Greetings, and welcome to the Third Quarter 2014 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Shirley Stacy. Thank you, you may begin.

Good afternoon, and thank you for joining us. I’m Shirley Stacy, Vice President of Corporate Communications and Investor Relations. Joining me for today’s call is Tom Prescott, President and CEO; and David White, CFO. We issued third quarter 2014 financial results today via MarketWire, which is available on our website at investor.aligntech.com. Today’s conference call is being audio webcast and will be archived on our website for approximately 12 months. A telephone replay will be available today by approximately 5:30 PM Eastern Time through 5:30 PM Eastern Time on October 30th. To access the telephone replay, domestic callers should dial 877-660-6853 with conference number 13591983, followed by pound. International callers should dial 201-612-7415 with the same conference number. As a reminder, the information that the presenters discuss today will include forward-looking statements including without limitations, statements about Align’s future events, product outlook and the expected financial results for the fourth quarter 2014. These forward-looking statements are only predictions and involve risks and uncertainties such that actual results may vary significantly. These and other risks are set forth in more detail in our Form 10-K for the fiscal year ended December 31, 2013 and our Form 10-Q for the third quarter of fiscal 2014. These forward-looking statements reflect beliefs, estimates and predictions as of today, and Align expressly assumes no obligation to update any such forward-looking statements. We’ve posted a set of GAAP and non-GAAP historical financial statements including the corresponding reconciliations and our third quarter conference call slides on our website under Quarterly Results. Please refer to these files for more detailed information. With that, I’ll turn the call over to Align Technology’s President and CEO, Tom Prescott. Tom?

Thanks, Shirley. Good afternoon, everyone, and thank you all for joining us. On the call today, I’ll provide some highlights from our third quarter and briefly discuss the performance of our two operating segments; Invisalign clear aligner, and scanner and services. I’ll also provide some color on our customers as well as progress in our geographies around the world. David will then share more detail on our third quarter financials and discuss our outlook for the fourth quarter. Following that I’ll come back and summarize a few key points and open up the call to your questions. Q3 revenues have $189.9 million increase, 15.4% year-over-year driven by higher Invisalign volume across all customer channels and geographies with continued strong growth from our international doctors. Scanner and Services revenues of $11.7 million were up over 7.1% year-over-year. As a result of better than expected gross margin and management of operating expenses, EPS was $0.03 above the high end range of our outlook. Our Q3 results reflects continued execution of our strategic plan including our three key growth drivers which are; market expansion, product innovation, and brand strength. I’ll provide a brief update on each of these before discussing our results further. First, market expansion, this strategic growth driver encompasses the many ways we are working to open up new geographies such as the additional countries in the EMEA region or that were recently added to our direct sales coverage area, expanding the adult treatment category for those consumers unwilling to seek orthodontic treatment with brackets and wires, and increasing our share of teenage market, the largest segment of the orthodontic market worldwide. Our months of June, July, and August are typically a seasonally strong period for Teenage Orthodontic Case Starts in 20.4% year-over-year growth of Invisalign teenage cases in Q2 marked…

Thanks, Tom. Before I get into the details, I’d like to note that unless stated otherwise, all of the financial information I will discuss will be presented on a GAAP basis. With that lets review our third quarter financial results. Revenue for the third quarter was $189.9 million, down 1.4% from the prior quarter, consistent with normal Q3 seasonality, and up 15.4% from the corresponding quarter a year ago. Third quarter clear aligner revenue of $178.1 million was down 0.9% sequentially, and up 16.0% year-over-year. Q3 ASPs were down sequentially $11, primarily due to foreign exchange losses related to the weakening euro which primarily impacts in September. I’ll make further comments about the impact of currency later. Our year-over-year revenue growth reflected Invisalign case volume growth across all customer channels as well as favorable ASPs from higher mix of Invisalign full products and a higher mix of international business. For the third quarter, total Invisalign shipments of 119.6000 cases were flat sequentially reflecting increases from North America ortho case volume and Asia Pacific growth offset by expected seasonal decreases from North America GPs and EMEA. Year-over-year growth of 11.9% reflects continued strong international growth, increased utilization from international doctors, and North American orthos, as well as expansion of our customer base. For North American orthodontists Q3 Invisalign case volume increased 5.6% sequentially and 10.6% year-over-year. For North American GP Dentists case volume decreased 4.6% sequentially and increased 2.3% year-over-year. For international doctors Invisalign case volume decreased 0.7% sequentially and increased 27.8% year-over-year. In Q3, we added 1125 new North American doctors and 1400 new international doctors, a year-over-year increase of roughly 42% and 60% respectively. In Q3 Asia Pacific trained total of 745 new doctors, the most ever in a single quarter, with 50% coming from China. In total for…

