January 28, 2016

Align Technology Announces Fourth Quarter and 2015 Results


SAN JOSE, CA -- (Marketwired) -- 01/28/16 -- Align Technology, Inc. (NASDAQ: ALGN)

  • Q4 revenues of $230.3 million, up 15.9% year-over-year, and diluted EPS of $0.60
  • Q4 Clear Aligner shipments of 160.4 thousand cases, up 26.4% year-over-year
  • Q4 international Clear Aligner shipments, up 34.8% year-over-year and 33.7% of total worldwide case shipments
  • 2015 revenues of $845.5 million, up 11.0% year-over-year, and diluted EPS of $1.77
  • 2015 Clear Aligner shipments of 583.2 thousand cases, up 22.0% year-over-year

Align Technology, Inc. (NASDAQ: ALGN) today reported financial results for the fourth quarter and year ended December 31, 2015. Clear Aligner case shipments in the fourth quarter of 2015 (Q4'15) were 160.4 thousand, a 26.4% increase year-over-year. For Q4'15, revenues were $230.3 million, a 15.9% increase year-over-year, and net profit was $48.9 million, or $0.60 per diluted share, up $0.12 over the prior year.

Clear Aligner case shipments in 2015 were 583.2 thousand, a 22.0% increase year-over-year. For 2015, revenues were $845.5 million, an 11.0% increase year-over-year and net profit was $144.0 million, or $1.77 per diluted share, flat compared with the prior year.

"The fourth quarter was a strong finish to another record year for Align," said Joe Hogan, Align Technology President and CEO. "Better than expected revenue and earnings were driven by record Invisalign volume, which was up 26% year-over-year. These results reflect strong growth across our customer base and geographies -- from both an increase in the number of submitters as well as cases per doctor. In addition, strong scanner revenue growth of 33% year-over-year exceeded expectations as shipments of the new iTero Element began ramping this quarter resulting in record scanner shipments."

Continued Hogan, "For the full year 2015, over half a million patients started Orthodontic treatment with Invisalign, an increase of 22% compared to 13% last year. Our increased growth rate reflects continued adoption and utilization from international doctors and a solid rebound in North America, both driven by investments in territory coverage and sales and marketing programs, including clinical education. Product and technology innovation is also a key growth driver for the Company, and as a result, in 2015 we continued to see increased clinical confidence in Invisalign treatment for our customers worldwide."

GAAP Summary Financial Comparisons
Fourth Quarter Fiscal 2015

Q4'15 Q3'15 Q4'14 Q/Q Change Y/Y Change
Clear Aligner Shipments 160,400 147,485 126,905 +8.8 % +26.4 %
Net Revenues $ 230.3M $ 207.6M $ 198.6M +10.9 % +15.9 %
Clear Aligner $ 214.0M $ 198.3M $ 186.4M +7.9 % +14.8 %
Scanner & Services $ 16.2M $ 9.3M $ 12.2M +73.7 % +33.4 %
Net Profit $ 48.9M $ 27.6M $ 39.5M +77.0 % +23.6 %
EPS $ 0.60 $ 0.34 $ 0.48 +$0.26 +$0.12

Fiscal 2015

2015 2014 Y/Y Change
Clear Aligner Shipments 583,235 478,000 +22.0 %
Net Revenues $ 845.5M $ 761.7M +11.0 %
Clear Aligner $ 800.2M $ 712.5M +12.3 %
Scanner & Services $ 45.3M $ 49.1M (7.7 )%
Net Profit $ 144.0M $ 145.8M (1.2 )%
EPS $ 1.77 $ 1.77 $ 0.00

Note: Changes and percentages are based on actual values and may effect totals due to rounding

As of December 31, 2015, Align had $678.7 million in cash, cash equivalents and marketable securities compared to $602.6 million as of December 31, 2014. We repurchased approximately 0.2 million shares of stock for $11.2 million in Q4'15 and 1.7 million shares for $101.8 million in 2015. These repurchases were collectively part of a three-year, $300 million stock repurchase program announced in April 2014, of which there is approximately $100 million remaining for repurchases through April 2017.

Additional Aligners at No Charge Effective July 18, 2015
Align implemented its new Additional Aligners policy on July 18, 2015 in which the Company no longer distinguishes between mid-course corrections and case refinements providing doctors the ability to order additional aligners to address either treatment need at no charge, subject to certain requirements. These changes were effective for all new Invisalign Full, Teen, and Assist treatments shipped worldwide after July 18, 2015, as well as any cases that were open as of this date. While this policy change was largely immaterial to the Company's cash flows, it did impact the timing at which the Company recognizes revenue. The Company estimates Q4'15 and 2015 reported revenues and pre tax income were lower by approximately $7.0 million and $14 million, respectively due to this change.

