##### Table of Contents





UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended December 31, 2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    000-23092
 NATIONAL DENTEX
    CORPORATION
 (Exact name of registrant as
    specified in its charter)
  MASSACHUSETTS(State or Other Jurisdiction
    of
    Incorporation or Organization)

04-2762050(I.R.S. Employer
    Identification No.)2 Vision Drive,
    Natick, MA(Address of Principal
    Executive Offices)

01760(Zip
    Code)   (508) 907-7800 (Registrants
    Telephone No., including Area Code) Securities
    registered pursuant to Section 12(b) of the Act:
  Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, par value $.01 per share

The NASDAQ Stock Market, LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated filer o

Accelerated filer o

Non-accelerated filer þ

Smaller reporting company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---





TABLE OF CONTENTS  PART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Removed and ReservedItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesPART IIItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures about Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder MattersItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesINDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULEREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMCONSOLIDATED BALANCE SHEETSCONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITYCONSOLIDATED STATEMENTS OF CASH FLOWSNATIONAL DENTEX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2009SIGNATURESEXHIBIT INDEXEX-10.15 WRITTEN SUMMARY OF COMPENSATION ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERSEX-23 CONSENT OF PRICEWATERHOUSECOOPERS LLPEX-31.1 SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICEREX-31.2 SECTION 302 CERTIFICATION OF CHIEF FINANCIAL OFFICEREX-32.1 SECTION 906 CERTIFICATION OF CHIEF EXECUTIVE OFFICEREX-32.2 SECTION 906 CERTIFICATION OF CHIEF FINANCIAL OFFICER    Table of Contents  
  PART I
 
  Item 1.
    Business  General
    (508) 907-7800. Form 10-K, Form 10-Q, Form 8-K,
  Information
    as to Industry and Operating Segments
    Description
    of Business
      Restorative Products.
 1




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##### Table of Contents



Reconstructive Products.
  Cosmetic Products.
  tm
  Laboratory
    and Corporate Operations
        Sales
    and Marketing
   2




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tm
  Competition
       3




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##### Table of Contents



Employees
    Intellectual
    Property
  tm
  Backlog
   
  Item 1A.
    Risk
    Factors    Our
    success depends on economic and other external factors that
    affect consumer decisions about whether and when to have dental
    procedures performed.
     4




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##### Table of Contents



We
    operate in a highly competitive and fragmented market that is
    increasingly global in scope.
    We
    face increased competitive pressures from foreign-sourced
    products and technology-based solutions.
      We
    face increased competitive pressures from multiple location
    operators and the consolidation in the industry.
    Our
    failure to generate sufficient cash to meet our liquidity needs
    may affect our ability to service our indebtedness and grow our
    business.
     5




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##### Table of Contents



We may
    be more leveraged than some of our competitors, which could
    adversely affect our business plans.
      Our
    Senior Credit Facility contains a number of financial and other
    covenants that may restrict our ability to engage in some
    business transactions.
      An
    impairment in the carrying value of goodwill or other acquired
    intangibles could negatively affect our operating results and
    net worth.
     6




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##### Table of Contents



Risks
    associated with our strategic acquisitions could adversely
    affect our business.
    
    difficulties integrating the acquired company, retaining the
    acquired laboratories customers, and achieving the
    expected benefits of the acquisition, such as revenue increases,
    cost savings, and increases in geographic or product presence,
    in the desired time frames, if at all;
    loss of key employees from the acquired company;
    implementing and maintaining consistent standards, controls,
    procedures, policies and information systems; and
    diversion of managements attention from other business
    concerns.    If we
    fail to develop new or expand existing customer relationships,
    our ability to grow our business will be impaired.
   7




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If we
    cannot continue to respond to technical innovations we may not
    be able to compete effectively.
    Our
    failure to attract and retain qualified personnel would
    adversely affect our business.
    Our
    business results are adversely affected by increases in labor,
    benefits and related costs.
    Our
    operating results can be adversely affected by changes in the
    cost or availability of raw materials, particularly precious
    metals like gold, platinum and palladium.
    Compliance
    with changing regulation of corporate governance, public
    disclosure, and accounting standards may result in additional
    expenses and risks.
   8




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We are
    subject to a number of continuing listing standard requirements
    of Nasdaq Global Market. If we fail to comply with these listing
    standards we may be subject to delisting.
    We may
    face increased regulatory action by, among other governmental
    entities, the United States Food and Drug Administration (the
    FDA).
    Our
    business may be adversely affected by the actions of and risks
    associated with our third-party suppliers.
    Forward
    Looking Statements
   9




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##### Table of Contents



Item 1B.
    Unresolved
    Staff Comments   
  Item 2.
    Properties  $
     
  Item 3.
    Legal
    Proceedings   
  Item 4.
    Removed
    and Reserved 
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities 10




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##### Table of Contents



PART II
  Trading
    Market
      PriceQuarter Ending

Low

High03/31/08

$
11.50


$
16.8406/30/08

$
10.05


$
13.2509/30/08

$
6.01


$
12.6012/31/08

$
4.19


$
6.9003/31/09

$
1.25


$
5.3506/30/09

$
3.78


$
8.0009/30/09

$
6.25


$
8.9312/31/09

$
6.00


$
12.73   Holders
    Dividends
    Recent
    Sales of Unregistered Securities
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
    Issuer
    Purchases of Equity Securities
  Maximum NumberTotal Number of

of Shares thatShares Purchased

May Yet BeTotal Number

Average

as Part of Publicly

Purchased Underof Shares

Price Paid

Announced Plans

the Plans orFiscal Period

Purchased

per Share

or Programs

ProgramsJanuary 1, 2009 - December 31, 2009





$








206,700  11




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Stock
    Performance Graph
      COMPARISON
    OF CUMULATIVE TOTAL RETURN (1) AMONG NATIONAL DENTEX
    (NADX),
    NASDAQ INDUSTRIAL INDEX AND PEER GROUP INDEX (2)
  
  12-31-04



12-31-05



12-31-06



12-31-07



12-31-08



12-31-09NADX



100.00




111.03




86.20




78.42




22.41




49.75NASDAQ Industrial Index



100.00




100.12




112.52




117.27




64.11




94.07Peers



100.00




84.82




92.01




111.40




66.55




89.65   (1)
    
    Assumes $100 invested on December 31, 2004 in our common
    stock, the NASDAQ Industrial Index and the Peer Group Index,
    including reinvestment of any dividends paid on the investment.(2)
    
    The Peer Group Index consists of Dentsply International, Inc.
    and Patterson Companies, Inc. We believe that these companies
    represent the other publicly traded companies within the dental
    service community. 12




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Item 6.
    Selected
    Financial Data    2005


2006


2007


2008


2009(Dollars in thousands, except per share data)Consolidated Statements of Income:Net sales

$
135,843


$
150,107


$
170,361


$
171,674


$
161,195Cost of goods sold


78,381



88,269



97,739



102,184



93,119Gross profit


57,462



61,838



72,622



69,490



68,076Selling, general & administrative expenses


44,728



50,097



58,562



58,588



55,755Goodwill impairment














6,950



264Operating income


12,734



11,741



14,060



3,952



12,057Other expense


646



786



771



747



745Interest expense


665



1,523



2,803



2,110



1,257Income before provision for income taxes


11,423



9,432



10,486



1,095



10,055Provision for income taxes


4,334



3,669



3,860



1,972



4,178Net income (loss)

