UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
report (Date of earliest event reported) July 25, 2007
ALIGN
TECHNOLOGY, INC.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
(State
or
Other Jurisdiction of
Incorporation)
|
0-32259
|
94-3267295
|
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
881
Martin Avenue, Santa Clara, California
|
95050
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(408)
470-1000
(Registrant’s
Telephone Number, Including Area Code)
Not
applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM
2.01 RESULTS
OF OPERATIONS AND FINANCIAL CONDITIONS
On
July
25, 2007, Align Technology, Inc. ("Align") is issuing a press release and
holding a conference call regarding its financial results for its second quarter
ended June 30, 2007. The full text of the press release is furnished as Exhibit
99.1 to this Form 8-K.
This
information shall not be deemed "filed" for purposes of Section 18 of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
Align
is
making reference to non-GAAP financial information in both the press release
and
the conference call. A reconciliation of non-GAAP financial measures contained
in the attached press release to the comparable GAAP financial measures is
contained in the attached press release and a reconciliation of these and
certain other non-GAAP financial information provided on the conference call
(to
the extent not reconciled on such call) is contained on the Investor Relations
section of our website at investor.aligntech.com.
ITEM
9.01 Financial Statements
and Exhibits
(d)
Exhibits
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release of Align Technology, Inc. dated July 25,
2007
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
| Dated: July 25, 2007 | ALIGN TECHNOLOGY, INC. | |
| |
|
|
| By: | /s/ Eldon M. Bullington | |
|
Eldon M. Bullington |
||
| Vice President, Finance and Chief Financial Officer | ||
INDEX
TO
EXHIBITS
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release of Align Technology, Inc. dated July 25,
2007
|
 |
 |
|
Investor
Relations Contact
|
Press
Contact
|
|
Shirley
Stacy
|
Shannon
Mangum Henderson
|
|
Align
Technology, Inc.
|
Ethos
Communication, Inc.
|
|
(408)
470-1150
|
(678)
540-9222
|
|
sstacy@aligntech.com
|
align@ethoscommunication.com
|
Align
Technology Announces Second Quarter 2007 Results, Revenues Increase 44% Year
Over Year
|
·
|
Q2
Revenues of $76.6 Million Increase 44 Percent Year Over
Year
|
|
·
|
Q2
GAAP Net Profit of $13.6 Million, or $0.19 per share
diluted
|
|
·
|
Case
Shipments of 55,000 Increase 42 Percent Year Over
Year
|
Santa
Clara, Calif. - July 25, 2007 - 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
2007, ended June 30, 2007. Total revenues for the second quarter of 2007
(Q2 07)
were a record $76.6 million, a sequential increase of 20 percent compared
to
$63.8 million in the first quarter of 2007 (Q1 07) and a year-over-year increase
of 44 percent compared to $53.2 million in the second quarter of 2006 (Q2
06).
“Our
second quarter results were outstanding by any measure and we are very pleased
to deliver our second consecutive record quarter,” said Thomas M. Prescott,
President and CEO of Align Technology. “Consumer demand and physician interest
in the Invisalign system continue to expand, enabling case and revenue growth
and increased profitability. Beyond our financial results, we continue to
make
progress on new product and technology development, and other key strategic
objectives.”
On
a
generally accepted accounting principles (GAAP) basis, net profit for Q2
07 was
$13.6 million, or $0.19 per share diluted. This reflects an increase in GAAP
net
profit of 94 percent from $7.0 million, or $0.10 per share diluted in Q1
07, and
an increase from a GAAP net loss of $2.6 million, or $0.04 loss per share
diluted in Q2 06.
Non-GAAP
net profit for Q2 07 was $16.5 million, or $0.23 per share diluted. This
reflects an increase in non-GAAP net profit of 116 percent from $7.6 million,
or
$0.11 per share diluted in Q1 07, and an increase from a non-GAAP net loss
of
$0.3 million, or $0.01 loss per share diluted in Q2 06. Non-GAAP financial
measures should be considered in addition to results prepared in accordance
with
GAAP, but should not be considered a substitute for, or superior to, GAAP
results. A detailed reconciliation between GAAP and non-GAAP information
is
contained in the tables included herein.
