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

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