Smile Direct Club Ipo Range

Smile direct club ipo range

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, (GLOBE NEWSWIRE) -- (NASDAQ: SDC) today announced its financial results for the quarter ended .

Third Quarter 2019 Financial Highlights

  • Third quarter total revenue increased , or 50.6%, over the third quarter of 2018, to .
  • Third quarter net loss of .
  • Third quarter Adjusted EBITDA of .
  • Third quarter diluted EPS of .

Key Operating Metrics

  • Third quarter unique aligner shipments of 106,070, compared to 72,387 in the third quarter of 2018.
  • Average aligner gross sales price (“ASP”)1 of compared to in the third quarter of 2018.

“Post-IPO, our team is laser focused on execution.

Our results for the quarter, all of which exceeded management’s expectations, are a testament to the strength and momentum of the underlying business,” said , SmileDirectClub’s CFO.

SmileDirectClub’s Chairman and CEO, continued, “Q3 was a good quarter. We were able to demonstrate our ability to execute.

We have an incredible team, the best I have ever worked with.

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Overall, our business is better positioned than ever to capitalize on the massive market opportunity in front of us, and we look forward to demonstrating that in the quarters to come.”

Business Outlook

Our guidance for the fiscal year 2019 is as follows:

  • Revenues are expected to be in the range of , representing growth of 78% year-over-year at the mid-point of the range.
  • Adjusted EBITDA for the fiscal year is expected between .

Conference Call Information

SmileDirectClub Third Quarter 2019 Conference Call Details
Date:Tuesday, November 12, 2019
Time:4:30 p.m.

ET (1:30 p.m. PT)

Dial-In: 1-877-407-9208 (domestic) or 1-201-493-6784 (international)
Webcast: Visit “Events and Presentations” section of the company’s IR page at http://investors.smiledirectclub.com.

A replay of the call may be accessed from 7:30 p.m.

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ET on Tuesday, November 12, 2019 until 11:59 p.m ET on Tuesday, November 26, 2019 by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the replay PIN: 13694923. An archived version of the call and a copy of the 2019 Q3 Results supplemental earnings presentation will also be available upon completion on the Investor Relations section of SmileDirectClub’s website at http://investors.smiledirectclub.com.

Forward-Looking Statements

This earnings release contains forward-looking statements.

All statements other than statements of historical facts may be forward-looking statements.

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Forward-looking statements generally relate to future events and include, without limitation, projections, forecasts and estimates about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. Some of these statements may include words such as “expects,” “anticipates,” “believes,” “estimates,” “targets,” “plans,” “potential,” “intends,” “projects,” and “indicates.”

Although they reflect our current, good faith expectations, these forward-looking statements are not guarantees of future performance, and involve a number of risks, uncertainties, estimates, and assumptions, which are difficult to predict.

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Some of the factors that may cause actual outcomes and results to differ materially from those expressed in, or implied by, the forward-looking statements include, but are not necessarily limited to: our management of growth; the execution of our business strategies, implementation of new initiatives, and improved efficiency; our sales and marketing efforts; our manufacturing capacity, performance, and cost; our ability to obtain future regulatory approvals; our financial estimates and needs for additional financing; consumer acceptance of and competition for our clear aligners; our relationships with retail partners and insurance carriers; our R&D, commercialization, and other activities and expenditures; the methodologies, models, assumptions, and estimates we use to prepare our financial statements, make business decisions, and manage risks; laws and regulations governing remote healthcare and the practice of dentistry; our relationships with vendors; the security of our operating systems and infrastructure; our risk management framework; our cash and capital needs; our intellectual property position; our exposure to claims and legal proceedings; and other factors described in our filings with the , including but not limited to our Quarterly Report on Form 10-Q for the quarter ended .

New risks and uncertainties arise over time, and it is not possible for us to predict all such factors or how they may affect us.

You should not place undue reliance on forward-looking statements, which speak only as of the date they are made.