Q2
07 Operating Results
Operating
results reflect stock-based compensation expense of $2.9 million for Q2 07,
and
includes a one-time $1.6 million credit for an insurance reimbursement of
legal
costs associated with OrthoClear litigation.
|
Key
GAAP Operating Results
|
Q2
07
|
Q1
07
|
Q2
06
|
|
Gross
Margin
|
73.6%
|
72.5%
|
69.0%
|
|
Operating
Expense
|
$42.9M
|
$39.2M
|
$40.0M
|
|
Net
Profit (Loss)
|
$13.6M
|
$7.0M
|
($2.6M)
|
|
Earnings
(Loss) Per Share (EPS), Diluted
|
$0.19
|
$0.10
|
($0.04)
|
|
Key
Non-GAAP Operating Results
|
Q2
07
|
Q1
07
|
Q2
06
|
|
Non-GAAP
Gross Margin
|
73.8%
|
72.9%
|
69.4%
|
|
Non-GAAP
Operating Expense
|
$40.3M
|
$38.7M
|
$37.9M
|
|
Non-GAAP
Net Profit (Loss)
|
$16.5M
|
$7.6M
|
($0.3M)
|
|
Non-GAAP
EPS (Loss), Diluted
|
$0.23
|
$0.11
|
($0.01)
|
Liquidity
and Capital Resources
As
of
June 30, 2007, Align had $82.0 million in cash, cash equivalents, marketable
securities and restricted cash, compared to $64.1 million as of December
31,
2006. During the second quarter the Company paid off the remaining $8 million
of
its credit facility and has no outstanding balance, under the credit facility,
as of June 30, 2007.
Key
Business Metrics
The
following table highlights business metrics for Align’s second quarter of 2007.
Additional historical information is available on the Company’s website at
investor.aligntech.com.
-
2
-
|
Revenue
by Channel:
|
Q2
07
|
Q2’07/Q1’07
%
Change
|
Q2’07/Q2’06
%
Change
|
|
U.S.
Orthodontists
|
$24.9
million
|
16.0%
|
40.9%
|
|
U.S.
GP Dentists
|
$36.4
million
|
22.0%
|
50.9%
|
|
International
|
$11.6
million
|
26.8%
|
40.1%
|
|
Training
and Other
|
$
3.7 million
|
11.5%
|
17.5%
|
|
Total
Revenue
|
$76.6
million
|
20.1%
|
43.9%
|
|
Average
Selling Price (ASP)
|
Q2
07
|
Q2’07/Q1’07
%
Change
|
Q2’07/Q2’06
%
Change
|
|
Total
Worldwide Blended ASP
|
$1,330
|
(1.3%)
|
2.4%
|
|
Total
Worldwide ASP excluding Invisalign Express
|
$1,430
|
(1.3%)
|
(3.9%)
|
|
U.S.
Orthodontists Blended ASP
|
$1,230
|
(2.5%)
|
(1.2%)
|
|
U.S.
GP Dentists Blended ASP
|
$1,310
|
(0.8%)
|
6.4%
|
|
International
|
$1,630
|
(1.3%)
|
(1.8%)
|
|
Cases
Shipped:
|
Q2
07
|
Q2’07/Q1’07
%
Change
|
Q2’07/Q2’06
%
Change
|
|
U.S.
Orthodontists - Full Invisalign
|
16,800
|
18.6%
|
61.3%
|
|
U.S.
Orthodontists - Invisalign Express
|
3,400
|
19.9%
|
(
9.7%)
|
|
U.S.
GP Dentists - Full Invisalign
|
22,800
|
22.3%
|
74.9%
|
|
U.S.
GP Dentists - Invisalign Express
|
4,900
|
28.0%
|
(24.4%)
|
|
International-
Full Invisalign
|
7,000
|
29.0%
|
45.0%
|
|
International-
Invisalign Express
|
100
|
(
2.6%)
|
(28.8%)
|
|
Total
Cases Shipped
|
55,000
|
22.2%
|
42.2%
|
|
Doctors
Cases were Shipped to
|
Q2
07
|
||
|
U.S.
Orthodontists
|
3,800
|
||
|
U.S.
GP Dentists
|
10,100
|
||
|
International
|
2,300
|
||
|
Total
Doctors Cases were Shipped to Worldwide
|
16,200
|
||
|
Doctors
Trained Worldwide
|
Q2
07
|
Cumulative
|
|
|
U.S.
Orthodontists
|
100
|
8,100
|
|
|
U.S.
