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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) January 26, 2005
ALIGN TECHNOLOGY, INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-32259 94-3267295
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(Commission File Number) (IRS Employer Identification No.)
881 Martin Avenue, Santa Clara, California 95050
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(Address of Principal Executive Offices) (Zip Code)
(408) 470-1000
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(Registrant's Telephone Number, Including Area Code)
Not applicable
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(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 January 26, 2005, Align Technology, Inc. ("Align") is issuing a press
release and holding a conference call regarding its financial results for its
fourth quarter and full fiscal year ended December 31, 2004. 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 these non-GAAP
financial measures to the comparable GAAP financial measures is contained in the
attached press release.
ITEM 8.01 OTHER EVENTS
On January 26, 2005, Align is announcing its financial results for its
fourth quarter and full fiscal year ended December 31, 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.
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 January 26, 2005
99.2 Financial Results for the fourth quarter and full fiscal year
ended December 31, 2004
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: January 26, 2005 ALIGN TECHNOLOGY, INC.
By: /s/ Eldon M. Bullington
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Eldon M. Bullington
Vice President of Finance and
Chief Financial Officer
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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99.1 Press Release of Align Technology, Inc. dated January 26, 2005
99.2 Financial Results for the fourth quarter and full fiscal year
ended December 31, 2004
Exhibit 99.1
ALIGN TECHNOLOGY, INC. REPORTS REVENUES OF $43.7M FOR Q4 2004 AND $172.8M FOR
FISCAL YEAR 2004
- 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(R), 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
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(in thousands, except per Dec. 31, Dec. 31, Dec. 31, Dec. 31,
share data) 2004 2003 2004 2003
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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)
December 31, December 31,
(in thousands) 2004 2003
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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
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(in thousands, except per Dec. 31, Dec. 31, Dec. 31, Dec. 31,
share data) 2004 2003 2004 2003
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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
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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.
-0- 01/26/2005
/CONTACT: investors, Barbara Domingo of Align Technology, Inc.,
+1-408-470-1204, or bdomingo@aligntech.com; or media, Shannon Henderson of
Ethos Communications, Inc., +1-678-417-1767, or
shannon@ethoscommunication.com, for Align Technology, Inc./
/Web site: http://www.invisalign.com /
(ALGN)
Exhibit 99.2
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)
December 31, December 31,
(in thousands) 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