SAN JOSE, CA--(Marketwire - Jan 30, 2013) - Align Technology, Inc. (
- 2012 net revenues were a record $560.0 million, an increase of 16.7% year-over-year
- 2012 Invisalign clear aligner case shipments were a record 363.5 thousand, an increase 17.5% year-over-year
- Q4 net revenues of $142.8 million include the release of $4.9 million of previously deferred revenue for Invisalign case refinement
- Q4 Invisalign clear aligner revenue of $132.8 million increased 4.8% sequentially and 11.7% year-over-year
- Q4 Invisalign clear aligner shipments were 90.5 thousand, compared to 92.5 thousand in Q3 12 and 82.6 thousand in Q4 11
- Q4 diluted GAAP diluted EPS was $0.12, non-GAAP diluted EPS was $0.27
Align Technology, Inc. (
Total net revenues for the fourth quarter of fiscal 2012 (Q4 12) were $142.8 million. This is compared to $136.5 million reported in the third quarter of 2012 (Q3 12) and compared to $128.9 million reported in the fourth quarter of 2011 (Q4 11). Q4 12 net revenues include the release of $4.9 million of revenue previously deferred for Invisalign case refinement. Q4 12 Invisalign clear aligner revenue was $132.8 million, compared to $126.7 million in Q3 12 and $118.9 million in Q4 11. Q4 12 Invisalign clear aligner case shipments were 90.5 thousand, compared to 92.5 thousand in Q3 12 and 82.6 thousand in Q4 11. Q4 12 scanner and CAD/CAM services revenue was $10.0 million, compared to $9.8 million in Q3 12 and compared to $10.0 million in Q4 11.
Align defers revenue for Invisalign case refinement, which is an optional finishing tool used to adjust a patient's teeth to the desired final position that is generally ordered in the last stages of orthodontic treatment. In Q4 12, we determined that the actual usage rate was lower than our estimate and as a result we released $4.9 million of revenue deferred for case refinement.
For fiscal 2012 (FY 12), record net revenues of $560.0 million increased 16.7 percent from $479.7 million reported for fiscal 2011 (FY 11). Record FY 12 Invisalign clear aligner net revenues of $516.6 million increased 14.4% from $451.7 million reported for FY 11. FY 12 Invisalign clear aligner case shipments of 363.5 thousand increased 17.5% from 309.3 thousand reported for FY 11. FY 12 scanner and CAD/CAM services net revenues was $43.4 million compared to $28.0 million in FY 11. FY 11 scanner and CAD/CAM services net revenues reflect eight months of sales resulting from the acquisition of Cadent Holdings, Inc., which closed on April 29, 2011.
"I'm very pleased to report a solid fourth quarter which culminated in a record fiscal year for with over 17 percent growth for Invisalign volume", said Thomas M. Prescott, Align president and CEO. "Despite a soft start this quarter in North America for Align and most of the dental industry, Invisalign case submissions rebounded in December and this trend has continued into the first quarter of 2013. Overall, we've seen an uptick in North American case receipts -- reflecting increased patient traffic in our customers' offices, as well as traction from customer engagement and practice development activities. We've also seen increased customer interest in Invisalign related to the launch of SmartTrack, our next generation aligner material which is commercially available now." Prescott continued, "We had many significant accomplishments in 2012 that contributed to our growth, including entry into new market segments with the launch of Invisalign Express 5 and Invisalign i7 and expansion into new emerging country markets. We are starting off the new year with several new products and feature enhancements including the new iTero scanner, Invisalign Outcome Simulator, and Invisalign G4 enhancements which will contribute to our growth throughout the year."
Net profit for Q4 12 of $9.6 million, or $0.12 per diluted share, includes the release of $4.9 million of revenue previously deferred for Invisalign case refinement. This is compared to net loss of $0.3 million, or $0.00 per diluted share in Q3 12 and net profit of $20.4 million, or $0.25 per diluted share in Q4 11. Net profit for Q4 12 includes a goodwill impairment charge of $11.9 million resulting from finalizing our Q3 12 preliminary estimate and a pre-tax amortization of acquired intangible assets of $1.0 million with a total income tax-related adjustment of $0.2 million. Net loss for Q3 12 includes a preliminary estimate pre-tax goodwill impairment charge of $24.7 million, pre-tax acquisition and integration related costs of $0.2 million, pre-tax amortization of acquired intangible assets of $1.1 million, pre-tax severance and benefit costs of $0.1 million with a total income tax-related adjustment of $2.1 million. 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.
