July 19, 2012

Align Technology Announces Second Quarter Fiscal Year 2012 Results


  • Q2 net revenues of $145.6 million increased 7.8% sequentially and 21.3% year-over-year
  • Q2 Invisalign clear aligner revenue of $133.7 million increased 8.4% sequentially and 17.6% year-over-year
  • Q2 Invisalign case shipments of 95.3 thousand increased 11.7% sequentially and 25.3% year-over-year
  • Q2 scanner and CAD/CAM services revenue of $11.9 million increased 1.8% sequentially
  • Q2 diluted EPS was $0.34

SAN JOSE, Calif., July 19, 2012 (GLOBE NEWSWIRE) -- Align Technology, Inc. (Nasdaq:ALGN) today reported financial results for the second quarter of fiscal 2012 ended June 30, 2012.

Total net revenues for the second quarter of fiscal 2012 (Q2 12) were $145.6 million. This is compared to $135.1 million reported in the first quarter of 2012 (Q1 12) and compared to $120.1 million reported in the second quarter of 2011 (Q2 11). Q2 12 Invisalign clear aligner revenue of $133.7 million increased 8.4% sequentially and 17.6% year-over-year. Q2 12 Invisalign clear aligner case shipments of 95.3 thousand increased 11.7% sequentially and 25.3% year-over-year. Q2 12 scanner and CAD/CAM services revenue was $11.9 million, compared to $11.8 million in Q1 12 and compared to $6.4 million in Q2 11. Q2 11 includes two months of scanner and CAD/CAM services financial results from the acquisition of Cadent Holdings, Inc. which closed on April 29, 2011.

"The second quarter was another great one for Align and I'm pleased to report strong results for revenue, operating margin and EPS — all better than our outlook," said Thomas M. Prescott, Align president and CEO. "During the quarter strong Invisalign volume grew across all products and customer channels reflecting continued increased Invisalign utilization." Prescott continued, "Our scanner business in North America also grew nicely this quarter and continues to exceed our expectations, while scanner sales in Europe remain challenging and our disappointing results there continue."

Net profit for Q2 12 was $28.5 million, or $0.34 per diluted share. This is compared to net profit of $21.0 million, or $0.26 per diluted share in Q1 12 and net profit of $11.2 million, or $0.14 per diluted share in Q2 11. Net profit for Q2 12 includes pre-tax acquisition and integration related costs of $0.3 million, pre-tax amortization of acquired intangible assets of $1.1 million, pre-tax severance and benefit costs of $0.2 million with a total income tax-related adjustment of $1.5 million. Net profit for Q1 12 includes pre-tax acquisition and integration related costs of $0.7 million, pre-tax amortization of acquired intangible assets of $1.1 million, pre-tax severance and benefit costs of $0.5 million with a total income tax-related adjustment of $1.2 million. Net profit for Q2 11 includes pre-tax acquisition and integration related costs of $5.9 million, pre-tax amortization of acquired intangible assets of $0.8 million, with a total income tax-related adjustment of $1.6 million.

To supplement our consolidated financial statements, we use the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP operating expense, non-GAAP operating margin, non-GAAP net profit, non-GAAP earnings per share, EBITDA and adjusted EBITDA. Detailed reconciliations between GAAP and non-GAAP information are contained in the tables following the financial tables of this release.

Non-GAAP net profit for Q2 12 was $28.6 million, or $0.34 per diluted share. This is compared to non-GAAP net profit of $22.1 million, or $0.27 per diluted share in Q1 12 and non-GAAP net profit of $16.3 million, or $0.20 per diluted share in Q2 11.

