Align Technology, Inc. : Align Technology Announces Fourth Quarter and Fiscal Year 2011 Results
01/30/2012| 05:54pm US/Eastern
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Record Q4 net revenues of $128.9 million increased 2.4%
sequentially and 38.8% year-over-year
Record Q4 Invisalign revenue of $118.9 million increased
4.1% sequentially and 28.0% year-over-year with record
Invisalign case shipments of 82.6 thousand
Q4 GAAP diluted EPS was $0.25 and Q4 Non-GAAP diluted EPS
was $0.28
Record fiscal 2011 net revenues of $479.7 million
increased 23.9% year-over-year
Record fiscal 2011 case shipments of 309.3 thousand
increased 18.6% year-over-year
SAN JOSE, Calif., Jan. 30, 2012 (GLOBE NEWSWIRE) -- Align
Technology, Inc. (Nasdaq:ALGN) today reported financial
results for the fourth quarter and fiscal year ended
December 31, 2011.
Total net revenues for the fourth quarter of fiscal 2011
(Q4 11) were a record $128.9 million. This is compared to
$125.9 million reported in the third quarter of 2011 (Q3
11) and compared to $92.9 million reported in the fourth
quarter of 2010 (Q4 10). For fiscal 2011 (FY 11), record
net revenues of $479.7 million increased 23.9 percent from
$387.1 million reported for fiscal 2010 (FY 10). FY10 net
revenues include the release of $14.3 million of previously
deferred revenue for Invisalign Teen replacement aligners.
Q4 11 Invisalign revenue of $118.9 million increased 4.1%
sequentially and 28.0% year over year. Fiscal 2011
Invisalign net revenues of $451.7 million increased 16.7%
from $387.1 million reported for FY 10. Invisalign case
shipments for Q4 11 were 82.6 thousand, compared to 79.4
thousand in Q3 11 and compared to 63.5 thousand in Q4 10.
For FY 11, record case shipments of 309.3 thousand
increased 18.6 percent from 260.8 thousand reported for FY
10.
Q4 11 scanner and CAD/CAM services revenue was $10.0
million, compared to $11.6 million in Q3 11. Fiscal 2011
net revenues for Scanner and CAD/CAM Services was $28.0
million and reflects eight months of sales resulting from
the acquisition of Cadent Holdings, Inc., which closed on
April 29, 2011.
"The fourth quarter was a strong finish to the year
for Align and we're pleased to have delivered better
than expected revenue and earnings, driven by increased
Invisalign case volume and lower than projected operating
expenses," said Thomas M. Prescott, Align president
and CEO. "We continue to see solid performance of
Invisalign across all customer channels and believe that
our continuing focus on Invisalign product evolution and
market expansion is at the core of this progress."
Prescott continued, "We had many significant
accomplishments in 2011 including the acquisition of
Cadent, followed shortly by interoperability with
Invisalign on both the iOC and iTero scanners and other
significant improvements. For Invisalign, we continued to
gain share in the very important Teen Orthodontic segment
in existing markets while expanding into new geographies
including China, Turkey, the Middle East and Russia. These
important milestones will all help us drive continued
adoption and utilization of Invisalign and leverage that
strong base to become the leader in the intra-oral scanner
market."
Gross margin for Q4 11 was 74.1%, compared to 73.4% in Q3
11 and 77.2% in Q4 10. Q4 11 gross margin includes
acquisition and integration related costs of $0.1 million,
amortization of acquired intangible assets related to cost
of revenues of $0.3 million, and severance and benefits
costs of $0.6 million. Q3 11 gross margin includes
acquisition and integration related costs of $0.2 million,
amortization of acquired intangible assets related to cost
of revenues of $0.3 million, and severance and benefits
costs of $0.2 million. The sequential increase in Q4 11
gross margin primarily reflects higher Invisalign case
volume. Q4 11 gross margin for Invisalign was 78.7%,
compared to 78.6% in Q3 11 and 77.2% in Q4 10. Q4 11 gross
margin for scanner and CAD/CAM services was 20.0%, compared
to 21.5% in Q3 11.
