U.S. markets open in 3 hours 55 minutes
  • S&P Futures

    4,534.25
    +25.75 (+0.57%)
     
  • Dow Futures

    34,264.00
    +262.00 (+0.77%)
     
  • Nasdaq Futures

    15,914.25
    +44.50 (+0.28%)
     
  • Russell 2000 Futures

    2,168.40
    +22.10 (+1.03%)
     
  • Crude Oil

    67.03
    +1.46 (+2.23%)
     
  • Gold

    1,775.60
    -8.70 (-0.49%)
     
  • Silver

    22.36
    +0.02 (+0.09%)
     
  • EUR/USD

    1.1333
    +0.0010 (+0.09%)
     
  • 10-Yr Bond

    1.4340
    0.0000 (0.00%)
     
  • Vix

    28.79
    +1.60 (+5.88%)
     
  • GBP/USD

    1.3315
    +0.0038 (+0.28%)
     
  • USD/JPY

    113.0370
    +0.2570 (+0.23%)
     
  • BTC-USD

    56,634.78
    -458.57 (-0.80%)
     
  • CMC Crypto 200

    1,442.74
    -26.35 (-1.79%)
     
  • FTSE 100

    7,116.61
    -52.07 (-0.73%)
     
  • Nikkei 225

    27,753.37
    -182.25 (-0.65%)
     

Align Technology Announces Record First Quarter 2017 Results

SAN JOSE, CA--(Marketwired - April 27, 2017) -

  • Q1 revenues up 5.8% sequentially, up 30.0% year-over-year to a record $310.3 million

  • Q1 Invisalign case shipments up 9.5% sequentially, up 27.1% year-over-year to a record 208 thousand cases

  • Q1 International Invisalign case shipments up 41% year-over-year, North America Invisalign case shipments up 20% year-over-year

  • Q1 Invisalign case shipments to teenage patients up 11.3% sequentially, up 31.6% year-over-year

Align Technology, Inc. (ALGN) today reported financial results for the first quarter ended March 31, 2017. Invisalign case shipments in the first quarter of 2017 (Q1'17) were 208.1 thousand, a 27.1% increase year-over-year. For Q1'17, revenues were $310.3 million, a 30.0% increase year-over-year, and net profit was $69.4 million, or $0.85 per diluted share, up $0.35 per diluted share compared to the same period in the prior year. Q1'17 EPS included the benefit of $21.3 million, or $0.26, from excess tax benefits on stock based compensation in accordance with the new accounting guidance.

Commenting on Align's Q1 2017 results, Align Technology President and CEO Joe Hogan said, "2017 is off to a great start with first quarter revenues, volumes, gross margin and EPS above our expectations. For the quarter, net revenues were up 30% year-over-year, driven by strong Invisalign case shipments of 27% year-over-year to a record 38.9 thousand doctors shipped to during the quarter. These results reflect growth from both our North America and International regions, and higher than expected teenage cases across the board, which increased 32% year-over-year. iTero scanner revenues increased 47% year-over-year, and were down sequentially as expected."

GAAP Summary Financial Comparisons

First Quarter Fiscal 2017

Q1'17

Q4'16

Q1'16

Q/Q Change

Y/Y Change

Invisalign Case Shipments*

208,060

190,055

163,695

+9.5%

+27.1%

Net Revenues

$310.3M

$293.2M

$238.7M

+5.8%

+30.0%

Clear Aligner**

$282.4M

$251.5M

$219.7M

+12.3%

+28.5%

Scanner & Services

$27.9M

$41.7M

$19.0M

(33.0)%

+46.9%

Net Profit

$69.4M

$47.6M

$40.5M

+45.8%

+71.2%

Diluted EPS

$0.85

$0.59

$0.50

+$0.26

+$0.35

Note: Changes and percentages are based on actual values and may effect totals due to rounding
* Invisalign Shipment figures does not include SmileDirectClub aligners
** Clear aligner revenue includes revenues from Invisalign clear aligners and SmileDirectClub aligners

