Securities Exchange Act of 1934
| DE | 0-32259 | 94-3267295 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
| 2560 Orchard Parkway, San Jose, CA | 95131 | |
| (Address of principal executive offices) | (Zip Code) |
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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.
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.
| Dated: July 28, 2016 |
Align Technology, Inc. By: /s/ Roger E. George Roger E. George Vice President, Legal and Corporate Affairs and General Counsel |
| Exhibit No. | Description | |
| 99.1 | Press Release of Align Technology, Inc. dated July 28, 2016 |
SAN JOSE, CA -- (Marketwired - July 28, 2016) - Align Technology, Inc. (NASDAQ: ALGN) -
-- Q2 revenues up 28.6% year-over-year to $269.4 million
-- Q2 results driven by Clear aligner revenues up 21.2% year-over-year and
Scanner revenues up almost 200% year-over-year
-- Q2 Clear Aligner shipments up 22.4% year-over-year to 177 thousand
cases, international shipments up 38.3% year-over-year
-- Diluted EPS $0.62, up $0.23 year-over-year
Align Technology, Inc. (NASDAQ: ALGN) today reported financial results for the second quarter ended June 30, 2016. Clear Aligner case shipments in the second quarter of 2016 (Q2'16) were 177 thousand, a 22.4% increase year-over-year. For Q2'16, revenues were $269.4 million, a 28.6% increase year-over-year, and net profit was $50.1 million, or $0.62 per diluted share, up $0.23 per diluted share compared to the same period in the prior year.
"Q2 was driven by better than expected revenue due to continued strong year-over-year Invisalign volume across our customer base and record utilization, with international case volume up 38.3%, and North America up 15.3%," said Joe Hogan, Align Technology President and CEO. "We also had continued strong demand for our iTero Element with record shipments this quarter resulting in revenue growth of almost 200% year-over-year."
GAAP Summary Financial Comparisons
Second Quarter Fiscal 2016
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Q2'16 Q1'16 Q2'15 Q/Q Change Y/Y Change
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Clear Aligner
Shipments 176,995 163,695 144,570 +8.1% +22.4%
Net Revenues $ 269.4M $ 238.7M $ 209.5M +12.8% +28.6%
Clear Aligner $ 243.4M $ 219.7M $ 200.8M +10.8% +21.2%
Scanner & Services $ 26.0M $ 19.0M $ 8.7M +36.3% +199.0%
Net Profit $ 50.1M $ 40.5M $ 31.4M +23.7% +60.0%
Diluted EPS $ 0.62 $ 0.50 $ 0.39 $ 0.12 +$0.23
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Note: Changes and percentages are based on actual values and may effect totals due to rounding
As of June 30, 2016, Align had $685.0 million in cash, cash equivalents and marketable securities compared to $678.7 million as of December 31, 2015. On May 3, 2016, as part of our $300.0 million April 2014 stock repurchase program, we entered into an Accelerated Stock Repurchase agreement and funded the repurchase of $50.0 million of our common stock. On that date we received an initial delivery of approximately 0.5 million shares based on current market prices. The final number of shares to be repurchased will be based on our volume-weighted average stock price during the term of the agreement, less an agreed upon discount. Upon completion of this agreement, we will commence repurchasing an additional $50.0 million of our common stock on the open market. These two actions will complete the April 2014 stock repurchase program. During the quarter the Company also announced a new plan to repurchase up to an additional $300.0 million of the Company's stock, all of which remains available for repurchase as of June 30, 2016.
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 Q2'16 revenues and pre-tax income were lower by approximately $8.3 million due to this change.
Q3 2016 Business Outlook
For the third quarter of 2016 (Q3'16), Align provides the following guidance:
-- Clear Aligner case shipments in the range of 174.2 thousand to 176.9
thousand, up approximately 18.1% to 19.9% over the same period a year
ago.
-- Net revenues in the range of $267.2 million to $273.5 million.
-- Diluted EPS in the range of $0.49 to $0.52.
Align Technology to Supply Non-Invisalign Clear Aligners to SmileDirect Club in North America
In a separate press release today, Align announced a supply agreement with SmileDirectClub to manufacture non-Invisalign clear aligners for SmileDirectClub's doctor-directed, at-home program for affordable, cosmetic teeth straightening.
