Align's Revenues Miss Estimations - Analyst Blog site

Align Technology (ALGN) mentioned 4th quarter adjusted EPS of 14 cents, missing out on both the Zacks Consensus Estimate of 17 cents and the year-ago quarter & rsquo; s 16 cents. For fiscal 2010, adjusted EPS came in at 80 pennies, skipping the Zacks Consensus Estimate by 2 pennies, however above 41 pennies in 2009.

Complete profits boosted 7.3 % year over year to $92.9 thousand (within the firm & rsquo; s guidance of $90.5--$93.0 million), hardly defeating the Zacks Consensus Estimate of $92.0 thousand. For fiscal 2010, revenue can be found in at $372.8 thousand (after adjusting for $14.3 thousand of formerly deferred earnings for Invisalign Teen substitute aligners), up 19.4 % compared with 2009 and marginally topping the Zacks Consensus Estimate of $372.0 million.
In spite of greater incomes, EPS boiled down as a result of lower gross and running margin. While gross margin boiled down by 140 basis indicate 77.2 % compared to the 4th quarter of 2009, adjusted operating margin decreased by 460 basis points to 17.2 %.

The primary reason for the huge decline in operating margin was a 13.2% rise in operating expenses driven by higher sales and marketing (8.4%), general and administrative (20.3%), and research and development (19.2%) expenses.
Align recorded 36.4% of total sales from North American GP Dentists (declined 8.1% quarter over quarter to $33.8 million), 31.1% from North America orthodontists (declined 7.2% to $28.9 million), 26.7% from international (grew 6.9% to $24.8 million) and 5.8% from non-case revenue (increased 12% to $5.4 million).

On a sequential basis, barring revenue from non-case products which increased 12% to $5.4 million, all the products in Align’s portfolio recorded a decline. The company’s highest contribution (69.8% of total revenues) comes from Invisalign Full, which declined 2.6% compared to the third quarter of fiscal 2010.

Other products including Invisalign Teen (down 6.2% to $10.6 million), Invisalign Express (6.4% to $8.3 million), and Invisalign Assist (13.7% to $3.7 million) had a disappointing quarter.

Align recorded a 6.6% improvement in international average selling price (ASP) ($1,525), while the blended pricing improved marginally (0.72% to $1,400). The company said that although it had been struggling regarding the case shipments in the US market in the beginning, the situation improved in the second half of the year and continued into the first quarter of 2011.

The total number of cases shipped in the reported quarter increased 3.9% annually to 63,490 (company’s guidance of 61,500 − 63,000), but declined 4.1% sequentially. While cases shipped to the International market remained almost unchanged at 16,295, cases shipped to North American Orthodontists and North American GP Dentists declined 5.3% and 5.8%, respectively.

Moreover, cases shipped for Invisalign Full, Invisalign Express, Invisalign Teen and Invisalign Assist recorded declines of 2.4%, 9.1%, 8.6% and 3.5%, respectively.

Along with quarterly results, Align provided an update regarding its operations. The company has received approval from the Chinese State Food and Drug Administration (SFDA) to market the Invisalign system as a Class II medical device to treat malocclusion. Invisalign is expected to be commercially available in the second half of 2011.
This is a significant achievement for the company as it would help Align to expand its foothold into one of the fastest growing markets for orthodontics, China. Moreover, in January 2011, Align entered into an agreement to jointly develop software applications that will run on Cadent scanners and be used for Invisalign treatment. Read the full info on invisalign cost Manly here at this site.

Guidance

Align provided its outlook for the first quarter of fiscal 2011. It expects total revenue and EPS to be in the range $99.0−$102.5 million and 15 cents−17 cents, respectively. Although the revenues guidance exceeds the Zacks Consensus Estimate of $95 million, the EPS guidance lags behind the Zacks Consensus Estimate of 19 cents.
Case volumes are expected to be in a range of 67,000 − 69,500. Gross margin and operating margin should range within 77.3%–77.8% and 17.2% − 18.8%, respectively. Align expects to generate cash and cash equivalents of $315-$320 million while $8–$10 million of capital expenditures.

Recommendation

Align has undertaken several strategies to further penetrate the malocclusion market. However, Align’s performance was affected by lower demand from the US GP dentists and the elimination of the minimum case requirements program.

