Align Technology, Inc. (Nasdaq: ALGN) today reported financial
results for the second quarter of 2020 (“Q2’20”). Q2’20 total
revenues were $352.3 million, down 41.3% year-over-year. Q2’20
Clear Aligner revenues were $298.3 million, down 39.9%
year-over-year and Q2’20 Imaging Systems and CAD/CAM Services
(formerly Scanner and Services) revenues were $54.0 million, down
48.1% year-over-year. Q2’20 Invisalign volume was 221.9 thousand
cases, down 41.2% year-over-year. For the Americas and
International regions, Q2’20 Invisalign volume was down 52.2% and
down 27.1% year-over-year, respectively. Q2’20 Invisalign volume
for teenage patients was 70.6 thousand cases, down 31.9%
year-over-year. We had an operating loss of $73.0 million in Q2’20,
down 141.4% year-over-year from an operating profit of $176.5M,
resulting in a Q2’20 operating margin of (20.7)%. Q2’20 GAAP net
loss was $40.6 million, or $(0.52) per diluted share. On a non-GAAP
basis, Q2’20 net loss was $27.6 million, or $(0.35) per diluted
share.
On April 1, 2020, we acquired privately held
exocad Global Holdings GmbH (exocad) for a cash purchase
price of $430 million. In recognition of the acquisition, as of
Q2’20, we have renamed the Scanner and Services segment to Imaging
Systems & CAD/CAM Services (ISCCS) or “Systems and
Services.”
Commenting on Align’s Q2’20 results, Align
Technology President and CEO Joe Hogan said, “I’m pleased to report
Q2 results and continued progress across all regions and customer
channels that reflect our COVID-19 recovery efforts and those of
our customers. Practices across every region have reopened and are
seeing patients, and many of those practices are embracing digital
treatment in new ways and more purposefully than ever before. In
particular, Invisalign providers are using the virtual tools we
expedited over the last few months to minimize in-office
appointments and deliver doctor-directed, personalized treatment
that meets the needs of the moment – trusted, safe, convenient, and
reflecting digital adoption. We have received consistently positive
reactions and feedback from doctors in support of our efforts over
the last few months. While it is too early to know for sure how
extensive and sustainable the digital transition will be, interest
in digital solutions is building, even among doctors who were not
early adopters or advocates prior to the pandemic. This positive
feedback and momentum is not just around Invisalign treatment – it
includes digital workflow around iTero scanners and general
dentistry. Doctors are telling us that the iTero imaging system is
central to their practice and to their practice workflows, and it
is key to driving digital treatment.”
Continued Hogan, “We’re also pleased to announce
that during the quarter we reached another major milestone with our
1 millionth Invisalign patient in APAC, an adult patient from
Tokyo, Japan. Ms. Ayuma Saito, an athlete in modern pentathlon and
fencing, is being treated by Dr. Koji Yokoya, Head Director at
Aoyama Gaien Orthodontics Dental Offices, who is a certified
orthodontist of the Japanese Orthodontic Society, Doctor of Medical
Dentistry.”
Financial SummarySecond
Quarter Fiscal 2020
|
Q2’20 |
Q1’20 |
Q2’19 |
Invisalign Case Shipments 1 |
221,880 |
359,440 |
377,145 |
GAAP |
|
|
|
Net Revenues |
$352.3M |
$551.0M |
$600.7M |
Clear Aligner 2 |
$298.3M |
$481.6M |
$496.7M |
Imaging Systems & CAD/CAM Services |
$54.0M |
$69.4M |
$104.0M |
Net Profit (Loss) |
$(40.6)M |
$1,518.1M |
$147.1M |
Diluted EPS |
$(0.52) |
$19.21 |
$1.83 |
Non-GAAP |
Net Profit (Loss) |
$(27.6)M |
$57.9M |
$120.0M |
Diluted EPS |
$(0.35) |
$0.73 |
$1.49 |
1 Invisalign shipments do not include
SmileDirectClub (“SDC“) aligners.
2 Clear aligner revenues include Invisalign
clear aligners and SDC aligners. The supply agreement with SDC
terminated December 31, 2019 and was not renewed.
