Align Technology, Inc. (Nasdaq: ALGN) today reported financial
results for the third quarter of 2020 (“Q3’20”). Q3’20 total
revenues were $734.1 million, up 20.9% year-over-year. Q3’20 Clear
Aligner revenues were $620.8 million, up 20.2% year-over-year and
Q3’20 Imaging Systems and CAD/CAM Services revenues were $113.4
million, up 24.5% year-over-year. Q3’20 Clear Aligner volume was
496.1 thousand cases, up 28.7% year-over-year. For the Americas and
International regions, Q3’20 Clear Aligner volume was up 24.9% and
up 33.6% year-over-year, respectively. Q3’20 Clear Aligner volume
for teenage patients was 162.7 thousand cases, up 25.6%
year-over-year. Q3’20 operating income of $177.1 million was up
39.3% year-over-year resulting in an operating margin of
24.1%. Q3’20 GAAP net income was $139.4 million, or $1.76 per
diluted share. On a non-GAAP basis, Q3’20 net income was $177.9
million, or $2.25 per diluted share.
Commenting on Align’s Q3’20 results, Align
Technology President and CEO Joe Hogan said, “I’m pleased to report
stronger than expected results with record third quarter revenues
up 21% year-over-year reflecting strong momentum across all regions
and customer channels for both Invisalign clear aligners and iTero
scanner and services. During the quarter, we continued to support
doctor recovery efforts with products, programs, and virtual tools
and training that helped more doctors transition their practices to
digital technologies and drove record utilization across the
Invisalign portfolio. Capping off our record quarter is the
achievement of our 9 millionth Invisalign patient milestone. We
also saw strong response to our new teen and mom-focused consumer
campaign with 118% year-over-year increase in total leads, an
uptick in consumer engagement from new social media influencers
like Charli D’Amelio and Marsai Martin, and a 25.6% year over year
increase in teenagers using Invisalign clear aligners. Our overall
revenue momentum has continued into October and we are encouraged
by positive feedback from Invisalign providers regarding the
benefits of digital orthodontics starting with an iTero scanner for
Invisalign treatment - especially in this COVID-19
environment.”
Financial Summary -
Third Quarter Fiscal 2020
|
Q3’20 |
Q2’20 |
Q3’19 |
Invisalign Case Shipments 1 |
|
496,065 |
|
221,880 |
|
385,360 |
GAAP |
|
|
|
Net Revenues |
$734.1M |
$352.3M |
$607.3M |
Clear Aligner 2 |
$620.8M |
$298.3M |
$516.3M |
Imaging Systems & CAD/CAM Services |
$113.4M |
$54.0M |
$91.1M |
Net Income (Loss) |
$139.4M |
$(40.6)M |
$102.5M |
Diluted EPS |
|
$1.76 |
|
$(0.52) |
|
$1.28 |
Non-GAAP |
Net Income (Loss) |
$177.9M |
$(27.6)M |
$118.4M |
Diluted EPS |
|
$2.25 |
|
$(0.35) |
|
$1.48 |
1Invisalign 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 September 30, 2020, Align had $615.5
million in cash and cash equivalents compared to $404.4 million as
of June 30, 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
- Align celebrated reaching its 1
millionth patient in the Asia Pacific region in treatment with the
Invisalign system. Align’s Invisalign system is the only clear
aligner with 1 million patients in the Asia Pacific region. This
achievement reflects Align’s commitment to the Asia Pacific region
and adoption of Invisalign treatment for transforming smiles and
changing lives. The 1 millionth Invisalign patient from the Asia
Pacific region is Ayumu Saito, a 23-year-old aspiring Olympic
athlete from Japan who is a modern pentathlon champion (2019),
fencer, and fashion model. Ayumu is in treatment with Dr. Koji
Yokoya, head director at Aoyama Gaien Orthodontics Dental Offices
in Tokyo.
- Align announced an agreement with
the National Football League (“NFL”) to make the
Invisalign brand the Official Clear Aligner Sponsor of
the NFL. Through this agreement, the Invisalign brand will
connect with doctors, patients, and consumers through an extended
network of NFL sponsored channels and support a variety
of community initiatives championed by NFL Clubs, including
youth focused programs. This agreement builds on Align’s previously
announced Club sponsorship agreements with the New England
Patriots and the San Francisco 49ers and expands the
Invisalign brand’s “Official Smile” designation to 11
individual NFL Clubs with the Dallas Cowboys, New
Orleans Saints, Green Bay Packers, New York
Giants, Kansas City Chiefs, Houston
Texans, Philadelphia Eagles, Tampa Bay
Buccaneers, and the Chicago
Bears.