In Q3 12, we determined that there were sufficient indicators of a potential impairment to the goodwill attributed to the scanner and CAD/CAM services reporting unit, therefore we conducted step one of the goodwill impairment analysis and concluded that the goodwill was impaired. Based on our preliminary step two analysis, we recorded an estimated goodwill impairment charge of $24.7 million in Q3 12. In Q4 12, we finalized step two of our analysis and recorded an additional goodwill impairment charge of $11.9 million.
Net profit for FY 12 was $58.7 million or $0.71 per diluted share and includes pre-tax goodwill impairment charge of $36.6 million, pre-tax acquisition and integration related costs of $1.3 million, pre-tax amortization of acquired intangible assets of $4.4 million, pre-tax severance and benefit costs of $0.8 million with a total tax effect of $4.9 million. This compares to net profit for FY 11 of $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.
To supplement our consolidated financial statements, we use the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP operating expense, non-GAAP operating margin, non-GAAP net profit, non-GAAP earnings per diluted share, EBITDA and adjusted EBITDA. Detailed reconciliations between GAAP and non-GAAP information are contained in the tables following the financial tables of this release.
Non-GAAP net profit for Q4 12 was $22.3 million, or $0.27 per diluted share. This is compared to non-GAAP net profit of $23.7 million, or $0.28 per diluted share in Q3 12 and non-GAAP net profit of $23.0 million, or $0.28 per diluted share in Q4 11. Non-GAAP net profit for FY 12 was $96.7 million, or $1.17 per diluted share. This compares to non-GAAP net profit for FY 11 of $78.1 million, or $0.97 per diluted share.
| Q4 12 Operating Results ($M) | ||||||||||||||
| Key GAAP Operating Results | Q4 12 | Q3 12 | Q4 11 | |||||||||||
| Revenue | $ | 142.8 | $ | 136.5 | $ | 128.9 | ||||||||
| Clear Aligner | $ | 132.8 | $ | 126.7 | $ | 118.9 | ||||||||
| Scanner and CAD/CAM Services | $ | 10.0 | $ | 9.8 | $ | 10.0 | ||||||||
| Gross Margin | 74.5 | % | 73.5 | % | 74.1 | % | ||||||||
| Clear Aligner | 78.8 | % | 77.6 | % | 78.7 | % | ||||||||
| Scanner and CAD/CAM Services | 18.5 | % | 20.6 | % | 20.0 | % | ||||||||
| Operating Expense | $ | 89.4 | $ | 95.8 | $ | 69.1 | ||||||||
| Operating Margin | 12.0 | % | 3.3 | % | 20.5 | % | ||||||||
| Net Profit (Loss) | $ | 9.6 | $ | (0.3 | ) | $ | 20.4 | |||||||
| Earnings (Loss) Per Diluted Share (EPS) | $ | 0.12 | $ | (0.00 | ) | $ | 0.25 | |||||||
| Key Non-GAAP Operating Results | Q4 12 | Q3 12 | Q4 11 | |||||||||||
| Non-GAAP Gross Margin | 74.7 | % | 73.7 | % | 74.9 | % | ||||||||
| Non-GAAP Clear Aligner | 78.8 | % | 77.6 | % | 78.7 | % | ||||||||
| Non-GAAP Scanner & CAD/CAM Services | 20.5 | % | 23.8 | % | 30.0 | % | ||||||||
| Non-GAAP Operating Expense | $ | 76.6 | $ | 70.0 | $ | 66.9 | ||||||||
| Non-GAAP Operating Margin | 21.0 | % | 22.4 | % | 23.0 | % | ||||||||
| Non-GAAP Net Profit | $ | 22.3 | $ | 23.7 | $ | 23.0 | ||||||||
| Non-GAAP Earnings Per Diluted Share (EPS) | $ | 0.27 | $ | 0.28 | $ | 0.28 | ||||||||
| EBITDA | $ | 21.7 | $ | 8.5 | $ | 30.7 | ||||||||
| Adjusted EBITDA | $ | 33.6 | $ | 33.6 | $ | 32.6 | ||||||||
Total stock-based compensation expense included in Q4 12 was $6.0 million compared to $5.4 million in Q3 12 and $5.0 million in Q4 11. Stock based compensation expense included in GAAP gross margin in Q4 12, Q3 12 and Q4 11 was $0.5 million. Stock-based compensation expense included in GAAP operating expense in Q4 12 was $5.5 million compared to $4.9 million in Q3 12 and $4.5 million in Q4 11.
