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Align Technology, Inc. Reports 9th Consecutive Quarter of Increasing Revenues
- Third Quarter Revenues Increase 35% Year Over Year to $45.8 Million
- Company Reports GAAP Net Profit of $3.3 Million, or EPS of $0.05, and Non-GAAP Net Profit of $4.7 Million, or EPS of $0.07 - Company Increases Cash Position by $16.3 Million Year-to-Date
SANTA CLARA, Calif., Oct 21, 2004 /PRNewswire-FirstCall via COMTEX/ -- Align Technology, Inc. (Nasdaq: ALGN), the inventor of Invisalign®, a proprietary method of straightening teeth without wires and brackets, today reported financial results for the third quarter of 2004. Total revenues for the third quarter of 2004 were $45.8 million, compared to $34.0 million in the third quarter of 2003, an increase of 34.5 percent, and $44.2 million in the second quarter of 2004, an increase of 3.5 percent.
"We are pleased with our earnings this quarter," stated Thomas M. Prescott, Align Technology's President and CEO. "As we continue building the company, we look forward to strengthening the infrastructure and positioning Align for long-term growth and profitability. Additionally, we believe that year-over-year, revenues will grow by introducing several strategic initiatives including an expanded sales force, enhanced consumer marketing programs and the introduction of new products. "
The net profit for the third quarter of 2004 as determined under generally accepted accounting principles ("GAAP") was $3.3 million, or earnings per diluted share of $0.05. This compares to a net loss for the third quarter of 2003 of $2.1 million, or a net loss of $0.04 per share, and a net profit for the second quarter of 2004 of $3.8 million, or earnings per diluted share of $0.06. Third quarter 2004 profit includes a $1.1 million severance charge related to the previously announced departure of an executive.
The non-GAAP net profit for the third quarter of 2004, which excludes $1.4 million of stock-based compensation, was $4.7 million, or non-GAAP earnings per diluted share of $0.07. This compares to a non-GAAP net profit of $1.2 million in the third quarter of 2003, which excludes $3.4 million of stock-based compensation charges, or a non-GAAP earnings per diluted share of $0.02. This also compares to a non-GAAP net profit of $5.6 million in the second quarter of 2004, which excludes $1.8 million of stock-based compensation, or a non-GAAP earnings per diluted share of $0.09. The reconciliation of the GAAP to non-GAAP measurements for net profit for the third quarter of 2004 is set forth below within Align Technology's financial statements.
As of September 30, 2004, Align had $64.0 million in cash, cash equivalents and marketable securities, compared to $47.7 million as of December 31, 2003.
Conference Call
As previously announced, Align Technology, Inc. will host a live webcast and conference call today, October 21, 2004, at 10:00 a.m. EDT, 7:00 a.m. PDT, to review third quarter of 2004 results and discuss future operating trends and guidance outlook for the future. The webcast of Align's conference call will be accessible through the website at: http://www.aligntech.com/generalapp/us/en/corporate/investor_frameset.jsp .
The webcast will be archived for future on-demand replay. To access the conference call, please dial 201-689-8341 approximately ten minutes prior to the start of the call. If you are unable to listen to the call, an archived web cast will be available beginning approximately one hour after the call's conclusion and will remain available through 5:30 p.m. EDT on October 20, 2005. Additionally, a telephonic replay of the call can be accessed by dialing 877-660-6853 with account number 292 followed by # and conference number 119689 followed by #. The replay may be accessed from international locations by dialing 201-612-7415 and using the same account and conference numbers referenced above. The telephonic replay will be available through 5:30 p.m. EDT on November 5, 2004.
About Align Technology, Inc.
Align Technology designs, manufactures and markets Invisalign, a proprietary method for treating malocclusion, or the misalignment of teeth. Invisalign corrects malocclusion using a series of clear, nearly invisible, removable appliances that gently move teeth to a desirYr3%9al position.
Because it does not rely on the use of metal or ceramic brackets and wires, Invisalign significantly reduces the aesthetic and other limitations associated with braces. Invisalign is appropriate for treating adults and older teens. Align Technology was founded in March 1997 and received FDA clearance to market Invisalign in 1998.
To learn more about Invisalign or to find a certified Invisalign doctor in your area, please visit www.invisalign.com or call 1-800-INVISIBLE.
