Non-GAAP Discussion Disclosure
The information discussed within this release includes financial results and projections that are in accordance with accounting principles generally accepted in the United States (GAAP). In addition, certain non-GAAP financial measures have been provided excluding certain charges, expenses and income. The non-GAAP measures should be read in conjunction with the corresponding GAAP measures and should be considered in addition to, and not as an alternative or substitute for, the measures prepared in accordance with GAAP. The non-GAAP financial measures are provided in an effort to provide information that investors may deem relevant to evaluate results from the company’s core business operations and to compare the company’s performance with prior periods. The non-GAAP financial measures primarily identify and exclude certain discrete items, such as merger-related expenses, amortization expenses and expenses associated with share-based compensation required under ASC 718. The company uses these non-GAAP financial measures for evaluating comparable financial performance against prior periods.
This release is available on the Stratasys web site at www.stratasys.com.
Stratasys Ltd. (Nasdaq: SSYS), headquartered in Minneapolis, Minn. and Rehovot, Israel, manufactures 3D printers and materials for prototyping and production. The company’s patented FDM® and PolyJetTM 3D Printing technologies produce prototypes and manufactured goods directly from 3D CAD files or other 3D content. Systems include 3D printers for idea development, prototyping and direct digital manufacturing. Stratasys subsidiaries include MakerBot and Solidscape, and the company operates the RedEye digital-manufacturing service. Stratasys has more than 1800 employees, holds over 550 granted or pending additive manufacturing patents globally, and has received more than 20 awards for its technology and leadership. Online at: www.stratasys.com or http://blog.stratasys.com.
| Stratasys Ltd. | |||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||
| Net sales | |||||||||||||||
| Products | $ | 134,943 | $ | 59,461 | $ | 414,853 | $ | 179,762 | |||||||
| Services | 20,142 | 11,690 | 69,550 | 35,482 | |||||||||||
| 155,085 | 71,151 | 484,403 | 215,244 | ||||||||||||
| Cost of sales | |||||||||||||||
| Products | 65,088 | 32,138 | 213,427 | 86,742 | |||||||||||
| Services | 12,195 | 6,175 | 44,803 | 18,591 | |||||||||||
| 77,283 | 38,313 | 258,230 | 105,333 | ||||||||||||
| Gross profit | 77,802 | 32,838 | 226,173 | 109,911 | |||||||||||
| Operating expenses | |||||||||||||||
| Research and development, net | 17,669 | 7,083 | 52,310 | 19,659 | |||||||||||
| Selling, general and administrative | 64,462 | 30,764 | 202,040 | 73,130 | |||||||||||
| Change in fair value of earn-out obligations | (853 | ) | - | 754 | - | ||||||||||
| 81,278 | 37,847 | 255,104 | 92,789 | ||||||||||||
| Operating income (loss) | (3,476 | ) | (5,009 | ) | (28,931 | ) | 17,122 | ||||||||
| Other income (expense) | (650 | ) | 871 | (450 | ) | 1,388 | |||||||||
| Income (loss) before income taxes | (4,126 | ) | (4,138 | ) | (29,381 | ) | 18,510 | ||||||||
| Income taxes (benefit) | (2,137 | ) | (239 | ) | (2,474 | ) | 9,687 | ||||||||
| Net income (loss) | $ | (1,989 | ) | $ | (3,899 | ) | $ | (26,907 | ) | $ | 8,823 | ||||
| Net income (loss) attributable to non-controlling interest | $ | - | $ | 332 | $ | 47 | $ | 332 | |||||||
| Net income (loss) attributable to Stratasys Ltd. | $ | (1,989 | ) | $ | (4,231 | ) | $ | (26,954 | ) | $ | 8,491 | ||||
| Net income (loss) per ordinary share attributable to Stratasys Ltd. | |||||||||||||||
| Basic | $ | (0.04 | ) | $ | (0.16 | ) | $ | (0.64 | ) | $ | 0.37 | ||||
| Diluted | (0.07 | ) | (0.16 | ) | (0.68 | ) | 0.36 | ||||||||
| Weighted average ordinary shares outstanding | |||||||||||||||
| Basic | 48,955 | 27,261 | 42,079 | 22,812 | |||||||||||
| Diluted | 49,036 | 27,261 | 42,099 | 23,776 | |||||||||||
| Stratasys Ltd. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| December 31, | December 31, | |||||||
