Align Technology Announces Fourth Quarter and Year Ended 2016 Results SAN JOSE, CA -- (Marketwired

Align Technology Announces Fourth Quarter and Year Ended 2016 Results

SAN JOSE, CA -- (Marketwired - January 31, 2017) - Align Technology, Inc. (NASDAQ: ALGN)

-- Record 2016 revenues of $1.1 billion, up 27.7% year-over-year, and

diluted EPS of $2.33

-- 2016 Invisalign case shipments of 708.5 thousand cases, up 21.5% year-

-- Q4 revenues up 27.3% year-over-year to $293.2 million

-- Q4 Clear Aligner** revenues up 17.5% and Scanner revenues up 156.8%

-- Q4 Invisalign case shipments up 18.5% year-over-year to 190.1 thousand

cases, international Invisalign case shipments up 25.0% year-over-year

-- Q4 diluted EPS $0.59, down $0.01 year-over-year

Align Technology, Inc. (NASDAQ: ALGN) today reported financial results for the fourth quarter and year ended December 31, 2016. Invisalign case shipments in the fourth quarter of 2016 (Q4'16) were 190.1 thousand, a 18.5% increase year-over-year. For Q4'16, revenues were $293.2 million, a 27.3% increase year-over-year, and net profit was $47.6 million, or $0.59 per diluted share, down $0.01 per diluted share compared to the same period in the prior year. Q4'16 EPS was unfavorably impacted by a stronger U.S. dollar, which amounted to approximately $0.08 per diluted share due to net foreign exchange losses related to the revaluation of certain balance sheet accounts.

For 2016, Invisalign case shipments were 708.5 thousand cases and iTero scanner shipments were 3,970 units, an increase of 21.5% and 229.6%, respectively. For 2016, revenues were $1.1 billion, a 27.7% increase year-over-year and net profit was $189.7 million, or $2.33 per diluted share, up $0.56 per diluted share compared to the prior year.

Commenting on Align's Q4 and 2016 results, Align Technology President and CEO Joe Hogan said, "Q4 was another record quarter for Align, reflecting continued strong growth across all geographies and customer channels compared to the prior quarter last year. These results helped us to exceed $1 billion in annual revenue for the first time in our history. In addition, more than 700 thousand patients started orthodontic treatment with Invisalign clear aligners in 2016, helping us to surpass our 4 millionth Invisalign patient. We also saw strong adoption of our new iTero Element scanner this year, which more than tripled our scanner shipments over the prior year."

GAAP Summary Financial Comparisons

Fourth Quarter Fiscal 2016

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Q4'16 Q3'16 Q4'15 Change Change

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Shipments* 190,055 177,755 160,400 +6.9% +18.5%

Net Revenues $ 293.2M $ 278.6M $ 230.3M +5.2% +27.3%

Clear Aligner** $ 251.5M $ 243.7M $ 214.0M +3.2% +17.5%

Scanner & Services $ 41.7M $ 34.9M $ 16.2M +19.3% +156.8%

Net Profit $ 47.6M $ 51.4M $ 48.9M (7.3)% (2.6)%

Diluted EPS $ 0.59 $ 0.63 $ 0.60 $ (0.04) $ (0.01)

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2016 2015 Y/Y Change

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Invisalign Case Shipments* 708,500 583,235 +21.5%

Net Revenues $ 1,079.9M $ 845.5M +27.7%

Clear Aligner** $ 958.3M $ 800.2M +19.8%

Scanner & Services $ 121.5M $ 45.3M +168.3%

Net Profit $ 189.7M $ 144.0M +31.7%

Diluted EPS $ 2.33 $ 1.77 $ 0.56

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Note: Changes and percentages are based on actual values and may effect

totals due to rounding

* Invisalign Shipment figures exclude SmileDirectClub aligners

** Clear aligner revenue includes revenues from Invisalign clear aligners

and SmileDirectClub aligners

As of December 31, 2016, Align had $700.0 million in cash, cash equivalents and marketable securities compared to $678.7 million as of December 31, 2015. We repurchased approximately 0.4 million shares of stock for $38.0 million in Q4'16 under the April 2014 Repurchase Program. Subsequent to year-end, the Company purchased the remaining shares under this plan for $3.8 million completing the Align 2014 Repurchase Plan. Align has $300.0 million available for repurchase under its 2016 Repurchase Plan announced on April 28, 2016.

