SAN JOSE, CA--(Marketwired - Jan 30, 2014) - Align Technology, Inc. (
- Q4 Net revenues of $178.3 million increased 24.8% year-over-year
- Q4 Invisalign clear aligner net revenues of $166.2 million increased 25.1% year-over-year
- Q4 GAAP Earnings per diluted share (EPS) of $0.51
- 2013 Net revenues of $660.2 million, increased 17.9% year-over-year
- 2013 GAAP diluted EPS was $0.78, non-GAAP diluted EPS was $1.54
Align Technology, Inc. (
Consolidated net revenues and net profit for both the fourth quarter and fiscal year were each records for the Company.
Total net revenues for the fourth quarter of 2013 (Q4'13) was a record $178.3 million. This is compared to net revenues of $164.5 million reported in the third quarter of 2013 (Q3'13) and $142.8 million in the fourth quarter of 2012 (Q4'12). Q4'13 clear aligner net revenues was $166.2 million, compared to $153.5 million in Q3'13 and $132.8 million in Q4'12. Clear aligner case shipments in Q4'13 were 111.1 thousand, compared to 106.9 thousand in Q3'13 and 90.5 thousand in Q4'12. Q4'13 scanner and CAD/CAM services net revenues was a $12.1 million, compared to $11.0 million in Q3'13 and compared to $10.0 million in Q4'12.
For fiscal 2013 (FY'13), net revenues was $660.2 million, an increase of 17.9% from $560.0 million reported for fiscal 2012 (FY'12). FY'13 clear aligner net revenues of $614.6 million increased 19.0% from $516.6 million for FY'12. FY'13 clear aligner case shipments of 422.3 thousand increased 16.2% from 363.5 thousand for FY'12. FY'13 scanner and CAD/CAM services net revenues was $45.6 million compared to $43.5 million in FY'12.
"The fourth quarter was a solid finish to the year for Align and we're pleased to have delivered better than expected revenue, operating margins and earnings, driven by strong Invisalign growth from our international doctors in Europe and Asia Pacific," said Thomas M. Prescott, Align president and CEO. "While North American Invisalign case shipments were sequentially flat, Invisalign case receipts were softer than expected in December, as many Orthodontist and GP Dentist practices had fewer days in office due to the timing of the four major holidays between Thanksgiving and New Year's Day. However, January receipts are improving and it appears that doctors and their patients are getting back to business."
Net profit for Q4'13 was $42.4 million, or $0.51 per diluted share. This is compared to net profit of $34.5 million, or $0.42 per diluted share in Q3'13, and net profit of $9.6 million, or $0.12 per diluted share in Q4'12. Q4'12 net profit included a goodwill impairment charge of $11.9 million.
Net profit for FY'13 was $64.3 million or $0.78 per diluted share. This compares to net profit for FY'12 of $58.7 million or $0.71 per diluted share. Net profit in FY'13 and FY'12 included $63.2 million and $34.7 million, respectively, of various charges, net of tax, related to the impairment of goodwill and intangible assets and other non-recurring items. Excluding these charges, non-GAAP net profit for FY'13 was $127.5 million compared with non-GAAP net profit in FY'12 of $93.4 million (see "About Non-GAAP Financial Measures").
As of December 31, 2013, the Company had $472.0 million in cash, cash equivalents, and short and long-term marketable securities compared to $356.1 million as of December 31, 2012.
To supplement our consolidated financial statements, we provide the following GAAP and non-GAAP financial measures. Detailed reconciliations between GAAP and non-GAAP information are contained in the tables following the financial tables of this release. Starting in fiscal 2013, amortization of acquired intangible assets is no longer excluded as a non-GAAP measure. This expense is included in GAAP gross profit, operating expenses, operating profit and net profit for the periods presented below and therefore is no longer a reconciling item.
