================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) April 26, 2006
ALIGN TECHNOLOGY, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware
----------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-32259 94-3267295
------------------------ ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
881 Martin Avenue, Santa Clara, California 95050
------------------------------------------ ----------
(Address of Principal Executive Offices) (Zip Code)
(408) 470-1000
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not applicable
-------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
================================================================================
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On April 26, 2006, Align Technology, Inc. ("Align") is issuing a press
release and holding a conference call regarding its financial results for its
first quarter ended March 31, 2006. The full text of the press release is
furnished as Exhibit 99.1 to this Form 8-K.
This information shall not be deemed "filed" for purposes of Section 18 of
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
Align is making reference to non-GAAP financial information in both the
press release and the conference call. A reconciliation of non-GAAP financial
measures contained in the attached press release to the comparable GAAP
financial measures is contained in the attached press release and a
reconciliation of these and certain other non-GAAP financial information
provided on the conference call is contained on the Investor Relations section
of our website at investor.aligntech.com.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) EXHIBITS.
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------
99.1 Press Release of Align Technology, Inc. dated April 26, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 26, 2006 ALIGN TECHNOLOGY, INC.
By: /s/ Eldon M. Bullington
-------------------------------
Eldon M. Bullington
Vice President of Finance and
Chief Financial Officer
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- ------------------------------------------------------------
99.1 Press Release of Align Technology, Inc. dated April 26, 2006
Exhibit 99.1
FOR IMMEDIATE RELEASE
Investor Relations Contact: Press Contact:
- --------------------------- --------------
Barbara Domingo Shannon Henderson
Align Technology, Inc. Ethos Communications, Inc.
(408) 470-1000 (678) 417-1767
investorinfo@aligntech.com shannon@ethoscommunication.com
ALIGN TECHNOLOGY, INC. REPORTS Q1 2006 REVENUES OF $48.9M
Santa Clara, Calif. - April 26, 2006 - Align Technology, Inc. (Nasdaq: ALGN),
the inventor of Invisalign(R), a proprietary method of straightening teeth
without wires and brackets, today reported financial results for the first
quarter of 2006. Total revenues for the first quarter of 2006 were $48.9
million, compared to $51.2 million in the first quarter of 2005, a decrease of
4.4 percent.
"The first quarter represented a good start to the year for Align, as case
volumes and utilization grew significantly," stated Thomas M. Prescott, Align
Technology's President and CEO. "Continuing volume growth and increasing
revenues in the face of recent pricing changes and mix shift are central to our
business plan this year. As we continue to execute on our strategy and deliver
value to our customers, adoption of Invisalign as an important part of their
practice will grow."
The net loss for the first quarter of 2006, as reported on a GAAP basis, was
$4.8 million, or loss per share of $0.08. This compares to GAAP net profit of
$1.9 million for the first quarter of 2005, or EPS of $0.03.
The non-GAAP net loss for the first quarter of 2006, which excludes $2.2 million
from the expensing of stock options pursuant to FAS 123R, was $2.6 million, or
non-GAAP loss per share of $0.04. This compares to a non-GAAP net profit of $1.9
million in the first quarter of 2005, which excludes $12 thousand of stock-based
compensation, or non-GAAP EPS of $0.03. The reconciliation of the GAAP to
non-GAAP measurements for net profit (loss) for the first quarter of 2006 is set
forth below within Align Technology's financial statements.
Align Technology Inc. 881 Martin Avenue Santa Clara, CA 95050
Tel: (408) 470-1000 Fax: (408) 470-1201
As of March 31, 2006, Align had $71.9 million in cash, cash equivalents,
marketable securities, and restricted cash, compared to $74.4 million as of
December 31, 2005.