Operating expenses for Q4 11 were $69.1 million, compared
to $66.1 million in Q3 11 and $57.0 million in Q4 10. Q4 11
operating expenses include acquisition and integration
related transaction costs of $1.0 million, amortization of
acquired intangible assets of $1.0 million and severance
and benefit costs of $0.3 million. Q3 11 operating expenses
include acquisition and integration related transaction
costs of $1.3 million, amortization of acquired intangible
assets of $0.9 million and severance and benefit costs of
$0.1 million. Q4 10 operating expenses includes litigation
settlement costs of $1.2 million related to a class action
settlement.
Net profit for Q4 11 was $20.4 million, or $0.25 per
diluted share. This is compared to net profit of $19.3
million, or $0.24 per diluted share in Q3 11 and net profit
of $9.9 million, or $0.13 per diluted share in Q4
10. Net profit for Q4 11 includes pre-tax acquisition
and integration related costs of $1.1 million, pre-tax
amortization of acquired intangible assets of $1.3 million,
pre-tax severance and benefit costs of $0.8 million with a
total tax effect of $0.7 million. Net profit for Q3 11
includes pre-tax acquisition and integration related costs
of $1.5 million, pre-tax amortization of acquired
intangible assets of $1.1 million, pre-tax severance and
benefit costs of $0.2 million with a total tax effect of
$0.2 million. Q4 10 net profit includes pre-tax litigation
settlement costs of $1.2 million related to the settlement
of a class action lawsuit with a total tax effect of $0.2
million.
Net profit for FY 11 was $66.7 million, or $0.83 per
diluted share and includes pre-tax acquisition and
integration related costs of $10.0 million, pre-tax
amortization of acquired intangible assets of $3.2 million,
pre-tax severance and benefit costs of $1.1 million with a
total tax effect of $2.9 million. This compares to net
profit for FY 10 of $74.3 million, or $0.95 per diluted
share which includes the following pre-tax items; a benefit
of $14.3 million to net revenues from the release of
previously deferred revenue related to Invisalign Teen
replacement aligners, a credit of $8.7 million to operating
expenses for an insurance settlement related to the
OrthoClear litigation, litigation settlement costs of $4.5
million related to the settlement of the Leiszler class
action lawsuit, and royalties of $0.8 million, with a total
tax effect of $5.6 million.
To supplement our consolidated financial statements, we use
the following non-GAAP financial measures: non-GAAP net
revenues, non-GAAP gross profit, non-GAAP operating
expense, non-GAAP operating margin, non-GAAP net profit and
non-GAAP earnings per share. Detailed reconciliations
between GAAP and non-GAAP information are contained in the
tables following the financial tables of this release.
Non-GAAP gross margin for Q4 11 was 74.9%, compared to
73.9% in Q3 11 and 77.2% in Q4 10. For Invisalign, there
was no difference between GAAP and non-GAAP gross margin
for Q4 11, Q3 2011 and Q4 2010. Q4 11 non-GAAP gross margin
for scanner and CAD/CAM services was 30.0%, compared to
27.1% in Q3 11. Non-GAAP net profit for Q4 11 was $23.0
million, or $0.28 per diluted share. This is compared to
non-GAAP net profit of $21.9 million, or $0.27 per diluted
share in Q3 11 and non-GAAP net profit of $11.0 million, or
$0.14 per diluted share in Q4 10. Non-GAAP net profit
for FY 11 was $78.1 million, or $0.97 per diluted share.
This compares to non-GAAP net profit for FY 10 of $62.3
million, or $0.80 per diluted share.
Q4 11 Operating Results ($M)
Key GAAP Operating Results
Q4 11
Q3 11
Q4 10
Revenue
$128.9
$125.9
$92.9
-Invisalign Revenue
$118.9
$114.3
$92.9
-Scanner and CAD/CAM Services Revenue
$10.0
$11.6
N/A
Gross Margin
74.1%
73.4%
77.2%
-Invisalign Gross Margin
78.7%
78.6%
77.2%
-Scanner and CAD/CAM Services Gross Margin
20.0%
21.5%
N/A
Operating Expense
$69.1
$66.1
$57.0
Operating Margin
20.5%
20.9%
15.9%
Net Profit
$20.4
$19.3
$9.9
Earnings Per Diluted Share (EPS)
$0.25
$0.24
$0.13
Key Non-GAAP Operating Results
Q4 11
Q3 11
Q4 10
Non-GAAP Gross Margin
74.9%
73.9%
77.2%
-Non-GAAP Invisalign Gross Margin
78.7%
78.6%
77.2%
-Non-GAAP Scanner & CAD/CAM Services GM
30.0%
27.1%
N/A
Non-GAAP Operating Expense
$66.9
$63.8
$55.7
Non-GAAP Operating Margin
23.0%
23.2%
17.2%
Non-GAAP Net Profit
$23.0
$21.9
$11.0
Non-GAAP Earnings Per Diluted Share (EPS)
$0.28
$0.27
$0.14
Total stock-based compensation expense included in Q4 11
and Q3 11 was $5.0 million compared to $3.9 million in Q4
10. Stock based compensation expense included in GAAP gross
margin in Q4 11 and Q3 11 was $0.5 million compared to $0.4
million in Q4 10. Stock-based compensation expense
included in GAAP operating expense in Q4 11 and Q3 11 was
$4.5 million compared to $3.5 million in Q4 10.