Thanks, David. We are pleased to have delivered another good quarter with progress across the business paced by the strong growth in our EMEA and APAC regions. North America delivered a solid result in a softer market and yet we know we can do better. Despite of challenging global environment we are confident we can continue to deliver growth rates at multiples above market growth in every geography we serve. Our confidence is based on continued strong execution of product innovation combined with continued investments in the right sales coverage and go to market initiatives each of which become far more effective when we add in high impact that’s why our marketing campaign. The Align team is excited about the opportunities ahead of us. We look forward to a very busy fourth quarter with important trade shows, major customer events like our North America orthodontic summit and a full calendar of new customer training events. We look forward to seeing many of you at upcoming investor conferences and to sharing our continued progress when we discussed our UN results in late January. That’s it for now, and we can move to take your question. Operator?

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Our first question comes from Jon Block with Stifel. Please proceed. Jon Block – Stifel: Great, thanks. Excuse me guys, good afternoon. I think the first one, David just for you, maybe a two point question. One, if you can comment at all on trends throughout the quarter, maybe what you saw. And then to the guide, can we have some more detail there. It just seems to be like a big sequential step up, you called out North America being up 4Q versus 3Q, but when I look back in 2012 you were down 3% sequentially, 3Q to 4Q last year you were flat in North America sequentially, and you’re still positioning this is a tough environment here with a slower return on some of your investments. So what gives you the confidence North American cases will be up 3Q to 4Q? Thanks, guys.

Okay Jon, back to the first question on trends on Q3. I don’t know if there is anything peculiar in terms of trends versus any other Q3 we’ve experienced. I think one – perhaps one anomaly that Tom mentioned in his prepared remarks had to do with our team season potentially being a little bit earlier in the year than what we saw last year since we got a very good uplift in the second quarter but the uplift in the third quarter is a little bit soft than what we have anticipated. But other than that I think the case – our business is fairly linear to the quarter, and in summer months typically we see a soft August, particularly in the international area, particularly EMEA as people are taking vacations and closing their offices and so forth. And then we hold our breadth for a little bit, you might say for September waiting for things to kind of pick back up as people wake up from vacation to get back engage. But other than those trends there I’d say fairly consistent with third quarter at least a year ago and other quarters that we’ve seen. As it relates to Q4 North America, couple of things; if we look at our three-year average, sequential average it’s typically been up – just a little bit under 1% quarter-over-quarter. And as we look at North America and our guidance, I’m sorry, it has typically been up around – roughly flat quarter-over-quarter from Q3 to Q4 and our guide is up, I think want to say about 5% or so. One of the things that influences that is, we’ve – Tom talking about DSOs and so as we engage with more of those selling organizations and so forth, we expect to see uplift as those doctors are trained and as they become engaged with the Invisalign product, so that’s part of the uplift works that can be seen in the fourth quarter. And we’re continuing also with some of the promotions we ran in Q3, expecting them to receive some protraction in Q4. And we’ll also see some more immediate spend in Q4 as well. So those things tend to give us a little bit more of a seasonal uptick in Q4 from Q3. Jon Block – Stifel: Okay.

Jon, if I pile on for just a second? Jon Block – Stifel: Absolutely.

