- Net revenues increased 9% sequentially to $76.3 million
- International revenues increased 27% sequentially to $18.1 million or 24% of worldwide revenues
- Invisalign Teen cases increased 53% sequentially to 11% of worldwide cases
- GAAP diluted EPS of $0.07 exceeded outlook of breakeven to a penny
SANTA CLARA, Calif., July 23 /PRNewswire-FirstCall/ -- Align Technology, Inc. (Nasdaq: ALGN) today reported financial results for the second quarter, ended June 30, 2009.
Total net revenues for the second quarter of fiscal 2009 (Q2 09) were $76.3 million compared to $70.1 million reported in the first quarter of 2009 (Q1 09) and compared to $79.9 million reported in the second quarter of 2008 (Q2 08). Invisalign case shipments for Q2 09 were 53.0 thousand, compared to 50.1 thousand in Q1 09 and compared to 54.9 thousand in Q2 08.
Net profit for Q2 09 was $4.5 million, or $0.07 per diluted share. This is compared to net profit of $2.6 million, or $0.04 per diluted share in Q1 09 and net profit of $4.0 million, or $0.06 per diluted share in Q2 08. Stock-based compensation expense included in Q2 09 net profit was $4.3 million compared to $3.7 million in Q1 09 and $4.8 million in Q2 08.
"Overall, we had a good quarter with better than expected results across the board, including record gross margins and continued profitability," said Thomas M. Prescott, president and CEO of Align Technology. "Second quarter revenues increased 9% sequentially to $76.3 million on case shipments of 53.0 thousand, driven by strong international growth and continued uptake of Invisalign Teen."
To supplement our consolidated financial statements, we use the following non-GAAP financial measures: non-GAAP operating expense, non-GAAP operating margin, non-GAAP net profit and non-GAAP earnings per share. For Q2 09, the non-GAAP financial measures excluded the impact of the Company's restructuring plan announced previously. A detailed reconciliation between GAAP and non-GAAP information is contained in the tables following the financial tables of this release.
Non-GAAP net profit for Q2 09 was $4.8 million, or $0.07 per diluted share. This is compared to non-GAAP net profit of $3.2 million, or $0.05 per diluted share in Q1 09. In Q2 08, there was no difference between GAAP and non-GAAP net profit.
Q2 09 Operating Results
Key GAAP Operating Results Q2 09 Q1 09 Q2 08
----- ----- -----
Gross Margin 76.0% 75.2% 74.7%
Operating Expense $51.7M $47.4M $55.8M
Operating Margin 8.2% 7.5% 4.8%
Net Profit $4.5M $2.6M $4.0M
Earnings Per Diluted Share (EPS) $0.07 $0.04 $0.06
Key Non-GAAP Operating Results Q2 09 Q1 09 Q2 08
----- ----- -----
Non-GAAP Operating Expense $51.3M $46.5M $55.8M
Non-GAAP Operating Margin 8.7% 8.8% 4.8%
Non-GAAP Net Profit $4.8M $3.2M $4.0M
Non-GAAP Earnings Per Diluted
Share (EPS) $0.07 $0.05 $0.06
Liquidity and Capital Resources
As of June 30, 2009, Align had $143.1 million in cash, cash equivalents, and short-term marketable securities compared to $110.2 million as of December 31, 2008.
Key Business Metrics
The following table highlights business metrics for Align's second quarter of 2009. Additional historical information is available on the Company's website at http://investor.aligntech.com.
% of Total Q2 09/Q1 09
Revenue by Channel ($M): Q2 09 Revenue % Change
----- ---------- --------
North American Orthodontists $21.6 28.3% 2.3%
North American GP Dentists $31.7 41.6% 2.7%
International $18.1 23.6% 26.6%
Non-case Revenue* $4.9 6.5% 27.6%
---- --- ----
Total Revenue $76.3 100% 8.8%
===== === ===
*includes training, ancillary
products, and retainers
Cases Shipped by Channel: % of Total Q2 09/Q1 09
Q2 09 Cases % Change
----- ---------- --------
North American Orthodontists 17,470 33.0% 3.4%
North American GP Dentists 23,525 44.4% 0.8%
International 12,010 22.6% 22.1%
------ ---- ----
Total Cases Shipped 53,005 100% 5.9%
====== === ===
Cases Shipped by Product: % of Total Q2 09/Q1 09
Q2 09 Cases % Change
----- ---------- --------
Invisalign Full 37,840 71.4% 1.6%
Invisalign Express 8,000 15.1% (0.1%)
Invisalign Teen 5,940 11.2% 52.5%
Invisalign Assist 1,225 2.3% 34.7%
----- --- ----
Total Cases Shipped 53,005 100% 5.9%
====== === ===
Average Selling Price (ASP), Q2 09
as billed: -----
Total Worldwide Blended ASP $1,400
International ASP $1,530
Number of Doctors Cases were Q2 09
Shipped to: -----
North American Orthodontists 3,750
North American GP Dentists 10,630
International 3,385
-----
Total Doctors Cases were
Shipped to Worldwide 17,765
======
Number of Doctors Trained Q2 09 Cumulative
Worldwide: ----- ----------
North American Orthodontists 65 8,805
North American GP Dentists 900 34,375
International 515 15,030
--- ------
Total Doctors Trained
Worldwide 1,480 58,210
===== ======
Doctor Utilization Rates*: Q2 09 Q1 09 Q2 08
----- ----- -----
North American Orthodontists 4.7 4.6 4.9
North American GP Dentists 2.2 2.2 2.5
International 3.6 3.2 3.3
--- --- ---
Total Utilization Rate 3.0 2.9 3.1
=== === ===
* Utilization = # of cases shipped/# of doctors to whom cases were shipped
Total Invisalign Patients
(cases shipped): Q2 09 Cumulative
----- ----------
Number of Patients Treated or in
Treatment (cases) 53,005 1,047,120
====== =========
Q3 Fiscal 2009 Business Outlook
For the third quarter of fiscal 2009 (Q3 09), Align Technology expects net revenues to be in a range of $71.0 million to $74.5 million. GAAP earnings per diluted share for Q3 09 is expected to be in a range of $0.03 to $0.05.
