Economy dims dental industry's smile

By Helen Chernikoff - Analysis

NEW YORK (Reuters) - Makers of dental veneers aren't smiling so brightly these days as the slowing economy weakens demand for expensive optional treatments.

In the first quarter, companies such as diversified manufacturers 3M Co (MMM.N: Quote, Profile, Research, Stock Buzz) and Danaher Corp (DHR.N: Quote, Profile, Research, Stock Buzz) and dental distributor Henry Schein Inc (HSIC.O: Quote, Profile, Research, Stock Buzz) reported slower sales of items like braces and crowns.

"Market growth has slowed in higher-end discretionary procedures," said Bret Wise, chief executive of manufacturer Dentsply International Inc (XRAY.O: Quote, Profile, Research, Stock Buzz), during the company's first-quarter conference call.

A set of veneers can cost $10,000, while the implant and crown-and-bridge work that reconstructs a tooth can cost $3,000. Dental insurance, for those that have it, usually does not cover optional treatments and often does not fully cover even those treatments necessitated by pain.

In an economic downturn, patients tend to postpone these treatments or downgrade to cheaper alternatives, said Dr. Matthew Messina, owner of a general dental practice in suburban Cleveland, Ohio.

Small-cap Birner Dental Management Services Inc (BDMS.O: Quote, Profile, Research, Stock Buzz) has seen a greater than 10 percent reduction in demand for crowns and bridges this year, said board member Brooks O'Neil, also an analyst for Dougherty & Company.

"In dentistry, it's less the economy than the perception of the economy," Messina said. "If people are confident about their future, their job, then they're willing to invest in more elective procedures."

This past quarter's results reflected the new tendency of dental patients to keep their wallets in their pockets.