Align Technology Announces Record Fourth Quarter and Fiscal 2020 Financial Results

Achieves 2 Millionth Invisalign Patient Milestone in EMEA

San Jose, California, UNITED STATES


  • Q4 total revenues up 13.7% sequentially and 28.4% year-over-year to a record $834.5 million
  • Q4 diluted net income per share of $2.00, Q4 non-GAAP diluted net income per share of $2.61
  • Q4 operating margin of 25.5%, up 1.4 points sequentially and up 2.3 points year-over-year
  • Q4 Clear Aligner revenues up 12.9% sequentially and 28.9% year-over-year to a record $700.7 million
  • Q4 Clear Aligner volume up 14.5% sequentially and 37.3% year-over-year to 568.0 thousand cases
  • Q4 Clear Aligner volume for teenage patients was 160.9 thousand cases, up 38.7% year-over-year
  • Q4 Imaging Systems and CAD/CAM Services revenues were up 18.0% sequentially and 26.0% year-over-year to a record $133.8 million
  • 2020 total revenues up 2.7% to a record $2.5 billion, Clear Aligner revenues a record $2.1 billion

TEMPE, Ariz., Feb. 03, 2021 (GLOBE NEWSWIRE) -- Align Technology, Inc. (Nasdaq: ALGN) today reported financial results for the fourth quarter ("Q4'20") and year ended December 31, 2020. Q4'20 total revenues were $834.5 million, up 28.4% year-over-year. Q4'20 Clear Aligner revenues were $700.7 million, up 28.9% year-over-year and Q4'20 Imaging Systems and CAD/CAM Services revenues were $133.8 million, up 26.0% year-over-year. Q4'20 Clear Aligner volume was 568.0 thousand cases, up 37.3% year-over-year. For the Americas and International regions, Q4'20 Clear Aligner volume was up 34.1% and up 41.1% year-over-year, respectively. Q4'20 Clear Aligner volume for teenage patients was 160.9 thousand cases, up 38.7% year-over-year. Q4'20 operating income of $213.2 million was up 41.0% year-over-year, resulting in an operating margin of 25.5%. Q4'20 GAAP net income was $159.0 million, or $2.00 per diluted share. On a non-GAAP basis, Q4'20 net income was $207.7 million, or $2.61 per diluted share.

Commenting on Align's Q4'20 and 2020 results, Align Technology President and CEO Joe Hogan said, “Our fourth quarter was a strong finish to the year -- with record revenues and volumes from both Invisalign aligners and iTero scanners, as well as increased gross margins, operating margins, EPS, and cash flow. Our Q4 performance was driven by strong year-over-year growth across customer channels and regions and continued momentum sequentially. Q4 reflects increased Invisalign adoption from both adults and teenagers, which were up 36.7% and 38.7% year-over-year, respectively. Our Teen and Mom-focused consumer campaign generated a +77% year-over-year increase in unique visitors to our website and a 76% increase in leads generated. In addition, Invisalign social media influencers like Charli D' Amelio, Marsai Martin, Christina Milian, Tisha Campbell-Martin, Rachel Zoe, Tiffany Ma, and Tahj Mowry continued to deliver exciting new content and increased engagement for the Invisalign brand with consumers and among their millions of followers.”

For 2020, total revenues were a record $2.5 billion, up 2.7% year-over-year. Record 2020 Clear Aligner revenues were $2.1 billion, up 3.7% year-over-year and record Clear Aligner volume was 1.6 million cases, up 7.0% year-over-year. 2020 Imaging Systems and CAD/CAM Services revenues were $370.5 million, down 2.8% year-over-year. 2020 Invisalign cases for teenage patients were 498.2 thousand, up 11.5% year-over-year. 2020 net income was $1,775.9 million, or $22.41 per diluted share. On a non-GAAP basis, 2020 net income was $415.9 million, or $5.25 per diluted share.

Continued Hogan, “2020 was a year unlike any other that we have experienced. The COVID-19 pandemic and its impact have been life-changing – marked by loss and separation, recovery and renewal, record highs and lows, and significant milestones and accomplishments even in a time of huge disruption. Despite the swift onset of the pandemic and uncertainty throughout 2020, we didn’t halt our plans or change our strategy for continued growth. We completed the acquisition and integration of exocad; accelerated our investments in marketing to create Invisalign brand awareness and drive consumer demand for our doctors’ offices; accelerated new technology to market with virtual tools that enabled our doctors to stay connected with their patients; provided PPE to those in need; and supported doctors and their teams with online education and digital forums that went beyond products to help them navigate the uncertainties of the pandemic. As a result of our continued strategic focus and investments, we exited the year stronger than we started and 2021 is off to a great start.”

