<PAGE>   1

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                            ------------------------

                                   FORM 10-K
(MARK ONE)
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 [FEE REQUIRED]
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                       OR
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
           FOR THE TRANSITION PERIOD FROM             TO
                        COMMISSION FILE NUMBER 000-23092

                          NATIONAL DENTEX CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                            <C>
                MASSACHUSETTS                                    04-2762050
       (STATE OR OTHER JURISDICTION OF              (I.R.S. EMPLOYER IDENTIFICATION NO.)
        INCORPORATION OR ORGANIZATION)

      526 BOSTON POST ROAD, WAYLAND, MA                            01778
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)
</TABLE>

                                 (508) 358-4422
               (REGISTRANT'S TELEPHONE NO., INCLUDING AREA CODE)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, PAR
                              VALUE $.01 PER SHARE
                                (TITLE OF CLASS)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                                Yes [X]  No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     As of February 15, 2000, the aggregate market value of the 3,453,112
outstanding shares of voting stock held by non-affiliates of the registrant was
$59,134,543.

     As of February 15, 2000, 3,551,083 shares of the registrant's Common Stock,
par value $.01 per share, were issued and outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

     The Registrant's definitive Proxy Statement for the Registrant's Special
Meeting in Lieu of Annual Meeting of Stockholders to be held on April 4, 2000 is
incorporated by reference into Part III.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2

                                     PART I

ITEM 1.  BUSINESS

GENERAL

     National Dentex Corporation (the "Company") was founded in 1982 as H&M
Laboratories Services, Inc., a Massachusetts corporation, which acquired six
full-service dental laboratories and related branch laboratories from Healthco,
Inc. In 1983, the Company changed its name to National Dentex Corporation and
acquired 20 additional full-service dental laboratories and related branch
laboratories from Lifemark Corporation. The Company today owns and operates 31
dental laboratories, consisting of 26 full-service dental laboratories and five
branch laboratories located in 22 states throughout the United States. The
Company's dental laboratories custom design and fabricate dentures, crowns and
fixed bridges, and other dental prosthetic appliances. Each dental laboratory
operates under its own business name. The Company's principal executive offices
are located at 526 Boston Post Road, Wayland, MA 01778, telephone number (508)
358-4422. Its corporate web site is located at www.nadx.com.

INFORMATION AS TO INDUSTRY SEGMENTS

     The Company's business consists of only one industry segment, which is the
design, fabrication, marketing and sale of custom dental prosthetic appliances
for and to dentists.

DESCRIPTION OF BUSINESS

     The Company's dental laboratories design and fabricate custom dental
prosthetic appliances such as dentures, crowns and bridges. These products are
produced by trained technicians working primarily in dental laboratories in
accordance with work orders and cases (consisting of impressions, models and
occlusal registrations of a patient's teeth) provided by the dentist. Dentists
are the direct purchasers of the Company's products.

     The Company's products are grouped into the following three main
categories:

          Restorative Products.  Restorative products sold by the Company's
     dental laboratories consist primarily of crowns and bridges. A crown
     replaces the part of a tooth which is visible, and is usually made of gold
     or porcelain. A bridge is a restoration of one or more missing teeth which
     is permanently attached to the natural teeth or roots. In addition to the
     traditional crown, the Company also makes porcelain jackets, which are
     crowns constructed entirely of porcelain; onlays, which are partial crowns
     which do not cover all of the visible tooth; and precision crowns, which
     are restorations designed to receive and connect a removable partial
     denture. The Company also makes inlays, which are restorations made to fit
     a prepared tooth cavity and then cemented into place.

          Reconstructive Products.  Reconstructive products sold by the
     Company's dental laboratories consist primarily of partial dentures and
     full dentures. Partial dentures are removable dental prostheses which
     replace missing teeth and associated structures. Full dentures are dental
     prostheses which substitute for the total loss of teeth and associated
     structures. The Company also sells precision attachments, which connect a
     crown and an artificial prosthesis, and implants, which are fixtures
     anchored securely in the bone of the mouth to which a crown, partial or
     full denture is secured by means of screws or clips.

          Cosmetic Products.  Cosmetic products sold by the Company's dental
     laboratories consist primarily of porcelain veneers and ceramic crowns.
     Porcelain veneers are thin coverings of porcelain cemented to the front of
     a tooth to enhance personal appearance. Ceramic crowns are crowns made from
     ceramic materials which most closely replicate natural teeth. The Company
     also sells composite inlays and onlays, which replace silver fillings for a
     more natural appearance, and orthodontic appliances, which are products
     fabricated to move existing teeth to enhance function and appearance.

                                        1
<PAGE>   3

LABORATORY AND CORPORATE OPERATIONS

     The Company's full-service dental laboratories design and fabricate a full
range of custom-made dental prosthetic appliances. These custom products are
manufactured from raw materials, such as high noble, noble and predominantly
base alloys, dental resins, composites and porcelain. There are different
production processes for the various types of prosthetic appliances depending
upon the product and the materials used in the type of appliance being
fabricated, each of which requires different skills and levels of training. The
Company's dental laboratories perform numerous quality control checks throughout
the production cycle to improve the quality of its products and to make certain
the design and appearance satisfy the needs of the dentist and the patient. The
Company's branch dental laboratories are smaller in size and offer a limited
number of products. When a branch receives an order that it cannot fill, the
branch refers the business to its affiliated full-service dental laboratory.

     The Company operates each of its dental laboratories as a stand-alone
facility under the direction of a local manager responsible for operation of the
dental laboratory, supervision of its technical and sales staff and delivery of
quality products and services. Each of the Company's dental laboratories markets
and sells its products through its own direct sales force, supported by regional
sales managers and Company-wide marketing programs. Employees at each dental
laboratory have a direct stake in the financial success of the dental laboratory
through participation in the Company's cash and stock incentive plans.

     The Company's corporate management provides overall strategy, direction and
financial management for the Company and negotiates all acquisitions. Corporate
personnel also support the operations of its dental laboratories by performing
functions which are not directly related to the production and sale of dental
laboratory products, such as processing payroll and related benefit programs,
obtaining insurance and procuring financing. The Company's corporate management
provides marketing, financial and administrative services, negotiates
Company-wide purchasing arrangements, and sets quality and performance standards
for the dental laboratories.

SALES AND MARKETING

     The Company's local dental laboratories market and sell their products
through their own direct sales force. The sales force interacts with dentists
within its market area, primarily through visits to dentists' offices, to
introduce the dental laboratory's services and products offered, and to promote
new products and techniques that can assist dentists in expanding their
practices. The Company has developed a customer-focused marketing and sales
program entitled "Knowledge Based Relationships".(TM) The Company believes that
this unique approach to assist the dentist and his or her staff to improve
chairtime efficiencies will enhance its ability to expand its base of business
by establishing lasting professional relationships with its customers. The
Company presently has a total of 21 sales representatives. In addition, the
dental laboratories, either alone or with local dental societies, dental schools
or study clubs, sponsor technical training clinics for dentists on topics such
as advanced clinical techniques. The local dental laboratories also exhibit at
state and local dental conventions.

COMPETITION

     The dental laboratory industry is highly competitive and fragmented. A
typical dental laboratory's business originates from dentists located within 50
miles of the dental laboratory. There are approximately 12,000 dental
laboratories in the United States, ranging in size from one to approximately 200
technicians. The Company estimates that presently its sales represent less than
3% of the total sales of custom-made dental prosthetic appliances in the United
States. Competition is primarily from other dental laboratories in the
respective local market areas. The vast majority of dental laboratories consist
of single units, although the Company believes there is one national chain,
Dental Services Group -- Sentage Corporation, which competes with the Company in
two market areas. There is also limited competition from mail order dental
laboratories.

     Most dentists use a limited number of dental laboratories, relying on those
laboratories which produce quality products delivered on a timely basis and
which carry all of the products which the dentist may need,
                                        2
<PAGE>   4

even if a particular item is a newer specialty product used only sporadically by
the dentist. While price is one of the competitive factors in the dental
laboratory industry, the Company believes that most dentists consider product
quality and service to be more important. The Company believes that it competes
favorably with respect to these factors. The Company considers that its ability
to produce quality products locally and to deliver such products on a timely
basis, the breadth of its product line, the use of innovative marketing
programs, and its sponsorship of educational clinics provide a competitive
advantage over other dental laboratories in the local markets in which its
dental laboratories operate. The Company's ability to provide newer specialty
products for implantology, adult orthodontics and cosmetic dentistry, which
require highly skilled technicians, more extensive inventories, additional
working capital, and investment in both training and capital equipment, also
distinguishes it from many smaller dental laboratories which do not have
comparable resources to provide these products. While such specialty products
presently represent less than 20% of the Company's business, the Company
believes that the ability to offer these products is essential for dental
laboratories to remain competitive.

