Washington, D.C. 20549


Date of report (Date of earliest event reported): August 9, 2021

SmileDirectClub, Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware 001-39037 83-4505317
(State or Other Jurisdiction
of Incorporation)
File Number)
 (IRS Employer
Identification No.)
414 Union Street
Nashville, Tennessee
(Address of Principal Executive Offices) (Zip Code)
(800) 848-7566
(Registrant’s telephone number, including area code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class Trading symbol Name on each exchange on which registered
Class A common stock, par value $.0001 per share SDC The NASDAQ Stock Market LLC

Item 2.02.  Results of Operations and Financial Condition.
On August 9, 2021, SmileDirectClub, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2021. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Current Report on Form 8-K, including the information set forth in Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. In addition, this information shall not be deemed incorporated by reference in any filing of SmileDirectClub, Inc. with the Securities and Exchange Commission, except as expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
Press release dated August 9, 2021 reporting financial results for the quarter ended June 30, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 By:/s/ Kyle Wailes
 Name:Kyle Wailes
 Title:Chief Financial Officer
Date: August 9, 2021


SmileDirectClub Reports Second Quarter 2021 Financial Results

NASHVILLE, Tenn., August 9, 2021 -- SmileDirectClub, Inc. (Nasdaq: SDC), the next generation oral care company with the first medtech platform for teeth straightening, today announced its financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Financial Highlights

Total revenue of $174 million, an improvement of 62.7% over the prior year period.
Net loss of $(55) million, an improvement of 41.6% over the prior year period.
Adjusted EBITDA of $(22) million, a decrease of $2 million over the prior year period.
Diluted EPS of $(0.14), a 44.0% improvement over the prior year period.

Key Operating Metrics

Unique aligner shipments of 90,006.
Average aligner gross sales price (“ASP”) of $1,885 for the second quarter of 2021, compared to $1,817 for the second quarter of 2020.

“We have a singular focus on maximizing our global opportunity and extending our leading telehealth platform for orthodontia through a persistent emphasis on customer experience, improving consumer perception around credibility, driving positive sentiment with our Challenger campaign, and investing in innovation,” said David Katzman, Chief Executive Officer and Chairman of SmileDirectClub.

SmileDirectClub Chief Financial Officer Kyle Wailes added, “The short-term headwinds from residual impacts of the April cyber-attack, the lasting economic effects from COVID on our target demographic and the slower scaling of some of our new international markets due to COVID prevented us from achieving our anticipated second quarter results. Our planned overinvestment in marketing to relaunch in Germany and Spain later this year, combined with continued execution on expanding customer acquisition channels, in particular the professional channel, should help us drive controlled and profitable growth consistent with our long-term targets.”

Business Outlook

While there continue to be short-term headwinds associated with macroeconomic factors and impacts associated with the cyber-attack, SmileDirectClub’s long-term revenue growth targets as well as the opportunity to leverage its vertically integrated platform and unique, difficult-to-replicate assets remain unchanged. The focus continues to be to provide the best Club Member experience, and to drive controlled and profitable growth. SmileDirectClub remains the low-cost provider, with brand presence, no pricing pressure, and no real competitor that provides an end-to-end vertically integrated platform for the consumer.

As consumers are considering straightening their teeth, they do three things as part of their research on which provider they should choose: one, they search online, two, they ask their dentist, and three, they ask a friend or family member. The Company continues to make significant investments across these three areas to organically become the leader in teeth straightening. Online, it is making significant investments in brand credibility, driven by the Challenger campaign, which drives home its compelling value proposition, and evidenced by its consumer sentiment and brand credibility, is

working. With dentists, the partner network is off to a good start, and the Company will be making significant investments in the channel in the coming quarters. And lastly, on friends and family, our customer experience continues to improve, and we expect that to pay off in higher referrals in the coming quarters.

In addition to these investments in influencing consumer decision making, the Company will continue to make strategic investments in international growth and in penetrating new demographics to drive controlled growth, while also executing against its profitability goals. Lastly, favorable industry dynamics continue to increase with broader acceptance of telehealth and specifically tele-dentistry, minimal penetration against the total addressable market, a number of recent regulatory wins that should help remove barriers to access to care, and clear aligners gaining share in the overall industry.

Full Year 2021 Guidance

For the year ended December 31, 2021, the Company expects total revenue to be in the range of $750 million to $800 million. While macroeconomic trends persisted into July 2021 from a demand perspective, the Company notes that its business can be highly variable on a month-to-month or quarter-to-quarter basis. For example, March 2021 was one of the best months SmileDirectClub has had for gross orders, which the Company believes was correlated with the timing of stimulus payments, along with other factors.

