SmileDirectClub Stock Down 4.57%, Company Reports Q1 2020 Financial Results

UTC by Bhushan Akolkar · 2 min read
SmileDirectClub Stock Down 4.57%, Company Reports Q1 2020 Financial Results
Photo: Wikimedia Commons

SmileDirectClub saw a 10% decline in its sales due to the COVID-19 pandemic effect. However, the unique aligner shipments for the first quarter of 2020 demonstrated a 12% jump against that of Q1 2019. SDC stock is down.

The world’s first direct-to-consumer medtech platform SmileDirectClub Inc (NASDAQ: SDC) reported its Q1 earnings 2020. Although telemedicine has surged during the COVID-19 pandemic, this teledentistry company saw its earnings slipping over 10%.

On Wednesday closing, SmileDirectClub stock was trading at a price of $7.72 with a market cap of $2.97 billion. At the time of writing, SDC stock is at $7.13 (-7.64%)

During the first quarter, SmileDirectClub reported sales of $196.5 million against the estimated $219.5 million. Thus, SmileDirectclub reported a quarterly loss of 28 cents per share while missing the analyst’s estimates by 9 cents. On the other hand, the company saw a surge of 12% in its unique aligner shipments in Q1 2020 against that of Q1 2019.

Thus, in the first quarter this year, the teledentistry company reported total shipments at 122,751, compared to 109,894 in the first quarter of 2019. The company also said that it has satisfactorily managed to overcome the headwinds caused by the COVID-19 pandemic.

While the company’s marketing spends plunged, its impression kit business showed robust performance. The company’s marketing spend dropped 90% during the pandemic period of the last 60 days. At the same time, its kit and scan volume was down by only 40%. SmileDirectClub Chief Executive Officer David Katzman said:

“Despite these challenging times and a unique and complex operating environment, the SmileDirectClub team has navigated through the initial obstacles of the global pandemic by implementing changes to how we operate our business. We leveraged our teledentistry platform, along with our completely remote kit business, to continue to serve our Club Members during these challenging times. Our performance in the quarter, and more important, since then, validates the strength, durability and flexibility of our business model.”

SmileDirectClub Debt Restructuring and Refinancing in Q1 202

In partnership with HPS Investment Partners, SmileDirectClud has entered a new debt facility. This move comes after refinancing the previous debt facility wherein the company holds approximately $420 million in cash on its balance sheet.

This will help the company to have enough liquidity at hand required for its growth plans and manage any potential downsides.

“The unprecedented events of the past few months have provided a number of insights about our business. These learnings, along with our new debt facility with HPS Investment Partners, will allow us to emerge from this crisis stronger. We believe we are well capitalized and uniquely positioned to achieve our long-term growth targets,” explained SmileDirectClub Chief Financial Officer Kyle Wailes.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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