EMPLOYEES

     As of December 31, 1999, the Company had 1,241 employees, 1,220 of whom
worked at individual laboratories. Corporate management and administrative staff
totaled 21 people. None of the Company's employees is covered by a collective
bargaining agreement. Management considers the Company's employee relations to
be good.

INTELLECTUAL PROPERTY

     The Company's general technological know-how and experience are important
to the conduct of the Company's business. The Company has several trademarks and
licenses to use trademarks, but does not deem any of such trademarks or licenses
to be material to the conduct of its business. Each of its dental laboratories
operates under its own trade name, and the Company considers these trade names
to be important to the goodwill of its dental laboratories.

ITEM 2.  PROPERTIES

     The Company currently leases a total of approximately 157,000 square feet
of space. As of December 31, 1999, the aggregate minimum annual rent payable for
all of its leased real properties was approximately $1,319,000. The Company
considers these properties to be modern, well maintained and suitable for its
purposes and believes that its current facilities are adequate to meet its needs
for the foreseeable future. The Company also believes that suitable substitute
or replacement space is readily available. The Company's principal executive and
administrative offices occupy approximately 10,200 square feet of space in
Wayland, Massachusetts. Its 25 leased dental laboratories range in size from
1,000 to 21,000 square feet and average $49,000 in annual base rent.

     The Company owns six dental laboratory facilities, which are located in
Denver, Colorado; Metairie, Louisiana; Dallas, Texas; Houston, Texas;
Jacksonville, Florida; and Waukesha, Wisconsin. These locations total
approximately 70,000 square feet and range in building size from 4,000 to 20,000
square feet.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is involved from time to time in litigation incidental to its
business. Management believes that the outcome of current litigation will not
have a material adverse effect upon the operations or financial condition of the
Company and will not disrupt the normal operations of the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

                                        3
<PAGE>   5

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock, $.01 par value, is traded on the
over-the-counter market, on the Nasdaq National Market System, under the symbol
"NADX". The following table presents low and high bid information for the time
periods specified. The over-the-counter market quotations reflect inter-dealer
prices, without retail markup, markdown or commission and may not necessarily
represent actual transactions. The over-the-counter market quotations have been
furnished by the Nasdaq Stock Market, Inc. Trading in the Company's Common Stock
commenced on December 21, 1993.

<TABLE>
<CAPTION>
                                                                  PRICE
                                                           -------------------
                     QUARTER ENDING                        LOW BID    HIGH BID
                     --------------                        -------    --------
<S>                                                        <C>        <C>
03/31/98.................................................  $21.000    $25.750
06/30/98.................................................  $21.000    $26.750
09/30/98.................................................  $15.000    $24.000
12/31/98.................................................  $14.500    $19.000
03/31/99.................................................  $14.500    $19.500
06/30/99.................................................  $12.438    $17.250
09/30/99.................................................  $15.375    $18.125
12/31/99.................................................  $16.000    $18.625
</TABLE>

     The Company has paid no cash dividends in the past and has no plans to pay
cash dividends in the foreseeable future.

     As of February 15, 2000, there were approximately 375 registered record
holders of the Company's Common Stock, which the Company believes represented
approximately 1,375 beneficial holders. As of February 15, 2000, the low and
high bid prices of the Common Stock were each $17.125.

                                        4
<PAGE>   6

ITEM 6.  SELECTED FINANCIAL DATA

     The following selected financial data for the five years ended December 31,
1999 are derived from the audited consolidated financial statements of the
Company. The data should be read in conjunction with the consolidated financial
statements and the related notes included in this Report and in conjunction with
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations."

<TABLE>
<CAPTION>
                                            1995       1996       1997       1998       1999
                                           -------    -------    -------    -------    -------
                                                  (IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                                        <C>        <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENTS OF INCOME:
Net sales................................  $44,283    $51,971    $59,196    $63,817    $69,639
Cost of goods sold.......................   24,853     29,627     33,755     36,697     40,396
                                           -------    -------    -------    -------    -------
Gross profit.............................   19,430     22,344     25,441     27,120     29,243
Total operating expenses.................   14,440     16,462     18,370     19,545     20,803
                                           -------    -------    -------    -------    -------
Operating income.........................    4,990      5,882      7,071      7,575      8,440
Other income (expense)...................      187        141         69         18        (57)
Interest income..........................      234        131         81        187        336
                                           -------    -------    -------    -------    -------
Income before provision for income
  taxes..................................    5,411      6,154      7,221      7,780      8,719
Provision for income taxes...............    2,167      2,449      2,874      3,097      3,457
                                           -------    -------    -------    -------    -------
Net income...............................  $ 3,244    $ 3,705    $ 4,347    $ 4,683    $ 5,262
                                           =======    =======    =======    =======    =======
Net income per share -- basic............  $  1.02    $  1.09    $  1.26    $  1.34    $  1.48
                                           =======    =======    =======    =======    =======
Net income per share -- diluted..........  $  0.95    $  1.06    $  1.24    $  1.32    $  1.48
                                           =======    =======    =======    =======    =======
Weighted average shares
  outstanding-basic......................    3,175      3,414      3,454      3,486      3,544
Weighted average shares
  outstanding-diluted....................    3,427      3,509      3,517      3,560      3,566

CONSOLIDATED BALANCE SHEET DATA:
Working capital..........................  $ 7,557    $ 9,859    $ 9,611    $13,652    $16,713
Total assets.............................   28,202     30,234     35,730     42,470     49,205
Long-term debt, including current
  portion................................      298        204         --         --         --
Stockholders' equity.....................  $19,956    $24,036    $28,669    $33,877    $39,549
</TABLE>

                                        5
<PAGE>   7

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital increased from $13,652,000 at December 31,
1998 to $16,713,000 at December 31, 1999. Cash and equivalents increased
$2,689,000 from $8,526,000 at December 31, 1998 to $11,215,000 at December 31,
1999. Operating activities provided $5,695,000 in cash flow for the year ended
December 31, 1999. Inventories increased $503,000 from December 31, 1998. The
increase in inventory was attributable to the acquisition of dental laboratories
and the increased cost of palladium, a component of many dental alloys.

     Cash outflows related to dental laboratory acquisitions totaled $2,680,000
for the year ended December 31, 1999. Capital expenditures for the same period
were $1,752,000. The Company expects that increases in capital expenditures, if
any, will be in proportion with increasing revenues.

     The Company maintains a financing agreement (the "Agreement") with Citizens
Bank of Massachusetts (formerly State Street Bank and Trust Company) (the
"Bank"). The Agreement, as amended and extended on June 27, 1997, includes
revolving lines of credit of $4,000,000 and $8,000,000. The interest rate on
both revolving lines of credit is the prime rate minus 0.5% or LIBOR rate plus
1.5%, at the Company's option. Both revolving lines of credit mature on June 1,
2001. A commitment fee of one eighth of 1% is payable on the unused amount of
both lines of credit. At December 31, 1999, the full principal amount was
available to the Company under both revolving lines of credit. The Agreement
requires compliance with certain covenants, including the maintenance of net
worth and other financial ratios. As of December 31, 1999, the Company was in
compliance with these covenants.

     Management believes that cash flow from operations and existing financing
will be sufficient to meet contemplated operating and capital requirements,
including costs associated with anticipated acquisitions, if any, in the
foreseeable future.

RESULTS OF OPERATIONS

     The following table sets forth for the periods indicated the percentage of
net sales represented by certain items in the Company's Consolidated Financial
Statements:

<TABLE>
<CAPTION>
                                                               YEARS ENDED DECEMBER 31,
                                                              --------------------------
                                                               1997      1998      1999
                                                              ------    ------    ------
<S>                                                           <C>       <C>       <C>
Net sales...................................................  100.0%    100.0%    100.0%
Cost of goods sold..........................................   57.0      57.5      58.0
                                                              -----     -----     -----
Gross profit................................................   43.0      42.5      42.0
Total operating expenses....................................   31.0      30.6      29.9
                                                              -----     -----     -----
Operating income............................................   12.0      11.9      12.1
Other income (expense)......................................    0.1       0.0      (0.1)
Interest income.............................................    0.1       0.3       0.5
                                                              -----     -----     -----
Income before provision for income taxes....................   12.2      12.2      12.5
Provision for income taxes..................................    4.9       4.9       5.0
                                                              -----     -----     -----
Net income..................................................    7.3%      7.3%      7.5%
                                                              =====     =====     =====
</TABLE>

YEAR ENDED DECEMBER 31, 1999 COMPARED WITH YEAR ENDED DECEMBER 31, 1998

  Net Sales

     For the year ended December 31, 1999, net sales increased $5,822,000 or
9.1% over the prior year. Approximately $4,285,000 of this increase was
attributable to business at dental laboratories owned less than one year, with
the remaining increase representing sales growth at dental laboratories owned
both the year ended December 31, 1999 and the comparable year ended December 31,
1998.