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We are under no duty to update any of these forward-looking statements after the date of this earnings release to conform these statements to actual results or revised expectations. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this earnings release.

About
(NASDAQ: SDC) is the industry pioneer as the first direct-to-consumer med-tech platform for transforming smiles.

Through our cutting-edge teledentistry technology and vertically integrated model, we are revolutionizing the oral care industry.

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SmileDirectClub’s mission is to unleash the power of people’s smiles to empower them to positively impact their place in the world. was founded by and in partnership with .

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Available in the U.S., , , , the , and Ireland. is headquartered in , Tennessee.

For more information, visit SmileDirectClub.com

Investor/Media Contact:


Vice President, Investor Relations 310-562-7297
[email protected]

Consolidated Balance Sheet

(in thousands)

September 30
2019
December 31,
2018
ASSETS
Cash$547,563$313,929
Accounts receivable224,360113,934
Inventories14,6338,781
Prepaid and other current assets11,9875,782
Total current assets798,543442,426
Accounts receivable, non-current87,29960,217
Property, plant and equipment, net119,13052,551
Other assets6,269
Total assets$1,011,241$555,194
LIABILITIES, TEMPORARY AND PERMANENT EQUITY (DEFICIT)
Accounts payable$40,561$25,250
Accrued liabilities129,43434,939
Due to related parties1,12820,305
Deferred revenue24,89319,059
Current portion of related party debt16,054
Current portion of long-term debt29,7371,866
Total current liabilities225,753117,473
Long-term debt, net of current portion189,648137,123
Long-term related party debt1,799
Other long-term liabilities45,230602
Total liabilities460,631256,997
Commitment and contingencies
Temporary Equity
Redeemable Series A Preferred Units388,634
Permanent Equity (Deficit)
Class A common stock, par value $0.0001 and 102,807,291 shares issued and outstanding at September 30, 2019 and 0 shares issued and outstanding at December 31, 201810
Class B common stock, par value $0.0001 and 279,474,505 shares issued and outstanding at September 30, 2019 and 0 shares issued and outstanding at December 31, 201828
Additional paid-in-capital441,85557,497
Accumulated deficit(88,296)(148,249)
Noncontrolling interest197,013
Warrants315
Total permanent equity (deficit)550,610(90,437)
Total liabilities, temporary and permanent equity (deficit)$1,011,241$555,194

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

Three months ended
September 30,
Nine months ended
September 30,
2019201820192018
Revenue, net$168,663$112,508$522,529$278,024
Financing revenue11,5227,15831,18516,706
Total revenues180,185119,666553,714294,730
Cost of revenues39,12525,837111,36367,704
Cost of revenues—related parties2,31010,09813,65228,608
Total cost of revenues41,43535,935125,01596,312
Gross profit138,75083,731428,699198,418
Marketing and selling expenses131,26357,210340,409143,667
General and administrative expenses389,82830,249486,31977,550
Loss from operations(382,341)(3,728)(398,029)(22,799)
Interest expense4,2914,35211,6079,283
Interest expense—related parties293751,246
Loss on extinguishment of debt3229,672
Other expense4216,49350015,135
Net loss before provision for income tax expense(387,085)(14,866)(439,883)(48,463)
Provision for income tax expense47985596294
Net loss(387,564)(14,951)(440,479)(48,757)
Net loss attributable to noncontrolling interest(299,268)(352,183)
Net loss attributable to SDC Inc.$(88,296)$(14,951)$(88,296)$(48,757)
Earnings per share of Class A common stock:
Basic$(0.89)N/A$(0.89)N/A
Diluted$(0.89)N/A$(0.89)N/A
Weighted Average Shares Outstanding:
Basic99,533,877N/A99,533,877N/A
Diluted379,008,382N/A379,008,382N/A

Consolidated Statements of Cash Flows

(in thousands)

