SAN JOSE, CA -- (Marketwired) -- 04/23/15 -- Align Technology (NASDAQ: ALGN)

• Q1 revenues of $198 million, up 10% year-over-year, and diluted EPS of $0.44
• Q1 worldwide Clear Aligner shipments of 131 thousand cases, up 17% year-over-year, with North America up 12% and International up 29%

Align Technology, Inc. (NASDAQ: ALGN) today reported financial results for the first quarter ended March 31, 2015. Revenues for the first quarter of 2015 (Q1'15) were $198.1 million, a 9.7% increase year-over-year from $180.6 million in the first quarter of 2014 (Q1'14). Clear Aligner case shipments in Q1'15 were 130.8 thousand, a 16.6% increase year-over-year from 112.2 thousand in Q1'14. Net profit for Q1'15 was $36.2 million, or $0.44 per diluted share, compared to $32.4 million, or $0.39 per diluted share in Q1'14. Q1'15 operating income included a one-time benefit of $6.8 million from a refund of Medical Device Excise Taxes paid in 2013, contributing $0.06 per diluted share, net of tax.

"Our first quarter was a bit stronger than we expected, getting us off to a good start to the year. This progress was driven by continued strong year-over-year growth from our International team and solid improvement in our North American business as well," said Thomas M. Prescott, Align president and CEO. "We are pleased to have delivered better than expected results with strong revenues, margins, and EPS, driven primarily by higher Invisalign volume from our North American orthodontists."

Summary Financial Comparisons
(In millions except for shipments and per share amounts)

			Q1'15			Q4'14			Q1'14			Q/Q				Y/Y
GAAP
Clear Aligner shipments				130,780			126,905			112,180			3.1	%			16.6	%
Net revenues			$	198.1		$	198.6		$	180.6			(0.3	)%			9.7	%
	Clear Aligner		$	187.0		$	186.4		$	168.2			0.3	%			11.2	%
	Scanner & Services		$	11.1		$	12.2		$	12.4			(9.1	)%			(10.9	)%
Net profit			$	36.2		$	39.5		$	32.4			(8.5	)%			11.5	%
Diluted EPS			$	0.44		$	0.48		$	0.39		$	(0.04	)		$	0.05

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

As of March 31, 2015, Align had $613.0 million in cash, cash equivalents and short-term and long-term marketable securities compared to $602.6 million as of December 31, 2014. We repurchased approximately 0.03 million shares of stock for $1.8 million in Q1'15. These repurchases were part of a three-year, $300 million stock repurchase program announced on April 23, 2014 of which the first $100 million of the program was completed in Q1'15.

Q2 2015 Business Outlook
For the second quarter of 2015 (Q2'15), Align provides the following guidance:

• Clear Aligner case shipments in a range of 139.5 thousand to 142.0 thousand, up approximately 18% over the same period a year-ago at the mid-point of the range and above our three-year average.
• Net revenues in a range of $206.6 million to $210.4 million.
• Diluted EPS in a range of $0.35 to $0.38.

Align Web Cast and Conference Call
Align will host a conference call today, April 23, 2015 at 4:30 p.m. ET, 1:30 p.m. PT, to review its first quarter 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 13605393 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 April 30, 2015.

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 second quarter of 2015, including, but not limited to, anticipated net revenues, gross margin, operating expenses, operating profit, diluted earnings per share, case shipments, and additional common stock repurchases. 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
			March 31, 2015				March 31, 2014
Net revenues			$	198,086			$	180,646
Cost of revenues				46,996				43,395
Gross profit				151,090				137,251
Operating expenses:
	Selling, general and adminstrative			88,281				82,067
	Research and development			13,885				13,380
Total operating expenses				102,166				95,447
Operating profit				48,924				41,804
Interest and other income (expense), net				(1,452	)			601
Profit before income taxes				47,472				42,405
Provision for income taxes				11,295				9,961
Net profit			$	36,177			$	32,444
Net profit per share
	- basic		$	0.45			$	0.40
	- diluted		$	0.44			$	0.39
Shares used in computing net profit per share
	- basic			80,459				81,120
	- diluted			81,824				82,817

ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
				March 31,			December 31,
				2015			2014
ASSETS
Current assets:
	Cash and cash equivalents			$	189,978		$	199,871
	Marketable securities, short-term				254,823			254,787
	Accounts receivable, net				138,159			129,751
	Inventories				14,572			15,928
	Prepaid expenses and other current assets				59,780			56,823
		Total current assets			657,312			657,160
Marketable securities, long-term					168,171			147,892
Property, plant and equipment, net					99,764			90,125
Goodwill and intangible assets, net					81,274			82,056
Deferred tax assets					14,630			3,099
Other assets					7,254			7,665
		Total assets		$	1,028,405		$	987,997
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	24,996		$	23,247
	Accrued liabilities				81,711			87,880
	Deferred revenues				93,868			90,684
		Total current liabilities			200,575			201,811
Other long term liabilities					34,296			33,415
		Total liabilities			234,871			235,226
Total stockholders' equity					793,534			752,771
	Total liabilities and stockholders' equity			$	1,028,405		$	987,997

ALIGN TECHNOLOGY, INC.

