EX-99.1 2 at7603ex991.txt EXHIBIT 99.1 Exhibit 99.1 FOR IMMEDIATE RELEASE Investor Relations Contact: Press Contact: --------------------------- -------------- Barbara Domingo Shannon Henderson Align Technology, Inc. Ethos Communications, Inc. (408) 470-1000 (678) 540-9222 investorinfo@aligntech.com align@ethoscommunication.com ALIGN TECHNOLOGY, INC. REPORTS Q3 2006 REVENUES OF $49.0 MILLION Santa Clara, Calif. - October 25, 2006 - Align Technology, Inc. (Nasdaq: ALGN), the inventor of Invisalign(R), a proprietary method of straightening teeth without wires and brackets, today reported financial results for the third quarter of 2006. Total revenues for the third quarter of 2006 were $49.0 million, compared to $50.9 million in the third quarter of 2005, a decrease of 3.6 percent. "The third quarter was a busy one for Align," stated Thomas M. Prescott, Align Technology's President and CEO. "Over 1,100 doctors used Invisalign for the first time and we trained almost 1,000 new doctors. Additionally, at the end of the quarter, we announced our intent to sign a definitive agreement with OrthoClear - which we did earlier this month - ending all pending litigation matters with them. With the litigation now behind us and our base of doctors growing, we can focus entirely on growing the top line. We will generate that growth through increased adoption of Invisalign by dentists and orthodontists as the Invisalign product evolves to better meet their specific needs. Our goal is to return to profitability and increase value for our shareholders, customers, and employees." The net loss for the third quarter of 2006, as reported on a GAAP basis, was $10.3 million, or loss per share of $0.16. This compares to GAAP net loss of $1.5 million for the third quarter of 2005, or loss per share of $0.02. Align Technology Inc. 881 Martin Avenue Santa Clara, CA 95050 Tel: (408) 470-1000 Fax: (408) 470-1201 The non-GAAP net loss for the third quarter of 2006 was $8.0 million, or non-GAAP loss per share of $0.13. The reconciliation of the GAAP to non-GAAP measurements for net loss for the third quarter of 2006 is set forth below within Align Technology's financial statements. As of September 30, 2006, Align had $86.1 million in cash, cash equivalents, marketable securities, and restricted cash, compared to $74.4 million as of December 31, 2005. Align borrowed $15 million from its credit facility during the third quarter. Additionally, on October 13, 2006, Align signed the definitive agreement with OrthoClear and subsequently disbursed $20 million to them. Align Webcast and Conference Call --------------------------------- Align Technology will host a webcast and conference call today, October 25, 2006 at 8:45 a.m. EDT, 5:45 a.m. PDT, to review the third quarter of 2006 results and discuss future operating trends and guidance. To access the webcast, click on "Webcasts & Presentations" 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 through 5:30 p.m. EDT on July 25, 2007. Additionally, a telephonic replay of the call can be accessed by dialing (877) 660-6853 with account number 292 followed by # and conference number 199387 followed by #. The replay may 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. EDT on November 8, 2006. 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 older teens. Align Technology was founded in April 1997 and received FDA clearance to market Invisalign in 1998. 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. Forward-Looking Statement This news release contains forward-looking statements, including statements regarding Align's expectation that it will generate revenue growth through increased adoption of Invisalign by dentists and orthodontists by evolving the Invisalign system to better meet their specific needs. 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, risks relating to Align's ability to sustain or increase profitability or revenue growth in future periods while controlling expenses, including expenses related to the OrthoClear settlement, customer demand for Invisalign, 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, including members of its direct sales force. 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, 2005, which was filed with the Securities and Exchange Commission on March 1, 2006, and its Quarterly Reports on Form 10-Q. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason. # # # ALIGN TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended Nine Months Ended ----------------------------- ----------------------------- September 30, September 30, September 30, September 30, (in thousands, except per share data) 2006 2005 2006 2005 ---------------------------------------------------- ------------- ------------- ------------- ------------- Revenues $ 49,034 $ 50,866 $ 151,163 $ 155,961 Cost of revenues 16,789 14,975 47,578 47,073 ------------- ------------- ------------- ------------- Gross profit 32,245 35,891 103,585 108,888 ------------- ------------- ------------- ------------- Operating expenses: Sales and marketing 19,165 21,315 59,872 61,498 General and administrative 19,238 11,715 49,656 30,949 Research and development 4,807 4,400 13,526 14,658 ------------- ------------- ------------- ------------- Total operating expenses 43,210 37,430 123,054 107,105 ------------- ------------- ------------- ------------- Profit (Loss) from operations (10,965) (1,539) (19,469) 1,783 Interest and other income, net 854 326 2,393 28 Provision for income taxes (209) (303) (618) (926) ------------- ------------- ------------- ------------- Net profit (loss) $ (10,320) $ (1,516) $ (17,694) $ 885 ============= ============= ============= ============= Net profit (loss) per share - basic $ (0.16) $ (0.02) $ (0.28) $ 0.01 ============= ============= ============= ============= - diluted $ (0.16) $ (0.02) $ (0.28) $ 0.01 ============= ============= ============= ============= Shares used in computing net profit (loss) per share - basic 63,230 61,788 62,907 61,509 ============= ============= ============= ============= - diluted 63,230 61,788 62,907 63,129 ============= ============= ============= =============
ALIGN TECHNOLOGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
September 30, December 31, (in thousands) 2006 2005 ---------------------------------------------------- ------------- ------------- ASSETS Current assets: Cash and cash equivalents $ 74,034 $ 74,219 Restricted cash 161 150 Marketable securities, short-term 11,898 - Accounts receivable, net 32,607 29,305 Inventories, net 2,665 2,930 Other current assets 5,299 4,982 ------------- ------------- Total current assets 126,664 111,586 Property and equipment, net 27,336 26,427 Other long-term assets 2,891 4,097 ------------- ------------- Total assets $ 156,891 $ 142,110 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Line of credit $ 15,000 $ - Accounts payable 7,137 2,489 Accrued liabilities 31,891 29,372 Deferred revenue 12,143 16,747 ------------- ------------- Total current liabilities 66,171 48,608 Other long term liabilities 296 64 ------------- ------------- Total liabilities 66,467 48,672 Total stockholders' equity 90,424 93,438 ------------- ------------- Total liabilities and stockholders' equity $ 156,891 $ 142,110 ============= =============
ALIGN TECHNOLOGY, INC. NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) USE OF NON-GAAP FINANCIAL INFORMATION To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP measures of gross profit, profit (loss) from operations, net profit (loss) and certain expenses (including sales and marketing, general and administrative and research and development), which exclude stock-based compensation to allow for a better comparison of results in the current period to those in prior periods that did not include FAS 123(R) stock-based compensation. We believe the non-GAAP measures that exclude stock-based compensation enhance the comparability of results against prior periods. In addition, we use these non-GAAP financial measures for internal management purposes, when publicly providing our business outlook and as a means to evaluate period-to-period comparisons. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
Three Months Ended September 30, 2006 Three Months Ended September 30, 2005 ------------------------------------------ ------------------------------------------ (in thousands, except per share data) Reported Adjustments (a) Non GAAP Reported Adjustments (a) Non GAAP ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ Revenues $ 49,034 $ - $ 49,034 $ 50,866 $ - $ 50,866 Cost of revenues 16,789 (186) 16,603 14,975 - 14,975 ------------ ------------ ------------ ------------ ------------ ------------ Gross profit 32,245 186 32,431 35,891 - 35,891 ------------ ------------ ------------ ------------ ------------ ------------ Operating expenses: Sales and marketing 19,165 (714) 18,451 21,315 - 21,315 General and administrative 19,238 (1,015) 18,223 11,715 - 11,715 Research and development 4,807 (362) 4,445 4,400 - 4,400 ------------ ------------ ------------ ------------ ------------ ------------ Total operating expenses 43,210 (2,091) 41,119 37,430 - 37,430 ------------ ------------ ------------ ------------ ------------ ------------ Profit (Loss) from operations (10,965) 2,277 (8,688) (1,539) - (1,539) Interest and other income, net 854 - 854 326 - 326 Provision for income taxes (209) - (209) (303) - (303) ------------ ------------ ------------ ------------ ------------ ------------ Net profit (loss) $ (10,320) $ 2,277 $ (8,043) $ (1,516) $ - $ (1,516) ============ ============ ============ ============ ============ ============ Net profit (loss) per share - basic $ (0.16) $ (0.13) $ (0.02) $ (0.02) ============ ============ ============ ============ - diluted $ (0.16) $ (0.13) $ (0.02) $ (0.02) ============ ============ ============ ============ Shares used in computing net profit (loss) per share - basic 63,230 63,230 61,788 61,788 ============ ============ ============ ============ - diluted 63,230 63,230 61,788 61,788 ============ ============ ============ ============
