Align Technology Announces First Quarter 2001 Results

Apr 26, 2001, 01:00 ET from Align Technology, Inc.

    SANTA CLARA, Calif., April 26 /PRNewswire/ --
 Align Technology, Inc. (Nasdaq: ALGN) the inventor of the Invisalign(R)
 System, a proprietary method of straightening teeth without unsightly wires
 and brackets, today announced results for its first quarter ended
 March 31, 2001.
     Revenues for the first quarter of 2001 were $7.7 million, a sequential
 increase of 133% from $3.3 million in the fourth quarter ended December 31,
 2000 and up 1,183% from $0.6 million in the same period last year.
     The company incurred a net loss in the first quarter as it continued to
 execute its operating strategy. The pro forma net loss, which excludes non-
 cash charges for all periods presented, for the first quarter of 2001 was
 $24.5 million or $0.73 per share, compared to a pro forma net loss of $7.4
 million or $1.42 per share for the same period a year ago, and a pro forma net
 loss of $29.0 million or $4.78 per share for the fourth quarter of fiscal
 2000. The pro forma net loss, as adjusted, which assumes conversion of
 preferred stock into common stock as of the date of original issuance for all
 periods presented was $0.60 per share for the first quarter of 2001 compared
 to a pro forma net loss, as adjusted, of $0.35 per share for the first quarter
 of 2000. Refer to the financial tables provided with this press release for
 further details regarding non-cash charges.
     "The first quarter marked an important period for Align Technology," said
 Zia Chishti, chief executive officer of Align Technology. "We made significant
 strides in executing our strategy to establish the Invisalign System as the
 standard method for treating orthodontic malocclusion. We are very pleased
 with the strong sequential revenue growth we achieved this quarter, and
 believe the greater than 40 percent growth in cases we accepted during the
 first quarter reinforces the increasing demand for our product. Additionally,
 we have made meaningful progress in increasing operating efficiencies. As a
 result, our shipping cycle decreased from eight weeks to six weeks during the
 quarter."
     Align Technology will host a webcast and conference call on Thursday,
 April 26, 2001 at 9:00 a.m. EDT, 6:00 a.m. PDT to review first quarter 2001
 results, as well as discuss future operating trends and guidance on the
 outlook for the future. To access the webcast, go to the investor relations
 portion of Align Technology's website at www.invisalign.com. An archived
 webcast replay of the call will also be available at that website. To access
 the conference call please dial 415-537-1802 approximately ten minutes prior
 to the start of the call and enter reservation number 18581642. If you are
 unable to listen to the call, a taped replay will also be available beginning
 approximately one hour after the call's conclusion and will remain available
 through 11:00 a.m. EDT on May 3, 2001 and can be accessed by dialing 800-633-
 8284 with reservation number 18581642. The replay may be accessed from
 international locations by dialing 858-812-6440 using the same reservation
 number.
 
     About Align Technology, Inc.
     Align Technology designs, manufactures and markets the Invisalign System,
 a proprietary new method for treating malocclusion, or the misalignment of
 teeth. The Invisalign System 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, the Invisalign System significantly reduces the aesthetic
 and other limitations associated with braces. Invisalign is appropriate for
 treating adults and older teens. Align Technology was founded in March 1997
 and received FDA clearance to market the Invisalign System in 1998.
 
     This release may contain forward-looking statements based on Align
 Technology's current expectations. These forward-looking statements involve
 risks and uncertainties. A number of important factors could cause actual
 results to differ materially from those in the forward-looking statements.
 These factors include Align Technology's ability to achieve profitability, the
 adoption by orthodontists and consumers of the Invisalign System, Align
 Technology's successful enforcement of its intellectual property and avoidance
 of infringement on third party patents, Align Technology's ability to
 establish and maintain reliable, high-volume manufacturing capacity in the
 U.S. and internationally and Align Technology's ability to manage its
 significant growth and retain its key personnel. These factors, as well as
 other factors that could cause actual results to differ materially, are
 discussed in more detail in Align Technology's Annual Report on Form 10-K, as
 well as other reports and documents filed from time to time with
 the Securities and Exchange Commission.
 
