Align Technology (NASDAQ: ALGN)shareholders had plenty of reasons to be happy in 2016. The orthodontic-device maker'sstock soared nearly 50% last year. Align easily surpassed earnings expectations in the first three quarters of 2016. The company announced its fourth-quarter and full-year 2016 results after the market closed on Tuesday. Did Align pull off another win? Here are the highlights.
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Align results: The raw numbers
Data source: Align Technology.
What happened with Align this quarter?
Align's revenue set an all-time record for the company. Its clear aligner business continued to fire on all cylinders, with Invisalign case shipments up 18.5% year over year. This performance drove clear aligner revenue 17.5% higher than the prior-year period.
Even faster growth came from Align's scanner and services business unit. Sales soared 156.8% year over year to $41.7 million. This surge was driven largely by strong adoption of the company'siTero scanner.
However, Align's bottom-line performance in the fourth quarter was weaker than the prior-year period. The primary culprit was the strong U.S. dollar. Foreign exchange losses caused fourth-quarter earnings to come in around $0.08 lower than they would have been on a constant currency basis.
A key business development for Align in the fourth quarter was acollaborative agreement with Denmark-based 3Shape. Under this deal, the two companies are working together to improve interoperability between Align's iTiero scanners and 3Shape's dental software. Align also announced that three of 3Shape's scanners were approved for Invisalign case submission.
Align ended the fourth quarter with a strong cash position, reporting $700 millionin cash, cash equivalents, and marketable securities as of Dec. 31, 2016. The company spent $48 million during the quarter to repurchase shares. Align still has $300 million available for stock buybacks under its2016 repurchase plan announced in April.
What management had to say
Align Technology CEO Joe Hogan was certainly pleased with his company's performance:
The first quarter of 2017 appears to be shaping up nicely. Align projectsInvisalign case shipments during the quarter will be between 200,000 and 203,000. That's a solid year-over-year increase of 22% to 24%.
Align expects total revenue for the first quarter will be in the range of $295 millionto$298 million. Diluted earnings per share are projected to come in between$0.64and$0.67, including$12 millionin excess tax benefits.
Perhaps the biggest risk for Align in 2017 is competition from other companies that make clear aligners. However, Align appears to be prepared to fight -- both in the marketplace and in the court system. The company announced that it had filed a patent infringement lawsuit against ClearCorrect and Your Smile Direct on Tuesday.
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