I mean, the couple of year’s you called out were really non-linear for us and the reason why we were sequentially down going into – in twelve, especially and there were couple of other ones because volume disappears late in the quarter and we went into the quarter with a little less flow of business. So when David speaks to some reasonable linearity, not as strong as we like in North America, that’s actually a good thing. And we’ve been – linearity means it’s building so that we’ve got solid progress going in the quarter which means for the first months of that quarter, the pipes reasonably fall. With all that said, the second thing is we continue to build in Asia and is that becoming more meaningful in total volume, that has a bigger contribution totally. And all this time so far in Europe that they continue their trajectory, our doctors are back to work and building and despite more challenging economy in the new G here there solid. So I think when you put all of building blocks together with the same methodology we always use, reasonably confident that we can go deliver that guidance. Jon Block – Stifel: Okay, that was very helpful. And Tom just as a follow up, maybe at a high level, you can just speak to return on investment in sales reps, I guess where I’m going with this is, the North America GP market is just proven to be challenging and you guys have thrown more bodies at it over the past 18 to 24 months. Of course four five years ago I got to bring up the pay worthy proficiency program, where I’m going with this is, is there an opportunity to redeploy investments elsewhere, you’re doing so well in teen, international is crushing it. You sort to say, you know what, GPs will get some growth there as we add and train new docs but let’s throw bodies and investments elsewhere that seems more ripe for accelerating growth. Thanks guys.

Sounds like you’ve been sitting in some of our meetings as we do resource allocation, hard choices. Let me start with your very last point around DSOs, that is the place we’ve deploy more resources in terms of program and approach and training, and we are getting some early traction there. It takes time since they have anywhere from dozens to hundreds of offices scattered across the country in some cases, and as we activate we want them to have high quality capability when that patient comes in even if this is a new line of practice for them. So these are all very different the way they work but we are deploying a way to do that. So that’s one example of deploying additional resources there. Secondly we are deploying more resources and our really fast growing geographies like China, we don’t have an annual resources allocation discussion with an annual plan, we look at that every quarter literally, and if they can keep delivering on their plan we give them more resources against a game plan. So that’s going on as a consistent theme. To some extent the same is true in EMEA with that more frequent relook at resource allocation; they earn the right to get more headcount, a little more for consumer, and in some cases acceleration of a key product initiative. When you come back to North America, we actually are making progress in GP utilization; it’s just that it’s hard to see against the 20,000 or more GPs that we do business with at some level of frequency. And if I go back to late last year when we rolled out in pilot our new fundamentals training course, we had hopes that would help and in fact, in general these are smaller attended groups,…

Thank you. Our next question comes from Robert Jones with Goldman Sachs. Please proceed. Robert Jones – Goldman Sachs: Great, thanks for the questions. Just looking out of the 4Q and the guidance, the cases certainly there seem stronger than what we’re looking for. I know you guys just commented on that but I guess I would say at those levels I think we would have been looking for sales range to be a touch higher than what the guidance is. I was wondering if you guys should maybe just spend a little bit of time talking about your expectations for ASP growth from both a product level, and then also from a geographic standpoint just given some of the trends we saw in the quarter.

Bob, I’ll start it with few broad strokes and then I’ll let David fill in behind that with some of the facts that we laid out in the framework for guidance. First would be we expect a little bit of mix shift, we’ve already got a little bit of FX headwind, I’m not going to speak to it, everything is captured in guidance. So that believes a little bit right off the top but we expect a little more mix shift as the team is going a little more aggressively after i7 and i14 in EMEA and Express 5 and Express 10 in North America, and part of that is promotions, part of that is little bit of increasing interest from our GPs and some orthos. So whether we never quite get that right it has been pretty stable, if that stays where it is the mix will be a little higher and we’ll have little more revenue lift out of that but as we see it today going in, our internal outlook which informs us says there is a little mix shift and there is some promos with that. Other than that those are the two big factors and I’ll let David build on that just a little.

Yes, just to add to the foreign exchange piece of it. Most of our international business in EMEA is built in euro, and if you’ve tracked currency trends, I’m sure you have, we’ve seen some big moves in that just in the last couple of months but principally beginning in the early September and that’s really influenced our third quarter in amounts that we’ve not seen historically or in the company for a long time at least. And so as we look about that going forward certainly that does have some impact on ASPs going forward when you translate those back into dollars and that has put a little bit of you might say headwind into the revenue guide for Q4 but it is included in the guidance, I’ll make that clear. But one point I think to make a note of is the fact that when you look at the countries that we’re selling internationally, most of those revenues are denominated in local currency and we incur our selling, marketing and to some extent some G&A expense locally in those markets as well. So while it puts a little bit of headroom you might say or headwind into the top line, we have somewhat of a natural hedge to some extent given that the expenses will translate back at a lower amount as well, and then when you net that of a tax it mitigates a little further. So if you look at our Q4 guidance so forth, about $0.01 a share roughly is the impact of currency relative to where it was earlier in Q3. Robert Jones – Goldman Sachs: That’s helpful and that might actually partially answer my follow up question which was if I look at SG&A it was actually little lighter than what we were looking for and yet you seem to be rolling out a lot of new initiatives to reach the consumer. I guess I was wondering kind of outside of FX, is there any level of efficiency that you guys are realizing and getting the word out or should we be thinking about investment in sales and marketing, kind of reaccelerate it back to more normal levels from this point forward?

