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Online Dental Products Company SmileDirectClub reported its first earnings after going public with better than expected third quarter revenue after the market close Tuesday.  The stock however plunged 20% and high expenses and legal costs

Smile Direct

SmileDirectClub Inc NASDAQ: SDC Reported Earnings After Close Tuesday

($0.89) Beat ($0.97) EPS AND $180.2M Beat $165.40 Million Revenue Forecast 

Earnings

SmileDirectClub Inc. reported a wider loss late Tuesday as third quarter revenue soared,  SDC reported a third-quarter loss of $88.3 million, or 89 cents a share, compared with a loss of $15 million in the year-ago period. Revenue rose to $180.2 million from $119.7 million in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of 97 cents on revenue of $165.4 million. 

SmileDirectClub shares went public in September at $23 and have struggled since.

SmileDirectClub Inc NASDAQ: SDC

Market Reaction - After hours $8.91 −2.17 (-19.61%)

Highlights

  • SDS shipped 106,070 teeth aligners in the quarter, up from 72,387 in the same period last year.
  • The average price of the aligners sold rose to $1,788, up from $1,773 in the year-ago quarter
  • The company’s expenses climbed in the quarter.
  • SmileDirectClub recorded a one-time charge of $324 million related to stock-based compensation and a $6 million charge related to its IPO costs.
  • Meantime, SmileDirectClub’s legal expenses doubled as the company fights legislation aimed at reining in online dentistry companies.

“Q3 was a good quarter. We were able to demonstrate our ability to execute, said SmileDirectClub Chairman and CEO David Katzman in a statement. “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.”

Outlook

SmileDirectClub expects full-year revenue of $750 million to $755 million for the year, while analysts forecast revenue of $746.5 million.

About SmileDirectClub

The compony made its public debut in September. Shares slid 28% on its first day of trading, making it the worst initial public offering of the year for a so-called unicorn, or a start-up valued above $1 billion. The stock was priced at a $23 per share IPO price.

The start-up, founded in 2014, sells teeth aligners directly to consumers on its website and in its “SmileShops” starting at $1,895 for a two-year plan. Founders Fenkell and Jordan Katzman say they want to disrupt the orthodontics industry with less expensive teeth-straightening treatments, convenience, and splashy television and social media advertisements.

 Source: SDC; AlphaStreet

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