 
      ALIGN TECHNOLOGY, INC.
      PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
       except per share data)
      UNAUDITED
                                         Three Months Ended  Three Months Ended
                                           March 31, 2001      March 31, 2000
     Statement of Operations Data:
 
     Revenues                                  $7,689                $629
 
     Cost of revenues                          10,352               1,938
 
     Gross loss                                (2,663)             (1,309)
     Operating expenses:
 
     Sales and marketing                       15,715               3,300
 
     General and administrative                 4,517               1,904
 
     Research and development                   2,872                 869
 
     Total operating expenses                  23,104               6,073
 
     Loss from operations                     (25,767)             (7,382)
 
     Interest and other income (expense), net   1,270                 (32)
 
     Pro forma net loss                      $(24,497)            $(7,414)
 
     Pro forma net loss per share available to
      common stockholders, basic and diluted   $(0.73)             $(1.42)
 
     Shares used in computing pro forma net
      loss per share available to common
      stockholders, basic and diluted          33,574               5,225
 
     Pro forma net loss per share, as adjusted,
      available to common stockholders,
      basic and diluted                        $(0.60)             $(0.35)
 
     Shares used in computing pro forma net
      loss, as adjusted, per share available
      to common stockholders, basic and
      diluted                                  40,726              21,479
 
 
     Pro forma net loss for all periods presented excludes stock based
 compensation expense. In addition, pro forma net loss for the quarter ended
 2001 excludes the dividend related to the beneficial conversion feature of
 preferred stock and related interest charges from the subordinated notes on
 the preferred stock.
 
     Shares used in computing pro forma net loss, as adjusted, per share per
 common stockholder assumes the conversion of preferred stock into common stock
 as of the date of original issuance for all periods presented.
 
 
      ALIGN TECHNOLOGY, INC.
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per
       share data)
      UNAUDITED
                                     Three Months Ended  Three Months Ended
                                        March 31, 2001     March 31, 2000
     Statement of Operations Data:
 
     Revenues                                $7,689              $629
 
     Cost of revenues                        11,554             2,026
 
     Gross loss                              (3,865)           (1,397)
     Operating expenses:
 
     Sales and marketing                     16,711             3,438
 
     General and administrative               6,905             2,156
 
     Research and development                 3,944             1,057
 
     Total operating expenses                27,560             6,651
 
     Loss from operations                   (31,425)           (8,048)
 
     Interest and other income (expense), net  (533)              (32)
 
     Net loss                               (31,958)           (8,080)
     Dividend related to beneficial
      conversion feature of preferred stock (11,191)               --
 
     Net loss available to common
      stockholders                         $(43,149)          $(8,080)
 
     Net loss per share available to common
      stockholders, basic and diluted        $(1.29)           $(1.55)
 
     Shares used in computing net loss per
      share available to common stockholders,
      basic and diluted                      33,574             5,225
 
     Pro forma net loss per share available
      to common stockholders, basic and
      diluted                                $(0.78)           $(0.38)
 
     Shares used in computing pro forma net
      loss per share available to common
      stockholders, basic and diluted        40,726            21,479
 
     Shares used in computing pro forma net loss per share per common
 stockholder assumes the conversion of preferred stock into common stock as of
 the date of original issuance for all periods presented.
 
 
      Align Technology, Inc.
      CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
      UNAUDITED
                                           March 31, 2001  December 31, 2000
     ASSETS
     Current assets:
 
     Cash and cash equivalents                $56,605           $2,828
 
     Restricted cash                            8,939           15,986
 
     Marketable securities, short-term         55,910            9,633
 
     Accounts receivable, net                   6,718            4,465
 
     Inventories                                2,614            2,024
 
     Deferred costs                             3,607            2,431
 
     Other current assets                       1,774            3,995
 
       Total current assets                   136,167           41,362
 
     Property and equipment, net               26,502           21,100
 
     Marketable securities, long-term           7,010            6,251
 
     Other assets                               1,872            1,848
 
       Total assets                          $171,551          $70,561
 
     LIABILITIES, CONVERTIBLE PREFERRED STOCK
      AND STOCKHOLDERS' EQUITY (DEFICIT)
     Current liabilities:
 
     Accounts payable                          $2,180           $5,541
 
     Accrued liabilities                       16,948           14,753
 
     Deferred revenue                           2,951            2,350
 
     Current portion of capital lease obligations 452              445
 
       Total current liabilities               22,531           23,089
 
     Capital lease obligations, net of current
      portion                                   1,337            1,455
 
       Total liabilities                       23,868           24,544
 
     Convertible preferred stock                   --          130,691
 
     Stockholder's equity (deficit):
 
     Common stock                                   5                1
 
     Additional paid-in capital               365,794          105,828
 
     Deferred stock-based compensation        (75,817)         (80,160)
 
     Notes receivable from stockholders        (1,858)          (1,814)
 
     Accumulated other comprehensive income       119               73
 
     Accumulated deficit                     (140,560)        (108,602)
 
       Total stockholders' equity (deficit)   147,683          (84,674)
       Total liabilities, convertible preferred
        stock and stockholders' equity
        (deficit)                            $171,551          $70,561
 
