SOURCE: Align Technology

Align Technology

October 17, 2013 16:00 ET

Align Technology Announces Third Quarter 2013 Results

SAN JOSE, CA--(Marketwired - Oct 17, 2013) - Align Technology, Inc. (NASDAQ: ALGN)

  • Net revenues of $164.5 million were up 20.5% year-over-year
  • Invisalign clear aligner net revenues of $153.5 million were up 21.2% year-over-year
  • Invisalign clear aligner shipments of 106.9 thousand were up 15.5% year-over-year
  • GAAP earnings per diluted share (EPS) of $0.42

Align Technology, Inc. (NASDAQ: ALGN) today reported financial results for the third quarter ended September 30, 2013.

Total net revenues for the third quarter of 2013 (Q3'13) were $164.5 million. This is compared to net revenues of $163.8 million reported in the second quarter of 2013 (Q2'13) and $136.5 million in the third quarter of 2012 (Q3'12). Q3'13 clear aligner net revenues were $153.5 million, compared to $153.3 million in Q2'13 and $126.7 million in Q3'12. Clear aligner case shipments in the third quarter of 2013 were 106.9 thousand, compared to 106.1 thousand in Q2'13 and 92.5 thousand in Q3'12. Q3'13 scanner and CAD/CAM services net revenues were $11.0 million, compared to $10.5 million in Q2'13 and compared to $9.8 million in Q3'12.

"I'm pleased to report another very good quarter for Align with net revenues, gross margin, and EPS higher than our outlook. Further we achieved record levels of net revenues, Invisalign case volume, and North American iTero scanner volume, enabling us to reach the low end of our long term model for operating margin, while generating strong operating cash flow," said Thomas M. Prescott, Align president and CEO. "The third quarter includes a seasonally slower period in Europe and in North America for our GP dentists, along with the peak of the summer season for teenage orthodontic case starts. We're pleased that patient traffic appears to have remained solid for our North American Orthodontist customers this summer, which resulted in strong sequential and year over year growth for Invisalign volume, especially in the important teenage segment."

Net profit for the third quarter of 2013 was $34.5 million, or $0.42 per diluted share, which includes $1.3 million, or $0.02 per diluted share, for a one-time tax benefit related to our fiscal 2012 U.S. federal income taxes. This is compared to net profit of $29.3 million, or $0.36 per diluted share, in Q2'13 and net loss of $0.3 million, or $0.00 per diluted share in Q3'12. In the third quarter last year, net loss included a pre-tax goodwill impairment charge of $24.7 million, as well as other pre-tax acquisition and integration related costs of $0.4 million.

As of September 30, 2013, the Company had $400.4 million in cash, cash equivalents, and short and long-term marketable securities compared to $356.1 million as of December 31, 2012.

To supplement our consolidated financial statements, we provide the following GAAP and non-GAAP financial measures. Detailed reconciliations between GAAP and non-GAAP information are contained in the tables following the financial tables of this release. Starting in fiscal 2013, amortization of acquired intangible assets is no longer excluded as a non-GAAP measure. This expense is included in GAAP gross profit, operating expenses, operating profit and net profit (loss) for the periods presented below and therefore is no longer a reconciling item.

 
 
 
Q3'13 Operating Results ($M except for per share amounts and percentages)  
             
             
Key GAAP Operating Results   Q3'13   Q2'13   Q3'12
Net Revenues   $164.5   $163.8   $136.5
- Clear Aligner   $153.5   $153.3   $126.7
- Scanner and CAD/CAM Services   $11.0   $10.5   $9.8
             
Gross Margin   76.0%   75.5%   73.5%
- Clear Aligner   79.9%   78.4%   77.6%
- Scanner and CAD/CAM Services   22.2%   33.9%   20.6%
             
Operating Expenses   $83.6   $85.8   $95.8
Operating Margin   25.2%   23.1%   3.3%
Net Profit (Loss)   $34.5   $29.3   ($0.3)
Earnings (Loss) Per Diluted Share (EPS)   $0.42   $0.36   ($0.00)
             
