Align Technology Announces Fourth Quarter and Year Ended 2016 Results
- Record 2016 revenues of
$1.1 billion, up 27.7% year-over-year, and diluted EPS of $2.33
- 2016 Invisalign case shipments of 708.5 thousand cases, up 21.5% year-over-year
- Q4 revenues up 27.3% year-over-year to
- Q4 Clear Aligner** revenues up 17.5% and Scanner revenues up 156.8% year-over-year
- Q4 Invisalign case shipments up 18.5% year-over-year to 190.1 thousand cases, international Invisalign case shipments up 25.0% year-over-year
- Q4 diluted EPS
$0.59, down $0.01year-over-year
For 2016, Invisalign case shipments were 708.5 thousand cases and iTero scanner shipments were 3,970 units, an increase of 21.5% and 229.6%, respectively. For 2016, revenues were
Commenting on Align's Q4 and 2016 results,
GAAP Summary Financial Comparisons
Fourth Quarter Fiscal 2016
|Q4'16||Q3'16||Q4'15||Q/Q Change||Y/Y Change|
|Invisalign Case Shipments*||190,055||177,755||160,400||+6.9||%||+18.5||%|
|Scanner & Services||$||41.7M||$||34.9M||$||16.2M||+19.3||%||+156.8||%|
|Invisalign Case Shipments*||708,500||583,235||+21.5||%|
|Scanner & Services||$||121.5M||$||45.3M||+168.3||%|
|Note: Changes and percentages are based on actual values and may effect totals due to rounding|
|* Invisalign Shipment figures exclude SmileDirectClub aligners|
|** Clear aligner revenue includes revenues from Invisalign clear aligners and SmileDirectClub aligners|
2016 Business Highlights
The following list highlights Align's key announcements over the past year:
- Launched iTero Element 1.4 software and Invisalign Outcome Simulator 4.0 application: Align announced the iTero Element 1.4 new software upgrade which includes color scanning, restorative pre-treatment scanning and optimized orthodontic scanning. In addition, the iTero scanners include the enhanced Invisalign Outcome Simulator 4.0 application now with Invisalign 3D Progress Tracking and Patient Simulation Sharing.
- Launched Invisalign G7: Align announced Invisalign G7, a new set of features designed to deliver greater control of tooth movements and improved treatment outcomes. Invisalign G7 builds on earlier Invisalign G-series releases with new features to fine-tune certain tooth movements and deliver treatment outcome quality that Invisalign providers expect, particularly with teenage patients.
- Weekly Aligner Wear Recommendation: Align announced one-week aligner wear recommendation for all Invisalign Full, Teen and Assist products instead of two-week aligner wear for each stage of Invisalign treatment. Continued Invisalign product innovation including "G-Series" features, SmartTrack aligner material, and clinically proven treatment predictability, allowed the company to confidently recommend one-week wear.
- Launched ClinCheck Pro 5.0: Align announced ClinCheck Pro 5.0, the next generation Invisalign treatment software, with ability to view side-by-side treatment plans, a more realistic 3D visual model, and a new configurable toolbar for even greater flexibility.
- 4 Million Patients Milestone: Align announced that 4 million patients started treatment with Invisalign clear aligners. This is a significant accomplishment for the company and the 100,000 Invisalign-trained doctors around the world, demonstrating increased global acceptance of Invisalign treatment as a preferred choice for straightening teeth.
- SmileDirectClub Supplier Agreement: Align announced a supply agreement with SmileDirectClub to manufacture non-Invisalign clear aligners for SmileDirectClub's doctor-directed, at-home program for affordable, cosmetic teeth straightening. SmileDirectClub aligners will include up to 20 stages without attachments or interproximal reduction (IPR), and will be manufactured by Align per SmileDirectClub's specifications for minor tooth movement.
Research Awards Program for 2016 and 2017: Align announced the Research Awards Program for 2017. This is an ongoing annually funded program established in 2010 and designed to promote clinical and scientific dental research in universities across the globe. Align also announced that fourteen research awards totaling
$310,000were awarded to four universities in North Americaand eight International universities under its 2016 program.
- 3Shape Trios Scanner Interoperability: Align announced that 3Shape's TRIOS® Standard, TRIOS Color and TRIOS 3 scanners were qualified in Q4'16 for Invisalign case submission. Align and 3Shape also announced a collaborative agreement to enhance the existing STL export workflow with iTero® scanners and laboratory partners using 3Shape Dental System™ Software which will enable improved consistency for customers using the workflow.
Invisalign Commercially Available in
India: Align announced commercial availability of the Invisalign system in Indiain February 2016. Align is offering a comprehensive range of products including Invisalign Full, Invisalign Teen, Invisalign Lite clear aligners, and Vivera Retainers. Align began training doctors in Delhi, Mumbai, Pune, Chandigarh, Chennai, and expanded into Bangalore, Ahmedabad, Hyderabad, Calcutta, and Cochinover the year. Align also launched a consumer marketing campaign.
- ERP System Implementation: Align implemented a new ERP system in July, which provides a foundation that enables new capabilities, improves speed of execution, and will be used to improve Align's customers' experience.