                                        6
<PAGE>   8

  Cost of Goods Sold

     The Company's cost of goods sold increased by $3,699,000 or 10.1% in the
fiscal year ended December 31, 1999 over the prior fiscal year, attributable
primarily to increased unit sales. As a percentage of sales, cost of goods sold
increased from 57.5% to 58.0%. Increases in labor and material costs were
partially offset by decreases in laboratory overhead expenses. The continued
rising cost of palladium, a component of dental alloys used in the manufacture
of many of the Company's products, continues to be a factor in the increased
material costs. The average cost of this "noble" metal rose 26% in 1999 over the
average cost during 1998. During 1998 the Company attempted to address this
issue in each marketplace by instituting price increases, temporary surcharges
and the use of substitute metals. Since the cost of this commodity shows no sign
of returning to historical levels, each of the Company's laboratories has begun
a program to either switch its current noble metal customers to "high noble"
metals, such as gold, or to make the surcharges permanent by eliminating all
unit pricing and charging a fee per unit plus metal.

  Total Operating Expenses

     Operating expenses, which consist of selling, delivery and administrative
expenses both at the laboratory and corporate level, increased by $1,258,000 or
6.4% in the year ended December 31, 1999 over 1998. During this same period
operating expenses decreased as a percentage of net sales from 30.6% in 1998 to
29.9% in 1999.

  Operating Income

     Due to the increase in net sales and a reduction in operating expenses as a
percent of net sales, operating income increased $865,000 or 11.4% in fiscal
year 1999 over fiscal year 1998.

  Interest (Income) Expense

     Interest income increased by $149,000 in the year ended December 31, 1999
from 1998. The increase was due to increased investment principal and rising
interest rates.

  Provision for Income Taxes

     The provision for income taxes increased to $3,456,000 in 1999 from
$3,096,000 in 1998. This $360,000 increase was the result of increased income.
The 39.8% effective tax rate for fiscal year 1998 declined to 39.6% for fiscal
year 1999.

  Net Income

     As a result of all the factors discussed above, net income increased to
$5,262,000 or $1.48 per share on a diluted basis in 1999 from $4,683,000 or
$1.32 per share on a diluted basis in 1998.

YEAR ENDED DECEMBER 31, 1998 COMPARED WITH YEAR ENDED DECEMBER 31, 1997

  Net Sales

     Net sales increased $4,621,000 or 7.8% for the year ended December 31, 1998
over the year ended December 31, 1997. Approximately $3,014,000 of this increase
was attributable to business at dental laboratories owned less than one year,
with the remaining increase representing sales growth at dental laboratories
owned both the year ended December 31, 1998 and the comparable year ended
December 31, 1997.

  Cost of Goods Sold

     Cost of goods sold, which consists principally of labor and related
benefits, cost of materials, and laboratory overhead, increased by $2,942,000.
As a percentage of sales, cost of goods sold increased from 57.0% to 57.5%,
representing a gross margin decrease of 0.5%. Increases in materials costs
(primarily the

                                        7
<PAGE>   9

increased cost of palladium, as discussed above) and laboratory overhead
expenses were partially offset by improvements in labor productivity.

  Total Operating Expenses

     Total operating expenses, which consist of (i) selling expenses, the cost
of the Company's pick-up and delivery services and administrative expenses at
the dental laboratory level, (ii) costs of operation by the Company's corporate
headquarters and field support services and (iii) amortization expense,
increased by $1,175,000 or 6.4% during the year ended December 31, 1998 over the
corresponding period in 1997. This increase was primarily attributable to the
operating and amortization expenses associated with acquired dental
laboratories.

     Operating expenses decreased as a percentage of net sales from 31.0% to
30.6% during the year ended December 31, 1998 compared with the corresponding
period in 1997.

  Operating Income

     Operating income increased by $504,000 or 7.1% for the year ended December
31, 1998 over the corresponding period in 1997. The increase was the result of
higher sales volume and reductions in operating expenses as a percentage of net
sales, partially offset by an increase in cost of goods sold.

  Interest Income

     Interest income increased by $106,000 or 130.9% in the year ended December
31, 1998 over the corresponding period in 1997. The increase was primarily due
to increased investment principal, partially offset by declining interest rates.

  Provision for Income Taxes

     The Company's provision for income taxes for the year ended December 31,
1998 increased to $3,096,000 from $2,874,000 in the corresponding period in
1997. The effective tax rate remained constant at 39.8%.

  Net Income

     As a result of the factors discussed above, net income for the year ended
December 31, 1998 increased by $337,000 or 7.7% over the corresponding period in
1997. Net income per share, on a diluted basis, increased from $1.24 per share
to $1.32 per share.

YEAR 2000 (Y2K) COMPLIANCE

     The Company has suffered no material adverse effects from Year 2000 ("Y2K")
compliance issues following the date change on January 1, 2000.

  Information Technology Issues

     The central focus of the Company's Y2K plan was to mitigate the data
processing issues. The areas that needed to be addressed were the Company's
centralized corporate financial systems along with individual laboratory billing
systems. The corporate systems embody the Company's general ledger and accounts
payable systems. The laboratory systems handle production scheduling, billing
and accounts receivable. Purchasing and inventory control records are generally
kept manually.

     With respect to its central corporate financial systems, the Company
licensed and installed an upgrade from an existing vendor. While the vendor had
represented that the software was Y2K compliant, the Company completed its own
testing to gain further confidence in the vendor's representations.

     The Company had also licensed an upgrade for each laboratory system. The
Company successfully implemented the upgrade at all of its locations by June
1999. While the vendor had represented that the

                                        8
<PAGE>   10

software was Y2K compliant, the Company performed its own internal testing and
discovered programming errors, which were subsequently corrected by the vendor.

     The costs of both the upgrade of the central corporate financial systems
and the laboratory systems of approximately $60,000 have been incurred and will
be amortized according to standard Company practice over an estimated useful
life of five years.

  Business Partners

     The Company has not experienced any material delays in raw materials
shipments as a result of Y2K difficulties affecting its suppliers.

  Embedded Systems

     The Company's laboratory manufacturing equipment, building systems,
communications equipment and other systems have not experienced any material
malfunctions due to Y2K issues.

GENERAL

     This Form 10-K contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company's actual results could
differ materially from those set forth in the forward-looking statements.
Certain factors that could affect capital expenditures, the Company's
requirements for capital, the costs associated with anticipated acquisitions and
the Company's results of operations include general economic conditions, the
availability of laboratories for purchase by the Company, the ability of the
Company to acquire and successfully operate additional laboratories,
governmental regulation of health care, trends in the dental industry towards
managed care, other factors affecting patient visits to the Company's clients,
increases in labor and materials costs and other risks indicated from time to
time in filings with the Securities and Exchange Commission.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

QUARTERLY RESULTS

     The following table sets forth certain selected financial information for
the Company for its eight most recent fiscal quarters. In the opinion of the
Company, this unaudited information has been prepared on the same basis as the
audited financial information and includes all adjustments (consisting of only
normal, recurring adjustments) necessary to present this information fairly when
reviewed in conjunction with the Company's Consolidated Financial Statements and
notes thereto contained herein.

