July 26, 2006

Align Technology, Inc. Reports Q2 2006 Revenues of $53.2 Million


Additional Quarterly Information

SANTA CLARA, Calif., July 26, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Align Technology, Inc. (Nasdaq: ALGN), the inventor of Invisalign®, a proprietary method of straightening teeth without wires and brackets, today reported financial results for the second quarter of 2006. Total revenues for the second quarter of 2006 were $53.2 million, compared to $53.9 million in the second quarter of 2005, a decrease of 1.3 percent.

"We are pleased with our steady progress and results in the second quarter of 2006," stated Thomas M. Prescott, Align Technology's President and CEO. "We continue to develop the Invisalign system, along with the technology and service offerings that will allow us to become a greater part of our customers' practices in the future."

The net loss for the second quarter of 2006, as reported on a GAAP basis, was $2.6 million, or loss per share of $0.04. This compares to GAAP net profit of $538 thousand for the second quarter of 2005, or EPS of $0.01.

The non-GAAP net loss for the second quarter of 2006 was $344 thousand, or non-GAAP loss per share of $0.01. This compares to non-GAAP net profit of $538 thousand for the second quarter of 2005, or EPS of $0.01. The reconciliation of the GAAP to non-GAAP measurements for net loss for the second quarter of 2006 is set forth below within Align Technology's financial statements.

As of June 30, 2006, Align had $69.9 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, July 26, 2006 at 8:45 a.m. EDT, 5:45 a.m. PDT, to review the second 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 July 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 199386 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 August 9, 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 developing the Invisalign system and the technology and service offerings that Align expects will allow it to become a greater part of its customers' practices. 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  Six Months Ended
                                        June 30, June 30,   June 30, June 30,
                                          2006     2005      2006      2005
    (in thousands, except per share data)
    Revenues                             $53,221  $53,940  $102,129  $105,095
    Cost of revenues                      16,492   16,620    30,789    32,098
    Gross profit                          36,729   37,320    71,340    72,997
    Operating expenses:
    Sales and marketing                   20,641   21,049    40,707    40,183
    General and administrative            15,354    9,723    30,418    19,234
    Research and development               4,025    5,355     8,719    10,258
    Total operating expenses              40,020   36,127    79,844    69,675

    Profit (Loss) from operations         (3,291)   1,193    (8,504)    3,322
    Interest and other income (expense),
     net                                     841     (238)    1,539      (298)
    Provision for income taxes              (160)    (417)     (409)     (623)
    Net profit (loss)                    $(2,610)    $538   $(7,374)   $2,401
    Net profit (loss) per share
         - basic                          $(0.04)   $0.01    $(0.12)    $0.04
         - diluted                        $(0.04)   $0.01    $(0.12)    $0.04
    Shares used in computing net profit
     (loss) per share
         - basic                          62,966   61,484    62,743    61,367
         - diluted                        62,966   62,953    62,743    62,939

    ALIGN TECHNOLOGY, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (unaudited)
                                            June 30, 2006  December 31, 2005
    (in thousands)
                   ASSETS
    Current assets:
    Cash and cash equivalents                   $57,486        $74,219
    Restricted cash                                 159            150
    Marketable securities, short-term            12,268             --
    Accounts receivable, net                     32,790         29,305
    Inventories, net                              2,733          2,930
    Other current assets                          6,487          4,982
       Total current assets                     111,923        111,586
    Property and equipment, net                  26,610         26,427
    Other long-term assets                        3,224          4,097
         Total assets                          $141,757       $142,110
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
    Accounts payable                             $4,813         $2,489
    Accrued liabilities                          26,600         29,372
    Deferred revenue                             13,250         16,747
       Total current liabilities                 44,663         48,608
    Other long term liabilities                     379             64
        Total liabilities                        45,042         48,672
    Total stockholders' equity                   96,715         93,438
          Total liabilities and
           stockholders' equity                $141,757       $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 management 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.
    (in thousands, except per share data)
                             Three Months Ended      Three Months Ended
                               June 30, 2006            June 30, 2005
                                 Adjust-                    Adjust-
                        Reported ments(a) Non GAAP Reported ments(a) Non GAAP
    Revenues             $53,221     $--    $53,221  $53,940  $--     $53,940
    Cost of revenues      16,492    (181)    16,311   16,620   --      16,620
    Gross profit          36,729     181     36,910   37,320   --      37,320
    Operating expenses:
    Sales and marketing   20,641    (732)    19,909   21,049   --      21,049
    General and
     administrative       15,354  (1,029)    14,325    9,723   --       9,723
    Research and
     development           4,025    (324)     3,701    5,355   --       5,355
    Total operating
     expenses             40,020  (2,085)    37,935   36,127   --      36,127

