Exhibit 99.1
| Align Technology | Ethos Communication: |
| Madelyn Homick | Shannon Mangum Henderson |
| (408) 470-1180 | (678) 261-7803 |
| mhomick@aligntech.com | align@ethoscommunication.com |
ALIGN TECHNOLOGY ANNOUNCES FIRST QUARTER 2018 FINANCIAL RESULTS
| • | Q1 revenues up 40.8% year-over-year to a record $436.9 million, and diluted EPS of $1.17 |
| • | Q1 operating income up 59.2% year-over-year to $98.2 million or operating margin of 22.5% |
| • | Q1 total Invisalign case shipments up 30.8% year-over-year to 272.2 thousand |
| • | Q1 Invisalign cases for teenage patients up 40.9% year-over-year to 69.1 thousand |
| • | Q1 scanner and services revenues up 84.0% year-over-year to $51.4 million |
SAN JOSE, Calif., April 25, 2018 -- Align Technology, Inc. (Nasdaq: ALGN) today reported financial results for the first quarter ended March 31, 2018. Invisalign case shipments in the first quarter of 2018 (Q1’18) were 272.2 thousand, up 30.8% year-over-year. Americas and International region case shipments were up year-over-year 24.0% and 43.4%, respectively. Beginning Q1'18, Americas region includes North America and LATAM and the International region includes EMEA and APAC. Q1’18 Invisalign cases for teenage patients were 69.1 thousand, up 40.9% year-over-year. Q1’18 revenues were $436.9 million, up 40.8% year-over-year with Q1’18 operating income $98.2 million, up 59.2% year-over-year resulting in an operating margin of 22.5%. Net profit was $95.9 million, or $1.17 per diluted share, up $0.32 over the prior year.
Commenting on Align’s Q1 2018 results, Align Technology President and CEO Joe Hogan said, “I’m pleased to report better than expected first quarter results and a strong start to the year for Align, with revenues, volumes and EPS above our guidance. Record Q1 revenues were up 41% year-over-year reflecting continued strong Invisalign volume across all geographies and customer channels, as well as iTero scanner sales which were up 84% year-over-year. Q1 Invisalign volume growth of 31% year-over-year was driven by increased utilization including strong teen case growth globally, and expansion of our customer base, which included over 4,200 new Invisalign-trained doctors worldwide.”
GAAP Summary Financial Comparisons
First Quarter Fiscal 2018
| Q1’18 | Q4’17 | Q1’17 | Q/Q Change | Y/Y Change | |
| Invisalign Case Shipments1 | 272,235 | 255,030 | 208,060 | +6.7% | +30.8% |
| Net Revenues | $436.9M | $421.3M | $310.3M | +3.7% | +40.8% |
| Clear Aligner2 | $385.5M | $364.2M | $282.4M | +5.8% | +36.5% |
| Scanner & Services | $51.4M | $57.1M | $27.9M | (10.0)% | +84.0% |
| Net Profit3 | $95.9M | $10.3M | $69.4M | 834.0% | 38.1% |
| Diluted EPS3 | $1.17 | $0.13 | $0.85 | $1.04 | $0.32 |
Note: Changes and percentages are based on actual values and may effect totals due to rounding
Align Technology, Inc. 2820 Orchard Pkwy, San Jose, CA 95134
Tel: (408) 470-1000 Fax: (408) 470-1010
WWW.ALIGNTECH.COM
1Invisalign Shipment figures do not include SmileDirectClub aligners
2Clear aligner revenue includes revenues from Invisalign clear aligners and SmileDirectClub aligners
3Q4’17 net profit and diluted EPS includes $86.6 million tax expense, or $1.06 per diluted share negative impact due to the U.S. Tax Cut and Jobs Act
As of March 31, 2018, Align had $673.0 million in cash, cash equivalents and marketable securities compared to $761.5 million as of December 31, 2017. We repurchased approximately 0.4 million shares of stock for $100.0 million in Q1’18 under the April 2016 Repurchase Program. We have $100.0 million remaining available for repurchases under the existing stock repurchase authorization.
