Align Technology (NSDQ:ALGN) got a big Wall Street boost today after reporting a big increase in sales and strong growth in shipments of its flagship Invisalign product.
The medical device maker reported a 15.1% uptick in Invisalign shipments compared with the same time last year, according to the company. Q1 Invisalign revenues amounted to $141.6 million, compared with $123.3 million in Q1 2012, a top-line increase of 14.8% for the product.
In total Align posted a 13.7% increase in sales but swung to losses on special charges. Adjusted for 1-time charges the company posted earnings of 32.9¢, blowing away analysts’ consensus earnings estimate of 23¢ per share. ALGN shares were up 4.8% to $31.58 as of about 2:05 p.m. today.
"Q1 was a solid quarter across the board," president & CEO Thomas Prescott said in prepared remarks. "We’ve started the year with better than expected revenue and non-GAAP earnings driven primarily by record Invisalign case volume."
In total Align reported losses of $42 million, or 52¢ lost per share, on sales of $153.6 million during the 3 months ended March 31, 2013. That compared with earnings of $21 million, or 26¢ per share, on sales of $125.1 million during Q1 of 2012.
Align took some hits in the Invisalign business due to a change in its mid-course correction policy, which is due to take effect June 15, 2013. That correction resulted in a $2.7 million revenue decrease, the company reported, which was off-set by $4.4 million in revenue expected from the consolidation of some Vivera retainer product shipments from 4 per year to 1.
Revenues generated by Align’s scanner and CAD/CAM product was effectively flat at $12 million in the most recent quarter, including $1.4 million that was deferred in the last half of fiscal 2012. New competition from low-priced orthodontic and general dentistry scanners forced Align to revise expectations for that business, and the company recorded a $26.3 million impairment in assets and a $40.7 million impairment in goodwill for the scanner and CAD/CAM division.
"Although we determined it was appropriate to record the impairment charges related to the scanner and CAD/CAM services unit, our long term view of this business remains positive and we will continue to execute plans to be a leader in this business," Prescott said. "In addition, we continue to see leverage in the Invisalign business from scanner technology and maintain our belief in the long term benefits of the scanner and CAD/CAM services business."
