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Align Technology, Inc. Reports Revenues of $43.7M for Q4 2004 and $172.8M for Fiscal Year 2004
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GAAP and Non-GAAP Supplementary 12-Quarter Financial Model - Ending 4Q 2004 - (1/26/2005)
- Company Reports First Profitable Year - GAAP EPS of $0.14 and non-GAAP EPS of $0.23; FY 2004 Revenues Increase 40.8% Year Over Year - Q4 Revenues Decrease 4.6% Sequentially, Including The Effect Of The Previously Announced One-Time $1.9 Million Case Refinement Revenue Reduction, and Increase 19.6% Year Over Year; - Company Increases Cash Position By $22.3 Million in 2004 SANTA CLARA, Calif., Jan. 26 /PRNewswire-FirstCall/ -- 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 fourth quarter and full year of 2004. Total revenues for the fourth quarter of 2004 were $43.7 million, compared to $45.8 million in the third quarter of 2004, a decrease of 4.6 percent, and $36.5 million in the fourth quarter of 2003, an increase of 19.6 percent. For fiscal year 2004, Align reported revenues of $172.8 million, compared to $122.7 million for fiscal year 2003, an increase of 40.8 percent. On December 9, 2004, the Company announced a change to its case refinement policy that had a one-time effect on fourth quarter 2004 revenues and associated costs. The impact of this policy change was a decrease in revenues of $1.9 million. The bottom-line impact to GAAP and non-GAAP net profit was a decrease of $1.9 million. "We are pleased with our results for 2004," stated Thomas M. Prescott, Align Technology's President and CEO. "We are in the process of executing on a multi-year strategy to ensure the people, processes and systems are in place to build a great company. We have taken steps to help doctors confidently recommend Invisalign to their patients and to become the treatment that patients will request. We expect 2005 to be a year in which we continue building a business that is primed for future growth." The net profit for the fourth quarter of 2004 as determined under generally accepted accounting principles ("GAAP") was $1.5 million, or diluted earnings per share (EPS) of $0.02. This compares to net profit of $3.3 million for the third quarter of 2004, or EPS of $0.05 per diluted share, and a net profit for the fourth quarter of 2003 of $452 thousand, or EPS of $0.01 per diluted share. For fiscal year 2004, the net profit was $9.2 million, or EPS of $0.14 per diluted share. This compares to a net loss of $20.1 million for fiscal year 2003, or a net loss of $0.35 per diluted share. The non-GAAP net profit for the fourth quarter of 2004, which excludes $214 thousand of stock-based compensation, was $1.7 million, or EPS of $0.03 per diluted share. This compares to a non-GAAP net profit of $4.7 million in the third quarter of 2004, which excludes $1.4 million of stock-based compensation, or non-GAAP EPS of $0.07 per diluted share. This also compares to a non-GAAP net profit of $3.5 million in the fourth quarter of 2003, which excludes $3.0 million of stock-based compensation, or non-GAAP EPS of $0.05 per diluted share. For the fiscal year 2004, the non-GAAP net profit, which excludes $5.6 million of stock-based compensation, was $14.8 million, or non- GAAP EPS of $0.23 per diluted share. This compares to a non-GAAP net loss of $4.6 million for fiscal year 2003, which excludes $15.0 million of stock-based compensation and $507 thousand of restructuring charges, or a non-GAAP net loss of $0.08 per diluted share. The reconciliation of the GAAP to non-GAAP measurements for net loss for the fourth quarter and fiscal year of 2004 is set forth below within Align Technology's financial statements. As of December 31, 2004, Align had $70.0 million in cash, cash equivalents, and marketable securities, compared to $47.7 million as of December 31, 2003. Align Webcast and Conference Call Align Technology will host a webcast and conference call today, January 26, 2005 at 10:00 a.m. EDT, 7:00 a.m. PDT, to review the fourth quarter and fiscal year of 2004 results and discuss future operating trends and guidance. To access the webcast, click on "Conference Calls" on Align Technology's Investor Relations web site at http://www.aligntech.com/generalapp/us/en/corporate/investor_frameset.jsp . 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 be available on our website. Additionally, a telephonic replay of the call can be accessed by dialing (877) 660-6853 with account number 292 followed by # and conference number 128267 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. EST on February 9, 2005. 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 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 ensure the people, process and systems are in place to build a great company and to continue building a business that is primed for future growth. 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, Align's limited operating history, Align's ability to maintain the adequacy of its internal controls, customer demand for Invisalign, acceptance of Invisalign by consumers and dental professionals, failure of orthodontists and GP dentists to collaborate, 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, Align's ability to manage its rapid growth, competition from manufacturers of traditional braces, Align's ability to ensure that customer and patient information is not compromised, the potential volatility of the market price of Align's common stock and risks related to any deterioration in the general economic condition or specifically in the markets in which Align sells its products. 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.