Key Non-GAAP Operating Results   Q3'13   Q2'13   Q3'12
Non-GAAP Gross Margin   76.0%   75.5%   73.6%
- Non-GAAP Clear Aligner   79.9%   78.4%   77.6%
- Non-GAAP Scanner & CAD/CAM Services   22.2%   33.9%   21.6%
             
Non-GAAP Operating Expenses   $83.6   $85.8   $70.9
Non-GAAP Operating Margin   25.2%   23.1%   21.6%
Non-GAAP Net Profit   $34.5   $29.3   $22.2
Non-GAAP Earnings Per Diluted Share (EPS)   $0.42   $0.36   $0.26
EBITDA   $45.8   $41.4   $8.5
Adjusted EBITDA   $45.8   $41.4   $33.6
             
Stock-based Compensation (SBC)   Q3'13   Q2'13   Q3'12
Total SBC Expense   $7.6   $7.3   $5.4
- SBC included in Gross Margin   $0.7   $0.6   $0.5
- SBC included in Operating Expenses   $6.9   $6.7   $4.9
             
             
             

Q4 Fiscal 2013 Business Outlook
For the fourth quarter of 2013 (Q4'13), Align Technology provides the following guidance:

  • Clear aligner case shipments in a range of 109.7 to 112.1 thousand cases, which reflects a year-over-year increase of 21.2% to 23.9%
  • Net revenues in a range of $169.1 million to $173.1 million
  • Earnings per diluted share in a range of $0.41 to $0.43

Align Web Cast and Conference Call
Align Technology will host a conference call today, October 17, 2013 at 4:30 p.m. ET, 1:30 p.m. PT, to review its third quarter 2013 results, discuss future operating trends and the business outlook. The conference call will also be web cast live via the Internet. To access the web cast, go to the "Events & Presentations" section under Company Information on Align Technology's Investor Relations web site at http://investor.aligntech.com. To access the conference call, please dial 201-689-8261 approximately fifteen minutes prior to the start of the call. 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 421424 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 October 25, 2013.

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 teens. Align Technology was founded in March 1997 and received FDA clearance to market Invisalign in 1998.The Invisalign product family includes Invisalign, Invisalign Teen, Invisalign Assist, Invisalign Express 10, Invisalign Express 5, Invisalign Lite, and Vivera Retainers. To learn more about Invisalign or to find an Invisalign trained doctor in your area, please visit www.invisalign.com.

Cadent Holdings, Inc. is a subsidiary of Align Technology and is a leading provider of 3D digital scanning solutions for orthodontics and dentistry. The Cadent family of products includes the iTero scanning systems, OrthoCAD iCast and OrthoCAD iRecord. For additional information, please visit www.cadentinc.com.

About Non-GAAP Financial Measures
To supplement our consolidated financial statements and our business outlook, we may use from time to time the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating profit, non-GAAP net profit and non-GAAP earnings per share, which exclude, as applicable, acquisition and integration related costs, severance and benefit costs, impairment of goodwill, impairment of long-lived assets and any related income tax-related adjustments, and EBITDA and adjusted EBITDA. The presentation of this financial information is not intended to be considered in isolation, or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these 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 "core operating performance." Management believes that "core operating performance" represents Align's performance in the ordinary, on-going and customary course of its operations. Accordingly, management excludes from "core operating performance" certain expenditures and other items that may not be indicative of our operating performance including discrete cash and non-cash charges that are infrequent, or one-time in nature. 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 are provided to and used by our institutional investors and the analyst community to facilitate comparisons with prior and subsequent reporting periods. A reconciliation of the GAAP and non-GAAP financial measures for the quarter and year and a more detailed explanation of each non-GAAP financial measure and its uses are provided in the footnotes to the table captioned "Reconciliation of GAAP to non-GAAP Key Financial Metrics" and "Business Outlook Summary" included at the end of this release.