2016 Business Highlights

The following list highlights Align's key announcements over the past year:

-- Launched iTero Element 1.4 software and Invisalign Outcome Simulator 4.0

application: Align announced the iTero Element 1.4 new software upgrade

which includes color scanning, restorative pre-treatment scanning and

optimized orthodontic scanning. In addition, the iTero scanners include

the enhanced Invisalign Outcome Simulator 4.0 application now with

Invisalign 3D Progress Tracking and Patient Simulation Sharing.

-- Launched Invisalign G7: Align announced Invisalign G7, a new set of

features designed to deliver greater control of tooth movements and

improved treatment outcomes. Invisalign G7 builds on earlier Invisalign

G-series releases with new features to fine-tune certain tooth movements

and deliver treatment outcome quality that Invisalign providers expect,

particularly with teenage patients.

-- Weekly Aligner Wear Recommendation: Align announced one-week aligner

wear recommendation for all Invisalign Full, Teen and Assist products

instead of two-week aligner wear for each stage of Invisalign treatment.

Continued Invisalign product innovation including "G-Series" features,

SmartTrack aligner material, and clinically proven treatment

predictability, allowed the company to confidently recommend one-week

-- Launched ClinCheck Pro 5.0: Align announced ClinCheck Pro 5.0, the next

generation Invisalign treatment software, with ability to view side-by-

side treatment plans, a more realistic 3D visual model, and a new

configurable toolbar for even greater flexibility.

-- 4 Million Patients Milestone: Align announced that 4 million patients

started treatment with Invisalign clear aligners. This is a significant

accomplishment for the company and the 100,000 Invisalign-trained

doctors around the world, demonstrating increased global acceptance of

Invisalign treatment as a preferred choice for straightening teeth.

-- SmileDirectClub Supplier Agreement: Align announced a supply agreement

with SmileDirectClub to manufacture non-Invisalign clear aligners for

SmileDirectClub's doctor-directed, at-home program for affordable,

cosmetic teeth straightening. SmileDirectClub aligners will include up

to 20 stages without attachments or interproximal reduction (IPR), and

will be manufactured by Align per SmileDirectClub's specifications for

minor tooth movement.

-- Research Awards Program for 2016 and 2017: Align announced the Research

Awards Program for 2017. This is an ongoing annually funded program

established in 2010 and designed to promote clinical and scientific

dental research in universities across the globe. Align also announced

that fourteen research awards totaling $310,000 were awarded to four

universities in North America and eight International universities under

-- 3Shape Trios Scanner Interoperability: Align announced that 3Shape's

TRIOS Standard, TRIOS Color and TRIOS 3 scanners were qualified in

Q4'16 for Invisalign case submission. Align and 3Shape also announced a

collaborative agreement to enhance the existing STL export workflow with

iTero scanners and laboratory partners using 3Shape Dental System

Software which will enable improved consistency for customers using the

-- Invisalign Commercially Available in India: Align announced commercial

availability of the Invisalign system in India in February 2016. Align

is offering a comprehensive range of products including Invisalign Full,

Invisalign Teen, Invisalign Lite clear aligners, and Vivera Retainers.

Align began training doctors in Delhi, Mumbai, Pune, Chandigarh,

Chennai, and expanded into Bangalore, Ahmedabad, Hyderabad, Calcutta,

and Cochin over the year. Align also launched a consumer marketing

-- ERP System Implementation: Align implemented a new ERP system in July,

which provides a foundation that enables new capabilities, improves

speed of execution, and will be used to improve Align's customers'

Q1 2017 Business Outlook