- During the quarter, Align also
announced a multi-year partnership with the New Orleans
Saints, making the Invisalign brand the “Official Smile” partner of
the Saints. The collaboration will focus on building awareness and
generating demand for Invisalign treatment across social and
digital platforms to engage consumers and highlight the benefits of
in-office, doctor-delivered clear aligner treatment. Additionally,
the Invisalign brand and the Saints have teamed up with defensive
end Cam Jordan to bring more smiles to teens and young
adults through the Youth Empowerment
Project (“YEP”).
- Align announced the global launch
of the Align Digital and Practice Transformation (“ADAPT”) service
for Invisalign and iTero doctors. ADAPT is an expert and
independent fee-based business consulting service offered by Align
to optimize practices’ operational workflow and processes to
enhance patients’ experiences and customer and staff satisfaction,
which will in turn translate into higher growth and greater
efficiencies for orthodontic practices. The goal of ADAPT is to
support digital practice transformation for Invisalign doctors and
their staff.
- Align awarded nine research grants
totaling $225,000 under the company’s eleventh Annual Research
Award Program. The funded research studies cover a wide range of
topics for projects seeking to better understand treatment in
orthodontics and dentistry. The global interest in research of
dental and orthodontic treatment continues to grow as evidenced by
the increasing number of applications Align receives each
year from universities around the world.
Product
- Align announced the launch of
Invisalign G8 with SmartForce® Aligner Activation, the latest of
the company’s biomechanics innovations. Invisalign G8 with
SmartForce Aligner Activation is informed by the company’s
foundational biomechanics for clear aligners and its database of
more than 9 million Invisalign patients to optimize tooth movements
and further improve predictability for frequently treated crowding,
crossbite, and deep bite cases. With SmartForce Aligner Activation,
select areas of the aligner surface are now specifically contoured
to apply optimal forces to the tooth surfaces to control the
location, direction and magnitude of the force to produce the
desired outcome and minimize unwanted movement. Specific, strategic
contact areas between the aligner and the tooth are created by
SmartForce Aligner Activation and work in concert with SmartForce
features for even greater control of the force systems. Invisalign
G8 will be available on all Invisalign products in the first
quarter of 2021.
- Align announced the commercial
availability of its previously announced proprietary ClinCheck™
treatment planning software which was featured at the Align APAC
Virtual Symposium on October 16, a fully digital event that
showcased digital treatment techniques and featured practitioners
from across the Asia Pacific region. ClinCheck software provides
doctors with a 3D model of planned tooth movements throughout
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
includes 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.
- Align announced the launch of
Invisalign Stickables, innovative sticker accessories designed
exclusively for use with the patented SmartTrack® material in
Invisalign clear aligners designed to personalize Invisalign clear
aligners. Available in an array of designs, colors, shapes, and
themes, Invisalign Stickables are a cool, engaging, and fun way for
patients to show their personal flair during Invisalign treatment.
Invisalign Stickables patent-pending accessories are available in
the U.S. and Canada and are expected to be introduced in
other countries in 2021. Invisalign providers can purchase
Invisalign Stickables through the Webstore in Invisalign Doctor
Site. Invisalign Stickables are also available to Invisalign
patients at participating doctor offices or online through the
Invisalign accessories
site https://www.invisalignaccessories.com/.
