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) April 29, 2008
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
2.02 RESULTS
OF OPERATIONS AND FINANCIAL CONDITIONS
On
April
29, 2008, Align Technology, Inc. ("Align") is issuing a press release and
holding a conference call regarding its financial results for its first quarter
ended March 31, 2008. 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.
ITEM
9.01 Financial Statements and Exhibits
(d)
Exhibits
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release of Align Technology, Inc. dated April 29,
2008
|
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: April 29, 2008 | ALIGN TECHNOLOGY, INC. | |
| |
|
|
| By: | /s/ Kenneth B. Arola | |
|
Kenneth B. Arola |
||
| Vice President, Finance and Chief Financial Officer | ||
INDEX
TO EXHIBITS
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release of Align Technology, Inc. dated April 29,
2008
|
 |
 |
|
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 First Quarter Fiscal 2008 Results;
Board
Authorizes $50 Million Stock Repurchase Program
| · |
Q1
Net Revenues of $74.8 Million Increase 17 Percent
Year-Over-Year
|
| · |
Q1
GAAP Net Profit of $5.3 Million, or $0.07 per diluted
share
|
| · |
Case
Shipments of 51,770 Increase 15 Percent
Year-Over-Year
|
Santa
Clara, Calif. - April 29, 2008 - Align Technology, Inc. (Nasdaq: ALGN) today
reported financial results for the first quarter of fiscal 2008, ended March
31,
2008.
Total
net
revenues for the first quarter of fiscal 2008 (Q1 08) were $74.8 million.
This
reflects a year-over-year increase of 17 percent compared to $63.8 million
in
the first quarter of 2007 (Q1 07). On a sequential basis, net revenues increased
3 percent from $72.5 million in the fourth quarter of 2007 (Q4 07).
“I’m
pleased to report another good quarter for Align and a solid start to fiscal
2008. Our better than expected Q1 results were driven primarily by higher
ASPs
and expense management,” said Thomas M. Prescott, president and CEO of Align
Technology.
Net
profit for Q1 08 was $5.3 million, or $0.07 per diluted share. This is compared
to net profit of $7.0 million, or $0.10 per diluted share in Q1 07, and net
profit of $5.7 million, or $0.08 per diluted share in Q4 07. Stock-based
compensation expense included in net profit in Q1 08 was $4.0 million, compared
to $2.5 million in Q1 07, and $3.4 million in Q4 07.
Q1
08 Operating Results
|
Key
GAAP Operating Results
|
Q1
08
|
Q4
07
|
Q1
07
|
|
Gross
Margin
|
73.8%
|
73.6%
|
72.5%
|
|
Operating
Expense
|
$50.5M
|
$48.4M
|
$39.2M
|
|
Operating
Margin
|
6.2%
|
6.9%
|
11.0%
|
|
Net
Profit
|
$5.3M
|
$5.7M
|
$7.0M
|
|
Earnings
Per Diluted Share (EPS)
|
$0.07
|
$0.08
|
$0.10
|
Liquidity
and Capital Resources
As
of
March 31, 2008, Align had $132.4 million in cash, cash equivalents, marketable
securities and restricted cash, compared to $127.9 million as of December
31,
2007.
Align
Technology Inc. 881 Martin Avenue Santa Clara, CA 95050 Tel: (408) 470-1000
Fax:
(408) 470-1201
-1-
Align
Technology, Inc. Q1Fiscal 2008 Earnings Release
Key
Business Metrics
The
following table highlights business metrics for Align’s first quarter of 2008.
Additional historical information is available on the Company’s website at
http://investor.aligntech.com.
|
Revenue
by Channel:
|
Q1
08
|
Q1’08/Q4’07
%
Change
|
Q1’08/Q1’07
%
Change
|
|
|
U.S.
Orthodontists
|
$22.8M
|
6.3%
|
6.0%
|
|
|
U.S.
GP Dentists
|
$34.8M
|
3.9%
|
16.7%
|
|
|
International
|
$14.2M
|
0%
|
54.7%
|
|
|
Training
and Other
|
$
3.0M
|
(11.8%)
|
(8.2%)
|
|
|
Total
Revenue
|
$74.8M
|
3.1%
|
17.3%
|
|
|
Average
Selling Price (ASP):
|
Q1
08
|
Q1’08/Q4’07
%
Change
|
Q1’08/Q1’07
%
Change
|
|
|
Total
Worldwide Blended ASP
|
$1,380
|
1.5%
|
3.0%
|
|
|
Total
Worldwide ASP excluding Invisalign Express
|
$1,500
|
2.0%
|
3.4%
|
|
|
U.S.
Orthodontists Blended ASP
|
$1,290
|
4.0%
|
1.6%
|
|
|
U.S.
GP Dentists Blended ASP
|
$1,340
|
1.5%
|
0.8%
|
|
|
International
|
$1,700
|
(3.4%)
|
3.0%
|
|
|
Number
of Cases Shipped:
|
Q1
08
|
Q1’08/Q4’07
%
Change
|
Q1’08/Q1’07
%
Change
|
|
|
U.S.