Q2 12 Operating Results ($M)      
Key GAAP Operating Results Q2 12 Q1 12 Q2 11
Revenue  $ 145.6  $ 135.1  $ 120.1
- Clear Aligner  $ 133.7  $ 123.3  $ 113.6
- Scanner and CAD/CAM Services  $ 11.9  $ 11.8  $ 6.4
       
Gross Margin 74.7% 74.6% 75.9%
- Clear Aligner 79.0% 79.0% 78.4%
- Scanner and CAD/CAM Services 26.6% 28.7% 32.5%
       
Operating Expense  $ 72.8  $ 72.8  $ 74.5
Operating Margin 24.7% 20.7% 13.8%
Net Profit  $ 28.5  $ 21.0  $ 11.2
Earnings Per Diluted Share (EPS)  $ 0.34  $ 0.26  $ 0.14
       
Key Non-GAAP Operating Results Q2 12 Q1 12 Q2 11
Non-GAAP Gross Margin 75.0% 75.1% 76.1%
- Non-GAAP Clear Aligner 79.0% 79.0% 78.4%
- Non-GAAP Scanner & CAD/CAM Services 30.3% 34.6% 36.2%
       
Non-GAAP Operating Expense  $ 71.6  $ 71.1  $ 68.1
Non-GAAP Operating Margin 25.8% 22.4% 19.4%
Non-GAAP Net Profit  $ 28.6  $ 22.1  $ 16.3
Non-GAAP Earnings Per Diluted Share (EPS)  $ 0.34  $ 0.27  $ 0.20
EBITDA  $ 40.8  $ 31.1  $ 20.9
Adjusted EBITDA  $ 41.3  $ 32.2  $ 26.8

Total stock-based compensation expense included in Q2 12 was $5.3 million compared to $4.9 million in Q1 12 and $5.0 million in Q2 11. Stock based compensation expense included in GAAP gross margin in Q2 12, Q1 12 and Q2 11 was $0.5 million. Stock-based compensation expense included in GAAP operating expense in Q2 12 was $4.8 million compared to $4.4 million in Q1 12 and $4.5 million in Q2 11. 

Liquidity and Capital Resources

As of June 30, 2012, Align Technology had $304.0 million in cash, cash equivalents, and marketable securities compared to $248.1 million as of December 31, 2011.

Q3 Fiscal 2012 Business Outlook

For the third quarter of fiscal 2012 (Q3 12), Align Technology expects net revenues to be in a range of $136.8 million to $140.8 million. Invisalign clear aligner case shipments for Q3 12 are expected to be in a range of 94.8 to 96.3 thousand cases, which reflect a year-over-year increase of 19.5% to 21.3%. GAAP earnings per diluted share for Q3 12 is expected to be in a range of $0.26 to $0.28. Non-GAAP earnings per diluted share for Q3 12 is expected to be in a range of $0.27 to $0.29. A more comprehensive business outlook is available following the financial tables of this release.

Commenting on Align's Q3 12 business outlook, Ken Arola, Align CFO said, "Total net revenues for the third quarter of 2012 will be impacted by lower Invisalign ASPs resulting from revenue deferrals associated with the Invisalign Teen/Vivera Retainer promotion, Advantage volume rebates, and headwinds from foreign exchange rates. Our Q3 12 outlook for Invisalign case shipment growth of 19.5% to 21.3% year-over-year is an important metric pointing to the continued progress and strength of the business."

Align Web Cast and Conference Call

Align Technology will host a conference call today, July 19, 2012 at 4:30 p.m. ET, 1:30 p.m. PT, to review its second quarter fiscal 2012 results, discuss future operating trends and business outlook. The conference call will also be web cast live via the Internet. To access the web cast, go to the "Events & Presentations" section under Company Information on Align Technology's Investor Relations web site at http://investor.aligntech.com. To access the conference call, please dial 201-689-8261 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 for approximately 12 months. Additionally, a telephonic replay of the call can be accessed by dialing 877-660-6853 with account number 292 followed by # and conference number 396846 followed by #. The replay must 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. ET on July 26, 2012.

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 teens. Align Technology was founded in March 1997 and received FDA clearance to market Invisalign in 1998.The Invisalign product family includes Invisalign, Invisalign Teen, Invisalign Assist, Invisalign Express 10, Invisalign Express 5, and Vivera Retainers. To learn more about Invisalign or to find an Invisalign trained doctor in your area, please visit www.invisalign.com.

Cadent Holdings, Inc. is a subsidiary of Align Technology and is a leading provider of 3D digital scanning solutions for orthodontics and dentistry. The Cadent family of products includes iTero and iOC scanning systems, OrthoCAD iCast, OrthoCAD iQ and OrthoCAD iRecord. For additional information, please visit www.cadentinc.com.