Align Web Cast and Conference
CallAlign will host a conference call today, October 21,
2020 at 4:30 p.m. ET, 1:30 p.m. PT, to review its third 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
13710706 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
November 4, 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 from operations, operating margin, interest income
and other income (expense), net, provision for (benefit from)
income taxes, effective tax rate, net income and diluted net income
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 9 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 contains forward-looking statements, including
quotations from management regarding business momentum, the
COVID-19 pandemic, its impact on our business and results of
operations, our expectations for digital adoption in dentistry and
the potential impact of our products in the transition, our
expectations for our marketing activities, and our expectations for
our new products, features, and accessories. Forward-looking
statements contained in this news release 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 June 30, 2020, which was filed with the SEC on July
31, 2020. 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 September
30, |
|
Nine Months Ended September
30, |
|
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
734,144 |
|
$ |
607,341 |
|
|
$ |
1,637,421 |
|
|
$ |
1,757,009 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of net
revenues |
|
|
200,056 |
|
|
169,787 |
|
|
|
484,649 |
|
|
|
485,070 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
534,088 |
|
|
437,554 |
|
|
|
1,152,772 |
|
|
|
1,271,939 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
312,492 |
|
|
277,514 |
|
|
|
852,365 |
|
|
|
792,572 |
|
|
Research and development |
|
|
44,527 |
|
|
39,680 |
|
|
|
126,420 |
|
|
|
116,034 |
|
|
Impairments and other (gains) charges |
|
|
- |
|
|
(6,792 |
) |
|
|
- |
|
|
|
22,990 |
|
|
Litigation settlement gain |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(51,000 |
) |
|
Total operating expenses |
|
|
357,019 |
|
|
310,402 |
|
|
|
978,785 |
|
|
|
880,596 |
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
177,069 |
|
|
127,152 |
|
|
|
173,987 |
|
|
|
391,343 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and other
income (expense), net: |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
329 |
|
|
3,478 |
|
|
|
2,788 |
|
|
|
9,576 |
|
|
Other income (expense), net |
|
|
7,147 |
|
|
(2,211 |
) |
|
|
(12,368 |
) |
|
|
5,935 |
|
|
Total interest income and other income (expense), net |
|
7,476 |
|
|
1,267 |
|
|
|
(9,580 |
) |
|
|
15,511 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income before provision
for (benefit from) income taxes and equity in losses of
investee |
|
|
184,545 |
|
|
128,419 |
|
|
|
164,407 |
|
|
|
406,854 |
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit from)
income taxes |
|
|
45,174 |
|
|
25,895 |
|
|
|
(1,452,493 |
) |
|
|
77,812 |
|
|
Equity in losses of investee,
net of tax |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
7,528 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
139,371 |
|
$ |
102,524 |
|
|
$ |
1,616,900 |
|
|
$ |
321,514 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.77 |
|
$ |
1.29 |
|
|
$ |
20.54 |
|
|
$ |
4.03 |
|
|
Diluted |
|
$ |
1.76 |
|
$ |
1.28 |
|
|
$ |
20.45 |
|
|
$ |
4.00 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing net
income per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
78,824 |
|
|
79,332 |
|
|
|
78,729 |
|
|
