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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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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)
October 21, 2004
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ALIGN TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-32259 94-3267295
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
881 Martin Avenue
Santa Clara, California 95050
(Address of principal executive offices, including 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):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition
On October 21, 2004, Align is issuing a press release and holding a
conference call regarding its financial results for the third quarter of fiscal
2004 ended September 30, 2004. A copy of the press release is furnished as
Exhibit 99.1 to this Form 8-K and is incorporated by reference.
This information shall not be deemed "filed" for purposes of Section 18 of
the Securities 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 these non-GAAP
financial measures to the comparable GAAP financial measures is contained in the
attached press release.
Item 8.01 Other Events
On October 21, 2004, Align is announcing its financial results for the
third quarter of fiscal 2004 ended September 30, 2004. These financial results
are attached hereto as Exhibit 99.2. Exhibit 99.2 shall be deemed "filed" for
purposes of Section 18 of the Exchange Act and shall be deemed incorporated by
reference in filings under the Securities Act of 1933 or the Exchange Act.
-2-
Item 9.01. Financial Statements and Exhibits
(c) Exhibits.
Exhibit No. Description
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99.1 Press Release of Align Technology, Inc. dated October 21, 2004
99.2 Financial Results for the Quarter ended September 30, 2004
-3-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALIGN TECHNOLOGY, INC.
By: /s/ Eldon M. Bullington
-------------------------------
Eldon M. Bullington
Vice President of Finance and
Chief Financial Officer
Date: October 21, 2004
-4-
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release of Align Technology, Inc. dated October 21, 2004
99.2 Financial Results for the Quarter ended September 30, 2004
Exhibit 99.1
Align Technology, Inc. Reports 9th Consecutive Quarter of Increasing Revenues
- Third Quarter Revenues Increase 35% Year Over Year to $45.8 Million
- Company Reports GAAP Net Profit of $3.3 Million, or EPS of $0.05, and
Non-GAAP Net Profit of $4.7 Million, or EPS of $0.07
- Company Increases Cash Position by $16.3 Million Year-to-Date
SANTA CLARA, Calif., Oct. 21 /PRNewswire-FirstCall/ -- 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 2004. Total revenues for the third quarter of
2004 were $45.8 million, compared to $34.0 million in the third quarter of
2003, an increase of 34.5 percent, and $44.2 million in the second quarter of
2004, an increase of 3.5 percent.
"We are pleased with our earnings this quarter," stated Thomas M.
Prescott, Align Technology's President and CEO. "As we continue building the
company, we look forward to strengthening the infrastructure and positioning
Align for long-term growth and profitability. Additionally, we believe that
year-over-year, revenues will grow by introducing several strategic
initiatives including an expanded sales force, enhanced consumer marketing
programs and the introduction of new products. "
The net profit for the third quarter of 2004 as determined under generally
accepted accounting principles ("GAAP") was $3.3 million, or earnings per
diluted share of $0.05. This compares to a net loss for the third quarter of
2003 of $2.1 million, or a net loss of $0.04 per share, and a net profit for
the second quarter of 2004 of $3.8 million, or earnings per diluted share of
$0.06. Third quarter 2004 profit includes a $1.1 million severance charge
related to the previously announced departure of an executive.
The non-GAAP net profit for the third quarter of 2004, which excludes
$1.4 million of stock-based compensation, was $4.7 million, or non-GAAP
earnings per diluted share of $0.07. This compares to a non-GAAP net profit of
$1.2 million in the third quarter of 2003, which excludes $3.4 million of
stock-based compensation charges, or a non-GAAP earnings per diluted share of
$0.02. This also compares to a non-GAAP net profit of $5.6 million in the
second quarter of 2004, which excludes $1.8 million of stock-based
compensation, or a non-GAAP earnings per diluted share of $0.09. The
reconciliation of the GAAP to non-GAAP measurements for net profit for the
third quarter of 2004 is set forth below within Align Technology's financial
statements.