Align Web Cast and Conference Call
Align will host a conference call today, July 28, 2016 at 4:30 p.m. ET, 1:30 p.m. PT, to review its second quarter 2016 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. 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 13640324 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 August 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 third 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, or that the expected benefits of new or existing business relationships will not be achieved as anticipated, 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, 2015, which was filed with the Securities and Exchange Commission (SEC) on February 25, 2016, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, which was filed with the SEC on May 5, 2016. 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 Six Months Ended
June 30, June 30,
-------------------------- -------------------------
2016 2015 2016 2015
------------ ------------- ------------ ------------
Net revenues $ 269,362 $ 209,488 $ 508,082 $ 407,574
Cost of net revenues 64,146 50,854 122,239 97,850
------------ ------------- ------------ ------------
Gross profit 205,216 158,634 385,843 309,724
------------ ------------- ------------ ------------
Operating expenses:
Selling, general and
adminstrative 121,467 100,625 233,677 188,906
Research and
development 18,613 15,684 33,696 29,569
------------ ------------- ------------ ------------
Total operating
expenses 140,080 116,309 267,373 218,475
Income fom operations 65,136 42,325 118,470 91,249
Interest and other
income (expense), net 125 174 (302) (1,278)
------------ ------------- ------------ ------------
Net income before
provision for income
taxes 65,261 42,499 118,168 89,971
Provision for income
taxes 15,113 11,149 27,474 22,444
------------ ------------- ------------ ------------
Net income $ 50,148 $ 31,350 $ 90,694 $ 67,527
============ ============= ============ ============
Net income per share
Basic $ 0.63 $ 0.39 $ 1.14 $ 0.84
============ ============= ============ ============
Diluted $ 0.62 $ 0.39 $ 1.11 $ 0.83
============ ============= ============ ============
Shares used in
computing net income
per share
Basic 79,951 80,257 79,891 80,358
============ ============= ============ ============
Diluted 81,281 81,394 81,440 81,729
============ ============= ============ ============
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2016 2015
---------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents $ 167,706 $ 167,714
Marketable securities, short-term 404,107 359,581
Accounts receivable, net 192,660 158,550
Inventories 22,992 19,465
Prepaid expenses and other current
assets 37,942 26,700
---------------- ----------------
Total current assets 825,407 732,010
Marketable securities, long-term 113,158 151,370
Property, plant and equipment, net 161,685 136,473
Goodwill and intangible assets, net 83,749 79,162
Deferred tax assets 60,051 51,416
Other assets 7,223 8,202
---------------- ----------------
Total assets $ 1,251,273 $ 1,158,633
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,927 $ 34,354
Accrued liabilities 107,505 107,765
Deferred revenues 160,557 129,553
---------------- ----------------
Total current liabilities 298,989 271,672
Income tax payable 41,244 37,512
Other long term liabilities 1,182 1,523
---------------- ----------------
Total liabilities 341,415 310,707
Total stockholders' equity 909,858 847,926
---------------- ----------------
Total liabilities and stockholders'
equity $ 1,251,273 $ 1,158,633
================ ================
ALIGN TECHNOLOGY, INC. Q2 2016 FINANCIAL AND BUSINESS METRICS (in thousands except average selling price, utilization and doctors trained) ALIGN TECHNOLOGY, INC. Q2 2016 FINANCIAL AND BUSINESS METRICS (in thousands except average selling price, utilization and doctors trained)
--------
Q1 Q2 Q3 Q4 Fiscal Q1 Q2
2015 2015 2015 2015 2015 2016 2016
Invisalign Clear Aligner Net Revenues
by Geography:
North America $118,844 $126,137 $124,085 $129,663 $498,729 $135,699 $143,909
