Align Technology Zeno Group:
Madelyn Homick Sarah Johnson
(408) 470-1180  (828) 551-4201
mhomick@aligntech.com sarah.johnson@zenogroup.com





Q1 revenues up 25.6% year-over-year to a record $549.0 million
Q1 Invisalign volume up 28.3% year-over-year to 349.2 thousand cases
Q1 scanner and services revenues up 55.1% year-over-year to $79.8 million
Q1 Invisalign cases for teenage patients up 41.1% year-over-year to 97.4 thousand
Q1 operating income of $87.7 million included impairments and other charges of $29.8 million related to the U.S. Invisalign Store closures
Q1 net profit of $71.8 million and $0.89 diluted EPS


SAN JOSE, Calif., April 24, 2019 (GLOBE NEWSWIRE) -- Align Technology, Inc. (Nasdaq: ALGN) today reported financial results for the first quarter ended March 31, 2019. Q1’19 Invisalign volume was 349.2 thousand cases, up 28.3% year-over-year. For the Americas and International regions, Q1’19 Invisalign volume was up 21.8% and 38.5% year-over-year, respectively. Q1’19 Invisalign volume for teenage patients was 97.4 thousand cases, up 41.1% year-over-year. Q1’19 total revenues were $549.0 million, up 25.6% year-over-year, and Q1’19 scanner and services revenues were $79.8 million, up 55.1% year-over-year.


Q1’19 operating income of $87.7 million was down 10.7% year-over-year resulting in an operating margin of 16.0%. As a result of the arbitrator’s decision regarding SmileDirectClub (SDC) announced on March 5, 2019, Q1’19 operating income included impairments and other charges related to the U.S. Invisalign Store closures of $29.8 million which reduced operating margin by 5.4%. Q1’19 net profit was $71.8 million, or $0.89 per diluted EPS which reflected the Invisalign Store closure charges of $22.2 million, net of tax effects of $7.5 million, or $0.28 per diluted EPS.


Commenting on Align’s Q1 2019 results, Align Technology President and CEO Joe Hogan said, “Our first quarter was a very good start to the year with revenues, volumes, gross margin, and EPS above our guidance. Record Q1 revenues and Invisalign volumes were up 25.6% and 28.3% year-over-year, respectively, reflecting continued strong growth across all geographies and customer channels, as well as strong iTero scanner and services revenues, which were up 55.1% year-over-year. Q1 sequential growth was driven primarily by North America and the EMEA region, reflecting strength across the Invisalign product portfolio. We also saw a nice uptick in adoption of Invisalign treatment with record utilization overall, as well as expansion of our customer base which totaled 57,000 active doctors worldwide in Q1.”


Align Technology, Inc. 2820 Orchard Pkwy, San Jose, CA 95134

Tel: (408) 470-1000 Fax: (408) 470-1010



Align Technology Announces First Quarter 2019 Results

GAAP Summary Financial Comparisons

First Quarter Fiscal 2019

  Q1’19 Q4’18 Q1’18  Q/Q Change  Y/Y Change
Invisalign Case Shipments1 349,195 333,800 272,235 +4.6% +28.3%
Net Revenues $549.0M $534.0M $436.9M +2.8% +25.6%
    Clear Aligner2 $469.2M $445.6M $385.5M +5.3% +21.7%
    Scanner & Services $79.8M $88.4M $51.4M  (9.8)%  +55.1%
Net Profit3 $71.8M $97.4M $95.9M (26.2)% (25.1)%
Diluted EPS3 $0.89 $1.20 $1.17 $(0.31) $(0.28)


Note: Changes and percentages are based on actual values and may affect 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 Q1’19 results include impairments and other charges related to closing Invisalign Stores in the U.S. as a result of the arbitrator’s decision regarding SmileDirectClub (SDC) announced March 5, 2019.


As of March 31, 2019, Align had $732.5 million in cash, cash equivalents and marketable securities compared to $744.5 million as of December 31, 2018. In February 2019, we purchased on the open market approximately 0.2 million shares of our common stock at an average price of $243.42 per share, including commission for an aggregate purchase price of approximately of $50.0 million. We have $450.0 million remaining available for repurchase under the May 2018 Repurchase Program.


Announcements and Highlights


The following list highlights Align’s key announcements over the past quarter:


Invisalign and iTero Intraoral Scanner

·Launched the new iTero Element 5D Imaging System for comprehensive, preventative and restorative oral care. The iTero Element 5D Imaging System provides a new comprehensive approach to clinical applications, workflows and user experience that expands the suite of existing high-precision, full-color imaging and fast scan times of the iTero Element portfolio.
·Launched SmileView, an online tool designed to help prospective Invisalign patients visualize a new, straighter smile before they opt for Invisalign treatment.