We’re always looking at new investments and we’re constantly evaluating new opportunities to invest in the business whether it’s on the product side or whether it’s on the sales or marketing side. So I don’t think there is anything new there. Clearly, one of our objectives is to – as we penetrate further and further into the market one of our objective is obviously is to get with better adoption to get better field efficiency you might say with the people we have out in the field that are in that selling position. But if you look at the Q3 expenses as you looked at – some of that is just some seasonality, lower media spend in Q3 is very typical for us and the fact that payroll tax is being enrolling off for some of the employees here in the US, and so those are some of the contributing factors why Q3 was little bit lower.

Bob, before we may finish beating this one to death, there are a couple of examples, explicitly on marketing spend that we do get efficiency out of, and I’ll give you a small example but it’s big dollars. We can lock in especially when the markets will softer for media, we can lock in traditional media out multiple quarters, sometimes it’s far as a year to get placement rates in the programs that fit with our brand, and we can get literally millions of dollars of improvement or leverage out of those working media dollars. And then in addition one of the things that comes with a little bit of math now that in this line it’s becoming a well-known brand at least in North America and we’re taking first steps in Europe is that we call paid media, traditional media, unpaid media is people doing their own videos on YouTube and talking about on their blogging how it changed their lives. So we get that, that all goes into the impact in search and impressions that people form in total and in many cases that has greater weight than paid media, so we tend to tune off ads and listen more carefully to what I'll call honest conversation. And that is the place that efficiency shows up for us and we see some of that in North America for sure, starting to see a little bit on the digital side in Europe, again, we’re still earlier days there but that’s very specific example of some leverage. Robert Jones – Goldman Sachs: That’s helpful, thanks so much.

Thanks.

Thank you. Our next question comes from Glen Santangelo with Credit Suisse. Please proceed. Glen Santangelo – Credit Suisse: Yes, thanks. Tom, I just want to follow up on this North American GP issue just one more time. I mean it’s clear this seems to be sort of the onetime the ointment for you guys in terms of achieving higher growth and I’m just kind of want to get your perspective, I mean do you feel at all concerned that maybe the North American GP market is becoming maybe a little bit saturated with your product? Do you feel like you’re choking on large numbers in this market or you just really feel that the company hasn’t really executed that well in this customer class and you just – you don’t need to do a better job?

I’ll start with that last part and say yes, we can do – I think we’ve executed well, there aren’t that many companies that have built a great standalone business with the North American GP given the enormous amount of fragmentation. But I’ll go to your fetch, so I’m saying yes, we can do better, we have lots of ideas how to do that, we’ve got experiments going on all over the place to make that happen. The saturation point, it’s actually the opposite, we are so far from saturation, in fact even our – even routine customers do Invisalign almost as a hobby in GP, even our biggest customers on the GP side have multiple practices and Invisalign is still a very small fraction of the 3000 to 5000 to 7000 procedures they do a year even if there are multispecialty office. And so our job is becoming more relevant and meaningful and making Invisalign which is orthodontics which isn’t as typical a part of a GP practice worked towards mainstream. We know what success looks like Glen, I mean you’ve been an observer here, not just us but others for a long time and we know how to replicate that success, we have to do it office-by-office across the country and I think we know how to do that, it just takes time. I’ll point back to a comment I made earlier, we’ve completely overhauled our clinical education frontend and it’s working much better, that’s the foundation. We wind up with the rep meeting the doctor literally within a week or when they were in class where they meet them, and they were out there working together to get the staff and everybody else onboard, in many cases they bring the staff with them to training. So the…

