UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the |
Date of Report: January 28, 2016
(Date of earliest event reported)
Align Technology, Inc.
(Exact name of registrant as specified in its charter)
DE
(State or other jurisdiction
of incorporation)
0-32259
(Commission File Number)
94-3267295
(IRS Employer
Identification Number)
2560 Orchard Parkway, San Jose CA
(Address of principal executive offices)
95131
(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:
- 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))
- o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Item 2.02. Results of Operations and Financial Condition On January 28, 2016, Align Technology, Inc. ("Align") is issuing a press release and holding a conference call regarding its financial results for its fourth quarter and fiscal year ended December 31, 2015. 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
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.
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Dated: January 28, 2016 |
ALIGN TECHNOLOGY, INC.
By: /s/ Roger E. George |
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| Exhibit No. | Description |
| 99.1 | Press Release of Align Technology, Inc. dated January 28, 2016 |
SAN JOSE, CA -- (Marketwired - January 28, 2016) - Align Technology, Inc. (NASDAQ: ALGN)
- Q4 revenues of $230.3 million, up 15.9% year-over-year, and diluted EPS of $0.60
- Q4 Clear Aligner shipments of 160.4 thousand cases, up 26.4% year-over-year
- Q4 international Clear Aligner shipments, up 34.8% year-over-year and 33.7% of total worldwide case shipments
- 2015 revenues of $845.5 million, up 11.0% year-over-year, and diluted EPS of $1.77
- 2015 Clear Aligner shipments of 583.2 thousand cases, up 22.0% year-over-year
Align Technology, Inc. (NASDAQ: ALGN) today reported financial results for the fourth quarter and year ended December 31, 2015. Clear Aligner case shipments in the fourth quarter of 2015 (Q4'15) were 160.4 thousand, a 26.4% increase year-over-year. For Q4'15, revenues were $230.3 million, a 15.9% increase year-over-year, and net profit was $48.9 million, or $0.60 per diluted share, up $0.12 over the prior year.
Clear Aligner case shipments in 2015 were 583.2 thousand, a 22.0% increase year-over-year. For 2015, revenues were $845.5 million, an 11.0% increase year-over-year and net profit was $144.0 million, or $1.77 per diluted share, flat compared with the prior year.
"The fourth quarter was a strong finish to another record year for Align," said Joe Hogan, Align Technology President and CEO. "Better than expected revenue and earnings were driven by record Invisalign volume, which was up 26% year-over-year. These results reflect strong growth across our customer base and geographies -- from both an increase in the number of submitters as well as cases per doctor. In addition, strong scanner revenue growth of 33% year-over-year exceeded expectations as shipments of the new iTero Element began ramping this quarter resulting in record scanner shipments."
Continued Hogan, "For the full year 2015, over half a million patients started Orthodontic treatment with Invisalign, an increase of 22% compared to 13% last year. Our increased growth rate reflects continued adoption and utilization from international doctors and a solid rebound in North America, both driven by investments in territory coverage and sales and marketing programs, including clinical education. Product and technology innovation is also a key growth driver for the Company, and as a result, in 2015 we continued to see increased clinical confidence in Invisalign treatment for our customers worldwide."
GAAP Summary Financial Comparisons
Fourth Quarter Fiscal 2015
----------------------------------------------------------------------------
Q4'15 Q3'15 Q4'14 Q/Q Change Y/Y Change
----------------------------------------------------------------------------
Clear Aligner 160,400 147,485 126,905 +8.8 % +26.4 %
Shipments
Net Revenues $ 230.3M $ 207.6M $ 198.6M +10.9 % +15.9 %
Clear Aligner $ 214.0M $ 198.3M $ 186.4M +7.9 % +14.8 %
Scanner & Services $ 16.2M $ 9.3M $ 12.2M +73.7 % +33.4 %
Net Profit $ 48.9M $ 27.6M $ 39.5M +77.0 % +23.6 %
EPS $ 0.60 $ 0.34 $ 0.48 +$0.26 +$0.12
----------------------------------------------------------------------------
Fiscal 2015
----------------------------------------------------------------------------
2015 2014 Y/Y Change
----------------------------------------------------------------------------
Clear Aligner Shipments 583,235 478,000 +22.0%
Net Revenues $ 845.5M $ 761.7M +11.0%
Clear Aligner $ 800.2M $ 712.5M +12.3%
Scanner & Services $ 45.3M $ 49.1M (7.7)%
Net Profit $ 144.0M $ 145.8M (1.2)%
EPS $ 1.77 $ 1.77 $ 0.00
----------------------------------------------------------------------------
Note: Changes and percentages are based on actual values and may effect totals due to rounding
As of December 31, 2015, Align had $678.7 million in cash, cash equivalents and marketable securities compared to $602.6 million as of December 31, 2014. We repurchased approximately 0.2 million shares of stock for $11.2 million in Q4'15 and 1.7 million shares for $101.8 million in 2015. These repurchases were collectively part of a three-year, $300 million stock repurchase program announced in April 2014, of which there is approximately $100 million remaining for repurchases through April 2017.
