UNITED STATES SECURITIES AND
EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x
        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period
ended September 30, 2005. OR o
        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934  For the transition period
from  ____________ to ____________. Commission file
number:  000-22673 SCHICK TECHNOLOGIES,
INC.(Exact name of registrant as specified in its charter) Delaware
(State or other jurisdiction of
incorporation or organization)
        11-3374812
(I.R.S. Employer
Identification Number)  30-00 47th Avenue
Long Island City, New York
(Address of principal executive offices)
        11101
(Zip Code)  Registrants telephone
number, including area code: (718) 937-5765 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 o Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act). Yes x         No o As of November 6, 2005, 16,170,463
shares of common stock, par value $.01 per share, were outstanding.   SCHICK TECHNOLOGIES, INC.


TABLE OF CONTENTS


PART I.
     
     
     Financial InformationItem 1.
     Financial StatementsConsolidated Balance Sheets as of September 30, 2005 (unaudited)and March 31, 2005
     Page 1Consolidated Statements of Income for the three and six months endedSeptember 30, 2005 and 2004 (unaudited)
     Page 2Consolidated Statements of Stockholders Equity as of September, 30,2005 and 2004 (unaudited)
     Page 3Consolidated Statements of Cash Flows for the six months endedSeptember 30, 2005 and 2004 (unaudited)
     Page 4Notes to Consolidated Financial Statements (unaudited)
     Page 5Item 2.
     Managements Discussion and Analysis of Financial Conditionand Results of Operations
     Page 8Item 3.
     Quantitative and Qualitative Disclosures About Market Risk
     Page 13Item 4.
     Controls and Procedures
     Page 13PART II.
     OTHER INFORMATION
     Page 13Item 1.
     Legal Proceedings
     Page 13Item 2.
     Unregistered Sales of Equity Securities and Use of Proceeds
     Page 13Item 3.
     Defaults Upon Senior Securities
     Page 13Item 4.
     Submission of Matters to a Vote of Security Holders
     Page 13Item 5.
     Other Information
     Page 14Item 6.
     Exhibits
     Page 14SIGNATURES
     Page 14CERTIFICATIONS
     Page 15
PART I.  Financial
Information




Item 1.  Financial
Statements




Schick Technologies,
Inc. and Subsidiary Consolidated Balance Sheets (In thousands, except share amounts)


September 30,
     
     March 31,2005(unaudited)AssetsCurrent assetsCash and cash equivalents
     $45,071
        
     $39,725Accounts receivable, net of allowance for doubtful accounts of $57
     6,236
        
     5,663Inventories
     4,457
        
     3,545Prepayments and other current assets
     1,880
        
     780Deferred income taxes
     4,267
        
     5,681Total current assets
     61,911
        
     55,394Equipment, net
     1,319
        
     1,317Goodwill, net
     266
        
     266Deferred income taxes
     320
        
     270Other assets
     811
        
     287Total assets
     $64,627
        
     $57,534Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable and accrued expenses
     $3,082
        
     $1,903Accrued salaries and commissions
     1,251
        
     1,590Deposits from customers
     35
        
     30Warranty obligations
     575
        
     446Deferred revenue
     3,536
        
     4,316Total current liabilities
     8,479
        
     8,285Commitments and contingencies
     
        
     Stockholders equityPreferred stock ($0.01 par value; 2,500,000 shares authorized; none issuedand outstanding)
     
        
     Common stock ($0.01 par value; 50,000,000 shares authorized;16,168,690 and 16,034,230 shares issued and outstanding, respectively)
     162
        
     160Additional paid-in capital
     47,627
        
     46,765Retained earnings
     8,359
        
     2,324Total stockholders equity
     56,148
        
     49,249Total liabilities and stockholders equity
     $64,627
        
     $57,534The accompanying footnotes are an
integral part of these consolidated financial statements



1

Schick Technologies,
Inc. and Subsidiary Consolidated Statements of Income (unaudited) (In thousands, except
share and per share amounts)


Three months ended
September 30,
     
     Six months ended
September 30,2005
     
     2004
     
     2005
     
     2004Revenue, net
     
     
     $14,111
        
     $10,870
        
     $29,794
        
     $21,751Total cost of sales
     4,461
        
     2,972
        
     9,160
        
     6,181Gross profit
     9,650
        
     7,898
        
     20,634
        
     15,570Operating expenses:Selling and marketing
     2,342
        
     1,531
        
     4,668
        
     2,987General and administrative
     1,515
        
     1,284
        
     3,330
        
     3,269Research and development
     1,234
        
     1,305
        
     2,359
        
     2,417Acquisition and merger related expenses
     1,107
        
     
        
     1,107
        
     Total operating costs
     6,198
        
     4,120
        
     11,464
        
     8,673Income from operations
     3,452
        
     3,778
        
     9,170
        
     6,897Other income (expense)Interest income
     324
        
     84
        
     575
        
     177Other expense
     (1
        )
     
