SAN JOSE, CA--(Marketwired - January 30, 2018) -
Align Technology, Inc. (
For 2017, record Invisalign revenues were $1.3 billion, up 34.1% year-over-year with Invisalign case shipments of 931.0 thousand, up 31.4% year-over-year. 2017 iTero revenues were $164.2 million, up 35.1% with record volumes, up 37.5% year-over-year. 2017 Invisalign cases for teenage patients were 237.5 thousand, up 40.4% year-over-year. For 2017, revenues were $1.5 billion, up 36.4% year-over-year and net profit was $231.4 million, or $2.83 per diluted share, which includes an $86.6 million tax expense, or $1.06 per diluted share negative impact due to the new U.S. Tax Cut and Jobs Act, comprised of a $10.0 million non-cash write-down of our deferred tax assets and a mandatory deemed repatriation tax of $76.6 million.
Commenting on Align's Q4 and 2017 results, Align Technology President and CEO Joe Hogan said, "Overall, the fourth quarter was a strong finish to another outstanding year for Align, with better than expected revenues, volumes and operating income. Record Q4 revenues were up 43.7% year-over-year driven by increased Invisalign volumes across all geographies and customer channels, as well as by record iTero scanner revenue. Q4 Invisalign volume was up 34.2% year-over-year reflecting strong international growth from increased utilization and expansion of our customer base which included over 4,000 new customers for the third consecutive quarter. Notwithstanding this strong performance, our Q4 results were impacted by the new U.S. Tax Cut and Jobs Act which reduced our reported net income and EPS. However, Q4 operating income was a record $109.6M or 26.0%."
Hogan continued, "For the full year, revenues of $1.5 billion increased 36.4% year-over-year driven by both record Invisalign revenue which surpassed the $1 billion mark for the first time ever and record iTero scanner revenues. These results reflect continued progress and execution of our four strategic growth drivers which focus on: driving international expansion; increasing Orthodontists utilization of Invisalign, especially with teenagers; enabling GP dentists to treat or refer more Invisalign cases; and generating consumer demand from millions of people worldwide and connecting them with an Invisalign doctor."
GAAP Summary Financial Comparisons | |||||||||||
Fourth Quarter Fiscal 2017 | |||||||||||
Q4'17 | Q3'17 | Q4'16 | Q/Q Change | Y/Y Change | |||||||
Invisalign Case Shipments1 | 255.0K | 236.1K | 190.1K | +8.0% | +34.2% | ||||||
Net Revenues | $421.3M | $385.3M | $293.2M | +9.4% | +43.7% | ||||||
Clear Aligner2 | $364.2M | $341.6M | $251.5M | +6.6% | +44.8% | ||||||
Scanner & Services | $57.1M | $43.7M | $41.7M | +30.8% | +37.0% | ||||||
Net Profit3 | $10.3M | $82.6M | $47.6M | (87.6)% | (78.4)% | ||||||
Diluted EPS3 | $0.13 | $1.01 | $0.59 | $(0.88) | $(0.46) | ||||||
Fiscal 2017 | |||||||
2017 | 2016 | Y/Y Change | |||||
Invisalign Case Shipments1 | 931,045 | 708,500 | +31.4% | ||||
Net Revenues | $1,473.4M | $1,079.9M | +36.4% | ||||
Clear Aligner2 | $1,309.3M | $958.3M | +36.6% | ||||
Scanner & Services | $164.2M | $121.5M | +35.1% | ||||
Net Profit3 | $231.4M | $189.7M | +22.0% | ||||
Diluted EPS3 | $2.83 | $2.33 | +$0.50 |
Note: Changes and percentages are based on actual values and may effect totals due to rounding |
1 Invisalign Shipment figures do not include SmileDirectClub aligners |
2 Clear aligner revenue includes revenues from Invisalign clear aligners and SmileDirectClub aligners |
3 Q4'17 and 2017 net profit and diluted EPS includes $86.6 million tax expense, or $1.06 per diluted share negative impact due to the new U.S. Tax Cut and Jobs Act |
As of December 31, 2017, Align had $761.5 million in cash, cash equivalents and marketable securities compared to $700.0 million as of December 31, 2016. We repurchased approximately 0.2 million shares of stock for $50.0 million in Q4'17 under the April 2016 Repurchase Program. We have $200.0 million remaining available for repurchases under the existing stock repurchase authorization.
2017 Business Highlights
The following list highlights Align's key announcements over the past year:
Q1 2018 Business Outlook
For the first quarter of 2018 (Q1'18), Align provides the following guidance:
Align Web Cast and Conference Call
Align will host a conference call today, January 30, 2018 at 4:30 p.m. ET, 1:30 p.m. PT, to review its fourth quarter and year ended 2017 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 12 months. Additionally, a telephonic replay of the call can be accessed by dialing 877-660-6853 with conference number 13674959 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 13, 2018.
About Align Technology, Inc.
Align Technology designs and manufactures the Invisalign® system, the most advanced clear aligner system in the world, and iTero® intraoral scanners and services. Align's products help dental professionals achieve the clinical results they expect and deliver effective, cutting-edge dental options to their patients. Visit www.aligntech.com for more information.