GP Dentists
|
1,500
|
24,800
|
|
|
International
|
300
|
11,600
|
|
|
Total
Doctors Trained Worldwide
|
1,900
|
44,500
|
|
|
Multiple
Case Doctors (Cumulative as of)
|
Q2
07
|
||
|
U.S.
Orthodontists
|
89%
|
||
|
U.S.
GP Dentists
|
87%
|
||
|
International
|
74%
|
||
|
Doctors
Starting Invisalign Treatment (Cumulative as of)
|
Q2
07
|
||
|
U.S.
Orthodontists
|
6,500
|
||
|
U.S.
GP Dentists
|
19,400
|
||
|
International
|
6,000
|
||
|
Total
Doctors Starting Invisalign Treatment
|
31,900
|
||
|
Doctor
Utilization Rates*:
|
Q2
07
|
Q1
07
|
Q2
06
|
|
U.S.
Orthodontists
|
5.3
|
4.8
|
5.0
|
|
U.S.
GP Dentists
|
2.7
|
2.6
|
2.6
|
|
International
|
3.1
|
2.8
|
2.9
|
|
Total
Utilization Rate
|
3.4
|
3.2
|
3.2
|
|
*Utilization
= # of cases/# of doctors cases were shipped to
|
|||
|
Patients
First Program Information
|
|||
|
Cases
Registered
|
30,500
|
||
|
Final
Number of OC Cases Received (Net of Cancellations)
|
24,200
|
||
|
Cases
Shipped
|
24,000
|
||
|
In
Process Cases to be Shipped
|
200
|
||
|
Note:
Amounts above rounded to the nearest hundred.
|
-
3
-
Patients
First Program Update
During
Q2
07, the Patients First Program (PFP) was completed and Align shipped virtually
all of the 24,200 cases that were registered and received, net of approximately
500 case cancellations. There are approximately 200 cases pending ClinCheck
approval by doctors. Once the Company completes these shipments, it will
have
fulfilled its commitment to deliver all PFP cases.
Business
Outlook for the Third Quarter 2007 and Full Year 2007
For
the
third quarter 2007 (Q3 07), Align Technology expects revenues between $70.3
and
$72.2 million and GAAP diluted EPS between $0.07 and $0.09. Non-GAAP diluted
EPS
is expected to be between $0.11 and $0.13.
For
the
full year 2007, Align Technology expects revenues between $281.6 and $286.8
million and GAAP diluted EPS between $0.43 and $0.49. Non-GAAP diluted EPS
for
full year 2007 is expected to be between $0.57 and $0.63.
A
more
comprehensive business outlook, including a reconciliation of GAAP to Non-GAAP
financial measures, is available following the financial tables of this
release.
Align
Web cast and Conference Call
Align
Technology will host a conference call today, July 25, 2007 at 8:30 a.m.
ET,
5:30 a.m. PT, to review its second quarter 2007 results, discuss future
operating trends and business outlook. The conference call will also be webcast
live via the Internet. To access the webcast, go to the “Events &
Presentations” section under Company Information 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 webcast will be available beginning approximately one hour after
the
call’s conclusion and will remain available through July 24, 2008. Additionally,
a telephonic replay of the call can be accessed by dialing 877-660-6853 with
account number 292 followed by # and conference number 227478 followed by
#. The
replay must 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 8, 2007.
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.
-
4
-
About
non-GAAP Financial Measures
To
supplement our consolidated financial statements, which are prepared and
presented in accordance with generally accepted accounting principals (GAAP), we
use the following non-GAAP financial measures: non-GAAP gross profit, gross
margin, profit (loss) from operations, net profit (loss), earnings (loss)
per
share, and certain expenses (including sales and marketing, general and
administrative and research and development), which exclude stock-based
compensation and the Patients First Program charge. The presentation of this
financial information is not intended to be considered in isolation or as
a
substitute for, or superior to, the financial information prepared and presented
in accordance with GAAP. For more information on these non-GAAP financial
measures, please see the tables captioned "Reconciliation of GAAP to Non-GAAP
Condensed Consolidated Statements of Operations” and “Business Outlook Summary”
included at the end of this release.
