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Align Technology, Inc. Reports Q3 2006 Revenues of $49.0 Million
SANTA CLARA, Calif., Oct 25, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Align Technology, Inc. (Nasdaq: ALGN), the inventor of Invisalign(R), a proprietary method of straightening teeth without wires and brackets, today reported financial results for the third quarter of 2006. Total revenues for the third quarter of 2006 were $49.0 million, compared to $50.9 million in the third quarter of 2005, a decrease of 3.6 percent.
"The third quarter was a busy one for Align," stated Thomas M. Prescott, Align Technology's President and CEO. "Over 1,100 doctors used Invisalign for the first time and we trained almost 1,000 new doctors. Additionally, at the end of the quarter, we announced our intent to sign a definitive agreement with OrthoClear -- which we did earlier this month -- ending all pending litigation matters with them. With the litigation now behind us and our base of doctors growing, we can focus entirely on growing the top line. We will generate that growth through increased adoption of Invisalign by dentists and orthodontists as the Invisalign product evolves to better meet their specific needs. Our goal is to return to profitability and increase value for our shareholders, customers, and employees."
The net loss for the third quarter of 2006, as reported on a GAAP basis, was $10.3 million, or loss per share of $0.16. This compares to GAAP net loss of $1.5 million for the third quarter of 2005, or loss per share of $0.02.
The non-GAAP net loss for the third quarter of 2006 was $8.0 million, or non-GAAP loss per share of $0.13. The reconciliation of the GAAP to non-GAAP measurements for net loss for the third quarter of 2006 is set forth below within Align Technology's financial statements.
As of September 30, 2006, Align had $86.1 million in cash, cash equivalents, marketable securities, and restricted cash, compared to $74.4 million as of December 31, 2005. Align borrowed $15 million from its credit facility during the third quarter. Additionally, on October 13, 2006, Align signed the definitive agreement with OrthoClear and subsequently disbursed $20 million to them.
Align Webcast and Conference Call
Align Technology will host a webcast and conference call today, October 25, 2006 at 8:45 a.m. EDT, 5:45 a.m. PDT, to review the third 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 199387 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 8, 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 expectation that it will generate revenue growth through increased adoption of Invisalign by dentists and orthodontists by evolving the Invisalign system to better meet their specific needs. 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 settlement, 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, Align's ability to develop and successfully introduce new products and product enhancements, 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.
Investor Relations Contact:
Barbara Domingo
Align Technology, Inc.
408-470-1000
investorinfo@aligntech.com
Press Contact:
Shannon Henderson
Ethos Communications, Inc.
678-540-9222
align@ethoscommunication.com
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
Sept. Sept. Sept. Sept.
30, 2006 30, 2005 30, 2006 30, 2005
(in thousands, except per share
data)
Revenues $49,034 $50,866 $151,163 $155,961
Cost of revenues 16,789 14,975 47,578 47,073
Gross profit 32,245 35,891 103,585 108,888
Operating expenses:
Sales and marketing 19,165 21,315 59,872 61,498
General and administrative 19,238 11,715 49,656 30,949
Research and development 4,807 4,400 13,526 14,658
Total operating expenses 43,210 37,430 123,054 107,105
Profit (Loss) from operations (10,965) (1,539) (19,469) 1,783
Interest and other income, net 854 326 2,393 28
Provision for income taxes (209) (303) (618) (926)
Net profit (loss) $(10,320) $(1,516) $(17,694) $885
Net profit (loss) per share
- basic $(0.16) $(0.02) $(0.28) $0.01
- diluted $(0.16) $(0.02) $(0.28) $0.01
Shares used in computing net profit
(loss) per share
- basic 63,230 61,788 62,907 61,509
- diluted 63,230 61,788 62,907 63,129
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
Sept. 30, 2006 Dec. 31, 2005
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents $74,034 $74,219
Restricted cash 161 150
Marketable securities, short-term 11,898 --
Accounts receivable, net 32,607 29,305
Inventories, net 2,665 2,930
Other current assets 5,299 4,982
Total current assets 126,664 111,586