As of June 30, 2020, Align had $404.4 million in
cash and cash equivalents compared to $790.7 million as of March
31, 2020. Additionally, we have $100.0 million remaining available
for repurchase of our common stock under our May 2018 Repurchase
Program.
Align Announcement
Highlights:
Corporate
- Entered into a $300.0 million, three-year unsecured revolving
credit facility (“Credit Agreement”) with Citibank, N.A.,
(“Citibank”), Bank of America, N.A., and HSBC Bank USA, N.A., with
Citibank also acting as administrative agent. The Credit Agreement
replaces Align’s existing revolving credit facility with Wells
Fargo Bank, National Association.
- Closed the acquisition of privately held exocad, a global
leader in the dental CAD/CAM software market that offers fully
integrated workflows to dental labs and dental practices via a
broad customer base of partners and resellers in over 150
countries. The acquisition of exocad broadens Align’s digital
platform reach by adding technology that addresses restorative
needs in an end-to-end digital platform workflow to facilitate
ortho-restorative and comprehensive dentistry. The acquisition
brings exocad’s expertise in restorative dentistry, implantology,
guided surgery, and smile design to the Align technology
portfolio.
- Announced the 2 millionth Invisalign teen patient, reflecting
accelerating adoption in the largest segment of the orthodontic
market. The 2 millionth teen Invisalign patient, Kaitlynn
Ratliff, is a student and athlete who started her Invisalign
treatment in January 2020. She’s being treated by Dr. Tom
Hartsock of Hartsock and Sword Orthodontics in Pikeville,
Kentucky. Dr. Hartsock is an Invisalign provider who
specializes in teen treatment with Invisalign aligners and with the
iTero scanner.
- Announced that an Administrative Law Judge (ALJ) with
the United States International Trade Commission (ITC)
issued an Initial Determination regarding her investigation of
3Shape A/S, 3Shape Trios A/S, and 3Shape Inc.’s (“3Shape”)
infringement of Align’s patents. The ALJ determined that 3Shape
infringes 7 of the 9 patent claims asserted by Align, found valid 6
of the 9 claims asserted by Align, and found a violation of Section
337 stemming from 3Shape’s infringement of 4 claims in 2 of Align’s
asserted patents. The ALJ recommended an exclusion order and cease
and desist order be entered against 3Shape’s unlawful
importation.
- Announced our partnership with MedTech Innovator Asia Pacific,
the premier nonprofit startup accelerator in the medical technology
industry. MedTech Innovator matches healthcare industry
leaders with innovative medtech startups for mentorship and
support. Support for the program underscores Align’s commitment to
advancing health solutions and improving the lives of patients in
the Asia Pacific Region.
Product
- Introduced virtual solutions to connect doctors and existing
Invisalign patients for continuity of care.
Invisalign® Virtual Appointment and Invisalign® Virtual
Care represent the next level in practice and care transformation,
enabling doctors to manage a range of practice services even when
they are not in the same physical location as their patients. Until
recently, both solutions were in pilot phases, but their launch was
accelerated to support doctors to manage their practices and
continue patient care during the COVID-19 pandemic.
- Introduced the latest version of Align’s proprietary ClinCheck®
treatment planning software at the Invisalign Scientific Symposium
on May 15, 2020, a fully digital event for Invisalign-trained
orthodontists. ClinCheck software provides doctors with a 3D model
of planned tooth movements throughout the Invisalign treatment.
ClinCheck Pro 6.0 moves Invisalign digital treatment planning to
the cloud, making its robust ClinCheck treatment planning tools and
features available to doctors anytime, anywhere, on any laptop,
personal computer or tablet. The release included the new ClinCheck
“In-Face” Visualization tool, an enhanced doctor-facing digital
clinical tool that combines a photo of the patient’s face with
their 3D Invisalign treatment plan, creating a personalized view of
how their new smile could look.
- Announced that the iTero Element 5D Imaging System was awarded
“Best New Technology Solution for Dentistry” from MedTech
Breakthrough, an independent market intelligence organization that
recognizes the top technology product companies in the global
health and medical technology market. The iTero Element 5D, the
latest innovation in the iTero product portfolio, is the first
integrated dental imaging system that simultaneously records 3D
intra-oral optical impressions, 2D color images, and Near Infrared
images (NIRI).