Liquidity and Capital Resources
As of December 31, 2012, Align Technology had $356.1 million in cash, cash equivalents, and marketable securities compared to $248.1 million as of December 31, 2011. During Q4 12, we purchased approximately 1.4 million shares of our common stock at an average price of $26.41 per share for a total of approximately $37.0 million. There remains approximately $95.5 million available under the Company's existing stock repurchase authorization.
Q1 Fiscal 2013 Business Outlook
For the first quarter of fiscal 2013 (Q1 13), Align Technology expects net revenues to be in a range of $146.0 million to $150.5 million. Invisalign clear aligner case shipments for Q1 13 are expected to be in a range of 95.0 to 97.5 thousand cases, which reflect a year-over-year increase of 11.4% to 14.3%. Earnings per diluted share for Q1 13 is expected to be in a range of $0.21 to $0.23. Starting in fiscal year 2013, amortization of acquired intangible assets will no longer be excluded as a non-GAAP measure. The expense is now included in all periods presented, therefore, excluding it as a non-GAAP measure is no longer meaningful in period-to-period comparisons. 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, 2013 at 4:30 p.m. ET, 1:30 p.m. PT, to review its fourth quarter and fiscal year 2012 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. 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 406337 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 8, 2013.
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, Invisalign Lite, 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 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 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, acquisition and integration related costs, amortization of acquired intangible assets, severance and benefit costs, impairment of goodwill, and any related income tax-related 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, ongoing 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.
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 2013, including anticipated net 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, 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, 2011, which was filed with the Securities and Exchange Commission on February 29, 2012. 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, 2012 | December 31, 2011 | December 31, 2012 | December 31, 2011 | ||||||||||||||
| Net revenues | $ | 142,840 | 128,905 | $ | 560,041 | 479,741 | |||||||||||
| Cost of revenues | 36,362 | 33,355 | 143,653 | 118,458 | |||||||||||||
| Gross profit | 106,478 | 95,550 | 416,388 | 361,283 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Sales and marketing | 37,769 | 36,112 | 152,041 | 142,174 | |||||||||||||
| General and administrative | 27,166 | 22,457 | 95,840 | 89,152 | |||||||||||||
| Research and development | 11,711 | 9,568 | 42,869 | 37,154 | |||||||||||||
| Impairment of goodwill | 11,926 | - | 36,591 | - | |||||||||||||
| Amortization of acquired intangible assets | 835 | 983 | 3,455 | 2,443 | |||||||||||||
| Total operating expenses | 89,407 | 69,120 | 330,796 | 270,923 | |||||||||||||
| Profit from operations | 17,071 | 26,430 | 85,592 | 90,360 | |||||||||||||
| Interest and other income (expense), net | (672 | ) | (84 | ) | (1,296 | ) | (419 | ) | |||||||||
| Profit before income taxes | 16,399 | 26,346 | 84,296 | 89,941 | |||||||||||||
| Provision for income taxes | 6,840 | 5,897 | 25,605 | 23,225 | |||||||||||||
| Net profit | $ | 9,559 | $ | 20,449 | $ | 58,691 | $ | 66,716 | |||||||||
| Net profit per share | |||||||||||||||||
| - basic | $ | 0.12 | $ | 0.26 | $ | 0.73 | $ | 0.86 | |||||||||
| - diluted | $ | 0.12 | $ | 0.25 | $ | 0.71 | $ | 0.83 | |||||||||
| Shares used in computing net profit per share | |||||||||||||||||
| - basic | 81,043 | 78,737 | 80,528 | 77,988 | |||||||||||||
| - diluted | 82,981 | 80,849 | 83,040 | 80,294 | |||||||||||||
| ALIGN TECHNOLOGY, INC. | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands) | ||||||||
| December 31, 2012 |
December 31, 2011 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 306,386 | $ | 240,675 | ||||
| Restricted cash | 1,575 | 4,026 | ||||||