As expected, this trend continued in the fourth quarter as well. We also remain concerned about the economic uncertainty as dental procedures, being elective in nature, often get deferred.

Back to braces An old treatment for back discomfort is making a comeback.

With expanding evidence that most medical procedures for back pain are largely inadequate, patients are discovering relief from a shockingly basic therapy.

The back brace, re-engineered to make it more comfortable and effective, is rebounding. A handful of new braces have been introduced in the previous a number of months, with more anticipated this year. The braces are made to relieve the stress on vertebral disks that are usually the source of lower-back pain.

The brand-new braces are a much cry from the conditional and heavy back braces offered a decade ago. The aged designs were created to limit motion and immobilize the spine. Not just were the braces impractical to use, they typically resulted in intense weakening of abdominals, creating a variety of new health and wellness troubles.
The new models are made of lighter-weight, flexible materials. Instead of immobilizing the back, the new braces are designed to "unload" the pressure on a disk while still allowing patients to maintain a normal range of movement.
Such innovation is helping spur renewed interest in braces. Meanwhile, physicians are becoming increasingly disillusioned with current treatments for the 20 million people affected by back pain each year in the United States. Injection treatments, disk-heating procedures and back fusion surgery have posted disappointing results in clinical studies as well as the real world. Although the procedures are still a good option for certain patients, doctors increasingly believe many more patients could benefit from trying less-invasive options, like braces, first.
"Because we have a lot of 'failed-back syndrome' and people who don't do well, you really want to exhaust nonoperative treatments," says Daniel Lee, orthopedic spine surgeon in Las Vegas.

"Patients have very good results," said Linda Dean, certified prosthetist and orthotist and owner of Dean Prosthetic and Orthotic Services in Evanston.

The braces aren't a cure-all. Even a 2-pound lightweight brace can be too heavy for a frail 80-year-old, Dean said. And wearing a brace might reduce patients' willingness to take more active steps to relieve pain, like exercising and losing weight, said Dr. Richard S. Rabinowitz, an orthopedic spinal surgeon in Hoffman Estates and Elk Grove Village.
Others say the devices can provide a respite that helps interrupt pain signals and allows patients to begin physical therapy and muscle-strengthening exercises.

Nicholas Pellegrino, a 72-year-old semiretired mortgage banker, began wearing a new brace just over a week ago. Before the treatment, the Lynbrook, N.Y., man found it difficult to even take a few steps. "On a scale of one to 10 for pain, I was a 10," Pellegrino says. "After the brace, I'm about a four. It's difficult to put it into words, I feel so much better."

The brace used by Pellegrino, the Disc Unloader from Corflex of Manchester, N.H., wraps around the abdomen and is cinched tight using Velcro straps. The 2-pound brace eases the pressure on the disks by shifting the burden of back support to the abdomen. The brace has been shown to reduce disk pressure by 41 percent. Pellegrino says wearing the snug brace isn't entirely comfortable and makes him look about 10 pounds heavier, but it's a small price to pay to ease his back pain.

The Unloader brace and others like it generally are worn for a few hours at a time, depending on how much relief is needed. They are available only by prescription, because long-term use can still lead to some weakening of the abdominal muscles so patients must do daily abdominal strengthening exercises. Pellegrino has begun pedaling a stationary recumbent bike to boost his strength.

Doctors say that in addition to providing short-term pain relief, use of the braces manly can help break the psychological cycle of back pain, which often leads to depression and inactivity, which in turn, exacerbates the back problem.
"It's a crutch to reduce the pain and to get people into sound exercise regimens," says Vijay Vad, sports-medicine specialist at Hospital for Special Surgery in Manhattan who designed the Corflex brace and receives royalties from sales.

The Orthotrac Pneumatic Vest, made by Orthofix International of Huntersville, N.C., also "unloads" pressure from the disk. But instead of shifting back support to the abdomen, the Orthotrac device, introduced last year, transfers the weight to the hips. The vest, which weighs about five pounds, uses an inflation device to push "lifters" up against the rib cage and down against the pelvis. It sounds odd, but the gentle pressure is likened to a tight belt, and patients say it's mild compared with the discomfort of back pain.

