SmileDirectClub will close certain overseas operations, pause its move into other international markets, cut jobs and book related costs
SmileDirectClub (SDC) – Get SmileDirectClub Inc Class A Report said it would close certain overseas operations, pause its move into other international markets, cut jobs and book related costs in an effort to improve its performance.
The company also affirmed its full-year 2021 revenue estimate at $630 million to $650 million.
In a statement after hours Monday, the Nashville provider of orthodontic services didn’t specify the number of jobs it would cut.
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It expects the broad effort to require costs of about $25 million, including lease buyouts, asset impairments tied to closing operating centers, and employee costs including severance and retention.
The company said it would book $3 million of the costs for the fourth quarter and the rest during 2022. It expects savings from the effort to be about $120 million.
SmileDirectClub is ceasing operations in Austria, Germany, Hong Kong, Mexico, the Netherlands, New Zealand, Singapore and Spain. Operations will continue in the U.S., Canada, the U.K., Ireland, France and Australia.
The move will focus SDC’s efforts on “the key growth initiatives that will produce the highest return on investment,” it said.
These include expanding its professional partner network, adding innovations in its teeth aligners to help boost its market share among teenagers and higher-income households, and further building its oral-care product business.
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A survey of Wall Street analysts by FactSet expects SmileDirectClub to report full-year revenue or $640.5 million.
Wall Street expects a fourth-quarter loss at SDC of 28 cents a share on revenue of $129.3 million.
At last check SmileDirectClub shares were trading up 8.5% at $2.16 a share. On Monday they rose 2.1% to $1.99. Almost a year ago they’d set a 52-week high $16.08.
