Align's Earnings Beat Ests, Revs Grow


Dental technology company - Align Technology Inc. (ALGN) reported its first-quarter 2013 net loss of $42 million (or 52 cents a share), well below the year-ago earnings of $21 million (or 26 cents a share).  The decline in the net earnings was primarily due to the inclusion of impaired assets worth $26.3 million and goodwill impairment charge of $40.7 million.

However, after adjusting for one-time items, adjusted earnings came in at 26 cents, surpassing the company’s guidance range as well as beating the Zacks Consensus Estimate of 23 cents. Nonetheless, adjusted earnings were in line with the year-ago figures.


Net revenue increased 13.7% year over year to $153.6 million in the reported quarter, surpassing the Zacks Consensus Estimate of $149 million. It also exceeded the previously guided range of $146–$150.5 million issued by the company.

Total Invisalign Clear Aligner revenues were up 14.8% year over year to $141.6 million. The revenues were primarily driven by 98,175 (up 15% year over year) cases shipped in the quarter. Revenues from Scanner and CAD/CAM services inched up 2.2% year over year to $12 million.    

The company recorded 34.5% of the total Invisalign Clear Aligner sales from North America orthodontists (up 17.2% year over year to $48.9 million), 34% from North American GP Dentists (up 6.6% to $48.2 million), 22.5% from the international market (up 7% to $31.2 million) and 9% from non-case revenues (up 88% to $12.7 million).


Gross margin contracted by about 110 basis points (bps) year over year to 73.5% in the first quarter. The margin contraction was on account of lower average selling price (ASP). The company witnessed a 9.2% increase in sales and marketing expenses to $42.3 million; 29.1% rise in general and administrative expenses to $30.3 million and a 7.2% increase in research and development expenses to $11.3 million. As a result, adjusted operating margin contracted 190 bps to 18.8% in the quarter.

Balance Sheet

Align exited the quarter with $328.7 million in cash and cash equivalents compared with $306.4 million at the end of fiscal 2012. During the quarter, Align also purchased 75 thousand shares for a total of $2.4 million. Currently, the company has $92.7 million remaining under its existing stock repurchase authorization.


For the second quarter of 2013, the company expects revenue in the range of $153.6 million and $157.4 million. The current Zacks Consensus Estimate of $157 million remains at the upper end of the guided range. Earnings per share are expected in the range of 26–28 cents compared with the Zacks Consensus Estimate of 30 cents.

Shipments for the Invisalign clear aligner are expected to increase in the range of 7.2%–9.8% on a sequential basis to 102.2–104.7 thousand.

Our Take

Align exited first quarter 2013 on a positive note. The company’s revenue and earnings continue to increase, surpassing the previous guidance. However, the year-over-year decrease in the average selling price remains a cause of concern as it negatively affects the gross margin. This is reflected in the conservative second-quarter guidance. Eventually, the company will likely overcome the headwinds as it has performed well.

The stock currently carries a Zack Rank #2 (Buy). However, medical stocks such as Oculus Innovative Sciences, Inc. (OCLS), The Cooper Companies Inc. (COO) and West Pharmaceutical Services, Inc. (WST), which also carry a Zacks Rank #2 (Buy) are expected to do well and warrant a look.

Read the Full Research Report on ALGN

Read the Full Research Report on COO

Read the Full Research Report on OCLS

Read the Full Research Report on WST

Zacks Investment Research

More From


View Comments (0)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • Enjoy this refreshing Triple Play offer!

    Get FIOS TV Mundo starting at $79.99/mo. w/ no annual contract + 2-yr. price guarantee. Or sign for 2 yrs. & get a $300 prepaid Visa. Click here.

    AdChoicesVerizon FiOS ®Sponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

  • Wondering How You Could Save on Home Insurance?

    Get a quote from Farmers Insurance and discover how you could save. Speak with an agent to get the knowledge you need to make an informed decision.

    AdChoicesFarmers InsuranceSponsored
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • Play

    What the Fed Meeting Means for Bonds

    Janet Yellen & Co. are expected to hint at their timetable for raising interest rates. Here's how investors should prepare ahead of the meeting.

    WSJ Live
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • AARP® Auto Insurance Program from The Hartford

    50+? Request a free quote and you could save $404* on Auto Insurance from The Hartford!

    AdChoicesThe HartfordSponsored
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • Don't buy Alibaba stock: 'Dean of Valuation'

    Investors should steer clear of Alibaba , valuation expert Aswath Damodaran said Wednesday. On CNBC's " Fast Money ," Damodaran, a professor of finance at New York University's Stern School of Business, noted that he was looking at Alibaba stock from the perspective of a long-term investor, not a…

  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • Froot Loops® Cereal

    Who Says You Have to be a Kid to Enjoy the Fruity Goodness of Froot Loops? Remember The Sweet Aroma & Fruity Taste with a Bowl of Froot Loops Today!

    AdChoicesKellogg's Froot Loops®Sponsored
  • 6 Things Debt Collectors Wish You Knew

    The work debt collectors do is not popular, and has become increasingly derided by those who don’t like what we do or simply don’t know the facts about debt collection. Too often, debt collection is painted with a broad brush to create a portrait that isn’t accurate, and doesn’t properly educate…