Align Webcast and Conference Call
- ---------------------------------
Align Technology will host a webcast and conference call today, April 26, 2006
at 10:00 a.m. EDT, 7:00 a.m. PDT, to review the first quarter of 2006 results
and discuss future operating trends and guidance. To access the webcast, click
on "Webcasts & Presentations" on Align Technology's Investor Relations web site
at http://investor.aligntech.com. To access the conference call, please dial
(201) 689-8341 approximately fifteen minutes prior to the start of the call. If
you are unable to listen to the call, an archived web cast will be available
beginning approximately one hour after the call's conclusion and will remain
available through 5:30 p.m. EDT on April 25, 2007. Additionally, a telephonic
replay of the call can be accessed by dialing (877) 660-6853 with account number
292 followed by # and conference number 199384 followed by #. The replay may be
accessed from international locations by dialing (201) 612-7415 and using the
same account and conference numbers referenced above. The telephonic replay will
be available through 5:30 p.m. EDT on May 10, 2006.
About Align Technology, Inc.
Align Technology designs, manufactures and markets Invisalign, a proprietary
method for treating malocclusion, or the misalignment of teeth. Invisalign
corrects malocclusion using a series of clear, nearly invisible, removable
appliances that gently move teeth to a desired final position. Because it does
not rely on the use of metal or ceramic brackets and wires, Invisalign
significantly reduces the aesthetic and other limitations associated with
braces. Invisalign is appropriate for treating adults and older teens. Align
Technology was founded in April 1997 and received FDA clearance to market
Invisalign in 1998.
To learn more about Invisalign or to find a certified Invisalign doctor in your
area, please visit www.invisalign.com or call 1-800-INVISIBLE.
Forward-Looking Statement
- -------------------------
This news release contains forward-looking statements, including statements
regarding Align's focus on continuing volume growth and increasing revenues
despite recent pricing changes and product mix shift, as well as its belief that
continued execution of its strategy will increase adoption of Invisalign by its
customers. Forward-looking statements contained in this news release relating to
expectations about future events or results are based upon information available
to Align as of the date hereof. Readers are cautioned that these forward-looking
statements are only predictions and are subject to risks, uncertainties and
assumptions that are difficult to predict. As a result, actual results may
differ materially and adversely from those expressed in any forward-looking
statement. Factors that might cause such a difference include, but are not
limited to, risks relating to Align's ability to sustain or increase
profitability or revenue growth in future periods while controlling expenses,
including expenses related to the OrthoClear litigation, customer demand for
Invisalign, acceptance of Invisalign by consumers and dental professionals,
Align's third party manufacturing processes and personnel, foreign operational,
political and other risks relating to Align's international manufacturing
operations, Align's ability to protect its intellectual property rights,
competition from manufacturers of traditional braces and new competitors, such
as OrthoClear, Align's ability to develop and successfully introduce new
products, and the loss of key personnel, including members of its direct sales
force. These and other risks are detailed from time to time in Align's periodic
reports filed with the Securities and Exchange Commission, including, but not
limited to, its Annual Report on Form 10-K for the fiscal year ended December
31, 2005, which was filed with the Securities and Exchange Commission on March
1, 2006, and its Quarterly Reports on Form 10-Q. Align undertakes no obligation
to revise or update publicly any forward-looking statements for any reason.