| Marketable securities, short-term | 28,485 | 7,395 | ||||||
| Accounts receivable, net | 98,992 | 91,537 | ||||||
| Inventories | 15,122 | 9,402 | ||||||
| Other current assets | 35,233 | 31,781 | ||||||
| Total current assets | 485,793 | 384,816 | ||||||
| Marketable securities, long-term | 21,252 | - | ||||||
| Property and equipment, net | 79,191 | 53,965 | ||||||
| Goodwill and intangible assets, net | 145,013 | 185,405 | ||||||
| Deferred tax assets | 21,609 | 22,337 | ||||||
| Other long-term assets | 3,454 | 2,741 | ||||||
| Total assets | $ | 756,312 | $ | 649,264 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 19,549 | $ | 19,265 | ||||
| Accrued liabilities | 74,247 | 76,600 | ||||||
| Deferred revenue | 65,239 | 52,252 | ||||||
| Total current liabilities | 159,035 | 148,117 | ||||||
| Other long term liabilities | 15,960 | 10,366 | ||||||
| Total liabilities | 174,995 | 158,483 | ||||||
| Total stockholders' equity | 581,317 | 490,781 | ||||||
| Total liabilities and stockholders' equity | $ | 756,312 | $ | 649,264 | ||||
| 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, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||
| GAAP Gross profit | $ | 106,478 | $ | 100,350 | $ | 95,550 | ||||||||
| Acquisition and integration costs related to cost of revenues (1) | - | 55 | 139 | |||||||||||
| Amortization of acquired intangible assets related to cost of revenues (2) | 201 | 213 | 285 | |||||||||||
| Severance and benefit costs related to cost of revenues(3) | - | 39 | 579 | |||||||||||
| Non-GAAP Gross profit | $ | 106,679 | $ | 100,657 | $ | 96,553 | ||||||||
| Reconciliation of GAAP to Non-GAAP Gross Profit Scanner and CAD/CAM Services | ||||||||||||||
| (in thousands) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||
| GAAP Scanner and CAD/CAM Services gross profit | $ | 1,848 | $ | 2,016 | $ | 1,993 | ||||||||
| Acquisition and integration costs related to cost of revenues (1) | - | 55 | 139 | |||||||||||
| Amortization of acquired intangible assets related to cost of revenues (2) | 201 | 213 | 285 | |||||||||||
| Severance and benefit costs related to cost of revenues(3) | - | 39 | 579 | |||||||||||
| Non-GAAP Gross profit | $ | 2,049 | $ | 2,323 | $ | 2,996 | ||||||||
| Reconciliation of GAAP to Non-GAAP Operating Expenses | ||||||||||||||
| (in thousands) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||
| GAAP Operating expenses | $ | 89,407 | $ | 95,847 | $ | 69,120 | ||||||||
| Acquisition and integration costs related to operating expenses (1) | - | (179 | ) | (1,005 | ) | |||||||||
| Amortization of acquired intangible assets related to operating expenses (2) | (835 | ) | (866 | ) | (983 | ) | ||||||||
| Severance and benefit costs related to operating expenses (3) | - | (105 | ) | (256 | ) | |||||||||
| Impairment of goodwill (4) | (11,926 | ) | (24,665 | ) | - | |||||||||
| Non-GAAP Operating expenses | $ | 76,646 | $ | 70,032 | $ | 66,876 | ||||||||
| Reconciliation of GAAP to Non-GAAP Profit from Operations | ||||||||||||||
| (in thousands) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||
| GAAP Profit from operations | $ | 17,071 | $ | 4,503 | $ | 26,430 | ||||||||
| Acquisition and integration costs (1) | - | 234 | 1,144 | |||||||||||
| Amortization of acquired intangible assets (2) | 1,036 | 1,079 | 1,268 | |||||||||||
| Severance and benefit costs (3) | - | 144 | 835 | |||||||||||
| Impairment of goodwill | 11,926 | 24,665 | - | |||||||||||
| Non-GAAP Profit from operations | $ | 30,033 | $ | 30,625 | $ | 29,677 | ||||||||
| Reconciliation of GAAP to Non-GAAP Net Profit | ||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||
| GAAP Net profit (loss) | $ | 9,559 | $ | (344 | ) | $ | 20,449 | |||||||
| Acquisition and integration costs (1) | - | 234 | 1,144 | |||||||||||
| Amortization of acquired intangible assets (2) | 1,036 | 1,079 | 1,268 | |||||||||||
| Severance and benefit costs (3) | - | 144 | 835 | |||||||||||
| Impairment of goodwill (4) | 11,926 | 24,665 | - | |||||||||||
| Income tax-related adjustments (5) | (193 | ) | (2,078 | ) | (715 | ) | ||||||||
| Non-GAAP Net profit | $ | 22,328 | $ | 23,700 | $ | 22,981 | ||||||||