·Announced that Raj Pudipeddi joined Align Technology as senior vice president and CMO, responsible for Align’s global marketing organization including product portfolio, product management, commercialization, and global branding for the Invisalign and iTero product brands.
·Announced that on February 27, 2019, the United States International Trade Commission voted to institute a third investigation based on Align’s claims of scanner related 3Shape patent infringement.
·Announced the outcome of the arbitration decision with SDC Entities requiring Align to close its U.S. Invisalign Stores by April 3, 2019.



Align Technology Announces First Quarter 2019 Results

·Announced that on March 1, 2019, an Administrative Law Judge with the United States International Trade Commission determined that 3Shape infringes four claims from three Align patents, but declined to find a violation of Section 337.
·Entered into a distribution agreement with Benco Dental, the largest privately-owned dental distributor in the United States, for Align’s family of iTero Element intraoral scanners.
·Entered into a partnership with Digital Smile Design (DSD), a leader in holistic, digital and emotional dentistry solutions, to bring dedicated tools that incorporate DSD into Align’s end-to-end digital workflow, including iTero scanning technology.
·Opened Align University Training Institute in Shanghai, China, Align’s second training facility in China.
·Announced that Align Technology and Straumann Group settled global ClearCorrect patent disputes and signed a non-binding letter of intent for Straumann to distribute iTero scanners.


Q2 2019 Business Outlook

For the second quarter of 2019 (Q2’19), Align provides the following guidance:

·Net revenues in the range of $590 million to $600 million, up approximately 20% to 22% over the same period a year ago
·Invisalign case shipments in the range of 380 thousand to 385 thousand, up approximately 26% to 27% over the same period a year ago
·Operating margin in the range of 24.5% to 25.4%
·Diluted EPS in the range of $1.47 to $1.54


Align Web Cast and Conference Call

Align will host a conference call today, April 24, 2019 at 4:30 p.m. ET, 1:30 p.m. PT, to review its first quarter 2019 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 13689188 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 8, 2019.


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 doctor in your area, please visit www.invisalign.com. For additional information about iTero digital scanning system, please visit www.itero.com.



Align Technology Announces First Quarter 2019 Results

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 2019, 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 excess or constrained capacity at our manufacturing and treat operations facilities 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 as well as an increased manufacturing costs per case, 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, 2018, which was filed with the Securities and Exchange Commission (SEC) on February 28, 2019. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.




Align Technology Announces First Quarter 2019 Results

(in thousands, except per share data)
   Three Months Ended
March 31,
   2019  2018
Net revenues  $548,971   $436,924 
Cost of net revenues   146,875    109,516 
Gross profit   402,096    327,408 
Operating expenses:          
Selling, general and administrative   247,110    199,625 
Research and development   37,503    29,591 
Impairments and other charges   29,782    - 
Total operating expenses   314,395    229,216 
Income from operations   87,701    98,192 
Interest income   2,633    2,176 
Other income (expense), net   (5,746)   177 
Net income before provision for income taxes and equity in losses of investee   84,588    100,545 
Provision for income taxes   8,796    2,902 
Equity in losses of investee, net of tax   3,944    1,777 
Net income  $71,848   $95,866 
Net income per share:          
Basic  $0.90   $1.20 
Diluted  $0.89   $1.17 
Shares used in computing net income per share:          
Basic   79,860    80,036 
Diluted   80,687    81,628 



Align Technology Announces First Quarter 2019 Results

(in thousands)
    March 31,
    December 31,
Current assets:          
Cash and cash equivalents  $588,001   $636,899 
Marketable securities, short-term   144,540    98,460 
Equity method investments   41,969    - 
Accounts receivable, net   479,281    439,009 
Inventories   68,489    55,641 
Prepaid expenses and other current assets   116,833    72,470 
Total current assets   1,439,113    1,302,479 
Marketable securities, long-term   -    9,112 
Property, plant and equipment, net   575,267    521,329 
Operating lease right-of-use assets   56,384    - 
Equity method investments   -    45,913 
Goodwill and intangible assets, net   80,329    81,949 
Deferred tax assets   57,151    64,689 
Other assets   26,186    26,987 
Total assets  $2,234,430   $2,052,458 
Current liabilities:          
Accounts payable  $62,512   $64,256 
Accrued liabilities   252,754    234,679 
Finance lease liabilities   56,100    - 
Deferred revenues   433,518    393,138 
Total current liabilities   804,884    692,073 
Income tax payable   93,463    78,008 
Operating lease liabilities   59,307    - 
Other long-term liabilities   21,072    29,486 
Total liabilities   978,726    799,567 
Total stockholders' equity   1,255,704    1,252,891 
Total liabilities and stockholders' equity  $2,234,430   $2,052,458 