About non-GAAP Financial Measures

To supplement our consolidated financial statements and our business outlook, we use the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP operating expenses, non-GAAP profit from operations, non-GAAP net profit and non-GAAP earnings per share, which exclude, as applicable, acquisition and integration related costs, amortization of acquired intangible assets, severance and benefit costs, and any related income tax-related adjustments, and EBITDA and adjusted EBITDA. The presentation of this financial information is not intended to be considered in isolation, or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our "core operating performance". Management believes that "core operating performance" represents Align's performance in the ordinary, ongoing and customary course of its operations. Accordingly, management excludes from "core operating performance" certain expenditures and other items that may not be indicative of our operating performance including discrete cash and non-cash charges that are infrequent or one-time in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal evaluation of period-to-period comparisons. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) they are provided to and used by our institutional investors and the analyst community to facilitate comparisons with prior and subsequent reporting periods. A reconciliation of the GAAP and non-GAAP financial measures for the quarter and year and a more detailed explanation of each non-GAAP financial measure and its uses are provided in the footnotes to the table captioned "Reconciliation of GAAP to non-GAAP Key Financial Metrics" and "Business Outlook Summary" included at the end of this release. 

Forward-Looking Statement

This news release, including the tables below, contains forward-looking statements, including statements regarding certain business metrics for the second quarter of 2012, including anticipated net revenue, gross margin, operating expense, operating income, earnings per share, case shipments and cash. Forward-looking statements contained in this news release and the tables below 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, difficulties predicting customer and consumer purchasing behavior, the willingness and ability of our customers to maintain and/or increase utilization in sufficient numbers, the possibility that the development and release of new products does not proceed in accordance with the anticipated timeline, the possibility that the market for the sale of these new products may not develop as expected, the risks relating to Align's ability to sustain or increase profitability or revenue growth in future periods while controlling expenses, growth related risks, including capacity constraints and pressure on our internal systems and personnel, our ability to successfully achieve the anticipated benefits from the acquisition of Cadent Holdings, Inc., continued customer demand for our existing and new products, changes in consumer spending habits as a result of, among other things, prevailing economic conditions, levels of employment, salaries and wages and consumer confidence, the timing of case submissions from our doctors within a quarter, acceptance of our products by consumers and dental professionals, foreign operational, political and other risks relating to Align's international manufacturing operations, Align's ability to protect its intellectual property rights, continued compliance with regulatory requirements, competition from existing and new competitors, Align's ability to develop and successfully introduce new products and product enhancements, and the loss of key personnel. 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, 2011, which was filed with the Securities and Exchange Commission on February 29, 2012. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

ALIGN TECHNOLOGY, INC.        
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
(in thousands, except per share data)         
         
  Three Months Ended Six Months Ended
  June 30,
2012
June 30,
2011
June 30,
2012
June 30,
2011
         
Net revenues  $ 145,626  120,086  $ 280,705  224,942
         
Cost of revenues   36,826  28,949  71,145  51,579
         
Gross profit  108,800  91,137  209,560  173,363
         
Operating expenses:        
Sales and marketing  39,087  38,586  77,804  71,407
General and administrative  22,152  26,094  44,778  45,086
Research and development  10,680  9,270  21,206  18,660
Amortization of acquired intangible assets  869  592  1,754  592
Total operating expenses  72,788  74,542  145,542  135,745
         
Profit from operations  36,012  16,595  64,018  37,618
         
Interest and other income (expense), net  541  (306)  (271)  (217)
         
Profit before income taxes  36,553  16,289  63,747  37,401
         
Provision for income taxes  8,061  5,127  14,271  10,398
         
Net profit   $ 28,492  $ 11,162  $ 49,476  $ 27,003
         
Net profit per share        
- basic  $ 0.35  $ 0.14  $ 0.62  $ 0.35
- diluted  $ 0.34  $ 0.14  $ 0.60  $ 0.34
         
Shares used in computing net profit per share        
- basic  80,384  77,888  79,810  77,369
- diluted  82,954  80,321  82,446  79,903
     
     
ALIGN TECHNOLOGY, INC.    
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS   
(in thousands)     
     