Business OutlookDue to the
uncertain scope and duration of the pandemic, and uncertain timing
of the global recovery and economic normalization, we cannot at
this time reasonably estimate the future impact on our operations
and financial results. Accordingly, we are not providing guidance
for the third quarter of fiscal year 2020.
Align Web Cast and Conference
CallAlign will host a conference call today, July 22, 2020
at 4:30 p.m. ET, 1:30 p.m. PT, to review its second quarter 2020
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 one month.
Additionally, a telephonic replay of the call can be accessed by
dialing 877-660-6853 with conference number 13705887 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 August 5, 2020.
About Non-GAAP Financial
MeasuresTo supplement our condensed consolidated financial
statements, which are prepared and presented in accordance with
generally accepted accounting principles in the United States
(“GAAP”), we may provide investors with certain non-GAAP financial
measures including, non-GAAP gross profit, gross margin, operating
expenses, income (loss) from operations, operating margin, interest
income and other income (expense), net, provision for (benefit
from) income taxes, effective tax rate, net income (loss) and
diluted net income (loss) per share, which exclude certain items
that may not be indicative of our fundamental operating performance
including discrete cash and non-cash charges or gains that are
included in the most directly comparable GAAP measure. Non-GAAP
measures will exclude the effects of stock-based compensation,
amortization of acquired intangibles, non-cash deferred tax assets
and associated amortization related to intra-entity transfer of
non-inventory assets, acquisition related costs, impairments and
other (gains) charges, and litigation settlement gains, and, if
applicable, any associated tax impacts.
We use 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 recurring core operating performance. 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 will be provided to and used by our institutional
investors and the analyst community to help them analyze the
performance of our business.
There are limitations to using non-GAAP
financial measures, though, because they are not prepared in
accordance with GAAP and may be different from non-GAAP financial
measures used by other companies. The non-GAAP financial measures
are limited in value because they exclude certain items that may
have a material impact upon our reported financial results. In
addition, they are subject to inherent limitations as they reflect
the exercise of judgments by management about which charges are
excluded from the non-GAAP financial measures. We compensate for
these limitations by analyzing current and future results on a GAAP
as well as a non-GAAP basis and also by providing GAAP measures in
our public disclosures. The presentation of non-GAAP financial
information is meant to be considered in addition to, not as a
substitute for or in isolation from, the directly comparable
financial measures prepared in accordance with GAAP. We urge
investors to review the reconciliation of our GAAP financial
measures to the comparable Non-GAAP financial measures included in
this presentation, and not to rely on any single financial measure
to evaluate our business. For more information on these non-GAAP
financial measures, please see the table captioned "Unaudited GAAP
to Non-GAAP Reconciliation."
About Align Technology,
Inc.Align Technology designs and manufactures the
Invisalign® system, the most advanced clear aligner system in the
world, iTero® intraoral scanners and services, and exocad CAD/CAM
software. Align has helped treat over 8 million patients with the
Invisalign system and is driving the evolution in digital dentistry
with the iTero intraoral scanner and exocad CAD/CAM software −
modernizing today’s practices by enabling enhanced digital
orthodontic and restorative workflows to improve patient outcomes
and practice efficiencies. Visit www.aligntech.com for
more information.
For additional information about the Invisalign
system or to find an Invisalign doctor in your area, please
visit www.invisalign.com. For additional information about the
iTero digital scanning system, please visit www.itero.com. For
additional information about exocad dental CAD/CAM offerings and a
list of exocad reseller partners, please
visit www.exocad.com.