        
     (1
        )
     Total other income (expense)
     323
        
     84
        
     574
        
     177Income before income taxes
     3,775
        
     3,862
        
     9,744
        
     7,074Provision (benefit) for income taxes
     1,372
        
     1,376
        
     3,709
        
     2,789Net income
     $2,403
        
     $2,486
        
     $6,035
        
     $4,285Basic earnings per share
     $0.15
        
     $0.16
        
     $0.38
        
     $0.28Diluted earnings per share
     $0.13
        
     $0.14
        
     $0.34
        
     $0.25Weighted average common shares (basic)
     16,056,514
        
     15,099,299
        
     16,046,188
        
     15,063,501Weighted average common shares (diluted)
     17,843,577
        
     17,230,852
        
     17,772,542
        
     17,219,421The accompanying footnotes are an
integral part of these consolidated financial statements



2

Schick Technologies,
Inc. and Subsidiary Consolidated Statements of Changes in Stockholders Equity
(unaudited) (In thousands, except share amounts)


Common Stock
     
     Additional
Paid -in
     
     Retained
     
     Total
StockholdersShares
     
     Amount
     
     Capital
     
     Earnings
     
     EquityBalance at March 31, 2004
     
     
     15,026,470
        
     $150
        
     $44,626
        
     $(9,748
        )
     $35,028Issuance of common stock
     158,135
        
     2
        
     264
        
     
        
     266Tax benefit of stock optionsexercised
     
        
     
        
     123
        
     
        
     123Non cash compensation
     
        
     
        
     393
        
     
        
     393Net income
     
        
     
        
     
        
     4,285
        
     4,285Balance at September 30, 2004
     15,184,605
        
     $152
        
     $45,406
        
     $(5,463
        )
     $40,095Balance at March 31, 2005
     16,034,230
        
     $160
        
     $46,765
        
     $2,324
        
     $49,249Issuance of common stock
     134,460
        
     2
        
     284
        
     
        
     286Tax benefit of stock optionsexercised
     
        
     
        
     204
        
     
        
     204Non cash compensation
     
        
     
        
     374
        
     
        
     374Net income
     
        
     
        
     
        
     6,035
        
     6,035Balance at September 30, 2005
     16,168,690
        
     $162
        
     $47,627
        
     $8,359
        
     $56,148The accompanying notes are an
integral part of these consolidated financial statements



3

Schick Technologies,
Inc. and Subsidiary Consolidated Statements of Cash Flows (unaudited) (In thousands)


Six months ended
September 30,2005
     
     2004Cash flows from operating activitiesNet income
     $6,035
        
     $4,285Adjustments to reconcile net income to net cash provided byoperating activitiesNon-cash compensation
     374
        
     393Depreciation and amortization
     284
        
     345Deferred income taxes
     1,364
        
     2,296Tax benefit of stock options exercised
     204
        
     123Provision for excess and obsolete inventory
     142
        
     15Changes in assets and liabilities:Accounts receivable
     (573
        )
     (330
        )Inventories
     (1,054
        )
     (117
        )Prepayments and other current assets
     (1,102
        )
     (9
        )Other assets
     (38
        )
     (26
        )Accounts payable, accrued expenses, salaries andcommissions
     840
        
     (473
        )Income taxes payable
     
        
     17Deposits from customers
     5
        
     12Warranty obligations
     129
        
     90Deferred revenue
     (780
        )
     (796
        )Net cash provided by operating activities
     5,830
        
     5,825Cash flows from investing activitiesOther
     (500
        )
     Capital expenditures
     (272
        )
     (385
        )Net cash used in investing activities
     (772
        )
     (385
        )Cash flows from financing activitiesNet proceeds from issuance of common stock
     288
        
     267Net cash provided by financing activities
     288
        
     267Net increase in cash and cash equivalents
     5,346
        
     5,707Cash and cash equivalents at beginning of period
     39,725
        
     20,734Cash and cash equivalents at end of period
     $45,071
        
     $26,441Income taxes paid
     $3,196
        
     $201The accompanying footnotes are an
integral part of these consolidated financial statements


4

Schick Technologies,
Inc. and Subsidiary Notes to Consolidated Financial Statements (unaudited) (in thousands,
except share and per share amounts)


1.
Basis
of PresentationThe
consolidated financial statements of Schick Technologies, Inc. (the Company) have been
prepared in accordance with accounting principles generally accepted in the United States
of America (US GAAP) for interim financial information and the rules of the Securities
and Exchange Commission (the SEC) for quarterly reports on Form 10-Q, and do not
include all of the information and footnote disclosures required by US GAAP for complete
financial statements. These statements should be read in conjunction with the audited
consolidated financial statements and notes thereto for the year ended March 31, 2005
included in the Companys Annual Report on Form 10-K.