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED
                          -----------------------------------------------------------------------------------------
                          MARCH 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MARCH 31,   JUNE 30,   SEPT. 30,   DEC. 31,
                            1998        1998       1998        1998       1999        1999       1999        1999
                          ---------   --------   ---------   --------   ---------   --------   ---------   --------
                                                (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<S>                       <C>         <C>        <C>         <C>        <C>         <C>        <C>         <C>
Net sales...............   $15,140    $16,710     $15,801    $16,166     $17,012    $18,233     $17,146    $17,248
Gross profit............   $ 6,423    $ 7,441     $ 6,366    $ 6,890     $ 7,198    $ 7,805     $ 7,004    $ 7,235
Gross margin............      42.4%      44.5%       40.3%      42.6%       42.3%      42.8%       40.8%      41.9%
Operating income........   $ 1,708    $ 2,459     $ 1,614    $ 1,794     $ 2,001    $ 2,523     $ 1,861    $ 2,054
Operating margin........      11.3%      14.7%       10.2%      11.1%       11.8%      13.8%       10.9%      11.9%
Net income..............   $ 1,054    $ 1,495     $ 1,016    $ 1,118     $ 1,210    $ 1,553     $ 1,165    $ 1,334
Net income per share....   $  0.30    $  0.42     $  0.29    $  0.32     $  0.34    $  0.44     $  0.33    $  0.37
</TABLE>

     The Company's results of operations have historically fluctuated on a
quarterly basis and are expected to be subject to quarterly fluctuations in the
future. As a result, the Company believes that the results of

                                        9
<PAGE>   11

operations for the interim periods are not necessarily indicative of the results
to be expected for any future period or for a full year. Quarterly results are
subject to fluctuations resulting from a number of factors, including the number
of working days in the quarter for both dentists and Company employees, the
number of paid vacation days and holidays in the period and general economic
conditions. Historically, the second quarter has generated the highest quarterly
net sales for the year and has been the most profitable for the Company due to
the greater number of working days in the quarter and more patients scheduling
visits with their dentists before departing for summer vacation.

LOCATION OF FINANCIAL STATEMENTS

     The consolidated financial statements furnished in connection with this
Report are attached immediately following the Signatures.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None.

                                       10
<PAGE>   12

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     (a) Directors.  The information with respect to directors required by this
item is incorporated herein by reference from the Company's Proxy Statement
dated March 3, 2000 for the Special Meeting in Lieu of Annual Meeting of
Shareholders to be held on April 4, 2000 (the "2000 Proxy Statement").

     (b) Executive Officers.  The information with respect to executive officers
required by this item is incorporated herein by reference from the 2000 Proxy
Statement.

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by this item is incorporated herein by reference
from the 2000 Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item is incorporated herein by reference
from the 2000 Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item is incorporated herein by reference
from the 2000 Proxy Statement.

                                       11
<PAGE>   13

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a), (d) Financial Statements and Schedules.

        (1) The financial statements set forth in the list below are filed as
part of this Report.

        (2) The financial statement schedules set forth in the list below are
filed as part of this Report.

        (3) Exhibits filed herewith or incorporated herein by reference are set
forth in Item 14(c) below.

  List of Financial Statements and Schedules Referenced in this Item 14

     The historical consolidated financial statements of National Dentex
Corporation included herein are as listed below:

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Report of Independent Public Accountants....................  F-2
Consolidated Balance Sheets as of December 31, 1998 and
  1999......................................................  F-3
Consolidated Statements of Income for the three years ended
  December 31, 1999.........................................  F-4
Consolidated Statements of Stockholders' Equity for the
  three years ended December 31, 1999.......................  F-5
Consolidated Statements of Cash Flows for the three years
  ended December 31, 1999...................................  F-6
Notes to Consolidated Financial Statements..................  F-7
</TABLE>

  Financial Schedule included herewith:

     Schedule II: Valuation and Qualifying Accounts

     All other schedules are omitted because they are not applicable or not
required, or because the required information is shown either in the financial
statements or in the notes thereto.

     (b) Reports on Form 8-K.

     During the Company's fiscal quarter ended December 31, 1999, the Company
was not required to file, and did not file, any Current Report on Form 8-K.

     (c) Exhibits.

        (i) The following exhibits, required by Item 601 of Regulation S-K, are
            filed herewith:

<TABLE>
<CAPTION>
EXHIBIT NO.                             TITLE
-----------                             -----
<C>           <S>
   *10a       Letter Agreement with Thomas E. Gildersleeve, dated
              February 16, 2000.
   *10b       Employment Agreement between the Company and Donald E.
              Merz, dated November 1, 1983.
   *10c       Employment Agreement between the Company and Eloy V.
              Sepulveda, dated June 15, 1983.
     23       Consent of Arthur Andersen LLP
     27       Financial Data Schedule
</TABLE>

                                       12
<PAGE>   14

          (ii) The following exhibits were filed with the Company's Annual
               Report on Form 10-K for the year ended December 31, 1995 and are
               herein incorporated by reference:

<TABLE>
<CAPTION>
EXHIBIT NO.                             TITLE
-----------                             -----
<C>           <S>
   *10d       Long Term Incentive Plan, as amended.
   *10e       Employment Agreement between the Company and Richard F.
              Becker, Jr., dated April 1, 1995.
   *10f       Change of Control Severance Agreement between the Company
              and Richard F. Becker, Jr., dated April 1, 1995.
   *10g       Employment Agreement between the Company and David L.
              Brown, dated April 1, 1995.
   *10h       Change of Control Severance Agreement between the Company
              and David L. Brown dated April 1, 1995.
   *10i       Employment Agreement between the Company and William M.
              Mullahy, dated April 1, 1995.
   *10j       Change of Control Severance Agreement between the Company
              and William M. Mullahy, dated April 1, 1995.
</TABLE>

        (iii) The following exhibits were filed as part of the Company's Form
              S-1 Registration Statement (File No. 33-70440) declared effective
              by the Securities and Exchange Commission on December 21, 1993 and
              are herein incorporated by reference:

<TABLE>
<CAPTION>
EXHIBIT NO.                             TITLE
-----------                             -----
<C>           <S>
     3a       Restated Articles of Organization of the Company, filed
              with Massachusetts Secretary of State on October 14, 1993.
     3b       By-Laws of the Company, as amended on December 31, 1982
              and May 26, 1992.
     4a       Restated Letter Agreement, dated February 22, 1993,
              between the Company and State Street Bank and Trust
              Company (the "Bank").
   *10k       Salary Continuation Agreement, dated April 1, 1985,
              between the Company and William M. Mullahy.
   *10l       Salary Continuation Agreement, dated April 1, 1985,
              between the Company and Donald E. Merz.
   *10m       National Dentex Corporation Laboratory Incentive
              Compensation Plan.
   *10n       National Dentex Corporation Corporate Executives Incentive
              Compensation Plan.
   *10o       National Dentex Corporation Group Managers Incentive
              Compensation Plan.
   *10p       National Dentex Corporation Dollars Plus Plan, as amended
              on January 3, 1986.
   *10q       National Dentex Corporation Employees' Stock Purchase
              Plan.
</TABLE>

---------------
* These exhibits relate to a management contract or to a compensatory plan or
  arrangement.

                                       13
<PAGE>   15

                                   SIGNATURES

     Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

NATIONAL DENTEX CORPORATION

March 3, 2000
                                          By:      /s/ DAVID L. BROWN
                                            ------------------------------------
                                                 David L. Brown, President

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

         /s/ DAVID V. HARKINS
-----------------------------------------
David V. Harkins, Chairman of the Board
and Director
March 3, 2000

          /s/ JACK R. CROSBY
-----------------------------------------
Jack R. Crosby, Director
March 3, 2000

        /s/ WILLIAM H. MCCLURG
-----------------------------------------
William H. McClurg, Director
March 3, 2000

         /s/ NORMAN F. STRATE
-----------------------------------------
Norman F. Strate, Director
March 3, 2000

          /s/ DAVID L. BROWN
-----------------------------------------
David L. Brown, President, Treasurer,
and Director
(Principal Executive Officer)
March 3, 2000

      /s/ RICHARD F. BECKER, JR.
-----------------------------------------
Richard F. Becker, Jr, Vice President,
Finance, Chief Financial Officer and
Assistant Treasurer
(Principal Financial Officer)
March 3, 2000

                                       14
<PAGE>   16

                          NATIONAL DENTEX CORPORATION

            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Financial Statements:
  The historical consolidated financial statements of
     National Dentex Corporation included herein are as
     listed below.
     Report of Independent Public Accountants...............  F-2
     Consolidated Balance Sheets as of December 31, 1998 and
      1999..................................................  F-3
     Consolidated Statements of Income for the three years
      ended December 31, 1999...............................  F-4
     Consolidated Statements of Stockholders' Equity for the
      three years ended December 31,
       1999.................................................  F-5
     Consolidated Statements of Cash Flows for the three
      years ended December 31, 1999.........................  F-6
     Notes to Consolidated Financial Statements.............  F-7
Schedule:
  Valuation and Qualifying Accounts....................Schedule II
</TABLE>

                                       F-1
<PAGE>   17

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To National Dentex Corporation:

     We have audited the accompanying consolidated balance sheets of National
Dentex Corporation (a Massachusetts corporation) as of December 31, 1999 and
1998, and the related consolidated statements of income, stockholders' equity
and cash flows for each of the three years in the period ended December 31,
1999. These consolidated financial statements and the schedule referred to below
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of National
Dentex Corporation as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with generally accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedule in the index to
consolidated financial statements is presented for purposes of complying with
the Securities and Exchange Commission's rules and is not a required part of the
basic consolidated financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic consolidated financial
statements and, in our opinion, fairly states, in all material respects, the
financial data required to be set forth therein, in relation to the basic
financial statements taken as a whole.

