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Align Technology, Inc. Reports Q2 2006 Revenues of $53.2 Million
Additional Quarterly Information
SANTA CLARA, Calif., July 26, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- 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 second quarter of 2006. Total revenues for the second quarter of 2006 were $53.2 million, compared to $53.9 million in the second quarter of 2005, a decrease of 1.3 percent.
"We are pleased with our steady progress and results in the second quarter of 2006," stated Thomas M. Prescott, Align Technology's President and CEO. "We continue to develop the Invisalign system, along with the technology and service offerings that will allow us to become a greater part of our customers' practices in the future."
The net loss for the second quarter of 2006, as reported on a GAAP basis, was $2.6 million, or loss per share of $0.04. This compares to GAAP net profit of $538 thousand for the second quarter of 2005, or EPS of $0.01.
The non-GAAP net loss for the second quarter of 2006 was $344 thousand, or non-GAAP loss per share of $0.01. This compares to non-GAAP net profit of $538 thousand for the second quarter of 2005, or EPS of $0.01. The reconciliation of the GAAP to non-GAAP measurements for net loss for the second quarter of 2006 is set forth below within Align Technology's financial statements.
As of June 30, 2006, Align had $69.9 million in cash, cash equivalents, marketable securities, and restricted cash, compared to $74.4 million as of December 31, 2005.
Align Webcast and Conference Call
Align Technology will host a webcast and conference call today, July 26, 2006 at 8:45 a.m. EDT, 5:45 a.m. PDT, to review the second quarter of 2006 results and discuss future operating trends and guidance. To access the webcast, click on "Webcasts & Presentations" on Align Technology's Investor Relations web site at http://investor.aligntech.com . To access the conference call, please dial 201-689-8341 approximately fifteen 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 July 25, 2007. Additionally, a telephonic replay of the call can be accessed by dialing 877-660-6853 with account number 292 followed by # and conference number 199386 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 August 9, 2006.
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 desired final 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 April 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 Statement
This news release contains forward-looking statements, including statements regarding Align's focus on developing the Invisalign system and the technology and service offerings that Align expects will allow it to become a greater part of its customers' practices. 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 ability to sustain or increase profitability or revenue growth in future periods while controlling expenses, including expenses related to the OrthoClear litigation, customer demand for Invisalign, acceptance of Invisalign by consumers and dental professionals, 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, competition from manufacturers of traditional braces and new competitors, such as OrthoClear, Align's ability to develop and successfully introduce new products, and the loss of key personnel, including members of its direct sales force. 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, 2005, which was filed with the Securities and Exchange Commission on March 1, 2006, 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 Six Months Ended
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
(in thousands, except per share data)
Revenues $53,221 $53,940 $102,129 $105,095
Cost of revenues 16,492 16,620 30,789 32,098
Gross profit 36,729 37,320 71,340 72,997
Operating expenses:
Sales and marketing 20,641 21,049 40,707 40,183
General and administrative 15,354 9,723 30,418 19,234
Research and development 4,025 5,355 8,719 10,258
Total operating expenses 40,020 36,127 79,844 69,675
Profit (Loss) from operations (3,291) 1,193 (8,504) 3,322
Interest and other income (expense),
net 841 (238) 1,539 (298)
Provision for income taxes (160) (417) (409) (623)
Net profit (loss) $(2,610) $538 $(7,374) $2,401
Net profit (loss) per share
- basic $(0.04) $0.01 $(0.12) $0.04
- diluted $(0.04) $0.01 $(0.12) $0.04
Shares used in computing net profit
(loss) per share
- basic 62,966 61,484 62,743 61,367
- diluted 62,966 62,953 62,743 62,939
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30, 2006 December 31, 2005
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $57,486 $74,219
Restricted cash 159 150
Marketable securities, short-term 12,268 --
Accounts receivable, net 32,790 29,305
Inventories, net 2,733 2,930
Other current assets 6,487 4,982
Total current assets 111,923 111,586
Property and equipment, net 26,610 26,427
Other long-term assets 3,224 4,097
Total assets $141,757 $142,110
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,813 $2,489
Accrued liabilities 26,600 29,372
Deferred revenue 13,250 16,747
Total current liabilities 44,663 48,608
Other long term liabilities 379 64
Total liabilities 45,042 48,672
Total stockholders' equity 96,715 93,438
Total liabilities and
stockholders' equity $141,757 $142,110
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, we use non-GAAP measures of gross profit, profit (loss) from
operations, net profit (loss) and certain expenses (including sales and
marketing, general and administrative and research and development), which
exclude stock-based compensation to allow for a better comparison of
results in the current period to those in prior periods that did not
include FAS 123(R) stock-based compensation. We believe the non-GAAP
measures that exclude stock-based compensation enhance the comparability
of results against prior periods. In addition, we use these non-GAAP
financial measures for internal management purposes, when publicly
providing our business outlook and as a means to evaluate period-to-period
comparisons. These non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, or superior to, financial
measures prepared in accordance with GAAP.
