However, the company has been struggling to manage the complaints filed against it in the last five years. The complaints raised questions about its practice of medicine and the lives of patients while the dental boards in Georgia and Alabama have deemed certain of its practices as illegal.
The company has incurred net operating losses since inception and this is likely to continue in the near future. Till now, significant funds were spent in organizational and start-up activities, to recruit employees, to develop clear aligners, to develop manufacturing and member support resources, and for research and development.
The adoption of the teledentistry model by the consumers remained the main of the company. The unwillingness of adoption by the consumers could hurt the company’s future results. However, the company expects sales of its clear aligners to continue to account for the vast majority of its total net revenues for the foreseeable future.
The total market of SmileDirectClub is greater than 120 million people in the US and about 500 million people globally, based on total malocclusion prevalence and age and income demographics. The company is in the early stage of penetrating the opportunity of addressing over 90% of the market today.
For the six months ended June 30, 2019, the company reported a 113% jump in revenues as an increase in the number of website visitors and conversion thereof to aligner sales drove unique aligner orders higher. An increase in the costs and expenses specifically of sales and marketing spend hurt the bottom line with the loss expanding wider than the prior-year period.