"It does restrict your activity but it makes the difference between having pain and not having pain," said David Zeiger, a Chicago osteopathic doctor who prescribes the vest for patients and has used it himself.

According to early clinical trial results presented to the North American Spine Society in December, patients using the Orthotrac device reported significant pain relief compared with an older- style brace.

Rabinowitz said he'd like to see more thorough randomized, blinded studies showing the new devices are effective for treating lower-back pain caused by pressure on spinal disks. Meanwhile, he said, using a brace is a low-risk strategy for some patients.

"Is it possible it may be of benefit? Yes. Is there a huge down side? No. If it doesn't work, take it off," he said.
Typically, patients whose pain is caused by pressure on spinal disks are candidates for the braces. Patients with other types of back pain or those who can't stand up straight because of the pain might not be good candidates for braces, which typically are covered by insurance.

Benedetta Riccardo, a 46-year-old retired baker from Utica, N.Y., has suffered for three years from herniated disks. In June, she began wearing the Orthotrac device. She's not entirely pain- free, but no longer needs pain pills. She concedes the device is a bit awkward, but worth it.

"At least I can pick up my grandchildren, which I couldn't do before," Riccardo says. "I can walk a little bit. I can go shopping, which I couldn't do before. I can do normal things."
- Daily Herald Features Editor Anna Madrzyk contributed to this story

Halloween Isn't Much of a Surprise For Orthodontists

At some point late last night, the after-hours phone calls began. Metal brackets glued to tooth enamel began to pop. Cables were twisted out of place, jabbing cheeks and aggravating gums.

Some orthodontists have called it Halloween Hell, Candy Craze and, this year, Black Thursday.
For the next week approximately, orthodontists' workplaces will be flooded. All that hard, tacky, chewy sweet and gum spilling out of sacks collected from the next-door neighbors isn't really just bad for you; it's killer on braces.

"It's all hands on deck, no trip time for anybody," claimed Lee W. Graber, a trustee to the American Association of Orthodontists who techniques in a Chicago residential area.
The emergency calls and extra appointments start to trickle in on the days leading up to Halloween, flare on the day after, steadily continue for a week and then taper off as the candy supply lessens. The extra workload can last six weeks, because it takes some patients a while to realize problems, said Harold L. Frank, an orthodontist with offices in Arlington and Woodbridge.
And some problems are not so minor; braces relinquish their straightening powers if any breakage is not corrected immediately. That means scheduling several emergency appointments on an already full calendar.

"Whatever your imagination can run with, it's worse than that," Frank said. "We warn the staff, but there's nothing you can do to avoid it."
Although a majority of the patients are children and teenagers, orthodontists say some of their adult patients also slip up occasionally. That's why orthodontists remind everyone of the rules.
"We always tell them, 'Remember, guys, it's Halloween. Don't eat anything hard or sticky,' " said Kathleen Tompros, an orthodontist assistant in Ellicott City. "But you know they will. It's Halloween."

Andrew Schwartz can usually predict which of his patients will land in his chair most often, but those predictions go out the window during Halloween, because everyone is tempted. Things got so busy in his Rockville orthodontic office last year that he hired another staff assistant for the week this year.

Schwartz, who also has a D.C. office, sees three extremes: There are the perfect, studious patients who follow all the rules and never, ever eat anything from the list of forbidden things. Then there are the kids who try to be good, but he can tell they don't follow the rules -- telltale gum fragments caught in wires and tattling siblings build the case. And then there are the unashamedly bad kids who sit in the dentist's chair, awaiting their appointment, and loudly chew gum. You could try these out Braces Manly too.

"It's a traditional bell curve," Schwartz says. "No one is perfect, and not many are that bad. . . . During Halloween, they all break the rules."

Daniel Holter, 12, of La Plata says he is in the second category. He tries to follow the rules, but he also really likes gummy worms, Airhead taffy and Dubble Bubble Gum. Although he has yet to break or bend anything, he has spent hours pulling gum out of his braces.

"Totally worth it," he said.
Kassi Thompson, 10, has been more careful since she busted the spreader for her upper jaw, a precursor to braces, when she bit into a Slim Jim in the summer. She still sucks on Skittles occasionally, but she said yesterday that any other sticky or hard candy she collects while trick-or-treating as a Goth girl goes to her dad and other family members.