Yes, I think as David said it’s for the framework for thinking about guidance was – was that these are GPs returning, in fact orthos maybe two minute down a little bit, start treating more adults after the summer rush for teens. GPs offices get busy again after Labor Day and that’s in our thinking, we expect GPs offices to pick up, we expect EMEA to get busy, they came screaming back in September and that push is on until the end of the year, and again, APAC is still running like the dickens. So all those factors go together and are reflected in the guidance that David spoke. Glen Santangelo – Credit Suisse: And maybe just one…

I was just going to say APAC, APAC just kind of pile on a guess, we saw a very strong September in APAC which is very encouraging for us as we think about Q4. Glen Santangelo – Credit Suisse: Okay, maybe if I just ask my last question on the margin side.

This is your last one Glen.

This is number two. Glen Santangelo – Credit Suisse: I’ll jump off; I’ll give others a chance.

No, no, no. It’s okay, go ahead. Glen Santangelo – Credit Suisse: I just going to ask on the margin side, I mean basically this is the second best operating margin we’ve seen in the company’s history, at least as long as my history with it, obviously you’ve got a benefit on your gross margin line and you control the expenses, I mean should we think about maybe pushing higher into that 25% to 30% operating profit range, I mean do you think you can finally push into the higher end of that range given the groundwork you’ve laid this quarter?

Let’s not getting into a discussion between the CEO and CFO here so I will take that one. Look, what we’ve said consistently as we’ve got a long term model out there, we’re trying to thread the needle quarter-to-quarter through that. We want you to think about a whole year of performance and we have a lot of investments, we always dropped against the wall to make and where we’re confident we can continue to generate leverage in the business we’ll make more but we’re not ready yet to think about the long term financial model, I’d like to put that aside for the moment.

Yes, I’ll just add to that. I think we’ve said consistently that as it relates to our long term model our objective has been and continues to be to deliver a full year within that model, we’re yet to do that, we hope we’re on track to do that this year but at the end of the year we can talk more about what that model looks like if we change it or otherwise. Glen Santangelo – Credit Suisse: Thank you.

Thanks, Glen.

Thanks, Glen.

Thank you. Our next question comes from Jeff Johnson with Robert W. Baird. Please proceed. Jeff Johnson – Robert W. Baird: Thank you, good evening guys. David I wanted to start with you on ASPs, I want to go to backup point there. It looks your ASPs have been running up, about 4% or 5% on average over the last four quarters or so. If I back into your ASP guidance for fourth quarter it looks to me down a point or two year-over-year and maybe that’s a little aggressive but that’s where my math has taken me. Is that all currency because if I do the math on that, that’s about an $8 million swing and in the past your currency swings when they’ve been bad, has been maybe a $1 million or $2 million, so this seem like it’s bigger than that. So I’m wondering if it’s all currency in that swing or if there is something else in there that might be swing in the ASPs even more than currency.

Currency is probably the largest component of it. Mix as we talked about a few minutes ago is also a component of it because we’re expecting to see some traction on the express side of our business in the fourth quarter with some promotions we’re running, particularly internationally, so those two are the biggest contributing factors to it. Long term however I guess I would still emphasize the point that we believe that our ASPs long term are going to continue to grow as our international business treats more complex cases and is growing at a rate faster than North America, and in particularly APAC where they treat the most complex cases. So while we might see some – little bit of volatility in ASP from quarter-over-quarter basis and that reflect in our Q4 guidance, I think long term we still accept – it would expect the ASPs to be stable to modestly up.