Announcements and Highlights
Today, Align issued the following press releases entitled:
| · | Align Introduces New Invisalign Go Clear Aligner System Integrated with iTero Scanner for Mild to Moderate Cases |
| · | Align Technology To Introduce Two New iTero Scanners Featuring Greater Power and Portability |
| · | Align Announces China Food and Drug Administration Approval for the iTero Element Scanner |
Additional highlights in 2018 include:
| · | Announced a new expanded Invisalign product portfolio that includes new options and greater flexibility to treat a broader range of patients. The new Invisalign product portfolio offers doctors more choices by extending desirable features across the entire portfolio and creating new Invisalign Treatment Packages, as well as new options to treat young patients with early mixed dentition. |
| · | Announced it is extending the Invisalign product family with Invisalign First clear aligners, designed with features specifically for younger patients with early mixed dentition (with a mixture of primary/baby and permanent teeth). |
| · | Announced the commercial availability of Vivera Retainers with Precision Bite Ramps, the first retainers in the market that can be customized to provide additional support after deep bite correction. |
Q2 2018 Business Outlook
For the second quarter of 2018 (Q2’18), Align provides the following guidance:
| · | Net revenues in the range of $460 million to $470 million, up approximately 29% to 32% over the same period a year ago. |
| · | Invisalign case shipments in the range of 296 thousand to 301 thousand, up approximately 28% to 30% over the same period a year ago. |
| · | Operating margin in the range of 21.0% to 21.8% |
| · | Diluted EPS in the range of $1.02 to $1.06 |
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Align Web Cast and Conference Call
Align will host a conference call today, April 25, 2018 at 4:30 p.m. ET, 1:30 p.m. PT, to review its first quarter 2018 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 13678038 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 May 9, 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 second quarter of 2018, 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, changes to our interpretation of the U.S. Tax Cuts and Jobs Act which may change as we receive additional clarification and implementation guidance, possibly materially, 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, 2017, which was filed with the Securities and Exchange Commission (SEC) on February 28, 2018. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
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| ALIGN TECHNOLOGY, INC. | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (in thousands, except per share data) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2018 | 2017 | |||||||
| Net revenues | $ | 436,924 | $ | 310,341 | ||||
| Cost of net revenues | 109,516 | 74,716 | ||||||
| Gross profit | 327,408 | 235,625 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 199,625 | 151,148 | ||||||
| Research and development | 29,591 | 22,804 | ||||||
| Total operating expenses | 229,216 | 173,952 | ||||||
| Income from operations | 98,192 | 61,673 | ||||||
| Interest income | 2,176 | 1,195 | ||||||
| Other income (expense), net | 177 | 450 | ||||||
| Net income beforeprovision for (benefit from) income taxes and equity in losses of investee | 100,545 | 63,318 | ||||||
| Provision for (benefit from) income taxes | 2,902 | (7,223 | ) | |||||
| Equity in lossesof investee, net of tax | 1,777 | 1,121 | ||||||
| Net income | $ | 95,866 | $ | 69,420 | ||||
| Net income per share: | ||||||||
| Basic | $ | 1.20 | $ | 0.87 | ||||
