Stratasys Releases Fourth Quarter and Full Year 2015 Financial Results
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Stratasys Releases Fourth Quarter and Full Year 2015 Financial Results

Company reports $173.4 million in revenue for the fourth quarter

Fourth quarter non-GAAP net loss of $0.7 million, or ($0.01) per diluted share; and GAAP net loss of $232.3 million, or ($4.46) per diluted share

Company provides financial guidance for full year 2016

 

MINNEAPOLIS & REHOVOT, Israel — (BUSINESS WIRE) — March 3, 2016Stratasys Ltd. (Nasdaq: SSYS), the 3D printing and additive manufacturing solutions company, announced financial results for the fourth quarter and fiscal year 2015.

Q4-2015 Financial Results Summary:

Fiscal 2015 Financial Results Summary:

“Our fourth quarter results reflect the impact of a market environment that is consistent with conditions we have observed throughout the year,” said David Reis, chief executive officer of Stratasys. “Despite this challenging environment, we remain focused on our strategic initiatives. We are also making progress in optimizing our company’s cost structure and improving working capital management, and were satisfied to observe a favorable trend in operating expenses and positive cash flow from operations during the quarter.”

Recent Business Highlights:

“We have entered a transformative new phase in our company’s development,” continued Reis. “Our goal is to maintain our leadership position in prototyping, while developing a solutions-based business model that targets key vertical markets and emerging applications for end-use parts. We believe our comprehensive new strategy will help grow our markets and is essential for maintaining our leadership position.”

Financial Guidance:

Stratasys today provided the following information regarding the company’s projected revenue and net income for the fiscal year ending December 31, 2016:

Stratasys provided the following additional information regarding the company’s performance and strategic plans for 2016:

The company believes that it can achieve a significant improvement in its operating structure in 2016 that will translate into improved operating profit compared to the prior year. Given the expected ongoing negative impact on net income of the planned accounting treatment for valuation of deferred tax assets, the company believes operating profit growth will be the best measure of performance in 2016.

“Given the current environment, we recognize the importance of optimizing our cost structure and improving our financial performance, and have made those goals a priority for 2016. In addition, we are committed to developing the many growth opportunities we have identified, including MakerBot, as well as investing aggressively in initiatives to support long-term growth, such as software, corporate IT infrastructure, and vertical market development. We remain excited about our company’s future,” Reis concluded.

Non-GAAP earnings guidance excludes $59.0 million of projected amortization of intangible assets; $25.0 to $27.0 million of share-based compensation expense; $7.0 million in merger and acquisition related expense; $4.0 to $5.0 million in reorganization and other related costs; and includes $5.0 million in tax expenses related to non-GAAP adjustments.

Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of this press release. The table provides itemized detail of the non-GAAP financial measures.

Stratasys Ltd. Q4 2015 Conference Call Details

The Company will hold a conference call to discuss its fourth quarter and full year financial results on Thursday, March 3, 2016 at 8:30 a.m. (ET).

The investor conference call will be available via live webcast on the Stratasys Web site at www.stratasys.com under the "Investors" tab; or directly at the following web address: http://edge.media-server.com/m/p/bp67mmzn.

To participate by telephone, the domestic dial-in number is800-688-0836 and the international dial-in is617-614-4072. The access code is 49835079.

Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for 90 days on the "Investors" page of the Stratasys Web site or by accessing the provided web address.

For more than 25 years, Stratasys Ltd. (NASDAQ: SSYS) has been a defining force and dominant player in 3D printing and additive manufacturing – shaping the way things are made. Headquartered in Minneapolis, Minnesota and Rehovot, Israel, the company empowers customers across a broad range of vertical markets by enabling new paradigms for design and manufacturing. The company’s solutions provide customers with unmatched design freedom and manufacturing flexibility – reducing time-to-market and lowering development costs, while improving designs and communications. Stratasys subsidiaries include MakerBot and Solidscape, and the Stratasys ecosystem includes 3D printers for prototyping and production; a wide range of 3D printing materials; parts on-demand via Stratasys Direct Manufacturing; strategic consulting and professional services; and the Thingiverse and GrabCAD communities with over 2 million 3D printable files for free designs. With more than 2,700 employees and 800 granted or pending additive manufacturing patents, Stratasys has received more than 30 technology and leadership awards. Visit us online at: www.stratasys.com or http://blog.stratasys.com/, and follow us on LinkedIn.