In
the opinion of management, the accompanying unaudited consolidated financial statements
include all adjustments (consisting of normal, recurring adjustments) necessary for a
fair presentation of results of operations for the interim periods. The results of
operations for the three and six months ended September 30, 2005 are not necessarily
indicative of the results to be expected for the full year ending March 31, 2006.


The
consolidated financial statements of the Company, at September 30, 2005, include the
accounts of the Company and its wholly owned subsidiary. All significant intercompany
balances have been eliminated.


Stock-based
compensation


At
September 30, 2005, the Company has stock-based compensation plans. As permitted by SFAS
No. 123, Accounting for Stock-Based Compensation, the Company accounts for stock-based
compensation arrangements with employees under the recognition and measurement principles
of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related
Interpretations. No stock-based employee compensation cost is reflected in net income, as
all options granted under those plans had an exercise price equal to the market value of
the underlying common stock on the date of grant. The following table illustrates the
effect on net income and earnings per share if the Company had applied the fair value
recognition provisions of FASB Statement No. 123, Accounting for Stock-Based
Compensation, to stock-based employee compensation.


Three months ended
     
     Six months endedSeptember 30,2005
     
     2004
     
     2005
     
     2004Net income, as reported
     
     
     $2,403
        
     $2,486
        
     $6,035
        
     $4,285Deduct: Total stock-based employee compensationexpense determined under fair value based methodfor all awards, net of related tax effects
     344
        
     171
        
     588
        
     346Proforma net income
     $2,059
        
     $2,315
        
     $5,447
        
     $3,939Earnings per share:Basic - as reported
     $0.15
        
     $0.16
        
     $0.38
        
     $0.28Basic - proforma
     $0.13
        
     $0.15
        
     $0.34
        
     $0.26Diluted - as reported
     $0.13
        
     $0.14
        
     $0.34
        
     $0.25Diluted - proforma
     $0.12
        
     $0.14
        
     $0.31
        
     $0.242.
InventoriesInventories,
net of reserves, are comprised of the following:



5


September 30,
     
     March 31,2005Raw materials
     
     
     $2,879
        
     $2,171Work-in-process
     302
        
     218Finished goods
     1,276
        
     1,156Total inventories
     $4,457
        
     $3,5453.
Earnings
Per ShareBasic
earnings per share are calculated by dividing net income by the average number of common
shares outstanding during the year. Diluted earnings per share are calculated by dividing
net income by the average number of common shares outstanding assuming dilution, the
calculation of which assumes that all stock options and warrants whose exercise prices
are less than the average market price during the period are exercised at the beginning
of the period and the proceeds used by the Company to purchase shares at the average
market price for the period. The following is the reconciliation from basic to diluted
shares for the three and six months ended September 30, 2005 and 2004:



Three months ended September 30,
     
     Six months ended September 30,2005
     
     2004
     
     2005
     
     2004Basic shares
     
     
     16,056,514
        
     15,099,299
        
     16,046,188
        
     15,063,501Dilutive:Options
     1,740,270
        
     1,339,410
        
     1,679,561
        
     1,365,144Warrants
     46,793
        
     792,143
        
     46,793
        
     790,776Diluted shares
     17,843,577
        
     17,230,852
        
     17,772,542
        
     17,219,421The Company excluded 110,225 and
87,061 options from the computation of diluted earnings per share for the three months
ended September 30, 2005 and 2004, respectively, because they are anti-dilutive. The
Company excluded 93,325 and 110,150 options from the computation of diluted earnings per
share for the six months ended September 30, 2005 and 2004, respectively, because they
are anti-dilutive.


4.
Proposed
Business Combination with Sirona Dental SystemsOn
September 26, 2005, the Company announced that it had entered into a definitive agreement
to combine its business with Sirona Dental Systems Group. The transaction is
structured as a stock-for-stock tax-free exchange in which the Company will issue
Sironas parent company 36.97 million new shares of the Companys Common Stock in
exchange for 100% of that parents economic interest in Sirona. Sironas owners will have
an ownership interest in the combined company of 67%, with current Company shareholders
holding the remainder. The Companys shareholders will also receive a $2.50 per share
cash dividend, which is expected to be declared prior to the closing of this transaction.


Management
believes that the transaction will create a global leader in high-tech dental equipment
with a strong global presence and a breadth of products. It is expected that the
merged company will be renamed Sirona Dental Systems, Inc., with corporate headquarters
to be located at Sironas facilities in Bensheim, Germany and U.S. headquarters at the
Companys facilities in New York.


The
merger has been unanimously approved by both companies Boards of Directors and is
expected to close in the first calendar quarter of 2006. It is subject to approval by the
Companys shareholders, clearance by appropriate regulatory agencies, preparation of
Sironas financial statements in accordance with United States GAAP and other customary
closing conditions. Voting agreements in support of the transaction have been signed by
shareholders holding approximately 37% of the Companys issued and outstanding common
shares.