Total stock-based compensation expense included in FY 11
was $19.2 million compared to $16.1 million in FY 10. Stock
based compensation expense included in GAAP gross margin in
FY 11 was $1.8 million compared to $1.6 million in FY
10. Stock-based compensation expense included in GAAP
operating expense in FY 11 was $17.4 million compared to
$14.5 million in FY 10.
Liquidity and Capital Resources
As of December 31, 2011, Align Technology had $248.1
million in cash, cash equivalents, and marketable
securities compared to $312.4 million as of December 31,
2010. During Q4 11, Align purchased 0.3 million shares at
an average price of $24.00 per share for a total of
approximately $7.8 million. There remains $142.2
million under the Company's existing stock repurchase
authorization.
Key Business Metrics
The following table highlights business metrics for Q4 11,
Q3 11 and Q4 10. Additional historical information is
available on the Company's website at http://investor.aligntech.com.
Revenue by Channel ($M):
Q4 11
Q3 11
Q4 10
North American Orthodontists
$43.2
$42.6
$28.9
North American GP Dentists
$48.2
$46.1
$33.8
International
$30.4
$30.9
$24.8
Non-case Invisalign Revenue*
$7.1
$6.3
$5.4
Total Revenue
$128.9
$125.9
$92.9
Revenue by Product ($M):
Q4 11
Q3 11
Q4 10
Invisalign Full
$79.5
$75.1
$64.9
Invisalign Express/Lite
$10.9
$10.5
$8.3
Invisalign Teen
$14.4
$15.4
$10.6
Invisalign Assist
$7.0
$7.0
$3.7
Non-case Invisalign Revenue*
$7.1
$6.3
$5.4
Total Invisalign
$118.9
$114.3
$92.9
Scanners
$5.2
$5.4
N/A
CAD/CAM Services
$4.8
$6.2
N/A
Total Scanners and CAD/CAM Services
$10.0
$11.6
N/A
Total Revenue
$128.9
$125.9
$92.9
*includes Invisalign training, ancillary products, and
retainers
Invisalign Cases Shipped by Channel:
Q4 11
Q3 11
Q4 10
North American Orthodontists
29,890
30,070
21,920
North American GP Dentists
33,100
31,120
25,275
International
19,600
18,170
16,295
Total Invisalign Cases Shipped
82,590
79,360
63,490
Invisalign Cases Shipped by Product:
Q4 11
Q3 11
Q4 10
Invisalign Full
55,700
51,360
43,870
Invisalign Express/Lite
11,385
11,020
8,875
Invisalign Teen
9,810
11,730
6,940
Invisalign Assist
5,695
5,250
3,805
Invisalign Total Cases Shipped
82,590
79,360
63,490
Average Invisalign Selling Price (ASP), as billed:
Q4 11
Q3 11
Q4 10
Total Worldwide Blended ASP
$1,360
$1,385
$1,400
International ASP
$1,530
$1,560
$1,530
Number of Invisalign Doctors Cases Shipped to:
Q4 11
Q3 11
Q4 10
North American Orthodontists
4,280
4,260
3,940
North American GP Dentists
10,875
11,040
9,600
International
4,795
4,590
4,180
Total Doctors Cases were Shipped to Worldwide
19,950
19,890
17,720
Invisalign Doctor Utilization Rates*:
Q4 11
Q3 11
Q4 10
North American Orthodontists
7.0
7.1
5.6
North American GP Dentists
3.0
2.8
2.6
International
4.1
4.0
3.9
Total Utilization Rate
4.1
4.0
3.6
* Utilization = # of cases shipped/# of doctors to whom
cases were shipped
Number of Invisalign Doctors Trained:
Q4 11
Q3 11
Cumulative
North American Orthodontists
100
100
9,625
North American GP Dentists
855
630
40,080
International
970
855
19,810
Total Doctors Trained Worldwide
1,925
1,585
69,515
Total Invisalign Patients (cases shipped):
Q4 11
Q3 11
Cumulative
Number of Patients Treated or in Treatment (cases)
82,590
79,360
1,734,860
2011 Business Highlights
Fiscal 2011 was another good year for Align Technology and
reflects the Company's continued solid execution of its
key strategic initiatives including product and clinical
innovation, consumer demand creation, enhancing the
customer experience, and international growth and
expansion. The following business highlights summarize
the company's accomplishments related to these
initiatives:
In January, Align and Cadent Holdings, Inc., a leading
provider of 3D digital scanning solutions for
orthodontics and dentistry, announced an agreement to
jointly develop software applications for the iTero® and
iOC® scanning systems. The new applications will optimize
case assessment and planning for Invisalign® treatment,
and bring valuable digital tools chair-side for
Invisalign providers who use Cadent scanners.