Forward-Looking Statement
This news release, including the tables below, contains forward-looking statements, including statements regarding certain business metrics for the fourth quarter of 2013, including anticipated net revenues, gross margin, operating expenses, operating profit, diluted earnings per share, case shipments and cash, cash equivalents and short-term and long-term investments. 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, the willingness and ability of our customers to maintain and/or increase 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, 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, our ability to successfully achieve the anticipated benefits from the scanner and the CAD/CAM services business, 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, foreign operational, political and other risks relating to Align's international manufacturing operations, Align's ability to protect its intellectual property rights, continued compliance with regulatory requirements, competition from existing and new competitors, Align's ability to develop and successfully introduce new products and product enhancements, the loss of key personnel and impairments in the book value of goodwill or other intangible assets. 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, 2012, which was filed with the Securities and Exchange Commission on March 1, 2013. 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     Nine Months Ended  
    September 30,
2013
  September 30,
2012
    September 30,
2013
    September 30,
2012
 
                       
Net revenues   $ 164,506     136,496     $ 481,914       417,201  
                               
Cost of net revenues     39,416     36,146       120,284       107,291  
                               
Gross profit     125,090     100,350       361,630       309,910  
                               
Operating expenses:                              
  Sales and marketing     45,224     36,468       135,352       114,272  
  General and administrative     27,487     24,762       84,862       71,294  
  Research and development     10,915     9,952       33,113       31,158  
  Impairment of goodwill     -     24,665       40,693       24,665  
  Impairment of long-lived assets     -     -       26,320       -  
Total operating expenses     83,626     95,847       320,340       241,389  
                               
Operating profit     41,464     4,503       41,290       68,521  
                               
Interest and other income (expense), net     449     (353 )     (874 )     (624 )
                               
Profit before income taxes     41,913     4,150       40,416       67,897  
                               
Provision for income taxes     7,376     4,494       18,542       18,765  
                               
Net profit (loss)   $ 34,537   $ (344 )   $ 21,874     $ 49,132  
                               
Net profit (loss) per share                              
    - basic   $ 0.43   $ (0.00 )   $ 0.27     $ 0.61  
    - diluted   $ 0.42   $ (0.00 )   $ 0.26     $ 0.59  
                               
Shares used in computing net profit (loss) per share                              
    - basic     79,967     81,437       80,592       80,356  
    - diluted     81,848     81,437       82,549       83,016  
         
         
         
ALIGN TECHNOLOGY, INC.      
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS    
(in thousands)       
         
    September 30,
2013
  December 31,
2012
         
ASSETS            
             
Current assets:            
  Cash and cash equivalents   $ 175,839   $ 306,386
  Marketable securities, short-term     147,740     28,485
  Accounts receivable, net     109,179     98,992
  Inventories     14,662     15,122
  Other current assets     34,839     36,808
    Total current assets     482,259     485,793
             
Marketable securities, long-term     76,836     21,252
Property and equipment, net     76,552     79,191
Goodwill and intangible assets, net     86,107     145,013
Deferred tax assets     28,822     21,609
Other long-term assets     8,630     3,454
             
    Total assets   $ 759,206   $ 756,312
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
             
Current liabilities:            
  Accounts payable   $ 19,157   $ 19,549
  Accrued liabilities     73,714     74,247
  Deferred revenue     70,397     61,975
    Total current liabilities     163,268     155,771
             
Other long term liabilities     20,254     19,224
             
    Total liabilities     183,522     174,995
             
Total stockholders' equity     575,684     581,317
             
  Total liabilities and stockholders' equity   $ 759,206   $ 756,312
               
               
               
ALIGN TECHNOLOGY, INC.          
RECONCILIATION OF GAAP TO NON-GAAP KEY FINANCIAL METRICS       
               
               
               
Reconciliation of GAAP to Non-GAAP Gross Profit              
(in thousands)              
    Three Months Ended  
    September 30,
2013
  June 30, 2013   September 30, 2012  
                     
GAAP Gross profit   $ 125,090   $ 123,691   $ 100,350  
  Acquisition and integration costs related to cost of revenues (1)     -     -     55  
  Severance and benefit costs related to cost of revenues (2)     -     -     39  
Non-GAAP Gross profit   $ 125,090   $ 123,691   $ 100,444  
                     