Sironas
Chief Executive Officer, Jost C. Fischer, will become Chairman, President and Chief
Executive Officer of the combined Sirona Dental Systems, Inc. Jeffrey T. Slovin, Schicks
President and Chief Executive Officer, will become Executive Vice President of the
combined company and Chief Operating Officer of U.S. Operations. Sironas Chief Financial
Officer, Simone Blank, will become Executive Vice President and Chief



6


Financial Officer of the combined
company. Sirona will hold seven seats on the combined companys board, with Schick
holding three seats.


The
transaction will be presented for approval at a special meeting of Company shareholders
to be scheduled following the conversion of Sironas financial statements to U.S. GAAP.
In connection with the shareholders meeting, the Company intends to file proxy materials
with the Securities and Exchange Commission. These proxy materials will set forth
additional details and other information concerning the transaction, which investors
should carefully read before making a decision regarding the transaction. In connection
with this transaction, the Company has hired an investment banking company whose fees are
payable on the closing of the transaction.


During
the three months ended September 30, 2005, the Company charged $1.1 million to
operations for acquisition-related expenses, including $0.8 million for the Sirona transaction.
Additionally, $0.3 million was charged to operations in connection with other potential
acquisitions.


The
foregoing statements regarding the proposed transaction between the Company and Sirona
include forward-looking statements within the meaning of Section 27 of the Securities Act of
1933, as amended, and Section 21E of the Exchange Act. Words such as seek, intend,
may, believe, will, project, plan, estimate, expect, anticipate and other
similar statements of a forward-looking nature identify forward-looking statements. Some
or all of the results anticipated by these forward-looking statements may not occur and
are based on the Companys current expectations and beliefs, and involve a number of
risks and uncertainties that could cause actual results to differ materially from those
stated or implied by the forward-looking statements. Those risks and uncertainties
include, but are not limited to: 1) the possibility that the companies may be unable to
obtain shareholder or regulatory approvals required for the proposed transaction or that
such approvals take longer to obtain than expected; 2) difficulties in successfully
integrating the businesses and operations of the two companies; 3) unexpected costs in
connection with the proposed transaction; 4) the combined company may be unable to
achieve cost-saving synergies; 5) the businesses may suffer as a result of uncertainty
surrounding the proposed transaction; and 6) the industry may be subject to future
regulatory or legislative actions. Additional risks and uncertainties include the effects
of competition (in particular the response to the proposed transaction in the
marketplace), the effects of general economic and other factors beyond the control of
Sirona and Schick, and other risks and uncertainties described from time to time in
Schicks public filings with United States Securities and Exchange Commission.


5.
Income
TaxesThe
following table summarizes income tax expense for the three and six months ended
September 30, 2005 and 2004:


Three months ended
     
     Six months endedSeptember 302005
     
     2004
     
     2005
     
     2004Current - Federal and state
     
     
     $591
        
     $158
        
     $2,344
        
     $370Deferred - Federal and state
     781
        
     1,218
        
     1,365
        
     2,419Net income tax expense
     $1,372
        
     $1,376
        
     $3,709
        
     $2,7896.
Contingencies
and OtherProduct Liability and
Litigation


The
Company is subject to the risk of product liability and other liability claims in the
event that the use of its products results in personal injury or other claims. Although
the Company has not experienced any product liability claims to date, any such claims
could have an adverse impact on the Company. The Company maintains insurance coverage
related to product liability claims, but there can be no assurance that product liability or other
claims will not exceed its insurance coverage limits, or that such insurance will
continue to be available on commercially acceptable terms, or at all. In addition, the
Company may be a party to a variety of legal actions such as



7


employment and employment
discrimination-related suits, employee benefit claims, breach of contract actions, tort
claims and intellectual property related litigation.


In
addition, because of the nature of its business, the Company is subject to a variety of
legal actions relating to its business operations. In some cases, substantial punitive
damages may be sought. The Company currently has insurance coverage for some of these
potential liabilities. Other potential liabilities may not be covered by insurance,
insurers may dispute coverage, or the amount of insurance may not be sufficient to cover
the damages awarded. In addition, certain types of damages, such as punitive damages, may
not be covered by insurance and insurance coverage for all or certain forms of liability
may become unavailable or prohibitively expensive in the future.


Lawsuit Challenging
Terms of Proposed Business Combination


On
September 28, 2005, a complaint was filed in the Delaware Court of Chancery with respect
to the proposed combination between the Company, Sirona Holdings Luxco S.C.A. (Sirona
Holdings) and Blitz 05-118 GmbH (Blitz). The complaint purports to be filed by a stockholder of
the Company as a class action. It names the Company, its Directors, Sirona Holdings,
Sirona Holdings S.A., Madison Dearborn Partners, LLC, and related parties, as Defendants.