Forward-Looking StatementsThis
news release, including the tables below, contains forward-looking
statements, including quotations from management regarding the
COVID-19 pandemic, its impact on our business and results of
operations, our beliefs regarding our recovery and recovery
efforts, our expectations for digital adoption in dentistry and the
potential impact of our products in the transition, and future
progress, our expectations regarding the acquisition of exocad and
its expected impact, and our expectations for our new product
releases. 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:
- the impact of the COVID-19 pandemic on the health and safety of
our employees, customers, patients, and our suppliers as well as
the physical and economic impacts of the various recommendations,
orders and protocols issued by local and national governmental
agencies in light of the evolving situation, including any
reimplementation of preventative measures;
- the ability to (i) realize expected benefits in connection with
the acquisition of exocad within the expected timeframes or at all,
(ii) timely, cost-efficiently and effectively integrate exocad’s
business without adversely impacting operations of either Align or
exocad, and (iii) avoid or mitigate uncertainties or liabilities in
connection with the acquisition or its impacts on the value of our
stock;
- difficulties predicting customer and consumer purchasing
behavior and changes in consumer spending habits as a result of,
among other things, prevailing economic conditions, levels of
employment, salaries and wages and consumer confidence;
- expectations regarding the continued growth or declines of our
domestic and/or international markets;
- increasing competition from existing and new competitors;
- rapidly evolving and groundbreaking advances that are
fundamentally changing the dental industry and the way new and
existing participants market and provide products and services to
consumers;
- the ability to protect our intellectual property rights;
- continued compliance with regulatory requirements;
- our expectations regarding sales of our intra-oral scanners
domestically and internationally and our belief that technology
features and functionality of the iTero scanners and exocad
technology will increase adoption of Invisalign and increase sales
of our intra-oral scanners;
- 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 or enhancements to existing products do not proceed in
accordance with the anticipated timeline or may themselves contain
bugs or errors requiring remediation and that the market for the
sale of these new or enhanced products may not develop as
expected;
- a tougher consumer demand environment in China generally,
especially for manufacturers and service providers whose
headquarters or primarily operations are not based in China;
- the risks relating to our ability to sustain or increase
profitability or revenue growth in future periods (or minimize
declines) while controlling expenses;
- the impact of excess or constrained capacity at our
manufacturing and treat operations facilities and pressure on our
internal systems and personnel;
- the compromise of customer and/or patient data for any
reason;
- the timing of case submissions from our doctors within a
quarter as well as an increased manufacturing costs per case;
- foreign operational, political and other risks relating to our
international manufacturing operations; and
- the loss of key personnel or work stoppages.
The foregoing and other risks are detailed from
time to time in our periodic reports filed with the Securities and
Exchange Commission, including, but not limited to, our Annual
Report on Form 10-K for the year ended December 31, 2019, which was
filed with the Securities and Exchange Commission (SEC) on February
28, 2020 and its latest Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020, which was filed with the SEC on May