Nine months ended September 30,
20192018
Operating Activities
Net loss$(440,479)$(48,757)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization16,2374,966
Deferred loan cost amortization1,496461
Accrued interest to related parties884
Fair value adjustment of warrant derivative14,500
Equity-based compensation332,75913,626
Loss on extinguishment of debt17,693
Other non-cash operating activities1,7833,305
Changes in operating assets and liabilities:
Accounts receivable(137,509)(97,005)
Inventories(5,852)(3,963)
Prepaid and other current assets(6,205)(2,233)
Accounts payable(4,475)11,935
Accrued liabilities45,8809,926
Due to related parties(19,177)306
Deferred revenue5,8348,869
Net cash used in operating activities(192,015)(83,180)
Investing Activities
Purchases of property and equipment—related party(4,722)
Purchases of property, equipment, and intangible assets(66,355)(15,231)
Net cash used in investing activities(66,355)(19,953)
Financing Activities
IPO proceeds, net of discount and related fees1,285,759
Repurchase of Class A shares and LLC Units(696,489)
Repurchase of Class A shares to cover employee tax withholdings(81,603)
Settlement of canceled awards(2,000)
Issuance of Class A common stock6
Proceeds from sale of Preferred Units, net298,549
Borrowings on long-term debt176,000117,375
Payments of issuance costs(6,127)(3,174)
Principal payments on long-term debt(159,047)
Principal payments on related party debt(24,581)(34,376)
Other86
Net cash provided by financing activities492,004378,374
Increase in cash233,634275,241
Cash at beginning of period313,9294,071
Cash at end of period$547,563$279,312


Use of Non-GAAP Financial Measures

This earnings release contains certain non-GAAP financial measures, including adjusted EBITDA (“Adjusted EBITDA”).

We provide a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure below and in our Current Report on Form 8-K announcing our quarterly earnings results, which can be found on the SEC’s website at www.sec.gov and our website at investors.smiledirectclub.com.

We utilize certain non-GAAP financial measures, including Adjusted EBITDA, to evaluate our actual operating performance and for planning and forecasting of future periods.

We define Adjusted EBITDA as net loss plus depreciation and amortization, interest expense, income tax expense, adjusted to remove derivative fair value adjustments, loss on extinguishment of debt, equity-based compensation and certain other non-operating expenses such as IPO related costs and foreign currency adjustments.

SmileDirectClub estimates IPO price range of $19-22 per share

We use Adjusted EBITDA when evaluating our performance when we believe that certain items are not indicative of operating performance. Adjusted EBITDA provides useful supplemental information to management regarding our operating performance and we believe it will provide the same to members/stockholders.

We believe that Adjusted EBITDA will provide useful information to members/stockholders about our performance, financial condition, and results of operations for the following reasons: (i) Adjusted EBITDA would be among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions and (ii) Adjusted EBITDA is frequently used by securities analysts, investors, lenders, and other interested parties as a common performance measures to compare results or estimate valuations across companies in our industry.

Adjusted EBITDA does not have a definition under GAAP, and our definition of Adjusted EBITDA may not be the same as, or comparable to, similarly titled measures used by other companies.

Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is set forth below.

Reconciliation of Net Loss to Adjusted EBITDA

(in thousands)Three months ended
September 30,
Nine months ended
September 30,
2019201820192018
(unaudited)
Net loss$(387,564)$(14,951)$(440,479)$(48,757)
Depreciation and amortization6,5142,23216,2374,966
Total interest expense4,2914,64511,68210,529
Income tax expense47985596294
Fair value adjustment of warrant derivative5,87614,500
Loss on extinguishment of debt3229,672
Equity-based compensation324,4975,754332,75913,626
IPO related costs6,1466,146
Other421617502635
Adjusted EBITDA$(45,184)$4,258$(42,885)$(4,207)


1 We define average aligner gross sales price ("ASP") as gross revenue, before implicit price concession and other variable considerations and exclusive of sales tax, from aligner orders shipped divided by the number of unique aligner orders shipped.

Source: SmileDirectClub