  June 30,
2012
December 31,
2011
ASSETS    
     
Current assets:    
Cash and cash equivalents  $ 262,799  $ 240,675
Restricted cash  1,178  4,026
Marketable securities, short-term  20,752  7,395
Accounts receivable, net  102,149  91,537
Inventories  14,623  9,402
Other current assets  33,634  31,781
Total current assets  435,135  384,816
     
Marketable securities, long-term  20,475  -- 
Property and equipment, net  72,207  53,965
Goodwill and intangible assets, net  183,728  185,405
Deferred tax asset  29,853  22,337
Other long-term assets  2,765  2,741
     
Total assets  $ 744,163  $ 649,264
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable  $ 15,226  $ 19,265
Accrued liabilities  69,207  76,600
Deferred revenue  59,403  52,252
Total current liabilities  143,836  148,117
     
Other long term liabilities  14,032  10,366
     
Total liabilities   157,868  158,483
     
Total stockholders' equity  586,295  490,781
     
Total liabilities and stockholders' equity   $ 744,163  $ 649,264
       
       
ALIGN TECHNOLOGY, INC.      
RECONCILIATION OF GAAP TO NON-GAAP KEY FINANCIAL METRICS      
       
       
Reconciliation of GAAP to Non-GAAP Gross Profit      
(in thousands)       
   Three Months Ended 
  June 30,
2012
March 31,
2012
June 30,
2011
       
GAAP Gross profit  $108,800  $100,760  $91,137
Acquisition and integration costs related to cost of revenues (1)  72  134  57
Amortization of acquired intangible assets related to cost of revenues (2)  232  261  183
Severance and benefit costs related to cost of revenues(3)  135  300  -- 
Non-GAAP Gross profit  $109,239  $101,455  $91,377
       
       
Reconciliation of GAAP to Non-GAAP Gross Profit Scanner and CAD/CAM Services      
(in thousands)       
   Three Months Ended 
  June 30,
2012
March 31,
2012
June 30,
2011
       
GAAP Scanner and CAD/CAM Services gross profit  $ 3,183  $ 3,371  $ 2,090
Acquisition and integration costs related to cost of revenues (1)  72  134  57
Amortization of acquired intangible assets related to cost of revenues (2)  232  261  183
Severance and benefit costs related to cost of revenues(3)  135  300  -- 
Non-GAAP Gross profit  $ 3,622  $ 4,066  $ 2,330
       
       
       
Reconciliation of GAAP to Non-GAAP Operating Expenses      
(in thousands)       
   Three Months Ended 
  June 30,
2012
March 31,
2012
June 30,
2011
       
GAAP Operating expenses  $ 72,788  $ 72,754  $74,542
Acquisition and integration costs related to operating expenses (1)  (261)  (570)  (5,850)
Amortization of acquired intangible assets related to operating expenses (2)  (869)  (885)  (592)
Severance and benefit costs related to operating expenses (3)  (49)  (152)  --
Non-GAAP Operating expenses  $ 71,609  $ 71,147  $68,100
       
Reconciliation of GAAP to Non-GAAP Profit from Operations      
(in thousands)      
   Three Months Ended 
  June 30,
2012
March 31,
2012
June 30,
2011
       
GAAP Profit from operations  $ 36,012  $ 28,006  $16,595
Acquisition and integration costs (1)  333  704  5,907
Amortization of acquired intangible assets (2)  1,101  1,146  775
Severance and benefit costs (3)  184  452  -- 
Non-GAAP Profit from operations  $ 37,630  $ 30,308  $23,277
       
Reconciliation of GAAP to Non-GAAP Net Profit       
(in thousands, except per share amounts)       
   Three Months Ended 
  June 30,
2012
March 31,
2012
June 30,
2011
       
GAAP Net profit   $ 28,492  $ 20,984  $11,162
Acquisition and integration costs (1)  333  704  5,907
Amortization of acquired intangible assets (2)  1,101  1,146  775
Severance and benefit costs (3)  184  452  -- 
Income tax-related adjustments (4)  (1,512)  (1,164)  (1,565)
Non-GAAP Net profit   $ 28,598  $ 22,122  $16,279
       