                     
Reconciliation of GAAP to Non-GAAP Gross Profit Scanner and CAD/CAM Services                    
(in thousands)                    
    Three Months Ended  
    September 30,
2013
  June 30, 2013   September 30, 2012  
                     
GAAP Scanner and CAD/CAM Services gross profit   $ 2,427   $ 3,567   $ 2,016  
  Acquisition and integration costs related to cost of revenues (1)     -     -     55  
  Severance and benefit costs related to cost of revenues (2)     -     -     39  
Non-GAAP Gross profit   $ 2,427   $ 3,567   $ 2,110  
                     
                     
Reconciliation of GAAP to Non-GAAP Operating Expenses              
(in thousands)              
    Three Months Ended  
    September 30,
2013
  June 30, 2013   September 30, 2012  
                     
GAAP Operating expenses   $ 83,626   $ 85,790   $ 95,847  
  Acquisition and integration costs related to operating expenses (1)     -     -     (179 )
  Severance and benefit costs related to operating expenses (2)     -     -     (105 )
  Impairment of goodwill (3)     -     -     (24,665 )
  Impairment of long-lived assets (4)     -     -     -  
Non-GAAP Operating expenses   $ 83,626   $ 85,790   $ 70,898  
                     
                     
Reconciliation of GAAP to Non-GAAP Operating Profit              
(in thousands)              
    Three Months Ended  
    September 30,
2013
  June 30, 2013   September 30, 2012  
                     
GAAP Operating profit   $ 41,464   $ 37,901   $ 4,503  
  Acquisition and integration costs (1)     -     -     234  
  Severance and benefit costs (2)     -     -     144  
  Impairment of goodwill (3)     -     -     24,665  
  Impairment of long-lived assets (4)     -     -     -  
Non-GAAP Operating profit   $ 41,464   $ 37,901   $ 29,546  
                     
                     
Reconciliation of GAAP to Non-GAAP Net Profit              
(in thousands, except per share amounts)              
    Three Months Ended  
    September 30,
2013
  June 30, 2013   September 30, 2012  
                     
GAAP Net profit (loss)   $ 34,537   $ 29,320   $ (344 )
  Acquisition and integration costs (1)     -     -     234  
  Severance and benefit costs (2)     -     -     144  
  Impairment of goodwill (3)     -     -     24,665  
  Impairment of long-lived assets (4)     -     -     -  
  Income tax-related adjustments (5)     -     -     (2,512 )
Non-GAAP Net profit   $ 34,537   $ 29,320   $ 22,187  
                     
Diluted Net profit (loss) per share:                    
    GAAP   $ 0.42   $ 0.36   $ (0.00 )
    Non-GAAP   $ 0.42   $ 0.36   $ 0.26  
                     
Shares used in computing diluted GAAP Net profit (loss) per share     81,848     82,149     81,437  
Shares used in computing diluted Non-GAAP Net profit per share     81,848     82,149     83,906  
                     
                     
Reconciliation of GAAP Net Profit to EBITDA and Adjusted EBITDA              
(in thousands)              
    Three Months Ended  
    September 30,
2013
  June 30, 2013   September 30, 2012  
                     
GAAP Net profit (loss)   $ 34,537   $ 29,320   $ (344 )
Provision for income taxes     7,376     8,246     4,494  
Depreciation and amortization     3,858     3,846     4,374  
EBITDA (6)     45,771     41,412     8,524  
                     
Adjustments or charges:                    
  Acquisition and integration related costs (1)     -     -     234  
  Severance and benefit costs (2)     -     -     144  
  Impairment of goodwill (3)     -     -     24,665  
  Impairment of long-lived assets (4)     -     -     -  
EBITDA after adjustments (6)   $ 45,771   $ 41,412   $ 33,567  

Starting in fiscal 2013, amortization of acquired intangible assets is no longer excluded as a non-GAAP measure. This expense is included in GAAP gross profit, operating expenses, operating profit (loss) and net profit (loss) for the periods presented below and therefore is no longer a reconciling item.