Stratasys is a registered trademark of Stratasys Ltd. and/or its subsidiaries or affiliates.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys' belief that its comprehensive new strategy will help grow its markets, and the statements regarding its projected future financial performance, including under the heading “Financial Guidance,” are forward-looking statements reflecting management's current expectations and beliefs. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys' business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: the overall global economic environment; the impact of competition and new technologies; general market, political and economic conditions in the countries in which Stratasys operates; changes in projected capital expenditures and liquidity; changes in Stratasys' strategy; changes in government regulations and approvals; changes in customers’ budgeting priorities; and other factors referred to under “Risk Factors,” “Information on the Company,” “Operating and Financial Review and Prospects,” and generally in Stratasys' annual report on Form 20-F for the year ended December 31, 2014, filed with the U.S. Securities and Exchange Commission (the “SEC”), and in other reports that Stratasys has filed with or furnished to the SEC from time to time. Readers are urged to carefully review and consider the various disclosures made in Stratasys' SEC reports, which are designed to advise investors as to the risks and other factors that may affect Stratasys' business, financial condition, results of operations and prospects. Any guidance and other forward-looking statements in this press release are made as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 
Stratasys Ltd.
               
Consolidated Balance Sheets
               
(in thousands, except share data)
        December 31,     December 31,
        2015     2014
               
ASSETS              
               
Current assets              
Cash and cash equivalents       $ 257,592       $ 442,141  
Short-term bank deposits         571         595  
Accounts receivable, net         123,215         150,806  
Inventories         123,658         123,385  
Net investment in sales-type leases         11,704         8,170  
Prepaid expenses         8,469         7,931  
Deferred income taxes         -         25,697  
Other current assets         21,864         37,903  
               
Total current assets         547,073         796,628  
               
Non-current assets              
Goodwill         383,853         1,323,502  
Other intangible assets, net         252,468         597,903  
Property, plant and equipment, net         201,934         157,036  
Net investment in sales-type leases - long term         17,785         14,822  
Deferred income taxes and other non-current assets         11,243         9,216  
               
Total non-current assets         867,283         2,102,479  
               
Total assets       $ 1,414,356       $ 2,899,107  
               
LIABILITIES AND EQUITY              
               
Current liabilities              
Accounts payable       $ 39,021       $ 37,359  
Short term debt         -         50,000  
Accrued expenses and other current liabilities         31,314         34,514  
Accrued compensation and related benefits         34,052         42,332  
Income taxes payable         11,395         13,246  
Obligations in connection with acquisitions         4,636         28,092  
Deferred revenues         52,309         45,023  
               
Total current liabilities         172,727         250,566  
               
Non-current liabilities              
Obligations in connection with acquisitions - long term         4,354         26,461  
Deferred tax liabilities         16,040         55,835  
Deferred revenues - long-term         7,627         5,946  
Other non-current liabilities         22,428         25,091  
               
Total non-current liabilities         50,449         113,333  
               
Total liabilities         223,176         363,899  
               
Redeemable non-controlling interests         2,379         3,969  
               
Equity              

Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 52,082 thousands shares and 50,923 thousands shares issued and outstanding at December 31, 2015 and 2014, respectively

        141         139  
Additional paid-in capital         2,605,957         2,568,149  
Accumulated deficit         (1,406,706 )       (33,871 )
Accumulated other comprehensive loss         (10,774 )       (3,647 )
Equity attributable to Stratasys Ltd.         1,188,618         2,530,770  
Non-controlling interest         183         469  
               

Total equity

        1,188,801         2,531,239  
               
Total liabilities and equity       $ 1,414,356       $ 2,899,107  
                       
                           
Stratasys Ltd.
                           