Q1 2016 Business Outlook
For the first quarter of 2016 (Q1'16), Align provides the following guidance:

  • Clear Aligner case shipments in the range of 161.3 thousand to 163.7 thousand, up approximately 23% to 25% over the same period a year ago.
  • Net revenues in the range of $232.5 million to $236.6 million.
  • Diluted EPS in the range of $0.37 to $0.40.

Align Web Cast and Conference Call
Align will host a conference call today, January 28, 2016 at 4:30 p.m. ET, 1:30 p.m. PT, to review its fourth quarter and 2015 results, discuss future operating trends and the 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'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. An archived audio 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 conference number 13627358 followed by #. For international callers, please dial 201-612-7415 and use the same conference number referenced above. The telephonic replay will be available through 5:30 p.m. ET on February 11, 2016.

About Align Technology, Inc.
Align Technology is the leader in modern Clear Aligner orthodontics that designs, manufactures and markets the Invisalign® system, which provides dental professionals with a range of treatment options for adults and teenagers. Align also offers the iTero 3D digital scanning system and services for orthodontic and restorative dentistry. Align was founded in March 1997 and received FDA clearance to market the Invisalign system in 1998. Visit www.aligntech.com for more information.

For additional information about the Invisalign system or to find an Invisalign provider in your area, please visit www.invisalign.com. For additional information about the iTero 3D digital scanning system, please visit www.itero.com.