5, 2020. Align undertakes no obligation to revise or update
publicly any forward-looking statements for any reason.
Align
TechnologyMadelyn Homick(408) 470-1180mhomick@aligntech.com |
Zeno
GroupSarah Johnson(828) 551-4201sarah.johnson@zenogroup.com |
ALIGN TECHNOLOGY, INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Month Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
352,314 |
|
|
$ |
600,697 |
|
|
$ |
903,277 |
|
|
$ |
1,149,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net revenues |
|
127,986 |
|
|
|
168,408 |
|
|
|
284,593 |
|
|
|
315,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
224,328 |
|
|
|
432,289 |
|
|
|
618,684 |
|
|
|
834,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
256,967 |
|
|
|
267,948 |
|
|
|
539,873 |
|
|
|
515,058 |
|
Research and development |
|
40,361 |
|
|
|
38,851 |
|
|
|
81,893 |
|
|
|
76,354 |
|
Impairments and other charges |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
29,782 |
|
Litigation settlement gain |
|
- |
|
|
|
(51,000 |
) |
|
|
- |
|
|
|
(51,000 |
) |
Total operating expenses |
|
297,328 |
|
|
|
255,799 |
|
|
|
621,766 |
|
|
|
570,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
(73,000 |
) |
|
|
176,490 |
|
|
|
(3,082 |
) |
|
|
264,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
473 |
|
|
|
3,465 |
|
|
|
2,459 |
|
|
|
6,098 |
|
Other income (expense), net |
|
(966 |
) |
|
|
13,892 |
|
|
|
(19,515 |
) |
|
|
8,146 |
|
Total interest income and other income (expense), net |
|
(493 |
) |
|
|
17,357 |
|
|
|
(17,056 |
) |
|
|
14,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before provision for (benefit from) income taxes
and equity in losses of investee |
|
(73,493 |
) |
|
|
193,847 |
|
|
|
(20,138 |
) |
|
|
278,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit from) income taxes |
|
(32,891 |
) |
|
|
43,121 |
|
|
|
(1,497,667 |
) |
|
|
51,917 |
|
Equity in losses of investee, net of tax |
|
- |
|
|
|
3,584 |
|
|
|
- |
|
|
|
7,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(40,602 |
) |
|
$ |
147,142 |
|
|
$ |
1,477,529 |
|
|
$ |
218,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.52 |
) |
|
$ |
1.84 |
|
|
$ |
18.78 |
|
|
$ |
2.74 |
|
Diluted |
$ |
(0.52 |
) |
|
$ |
1.83 |
|
|
$ |
18.70 |
|
|
$ |
2.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
78,769 |
|
|
|
79,943 |
|
|
|
78,681 |
|
|
|
79,901 |
|
Diluted |
|
78,769 |
|
|
|
80,590 |
|
|
|
79,016 |
|
|
|
80,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALIGN TECHNOLOGY, INC. |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands) |
|
|
|
|
|
June 30, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
404,359 |
|
|
$ |
550,425 |
|
Marketable securities, short-term |
|
- |
|
|
|
318,202 |
|
Accounts receivable, net |
|
473,314 |
|
|
|
550,291 |
|
Inventories |
|
131,276 |
|
|
|
112,051 |
|
Prepaid expenses and other current assets |
|
140,295 |
|
|
|
102,450 |
|
Total current assets |
|
1,149,244 |
|
|
|
1,633,419 |
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
668,951 |
|
|
|
631,730 |
|
Operating lease right-of-use assets, net |
|
68,578 |
|
|
|
56,244 |
|
Goodwill and intangible assets, net |
|
543,211 |
|
|
|
75,692 |
|
Deferred tax assets |
|
1,568,293 |
|
|
|
64,007 |
|
Other assets |
|
27,580 |
|
|
|
39,610 |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
4,025,857 |
|
|
$ |
2,500,702 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
$ |
94,987 |
|
|
$ |
87,250 |
|
Accrued liabilities |
|
244,774 |
|
|
|
319,958 |
|
Deferred revenues |
|
601,831 |
|
|
|
563,762 |
|
Total current liabilities |
|
941,592 |
|
|
|
970,970 |
|
|
|
|
|
|
|
|
|
Income tax payable |
|
115,257 |
|
|
|
102,794 |
|
Operating lease liabilities |
|
50,619 |
|
|
|
43,463 |
|
Other long-term liabilities |
|
73,344 |
|
|
|
37,306 |
|
Total liabilities |
|
1,180,812 |
|
|
|
1,154,533 |
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