Property and equipment, net 27,336 26,427
Other long-term assets 2,891 4,097
Total assets $156,891 $142,110
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $15,000 $--
Accounts payable 7,137 2,489
Accrued liabilities 31,891 29,372
Deferred revenue 12,143 16,747
Total current liabilities 66,171 48,608
Other long term liabilities 296 64
Total liabilities 66,467 48,672
Total stockholders' equity 90,424 93,438
Total liabilities and
stockholders' equity $156,891 $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 September 30,
2006
Reported Adjustments(a) Non GAAP
Revenues $49,034 $-- $49,034
Cost of revenues 16,789 (186) 16,603
Gross profit 32,245 186 32,431
Operating expenses:
Sales and marketing 19,165 (714) 18,451
General and administrative 19,238 (1,015) 18,223
Research and development 4,807 (362) 4,445
Total operating expenses 43,210 (2,091) 41,119
Profit (Loss) from operations (10,965) 2,277 (8,688)
Interest and other income, net 854 -- 854
Provision for income taxes (209) -- (209)
Net profit (loss) $(10,320) $2,277 $(8,043)
Net profit (loss) per share
- basic $(0.16) $(0.13)
- diluted $(0.16) $(0.13)
Shares used in computing net profit
(loss) per share
- basic 63,230 63,230
- diluted 63,230 63,230
Three Months Ended September 30,
2005
Reported Adjustments(a) Non GAAP
Revenues $50,866 $-- $50,866
Cost of revenues 14,975 -- 14,975
Gross profit 35,891 -- 35,891
Operating expenses:
Sales and marketing 21,315 -- 21,315
General and administrative 11,715 -- 11,715
Research and development 4,400 -- 4,400
Total operating expenses 37,430 -- 37,430
Profit (Loss) from operations (1,539) -- (1,539)
Interest and other income, net 326 -- 326
Provision for income taxes (303) -- (303)
Net profit (loss) $(1,516) $-- $(1,516)
Net profit (loss) per share
- basic $(0.02) $(0.02)
- diluted $(0.02) $(0.02)
Shares used in computing net profit
(loss) per share
- basic 61,788 61,788
- diluted 61,788 61,788
(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)
Nine Months Ended September 30, 2006
Reported Adjustments(a) Non GAAP
Revenues $151,163 $-- $151,163
Cost of revenues 47,578 (515) 47,063
Gross profit 103,585 515 104,100
Operating expenses:
Sales and marketing 59,872 (2,125) 57,747
General and administrative 49,656 (3,132) 46,524
Research and development 13,526 (976) 12,550
Total operating expenses 123,054 (6,233) 116,821
Profit (Loss) from operations (19,469) 6,748 (12,721)
Interest and other income, net 2,393 -- 2,393
Provision for income taxes (618) -- (618)
Net profit (loss) $(17,694) $6,748 $(10,946)
Net profit (loss) per share
- basic $(0.28) $(0.17)
- diluted $(0.28) $(0.17)
Shares used in computing net
profit(loss) per share
- basic 62,907 62,907
- diluted 62,907 62,907
Nine Months Ended September 30, 2005
Reported Adjustments(a) Non GAAP
Revenues $155,961 $-- $155,961
Cost of revenues 47,073 -- 47,073
Gross profit 108,888 -- 108,888
Operating expenses:
Sales and marketing 61,498 (6) 61,492
General and administrative 30,949 (6) 30,943
Research and development 14,658 -- 14,658
Total operating expenses 107,105 (12) 107,093
Profit (Loss) from operations 1,783 12 1,795
Interest and other income, net 28 -- 28
Provision for income taxes (926) -- (926)
Net profit (loss) $885 $12 $897
Net profit (loss) per share
- basic $0.01 $0.01
- diluted $0.01 $0.01
Shares used in computing net
profit(loss) per share
- basic 61,509 61,509
- diluted 63,129 63,129
(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 third
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 3Q 2006
U.S. Orthodontists - Full 9,600
U.S. Orthodontists - Invisalign
Express 3,400
U.S. GP dentists - Full 12,500
U.S. GP dentists - Invisalign
Express 5,800
International - Full 4,300
International - Invisalign Express 100
Total Cases Delivered 35,700
Doctors Trained 3Q 2006 Cumulative
Total
U.S. Orthodontists -- 7,900
U.S. GP dentists 750 20,700
International 200 10,400
Total Doctors Trained 950 39,000
Total Submitting Doctors 3Q 2006
U.S. Orthodontists 2,700
U.S. GP dentists 7,700
International 1,700
Total Submitting Doctors 12,100
Doctor Utilization* 3Q 2006
U.S. Orthodontists 4.71
U.S. GP dentists 2.49
International 2.72
* Doctor Utilization = # of cases / # of doctors cases are shipped to
SOURCE Align Technology, Inc.
investors, Barbara Domingo of Align Technology, Inc., +1-408-470-1000, or investorinfo@aligntech.com; or media, Shannon Henderson of Ethos Communications, Inc., +1-678-540-9222, or align@ethoscommunication.com, for Align Technology, Inc.
http://www.invisalign.com
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