Orthodontists - Full Invisalign
|
14,500
|
1.6%
|
2.1%
|
|
|
U.S.
Orthodontists - Invisalign Express
|
3,090
|
1.0%
|
10.0%
|
|
|
U.S.
GP Dentists - Full Invisalign
|
20,900
|
0.5%
|
12.3%
|
|
|
U.S.
GP Dentists - Invisalign Express
|
4,950
|
6.9%
|
28.9%
|
|
|
International-
Full Invisalign
|
8,200
|
3.1%
|
50.5%
|
|
|
International-
Invisalign Express
|
130
|
8.3%
|
18.2%
|
|
|
Total
Cases Shipped
|
51,770
|
1.8%
|
15.0%
|
|
|
Number
of Doctors Cases were Shipped to:
|
Q1
08
|
|||
|
U.S.
Orthodontists
|
3,680
|
|||
|
U.S.
GP Dentists
|
10,640
|
|||
|
International
|
2,630
|
|||
|
Total
Doctors Cases were Shipped to Worldwide
|
16,950
|
|||
|
Number
of Doctors Trained Worldwide:
|
Q1
08
|
Cumulative
|
||
|
U.S.
Orthodontists
|
100
|
8,410
|
||
|
U.S.
GP Dentists
|
1,150
|
28,630
|
||
|
International
|
400
|
12,740
|
||
|
Total
Doctors Trained Worldwide
|
1,650
|
49,780
|
||
|
Multiple
Case Doctors (Cumulative as of):
|
Q1
08
|
|||
|
U.S.
Orthodontists
|
90.0%
|
|||
|
U.S.
GP Dentists
|
86.8%
|
|||
|
International
|
76.6%
|
|||
|
Doctors
Starting Invisalign Treatment (Cumulative as of):
|
Q1
08
|
|||
|
U.S.
Orthodontists
|
6,830
|
|||
|
U.S.
GP Dentists
|
22,740
|
|||
|
International
|
6,960
|
|||
|
Total
Doctors Starting Invisalign Treatment
|
36,530
|
|||
-2-
Align
Technology, Inc. Q1Fiscal 2008 Earnings Release
|
Doctor
Utilization Rates*:
|
Q1
08
|
Q4
07
|
Q1
07
|
|
U.S.
Orthodontists
|
4.8
|
4.8
|
4.8
|
|
U.S.
GP Dentists
|
2.4
|
2.5
|
2.6
|
|
International
|
3.2
|
3.2
|
2.8
|
|
Total
Utilization Rate
|
3.1
|
3.1
|
3.2
|
|
*Utilization
= # of cases/# of doctors to whom cases were shipped
|
Business
Outlook
For
the
second quarter 2008 (Q2 08), Align Technology expects net revenues to be
in a
range of $78.5 million to $81.5 million. Earnings per diluted share for Q2
08 is
expected to be in a range of $0.04 to $0.06. Stock-based stock compensation
expense for Q2 08 is expected to be approximately $4.9 million.
For
fiscal 2008, the Company remains comfortable with its prior outlook. The
increase in deferred revenue for fiscal 2008 is expected to be in the range
of
$6 million to $9 million primarily associated with new products, which will
be
recognized in future periods, bringing the Company’s total deferred revenue
balance at the end of 2008 to a range of $18 million to $22
million.
A
more
comprehensive business outlook is available following the financial tables
of
this release.
Stock
Repurchase Program
In
a
separate announcement today Align also announced that its board of directors
has
authorized a stock repurchase program of up to $50 million, effective
immediately. For more information, please see Align’s press release titled,
“Align Technology Announces $50 Million Stock Repurchase Program.”
Align
Web Cast and Conference Call
Align
Technology will host a conference call today, April 29, 2008 at 4:30 p.m.
ET,
1:30 p.m. PT, to review its first quarter fiscal 2008 results, discuss future
operating trends and business outlook. The conference call will also be web
cast
live via the Internet. To access the web cast, 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 web cast will be available beginning approximately one hour after
the call's conclusion and will remain available for approximately 12 months.
Additionally, a telephonic replay of the call can be accessed by dialing
877-660-6853 with account number 292 followed by # and conference number
280015
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 4:30 p.m.
ET
on May 14, 2008.
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.
-3-
Align
Technology, Inc. Q1Fiscal 2008 Earnings Release
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, including the tables below, contains forward-looking statements,
including statements regarding Align's anticipated financial results and
certain
business metrics for the second quarter and full year of 2008, including
anticipated revenue and deferred revenue, gross profit, gross margin, operating
expense, net profit, 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, the possibility
that the development and release of new products does not proceed in accordance
with the anticipated timeline, the possibility that the market for the sale
of
these new products may not develop as expected, the 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 and
new
products, the timing of case submissions from our doctors within a 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. 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, 2007, which was filed with the Securities and Exchange
Commission on February 26, 2008. Align undertakes no obligation to revise
or
update publicly any forward-looking statements for any reason.
-4-
|
ALIGN
TECHNOLOGY, INC.