Diluted Net profit per share:      
GAAP  $ 0.34  $ 0.26  $ 0.14
Non-GAAP  $ 0.34  $ 0.27  $ 0.20
       
Shares used in computing diluted GAAP Net profit per share  82,954  81,856  80,321
Shares used in computing diluted Non-GAAP Net profit per share  82,954  81,856  80,321
       
Reconciliation of GAAP Net Profit to EBITDA Adjusted EBITDA      
(in thousands)       
   Three Months Ended 
  June 30,
2012
March 31,
2012
June 30,
2011
       
GAAP Net profit   $ 28,492  $ 20,984  $11,162
Provision for income taxes  8,061  6,210  5,127
Depreciation and amortization (5)  4,267  3,899  4,605
EBITDA (6)  40,820  31,093  20,894
       
Adjustments or charges:      
Acquisition and integration related costs (1)  333  704  5,907
Severance and benefit costs (3)  184  452  -- 
EBITDA after adjustments (6)  $ 41,337  $ 32,249  $26,801

(1) Acquisition costs and integration related. We have incurred acquisition-related and other expenses which include legal, banker, accounting and other advisory fees of third parties, retention bonuses, integration and professional fees. We do not engage in acquisitions in the ordinary course of business. We believe that it is important to understand these charges; however, we do not believe that these charges are indicative of future operating results. We believe that eliminating these expenses from our non-GAAP measures is useful because we generally would not have otherwise incurred such expenses in the periods presented as part of our continuing operations.

(2) Amortization of acquired intangible assets. When conducting internal development of intangible assets (including developed technology, customer relationships, trademarks, etc.), GAAP accounting rules require that we expense the costs as incurred. In the case of acquired businesses, however, we are required to allocate a portion of the purchase price to the accounting value assigned to intangible assets acquired and amortize this amount over the estimated useful lives of the acquired intangibles. The acquired company, in most cases, has itself previously expensed the costs incurred to develop the acquired intangible assets, and the purchase price allocated to these assets is not necessarily reflective of the cost we would incur in developing the intangible asset. We eliminate these amortization charges for our non-GAAP operating results to provide better comparability of pre and post-acquisition operating results and comparability to results of businesses utilizing internally developed intangible assets.

(3) Severance and benefits costs. These costs are related to the closure of our New Jersey operations and will be realized through the first three quarters of 2012. We have engaged in various restructuring and exit activities in 2011 and 2009 that have resulted in costs associated with severance and benefits. Such activity has been a discrete event based on a unique set of business objectives or circumstances, and each has differed from the others in terms of its operational implementation, business impact and scope. We do not engage in restructuring and/or exit activities in the ordinary course of business. We believe that it is important to understand these charges and, we believe that investors benefit from excluding these charges from our operating results to facilitate a more meaningful evaluation of current operating performance and comparisons to past operating performance.

(4) Income tax-related adjustments. Non-GAAP financial information for the quarter is adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP income. This rate is based on our estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating the non-GAAP financial measures presented above. Our estimated tax rate on non-GAAP income is determined annually and may be re-calculated during the year to take into account events or trends that we believe materially impact the estimated annual rate.

(5) Includes the amortization of acquired intangible assets.

(6) EBITDA and adjusted EBITDA. We use EBITDA as a performance measure for benchmarking against our peers and competitors. We believe EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties to evaluate companies in the medical technology industry. We also use adjusted EBITDA which excludes certain special or non-recurring expenses, net of certain special or non-recurring benefits, detailed in the reconciliation tables that accompany this release, as an internal measure of business operating performance. We believe such financial measures provide a meaningful perspective of the underlying operating performance to our current business. EBITDA and adjusted EBITDA are not recognized terms under GAAP. Because all companies do not calculate EBITDA and similarly titled financial measures in the same way, those measures as used by other companies may not be consistent with the way we calculate such measures and should not be considered as alternative measures of operating or net profit.

