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SDC Smiledirectclub

SmileDirectClub, Inc. ('SmileDirectClub') is an oral care company and creator of the first medtech platform for teeth straightening, now also offered directly via dentist and orthodontist offices. Through its proprietary technology and vertically integrated model, SmileDirectClub is revolutionizing the oral care industry, offering consumers the ability to get clinically safe and effective treatment but without the 3x markup associated with traditional orthodontics. SmileDirectClub's mission is to democratize access to a smile each and every person loves by making it affordable and convenient for everyone, from clear aligner therapy to premium oral care products. SmileDirectClub is headquartered in Nashville, Tennessee and operates in the U.S., Canada, Australia, New Zealand, United Kingdom, Ireland, Germany, Austria, Spain, Netherlands, Hong Kong and Singapore.

Company profile

Ticker
SDC
Exchange
CEO
David B. Katzman
Employees
Incorporated
Location
Fiscal year end
SEC CIK
Subsidiaries
Access Dental Lab TX, LLC • Access Dental Lab, LLC • SDC Canada Inc. • SDC Financial, LLC • SDC Holding, LLC • SDC Plane, LLC • SmileDirectClub AUS PTY LTD • SmileDirectClub DEU GmbH • SmileDirectClub HK Limited • SmileDirectClub IRL Ltd ...
IRS number
834505317

SDC stock data

(
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Calendar

9 Aug 21
17 Oct 21
31 Dec 21
Quarter (USD)
Jun 21 Mar 21 Dec 20 Sep 20
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD)
Dec 20 Dec 19
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS

Financial data from company earnings reports.

Cash burn rate (estimated) Burn method: Change in cash Burn method: Operating income/loss Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 376.65M 376.65M 376.65M 376.65M 376.65M 376.65M
Cash burn (monthly) 19.3M 1.03M 17.73M 10.67M 10.34M 4.76M
Cash used (since last report) 69.49M 3.7M 63.85M 38.41M 37.22M 17.13M
Cash remaining 307.16M 372.95M 312.8M 338.24M 339.43M 359.52M
Runway (months of cash) 15.9 363.2 17.6 31.7 32.8 75.6

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
1 Sep 21 Hamilton Carol Class A Common Stock Grant Acquire A No No 0 27,422 0 75,107
1 Sep 21 Richard F Wallman Class A Common Stock Grant Acquire A No No 0 27,422 0 177,107
12 Aug 21 CD&R Investment Associates X Class A common stock, $0.0001 par value Sell Dispose S Yes No 5.3 500,000 2.65M 11,403,167
11 Aug 21 Oswald Kay Class A Common Stock Buy Acquire P No No 5.38 4,170 22.43K 250,041
12 May 21 Frist William H. Class A Common Stock Buy Acquire P No No 7.83 13,000 101.79K 64,241

Data for the last complete 13F reporting period. To see the most recent changes to ownership, click the ownership history button above.

75.3% owned by funds/institutions
13F holders
Current Prev Q Change
Total holders 158 164 -3.7%
Opened positions 30 34 -11.8%
Closed positions 36 48 -25.0%
Increased positions 54 64 -15.6%
Reduced positions 41 42 -2.4%
13F shares
Current Prev Q Change
Total value 1.08B 1B +7.3%
Total shares 89.49M 95.17M -6.0%
Total puts 2.78M 2.42M +14.6%
Total calls 4.54M 4.91M -7.5%
Total put/call ratio 0.6 0.5 +23.8%
Largest owners
Shares Value Change
Clayton, Dubilier & Rice 11.9M $103.32M 0.0%
CD&R Investment Associates X 11.9M $142.12M 0.0%
Vanguard 9.55M $82.91M +14.7%
Frontier Capital Management 9.34M $81.05M +32.8%
683 Capital Management 4.09M $35.49M +23.5%
MS Morgan Stanley 3.92M $34.05M +10.0%
Royce & Associates 3.72M $32.25M +24.0%
Prentice Capital Management 3.65M $31.67M NEW
UBS UBS Group AG - Registered Shares 2M $17.37M +190.8%
Integrated Investment Consultants 1.87M $3.37M +8938.8%
Largest transactions
Shares Bought/sold Change
Victory Capital Management 0 -8.46M EXIT
FMR 54 -4.39M -100.0%
Prentice Capital Management 3.65M +3.65M NEW
Frontier Capital Management 9.34M +2.3M +32.8%
Integrated Investment Consultants 1.87M +1.85M +8938.8%
Balyasny Asset Management 0 -1.73M EXIT
Citadel Advisors 492.67K -1.6M -76.4%
BLK Blackrock 1.57M -1.58M -50.0%
Gilder Gagnon Howe & Co 1.38M +1.38M NEW
UBS UBS Group AG - Registered Shares 2M +1.31M +190.8%