Financial Summary - Fourth Quarter Fiscal 2020

 Q4'20Q3'20Q4'19
Invisalign Case Shipments 1 567,950 496,065 413,715
GAAP   
Net Revenues$834.5M$734.1M$649.8M
Clear Aligner 2$700.7M$620.8M$543.6M
Imaging Systems & CAD/CAM Services$133.8M$113.4M$106.2M
Net Income$159.0M$139.4M$121.3M
Diluted EPS$2.00$1.76$1.53
Non-GAAP
Net Income$207.7M$177.9M$139.4M
Diluted EPS$2.61$2.25$1.76

Financial Summary - Fiscal 2020

  2020 2019
Invisalign Case Shipments 1 1,645,335 1,525,415
GAAP  
Net Revenues$2,471.9M$2,406.8M
Clear Aligner 2$2,101.5M$2,025.8M
Imaging Systems & CAD/CAM Services$370.5M$381.0M
Net Income$1,775.9M$442.8M
Diluted EPS$22.41$5.53
Non-GAAP
Net Income$415.9M$478.3M
Diluted EPS$5.25$5.97

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 on December 31, 2019, and was not renewed.

As of December 31, 2020, Align had $960.8 million in cash and cash equivalents and marketable securities, short-term, compared to $868.6 million as of December 31, 2019. Additionally, we have $100.0 million remaining available for repurchase of our common stock under our May 2018 Repurchase Program.

2020 Announcement Highlights:

  • Align achieved a major milestone in EMEA with the shipment to our 2 millionth Invisalign patient, that we will amplify with an EMEA-wide campaign that will launch next month. This milestone for EMEA reflects strong acceleration in Invisalign adoption and growth.
  • Align established its new global corporate headquarters in Tempe, Arizona, effective January 1, 2021. The Company’s San Jose, California campus remains the hub for its global innovation, product, and marketing organization and will become home to its new Digital Innovation Center, currently under construction.
  • Align 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.
  • Align celebrated its 1 millionth Invisalign patient milestone in the Asia Pacific region. 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 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. 
  • Align 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 worldwide.
  • Align 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.
  • Align 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.
  • Align announced the following contributions towards relief efforts in response to COVID-19:
    - Pledged RMB 1 million donation to the Chinese Red Cross Foundation to support its ongoing prevention and control efforts for the outbreak in China.
    - The Align Technology Foundation, Align's donor-advised fund through Fidelity Charitable, pledged US $1 million donation to support relief efforts globally. In addition, Align donated personal protective equipment (PPE) such as N95 masks, working with partners to source supplies for any additional PPE to help hospitals and healthcare providers treating patients with COVID-19. As the world's largest manufacturer of custom 3D-printed materials, Align also reached out to public and private sector organizations to offer its technology expertise and counsel on ways to reduce the scarcity of parts and materials for public health needs.

Product

  • Align announced the launch of the iTero Element Plus Series next generation of scanners and imaging systems. The Series of new solutions feature advanced technology and capabilities designed to improve the scanning experience, increase practice productivity, and drive higher patient treatment conversion. The new iTero Element Plus Series of scanners and imaging systems builds on the success of the award-winning iTero Element family of scanners and offers all of the existing orthodontic and restorative digital capabilities doctors have come to rely on — plus faster processing time and advanced visualization capabilities for a seamless scanning experience in a new sleek, ergonomically designed package. Available in both cart and mobile configurations, the iTero Element Plus Series offers increased flexibility and mobility. The mobile configuration makes the power of the iTero Element Plus Series portable with a medical grade, compact mobile scanner solution that delivers the same high-quality images as the cart configuration.
  • Align announced the launch and then the global commercial availability 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.
  • Align announced the commercial availability of its previously announced ClinCheck™ Pro 6.0 proprietary 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 Pro 6.0 software provides doctors with a 3D model of planned tooth movements throughout Invisalign treatment. ClinCheck Pro 6.0 software 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 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.
  • Align announced the launch of Invisalign Stickables, innovative sticker accessories 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 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).
  • Align launched ClinCheck® "In-Face" visualization tool for the Invisalign Go system, Align's innovative tooth movement system designed for general dentists. The ClinCheck In-Face Visualization tool enhances the digital treatment planning experience for doctors and their patients by incorporating a front-facing smile image of a patient's face into their ClinCheck treatment plan.
  • Received U.S. Food and Drug Administration (FDA) 510(K) clearance for the award-winning iTero Element 5D Imaging System for commercial availability in the United States. The iTero Element 5D Imaging System expands the suite of existing high-precision, full-color imaging and fast scan times of the iTero Element intraoral scanner portfolio with a new clinical approach, optimized orthodontic and restorative dental workflows, and an improved doctor experience.

