Washington, D.C. 20549


Date of report (Date of earliest event reported): November 7, 2022

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 November 7, 2022, SmileDirectClub, Inc. issued a press release announcing its financial results for the third quarter ended September 30, 2022. 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
Cover Page Interactive Data File (embedded within the Inline XBRL document)
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/ Troy Crawford
  Troy Crawford
 Chief Financial Officer
Date: November 7, 2022


SmileDirectClub Reports Third Quarter 2022 Financial Results

Disciplined Cost Management Drove Improving Cash Flow
Raises Midpoint of 2022 Revenue and Adjusted EBITDA Guidance

NASHVILLE, Tenn., November 7, 2022 -- 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 third quarter ended September 30, 2022.

Third Quarter 2022 Financial Highlights

Total revenue of $107 million, a 15.1% decrease over the second quarter of 2022 and a decrease of 22.5% over the prior year period.
Net loss of $(70) million, an increased loss of $4 million over the second quarter of 2022 and an improvement of $20 million over the prior year period.
Adjusted EBITDA of $(30) million, a $7 million decrease over the second quarter of 2022, and an improvement of $24 million over the prior year period.
Diluted EPS of $(0.18), a decrease of $0.01 over the second quarter of 2022, and a improvement of $0.05 over the prior year period.
Net cash used in operating activities was $(24) million, an increase of $6 million over the second quarter of 2022 and an improvement of $15 million over the prior year period.
Free Cash Flow defined as net cash used in operating activities less net cash used in investing activities of $(35) million, an improvement of $1 million over the second quarter of 2022 and an improvement of $29 million over the prior year period

Key Operating Metrics and Strategic Highlights

Third quarter unique aligner shipments of 52,367, a 16.5% sequential decrease over 62,705 shipments in the second quarter of 2022.
Third quarter average aligner gross sales price (“ASP”) of $1,902 compared to $1,917 for the second quarter of 2022.

“Our team delivered both revenue and bottom-line results that are on track with our updated outlook provided on our second quarter call. We are raising our full year 2022 midpoint guidance for revenue and adjusted EBITDA based on better traction with customers driven by improving marketing efficiencies. Our disciplined cost management enabled us to produce improved year-over-year bottom line results despite top line headwinds,” said David Katzman, Chief Executive Officer and Chairman of SmileDirectClub. “During the third quarter, our team made great progress on our key growth initiatives. Our innovative SmileMaker mobile scanning app for 3D treatment planning is on track to launch in a test market in the fourth quarter with an expanded geographic release in early 2023. Our in-person, premium aligner offering SmileDirectClub Care+ is targeted for test market release in the first quarter of 2023. This solution and value proposition has resonated well within the dental industry as we continue to build scale in our partner network by adding 260 new partners in the third quarter, with growing provider interest in joining the network even before the official launch of Care+.”

Business Outlook

SmileDirectClub’s mission is to democratize access to a smile each and every person loves and deserves by making it affordable and convenient for everyone. The aspirational vision of the Company’s organization is to become the “world’s leading oral health brand by helping more people realize the life changing potential of a confident smile.” SmileDirectClub’s vision and mission are much greater than manufacturing and marketing clear aligners. Every decision and investment the Company has made is to support and expand this mission and enable its long-term growth potential. For SmileDirectClub to realize the Company’s vision through its mission, the Company must expand its reach within and beyond the Company’s existing core customer base. Expanding reach comes through continuously bringing transformative innovation to the market across an entire portfolio of both consumer facing and non-consumer facing innovations through the Company’s focus on Partner Network, aligner product innovations, Care+ and oral care solutions. SmileDirectClub possesses the unique assets and innovation to disrupt the incumbents, the agility to adjust to the needs of its customer, and a sustainable brand that is top of mind with consumers.

The Company has been issued 46 patents and counting for its innovations in orthodontic treatment planning, aligner manufacturing, smile scanning technologies, its proprietary telehealth platform and a variety of other areas. There are many more patents pending and in the pipeline in both the U.S. and abroad on various technologies relating to data capture, 3D image capture, intraoral scanning, monitoring, manufacturing, and consumer products. In addition, the Company has enabled treatment for over 1.8 million customers, built the only end-to-end vertically integrated platform for the consumer at scale, created a Dental Partner Network with 950 global practices that are live or pending training, created oral care products available at over 16,300 retail stores worldwide, and remains the strongest teledentistry brand with 58% aided awareness. Demand for medical professionals to join SmileDirectClub’s Partner Network has been strong with 260 new partners added in the third quarter and a robust pipeline of additional practice interest even before the launch of the Care+ offering.