Consolidated Statements of Operations
                           
(in thousands, except per share data)
                           
        Three Months Ended December 31,     Twelve Months Ended December 31,
        2015     2014     2015     2014
        (unaudited)     (unaudited)            
Net sales                          
Products       $ 124,316       $ 168,595       $ 503,946       $ 612,138  
Services         49,046         48,517         192,049         137,991  
          173,362         217,112         695,995         750,129  
                           
Cost of sales                          
Products         86,753         82,985         466,221         302,838  
Services         33,537         28,943         127,602         84,897  
          120,290         111,928         593,823         387,735  
                           
Gross profit         53,072         105,184         102,172         362,394  
                           
Operating expenses                          
Research and development, net         31,919         23,189         122,360         82,270  
Selling, general and administrative         113,126         95,646         434,619         351,993  
Goodwill impairment         96,550         102,470         942,408         102,470  
Change in the fair value of obligations in connection with acquisitions         (714 )       (24,862 )       (23,671 )       (26,150 )
          240,881         196,443         1,475,716         510,583  
                           
Operating loss         (187,809 )       (91,259 )       (1,373,544 )       (148,189 )
                           
Financial expense         (947 )       (4,145 )       (10,287 )       (6,529 )
                           
Loss before income taxes         (188,756 )       (95,404 )       (1,383,831 )       (154,718 )
                           
Income taxes         43,770         (3,370 )       (10,320 )       (35,248 )
                           
Net loss         (232,526 )       (92,034 )       (1,373,511 )       (119,470 )
                           
Net loss attributable to non-controlling interest         (183 )       (25 )       (676 )       (50 )
                           
Net loss attributable to Stratasys Ltd.       $ (232,343 )     $ (92,009 )     $ (1,372,835 )     $ (119,420 )
                           
Net loss per ordinary share attributable to Stratasys Ltd.                          
Basic       $ (4.46 )     $ (1.81 )     $ (26.64 )     $ (2.39 )
Diluted         (4.46 )       (1.81 )       (26.64 )       (2.39 )
                           
Weighted average ordinary shares outstanding                          
Basic         52,046         50,912         51,592         50,019  
Diluted         52,046         50,912         51,592         50,019  
                                           
                                       
Stratasys Ltd.
                                       
Reconciliation of GAAP to Non-GAAP Results of Operations
                                       
(in thousands, except per share data)
                                       
        Three Months Ended December 31, 2015     Three Months Ended December 31, 2014
                                       
        GAAP           Non-GAAP     GAAP           Non-GAAP
        (unaudited)     Adjustments*     (unaudited)     (unaudited)     Adjustments*     (unaudited)
Net sales                                      
Products       $ 124,316       $ -       $ 124,316       $ 168,595       $ -       $ 168,595  
Services         49,046         -         49,046         48,517         -         48,517  
          173,362         -         173,362         217,112         -         217,112  
                                       
Cost of sales                                      
Products         86,753         (28,080 )       58,673         82,985         (14,490 )       68,495  
Services         33,537         (2,229 )       31,308         28,943         (1,915 )       27,028  
          120,290         (30,309 )       89,981         111,928         (16,405 )       95,523  
                                       
Gross profit         53,072         30,309         83,381         105,184         16,405         121,589  
                                       
Operating expenses                                      
Research and development, net         31,919         (9,741 )       22,178         23,189         (1,822 )       21,367  
Selling, general and administrative         113,126         (43,041 )       70,085         95,646         (20,368 )       75,278  
Goodwill impairment         96,550         (96,550 )       -         102,470         (102,470 )       -  
Change in the fair value of obligations in connection with acquisitions         (714 )       714         -         (24,862 )       24,862         -  
          240,881         (148,618 )       92,263         196,443         (99,798 )       96,645  
                                       