As of March 31, 2017, Align had $644.2 million in cash, cash equivalents and marketable securities compared to $700.0 million as of December 31, 2016. In Q1'17, we purchased a new headquarters building in San Jose, California for approximately $44.1 million. We also paid $36.5M for employee taxes related to the net settlement of vesting employee stock awards during the quarter. Lastly, we repurchased approximately 0.04 million shares of stock for $3.8 million in Q1'17 under the 2014 Repurchase Program. Align has $300.0 million available for repurchase under its 2016 Repurchase Program announced on April 28, 2016.

Q2 2017 Business Outlook

For the second quarter of 2017 (Q2'17), Align provides the following guidance:

  • Invisalign case shipments in the range of 221 thousand to 224 thousand, up approximately 25% to 27% over the same period a year ago.

  • Net revenues in the range of $340 million to $345 million, up approximately 26% to 28% over the same period a year ago.

  • Diluted EPS in the range of $0.71 to $0.74, which includes $0.03 of excess tax benefit.

Regarding our tax rate: During the first quarter of 2017, we adopted accounting standards update entitled "Improvements to Employee Share-Based Payment Accounting". Under this new standard, excess tax benefits and deficiencies associated with employee share-based payments are no longer recognized as additional paid-in capital on the balance sheet but instead are recognized directly to income tax expense or benefit in the income statement for the reporting period in which they occur. Under this new standard, we expect our Q2 effective tax rate to be approximately 21%, which includes $2 to $3 million in excess tax benefits.

Align Web Cast and Conference Call

Align will host a conference call today, April 27, 2017 at 4:30 p.m. ET, 1:30 p.m. PT, to review its first quarter 2017 results, discuss future operating trends and the business outlook. The conference call will also be web cast live via the Internet. To access the webcast, 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 13658703 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 May 11, 2017.

About Align Technology, Inc.

Align Technology designs and manufactures the Invisalign® system, the most advanced clear aligner system in the world, and iTero® intraoral scanners and services. Align's products help dental professionals achieve the clinical results they expect and deliver effective, cutting-edge dental options to their patients. 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 iTero 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 second quarter of 2017, including, but not limited to, anticipated net revenues, gross margin, operating expenses, operating profit, diluted earnings per share, tax rate 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, Align's ability to protect its intellectual property rights, continued compliance with regulatory requirements, competition from existing and new competitors, 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, 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 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, 2016, which was filed with the Securities and Exchange Commission (SEC) on February 28, 2017. 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


March 31, 2017


March 31, 2016

Net revenues

$

310,341

$

238,720

Cost of net revenues

74,716

58,093

Gross profit

235,625

180,627

Operating expenses:

Selling, general and adminstrative

151,148

112,210

Research and development

22,804

15,083

Total operating expenses

173,952

127,293

Income from operations

61,673

53,334

Interest and other income (expense), net

1,645

(427)

Net income before provision for income taxes and equity in losses of investee

63,318

52,907

Provision (benefit) for income taxes

(7,223)

12,361

Equity in losses of investee, net of tax

1,121

-

Net income

$

69,420

$

40,546

Net income per share:

Basic

$

0.87

$

0.51

Diluted

$

0.85

$

0.50

Shares used in computing net income per share:

Basic

79,904

79,831

Diluted

81,534

81,320

ALIGN TECHNOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

March 31,
2017

December 31,
2016

ASSETS

Current assets:

Cash and cash equivalents

$

261,027

$

389,275

Marketable securities, short-term

284,559

250,981

Accounts receivable, net

267,128

247,415

Inventories

35,174

27,131

Prepaid expenses and other current assets

70,279

38,176

Total current assets

918,167

952,978

Marketable securities, long-term

98,574

59,783

Property, plant and equipment, net

231,692

175,167

Equity method investments

43,940

45,061

Goodwill and intangible assets, net

92,447

81,998

Deferred tax assets

60,068

67,844

Other assets

14,405

13,320

Total assets

$

1,459,293

$

1,396,151

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

37,028

$

28,596

Accrued liabilities

125,631

134,332

Deferred revenues

202,895

191,407

Total current liabilities

365,554

354,335

Income tax payable

46,322

45,133

Other long term liabilities

2,542

1,294

Total liabilities

414,418

400,762

Total stockholders' equity

1,044,875

995,389

Total liabilities and stockholders' equity

$

1,459,293

$

1,396,151

ALIGN TECHNOLOGY, INC.

