SAN JOSE, CA -- (Marketwired) -- 11/07/16 --

• Q3 revenues up 34.2% year-over-year to $278.6 million
• Q3 results driven by Clear Aligner revenues up 22.9% year-over-year and Scanner revenues up 273.7% year-over-year.
• Q3 Clear Aligner shipments up 20.5% year-over-year to 177.8 thousand cases, international shipments up 33.8% year-over-year
• Diluted EPS $0.63, up $0.29 year-over-year

Align Technology, Inc. (NASDAQ: ALGN) today reported financial results for the third quarter ended September 30, 2016. Clear Aligner case shipments in the third quarter of 2016 (Q3'16) were 177.8 thousand, a 20.5% increase year-over-year. For Q3'16, revenues were $278.6 million, a 34.2% increase year-over-year, and net profit was $51.4 million, or $0.63 per diluted share, up $0.29 per diluted share compared to the same period in the prior year.

"Q3 was a solid quarter with revenue, margins and EPS above the high end of our guidance. Our results were driven by record Invisalign case volume, up 20.5% year-over-year reflecting growth across all customer channels and geographies, as well as continued demand for iTero scanners," said Joe Hogan, Align Technology President and CEO.

GAAP Summary Financial Comparisons
Third Quarter Fiscal 2016

			Q3'16		Q2'16		Q3'15		Q/Q Change		Y/Y Change
Clear Aligner Shipments			177,755		176,995		147,485		+0.4%		+20.5%
Net Revenues			$278.6M		$269.4M		$207.6M		+3.4%		+34.2%
	Clear Aligner		$243.7M		$243.4M		$198.3M		+0.1%		+22.9%
	Scanner & Services		$34.9M		$25.90M		$9.3M		+34.7%		+273.7%
Net Profit			$51.4M		$50.1M		$27.6M		+2.4%		+86.0%
Diluted EPS			$0.63		$0.62		$0.34		$0.01		$0.29

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

As of September 30, 2016, Align had $675.8 million in cash, cash equivalents and marketable securities compared to $678.7 million as of December 31, 2015. During Q3'16, Align concluded our previously announced $50 million accelerated stock repurchase (ASR) with final delivery of 143,310 shares and purchased an additional 88,000 shares amounting to $8.2 million in open market repurchases. These repurchases were collectively part of a three-year, $300 million stock repurchase program announced on April 23, 2014 ("the Align 2014 Repurchase Plan") of which the third $100 million was authorized to be purchased through April 2017. In addition to the April 2014 Repurchase Plan, Align also announced on April 28, 2016 a new plan to repurchase up to an additional $300.0 million of the Company's stock. There remains approximately $341.8 million available for repurchases under the two existing stock repurchase authorizations.

Q4 2016 Business Outlook

For the fourth quarter of 2016 (Q4'16), Align provides the following guidance:

• Clear Aligner case shipments in the range of 182.5 thousand to 184.5 thousand, up approximately 13.8% to 15.0% over the same period a year ago.
• Net revenues in the range of $289.2 million to $293.9 million.
• Diluted EPS in the range of $0.64 to $0.67.

Align Web Cast and Conference Call

Align will host a conference call today, November 7, 2016 at 4:30 p.m. ET, 1:30 p.m. PT, to review its third quarter 2016 results, discuss future operating trends and the business outlook. The conference call will also be web cast live via the Internet. To access the webcast, 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. 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 13646649 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 November 21, 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 fourth 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, 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, 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, 2015, which was filed with the Securities and Exchange Commission (SEC) on February 25, 2016, and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, which was filed with the SEC on August 4, 2016. 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						Nine Months Ended
			September 30,						September 30,
			2016			2015			2016			2015
Net revenues			$	278,589		$	207,636		$	786,671		$	615,210
Cost of net revenues				69,387			50,060			191,626			147,910
Gross profit				209,202			157,576			595,045			467,300
Operating expenses:
	Selling, general and adminstrative			126,708			101,751			360,385			290,657
	Research and development			20,415			17,779			54,111			47,348
Total operating expenses				147,123			119,530			414,496			338,005
Income fom operations				62,079			38,046			180,549			129,295
Interest and other income (expense), net				1,463			(1,568)			1,161			(2,846)
Net income before provision for income taxes and equity in losses of investee				63,542			36,478			181,710			126,449
Provision for income taxes				11,698			8,862			39,172			31,306
Equity in losses of investee, net of tax				477			-			477			-
Net income			$	51,367		$	27,616		$	142,061		$	95,143
Net income per share
	Basic		$	0.64		$	0.35		$	1.78		$	1.19
	Diluted		$	0.63		$	0.34		$	1.74		$	1.17
Shares used in computing net income per share
	Basic			79,977			79,808			79,920			80,173
	Diluted			81,466			81,092			81,523			81,576

ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
					September 30, 2016			December 31, 2015
ASSETS
Current assets:
	Cash and cash equivalents				$	419,948		$	167,714
	Marketable securities, short-term					193,018			359,581
	Accounts receivable, net					244,992			158,550
	Inventories					26,341			19,465
	Prepaid expenses and other current assets					27,469			26,700
		Total current assets				911,768			732,010
Marketable securities, long-term						62,820			151,370
Property, plant and equipment, net						172,658			136,473
Equity method investments						46,268			-
Goodwill and intangible assets, net						82,987			79,162
Deferred tax assets						68,918			51,416
Other assets						13,474			8,202
		Total assets			$	1,358,893		$	1,158,633
			LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable				$	33,104		$	34,354
	Accrued liabilities					132,538			107,765
	Deferred revenues					177,409			129,553
		Total current liabilities				343,051			271,672
Income tax payable						42,539			37,512
Other long term liabilities						993			1,523
		Total liabilities				386,583			310,707
Total stockholders' equity						972,310			847,926
		Total liabilities and stockholders' equity			$	1,358,893		$	1,158,633

ALIGN TECHNOLOGY, INC.