(1) Acquisition costs and integration related. We have incurred acquisition-related and other expenses which include legal, banker, accounting and other advisory fees of third parties, retention bonuses, integration and professional fees. We do not engage in acquisitions in the ordinary course of business. We believe that it is important to understand these charges; however, we do not believe that these charges are indicative of future operating results. We believe that eliminating these expenses from our non-GAAP measures is useful because we generally would not have otherwise incurred such expenses in the periods presented as part of our continuing operations.

(2) Severance and benefits costs. These costs are related to the closure of our New Jersey operations and were realized through the first three quarters of 2012. We have engaged in various restructuring and exit activities in 2011 and 2009 that have resulted in costs associated with severance and benefits. Such activity has been a discrete event based on a unique set of business objectives or circumstances, and each has differed from the others in terms of its operational implementation, business impact and scope. We do not engage in restructuring and/or exit activities in the ordinary course of business. We believe that it is important to understand significant severance and benefits costs from restructuring and exit activities and believe that investors benefit from excluding these charges from our operating results to facilitate a more meaningful evaluation of current operating performance and comparisons to past operating performance.

(3) Impairment of goodwill. These costs represents non-cash write-downs of our goodwill generally related to negative trends in market and economic conditions, termination of relationships with distributors, or the increase in competitive environment related to our Scanner and CAD/CAM Services reporting unit. We remove the impact of these charges to our operating performance to assist in assessing our ability to generate cash from operations. We believe this may be useful information to users of our financial statements; therefore, we have excluded these charges for purposes of calculating these non-GAAP measures to facilitate an evaluation of our current operating performance, particularly in terms of liquidity.

(4) Impairment of long-lived assets. These costs represents non-cash write-downs of our long-lived assets generally related to the increase in competitive environment related to our Scanner and CAD/CAM Services reporting unit. As a result of these conditions, we have assessed that our asset group within the reporting unit was not recoverable and therefore recorded an impairment charge. We remove the impact of these charges to our operating performance to assist in assessing our ability to generate cash from operations. We believe this may be useful information to users of our financial statements; therefore, we have excluded these charges for purposes of calculating these non-GAAP measures to facilitate an evaluation of our current operating performance, particularly in terms of liquidity.

(5) Income tax-related adjustments. Non-GAAP financial information for the quarter is adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP income. This rate is based on our estimated annual GAAP income tax rate forecast, adjusted to account for discrete tax items and items excluded from GAAP income in calculating the non-GAAP financial measures presented above. Our estimated tax rate on non-GAAP income is determined annually and may be re-calculated during the year to take into account events or trends that we believe materially impact the estimated annual rate.

(6) EBITDA and adjusted EBITDA. We use EBITDA as a performance measure for benchmarking against our peers and competitors. We believe EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties to evaluate companies in the medical technology industry. We also use adjusted EBITDA which excludes certain special or non-recurring expenses, net of certain special or non-recurring benefits, detailed in the reconciliation tables that accompany this release, as an internal measure of business operating performance. We believe such financial measures provide a meaningful perspective of the underlying operating performance to our current business. EBITDA and adjusted EBITDA are not recognized terms under GAAP. Because all companies do not calculate EBITDA and similarly titled financial measures in the same way, those measures as used by other companies may not be consistent with the way we calculate such measures and should not be considered as alternative measures of operating or net profit.

ALIGN TECHNOLOGY  
Q3 2013 EARNINGS RELEASE ADDITIONAL DATA  
REVENUE PERFORMANCE AND CLEAR ALIGNER METRICS  
(in thousands except per share data)  
   