Operating income (loss)         (187,809 )       178,927         (8,882 )       (91,259 )       116,203         24,944  
                                       
Financial expense         (947 )       -         (947 )       (4,145 )       -         (4,145 )
                                       
Income (loss) before income taxes         (188,756 )       178,927         (9,829 )       (95,404 )       116,203         20,799  
                                       
Income taxes         43,770         (52,720 )       (8,950 )       (3,370 )       (750 )       (4,120 )
                                       
Net income (loss)         (232,526 )       231,647         (879 )       (92,034 )       116,953         24,919  
                                       
Net loss attributable to non-controlling interest         (183 )       -         (183 )       (25 )       -         (25 )
                                       
Net income (loss) attributable to Stratasys Ltd.       $ (232,343 )     $ 231,647       $ (696 )     $ (92,009 )     $ 116,953       $ 24,944  
                                       
Net income (loss) per ordinary share attributable to Stratasys Ltd.                                      
Basic       $ (4.46 )           $ (0.01 )     $ (1.81 )           $ 0.49  
Diluted         (4.46 )             (0.01 )       (1.81 )             0.48  
                                       
Weighted average ordinary shares outstanding                                      
Basic         52,046               52,046         50,912               50,912  
Diluted         52,046               52,046         50,912               52,491  
                                       

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 GAAP to Non-GAAP Results of Operations
                                       
(in thousands, except per share data)
                                       
        Twelve Months Ended December 31, 2015     Twelve Months Ended December 31, 2014
                                       
                                       
        GAAP     Adjustments*     Non-GAAP     GAAP     Adjustments*     Non-GAAP
Net sales                                      
Products       $ 503,946       $ -       $ 503,946       $ 612,138       $ 235       $ 612,373  
Services         192,049         -         192,049         137,991         -         137,991  
          695,995         -         695,995         750,129         235         750,364  
                                       
Cost of sales                                      
Products         466,221         (254,494 )       211,727         302,838         (69,717 )       233,121  
Services         127,602         (5,051 )       122,551         84,897         (6,925 )       77,972  
          593,823         (259,545 )       334,278         387,735         (76,642 )       311,093  
                                       
Gross profit         102,172         259,545         361,717         362,394         76,877         439,271  
                                       
Operating expenses                                      
Research and development, net         122,360         (28,198 )       94,162         82,270         (8,813 )       73,457  
Selling, general and administrative         434,619         (151,097 )       283,522         351,993         (94,442 )       257,551  
Goodwill impairment         942,408         (942,408 )       -         102,470         (102,470 )       -  
Change in the fair value of obligations in connection with acquisitions         (23,671 )       23,671         -         (26,150 )       26,150         -  
          1,475,716         (1,098,032 )       377,684         510,583         (179,575 )       331,008  
                                       
Operating income (loss)         (1,373,544 )       1,357,577         (15,967 )       (148,189 )       256,452         108,263  
                                       
Financial income (expense)         (10,287 )       2,705         (7,582 )       (6,529 )       -         (6,529 )
                                       
Income (loss) before income taxes         (1,383,831 )       1,360,282         (23,549 )       (154,718 )       256,452         101,734  
                                       
Income taxes         (10,320 )       (22,507 )       (32,827 )       (35,248 )       33,403         (1,845 )
                                       
Net income (loss)         (1,373,511 )       1,382,789         9,278         (119,470 )       223,049         103,579  
                                       
Net loss attributable to non-controlling interest         (676 )       -         (676 )       (50 )       -         (50 )
                                       
Net income (loss) attributable to Stratasys Ltd.       $ (1,372,835 )     $ 1,382,789       $ 9,954       $ (119,420 )     $ 223,049       $ 103,629  
                                       