/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP

Boston, Massachusetts
February 2, 2000

                                       F-2
<PAGE>   18

                          NATIONAL DENTEX CORPORATION

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              DECEMBER 31,    DECEMBER 31,
                                                                  1998            1999
                                                              ------------    ------------
<S>                                                           <C>             <C>
ASSETS
CURRENT ASSETS:
  Cash and equivalents......................................  $ 8,525,648     $11,215,179
  Accounts receivable:
    Trade, less allowance of $145,000 in 1998 and $196,000
     in 1999................................................    7,322,515       7,722,729
    Other...................................................      272,280         436,401
  Inventories...............................................    3,338,103       3,840,821
  Prepaid expenses..........................................      714,066         912,513
  Deferred tax asset........................................      373,800         350,820
                                                              -----------     -----------
         Total current assets...............................   20,546,412      24,478,463
                                                              -----------     -----------
PROPERTY AND EQUIPMENT:
  Land and buildings........................................    3,683,402       3,887,402
  Leasehold and building improvements.......................    3,297,586       3,976,361
  Laboratory equipment......................................    6,797,200       7,356,055
  Furniture and fixtures....................................    1,940,580       2,228,775
  Capital leases............................................      342,819              --
                                                              -----------     -----------
                                                               16,061,587      17,448,593
    Less -- Accumulated depreciation and amortization.......    8,561,566       9,020,264
                                                              -----------     -----------
    Net property and equipment..............................    7,500,021       8,428,329
                                                              -----------     -----------
OTHER ASSETS, net:
  Goodwill..................................................    9,763,813      11,111,435
  Non-competition agreements................................    3,639,302       3,539,947
  Deferred tax asset........................................           --         337,268
  Other.....................................................    1,020,016       1,310,044
                                                              -----------     -----------
                                                               14,423,131      16,298,694
                                                              -----------     -----------
                                                              $42,469,564     $49,205,486
                                                              ===========     ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable..........................................  $ 1,383,928     $ 1,491,285
  Accrued liabilities:
    Payroll and employee benefits...........................    3,249,460       3,764,657
    Current portion of deferred purchase price..............    1,839,856       2,403,888
    Other...................................................      421,158         104,977
                                                              -----------     -----------
         Total current liabilities..........................    6,894,402       7,764,807
                                                              -----------     -----------
LONG TERM LIABILITIES:
  Deferred tax liability....................................      101,277              --
  Payroll and employee benefits.............................      433,091       1,159,871
  Deferred purchase price...................................    1,163,300         731,334
                                                              -----------     -----------
         Total long-term liabilities........................    1,697,668       1,891,205
                                                              -----------     -----------
COMMITMENTS AND CONTINGENCIES (Note 7)
STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value Authorized -- 500,000
    shares; None issued and outstanding.....................           --              --
  Common stock, $.01 par value Authorized -- 8,000,000
    shares; Issued and outstanding -- 3,513,148 shares at
    December 31, 1998, and 3,550,083 shares at December 31,
    1999....................................................       35,131          35,500
  Paid-in capital...........................................   14,493,655      14,903,119
  Retained earnings.........................................   19,348,708      24,610,855
                                                              -----------     -----------
         Total stockholders' equity.........................   33,877,494      39,549,474
                                                              -----------     -----------
                                                              $42,469,564     $49,205,486
                                                              ===========     ===========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                       F-3
<PAGE>   19

                          NATIONAL DENTEX CORPORATION

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                      YEARS ENDED
                                                      --------------------------------------------
                                                      DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                          1997            1998            1999
                                                      ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>
Net sales...........................................  $59,196,110     $63,817,100     $69,639,240
Cost of goods sold..................................   33,755,470      36,697,495      40,396,188
                                                      -----------     -----------     -----------
  Gross profit......................................   25,440,640      27,119,605      29,243,052
Total operating expenses............................   18,370,360      19,545,023      20,802,705
                                                      -----------     -----------     -----------
  Operating income..................................    7,070,280       7,574,582       8,440,347
Other income (expense)..............................       69,265          17,922         (57,491)
Interest income.....................................       81,114         187,257         335,722
                                                      -----------     -----------     -----------
  Income before provision for income taxes..........    7,220,659       7,779,761       8,718,578
Provision for income taxes..........................    2,873,823       3,096,345       3,456,431
                                                      -----------     -----------     -----------
  Net income........................................  $ 4,346,836     $ 4,683,416     $ 5,262,147
                                                      ===========     ===========     ===========
Net income per share -- Basic.......................  $      1.26     $      1.34     $      1.48
                                                      ===========     ===========     ===========
Net income per share -- Diluted.....................  $      1.24     $      1.32     $      1.48
                                                      ===========     ===========     ===========
Weighted average shares outstanding -- Basic........    3,454,473       3,485,763       3,543,752
                                                      ===========     ===========     ===========
Weighted average shares outstanding -- Diluted......    3,516,770       3,560,392       3,566,332
                                                      ===========     ===========     ===========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                       F-4
<PAGE>   20

                          NATIONAL DENTEX CORPORATION

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                           PREFERRED STOCK          COMMON STOCK
                                         --------------------   --------------------
                                         NUMBER OF   $.01 PAR   NUMBER OF   $.01 PAR     PAID-IN      RETAINED
                                          SHARES      VALUE      SHARES      VALUE       CAPITAL      EARNINGS        TOTAL
                                         ---------   --------   ---------   --------   -----------   -----------   -----------
<S>                                      <C>         <C>        <C>         <C>        <C>           <C>           <C>
BALANCE, December 31, 1996.............     --          $--     3,440,738   $34,407    $13,683,615   $10,318,456   $24,036,478
Issuance of 6,295 shares of common
  stock under the stock option plans...     --          --         6,295         63         79,635            --        79,698
Issuance of 12,386 shares of common
  stock under the employee stock
  purchase plan........................     --          --        12,386        124        181,525            --       181,649
Issuance of 1,410 shares of common
  stock as director's fees.............     --          --         1,410         14         23,956            --        23,970
Net income.............................     --          --            --         --             --     4,346,836     4,346,836
                                             --         --      ---------   -------    -----------   -----------   -----------
BALANCE, December 31, 1997.............     --          --      3,460,829    34,608     13,968,731    14,665,292    28,668,631
                                             --         --      ---------   -------    -----------   -----------   -----------
Issuance of 36,758 shares of common
  stock under the stock option plans...     --          --        36,758        367        287,470            --       287,837
Issuance of 14,601 shares of common
  stock under the employee stock
  purchase plan........................     --          --        14,601        146        213,464            --       213,610
Issuance of 960 shares of common stock
  as director's fees...................     --          --           960         10         23,990            --        24,000
Net income.............................     --          --            --         --             --     4,683,416     4,683,416
                                             --         --      ---------   -------    -----------   -----------   -----------
BALANCE, December 31, 1998.............     --          --      3,513,148    35,131     14,493,655    19,348,708    33,877,494
                                             --         --      ---------   -------    -----------   -----------   -----------
Issuance of 19,483 shares of common
  stock under the stock option plans...     --          --        19,483        195        187,919            --       188,114
Issuance of 16,624 shares of common
  stock under the employee stock
  purchase plan........................     --          --        16,624        166        209,547            --       209,713
Issuance of 828 shares of common stock
  as director's fees...................     --          --           828          8         11,998            --        12,006
Net income.............................     --          --            --         --             --     5,262,147     5,262,147
                                             --         --      ---------   -------    -----------   -----------   -----------
BALANCE, December 31, 1999.............     --          $--     3,550,083   $35,500    $14,903,119   $24,610,855   $39,549,474
                                             --         --      ---------   -------    -----------   -----------   -----------
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                       F-5
<PAGE>   21