Align Web Cast and Conference Call
Align will host a conference call today, February 3, 2021, at 4:30 p.m. ET, 2:30 p.m. MT, to review its fourth quarter and full-year 2020 results, discuss future operating trends and the business outlook. The conference call will also be webcast 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 webcast 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 13714292 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 17, 2021.

About Non-GAAP Financial Measures
To 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 for gross profit, gross margin, operating expenses, income from operations, operating margin, interest income and other income (expense), net, net income before 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 the 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 9.6 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 Statements
This news release contains forward-looking statements, including quotations from management regarding business and product momentum, the COVID-19 pandemic and 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 and their availability. 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 continual evolution of the pandemic, including any periodic reimplementation of preventative measures in various global locations;
  • 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, particularly in light of the pandemic;
  • unexpected or rapid changes in the growth or decline of our domestic and/or international markets;
  • increasing competition from existing and new competitors;
  • rapidly evolving and groundbreaking advances that fundamentally alter the dental industry or the way new and existing customers market and provide products and services to consumers;
  • the ability to protect our intellectual property rights;
  • continued compliance with regulatory requirements;
  • declines in, or the slowing of the growth of, sales of our intra-oral scanners domestically and/or internationally and the impact either would have on the adoption of Invisalign products;
  • 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 September 30, 2020, which was filed with the SEC on October 30, 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
December 31,
 Year Ended
December 31,
  2020 2019  2020   2019 
         
Net revenues $834,520 $649,787 $2,471,941  $2,406,796 
         
Cost of net revenues  224,057  177,829  708,706   662,899 
         
Gross profit  610,463  471,958  1,763,235   1,743,897 
         
Operating expenses:        
Selling, general and administrative  348,392  279,481  1,200,757   1,072,053 
Research and development  48,887  41,327  175,307   157,361 
Impairments and other (gains) charges  -     -     -      22,990 
Litigation settlement gain  -     -     -      (51,000)
Total operating expenses  397,279  320,808  1,376,064   1,201,404 
         
Income from operations  213,184  151,150  387,171   542,493 
         
Interest income and other income (expense), net:        
Interest income  337  2,906  3,125   12,482 
Other income (expense), net  1,021  1,741  (11,347)  7,676 
Total interest income and other income (expense), net 1,358  4,647  (8,222)  20,158 
         
Net income before provision for (benefit from) income taxes and equity in losses of investee  214,542  155,797  378,949   562,651 
         
Provision for (benefit from) income taxes  55,554  34,535  (1,396,939)  112,347 
Equity in losses of investee, net of tax  -     -     -      7,528 
         
Net income $158,988 $121,262 $1,775,888  $442,776 
         
Net income per share:        
Basic $2.02 $1.54 $22.55  $5.57 
Diluted $2.00 $1.53 $22.41  $5.53 
         
Shares used in computing net income per share:        
Basic  78,853  78,578  78,760   79,424 
Diluted  79,505  79,137  79,230   80,100 
         

 

     
ALIGN TECHNOLOGY, INC.    
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS  
(in thousands)    
     
  December 31,
2020
 December 31,
2019
ASSETS    
     
Current assets:    
Cash and cash equivalents $960,843 $550,425
Marketable securities, short-term  -     318,202
Accounts receivable, net  657,704  550,291
Inventories  139,237  112,051
Prepaid expenses and other current assets  91,754  102,450
Total current assets  1,849,538  1,633,419
     
Property, plant and equipment, net  734,721  631,730
Operating lease right-of-use assets, net  82,553  56,244
Goodwill  444,817  63,924
Intangible assets, net  130,072  11,768
Deferred tax assets  1,552,831  64,007
Other assets  35,151  39,610
     
Total assets $4,829,683 $2,500,702
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable $142,132 $87,250
Accrued liabilities  405,582  319,958
Deferred revenues  777,887  563,762
Total current liabilities  1,325,601  970,970
     
Income tax payable  105,748  102,794
Operating lease liabilities  64,445  43,463
Other long-term liabilities  100,024  37,306
Total liabilities  1,595,818  1,154,533
     