    Profit (Loss) from
     operations           (3,291)  2,266     (1,025)   1,193   --       1,193
    Interest and other
     income (expense),
     net                     841      --        841     (238)  --        (238)
    Provision for income
     taxes                  (160)     --       (160)    (417)  --        (417)
    Net profit (loss)    $(2,610) $2,266      $(344)    $538  $--         $538
    Net profit (loss)
     per share
         - basic          $(0.04)            $(0.01)   $0.01             $0.01
         - diluted        $(0.04)            $(0.01)   $0.01             $0.01
    Shares used in
     computing net
     profit (loss) per
     share
         - basic          62,966             62,966   61,484            61,484
         - diluted        62,966             62,966   62,953            62,953

    (a)   Non cash stock-based compensation included in cost of sales and
    operating expenses.

    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 management 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.
    (in thousands, except per share data)
                              Six Months Ended          Six Months Ended
                               June 30, 2006              June 30, 2005
                                   Adjust-    Non              Adjust-   Non
                         Reported  ments(a)   GAAP   Reported  ments(a) GAAP
    Revenues             $102,129     $--  $102,129  $105,095   $--  $105,095
    Cost of revenues       30,789    (329)   30,460    32,098    --    32,098
    Gross profit           71,340     329    71,669    72,997    --    72,997
    Operating expenses:
    Sales and marketing    40,707  (1,411)   39,296    40,183    (6)   40,177
    General and
     administrative        30,418  (2,117)   28,301    19,234    (6)   19,228
    Research and
     development            8,719    (614)    8,105    10,258    --    10,258
    Total operating
     expenses              79,844  (4,142)   75,702    69,675   (12)   69,663

    Profit (Loss) from
     operations            (8,504)  4,471    (4,033)    3,322    12     3,334
    Interest and other
     income (expense),
     net                    1,539      --     1,539      (298)   --      (298)
    Provision for income
     taxes                   (409)     --      (409)     (623)   --      (623)
    Net profit (loss)     $(7,374) $4,471   $(2,903)   $2,401   $12    $2,413
    Net profit (loss)
     per share
         - basic           $(0.12)           $(0.05)    $0.04           $0.04
         - diluted         $(0.12)           $(0.05)    $0.04           $0.04
    Shares used in
     computing net
     profit(loss) per
     share
         - basic           62,743            62,743    61,367          61,367
         - diluted         62,743            62,743    62,939          62,939

    (a)   Non cash stock-based compensation included in cost of sales and
    operating expenses

    ALIGN TECHNOLOGY, INC.
    FACT SHEET
    The following information highlights business metrics for Align's second
    quarter of 2006. For prior quarter information, please refer to the
    Investor Relations website at http://investor.aligntech.com.
    (rounded to the nearest hundred, except in utilization)
    Cases Delivered                      2Q 2006
    U.S. Orthodontists - Full             10,400
    U.S. Orthodontists - Invisalign
     Express                               3,700
    U.S. GP dentists - Full               13,000
    U.S. GP dentists - Invisalign Express  6,500
    International - Full                   4,800
    International - Invisalign Express       200
    Total Cases Delivered                 38,700
    Doctors Trained                      2Q 2006      Cumulative
                                                        Total
    U.S. Orthodontists                        --         7,900
    U.S. GP dentists                       1,000        19,900
    International                            300        10,200
    Total Doctors Trained                  1,300        38,000
    Total Submitting Doctors             2Q 2006
    U.S. Orthodontists                     2,900
    U.S. GP dentists                       7,800
    International                          1,800
    Total Submitting Doctors              12,500
    Doctor Utilization*                  2Q 2006
    U.S. Orthodontists                      4.95
    U.S. GP dentists                        2.58
    International                           2.86
    * Doctor Utilization = # of cases / # of doctors cases are shipped to

    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

SOURCE Align Technology, Inc.

Barbara Domingo, Investor Relations of Align Technology, Inc., +1-408-470-1000, or
investorinfo@aligntech.com; or Shannon Henderson of Ethos Communications, Inc.,
+1-678-417-1767, or shannon@ethoscommunication.com, for Align Technology, Inc.
http://www.prnewswire.com

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

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