April 26, 2006

Align Technology, Inc. Reports Q1 2006 Revenues of $48.9M

SANTA CLARA, Calif., April 26, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- 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.

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.

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


                                                       Three Months Ended
                                                  March 31,          March 31,
                                                    2006               2005

    (in thousands, except per share data)

    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


                                                   March 31,      December 31,
    (in thousands)                                   2006             2005

    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


    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


    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


                                                     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

    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.

SOURCE Align Technology, Inc.

investors, Barbara Domingo of Align Technology, Inc., +1-408-470-1000, or
investorinfo@aligntech.com; or press, Shannon Henderson of Ethos Communications,
Inc., +1-678-417-1767, or shannon@ethoscommunication.com, for Align Technology, Inc.

Copyright (C) 2006 PR Newswire. All rights reserved.

News Provided by COMTEX

Close window | Back to top

Copyright 2018 Align Technology, Inc.