Align Technology to close New Jersey operations

September 8, 2011

In the wake of the company's recently completed acquisition of iTero intraoral scanner maker Cadent, Align Technologies recently announced plans to consolidate it's CAD/CAM operations into existing facilities. This will mean the company will be closing it's Carlstadt, N.J.

In the wake of the company's recently completed acquisition of iTero intraoral scanner maker Cadent, Align Technologies recently announced plans to consolidate it's CAD/CAM operations into existing facilities. This will mean the company will be closing it's Carlstadt, N.J. facility by the 3rd quarter of 2012.

The move is being made to bring all of the company's CAD/CAM and scanner customer care services to one location in Costa Rica, while distribution and repair for those products will be moved to a pair of facilities in Costa Rica and Mexico. Accounting and financial functions previously done in the N.J. office will be moved to Align corporate headquarters in San Jose, Calif.

The closure of the N.J. operations will include the elimination of 119 positions, with the transition and layoffs likely to begin in the fourth quarter of this year. A move such as this is one of the expected outcomes of this sort of corporate acquisition. Align is making these moves to eliminate redundancies in facilities and streamline operations, which makes solid business sense. At the same time it is sad to think of anyone having their job eliminated in the current economic climate. Align expects to pay out approximately $2 million in severance, and hopefully that will provide the cushion necessary for those losing their jobs to find new ways to support themselves and their families.

Read the complete press release below:

Align Technology Announces Plans to Consolidate New Jersey Operations With Existing Manufacturing and Shared Services Organizations; Intra-Oral Scanner R&D and Manufacturing to Remain in Israel

SAN JOSE, Calif., Sept. 7, 2011 (GLOBE NEWSWIRE) -- Align Technology, Inc. (Nasdaq:ALGN) today announced plans to consolidate its CAD/CAM services and scanner-related activities based in Carlstadt, New Jersey with its existing manufacturing and shared services organizations in order to optimize efficiency, consolidate customer-facing functions, and reduce operating costs. All existing scanner research and development and manufacturing operations will remain in Or Yehuda, Israel. These actions include a phased transition of the following activities over the next few quarters:

  • Consolidation of CAD/CAM services and scanner customer care into Align's existing shared services organization in San Jose, Costa Rica;

  • Transition of CAD/CAM services and scanner distribution and repair to Align's state-of-the-art Treat operations in San Jose, Costa Rica and world-class manufacturing facilities in Juarez, Mexico; and

  • Consolidation of accounting and finance functions at Align's corporate headquarters in San Jose, California.

  • Closure of the New Jersey facility by the third quarter of 2012.

"After acquiring Cadent, our initial integration focus was on identifying revenue synergies and leveraging Align's sales and marketing resources to better drive and support go-to-market initiatives for iTero and iOC scanners. Now, with the bulk of integration well under way, we can accelerate other initiatives such as enhancing the customer experience, improving operational efficiency, and reducing costs," said Thomas M. Prescott, president and CEO of Align Technology. "As a result of today's announcement many valued employees will be impacted. These actions, while difficult, are necessary to create the most streamlined service for customers and optimize efficiency across the business. Once the consolidation is complete, we expect to realize annualized net savings of approximately $4.0 million per year."

The consolidation of Align's New Jersey operations includes a total reduction of 119 full time headcount in Carlstadt, New Jersey. The transition will begin in the fourth quarter of 2011 and is expected to be completed by the third quarter of 2012. As part of this consolidation, Align will incur costs for severance estimated to be approximately $2.0 million, of which approximately $1.1 million will be realized in 2011 and $0.9 million over the first three quarters of 2012. The Company does not expect this to be material to its fiscal 2011 GAAP and non-GAAP diluted EPS. As of June 30, 2011, Align had a regular employee base of approximately 2,400 worldwide.

Align also announced today that it has closed on the purchase of land and a manufacturing facility in Juarez, Mexico, adding approximately 150,000 square feet of space. This new property is in addition to the company's existing world-class manufacturing facility in Juarez. As previously disclosed, Align paid approximately $3.2 million in cash for the property and plans to transition its aligner fabrication and scanner-related activities into this facility in 2012.

About Align Technology, Inc.

Align Technology designs, manufactures and markets Invisalign, a proprietary 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. Because it does not rely on the use of metal or ceramic brackets and wires, Invisalign significantly reduces the aesthetic and other limitations associated with braces. Invisalign is appropriate for treating adults and teens. Align Technology was founded in March 1997 and received FDA clearance to market Invisalign in 1998.The Invisalign product family includes Invisalign, Invisalign Teen, Invisalign Assist, Invisalign Express, and Vivera Retainers. To learn more about Invisalign or to find an Invisalign trained doctor in your area, please visit www.invisalign.com.

Cadent Holdings, Inc. is a subsidiary of Align Technology and is a leading provider of 3D digital scanning solutions for orthodontics and dentistry. The Cadent family of products includes iTero and iOC scanning systems, OrthoCAD iCast, OrthoCAD iQ and OrthoCAD iRecord. For additional information, please visit www.cadentinc.com.