 
ALIGN TECHNOLOGY
Q2 2012 EARNINGS RELEASE ADDITIONAL DATA
REVENUE PERFORMANCE AND CLEAR ALIGNER METRICS
(in thousands except per share data)
               
  Q1 Q2 Q3 Q4 FISCAL Q1 Q2
  2011 2011 2011 2011 2011 2012 2012
Invisalign Clear Aligner Revenues by Geography:              
North America  $ 74,258  $ 79,755  $ 79,678  $ 81,789  $ 315,480  $ 86,871  $ 92,997
North American Orthodontists  35,017  37,112  37,450  37,939  147,518  41,688  43,942
North American GP Dentists  39,241  42,643  42,228  43,850  167,962  45,183  49,055
International   25,179  27,898  28,346  30,054  111,477  29,700  32,883
Teen Deferred Revenue Release  --   --   --   --   --   --   -- 
Non-case*  5,419  5,994  6,254  7,089  24,756  6,757  7,789
Total Clear Aligner Revenue  $ 104,856  $ 113,647  $ 114,278  $ 118,932  $ 451,713  $ 123,328  $ 133,669
YoY % growth 16.4% 5.0% 19.1% 28.0% 16.7% 17.6% 17.6%
QoQ % growth 12.9% 8.4% 0.6% 4.1%   3.7% 8.4%
*includes Invisalign training, ancillary products, and retainers  
               
Invisalign Clear Aligner Revenues by Product:              
Invisalign Full  $ 71,128  $ 76,636  $ 75,158  $ 79,469  $ 302,391  $ 82,424  $ 88,617
Invisalign Express/Lite  10,051  11,095  10,498  10,865  42,509  11,806  13,632
Invisalign Teen  11,876  12,817  15,393  14,443  54,529  15,148  16,380
Invisalign Assist  6,382  7,105  6,974  7,066  27,527  7,193  7,251
Non-case*  5,419  5,994  6,255  7,089  24,757  6,757  7,789
Total Clear Aligner Revenue  $ 104,856  $ 113,647  $ 114,278  $ 118,932  $ 451,713  $ 123,328  $ 133,669
               
Average Invisalign Selling Price (ASP), as billed:              
Total Worldwide Blended ASP $1,395 $1,410 $1,385 $1,360 $1,385 $1,370 $1,335
International ASP $1,555 $1,660 $1,560 $1,530 $1,575 $1,485 $1,455
               
Invisalign Clear Aligner Cases Shipped by Geography:              
North America 55,180 59,230 61,190 62,990 238,585 65,280 72,685
North American Orthodontists 26,890 28,520 30,070 29,890 115,370 32,235 35,420
North American GP Dentists 28,290 30,710 31,120 33,100 123,215 33,045 37,265
International  16,190 16,790 18,170 19,600 70,750 19,985 22,595
Total Cases Shipped 71,370 76,020 79,360 82,590 309,335 85,265 95,280
               
Invisalign Clear Aligner Cases Shipped by Product:              
Invisalign Full 48,110 51,100 51,360 55,700 206,270 57,145 62,510
Invisalign Express/Lite 10,500 11,310 11,020 11,385 44,215 12,855 15,300
Invisalign Teen 7,930 8,615 11,730 9,810 38,080 9,935 11,860
Invisalign Assist 4,830 4,995 5,250 5,695 20,770 5,330 5,610
Total Cases Shipped 71,370 76,020 79,360 82,590 309,335 85,265 95,280
               
Number of Invisalign Doctors Cases Shipped to:              
North American Orthodontists 4,150 4,160 4,260 4,280 5,280 4,460 4,575
North American GP Dentists 10,250 10,665 11,040 10,875 17,305 11,365 12,120
International  4,150 4,260 4,590 4,795 7,625 5,085 5,480
Total Doctors Cases were Shipped to Worldwide 18,550 19,085 19,890 19,950 30,210 20,910 22,175
               
Invisalign Doctor Utilization Rates*:              
North American Orthodontists 6.5 6.9 7.1 7.0 21.9 7.2 7.7
North American GP Dentists 2.8 2.9 2.8 3.0 7.1 2.9 3.1
International  3.9 3.9 4.0 4.1 9.3 3.9 4.1
Total Utilization Rates 3.9 4.0 4.0 4.1 10.2 4.1 4.3
* # of cases shipped/# of doctors to whom cases were shipped  
               