 

SOURCE Align Technology, Inc.
    SANTA CLARA, Calif., April 26 /PRNewswire/ --
 Align Technology, Inc. (Nasdaq: ALGN) the inventor of the Invisalign(R)
 System, a proprietary method of straightening teeth without unsightly wires
 and brackets, today announced results for its first quarter ended
 March 31, 2001.
     Revenues for the first quarter of 2001 were $7.7 million, a sequential
 increase of 133% from $3.3 million in the fourth quarter ended December 31,
 2000 and up 1,183% from $0.6 million in the same period last year.
     The company incurred a net loss in the first quarter as it continued to
 execute its operating strategy. The pro forma net loss, which excludes non-
 cash charges for all periods presented, for the first quarter of 2001 was
 $24.5 million or $0.73 per share, compared to a pro forma net loss of $7.4
 million or $1.42 per share for the same period a year ago, and a pro forma net
 loss of $29.0 million or $4.78 per share for the fourth quarter of fiscal
 2000. The pro forma net loss, as adjusted, which assumes conversion of
 preferred stock into common stock as of the date of original issuance for all
 periods presented was $0.60 per share for the first quarter of 2001 compared
 to a pro forma net loss, as adjusted, of $0.35 per share for the first quarter
 of 2000. Refer to the financial tables provided with this press release for
 further details regarding non-cash charges.
     "The first quarter marked an important period for Align Technology," said
 Zia Chishti, chief executive officer of Align Technology. "We made significant
 strides in executing our strategy to establish the Invisalign System as the
 standard method for treating orthodontic malocclusion. We are very pleased
 with the strong sequential revenue growth we achieved this quarter, and
 believe the greater than 40 percent growth in cases we accepted during the
 first quarter reinforces the increasing demand for our product. Additionally,
 we have made meaningful progress in increasing operating efficiencies. As a
 result, our shipping cycle decreased from eight weeks to six weeks during the
 quarter."
     Align Technology will host a webcast and conference call on Thursday,
 April 26, 2001 at 9:00 a.m. EDT, 6:00 a.m. PDT to review first quarter 2001
 results, as well as discuss future operating trends and guidance on the
 outlook for the future. To access the webcast, go to the investor relations
 portion of Align Technology's website at www.invisalign.com. An archived
 webcast replay of the call will also be available at that website. To access
 the conference call please dial 415-537-1802 approximately ten minutes prior
 to the start of the call and enter reservation number 18581642. If you are
 unable to listen to the call, a taped replay will also be available beginning
 approximately one hour after the call's conclusion and will remain available
 through 11:00 a.m. EDT on May 3, 2001 and can be accessed by dialing 800-633-
 8284 with reservation number 18581642. The replay may be accessed from
 international locations by dialing 858-812-6440 using the same reservation
 number.
 
     About Align Technology, Inc.
     Align Technology designs, manufactures and markets the Invisalign System,
 a proprietary new method for treating malocclusion, or the misalignment of
 teeth. The Invisalign System 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, the Invisalign System significantly reduces the aesthetic
 and other limitations associated with braces. Invisalign is appropriate for
 treating adults and older teens. Align Technology was founded in March 1997
 and received FDA clearance to market the Invisalign System in 1998.
 
     This release may contain forward-looking statements based on Align
 Technology's current expectations. These forward-looking statements involve
 risks and uncertainties. A number of important factors could cause actual
 results to differ materially from those in the forward-looking statements.
 These factors include Align Technology's ability to achieve profitability, the
 adoption by orthodontists and consumers of the Invisalign System, Align
 Technology's successful enforcement of its intellectual property and avoidance
 of infringement on third party patents, Align Technology's ability to
 establish and maintain reliable, high-volume manufacturing capacity in the
 U.S. and internationally and Align Technology's ability to manage its
 significant growth and retain its key personnel. These factors, as well as
 other factors that could cause actual results to differ materially, are
 discussed in more detail in Align Technology's Annual Report on Form 10-K, as
 well as other reports and documents filed from time to time with
 the Securities and Exchange Commission.
 