In April, Align acquired its joint development partner
Cadent Holdings, Inc. for $187 million in cash. The
acquisition of Cadent positions Align as a leader in one
of the best growth opportunities in dentistry and medical
devices. Intra-oral scanning is a critical part of
enabling new digital technologies and procedures in
dental practices including CAD/CAM for restorative
dentistry or in-office restorations.
In May, Align announced interoperability with Invisalign
for the iOC scanning system with the latest software
version iOC 4.0. Invisalign customers with iOC systems
can now submit 3D digital scans in place of physical
impressions. In May, Align also announced commercial
availability of Invisalign in the People's Republic
of China. The company is training orthodontists based in
the four major cities of Shanghai, Beijing, Shenzhen, and
Guangzhou, which have a combined population of over 70
million people. Align is offering Invisalign Full,
Invisalign Teen and Vivera Retainers directly to
Invisalign-trained orthodontists.
In October, Align announced Invisalign® G4, the next
generation of SmartForce® clinical innovations, designed
to address some of the most significant treatment
challenges doctors encounter. The new and improved
SmartForce features in Invisalign G4 are engineered to
help doctors achieve even better clinical results for
open bite treatments, more predictable movement of upper
laterals, and improved root control for canines and
central incisors. The expanded Invisalign G4 product
features are available on all Invisalign products.
In October, Align announced that it has extended its
funding of the Clear Aligner Research Award Program for a
third consecutive year for North America universities and
a second year for international universities. Launched in
2009, the Clear Aligner Research Award Program is an
annually funded program designed to promote clinical and
scientific research in clear aligner therapy. For 2012,
four one-year awards of $25,000 for North America
universities and four one-year awards of $15,000 for
international universities will be available, for a total
award of $160,000.
In December, Align announced a significant software
upgrade for its iTero 3D scanning system used in dental
practices for a wide range of restorative dental
procedures. The iTero 4.05 software upgrade includes the
Invisalign Scanning Protocol for full interoperability
with Invisalign treatment, as well as enhancements to
software tools that deliver expanded features and greater
efficiency in scanning for iTero customers.
In December, Align received a Product Registration
Certificate for the Invisalign system from the Federal
Service of Health Care and Social Development Control of
the Russian Federation. This regulatory approval allows
Align to train doctors and to sell Invisalign Full,
Invisalign Lite, Invisalign Teen, and Vivera Retainers
throughout Russia.
Q1 Fiscal 2012 Business Outlook
For the first quarter of fiscal 2012 (Q1 12), Align
Technology expects net revenues to be in a range of $125.4
million to $127.9 million. GAAP earnings per diluted share
for Q1 12 is expected to be in a range of $0.17 to $0.19.
Non-GAAP earnings per diluted share for Q1 12 is expected
to be in a range of $0.19 to $0.21. A more comprehensive
business outlook is available following the financial
tables of this release.
Align Web Cast and Conference Call
Align Technology will host a conference call today, January
30, 2012 at 4:30 p.m. ET, 1:30 p.m. PT, to review its
fourth quarter fiscal 2011 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 201-689-8261
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 386750 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 5:30 p.m. ET on February 6, 2012.