|
79,709 |
|
|
Diluted |
|
|
79,163 |
|
|
79,825 |
|
|
|
79,078 |
|
|
|
80,397 |
|
|
|
|
|
|
|
|
|
|
|
|
ALIGN TECHNOLOGY, INC. |
|
|
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2020 |
|
December 31, 2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
615,532 |
|
$ |
550,425 |
|
Marketable securities, short-term |
|
|
- |
|
|
318,202 |
|
Accounts receivable, net |
|
|
626,046 |
|
|
550,291 |
|
Inventories |
|
|
123,093 |
|
|
112,051 |
|
Prepaid expenses and other current assets |
|
|
108,576 |
|
|
102,450 |
|
Total current assets |
|
|
1,473,247 |
|
|
1,633,419 |
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
|
703,657 |
|
|
631,730 |
|
Operating lease right-of-use
assets, net |
|
|
83,386 |
|
|
56,244 |
|
Goodwill and intangible
assets, net |
|
|
555,946 |
|
|
75,692 |
|
Deferred tax assets |
|
|
1,566,227 |
|
|
64,007 |
|
Other assets |
|
|
32,628 |
|
|
39,610 |
|
|
|
|
|
|
|
Total assets |
|
$ |
4,415,091 |
|
$ |
2,500,702 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
119,184 |
|
$ |
87,250 |
|
Accrued liabilities |
|
|
318,471 |
|
|
319,958 |
|
Deferred revenues |
|
|
684,139 |
|
|
563,762 |
|
Total current liabilities |
|
|
1,121,794 |
|
|
970,970 |
|
|
|
|
|
|
|
Income tax payable |
|
|
108,669 |
|
|
102,794 |
|
Operating lease
liabilities |
|
|
65,518 |
|
|
43,463 |
|
Other long-term
liabilities |
|
|
85,639 |
|
|
37,306 |
|
Total liabilities |
|
|
1,381,620 |
|
|
1,154,533 |
|
|
|
|
|
|
|
Total stockholders'
equity |
|
|
3,033,471 |
|
|
1,346,169 |
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity |
|
$ |
4,415,091 |
|
$ |
2,500,702 |
|
|
|
|
|
|
|
ALIGN TECHNOLOGY, INC. |
|
|
|
|
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September
30, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
|
|
Net
cash provided by operating activities |
|
$ |
280,756 |
|
|
$ |
529,093 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES |
|
|
|
|
|
Net
cash used in investing activities |
|
|
(186,840 |
) |
|
|
(290,333 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES |
|
|
|
|
|
Net
cash used in financing activities |
|
|
(28,360 |
) |
|
|
(383,163 |
) |
|
Effect of foreign
exchange rate changes on cash, cash equivalents, and restricted
cash |
|
|
(568 |
) |
|
|
(2,098 |
) |
|
Net increase
(decrease) in cash, cash equivalents, and restricted cash |
|
|
64,988 |
|
|
|
(146,501 |
) |
|
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 |
|
$ |
616,122 |
|
|
$ |
491,065 |
|
|
|
|
|
|
|
|
ALIGN TECHNOLOGY,
INC. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVISALIGN BUSINESS
METRICS* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Fiscal |
|
Q1 |
|
Q2 |
|
Q3 |
|
|
|
|
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2020 |
|
|
|
2020 |
|
|
Invisalign
Average Selling Price (ASP): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide ASP |
|
|
|
$ |
1,245 |
|
|
$ |
1,230 |
|
|
$ |
1,260 |
|
|
$ |
1,240 |
|
|
$ |
1,245 |
|
|
$ |
1,255 |
|
|
$ |
1,255 |
|
|
$ |
1,180 |
|
|
|
International ASP |
|
|
|
$ |
1,330 |
|
|
$ |
1,305 |
|
|
$ |
1,330 |
|
|
$ |
1,300 |
|
|
$ |
1,315 |
|
|
$ |
1,340 |
|
|
$ |
1,285 |
|
|
$ |
1,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invisalign
Cases Shipped by Geography: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
202,935 |
|
|
|
211,360 |
|
|
|
215,355 |
|
|
|
225,925 |
|
|
|
855,575 |
|
|
|
213,505 |
|
|
|
100,995 |
|
|
|
268,970 |
|
|
|
International |
|
|
|
|
146,260 |
|
|
|
165,785 |
|
|
|
170,005 |
|
|
|
187,790 |
|
|
|
669,840 |
|
|
|
145,935 |
|
|
|
120,885 |
|
|
|
227,095 |
|
