UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 24, 2003 |
| ALIGN TECHNOLOGY, INC. |
| (Exact name of registrant as specified in its charter) |
| Delaware |
0-32259 |
94-3267295 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| 821 Martin Avenue, Santa Clara, California |
95050 | |
| (Address of principal executive offices) |
(Zip Code) |
| Registrant’s telephone number, including area code |
(408) 470-1000 |
| Not applicable |
| (Former name or former address, if changed since last report) |
| ITEM 7. | FINANCIAL STATEMENTS AND EXHIBITS |
| (c) | Exhibits. |
| Exhibit No. |
Description | |
| 99.1 |
Press Release of Align Technology, Inc. dated April 24, 2003 |
| ITEM 9. | REGULATION FD DISCLOSURE (Information furnished pursuant to Item 12—Results of Operations and Financial Condition) |
On April 24, 2003, Align Technology, Inc. (“Align”) is issuing a press release and holding a conference call regarding its financial results for the first quarter of fiscal 2003 ended March 31, 2003. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K. Align is making reference to non-GAAP financial information in both the press release and the conference call.
The information in this Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
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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 24, 2003 |
ALIGN TECHNOLOGY, INC. | |||||||
| By: |
/s/ Eldon M. Bullington | |||||||
| Eldon M. Bullington | ||||||||
| Vice President of Finance and Chief Financial Officer | ||||||||
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INDEX TO EXHIBITS
| Exhibit No. |
Description | |
| 99.1 |
Press Release of Align Technology, Inc. dated April 24, 2003 |
Exhibit 99.1
| Investor Relations Contacts |
Press Contacts | |
| Barbara Domingo |
Shannon Henderson | |
| Align Technology, Inc. |
Fenton Communications | |
| (408) 470-1204 |
(678) 417-1767 | |
| bdomingo@aligntech.com |
shannon@ethospr.com |
Align Technology Reports First Quarter 2003 Financial Results
Revenues Increase 44% Year Over Year; Net Loss Decreases 53% Year Over Year
Santa Clara, Calif. – April 24, 2003 – Align Technology, Inc. (Nasdaq: ALGN), the inventor of Invisalign®, a proprietary method of straightening teeth without wires and brackets, today announced financial results for the quarter ending March 31, 2003. Total revenues for the first quarter of 2003 were $24.7 million, compared to $22.4 million in the fourth quarter of 2002, an increase of 10.3 percent, and $17.1 million in the first quarter of 2002, an increase of 44.3 percent.
“I am pleased with the progress we are making as a company. We are working to create a strong customer base resulting in growth in our case shipments and revenues,” said Thomas M. Prescott, President and Chief Executive Officer of Align Technology. “Our expenses have been reduced to levels more consistent with our revenue base, and we believe we have sufficient cash to manage the company beyond profitability. We are building a company focused on customers and we are committed to driving the business performance that will increase shareholder value.”
The net loss for the first quarter of 2003 as determined under generally accepted accounting principles (“GAAP”) was $8.8 million, or a net loss per share of $0.15. This compares to a net loss for the fourth quarter of 2002 of $13.9 million, or a net loss of $0.27 per share, and a net loss for the first quarter of 2002 of $18.5 million, or a net loss of $0.40 per share. Non-GAAP net loss for the first quarter of 2003, which excludes $4.3 million of stock-based compensation and $0.5 million of restructuring charges, was $4 million, or a non-GAAP net loss of $0.07 per share, compared to non-GAAP net loss of $12.9 million in the first quarter of 2002, which excludes $5.6 million of stock-based compensation, or a non-GAAP net loss of $0.28 per share. The
reconciliation of the GAAP to non-GAAP measurements for net loss for the first quarter of 2003 is set forth below within Align Technology’s financial statements.
As of March 31, 2003 Align had $37.3 million in cash, cash equivalents and marketable securities, compared to $41.5 million as of December 31, 2002. Align Technology did not incur additional borrowings or draw-downs against its credit facility during the first quarter of 2003.