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 teens. Align Technology was founded in
March 1997 and received FDA clearance to market Invisalign
in 1998.The Invisalign product family includes Invisalign,
Invisalign Teen, Invisalign Assist, Invisalign Express 10,
Invisalign Express 5, and Vivera Retainers. To learn more
about Invisalign or to find an Invisalign trained doctor in
your area, please visit www.invisalign.com.
Cadent Holdings, Inc. is a subsidiary of Align Technology
and is a leading provider of 3D digital scanning solutions
for orthodontics and dentistry. The Cadent family of
products includes iTero and iOC scanning systems, OrthoCAD
iCast, OrthoCAD iQ and OrthoCAD iRecord. For additional
information, please visit
www.cadentinc.com.
About non-GAAP Financial Measures
To supplement our consolidated financial statements and our
business outlook, we use the following non-GAAP financial
measures: non-GAAP revenue, non-GAAP gross profit, non-GAAP
operating expenses, non-GAAP profit from operations,
non-GAAP net profit, and non-GAAP earnings per share, which
exclude, as applicable, Teen deferred revenues release,
Ormco royalties, acquisition and integration related costs,
amortization of acquired intangible assets, severance and
benefit costs, insurance settlement, litigation settlement
and any related tax effects. The presentation of this
financial information is not intended to be considered in
isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance
with GAAP.
We use these non-GAAP financial measures for financial and
operational decision making and as a means to evaluate
period-to-period comparisons. Our management believes that
these non-GAAP financial measures provide meaningful
supplemental information regarding our "core operating
performance". Management believes that "core
operating performance" represents Align's
performance in the ordinary, ongoing and customary course
of its operations. Accordingly, management excludes from
"core operating performance" certain
expenditures, revenues and other items that may not be
indicative of our operating performance including discrete
cash and non-cash charges that are infrequent or one-time
in nature. We believe that both management and investors
benefit from referring to these non-GAAP financial measures
in assessing our performance and when planning, forecasting
and analyzing future periods. These non-GAAP financial
measures also facilitate management's internal
evaluation of period-to-period comparisons. We believe
these non-GAAP financial measures are useful to investors
both because (1) they allow for greater transparency with
respect to key metrics used by management in its financial
and operational decision making and (2) they are provided
to and used by our institutional investors and the analyst
community to facilitate comparisons with prior and
subsequent reporting periods. A reconciliation of the GAAP
and non-GAAP financial measures for the quarter and year
and a more detailed explanation of each non-GAAP financial
measure and its uses are provided in the footnotes to the
table captioned "Reconciliation of GAAP to non-GAAP
Key Financial Metrics" and "Business Outlook
Summary" included at the end of this release.
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 2012,
including anticipated revenue, gross margin, operating
expense, operating income, earnings per share, case
shipments and cash. 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
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 acquisition of Cadent
Holdings, Inc., 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 fiscal year ended December 31,
2010, which was filed with the Securities and Exchange
Commission on February 26, 2011. 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,
2011
December 31,
2010
December 31,
2011
December 31,
2010
Net revenues (1)
$ 128,905
$ 92,893
$ 479,741
$ 387,126
Cost of revenues
33,355
21,137
118,458
83,709
Gross profit
95,550
71,756
361,283
303,417
Operating expenses:
Sales and marketing
36,112
30,223
142,174
114,013
General and administrative
22,457
18,631
89,152
64,790
Research and development
9,568
6,893
37,154
25,997
Litigation settlement
--
1,239
--
4,549
Insurance settlement
--
--
--
(8,666)
Amortization of acquired intangible assets
983
--
2,443
--
Total operating expenses
69,120
56,986
270,923
200,683
Profit from operations
26,430
14,770
90,360
102,734
Interest and other income (expense), net
(84)
(251)
(419)
(731)
Profit before income taxes
26,346
14,519
89,941
102,003
Provision for income taxes
5,897
4,614
23,225
27,750
Net profit
$ 20,449
$ 9,905
$ 66,716
$ 74,253
Net profit per share
- basic
$ 0.26
$ 0.13
$ 0.86
$ 0.98
- diluted
$ 0.25
$ 0.13
$ 0.83
$ 0.95
Shares used in computing net profit per share
- basic
78,737
76,333
77,988
75,825
- diluted
80,849
78,724
80,294
78,080
(1) The year ended December 30, 2010 include a $14.3
million release of previously deferred revenue for
Invisalign Teen replacement aligners.