| Diluted | $ | 1.17 | $ | 0.85 | ||||
| Shares used in computing net income per share: | ||||||||
| Basic | 80,036 | 79,904 | ||||||
| Diluted | 81,628 | 81,534 | ||||||
| ||||||||
* During Q1'18, we adopted the ASC 606, "Revenues from Contracts with Customers" using the full retrospective method. The adoption of ASC 606 did not have a material impact on our Condensed Consolidated Statements of Operations presented herein. | ||||||||
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| ALIGN TECHNOLOGY, INC. | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS* | ||||||||
| (in thousands) | ||||||||
| March 31, 2018 | December 31, 2017 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 498,003 | $ | 449,511 | ||||
| Marketable securities, short-term | 164,740 | 272,031 | ||||||
| Accounts receivable, net | 361,459 | 324,189 | ||||||
| Inventories | 35,866 | 31,688 | ||||||
| Prepaid expenses and other current assets | 108,708 | 80,948 | ||||||
| Total current assets | 1,168,776 | 1,158,367 | ||||||
| Marketable securities, long-term | 10,212 | 39,948 | ||||||
| Property, plant and equipment, net | 400,528 | 348,793 | ||||||
| Equity method investments | 52,829 | 54,606 | ||||||
| Goodwill and intangible assets, net | 87,629 | 89,068 | ||||||
| Deferred tax assets | 45,524 | 49,334 | ||||||
| Other assets | 17,233 | 43,893 | ||||||
| Total assets | $ | 1,782,731 | $ | 1,784,009 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 41,881 | $ | 36,776 | ||||
| Accrued liabilities | 180,093 | 195,562 | ||||||
| Deferred revenues | 296,011 | 267,713 | ||||||
| Total current liabilities | 517,985 | 500,051 | ||||||
| Income tax payable | 119,349 | 114,091 | ||||||
| Other long-term liabilities | 17,937 | 15,579 | ||||||
| Total liabilities | 655,271 | 629,721 | ||||||
| Total stockholders' equity | 1,127,460 | 1,154,288 | ||||||
| Total liabilities and stockholders' equity | $ | 1,782,731 | $ | 1,784,009 | ||||
* During Q1'18, we adopted the ASC 606, "Revenues from Contracts with Customers" using the full retrospective method. Condensed Consolidated Balance Sheet as of December 31, 2017 has been recasted to comply with the adoption.
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| ALIGN TECHNOLOGY, INC. | ||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS* | ||||||||
| (in thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2018 | 2017 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 95,866 | $ | 69,420 | ||||
| Net cash provided by operating activities | 77,332 | 47,621 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Net cash provided by (used in) investing activities | 109,269 | (148,462 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Net cash used in financing activities | (139,822 | ) | (33,001 | ) | ||||
| Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | 1,715 | 2,430 | ||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 48,494 | (131,412 | ) | |||||
| Cash, cash equivalents, and restricted cash at beginning of the period | 450,125 | 393,019 | ||||||
| Cash, cash equivalents, and restricted cash at end of the period | $ | 498,619 | $ | 261,607 | ||||
*During Q1'18, we adopted ASU 2016-18, "Statement of Cash Flows - Restricted Cash" on a retrospective basis. Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2017 has been recasted to comply with the adoption.
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| ALIGN TECHNOLOGY, INC. | |||||||||||||||||||||||||
| INVISALIGN BUSINESS METRICS* | |||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Fiscal | Q1 | ||||||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2017 | 2018 | ||||||||||||||||||||
| Invisalign Average Selling Price (ASP): | |||||||||||||||||||||||||