International 55,920 61,896 61,265 70,980 250,061 69,850 83,703
Non-case* 12,265 12,784 12,942 13,405 51,396 14,149 15,824
-------- -------- -------- -------- ----------------- --------
Total Clear Aligner Net Revenues $187,029 $200,817 $198,292 $214,048 $800,186 $219,698 $243,436
======== ======== ======== ======== ================= ========
YoY % growth 11.2% 11.7% 11.3% 14.8% 12.3% 17.5% 21.2%
QoQ % growth 0.3% 7.4% -1.3% 7.9% 2.6% 10.8%
*includes Invisalign training,
ancillary products, and retainers
Average Invisalign Selling Price (ASP):
Worldwide ASP $ 1,335 $ 1,300 $ 1,255 $ 1,250 $ 1,285 $ 1,255 $ 1,285
International ASP $ 1,410 $ 1,380 $ 1,325 $ 1,315 $ 1,355 $ 1,315 $ 1,345
Invisalign Clear Aligner Cases Shipped
by Geography:
North America 91,110 99,630 101,260 106,390 398,390 110,500 114,855
International 39,670 44,940 46,225 54,010 184,845 53,195 62,140
-------- -------- -------- -------- ----------------- --------
Total Cases Shipped 130,780 144,570 147,485 160,400 583,235 163,695 176,995
======== ======== ======== ======== ================= ========
YoY % growth 16.6% 28.9% 23.6% 26.4% 22.0% 25.2% 22.4%
QoQ % growth 3.1% 10.5% 2.0% 8.8% 2.1% 8.1%
Number of Invisalign Doctors Cases
Shipped To:
North America 20,165 21,335 21,160 21,835 31,710 22,355 22,575
International 9,050 9,790 10,150 10,865 16,460 11,280 12,485
-------- -------- -------- -------- ----------------- --------
Total Doctors Cases Shipped To 29,215 31,125 31,310 32,700 48,170 33,635 35,060
======== ======== ======== ======== ================= ========
Invisalign Doctor Utilization Rates*:
North America 4.5 4.7 4.8 4.9 12.6 4.9 5.1
North American Orthodontists 9.0 9.5 9.9 9.9 31.8 10.4 10.7
North American GP Dentists 2.9 3.0 2.9 3.1 7.4 3.0 3.1
International 4.4 4.6 4.6 5.0 11.2 4.7 5.0
Total Utilization Rates 4.5 4.6 4.7 4.9 12.1 4.9 5.1
* # of cases shipped/# of doctors to
whom cases were shipped
Number of Invisalign Doctors Trained:
North America 870 1,120 1,060 1,270 4,320 875 1,125
International 1,540 1,335 1,200 1,400 5,475 1,605 1,760
-------- -------- -------- -------- ----------------- --------
Total Doctors Trained Worldwide 2,410 2,455 2,260 2,670 9,795 2,480 2,885
======== ======== ======== ======== ================= ========
Total to Date Worldwide 96,405 98,860 101,120 103,790 103,790 106,270 109,155
======== ======== ======== ======== ================= ========
Total Net Revenues:
Clear Aligner Net Revenues $187,029 $200,817 $198,292 $214,048 $800,186 $219,698 $243,436
Scanner & Services Net Revenues 11,057 8,671 9,344 16,228 45,300 19,022 25,926
-------- -------- -------- -------- ----------------- --------
Total Worldwide Net Revenues $198,086 $209,488 $207,636 $230,276 $845,486 $238,720 $269,362
======== ======== ======== ======== ================= ========
YoY % growth 9.7% 8.8% 9.4% 15.9% 11.0% 20.5% 28.6%
QoQ % growth -0.3% 5.8% -0.9% 10.9% 3.7% 12.8%
Stock-based Compensation (SBC)
SBC included in Gross Profit $ 980 $ 970 $ 984 $ 1,008 $ 3,942 $ 961 $ 932
SBC included in Operating Expenses 10,670 11,860 13,677 12,799 49,006 11,563 12,767
-------- -------- -------- -------- ----------------- --------
Total SBC Expense $ 11,650 $ 12,830 $ 14,661 $ 13,807 $ 52,948 $ 12,524 $ 13,699
======== ======== ======== ======== ================= ========
--------
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
appropriate 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 the press release.
Financial Outlook
(in millions, except per share amounts and percentages)
Q3'16 Guidance
-------------------------
GAAP
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Net Revenues $267.2 - $273.5
Gross Margin 74.4% - 74.8%
Operating Expenses $147.1 - $148.1
Operating Margin 19.3% - 20.6%
Net Income per Diluted Share $0.49 - $0.52
Business Metrics: Q3'16
-------------------------
Case Shipments 174.2K - 176.9K
Capital Expenditure $20M - $25M
Depreciation & Amortization $7.0M - $7.5M
Diluted Shares Outstanding 81.4M*
Stock Based Compensation Expense $14.4M
Tax Rate 24.5%
* 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