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 December 31, 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 ofincorporation or organization)
        11-3374812
(I.R.S. EmployerIdentification Number)30-00 47th AvenueLong 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 January 31, 2006, 16,259,199
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 December 31, 2005 (unaudited)and March 31, 2005
     Page 1Consolidated Statements of Income for the three and nine monthsended December 31, 2005 and 2004 (unaudited)
     Page 2Consolidated Statements of Changes in Stockholders Equity as ofDecember 31, 2005 and 2004 (unaudited)
     Page 3Consolidated Statements of Cash Flows for the nine months endedDecember 31, 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 12Item 4.
     Controls and Procedures
     Page 12PART II.
     OTHER INFORMATION
     Page 12Item 1.
     Legal Proceedings
     Page 12Item 2.
     Unregistered Sales of Equity Securities and Use of Proceeds
     Page 12Item 3.
     Defaults Upon Senior Securities
     Page 13Item 4.
     Submission of Matters to a Vote of Security Holders
     Page 13Item 5.
     Other Information
     Page 13Item 6.
     Exhibits
     Page 13SIGNATURES
     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)


December 31,
     
     March 31,2005(unaudited)AssetsCurrent assetsCash and cash equivalents
     $13,902
        
     $39,725Short-term investments
     35,100
        
     Accounts receivable, net of allowance for doubtful accounts of $57
     15,221
        
     5,663Inventories
     5,160
        
     3,545Prepayments and other current assets
     765
        
     780Deferred income taxes
     4,329
        
     5,681Total current assets
     74,477
        
     55,394Equipment, net
     1,279
        
     1,317Goodwill, net
     266
        
     266Deferred income taxes
     365
        
     270Other assets
     813
        
     287Total assets
     $77,200
        
     $57,534Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable and accrued expenses
     $2,518
        
     $1,903Accrued salaries and commissions
     2,171
        
     1,590Income taxes payable
     1,726
        
     Deposits from customers
     38
        
     30Warranty obligations
     660
        
     446Deferred revenue
     7,196
        
     4,316Total current liabilities
     14,309
        
     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;16,202,405 and 16,034,230 shares issued and outstanding, respectively)
     162
        
     160Additional paid-in capital
     48,360
        
     46,765Retained earnings
     14,369
        
     2,324Total stockholders equity
     62,891
        
     49,249Total liabilities and stockholders equity
     $77,200
        
     $57,534The accompanying footnotes are an
integral part of these consolidated financial statements1


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


Three months ended
December 31,
     
     Nine months ended
December 31,2005
     
     2004
     
     2005
     
     2004Revenue, net
     
     
     $22,105
        
     $16,813
        
     $51,899
        
     $38,564Total cost of sales
     6,426
        
     4,144
        
     15,586
        
     10,325Gross profit
     15,679
        
     12,669
        
     36,313
        
     28,239Operating expenses:Selling and marketing
     2,360
        
     2,235
        
     7,028
        
     5,222General and administrative
     1,862
        
     1,723
        
     5,192
        
     4,992Research and development
     1,204
        
     1,456
        
     3,563
        
     3,873Acquisition and merger related expenses
     285
        
     
        
     1,392
        
     Termination of consulting agreement
     650
        
     
        
     650
        
     Total operating costs
     6,361
        
     5,414
        
     17,825
        
     14,087Income from operations
     9,318
        
     7,255
        
     18,488
        
     14,152Other income (expense)Interest income
     313
        
     111
        
     888
        
     288Other income
     30
        
     
        
     29
        
     Total other income
     343
        
     111
        
     917
        
     288Income before income taxes
     9,661
        
     7,366
        
     19,405
        
     14,440Provision for income taxes
     3,651
        
     2,968
        
     7,360
        
     5,757Net income
     $6,010
        
     $4,398
        
     $12,045
        
     $8,683Basic earnings per share
     $0.37
        
     $0.28
        
     $0.75
        
     $0.57Diluted earnings per share
     $0.33
        
     $0.25
        
     $0.67
        
     $0.50Weighted average common shares (basic)
     16,174,611
        
     15,440,891
        
     16,088,995
        
     15,189,316Weighted average common shares (diluted)
     18,027,735
        
     17,359,203
        
     17,857,607
        
     17,212,293The accompanying
footnotes are an integral part of these consolidated financial statements2


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
     904,237
        
     9
        
     378
        
     
        