    Q1     Q2     Q3     Q4     FISCAL     Q1     Q2     Q3  
    2012     2012     2012     2012     2012     2013     2013     2013  
Invisalign Clear Aligner Net Revenues by Geography:                                                                
  North America   $ 86,871     $ 92,997     $ 89,568     $ 91,686     $ 361,122     $ 97,045     $ 102,217     $ 103,888  
    North American Orthodontists     41,688       43,942       43,090       43,812       172,532       48,859       50,476       52,504  
    North American GP Dentists     45,183       49,055       46,478       47,874       188,590       48,186       51,741       51,384  
  International     29,700       32,883       29,700       32,513       124,796       31,818       40,320       38,983  
  Non-case*     6,757       7,789       7,457       8,660       30,663       12,709       10,766       10,679  
    Total Clear Aligner Net Revenues   $ 123,328     $ 133,669     $ 126,725     $ 132,859     $ 516,581     $ 141,572     $ 153,303     $ 153,550  
  *includes Invisalign training, ancillary products, and retainers                                                                
                                                                 
Invisalign Clear Aligner Net Revenues by Product:                                                                
  Invisalign Full   $ 82,424     $ 88,617     $ 80,294     $ 87,265     $ 338,600     $ 85,914     $ 95,762     $ 93,945  
  Invisalign Express/Lite     11,806       13,632       12,779       13,269       51,486       16,083       19,158       17,702  
  Invisalign Teen     15,148       16,380       19,144       16,455       67,127       18,573       19,937       23,779  
  Invisalign Assist     7,193       7,251       7,051       7,210       28,705       8,293       7,680       7,445  
  Non-case*     6,757       7,789       7,457       8,660       30,663       12,709       10,766       10,679  
    Total Clear Aligner Net Revenues   $ 123,328     $ 133,669     $ 126,725     $ 132,859     $ 516,581     $ 141,572     $ 153,303     $ 153,550  
                                                                 
Average Invisalign Selling Price (ASP):                                                                
  Worldwide ASP (1)   $ 1,370     $ 1,320     $ 1,290     $ 1,375     $ 1,340     $ 1,315     $ 1,345     $ 1,335  
  Worldwide ASP, adjusted (2)   $ 1,370     $ 1,320     $ 1,290     $ 1,320     $ 1,325     $ 1,340     $ 1,355     $ 1,335  
  International ASP   $ 1,485     $ 1,455     $ 1,355     $ 1,455     $ 1,435     $ 1,355     $ 1,480     $ 1,455  
  (1) Invisalign case net revenues / Invisalign case shipments                                                                
  (2) Adjusted for one-time adjustments (eg. Q4'12 refinement release and Q1'13 and Q2'13 grandfathered mid-course correction deferrals)                                                                
                                                                 
Invisalign Clear Aligner Cases Shipped by Geography:                                                                
  North America     65,280       72,685       70,610       68,140       276,715       74,730       78,865       80,130  
  North American Orthodontists     32,235       35,420       35,885       33,505       137,045       38,000       39,545       41,610  
  North American GP Dentists     33,045       37,265       34,725       34,635       139,670       36,730       39,320       38,520  
  International     19,985       22,595       21,905       22,340       86,825       23,445       27,270       26,770  
    Total Cases Shipped     85,265       95,280       92,515       90,480       363,540       98,175       106,135       106,900  
                                                                 
Invisalign Clear Aligner Cases Shipped by Product:                                                                
  Invisalign Full     57,145       62,510       57,400       57,920       234,975       61,245       65,525       64,600  
  Invisalign Express/Lite     12,855       15,300       14,610       15,940       58,705       18,940       21,285       19,230  
  Invisalign Teen     9,935       11,860       15,265       11,255       48,315       12,580       13,920       17,740  
  Invisalign Assist     5,330       5,610       5,240       5,365       21,545       5,410       5,405       5,330  
    Total Cases Shipped     85,265       95,280       92,515       90,480       363,540       98,175       106,135       106,900  
                                                                 
Number of Invisalign Doctors Cases Shipped To:                                                                
  North American Orthodontists     4,460       4,575       4,660       4,615       5,665       4,760       4,940       4,970  
  North American GP Dentists     11,365       12,120       11,925       11,685       19,285       12,520       13,130       13,170  
  International     5,085       5,480       5,400       5,715       9,285       5,840       6,355       6,510  
    Total Doctors Cases Shipped To     20,910       22,175       21,985       22,015       34,235       23,120       24,425       24,650  
                                                                 