$
7,089


$
5,763


$
6,626


$
(877
)

$
5,877Net income (loss) per share  basic

$
1.33


$
1.05


$
1.20


$
(0.16
)

$
1.03Net income (loss) per share  diluted

$
1.27


$
1.01


$
1.17


$
(0.16
)

$
1.02Weighted average shares outstanding  basic


5,334



5,485



5,540



5,631



5,727Weighted average shares outstanding  diluted


5,601



5,732



5,665



5,631



5,761Consolidated Balance Sheet Data:Working capital

$
11,126


$
6,232


$
6,000


$
9,527


$
9,296Total assets


117,119



148,490



155,639



161,515



155,295Long-term debt, including current portion


18,701



35,458



29,695



39,258



26,848Stockholders equity

$
76,074


$
82,794


$
91,192


$
90,492


$
97,790  
  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion should be read in conjunction with
    the Consolidated Financial Statements
 and the related notes that appear elsewhere in this
    document.
  Certain statements in this Annual Report, particularly
    statements contained in this Item 7,
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations constitute
    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 words anticipate, believe,
    estimate, expect, plan,
    intend and other similar expressions are intended to
    identify these forward-looking statements, but are not the
    exclusive means of identifying them. Forward-looking statements
    included in this Annual Report or hereafter included in other
    publicly available documents filed with the Securities and
    Exchange Commission (SEC), reports to our
    stockholders and other publicly available statements issued or
    released by us involve known and unknown risks, uncertainties,
    and other factors which could cause our actual results,
    performance (financial or operating) or achievements to differ
    from the future results, performance (financial or operating) or
    achievements expressed or implied by such forward-looking
    statements. Such future results are based upon our best
    estimates based upon current conditions and the most recent
    results of operations. Various risks, uncertainties and
    contingencies could cause our actual results, performance or
    achievements to differ materially from those
 13




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##### Table of Contents



expressed in, or implied by, the forward-looking statements
    contained in this Annual Report. These include, but are not
    limited to, those described above under Item 1A, Risk
    Factors. We assume no obligation to update these
    forward-looking statements contained in this report, whether as
    a result of new information, future events, or otherwise.
  Overview
      Restorative Products.
  Reconstructive Products.
  Cosmetic Products.
  non-exclusive tm
  Recent
    Trends
   14




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Acquisitions
    long-term
  Overview
    of Results of Operations
     15




---



##### Table of Contents



.
        Liquidity
    and Capital Resources
   16




---



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17




---



##### Table of Contents



Long-Term
    Obligations:
  December 31,


December 31,2008


2009Term note

$
24,583,000


$
19,583,000Borrowings classified as long term under the revolving line of
    credit


13,800,000



6,529,000Borrowings classified as short term under the revolving line of
    credit


2,940,000



Other long-term debt


875,000



736,000Total long-term debt


42,198,000



26,848,000Less: current maturities


8,055,000



5,072,000Long-term debt, less current portion

$
34,143,000


$
21,776,000     December 31, 2009Principal DueFiscal 2010


5,072,000Fiscal 2011


21,187,000Fiscal 2012


80,000Fiscal 2013


85,000Fiscal 2014


90,000Thereafter


334,000Total

$
26,848,000   Liquidity:
    
    increases in accrued expenses and accounts payable of $2,117,000
    as a result of increases in payroll related accruals and the
    timing of vendor payments;
    decreases of other receivables of $841,000 primarily due to
    collections of stop loss insurance for medical claims;
    decreases in benefit for deferred income taxes of $957,000 due
    to timing differences in the deductibility of depreciation and
    goodwill impairment;    
    increases in inventory of $349,000 primarily due to increased
    precious metal values;
    increases in prepaid assets of $681,000 primarily due to the
    timing of insurance payments, income taxes, and director fees;
    and;
    increases in other assets of $722,000 due to improved
    performance of the cash surrender value of assets held for life
    insurance policies related to our supplemental employee
    retirement plans. 18




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##### Table of Contents



Commitments
    and Contingencies
    Payments Due By PeriodLess Than








Greater ThanTotal


1 Year


1 - 3 Years


4 - 5 Years


5 YearsTerm Loan Facility

$
19,583,000


$
5,000,000


$
14,583,000


$



$
Line of Credit


6,529,000







6,529,000







Capital Leases


736,000



71,000



156,000



175,000



334,000Operating Leases:Real Estate


18,386,000



3,829,000



6,629,000



4,165,000



3,763,000Vehicles


444,000



444,000











Equipment


236,000



111,000



98,000



26,000



1,000TOTAL

$
45,914,000


$
9,455,000


$
27,995,000


$
4,366,000


$
4,098,000      19




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##### Table of Contents



Results
    of Operations
    Years Ended December 31,2007

2008

2009Net sales


100.0
%


100.0
%


100.0
%Cost of goods sold


57.4



59.5



57.8Gross profit


42.6



40.5



42.2Selling, general and administrative expenses


34.3



34.2



34.5Goodwill impairment






4.0



0.2Operating income


8.3



2.3



7.5Other expense


0.5



0.4



0.5Interest expense


1.6



1.3



0.8Income before provision for income taxes


6.2



0.6



6.2Provision for income taxes


2.3



1.1



2.5Net income (loss)


3.9
%


(0.5
)%


3.7
%   Year
    Ended December 31, 2009 Compared with Year Ended
    December 31, 2008
  Net
    Sales
      Cost of
    Goods Sold
   20




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##### Table of Contents



Selling,
    General and Administrative Expenses
      
    Decreases in delivery costs, resulting from decreases of
    $1,108,000 in fuel and delivery services and decreases of
    $857,000 in compensation  $2,006,000;
    Decreases in administrative expenses at the laboratory level,
    including $1,095,000 in decreased compensation primarily
    resulting from workforce reductions, decreases of $276,000 in
    travel costs, decreases of $168,000 in recruiting and training
    expenses, and $684,000 of other broad based expense
    reductions  $2,223,000;
    Decreases in selling expenses, including $261,000 in decreased
    sales compensation, $241,000 in decreased marketing expense at
    Keller, $228,000 in decreased travel related expenses, and
    $134,000 in decreased promotional related expenses 
    $886,000;
    Decreases in consulting and professional fees 
    $655,000;
    Decrease in insurance expense resulting from increases in the
    cash surrender value of insurance, net of increases in the
    related deferred compensation accruals for our supplemental
    executive retirement plans  $460,000;
    The decrease in training and travel expenses at the corporate
    level  $295,000; and additionally,
    The gain from the sale of real estate in Denver,
    Colorado  $365,000;    
    Increases in laboratory incentive compensation as a result of
    additional operating profit  $1,239,000;
    Additional operating and amortization expense associated with
    the Dental Art acquisition  $1,083,000;
    Increases in corporate incentive compensation accruals due to
    our improved financial results  $1,040,000; and
    Increase in amortization due primarily to $317,000 of trade name
    impairment charges  $380,000. 21