Q3 2016 FINANCIAL AND BUSINESS METRICS

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

					Q1			Q2			Q3			Q4		Fiscal			Q1			Q2			Q3
					2015			2015			2015			2015		2015			2016			2016			2016
Invisalign Clear Aligner Net Revenues by Geography:
	North America				$	118,844		$	126,137		$	124,085		$	129,663	$	498,729		$	135,699		$	143,909		$	143,800
	International					55,920			61,896			61,265			70,980		250,061			69,850			83,703			84,304
	Non-case*					12,265			12,784			12,942			13,405		51,396			14,149			15,824			15,564
		Total Clear Aligner Net Revenues			$	187,029		$	200,817		$	198,292		$	214,048	$	800,186		$	219,698		$	243,436		$	243,668
			YoY % growth			11.2%			11.7%			11.3%			14.8%		12.3%			17.5%			21.2%			22.9%
			QoQ % growth			0.3%			7.4%			-1.3%			7.9%					2.6%			10.8%			0.1%
	*includes Invisalign training, ancillary products, and retainers
Average Invisalign Selling Price (ASP):
	Worldwide ASP				$	1,335		$	1,300		$	1,255		$	1,250	$	1,285		$	1,255		$	1,285		$	1,285
	International ASP				$	1,410		$	1,380		$	1,325		$	1,315	$	1,355		$	1,315		$	1,345		$	1,365
Invisalign Clear Aligner Cases Shipped by Geography:
	North America					91,110			99,630			101,260			106,390		398,390			110,500			114,855			115,900
	International					39,670			44,940			46,225			54,010		184,845			53,195			62,140			61,855
		Total Cases Shipped				130,780			144,570			147,485			160,400		583,235			163,695			176,995			177,755
			YoY % growth			16.6%			28.9%			23.6%			26.4%		22.0%			25.2%			22.4%			20.5%
			QoQ % growth			3.1%			10.5%			2.0%			8.8%					2.1%			8.1%			0.4%
Number of Invisalign Doctors Cases Shipped To:
	North America					20,165			21,335			21,160			21,835		31,710			22,355			22,575			22,570
	International					9,050			9,790			10,150			10,865		16,460			11,280			12,485			12,720
		Total Doctors Cases Shipped To				29,215			31,125			31,310			32,700		48,170			33,635			35,060			35,290
Invisalign Doctor Utilization Rates*:
	North America					4.5			4.7			4.8			4.9		12.6			4.9			5.1			5.1
		North American Orthodontists				9.0			9.5			9.9			9.9		31.8			10.4			10.7			11.1
		North American GP Dentists				2.9			3.0			2.9			3.1		7.4			3.0			3.1			3.0
	International					4.4			4.6			4.6			5.0		11.2			4.7			5.0			4.9
		Total Utilization Rates				4.5			4.6			4.7			4.9		12.1			4.9			5.1			5.0
	* # of cases shipped/# of doctors to whom cases were shipped
Number of Invisalign Doctors Trained:
	North America					870			1,120			1,060			1,270		4,320			875			1,125			1,300
	International					1,540			1,335			1,200			1,400		5,475			1,605			1,760			1,315
		Total Doctors Trained Worldwide				2,410			2,455			2,260			2,670		9,795			2,480			2,885			2,615
		Total to Date Worldwide				96,405			98,860			101,120			103,790		103,790			106,270			109,155			111,770
Total Net Revenues:
	Clear Aligner Net Revenues				$	187,029		$	200,817		$	198,292		$	214,048	$	800,186		$	219,698		$	243,436		$	243,668
	Scanner & Services Net Revenues					11,057			8,671			9,344			16,228		45,300			19,022			25,926			34,921
		Total Worldwide Net Revenues			$	198,086		$	209,488		$	207,636		$	230,276	$	845,486		$	238,720		$	269,362		$	278,589
			YoY % growth			9.7%			8.8%			9.4%			15.9%		11.0%			20.5%			28.6%			34.2%
			QoQ % growth			-0.3%			5.8%			-0.9%			10.9%					3.7%			12.8%			3.4%
Stock-based Compensation (SBC)
	SBC included in Gross Profit				$	980		$	970		$	984		$	1,008	$	3,942		$	961		$	932		$	995
	SBC included in Operating Expenses					10,670			11,860			13,677			12,799		49,006			11,563			12,767			12,716
		Total SBC Expense			$	11,650		$	12,830		$	14,661		$	13,807	$	52,948		$	12,524		$	13,699		$	13,711

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)
	Q4'16 Guidance
	GAAP
Net Revenues	$289.2 - $293.9
Gross Margin	74.7% - 75.1%
Operating Expenses	$149.6 - $150.6
Operating Margin	23.0% - 23.9%
Net Income per Diluted Share	$0.64 - $0.67
Business Metrics:	Q4'16
Case Shipments	182.5K - 184.5K
Capital Expenditure	$63M - $68M
Depreciation & Amortization	$7.0M - $7.5M
Diluted Shares Outstanding	81.5M*
Stock Based Compensation Expense	$14.7M
Tax Rate	22.0%
* Excludes any stock repurchases during the quarter

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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