SmileDirectClub, Inc. (Nasdaq: SDC) today announced a series of
strategic actions to position the Company for improved business
performance and future growth, including right-sizing its cost
structure to better support core growth initiatives and allocating
capital to countries with the greatest potential for near-term
profitability.
Following an evaluation of its business and the
continuing macroeconomic factors impacting consumers, the Company
is taking specific actions that will focus efforts on supporting
the key growth initiatives that will produce the highest return on
investment. These initiatives include the expansion of its
professional channel, the SmileDirectClub Partner Network;
innovations to its aligner products so as to allow the Company to
capture greater market share of the teen and higher-household
income demographics; its burgeoning oral care product business; and
SmileShop growth in markets with strong consumer demand. Expansion
into new international markets will be paused while the global
economy recovers from pandemic and macroeconomic pressures that
have contributed to challenging operating environments.
In connection with these operational changes,
the Company announced it has suspended operations in Mexico, Spain,
Germany, Netherlands, Austria, Hong Kong, Singapore and New
Zealand. The Company will continue to operate in and scale its
presence in the United States, Canada, United Kingdom, Ireland,
France and Australia. With these changes, the Company will undergo
a reduction in workforce to right-size its operating structure so
it is tailored to the countries in which the Company will continue
to operate and focus.
“Our mission has always been rooted in the
belief that everyone deserves access to premium oral care that is
affordable, accessible, and convenient,” said SmileDirectClub CEO
David Katzman. “Though these decisions are difficult and will
impact many of our team members who have worked tirelessly with us
to deliver on that mission, these changes are the right thing to do
at this time for our business so that we may continue to innovate
and lead the industry to a better oral care solution for all.”
The Company estimates year-over-year cost and
capital savings associated with these actions to be approximately
$120 million in 2022. The Company also anticipates one-time
reorganization costs between Q4 2021 and 2022 of approximately $25
million, which may include lease buyouts, asset impairments related
to the closure of regional operating centers and SmileShops, and
employee-related costs, including severance and retention payments,
associated with the organizational changes. Approximately $3
million of one-time reorganization costs are expected to be booked
in Q4 2021 with the remainder, $22 million, being incurred during
2022.
Additionally, SmileDirectClub affirmed its
previously issued guidance for full year 2021 revenue in the range
of $630 million to $650 million.
“These steps reflect our commitment to
optimizing our investments in those initiatives that are expected
to bring sustainable long-term revenue growth, driving improved
profitability to our business model and right-sizing the
organization to support these programs," Katzman said. "We believe
these initiatives are the right strategy for the future of
SmileDirectClub by stabilizing the balance sheet and having
sufficient cash to operate and invest in the business. We look
forward to providing more detail on our progress in our fourth
quarter earnings release and conference call.”
Forward Looking Statement
This press release contains forward-looking
statements. All statements other than statements of historical
facts may be forward-looking statements. Forward-looking statements
generally relate to future events and include, without limitation,
projections, forecasts and estimates about possible or assumed
future results of our business, financial condition, liquidity,
results of operations, plans, and objectives. Some of these
statements may include words such as “expects,” “anticipates,”
“believes,” “estimates,” “targets,” “plans,” “potential,”
“intends,” “projects,” and “indicates.”
Although they reflect our current, good faith
expectations, these forward-looking statements are not a guarantee
of future performance, and involve a number of risks,
uncertainties, estimates, and assumptions, which are difficult to
predict. Some of the factors that may cause actual outcomes and
results to differ materially from those expressed in, or implied
by, the forward-looking statements include, but are not necessarily
limited to: the ongoing assessment of the cyber incident, material
legal, financial and reputational risks resulting from such
incident and the related operational disruptions; the duration and
magnitude of the COVID-19 pandemic and related containment
measures; our management of growth; the execution of our business
strategies, implementation of new initiatives, and improved
efficiency; our sales and marketing efforts; our manufacturing
capacity, performance, and cost; our ability to obtain future
regulatory approvals; our financial estimates and needs for
additional financing; consumer acceptance of and competition for
our clear aligners; our relationships with retail partners and
insurance carriers; our R&D, commercialization, and other
activities and expenditures; the methodologies, models,
assumptions, and estimates we use to prepare our financial
statements, make business decisions, and manage risks; laws and
regulations governing remote healthcare and the practice of
dentistry; our relationships with vendors; the security of our
operating systems and infrastructure; our risk management
framework; our cash and capital needs; our intellectual property
position; our exposure to claims and legal proceedings; and other
factors described in our filings with the Securities and Exchange
Commission, including but not limited to our Annual Report on Form
10-K for the year ended December 31, 2020 and our Quarterly Report
on Form 10-Q for the quarter ended September 30, 2021.
New risks and uncertainties arise over time, and
it is not possible for us to predict all such factors or how they
may affect us. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made. We are under no duty to update any of these
forward-looking statements after the date of this press release to
conform these statements to actual results or revised expectations.
You should, therefore, not rely on these forward-looking statements
as representing our views as of any date subsequent to the date of
this press release.
About SmileDirectClub SmileDirectClub,
Inc. (Nasdaq: SDC) (“SmileDirectClub”) is an oral care company
and creator of the first medtech platform for teeth
straightening. Through its cutting-edge telehealth technology and
vertically integrated model, SmileDirectClub is
revolutionizing the oral care
industry. SmileDirectClub’s mission is to democratize
access to a smile each and every person loves by making
it affordable and convenient for everyone. SmileDirectClub is
headquartered in Nashville, Tennessee, USA. For more
information, please visit SmileDirectClub.com.
Contact: SmileDirectClub Media
Relations: Press@SmileDirectClub.com
SmileDirectClub Investor Relations:
InvestorRelations@SmileDirectClub.com
SmileDirectClub (NASDAQ:SDC)
Historical Stock Chart
From Jun 2024 to Jul 2024
SmileDirectClub (NASDAQ:SDC)
Historical Stock Chart
From Jul 2023 to Jul 2024