The assumptions underlying the $750 million revenue estimate include:

Expectations for a higher Q4 than Q3, driven by typical seasonality experienced in Q4, along with a small ramp in Germany and Spain.
A continuation of the macroeconomic headwind that was evident in the latter half of Q2 into Q3.

The assumptions underlying the $800 million revenue estimate include (Note that this does not assume all of these occur, but that there is some combination of the factors below):

As noted above, expectations for a higher Q4 than Q3, driven by typical seasonality experienced in Q4.
Return of normal consumer spending patterns for the Company’s target demographic (return to a normal macroeconomic environment).
Success with its Challenger Campaign – which officially launched in July 2021 with the Company’s TV spots.
Success with reallocating marketing dollars from Facebook to TV.
Success in Germany and/or Spain as the Company relaunches those markets with enhanced marketing spend in the second half of this year.
Greater Partner Network adoption. The Company has a professional network of dental partners with 1,800 locations and 500 of them are already active or pending training. SmileDirectClub plans to invest significantly in the Partner Network in the second half of this year.

The full year 2021 margin outlook is based on the following:

On COGS, SmileDirectClub is making good progress on manufacturing automation, with its second-generation machines producing approximately 85% of all aligner orders and plans to manufacture approximately 90% of all orders on the Gen2 line by the end of Q3. Streamlining the cost profile through operational efficiencies will improve the Company’s margin profile and will provide a consistently superior customer experience that upholds the brand promise.
Gross margin (as a percentage of total revenues) in the mid-70% range through the second half of 2021.
Sales & marketing (as a percentage of total revenues) in the range of 50% to 55% through the second half of 2021. The SmileShops function primarily as fulfillment centers instead of sources of demand generation. As of quarter end, the Company had 135 permanent shops open, and held 153 pop-up events over the course of the quarter for a total of 288 location sites. SmileDirectClub continues to see its shops performing well with higher utilization, a key part of meeting the Company’s long-term financial targets. The strategy of temporary pop-up locations has been successful, allowing SmileDirectClub to fulfill demand without the addition of fixed locations and associated costs. Additionally, marketing and selling expenses in the quarter reflect significant investment in brand building to support long-term growth in international markets. Revenue from rest of world markets (defined as markets outside the U.S. and Canada, “ROW”) came in at approximately 16.4% of total revenue for Q2, which

was impacted by the slower scaling of some the Company’s larger markets due to lingering effects from COVID. SmileDirectClub intends to overinvest in international markets during the second half of 2021, which will include relaunching in Germany and Spain, and into 2022. This level of investment will temporarily place the Company above its long-term target range. SmileDirectClub is focused on investment overseas, where 75% of the total market opportunity lies and where the competitive landscape is highly fragmented.
General and administrative expenses (expressed in dollars) are expected to slightly grow seasonally to support growth in the second half of 2021 and in preparation for Q1 2022 growth.
On liquidity, SmileDirectClub retains approximately $377 million of cash on the balance sheet, providing ample liquidity to support its growth initiatives, while also investing in R&D and innovation.

Conference Call Information

SmileDirectClub Second Quarter 2021 Conference Call Details
Date:August 9, 2021
Time:4:30 p.m. ET (1:30 p.m. PT)
Dial-In: 1-877-407-9208 (domestic) or 1-201-493-6784 (international)
Visit “Events and Presentations” section of the company’s IR page at or a direct link to the webcast.

A replay of the call may be accessed from 7:30 p.m. ET on Monday, August 9, 2021 until 11:59 pm ET on Monday, August 23, 2021 by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the replay PIN: 13721598. A copy of the 2021 second quarter results supplemental earnings presentation and an archived version of the call, when completed, will also be available on the Investor Relations section of SmileDirectClub’s website at

Forward-Looking Statements

This earnings release contains forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Forward-looking statements generally relate to future events and include, without limitation, projections, forecasts and estimates about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. Some of these statements may include words such as “expects,” “anticipates,” “believes,” “estimates,” “targets,” “plans,” “potential,” “intends,” “projects,” and “indicates.”