| Worldwide ASP | $ | 1,270 | $ | 1,285 | $ | 1,310 | $ | 1,305 | $ | 1,295 | $ | 1,310 | |||||||||||||
| International ASP | $ | 1,345 | $ | 1,340 | $ | 1,395 | $ | 1,400 | $ | 1,375 | $ | 1,435 | |||||||||||||
| Invisalign Cases Shipped by Geography: | |||||||||||||||||||||||||
| Americas | 134,450 | 148,470 | 147,660 | 155,625 | 586,205 | 166,665 | |||||||||||||||||||
| International | 73,610 | 83,420 | 88,405 | 99,405 | 344,840 | 105,570 | |||||||||||||||||||
| Total Cases Shipped | 208,060 | 231,890 | 236,065 | 255,030 | 931,045 | 272,235 | |||||||||||||||||||
| YoY % growth | 27.1 | % | 31.0 | % | 32.8 | % | 34.2 | % | 31.4 | % | 30.8 | % | |||||||||||||
| QoQ % growth | 9.5 | % | 11.5 | % | 1.8 | % | 8.0 | % | 6.7 | % | |||||||||||||||
| Number of Invisalign Doctors Cases Were Shipped To: | |||||||||||||||||||||||||
| Americas | 24,595 | 25,570 | 25,865 | 26,480 | 38,230 | 27,105 | |||||||||||||||||||
| International | 14,270 | 15,695 | 16,740 | 18,505 | 26,175 | 19,700 | |||||||||||||||||||
| Total Doctors Cases Shipped To | 38,865 | 41,265 | 42,605 | 44,985 | 64,405 | 46,805 | |||||||||||||||||||
| Invisalign Doctor Utilization Rates**: | |||||||||||||||||||||||||
| North America | 5.6 | 5.9 | 5.8 | 6.0 | 15.8 | 6.3 | |||||||||||||||||||
| North American Orthodontists | 12.6 | 13.6 | 13.8 | 14.0 | 46.6 | 15.3 | |||||||||||||||||||
| North American GP Dentists | 3.1 | 3.3 | 3.1 | 3.3 | 8.2 | 3.4 | |||||||||||||||||||
| International | 5.2 | 5.3 | 5.3 | 5.4 | 13.2 | 5.4 | |||||||||||||||||||
| Total Utilization Rates | 5.4 | 5.6 | 5.5 | 5.7 | 14.5 | 5.8 | |||||||||||||||||||
| Number of Invisalign Doctors Trained: | |||||||||||||||||||||||||
| Americas | 1,040 | 1,820 | 1,740 | 1,685 | 6,285 | 1,605 | |||||||||||||||||||
| International | 2,220 | 3,055 | 2,540 | 2,400 | 10,215 | 2,645 | |||||||||||||||||||
| Total Doctors Trained Worldwide | 3,260 | 4,875 | 4,280 | 4,085 | 16,500 | 4,250 | |||||||||||||||||||
| Total to Date Worldwide | 118,730 | 123,605 | 127,885 | 131,970 | 131,970 | 136,220 | |||||||||||||||||||
| Note: Historical public data may differ due to rounding. Additionally, rounding may effect totals. Effective Q1'18, Americas region includes North America and LATAM. International region includes EMEA and APAC. We have recasted historical data to reflect the change. | |||||||||||||||||||||||||
| * 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 | ||||||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2017 | 2018 | ||||||||||||||||||||
| Stock-based Compensation (SBC) | |||||||||||||||||||||||||
| SBC included in Gross Profit | $ | 925 | $ | 768 | $ | 833 | $ | 804 | $ | 3,330 | $ | 881 | |||||||||||||
| SBC included in Operating Expenses | 13,887 | 13,477 | 14,134 | 14,026 | 55,524 | 14,949 | |||||||||||||||||||
| Total SBC Expense | $ | 14,812 | $ | 14,245 | $ | 14,967 | $ | 14,830 | $ | 58,854 | $ | 15,830 | |||||||||||||
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| 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) | |||||
| Q2'18 Guidance | |||||
| GAAP | |||||
| Net Revenues | $460.0 - $470.0 | ||||
| Gross Margin | 74.2% - 75.0% | ||||
| Operating Expenses | $245.0 - $250.0 | ||||
| Operating Margin | 21.0% - 21.8% | ||||
| Net Income per Diluted Share | $1.02 - $1.06 | (1) | |||
| Business Metrics: | Q2'18 | ||||
| Case Shipments | 296K - 301K | ||||
| Capital Expenditure | $65M - $70M | ||||
| Depreciation & Amortization | $10M - $11M | ||||
| Diluted Shares Outstanding | 81.6M | (2) | |||
| Stock Based Compensation Expense | $18.3M | ||||
| Effective Tax Rate | 13.0% | (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 | |||||
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