| 2013 | 2012 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 414,088 | $ | 133,826 | ||||
| Short-term bank deposits | 200,370 | 20,063 | ||||||
|
Accounts receivable less allowance for doubtful accounts of $1,804 at December 31, 2013 and $654 at December 31, 2012 |
99,200 | 64,678 | ||||||
| Inventories | 88,406 | 67,995 | ||||||
|
Net investment in sales-type leases, net for doubtful accounts of $183 at December 31, 2013 and $301 at December 31, 2012 |
6,696 | 5,134 | ||||||
| Prepaid expenses | 5,470 | 2,751 | ||||||
| Deferred income taxes | 16,501 | 4,968 | ||||||
| Other current assets | 21,398 | 23,863 | ||||||
| Total current assets | 852,129 | 323,278 | ||||||
| Non-current assets | ||||||||
| Goodwill | 1,195,891 | 822,475 | ||||||
| Other intangible assets, net | 622,330 | 510,372 | ||||||
| Net investment in sales-type leases | 11,219 | 7,872 | ||||||
|
Amounts funded in respect of employees rights upon retirement |
3,166 | 2,628 | ||||||
| Property, plant and equipment, net | 91,005 | 62,070 | ||||||
| Other non-current assets | 6,481 | 2,818 | ||||||
| Total non-current assets | 1,930,092 | 1,408,235 | ||||||
| Total assets | $ | 2,782,221 | $ | 1,731,513 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 35,375 | $ | 35,235 | ||||
| Accrued expenses and other current liabilities | 32,849 | 22,197 | ||||||
| Accrued compensation and related benefits | 21,441 | 16,849 | ||||||
| Earn-out obligation | 12,027 | - | ||||||
| Unearned revenues | 36,033 | 18,068 | ||||||
| Total current liabilities | 137,725 | 92,349 | ||||||
| Non-current liabilities | ||||||||
| Employee rights upon retirement | 4,683 | 4,188 | ||||||
| Earn-out obligation - long-term | 16,998 | - | ||||||
| Deferred tax liabilities | 105,901 | 54,693 | ||||||
| Unearned revenues - long-term | 3,315 | 3,181 | ||||||
| Other non-current liabilities | 13,812 | 4,946 | ||||||
| Total liabilities | 282,434 | 159,357 | ||||||
| Commitments and contingencies | ||||||||
| Equity | ||||||||
|
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 shares; 49,211 and 38,372 shares issued and outstanding at December 31, 2013 and 2012, respectively |
133 | 101 | ||||||
| Additional paid-in capital | 2,412,197 | 1,459,294 | ||||||
| Retained earnings | 85,549 | 112,503 | ||||||
| Accumulated other comprehensive income (loss) | 1,908 | (238 | ) | |||||
| Equity attributable to Stratasys Ltd. | 2,499,787 | 1,571,660 | ||||||
| Non-controlling interest | - | 496 | ||||||
| Total equity | 2,499,787 | 1,572,156 | ||||||
| Total liabilities and equity | $ | 2,782,221 | $ | 1,731,513 | ||||
| Stratasys Ltd. | ||||||||||||||||||||||||
| Reconciliation of Pro Forma GAAP to Pro Forma Non-GAAP Results of Operations | ||||||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||||
| Three Months Ended December 31, 2013 | Three Months Ended December 31, 2012 | |||||||||||||||||||||||
| Pro Forma | Pro Forma | |||||||||||||||||||||||
| Including Objet | Including Objet | |||||||||||||||||||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||||||||||
| (unaudited) | Adjustments* | (unaudited) | (unaudited) | Adjustments* |
(unaudited) |
|||||||||||||||||||
| Net sales | ||||||||||||||||||||||||
| Products | $ | 134,943 | $ | 668 | $ | 135,611 | $ | 81,651 | $ | - | $ | 81,651 | ||||||||||||
| Services | 20,142 | - | 20,142 | 14,711 | - | 14,711 | ||||||||||||||||||
| 155,085 | 668 | 155,753 | 96,362 | - | 96,362 | |||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||
| Products | 65,088 | (14,765 | ) | 50,323 | 41,641 | (10,936 | ) | 30,705 | ||||||||||||||||
| Services | 12,195 | (495 | ) | 11,700 | 10,329 | (397 | ) | 9,932 | ||||||||||||||||
| 77,283 | (15,260 | ) | 62,023 | 51,970 | (11,333 | ) | 40,637 | |||||||||||||||||
| Gross profit | 77,802 | 15,928 | 93,730 | 44,392 | 11,333 | 55,725 | ||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Research and development, net | 17,669 | (2,207 | ) | 15,462 | 10,210 | (988 | ) | 9,222 | ||||||||||||||||