We
use
these non-GAAP financial measures for financial and operational decision
making
and as a means to evaluate period-to-period comparisons. Our management believes
that these non-GAAP financial measures provide meaningful supplemental
information regarding our “core operating performance”. Management believes that
“core operating performance” represents Align’s performance in the ordinary,
ongoing and customary course of its operations. Accordingly, management excludes
from “core operating performance” certain expenses and expenditures that may not
be indicative of our operating performance including not only non-cash charges,
such as stock-based compensation, but also discrete cash charges that are
infrequent or one-time in nature. We believe that both management and investors
benefit from referring to these non-GAAP financial measures in assessing
our
performance and when planning, forecasting and analyzing future periods.
These
non-GAAP financial measures also facilitate management's internal evaluation
of
period-to-period comparisons. We believe these non-GAAP financial measures
are
useful to investors both because (1) they allow for greater transparency
with
respect to key metrics used by management in its financial and operational
decision making and (2) they are provided to and used by our institutional
investors and the analyst community to help them analyze the health of our
business.
-
5
-
Forward-Looking
Statement
This
news
release, including the tables below, contain forward-looking statements,
including statements regarding Align's anticipated financial results and
certain
business metrics for the third quarter and full year of 2007, including
anticipated revenue, operating expense, earnings per share, percentage of
revenue by channel, case shipments and average selling prices. 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, risks relating to Align's ability to sustain or increase
profitability or revenue growth in future periods while controlling expenses,
continued customer demand for Invisalign, including during the summer vacation
periods in the United States and Europe in the third quarter, 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, 2006, which
was filed with the Securities and Exchange Commission on March 12, 2007,
and its
Quarterly Reports on Form 10-Q. Align undertakes no obligation to revise
or
update publicly any forward-looking statements for any reason.
#
#
#
-
6
-
ALIGN
TECHNOLOGY, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
|
|
|
|
June
30, 2007
|
|
|
June
30, 2006
|
|
June
30, 2007
|
June
30, 2006
|
||||
|
(in
thousands, except per share data)
|
|||||||||||||
|
Revenues
|
$
|
76,603
|
$
|
53,221
|
$
|
140,364
|
$
|
102,129
|
|||||
|
Cost
of revenues
|
20,247
|
16,492
|
37,776
|
30,789
|
|||||||||
|
Gross
profit
|
56,356
|
36,729
|
102,588
|
71,340
|
|||||||||
|
Operating
expenses:
|
|||||||||||||
|
Sales
and marketing
|
24,353
|
20,641
|
47,503
|
40,707
|
|||||||||
|
General
and administrative
|
11,880
|
15,354
|
24,065
|
30,418
|
|||||||||
|
Research
and development
|
6,675
|
4,025
|
12,368
|
8,719
|
|||||||||
|
Patients
First Program
|
-
|
-
|
(1,796
|
)
|
-
|
||||||||
|
Total
operating expenses
|
42,908
|
40,020
|
82,140
|
79,844
|
|||||||||
|
Profit
(loss) from operations
|
13,448
|
(3,291
|
)
|
20,448
|
(8,504
|
)
|
|||||||
|
Interest
and other income, net
|
680
|
841
|
1,135
|
1,539
|
|||||||||
|
Provision
for income taxes
|
(510
|
)
|
(160
|
)
|
(987
|
)
|
(409
|
)
|
|||||
|
Net
profit (loss)
|
$
|
13,618
|
$
|
(2,610
|
)
|
$
|
20,596
|
$
|
(7,374
|
)
|
|||
|
Net
profit (loss) per share
|
|||||||||||||
|
-
basic
|
$
|
0.20
|
$
|
(0.04
|
)
|
$
|
0.31
|
$
|
(0.12
|
)
|
|||
|
-
diluted
|
$
|
0.19
|
$
|
(0.04
|
)
|
$
|
0.29
|
$
|
(0.12
|
)
|
|||
|
Shares
used in computing net profit (loss) per share
|
|||||||||||||
|
-
basic
|
66,696
|
62,966
|
66,068
|
62,743
|
|||||||||
|
-
diluted
|
71,207
|
62,966
|
70,346
|
62,743
|
|||||||||
-
7
-
ALIGN
TECHNOLOGY, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(unaudited)
|
June
30, 2007
|
December
31, 2006
|
||||||
|
(in
thousands)
|
|||||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
65,594
|
$
|
55,113
|
|||
|
Restricted
cash
|
95
|
93
|
|||||
|
Marketable
securities, short-term
|
13,551
|
8,931
|
|||||
|
Accounts
receivable, net
|
47,237
|
33,635
|
|||||
|
Inventories,
net
|
3,388
|
3,090
|
|||||
|
Other
current assets
|
8,560
|
7,227
|
|||||
|
Total
current assets
|
138,425
|
108,089
|
|||||
|
Property
and equipment, net
|
26,675
|
26,904
|
|||||
|
Goodwill
and intangible assets, net
|
12,511
|
14,302
|
|||||
|
Marketable
securities, long-term
|
2,776
|
-
|
|||||
|
Other
long-term assets
|
1,968
|
2,263
|
|||||
|
Total
assets
|
$
|
182,355
|
$
|
151,558
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Line
of credit
|
$
|
-
|
$
|
11,500
|
|||
|
Accounts
payable
|
5,728
|
5,034
|
|||||
|
Accrued
liabilities
|
35,949
|
40,307
|
|||||
|
Deferred
revenue
|
12,159
|
10,942
|
|||||
|
Total
current liabilities
|
53,836
|
67,783
|
|||||
|
Other
long term liabilities
|
189
|
219
|
|||||
|
Total
liabilities
|
54,025
|
68,002
|
|||||
|
Total
stockholders' equity
|
128,330
|
83,556
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
182,355
|
$
|
151,558
|
|||
-
8
-
ALIGN
TECHNOLOGY, INC.