Total stockholders' equity  3,233,865  1,346,169
     
Total liabilities and stockholders' equity $4,829,683 $2,500,702
     



     
ALIGN TECHNOLOGY, INC.    
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS    
(in thousands)    
     
  Year Ended
December 31,
   2020   2019 
     
CASH FLOWS FROM OPERATING ACTIVITIES    
Net cash provided by operating activities $662,174  $747,270 
     
CASH FLOWS FROM INVESTING ACTIVITIES    
Net cash used in investing activities  (231,506)  (350,444)
     
CASH FLOWS FROM FINANCING ACTIVITIES    
Net cash used in financing activities  (30,808)  (485,540)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash  10,480   2,282 
Net increase (decrease) in cash, cash equivalents, and restricted cash  410,340   (86,432)
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 $961,474  $551,134 
     


                     
ALIGN TECHNOLOGY, INC.                    
INVISALIGN BUSINESS METRICS*                    
                      
                      
   Q1 Q2 Q3 Q4 Fiscal Q1 Q2 Q3 Q4 Fiscal
    2019   2019   2019   2019   2019   2020   2020   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  $1,165  $1,200 
 International ASP $1,330  $1,305  $1,330  $1,300  $1,315  $1,340  $1,285  $1,240  $1,255  $1,270 
                      
Invisalign Cases Shipped by Geography:                    
 Americas  202,935   211,360   215,355   225,925   855,575   213,505   100,995   268,970   302,995   886,465 
 International  146,260   165,785   170,005   187,790   669,840   145,935   120,885   227,095   264,955   758,870 
 Total Cases Shipped  349,195   377,145   385,360   413,715   1,525,415   359,440   221,880   496,065   567,950   1,645,335 
        YoY % growth  28.3%   24.6%   20.7%   23.9%   24.2%   2.9%   -41.2%   28.7%   37.3%   7.9% 
        QoQ % growth  4.6%   8.0%   2.2%   7.4%     -13.1%   -38.3%   123.6%   14.5%   
                      
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   38,165   49,615 
 International  26,510   28,970   30,980   33,720   48,650   28,535   25,945   35,380   38,585   52,445 
 Total Doctors Cases Shipped To  56,710   60,415   62,955   66,850   95,780   60,850   48,110   70,005   76,750   102,060 
                      
Invisalign Doctor Utilization Rates**:                  
 North America  7.0   7.0   7.0   7.2   19.4   6.9   4.8   8.4   8.7   19.8 
 North American Orthodontists  18.3   18.9   19.1   19.3   65.0   18.9   11.0   24.1   25.0   67.3 
 North American GP Dentists  3.6   3.6   3.5   3.8   9.5   3.6   2.5   4.2   4.5   9.6 
 International  5.5   5.7   5.5   5.6   13.8   5.1   4.7   6.4   6.9   14.5 
 Total Utilization Rates  6.2   6.2   6.1   6.2   15.9   5.9   4.6   7.1   7.4   16.1 
                      
Number of Invisalign Doctors Trained:                  
 Americas  1,840   3,070   2,760   2,095   9,765   2,035   1,140   3,350   2,550   9,075 
 International  2,410   3,520   3,135   3,445   12,510   2,600   2,350   3,175   3,900   12,025 
 Total Doctors Trained Worldwide  4,250   6,590   5,895   5,540   22,275   4,635   3,490   6,525   6,450   21,100 
 Total to Date Worldwide  156,205   162,795   168,690   174,230   174,230   178,865   182,355   188,880   195,330   195,330 
                      
                      
* 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 Q4 Fiscal
   2019 2019 2019 2019 2019 2020 2020 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  $1,234  $4,719 
 SBC included in Operating Expenses  19,932   21,189   22,822   19,087   83,030   21,580   24,116   23,982   24,030   93,708 
 Total SBC $21,044  $22,467  $24,176  $20,497  $88,184  $22,927  $25,007  $25,229  $25,264  $98,427 
                      

 

         
ALIGN TECHNOLOGY, INC.        
UNAUDITED GAAP TO NON-GAAP RECONCILIATION        
(in thousands except per share data)        
          
   Three Months Ended
December 31,
 Year Ended
December 31,
    2020   2019   2020   2019 
          
GAAP gross profit $610,463  $471,958  $1,763,235  $1,743,897 
 Stock-based compensation  1,234   1,410   4,719   5,154 
 Amortization of intangibles (1)  2,175   -      6,525   -    
Non-GAAP gross profit $613,872  $473,368  $1,774,479  $1,749,051 
          