|
|
Total Cases
Shipped |
|
|
|
|
349,195 |
|
|
|
377,145 |
|
|
|
385,360 |
|
|
|
413,715 |
|
|
|
1,525,415 |
|
|
|
359,440 |
|
|
|
221,880 |
|
|
|
496,065 |
|
|
|
YoY % growth |
|
|
|
|
28.3 |
% |
|
|
24.6 |
% |
|
|
20.7 |
% |
|
|
23.9 |
% |
|
|
24.2 |
% |
|
|
2.9 |
% |
|
|
-41.2 |
% |
|
|
28.7 |
% |
|
|
QoQ % growth |
|
|
|
|
4.6 |
% |
|
|
8.0 |
% |
|
|
2.2 |
% |
|
|
7.4 |
% |
|
|
|
|
-13.1 |
% |
|
|
-38.3 |
% |
|
|
123.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Invisalign Doctors Cases Were Shipped
To: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
30,200 |
|
|
|
31,445 |
|
|
|
31,975 |
|
|
|
33,130 |
|
|
|
47,130 |
|
|
|
32,315 |
|
|
|
22,165 |
|
|
|
34,625 |
|
|
|
International |
|
|
|
|
26,510 |
|
|
|
28,970 |
|
|
|
30,980 |
|
|
|
33,720 |
|
|
|
48,650 |
|
|
|
28,535 |
|
|
|
25,945 |
|
|
|
35,380 |
|
|
|
Total Doctors
Cases Shipped To |
|
|
|
|
56,710 |
|
|
|
60,415 |
|
|
|
62,955 |
|
|
|
66,850 |
|
|
|
95,780 |
|
|
|
60,850 |
|
|
|
48,110 |
|
|
|
70,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invisalign
Doctor Utilization Rates**: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
7.0 |
|
|
|
7.0 |
|
|
|
7.0 |
|
|
|
7.2 |
|
|
|
19.4 |
|
|
|
6.9 |
|
|
|
4.8 |
|
|
|
8.4 |
|
|
|
North American
Orthodontists |
|
|
|
|
18.3 |
|
|
|
18.9 |
|
|
|
19.1 |
|
|
|
19.3 |
|
|
|
65.0 |
|
|
|
18.9 |
|
|
|
11.0 |
|
|
|
24.1 |
|
|
|
North American GP
Dentists |
|
|
|
|
3.6 |
|
|
|
3.6 |
|
|
|
3.5 |
|
|
|
3.8 |
|
|
|
9.5 |
|
|
|
3.6 |
|
|
|
2.5 |
|
|
|
4.2 |
|
|
|
International |
|
|
|
|
5.5 |
|
|
|
5.7 |
|
|
|
5.5 |
|
|
|
5.6 |
|
|
|
13.8 |
|
|
|
5.1 |
|
|
|
4.7 |
|
|
|
6.4 |
|
|
|
Total Utilization
Rates |
|
|
|
|
6.2 |
|
|
|
6.2 |
|
|
|
6.1 |
|
|
|
6.2 |
|
|
|
15.9 |
|
|
|
5.9 |
|
|
|
4.6 |
|
|
|
7.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Invisalign Doctors Trained: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
1,840 |
|
|
|
3,070 |
|
|
|
2,760 |
|
|
|
2,095 |
|
|
|
9,765 |
|
|
|
2,035 |
|
|
|
1,140 |
|
|
|
3,350 |
|
|
|
International |
|
|
|
|
2,410 |
|
|
|
3,520 |
|
|
|
3,135 |
|
|
|
3,445 |
|
|
|
12,510 |
|
|
|
2,600 |
|
|
|
2,350 |
|
|
|
3,175 |
|
|
|
Total Doctors
Trained Worldwide |
|
|
|
|
4,250 |
|
|
|
6,590 |
|
|
|
5,895 |
|
|
|
5,540 |
|
|
|
22,275 |
|
|
|
4,635 |
|
|
|
3,490 |
|
|
|
6,525 |
|
|
|
Total to Date
Worldwide |
|
|
|
|
156,205 |
|
|
|
162,795 |
|
|
|
168,690 |
|
|
|
174,230 |
|
|
|
174,230 |
|
|
|
178,865 |
|
|
|
182,355 |
|
|
|
188,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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 |
|
Q3 |
|
|
|
|
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2020 |
|
|
|
2020 |
|
|
Stock-based Compensation (SBC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SBC included in Gross
Profit |
|
|
|
$ |
1,112 |
|
|
$ |
1,278 |
|
|
$ |
1,354 |
|
|
$ |
1,410 |
|
|
$ |
5,154 |
|
|
$ |
1,347 |
|
|
$ |
891 |
|
|
$ |
1,247 |
|
|
|
SBC included in Operating
Expenses |
|
|
|
|
19,932 |
|
|
|
21,189 |
|
|
|
22,822 |
|
|
|
19,087 |
|
|
|
83,030 |
|
|
|
21,580 |
|
|
|
24,116 |
|
|
|
23,982 |
|
|
|
Total
SBC |
|
|
|
$ |
21,044 |
|
|
$ |
22,467 |
|
|
$ |
24,176 |
|
|
$ |
20,497 |
|
|
$ |
88,184 |
|
|
$ |
22,927 |
|
|
$ |
25,007 |
|
|
$ |
25,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALIGN TECHNOLOGY,
INC. |
|
|
|
|
|
|
|
|
|
|
UNAUDITED GAAP TO
NON-GAAP RECONCILIATION |
|
|
|
|
|
|
|
|
|
|
(in thousands except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
|
Nine Months Ended September
30, |
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit |
|
$ |
534,088 |
|
|
$ |