RECONCILIATION
OF GAAP TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in
thousands, except per share data)
|
Three
Months Ended June 30, 2007
|
Three
Months Ended June 30, 2006
|
||||||||||||||||||
|
Reported
|
|
Adjustments
|
|
Non
GAAP
|
Reported
|
Adjustments
|
Non
GAAP
|
||||||||||||
|
Revenues
|
$
|
76,603
|
$
|
-
|
$
|
76,603
|
$
|
53,221
|
$
|
-
|
$
|
53,221
|
|||||||
|
Cost
of revenues
|
20,247
|
(210
|
(a)
|
20,037
|
16,492
|
(181
|
)(a)
|
16,311
|
|||||||||||
|
Gross
profit
|
56,356
|
210
|
56,566
|
36,729
|
181
|
36,910
|
|||||||||||||
|
Operating
expenses:
|
|||||||||||||||||||
|
Sales
and marketing
|
24,353
|
(898
|
)(a)
|
23,455
|
20,641
|
(732
|
)(a)
|
19,909
|
|||||||||||
|
General
and administrative
|
11,880
|
(1,429
|
)(a)
|
10,451
|
15,354
|
(1,029
|
)(a)
|
14,325
|
|||||||||||
|
Research
and development
|
6,675
|
(328
|
)(a)
|
6,347
|
4,025
|
(324
|
)(a)
|
3,701
|
|||||||||||
|
Total
operating expenses
|
42,908
|
(2,655
|
)
|
40,253
|
40,020
|
(2,085
|
)
|
37,935
|
|||||||||||
|
Profit
(loss) from operations
|
13,448
|
2,865
|
16,313
|
(3,291
|
)
|
2,266
|
(1,025
|
)
|
|||||||||||
|
|
|||||||||||||||||||
|
Interest
and other income, net
|
680
|
-
|
680
|
841
|
-
|
841
|
|||||||||||||
|
Provision
for income taxes
|
(510
|
)
|
(33
|
)(b)
|
(543
|
)
|
(160
|
)
|
-
|
(160
|
)
|
||||||||
|
Net
profit (loss)
|
$
|
13,618
|
$
|
2,832
|
$
|
16,450
|
$
|
(2,610
|
)
|
$
|
2,266
|
$
|
(344
|
)
|
|||||
|
Net
profit (loss) per share
|
|||||||||||||||||||
|
-
basic
|
$
|
0.20
|
$
|
0.25
|
$
|
(0.04
|
)
|
$
|
(0.01
|
)
|
|||||||||
|
-
diluted
|
$
|
0.19
|
$
|
0.23
|
$
|
(0.04
|
)
|
$
|
(0.01
|
)
|
|||||||||
|
Shares
used in computing net profit (loss) per share
|
|||||||||||||||||||
|
-
basic
|
66,696
|
66,696
|
62,966
|
62,966
|
|||||||||||||||
|
-
diluted
|
71,207
|
71,207
|
62,966
|
62,966
|
|||||||||||||||
(a) Non
cash
stock-based compensation included in cost of sales and operating
expenses.
(b) Tax
impact
on non-GAAP adjustments.