For additional information about the Invisalign system or to find an Invisalign provider in your area, please visit www.invisalign.com. For additional information about iTero digital scanning system, please visit www.itero.com.
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 2018 year end, including, but not limited to, anticipated net revenues, gross margin, operating expenses, operating profit, diluted earnings per share, tax rate and case shipments. 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, Align's ability to protect its intellectual property rights, continued compliance with regulatory requirements, competition from existing and new competitors, 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 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, or that the expected benefits of new or existing business relationships will not be achieved as anticipated, 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, the security of customer and/or patient data is compromised for any reason, 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 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 year ended December 31, 2016, which was filed with the Securities and Exchange Commission (SEC) on February 28, 2017, and its latest Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, which was filed with the SEC on November 2, 2017. 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 December 31, |
Year Ended December 31, |
||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Net revenues | $ | 421,323 | $ | 293,203 | $ | 1,473,413 | $ | 1,079,874 | |||||||||
Cost of net revenues | 103,406 | 72,954 | 356,466 | 264,580 | |||||||||||||
Gross profit | 317,917 | 220,249 | 1,116,947 | 815,294 | |||||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and adminstrative | 182,141 | 130,268 | 665,777 | 490,653 | |||||||||||||
Research and development | 26,170 | 21,609 | 97,559 | 75,720 | |||||||||||||
Total operating expenses | 208,311 | 151,877 | 763,336 | 566,373 | |||||||||||||
Income from operations | 109,606 | 68,372 | 353,611 | 248,921 | |||||||||||||
Interest and other income (expense), net | 2,581 | (7,516 | ) | 11,188 | (6,355 | ) | |||||||||||
Net income before provision for income taxes and equity in losses (gains) of investee | 112,187 | 60,856 | 364,799 | 242,566 | |||||||||||||
Provision for income taxes | 103,654 | 12,028 | 130,162 | 51,200 | |||||||||||||
Equity in losses (gains) of investee, net of tax | (1,731 | ) | 1,207 | 3,219 | 1,684 | ||||||||||||
Net income | $ | 10,264 | $ | 47,621 | $ | 231,418 | $ | 189,682 | |||||||||
Net income per share: | |||||||||||||||||
Basic | $ | 0.13 | $ | 0.60 | $ | 2.89 | $ | 2.38 | |||||||||
Diluted | $ | 0.13 | $ | 0.59 | $ | 2.83 | $ | 2.33 | |||||||||
Shares used in computing net income per share: | |||||||||||||||||
Basic | 80,080 | 79,667 | 80,085 | 79,856 | |||||||||||||
Diluted | 81,863 | 81,248 | 81,832 | 81,484 | |||||||||||||
ALIGN TECHNOLOGY, INC. | ||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
December 31, 2017 |
December 31, 2016 |
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ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 449,511 | $ | 389,275 | ||||
Marketable securities, short-term | 272,031 | 250,981 | ||||||
Accounts receivable, net | 322,825 | 247,415 | ||||||
Inventories | 31,688 | 27,131 | ||||||
Prepaid expenses and other current assets | 80,948 | 38,176 | ||||||
Total current assets | 1,157,003 | 952,978 | ||||||
Marketable securities, long-term | 39,948 | 59,783 | ||||||
Property, plant and equipment, net | 348,793 | 175,167 | ||||||
Equity method investments | 54,606 | 45,061 | ||||||
Goodwill and intangible assets, net | 89,068 | 81,998 | ||||||
Deferred tax assets | 50,059 | 67,844 | ||||||
Other assets | 38,379 | 13,320 | ||||||
Total assets | $ | 1,777,856 | $ | 1,396,151 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 36,776 | $ | 28,596 | ||||
Accrued liabilities | 194,198 | 134,332 | ||||||
Deferred revenues | 266,842 | 191,407 | ||||||
Total current liabilities | 497,816 | 354,335 | ||||||
Income tax payable | 114,091 | 45,133 | ||||||
Other long-term liabilities | 15,579 | 1,294 | ||||||
Total liabilities | 627,486 | 400,762 | ||||||
Total stockholders' equity | 1,150,370 | 995,389 | ||||||
Total liabilities and stockholders' equity | $ | 1,777,856 | $ | 1,396,151 | ||||
ALIGN TECHNOLOGY, INC. |