Net income (loss) per ordinary share attributable to Stratasys Ltd.                                      
Basic       $ (26.64 )           $ 0.19       $ (2.39 )           $ 2.07  
Diluted         (26.64 )             0.19         (2.39 )             2.00  
                                       

Weighted average ordinary shares outstanding

                                     
Basic         51,592               51,592         50,019               50,019  
Diluted         51,592               52,824         50,019               51,805  
                                                       

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 Non-GAAP Adjustments
                           
(in thousands)
                           
       

Three Months Ended December
31,

   

Twelve Months Ended December
31,

        2015     2014     2015     2014
Net sales, products                          
Deferred revenue step-up       $ -       $ -       $ -       $ 235  
                           
Cost of sales, products                          
Acquired intangible assets amortization         (10,830 )       (14,654 )       (50,353 )       (56,235 )
Acquired intangible assets impairment         (10,779 )       -         (191,534 )       (11,636 )
Non-cash stock-based compensation expense         (675 )       164         (3,508 )       (1,846 )
Reorganization and other related costs         (5,796 )       -         (9,099 )       -  
          (28,080 )       (14,490 )       (254,494 )       (69,717 )
Cost of sales, services                          
Acquired intangible assets amortization         -         537         -         -  
Non-cash stock-based compensation expense         (338 )       (1,430 )       (1,873 )       (2,647 )
Reorganization and other related costs         (1,726 )       -         (1,850 )       -  
Merger and acquisition related expense         (165 )       (1,022 )       (1,328 )       (4,278 )
          (2,229 )       (1,915 )       (5,051 )       (6,925 )
Research and development, net                          
Non-cash stock-based compensation expense         (1,400 )       (1,942 )       (5,758 )       (4,862 )
Acquired intangible assets impairment         (7,900 )       -         (17,746 )       (3,000 )
Reorganization and other related costs         (249 )       -         (1,593 )       -  
Merger and acquisition related expense         (192 )       120         (3,101 )       (951 )
          (9,741 )       (1,822 )       (28,198 )       (8,813 )
                           
Selling, general and administrative                          
Acquired intangible assets amortization         (4,464 )       (7,607 )       (22,436 )       (24,952 )
Non-cash stock-based compensation expense         (3,437 )       (5,589 )       (18,871 )       (20,852 )
Merger and acquisition related expense         (2,624 )       (7,172 )       (25,238 )       (48,638 )
Reorganization and other related costs         (9,117 )       -         (15,361 )       -  
Acquired intangible assets impairment         (23,399 )       -         (69,191 )       -  
          (43,041 )       (20,368 )       (151,097 )       (94,442 )
                           
Goodwill impairment         (96,550 )       (102,470 )       (942,408 )       (102,470 )
                           
Change in the fair value of obligations in connection with acquisitions                          
Change in the fair value of obligations in connection with acquisitions         714         24,862         23,671         26,150  
                           
Financial expense                          
Credit facility extinguishment related costs         -         -         (2,705 )       -  
                           
Income taxes                          
Corresponding tax effect and other tax adjustments         (52,720 )       (750 )       (22,507 )       33,403  
                           
                           
Net income       $ 231,647       $ 116,953       $ 1,382,789       $ 223,049  
                                           
 
Stratasys Ltd.
           
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
           
Fiscal Year 2016
           
(in millions, except per share data)
           
GAAP net loss         ($84) to ($67)
           

Adjustments

         
Stock-based compensation expense         $25 to $27
Intangible assets amortization expense         $59
Merger and acquisition related expense         $7
Reorganization and other related costs         $4 to $5
Tax expense related to Non-GAAP adjustments         ($5)
           
Non-GAAP net income         $9 to $23
           
GAAP loss per share         ($1.60) to ($1.28)
           
Non-GAAP diluted earnings per share         $0.17 to $0.43

 



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Stratasys Investor Relations
Shane Glenn, 952-294-3416
Vice President - Investor Relations
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