Operating Results Summary ($M except for per share amounts and percentages)
|Key GAAP Operating Results||Q4'13||Q3'13||Q4'12||FY'13||FY'12|
|- Clear Aligner||$||166.2||$||153.5||$||132.8||$||614.6||$||516.6|
|- Scanner and CAD/CAM Services||$||12.1||$||11.0||$||10.0||$||45.6||$||43.4|
|- Clear Aligner||79.8||%||79.9||%||78.8||%||78.9||%||78.6||%|
|- Scanner and CAD/CAM Services||31.1||%||22.2||%||18.5||%||29.1||%||24.0||%|
|Key Non-GAAP Operating Results||Q4'13||Q3'13||Q4'12||FY'13||FY'12|
|Non-GAAP Gross Margin||76.5||%||76.0||%||74.5||%||75.4||%||74.5||%|
|- Non-GAAP Clear Aligner||79.8||%||79.9||%||78.8||%||78.9||%||78.6||%|
|- Non-GAAP Scanner and CAD/CAM Services||31.1||%||22.2||%||18.5||%||29.1||%||25.7||%|
|Non-GAAP Operating Expenses||$||83.6||$||83.6||$||77.5||$||336.9||$||292.9|
|Non-GAAP Operating Margin||29.7||%||25.2||%||20.3||%||24.4||%||22.2||%|
|Non-GAAP Net Profit||$||42.2||$||34.5||$||21.5||$||127.5||$||93.4|
|Stock-based Compensation (SBC)||Q4'13||Q3'13||Q4'12||FY'13||FY'12|
|Total SBC Expense||$||5.2||$||7.6||$||6.0||$||26.5||$||21.4|
|- SBC included in Gross Margin||$||0.7||$||0.7||$||0.5||$||2.6||$||1.8|
|- SBC included in Operating Expenses||$||4.5||$||6.9||$||5.5||$||23.9||$||19.6|
The following list highlights the Company's key strategic announcements over the past year:
- Align announced the new iTero imaging system available as a single hardware platform with software options for restorative or orthodontic procedures.
- Align announced the commercial availability of the Invisalign Outcome Simulator, the Company's first chair-side application designed to preview an Invisalign treatment after creating a digital impression with an iTero scanner.
- Align announced the commercial availability of SmartTrack", the next generation of Invisalign clear aligner material. SmartTrack is a highly elastic, proprietary new aligner material that delivers a gentle, more constant force to improve control of tooth movements with Invisalign clear aligner treatment.
- Align announced the acquisition of its distributor for Invisalign products in the Asia Pacific region, marking the transitioning of Australia, New Zealand, Hong Kong, Singapore, Macau and Malaysia to a direct sales region.
- Align and Henry Schein Dental announced the introduction of Realine", an entry level, five-stage clear aligner product designed for very minor crowding and spacing issues.
- Align announced the upcoming release of Invisalign G5 innovations, specifically designed for the treatment of deep bite malocclusions.
Q1 Fiscal 2014 Business Outlook
For the first quarter of 2014 (Q1'14), Align Technology provides the following guidance:
- Net revenues in a range of $175.2 million to $179.6 million, which reflects a year-over-year increase of 14% to 17%.
- Clear aligner case shipments in a range of 110.1 to 113.1 thousand cases.
- EPS in a range of $0.32 to $0.34.
Align Web Cast and Conference Call
Align Technology will host a conference call today, January 30, 2014 at 4:30 p.m. ET, 1:30 p.m. PT, to review its fourth quarter 2013 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 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. 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 13573937 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 7, 2014.
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. The Company also offers the iTero 3D digital scanning system and services for orthodontic and restorative dentistry. Align Technology was founded in March 1997 and received FDA clearance to market Invisalign in 1998. Visit www.aligntech.com for more information.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements and our business outlook, we may use from time to time the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating profit, non-GAAP net profit and non-GAAP earnings per share, which exclude, as applicable, acquisition and integration related costs, severance and benefit costs, impairment of goodwill, impairment of long-lived assets and any related income tax adjustments, and EBITDA and adjusted EBITDA. 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, on-going and customary course of its operations. Accordingly, management excludes from "core operating performance" certain expenditures 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.
This news release, including the tables below, contains forward-looking statements, including statements regarding certain business metrics for the first quarter of 2014, including, but not limited to, anticipated net revenues, gross margin, operating expenses, operating profit, diluted earnings per share, case shipments and cash, cash equivalents and short-term and long-term investments. 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 the CAD/CAM 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, the loss of key personnel and impairments in the book value of goodwill or other intangible assets. 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, 2012, which was filed with the Securities and Exchange Commission on March 1, 2013. 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, |
|Cost of net revenues||41,816||36,362||162,100||143,653|
|Sales and marketing||44,694||37,769||180,046||152,041|
|General and administrative||27,889||28,001||112,752||99,295|
|Research and development||10,970||11,711||44,082||42,869|
|Impairment of goodwill||-||11,926||40,694||36,591|
|Impairment of long-lived assets||-||-||26,320||-|
|Total operating expenses||83,553||89,407||403,894||330,796|
|Interest and other income (expense), net||(199||)||(672||)||(1,073||)||(1,296||)|
|Profit before income taxes||52,724||16,399||93,139||84,296|
|Provision for income taxes||10,302||6,840||28,844...|