As of September 30, 2004, Align had $64.0 million in cash, cash
equivalents and marketable securities, compared to $47.7 million as of
December 31, 2003.
Conference Call
As previously announced, Align Technology, Inc. will host a live webcast
and conference call today, October 21, 2004, at 10:00 a.m. EDT, 7:00 a.m. PDT,
to review third quarter of 2004 results and discuss future operating trends
and guidance outlook for the future. The webcast of Align's conference call
will be accessible through the website at:
http://www.aligntech.com/generalapp/us/en/corporate/investor_frameset.jsp .
The webcast will be archived for future on-demand replay. To access the
conference call, please dial 201-689-8341 approximately ten 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
October 20, 2005. Additionally, a telephonic replay of the call can be
accessed by dialing 877-660-6853 with account number 292 followed by # and
conference number 119689 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 5, 2004.
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 strengthen its infrastructure,
position itself for long-term growth and profitability and the anticipated
success of Align's initiatives to increase revenue. 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 history of losses and negative operating
cash flows, Align's ability to increase its revenue significantly while
controlling expenses, Align's ability to manage growth, loss of key personnel
or the inability to attract and retain key personnel, Align's limited
operating history, customer demand for Invisalign, acceptance of Invisalign by
consumers and dental professionals, competition from manufacturers of
traditional braces, 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, and the potential volatility of the market
price of Align's common stock. 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.
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
(in thousands, except
per share data) Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
Revenues $45,766 $34,038 $129,175 $86,223
Cost of revenues 14,922 13,446 42,565 38,639
Gross profit 30,844 20,592 86,610 47,584
Operating expenses:
Sales and marketing 13,884 10,505 40,555 32,551
General and administrative 8,263 8,722 25,196 25,630
Research and development 4,846 3,113 11,750 9,810
Total operating expenses 26,993 22,340 77,501 67,991
Profit (loss) from operations 3,851 (1,748) 9,109 (20,407)
Interest and other income
(expense), net (217) (359) (619) (129)
Provision for income taxes (316) (37) (843) (38)
Net profit (loss) $3,318 $(2,144) $7,647 $(20,574)
Net profit (loss) per share -- basic $0.06 $(0.04) $0.13 $(0.36)
Weighted-average shares used in
computing basic net profit (loss)
per share 60,319 57,948 59,703 57,543
Net profit (loss) per
share -- diluted $0.05 $(0.04) $0.12 $(0.36)
Weighted-average shares used in
computing diluted net profit (loss)
per share 64,055 57,948 64,298 57,543
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands) September 30, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $63,215 $44,939
Restricted cash 281 439
Marketable securities, short-term 519 2,292
Accounts receivable, net 27,663 21,265
Inventories, net 2,150 2,334
Other current assets 5,855 5,845
Total current assets 99,683 77,114
Property and equipment, net 23,304 23,121
Other long-term assets 2,197 1,967
Total assets $125,184 $102,202
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,899 $3,095
Accrued liabilities 21,733 19,180
Deferred revenue 13,798 13,113
Debt, current portion 1,932 1,989
Total current liabilities 41,362 37,377
Debt, long-term portion 428 1,849
Total liabilities 41,790 39,226
Total stockholders' equity 83,394 62,976
Total liabilities and
stockholders' equity $125,184 $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 Nine Months Ended
Sept. Sept. Sept. Sept.
(in thousands, except per 30, 2004 30, 2003 30, 2004 30, 2003
share data)
Revenues $45,766 $34,038 $129,175 $86,223
Cost of revenues 14,784 12,830 41,710 36,619
Gross profit 30,982 21,208 87,465 49,604
Operating expenses:
Sales and marketing 13,770 9,984 39,920 30,798
General and administrative 7,754 7,117 22,588 19,439
Research and development 4,206 2,470 10,448 7,264
Total operating expenses 25,730 19,571 72,956 57,501
Profit (loss) from operations 5,252 1,637 14,509 (7,897)
Interest and other income
(expense), net (217) (359) (619) (129)
Provision for income taxes (316) (37) (843) (38)
Net profit (loss) $4,719 $1,241 $13,047 $(8,064)
Net profit (loss) per share -- basic $0.08 $0.02 $0.22 $(0.14)
Weighted-average shares used in
computing basic net profit (loss)
per share 60,319 57,948 59,703 57,543
Net profit (loss) per share -- diluted $0.07 $0.02 $0.20 $(0.14)
Weighted-average shares used in
computing diluted net profit (loss)
per share 64,055 62,912 64,298 57,543
ALIGN TECHNOLOGY, INC.