Additional Aligners at No Charge Effective July 18, 2015
Align implemented its new Additional Aligners policy on July 18, 2015 in which the Company no longer distinguishes between mid-course corrections and case refinements providing doctors the ability to order additional aligners to address either treatment need at no charge, subject to certain requirements. These changes were effective for all new Invisalign Full, Teen, and Assist treatments shipped worldwide after July 18, 2015, as well as any cases that were open as of this date. While this policy change was largely immaterial to the Company's cash flows, it did impact the timing at which the Company recognizes revenue. The Company estimates Q4'15 and 2015 reported revenues and pre tax income were lower by approximately $7.0 million and $14 million, respectively due to this change.
Q1 2016 Business Outlook
For the first quarter of 2016 (Q1'16), Align provides the following guidance:
- Clear Aligner case shipments in the range of 161.3 thousand to 163.7 thousand, up approximately 23% to 25% over the same period a year ago.
- Net revenues in the range of $232.5 million to $236.6 million.
- Diluted EPS in the range of $0.37 to $0.40.
Align Web Cast and Conference Call
Align will host a conference call today, January 28, 2016 at 4:30 p.m. ET, 1:30 p.m. PT, to review its fourth quarter and 2015 results, discuss future operating trends and the 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's Investor Relations web site at http://investor.aligntech.com. To access the conference call, please dial 201-689-8261 approximately fifteen minutes prior to the start of the call. An archived audio 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 conference number 13627358 followed by #. For international callers, please dial 201-612-7415 and use the same conference number referenced above. The telephonic replay will be available through 5:30 p.m. ET on February 11, 2016.
About Align Technology, Inc.
Align Technology is the leader in modern Clear Aligner orthodontics that designs, manufactures and markets the Invisalign® system, which provides dental professionals with a range of treatment options for adults and teenagers. Align also offers the iTero 3D digital scanning system and services for orthodontic and restorative dentistry. Align was founded in March 1997 and received FDA clearance to market the Invisalign system in 1998. Visit www.aligntech.com for more information.
For additional information about the Invisalign system or to find an Invisalign provider in your area, please visit www.invisalign.com. For additional information about the iTero 3D digital scanning system, please visit www.itero.com.
Forward-Looking Statement
This news release, including the tables below, contains forward-looking statements, including statements regarding certain business metrics for the first quarter of 2016, including, but not limited to, anticipated net revenues, gross margin, operating expenses, operating profit, diluted earnings per share, and case shipments. 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, difficulties predicting customer and consumer purchasing behavior, the willingness and ability of our customers to maintain and/or increase product utilization in sufficient numbers, 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, growth related risks, including capacity constraints and pressure on our internal systems and personnel, our ability to successfully achieve the anticipated benefits from the scanner and services business, continued customer demand for our existing and new products, changes in consumer spending habits as a result of, among other things, prevailing economic conditions, levels of employment, salaries and wages and consumer confidence, the timing of case submissions from our doctors within a quarter, acceptance of our products by consumers and dental professionals, foreign operational, political and other risks relating to Align's international manufacturing operations, Align's ability to protect its intellectual property rights, continued compliance with regulatory requirements, competition from existing 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 year ended December 31, 2014, which was filed with the Securities and Exchange Commission on February 26, 2015. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Year Ended