# # #
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
----------------------------
March 31, March 31,
(in thousands, except per share data) 2006 2005
- -------------------------------------------------------- ------------ ------------
Revenues $ 48,908 $ 51,155
Cost of revenues 14,297 15,478
------------ ------------
Gross profit 34,611 35,677
------------ ------------
Operating expenses:
Sales and marketing 20,066 19,134
General and administrative 15,064 9,511
Research and development 4,694 4,903
------------ ------------
Total operating expenses 39,824 33,548
------------ ------------
Profit (loss) from operations (5,213) 2,129
Interest and other income (expense), net 698 (60)
Provision for income taxes (249) (206)
------------ ------------
Net profit (loss) $ (4,764) $ 1,863
============ ============
Net profit (loss) per share
- basic $ (0.08) $ 0.03
============ ============
- diluted $ (0.08) $ 0.03
============ ============
Shares used in computing net profit (loss) per share
- basic 62,518 61,246
============ ============
- diluted 62,518 63,148
------------ ------------
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
March 31, December 31,
(in thousands) 2006 2005
- -------------------------------------------------------- ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 71,783 $ 74,219
Restricted cash 153 150
Accounts receivable, net 32,057 29,305
Inventories, net 3,094 2,930
Other current assets 6,445 4,982
------------ ------------
Total current assets 113,532 111,586
Property and equipment, net 28,022 26,427
Other long-term assets 3,434 4,097
------------ ------------
Total assets $ 144,988 $ 142,110
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,892 $ 2,489
Accrued liabilities 30,545 29,372
Deferred revenue 15,122 16,747
------------ ------------
Total current liabilities 48,559 48,608
Other long term liabilities 252 64
------------ ------------
Total liabilities 48,811 48,672
Total stockholders' equity 96,177 93,438
------------ ------------
Total liabilities and stockholders' equity $ 144,988 $ 142,110
------------ ------------
ALIGN TECHNOLOGY, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
USE OF NON-GAAP FINANCIAL INFORMATION
To supplement our condensed consolidated financial statements presented on a
GAAP basis, we use non-GAAP measures of gross profit, profit (loss) from
operations, net profit (loss) and certain expenses (including sales and
marketing, general and administrative and research and development), which
exclude stock-based compensation to allow for a better comparison of results in
the current period to those in prior periods that did not include FAS 123(R)
stock-based compensation. We believe the non-GAAP measures that exclude
stock-based compensation enhance the comparability of results against prior
periods. In addition, we use these non-GAAP financial measures for internal
managerial purposes, when publicly providing our business outlook and as a means
to evaluate period-to-period comparisons. These non-GAAP financial measures
should be considered as a supplement to, and not as a substitute for, or
superior to, financial measures prepared in accordance with GAAP.
Three Months Ended
----------------------------
March 31, March 31,
(in thousands, except per share data) 2006 2005
- -------------------------------------------------------- ------------ ------------
Revenues $ 48,908 $ 51,155
Cost of revenues 14,149 15,478
------------ ------------
Gross profit 34,759 35,677
------------ ------------
Operating expenses:
Sales and marketing 19,387 19,128
General and administrative 13,976 9,505
Research and development 4,404 4,903
------------ ------------
Total operating expenses 37,767 33,536
------------ ------------
Profit (loss) from operations (3,008) 2,141
Interest and other income (expense), net 698 (60)
Provision for income taxes (249) (206)
------------ ------------
Net profit (loss) $ (2,559) $ 1,875
============ ============
Net profit (loss) per share
- basic $ (0.04) $ 0.03
============ ============
- diluted $ (0.04) $ 0.03
============ ============
Shares used in computing net profit (loss) per share
- basic 62,518 61,246
============ ============
- diluted 62,518 63,148
============ ============
See Reconciliation of GAAP Net Profit (Loss) to non-GAAP Net Profit (Loss) on
Next Page
ALIGN TECHNOLOGY, INC.
RECONCILIATION OF GAAP NET PROFIT (LOSS) TO ADJUSTED NON-GAAP NET PROFIT (LOSS)
(unaudited)
Three Months Ended
-----------------------------
March 31, March 31,
(in thousands) 2006 2005
- -------------------------------------------------------- ------------ ------------
Calculation of non-GAAP net profit (loss)
excluding special items:
Net profit (loss) $ (4,764) $ 1,863
Items:
Stock-based compensation expense included in:
- cost of revenues 148(1) -
- sales and marketing 679(1) 6(2)
- general and administrative 1,088(1) 6(2)
- research and development 290(1) -
------------ ------------
Total stock-based compensation expense 2,205 12
------------ ------------
Non-GAAP net profit (loss) excluding special items $ (2,559) $ 1,875
============ ============
(1) Q1 2006 stock-based compensation expense included compensation expense for
stock-based payment awards granted prior to, but not yet vested as of,
December 31, 2005, based on the grant date fair value estimated in
accordance with the pro forma provisions of SFAS 123 and compensation
expense for the stock-based payment awards granted subsequent to December
31, 2005 based on the grant date fair value estimated in accordance with
the provisions of SFAS 123(R).
(2) Q1 2005 stock-based compensation expense represents the amortization of
deferred stock-based compensation recorded in connection with the granting
of stock options to employees and non-employees in relation to the
company's initial public offering in 2001.