Invisalign Doctor Utilization Rates*:                                                                
  North American Orthodontists     7.2       7.7       7.7       7.3       24.2       8.0       8.0       8.4  
  North American GP Dentists     2.9       3.1       2.9       3.0       7.2       2.9       3.0       2.9  
  International     3.9       4.1       4.1       3.9       9.4       4.0       4.3       4.1  
    Total Utilization Rates     4.1       4.3       4.2       4.1       10.6       4.3       4.4       4.3  
  * # of cases shipped/# of doctors to whom cases were shipped                                                                
                                                                 
Number of Invisalign Doctors Trained:                                                                
  North American Orthodontists     90       95       125       75       385       65       115       90  
  North American GP Dentists     720       995       675       920       3,310       690       1,015       705  
  International     715       965       685       780       3,145       905       1,020       840  
    Total Doctors Trained Worldwide     1,525       2,055       1,485       1,775       6,840       1,660       2,150       1,635  
    Total to Date Worldwide     71,180       73,235       74,720       76,495       76,495       78,155       80,305       81,940  
                                                                 
Scanner and CAD/CAM Services Net Revenues:                                                                
  North America Scanner and CAD/CAM Services   $ 11,120     $ 11,752     $ 9,439     $ 9,940     $ 42,251     $ 11,952     $ 10,454     $ 10,875  
  International Scanner and CAD/CAM Services     631       205       332       41       1,209       56       71       81  
    Total Scanner and CAD/CAM Net Revenues   $ 11,751     $ 11,957     $ 9,771     $ 9,981     $ 43,460     $ 12,008     $ 10,525     $ 10,956  
                                                                 
  Scanner Net Revenues   $ 5,361     $ 6,032     $ 4,023     $ 4,643     $ 20,059     $ 6,625     $ 5,027     $ 5,538  
  CAD/CAM Services Net Revenues     6,390       5,925       5,748       5,338       23,401       5,383       5,498       5,418  
    Total Scanner and CAD/CAM Services Net Revenues   $ 11,751     $ 11,957     $ 9,771     $ 9,981     $ 43,460     $ 12,008     $ 10,525     $ 10,956  
                                                                 
Total Net Revenues by Geography:                                                                
  Total North America Net Revenues   $ 97,991     $ 104,749     $ 99,007     $ 101,626     $ 403,373     $ 108,997     $ 112,671     $ 114,763  
  Total International Net Revenues     30,331       33,088       30,032       32,554       126,005       31,874       40,391       39,064  
  Total Non-case Net Revenues     6,757       7,789       7,457       8,660       30,663       12,709       10,766       10,679  
    Total Worldwide Net Revenues   $ 135,079     $ 145,626     $ 136,496     $ 142,840     $ 560,041     $ 153,580     $ 163,828     $ 164,506  
      YoY% growth     28.8 %     21.3 %     8.4 %     10.8 %     16.7 %     13.7 %     12.5 %     20.5 %
      QoQ% growth     4.8 %     7.8 %     -6.3 %     4.6 %             7.5 %     6.7 %     0.4 %
                                                                 
Note: Historical public data may differ due to rounding. Additionally, rounding may effect totals.  
   
   
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)
   
  Q4'13 Guidance
   
  GAAP
   
Net Revenues $169.1 - $173.1
   
Gross Margin 74.7% - 75.3%
   
Operating Expenses $83.8 - $85.4
   
Operating Margin 25.2% - 26.0%
   
Net Income per Diluted Share $0.41 - $0.43
   
Stock Based Compensation Expense:  
Cost of Net Revenues $0.8
Operating Expenses $7.1
Total Stock Based Compensation Expense $7.9
   
   
Business Metrics:  
  Q4'13
Case Shipments 109.7K - 112.1K
Cash, Cash Equivalents, and Marketable Securities $434M - $444M
Capex $3.3M - $4.8M
Depreciation & Amortization $3.8M - $4.3M
Diluted Shares Outstanding 82.2M