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##### Table of Contents



Goodwill
    Impairment
    Operating
    Income
    Interest
    Expense
    Provision
    for Income Taxes
    Net
    Income
    Operating
    Segment Results
    22




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##### Table of Contents



Year Ended December 312008


2009


$ Change


% ChangeRevenue:NDX Laboratories

$
126,240,949


$
118,801,942


$
(7,439,007
)


(5.9
)%Green Dental Laboratory


20,724,865



19,169,497



(1,555,368
)


(7.5
)%Keller Group


25,987,992



24,248,404



(1,739,588
)


(6.7
)%Subtotal


172,953,806



162,219,843



(10,733,963
)


(6.2
)%Less: Inter-segment Revenues:


1,279,371



1,024,639



(254,732
)


(19.9
)%Net Sales

$
171,674,435


$
161,195,204


$
(10,479,231
)


(6.1
)%Laboratory Operating Income:NDX Laboratories

$
15,059,508


$
16,318,096


$
1,258,588



8.4
%Green Dental Laboratory


4,795,136



4,418,446



(376,690
)


(7.9
)%Keller Group


3,660,913



4,237,948



577,035



15.8
%Laboratory Operating Income

$
23,515,557


$
24,974,490


$
1,458,933



6.2
%   NDX
    Laboratories
      Green
    Dental Laboratory
      Keller
    Group
   23




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##### Table of Contents



Year
    Ended December 31, 2008 Compared with Year Ended
    December 31, 2007
  Net
    Sales
      Cost of
    Goods Sold
     24




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##### Table of Contents



Selling,
    General and Administrative Expenses
      
    Additional operating and amortization expense associated with
    the Dental Art acquisition  $501,000;
    Increases in delivery costs, resulting primarily from cost
    increases in fuel and delivery services  $694,000;
    Increases in selling expenses, including $271,000 in increased
    marketing expense at Keller and $454,000 in increased sales
    compensation, offset by $273,000 of decreases in customer
    rewards program expenses  $507,000;
    Increases in administrative expenses at the laboratory level,
    including $852,000 in increased compensation primarily resulting
    from increases to base pay of $485,000 related to the change in
    the Laboratory Plan, offset by $189,000 of decreases to
    depreciation expense and losses on asset disposals 
    $758,000;
    Increases in salaries and benefits at the corporate
    level $649,000; and;
    Decrease of the cash surrender value of life insurance policies
    as a result of market value declines, net of decreases in the
    related deferred compensation accruals for our supplemental
    executive retirement plans  $730,000;    
    Decreases in laboratory incentive compensation as a result of
    the Laboratory Plan restructuring  $3,281,000.
    Decreases in executive incentive compensation accruals due to
    our financial results  $400,000; and
    Decrease in amortization due to fully amortized non-compete
    agreements  $193,000.  Goodwill
    Impairment
    Operating
    Income
   25




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##### Table of Contents



Interest
    Expense
    Provision
    for Income Taxes
    Net
    Income
    Operating
    Segment Results
    Year Ended December 312007


2008


$ Change


% ChangeRevenue:NDX Laboratories

$
127,388,588


$
126,240,949


$
(1,147,639
)


(0.9
)%Green Dental


19,859,770



20,724,865



865,095



4.4
%Keller Group


23,843,093



25,987,992



2,144,899



9.0
%Subtotal


171,091,451



172,953,806



1,862,355



1.1
%Less: Inter-segment Revenues:NDX Laboratories


370,913



438,200



67,287



18.1
%Green Dental


199,525



369,526



170,001



85.2
%Keller Group


160,384



471,645



311,261



194.1
%Net Sales

$
170,360,629


$
171,674,435


$
1,313,806



0.8
%Laboratory Operating Income:NDX Laboratories

$
17,572,491


$
15,059,508


$
(2,512,983
)


(14.3
)%Green Dental


4,665,630



4,795,136



129,506



2.8
%Keller Group


3,228,640



3,660,913



432,273



13.4
%Laboratory Operating Income

$
25,466,761


$
23,515,557


$
(1,951,204
)


(7.7
)%   NDX
    Laboratories
   26




---



##### Table of Contents



Green
    Dental Laboratory
      Keller
    Group
      Critical
    Accounting Policies
   27




---



##### Table of Contents



Summary
    of Significant Accounting Policies
  Revenue
    Recognition
    Goodwill
    and Other Indefinite-Lived Intangible Assets Not Subject to
    Amortization
        Intangible
    Assets Subject to Amortization
    Inventories
  (first-in,
 28




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##### Table of Contents



Property,
    Plant and Equipment
    Buildings


25 yearsFurniture and fixtures


5 - 10 yearsLaboratory equipment


5 - 20 yearsComputer equipment


3 - 5 years         Impairment
    of Long-Lived Assets
    Cash
    Surrender of Life Insurance
    Income
    Taxes
     29




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##### Table of Contents



Fair
    Value Measurements
  contract-by-contract
    Recent
    Accounting Pronouncements
      The tm and the Hierarchy of Generally Accepted Accounting
    Principles,
 
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk     30




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Quarterly
    Results
    Three Months EndedMarch 31,

June 30,

Sept. 30,

Dec. 31,

March 31,

June 30,

Sept. 30,

Dec. 31,2008

2008

2008

2008

2009

2009

2009

2009(Dollars in thousands except per share data)Net sales

$
43,529


$
44,580


$
42,302


$
41,264


$
41,260


$
42,755


$
39,006


$
38,175Gross profit

$
18,210


$
18,665


$
16,552


$
16,062


$
17,622


$
18,828


$
15,836


$
15,790Gross margin


41.8
%


41.9
%


39.1
%


38.9
%


42.7
%


44.0
%


40.6
%


41.4
%Operating income (loss)

$
3,389


$
3,861


$
2,183


$
(5,482
)

$
3,898


$
4,377


$
2,393


$
1,388Operating margin


7.8
%


8.7
%


5.2
%


(13.3
)%


9.4
%


10.2
%


6.1
%


3.6
%Net income (loss)

$
1,681


$
1,937


$
791


$
(5,286
)

$
2,059


$
2,330


$
1,059


$
429Net income (loss) per diluted share

$
0.30


$
0.34


$
0.14


$
(0.93
)

$
0.36


$
0.40


$
0.18


$
0.07     Location
    of Financial Statements
   
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   
  Item 9A.
    Controls
    and Procedures  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rules 13a-15(e) 15d-15(e),
 31




---



##### Table of Contents



Managements
    Report on Internal Control over Financial Reporting
  Rules 13a-15(f) 15d-15(f). Internal
    Control  Integrated Framework
  Form 10-K,
  Changes
    in Internal Control over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
 
  Item 9B.
    Other
    Information   
  PART III
 
  Item 10.
    Directors,
    Executive Officers and Corporate Governance    www.nationaldentex.com.
 