Align Technology will host a webcast and conference call today, April 24, 2003 at 4:15 p.m. EDT, 1:15 p.m. PDT, to review first quarter 2003 results, as well as discuss future operating trends and guidance on the outlook for the future. To access the webcast, go to “Presentations/Webcasts” in the Investor Relations section of Align Technology’s website at http://www.invisalign.com/US/html/corporate/investor_frameset.html. To access the conference call, please dial (415) 537-1856 approximately ten 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 23, 2004. Additionally, a telephonic replay of the call can be accessed by dialing 800-633-8284 with reservation number 21139506. The replay may be accessed from international locations by dialing 402-977-9140 using the same reservation number. The telephonic replay will be available through 5:30 p.m. EDT on May 8, 2003.
About Align Technology, Inc.
Align Technology designs, manufactures and markets Invisalign, a proprietary new 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 March 1997 and received FDA clearance to market Invisalign in 1998.
To learn more about Invisalign or to find a certified Invisalign doctor, please visit www.invisalign.com or call 1-800-INVISIBLE.
This news release contains forward-looking statements, including statements regarding Align’s current cash position relative to its ability to achieve profitability and its commitment to business performance as a means to increase shareholder value. 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 history of losses and negative operating cash flows, Align’s ability to increase its revenue significantly while controlling expenses, Align’s ability to raise additional capital as required, Align’s limited operating history, demand for Invisalign, acceptance of Invisalign by consumers and dental professionals, competition from manufacturers of traditional braces, 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, potential intellectual property or product liability claims or litigation, and the potential volatility of the market price of Align’s common stock. 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, 2002, which was filed with the Securities and Exchange Commission on March 27, 2003, 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(1)
(in thousands, except per share data)
(unaudited)
| Three Months Ended March 31, 2003 |
Three Months Ended March 31, 2002 |
|||||||
| Revenues |
$ |
24,735 |
|
$ |
17,141 |
| ||
| Cost of revenues |
|
11,810 |
|
|
12,505 |
| ||
| Gross profit |
|
12,925 |
|
|
4,636 |
| ||
| Operating expenses: |
||||||||
| Sales and marketing |
|
10,630 |
|
|
10,327 |
| ||
| General and administrative |
|
7,894 |
|
|
9,871 |
| ||
| Research and development |
|
2,985 |
|
|
3,346 |
| ||
| Total operating expenses |
|
21,509 |
|
|
23,544 |
| ||
| Loss from operations |
|
(8,584 |
) |
|
(18,908 |
) | ||
| Interest and other income (expense), net |
|
(198 |
) |
|
406 |
| ||
| Net loss |
$ |
(8,782 |
) |
$ |
(18,502 |
) | ||
| Basic and diluted net loss per share |
$ |
(0.15 |
) |
$ |
(0.40 |
) | ||
| Weighted-average shares used in computing basic and diluted net loss per share |
|
57,189 |
|
|
46,152 |
| ||
| (1) | Certain reclassifications of prior period amounts have been made to conform with current year presentation. |
ALIGN TECHNOLOGY, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(1)
(in thousands, except per share data)
(unaudited)
Use of Non-GAAP Financial Information
To supplement our condensed consolidated financial statements presented on a GAAP basis, Align uses a non-GAAP measure of net loss, which is adjusted to exclude certain costs and expenses. We believe that our non-GAAP net loss gives an indication of our baseline performance before other charges that are considered by management to be outside of our core operating results. In addition, our non-GAAP net loss is among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information should not be considered in isolation or as a substitute for net loss prepared in accordance with generally accepted accounting principles in the United States of America.