                          NATIONAL DENTEX CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                      YEARS ENDED
                                                      --------------------------------------------
                                                      DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                          1997            1998            1999
                                                      ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>
Cash flows from operating activities:
  Net income........................................  $ 4,346,836     $ 4,683,416     $ 5,262,147
  Adjustments to reconcile net income to net cash
     provided by operating activities, net of
     effects of acquisitions:
     Depreciation and amortization..................    1,753,376       2,004,927       2,286,977
     Increase in accounts receivable................      (47,640)       (271,559)       (220,969)
     Increase in inventories........................     (106,745)       (114,255)       (413,416)
     Decrease (increase) in prepaid expenses........      178,355        (219,137)       (198,447)
     Decrease (increase) in deferred tax asset......       47,724           1,179        (298,288)
     Increase in other assets.......................     (309,343)       (262,907)        (97,878)
     Increase (decrease) in accounts payable and
       accrued liabilities..........................       19,480         950,703        (523,888)
     Decrease in deferred tax liability.............     (108,992)        (94,550)       (101,277)
                                                      -----------     -----------     -----------
     Net cash provided by operating activities......    5,773,051       6,677,817       5,694,961
                                                      -----------     -----------     -----------
Cash flows from investing activities:
  Payment for acquisitions, net of cash acquired....   (3,691,799)     (2,066,966)     (2,172,123)
  Payment of deferred purchase price................     (684,631)       (691,949)       (508,063)
  Additions to property and equipment, net..........   (1,524,666)       (830,799)     (1,751,948)
  Proceeds from officer's life insurance policy.....           --              --       1,016,871
                                                      -----------     -----------     -----------
     Net cash used in investing activities..........   (5,901,096)     (3,589,714)     (3,415,263)
                                                      -----------     -----------     -----------
Cash flows from financing activities:
  Net payments of current and long-term
     obligations....................................     (204,213)             --              --
  Net proceeds from issuance of common stock........      285,317         525,448         409,833
                                                      -----------     -----------     -----------
     Net cash provided by financing activities......       81,104         525,448         409,833
                                                      -----------     -----------     -----------

Net (decrease) increase in cash and equivalents.....      (46,941)      3,613,551       2,689,531

Cash and equivalents at beginning of period.........    4,959,038       4,912,097       8,525,648
                                                      -----------     -----------     -----------
Cash and equivalents at end of period...............  $ 4,912,097     $ 8,525,648     $11,215,179
                                                      ===========     ===========     ===========
Supplemental disclosures of cash flow information:
  Interest paid.....................................  $    11,179     $    12,084     $    10,139
                                                      ===========     ===========     ===========
  Income taxes paid.................................  $ 3,071,545     $ 2,993,473     $ 3,897,742
                                                      ===========     ===========     ===========
Supplemental schedule of noncash investing and financing activities:
</TABLE>

     The Company purchased the operations of certain dental laboratories in
1997, 1998 and 1999.

     In conjunction with these acquisitions, liabilities were assumed as
follows:

<TABLE>
<S>                                                   <C>             <C>             <C>
     Fair value of assets acquired..................  $ 5,735,000     $ 3,434,000     $ 3,352,000
     Cash paid......................................   (3,893,000)     (2,067,000)     (2,172,000)
     Deferred purchase price at date of
       acquisition..................................   (1,545,000)     (1,080,000)       (883,000)
                                                      -----------     -----------     -----------
       Liabilities assumed..........................  $   297,000     $   287,000     $   297,000
                                                      ===========     ===========     ===========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                       F-6
<PAGE>   22

                          NATIONAL DENTEX CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1999

(1) ORGANIZATION

     National Dentex Corporation (the "Company") owned and operated 26
full-service dental laboratories and five branch laboratories in 22 states
throughout the United States as of December 31, 1999. Working from dentists'
work orders, the Company's dental laboratories custom design and fabricate
dentures, crowns and fixed bridges, and other dental prosthetic appliances.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Principles of Consolidation

     The consolidated financial statements include all operations of the
Company. Acquisitions are reflected from the date acquired by the Company (see
Note 3) to December 31, 1999. All significant intercompany balances and
transactions have been eliminated in consolidation.

  Revenue Recognition

     Revenue is recognized as the dentists' orders are shipped.

  Inventories

     Inventories, consisting principally of raw materials, are stated at the
lower of cost (first-in, first-out) or market.

  Property and Equipment

     Property and equipment are stated at cost, less accumulated depreciation.
Depreciation is calculated using the straight-line method over the following
estimated depreciable lives:

<TABLE>
<S>                                                        <C>
Buildings................................................  25 years
Furniture and fixtures...................................  5-10 years
Automobiles and trucks...................................  5 years
Laboratory equipment.....................................  10 years
Computer equipment.......................................  5 years
</TABLE>

     Leasehold improvements and capital leases are amortized over the lesser of
the assets' estimated useful lives or the lease terms.

     Gains and losses are recognized upon the disposal of property and
equipment, and the related accumulated depreciation and amortization are removed
from the accounts. Maintenance, repairs and betterments that do not enhance the
value of or increase the life of the assets are charged to operations as
incurred.

  Other Assets

     Included in other assets are the costs of noncompetition agreements which
are deferred and amortized on a straight-line basis according to the terms of
the agreements over five to ten years. Goodwill is being amortized using the
straight-line method over a period of 20 years, the estimated useful life. The
Company continually evaluates whether events and circumstances have occurred
that indicate the remaining estimated useful life of goodwill may warrant
revision or that the remaining balance of goodwill may not be recoverable. When
factors indicate that goodwill should be evaluated for possible impairment, the
Company uses an estimate of the related business segment's undiscounted
operating income over the remaining life of the

                                       F-7
<PAGE>   23
                          NATIONAL DENTEX CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

goodwill in measuring whether the goodwill is recoverable. As of December 31,
1999 there have been no write-downs of goodwill.

     Accumulated amortization on these intangible assets was approximately
$3,972,000 and $5,295,000 at December 31, 1998 and 1999, respectively.

  Income Taxes

     The Company follows Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes." Under SFAS No. 109, deferred tax assets and
liabilities are recognized for the expected future tax consequences of events
that have been included in the financial statements or tax returns. The amount
of deferred tax asset or liability is based on the difference between the
financial statement and tax basis of assets and liabilities using enacted tax
rates.

  Earnings Per Share

     The Company adopted SFAS No. 128, "Earnings per Share," effective December
15, 1997. In accordance with the requirements of SFAS No. 128, basic earnings
per share is computed by dividing net income by the weighted average number of
shares outstanding and diluted earnings per share reflects the dilutive effect
of stock options and warrants. The pro forma weighted average number of shares
outstanding, the dilutive effects of outstanding stock options and warrants, and
the shares under option plans which were anti-dilutive for the years ended
December 31, 1997, 1998 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                 YEARS ENDED DECEMBER 31,
                                                            -----------------------------------
                                                              1997         1998         1999
                                                            ---------    ---------    ---------
<S>                                                         <C>          <C>          <C>
Weighted average number of shares used in basic earnings
  per share calculation...................................  3,454,473    3,485,763    3,543,752
Incremental shares under option plans.....................     62,297       74,629       22,580
                                                            ---------    ---------    ---------
Weighted average number of shares used in diluted earnings
  per share calculation...................................  3,516,770    3,560,392    3,566,332
                                                            =========    =========    =========
Shares under option plans excluded in computation of
  diluted earnings per share due to anti-dilutive
  effects.................................................    185,789       11,800      187,851
                                                            =========    =========    =========
</TABLE>

  Cash and Equivalents

     The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.

  Stock-Based Compensation

     Effective January 1, 1996, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." The Company has elected to continue to account for employee stock
options at intrinsic value with disclosure of the effects of fair value
accounting on net income and earnings per share on a pro forma basis.

  Use of Estimates in the Financial Statements

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

  Disclosures About the Fair Value of Financial Instruments

     The Company's financial instruments consist mainly of cash and equivalents,
accounts receivable, accounts payable, accrued liabilities and long-term
liabilities. The carrying amounts of the Company's cash

                                       F-8
<PAGE>   24
                          NATIONAL DENTEX CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

and equivalents, accounts receivable, accounts payable and accrued liabilities
approximate their fair value due to the short-term nature of these instruments.
The carrying amounts of the long-term liabilities also approximates their fair
value, based on rates available to the Company for debt with similar terms and
remaining maturities.

  Reclassifications

     Certain amounts in the 1998 and 1997 financial statements and notes have
been reclassified to conform with the 1999 presentation.

