Specialist
Former senior director at SmileDirectClub
Agenda
- Key trends and developments in the orthodontic devices industry
- COVID-19 dynamics and impact on consumer utilisation, supply chain and sales cycle
- Analysis of SmileDirectClub's (NASDAQ: SDC) e-commerce channel and digital sales growth ability
- Competitive positioning for major players such as SmileDirectClub, Align Technology (NASDAQ: ALGN), Candid Care and Byte
- Business challenges, operational improvement levers and turnaround potential
Questions
1.
What major trends or developments have you been following in the clear aligner sector over the past year?
2.
What are some major business challenges have led to SmileDirectClub’s underperformance vs peers such as Align Technology over the past couple years?
3.
To what extent has coronavirus accelerated the option of clear aligners vs legacy wired bracket orthodontic treatments? How might widespread utilisation of telemedicine impact longer-term adoption trends for SmileDirectClub?
4.
What headwinds has inflation had on manufacturing operations? Are there any pricing increases for raw materials due to inflation or supply chain headwinds? To what extent are these increases being passed on to customers vs being absorbed by SmileDirectClub’s bottom line?
5.
Could you quantify the wage increases from labour shortages? How detrimental would those be to margins?
6.
SmileDirectClub’s core customer demographic is households with an annual income of around USD 70,000. To what extent could inflationary pressures prevent or delay consumers from purchasing aligners? What demand impact could this have on sales over the next year?
7.
Do you think the current economic climate could steer more affluent customers away from more expensive treatments such as brackets and wires or Invisalign? How do you reconcile any demand wins and losses from a net-net standpoint?
8.
How much opportunity might there be SmileDirectClub in the teen demographic? How do you assess the company’s efforts to drive penetration and adoption with teenagers? How competitive is it here vs Align, Byte and Candid?
9.
Do you think SmileDirectClub has been too reliant on Facebook historically to generate new business? How much might the iOS changes limiting the ability to leverage user data raise costs per lead and hurt the company’s go-to-market efforts?
10.
What levers can SmileDirectClub pull to reduce CAC [customer acquisition cost]? Could you elaborate on the opportunity to improve its marketing strategy? How could the company better optimise its sales marketing spend?
11.
How do you assess SmileDirectClub’s approach making inroads with dentists and orthodontists? Why would orthodontists invest time to get comfortable with the company, given its later movement into clinical offices and mixed reputation vs a company such as Align?
12.
How much leverage does SmileDirectClub have to gain traction due to its lower price point? Would some patients accept more unfavourable outcomes, given the cost discount? Do you think a ‘good, better, best’ model is feasible from a patient receptiveness standpoint?
13.
What are your thoughts on SmileDirectClub’s agreements with commercial payers to include insurance coverage for its aligners in network? Do you think the in network vs the out of network dynamic is a significant sticking point for customers?
14.
To what extent could payer agreements meaningfully contribute to sales?
15.
Could you outline SmileDirectClub’s business model and unit economics?
16.
How do you assess the lifetime value vs CAC for SmileDirectClub’s customers? How have these metrics evolved over time?
17.
What conversion rate was SmileDirectClub experiencing pre- vs post-iOS changes?
18.
Why haven’t some of SmileDirectClub’s strategic partnerships with Walmart and others been more fruitful?
19.
How do you think SmileDirectClub could improve its strategic partnerships or grow its revenue through these relationships? What might a more refined strategy be?
20.
What was the broader strategy behind SmileShops? How could these facilities help implement a personal component to the patient journey and improve customer outcomes?
21.
Could you describe SmileDirectClub’s e-commerce strategy, including its shifts to online sales and the revenue opportunity in that channel?
22.
What synergies can SmileDirect leverage from its retail portfolio offerings to help drive aligner sales? What’s the cross-selling revenue generation potential here?
23.
What are some examples of cross-selling? Which product sets might be more attractive to bundle to the same customer? How do you assess SmileDirectClub’s execution in that area?
24.
How do you assess SmileDirectClub’s efforts to expand telemedicine capabilities?
25.
What challenges could the subsidence of pandemic tailwinds for telehealth pose to SmileDirectClub? Would you consider the company’s telehealth business fairly sticky?
26.
What are your thoughts on SmileDirectClub’s night-time aligners? Has there been any credible research proving similar efficacy of these aligners vs Invisalign or SmileDirectClub full day aligner products?
27.
How much leverage do you think SmileDirectClub could have to either preserve or raise ASPs over the next two years, considering the inflationary headwinds and competitive dynamics against major players such as Align, Candid and Byte?
28.
What additional attractive product adjacencies could SmileDirectClub expand into to strengthen its portfolio offerings or maximise synergies across product lines?
29.
What are your thoughts on SmileDirectClub’s international expansion efforts and strategy abroad? Do you think the company has shifted resources to ex-US markets too soon as domestic business headwinds persist?
30.
What are the key differences between the marketing strategy in the US vs international? How do CACs, conversion rates and lead times compare?
31.
What levers could SmileDirectClub pull in the US or international markets to optimise its marketing strategy and spend?
32.
What do you consider to be the most attractive ex-US regions for SmileDirectClub to expand into, considering patient population and existing brand awareness?
33.
How do you assess SmileDirectClub’s positioning vs Align Technology, Candid, Byte and others? What are the key differences in their relative business models, go-to-market strategies and market shares?
34.
Why might SmileDirectClub have such an opportunity to take market share away from Align, given the past 1-2 years of underperformance? Is there any reason to be optimistic about this?
35.
Have you noticed any downward pricing pressure industry-wide ASPs? Would any player be particularly exposed to pricing compression?
36.
What are your thoughts on Dentsply Sirona’s acquisition of Byte? To what extent does this make Byte a stronger competitor, given Dentsply’s deeper pockets, scale, and synergies across business lines?
37.
What are your thoughts on SmileDirectClub’s CFO, Kyle Wailes, stepping down in December 2021? Does a change in leadership present a turnaround opportunity for the company?
38.
What should be the top 2-3 priorities for the new incoming CFO?
39.
What might an effective turnaround strategy be for SmileDirectClub? What low-hanging fruit could the company target to reduce operational costs? How confident are you in its ability to execute?
40.
Could SmileDirectClub be acquired, and if so, who might be a likely strategic buyer?
41.
Is it common for orthodontics to offer multiple clear aligner options? Has SmileDirectClub successfully convinced doctors to partner with it if the doctor was already offering another brand such as Align?
42.
What are your thoughts on SmileDirectClub’s senior management team? How active and engaged is it in the business? How credible do you find its go-to-market strategy?
43.
Is there anything else you’d like to highlight?
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