The California-based dental products manufacturer Align Technology has decided to close its manufacturing and call center facilities in Pakistan and the United Arab Emirates (UAE) and transition those operations to the United States and Costa Rica. The move is part of the company’s new strategy aiming to streamline worldwide operations and reduce operating losses.
The restructuring plan seeks to eliminate costly redundancy in Align’s manufacturing network and implement a more disciplined framework for international expansion, including resizing marketing efforts in regions where investment was substantially outpacing growth. The plan is hoped to enable the company to refocus on profitability without sacrificing customer programs and key corporate priorities.
THe company also plans to resize its international structure and spending, and implement a more measured approach to expansion in Europe, Latin America and Asia-Pacific. It will reduce across-the-board operating costs and a approximately 35 percent of worldwide staff, including ten percent of the workforce at Align's Santa Clara headquarters.
The Company estimated that these broad strategic changes would result in one-time charges and costs of between seven and nine million dollars, to be spread largely over the third and fourth quarters of 2002.
Invisalign product sales for the second quarter ended June 30, 2002 will come in at approximately $16.2 to $16.7 million, a greater than ten percent increase over the first quarter of 2002. Overall revenues for the second quarter of 2002 will be down slightly due to substantially lower training revenue, compared to the first quarter of 2002, as a result of the company's transition from its former dental distributor.
The company expects revenue to grow at between ten and fifteen percent each quarter over the next two quarters and between five and ten percent each quarter in 2003 as the new strategy unfolds.
Total revenues for the years 2002 and 2003 are expected to be $73-76 million and $100-105 million, respectively. The Company expects to reach positive cash flow by the fourth quarter of 2003, with substantially narrowed operating losses beginning in 2003.
Align Technology designs, manufactures and markets Invisalign, a proprietary new method for treating malocclusion, or the misalignment of teeth. Invisalign corrects malocclusion using a series of clear, nearly invisible, removable appliances that gently move teeth to a desired final position. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