Financial report summary

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Competition
Align Technology
Risks
  • We have a limited operating history and have grown significantly in a short period of time. If we fail to manage our growth effectively, our business could be materially adversely affected.
  • We have a history of net losses and we may not achieve or maintain profitability in the future.
  • We depend on sales of our clear aligners for the vast majority of our net revenues. Demand for our clear aligners may not increase as rapidly as we anticipate due to a variety of factors, including consumer reluctance to accept teledentistry, a weakness in general economic conditions, or competitive pressures.
  • Adverse changes in, or interpretations of, laws, rules, and regulations governing remote healthcare and the practice of dentistry could have a material adverse effect on our business.
  • We face competition in the market for our clear aligners, and we expect competition from existing competitors and other companies that may enter the market or introduce new technologies in the future, which may decrease our net revenues.
  • We spend significant amounts on advertising and other marketing campaigns to acquire new members, which may not be successful or cost‑effective.
  • If our retail partner relationships are not successful, our ability to market and sell our products would be harmed and our financial performance would be adversely affected.
  • Sales of a significant portion of our clear aligners may depend on our members’ ability to obtain reimbursement from third‑party payors, such as insurance carriers.
  • Our growth and future success may depend on our ability to enhance our existing products and services or to develop, obtain regulatory clearance for, successfully introduce, and achieve market acceptance of new products and services.
  • Because our current Chairman and Chief Executive Officer has other business interests, he may not be able or willing to devote a sufficient amount of time to our business operations, which could negatively impact our business, results of operations, and financial condition.
  • A disruption in the operations of our freight carriers or higher shipping costs could cause a decline in our net revenues or a reduction in our earnings.
  • We rely on third‑party suppliers for some of our manufacturing components and have limited control over our suppliers, which subjects us to significant risks, including the potential inability to obtain or produce quality products on a timely basis or in sufficient quantities.
  • If we encounter manufacturing problems or delays, our ability to generate revenue will be limited.
  • We are dependent on some international suppliers, which exposes us to foreign operational and political risks that may harm our business.
  • The majority of our operations are conducted in three geographic locations. Any disruption at our facilities could increase our expenses.
  • Our information technology systems are critical to our business. System integration and implementation issues and system security risks could disrupt our operations, which could have a material adverse impact on our business, results of operations, and financial condition.
  • Our international operations subject us to additional costs and risks, and our continued international expansion will subject us to additional costs and risks that may adversely impact our business, results of operations, and financial condition.
  • As we expand internationally, we will be exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations.
  • The results of the U.K.’s withdrawal from the E.U. may have a negative effect on global economic conditions, financial markets, and our business.
  • We depend on key personnel to operate our business, and if we are unable to retain and attract key personnel, we may be unable to pursue business opportunities or develop our products.
  • If we are unable to accurately predict our volume growth, and fail to hire a sufficient number of technicians in advance of such demand, the delivery time of our products could be delayed, which could adversely affect our results of operations.
  • If we choose to acquire or invest in new businesses, products, or technologies, instead of developing them ourselves, these acquisitions or investments could disrupt our business and could result in the use of significant amounts of equity, cash, or a combination of both.
  • We offer a financing option to our members, which could adversely affect our financial results.
  • Our SmilePay financing option subjects us to additional regulations and compliance and other costs.
  • Refunds and cancellations could harm our business.
  • We may be unable to raise additional capital, which could harm our ability to compete.
  • An increase in interest rates on our borrowings would increase the cost of servicing our debt and reduce our profitability.