(a) Non cash stock-based compensation included in cost of sales and operating expenses. ALIGN TECHNOLOGY, INC. NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) USE OF NON-GAAP FINANCIAL INFORMATION To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP measures of gross profit, profit (loss) from operations, net profit (loss) and certain expenses (including sales and marketing, general and administrative and research and development), which exclude stock-based compensation to allow for a better comparison of results in the current period to those in prior periods that did not include FAS 123(R) stock-based compensation. We believe the non-GAAP measures that exclude stock-based compensation enhance the comparability of results against prior periods. In addition, we use these non-GAAP financial measures for internal management purposes, when publicly providing our business outlook and as a means to evaluate period-to-period comparisons. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
Nine Months Ended September 30, 2006 Nine Months Ended September 30, 2005 ------------------------------------------ ------------------------------------------ (in thousands, except per share data) Reported Adjustments (a) Non GAAP Reported Adjustments (a) Non GAAP ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------ Revenues $ 151,163 $ - $ 151,163 $ 155,961 $ - $ 155,961 Cost of revenues 47,578 (515) 47,063 47,073 - 47,073 ------------ ------------ ------------ ------------ ------------ ------------ Gross profit 103,585 515 104,100 108,888 - 108,888 ------------ ------------ ------------ ------------ ------------ ------------ Operating expenses: Sales and marketing 59,872 (2,125) 57,747 61,498 (6) 61,492 General and administrative 49,656 (3,132) 46,524 30,949 (6) 30,943 Research and development 13,526 (976) 12,550 14,658 - 14,658 ------------ ------------ ------------ ------------ ------------ ------------ Total operating expenses 123,054 (6,233) 116,821 107,105 (12) 107,093 ------------ ------------ ------------ ------------ ------------ ------------ Profit (Loss) from operations (19,469) 6,748 (12,721) 1,783 12 1,795 Interest and other income, net 2,393 - 2,393 28 - 28 Provision for income taxes (618) - (618) (926) - (926) ------------ ------------ ------------ ------------ ------------ ------------ Net profit (loss) $ (17,694) $ 6,748 $ (10,946) $ 885 $ 12 $ 897 ============ ============ ============ ============ ============ ============ Net profit (loss) per share - basic $ (0.28) $ (0.17) $ 0.01 $ 0.01 ============ ============ ============ ============ - diluted $ (0.28) $ (0.17) $ 0.01 $ 0.01 ============ ============ ============ ============ Shares used in computing net profit(loss) per share - basic 62,907 62,907 61,509 61,509 ============ ============ ============ ============ - diluted 62,907 62,907 63,129 63,129 ============ ============ ============ ============
(a) Non cash stock-based compensation included in cost of sales and operating expenses ALIGN TECHNOLOGY, INC. FACT SHEET The following information highlights business metrics for Align's third quarter of 2006. For prior quarter information, please refer to the Investor Relations website at http://investor.aligntech.com. (rounded to the nearest hundred, except in utilization) Cases Delivered 3Q 2006 ------------------------------------------------------- U.S. Orthodontists - Full 9,600 U.S. Orthodontists - Invisalign Express 3,400 U.S. GP dentists - Full 12,500 U.S. GP dentists - Invisalign Express 5,800 International - Full 4,300 International - Invisalign Express 100 ------------------------------------------------------- Total Cases Delivered 35,700 Cumulative Doctors Trained 3Q 2006 Total ---------------------------------------------------------------------- U.S. Orthodontists - 7,900 U.S. GP dentists 750 20,700 International 200 10,400 ---------------------------------------------------------------------- Total Doctors Trained 950 39,000 Total Submitting Doctors 3Q 2006 ------------------------------------------------------- U.S. Orthodontists 2,700 U.S. GP dentists 7,700 International 1,700 ------------------------------------------------------- Total Submitting Doctors 12,100 Doctor Utilization* 3Q 2006 ------------------------------------------------------- U.S. Orthodontists 4.71 U.S. GP dentists 2.49 International 2.72 * Doctor Utilization = # of cases / # of doctors cases are shipped to