(3) ACQUISITIONS

     During 1998, the Company acquired the following dental laboratory
operations:

<TABLE>
<S>                                                   <C>
Continental Dental Laboratory.......................  March 1998
Monroe Dental.......................................  July 1998
Excel Berger Dental.................................  November 1998
Hearn Dental Laboratory.............................  November 1998
</TABLE>

     During 1999, the Company acquired the following dental laboratory
operations:

<TABLE>
<S>                                                   <C>
Advanced Dental Arts................................  January 1999
TVC Dental Laboratory...............................  February 1999
Oratech Dental Laboratory...........................  April 1999
Southside Dental Laboratory.........................  April 1999
Dentaltech Dental Laboratory........................  December 1999
</TABLE>

     These acquisitions, which have been reflected in the accompanying
consolidated financial statements from the dates of acquisition, have been
accounted for as purchases in accordance with Accounting Principles Board (APB)
Opinion No. 16. The excess of the total purchase price over the prior carrying
amount of the net assets acquired, based on preliminary estimates of their
related fair values (which are subject to revision), was allocated as follows as
of December 31, 1998 and 1999:

<TABLE>
<CAPTION>
                                                         1998          1999
                                                      ----------    ----------
<S>                                                   <C>           <C>
Total purchase price................................  $3,323,000    $3,055,000
Less fair market values assigned to assets and
  liabilities:
  Cash..............................................     101,000            --
  Accounts receivable...............................     407,000       343,000
  Property and equipment............................     123,000       141,000
  Noncompete agreements.............................     720,000       570,000
  Inventories.......................................     132,000        89,000
  Other assets......................................      11,000        17,000
  Accounts payable..................................      (8,000)      (37,000)
  Accrued liabilities and other.....................    (203,000)     (260,000)
                                                      ----------    ----------
Goodwill............................................  $2,040,000    $2,192,000
                                                      ==========    ==========
</TABLE>

     In connection with these acquisitions, the Company has incurred certain
deferred purchase costs relating to noncompete agreements with certain
individuals, ranging over periods of five to ten years and other contingent
payments provided for in the purchase agreements.

                                       F-9
<PAGE>   25
                          NATIONAL DENTEX CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following unaudited pro forma operating results of the Company assume
the acquisitions had been made as of January 1, 1998. Such information includes
adjustments to reflect additional depreciation, noncompete amortization,
amortization of goodwill and interest expense, and does not purport to represent
what the Company's results of operations would actually have been, or to be
indicative of the results of operations in future periods.

<TABLE>
<CAPTION>
                                                                      YEARS ENDED
                                                              ----------------------------
                                                              DECEMBER 31,    DECEMBER 31,
                                                                  1998            1999
                                                              ------------    ------------
                                                                      (UNAUDITED)
<S>                                                           <C>             <C>
Net sales...................................................    $69,250         $70,268
Net income..................................................      4,943           5,284
Net income per share:
  Basic.....................................................    $  1.42         $  1.49
  Diluted...................................................    $  1.39         $  1.48
</TABLE>

(4) INCOME TAXES

     The following is a summary of the provision for income taxes:

<TABLE>
<CAPTION>
                                                                YEARS ENDED
                                                --------------------------------------------
                                                DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                    1997            1998            1999
                                                ------------    ------------    ------------
<S>                                             <C>             <C>             <C>
Federal:
  Current.....................................   $2,343,556      $2,660,011      $3,261,696
  Deferred....................................      (70,966)        (92,012)       (353,230)
                                                 ----------      ----------      ----------
                                                  2,272,590       2,567,999       2,908,466
                                                 ----------      ----------      ----------
State:
  Current.....................................      613,756         544,583         610,300
  Deferred....................................      (12,523)        (16,237)        (62,335)
                                                 ----------      ----------      ----------
                                                    601,233         528,346         547,965
                                                 ----------      ----------      ----------
                                                 $2,873,823      $3,096,345      $3,456,431
                                                 ==========      ==========      ==========
</TABLE>

                                      F-10
<PAGE>   26
                          NATIONAL DENTEX CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Deferred income taxes are comprised of the following at December 31, 1998
and 1999:

<TABLE>
<CAPTION>
                                                        1998          1999
                                                      ---------    ----------
<S>                                                   <C>          <C>
Deferred tax assets:
Noncompete agreements...............................  $ 195,366    $  315,221
Other liabilities...................................    110,901       491,660
Vacation benefits...................................    182,515       191,398
Inventory basis differences.........................     59,896        15,840
Receivables basis differences.......................     47,402        55,672
Other reserves......................................     83,987        87,910
                                                      ---------    ----------
     Total deferred tax assets......................    680,067     1,157,701
                                                      ---------    ----------
Deferred tax liabilities:
Property basis differences..........................   (407,544)     (469,613)
                                                      ---------    ----------
     Total deferred tax liabilities.................   (407,544)     (469,613)
                                                      ---------    ----------
Net deferred tax (liability) asset..................  $ 272,523    $  688,088
                                                      =========    ==========
</TABLE>

     A reconciliation between the provision for income taxes computed at
statutory rates and the amount reflected in the accompanying consolidated
statements of income is as follows:

<TABLE>
<CAPTION>
                                                                YEARS ENDED
                                                --------------------------------------------
                                                DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                    1997            1998            1999
                                                ------------    ------------    ------------
<S>                                             <C>             <C>             <C>
Statutory federal income tax rate.............      34.0%           34.0%           34.0%
State income tax, net of federal income tax
  benefit.....................................       5.6             4.6             4.6
Other.........................................       0.2             1.2             1.0
                                                    ----            ----            ----
Effective income tax rate.....................      39.8%           39.8%           39.6%
                                                    ====            ====            ====
</TABLE>

(5) LONG-TERM OBLIGATIONS

     The Company maintains a financing agreement (the "Agreement") with Citizens
Bank of Massachusetts (formerly State Street Bank and Trust Company) (the
"Bank"). The Agreement, as amended on June 27, 1997, includes revolving lines of
credit of $4,000,000 and $8,000,000. The interest rate on both revolving lines
of credit is the prime rate minus 0.5% or the LIBOR rate plus 1.5%, at the
Company's option. Both revolving lines of credit mature on June 1, 2001.

     A commitment fee of one eighth of one percent is payable on the unused
amount of both revolving lines of credit. As of December 31, 1999, the full
principal amount was available to the Company under both revolving lines of
credit. The Agreement requires compliance with certain covenants, including the
maintenance of net worth and other financial ratios. As of December 31, 1999,
the Company was in compliance with these covenants.

     In August, 1999, the Company received approximately $1,000,000 in proceeds
from an officer's life insurance policy. Related to these proceeds, the Company
simultaneously recorded an obligation of approximately $1,000,000 in accordance
with the terms of the officer's employment agreement. The obligation has been
classified in accrued payroll and employee benefits in the Company's
consolidated balance sheet.

                                      F-11
<PAGE>   27
                          NATIONAL DENTEX CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(6) BENEFIT PLANS

     The Company has an employee savings plan (the "Plan") under IRS Code
Section 401(k). The Plan allows contributions of up to 10% of a participant's
salary, a portion of which is matched in cash by the Company. The Company
contributes this amount once a year, within 120 days after December 31, the
Plan's year-end. All employees are eligible to participate in the Plan after
completing one year of service with the Company and the attainment of age 21.
Participants become fully vested after six years of service or upon attaining
age 65. The Company has incurred charges to operations of approximately
$253,000, $334,000 and $401,000 to match contributions for the years ended
December 31, 1997, 1998 and 1999, respectively.

     The Company has an incentive plan, the Laboratory Plan, for dental
laboratory management and other designated key employees who could directly
influence the financial performance of an individual dental laboratory.
Eligibility is determined annually for each laboratory. Each participant is
eligible to receive an amount based on the achievement of certain earnings
levels of the participant's laboratory, as defined. The Company has incurred
charges to operations of approximately $1,897,000, $2,117,000 and $2,157,000 for
the years ended December 31, 1997, 1998 and 1999, respectively, under the
Laboratory Plan.

     The Company has an executive bonus plan (the "Executive Plan") for key
executives and management of the Company, and a management bonus plan (the
"Managers Plan") for laboratory group managers. Eligibility to participate in
each plan is determined annually. Participants are eligible to receive a bonus,
based on a percentage of salary, dependent upon the achievement of earnings
targets, as defined. The bonus is distributed within 90 days after year-end. The
Company has incurred aggregate charges to operations of approximately $592,000,
$480,000 and $507,000 for the years ended December 31, 1997, 1998 and 1999,
respectively, with respect to these plans.

