outstanding:
- Basic 5,573 5,655 5,540 5,631 - Diluted 5,683 5,655 5,665 5,631 �
Net Income per Share: - Basic $ .12 $ (.93 ) $ 1.20 $ (.16 ) -
Diluted $ .12 $ (.93 ) $ 1.17 $ (.16 ) � � � � � � � � �
National Dentex
Corporation
Selected Balance Sheet
Data
(Unaudited)
(In thousands)
� � December 31,
2007
� � December 31,
2008
� � Cash and Equivalents $ 1,689 $ 2,110 Accounts Receivable � net
18,559 19,228 Current Assets 33,125 33,019 Current Liabilities
27,124 23,492 � Working Capital 6,001 9,527 � Total Assets 155,639
161,515 � Long Term Obligations 37,323 47,531 Stockholders� Equity
$ 91,192 $ 90,492 � � � � � � �
National Dentex Corporation
Reconciliation of GAAP Net Income
to Non-GAAP Net Income
(Unaudited)
(In Thousands, except per share
data)
� Quarter Ended Twelve Months Ended
December 31,
December 31, 2007 �
2008 �
2007 �
2008 � � Net income (loss) $ 656 $
(5,286 ) $ 6,626 $ (877 ) � Add back: Goodwill impairment
-
6,950
-
6,950
Tax effect of goodwill
Impairment
�
-
�
(833 ) �
-
�
(833 ) � Non-GAAP net income * 656 831
6,626 5,240 � Weighted Average shares � basic 5,573 5,655 5,540
5,631 Weighted Average shares - diluted �
5,683 �
5,655 � �
5,665 �
5,631 � �
Net income (loss) per share � basic $ .12 $ (.93 ) $ 1.20 $ (.16 )
Net income (loss) per share � diluted $ .12 $ (.93 ) $ 1.17 $ (.16
) � Non-GAAP net income per share � basic * $ .12 $ .15 $ 1.20 $
.93 Non-GAAP net income per share �diluted * $ .12 $ .15 $ 1.17 $
.93 � �
*Non-GAAP net income excludes the
goodwill impairment charge of $6,950,000 taken in thefourth quarter
of 2008 as well as the tax effect resulting therefrom.
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