Q1 2017 Business Outlook
For the first quarter of 2017 (Q1'17), Align provides the following guidance:
- Invisalign case shipments in the range of 200 thousand to 203 thousand, up approximately 22% to 24% over the same period a year ago.
- Net revenues in the range of
$295 millionto $298 million.
- Diluted EPS in the range of
$0.64to $0.67, which includes $0.14of excess tax benefits.
Regarding our tax rate: At the start of 2017, we adopted accounting standards update entitled Improvements to Employee Share-Based Payment Accounting. Under this new standard, excess tax benefits and deficiencies associated with employee share-based payments are no longer recognized as additional paid-in capital on the balance sheet but instead recognized directly to income tax expense or benefit in the income statement for the reporting period in which they occur. Under this new standard, we expect our Q1 effective tax rate to be approximately 1% to 2%, which includes
Align Web Cast and Conference Call
Align will host a conference call today,
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.
This news release, including the tables below, contains forward-looking statements, including statements regarding certain business metrics for the first quarter of 2017, including, but not limited to, anticipated net revenues, gross margin, operating expenses, operating profit, diluted earnings per share, tax rate 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, Align's ability to protect its intellectual property rights, continued compliance with regulatory requirements, competition from existing and new competitors, 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, or that the expected benefits of new or existing business relationships will not be achieved as anticipated, 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, 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 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
|UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|(in thousands, except per share data)|
|Three Months Ended||Year Ended|
|Cost of net revenues||72,954||57,466||264,580||205,376|
|Selling, general and administrative||130,268||99,582||490,653||390,239|
|Research and development||21,609||13,889||75,720||61,237|
|Total operating expenses||151,877||113,471||566,373||451,476|
|Income from operations||68,372||59,339||248,921||188,634|
|Interest and other income (expense), net||(7,516)||313||(6,355)||(2,533)|
|Net income before provision for income taxes and equity in losses of investee||60,856||59,652||242,566||186,101|
|Provision for income taxes||12,028||10,775||51,200||42,081|
|Equity in losses of investee, net of tax||1,207||-||1,684||-|
|Net income per share:|
|Shares used in computing net income per share:|
|ALIGN TECHNOLOGY, INC.|
|UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS|
|Cash and cash equivalents||$||389,275||$||167,714|
|Marketable securities, short-term||250,981||359,581|
|Accounts receivable, net||247,415||158,550|
|Prepaid expenses and other current assets||38,176||26,700|
|Total current assets||952,978||732,010|
|Marketable securities, long-term||59,783||151,370|
|Property, plant and equipment, net||175,167||136,473|
|Equity method investments||45,061||-|
|Deferred tax assets||67,844||51,416|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Total current liabilities||354,335||271,672|
|Income tax payable||45,133||37,512|
|Other long term liabilities||1,294||1,523|
|Total stockholders' equity||995,389||847,926|
|Total liabilities and stockholders' equity||$||1,396,151||$||1,158,633|
|INVISALIGN BUSINESS METRICS*|
|Invisalign Average Selling Price (ASP):|
|Invisalign Cases Shipped by Geography:|
|Total Cases Shipped||160,400||583,235||163,695||176,995||177,755||190,055||708,500|
|Number of Invisalign Doctors Cases Were Shipped To:|
|Total Doctors Cases Shipped To||32,700||48,170||33,635||35,060||35,290||36,900||54,480|
|Invisalign Doctor Utilization Rates*:|
|North American Orthodontists||9.9||31.8||10.4||10.7||11.1||11.3||36.6|
|North American GP Dentists||3.1||7.4||3.0||3.1||3.0||3.2||7.6|
|Total Utilization Rates||4.9||12.1||4.9||5.1||5.0||5.2||13.0|
|* # of cases shipped/# of doctors to whom cases were shipped|
|Number of Invisalign Doctors Trained:|
|Total Doctors Trained Worldwide||2,670||9,795||2,480||2,885||2,615||3,700||11,680|
|Total to Date Worldwide||103,790||103,790||106,270||109,155||111,770||115,470||115,470|
|Note: Historical public data may differ due to rounding. Additionally, rounding may effect totals.|
|*Invisalign business metrics exclude SmileDirectClub aligners.|
|ALIGN TECHNOLOGY, INC.|
|Stock-based Compensation (SBC)|
|SBC included in Gross Profit||$||1,008||$||3,942||$||961||$||932||$||995||$||1,078||$||3,966|
|SBC included in Operating Expenses||12,799||49,006||11,563||12,767||12,716||13,136||50,182|
|Total SBC Expense||$||13,807||$||52,948||$||12,524||$||13,699||$||13,711||$||14,214||$||54,148|
|BUSINESS OUTLOOK SUMMARY|
|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.|
|(in millions, except per share amounts and percentages)|
|Gross Margin||74.2% - 74.5%|
|Operating Margin||19.1% - 19.3%|
|Net Income per Diluted Share||(1)|
|Case Shipments||200.0K - 203.0K|
|Depreciation & Amortization|
|Diluted Shares Outstanding||81.3M||(2)|
|Stock Based Compensation Expense|
|Tax Rate||1% - 2%||(1)|
|(1) Includes the benefit from the adoption of the new accounting standard update for share-based compensation|
|(2) Excludes any stock repurchases during the quarter|
News Provided by Acquire Media