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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) October 23, 2003
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ALIGN TECHNOLOGY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-32259 94-3267295
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
881 Martin Avenue, Santa Clara, California 95050
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 470-1000
-----------------------------
Not applicable
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(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, dated October 23, 2003, reporting the
results of operations for Align Technology, Inc. for its
third quarter ended September 30, 2003 (furnished and
not filed herewith solely pursuant to Item 12).
ITEM 12. Results of Operations and Financial Condition
On October 23, 2003, Align Technology, Inc. ("Align") is issuing a press
release and holding a conference call regarding its financial results for the
third quarter of fiscal 2003 ended September 30, 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. A reconciliation of these non-GAAP financial measures to the comparable
GAAP financial measures is contained in the attached press release.
The information contained herein and in the accompanying exhibit shall not
be incorporated by reference into any filing of Align, whether made before of
after the date hereof, regardless of any general incorporation language in such
filing, unless expressly incorporated by specific reference to such filing. 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, as
amended, or otherwise subject to the liabilities of that section, nor shall it
be deemed incorporated by reference in any filing under Section 11 and 12(a)(2)
of the Securities Act of 1933, as amended.
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: October 23, 2003 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
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99.1 Press Release, dated October 23, 2003, reporting the
results of operations for Align's third quarter ended
September 30, 2003.
Exhibit 99.1
Align Technology, Inc. Reports Record Revenues of $34.0 Million for the Third
Quarter 2003
- Third Quarter Revenues Increase 96% Year Over Year
- Company Reports GAAP Net Loss of $2.1 Million, or $0.04 per share;
Non-GAAP Net Profit Of $1.2 Million and Non-GAAP EPS Of $0.02 Per Share
- Company Increases Cash Position By $4.3 Million
SANTA CLARA, Calif., Oct. 23 /PRNewswire-FirstCall/ -- 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 third quarter of 2003. Total revenues for the third quarter of
2003 were $34.0 million, compared to $29.2 million in the second quarter of
2003, an increase of 16.5 percent, and $17.4 million in the third quarter of
2002, an increase of 95.9 percent.
"We are pleased to report our first profitable quarter on a non-GAAP
basis," stated Thomas M. Prescott, Align Technology's President and CEO.
"While achievement of this important milestone signifies the enormous progress
made over the past six quarters, we still have much to do towards our goal of
building a truly great company. Align is focused on becoming the most
important part of our customers' practices and helping them provide
outstanding clinical results to happier patients. As we meet or exceed their
high expectations, we expect our business to accelerate and our shareholders
to benefit."
The net loss for the third quarter of 2003 as determined under generally
accepted accounting principles ("GAAP") was $2.1 million, or a net loss per
share of $0.04. This compares to a net loss for the second quarter of 2003 of
$7.8 million, or a net loss of $0.13 per share, and a net loss for the third
quarter of 2002 of $17.8 million, or a net loss of $0.38 per share.
The non-GAAP net profit for the third quarter of 2003, which excludes
$3.4 million of stock-based compensation, was $1.2 million, or non-GAAP
earnings per share of $0.02. This compares to a non-GAAP net loss of
$3.4 million in the second quarter of 2003, which excludes $4.4 million of
stock-based compensation, or a non-GAAP net loss of $0.06 per share. This also
compares to a non-GAAP net loss of $11.0 million in the third quarter of 2002,
which excludes $6.8 million of stock-based compensation and restructuring
charges, or a non-GAAP net loss of $0.24 per share. The reconciliation of the
GAAP to non-GAAP measurements for net loss for the third quarter of 2003 is
set forth below within Align Technology's financial statements.
As of September 30, 2003 Align had $42.7 million in cash, cash equivalents
and marketable securities, compared to $38.4 million as of June 30, 2003.
Align Technology did not incur additional borrowings or draw-downs against its
credit facility during the third quarter of 2003.
Align Technology will host a webcast and conference call today,
October 23, 2003 at 10:00 a.m. EDT, 7:00 a.m. PDT, to review third quarter of
2003 results and discuss future operating trends and guidance on the outlook
for the future. To access the webcast, click on "Conference Calls" on Align
Technology's Investor Relations website at
http://www.invisalign.com/US/html/corporate/investor_frameset.html . To
access the conference call, please dial 415-537-1980 approximately ten minutes
prior to the start of the call. If you are unable to listen to the call, an
archived webcast will be available beginning approximately one hour after the
call's conclusion and will remain available through 5:30 p.m. EDT on October
22, 2004. Additionally, a telephonic replay of the call can be accessed by
dialing 800-633-8284 with reservation number 21161382. 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 November 6, 2003.
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 March 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 Statements
This news release contains forward-looking statements, including
statements regarding Align's ability to increase brand recognition for Align's
products and improve its reputation with orthodontists and dentists 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, customer
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/A for the fiscal year ended December 31,
2002, which was filed with the Securities and Exchange Commission on August
13, 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.
Investor Relations Contact: Press Contact:
Barbara Domingo Shannon Henderson
Align Technology, Inc. Ethos Communications, Inc.
