Company profile

Ticker
SDC
Exchange
CEO
David B. Katzman
Employees
Incorporated in
Location
Fiscal year end
SEC CIK
IRS number
834505317

SDC stock data

(
)

Calendar

14 Nov 19
28 Jan 20
31 Dec 20

News

82.3% owned by funds/institutions
13F holders
Current Prev Q Change
Total holders 110 0 +Infinity%
Opened positions 110 0 +Infinity%
Closed positions 0 0 NaN%
Increased positions 0 0 NaN%
Reduced positions 0 0 NaN%
13F shares
Current Prev Q Change
Total value 1.17B 0 +Infinity%
Total shares 84.57M 0 +Infinity%
Total puts 256.33K 0 +Infinity%
Total calls 1.95M 0 +Infinity%
Total put/call ratio 0.1
Largest owners
Shares Value Change
Clayton, Dubilier & Rice 26.9M $373.42M NEW
BLK BlackRock 4.78M $66.31M NEW
Vanguard 4.17M $57.9M NEW
Citadel Advisors 3.02M $41.95M NEW
BEN Franklin Resources 3.01M $41.81M NEW
FIL 2.96M $41.08M NEW
Hillhouse Capital Advisors 2.92M $40.57M NEW
Millennium Management 2.51M $34.9M NEW
FMR 2.26M $31.36M NEW
ArrowMark Colorado 2M $27.69M NEW
Largest transactions
Shares Bought/sold Change
Clayton, Dubilier & Rice 26.9M +26.9M NEW
BLK BlackRock 4.78M +4.78M NEW
Vanguard 4.17M +4.17M NEW
Citadel Advisors 3.02M +3.02M NEW
BEN Franklin Resources 3.01M +3.01M NEW
FIL 2.96M +2.96M NEW
Hillhouse Capital Advisors 2.92M +2.92M NEW
Millennium Management 2.51M +2.51M NEW
FMR 2.26M +2.26M NEW
ArrowMark Colorado 2M +2M NEW

Financial report summary

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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.
  • We operate many of our SmileShops under master license agreements with CVS and Walgreens, each of which, if not renewed after its initial term of five years, will require us to close or relocate a substantial number of our SmileShops.
  • 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.
  • We face risks related to our international sales, including the need to obtain necessary foreign regulatory clearance or approvals.
  • 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 referendum on 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.
  • 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.
  • 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 the regulation of the internet could adversely affect 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 cyber-security 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 or 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.
  • 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 receive 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 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 will incur increased costs and become subject to additional regulations and requirements as a result of becoming a public company, which could lower our profits or make it more difficult to run our business.
  • If we are unable to implement and maintain effective internal control over financial reporting in the future, 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 do not 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 additional shares of our Class A common stock, the market price of our Class A common stock could decline.
Management Discussion
  • Revenues increased $60.5 million, or 50.6%, to $180.2 million in the three months ended September 30, 2019 from $119.7 million in the three months ended September 30, 2018. The increase in revenues was primarily driven by growth in unique aligner shipments of 47% for the three months ended September 30, 2019 compared to the same period in 2018. Growth in unique aligner orders was primarily driven by an increase in number of website visitors and conversion thereof to aligner sales, along with an increase in sales and marketing spend.
  • Revenues increased $259.0 million, or 87.9%, to $553.7 million in the nine months ended September 30, 2019 from $294.7 million in the nine months ended September 30, 2018. The increase in revenues was primarily driven by growth in unique aligner shipments as compared to the prior year period.
  • Cost of revenues increased $5.5 million, or 15.3%, to $41.4 million in the three months ended September 30, 2019 from $35.9 million in the three months ended September 30, 2018. Cost of revenues decreased as a percentage of revenues from 30% in the three months ended September 30, 2018 to 23% in the three months ended September 30, 2019, primarily as a result of producing more aligners internally versus outsourcing to a contract manufacturer, as well as increased automation. As of the third quarter of 2019, we manufacture 100% of our aligners in-house.
Content analysis ?
Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
H.S. junior Avg

Proxies

No filings

Patents

APP
Utility
Technologies for Merging Three-dimensional Models of Dental Impressions
12 Dec 19
A computing device for dental impression scan merging includes a processor configured to generate a first model and a second model including a first and second plurality of geometric faces indicative of a first and second dental arch of a user.
GRANT
Utility
Systems and methods for selecting and marking a location on a dental aligner
19 Nov 19
Described herein are systems and methods for marking a dental aligner.
GRANT
Utility
Systems and methods for shearing adjustment of a dental aligner cutting tool
5 Nov 19
A system for adjusting a cutting tool includes a cutting system that includes a cutting tool that includes a tip configured to cut material thermoformed to a dental model.
GRANT
Utility
Arrangements for intraoral scanning
5 Nov 19
Systems and methods include determining, by an appointment management system, a condition that an appointment to conduct an intraoral scan at an intraoral scanning site has been missed by a user, automatically generating a message to the user based on the condition that indicates that an at-home impression kit will be sent to the user, sending the automatically generated message to the user, sending the at-home impression kit to the user, receiving the at-home impression kit from the user, and producing, at a fabrication site, a plurality of aligners based on the received at-home impression kit where the plurality of aligners are specific to the user and are configured to reposition one or more teeth of the user in accordance with a treatment plan.