| Selling, general and administrative | 64,462 | (17,633 | ) | 46,829 | 38,200 | (10,059 | ) | 28,141 | ||||||||||||||||
| Change in fair value of earn-out obligations | (853 | ) | 853 | - | - | - | - | |||||||||||||||||
| 81,278 | (18,987 | ) | 62,291 | 48,410 | (11,047 | ) | 37,363 | |||||||||||||||||
| Operating income (loss) | (3,476 | ) | 34,915 | 31,439 | (4,018 | ) | 22,380 | 18,362 | ||||||||||||||||
| Other income (expenses) | (650 | ) | - | (650 | ) | 1,408 | - | 1,408 | ||||||||||||||||
| Income (loss) before income taxes | (4,126 | ) | 34,915 | 30,789 | (2,610 | ) | 22,380 | 19,770 | ||||||||||||||||
| Income taxes (benefit) | (2,137 | ) | 7,133 | 4,996 | 747 | 2,606 | 3,353 | |||||||||||||||||
| Net income (loss) | $ | (1,989 | ) | $ | 27,782 | $ | 25,793 | $ | (3,357 | ) | $ | 19,774 | $ | 16,417 | ||||||||||
| Net income attributable to non-controlling interest | $ | - | $ | - | $ | - | $ | 158 | $ | - | $ | 158 | ||||||||||||
| Net income (loss) attributable to Stratasys Ltd. | $ | (1,989 | ) | $ | 27,782 | $ | 25,793 | $ | (3,515 | ) | $ | 19,774 | $ | 16,259 | ||||||||||
| Net income (loss) per ordinary share attributable to Stratasys Ltd. | ||||||||||||||||||||||||
| Basic | $ | (0.04 | ) | $ | 0.53 | $ | (0.09 | ) | $ | 0.43 | ||||||||||||||
| Diluted | (0.07 | ) | 0.50 | (0.09 | ) | 0.40 | ||||||||||||||||||
| Weighted average ordinary shares outstanding | ||||||||||||||||||||||||
| Basic | 48,955 | 48,964 | 37,557 | 37,557 | ||||||||||||||||||||
| Diluted | 49,036 | 51,429 | 37,557 | 40,327 | ||||||||||||||||||||
|
The Company considers these non-GAAP measures to be indicative of its core operating results and facilitates a comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes, however these measures should not be viewed as a substitute for the Company’s GAAP results. |
| * Refer to the "Reconciliation of Non-GAAP Adjustments" herein for further information regarding adjustments. |
| Stratasys Ltd. | ||||||||||||||||||||||||
| Reconciliation of Pro Forma GAAP to Pro Forma Non-GAAP Results of Operations | ||||||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||||
| Twelve Months Ended December 31, 2013 | Twelve Months Ended December 31, 2012 | |||||||||||||||||||||||
| Pro Forma | Pro Forma | |||||||||||||||||||||||
| Including Objet | Including Objet | |||||||||||||||||||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||||||||||
| Adjustments* | (unaudited) | (unaudited) | Adjustments* | (unaudited) | ||||||||||||||||||||
| Net sales | ||||||||||||||||||||||||
| Products | $ | 414,853 | $ | 2,316 | $ | 417,169 | $ | 306,043 | $ | - | $ | 306,043 | ||||||||||||
| Services | 69,550 | - | 69,550 | 53,011 | - | 53,011 | ||||||||||||||||||
| 484,403 | 2,316 | 486,719 | 359,054 | - | 359,054 | |||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||
| Products | 213,427 | (58,826 | ) | 154,601 | 158,828 | (42,964 | ) | 115,864 | ||||||||||||||||
| Services | 44,803 | (1,575 | ) | 43,228 | 36,303 | (1,475 | ) | 34,828 | ||||||||||||||||
| 258,230 | (60,401 | ) | 197,829 | 195,131 | (44,439 | ) | 150,692 | |||||||||||||||||
| Gross profit | 226,173 | 62,717 | 288,890 | 163,923 | 44,439 | 208,362 | ||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Research and development, net | 52,310 | (5,490 | ) | 46,820 | 36,923 | (3,597 | ) | 33,326 | ||||||||||||||||
| Selling, general and administrative | 202,040 | (57,652 | ) | 144,388 | 141,232 | (40,354 | ) | 100,878 | ||||||||||||||||
| Change in fair value of earn-out obligations | 754 | (754 | ) | - | - | - | - | |||||||||||||||||
| 255,104 | (63,896 | ) | 191,208 | 178,155 | (43,951 | ) | 134,204 | |||||||||||||||||
| Operating income (loss) | (28,931 | ) | 126,613 | 97,682 | (14,232 | ) | 88,390 | 74,158 | ||||||||||||||||
| Other income (expenses) | (450 | ) | - | (450 | ) | 2,124 | - | 2,124 | ||||||||||||||||
| Income (loss) before income taxes | (29,381 | ) | 126,613 | 97,232 | (12,108 | ) | 88,390 | 76,282 | ||||||||||||||||
| Income taxes (benefit) | (2,474 | ) | 17,575 | 15,101 | 9,407 | 7,225 | 16,632 | |||||||||||||||||