2,845,045 |
|
|
|
1,346,169 |
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
4,025,857 |
|
|
$ |
2,500,702 |
|
|
|
|
|
|
|
|
|
ALIGN TECHNOLOGY, INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in thousands) |
|
|
|
|
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
Net cash provided by operating activities |
$ |
69,684 |
|
|
$ |
294,561 |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
Net cash used in investing activities |
|
(172,326 |
) |
|
|
(321,020 |
) |
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Net cash used in financing activities |
|
(36,376 |
) |
|
|
(188,381 |
) |
Effect of foreign exchange rate changes on cash, cash equivalents,
and restricted cash |
|
(7,172 |
) |
|
|
1,467 |
|
Net decrease in cash, cash equivalents, and restricted cash |
|
(146,190 |
) |
|
|
(213,373 |
) |
Cash, cash equivalents, and restricted cash at beginning of the
period |
|
551,134 |
|
|
|
637,566 |
|
Cash, cash equivalents, and restricted cash at end of the
period |
$ |
404,944 |
|
|
$ |
424,193 |
|
|
|
|
|
|
|
|
|
ALIGN TECHNOLOGY, INC. |
INVISALIGN BUSINESS METRICS* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Fiscal |
|
Q1 |
|
Q2 |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
|
2020 |
|
2020 |
Invisalign Average Selling Price (ASP): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide ASP |
$ |
1,245 |
|
$ |
1,230 |
|
$ |
1,260 |
|
$ |
1,240 |
|
$ |
1,245 |
|
$ |
1,255 |
|
$ |
1,255 |
International ASP |
$ |
1,330 |
|
$ |
1,305 |
|
$ |
1,330 |
|
$ |
1,300 |
|
$ |
1,315 |
|
$ |
1,340 |
|
$ |
1,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invisalign Cases Shipped by Geography: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
202,935 |
|
|
211,360 |
|
|
215,355 |
|
|
225,925 |
|
|
855,575 |
|
|
213,505 |
|
|
100,995 |
International |
|
146,260 |
|
|
165,785 |
|
|
170,005 |
|
|
187,790 |
|
|
669,840 |
|
|
145,935 |
|
|
120,885 |
Total Cases Shipped |
|
349,195 |
|
|
377,145 |
|
|
385,360 |
|
|
413,715 |
|
|
1,525,415 |
|
|
359,440 |
|
|
221,880 |
YoY % growth |
|
28.3% |
|
|
24.6% |
|
|
20.7% |
|
|
23.9% |
|
|
24.2% |
|
|
2.9% |
|
|
-41.2% |
QoQ % growth |
|
4.6% |
|
|
8.0% |
|
|
2.2% |
|
|
7.4% |
|
|
|
|
-13.1% |
|
|
-38.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Invisalign Doctors Cases Were Shipped
To: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
30,200 |
|
|
31,445 |
|
|
31,975 |
|
|
33,130 |
|
|
47,130 |
|
|
32,315 |
|
|
22,165 |
International |
|
26,510 |
|
|
28,970 |
|
|
30,980 |
|
|
33,720 |
|
|
48,650 |
|
|
28,535 |
|
|
25,945 |
Total Doctors Cases Shipped To |
|
56,710 |
|
|
60,415 |
|
|
62,955 |
|
|
66,850 |
|
|
95,780 |
|
|
60,850 |
|
|
48,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invisalign Doctor Utilization Rates**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
7.0 |
|
|
7.0 |
|
|
7.0 |
|
|
7.2 |
|
|
19.4 |
|
|
6.9 |
|
|
4.8 |
North American Orthodontists |
|
18.3 |
|
|
18.9 |
|
|
19.1 |
|
|
19.3 |
|
|
65.0 |
|
|
18.9 |
|
|
11.0 |
North American GP Dentists |
|
3.6 |
|
|
3.6 |
|
|
3.5 |
|
|
3.8 |
|
|
9.5 |
|
|
3.6 |
|
|
2.5 |
International |
|
5.5 |
|
|
5.7 |
|
|
5.5 |
|
|
5.6 |
|
|
13.8 |
|
|
5.1 |
|
|
4.7 |
Total Utilization Rates |
|
6.2 |
|
|
6.2 |
|
|
6.1 |
|
|
6.2 |
|
|
15.9 |
|
|
5.9 |
|
|
4.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Invisalign Doctors Trained: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
1,840 |
|
|
3,070 |
|
|
2,760 |
|
|
2,095 |
|
|
9,765 |
|
|
2,035 |
|
|
1,140 |
International |
|
2,410 |
|
|
3,520 |
|
|
3,135 |
|
|
3,445 |
|
|
12,510 |
|
|
2,600 |
|
|
2,350 |
Total Doctors Trained Worldwide |
|
4,250 |
|
|
6,590 |
|
|
5,895 |
|
|
5,540 |
|
|
22,275 |
|
|
4,635 |
|
|
3,490 |
Total to Date Worldwide |
|
156,205 |
|
|
162,795 |
|
|
168,690 |
|
|
174,230 |
|
|
174,230 |
|
|
178,865 |
|
|
182,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Invisalign business metrics exclude SmileDirectClub