The
complaint alleges, among other things, that the terms of the contemplated transaction are
unfair to the Companys public shareholders and that the members of the Board of
Directors violated their fiduciary duties by, among other things, failing to maximize
shareholder value in a sale of control of the Company, and that they have effectively
made an acquisition of the Company untenable for any third party other than Sirona.


The
plaintiff seeks, among other things, class action certification, a preliminary and
permanent injunction against consummation of the proposed transaction, rescission should
the transaction be consummated, compensatory damages to the class, and attorneys fees
and expenses.


The
Company believes that the allegations contained in the complaint are completely unfounded
and without merit.



Other


Sales
to a single customer approximated 65% and 56% of revenue for the three months ended
September 30, 2005 and 2004, respectively. Sales to a single customer approximated 66%
and 56% of revenue for the six months ended September 30, 2005 and 2004, respectively.
Amounts due from that customer approximated 63% and 49% of net accounts receivable at
September 30, 2005 and March 31, 2005, respectively, substantially all of which have been
collected subsequent to those dates.





Item 2.
Managements
Discussion and Analysis of Financial Condition and Results of OperationsThis
Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange
Act. The words or phrases believes, may, should, will likely result, estimates,
projects, anticipates, expects or similar expressions and variations thereof are
intended to identify such forward-looking statements. Actual results, events and
circumstances could differ materially from those set forth in such statements due to
various factors. Such factors include uncertainties as to the future sales volume of the
Companys products, the Companys dependence on its exclusive North American distributor
and on its foreign distributors, the Companys dependence on products and technology,
competition, changing economic and competitive conditions in the medical and dental
digital radiography markets, dependence on key personnel, the Companys ability to manage
growth, fluctuation in results and seasonality, governmental approvals and
investigations, technological developments, protection of technology utilized by the
Company, patent infringement claims and other litigation, potential need for additional
financing and other risks and uncertainties, including those detailed in the Companys
other filings with the Securities and Exchange Commission.



8


General


The
Company designs, develops and manufactures digital imaging systems for the worldwide
dental and medical markets. In the field of dentistry, the Company currently manufactures
and markets a variety of digital imaging products including an intra-oral digital
radiography system (CDR® and CDR Wireless), a digital panoramic radiography sensor
(CDRPan®), an integrated digital panoramic radiography device (CDRPanX), an
intra-oral camera system (USBCam®) and a DC dental x-ray generator (SDX). The
Company has also developed a bone mineral density assessment device (accuDEXA®) to
assist in the diagnosis and treatment of osteoporosis, which was introduced in December
1997.


Critical
Accounting Policies


The
preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires the Company to make estimates and assumptions that
affect amounts reported in the accompanying consolidated financial statements and related
footnotes. These estimates and assumptions are evaluated on an ongoing basis based on
historical developments, market conditions, industry trends and other information the
Company believes to be reasonable under the circumstances. There can be no assurance that
actual results will conform to the Companys estimates and assumptions, and that reported
results of operations will not be materially adversely affected by the need to make
accounting adjustments to reflect changes in these estimates and assumptions from time to
time. The following policies are those that the Company believes to be the most sensitive
to estimates and judgments.


Accounts
Receivable


The
Company reports accounts receivable net of reserves for uncollectible accounts. The
majority of the Companys accounts receivable (63% and 49% at September 30, 2005 and
March 31, 2005, respectively) are due from its exclusive domestic distributor, Patterson
Dental Company (Patterson). Other accounts receivable were due from international
distributors and the U.S. military. Credit is extended to distributors on varying terms
between 30 and 90 days. Most international credit is underwritten by credit insurance.
The Company provides an allowance for doubtful accounts based upon analysis of the
accounts receivable aging. The Company writes off accounts receivable when they become
uncollectible. Subsequently received payments are credited to operations.


Inventories


Inventories
are stated at the lower of cost (determined on a first-in, first-out basis) or market
value. Cost is determined principally on the standard cost method for manufactured goods
and on the average cost method for other inventories, each of which approximates actual
cost on the first-in, first-out method. The Company establishes reserves for inventory
estimated to be obsolete, unmarketable or slow moving inventory equal to the difference
between the cost of inventory and estimated market value based upon assumptions about
future demand and market conditions. If actual market conditions are less favorable than
those anticipated or if changes in technology affect the Companys products, additional
inventory reserves may be required.


Revenue
Recognition


Revenues
from sales of the Companys hardware and software products are recognized at the time of
shipment to customers, and when no significant obligations exist and collectibility is
probable. With respect to products shipped to its exclusive domestic distributor, the
Company defers revenue until Patterson ships such inventory from its distribution
centers. The Company provides its exclusive domestic distributor with a 30-day return
policy but allows for an additional 15 days, and accordingly, recognizes allowances for
estimated returns pursuant to such policy at the time of shipment.