     387Tax benefit of stock optionsexercised
     
        
     
        
     229
        
     
        
     229Non cash compensation
     
        
     
        
     783
        
     
        
     783Net income
     
        
     
        
     
        
     8,683
        
     8,683Balance at December 31, 2004
     15,930,707
        
     $159
        
     $46,016
        
     $(1,065
        )
     $45,110Balance at March 31, 2005
     16,034,230
        
     $160
        
     $46,765
        
     $2,324
        
     $49,249Issuance of common stock
     168,175
        
     2
        
     474
        
     
        
     476Tax benefit of stock optionsexercised
     
        
     
        
     451
        
     
        
     451Non cash compensation
     
        
     
        
     670
        
     
        
     670Net income
     
        
     
        
     
        
     12,045
        
     12,045Balance at December 31, 2005
     16,202,405
        
     $162
        
     $48,360
        
     $14,369
        
     $62,891The accompanying notes
are an integral part of these consolidated financial statements3


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


Nine months ended
December 31,2005
     
     2004Cash flows from operating activitiesNet income
     $12,045
        
     $8,683Adjustments to reconcile net income to net cash provided byoperating activitiesNon-cash compensation
     670
        
     783Depreciation and amortization
     426
        
     544Deferred income taxes
     1,257
        
     5,100Tax benefit of stock options exercised
     451
        
     229Provision for excess and obsolete inventory
     142
        
     89Changes in assets and liabilities:Accounts receivable
     (9,558
        )
     (4,982
        )Inventories
     (1,757
        )
     (719
        )Prepayments and other current assets
     38
        
     22Other assets
     (50
        )
     3Accounts payable, accrued expenses, salaries andcommissions
     1,196
        
     1,032Income taxes payable
     1,726
        
     (8
        )Deposits from customers
     8
        
     69Warranty obligations
     214
        
     183Deferred revenue
     2,880
        
     (66
        )Net cash provided by operating activities
     9,688
        
     10,962Cash flows from investing activitiesInvestment - other
     (500
        )
     Purchase of short-term investments
     (35,100
        )
     (14,984
        )Capital expenditures
     (364
        )
     (531
        )Net cash used in investing activities
     (35,964
        )
     (15,515
        )Cash flows from financing activitiesNet proceeds from issuance of common stock
     453
        
     379Net cash provided by financing activities
     453
        
     379Net decrease in cash and cash equivalents
     (25,823
        )
     (4,174
        )Cash and cash equivalents at beginning of period
     39,725
        
     20,734Cash and cash equivalents at end of period
     $13,902
        
     $16,560Income taxes paid
     $3,882
        
     $353The accompanying
footnotes are an integral part of these consolidated financial statements4


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 nine months ended December 31, 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 December 31, 2005, include the
accounts of the Company and its wholly owned subsidiary. All significant intercompany
balances have been eliminated.


Stock-based
compensation


At
December 31, 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
     
     Nine months endedDecember 31,2005
     
     2004
     
     2005
     
     2004Net income, as reported
     
     
     $6,010
        
     $4,398
        
     $12,045
        
     $8,683Deduct: Total stock-based employee compensationexpense determined under fair value based methodfor all awards, net of related tax effects
     406
        
     168
        
     994
        
     514Proforma net income
     $5,604
        
     $4,230
        
     $11,051
        
     $8,169Earnings per share:Basic - as reported
     $0.37
        
     $0.28
        
     $0.75
        
     $0.57Basic - proforma
     $0.35
        
     $0.27
        
     $0.69
        
     $0.54Diluted - as reported
     $0.33
        
     $0.25
        
     $0.67
        
     $0.50Diluted - proforma
     $0.31
        
     $0.24
        
     $0.62
        
     $0.472.
Short-term
investmentsAt
December 31, 2005 the Company had $35 million in market rate marketable securities held
for sale that have been classified as short-term investments. At June 30 and September
30, 2005 the Company had approximately $10 million of similar securities that have been
classified as cash equivalents.