  • Our outstanding debt instruments contain restrictions and covenants that may limit our operating flexibility and which, if violated, could result in the acceleration of the amounts due.
  • Changes affecting the availability of the London Interbank Offered Rate (‘LIBOR’) may have consequences for the Company that cannot yet reasonably be predicted.
  • We may not generate sufficient cash flow to service our debt, pay our contractual obligations, and operate our business.
  • Changes in, or interpretations of, accounting rules and regulations could result in unfavorable accounting charges.
  • Changes in lease accounting standards may materially and adversely affect us.
  • Our effective tax rate may vary significantly from period to period.
  • Our business could be adversely affected by ongoing professional and legal challenges to our business model or by new state actions restricting our ability to provide our products and services in certain states.
  • We are the subject of purported class action lawsuits, and additional litigation may be brought against us in the future.
  • Our success depends in part on our proprietary technology, and if we are unable to successfully enforce our intellectual property rights, our competitive position may be harmed.
  • If we infringe the patents or proprietary rights of other parties or are subject to an intellectual property infringement or misappropriation claim, our ability to grow our business may be severely limited.
  • Complying with regulations enforced by FDA and other regulatory authorities is expensive and time‑consuming, and failure to comply could result in substantial penalties.
  • We may not receive the necessary authorizations to market our new products, and any failure to timely do so may adversely affect our ability to grow our business.
  • Certain modifications to our products may require new 510(k) clearance or other marketing authorizations and may require us to recall or cease marketing our products.
  • Our products must be manufactured in accordance with federal, state, and international regulations, and we could be forced to recall our products or terminate production if we fail to comply with these regulations.
  • Our products may cause or contribute to adverse medical events that we are required to report to FDA and other governmental authorities, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, results of operations, and financial condition. The discovery of serious safety issues with our products, or a recall of our products either voluntarily or at the direction of FDA or another governmental authority, could have a negative impact on us.
  • Extensive and changing government regulation of the healthcare industry may be expensive to comply with and exposes us to the risk of substantial government penalties.
  • Changes in internet regulations could adversely affect our business.
  • Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.
  • We are subject to data privacy and security laws and regulations governing our collection, use, disclosure, and storage of personally identifiable information, including personal health information, which may impose restrictions on us and our operations and subject us to penalties if we are unable to fully comply with such laws.
  • We obtain and process a large amount of sensitive data. Our systems and networks may be subject to cybersecurity breaches and other disruptions that could compromise our information. Any real or perceived improper use of, disclosure of, or access to such data could harm our reputation and have a material adverse effect on our business, results of operations, and financial condition.
  • We are subject to consumer protection laws that regulate our marketing practices and prohibit unfair or deceptive acts or practices. Our actual or perceived failure to comply with such obligations could harm our business, and changes in such regulations or laws could require us to modify our products, marketing or advertising efforts.
  • We are subject to a number of risks related to the credit card and debit card payments we accept.
  • Issues related to the quality and safety of our products, raw materials, or packaging could cause a product recall or discontinuation or litigation, resulting in harm to our reputation and negatively impacting our business, results of operations, and financial condition.
  • We are a “controlled company” within the meaning of the corporate governance standards of NASDAQ. As a result, we qualify for, and rely on, exemptions from certain corporate governance standards.
  • We are an “emerging growth company,” and the reduced public company reporting requirements applicable to emerging growth companies may make our Class A common stock less attractive to investors.
  • We incur increased costs and are subject to additional regulations and requirements as a result of being a public company, which could lower our profits or make it more difficult to run our business.