| Diluted Net profit (loss) per share: | ||||||||||||||
| GAAP | $ | 0.12 | $ | (0.00 | ) | $ | 0.25 | |||||||
| Non-GAAP | $ | 0.27 | $ | 0.28 | $ | 0.28 | ||||||||
| Shares used in computing diluted GAAP Net profit (loss) per share | 82,981 | 81,437 | 80,849 | |||||||||||
| Shares used in computing diluted Non-GAAP Net profit per share | 82,981 | 83,906 | 80,849 | |||||||||||
| Reconciliation of GAAP Net Profit to EBITDA and Adjusted EBITDA | ||||||||||||||
| (in thousands) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| December 31, 2012 | September 30, 2012 | December 31, 2011 | ||||||||||||
| GAAP Net profit (loss) | $ | 9,559 | $ | (344 | ) | $ | 20,449 | |||||||
| Provision for income taxes | 6,840 | 4,494 | 5,897 | |||||||||||
| Depreciation and amortization (6) | 5,278 | 4,374 | 4,320 | |||||||||||
| EBITDA (7) | 21,677 | 8,524 | 30,666 | |||||||||||
| Adjustments or charges: | ||||||||||||||
| Acquisition and integration related costs (1) | - | 234 | 1,144 | |||||||||||
| Severance and benefit costs (3) | - | 144 | 835 | |||||||||||
| Impairment of goodwill (4) | 11,926 | 24,665 | - | |||||||||||
| EBITDA after adjustments (7) | $ | 33,603 | $ | 33,567 | $ | 32,645 | ||||||||
| ALIGN TECHNOLOGY, INC. | ||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP KEY FINANCIAL METRICS | ||||||||||
| Reconciliation of GAAP to Non-GAAP Gross Profit | ||||||||||
| (in thousands) | ||||||||||
| Year Ended | ||||||||||
| December 31, 2012 | December 31, 2011 | |||||||||
| GAAP Gross profit | $ | 416,388 | $ | 361,283 | ||||||
| Acquisition and integration costs related to cost of revenues (1) | 261 | 398 | ||||||||
| Amortization of acquired intangible assets related to cost of revenues (2) | 907 | 735 | ||||||||
| Severance and benefit costs related to cost of revenues (3) | 474 | 754 | ||||||||
| Non-GAAP Gross profit | $ | 418,030 | $ | 363,170 | ||||||
| Reconciliation of GAAP to Non-GAAP Gross Profit Scanner and CAD/CAM Services | ||||||||||
| (in thousands) | ||||||||||
| Year Ended | ||||||||||
| December 31, 2012 | December 31, 2011 | |||||||||
| GAAP Scanner and CAD/CAM Services gross profit | $ | 10,418 | $ | 6,640 | ||||||
| Acquisition and integration costs related to cost of revenues (1) | 261 | 398 | ||||||||
| Amortization of acquired intangible assets related to cost of revenues (2) | 907 | 735 | ||||||||
| Severance and benefit costs related to cost of revenues(3) | 474 | 754 | ||||||||
| Non-GAAP Gross profit | $ | 12,060 | $ | 8,527 | ||||||
| Reconciliation of GAAP to Non-GAAP Operating Expenses | ||||||||||
| (in thousands) | ||||||||||
| Year Ended | ||||||||||
| December 31, 2012 | December 31, 2011 | |||||||||
| GAAP Operating expenses | $ | 330,796 | $ | 270,923 | ||||||
| Acquisition and integration costs related to operating expenses (1) | (1,010 | ) | (9,632 | ) | ||||||
| Amortization of acquired intangible assets related to operating expenses (2) | (3,455 | ) | (2,443 | ) | ||||||
| Severance and benefit costs related to operating expenses (3) | (306 | ) | (328 | ) | ||||||
| Impairment of goodwill (4) | (36,591 | ) | - | |||||||
| Non-GAAP Operating expenses | $ | 289,434 | $ | 258,520 | ||||||
| Reconciliation of GAAP to Non-GAAP Profit from Operations | ||||||||||
| (in thousands) | ||||||||||
| Year Ended | ||||||||||
| December 31, 2012 | December 31, 2011 | |||||||||
| GAAP Profit from Operations | $ | 85,592 | $ | 90,360 | ||||||
| Acquisition and integration costs related to cost of revenues (1) | 1,271 | 10,030 | ||||||||
| Amortization of acquired intangible assets related to cost of revenues (2) | 4,362 | 3,178 | ||||||||
| Severance and benefit costs related to cost of revenues (3) | 780 | 1,082 | ||||||||
| Impairment of goodwill (4) | 36,591 | - | ||||||||
| Non-GAAP Profit from Operations | $ | 128,596 | $ | 104,650 | ||||||
| Reconciliation of GAAP to Non-GAAP Net Profit | ||||||||||
| (in thousands, except per share amounts) | ||||||||||
| Year Ended | ||||||||||
| December 31, 2012 | December 31, 2011 | |||||||||
| GAAP Net profit | $ | 58,691 | $ | 66,716 | ||||||
| Acquisition and integration costs related to cost of revenues (1) | 1,271 | 10,030 | ||||||||