The
Company sells its CDR® digital radiography products in the international market through
independent regional distributors, generally pursuant to written distribution agreements.
Among other matters, foreign distribution agreements address exclusivity, territory,
minimum purchase requirements, product pricing, term of agreement and termination. The
Companys post-shipment obligation to foreign dealers is limited to



9


warranty coverage, as discussed below.
Foreign distributors do not have the right to return product. The Company occasionally
grants volume discounts to foreign distributors. These are accounted for, by the Company,
as a reduction of revenues when earned.


Amounts
received from customers in advance of product shipment are classified as deposits from
customers. Revenues from the sale of extended warranties on the Companys products are
recognized on a straight-line basis over the life of the extended warranty, which is
generally a one-year period. Deferred revenues relate to extended warranty fees paid by
customers prior to the performance of extended warranty services, and to certain
shipments to Patterson described above.


Warranties


The
Company records a liability for an estimate of costs that it expects to incur under its
basic limited warranty when product revenue is recognized. Factors affecting the
Companys warranty liability include the number of units sold and historical and
anticipated rates of claims and costs per claim. The Company periodically assesses the
adequacy of its warranty liability based on changes in these factors.


The
following table reconciles aggregate warranty liability for the three and six months
ended September 30, 2005 and 2004:


Three months ended
     
     Six months endedSeptember 30,2005
     
     2004
     
     2005
     
     2004Beginning balance
     
     
     $507
        
     $270
        
     $446
        
     $210Warranties recorded in period
     869
        
     587
        
     1,602
        
     1,269Warranties paid in period
     (801
        )
     (557
        )
     (1,473
        )
     (1,179
        )Balance end of period
     $575
        
     $300
        
     $575
        
     $300The
Company records revenues on extended warranties on a straight-line basis over the term of
the related warranty contracts (generally one year). Deferred revenues related to
extended warranties were $2.0 million and $2.2 million at September 30, 2005 and March
31, 2005, respectively.


Income
Taxes


Income
taxes are accounted for under the asset and liability method. Deferred income taxes are
recorded for temporary differences between financial statement carrying amounts and the
tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax
rates expected to be in effect for the years in which the differences are expected to
reverse. A valuation allowance is provided if it is more likely than not that some or the
entire deferred tax asset will not be realized.


Contractual
Obligations and Commercial Commitments


The
following table summarizes contractual obligations and commercial commitments at
September 30, 2005:


PAYMENTS DUE BY PERIODCONTRACTUAL
OBLIGATIONS
     Total
     
     Less Than
1 year
     
     1-3
years
     
     4-5
years
     
     After 5
yearsOperating leases
     
     
     $914
        
     $515
        
     $399
        
     
        
     Employment agreements
     773
        
     525
        
     248
        
     
        
     Consulting agreements
     581
        
     340
        
     241
        
     
        
     Total Contractual Cash Obligations
     $2,268
        
     $1,380
        
     $888
        
     
        
     10


Results of Operations


Net
revenues for the three months ended September 30, 2005 increased $3.2 million (30%) to
$14.1 million as compared to $10.9 million in fiscal 2005. The increase was due to
increased sales of the CDR® radiography and intraoral camera products. CDR® product
sales increased $3.3 million (35%) to $12.8 million (91% of the Companys revenues) from
$9.5 million (87% of revenue) in fiscal 2005. The Company believes that the sales
increases are a result of increasing acceptance and adoption of its products by dental
customers and an increased commitment from its dealers, including Patterson and
distributors in Europe and Asia. Warranty revenue for the three months ended September
30, 2005 decreased $55 (5%) to $1.2 million (8% of revenue) from $1.2 million in the same
period of the prior year (11% of revenue). The Company believes that the reduction of
warranty revenue will continue as increasing numbers of the Companys legacy customers
transition to Patterson for their service and warranty needs and revenues from Patterson
increase. Total domestic revenue for the three months ended September 30, 2005 increased
$3.3 million (42%) to $11.0 million (78% of revenue) from $7.8 million (72% of revenue)
in fiscal 2005. Domestically, Patterson revenues increased 52% and other domestic
revenues (principally from sales to the government) increased 44%. Total international
revenue for the three months ended September 30, 2005 was unchanged at $3.1 million (22%
and 28% of revenue, respectively). By region, sales to Europe decreased
$0.1 million (4%) to $1.8 million from $1.9 million in fiscal 2005 and sales to Asia
decreased $0.4 million (47%) to $0.5 from $0.9 million in fiscal 2005. Sales
outside of Europe and Asia increased $0.5 million (142%) to $0.8
million from $0.3 million in fiscal 2005.