  • If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock may decline.
  • The trading price of shares of our Class A common stock has declined significantly since our initial public offering and may continue to be volatile.
  • We have no current plans to pay cash dividends on our Class A common stock; as a result, our stockholders may not receive any return on investment unless our stockholders sell their Class A common stock for a price greater than that which they paid for it.
  • If our operating and financial performance in any given period does not meet the guidance that we provide to the public, the market price of our Class A common stock may decline.
  • If securities or industry analysts cease to publish research or reports about our business, or publish negative reports, the market price of our Class A common stock could decline.
  • The dual‑class structure of our common stock may adversely affect the trading market for our Class A Shares.
  • If we or the Pre‑IPO investors sell substantial amounts of shares of our Class A common stock, the market price of our Class A common stock could decline.
  • Pursuant to the Voting Agreement, David Katzman, our Chairman and Chief Executive Officer, controls a majority of the voting power of shares of our common stock eligible to vote in the election of our directors and on other matters submitted to a vote of our stockholders, and his interests may conflict with ours or our stockholders’ in the future.
  • We are a holding company. Our sole material asset is our equity interest in SDC Financial, and as such, we depend on our subsidiaries for cash to fund all of our expenses, including taxes and payments under the Tax Receivable Agreement.
  • SDC Financial may make distributions of cash to us substantially in excess of the amounts we use to make distributions to our stockholders and pay our expenses (including our taxes and payments under the Tax Receivable Agreement). To the extent we do not distribute such excess cash as dividends on our Class A common stock, the Continuing LLC Members would benefit from any value attributable to such cash as a result of their ownership of Class A common stock upon an exchange or redemption of their LLC Units.
  • Pursuant to the Tax Receivable Agreement, we will be required to pay the Continuing LLC Members for certain tax benefits we may claim as a result of the tax basis step‑up we received in connection with our initial public offering, as well as subsequent exchanges of LLC Units for shares of Class A common stock or cash. In certain circumstances, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual tax benefits we realize.
  • Anti‑takeover provisions in our organizational documents and Delaware law might discourage or delay attempts to acquire us that stockholders might consider favorable.
  • Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for certain disputes with us or our directors, officers, or employees.
  • Provisions in our organizational documents regarding exculpation and indemnification of our directors and officers may result in substantial expenditures by us and may discourage lawsuits against our directors and officers.
  • We have indebtedness in the form of convertible senior notes, which could adversely affect our financial health and our ability to respond to changes in our business.
  • We may be unable to raise the funds necessary to repurchase the notes for cash following a fundamental change or to pay any cash amounts due upon conversion, and our other indebtedness limits our ability to repurchase the notes or pay cash upon their conversion
Management Discussion
  • Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
  • See “Cautionary Statement Regarding Forward-Looking Statements.”
  • We are an oral care company and the creator of the first MedTech platform for teeth straightening. Through our cutting-edge teledentistry technology and vertically integrated model, we are revolutionizing the oral care industry, from clear aligner therapy to our affordable, premium oral care product line. Our mission is to democratize access to a smile each and every person loves by making it affordable and convenient for everyone. We are headquartered in Nashville, Tennessee and operate in the U.S., Costa Rica, Puerto Rico, Canada, Australia, New Zealand, United Kingdom, Ireland, Germany, Austria, the Netherlands, Mexico, Hong Kong, Singapore and Spain.
Content analysis
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Positive
Negative
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Constraining
Legalese
Litigous
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H.S. freshman Avg
New words: absence, Added, begun, challenge, challenging, drove, ease, France, globe, governmental, headcount, lessen, output, pendency, proceed, procuring, redeployment, remanded, remit, reopening, successful, unpredictable, unsettled, VAT
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