| Amortization of acquired intangible assets related to cost of revenues (2) | 4,362 | 3,178 | ||||||||
| Severance and benefit costs related to cost of revenues (3) | 780 | 1,082 | ||||||||
| Impairment of goodwill (4) | 36,591 | - | ||||||||
| Tax effect on non-GAAP adjustments (5) | (4,947 | ) | (2,862 | ) | ||||||
| Non-GAAP Net profit | $ | 96,748 | $ | 78,144 | ||||||
| Diluted Net profit per share: | ||||||||||
| GAAP | $ | 0.71 | $ | 0.83 | ||||||
| Non-GAAP | $ | 1.17 | $ | 0.97 | ||||||
| Shares used in computing diluted GAAP net profit per share | 83,040 | 80,294 | ||||||||
| Shares used in computing diluted non-GAAP net profit per share | 83,040 | 80,294 | ||||||||
| Reconciliation of GAAP Net Profit to EBITDA and Adjusted EBITDA | ||||||||||
| (in thousands) | ||||||||||
| Year Ended | ||||||||||
| December 31, 2012 | December 31, 2011 | |||||||||
| GAAP Net profit | $ | 58,691 | $ | 66,716 | ||||||
| Provision for income taxes | 25,605 | 23,225 | ||||||||
| Depreciation and amortization (6) | 17,811 | 17,477 | ||||||||
| EBITDA (7) | 102,107 | 107,418 | ||||||||
| Adjustments or charges: | ||||||||||
| Acquisition and integration related costs (1) | 1,271 | 10,030 | ||||||||
| Severance and benefit costs (3) | 780 | 1,082 | ||||||||
| Impairment of goodwill (4) | 36,591 | - | ||||||||
| EBITDA after adjustments (7) | $ | 140,749 | $ | 118,530 | ||||||
(1) 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.
(2) 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.
(3) Severance and benefits costs. These costs are related to the closure of our New Jersey operations and were 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 significant severance and benefits costs 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.
(4) Impairment of goodwill. This cost represents non-cash write-downs of our goodwill. During the third quarter of 2012, we determined that there were sufficient indicators such as the termination of our distribution agreement with Straumann for iTero intra-oral scanners as well as the market conditions and business trends within our Scanners and CAD/CAM Services reporting unit for an impairment of goodwill. We remove the impact of these charges to our operating performance to assist in assessing our ability to generate cash from operations. We believe this may be useful information to users of our financial statements and therefore we have excluded these charges for purposes of calculating these non-GAAP measures to facilitate an evaluation of our current operating performance, particularly in terms of liquidity.
(5) Income tax-related adjustments. Non-GAAP financial information for the quarter is adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP income. This rate is based on our estimated annual GAAP income tax rate forecast, adjusted to account for discrete tax items and items excluded from GAAP income in calculating the non-GAAP financial measures presented above. Our estimated tax rate on non-GAAP income is determined annually and may be re-calculated during the year to take into account events or trends that we believe materially impact the estimated annual rate.
(6) Includes the amortization of acquired intangible assets.
(7) EBITDA and adjusted EBITDA. We use EBITDA as a performance measure for benchmarking against our peers and competitors. We believe EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties to evaluate companies in the medical technology industry. We also use adjusted EBITDA which excludes certain special or non-recurring expenses, net of certain special or non-recurring benefits, detailed in the reconciliation tables that accompany this release, as an internal measure of business operating performance. We believe such financial measures provide a meaningful perspective of the underlying operating performance to our current business. EBITDA and adjusted EBITDA are not recognized terms under GAAP. Because all companies do not calculate EBITDA and similarly titled financial measures in the same way, those measures as used by other companies may not be consistent with the way we calculate such measures and should not be considered as alternative measures of operating or net profit.