Align Technology Announces First Quarter 2019 Results

(in thousands)
   Three Months Ended
March 31,
   2019  2018
Net cash provided by operating activities  $117,207   $77,332 
Net cash (used in) provided by investing activities   (74,418)   109,269 
Net cash used in financing activities   (92,762)   (139,822)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash   1,089    1,715 
Net (decrease) increase in cash, cash equivalents, and restricted cash   (48,884)   48,494 
Cash, cash equivalents, and restricted cash at beginning of the period   637,566    450,125 
Cash, cash equivalents, and restricted cash at end of the period  $588,682   $498,619 



Align Technology Announces First Quarter 2019 Results

   Q1  Q2  Q3  Q4  Fiscal  Q1
   2018  2018  2018  2018  2018  2019
Invisalign Average Selling Price (ASP):                  
Worldwide ASP   $1,310   $1,315   $1,230   $1,235   $1,270   $1,245 
International ASP  $1,435   $1,425   $1,340   $1,295   $1,370   $1,330 
Invisalign Cases Shipped by Geography:                              
Americas   166,665    181,425    190,615    189,410    728,115    202,935 
International   105,570    121,260    128,730    144,390    499,950    146,260 
   Total Cases Shipped   272,235    302,685    319,345    333,800    1,228,065    349,195 
       YoY % growth   30.8%   30.5%   35.3%   30.9%   31.9%   28.3%
       QoQ % growth   6.7%   11.2%   5.5%   4.5%        4.6%
Number of Invisalign Doctors Cases Were Shipped To:                              
Americas   27,105    28,280    28,890    29,215    42,000    30,200 
International   19,700    21,805    23,270    25,475    36,040    26,510 
   Total Doctors Cases Shipped To   46,805    50,085    52,160    54,690    78,040    56,710 
Invisalign Doctor Utilization Rates**:                              
North America   6.3    6.6    6.9    6.7    18.2    7.0 
  North American Orthodontists   15.3    16.4    17.4    16.5    56.7    18.3 
  North American GP Dentists   3.4    3.6    3.5    3.6    9.1    3.6 
International   5.4    5.6    5.5    5.7    13.9    5.5 
   Total Utilization Rates   5.8    6.0    6.1    6.1    15.7    6.2 
Number of Invisalign Doctors Trained***:                              
Americas   1,630    1,880    2,085    2,290    7,885    1,725 
International   2,645    3,300    2,845    2,980    11,770    2,410 
   Total Doctors Trained Worldwide   4,275    5,180    4,930    5,270    19,655    4,135 
   Total to Date Worldwide   136,575    141,755    146,685    151,955    151,955    156,090 
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. 
***2018 adjusted to reflect Americas doctors trained for Invisalign iGo
(in thousands)  
    Q1    Q2    Q3    Q4    Fiscal    Q1 
    2018    2018    2018    2018    2018    2019 
Stock-based Compensation (SBC)                              
SBC included in Gross Profit  $881   $900   $966   $948   $3,695   $1,112 
SBC included in Operating Expenses   14,949    15,990    18,232    17,897    67,068    19,932 
   Total SBC Expense  $15,830   $16,890   $19,198   $18,845   $70,763   $21,044 



Align Technology Announces First Quarter 2019 Results


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)              
    Q2'19 Guidance              
Net Revenues   $590.0 - $600.0              
Gross Margin   71.5% - 72.5%              
Operating Expenses   $277.0 - $282.0              
Operating Margin   24.5% - 25.4%              
Net Income per Diluted Share   $1.47 - $1.54              
Business Metrics:   Q2'19              
Case Shipments   380.0K - 385.0K              
Capital Expenditure   $85M-$90M              
Depreciation & Amortization   $20M-22M              
Diluted Shares Outstanding   80.6 (2)            
Stock Based Compensation Expense   $23M              
Effective Tax Rate   ~24% (1)            
(1) Includes excess tax benefits related to share-based compensation expense pursuant to ASU 2016-09
(2) Excludes any stock repurchases during the quarter              




The following information was filed by Align Technology Inc (ALGN) on Wednesday, April 24, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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