We recently reiterated our Neutral rating on Align Technology, Inc. (ALGN) with a target price of $18.50 based on a P/E of approximately 34.3x our fiscal 2010 EPS estimate of 54 cents.
 
Align reported strong financial results for the fourth quarter and full fiscal 2009. In the fourth quarter, earnings per share was 15 cents, surpassing the Zacks Consensus Estimate of 9 cents and the year-ago earnings of 7 cents. In fiscal 2009, earnings per share were 41 cents, compared to 32 cents, a year-ago.
 
Total revenues in the fourth quarter increased 16.9% year over year to $86.6 million. Growth was driven by higher sales across both the North American Orthodontists and North American GP Dentists segments fueled by strong case shipments. Total number of cases shipped in the reported quarter were 61,060, an increase of 8.0% sequentially and 16.0% year over year.
 
Align witnessed an expansion in most of its key business metrics. Total number of cases shipped to North American Orthodontists, North American GP Dentists, and International cases increased 5.1%, 8.4%, and 11.9%, respectively, compared to the prior quarter. In terms of cases shipped by products – Invisalign Full, Invisalign Express, Invisalign Teen, and Invisalign Assist increased 7.4%, 1.3%, 4.3%, and 80.7%, respectively, compared to the prior quarter.
 
Total utilization rate, which is defined as the ratio of the number of cases shipped to the number of doctors to whom cases were shipped, was 3.3, compared to 3.1 in the prior quarter and 3 in the year-ago quarter.   
 
Total worldwide average selling price (ASP) in the quarter was $1,400, compared to $1,390 in the prior quarter and $1,370 in the year-ago quarter. International ASP was $1,610, compared to $1,560 in the prior quarter and $1,510 in the year-ago quarter.
 
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.
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