Forward-Looking Statement
This news release, including the tables below, contains forward-looking statements, including statements regarding certain business metrics for the first quarter of 2016, including, but not limited to, anticipated net revenues, gross margin, operating expenses, operating profit, diluted earnings per share, and case shipments. 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 product 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 scanner and services business, 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 year ended December 31, 2014, which was filed with the Securities and Exchange Commission on February 26, 2015. 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 Year Ended
December 31,
2015
December 31,
2014
December 31,
2015
December 31,
2014
Net revenues $ 230,276 $ 198,600 $ 845,486 $ 761,653
Cost of revenues 57,466 47,938 205,376 183,210
Gross profit 172,810 150,662 640,110 578,443
Operating expenses:
Selling, general and adminstrative 99,582 85,893 390,239 332,068
Research and development 13,889 13,276 61,237 52,799
Total operating expenses 113,471 99,169 451,476 384,867
Operating profit 59,339 51,493 188,634 193,576
Interest and other income (expense), net 313 (1,716 ) (2,533 ) (3,207 )
Profit before income taxes 59,652 49,777 186,101 190,369
Provision for income taxes 10,775 10,236 42,081 44,537
Net profit $ 48,877 $ 39,541 $ 144,020 $ 145,832
Net profit per share
- basic $ 0.61 $ 0.49 $ 1.80 $ 1.81
- diluted $ 0.60 $ 0.48 $ 1.77 $ 1.77
Shares used in computing net profit per share
- basic 79,481 80,266 79,998 80,754
- diluted 81,051 81,691 81,521 82,283
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
2015
December 31,
2014
ASSETS
Current assets:
Cash and cash equivalents $ 167,714 $ 199,871
Marketable securities, short-term 359,581 254,787
Accounts receivable, net 158,550 129,751
Inventories 19,465 15,928
Prepaid expenses and other current assets 26,700 * 56,823
Total current assets 732,010 657,160
Marketable securities, long-term 151,370 147,892
Property, plant and equipment, net 136,473 90,125
Goodwill and intangible assets, net 79,162 82,056
Deferred tax assets 51,416 * 3,099
Other assets 8,202 7,665
Total assets $ 1,158,633 $ 987,997
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,354 $ 23,247
Accrued liabilities 107,765 87,880
Deferred revenues 129,553 90,684
Total current liabilities 271,672 201,811
Other long term liabilities 39,035 33,415
Total liabilities 310,707 235,226
Total stockholders' equity 847,926 752,771
Total liabilities and stockholders' equity $ 1,158,633 $ 987,997
* As of December 31, 2015 we early adopted Accounting Standards Update No. 2015-17, Income Taxes (Topic 740), which simplifies the presentation of deferred income taxes. Under the new standard, both deferred tax liabilities and assets are required to be classified as noncurrent in a consolidated balance sheet. The prior reporting period was not retrospectively adjusted.
ALIGN TECHNOLOGY, INC.
Q4 2015 FINANCIAL AND BUSINESS METRICS
(in thousands except average selling price, utilization and doctors trained)
Q4 Fiscal Q1 Q2 Q3 Q4 Fiscal
2014 2014 2015 2015 2015 2015 2015
Invisalign Clear Aligner Net Revenues by Geography:
North America $ 113,670 $ 446,577 $ 118,844 $ 126,137 $ 124,085 $ 129,663 $ 498,729
International 60,467 219,742 55,920 61,896 61,265 70,980 250,061
Non-case* 12,300 46,230 12,265 12,784 12,942 13,405 51,396
Total Clear Aligner Net Revenues $ 186,437 $ 712,549 $ 187,029 $ 200,817 $ 198,292 $ 214,048 $ 800,186
YoY % growth 12.2 % 15.9 % 11.2 % 11.7 % 11.3 % 14.8 % 12.3 %
QoQ % growth 4.7 % 0.3 % 7.4 % -1.3 % 7.9 %
*includes Invisalign training, ancillary products, and retainers
Average Invisalign Selling Price (ASP):
Worldwide ASP $ 1,370 $ 1,395 $ 1,335 $ 1,300 $ 1,255 $ 1,250 $ 1,285
International ASP $ 1,510 $ 1,575 $ 1,410 $ 1,380 $ 1,325 $ 1,315 $ 1,355
Invisalign Clear Aligner Cases Shipped by Geography:
North America 86,855 338,530 91,110 99,630 101,260 106,390 398,390
International 40,050 139,470 39,670 44,940 46,225 54,010 184,845
Total Cases Shipped 126,905 478,000 130,780 144,570 147,485 160,400 583,235
Number of Invisalign Doctors Cases Shipped To:
North America 19,745 29,890 20,165 21,335 21,160 21,835 31,710
International 8,945 13,450 9,050 9,790 10,150 10,865 16,460
Total Doctors Cases Shipped To 28,690 43,340 29,215 31,125 31,310 32,700 48,170
Invisalign Doctor Utilization Rates*:
North America 4.4 11.3 4.5 4.7 4.8 4.9 12.6
North American Orthodontists 8.6 27.7 9.0 9.5 9.9 9.9 31.8
North American GP Dentists 2.9 6.9 2.9 3.0 2.9 3.1 7.4
International 4.5 10.4 4.4 4.6 4.6 5.0 11.2
Total Utilization Rates 4.4 11.0 4.5 4.6 4.7 4.9 12.1
* # of cases shipped/# of doctors to whom cases were shipped
Number of Invisalign Doctors Trained:
North America 1,170 4,145 870 1,120 1,060 1,270 4,320
International 1,255 5,290 1,540 1,335 1,200 1,400 5,475
Total Doctors Trained Worldwide 2,425 9,435 2,410 2,455 2,260 2,670 9,795
Total to Date Worldwide 93,995 93,995 96,405 98,860 101,120 103,790 103,790
Total Net Revenues:
Clear Aligner Net Revenues $ 186,437 $ 712,549 $ 187,029 $ 200,817 $ 198,292 $ 214,048 $ 800,186
Scanner & Services Net Revenues 12,163 49,104 11,057 8,671 9,344 16,228 45,300
Total Worldwide Net Revenues $ 198,600 $ 761,653 $ 198,086 $ 209,488 $ 207,636 $ 230,276 $ 845,486
YoY % growth 11.4 % 15.4 % 9.7 % 8.8 % 9.4 % 15.9 % 11.0 %
QoQ % growth 4.6 % -0.3 % 5.8 % -0.9 % 10.9 %
Stock-based Compensation (SBC)
SBC included in Gross Profit $ 965 $ 3,570 $ 980 $ 970 $ 984 $ 1,008 $ 3,942
SBC included in Operating Expenses 9,510 36,225 10,670 11,860 13,677 12,799 49,006
Total SBC Expense $ 10,475 $ 39,795 $ 11,650 $ 12,830 $ 14,661 $ 13,807 $ 52,948
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.
Financial Outlook
(in millions, except per share amounts and percentages)
Q1'16 Guidance
GAAP
Net Revenues $232.5 - $236.6
Gross Margin 73.5% - 74.1%
Operating Expenses $130.9 - $132.4
Operating Margin 17.2% - 18.2%
Net Income per Diluted Share $0.37 - $0.40
Business Metrics: Q1'16
Case Shipments 161.3K - 163.7K
Capital Expenditure $20M - $25M
Depreciation & Amortization $5.0M - $5.5M
Diluted Shares Outstanding 81.1M*
Stock Based Compensation Expense $13.5M
Tax Rate 25.0%
* Excludes any stock repurchases during the quarter

Source: Align Technology

News Provided by Acquire Media


Close window | Back to top

Copyright 2017 Align Technology, Inc.