When consumers are considering straightening their teeth, they typically do one or all of the following: search online to understand their options; ask a dentist; ask a friend or family member which option they should choose. Based on the Company’s research, consumers have noted its product and customer experience is nearly identical to Invisalign, less expensive, and more convenient. Compared to other teledentistry platforms, research showed that significantly fewer customers would recommend those brands to their friends and family compared with SmileDirectClub customer recommendations. A first quarter consumer brand survey separately noted that the SmileDirectClub’s unaided and aided brand awareness continues to increase from and surpass its teledentistry competitors and close in on the brand awareness recognition of category originator Invisalign. Additionally, the Company’s pioneering telehealth platform was recently recognized by MedTech Breakthrough, winning the “Best Telehealth Platform” award in 2022.

In addition to these investments to create the next generation of oral care and influence consumer decision making, the Company will continue to make strategic investments 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 teledentistry, minimal penetration against the total addressable market, a number of recent regulatory wins that helped remove barriers to access to care, and clear aligners gaining share in the overall industry.

Revised Full Year 2022 Guidance

Challenges to consumer spending and sustained high inflation continue to impact our overall expected demand for the balance of the year. Our third quarter results were as expected and with only two months left in the year, we are tightening our full year 2022 outlook.

For the year ended December 31, 2022, the Company expects total revenue to be in the range of $470 million to $500 million.

The full year 2022 costs and capital outlook include (see Company’s supplemental earnings presentation for more insights regarding these assumptions):

Gross margin range (as a percentage of total revenues) of 70.5% to 71.5%
Adjusted EBITDA range of ($155 million) to ($135 million)
CapEx range of $55 million to $60 million
One-time costs range of $20 million to $25 million
Year-end cash balance between $110 million to $130 million

Year-end cash guidance includes an estimated $60 million to $70 million from outside funding, primarily coming from utilization of the outstanding HPS facility.

Conference Call Information
SmileDirectClub Third Quarter 2022 Conference Call Details
Date:November 8, 2022
Time:8:00 a.m. Eastern Time (7:00 a.m. Central Time)
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

A replay of the call may be accessed the same day from 11 a.m. Eastern Time on Tuesday, November 8, 2022 until 11:59 p.m. Eastern Time on Tuesday, November 15, 2022 by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the replay PIN: 13733253. A copy of the third quarter 2022 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, 2021 and our Form 10-Q for the period ended September 30, 2022.

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. SmileDirectClub’s mission is to democratize access to a smile each and every person loves by making it affordable and convenient for everyone. For more information, please visit

Investor Relations:
Jesse Weaver
Senior Vice President, Finance and Treasury

Jonathan Fleetwood
Director, Investor Relations

Media Relations:
Kim Atkinson
Senior Vice President, Global Communications

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

September 30,December 31,
Cash $120,181 $224,860 
Accounts receivable, net
152,531 184,558 
Inventories44,242 40,803 
Prepaid and other current assets21,085 17,519 
Total current assets338,039 467,740 
Accounts receivable, net, non-current
49,249 59,210 
Property, plant and equipment, net202,514 227,201 
Operating lease right-of-use assets
22,810 24,927 
Other assets19,184 15,480 
Total assets$631,796 $794,558 
Accounts payable$36,097 $19,922 
Accrued liabilities86,258 122,066 
Deferred revenue14,507 20,258 
Current portion of long-term debt4,217 10,997 
Other current liabilities6,703 4,997 
Total current liabilities147,782 178,240 
Long-term debt, net of current portion788,164 729,973 
Operating lease liabilities, net of current portion16,973 20,352 
Other long-term liabilities746 347 
Total liabilities953,665 928,912 
Commitment and contingencies
Equity (Deficit)
Class A common stock, par value $0.0001 and 121,420,358 shares issued and outstanding at September 30, 2022 and 119,280,781 shares issued and outstanding at December 31, 202112 12 
Class B common stock, par value $0.0001 and 268,823,501 shares issued and outstanding at September 30, 2022 and 269,243,501 shares issued and outstanding at December 31, 202127 27 
Additional paid-in-capital467,946 448,867 
Accumulated other comprehensive income741 293 
Accumulated deficit(359,881)(295,321)
Noncontrolling interest(448,334)(305,852)
Warrants17,620 17,620 
Total equity (deficit)
Total liabilities and equity (deficit)
$631,796 $794,558 