Grayslake Orthodontist at identification Orthodontics Joins French Study.

Dr. Michael Stosich, a Lake Forest and Grayslake orthodontist and craniofacial professional, just recently left for Montpellier, France to participate in a French and American clinical group collaboration performing analysis on complex orthodontic and craniofacial instances.

Stosich's involvement with this team started three years earlier throughout his time at Children's Hospital of Philadelphia, where he completed a craniofacial fellowship. UNITED STATE orthodontic and clinical experts are collaborating with French craniofacial and pediatric specialists on cutting-edge therapies and analysis.

"We're identifying means of bringing treatment to cleft people and those along with Crouzon Syndrome," stated Stosich, whose technique-- identification Orthodontics-- provides orthodontics for grownups and children. "We're also performing lab analysis and considering methods to introduce tissue engineering to this mix.".
Stosich has brought a new perspective to the research into treatment modalities, because an orthodontist is not among the French team.

"It's truly a privilege to be part of this research," said Libertyville orthodontist, Dr. Michael Stosich.

Work will focus this year on how to develop trained craniofacial teams. Accomplishing this will improve the present French scenario where pediatric surgeons perform a surgical procedure with no orthodontic guidance or input. Then the patient gets referred to a private practice orthodontist for further treatment. In the States, every treatment aspect is integrated from the day the baby is born, and the collaboration among specialists continues as the child grows. Have a peek at this web-site Orthodontist Manly and learn more.

"Our desire is to advance French treatment to the point where an orthodontist is brought in once a week instead of referring the patient to a private practice," Stosich said. "It's exhilarating to have a role in improving treatment for patients globally."

Decatur, Ga.-based company intends 'online bank' intended at orthodontists.

The Atlanta Journal-Constitution Knight Ridder/Tribune Business News
Jul. 22-- Brace on your own.

A Decatur-based firm intends to obtain a Dalton-based second hand and convert it in to a "virtual financial institution" to fund orthodontists and their patients using the Internet.
The thrift will make loans to consumers for orthodontic treatments, and also acquisition orthodontists' receivables-- the prices owed by clients-- for its very own financing profile, or to sell in the secondary market.

A lot more such specialized "online banks" can be en route, pointed out T. Stephen Johnson, chairman of PracticeBank Financial, which is buying Georgia Community Bank, with assets of $50 million.

The deal is expected to be completed by late September, if federal thrift regulators and Georgia Community Bank shareholders approve. Terms weren't disclosed.

"If we're successful, there are other types of professions that it should work for, such as plastic surgery, LASIK eye surgery and cosmetic dentistry," said Johnson, a founder of Alpharetta-based NetBank. "You're looking for any service that's a big-ticket item that insurance companies won't pay for."

In most of the United States, two years' worth of full traditional braces cost about $5,000. Ceramic brackets are about $500 extra. These costs do not include X-rays, extractions or special appliances.

Some 4 million Americans have braces on their teeth at any given time, according to the American Association of Orthodontics.

Problem is, not all insurance plans offer orthodontic coverage. And those that do only cover a portion of the total cost.
"At best, it's 50 percent," said Dr. Harold Enoch, a Marietta orthodonist who, like others, finances his patients' treatments.

"What PracticeBank will do is help the patient and the orthodontist to provide additional means of financing," said Enoch, a PracticeBank director.

PracticeBank will purchase the receivables of orthodontists like Enoch.

"My average accounts receivable at any given time is between $400,000 to $500,000," Enoch said.
PracticeBank also will make loans to help orthodontists expand their practices, Johnson said.

The privately held thrift holding company is being helped by a new regulation that permits financial institutions to accept checks in electronic form, beginning Oct. 28.

"This means that an orthodontist, or any other business, can simply take a check, swipe it through a machine and the check will clear, depositing the proceeds in the orthodontist's account, and charging the patient immediately," said Walter G. Moeling IV, PracticeBank's attorney.  Find out more by going this Orthodontist Manly link.

"So there's no need for the physical proximity of a bank branch to deposit checks," said Moeling, a partner in the Atlanta law firm of Powell Goldstein Frazer & Murphy.

As for making consumer loans for orthodontic work, Johnson considers it "pretty safe."
"You don't get the wire out of your mouth unless you make the last payment," he said, chuckling.