Q1 2015 FINANCIAL AND BUSINESS METRICS

(in thousands except average selling price, utilization and doctors trained)

					Q1				Q2				Q3				Q4				Fiscal				Q1
					2014				2014				2014				2014				2014				2015
Invisalign Clear Aligner Net Revenues by Geography:
	North America				$	107,910			$	111,648			$	113,349			$	113,670			$	446,577			$	118,844
	International					49,848				55,988				53,439				60,467				219,742				55,920
	Non-case*					10,481				12,099				11,350				12,300				46,230				12,265
		Total Clear Aligner Net Revenues			$	168,239			$	179,735			$	178,138			$	186,437			$	712,549			$	187,029
			YoY % growth			18.8	%			17.2	%			16.0	%			12.2	%			15.9	%			11.2	%
			QoQ % growth			1.2	%			6.8	%			-0.9	%			4.7	%							0.3	%
	*includes Invisalign training, ancillary products, and retainers
Average Invisalign Selling Price (ASP):
	Worldwide ASP				$	1,405			$	1,405			$	1,395			$	1,370			$	1,395			$	1,335
	International ASP				$	1,620			$	1,625			$	1,560			$	1,510			$	1,575			$	1,410
Invisalign Clear Aligner Cases Shipped by Geography:
	North America					81,420				84,850				85,405				86,855				338,530				91,110
	International					30,760				34,450				34,210				40,050				139,470				39,670
		Total Cases Shipped				112,180				119,300				119,615				126,905				478,000				130,780
Number of Invisalign Doctors Cases Shipped To:
	North America					19,015				19,505				19,550				19,745				29,890				20,165
	International					7,185				7,685				7,950				8,945				13,450				9,050
		Total Doctors Cases Shipped To				26,200				27,190				27,500				28,690				43,340				29,215
Invisalign Doctor Utilization Rates*:
	North America					4.3				4.4				4.4				4.4				11.3				4.5
	North American Orthodontists					8.1				8.4				8.8				8.6				27.7				9.0
	North American GP Dentists					2.9				2.9				2.8				2.9				6.9				2.9
	International					4.3				4.5				4.3				4.5				10.4				4.4
		Total Utilization Rates				4.3				4.4				4.4				4.4				11.0				4.5
	* # of cases shipped/# of doctors to whom cases were shipped
Number of Invisalign Doctors Trained:
	North America					700				1,150				1,125				1,170				4,145				870
	International					1,255				1,380				1,400				1,255				5,290				1,540
		Total Doctors Trained Worldwide				1,955				2,530				2,525				2,425				9,435				2,410
		Total to Date Worldwide				86,515				89,045				91,570				93,995				93,995				96,405
Total Net Revenues:
	Clear Aligner Net Revenues				$	168,239			$	179,735			$	178,138			$	186,437			$	712,549			$	187,029
	Scanner & Services Net Revenues					12,407				12,796				11,738				12,163				49,104				11,057
		Total Worldwide Net Revenues			$	180,646			$	192,531			$	189,876			$	198,600			$	761,653			$	198,086
			YoY % growth			17.6	%			17.5	%			15.4	%			11.4	%			15.4	%			9.7	%
			QoQ % growth			1.3	%			6.6	%			-1.4	%			4.6	%							-0.3	%
Stock-based Compensation (SBC)
	SBC included in Gross Profit				$	800			$	940			$	865			$	965			$	3,570			$	980
	SBC included in Operating Expenses					8,300				9,370				9,045				9,510				36,225				10,670
		Total SBC Expense			$	9,100			$	10,310			$	9,910			$	10,475			$	39,795			$	11,650

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)
	Q2'15 Guidance
	GAAP
Net Revenues	$206.6 - $210.4
Gross Margin	75.0% - 75.7%
Operating Expenses	$117.3 - $118.3
Operating Margin	18.3% - 19.5%
Net Income per Diluted Share	$0.35 - $0.38
Business Metrics:	Q2'15
Case Shipments	139.5K - 142.0K
Capital Expenditure	$20M - $25M
Depreciation & Amortization	$4.5M - $5.0M
Diluted Shares Outstanding	82.0M*
Stock Based Compensation Expense	$13.7M
Tax Rate	24.0%
* Excludes any stock repurchases during the quarter

Source: Align Technology

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