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

Three Months Ended September 30,Nine Months Ended September 30,
Revenue, net$98,524 $126,796 $357,838 $478,185 
Financing revenue8,246 10,887 26,374 33,140 
Total revenues106,770 137,683 384,212 511,325 
Cost of revenues31,995 39,412 109,136 133,233 
Gross profit74,775 98,271 275,076 378,092 
Marketing and selling expenses58,212 96,175 226,114 289,241 
General and administrative expenses75,507 85,658 218,620 251,778 
Lease abandonment and impairment of long-lived assets197 1,378 1,429 1,378 
Restructuring and other related costs3,169 95 17,869 1,759 
Loss from operations(62,310)(85,035)(188,956)(166,064)
Interest expense5,360 1,772 11,370 21,277 
Loss on extinguishment of debt— — — 47,631 
Other expense1,323 2,695 8,564 3,737 
Net loss before provision for income tax expense (benefit)(68,993)(89,502)(208,890)(238,709)
Provision for income tax expense (benefit)739 (119)(468)1,576 
Net loss(69,732)(89,383)(208,422)(240,285)
Net loss attributable to noncontrolling interest(48,058)(61,991)(143,862)(167,104)
Net loss attributable to SmileDirectClub, Inc.$(21,674)$(27,392)$(64,560)$(73,181)
Earnings (loss) per share of Class A common stock:
Weighted average shares outstanding:
121,163,578118,918,072120,729,146 118,081,711
389,987,079388,161,573389,654,332 387,554,625

SmileDirectClub, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended September 30,
Operating Activities
Net loss$(208,422)$(240,285)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization57,609 51,655 
Deferred loan cost amortization4,239 4,069 
Equity-based compensation21,559 37,659 
Loss on extinguishment of debt— 47,631 
Paid in kind interest expense626 3,324 
Asset impairment and related charges2,905 1,378 
Other non-cash operating activities2,117 977 
Changes in operating assets and liabilities:
Accounts receivable41,988 30,845 
Prepaid and other current assets(3,548)(10,062)
Accounts payable18,106 (20,984)
Accrued liabilities(34,693)9,827 
Deferred revenue
Net cash used in operating activities(106,704)(98,067)
Investing Activities
Purchases of property, equipment, and intangible assets(40,168)(70,284)
Net cash used in investing activities(40,168)(70,284)
Financing Activities
Repurchase of Class A shares to cover employee tax withholdings(2,953)(9,055)
Proceeds from stock purchase plan481 632 
Repayment of HPS Credit Facility— (396,497)
Payment of extinguishment costs— (37,701)
Borrowings of long-term debt54,920 747,500 
Payments of issuance costs(5,482)(21,179)
Purchase of capped call transactions— (69,518)
Final payment of Align arbitration— (43,400)
Principal payments on long-term debt— (4,609)
Payments of finance leases(6,780)(8,046)
1,820 684 
Net cash provided by financing activities42,006 158,811 
Effect of exchange rates change on cash and cash equivalents187 464 
Decrease in cash(104,679)(9,076)
Cash at beginning of period
224,860 316,724 
Cash at end of period
$120,181 $307,648 

Use of Non-GAAP Financial Measures

This earnings release contains certain non-GAAP financial measures, including adjusted EBITDA (“Adjusted EBITDA”) and Free Cash Flow. We provide a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures 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 Free Cash Flow and Adjusted EBITDA, to evaluate our actual operating performance and for the planning and forecasting of future periods.

We define Free Cash Flow as net cash used in operating activities less net cash used in investing activities.

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, retention and other labor costs, certain one-time legal settlement 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 both Free Cash Flow and Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure for Adjusted EBITDA, is set forth below.

SmileDirectClub, Inc.
Reconciliation of Free Cash Flow
(in thousands)

Three Months Ended
September 30, 2022June 30, 2022September 30, 2021
Net Cash used in operating activities $(24,100)$(17,840)$(38,716)
Net Cash used in investing activities (10,796)(17,754)(24,981)
  Free Cash Flow $(34,896)$(35,594)$(63,697)

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

Three Months Ended September 30,Nine Months Ended September 30,
Net loss$(69,732)$(89,383)$(208,422)$(240,285)
Depreciation and amortization19,113 18,486 57,609 51,655 
Total interest expense5,360 1,772 11,370 21,277 
Income tax expense (benefit)739 (119)(468)1,576 
Lease abandonment and impairment of long-lived assets197 1,378 1,429 1,378 
Restructuring and other related costs3,169 95 17,869 1,759 
Loss on extinguishment of debt— — — 47,631 
Equity-based compensation7,693 10,492 21,559 37,659 
Other non-operating general and administrative losses3,788 3,264 11,778 5,777 
Adjusted EBITDA