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(in
thousands, except per share data)
|
|
|
Three
Months Ended
|
||||||
|
March
31, 2008
|
March
31, 2007
|
||||||
|
Net
revenues
|
$
|
74,776
|
$
|
63,761
|
|||
|
Cost
of revenues
|
19,608
|
17,529
|
|||||
|
Gross
profit
|
55,168
|
46,232
|
|||||
|
Operating
expenses:
|
|||||||
|
Sales
and marketing
|
28,059
|
23,150
|
|||||
|
General
and administrative
|
15,188
|
12,185
|
|||||
|
Research
and development
|
7,295
|
5,693
|
|||||
|
Patients
First Program
|
-
|
(1,796
|
)
|
||||
|
Total
operating expenses
|
50,542
|
39,232
|
|||||
|
Profit
from operations
|
4,626
|
7,000
|
|||||
|
Interest
and other income, net
|
966
|
455
|
|||||
|
Profit
before income taxes
|
5,592
|
7,455
|
|||||
|
Provision
for income taxes
|
(288
|
)
|
(477
|
)
|
|||
|
Net
profit
|
$
|
5,304
|
$
|
6,978
|
|||
|
Net
profit per share
|
|||||||
|
-
basic
|
$
|
0.08
|
$
|
0.11
|
|||
|
-
diluted
|
$
|
0.07
|
$
|
0.10
|
|||
|
Shares
used in computing net profit per share
|
|||||||
|
-
basic
|
69,053
|
65,433
|
|||||
|
-
diluted
|
70,860
|
69,331
|
|||||
-5-
Align
Technology, Inc. Q1Fiscal 2008 Earnings Release
|
ALIGN
TECHNOLOGY, INC.
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
(in
thousands)
|
|
March
31, 2008
|
December
31, 2007
|
||||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash,
cash equivalents and restricted cash
|
$
|
113,680
|
$
|
89,140
|
|||
|
Marketable
securities, short-term
|
18,683
|
38,771
|
|||||
|
Accounts
receivable, net
|
47,475
|
44,850
|
|||||
|
Inventories,
net
|
3,010
|
2,910
|
|||||
|
Other
current assets
|
8,302
|
8,846
|
|||||
|
Total
current assets
|
191,150
|
184,517
|
|||||
|
Property
and equipment, net
|
27,762
|
25,320
|
|||||
|
Goodwill
and intangible assets, net
|
10,384
|
11,093
|
|||||
|
Other
long-term assets
|
1,754
|
1,831
|
|||||
|
Total
assets
|
$
|
231,050
|
$
|
222,761
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
10,100
|
$
|
9,222
|
|||
|
Accrued
liabilities
|
30,563
|
39,875
|
|||||
|
Deferred
revenue
|
13,295
|
12,362
|
|||||
|
Total
current liabilities
|
53,958
|
61,459
|
|||||
|
Other
long term liabilities
|
159
|
148
|
|||||
|
Total
liabilities
|
54,117
|
61,607
|
|||||
|
Total
stockholders' equity
|
176,933
|
161,154
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
231,050
|
$
|
222,761
|
|||
-6-
Align Technology, Inc. Q1Fiscal 2008 Earnings
Release
|
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. This outlook excludes
the effects of any stock
repurchases.
|
|
Financials:
|
|||||||
|
(in
millions, except per share amounts and percentages)
|
|||||||
|
Q2
2008
|
FY
2008
|
|||
|
Net
Revenue
|
$78.5
- $81.5
|
$320.0
- $330.0
|
||
|
Gross
Margin
|
73.0%
- 73.7%
|
74.2%
- 75.1%
|
||
|
Operating
Expenses
|
$55.8
- $57.0
|
$210.8
- $218.8
|
||
|
Net
Profit %
|
3%
- 5%
|
9%
- 10%
|
||
|
Net
Profit per Diluted Share
|
$0.04
- $0.06
|
$0.40
- $0.45
|
||
|
Increase
in Deferred Revenue
|
$6.0
- $9.0
|
|||
|
Total
Deferred Revenue Balance
|
$18.0
- $22.0
|
|||
|
Stock
Based Compensation Expense:
|
||||
|
Cost
of Revenues
|
$0.4
|
$1.2
|
||
|
Operating
Expenses
|
$4.5
|
$16.8
|
||
|
Total
Stock Based Compensation Expense
|
$4.9
|
$18.0
|
||
|
Business
Metrics:
|
||||
|
Q2
2008
|
FY
2008
|
|||
|
Case
Shipments
|
54.0K
- 56.0K
|
226.7K
- 237.2K
|
||
|
Cash
|
$130M
- $135M
|
$160M
- $170M
|
||
|
DSO
|
~56
days
|
|
~56
days
|
|
|
Capex
|
$5.0M
- $7.0M
|
$15.0M
- $20.0M
|
||
|
Depreciation
& Amortization
|
$2.0M
- $3.0M
|
$13.0M
- $14.0M
|
||
|
Diluted
Shares Outstanding
|
71.4M
|
73.2M
|
-7-