Jeff, if I just pile on for a moment. We would look at a mix shift ASP because the mix shift would be a positive effect because it’s something we’re actually trying to engineer, even though in our fall through in terms of operating margin is as good as or better than a full case. So for us that’s a good thing, it’s a case we might not have participated in in a growing area. And then secondly, I think as David said, if you think about our business in Europe specifically, almost all of our volume shifts in September and that’s exactly when the big – it was the biggest step we’ve ever seen in the percentage basis in the company, and because of virtually all of our shipments – because our doctors ask us to hold their cases until they are back from holiday, shift in September, it all got – it was all based on revenue based on a completely different euro and literally I think September 2nd or something it took a dive. So I think that’s the rational for via change FX will give and take but I think on the mix side we’re actually trying to do this, we want to separate those two factors. Jeff Johnson – Robert W. Baird: Alright, that’s helpful. An interesting September point there let me just – I guess my follow up Tom, on the i7, i14 and the mix shift there I understand kind of trying to engineer some volumes you might not have had in the past. But I know it’s been two or three quarters in a row here when you and I have had conversations where – when the mix has been going the other way to the fall and some of the team cases in that, especially in the international markets, your explanation to me has been that docs really don’t see in advantage from a price standpoint, they just assume to pay a little bit more to get all the flexibility of 30 Aligners instead of 7 or 14 or something and you’ve made it sound like docs just don’t even see a reason to use i7, i14, does the forward in teen are a much better product for lot of the guys in the international markets and now it seems like that argument is kind of shifting here and I’m just trying to understand why you would promote the i7, i14 if you’ve been seeing this kind of shift towards the fall in the higher revenue cases?

The short answer is we will continue to see in very unpenetrated markets around the world, a bias towards comprehensive treatment because the bulk of adults never got treatment as kids. Because we’re making progress, because the brand is getting out there and because there were children that were treated as kids by the National Health System in the UK, by the German Health Program in Germany etcetera, and never had retainers and relapsed, they are starting to see some cases with people that just want – they basically have a good bite and a solid occlusion but they are wanting to be strained up in front and so they are open minded about doing something for themselves, this is actually a wonderful thing because it means the idea of oral health and a better smile is slowly starting to catch on in Europe and it has not been at the top of their list ever. So it’s really – I think a good positive dynamic of market growth and this is feedback from some of our customers, and we’re trying to be responsive of that and give them incentives to try the product more. Jeff Johnson – Robert W. Baird: That’s helpful, thank you.

Sure.

Thank you. Our next question is from Brandon Couillard with Jefferies. Please proceed. Brandon Couillard – Jefferies: Good afternoon.

Hey, Brandon. Brandon Couillard – Jefferies: David just on the 4Q gross margin guidance, can you quantify those moving parts between ASPs, freight, and training cost and in terms of magnitude of effect because this will be the lowest gross margin I think in quite some time, if you could just give us some color there it would be helpful.

Well some of that is – there is probably three pieces to it; ASP which we’ve talked about, freight and higher training, and as you listen to calls in the past right because we’ve talked about training. Training ebbs and flows with some amount of seasonality in it, it’s relatively a breakeven proposition for us financially and so as training increases in one particular quarter it’s going to tend to be a drag on margins, it won’t be a drag on dollars but it winds up being a little bit of a drag on percent. The other piece to it is, our scanner business, we’re anticipating that to be a little bit down from a gross margin standpoint. So probably those three things together, I don’t have a waiting here to give you between them if I was to put them in order, a rank order, high ASP is the first item and primarily as a result of FX. And then training and freight and this kind of business. Brandon Couillard – Jefferies: Tom, one for you. As we look at the North American business, I know you don’t usually talk about it this way but in terms of the growth rates we’ve seen and case volumes over the last couple of quarters, can you speak to the trend between teen and non-teen markets and if you’ve seen I guess in the deceleration in the non-teen segment over the past in terms of the trajectory in recent periods.

Let me answer this way, the numbers show a deceleration in volumes or in rate of growth, we’re growing steadily but the rate of growth it’s slowing over a number of quarters, this is mostly the case in GP space. And I think going back to an earlier question, we have not generated leverage there yet, it’s something that’s highly, highly important to us and we’re working hard on it. If I strip all those parts away, there is still this huge laid demand in North America, 20 million to 25 million adults that want a better smile, that do not want brackets and wires, that know that the treatment cost is about $5000 and what they need is to become more important on their list of 20 or 30 things they would like to do. And we know because we talk to thousands of consumers. So I think our job is, when they are ready to make sure they go after Invisalign and then when they are after Invisalign they get to a practice that says we’re thrilled to put you into Invisalign. All those things don’t happen perfectly each time but we’re working on fixing that. So we have lots of opportunity, we can do a better and better job of creating demand, of activating that at a doctor’s office and make use of the doctor’s office is ready to rock. It just takes some time, I would saw finally we don’t pat ourselves in the back but one of the things I said purposely is we expect to grow multiples above market growth and competitive growth in every market we serve and we still do that even though we’re a little frustrated with our pace in North America right now. So I think our view is it was a softer orthodontic market and a softer dental procedures market during the quarter and we take no comfort there because our expectations were higher. But now we see all the opportunity, it drives us crazy sometimes but it’s there to be had. Brandon Couillard – Jefferies: Thank you.