     The Company established a Supplemental Executive Retirement Plan ("SERP")
for certain key employees providing for annual benefits payable over a period of
ten years beginning at age 65 or date of retirement. Benefits will be funded by
life insurance contracts purchased by the Company. The cost of these benefits is
being charged to expense and accrued using a present value method over the
expected terms of employment. The charges to expense for the years ended
December 31, 1997, 1998 and 1999 were approximately $124,000, $146,000 and
$171,000, respectively.

(7) COMMITMENTS AND CONTINGENCIES

  Operating Leases

     The Company is committed under various noncancelable operating lease
agreements covering its office space and dental laboratory facilities. Certain
of these leases also require the Company to pay maintenance, repairs, insurance
and related taxes. The total rental expense for the years ended December 31,
1997, 1998 and 1999 was approximately $1,095,000, $1,207,000 and $1,319,000,
respectively. The approximate aggregate minimum lease commitments under these
leases as of December 31, 1999 are as follows:

<TABLE>
<CAPTION>
                          YEAR                               AMOUNT
                          ----                             ----------
<S>                                                        <C>
2000.....................................................  $1,173,000
2001.....................................................   1,127,000
2002.....................................................   1,029,000
2003.....................................................     871,000
2004.....................................................     760,000
Thereafter...............................................   2,361,000
                                                           ----------
                                                           $7,321,000
                                                           ==========
</TABLE>

                                      F-12
<PAGE>   28
                          NATIONAL DENTEX CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Employment Contracts and Change-In-Control Arrangements

     In April 1995, the Company entered into employment contracts and
change-in-control arrangements with certain key executives. The initial term of
these employment contracts expired in April 1998, and the contracts by their
terms renew automatically thereafter until termination by the Company or the
executive. The change-in-control arrangements provide certain severance benefits
in the event that the executive is terminated by the Company without cause or
the executive terminates the employment contract for certain specified reasons.

(8) STOCK OPTIONS AND WARRANTS

  Stock Option Plans

     In May 1992, the Company's Board of Directors (the "Board") adopted the
1992 Long-Term Incentive Plan (the "LTIP"). Under the LTIP, the Board may grant
stock options, stock appreciation rights, restricted stock, deferred stock,
stock purchase rights and other stock-based compensation to key employees,
officers and directors of the Company. In August 1995 the Board amended the LTIP
to increase the number of shares of common stock reserved for issuance under the
plan from 150,000 to 235,000, in April 1997 to 335,000 and in April 1998 to
485,000. As of December 31, 1999, 325,624 options were outstanding, at between
$12.25 and $25.00 per share, the fair market value on the dates of grant,
233,096 of which were exercisable.

     The following summarizes the transactions of the Company's LTIP for the
years ended December 31, 1997, 1998 and 1999:

<TABLE>
<CAPTION>
                                          1997                  1998                  1999
                                   -------------------   -------------------   -------------------
                                              WEIGHTED              WEIGHTED              WEIGHTED
                                              AVERAGE               AVERAGE               AVERAGE
                                              EXERCISE              EXERCISE              EXERCISE
                                    SHARES     PRICE      SHARES     PRICE      SHARES     PRICE
                                   --------   --------   --------   --------   --------   --------
<S>                                <C>        <C>        <C>        <C>        <C>        <C>
Outstanding at beginning of
  year...........................   209,302    $15.25     320,771    $17.28     370,138    $17.28
Granted..........................   124,960     20.38      84,930     15.48       6,980     16.75
Exercised........................    (4,295)    10.64     (24,844)    11.59     (19,483)     9.66
Canceled.........................    (9,196)    16.41     (10,719)    18.29     (32,011)    18.66
                                   --------              --------              --------
Outstanding at end of year.......   320,771    $17.28     370,138    $17.28     325,624    $17.51
                                   ========    ======    ========    ======    ========    ======
Exercisable at end of year.......   116,620    $13.77     183,223    $16.32     233,096    $17.66
Weighted average fair value of
  options granted................  $   4.64              $   3.40              $   3.76
</TABLE>

     Of the options outstanding at December 31, 1999, 132,773 have exercise
prices between $12.25 and $15.25, with a weighted average price of $14.19 and a
weighted average remaining contractual life of 7.4 years. Of these options,
81,777 are exercisable at a weighted average exercise price of $13.52. Another
86,277 of the options outstanding have exercise prices between $16.25 and
$19.75, with a weighted average exercise price of $18.74 and a weighted average
remaining contractual life of 6.7 years. Of these options, 75,155 are
exercisable at a weighted average exercise price of $19.08. The remaining
106,574 options have exercise prices between $20.125 and $25.00, with a weighted
average exercise price of $20.66 and a weighted average remaining contractual
life of 7.6 years. Of these options, 76,164 are exercisable at a weighted
average exercise price of $20.68.

     Also, the Company has the 1992 Employees' Stock Purchase Plan (the "Stock
Purchase Plan") under which an aggregate of 100,000 shares of the Company's
common stock may be purchased, through a payroll deduction program, primarily at
a price equal to 85% of the fair market value of the common stock on either the
grant date or the exercise date, whichever is lower. The number of shares of
common stock purchased through the Stock Purchase Plan for 1997, 1998 and 1999
was 12,386, 14,601 and 16,624, respectively. The Stock Purchase Plan was renewed
with a grant date of April 1, 1999 and an exercise date of March 31, 2000.

                                      F-13
<PAGE>   29
                          NATIONAL DENTEX CORPORATION

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Company accounts for the LTIP and Stock Purchase Plan under APB Opinion
No. 25 under which no compensation cost has been recognized. Had compensation
costs for these plans been determined consistent with Statement of Financial
Accounting Standards No. 123 ("SFAS No. 123"), the Company's net income and
diluted earnings per share would have been reduced to the following pro forma
amounts:

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                 --------------------------------------
                                                    1997          1998          1999
                                                 ----------    ----------    ----------
<S>                                              <C>           <C>           <C>
Net income:
  As reported..................................  $4,346,836    $4,683,416    $5,262,147
  Pro forma....................................   4,026,642     4,216,387     4,852,296
Diluted earnings per share
  As reported..................................       $1.24         $1.32         $1.48
  Pro forma....................................        1.15          1.19          1.37
</TABLE>

     Because the SFAS No. 123 method of accounting has not been applied to
options granted prior to January 1, 1995, the resulting pro forma compensation
cost may not be representative of that to be expected in future years.

     In calculating the pro forma information set forth above, the fair value of
each option grant under the LTIP and the Stock Purchase Plan is estimated as of
the date of grant using the Black-Scholes option pricing model with the
following weighted average assumptions used for grants in 1997, 1998 and 1999,
respectively: risk-free interest rates of between 5.19% and 5.48% for the 1997
option grants, between 4.45% and 4.72% for the 1998 option grants and between
5.56% and 6.47% for the 1999 option grants; no expected dividend yield for any
plan year; expected lives of between one and three years for the 1997, 1998 and
1999 option grants, based on vesting periods; expected volatility of between
33.34% and 36.74% for 1997 option grants, between 31.63% and 33.77% for option
grants in 1998 and between 30.96% and 32.78% for option grants in 1999.

  Warrants

     In December 1993, the Company issued warrants to the representative of its
underwriters to purchase 100,000 shares of common stock of the Company at an
exercise price of 135% of the initial offering price of $8.00, or $10.80 per
share. In December 1998, the remaining 30,000 warrants were exercised in a
cashless transaction and 11,914 shares of common stock were issued.

(9) SUBSEQUENT EVENT

     On January 25, 2000, the Board of Directors voted, subject to shareholder
approval, to increase the number of common shares reserved for issuance under
the Employee Stock Purchase Plan from 100,000 to 200,000 shares.

                                      F-14
<PAGE>   30

                                                                     SCHEDULE II

                          NATIONAL DENTEX CORPORATION

                       VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                   BALANCE
                                                     AT        CHARGED TO                  BALANCE AT
                                                  BEGINNING    COSTS AND                     END OF
                                                  OF PERIOD     EXPENSES     WRITE-OFFS      PERIOD
                                                  ---------    ----------    ----------    ----------
<S>                                               <C>          <C>           <C>           <C>
Allowance for Doubtful Accounts:
  December 31, 1997.............................  $204,139      $49,473       $107,936      $145,676
  December 31, 1998.............................   145,676       64,661         65,788       144,549
  December 31, 1999.............................   144,549       94,059         42,850       195,758
</TABLE>

                                      F-15