5


3.
InventoriesInventories,
net of reserves, are comprised of the following:


December 31,
     
     March 31,2005Raw materials
     
     
     $2,989
        
     $2,171Work-in-process
     321
        
     218Finished goods
     1,850
        
     1,156Total inventories
     $5,160
        
     $3,5454.
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 nine months ended December 31, 2005 and 2004:


Three months ended December 31,
     
     Nine months ended December 31,2005
     
     2004
     
     2005
     
     2004Basic shares
     
     
     16,174,611
        
     15,440,891
        
     16,088,995
        
     15,189,316Dilutive:Options
     1,853,124
        
     1,457,509
        
     1,737,417
        
     1,342,905Warrants
     
        
     460,803
        
     31,195
        
     680,072Diluted shares
     18,027,735
        
     17,359,203
        
     17,857,607
        
     17,212,293The Company excluded 87,061 options
from the computation of diluted earnings per share for the three months ended December
31, 2004, because they are anti-dilutive. The Company excluded 102,454 options from the
computation of diluted earnings per share for the nine months ended December 31, 2004,
because they are anti-dilutive.


5.
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 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 during the first half of calendar 2006. It is subject to approval by
the Companys shareholders 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 Financial Officer
of the combined company. Sirona will hold seven seats on the combined companys board,
with Schick holding three seats.



6


The
transaction will be presented for approval at a special meeting of Company shareholders.
In connection with the shareholders meeting, the Company intends to file proxy materials
with the Securities and Exchange Commission. 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 December 31, 2005 the Company charged an additional $0.3 million
to operations for acquisition related expenses. During the three months ended September
30, 2005, the Company charged $1.4 million, to operations for acquisition-related
expenses including $1.1 million for the Sirona merger. Additionally, $0.3 million was
charged to operations in connection with other potential acquisitions.


6.
Income
TaxesThe
following table summarizes income tax expense for the three and nine months ended
December 31, 2005 and 2004:


Three months ended
     
     Nine months endedDecember 312005
     
     2004
     
     2005
     
     2004Current - Federal and state
     
     
     $3,759
        
     $58
        
     $6,103
        
     $428Deferred - Federal and state
     (108
        )
     2,910
        
     1,257
        
     5,329Net income tax expense
     $3,651
        
     $2,968
        
     $7,360
        
     $5,7577.
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 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 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


As
previously disclosed, 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. and Blitz 05-118 GmbH. There were no material developments relating to such
action during the quarter ended December 31, 2005.



7


Other


  During
    the three months ended December 31, 2005, the Company charged $650 to operations
    for one-time expenses incurred to terminate the technical consulting agreement
    with David Schick, the Companys former CEO. These expenses included
    non-cash ($112) and cash ($538) charges. The one-time payment represented
    the balance of the fees that were payable to him pursuant to the agreement.
    Mr. Schick was concurrently notified that he was relieved of all further consulting
    obligations under the agreement, and that the non-compete provisions contained
    in the agreement continued to remain in effect.


Sales
to a single customer approximated 74% of revenue for the three months ended December 31,
2005 and 2004. Sales to a single customer approximated 69% and 64% of revenue for the
nine months ended December 31, 2005 and 2004, respectively. Amounts due from that
customer approximated 84% and 49% of net accounts receivable at December 31, 2005 and
March 31, 2005, respectively.





Item 2.         Managements
Discussion and Analysis of Financial Condition and Results of Operations


This
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.



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(R) and CDR Wireless(TM)), a digital panoramic radiography sensor
(CDRPan(R)), an integrated digital panoramic radiography device (CDRPanX(TM)), an
intra-oral camera system (USBCam(R)) and a DC dental x-ray generator (SDX(TM)).


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 (84% and 49% at December 31, 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.



8


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(R) 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 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 nine months
ended December 31, 2005 and 2004:


Three months ended
     
     Nine months endedDecember 31,2005
     
     2004
     
     2005
     
     2004Beginning balance
     
     
     $507
        
     $270
        
     $446
        
     $210Warranties recorded in period
     1,016
        
     650
        
     2,550
        
     1,770Warranties paid in period
     (863
        )
     (527
        )
     (2,336
        )
     (1,587
        )Balance end of period
     $660
        
     $393
        
     $660
        
     $393The
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 $2.2 million at December 31, 2005 and March 31, 2005.