  Item 11.
    Executive
    Compensation   
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Shareholder Matters   
  Item 13.
    Certain
    Relationships and Related Transactions   32




---



##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services   
  PART IV
 
  Item 15.
    Exhibits
    and Financial Statement Schedules    page F-1.
        Form 10-K
    Form 10-K
   33




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
    SCHEDULE
  PageFinancial Statements:The consolidated financial statements of National Dentex
    Corporation included herein are as listed below:Report of Independent Registered Public Accounting Firm


F-2Consolidated Balance Sheets as of December 31, 2008 and 2009


F-3Consolidated Statements of Income for each of the three years in
    the period ended December 31, 2009


F-4Consolidated Statements of Stockholders Equity for each of
    the three years in the period ended December 31, 2009


F-5Consolidated Statements of Cash Flows for each of the three
    years in the period ended December 31, 2009


F-6Notes to Consolidated Financial Statements


F-7  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    Internal Control  Integrated Framework
        
   F-2




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
  CONSOLIDATED BALANCE SHEETS
  December 31,


December 31,2008


2009ASSETSCURRENT ASSETS:Cash and cash equivalents

$
2,109,943


$
1,510,046Accounts receivable:Trade, less allowance of $492,000 in 2008 and $583,000 in 2009


16,701,139



16,132,939Other


2,527,168



1,728,591Inventories


6,991,385



6,890,017Prepaid expenses


3,688,057



3,784,470Deferred tax assets


931,919



973,237Property held for sale


69,822



Total current assets


33,019,433



31,019,300PROPERTY, PLANT AND EQUIPMENT:Land and buildings


7,535,015



7,535,015Leasehold and building improvements


18,890,911



19,334,362Laboratory equipment


22,503,086



20,459,600Furniture and fixtures


8,721,724



8,337,52757,650,736



55,666,504Less  Accumulated depreciation and amortization


24,213,721



24,946,070Net property, plant and equipment


33,437,015



30,720,434OTHER ASSETS, net:Goodwill


69,384,320



69,616,034Trade names


9,977,917



9,490,645Customer relationships


6,210,176



5,352,962Non-competition agreements


1,583,895



1,291,824Other assets


7,902,147



7,803,877Total other assets


95,058,455



93,555,342Total assets

$
161,514,903


$
155,295,076LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Revolving line of credit

$
2,939,978


$
Current portion of long-term debt


5,115,032



5,071,050Accounts payable


3,541,996



3,495,044Accrued liabilities:Payroll and employee benefits


7,574,971



9,315,821Current portion of deferred acquisition costs


300,000



Other accrued expenses


4,019,992



3,841,752Total current liabilities


23,491,969



21,723,667LONG-TERM LIABILITIES:Long-term obligations


34,142,891



21,776,455Deferred compensation


6,114,609



6,739,265Other accrued expenses


1,419,561



1,475,247Deferred tax liabilities


5,853,821



5,789,956Total long-term liabilities


47,530,882



35,780,923COMMITMENTS AND CONTINGENCIES (Note 8)STOCKHOLDERS EQUITY:Preferred stock, $.01 par valueAuthorized  500,000 sharesNone issued and outstanding






Common stock, $.01 par valueAuthorized  8,000,000 sharesIssued and Outstanding  5,663,749 shares at
    December 31, 2008 and 5,761,363 shares at
    December 31, 2009


56,637



57,613Paid-in capital


19,522,536



20,374,197Retained earnings


71,312,895



77,189,758Accumulated other comprehensive (loss) income


(400,016
)


168,918Total stockholders equity


90,492,052



97,790,486Total liabilities and stockholders equity

$
161,514,903


$
155,295,076    F-3




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
  CONSOLIDATED STATEMENTS OF INCOME
  Years EndedDecember 31,


December 31,


December 31,2007


2008


2009Net sales

$
170,360,629


$
171,674,435


$
161,195,204Cost of goods sold


97,738,785



102,184,879



93,119,314Gross profit


72,621,844



69,489,556



68,075,890Selling, general and administrative expenses


58,561,368



58,587,890



55,755,023Goodwill impairment






6,950,000



263,537Operating income


14,060,476



3,951,666



12,057,330Other expense


771,660



746,633



744,867Interest expense


2,802,944



2,110,113



1,257,184Income before provision for income taxes


10,485,872



1,094,920



10,055,279Provision for income taxes


3,860,213



1,971,963



4,178,416Net income (loss)

$
6,625,659


$
(877,043
)

$
5,876,863Net income (loss) per share  basic

$
1.20


$
(0.16
)

$
1.03Net income (loss) per share  diluted

$
1.17


$
(0.16
)

$
1.02Weighted average shares outstanding  basic


5,540,496



5,631,450



5,727,071Weighted average shares outstanding  diluted


5,665,042



5,631,450



5,760,785    F-4




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY
  Common Stock








CumulativeNumber of


$.01 Par


Paid-in


Retained


TranslationShares


Value


Capital


Earnings


Adjustment


TotalBALANCE, December 31, 2006


5,509,412


$
55,094


$
17,296,170


$
65,564,279


$
(121,911
)


82,793,632Issuance of 42,450 shares of common stock under the stock
    option plans


42,450



425



567,407











567,832Issuance of 24,030 shares of common stock under the
    employee stock purchase program


24,030



240



295,325











295,565Tax benefit associated with exercise of stock options










15,859











15,859Net income














6,625,659







6,625,659Issuance of 6,227 shares of common stock as directors
    fees


6,227



62



165,302











165,364Stock compensation expense










161,112











161,112Cumulative translation adjustment


















567,240



567,240BALANCE, December 31, 2007


5,582,119



55,821



18,501,175



72,189,938



445,329



91,192,263Issuance of 12,000 shares of common stock under the stock
    option plans


20,250



202



188,799











189,001Issuance of 33,375 shares of common stock under the
    employee stock purchase program


33,375



334



371,308











371,642Tax benefit associated with exercise of stock options










12,037











12,037Net loss














(877,043
)






(877,043
)Issuance of 28,005 shares of common stock as
    directors fees


28,005



280



269,720











270,000Stock compensation expense










179,497











179,497Cumulative translation adjustment


















(845,345
)


(845,345
)BALANCE, December 31, 2008


5,663,749



56,637



19,522,536



71,312,895



(400,016
)


90,492,052Issuance of 93,102 shares of common stock under the
    employee stock purchase program


93,102



934



315,567











316,501Net income














5,876,863







5,876,863Issuance of 4,155 shares of common stock as directors
    fees


4,155



42



162,708











162,750Stock compensation expense










373,386











373,386Cumulative translation adjustment


















568,934



568,934BALANCE, December 31, 2009


5,761,006


$
57,613


$
20,374,197


$
77,189,758


$
168,918


$
97,790,486    F-5




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Years EndedDecember 31,


December 31,


December 31,2007


2008


2009Cash flows from operating activities:Net income (loss)

$
6,625,659


$
(877,043
)

$
5,876,863Adjustments to reconcile net income to net cash provided by
    operating activities, net of effects of acquisitions:Depreciation and amortization


5,338,432



6,011,564



5,825,730Goodwill impairment






6,950,000



263,536Loss (gain) on disposal of property, plant and equipment


150,109



(2,792
)


(311,472
)Benefit for deferred income taxes


(265,149
)


(1,099,572
)


(142,638
)Impairment of long-lived assets


94,000



44,000



361,443Tax benefit associated with exercise of stock options


15,859



12,037



Provision for bad debts


151,330



148,068



274,337Losses on write-down of inventories


107,791



219,255



124,583Stock-based compensation expense


326,477



449,498



536,136Other non-cash items


489,375







Changes in operating assets and liabilities, net of effects of
    acquisitions:(Increase) decrease in accounts receivable


