Gross margin for Q4 10 was 77.2%, compared to 78.1% in Q3 10 and 73.7% in Q4 09. The sequential decrease in gross margin reflects lower case volumes and higher customer rebates, offset by the favorable impact of foreign exchange rates on international shipments. Q4 10 gross margins were higher than Align's original guidance range of 76.0% to 76.5% because the cost for the Invisalign Ortho Summit and other continuing educational programs were not included in cost of goods sold (COGS) as the Company had expected when it provided Q4 10 guidance. Starting in October 2010, when the Company eliminated the Proficiency Program annual CE requirements, fees and costs incurred for continuing education programs, including the Invisalign Ortho Summit, were included in sales and marketing expense rather than COGS.Net profit for Q4 10 was $9.9 million, or $0.13 per diluted share. This is compared to net profit of $16.8 million, or $0.22 per diluted share in Q3 10 and net profit of $11.5 million, or $0.15 per diluted share in Q4 09. Q4 10 and Q3 10 net profit includes pre-tax litigation settlement costs of $1.2 million and $3.3 million, respectively, related to the settlement of the Leiszler class action lawsuit. Q4 09 net profit includes a benefit of $1.1 million to net revenues, or approximately $0.01 per share after taxes, reflecting an updated estimate for the fair value of Invisalign Teen replacement aligners.
Align Technology Announces Fourth Quarter And Fiscal 2010 Results
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