| ALIGN TECHNOLOGY |
| Q4 2012 EARNINGS RELEASE ADDITIONAL DATA |
| REVENUE PERFORMANCE AND CLEAR ALIGNER METRICS |
| (in thousands except per share data) |
| Q1 | Q2 | Q3 | Q4 | FISCAL | |||||||||||||||||||
| 2012 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||||||
| Invisalign Clear Aligner Revenues by Geography: | |||||||||||||||||||||||
| North America | $ | 86,871 | $ | 92,997 | $ | 89,568 | $ | 91,686 | $ | 361,122 | |||||||||||||
| North American Orthodontists | 41,688 | 43,942 | 43,090 | 43,812 | 172,532 | ||||||||||||||||||
| North American GP Dentists | 45,183 | 49,055 | 46,478 | 47,874 | 188,590 | ||||||||||||||||||
| International | 29,700 | 32,883 | 29,700 | 32,513 | 124,796 | ||||||||||||||||||
| Non-case* | 6,757 | 7,789 | 7,457 | 8,660 | 30,663 | ||||||||||||||||||
| Total Clear Aligner Revenue | $ | 123,328 | $ | 133,669 | $ | 126,725 | $ | 132,859 | $ | 516,581 | |||||||||||||
| YoY % growth | 17.6 | % | 17.6 | % | 10.9 | % | 11.7 | % | 14.4 | % | |||||||||||||
| QoQ % growth | 3.7 | % | 8.4 | % | -5.2 | % | 4.8 | % | |||||||||||||||
| *includes Invisalign training, ancillary products, and retainers | |||||||||||||||||||||||
| Invisalign Clear Aligner Revenues by Product: | |||||||||||||||||||||||
| Invisalign Full | $ | 82,424 | $ | 88,617 | $ | 80,294 | $ | 87,265 | $ | 338,600 | |||||||||||||
| Invisalign Express/Lite | 11,806 | 13,632 | 12,779 | 13,269 | 51,486 | ||||||||||||||||||
| Invisalign Teen | 15,148 | 16,380 | 19,144 | 16,455 | 67,127 | ||||||||||||||||||
| Invisalign Assist | 7,193 | 7,251 | 7,051 | 7,210 | 28,705 | ||||||||||||||||||
| Non-case* | 6,757 | 7,789 | 7,457 | 8,660 | 30,663 | ||||||||||||||||||
| Total Clear Aligner Revenue | $ | 123,328 | $ | 133,669 | $ | 126,725 | $ | 132,859 | $ | 516,581 | |||||||||||||
| Average Invisalign Selling Price (ASP), as billed: | |||||||||||||||||||||||
| Total Worldwide Blended ASP | $ | 1,370 | $ | 1,335 | $ | 1,320 | $ | 1,375 | $ | 1,350 | |||||||||||||
| International ASP | $ | 1,485 | $ | 1,455 | $ | 1,355 | $ | 1,455 | $ | 1,440 | |||||||||||||
| Invisalign Clear Aligner Cases Shipped by Geography: | |||||||||||||||||||||||
| North America | 65,280 | 72,685 | 70,610 | 68,140 | 276,715 | ||||||||||||||||||
| North American Orthodontists | 32,235 | 35,420 | 35,885 | 33,505 | 137,045 | ||||||||||||||||||
| North American GP Dentists | 33,045 | 37,265 | 34,725 | 34,635 | 139,670 | ||||||||||||||||||
| International | 19,985 | 22,595 | 21,905 | 22,340 | 86,825 | ||||||||||||||||||
| Total Cases Shipped | 85,265 | 95,280 | 92,515 | 90,480 | 363,540 | ||||||||||||||||||
| Invisalign Clear Aligner Cases Shipped by Product: | |||||||||||||||||||||||
| Invisalign Full | 57,145 | 62,510 | 57,400 | 57,920 | 234,975 | ||||||||||||||||||
| Invisalign Express/Lite | 12,855 | 15,300 | 14,610 | 15,940 | 58,705 | ||||||||||||||||||
| Invisalign Teen | 9,935 | 11,860 | 15,265 | 11,255 | 48,315 | ||||||||||||||||||
| Invisalign Assist | 5,330 | 5,610 | 5,240 | 5,365 | 21,545 | ||||||||||||||||||
| Total Cases Shipped | 85,265 | 95,280 | 92,515 | 90,480 | 363,540 | ||||||||||||||||||
| Number of Invisalign Doctors Cases Shipped to: | |||||||||||||||||||||||
| North American Orthodontists | 4,460 | 4,575 | 4,660 | 4,615 | 5,665 | ||||||||||||||||||
| North American GP Dentists | 11,365 | 12,120 | 11,925 | 11,685 | 19,285 | ||||||||||||||||||