 
      ALIGN TECHNOLOGY, INC.
      PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
       except per share data)
      UNAUDITED
                                         Three Months Ended  Three Months Ended
                                           March 31, 2001      March 31, 2000
     Statement of Operations Data:
 
     Revenues                                  $7,689                $629
 
     Cost of revenues                          10,352               1,938
 
     Gross loss                                (2,663)             (1,309)
     Operating expenses:
 
     Sales and marketing                       15,715               3,300
 
     General and administrative                 4,517               1,904
 
     Research and development                   2,872                 869
 
     Total operating expenses                  23,104               6,073
 
     Loss from operations                     (25,767)             (7,382)
 
     Interest and other income (expense), net   1,270                 (32)
 
     Pro forma net loss                      $(24,497)            $(7,414)
 
     Pro forma net loss per share available to
      common stockholders, basic and diluted   $(0.73)             $(1.42)
 
     Shares used in computing pro forma net
      loss per share available to common
      stockholders, basic and diluted          33,574               5,225
 
     Pro forma net loss per share, as adjusted,
      available to common stockholders,
      basic and diluted                        $(0.60)             $(0.35)
 
     Shares used in computing pro forma net
      loss, as adjusted, per share available
      to common stockholders, basic and
      diluted                                  40,726              21,479
 
 
     Pro forma net loss for all periods presented excludes stock based
 compensation expense. In addition, pro forma net loss for the quarter ended
 2001 excludes the dividend related to the beneficial conversion feature of
 preferred stock and related interest charges from the subordinated notes on
 the preferred stock.
 
     Shares used in computing pro forma net loss, as adjusted, per share per
 common stockholder assumes the conversion of preferred stock into common stock
 as of the date of original issuance for all periods presented.
 
 
      ALIGN TECHNOLOGY, INC.
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per
       share data)
      UNAUDITED
                                     Three Months Ended  Three Months Ended
                                        March 31, 2001     March 31, 2000
     Statement of Operations Data:
 
     Revenues                                $7,689              $629
 
     Cost of revenues                        11,554             2,026
 
     Gross loss                              (3,865)           (1,397)
     Operating expenses:
 
     Sales and marketing                     16,711             3,438
 
     General and administrative               6,905             2,156
 
     Research and development                 3,944             1,057
 
     Total operating expenses                27,560             6,651
 
     Loss from operations                   (31,425)           (8,048)
 
     Interest and other income (expense), net  (533)              (32)
 
     Net loss                               (31,958)           (8,080)
     Dividend related to beneficial
      conversion feature of preferred stock (11,191)               --
 
     Net loss available to common
      stockholders                         $(43,149)          $(8,080)
 
     Net loss per share available to common
      stockholders, basic and diluted        $(1.29)           $(1.55)
 
     Shares used in computing net loss per
      share available to common stockholders,
      basic and diluted                      33,574             5,225
 
     Pro forma net loss per share available
      to common stockholders, basic and
      diluted                                $(0.78)           $(0.38)
 
     Shares used in computing pro forma net
      loss per share available to common
      stockholders, basic and diluted        40,726            21,479
 
     Shares used in computing pro forma net loss per share per common
 stockholder assumes the conversion of preferred stock into common stock as of
 the date of original issuance for all periods presented.
 
 
      Align Technology, Inc.
      CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
      UNAUDITED
                                           March 31, 2001  December 31, 2000
     ASSETS
     Current assets:
 
     Cash and cash equivalents                $56,605           $2,828
 
     Restricted cash                            8,939           15,986
 
     Marketable securities, short-term         55,910            9,633
 
     Accounts receivable, net                   6,718            4,465
 
     Inventories                                2,614            2,024
 
     Deferred costs                             3,607            2,431
 
     Other current assets                       1,774            3,995
 
       Total current assets                   136,167           41,362
 
     Property and equipment, net               26,502           21,100
 
     Marketable securities, long-term           7,010            6,251
 
     Other assets                               1,872            1,848
 
       Total assets                          $171,551          $70,561
 
     LIABILITIES, CONVERTIBLE PREFERRED STOCK
      AND STOCKHOLDERS' EQUITY (DEFICIT)
     Current liabilities:
 
     Accounts payable                          $2,180           $5,541
 
     Accrued liabilities                       16,948           14,753
 
     Deferred revenue                           2,951            2,350
 
     Current portion of capital lease obligations 452              445
 
       Total current liabilities               22,531           23,089
 
     Capital lease obligations, net of current
      portion                                   1,337            1,455
 
       Total liabilities                       23,868           24,544
 
     Convertible preferred stock                   --          130,691
 
     Stockholder's equity (deficit):
 
     Common stock                                   5                1
 
     Additional paid-in capital               365,794          105,828
 
     Deferred stock-based compensation        (75,817)         (80,160)
 
     Notes receivable from stockholders        (1,858)          (1,814)
 
     Accumulated other comprehensive income       119               73
 
     Accumulated deficit                     (140,560)        (108,602)
 
       Total stockholders' equity (deficit)   147,683          (84,674)
       Total liabilities, convertible preferred
        stock and stockholders' equity
        (deficit)                            $171,551          $70,561
 
 SOURCE Align Technology, Inc.