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
2011
December 31,
2010
ASSETS
Current assets:
Cash and cash equivalents
$ 240,675
$ 294,664
Restricted cash
4,026
--
Marketable securities, short-term
7,395
8,615
Accounts receivable, net
91,537
65,430
Inventories
9,402
2,544
Other current assets
31,781
17,358
Total current assets
384,816
388,611
Marketable securities, long-term
--
9,089
Property and equipment, net
53,965
30,684
Goodwill and intangible assets, net
185,405
2,666
Deferred tax asset
22,337
42,439
Other long-term assets
2,741
3,454
Total assets
$ 649,264
$ 476,943
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$ 19,265
$ 7,768
Accrued liabilities
76,600
51,358
Deferred revenue
52,252
33,848
Total current liabilities
148,117
92,974
Other long term liabilities
10,366
6,222
Total liabilities
158,483
99,196
Total stockholders' equity
490,781
377,747
Total liabilities and stockholders'
equity
$ 649,264
$ 476,943
ALIGN TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP KEY FINANCIAL
METRICS
Reconciliation of GAAP to Non-GAAP Gross Profit
(in thousands)
Three Months Ended
December 31,
2011
September 30,
2011
December 31,
2010
GAAP Gross profit
$ 95,550
$ 92,370
$ 71,756
Acquisition and integration costs related to cost of
revenues (3)
139
202
--
Amortization of acquired intangible assets related to
cost of revenues (4)
285
267
--
Severance and benefit costs related to cost of
revenues(5)
579
175
--
Non-GAAP Gross profit
$ 96,553
$ 93,014
$ 71,756
Reconciliation of GAAP to Non-GAAP Gross Profit Scanner
and CAD/CAM Services
(in thousands)
Three Months Ended
December 31,
2011
September 30,
2011
December 31,
2010
GAAP Scanner and CAD/CAM Services gross profit
$ 1,993
$ 2,500
$ --
Acquisition and integration costs related to cost of
revenues (3)
139
202
--
Amortization of acquired intangible assets related to
cost of revenues (4)
285
267
--
Severance and benefit costs related to cost of
revenues(5)
579
175
--
Non-GAAP Gross profit
$ 2,996
$ 3,144
$ --
Reconciliation of GAAP to Non-GAAP Operating Expenses
(in thousands)
Three Months Ended
December 31,
2011
September 30,
2011
December 31,
2010
GAAP Operating expenses
$ 69,120
$ 66,058
$ 56,986
Litigation settlement (7)
--
--
(1,239)
Acquisition and integration costs related to operating
expenses (3)
(1,005)
(1,296)
--
Amortization of acquired intangible assets related to
operating expenses (4)
(983)
(868)
--
Severance and benefit costs related to operating
expenses (5)
(256)
(72)
--
Non-GAAP Operating expenses
$ 66,876
$ 63,822
$ 55,747
Reconciliation of GAAP to Non-GAAP Profit from
Operations
(in thousands)
Three Months Ended
December 31,
2011
September 30,
2011
December 31,
2010
GAAP Profit from operations
$ 26,430
$ 26,312
$ 14,770
Acquisition and integration costs related to cost of
revenues (3)
139
202
--
Amortization of acquired intangible assets related to
cost of revenues (4)
285
267
--
Severance and benefit costs related to cost of revenues
(5)
579
175
--
Litigation settlement (7)
--
--
1,239
Acquisition and integration costs related to operating
expenses (3)
1,005
1,296
--
Amortization of acquired intangible assets related to
operating expenses (4)
983
868
--
Severance and benefit costs related to operating
expenses (5)
256
72
--
Non-GAAP Profit from operations
$ 29,677
$ 29,192
$ 16,009
Reconciliation of GAAP to Non-GAAP Net Profit
(in thousands, except per share amounts)
Three Months Ended
December 31,
2011
September 30,
2011
December 31,
2010
GAAP Net profit
$ 20,449
$ 19,264
$ 9,905
Acquisition and integration costs related to cost of
revenues (3)
139
202
--
Amortization of acquired intangible assets related to
cost of revenues (4)
285
267
--
Severance and benefit costs related to cost of revenues
(5)
579
175
--
Litigation settlement (7)
--
--
1,239
Acquisition and integration costs related to operating
expenses (3)
1,005
1,296
--
Amortization of acquired intangible assets related to