-
9
-
ALIGN
TECHNOLOGY, INC.
RECONCILIATION
OF GAAP TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in
thousands, except per share data)
|
Three
Months Ended March 31, 2007
|
||||||||||
|
Reported
|
Adjustments
|
Non
GAAP
|
||||||||
|
Revenues
|
$
|
63,761
|
$
|
-
|
$
|
63,761
|
||||
|
Cost
of revenues
|
17,529
|
(234
|
)(a)
|
17,295
|
||||||
|
Gross
profit
|
46,232
|
234
|
46,466
|
|||||||
|
Operating
expenses:
|
||||||||||
|
Sales
and marketing
|
23,150
|
(857
|
)(a)
|
22,293
|
||||||
|
General
and administrative
|
12,185
|
(1,103
|
)(a)
|
11,082
|
||||||
|
Research
and development
|
5,693
|
(328
|
)(a)
|
5,365
|
||||||
|
Patients
First Program
|
(1,796
|
)
|
1,796
|
-
|
||||||
|
Total
operating expenses
|
39,232
|
(492
|
)
|
38,740
|
||||||
|
Profit
from operations
|
7,000
|
726
|
7,726
|
|||||||
|
Interest
and other income, net
|
455
|
-
|
455
|
|||||||
|
Provision
for income taxes
|
(477
|
)
|
(80
|
)(b)
|
(557
|
)
|
||||
|
Net
profit
|
$
|
6,978
|
$
|
646
|
$
|
7,624
|
||||
|
Net
profit per share
|
||||||||||
|
-
basic
|
$
|
0.11
|
$
|
0.12
|
||||||
|
-
diluted
|
$
|
0.10
|
$
|
0.11
|
||||||
|
Shares
used in computing net profit per share
|
||||||||||
|
-
basic
|
65,433
|
65,433
|
||||||||
|
-
diluted
|
69,331
|
69,331
|
||||||||
(a) Non
cash stock-based compensation included in cost of sales and operating
expenses.
(b) Tax
impact on non-GAAP adjustments.
-
10
-
ALIGN
TECHNOLOGY, INC.
RECONCILIATION
OF GAAP TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in
thousands, except per share data)
|
Six
Months Ended June 30, 2007
|
Six
Months Ended June 30,
|
||||||||||||||||||
|
Reported
|
Adjustments
|
Non
GAAP
|
Reported
|
Adjustments
|
Non
GAAP
|
||||||||||||||
|
Revenues
|
$
|
140,364
|
$
|
140,364
|
$
|
102,129
|
$
|
-
|
$
|
102,129
|
|||||||||
|
Cost
of revenues
|
37,776
|
(444
|
)(a)
|
37,332
|
30,789
|
(329
|
)(a)
|
30,460
|
|||||||||||
|
Gross
profit
|
102,588
|
444
|
103,032
|
71,340
|
329
|
71,669
|
|||||||||||||
|
Operating
expenses:
|
|||||||||||||||||||
|
Sales
and marketing
|
47,503
|
(1,755
|
)(a)
|
45,748
|
40,707
|
(1,411
|
)(a)
|
39,296
|
|||||||||||
|
General
and administrative
|
24,065
|
(2,532
|
)(a)
|
21,533
|
30,418
|
(2,117
|
)(a)
|
28,301
|
|||||||||||
|
Research
and development
|
12,368
|
(656
|
)(a)
|
11,712
|
8,719
|
(614
|
)(a)
|
8,105
|
|||||||||||
|
Patients
First Program
|
(1,796
|
)
|
1,796
|
-
|
-
|
-
|
-
|
||||||||||||
|
Total
operating expenses
|
82,140
|
(3,147
|
)
|
78,993
|
79,844
|
(4,142
|
)
|
75,702
|
|||||||||||
|
Profit
(loss) from operations
|
20,448
|
3,591
|
24,039
|
(8,504
|
)
|
4,471
|
(4,033
|
)
|
|||||||||||
|
Interest
and other income, net
|
1,135
|
1,135
|
1,539
|
-
|
1,539
|
||||||||||||||
|
Provision
for income taxes
|
(987
|
)
|
(113
|
)(b)
|
(1,100
|
)
|
(409
|
)
|
-
|
(409
|
)
|
||||||||
|
Net
profit (loss)
|
$
|
20,596
|
$
|
3,478
|
$
|
24,074
|
$
|
(7,374
|
)
|
$
|
4,471
|
$
|
(2,903
|
)
|
|||||
|
Net
profit (loss) per share
|
|||||||||||||||||||
|
-
basic
|
$
|
0.31
|
$
|
0.36
|
$
|
(0.12
|
)
|
$
|
(0.05
|
)
|
|||||||||
|
-
diluted
|
$
|
0.29
|
$
|
0.34
|
$
|
(0.12
|
)
|
$
|
(0.05
|
)
|
|||||||||
|
Shares
used in computing net profit (loss) per share
|
|||||||||||||||||||
|
-
basic
|
66,068
|
66,068
|
62,743
|
62,743
|
|||||||||||||||
|
-
diluted
|
70,346
|
70,346
|
62,743
|
62,743
|
|||||||||||||||
(a) Non
cash
stock-based compensation included in cost of sales and operating
expenses.