9


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 December
31, 2005:


PAYMENTS DUE BY PERIODCONTRACTUAL
     
     Less Than
     
     1-3
     
     4-5
     
     After 5OBLIGATIONS
     Total
     
     1 year
     
     years
     
     years
     
     yearsOperating leases
     
     
     $789
        
     $521
        
     $268
        
     
        
     Employment agreements
     623
        
     463
        
     160
        
     
        
     Total Contractual Cash Obligations
     $1,412
        
     $984
        
     $428
        
     
        
     Results of Operations


Net
revenues for the three months ended December 31, 2005 increased $5.3 million (32%) to
$22.1 million as compared to $16.8 million in fiscal 2005. The increase was due to
increased sales of the CDR(R) radiography and intraoral camera products. CDR(R) product
sales increased $5.3 million (34%) to $20.9 million (94% of the Companys revenues) from
$15.5 million (93% 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 internationally. Warranty revenue for the three months ended December 31,
2005 was unchanged at $1.2 million (5% and 7% of revenue, respectively). Total domestic
revenue for the three months ended December 31, 2005 increased $3.8 million (29%) to
$16.9 million (77% of revenue) from $13.1 million (78% of revenue) in fiscal 2005.
Domestically, Patterson revenues increased 32% and other domestic revenues decreased 32%.
Total international revenue for the three months ended December 31, 2005 increased $1.5
million (60%) to $4.0 million (18% of revenue) from $2.5 million (15% revenue) in fiscal
2005. By region, sales to European distributors increased $0.7 million (42%) to $2.6
million from $1.9 million in fiscal 2005 and sales to Asian distributors increased $0.7
million (221%) to $1.0 million from $0.3 million in fiscal 2005. Sales to distributors
other than European or Asian were unchanged at $0.3 million.


Net
revenues for the nine months ended December 31, 2005 increased $13.3 million (35%) to
$51.9 million from $38.6 million in fiscal 2005. The increase was due to increased sales
of the CDR(R) radiography and intraoral camera products. CDR(R) product sales increased
$13.6 million (39%) to $48.1 million (93% of revenue) from $34.5 million (90% of revenue)
in fiscal 2005. Warranty revenue for the nine months ended December 31, 2005 decreased
$0.2 million (5%) to $3.5 million (7% of revenue) from $3.7 million (10% of revenue) in
fiscal 2005. Total domestic revenue for the nine months ended December 31, 2005 increased
$11.4 million (44%) to $37.4 million (72% of revenue) from $26.0 million (67% of revenue)
in fiscal 2005. Domestically, Patterson revenues increased $11.5 million (47%) and other
domestic revenues decreased 2%. Total international revenue for the nine months ended
December 31, 2005 increased $2.1 million (24%) to $10.9 million (21% of revenue) from
$8.8 million (23% of revenue) in fiscal 2005. By region, sales to European distributors
increased $1.4 million (24%) to $6.8 million from $5.4 million in fiscal 2005 and sales
to Asian distributors increased $0.2 million (10%) to $2.6 million from $2.4 million in
fiscal 2005. Sales to distributors other than European or Asian increased $0.6 million
(51%) to $1.6 million from $1.0 million in fiscal 2005.


Total
cost of sales for the three months ended December 31, 2005 increased $2.3 million (55%)
to $6.4 million (29.1% of revenue) from $4.1 million (24.6% of revenue) in fiscal 2005.
The increase in the relative total cost of sales (4.5%) was due to increased revenues
generated from non intraoral digital radiographic products which have a lower profit
margin to the Company than do its other products.


Total
cost of sales for the nine months ended December 31, 2005 increased $5.3 million (51%) to
$15.6 million (30.0% of revenue) from $10.3 million (26.8% of revenue) in fiscal 2005.
The increase in the relative total cost of sales (3.2%) is due to increased revenues
generated from non intraoral digital radiographic products which have a lower profit
margin to the Company than do its other products.



10


Selling
and marketing expenses for the three months ended December 31, 2005 increased $0.2
million (6%) to $2.4 million (11% of revenue) from $2.2 million (13% of revenue) in
fiscal 2005. The increases result primarily from higher commission and payroll employment
related expenses.


Selling
and marketing expenses for the nine months ended December 31, 2005 increased $1.8 million
(35%) to $7.0 million (14% of revenue) from $5.2 million (14% of revenue) in fiscal 2005.
Increases are attributable to the items discussed above and increases in advertising,
promotions, training and trade shows.


General
and administrative expenses for the three months ended December 31, 2005 increased $0.1
million (8%) to $1.9 million (8% of revenue) from $1.7 million (10% of revenue) in fiscal
2005. The increase in general and administrative expenses was primarily attributable to
legal fees and filing fees incurred to list the Companys stock on the NASDAQ market and
legal fees incurred in connection with the stockholder law suit.