INVISALIGN BUSINESS METRICS* |
Q4 | Fiscal | Q1 | Q2 | Q3 | Q4 | Fiscal | |||||||||||||||||||||||||
2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||
Invisalign Average Selling Price (ASP): | |||||||||||||||||||||||||||||||
Worldwide ASP | $ | 1,230 | $ | 1,265 | $ | 1,270 | $ | 1,285 | $ | 1,310 | $ | 1,305 | $ | 1,295 | |||||||||||||||||
International ASP | $ | 1,315 | $ | 1,335 | $ | 1,325 | $ | 1,335 | $ | 1,390 | $ | 1,390 | $ | 1,360 | |||||||||||||||||
Invisalign Cases Shipped by Geography: | |||||||||||||||||||||||||||||||
North America | 122,555 | 463,810 | 132,885 | 146,510 | 144,870 | 152,245 | 576,510 | ||||||||||||||||||||||||
International | 67,500 | 244,690 | 75,175 | 85,380 | 91,195 | 102,785 | 354,535 | ||||||||||||||||||||||||
Total Cases Shipped | 190,055 | 708,500 | 208,060 | 231,890 | 236,065 | 255,030 | 931,045 | ||||||||||||||||||||||||
YoY % growth | 18.5 | % | 21.5 | % | 27.1 | % | 31.0 | % | 32.8 | % | 34.2 | % | 31.4 | % | |||||||||||||||||
QoQ % growth | 6.9 | % | 9.5 | % | 11.5 | % | 1.8 | % | 8.0 | % | |||||||||||||||||||||
Number of Invisalign Doctors Cases Were Shipped To: | |||||||||||||||||||||||||||||||
North America | 23,265 | 34,065 | 23,910 | 24,695 | 24,845 | 25,365 | 36,415 | ||||||||||||||||||||||||
International | 13,635 | 20,415 | 14,955 | 16,570 | 17,760 | 19,620 | 27,990 | ||||||||||||||||||||||||
Total Doctors Cases Shipped To | 36,900 | 54,480 | 38,865 | 41,265 | 42,605 | 44,985 | 64,405 | ||||||||||||||||||||||||
Invisalign Doctor Utilization Rates*: | |||||||||||||||||||||||||||||||
North America | 5.3 | 13.6 | 5.6 | 5.9 | 5.8 | 6.0 | 15.8 | ||||||||||||||||||||||||
North American Orthodontists | 11.3 | 36.6 | 12.6 | 13.6 | 13.8 | 14.0 | 46.6 | ||||||||||||||||||||||||
North American GP Dentists | 3.2 | 7.6 | 3.1 | 3.3 | 3.1 | 3.3 | 8.2 | ||||||||||||||||||||||||
International | 5.0 | 12.0 | 5.0 | 5.2 | 5.1 | 5.2 | 12.7 | ||||||||||||||||||||||||
Total Utilization Rates | 5.2 | 13.0 | 5.4 | 5.6 | 5.5 | 5.7 | 14.5 | ||||||||||||||||||||||||
* # of cases shipped/# of doctors to whom cases were shipped | |||||||||||||||||||||||||||||||
Number of Invisalign Doctors Trained: | |||||||||||||||||||||||||||||||
North America | 1,420 | 4,720 | 980 | 1,620 | 1,460 | 1,340 | 5,400 | ||||||||||||||||||||||||
International | 2,280 | 6,960 | 2,280 | 3,255 | 2,820 | 2,745 | 11,100 | ||||||||||||||||||||||||
Total Doctors Trained Worldwide | 3,700 | 11,680 | 3,260 | 4,875 | 4,280 | 4,085 | 16,500 | ||||||||||||||||||||||||
Total to Date Worldwide | 115,470 | 115,470 | 118,730 | 123,605 | 127,885 | 131,970 | 131,970 | ||||||||||||||||||||||||
Note: Historical public data may differ due to rounding. Additionally, rounding may effect totals. |
*Invisalign business metrics exclude SmileDirectClub aligners. |
ALIGN TECHNOLOGY, INC. | |||||||||||||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Q4 | Fiscal | Q1 | Q2 | Q3 | Q4 | Fiscal | |||||||||||||||||
2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||
Stock-based Compensation (SBC) | |||||||||||||||||||||||
SBC included in Gross Profit | $ | 1,078 | $ | 3,966 | $ | 925 | $ | 768 | $ | 833 | $ | 804 | $ | 3,330 | |||||||||
SBC included in Operating Expenses | 13,136 | 50,182 | 13,887 | 13,477 | 14,134 | 14,026 | 55,524 | ||||||||||||||||
Total SBC Expense | $ | 14,214 | $ | 54,148 | $ | 14,812 | $ | 14,245 | $ | 14,967 | $ | 14,830 | $ | 58,854 | |||||||||
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. | ||
Financial Outlook | ||
(in millions, except per share amounts and percentages) | ||
Q1'18 Guidance | ||
GAAP | ||
Net Revenues | $400.0 - $410.0 | |
Gross Margin | 74.3% - 75.0% | |
Operating Expenses | $223.5 - $227.5 | |
Operating Margin | 18.5% - 19.5% | |
Net Income per Diluted Share | $0.94 - $0.98 | (1) |
Business Metrics: | Q1'18 | |
Case Shipments | 264.0K - 269.0K | |
Capital Expenditure | $65M - $70M | |
Depreciation & Amortization | $10.5M - $11M | |
Diluted Shares Outstanding | 82.0M | (2) |
Stock Based Compensation Expense | $16.2M | |
Effective Tax Rate | 2.0% | (1) |
(1) Includes the benefit from the adoption of the accounting standard update 2016-09 related to share-based compensation expense | ||
(2) Excludes any stock repurchases during the quarter | ||
Contact Information:
Align Technology
Yin Cantor
(408) 470-1044
ycantor@aligntech.com
Ethos Communication:
Shannon Mangum Henderson
(678) 261-7803
align@ethoscommunication.com