(701,142
)


(5,886
)


1,159,268(Increase) decrease in inventories


(226,117
)


355,532



6,632(Increase) decrease in prepaid expenses


(2,363,317
)


586,798



(93,747
)(Increase) decrease in other assets


(19,635
)


616,081



(106,294
)Increase (decrease) in accounts payable and accrued liabilities


2,828,757



(80,844
)


2,038,549Net cash provided by operating activities


12,552,429



13,326,696



15,812,926Cash flows from investing activities:Payment for acquisitions, net of cash acquired






(10,000,000
)


Payment of deferred purchase price


(2,158,880
)


(1,577,720
)


(300,000
)Increase in notes receivable






(2,000,000
)


Premiums paid for life insurance policies


(386,621
)


(324,505
)


(171,042
)Proceeds received from life insurance policies


46,700



87,734



163,950Additions to property, plant and equipment


(7,535,578
)


(7,024,076
)


(1,557,588
)Cash proceeds from the disposition of property, plant, and
    equipment


183,373



322,589



450,097Net cash used in investing activities


(9,851,006
)


(20,515,978
)


(1,414,583
)Cash flows from financing activities:Borrowings of revolving line of credit


55,370,014



55,555,496



52,894,765Repayments of revolving line of credit


(52,166,141
)


(57,162,619
)


(63,106,023
)Borrowings of long-term debt






13,800,000



Repayments of long-term debt


(5,775,105
)


(5,109,985
)


(5,106,371
)Net proceeds from issuance of common stock


863,396



560,644



316,501Net cash (used in) provided by financing activities


(1,707,836
)


7,643,536



(15,001,128
)Effect of Exchange rate changes on cash


47,539



(33,702
)


2,888Net increase in cash and cash equivalents


1,041,126



420,552



(599,897
)Cash and cash equivalents at beginning of period


648,265



1,689,391



2,109,943Cash and cash equivalents at end of period

$
1,689,391


$
2,109,943


$
1,510,046Supplemental disclosures of cash flow information:Interest paid (net of capitalized interest of $37,000 in 2007,
    $26,000 in 2008 and $3,000 in 2009)

$
2,853,706


$
2,211,714


$
1,306,242Income taxes paid

$
5,792,166


$
3,156,077


$
4,499,336Supplemental schedule of non-cash investing and financing
    activities:Capital lease obligations

$



$
(881,000
)

$
The Company purchased the operations of certain dental
    laboratories in 2008. In connection with these acquisitions,
    liabilities were assumed as follows:Fair value of assets acquired including acquired cash

$



$
11,959,000


$
Cash purchase price






(10,112,000
)


Deferred purchase price at date of acquisition










Liabilities assumed

$



$
1,847,000


$
    F-6




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 December 31,
    2009
  (1)
    Organization    (2)
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Revenue
    Recognition
    Goodwill
    and Other Indefinite-Lived Intangible Assets Not Subject to
    Amortization
       F-7




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Intangible
    Assets Subject to Amortization
    Advertising
    and Promotional Costs
    Cash
    and Cash Equivalents
    Accounts
    Receivable and Allowance for Doubtful Accounts
      2008


2009Trade

$
17,193,121


$
16,715,927Allowance for doubtful accounts


(491,982
)


(582,988
)Employee


298,893



50,088Income Taxes


1,400,548



1,393,000Other


827,727



285,503Total Receivables

$
19,228,307


$
17,861,530  F-8




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Balance at

Charged to



Acquired in

Balance atBeginning

Costs and



Purchase Business

End ofof Period

Expenses

Write-offs

Combinations

PeriodAllowance for Doubtful Accounts:December 31, 2007


289,992



151,330



82,770







358,552December 31, 2008


358,552



148,069



84,639



70,000



491,982December 31, 2009


491,982



274,337



183,331







582,988   Inventories
    December 31,


December 31,2008


2009Raw Materials

$
5,783,468


$
5,726,274Work in Process


985,278



945,196Finished Goods


222,639



218,547$
6,991,385


$
6,890,017   (first-in,
  Property,
    Plant and Equipment
    Buildings

25 yearsFurniture and fixtures

5 - 10 yearsLaboratory equipment

5 - 20 yearsComputer equipment

3 - 5 years        F-9




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Impairment
    of Long-Lived Assets
    Cash
    Surrender of Life Insurance
    Income
    Taxes
      Earnings
    per Share
    Years Ended December 31,2007

2008

2009Weighted average number of shares used in basic earnings per
    share calculation


5,540,496



5,631,450



5,727,071Incremental shares under option and employee stock purchase plans


124,546







33,714Weighted average number of shares used in diluted earnings per
    share calculation


5,665,042



5,631,450



5,760,785Shares under option plans excluded in computation of diluted
    earnings per share due to anti-dilutive effects


1,215



591,486



621,511   Use of
    Estimates
   F-10




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Disclosures
    about the Fair Value of Financial Instruments
    Comprehensive
    Income
    Year Ended December 31,2007


2008


2009Net income (loss)

$
6,625,659


$
(877,043
)

$
5,876,863Foreign currency translation adjustments


567,240



(845,345
)


568,934Total comprehensive income (loss)

$
7,192,899


$
(1,722,388
)

$
6,445,797     Disclosures
    about Segments of an Enterprise
      Fair
    Value Measurements
   F-11




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  contract-by-contract
      Level 1:
  Level 2:
  Level 3:
    Quoted Prices in


Significant Other


SignificantAs of


Active Markets


Observable Inputs


UnobservableDescription

December 31, 2009


(Level 1)


(Level 2)


Inputs (Level 3)Financial AssetsCash Surrender Value of Life Insurance

$
5,546,000






$
5,546,000



Total Financial Assets

$
5,546,000






$
5,546,000



   Quoted Prices in


Significant Other


SignificantAs of


Active Markets


Observable Inputs


UnobservableDescription

December 31, 2008


(Level 1)


(Level 2)


Inputs (Level 3)Financial AssetsCash Surrender Value of Life Insurance

$
5,479,000






$
5,479,000



Total Financial Assets

$
5,479,000






$
5,479,000



   Recent
    Accounting Pronouncements
     F-12




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    The tm and the Hierarchy of Generally Accepted Accounting
    Principles,
  (3)
    Acquisitions        Acquisition

Form of Acquisition

Location

Period AcquiredDental Art Laboratories, Inc.

All Outstanding Capital Stock

Lansing, MI

September, 2008     TotalDental Art Laboratories, Inc.