Investor Relations Contact: Press Contact:
Barbara Domingo Shannon Henderson
Align Technology, Inc. Ethos Communications, Inc.
(408) 470-1204 (678) 417-1767
bdomingo@aligntech.com shannon@ethoscommunication.com
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Year Ended
(in thousands, except per Dec. 31, Dec. 31, Dec. 31, Dec. 31,
share data) 2004 2003 2004 2003
Revenues $43,655 $36,502 $172,830 $122,725
Cost of revenues 14,578 12,926 57,143 51,565
Gross profit 29,077 23,576 115,687 71,160
Operating expenses:
Sales and marketing 15,377 11,138 55,932 43,689
General and administrative 8,655 8,666 33,851 34,296
Research and development 4,006 3,302 15,756 13,112
Total operating expenses 28,038 23,106 105,539 91,097
Profit (loss) from operations 1,039 470 10,148 (19,937)
Interest and other income (expense),
net 616 28 (3) (101)
Provision for income taxes (151) (46) (994) (84)
Net profit (loss) $1,504 $452 $9,151 $(20,122)
Net profit (loss) per share - basic $0.02 $0.01 $0.15 $(0.35)
Weighted-average shares used in
computing basic net profit (loss)
per share 60,744 58,398 59,963 57,758
Net profit (loss) per share - diluted $0.02 $0.01 $0.14 $(0.35)
Weighted-average shares used in
computing diluted net profit (loss)
per share 63,560 63,704 64,089 57,758
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands) December 31, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $69,659 $44,939
Restricted cash 303 439
Marketable securities, short-term -- 2,292
Accounts receivable, net 28,809 21,265
Inventories, net 2,852 2,334
Other current assets 5,211 5,845
Total current assets 106,834 77,114
Property and equipment, net 22,085 23,121
Other long-term assets 2,176 1,967
Total assets $131,095 $102,202
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,361 $3,095
Accrued liabilities 23,481 19,180
Deferred revenue 16,257 13,113
Debt, current portion 1,849 1,989
Total current liabilities 44,948 37,377
Debt, long-term portion 25 1,849
Total liabilities 44,973 39,226
Total stockholders' equity 86,122 62,976
Total liabilities and
stockholders' equity $131,095 $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 Year Ended
(in thousands, except per Dec. 31, Dec. 31, Dec. 31, Dec. 31,
share data) 2004 2003 2004 2003
Revenues $43,655 $36,502 $172,830 $122,725
Cost of revenues 14,539 12,386 56,249 49,005
Gross profit 29,116 24,116 116,581 73,720
Operating expenses:
Sales and marketing 15,361 10,689 55,281 41,487
General and administrative 8,527 7,243 31,115 26,682
Research and development 3,975 2,686 14,423 9,950
Total operating expenses 27,863 20,618 100,819 78,119
Profit (loss) from operations 1,253 3,498 15,762 (4,399)
Interest and other income (expense),
net 616 28 (3) (101)
Provision for income taxes (151) (46) (994) (84)
Net profit (loss) $1,718 $3,480 $14,765 $(4,584)
Net profit (loss) per share - basic $0.03 $0.06 $0.25 $(0.08)
Weighted-average shares used in
computing basic net profit (loss)
per share 60,744 58,398 59,963 57,758
Net profit (loss) per share - diluted $0.03 $0.05 $0.23 $(0.08)
Weighted-average shares used in
computing diluted net profit (loss)
per share 63,560 63,704 64,089 57,758
ALIGN TECHNOLOGY, INC.
RECONCILIATION OF GAAP NET PROFIT (LOSS) TO ADJUSTED NON-GAAP NET PROFIT
(LOSS)
(unaudited)
Three Months
Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
(in thousands) 2004 2003 2004 2003
Net profit (loss) $1,504 $452 $9,151 $(20,122)
Stock-based compensation expense
included in: (1)
- cost of revenues 39 540 894 2,560
- sales and marketing 16 449 651 2,202
- general and administrative 128 1,423 2,736 7,107
- research and development 31 616 1,333 3,162
Restructuring costs included in general
and administrative: (2) -- -- -- 507
Non-GAAP net profit (loss) $1,718 $3,480 $14,765 $(4,584)
(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.
SOURCE Align Technology, Inc. |