aligners. |
** # of cases shipped / # of doctors to whom cases were shipped.
LATAM utilization rate is not separately disclosed, but included in
the total utilization rates. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALIGN TECHNOLOGY, INC. |
STOCK-BASED COMPENSATION |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Fiscal |
|
Q1 |
|
Q2 |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
|
2020 |
|
2020 |
Stock-based Compensation (SBC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
SBC included in Gross Profit |
$ |
1,112 |
|
$ |
1,278 |
|
$ |
1,354 |
|
$ |
1,410 |
|
$ |
5,154 |
|
$ |
1,347 |
|
$ |
891 |
SBC included in Operating Expenses |
|
19,932 |
|
|
21,189 |
|
|
22,822 |
|
|
19,087 |
|
|
83,030 |
|
|
21,580 |
|
|
24,116 |
Total SBC |
$ |
21,044 |
|
$ |
22,467 |
|
$ |
24,176 |
|
$ |
20,497 |
|
$ |
88,184 |
|
$ |
22,927 |
|
$ |
25,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALIGN TECHNOLOGY, INC. |
UNAUDITED GAAP TO NON-GAAP RECONCILIATION |
(in thousands except per share data) |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
GAAP gross profit |
$ |
224,328 |
|
|
$ |
432,289 |
|
|
$ |
618,684 |
|
|
$ |
834,385 |
|
Stock-based compensation |
|
891 |
|
|
|
1,278 |
|
|
|
2,238 |
|
|
|
2,390 |
|
Amortization of intangibles (1) |
|
1,650 |
|
|
|
- |
|
|
|
1,650 |
|
|
|
- |
|
Non-GAAP gross profit |
$ |
226,869 |
|
|
$ |
433,567 |
|
|
$ |
622,572 |
|
|
$ |
836,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin |
|
63.7% |
|
|
|
72.0% |
|
|
|
68.5% |
|
|
|
72.6% |
|
Non-GAAP gross margin |
|
64.4% |
|
|
|
72.2% |
|
|
|
68.9% |
|
|
|
72.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income (loss) from operations |
$ |
(73,000 |
) |
|
$ |
176,490 |
|
|
$ |
(3,082 |
) |
|
$ |
264,191 |
|
Stock-based compensation |
|
25,007 |
|
|
|
22,467 |
|
|
|
47,934 |
|
|
|
43,511 |
|
Amortization of intangibles (1) |
|
3,245 |
|
|
|
- |
|
|
|
3,245 |
|
|
|
- |
|
Acquisition related costs (2) |
|
5,968 |
|
|
|
- |
|
|
|
7,307 |
|
|
|
- |
|
Impairments and other charges (3) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
29,782 |
|
Litigation settlement gain (4) |
|
- |
|
|
|
(51,000 |
) |
|
|
- |
|
|
|
(51,000 |
) |
Non-GAAP income (loss) from operations |
$ |
(38,780 |
) |
|
$ |
147,957 |
|
|
$ |
55,404 |
|
|
$ |
286,484 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin |
|
(20.7)% |
|
|
|
29.4% |
|
|
|
(0.3)% |
|
|
|
23.0% |
|
Non-GAAP operating margin |
|
(11.0)% |
|
|
|
24.6% |
|
|
|
6.1% |
|
|
|
24.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP interest income and other income (expense),
net |
$ |
(493 |
) |
|
$ |
17,357 |
|
|
$ |
(17,056 |
) |
|
$ |
14,244 |
|
Acquisition related costs (2) |
|
1,012 |
|
|
|
- |
|
|
|
10,187 |
|
|
|
- |
|
Non-GAAP interest income and other income (expense),
net |
$ |
519 |
|
|
$ |
17,357 |
|
|
$ |
(6,869 |
) |
|
$ |
14,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) before provision for (benefit from)
income taxes and equity in losses of investee |
$ |
(73,493 |
) |
|
$ |
193,847 |
|
|
$ |
(20,138 |
) |
|
$ |
278,435 |
|
Stock-based compensation |
|
25,007 |
|
|
|
22,467 |
|
|
|
47,934 |
|
|
|
43,511 |
|
Amortization of intangibles (1) |
|
3,245 |
|
|
|
- |
|
|
|
3,245 |
|
|
|
- |
|
Acquisition related costs (2) |
|
6,980 |
|
|
|
- |
|
|
|
17,494 |
|
|
|
- |
|
Impairments and other charges (3) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
29,782 |
|
Litigation settlement gain (4) |
|
- |
|
|
|
(51,000 |
) |
|
|
- |
|
|
|
(51,000 |
) |
Non-GAAP net income (loss) before provision for (benefit