Thank you.

(Operator Instructions) And next question comes from Jeffrey Matthews with Ram Partners. Please proceed. Jeffrey Matthews – Ram Partners: Thank you, can you hear me?

Yes Jeff, we can. Good afternoon. Jeffrey Matthews – Ram Partners: Hi, good afternoon. Two things. One is, the progress you're making with DSOs seems more significant at this point than I would've expected. And I wonder if there is something about what you offer that is attractive to that organization, as opposed to an individual GP? Is it an easier sell for you for some reason? And then my second question is about China. I'm sort of gob smacked by the growth there. And I wonder really what your outlook is for the next couple of years in China, and why you seem to be kind of hitting this inflection point?

Let me start with the second, wouldn’t want you to be hanging there gob smacked. If you’re observer, you’ve spent real time over there and I think you told me at one point when you were in Shanghai you saw Invisalign signs or something. The receptivity – I think we’ve got the formulae right, we tried a multiple different ways in countries in Europe and in Asia, and when we went into China we decided that it was more important to build the right foundation than it was to go for volume, and part of that was based on launching with G4 several years ago in May and we waited till G4 was available because it was our first real opportunity to really treat the most complex cases. And then we brought in SmartTrack, shortly behind that one we got approval in China. So I think the second thing we did was we worked three or four year’s building relationships with universities and clinical leaders and try to do it in a very Chinese way as they would describe it, and we were very patient about starting to train doctors, it was only until we felt we had clinical supporters that it treated and finished cases there that can teach to other Chinese doctors with those Chinese cases and demonstrated great results where we really ready to step on the gas which we’ve done over the last couple of years. So we’re pleased, we think long term, I won’t put guidance kind of language around this, and I think we talked about this a little bit, Raphael Pascaud, our VP of International spoke about it in our Analyst Day. We think China is probably the one country in the world that offers that kind of rough sized opportunity of the US and so we’re approaching it with that kind of potential. I wouldn’t want to put a finer point on it for the next few years but it’s one of our biggest investment opportunities and we continue to work hard to scale it. I’ll stop in there and give it over to DSOs if I can. Jeffrey Matthews – Ram Partners: Thanks.

Sure. I don’t want to let you think that the business results are screaming with DSOs yet, I’m reflecting on it because; A, it showed up significantly in training new doctors, and we’ve been on this for about a year and a half, two years working on this. And I think we’ve got the formula down pretty well even though the different DSOs have different approaches. We’re attractive to them and they are attractive to us, they bring regional breadth, cross country breadth in some cases, they bring very operational mindset where they are used to driving for efficiency in cost yet still delivering great results clinically for patients. They are used to developing their own brand and series of treatment centers, and so we come in and they work hard to develop demand for each of their offices and each of their areas. We come out and alongside that we’re one of the best practice building opportunities in dentistry today with the Invisalign brand. And so what they can bring is a mindset with clinical leadership and a compliance mentality that this is one of the three things we’re going to focus on this year and everybody is going to get trained, we’re all going to do it, we’re going to measure it, and the company is going to line up behind us to help us. And I would say we’re in the early days there but we think this is a more focused approach to move the GP market. We’re not at all giving up on office-by-office, we have great customers out there doing incredible things, it’s just that 90 plus percent of all dental procedures in North America happen in individual provider offices and fragmentations, the operative term. So we have to do it from both directions and make sure our value proposition, our coverage, our product and our support model fit every side. But DSO early days it will turn into business results in the coming years. Jeffrey Matthews – Ram Partners: Got it, thanks very much.

Sure, take care.

Thank you. Our next question comes from Steve Beuchaw with Morgan Stanley. Please proceed. Steve Beuchaw – Morgan Stanley: Hi, good afternoon and thank you for taking the question.

