Align Beats Zacks Estimate – Analyst Blog

 

Align Technology, Inc. (ALGN) reported first quarter fiscal 2010 earnings per share of 20 cents, beating the Zacks Consensus Estimate of 13 cents and 5 cents in the corresponding period, a year-ago. Total revenues in the first quarter increased 28.5% year over year to $90.1 million. Growth was driven by higher sales across the North American Orthodontists, North American GP Dentists and International business segments, fueled by strong case shipments. Total number of cases shipped in the reported quarter were 63,610, an increase of 4.2% sequentially and 27.1% year over year.

Align witnessed an expansion in most of its key business metrics. Total number of cases shipped to North American Orthodontists and North American GP Dentists increased 12.0%, and 2.8%, respectively, compared to that in the prior quarter. However, International cases declined 4.3% quarter over quarter.

In terms of cases shipped by products – Invisalign Full, Invisalign Express and Invisalign Assist increased 5.2%, 8.1% and 19.0%, respectively compared to the prior quarter. However, Invisalign Teen declined 9.9% quarter over quarter. Total utilization rate, defined as the ratio of the number of cases shipped to the number of doctors to whom cases were shipped, was 3.5, compared to 3.3 in the prior quarter and 2.9 in the year-ago quarter.

Total worldwide average selling price (ASP) in the quarter was $1,395, compared to $1,400 in the prior quarter and $1,365 in the year-ago quarter. International ASP was $1,590, compared to $1,610 in the prior quarter and $1,450 in the year-ago quarter.

Both Non-GAAP Gross Margin and Non-GAAP Operating Margin increased 310 basis points and 1,510 basis points year over year to 78.3% and 23.9%, respectively. Non-GAAP figures in both these cases include royalties associated with Align’s settlement with Ormco.

Align ended the first quarter with cash, cash equivalents, and short-term marketable securities of $205.4 million, registering a sequential increase of 10%. The company had no outstanding debt at the end of the first quarter.

Align has provided detailed guidance for the second quarter of fiscal 2010. For the next quarter, net revenues are estimated between $88.0 million and $91.0 million. Earnings per share should be in the range of 12 to 14 cents. Gross margin should range between 75.6% and 76.4%. Operating margin should be in the range of 16.0% to 17.6%.

In the second quarter, total case shipments are estimated in the range of 63,500 to 65,500. Total capital expenditure should be $3.0 million to $5.0 million.

Align Technology is engaged in the design, manufacture, and marketing of Invisalign, a proprietary system for treating malocclusion, or crooked teeth. Invisalign is approved for the treatment of all types of crooked teeth in patients with mature dentition or fully erupted molars.

Presently, we are ‘Neutral’ on Align.