| International | 5,085 | 5,480 | 5,400 | 5,715 | 9,285 | ||||||||||||||||||
| Total Doctors Cases were Shipped to Worldwide | 20,910 | 22,175 | 21,985 | 22,015 | 34,235 | ||||||||||||||||||
| Invisalign Doctor Utilization Rates*: | |||||||||||||||||||||||
| North American Orthodontists | 7.2 | 7.7 | 7.7 | 7.3 | 24.2 | ||||||||||||||||||
| North American GP Dentists | 2.9 | 3.1 | 2.9 | 3.0 | 7.2 | ||||||||||||||||||
| International | 3.9 | 4.1 | 4.1 | 3.9 | 9.4 | ||||||||||||||||||
| Total Utilization Rates | 4.1 | 4.3 | 4.2 | 4.1 | 10.6 | ||||||||||||||||||
| * # of cases shipped/# of doctors to whom cases were shipped | |||||||||||||||||||||||
| Number of Invisalign Doctors Trained: | |||||||||||||||||||||||
| North American Orthodontists | 90 | 95 | 125 | 75 | 385 | ||||||||||||||||||
| North American GP Dentists | 720 | 995 | 675 | 920 | 3,310 | ||||||||||||||||||
| International | 715 | 965 | 685 | 780 | 3,145 | ||||||||||||||||||
| Total Doctors Trained Worldwide | 1,525 | 2,055 | 1,485 | 1,775 | 6,840 | ||||||||||||||||||
| Total to Date Worldwide | 71,180 | 73,235 | 74,720 | 76,495 | 76,495 | ||||||||||||||||||
| Scanner and CAD/CAM Services Revenue: | |||||||||||||||||||||||
| North America Scanner and CAD/CAM Services | $ | 11,120 | $ | 11,752 | $ | 9,439 | $ | 9,940 | $ | 42,251 | |||||||||||||
| International Scanner and CAD/CAM Services | 631 | 205 | 332 | 41 | 1,209 | ||||||||||||||||||
| Total Scanner and CAD/CAM Revenue | $ | 11,751 | $ | 11,957 | $ | 9,771 | $ | 9,981 | $ | 43,460 | |||||||||||||
| Scanner Revenue | $ | 5,361 | $ | 6,032 | $ | 4,023 | $ | 4,643 | $ | 20,059 | |||||||||||||
| CAD/CAM Services Revenue | 6,390 | 5,925 | 5,748 | 5,338 | 23,401 | ||||||||||||||||||
| Total Scanner and CAD/CAM Services Revenue | $ | 11,751 | $ | 11,957 | $ | 9,771 | $ | 9,981 | $ | 43,460 | |||||||||||||
| Total Revenue by Geography: | |||||||||||||||||||||||
| Total North America Revenue | $ | 97,991 | $ | 104,749 | $ | 99,007 | $ | 101,626 | $ | 403,373 | |||||||||||||
| Total International Revenue | 30,331 | 33,088 | 30,032 | 32,554 | 126,005 | ||||||||||||||||||
| Total Non-case Revenue | 6,757 | 7,789 | 7,457 | 8,660 | 30,663 | ||||||||||||||||||
| Total Worldwide Revenue | $ | 135,079 | $ | 145,626 | $ | 136,496 | $ | 142,840 | $ | 560,041 | |||||||||||||
| YoY % growth | 28.8 | % | 21.3 | % | 8.4 | % | 10.8 | % | 16.7 | % | |||||||||||||
| QoQ % growth | 4.8 | % | 7.8 | % | -6.3 | % | 4.6 | % | |||||||||||||||
| 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 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 2013 | ||
| Net Revenue | $146.0 - $150.5 | |
| Gross Profit | $105.8 - $110.1 | |
| Gross Margin | 72.4% - 73.1% | |
| Operating Expenses | $82.8 - $84.4 | |
| Operating Margin | 15.8% - 17.1% | |
| Net Income per Diluted Share | $0.21 - $0.23 | |
| Stock Based Compensation Expense: | ||
| Cost of Revenues | $0.7 | |
| Operating Expenses | $6.3 | |
| Total Stock Based Compensation Expense | $7.0 | |
| Business Metrics: | ||
| Q1 2013 | ||
| Case Shipments | 95.0K - 97.5K | |
| Cash, Cash Equivalents, and Marketable Securities | $365M - $375M * | |
| Capex | $3.5M - $5.0M | |
| Depreciation & Amortization | $4.5M - $5.0M | |
| Diluted Shares Outstanding | 83.2M* | |
| * Excludes any stock repurchases during the quarter | ||