General
and administrative expenses for the nine months ended December 31, 2005, increased $0.2
million (4%) to $5.2 million (10% of revenue) from $5.0 million (13% of revenue) in
fiscal 2005. Increases are attributable to the items discussed above.


Research
and development expenses for the three months ended December 31, 2005 decreased $0.3
million (17%) to $1.2 million (5% of revenue) from $1.5 million (9% of revenue) in fiscal
2005. The change is attributable to decreases in non-cash charges and research and
development material purchases.


Research
and development expenses for the nine months ended December 31, 2005 decreased $0.3
million (8%) to $3.6 million (7% of revenue) from $3.9 million (9% of revenue) in fiscal
2005. The decrease was attributable to the items discussed above.


During
the three and nine months ended December 31, 2005, the Company charged $0.3 million and
$1.4 million, respectively to operations for acquisition related expenses including $0.3
million and $1.1 million, respectively, for the Sirona merger. Additionally, $0.3 million
was charged to operations during the nine months in connection with other potential
acquisitions.


  During
    the three months ended December 31, 2005, the Company charged $650 to operations
    for one-time expenses incurred to terminate the technical consulting agreement
    with David Schick, the Companys former CEO. These expenses included
    non-cash ($112) and cash ($538) charges. The one-time payment represented
    the balance of the fees that were payable to him pursuant to the agreement.
    Mr. Schick was concurrently notified that he was relieved of all further consulting
    obligations under the agreement, and that the non-compete provisions contained
    in the agreement continued to remain in effect.


Interest
income increased for the three months and nine months ended December 31, 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 December 31, 2005 increased $2.3 million
(31%) to $9.7 million, from $7.4 million in fiscal 2005 for the reasons described above.


Income
before income tax for the nine months ended December 31, 2005 increased $5.0 million
(34%) to $19.4 million from $14.4 million in fiscal 2005.


Income
tax expense for the three months ended December 31, 2005 increased $0.7 million (23%) to
$3.7 million from $3.0 million in fiscal 2005. This increase is the result of increased
income before income taxes.


Income
tax expense for the nine months ended December 31, 2005 increased $1.6 million (28%) to
$7.4 million from $5.8million in fiscal 2005. This increase is the result of increased
income before income taxes.


Net
income for the three months ended December 31, 2005 increased $1.6 million (37%) to $6.0
million (27% of revenue) from $4.4 (26%) million in fiscal 2005. The increase is the
result of the items discussed above.



11


Net
income for the nine months ended December 31, 2005 increased $3.3 million (38%) to $12.0
million (23% of revenue) from $8.7 million (23% of revenue) in fiscal 2005. The increase
is the result of the items discussed above.


Liquidity and Capital
Resources


At
December 31, 2005, the Company had $49.0 million in cash, cash equivalents and short-term
investments and $60.5 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 nine months ended December 31, 2005 cash provided by operations decreased
    $1.3 million to $9.7 million from $11.0 million in fiscal 2005. 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 and inventory. These
    reductions in cash were offset by increases in income taxes payable and deferred
    revenues. Sales to a single customer approximated 69% and 64% of revenue for
    the nine months ended December 31, 2005 and 2004, respectively. Amounts due
    from that customer approximated 84% and 49% of net accounts receivable at
    December 31, 2005 and March 31, 2005, respectively. The increase in net accounts
    receivable is the result of increased product shipments to Patterson during
    the nine months ended December 31, 2005. The Company collected $12.5 million
    of this receivable through the end of January 2006. For the nine months ended
    December 31, 2005 capital expenditures decreased $0.1 million to $0.4 million
    from $0.5 million in fiscal 2005.


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 Risk


None.




Item 4.         Controls and
Procedures


a)
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 December 31,
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
Proceedings


As
previously disclosed, 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. and Blitz 05-118 GmbH. There were no material developments relating to such
action during the quarter ended December 31, 2005.





Item 2.          Unregistered
Sales of Equity Securities and Use of Proceeds


Not
Applicable.



12


Item 3.         Defaults Upon
Senior Securities


Not
Applicable.




Item 4.         Submission of
Matters to a Vote of Security Holders


Not
Applicable.




Item 5.         Other
Information


Not
Applicable.




Item 6.         Exhibits


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. 1350.13


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: February 2, 2006
        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