Align Technology Announces $275 Million Open Market Repurchase

Rhea-AI Summary

Align Technology (ALGN) has announced plans to repurchase $275 million of its common stock through open market repurchases under its $1.0 billion stock repurchase program approved in January 2023. The repurchases will be executed via a Rule 10b5-1 trading plan and are expected to complete by January 2025, funded by cash on hand. As of September 30, 2024, Align had approximately 74.8 million shares outstanding and $1,041.9 million in cash and cash equivalents. The company cites strong balance sheet and cash flow generation as drivers for this decision.

Positive

• Strong cash position with $1,041.9 million in cash and cash equivalents
• $275 million share repurchase program indicates financial strength and commitment to shareholder value
• Robust cash flow generation enabling stock buybacks while maintaining strategic investments

Negative

• None.

Insights

Financial Analyst

The $275 million share repurchase announcement signals strong financial health and management confidence. With $1.04 billion in cash reserves and robust cash flow generation, this buyback represents a balanced approach to capital allocation. The program, part of a larger $1 billion authorization, should be completed by January 2025, reducing the 74.8 million outstanding shares and potentially boosting earnings per share.

The company's strategic investments in technology and market expansion, coupled with its dominant position in clear aligners, suggest this buyback won't compromise growth initiatives. The timing is opportunistic given recent market conditions and the Rule 10b5-1 trading plan provides a structured approach to execution, minimizing market impact while maximizing shareholder value.

Market Research Analyst

Align Technology's market position remains robust with significant growth potential in the 600 million consumer market opportunity. The company's extensive network of 271,000 doctor customers and treatment of 18.9 million patients demonstrates strong market penetration. The share repurchase reflects management's belief that the stock is undervalued relative to these growth prospects.

The doctor-centered business model, combined with the Align Digital Platform ecosystem, creates high switching costs and competitive advantages. This strategic positioning, along with the company's commitment to technological advancement, suggests sustainable long-term growth potential beyond the current market valuation.

TEMPE, Ariz.--(BUSINESS WIRE)-- Align Technology, Inc. (“Align”) (Nasdaq: ALGN), a leading global medical device company that designs, manufactures, and sells the Invisalign® System of clear aligners, iTero™ intraoral scanners, and exocad™ CAD/CAM software for digital orthodontics and restorative dentistry, today announced that it is planning to repurchase $275 million of Align’s common stock through open market repurchases under Align’s $1.0 billion stock repurchase program that was approved by Align's Board of Directors in January 2023.

“Today’s announcement of our intention to repurchase $275 million of our common stock through open market repurchases reflects the strength of our balance sheet and cash flow generation, as well as management's and the Board’s continued confidence in our ability to capitalize on our large and untapped market opportunity while allowing us to provide value back to our shareholders,” said John Morici, Align CFO and executive vice president, global finance. “As the leader in clear aligners, we have made strategic investments in technology and scalability to enable a new phase of growth to transform the orthodontic industry and we remain confident in our ability to make the Invisalign® System the standard of care in orthodontics through our doctor-centered model.”

The open market repurchases of Align’s common stock will be executed pursuant to a Rule 10b5-1 trading plan. The timing and number of shares repurchased will be based on an evaluation of market conditions and other factors, including stock price, trading volume, general business and market conditions, and capital availability. The repurchases are expected to be completed by the end of January 2025 and will be funded with Align’s cash on hand. As of September 30, 2024, Align had approximately 74.8 million shares outstanding and $1,041.9 million in cash and cash equivalents.

About Align Technology, Inc.

Align Technology designs and manufactures the Invisalign® System, the most advanced clear aligner system in the world, iTero™ intraoral scanners and services, and exocad™ CAD/CAM software. These technology building blocks enable enhanced digital orthodontic and restorative workflows to improve patient outcomes and practice efficiencies for over 271 thousand doctor customers and are key to accessing Align’s 600 million consumer market opportunity worldwide. Over the past 27 years, Align has helped doctors treat approximately 18.9 million patients with the Invisalign System and is driving the evolution in digital dentistry through the Align™ Digital Platform, our integrated suite of unique, proprietary technologies and services delivered as a seamless, end-to-end solution for patients and consumers, orthodontists and GP dentists, and lab/partners. Visit www.aligntech.com for more information.

For additional information about the Invisalign system or to find an Invisalign doctor in your area, please visit www.invisalign.com. For additional information about the iTero digital scanning system, please visit www.itero.com. For additional information about exocad dental CAD/CAM offerings and a list of exocad reseller partners, please visit www.exocad.com.

Invisalign, iTero, exocad, Align, Align Digital Platform and iTero Lumina are trademarks of Align Technology, Inc.

Forward-Looking Statements

This news release contains forward-looking statements including statements regarding the expected completion date of the open market repurchases, the aggregate value and number of shares of common stock to be repurchased, Align's expectation that it will finance the repurchases with cash on hand, our confidence in our products and ability to capitalize on market opportunities, that the repurchases will provide value to our shareholders, as well as other statements regarding the open market repurchases along with our confidence in our business model. Forward-looking statements contained in this news release relating to expectations about future events or results are based upon information available to Align as of the date hereof. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. As a result, actual results may differ materially and adversely from those expressed in any forward-looking statement.

The foregoing and other risks are detailed from time to time in our periodic reports filed with the Securities and Exchange Commission ("SEC"), including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 28, 2024, and our latest Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, which was filed with the SEC on August 2, 2024. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241025624414/en/

Align Technology

Madelyn Valente

(909) 833-5839

mvalente@aligntech.com



Zeno Group

Sarah Johnson

(828) 551-4201

sarah.johnson@zenogroup.com

Source: Align Technology, Inc.

FAQ

How much stock will Align Technology (ALGN) repurchase in its new buyback program?

Align Technology will repurchase $275 million of its common stock through open market repurchases.

When will ALGN complete its $275 million stock repurchase program?

The stock repurchase program is expected to be completed by the end of January 2025.

How much cash does Align Technology (ALGN) have as of September 2024?

As of September 30, 2024, Align Technology had $1,041.9 million in cash and cash equivalents.

How many shares of ALGN were outstanding as of September 2024?

Align Technology had approximately 74.8 million shares outstanding as of September 30, 2024.