operating expenses (4)
983
868
--
Severance and benefit costs related to operating
expenses (5)
256
72
--
Tax effect on non-GAAP adjustments (8)
(715)
(203)
(179)
Non-GAAP Net profit
$ 22,981
$ 21,941
$ 10,965
Diluted Net profit per share:
GAAP
$ 0.25
$ 0.24
$ 0.13
Non-GAAP
$ 0.28
$ 0.27
$ 0.14
Shares used in computing diluted GAAP Net profit per
share
80,849
80,266
78,724
Shares used in computing diluted Non-GAAP Net profit
per share
80,849
80,266
78,724
ALIGN TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP KEY FINANCIAL
METRICS
Reconciliation of GAAP to Non-GAAP Net Revenues
(in thousands)
Year Ended
December 31,
2011
December 31,
2010
Net revenues
$ 479,741
$ 387,126
Teen deferred revenue release(1)
--
(14,298)
Non-GAAP net revenues
$ 479,741
$ 372,828
Reconciliation of GAAP to Non-GAAP Gross Profit
(in thousands)
Year Ended
December 31,
2011
December 31,
2010
GAAP Gross profit
$ 361,283
$ 303,417
Teen deferred revenue release (1)
--
(14,298)
Ormco royalties (2)
--
827
Acquisition and integration costs related to cost of
revenues (3)
398
--
Amortization of acquired intangible assets related to
cost of revenues (4)
735
--
Severance and benefit costs related to cost of
revenues(5)
754
--
Non-GAAP Gross profit
$ 363,170
$ 289,946
Reconciliation of GAAP to Non-GAAP Operating Expenses
(in thousands)
Year Ended
December 31,
2011
December 31,
2010
GAAP Operating expenses
$ 270,923
$ 200,683
Insurance settlement (6)
--
8,666
Litigation settlement (7)
--
(4,549)
Acquisition and integration costs related to operating
expenses (3)
(9,632)
--
Amortization of acquired intangible assets related to
operating expenses (4)
(2,443)
--
Severance and benefit costs related to operating
expenses (5)
(328)
--
Non-GAAP Operating expenses
$ 258,520
$ 204,800
Reconciliation of GAAP to Non-GAAP Profit from
Operations
(in thousands)
Year Ended
December 31,
2011
December 31,
2010
GAAP Profit from Operations
$ 90,360
$ 102,734
Teen deferred revenue release (1)
--
(14,298)
Ormco royalties (2)
--
827
Insurance settlement (6)
--
(8,666)
Litigation settlement (7)
--
4,549
Acquisition and integration costs related to cost of
revenues (3)
398
--
Amortization of acquired intangible assets related to
cost of revenues (4)
735
--
Severance and benefit costs related to cost of revenues
(5)
754
--
Acquisition and integration costs related to operating
expenses (3)
9,632
--
Amortization of acquired intangible assets related to
operating expenses (4)
2,443
--
Severance and benefit costs related to operating
expenses (5)
328
--
Non-GAAP Profit from Operations
$ 104,650
$ 85,146
.
Reconciliation of GAAP to Non-GAAP Net Profit
(in thousands, except per share amounts)
Year Ended
December 31,
2011
December 31,
2010
GAAP Net profit
$ 66,716
$ 74,253
Teen deferred revenue release (1)
--
(14,298)
Ormco royalties (2)
--
827
Insurance settlement (6)
--
(8,666)
Litigation settlement (7)
--
4,549
Acquisition and integration costs related to cost of
revenues (3)
398
--
Amortization of acquired intangible assets related to
cost of revenues (4)
735
--
Severance and benefit costs related to cost of revenues
(5)
754
--
Acquisition and integration costs related to operating
expenses (3)
9,632
--
Amortization of acquired intangible assets related to
operating expenses (4)
2,443
--
Severance and benefit costs related to operating
expenses (5)
328
--
Tax effect on non-GAAP adjustments (8)
(2,862)
5,631
Non-GAAP Net profit
$ 78,144
$ 62,296
Diluted Net profit per share:
GAAP
$ 0.83
$ 0.95
Non-GAAP
$ 0.97
$ 0.80
Shares used in computing diluted GAAP net profit/loss
per share
80,294
78,080
Shares used in computing diluted non-GAAP net profit
per share
80,294
78,080
(1) Teen deferred revenue release. In the
second quarter of 2010, we released $14.3 million of
previously deferred revenue for Invisalign Teen replacement
aligners. We excluded this non-recurring benefit as it is
not indicative of future operating results.