Although they reflect our current, good faith expectations, these forward-looking statements are not a guarantee of future performance, and involve a number of risks, uncertainties, estimates, and assumptions, which are difficult to predict. Some of the factors that may cause actual outcomes and results to differ materially from those expressed in, or implied by, the forward-looking statements include, but are not necessarily limited to: the ongoing assessment of the cyber incident, material legal, financial and reputational risks resulting from such incident and the related operational disruptions; the duration and magnitude of the COVID-19 pandemic and related containment measures; our management of growth; the execution of our business strategies, implementation of new initiatives, and improved efficiency; our sales and marketing efforts; our manufacturing capacity, performance, and cost; our ability to obtain future regulatory approvals; our financial estimates and needs for additional financing; consumer acceptance of and competition for our clear aligners; our relationships with retail partners and insurance carriers; our R&D, commercialization, and other activities and expenditures; the methodologies, models, assumptions, and estimates we use to prepare our financial statements, make business decisions, and manage risks; laws and regulations governing remote healthcare and the practice of dentistry; our relationships with vendors; the security of our operating systems and infrastructure; our risk management framework; our cash and capital needs; our intellectual property position; our exposure to claims and legal proceedings; and other factors described in our filings with the Securities and Exchange Commission, including but not limited to our Annual Report on Form 10-K for the year ended December 31, 2020 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.

New risks and uncertainties arise over time, and it is not possible for us to predict all such factors or how they may affect us. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We are under no duty to update any of these forward-looking statements after the date of this earnings release to conform

these statements to actual results or revised expectations. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this earnings release.

About SmileDirectClub

SmileDirectClub, Inc. (Nasdaq: SDC) (“SmileDirectClub”) is an oral care company and creator of the first medtech platform for teeth straightening. Through its cutting-edge telehealth 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. SmileDirectClub’s mission is to democratize access to a smile each and every person loves by making it affordable and convenient for everyone. SmileDirectClub is headquartered in Nashville, Tennessee and operates in the U.S., Canada, Australia, New Zealand, United Kingdom, Ireland, Germany, Austria, Hong Kong, Singapore, Spain and Mexico. For more information, please visit

Investor Relations:
Tripp Sullivan
SCR Partners, LLC

Media Relations:
Kim Atkinson
Vice President, Communications

SmileDirectClub, Inc.
Condensed Consolidated Balance Sheets
(in thousands)

June 30,December 31,
Cash $376,648 $316,724 
Accounts receivable214,316 221,973 
Inventories32,948 29,247 
Prepaid and other current assets18,092 12,832 
Total current assets642,004 580,776 
Accounts receivable, non-current75,286 71,355 
Property, plant and equipment, net199,944 189,995 
Operating lease right-of-use asset30,378 31,176 
Other assets12,772 11,487 
Total assets$960,384 $884,789 
Accounts payable$22,638 $36,848 
Accrued liabilities98,788 100,589 
Deferred revenue24,575 26,619 
Current portion of long-term debt10,681 15,664 
Other current liabilities6,814 6,821 
Total current liabilities163,496 186,541 
Long-term debt, net of current portion733,414 392,939 
Operating lease liabilities, net of current portion26,584 27,771 
Other long-term liabilities2,814 43,400 
Total liabilities926,308 650,651 
Commitment and contingencies
Class A common stock, par value $0.0001 and 118,672,409 shares issued and outstanding at June 30, 2021 and 115,429,319 shares issued and outstanding at December 31, 202012 11 
Class B common stock, par value $0.0001 and 269,243,501 shares issued and outstanding at June 30, 2021 and 270,908,566 shares issued and outstanding at December 31, 202027 27 
Additional paid-in-capital433,927 483,393 
Accumulated other comprehensive loss(128)(102)
Accumulated deficit(238,668)(192,879)
Noncontrolling interest(178,714)(73,932)
Warrants17,620 17,620 
Total equity
34,076 234,138 
Total liabilities and equity
$960,384 $884,789 

SmileDirectClub, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)

Three Months Ended June 30,Six Months Ended June 30,
Revenue, net$162,587 $94,409 $351,389 $278,337 
Financing revenue11,594 12,664 22,253 25,386 
Total revenues174,181 107,073 373,642 303,723 
Cost of revenues45,860 48,776 93,821 108,553 
Gross profit128,321 58,297 279,821 195,170 
Marketing and selling expenses95,943 34,518 193,066 176,842 
General and administrative expenses85,042 68,689 166,120 159,718 
Lease abandonment and impairment of long-lived assets— 24,633 — 24,633 
Other store closure and related costs536 4,476 1,664 4,476 
Loss from operations(53,200)(74,019)(81,029)(170,499)
Interest expense1,939 10,050 19,505 14,072 
Loss on extinguishment of debt— 13,781 47,631 13,781 
Other expense (income)130 (1,765)1,042 3,159 
Net loss before provision for income tax expense (benefit)(55,269)(96,085)(149,207)(201,511)
Provision for income tax expense (benefit)(12)(1,419)1,695 555 
Net loss(55,257)(94,666)(150,902)(202,066)
Net loss attributable to noncontrolling interest(38,377)(67,867)(105,113)(146,017)
Net loss attributable to SmileDirectClub, Inc.$(16,880)$(26,799)$(45,789)$(56,049)
Earnings (loss) per share of Class A common stock:
Weighted average shares outstanding:
118,344,050109,048,411117,656,599 106,819,870
387,609,677385,133,303387,246,120 384,492,628