AcquiredTotal Purchase Price

$
10,112,000Less Fair Market Values Assigned to Tangible Assets and
    Liabilities:Cash


112,000Accounts receivable


883,000Inventories


252,000Property, plant and equipment


332,000Other assets


140,000Accounts payable


(192,000
)Accrued liabilities and other


(1,655,000
)Less Fair Market Values Assigned to Intangible Assets:Customer relationships


1,500,000Trade names


920,000Non-compete agreements


150,000Goodwill

$
7,670,000    F-13




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Years EndedDecember 31, 2007

December 31, 2008Net sales

$
178,140,000


$
176,858,000Net income (loss)


7,324,000



(413,000
)Net income (loss) per share:Basic

$
1.32


$
(0.07
)Diluted

$
1.29


$
(0.07
)   (4)  Goodwill
    and Other Intangible Assets
    As of December 31,2008


2009NDX Laboratories SegmentGoodwill, Balance as of January 1

$
37,636,000


$
44,983,000Accumulated impairment losses






(6,950,000
)37,636,000



38,033,000Goodwill acquired during the year


7,501,000



Adjustments related to contingent consideration


300,000



Effects of exchange rate changes


(454,000
)


316,000Impairment losses and other adjustments


(6,950,000
)


(84,000
)Balance as of December 31Goodwill


44,983,000



45,299,000Accumulated impairment losses


(6,950,000
)


(7,034,000
)$
38,033,000


$
38,265,000   As of December 31,2008


2009Green Dental Laboratory SegmentGoodwill balance

$
15,208,000


$
15,208,000   As of December 31,2008


2009Keller Group SegmentGoodwill balance

$
16,143,000


$
16,143,000    F-14




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Trade
    Names
      Years EndedDecember 31,


December 31,2008


2009Beginning of year

$
8,998,000


$
9,978,000Trade names acquired during the year


1,100,000



Effects of exchange rate changes


(76,000
)


54,000Trade names


10,022,000



10,032,000Impairment charges and other adjustments


(44,000
)


(541,000
)Trade names  end of year, net

$
9,978,000


$
9,491,000  F-15




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Customer
    Relationships
    Years EndedDecember 31,


December 31,2008


2009Beginning of year, gross

$
7,993,000


$
9,439,000Customer relationships acquired during the year


1,500,000



Effects of exchange rate changes


(54,000
)


35,000Customer relationships, gross


9,439,000



9,474,000Less: Accumulated amortization


(3,229,000
)


(4,121,000
)Customer relationships, net  end of year

$
6,210,000


$
5,353,000     2010

$
894,0002011


894,0002012


825,0002013


614,0002014


483,000Thereafter


1,643,000$
5,353,000   Non-competition
    Agreements
    F-16




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Years EndedDecember 31,


December 31,2008


2009Beginning of year, gross

$
10,553,000


$
10,696,000Non-competition agreements acquired during the year


150,000



Effects of exchange rate changes


(7,000
)


3,000Non-competition Agreements, gross


10,696,000



10,699,000Less: Accumulated amortization


(9,112,000
)


(9,407,000
)Non-competition agreements, net

$
1,584,000


$
1,292,000       2010

$
287,0002011


247,0002012


192,0002013


170,0002014


115,000Thereafter


281,000$
1,292,000   (5)
    Income
    Taxes    Years EndedDecember 31,


December 31,


December 31,2007


2008


2009Federal Current

$
2,985,255


$
2,134,884


$
3,418,520Deferred


(189,842
)


(851,093
)


(533,076
)2,795,413



1,283,791



2,885,444State Current


860,500



646,717



1,168,660Deferred


(25,700
)


(188,545
)


(105,688
)834,800



458,172



1,062,972Foreign Current


237,848



240,108



251,460Deferred


(7,848
)


(10,108
)


(21,460
)230,000



230,000



230,000$
3,860,213


$
1,971,963


$
4,178,416    F-17




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      2008


2009Deferred Tax Assets:Non-compete agreements

$
900,252


$
811,491Other liabilities


2,917,310



3,321,180Vacation benefits


745,677



750,548Inventory basis differences


251,687



234,018Receivables basis differences


44,405



83,058Total deferred tax assets


4,859,331



5,200,295Deferred Tax Liabilities:Depreciation differences


(2,146,150
)


(2,373,141
)Intangible amortization differences


(7,635,082
)


(7,643,873
)Total deferred tax liabilities


(9,781,232
)


(10,017,014
)Net deferred tax asset/liability

$
(4,921,901
)

$
(4,816,719
)     December 31,

December 31,

December 31,2007

2008

2009Statutory federal income tax rate


35.0
%


34.0
%


34.0
%State income tax, net of federal income tax benefit


4.9



27.6



6.9Research and experimentation credit






(55.1
)


Non-deductible goodwill






151.3



0.9Cash surrender value of life insurance


(.7
)


21.9



(.2
)Domestic production deduction


(2.2
)


(13.2
)


(2.3
)Other


(.2
)


13.6



2.3Effective income tax rate


36.8
%


180.1
%


41.6
%    F-18




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Unrecognized tax benefits at January 1, 2008

$
2,033,000Additions based on tax positions related to the current year


Subtractions for tax positions of prior years


(536,000
)Unrecognized tax benefits at December 31, 2008


1,497,000Additions based on tax positions related to the current year


Subtractions for tax positions of prior years


Unrecognized tax benefits at December 31, 2009

$
1,497,000     (6)
    Lines of
    Credit and Term Loan Facility       F-19




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Long-Term Obligations:
  December 31,


December 31,2008


2009Term note

$
24,583,000


$
19,583,000Borrowings classified as long term under the revolving line of
    credit


13,800,000



6,529,000Borrowings classified as short term under the revolving line of
    credit


2,940,000



Other long-term debt


875,000



736,000Total long-term debt


42,198,000



26,848,000Less: current maturities


8,055,000



5,072,000Long-term debt, less current portion

$
34,143,000


$
21,776,000     December 31, 2009Principal DueFiscal 2010


5,072,000Fiscal 2011


21,187,000Fiscal 2012


80,000Fiscal 2013


85,000Fiscal 2014


90,000Thereafter


334,000Total

$
26,848,000   (7)
    Benefit
    Plans   F-20




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
            (8)
    Commitments
    and Contingencies  Operating
    Leases
    Year

Amount2010

$
4,383,0002011


3,691,0002012


3,231,0002013


2,459,0002014


1,739,000Thereafter


3,763,000$
19,266,000  F-21




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Employment
    Contracts and
    Change-in-Control
    Arrangements
  change-in-control change-in-control
  (9)
    Share-based
    Payments    Year Ended December 31,2007


2008


2009Employee stock purchase plan

$
161,000


$
179,000


$
230,000Restricted stock and restricted stock units


165,000



270,000



163,000Performance-based stock options










Incentive stock options










143,000Total share-based compensation expense

$
326,000


$
449,000


$
536,000     Share-based
    Compensation Plans
   F-22




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Stock
    Option Plans, Restricted Stock, and Restricted Stock
    Units
        Weighted-average grant date fair value

$
4.47Risk-free interest rate


3.84
%Expected volatility


30.19
%Expected holding period in years


6.0Expected dividends


None       Weighted-average grant date fair value

$
2.58Risk-free interest rate


2.91
%Expected volatility


58.02
%Expected holding period in years


8.0Expected dividends


None  F-23




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    LTIP


2001 Stock PlanWeighted-





Weighted-Shares


Average


Shares


AverageUnderlying


Exercise


Underlying


ExerciseOptions


Price


Options


PriceOutstanding December 31, 2008


154,330


$
12.18



563,000


$
13.25Granted










120,000



4.07Exercised














Canceled


(3,405
)


11.52



(92,414
)


12.02Outstanding December 31, 2009


150,925


$
12.20



590,586


$
11.58Exercisable at end of period:


150,925


$
12.20



287,250


$
14.45     Time-vested
    restricted stock and restricted stock units under the 2001 Stock
    Plan
      Restricted Stock


Restricted Stock UnitsWeighted-Average





Weighted-AverageGrant Date Fair





Grant Date FairNumber of Shares


Value


Number of Shares


ValueNonvested December 31, 2006


1,596


$
22.55



3,192


$
22.55Granted


9,002



17.99



6,003



17.99Vested


1,596



22.55



3,192



22.55Cancelled














Nonvested December 31, 2007


9,002



17.99



6,003



17.99Granted


20,280



10.65



10,140



10.65Vested


6,502



17.99



6,003



17.99Cancelled














Nonvested December 31, 2008


22,780



11.46



10,140



10.65Granted














Vested


14,330



11.93



10,140



10.65Cancelled














Nonvested December 31, 2009


8,450


$
10.65






$
    F-24




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Employees
    Stock Purchase Plan (ESPP)
      January 1-

April 1-March 31,

December 31,2009

2009Weighted-Average Grant Date Fair Value

$
3.91


$
1.82Risk-free Interest Rate


2.25
%


0.56
%Expected Volatility


40.54
%


78.76
%Expected Holding Period in Years


1.0



1.0Expected Dividends


None



None   January 1-

April 1-March 31,

December 31,2008

2008Weighted-Average Grant Date Fair Value

$
4.18


$
3.91Risk-free Interest Rate


4.92
%


2.25
%Expected Volatility


30.29
%


40.54
%Expected Holding Period in Years


1.0



1.0Expected Dividends


None



None   January 1-

April 1-March 31,

December 31,2007

2007Weighted-Average Grant Date Fair Value

$
6.69


$
4.18Risk-free Interest Rate


5.27
%


4.92
%Expected Volatility


33.19
%


30.29
%Expected Holding Period


1.0 Year



1.0 YearExpected Dividends


None



None  F-25




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  1-year
  (10)
    Segment
    Information     F-26




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2007


2008


2009Revenue:NDX Laboratories

$
127,388,588


$
126,240,949


$
118,801,942Green Dental Laboratory


19,859,770



20,724,865



19,169,497Keller Group


23,843,093



25,987,992



24,248,404Subtotal


171,091,451



172,953,806



162,219,843Inter-segment Revenues:NDX Laboratories


370,913



438,200



328,783Green Dental Laboratory


199,525



369,526



281,469Keller Group


160,384



471,645



414,387Net Sales

$
170,360,629


$
171,674,435


$
161,195,204Laboratory Operating Income:NDX Laboratories

$
17,572,491


$
15,059,508


$
16,318,096Green Dental Laboratory


4,665,630



4,795,136



4,418,446Keller Group


3,228,640



3,660,913



4,237,948$
25,466,761


$
23,515,557


$
24,974,490Total Assets:NDX Laboratories

$
87,811,020


$
93,661,985


$
89,146,022Green Dental Laboratory


26,756,893



26,140,524



25,758,671Keller Group


25,769,930



25,634,168



25,132,647Corporate


15,301,300



16,078,226



15,257,735$
155,639,143


$
161,514,903


$
155,295,075Capital Expenditures:NDX Laboratories

$
4,604,908


$
5,606,100


$
1,582,078Green Dental Laboratory


463,763



161,415



34,073Keller Group


756,581



420,628



86,039Corporate


1,871,058



899,243



288,694$
7,696,310


$
7,087,386


$
1,990,884Depreciation & Amortization on Property,
    Plant & Equipment:NDX Laboratories

$
2,579,090


$
3,114,183


$
2,853,540Green Dental Laboratory


330,820



330,698



342,671Keller Group


452,935



532,410



524,395Corporate


691,769



894,591



848,332$
4,054,614


$
4,871,882


$
4,568,938  F-27




---



##### Table of Contents



NATIONAL
    DENTEX CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2007


2008


2009Laboratory Operating Income

$
25,466,761


$
23,515,557


$
24,974,490Less:Corporate Selling, General and Administrative Expenses


10,894,225



12,220,728



11,780,255Amortization Expense  Intangible Assets


1,283,720



1,139,796



1,618,236Goodwill Impairment






6,950,000



263,536Add:Other Expense


771,660



746,633



744,867Consolidated Operating Income

$
14,060,476


$
3,951,666


$
12,057,330   (11)  Subsequent
    Events
   F-28




---



##### Table of Contents



SIGNATURES
      By:
    /s/  DAVID
    L. BROWN        Signature

Title

Date/s/  DAVID
    V. HARKINSDavid
    V. Harkins

Director

March 12, 2010/s/  JACK
    R. CROSBYJack
    R. Crosby

Director

March 12, 2010/s/  THOMAS
    E. CALLAHANThomas
    E. Callahan

Director

March 12, 2010/s/  NORMAN
    F. STRATENorman
    F. Strate

Director

March 12, 2010/s/  JAMES
    E. MULVIHILL, D.M.D.James
    E. Mulvihill, D.M.D.

Director

March 12, 2010/s/  DAVID
    L. BROWNDavid
    L. Brown

Chairman and CEO
    (Principal Executive Officer)

March 12, 2010/s/  WAYNE
    M. COLLWayne
    M. Coll

Vice President & Chief Financial Officer (Principal
    Financial Officer)

March 12, 2010




---



##### Table of Contents



EXHIBIT INDEX
  Exhibit No.

Description of Exhibit3
.1(2)

Restated Articles of Organization of the Company, filed with the
    Massachusetts Secretary of State on October 14, 1993.3
.2(2)

Articles of Amendment, filed with the Massachusetts Secretary of
    State on September 26, 1995.3
.3(17)

Amended and Restated By-Laws of the Company, as amended on
    March 25, 2008.10
.1(5)*

Amended & Restated 2001 Stock Plan, as amended on
    May 16, 2006.10
.1a(6)*

Form of Annual Director Fee Deferral and Restricted Stock/RSU
    Subscription Agreement.10
.1b(6)*

Form of Restricted Stock Unit Agreement for Employees and
    Directors Under the Companys Amended and Restated 2001
    Stock Plan.10
.1c(6)*

Form of Restricted Stock Agreement (Non-Employee Director).10
.1d(18)*

Amended and Restated 2001 Stock Plan Form of Incentive Stock
    Option Agreement for Employees.10
.1e(18)*

Amended and Restated 2001 Stock Plan Form of Non-Qualified Stock
    Option Agreement for Employees.10
.1f(18)*

Amended and Restated 2001 Stock Plan Form of Restricted Stock
    Agreement for Employees.10
.1g(18)*

Amended and Restated 2001 Stock Plan Form of Restricted Stock
    Unit Agreement for Employees.10
.1h(25)*

Amended and Restated 2001 Stock Plan Form of Incentive Stock
    Option Agreement for Employees with Extended Exercisability upon
    Retirement.10
.1i(25)*

Amended and Restated 2001 Stock Plan Form of Non-Qualified Stock
    Option Agreement for Employees with Extended Exercisability upon
    Retirement.10
.2(20)*

Form of Amended and Restated Change of Control Severance
    Agreement with David L. Brown, Richard F. Becker, Jr., and
    Arthur B. Champagne.10
.3(20)*