RECONCILIATION OF GAAP NET PROFIT (LOSS) TO ADJUSTED NON-GAAP NET PROFIT
(LOSS)
(unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(in thousands) 2004 2003 2004 2003
Net profit (loss) $3,318 $(2,144) $7,647 $(20,574)
Stock-based compensation expense
included in: (1)
- cost of revenues 138 616 855 2,020
- sales and marketing 114 521 635 1,753
- general and administrative 509 1,605 2,608 5,684
- research and development 640 643 1,302 2,546
Restructuring costs included in
general and administrative: (2) -- -- -- 507
Non-GAAP net profit (loss) $4,719 $1,241 $13,047 $(8,064)
(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.
Contact: investor relations, Barbara Domingo of Align Technology, Inc.,
+1-408-470-1000, or investorinfo@aligntech.com; or press, Shannon Henderson of
Ethos Communications, Inc., +1-678-417-1767, or
shannon@ethoscommunication.com.
SOURCE Align Technology, Inc.
-0- 10/21/2004
/CONTACT: investor relations, Barbara Domingo of Align Technology, Inc.,
+1-408-470-1000, or investorinfo@aligntech.com; or press, Shannon Henderson of
Ethos Communications, Inc., +1-678-417-1767, or
shannon@ethoscommunication.com/
/Web site: http://www.invisalign.com/
(ALGN)
CO: Align Technology, Inc.
ST: California
IN: MTC HEA
SU: ERN CCA
Exhibit 99.2
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
(in thousands, except
per share data) Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
Revenues $45,766 $34,038 $129,175 $86,223
Cost of revenues 14,922 13,446 42,565 38,639
Gross profit 30,844 20,592 86,610 47,584
Operating expenses:
Sales and marketing 13,884 10,505 40,555 32,551
General and administrative 8,263 8,722 25,196 25,630
Research and development 4,846 3,113 11,750 9,810
Total operating expenses 26,993 22,340 77,501 67,991
Profit (loss) from operations 3,851 (1,748) 9,109 (20,407)
Interest and other income
(expense), net (217) (359) (619) (129)
Provision for income taxes (316) (37) (843) (38)
Net profit (loss) $3,318 $(2,144) $7,647 $(20,574)
Net profit (loss) per share -- basic $0.06 $(0.04) $0.13 $(0.36)
Weighted-average shares used in
computing basic net profit (loss)
per share 60,319 57,948 59,703 57,543
Net profit (loss) per
share -- diluted $0.05 $(0.04) $0.12 $(0.36)
Weighted-average shares used in
computing diluted net profit (loss)
per share 64,055 57,948 64,298 57,543
ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands) September 30, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $63,215 $44,939
Restricted cash 281 439
Marketable securities, short-term 519 2,292
Accounts receivable, net 27,663 21,265
Inventories, net 2,150 2,334
Other current assets 5,855 5,845
Total current assets 99,683 77,114
Property and equipment, net 23,304 23,121
Other long-term assets 2,197 1,967
Total assets $125,184 $102,202
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,899 $3,095
Accrued liabilities 21,733 19,180
Deferred revenue 13,798 13,113
Debt, current portion 1,932 1,989
Total current liabilities 41,362 37,377
Debt, long-term portion 428 1,849
Total liabilities 41,790 39,226
Total stockholders' equity 83,394 62,976
Total liabilities and
stockholders' equity $125,184 $102,202