Net
revenues for the six months ended September 30, 2005 increased $8.0 million (37%) to
$29.8 million from $21.8 million in fiscal 2005. The increase was due to increased sales
of the CDR® radiography and intraoral camera products. CDR® product sales increased
$8.3 million (44%) to $27.2 million (92% of revenue) from $18.9 million (87% of revenue)
in fiscal 2005. Warranty revenue for the six months ended September 30, 2005 decreased
$129 to $2.3 million (8% of revenue) from $2.5 million (11% of revenue) in fiscal 2005.
Total domestic revenue for the six months ended September 30, 2005 increased $7.5 million
(48%) to $22.9 million (77% of revenue) from $15.4 million (71% of revenue) in fiscal
2005. Domestically, Patterson revenues increased 62% and other domestic revenues
(principally from sales to the government) increased 27%. Total international revenue for
the six months ended September 30, 2005 increased $0.6 million (9%) to $6.9 million (23%
of revenue) from $6.3 million (29% of revenue) in fiscal 2005. By region, sales to
Europe increased $0.5 million (15%) to $4.1 million from $3.6 million in
fiscal 2005 and sales to Asia decreased $0.4 million (24%) to $1.6 from
$2.0 million in fiscal 2005. Sales outside of Europe and Asia increased
$0.5 million (73%) to $1.2 million from $0.7 million in fiscal 2005.


Total
cost of sales for the three months ended September 30, 2005 increased $1.5 million (50%)
to $4.5 million (31.6% of revenue) from $3.0 million (27.3% of revenue) in fiscal 2005.
The increase in the relative total cost of sales (4.3%) was due to increased revenues
generated from non intraoral digital radiographic products which have a lower profit
margin than do the Companys other products.


Total
cost of sales for the six months ended September 30, 2005 increased $3.0 million (48%) to
$9.2 million (30.7% of revenue) from $6.2 million (28.4% of revenue) in fiscal 2005. The
increase in the relative total cost of sales (2.3%) is due to increased revenues
generated from non intraoral dental radiographic products which have a lower profit
margin than do the Companys other products.


Selling
and marketing expenses for the three months ended September 30, 2005 increased $0.8
million (53%) to $2.3 million (17% of revenue) from $1.5 million (14% of revenue) in
fiscal 2005. The increases result primarily from higher commission, payroll, promotional,
marketing, training and trade show expenses, including $0.4 million in seasonal
promotional and training activities.


Selling
and marketing expenses for the six months ended September 30, 2005 increased $1.7 million
(56%) to $4.7 million (16% of revenue) from $3.0 million (14% of revenue) in fiscal 2005.
Increases are attributable to the items discussed above.



11


General
and administrative expenses for the three months ended September 30, 2005 increased $0.2
million (18%) to $1.5 million (11% of revenue) from $1.3 million (12% of revenue) in
fiscal 2005. The increase in general and administrative expenses was primarily
attributable to a $0.3 increase in non-cash payroll costs.


General
and administrative expenses for the six months ended September 30, 2005 were $3.3 million, unchanged
as compared to fiscal 2005 (11% of revenue and 15% of revenue, respectively). Decreases in legal
expenses offset increases in non cash payroll costs.


Research
and development expenses for the three months ended September 30, 2005 decreased $0.1
million (5%) to $1.2 million (9% of revenue) from $1.3 million (12% of revenue) in fiscal
2005. The change is attributable to decreased non-cash charges related to the
technical consulting agreement with the Companys former CEO.


Research
and development expenses for the six months ended September 30, 2005 were
$2.4 million, unchanged as compared to fiscal 2005 (8% and 11% of revenue, respectively). The decrease was attributable to the
items discussed above.


During
the three and six months ended September 30, 2005, the Company charged $1.1 million to
operations for acquisition related expenses including $0.8 million for the Sirona transaction.
Additionally, $0.3 million was charged to operations in connection with other potential
acquisitions.


Interest
income increased for the three months and six months ended September 30, 2005 due to an
increase in the cash balance held by the Company in a money market account.


Income
before income tax for the three months ended September 30, 2005 decreased $0.1 million
(2%) to $3.8 million, from $3.9 million in the same period of the previous year for the
reasons described above.


Income
before income tax for the six months ended September 30, 2005 increased $2.7 million
(38%) to $9.8 million from $7.1 million in the same period of the previous year.


Income
tax expense for the three months ended September 30, 2005 was unchanged at $1.4 million..


Income
tax expense for the six months ended September 30, 2005 increased $0.9 million to $3.7
million from $2.8 million in fiscal 2005. This increase is the result of increased income
before income taxes.


Net
income for the three months ended September 30, 2005 decreased $0.1million (3%) to $2.4
million from $2.5 million in fiscal 2005. The decrease is the result of the items
discussed above.