437,554 |
|
|
|
$ |
1,152,772 |
|
|
$ |
1,271,939 |
|
|
|
Stock-based compensation |
|
|
1,247 |
|
|
|
1,354 |
|
|
|
|
3,485 |
|
|
|
3,744 |
|
|
|
Amortization of intangibles
(1) |
|
|
2,700 |
|
|
|
- |
|
|
|
|
4,350 |
|
|
|
- |
|
|
Non-GAAP
gross profit |
|
$ |
538,035 |
|
|
$ |
438,908 |
|
|
|
$ |
1,160,607 |
|
|
$ |
1,275,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin |
|
|
72.7 |
% |
|
|
72.0 |
% |
|
|
|
70.4 |
% |
|
|
72.4 |
% |
|
Non-GAAP
gross margin |
|
|
73.3 |
% |
|
|
72.3 |
% |
|
|
|
70.9 |
% |
|
|
72.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
operating expenses |
|
$ |
357,019 |
|
|
$ |
310,402 |
|
|
|
$ |
978,785 |
|
|
$ |
880,596 |
|
|
|
Stock-based compensation |
|
|
(23,982 |
) |
|
|
(22,822 |
) |
|
|
|
(69,678 |
) |
|
|
(63,943 |
) |
|
|
Amortization of intangibles
(1) |
|
|
(580 |
) |
|
|
- |
|
|
|
|
(2,175 |
) |
|
|
- |
|
|
|
Acquisition related costs
(2) |
|
|
(314 |
) |
|
|
- |
|
|
|
|
(7,621 |
) |
|
|
- |
|
|
|
Impairments and other (gains)
charges (3) |
|
|
- |
|
|
|
6,792 |
|
|
|
|
- |
|
|
|
(22,990 |
) |
|
|
Litigation settlement gain
(4) |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
51,000 |
|
|
Non-GAAP
operating expenses |
|
$ |
332,143 |
|
|
$ |
294,372 |
|
|
|
$ |
899,311 |
|
|
$ |
844,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
income from operations |
|
$ |
177,069 |
|
|
$ |
127,152 |
|
|
|
$ |
173,987 |
|
|
$ |
391,343 |
|
|
|
Stock-based compensation |
|
|
25,229 |
|
|
|
24,176 |
|
|
|
|
73,163 |
|
|
|
67,687 |
|
|
|
Amortization of intangibles
(1) |
|
|
3,280 |
|
|
|
- |
|
|
|
|
6,525 |
|
|
|
- |
|
|
|
Acquisition related costs
(2) |
|
|
314 |
|
|
|
- |
|
|
|
|
7,621 |
|
|
|
- |
|
|
|
Impairments and other (gains)
charges (3) |
|
|
- |
|
|
|
(6,792 |
) |
|
|
|
- |
|
|
|
22,990 |
|
|
|
Litigation settlement gain
(4) |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(51,000 |
) |
|
Non-GAAP
income from operations |
|
$ |
205,892 |
|
|
$ |
144,536 |
|
|
|
$ |
261,296 |
|
|
$ |
431,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
operating margin |
|
|
24.1 |
% |
|
|
20.9 |
% |
|
|
|
10.6 |
% |
|
|
22.3 |
% |
|
Non-GAAP
operating margin |
|
|
28.0 |
% |
|
|
23.8 |
% |
|
|
|
16.0 |
% |
|
|
24.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
interest income and other income (expense), net |
|
$ |
7,476 |
|
|
$ |
1,267 |
|
|
|
$ |
(9,580 |
) |
|
$ |
15,511 |
|
|
|
Acquisition related costs
(2) |
|
|
- |
|
|
|
- |
|
|
|
|
10,187 |
|
|
|
- |
|
|
Non-GAAP
interest income and other income (expense), net |
|
$ |
7,476 |
|
|
$ |
1,267 |
|
|
|
$ |
607 |
|
|
$ |
15,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income before provision for (benefit from) income taxes and equity
in losses of investee |
|
$ |
184,545 |
|
|
$ |
128,419 |
|
|
|
$ |
164,407 |
|
|
$ |
406,854 |
|
|
|
Stock-based compensation |
|
|
25,229 |
|
|
|
24,176 |
|
|
|
|
73,163 |
|
|
|
67,687 |
|
|
|
Amortization of intangibles
(1) |
|
|
3,280 |
|
|
|
- |
|
|
|
|
6,525 |
|
|
|
- |
|
|
|
Acquisition related costs
(2) |
|
|
314 |
|
|
|
- |
|
|
|
|
17,808 |
|
|
|
- |
|
|
|
Impairments and other (gains)
charges (3) |
|
|
- |
|
|
|
(6,792 |
) |
|
|
|
- |
|
|
|
22,990 |
|
|
|
Litigation settlement gain
(4) |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(51,000 |
) |
|
Non-GAAP
net income before provision for (benefit from) income taxes and
equity in losses of investee |
|
$ |
213,368 |
|
|
$ |
145,803 |
|
|
|
$ |
261,903 |
|
|
$ |
446,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
provision for (benefit from) income taxes |
|
$ |