(in thousands, except per share data)
Three Months Ended Three Months Ended
June 30, 2006 June 30, 2005
Adjust- Adjust-
Reported ments(a) Non GAAP Reported ments(a) Non GAAP
Revenues $53,221 $-- $53,221 $53,940 $-- $53,940
Cost of revenues 16,492 (181) 16,311 16,620 -- 16,620
Gross profit 36,729 181 36,910 37,320 -- 37,320
Operating expenses:
Sales and marketing 20,641 (732) 19,909 21,049 -- 21,049
General and
administrative 15,354 (1,029) 14,325 9,723 -- 9,723
Research and
development 4,025 (324) 3,701 5,355 -- 5,355
Total operating
expenses 40,020 (2,085) 37,935 36,127 -- 36,127
Profit (Loss) from
operations (3,291) 2,266 (1,025) 1,193 -- 1,193
Interest and other
income (expense),
net 841 -- 841 (238) -- (238)
Provision for income
taxes (160) -- (160) (417) -- (417)
Net profit (loss) $(2,610) $2,266 $(344) $538 $-- $538
Net profit (loss)
per share
- basic $(0.04) $(0.01) $0.01 $0.01
- diluted $(0.04) $(0.01) $0.01 $0.01
Shares used in
computing net
profit (loss) per
share
- basic 62,966 62,966 61,484 61,484
- diluted 62,966 62,966 62,953 62,953
(a) Non cash stock-based compensation included in cost of sales and
operating expenses.
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, we use non-GAAP measures of gross profit, profit (loss) from
operations, net profit (loss) and certain expenses (including sales and
marketing, general and administrative and research and development), which
exclude stock-based compensation to allow for a better comparison of
results in the current period to those in prior periods that did not
include FAS 123(R) stock-based compensation. We believe the non-GAAP
measures that exclude stock-based compensation enhance the comparability
of results against prior periods. In addition, we use these non-GAAP
financial measures for internal management purposes, when publicly
providing our business outlook and as a means to evaluate period-to-period
comparisons. These non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, or superior to, financial
measures prepared in accordance with GAAP.
(in thousands, except per share data)
Six Months Ended Six Months Ended
June 30, 2006 June 30, 2005
Adjust- Non Adjust- Non
Reported ments(a) GAAP Reported ments(a) GAAP
Revenues $102,129 $-- $102,129 $105,095 $-- $105,095
Cost of revenues 30,789 (329) 30,460 32,098 -- 32,098
Gross profit 71,340 329 71,669 72,997 -- 72,997
Operating expenses:
Sales and marketing 40,707 (1,411) 39,296 40,183 (6) 40,177
General and
administrative 30,418 (2,117) 28,301 19,234 (6) 19,228
Research and
development 8,719 (614) 8,105 10,258 -- 10,258
Total operating
expenses 79,844 (4,142) 75,702 69,675 (12) 69,663
Profit (Loss) from
operations (8,504) 4,471 (4,033) 3,322 12 3,334
Interest and other
income (expense),
net 1,539 -- 1,539 (298) -- (298)
Provision for income
taxes (409) -- (409) (623) -- (623)
Net profit (loss) $(7,374) $4,471 $(2,903) $2,401 $12 $2,413
Net profit (loss)
per share
- basic $(0.12) $(0.05) $0.04 $0.04
- diluted $(0.12) $(0.05) $0.04 $0.04
Shares used in
computing net
profit(loss) per
share
- basic 62,743 62,743 61,367 61,367
- diluted 62,743 62,743 62,939 62,939
(a) Non cash stock-based compensation included in cost of sales and
operating expenses
ALIGN TECHNOLOGY, INC.
FACT SHEET
The following information highlights business metrics for Align's second
quarter of 2006. For prior quarter information, please refer to the
Investor Relations website at http://investor.aligntech.com.
(rounded to the nearest hundred, except in utilization)
Cases Delivered 2Q 2006
U.S. Orthodontists - Full 10,400
U.S. Orthodontists - Invisalign
Express 3,700
U.S. GP dentists - Full 13,000
U.S. GP dentists - Invisalign Express 6,500
International - Full 4,800
International - Invisalign Express 200
Total Cases Delivered 38,700
Doctors Trained 2Q 2006 Cumulative
Total
U.S. Orthodontists -- 7,900
U.S. GP dentists 1,000 19,900
International 300 10,200
Total Doctors Trained 1,300 38,000
Total Submitting Doctors 2Q 2006
U.S. Orthodontists 2,900
U.S. GP dentists 7,800
International 1,800
Total Submitting Doctors 12,500
Doctor Utilization* 2Q 2006
U.S. Orthodontists 4.95
U.S. GP dentists 2.58
International 2.86
* Doctor Utilization = # of cases / # of doctors cases are shipped to
Investor Relations Contact: Press Contact:
Barbara Domingo Shannon Henderson
Align Technology, Inc. Ethos Communications, Inc.
(408) 470-1000 (678) 417-1767
investorinfo@aligntech.com shannon@ethoscommunication.com
SOURCE Align Technology, Inc.
Barbara Domingo, Investor Relations of Align Technology, Inc., +1-408-470-1000, or investorinfo@aligntech.com; or Shannon Henderson of Ethos Communications, Inc., +1-678-417-1767, or shannon@ethoscommunication.com, for Align Technology, Inc.http://www.prnewswire.com
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