------------------------- --------------------------
December 31, December 31, December 31, December 31,
2015 2014 2015 2014
------------ ------------ ------------ ------------
Net revenues $ 230,276 $ 198,600 $ 845,486 $ 761,653
Cost of revenues 57,466 47,938 205,376 183,210
------------ ------------ ------------ ------------
Gross profit 172,810 150,662 640,110 578,443
------------ ------------ ------------ ------------
Operating expenses:
Selling, general and
adminstrative 99,582 85,893 390,239 332,068
Research and
development 13,889 13,276 61,237 52,799
------------ ------------ ------------ ------------
Total operating
expenses 113,471 99,169 451,476 384,867
Operating profit 59,339 51,493 188,634 193,576
Interest and other
income (expense),
net 313 (1,716) (2,533) (3,207)
------------ ------------ ------------ ------------
Profit before income
taxes 59,652 49,777 186,101 190,369
Provision for income
taxes 10,775 10,236 42,081 44,537
------------ ------------ ------------ ------------
Net profit $ 48,877 $ 39,541 $ 144,020 $ 145,832
============ ============ ============ ============
Net profit per share
- basic $ 0.61 $ 0.49 $ 1.80 $ 1.81
============ ============ ============ ============
- diluted $ 0.60 $ 0.48 $ 1.77 $ 1.77
============ ============ ============ ============
Shares used in
computing net profit
per share
- basic 79,481 80,266 79,998 80,754
============ ============ ============ ============
- diluted 81,051 81,691 81,521 82,283
============ ============ ============ ============
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2015 2014
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 167,714 $ 199,871
Marketable securities, short-term 359,581 254,787
Accounts receivable, net 158,550 129,751
Inventories 19,465 15,928
Prepaid expenses and other current assets 26,700* 56,823
------------ ------------
Total current assets 732,010 657,160
Marketable securities, long-term 151,370 147,892
Property, plant and equipment, net 136,473 90,125
Goodwill and intangible assets, net 79,162 82,056
Deferred tax assets 51,416* 3,099
Other assets 8,202 7,665
------------ ------------
Total assets $ 1,158,633 $ 987,997
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,354 $ 23,247
Accrued liabilities 107,765 87,880
Deferred revenues 129,553 90,684
------------ ------------
Total current liabilities 271,672 201,811
Other long term liabilities 39,035 33,415
------------ ------------
Total liabilities 310,707 235,226
Total stockholders' equity 847,926 752,771
------------ ------------
Total liabilities and stockholders' equity $ 1,158,633 $ 987,997
============ ============
* As of December 31, 2015 we early adopted Accounting Standards Update No.
2015-17, Income Taxes (Topic 740), which simplifies the presentation of
deferred income taxes. Under the new standard, both deferred tax liabilities
and assets are required to be classified as noncurrent in a consolidated
balance sheet. The prior reporting period was not retrospectively adjusted.
ALIGN TECHNOLOGY, INC.
Q4 2015 FINANCIAL AND BUSINESS METRICS
(in thousands except average selling price, utilization and doctors trained)
----------
Q4 Fiscal Q1 Q2
2014 2014 2015 2015
Invisalign Clear Aligner Net
Revenues by Geography:
North America $ 113,670 $ 446,577 $ 118,844 $ 126,137
International 60,467 219,742 55,920 61,896
Non-case* 12,300 46,230 12,265 12,784
--------- --------- --------- ---------
Total Clear Aligner Net
Revenues $ 186,437 $ 712,549 $ 187,029 $ 200,817
========= ========= ========= =========
YoY % growth 12.2 % 15.9% 11.2% 11.7%
QoQ % growth 4.7 % 0.3% 7.4%
*includes Invisalign training,
ancillary products, and
retainers
Average Invisalign Selling
Price (ASP):
Worldwide ASP $ 1,370 $ 1,395 $ 1,335 $ 1,300
International ASP $ 1,510 $ 1,575 $ 1,410 $ 1,380
Invisalign Clear Aligner Cases
Shipped by Geography:
North America 86,855 338,530 91,110 99,630
International 40,050 139,470 39,670 44,940
--------- --------- --------- ---------
Total Cases Shipped 126,905 478,000 130,780 144,570
========= ========= ========= =========
Number of Invisalign Doctors
Cases Shipped To:
North America 19,745 29,890 20,165 21,335
International 8,945 13,450 9,050 9,790
--------- --------- --------- ---------
Total Doctors Cases Shipped
To 28,690 43,340 29,215 31,125
========= ========= ========= =========
Invisalign Doctor Utilization