45,174 |
|
|
$ |
25,895 |
|
|
|
$ |
(1,452,493 |
) |
|
$ |
77,812 |
|
|
|
Tax impact on non-GAAP
adjustments |
|
|
1,093 |
|
|
|
1,467 |
|
|
|
|
20,931 |
|
|
|
22,245 |
|
|
|
Tax related non-GAAP items
(5) |
|
|
(10,763 |
) |
|
|
- |
|
|
|
|
1,485,286 |
|
|
|
- |
|
|
Non-GAAP
provision for (benefit from) income taxes |
|
$ |
35,504 |
|
|
$ |
27,362 |
|
|
|
$ |
53,724 |
|
|
$ |
100,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
effective tax rate |
|
|
24.5 |
% |
|
|
20.2 |
% |
|
|
|
(883.5 |
)% |
|
|
19.1 |
% |
|
Non-GAAP
effective tax rate |
|
|
16.6 |
% |
|
|
18.8 |
% |
|
|
|
20.5 |
% |
|
|
22.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income |
|
$ |
139,371 |
|
|
$ |
102,524 |
|
|
|
$ |
1,616,900 |
|
|
$ |
321,514 |
|
|
|
Stock-based compensation |
|
|
25,229 |
|
|
|
24,176 |
|
|
|
|
73,163 |
|
|
|
67,687 |
|
|
|
Amortization of intangibles
(1) |
|
|
3,280 |
|
|
|
- |
|
|
|
|
6,525 |
|
|
|
- |
|
|
|
Acquisition related costs
(2) |
|
|
314 |
|
|
|
- |
|
|
|
|
17,808 |
|
|
|
- |
|
|
|
Impairments and other (gains)
charges (3) |
|
|
- |
|
|
|
(6,792 |
) |
|
|
|
- |
|
|
|
22,990 |
|
|
|
Litigation settlement gain
(4) |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(51,000 |
) |
|
|
Tax impact on non-GAAP
adjustments |
|
|
(1,093 |
) |
|
|
(1,467 |
) |
|
|
|
(20,931 |
) |
|
|
(22,245 |
) |
|
|
Tax related non-GAAP items
(5) |
|
|
10,763 |
|
|
|
- |
|
|
|
|
(1,485,286 |
) |
|
|
- |
|
|
Non-GAAP
net income |
|
$ |
177,864 |
|
|
$ |
118,441 |
|
|
|
$ |
208,179 |
|
|
$ |
338,946 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net income per share |
|
$ |
1.76 |
|
|
$ |
1.28 |
|
|
|
$ |
20.45 |
|
|
$ |
4.00 |
|
|
Non-GAAP diluted net income per share |
|
$ |
2.25 |
|
|
$ |
1.48 |
|
|
|
$ |
2.63 |
|
|
$ |
4.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing diluted net income per
share |
|
|
79,163 |
|
|
|
79,825 |
|
|
|
|
79,078 |
|
|
|
80,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes: |
|
|
|
|
|
|
|
|
|
|
(1) During the three and nine months ended September 30, 2020, we
recorded amortization of intangible assets related to our Q2'20
exocad acquisition. |
|
(2) During the three and nine months ended September 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 nine months ended September 30, 2019, we recorded a
net impairment charge of $23.0 million consisting 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 offset by a gain recorded in the three months ended
September 30, 2019 due to negotiation of early termination of our
Invisalign store leases. |
|
(4) During the nine months ended September 30, 2019, we recorded a
$51.0 million gain from the settlement of the Straumann
litigation. |
|
(5) For the nine months ended September 30, 2020, we recorded a
one-time net tax benefit for the deferred tax asset and certain
costs associated with the intra-entity transfer in the three months
ended March 31, 2020 of certain intellectual property rights and
assets to our Swiss subsidiary and related tax impact from the
amortization of the transferred intangibles assets. For the
three months ended September 30, 2020, we recorded amortization of
the benefit from the transferred intangibles
assets. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Refer to "About Non-GAAP Financial Measures" section of press
release. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Align
Technology Zeno
GroupMadelyn
Homick Sarah
Johnson(408) 470-1180
(828)
551-4201mhomick@aligntech.com
sarah.johnson@zenogroup.com
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