SANTA CLARA, Calif., July 23 Align Technology, Inc. (Nasdaq: ALGN) today reported financial results for the second quarter, ended June 30, 2009.
Total net revenues for the second quarter of fiscal 2009 (Q2 09) were $76.3 million compared to $70.1 million reported in the first quarter of 2009 (Q1 09) and compared to $79.9 million reported in the second quarter of 2008 (Q2 08). Invisalign case shipments for Q2 09 were 53.0 thousand, compared to 50.1 thousand in Q1 09 and compared to 54.9 thousand in Q2 08.
Net profit for Q2 09 was $4.5 million, or $0.07 per diluted share. This is compared to net profit of $2.6 million, or $0.04 per diluted share in Q1 09 and net profit of $4.0 million, or $0.06 per diluted share in Q2 08. Stock-based compensation expense included in Q2 09 net profit was $4.3 million compared to $3.7 million in Q1 09 and $4.8 million in Q2 08.
"Overall, we had a good quarter with better than expected results across the board, including record gross margins and continued profitability," said Thomas M. Prescott, president and CEO of Align Technology. "Second quarter revenues increased 9% sequentially to $76.3 million on case shipments of 53.0 thousand, driven by strong international growth and continued uptake of Invisalign Teen."
To supplement our consolidated financial statements, we use the following non-GAAP financial measures: non-GAAP operating expense, non-GAAP operating margin, non-GAAP net profit and non-GAAP earnings per share. For Q2 09, the non-GAAP financial measures excluded the impact of the Company's restructuring plan announced previously. A detailed reconciliation between GAAP and non-GAAP information is contained in the tables following the financial tables of this release.
Non-GAAP net profit for Q2 09 was $4.8 million, or $0.07 per diluted share. This is compared to non-GAAP net profit of $3.2 million, or $0.05 per diluted share in Q1 09. In Q2 08, there was no difference between GAAP and non-GAAP net profit.
Q2 09 Operating Results
Liquidity and Capital Resources
As of June 30, 2009, Align had $143.1 million in cash, cash equivalents, and short-term marketable securities compared to $110.2 million as of December 31, 2008.
Key Business Metrics
The following table highlights business metrics for Align's second quarter of 2009. Additional historical information is available on the Company's website at http://investor.aligntech.com.
Q3 Fiscal 2009 Business Outlook
For the third quarter of fiscal 2009 (Q3 09), Align Technology expects net revenues to be in a range of $71.0 million to $74.5 million. GAAP earnings per diluted share for Q3 09 is expected to be in a range of $0.03 to $0.05. Stock-based compensation expense for Q3 09 is expected to be approximately $4.6 million.
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, July 23, 2009 at 4:30 p.m. ET, 1:30 p.m. PT, to review its second quarter fiscal 2009 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 201-689-8341 approximately fifteen minutes prior to the start of the call. If you are unable to listen to the call, an archived 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 account number 292 followed by # and conference number 327280 followed by #. The replay must be accessed from international locations by dialing 201-612-7415 and using the same account and conference numbers referenced above. The telephonic replay will be available through 5:30 p.m. ET on August 6, 2009.
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. Today, the Invisalign product family includes Invisalign, Invisalign Teen, Invisalign Assist, Invisalign Express, and Vivera Retainers.
To learn more about Invisalign or to find a certified Invisalign doctor in your area, please visit www.invisalign.com or call 1-800-INVISIBLE.
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 operating expenses, non-GAAP profit from operations, non-GAAP net profit, and non-GAAP earnings per share, which exclude the effect of charges associated with the restructuring, and the related tax effect. 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. For more information on these non-GAAP financial measures, please see the tables captioned "Business Outlook Summary" included at the end of this release.
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 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.
This news release, including the tables below, contains forward-looking statements, including statements regarding, certain business metrics for the third quarter of 2009, including anticipated 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 as well as the willingness and ability of our customers to adopt the expected baseline requirements set forth in our recently announced proficiency program and the willingness and ability of our customers to maintain and/or increase utilization to meet the new proficiency standards in sufficient numbers, potential losses or damages arising from any legal settlements or judgments related to the Ormco litigation, including the issuance of a permanent injunction, or other equitable relief, 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, continued customer demand for Invisalign 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 Invisalign by consumers and dental professionals, Align's third party manufacturing processes and personnel, foreign operational, political and other risks relating to Align's international manufacturing operations, Align's ability to protect its intellectual property rights, competition from manufacturers of traditional braces and new competitors, Align's ability to develop and successfully introduce new products and product enhancements, and the loss of key personnel. 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, 2008, which was filed with the Securities and Exchange Commission on February 27, 2009. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
Key GAAP Operating Results Q2 09 Q1 09 Q2 08 ----- ----- ----- Gross Margin 76.0% 75.2% 74.7% Operating Expense $51.7M $47.4M $55.8M Operating Margin 8.2% 7.5% 4.8% Net Profit $4.5M $2.6M $4.0M Earnings Per Diluted Share (EPS) $0.07 $0.04 $0.06 Key Non-GAAP Operating Results Q2 09 Q1 09 Q2 08 ----- ----- ----- Non-GAAP Operating Expense $51.3M $46.5M $55.8M Non-GAAP Operating Margin 8.7% 8.8% 4.8% Non-GAAP Net Profit $4.8M $3.2M $4.0M Non-GAAP Earnings Per Diluted Share (EPS) $0.07 $0.05 $0.06
SOURCE Align Technology, Inc.