| Net income (loss) | $ | (26,907 | ) | $ | 109,038 | $ | 82,131 | $ | (21,515 | ) | $ | 81,165 | $ | 59,650 | ||||||||||
| Net income attributable to non-controlling interest | $ | 47 | $ | 125 | $ | 172 | $ | 62 | $ | - | $ | 62 | ||||||||||||
| Net income (loss) attributable to Stratasys Ltd. | $ | (26,954 | ) | $ | 108,913 | $ | 81,959 | $ | (21,577 | ) | $ | 81,165 | $ | 59,588 | ||||||||||
| Net income (loss) per ordinary share attributable to Stratasys Ltd. | ||||||||||||||||||||||||
| Basic | $ | (0.64 | ) | $ | 1.95 | $ | (0.58 | ) | $ | 1.61 | ||||||||||||||
| Diluted | (0.68 | ) | 1.84 | (0.58 | ) | 1.49 | ||||||||||||||||||
| Weighted average ordinary shares outstanding | ||||||||||||||||||||||||
| Basic | 42,079 | 42,079 | 36,987 | 36,987 | ||||||||||||||||||||
| Diluted | 42,099 | 44,511 | 36,987 | 39,970 | ||||||||||||||||||||
| TheCompany considers these non-GAAP measures to be indicative of its core operating results and facilitates a comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes, however these measures should not be viewed as a substitute for the Company’s GAAP results. |
| * Refer to the "Reconciliation of Non-GAAP Adjustments" herein for further information regarding adjustments. |
| Stratasys Ltd. | |||||||||||||||||
| Reconciliation of Non-GAAP Adjustments | |||||||||||||||||
| (in thousands) | |||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||
| Net sales, products | |||||||||||||||||
| Deferred revenue step-up | 668 | - | 2,316 | - | |||||||||||||
| Cost of sales, products | |||||||||||||||||
| Intangible assets amortization expense | (14,233 | ) | (10,260 | ) | (57,027 | ) | (41,038 | ) | |||||||||
| Non-cash stock-based compensation expense | (496 | ) | (361 | ) | (1,535 | ) | (1,190 | ) | |||||||||
| Merger related expense | (36 | ) | (315 | ) | (264 | ) | (736 | ) | |||||||||
| (14,765 | ) | (10,936 | ) | (58,826 | ) | (42,964 | ) | ||||||||||
| Cost of sales, services | |||||||||||||||||
| Non-cash stock-based compensation expense | (424 | ) | (397 | ) | (1,445 | ) | (1,475 | ) | |||||||||
| Merger related expense | (71 | ) | - | (130 | ) | - | |||||||||||
| (495 | ) | (397 | ) | (1,575 | ) | (1,475 | ) | ||||||||||
| Research and development, net | |||||||||||||||||
| Non-cash stock-based compensation expense | (925 | ) | (988 | ) | (3,491 | ) | (3,597 | ) | |||||||||
| Performance bonus expense | (1,282 | ) | - | (1,999 | ) | - | |||||||||||
| (2,207 | ) | (988 | ) | (5,490 | ) | (3,597 | ) | ||||||||||
| Selling, general and administrative | |||||||||||||||||
| Intangible assets amortization expense | (5,319 | ) | (2,375 | ) | (17,066 | ) | (9,500 | ) | |||||||||
| Non-cash stock-based compensation expense | (4,954 | ) | (5,187 | ) | (17,791 | ) | (21,592 | ) | |||||||||
| Merger related expense | (2,724 | ) | (2,497 | ) | (15,681 | ) | (9,262 | ) | |||||||||
| Performance bonus expense | (4,636 | ) | - | (7,114 | ) | - | |||||||||||
| (17,633 | ) | (10,059 | ) | (57,652 | ) | (40,354 | ) | ||||||||||
| Change in fair value of earn-out obligation | |||||||||||||||||
| Change in Earn-out obligation | 853 | - | (754 | ) | - | ||||||||||||
| Income taxes | |||||||||||||||||
| Tax expense related to non-GAAP adjustments | 7,133 | 2,606 | 17,575 | 7,225 | |||||||||||||
| Net income attributable to non-controlling interest | |||||||||||||||||
| Depreciation and amortization expense attributable to non-controlling interest | - | - | 125 | - | |||||||||||||
| Net income | $ | 27,782 | $ | 19,774 | $ | 108,913 | $ | 81,165 | |||||||||
| Stratasys Ltd. | ||
| Reconciliation of GAAP to Non-GAAP Forward Looking Guidance | ||
| Fiscal Year 2014 | ||
| (in millions, except per share data) | ||
| GAAP net income | $10.5 to $19.9 | |
|
Adjustments |
||
| Stock-based compensation expense | $25.1 to $28.2 | |
| Intangible assets amortization expense | $64.8 | |
| Merger related expense | $8.8 to $9.8 | |
| Non-GAAP net income | $113.3 to $118.6 | |
| GAAP diluted earnings per share | $0.20 to $0.38 | |
| Non-GAAP diluted earnings per share | $2.15 to $2.25 | |