Form of Change of Control Severance Agreement with Wayne Coll
    And John F. Green.10
.4(1)*

1992 Long-Term Incentive Plan, as amended.10
.5(1)*

Employment Agreement between the Company and Richard F. Becker,
    Jr., dated April 1, 1995.10
.5a(20)*

First Amendment to Employment Agreement between the Company and
    Richard F. Becker, Jr., dated July 28, 2008.10
.6(1)*

Employment Agreement between the Company and David L. Brown,
    dated April 1, 1995.10
.6b (20)*

First Amendment to Employment Agreement between the Company and
    David L. Brown dated July 28, 2008.10
.7(4)*

National Dentex Corporation Key Employee and Corporate Support
    Group Incentive Compensation Plan.10
.7a(26)*

Amended National Dentex Corporation Key Employee and Corporate
    Support Group Incentive Compensation Plan.10
.8(4)*

National Dentex Corporation Employees Stock Purchase Plan,
    as amended effective April 4, 2000.10
.8a(15)*

Second Amendment to National Dentex Corporation Employees
    Stock Purchase Plan.10
.8b(27)*

Third Amendment to National Dentex Corporation Employees
    Stock Purchase Plan.10
.9(9)

Second Amended and Restated Loan Agreement by and between Bank
    of America, N.A., National Dentex Corporation and Green Dental
    Laboratories, Inc. dated November 7, 2006.10
.9a(14)

Amendment dated October 24, 2007 to Second Amended and
    Restated Loan Agreement by and between Bank of America, N.A.,
    National Dentex Corporation, and its subsidiaries listed therein.10
.9b(13)

Loan Modification Agreement dated as of March 29, 2007 by
    and between Bank of America, N.A., National Dentex Corporation,
    Green Dental Laboratories, Inc., Keller Group, Inc., Keller
    Laboratories, Incorporation  Midwest, and Keller
    Laboratories, Incorporation  Southwest.10
.9c(18)

Amendment No. 2 to Second Amended and Restated Loan
    Agreement by and among Bank of America, N.A., National Dentex
    Corporation and the subsidiaries of National Dentex Corporation
    therein named.10
.9d(21)

Amendment No. 3 to Second Amended and Restated Loan
    Agreement by and between Bank of America, N.A., National Dentex
    Corporation and the subsidiaries therein named dated
    September 2, 2008.




---



##### Table of Contents



Exhibit No.

Description of Exhibit10
.9e(22)

Amendment No. 4 to Second Amended and Restated Loan
    Agreement by and between Bank of America, N.A., National Dentex
    Corporation and the subsidiaries therein named dated
    December 11, 2008.10
.9f(26)

Amendment No. 5 to Second Amended and Restated Loan
    Agreement by and between Bank of America, N.A., National Dentex
    Corporation and the subsidiaries therein named dated
    March 13, 2009.10
.10(4)*

National Dentex Supplemental Executive Retirement Plan.10
.10a(10)*

Amendment No. 1 to Supplemental Executive Retirement Plan
    dated as of January 17, 2006.10
.10b(10)*

Amendment No. 2 to Supplemental Executive Retirement Plan
    dated as of January 17, 2006.10
.10c(23)*

Amendment No. 3 to National Dentex Supplemental Executive
    Retirement Plan, dated December 31, 2008.10
.11(4)*

National Dentex Supplemental Laboratory Executive Retirement
    Plan.10
.11a(23)*

Amendment No. 2 to National Dentex Supplemental Laboratory
    Executive Retirement Plan., dated December 31, 2008.10
.12(3)

Stock Purchase Agreement by and among John W. Green IV, Richard
    M. Nordskog and the Company dated as of March 1, 2005.10
.13(7)*

Supplemental Executive Retirement Plan VI effective as of
    August 11, 2006.10
.13a(23)*

Amendment No. 1 to Supplemental Executive Retirement Plan
    VI effective as of December 31, 2008.10
.14(8)

Stock Purchase Agreement by and among William G. Keller, Thomas
    A. Keller and the Company dated October 5, 2006.10
.15*

Written Summary of Compensation Arrangements with Named
    Executive Officers.10
.16(24)*

Written Summary of Non-Employee Director Compensation
    Arrangements.10
.17(16)*

Retirement Agreement by and among National Dentex Corporation
    and Donald Merz dated January 2, 2008.21
(12)

Subsidiaries of the Company.23


Consent of PricewaterhouseCoopers LLP.31
.1

Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act (Chief Executive Officer).31
.2

Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act (Chief Financial Officer).32
.1

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    (Chief Executive Officer).32
.2

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    (Chief Financial Officer).Unless otherwise noted all exhibits are filed herewith. The file
    number for our Exchange Act reports is
    0-23092.*  These exhibits relate to a management contract or
    to a compensatory plan or arrangement.     (1)
    
    Incorporated by reference from the
    Form 10-K
    for the fiscal year ended December 31, 2003 as filed with
    the Commission on March 12, 2004.(2)
    
    Incorporated by reference from the Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2004 as filed with
    the Commission on May 24, 2005.(3)
    
    Incorporated by reference from the Current Report on
    Form 8-K/A
    as filed with the Commission on January 26, 2006.(4)
    
    Incorporated by reference from the Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2005 as filed with
    the Commission on March 16, 2006.(5)
    
    Incorporated by reference from the Proxy Statement filed on
    Schedule 14A with the Commission on March 29, 2006.(6)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    as filed with the Commission on May 22, 2006.




---



##### Table of Contents



(7)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    as filed with the Commission on August 14, 2006.(8)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    as filed with the Commission on October 6, 2006.(9)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    as filed with the Commission on November 8, 2006.(10)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    as filed with the Commission on December 12, 2006.(11)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    as filed with the Commission on January 29, 2007.(12)
    
    Incorporated by reference from the
    Form 10-K
    for the fiscal year ended December 31, 2006 filed with the
    Commission on March 13, 2007.(13)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    as filed with the Commission on April 2, 2007.(14)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    as filed with the Commission on October 30, 2007.(15)
    
    Incorporated by reference from the Registrants
    Registration Statement on
    Form S-8
    as filed on November 16, 2007.(16)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    as filed with the Commission on January 1, 2008.(17)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    filed with the Commission on March 27, 2008.(18)
    
    Incorporated by reference from the Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2008 as filed with the
    Commission on May 12, 2008.(19)
    
    Incorporated by reference from the Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2008 as filed with the
    Commission on August 8, 2008.(20)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    filed with the Commission on August 1, 2008.(21)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    filed with the Commission on September 8, 2008.(22)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    filed with the Commission on December 17, 2008.(23)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    filed with the Commission on January 6, 2009.(24)
    
    Incorporated by reference from the
    Form 10-K
    for the fiscal year ended December 31, 2007 filed with the
    Commission on March 12, 2008.(25)
    
    Incorporated by reference from the Current Report on
    Form 8-K
    filed with the Commission on April 23, 2009.(26)
    
    Incorporated by reference from the Annual Report on
    Form 10-K
    filed with the Commission on March 16, 2009.(27)
    
    Incorporated by reference from the Proxy Statement filed on
    Schedule 14A with the Commission on April 9, 2009.