Steve, how are you? Steve Beuchaw – Morgan Stanley: Very well, thank you. Just trying to turn attention on the GP channel, I wonder if Tom you could look at it from a different angle, maybe reflect back on your experience, one year into the realign initiative and I wonder if you have any updated views on how it may or may not make sense to push the gas pedal a little bit on the distribution channel in that way. And then my second question which is also actually about distribution, it relates to Europe. That business is growing quite nicely, I wondered if you could give us a sense for how much in your runway you think you have there? And more specifically, how your view on execution and the growth opportunity in Europe is changing, now that you have a more direct line of sight into how that channel is evolving. Thanks so much.

Let’s see the first one here, realign is still not meaningful, we are learning a lot and as we think about our long term evolution of our business model and customers, many GP customers that want to respond to a patients request but maybe don’t want to do a weekend course, don’t want to go deep, there is something there to be had and I’d say the Shine organization and our team are both working on how to make that scale. And I would say good success in a handful of regions but it is not been replicated across the Shine team or across our team. I think the second piece goes back to something I’d said in my prepared comments which is about – we’re still not relevant enough to the average GP, I guess there is an earlier question. We’re still not relevant enough to get them to link towards orthodontics, well it’s not something to do routinely, in fact they’ve got very little of it in most of their dental programs and they spent much more time on drilling fill and anesthetic and cosmetic and veneers and all that. So that’s what they normally do at where most of their business is, preventive and restorative. So where we come along, we try to get them do something different. I think when this really comes visible which realign where it’s hard to assess what you can treat in five stages with a realign case and don’t even have the benefit of scaling it up to an Express 10 if you’re a direct customer or a full case, automatically when our systems in stuff. And so I think a couple of things will happen to changes overtime Steve; one is that as scanners become ubiquitous and share side applications…

Thanks, Steve.

Operator, we’ll take one last question please.

Sure. Our next question is from John Kreger with William Blair. Please proceed. John Kreger – William Blair: Great, thanks. Not until time, I’ll just ask maybe two quick ones. Tom you just mentioned a minute ago that key is getting more scanners out there, any progress you can give us on your efforts to get more interoperability with other scanner operators? That would be helpful. And then the second, you talked a fair amount about DSOs on the call, as that ramps do you think that will have any impact on your ASP or on your margins? Thanks.

I will take that one first. As we look at programs we look at contribution margin more than we look at ASP and as long as we hear that contribution margins that will drop through to operating margins based on the entire support model, we are comfortable with different price points and a good example of that is our elite or super elite customers that we support with different resources and try to teach them how to use the product we work with them and business planning for what their years are going to look like, and with the company resources look at helping them do great local campaigns to get word of mouth and all that. So while we trade higher discount or lower ASP with those elite customers we also don’t put all the resources in the training and support that we do for a low volume customer that ultimately pays list. And the same can be said for DSO, they have clinical leaders that on a regional basis and national basis that will own programs and support, and these DSOs working alongside us, we pay training for those groups in language they use and then they go working support in challenge in a positive way, the local offices and the regional teams and they put experts out there in the field right alongside, and in many cases they don’t want our reps even calling on their accounts. They say look, let you have a corporate rep calling me, pull your reps out of those accounts and you don’t have to put that energy and effort in. So we can then take that rep and deploy them to another account that’s not owned by the DSO. So in our mind although you would see maybe some more ASPs going down, imagine that’s like an advantage effect but operating margins, contribution margins still very, very attractive and worth doing. And I completely forgot the second one you asked, I’m sorry. John Kreger – William Blair: Yes, just a follow up on any interoperability progress.

I wasn’t trying to shine in the topic, no. We continue to work with leading players on if we could and how we could validate and confirm interoperability as I have been saying clearly, it’s in our best interest to do so and while it will cost us some installed base sockets, iTero scanners, not everybody is going to buy an iTero scanner even though we believe it’s the best scanner in the world. So the upside is when there is more news we’ll let you know and until then you should assume it’s in our interest to do so. John Kreger – William Blair: Great, thanks.

Thank you, everyone. That concludes our conference call today. We look forward to speaking with you at upcoming conferences and meetings. Have a great day.