SmileDirectClub, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended June 30,
Operating Activities
Net loss$(150,902)$(202,066)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization33,169 25,357 
Deferred loan cost amortization3,041 1,666 
Equity-based compensation27,167 27,217 
Loss on extinguishment of debt47,631 13,594 
Paid in kind interest expense3,324 1,771 
Asset impairment and related charges— 25,915 
Changes in ROU asset798 4,070 
Changes in operating assets and liabilities:
Accounts receivable3,726 33,887 
Prepaid and other current assets(6,572)(4,009)
Accounts payable(11,998)(6,001)
Accrued liabilities(2,990)(13,184)
Deferred revenue
Net cash used in operating activities(59,351)(85,839)
Investing Activities
Purchases of property, equipment, and intangible assets(45,303)(47,861)
Net cash used in investing activities(45,303)(47,861)
Financing Activities
IPO proceeds, net of discount and related fees— (1,155)
Proceeds from warrant exercise— 922 
Repurchase of Class A shares to cover employee tax withholdings(6,260)(4,529)
Proceeds from stock purchase plan632 — 
Repayment of HPS Credit Facility(396,497)— 
Payment of extinguishment costs(37,701)— 
Proceeds from HPS Credit Facility and Warrants, net— 388,000 
Borrowings of long-term debt747,500 16,807 
Payments of issuance costs(21,179)(11,336)
Purchase of capped call transactions(69,518)— 
Final payment of Align arbitration(43,400)— 
Principal payments on long-term debt(4,609)(180,762)
Payments of finance leases(5,182)(4,997)
Net cash provided by financing activities163,703 204,213 
Effect of exchange rates change on cash and cash equivalents875 — 
Increase in cash59,924 70,513 
Cash at beginning of period
316,724 318,458 
Cash at end of period
$376,648 $388,971 

Use of Non-GAAP Financial Measures

This earnings release contains certain non-GAAP financial measures, including adjusted EBITDA (“Adjusted EBITDA”). We provide a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure below and in our Current Report on Form 8-K announcing our quarterly earnings results, which can be found on the SEC’s website at and our website at

We utilize certain non-GAAP financial measures, including Adjusted EBITDA, to evaluate our actual operating performance and for planning and forecasting of future periods.

We define Adjusted EBITDA as net loss, plus depreciation and amortization, interest expense, income tax expense (benefit), equity-based compensation, loss on extinguishment of debt, impairment of long-lived assets, abandonment and other related charges and certain other non-operating expenses, such as one-time store closure costs associated with our real estate repositioning strategy, severance and other labor costs, and unrealized foreign currency adjustments. We use Adjusted EBITDA when evaluating our performance when we believe that certain items are not indicative of operating performance. Adjusted EBITDA provides useful supplemental information to management regarding our operating performance, and we believe it will provide the same to members/stockholders.

We believe that Adjusted EBITDA will provide useful information to members/stockholders about our performance, financial condition, and results of operations for the following reasons: (i) Adjusted EBITDA is among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions and (ii) Adjusted EBITDA is frequently used by securities analysts, investors, lenders, and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry.

Adjusted EBITDA does not have a definition under GAAP, and our definition of Adjusted EBITDA may not be the same as, or comparable to, similarly titled measures used by other companies. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is set forth below.

SmileDirectClub, Inc.
Reconciliation of Net Loss to Adjusted EBITDA
(in thousands)

Three Months Ended June 30,Six Months Ended June 30,
Net loss$(55,257)$(94,666)$(150,902)$(202,066)
Depreciation and amortization16,709 13,916 33,169 25,357 
Total interest expense1,939 10,050 19,505 14,072 
Income tax expense (benefit)(12)(1,419)1,695 555 
Lease abandonment and impairment of long-lived assets— 24,633 — 24,633 
Other store closure and related costs536 4,476 1,664 4,476 
Loss on extinguishment of debt— 13,781 47,631 13,781 
Equity-based compensation12,008 10,821 27,167 27,217 
Other non-operating general and administrative losses (gains)1,601 (1,880)2,513 4,705 
Adjusted EBITDA