(2) Ormco Royalties. In the first quarter of
2010, we amortized royalty costs of $0.8 million based on
the litigation settlement agreement with Ormco. We excluded
this non-recurring benefit as it is not indicative of
future operating results.
(3) Acquisition costs and integration related.
We have incurred acquisition-related and other expenses
which include legal, banker, accounting and other advisory
fees of third parties, retention bonuses, integration and
professional fees. We do not engage in acquisitions in the
ordinary course of business. We believe that it is
important to understand these charges; however, we do not
believe that these charges are indicative of future
operating results. We believe that eliminating these
expenses from our non-GAAP measures is useful because we
generally would not have otherwise incurred such expenses
in the periods presented as part of our continuing
operations.
(4) Amortization of acquired intangible assets.
When conducting internal development of intangible assets
(including developed technology, customer relationships,
trademarks, etc.), GAAP accounting rules require that we
expense the costs as incurred. In the case of acquired
businesses, however, we are required to allocate a portion
of the purchase price to the accounting value assigned to
intangible assets acquired and amortize this amount over
the estimated useful lives of the acquired intangibles. The
acquired company, in most cases, has itself previously
expensed the costs incurred to develop the acquired
intangible assets, and the purchase price allocated to
these assets is not necessarily reflective of the cost we
would incur in developing the intangible asset. We
eliminate these amortization charges for our non-GAAP
operating results to provide better comparability of pre
and post-acquisition operating results and comparability to
results of businesses utilizing internally developed
intangible
assets.
(5) Severance and benefits costs. These costs
are related to the closure of our New Jersey operations and
will be realized through the first three quarters of 2012.
We have engaged in various restructuring and exit
activities in 2011 and 2009 that have resulted in costs
associated with severance and benefits. Such activity has
been a discrete event based on a unique set of business
objectives or circumstances, and each has differed from the
others in terms of its operational implementation, business
impact and scope. We do not engage in restructuring and/or
exit activities in the ordinary course of business. We
believe that it is important to understand these charges
and, we believe that investors benefit from excluding these
charges from our operating results to facilitate a more
meaningful evaluation of current operating performance and
comparisons to past operating performance.
(6) Insurance Settlement. In June 2010, we
received an $8.7 million insurance settlement over a
disputed coverage under our general liability umbrella that
was not previously reimbursed by our insurer related to
litigation with OrthoClear, Inc. We have excluded this
non-recurring benefit as it is not indicative of future
operating results.
(7) Litigation settlement. In 2010 we recorded
a litigation settlement charge of $4.5 million to resolve
the Leiszler class action suit. We have excluded this
non-recurring charge as it is not indicative of future
operating results.
(8) Tax effect on the above items. This amount
adjusts the provision for income taxes using our non-GAAP
tax rate to reflect the effect of the non-GAAP adjustments
on non-GAAP net profit.
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.
Financials
(in millions, except per share amounts and percentages)
Q1 2012
GAAP
Adjustment
(a)
Non-GAAP
Net Revenue
$125.4 - $127.9
$125.4 - $127.9
Gross Profit
$90.4 - $93.7
$0.8
$91.2 - $94.5
Gross Margin
72.1% - 73.3%
72.7% - 73.9%
Operating Expenses
$71.4 - $72.7
$1.7
$69.7 - $71.0
Operating Margin
15.2% - 16.4%
17.1% - 18.4%
Net Income per Diluted Share
$0.17 - $0.19
$0.02
$0.19 - $0.21
Stock Based Compensation Expense:
Cost of Revenues
$0.5
$0.5
Operating Expenses
$5.0
$5.0
Total Stock Based Compensation Expense
$5.5
$5.5
(a) Includes scanner and CAD/CAM services amortization
of acquired intangibles assets, severance and benefit
costs, and integration costs.
Business Metrics:
Q1 2012
Case Shipments
82.5K - 84.0K
Cash
$250M - $255M *
Capex
$8.0M - $10.0M
Depreciation & Amortization
$3.8M - $4.3M
Diluted Shares Outstanding
81M *
* Excludes any stock repurchases during the quarter
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