ALIGN TECHNOLOGY, INC. (NASDAQ:ALGN) Files An 8-K Costs Associated with Exit or Disposal Activities
Item 2.05. Costs Associated with Exit or Disposal Activities.
In connection with the arbitrator’s decision described in Item 7.01 below, Align Technology, Inc. (“Align” or the “Company”) expects to incur a material charge in the first quarter of 2019. The Company, however, is unable in good faith to make a determination of estimated costs and future cash expenditures associated with such actions. As a result, the Company intends to file amendments to the Current Report on Form 8-K, as required by Item 2.05 of Form 8-K, or report such costs or charges in its periodic reports, as appropriate.
Item 7.01. Regulation FD Disclosure.
On March 5, 2019, the Company issued a press release announcing the outcome of the arbitration of the claims asserted against it by SDC Financial LLC and SmileDirectClub LLC (collectively, the SDC Entities). As previously disclosed, the arbitration concluded on January 23, 2019. The arbitrator issued his decision on March 4, 2019. The arbitrator held that that Align breached the non-compete provision applicable to the members of SDC Financial LLC, including that Align misused the SDC Entities’ confidential information and violated fiduciary duties to SDC Financial LLC. The arbitrator ordered Align to close its Invisalign stores by April 3, 2019, and enjoined Align from opening new Invisalign stores or providing certain services in physical retail establishments in connection with the marketing and sale of clear aligners, and enjoined Align from using the SDC Entities’ confidential information. The arbitrator extended the expiration date of the non-compete provision with SDC to August 18, 2022. The arbitrator also ordered Align to tender its SDC Financial LLC membership interests to the SDC Entities for a purchase price equal to the capital account balance as of October 31, 2017, a price which is significantly below the current fair market value of such investment. No financial damages were awarded to the SDC Entities. This decision does not impact Align’s existing supply agreement with SDC which remains in place through 2019. A copy of the press release is attached hereto as Exhibit 99.1.
This Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws, including those statements relating to the Invisalign store closing (including the Company’s expectations regarding thematerial charge associated with theInvisalign Store closings, andthe Company’s expectations regarding theperiod in which such charge will be recorded).These forward-looking statements are based on management’s current expectations, estimates, forecasts, projections, beliefs, and assumptions and are not guarantees of future performance. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, actual results and the timing of selected events may differ materially from those expectations. Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, the risks and uncertainties that are described in the Company’s Annual Report on Form 10-K filed on February 28, 2019, as updated from time to time in the Company’s filings with the Securities and Exchange Commission. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
ALIGN TECHNOLOGY INC Exhibit
EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFilingEXHIBIT 99.1Arbitration Decision With SDC Entities Requires Align to Close Invisalign Stores Expects to Incur a Material Charge in the First QuarterExpects Minimal Impact on Align RevenuesNo Bearing on Long-Held Strategy to Connect Millions of Consumers with Invisalign Doctors SAN JOSE,…
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About ALIGN TECHNOLOGY, INC. (NASDAQ:ALGN)
Align Technology, Inc. designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design and computer-aided manufacturing (CAD/CAM) digital services used in dentistry, orthodontics and dental records storage. The Company operates through two segments: Clear Aligner segment and Scanner and Services (Scanner) segment. The Clear Aligner segment consists of its Invisalign System, which includes Invisalign Full, Express/Lite, Teen, Assist and Vivera Retainers, along with its training and ancillary products for treating malocclusion. The Scanner segment consists of intra-oral scanning systems and other services available with the intra-oral scanners that provide digital alternatives to the traditional cast models. The Company’s iTero scanner is used by dental professionals, and labs and services for restorative and orthodontic digital procedures, as well as Invisalign digital impression submission.