(b) Tax
impact
on non-GAAP adjustments.
-
11
-
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.
Financials
(including reconciliation of GAAP to non-GAAP financial
measures)
(in
millions, except per share amounts and percentages)
|
3Q
2007
|
FY
2007
|
|||||||||||||||
|
GAAP
|
Adjustment
|
Non-GAAP
|
GAAP
|
Adjustment
|
Non-GAAP
|
|||||||||||
|
Revenue
|
$70.3
- $72.2
|
$70.3
- $72.2
|
$281.6
- $286.8
|
$281.6
- $286.8
|
||||||||||||
|
Gross
Margin
|
72.1%
- 72.9%
|
0.4%
|
(a)
|
72.5%
- 73.3%
|
72.4%
- 72.9%
|
0.4%
|
(a)
|
72.8%
- 73.3%
|
||||||||
|
|
|
|
||||||||||||||
|
Sales
and Marketing
|
$24.8
- $25.2
|
$1.0
|
(a)
|
$23.8
- $24.2
|
$96.8
- $97.2
|
$3.8
|
(a)
|
$93.0
- $93.4
|
||||||||
|
R&D
|
$6.5
- $6.7
|
$0.4
|
(a)
|
$6.1
- $6.3
|
$25.8
- $26.4
|
$1.5
|
(a)
|
$24.3
- $24.9
|
||||||||
|
G&A
|
$14.5
- $14.9
|
$1.6
|
(a)
|
$12.9
- $13.3
|
$53.1
- $53.7
|
$5.7
|
(a)
|
$47.4
- $48.0
|
||||||||
|
Patient's
First Costs
|
|
($1.8)
|
|
($1.8)
|
|
|||||||||||
|
Operating
Expenses
|
$45.8
- $46.8
|
$3.0
|
$42.8
- $43.8
|
$173.9
- $175.5
|
$9.2
|
$164.8
- $166.4
|
||||||||||
|
|
|
|||||||||||||||
|
Net
Profit
|
$5.0
- $6.2
|
$3.3
|
$8.3
- $9.5
|
$30.3
- $34.6
|
$10.0
|
$40.3
- $44.6
|
||||||||||
|
Net
Profit per Share
|
$0.07
- $0.09
|
$0.04
|
$0.11
- $0.13
|
$0.43
- $0.49
|
$0.14
|
$0.57
- $0.63
|
||||||||||
(a)
Non
cash stock-based compensation included in cost of sales and operating
expenses
|
Business
Metrics
|
||||
|
3Q
2007
|
FY
2007
|
|||
|
Channel
as a % of Revenue
|
||||
|
U.S.
Orthodontists - Full
|
30%
|
30%
|
||
|
U.S.
GP Dentists - Full
|
44%
|
43%
|
||
|
International
Invisalign
|
15%
|
15%
|
||
|
Invisalign
Express
|
8%
|
8%
|
||
|
Training/Other
|
3%
|
4%
|
||
|
Case
Shipments
|
53K
- 54K
|
206K
- 209K
|
||
|
Blended
ASP, excl Express
|
$1380
- $1390
|
$1410
- $1420
|
||
|
Blended
ASP, incl Express
|
$1280
- $1290
|
$1300
- $1310
|
||
|
Cash
|
$95M
- $100M
|
$105
- $115
|
||
|
DSO
|
~55
days
|
~55
days
|
||
|
Capex
|
$8.0M
- $10.0M
|
|||
|
Depreciation
& Amortization
|
$13.0M
- $14.0M
|
-
12
-