408-470-1204 678-417-1767
bdomingo@aligntech.com shannon@ethoscommunication.com
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (A)
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(in thousands, except 2003 2002 2003 2002
per share data) (as restated) (as restated)
Revenues $34,038 $17,375 $86,223 $48,947
Cost of revenues 13,446 10,598 38,639 33,352
Gross profit 20,592 6,777 47,584 15,595
Operating expenses:
Sales and marketing 10,505 11,459 32,551 33,780
General and administrative 8,722 9,899 25,630 29,727
Research and development 3,113 3,208 9,810 9,829
Total operating expenses 22,340 24,566 67,991 73,336
Loss from operations (1,748) (17,789) (20,407) (57,741)
Interest and other income
(expense), net (396) (17) (167) 318
Net loss $(2,144) $(17,806) $(20,574) $(57,423)
Net loss per share - basic
and diluted $(0.04) $(0.38) $(0.36) $(1.23)
Weighted-average shares
used in computing basic
and diluted net loss per
share 57,948 46,934 57,543 46,556
(A) Certain reclassifications of prior period amounts have been made to
conform with current year presentation.
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (A)
(unaudited)
September 30, December 31,
2003 2002
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $37,250 $35,552
Restricted cash 3,420 3,261
Marketable securities, short-term 1,998 2,693
Accounts receivable, net 20,794 16,766
Inventories, net 1,578 1,533
Deferred costs 768 1,139
Other current assets 5,751 4,888
Total current assets 71,559 65,832
Property and equipment, net 22,331 25,078
Other long-term assets 1,960 1,946
Total assets $95,850 $92,856
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,755 $1,974
Accrued liabilities 18,319 11,112
Deferred revenue 13,301 9,403
Debt obligations, current portion 2,040 2,183
Total current liabilities 35,415 24,672
Debt obligations, long-term portion 2,083 3,333
Capital lease obligations, net of current
portion 265 504
Total liabilities 37,763 28,509
Total stockholders' equity 58,087 64,347
Total liabilities and stockholders'
equity $95,850 $92,856
(A) Certain prior period amounts have been adjusted to conform with
current year presentation.
ALIGN TECHNOLOGY, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (A) (B)
(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 profit (loss), which is
adjusted to exclude certain costs and expenses and any associated tax effects
of such adjustments. We believe that our non-GAAP net profit (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 profit (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 Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(in thousands, except 2003 2002 2003 2002
per share data) (as adjusted) (as adjusted)
Revenues $34,038 $17,375 $86,223 $48,947
Cost of revenues 12,830 9,237 36,619 30,139
Gross profit 21,208 8,138 49,604 18,808
Operating expenses:
Sales and marketing 9,984 10,222 30,798 31,059
General and administrative 7,117 6,573 19,439 19,994
Research and development 2,470 2,356 7,264 7,272
Total operating expenses 19,571 19,151 57,501 58,325
Profit (loss) from
operations 1,637 (11,013) (7,897) (39,517)
Interest and other income
(expense), net (396) (17) (167) 318
Net profit (loss) $1,241 $(11,030) $(8,064) $(39,199)
Net profit (loss) per share
- basic $0.02 $(0.24) $(0.14) $(0.84)
Weighted-average shares used
in computing basic net profit
(loss) per share 57,948 46,934 57,543 46,556
Net profit (loss) per share
- diluted $0.02 $(0.24) $(0.14) $(0.84)
Weighted-average shares used
in computing diluted net
profit (loss) per share 62,912 46,934 57,543 46,556
(A) Certain reclassifications of prior period amounts have been made to
conform with current year presentation.
(B) The as adjusted non-GAAP financials reflect the adjustments as noted
in this press release.
See following reconciliation of GAAP net loss to non-GAAP net loss.
ALIGN TECHNOLOGY, INC.
RECONCILIATION OF RESTATED GAAP NET LOSS TO ADJUSTED NON-GAAP NET PROFIT
(LOSS)
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(in thousands) 2003 2002 2003 2002
(as (as
adjusted) adjusted)
Calculation of non-GAAP net loss
excluding special items:
Net loss $(2,144) $(17,806) $(20,574) $(57,423)
Items:
Stock-based compensation expense
included in: (A)
- cost of revenues 616 802 2,020 2,654
- sales and marketing 521 591 1,753 2,076
- general and administrative 1,605 2,854 5,684 9,260
- research and development 643 771 2,546 2,476
Restructuring costs included in
general and administrative operating
expenses (B) -- 1,758 507 1,758
Non-GAAP net profit (loss) excluding
special items $1,241 $(11,030) $(8,064) $(39,199)
(A) 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.
(B) Restructuring costs represent restructuring charges for severance,
facility closures, and losses on disposal and impairment of fixed
assets incurred as part of our July 2002 plan to streamline worldwide
operations during 2002, and the remainder of our indirect operational
activities related to the transition of operations from the United
Arab Emirates and Pakistan to Costa Rica during the first quarter of
2003.
SOURCE Align Technology, Inc.
-0- 10/23/2003
/CONTACT: investors, Barbara Domingo of Align Technology, Inc., +1-408-
470-1204, or bdomingo@aligntech.com; or media, Shannon Henderson of Ethos
Communications, Inc., +1-678-417-1767, or shannon@ethoscommunication.com, for
Align Technology, Inc./
/Web site: http://www.invisalign.com /
(ALGN)
CO: Align Technology, Inc.
ST: California
IN: MTC HOU HEA
SU: ERN