Number of Invisalign Doctors Trained:              
North American Orthodontists 75 80 100 100 355 90 95
North American GP Dentists 715 765 630 855 2,960 720 995
International  165 520 855 970 2,510 715 965
Total Doctors Trained Worldwide 955 1,365 1,585 1,925 5,825 1,525 2,055
Total to Date Worldwide 64,780 66,145 67,730 69,655 69,655 71,180 73,235
               
Scanner and CAD/CAM Services Revenue:              
North America Scanner and CAD/CAM Services  $ --   $ 5,241  $ 9,098  $ 9,611  $ 23,950  $ 11,120  $ 11,752
International Scanner and CAD/CAM Services  --   1,198  2,518  362  4,078  631  205
Total Scanner and CAD/CAM Revenue  $ --   $ 6,439  $ 11,616  $ 9,973  $ 28,028  $ 11,751  $ 11,957
               
Scanner Revenue  $ --   $ 2,735  $ 5,420  $ 5,228  $ 13,383  $ 5,361  $ 6,032
CAD/CAM Services Revenue  --   3,704  6,196  4,745  14,645  6,390  5,925
Total Scanner and CAD/CAM Revenue  $ --   $ 6,439  $ 11,616  $ 9,973  $ 28,028  $ 11,751  $ 11,957
               
Total Revenue by Geography:              
Total North America Revenue  $ 74,258  $ 84,996  $ 88,776  $ 91,400  $ 339,430  $ 97,991  $ 104,749
Total International Revenue  25,179  29,096  30,864  30,416  115,555  30,331  33,088
Total Non-case Revenue  5,419  5,994  6,254  7,089  24,756  6,757  7,789
Total Worldwide Revenue  $ 104,856  $ 120,086  $ 125,894  $ 128,905  $ 479,741  $ 135,079  $ 145,626
YoY % growth 16.4% 11.0% 31.2% 38.8% 23.9% 28.8% 21.3%
QoQ % growth 12.9% 14.5% 4.8% 2.4%   4.8% 7.8%
               
Note: Historical public data may differ due to rounding. Additionally, rounding may effect totals.
         
         
ALIGN TECHNOLOGY, INC.        
BUSINESS OUTLOOK SUMMARY        
(unaudited)        
         
The outlook figures provided below and elsewhere in this press release are approximate in nature since Align's business outlook is difficult to predict. Align's future performance involves numerous risks and uncertainties and the company's results could differ materially from the outlook provided. Some of the factors that could affect Align's future financial performance and business outlook are set forth under "Forward Looking Information" above in this press release. 
         
Financials         
(in millions, except per share amounts and percentages)      
         
  Q3 2012
         
  GAAP Adjustment (a) Non-GAAP
         
Net Revenue $136.8 - 140.8     $136.8 - 140.8
         
Gross Profit $100.4 - $104.0 $0.3   $100.7 - 104.3
         
Gross Margin 73.4% - 73.8%      73.6% - 74.1%
         
Operating Expenses $71.7 - $72.4 $1.1   $70.6 - $71.3
         
Operating Margin 21.0% - 22.4%     22.0% - 23.5%
         
Net Income per Diluted Share $0.26 - $0.28 $0.01   $0.27 - $0.29
         
Stock Based Compensation Expense:        
Cost of Revenues $0.5     $0.5
Operating Expenses $5.1     $5.1
Total Stock Based Compensation Expense $5.6     $5.6
         
(a) Includes scanner and CAD/CAM services amortization of acquired intangibles assets, severance and benefit costs, and integration costs.
         
Business Metrics:        
  Q3 2012      
Invisalign Case Shipments 94.8K - 96.3K      
Cash, Cash Equivalents, and Marketable Securities $345M - $355M *      
Capex $6.5M - $8.0M      
Depreciation & Amortization $4.4M - $4.8M      
Diluted Shares Outstanding 83.5M*      
         
* Excludes any stock repurchases during the quarter
CONTACT: Investor Relations Contact

         Shirley Stacy

         Align Technology, Inc.

         (408) 470-1150

         sstacy@aligntech.com



         Press Contact

         Shannon Mangum Henderson

         Ethos Communication, Inc.

         (678) 261-7803

         align@ethoscommunication.com
Source: Align Technology

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