GAAP gross margin  73.2%   72.6%   71.3%   72.5% 
Non-GAAP gross margin  73.6%   72.8%   71.8%   72.7% 
          
GAAP operating expenses $397,279  $320,808  $1,376,064  $1,201,404 
 Stock-based compensation  (24,030)  (19,087)  (93,708)  (83,030)
 Amortization of intangibles (1)  (887)  -      (3,062)  -    
 Acquisition related costs (2)  (62)  -      (7,683)  -    
 Impairments and other (gains) charges (3)  -      -      -      (22,990)
 Litigation settlement gain (4)  -      -      -      51,000 
Non-GAAP operating expenses $372,300  $301,721  $1,271,611  $1,146,384 
          
GAAP income from operations $213,184  $151,150  $387,171  $542,493 
 Stock-based compensation  25,264   20,497   98,427   88,184 
 Amortization of intangibles (1)  3,062   -      9,587   -    
 Acquisition related costs (2)  62   -      7,683   -    
 Impairments and other (gains) charges (3)  -      -      -      22,990 
 Litigation settlement gain (4)  -      -      -      (51,000)
Non-GAAP income from operations $241,572  $171,647  $502,868  $602,667 
          
GAAP operating margin  25.5%   23.3%   15.7%   22.5% 
Non-GAAP operating margin  28.9%   26.4%   20.3%   25.0% 
          
GAAP interest income and other income (expense), net $1,358  $4,647  $(8,222) $20,158 
 Acquisition related costs (2)  -      -      10,187   -    
Non-GAAP interest income and other income (expense), net $1,358  $4,647  $1,965  $20,158 
          
GAAP net income before provision for (benefit from) income taxes and equity in losses of investee $214,542  $155,797  $378,949  $562,651 
 Stock-based compensation  25,264   20,497   98,427   88,184 
 Amortization of intangibles (1)  3,062   -      9,587   -    
 Acquisition related costs (2)  62   -      17,870   -    
 Impairments and other (gains) charges (3)  -      -      -      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 $242,930  $176,294  $504,833  $622,825 
          
GAAP provision for (benefit from) income taxes $55,554  $34,535  $(1,396,939) $112,347 
 Tax impact on non-GAAP adjustments  2,635   2,390   23,566   24,635 
 Tax related non-GAAP items (5)  (22,984)  -      1,462,302   -    
Non-GAAP provision for (benefit from) income taxes $35,205  $36,925  $88,929  $136,982 
          
GAAP effective tax rate  25.9%   22.2%   (368.6)%  20.0% 
Non-GAAP effective tax rate  14.5%   20.9%   17.6%   22.0% 
          
GAAP net income $158,988  $121,262  $1,775,888  $442,776 
 Stock-based compensation  25,264   20,497   98,427   88,184 
 Amortization of intangibles (1)  3,062   -      9,587   -    
 Acquisition related costs (2)  62   -      17,870   -    
 Impairments and other (gains) charges (3)  -      -      -      22,990 
 Litigation settlement gain (4)  -      -      -      (51,000)
 Tax impact on non-GAAP adjustments  (2,635)  (2,390)  (23,566)  (24,635)
 Tax related non-GAAP items (5)  22,984   -      (1,462,302)  -    
Non-GAAP net income $207,725  $139,369  $415,904  $478,315 
          
GAAP diluted net income per share $2.00  $1.53  $22.41  $5.53 
Non-GAAP diluted net income per share $2.61  $1.76  $5.25  $5.97 
          
Shares used in computing diluted net income per share  79,505   79,137   79,230   80,100 
          
Notes:        
(1) During the three months and year ended December 31, 2020, we recorded amortization of intangible assets related to our Q2'20 exocad acquisition.
(2) During the year ended December 31, 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. Acquisition costs for the three months ended December 31, 2020 relate to professional fees.
(3) During the year ended December 31, 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 from the negotiation of early termination of our Invisalign store leases.
(4) During the year ended December 31, 2019, we recorded a $51.0 million gain from the settlement of the Straumann litigation.
(5) During the year ended December 31, 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 December 31, 2020, we recorded amortization of the benefit from the transferred intangibles assets.
        
Refer to "About Non-GAAP Financial Measures" section of press release.       


Align TechnologyZeno Group
Madelyn HomickSarah Johnson
(408) 470-1180(828) 551-4201
mhomick@aligntech.comsarah.johnson@zenogroup.com