Forward-Looking Statements
This news release contains forward-looking statements, including statements regarding Align's ability to strengthen its infrastructure, position itself for long-term growth and profitability and the anticipated success of Align's initiatives to increase revenue. Forward-looking statements contained in this news release 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, risks relating to Align's history of losses and negative operating cash flows, Align's ability to increase its revenue significantly while controlling expenses, Align's ability to manage growth, loss of key personnel or the inability to attract and retain key personnel, Align's limited operating history, customer demand for Invisalign, acceptance of Invisalign by consumers and dental professionals, competition from manufacturers of traditional braces, Align's third party manufacturing processes and personnel, foreign operational, political and other risks relating to Align's international manufacturing operations, Align's ability to protect its intellectual property rights, potential intellectual property or product liability claims or litigation, and the potential volatility of the market price of Align's common stock. 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 fiscal year ended December 31, 2003, which was filed with the Securities and Exchange Commission on March 9, 2004, and its Quarterly Reports on Form 10-Q. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
(in thousands, except
per share data) Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
Revenues $45,766 $34,038 $129,175 $86,223
Cost of revenues 14,922 13,446 42,565 38,639
Gross profit 30,844 20,592 86,610 47,584
Operating expenses:
Sales and marketing 13,884 10,505 40,555 32,551
General and administrative 8,263 8,722 25,196 25,630
Research and development 4,846 3,113 11,750 9,810
Total operating expenses 26,993 22,340 77,501 67,991
Profit (loss) from operations 3,851 (1,748) 9,109 (20,407)
Interest and other income
(expense), net (217) (359) (619) (129)
Provision for income taxes (316) (37) (843) (38)
Net profit (loss) $3,318 $(2,144) $7,647 $(20,574)
Net profit (loss) per share -- basic $0.06 $(0.04) $0.13 $(0.36)
Weighted-average shares used in
computing basic net profit (loss)
per share 60,319 57,948 59,703 57,543
Net profit (loss) per
share -- diluted $0.05 $(0.04) $0.12 $(0.36)
Weighted-average shares used in
computing diluted net profit (loss)
per share 64,055 57,948 64,298 57,543
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands) September 30, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $63,215 $44,939
Restricted cash 281 439
Marketable securities, short-term 519 2,292
Accounts receivable, net 27,663 21,265
Inventories, net 2,150 2,334
Other current assets 5,855 5,845
Total current assets 99,683 77,114
Property and equipment, net 23,304 23,121
Other long-term assets 2,197 1,967
Total assets $125,184 $102,202
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,899 $3,095
Accrued liabilities 21,733 19,180
Deferred revenue 13,798 13,113
Debt, current portion 1,932 1,989
Total current liabilities 41,362 37,377
Debt, long-term portion 428 1,849
Total liabilities 41,790 39,226
Total stockholders' equity 83,394 62,976
Total liabilities and
stockholders' equity $125,184 $102,202
ALIGN TECHNOLOGY, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Use of Non-GAAP Financial Information
To supplement our condensed consolidated financial statements presented on a GAAP basis, Align uses a non-GAAP measure of net profit (loss), which is adjusted to exclude certain costs and expenses and any associated tax effects of such adjustments. We believe that our non-GAAP net profit (loss) gives an indication of our baseline performance before other charges that are considered by management to be outside of our core operating results. In addition, our non-GAAP net profit (loss) is among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information should not be considered in isolation or as a substitute for net profit (loss) prepared in accordance with generally accepted accounting principles in the United States of America.
Three Months Ended Nine Months Ended
Sept. Sept. Sept. Sept.
(in thousands, except per 30, 2004 30, 2003 30, 2004 30, 2003
share data)
Revenues $45,766 $34,038 $129,175 $86,223
Cost of revenues 14,784 12,830 41,710 36,619
Gross profit 30,982 21,208 87,465 49,604
Operating expenses:
Sales and marketing 13,770 9,984 39,920 30,798
General and administrative 7,754 7,117 22,588 19,439
Research and development 4,206 2,470 10,448 7,264
Total operating expenses 25,730 19,571 72,956 57,501
Profit (loss) from operations 5,252 1,637 14,509 (7,897)
Interest and other income
(expense), net (217) (359) (619) (129)
Provision for income taxes (316) (37) (843) (38)
Net profit (loss) $4,719 $1,241 $13,047 $(8,064)
Net profit (loss) per share -- basic $0.08 $0.02 $0.22 $(0.14)
Weighted-average shares used in
computing basic net profit (loss)
per share 60,319 57,948 59,703 57,543
Net profit (loss) per share -- diluted $0.07 $0.02 $0.20 $(0.14)
Weighted-average shares used in
computing diluted net profit (loss)
per share 64,055 62,912 64,298 57,543
ALIGN TECHNOLOGY, INC.
RECONCILIATION OF GAAP NET PROFIT (LOSS) TO ADJUSTED NON-GAAP NET PROFIT
(LOSS)
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(in thousands) 2004 2003 2004 2003
Net profit (loss) $3,318 $(2,144) $7,647 $(20,574)
Stock-based compensation expense
included in: (1)
- cost of revenues 138 616 855 2,020
- sales and marketing 114 521 635 1,753
- general and administrative 509 1,605 2,608 5,684
- research and development 640 643 1,302 2,546
Restructuring costs included in
general and administrative: (2) -- -- -- 507
Non-GAAP net profit (loss) $4,719 $1,241 $13,047 $(8,064)
(1)Stock-based compensation expense primarily represents the amortization of deferred stock-based compensation recorded in connection with the granting of stock options to employees and non-employees. Stock-based compensation expense also includes, in connection with severance packages for several employees, accelerated vesting of options granted prior to the company's initial public offering.
(2)Restructuring costs represented residual restructuring charges related to the transition of operations from the United Arab Emirates and Pakistan to Costa Rica during the first quarter of 2003.
Contact: investor relations, Barbara Domingo of Align Technology, Inc., +1-408-470-1000, or investorinfo@aligntech.com; or press, Shannon Henderson of Ethos Communications, Inc., +1-678-417-1767, or shannon@ethoscommunication.com.
SOURCE Align Technology, Inc.
investor relations, Barbara Domingo of Align Technology, Inc., +1-408-470-1000, or investorinfo@aligntech.com; or press, Shannon Henderson of Ethos Communications, Inc., +1-678-417-1767, or shannon@ethoscommunication.com
http://www.invisalign.com