Net
income for the six months ended September 30, 2005 increased $1.7 million (41%) to $6.0
million from $4.3 million in fiscal 2005. The increase is the result of the items
discussed above.


Liquidity and Capital
Resources


At
September 30, 2005, the Company had $45.1 million in cash and cash equivalents and $53.4
million in working capital, as compared to $39.7 million in cash and cash equivalents and
$47.1 million in working capital at March 31, 2005.


During
the six months ended September 30, 2005 cash provided by operations was unchanged from
fiscal 2005 at $5.8 million. Increases in cash were primarily provided by the Companys
operating profit. This increase was offset by a reduction in non-cash charges
(principally deferred income taxes) and by increases in accounts receivable, inventory
and prepayments (including $1.1 million from the payment of estimated income taxes).
These reductions in cash were offset by an increase in accounts payable and accrued
expenses. Sales to a single customer approximated 66% and 56% of revenue for the six
months ended September 30, 2005 and 2004, respectively. Amounts due from that customer
approximated 63% and 49% of net accounts receivable at September 30, 2005 and March 31,
2005, respectively, substantially all of which have been collected subsequent to those
dates. The increase in net accounts receivable is the result of increased product
shipments during the six months ended September 30, 2005. For the six months ended
September 30, 2005 capital expenditures decreased $0.1 million to $0.3 million from $0.4
million in fiscal 2005.



12


Management
believes that its existing capital resources and other potential sources of credit are
adequate to meet its current cash requirements.




Item 3.
Quantitative
and Qualitative Disclosures About Market RiskNone.




Item 4.
Controls
and Proceduresa)
Under
the supervision and with the participation of the Companys management, including its
chief executive          officer and principal financial officer, the Company has
evaluated the effectiveness of the Companys disclosure          controls and procedures
as of September 30, 2005.  They have concluded that these disclosure controls provide
         reasonable assurance that the Company can collect, process and disclose, within
the time periods specified in the          SECs rules and forms, the information
required to be disclosed in its periodic Exchange Act reports. The          Companys
officers have also concluded that our disclosure controls and procedures are effective to
ensure that          information required to be disclosed in the reports we file or
submit under the Exchange Act is accumulated and          communicated to our management,
including our chief executive officer and principal financial officer, so as to
         allow timely decisions regarding required disclosure.b)
There
have been no significant changes in the Companys          internal controls or in other
factors that could significantly          affect its internal controls subsequent to the
date of their                   most recent evaluation.


PART II.
OTHER
INFORMATION


Item 1.
Legal
ProceedingsOn
September 28, 2005, a complaint was filed in the Delaware Court of Chancery with respect
to the proposed combination between the Company, Sirona Holdings Luxco S.C.A. (Sirona
Holdings) and Blitz 05-118 GmbH (Blitz). The complaint purports to be filed by a stockholder of
the Company as a class action. It names the Company, its Directors, Sirona Holdings,
Sirona Holdings S.A., Madison Dearborn Partners, LLC, and related parties, as Defendants.


The
complaint alleges, among other things, that the terms of the contemplated transaction are
unfair to the Companys public shareholders and that the members of the Board of
Directors violated their fiduciary duties by, among other things, failing to maximize
shareholder value in a sale of control of the Company, and that they have effectively
made an acquisition of the Company untenable for any third party other than Sirona.


The
plaintiff seeks, among other things, class action certification, a preliminary and
permanent injunction against consummation of the proposed transaction, rescission should
the transaction be consummated, compensatory damages to the class, and attorneys fees
and expenses.


The
Company believes that the allegations contained in the complaint are without merit.




Item 2.
Unregistered
Sales of Equity Securities and Use of ProceedsNot
Applicable.




Item 3.
Defaults
Upon Senior SecuritiesNot
Applicable.




Item 4.
Submission
of Matters to a Vote of Security HoldersNot
Applicable.



13


Item 5.
Other
InformationNot
Applicable.




Item 6.
Exhibits3.2
Bylaws
of the Company, as amended.  (Incorporated by reference to Exhibit 3.2 to the Companys
Report on Form 8-K                   dated November 2, 2005.)10.2
Distributorship
Agreement by and between Schick Technologies,   Inc. and Patterson Dental Company, made
and                   entered into as of April 6, 2000.  (This copy omits information for
which confidential treatment has been                   requested.)31.1
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
                  2002.31.2
Certification
of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. ss. 1350.32.2
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. ss. 1350.SCHICK TECHNOLOGIES,
INC.




SIGNATURE


Pursuant
to the requirements 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.



SCHICK TECHNOLOGIES, INC.Date: November 9, 2005
        By:
        /S/ Jeffrey T. Slovin

Jeffrey T. Slovin
Chief Executive OfficerBy:
        /S/ Ronald Rosner

Ronald Rosner
Director of Finance and Administration
(Principal Financial Officer)14