Rates*:
North America 4.4 11.3 4.5 4.7
North American Orthodontists 8.6 27.7 9.0 9.5
North American GP Dentists 2.9 6.9 2.9 3.0
International 4.5 10.4 4.4 4.6
Total Utilization Rates 4.4 11.0 4.5 4.6
* # of cases shipped/# of
doctors to whom cases were
shipped
Number of Invisalign Doctors
Trained:
North America 1,170 4,145 870 1,120
International 1,255 5,290 1,540 1,335
--------- --------- --------- ---------
Total Doctors Trained
Worldwide 2,425 9,435 2,410 2,455
========= ========= ========= =========
Total to Date Worldwide 93,995 93,995 96,405 98,860
========= ========= ========= =========
Total Net Revenues:
Clear Aligner Net Revenues $ 186,437 $ 712,549 $ 187,029 $ 200,817
Scanner & Services Net
Revenues 12,163 49,104 11,057 8,671
--------- --------- --------- ---------
Total Worldwide Net Revenues $ 198,600 $ 761,653 $ 198,086 $ 209,488
========= ========= ========= =========
YoY % growth 11.4 % 15.4% 9.7% 8.8%
QoQ % growth 4.6 % -0.3% 5.8%
Stock-based Compensation (SBC)
SBC included in Gross Profit $ 965 $ 3,570 $ 980 $ 970
SBC included in Operating
Expenses 9,510 36,225 10,670 11,860
--------- --------- --------- ---------
Total SBC Expense $ 10,475 $ 39,795 $ 11,650 $ 12,830
========= ========= ========= =========
----------
----------
Q3 Q4 Fiscal
2015 2015 2015
Invisalign Clear Aligner Net
Revenues by Geography:
North America $ 124,085 $ 129,663 $ 498,729
International 61,265 70,980 250,061
Non-case* 12,942 13,405 51,396
--------- --------- ---------
Total Clear Aligner Net
Revenues $ 198,292 $ 214,048 $ 800,186
========= ========= =========
YoY % growth 11.3% 14.8% 12.3%
QoQ % growth -1.3% 7.9%
*includes Invisalign training,
ancillary products, and
retainers
Average Invisalign Selling
Price (ASP):
Worldwide ASP $ 1,255 $ 1,250 $ 1,285
International ASP $ 1,325 $ 1,315 $ 1,355
Invisalign Clear Aligner Cases
Shipped by Geography:
North America 101,260 106,390 398,390
International 46,225 54,010 184,845
--------- --------- ---------
Total Cases Shipped 147,485 160,400 583,235
========= ========= =========
Number of Invisalign Doctors
Cases Shipped To:
North America 21,160 21,835 31,710
International 10,150 10,865 16,460
--------- --------- ---------
Total Doctors Cases Shipped
To 31,310 32,700 48,170
========= ========= =========
Invisalign Doctor Utilization
Rates*:
North America 4.8 4.9 12.6
North American Orthodontists 9.9 9.9 31.8
North American GP Dentists 2.9 3.1 7.4
International 4.6 5.0 11.2
Total Utilization Rates 4.7 4.9 12.1
* # of cases shipped/# of
doctors to whom cases were
shipped
Number of Invisalign Doctors
Trained:
North America 1,060 1,270 4,320
International 1,200 1,400 5,475
--------- --------- ---------
Total Doctors Trained
Worldwide 2,260 2,670 9,795
========= ========= =========
Total to Date Worldwide 101,120 103,790 103,790
========= ========= =========
Total Net Revenues:
Clear Aligner Net Revenues $ 198,292 $ 214,048 $ 800,186
Scanner & Services Net
Revenues 9,344 16,228 45,300
--------- --------- ---------
Total Worldwide Net Revenues $ 207,636 $ 230,276 $ 845,486
========= ========= =========
YoY % growth 9.4% 15.9% 11.0%
QoQ % growth -0.9% 10.9%
Stock-based Compensation (SBC)
SBC included in Gross Profit $ 984 $ 1,008 $ 3,942
SBC included in Operating
Expenses 13,677 12,799 49,006
--------- --------- ---------
Total SBC Expense $ 14,661 $ 13,807 $ 52,948
========= ========= =========
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Note: Historical public data may differ due to rounding. Additionally,
rounding may effect totals.
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.
Financial Outlook
(in millions, except per share amounts and percentages)
Q1'16 Guidance
----------------
GAAP
----------------
Net Revenues $232.5 - $236.6
Gross Margin 73.5% - 74.1%
Operating Expenses $130.9 - $132.4
Operating Margin 17.2% - 18.2%
Net Income per Diluted Share $0.37 - $0.40
Business Metrics: Q1'16
----------------
Case Shipments 161.3K - 163.7K
Capital Expenditure $20M - $25M
Depreciation & Amortization $5.0M - $5.5M
Diluted Shares Outstanding 81.1M*
Stock Based Compensation Expense $13.5M
Tax Rate 25.0%
* Excludes any stock repurchases during the quarter
Investor Relations Contact Shirley Stacy Align Technology, Inc. (408) 470-1150 sstacy@aligntech.com Press Contact Shannon Mangum Henderson Ethos Communication, Inc. (678) 261-7803 align@ethoscommunication.com