from) income taxes and equity in losses of investee |
$ |
(38,261 |
) |
|
$ |
165,314 |
|
|
$ |
48,535 |
|
|
$ |
300,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for (benefit from) income
taxes |
$ |
(32,891 |
) |
|
$ |
43,121 |
|
|
$ |
(1,497,667 |
) |
|
$ |
51,917 |
|
Tax impact on non-GAAP adjustments |
|
19,702 |
|
|
|
(1,356 |
) |
|
|
19,838 |
|
|
|
20,778 |
|
Tax related non-GAAP items |
|
2,555 |
|
|
|
- |
|
|
|
1,496,049 |
|
|
|
- |
|
Non-GAAP provision for (benefit from) income
taxes |
$ |
(10,634 |
) |
|
$ |
41,765 |
|
|
$ |
18,220 |
|
|
$ |
72,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective tax rate |
|
44.8% |
|
|
|
22.2% |
|
|
|
7,437.0% |
|
|
|
18.6% |
|
Non-GAAP effective tax rate |
|
27.8% |
|
|
|
25.3% |
|
|
|
37.5% |
|
|
|
24.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
$ |
(40,602 |
) |
|
$ |
147,142 |
|
|
$ |
1,477,529 |
|
|
$ |
218,990 |
|
Stock-based compensation |
|
25,007 |
|
|
|
22,467 |
|
|
|
47,934 |
|
|
|
43,511 |
|
Amortization of intangibles (1) |
|
3,245 |
|
|
|
- |
|
|
|
3,245 |
|
|
|
- |
|
Acquisition related costs (2) |
|
6,980 |
|
|
|
- |
|
|
|
17,494 |
|
|
|
- |
|
Impairments and other charges (3) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
29,782 |
|
Litigation settlement gain (4) |
|
- |
|
|
|
(51,000 |
) |
|
|
- |
|
|
|
(51,000 |
) |
Tax impact on non-GAAP adjustments |
|
(19,702 |
) |
|
|
1,356 |
|
|
|
(19,838 |
) |
|
|
(20,778 |
) |
Tax related non-GAAP items (5) |
|
(2,555 |
) |
|
|
- |
|
|
|
(1,496,049 |
) |
|
|
- |
|
Non-GAAP net income (loss) |
$ |
(27,627 |
) |
|
$ |
119,965 |
|
|
$ |
30,315 |
|
|
$ |
220,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net income (loss) per share |
$ |
(0.52 |
) |
|
$ |
1.83 |
|
|
$ |
18.70 |
|
|
$ |
2.71 |
|
Non-GAAP diluted net income (loss) per share |
$ |
(0.35 |
) |
|
$ |
1.49 |
|
|
$ |
0.38 |
|
|
$ |
2.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing diluted net income (loss) per
share |
|
78,769 |
|
|
|
80,590 |
|
|
|
79,016 |
|
|
|
80,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) During the three months ended June 30, 2020, we recorded
amortization of intangible assets related to our Q2'20 exocad
acquisition. |
(2) During the three and six months ended June 30, 2020, we
recorded certain incremental expenses related to our Q2'20 exocad
acquisition including third party advisory, legal, tax, accounting,
banking, valuation, and other professional or consulting fees and
foreign exchange losses related to a forward contract for the
purchase commitment. |
(3) During the six months ended June 30, 2019, we recorded $29.8
million of impairments and other charges as a result of closing our
Invisalign Stores due to the arbitrator's decision regarding SDC
including operating lease right-of-use asset impairments, store
leasehold improvement and fixed asset impairments and employee
severance and other charges. |
(4) During the three and six months ended June 30, 2019, we
recorded a $51.0 million gain from the settlement of the Straumann
litigation. |
(5) During the three months ended March 31, 2020, we recorded a
one-time net tax benefit for the deferred tax asset and certain
costs associated with the intra-entity transfer of certain
intellectual property rights and assets to our Swiss subsidiary.
During the three months ended June 30, 2020, we reversed the
quarterly impact of the estimated annual 2020 tax benefit
associated with amortization of the transferred intangibles. |
|
Refer to "About Non-GAAP Financial Measures" section of press
release. |
|
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