INVISALIGN BUSINESS METRICS*

Q1

Q2

Q3

Q4

Fiscal

Q1

2016

2016

2016

2016

2016

2017

Invisalign Average Selling Price (ASP):

Worldwide ASP

$

1,255

$

1,285

$

1,285

$

1,230

$

1,265

$

1,270

International ASP

$

1,315

$

1,345

$

1,365

$

1,315

$

1,335

$

1,325

Invisalign Cases Shipped by Geography:

North America

110,500

114,855

115,900

122,555

463,810

132,885

International

53,195

62,140

61,855

67,500

244,690

75,175

Total Cases Shipped

163,695

176,995

177,755

190,055

708,500

208,060

YoY % growth

25.2%

22.4%

20.5%

18.5%

21.5%

27.1%

QoQ % growth

2.1%

8.1%

0.4%

6.9%

9.5%

Number of Invisalign Doctors Cases Were Shipped To:

North America

22,355

22,575

22,570

23,265

34,065

23,910

International

11,280

12,485

12,720

13,635

20,415

14,955

Total Doctors Cases Shipped To

33,635

35,060

35,290

36,900

54,480

38,865

Invisalign Doctor Utilization Rates*:

North America

4.9

5.1

5.1

5.3

13.6

5.6

North American Orthodontists

10.4

10.7

11.1

11.3

36.6

12.6

North American GP Dentists

3.0

3.1

3.0

3.2

7.6

3.1

International

4.7

5.0

4.9

5.0

12.0

5.0

Total Utilization Rates

4.9

5.1

5.0

5.2

13.0

5.4

* # of cases shipped/# of doctors to whom cases were shipped

Number of Invisalign Doctors Trained:

North America

875

1,125

1,300

1,420

4,720

980

International

1,605

1,760

1,315

2,280

6,960

2,280

Total Doctors Trained Worldwide

2,480

2,885

2,615

3,700

11,680

3,260

Total to Date Worldwide

106,270

109,155

111,770

115,470

115,470

118,730

Note: Historical public data may differ due to rounding. Additionally, rounding may effect totals.

*Invisalign business metrics exclude SmileDirectClub aligners.

ALIGN TECHNOLOGY, INC.

STOCK-BASED COMPENSATION

(in thousands)

Q1

Q2

Q3

Q4

Fiscal

Q1

2016

2016

2016

2016

2016

2017

Stock-based Compensation (SBC)

SBC included in Gross Profit

$

961

$

932

$

995

$

1,078

$

3,966

$

925

SBC included in Operating Expenses

11,563

12,767

12,716

13,136

50,182

13,887

Total SBC Expense

$

12,524

$

13,699

$

13,711

$

14,214

$

54,148

$

14,812

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)

Q2'17 Guidance

GAAP

Net Revenues

$340 - $345

Gross Margin

74.0% - 75.0%

Operating Expenses

$180 - $184

Operating Margin

21.0% - 21.7%

Net Income per Diluted Share

$0.71 - $0.74

(1)

Business Metrics:

Q2'17

Case Shipments

221K - 224K

Capital Expenditure

$30M - $35M

Depreciation & Amortization

$8M - $9M

Diluted Shares Outstanding

81.6M

(2)

Stock Based Compensation Expense

$14.7M

Effective Tax Rate

21%

(1)

(1) Includes the benefit from the adoption of the new accounting standard update for share-based compensation

(2) Excludes any stock repurchases during the quarter