| Three Months Ended March 31, 2003 |
Three Months Ended March 31, 2002 |
|||||||
| Revenues |
$ |
24,735 |
|
$ |
17,141 |
| ||
| Cost of revenues |
|
11,089 |
|
|
11,517 |
| ||
| Gross profit (loss) |
|
13,646 |
|
|
5,624 |
| ||
| Operating expenses: |
||||||||
| Sales and marketing |
|
10,002 |
|
|
9,516 |
| ||
| General and administrative |
|
5,202 |
|
|
6,988 |
| ||
| Research and development |
|
2,252 |
|
|
2,430 |
| ||
| Total operating expenses |
|
17,456 |
|
|
18,934 |
| ||
| Loss from operations |
|
(3,810 |
) |
|
(13,310 |
) | ||
| Interest and other income (expense), net |
|
(198 |
) |
|
406 |
| ||
| Net loss |
$ |
(4,008 |
) |
$ |
(12,904 |
) | ||
| Basic and diluted net loss per share |
$ |
(0.07 |
) |
$ |
(0.28 |
) | ||
| Weighted-average shares used in computing basic and diluted net loss per share |
|
57,189 |
|
|
46,152 |
| ||
| (1) | Certain reclassifications of prior period amounts have been made to conform with current year presentation. |
See Reconciliation of GAAP Net Loss to non-GAAP Net Loss on next page.
ALIGN TECHNOLOGY, INC.
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
(in thousands, except per share data)
(unaudited)
| Three Months Ended March 31, 2003 |
Three Months Ended March 31, 2002 |
|||||||
| Calculation of net loss excluding special items: |
||||||||
| Net loss |
$ |
(8,782 |
) |
$ |
(18,502 |
) | ||
| Items: |
||||||||
| Stock-based compensation expense included in: (1) |
||||||||
| – costs of revenues |
|
721 |
|
|
988 |
| ||
| – sales and marketing |
|
628 |
|
|
811 |
| ||
| – general and administrative |
|
2,185 |
|
|
2,883 |
| ||
| – research and development |
|
733 |
|
|
916 |
| ||
| Restructuring costs included in general and administrative operating expenses (2) |
|
507 |
|
|
— |
| ||
| Non-GAAP net loss (excluding special items) |
$ |
(4,008 |
) |
$ |
(12,904 |
) | ||
| (1) | 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. Stock-based compensation expense also includes the accelerated vesting of options to several employees in connection with severance packages. |
| (2) | Restructuring costs represent the remainder of our indirect operational activities related to the transition of operations from the United Arab Emirates and Pakistan to Costa Rica. |
Align Technology, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
| March 31, 2003 |
December 31, 2002 | |||||
| ASSETS |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ |
33,997 |
$ |
35,552 | ||
| Restricted cash |
|
3,265 |
|
3,261 | ||
| Marketable securities, short-term |
|
— |
|
2,693 | ||
| Accounts receivable, net |
|
17,078 |
|
16,766 | ||
| Inventories, net |
|
1,762 |
|
1,533 | ||
| Deferred costs |
|
1,031 |
|
1,139 | ||
| Other current assets |
|
6,650 |
|
4,888 | ||
| Total current assets |
|
63,783 |
|
65,832 | ||
| Property and equipment, net |
|
23,787 |
|
25,078 | ||
| Other long-term assets |
|
2,093 |
|
1,946 | ||
| Total assets |
$ |
89,663 |
$ |
92,856 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||
| Current liabilities: |
||||||
| Accounts payable |
$ |
2,078 |
$ |
1,974 | ||
| Accrued liabilities |
|
13,669 |
|
12,628 | ||
| Deferred revenue |
|
2,493 |
|
2,130 | ||
| Financing debt, current portion |
|
1,667 |
|
1,667 | ||
| Total current liabilities |
|
19,907 |
|
18,399 | ||
| Financing debt, long-term portion |
|
2,917 |
|
3,333 | ||
| Capital lease obligations, net of current portion |
|
425 |
|
504 | ||
| Total liabilities |
|
23,249 |
|
22,236 | ||
| Total stockholders’ equity |
|
66,414 |
|
70,620 | ||
| Total liabilities and stockholders’ equity |
$ |
89,663 |
$ |
92,856 | ||