Company reports $155.9 million in revenue
GAAP net loss of $10.2 million, or ($0.19) per diluted share, and non-GAAP net income of $4.1 million, or $0.08 per diluted share
Company increasing full year 2017 earnings guidance
MINNEAPOLIS & REHOVOT, Israel — (BUSINESS WIRE) — November 14, 2017 — Stratasys Ltd. (Nasdaq: SSYS), a global leader in applied additive technology solutions, announced financial results for the third quarter of 2017.
Q3 2017 Financial Results Summary:
Revenue for the third quarter of 2017 was $155.9 million, compared to $157.2 million for the same period last year.
- GAAP gross margin was 48.3% for the quarter, compared to a GAAP gross margin of 46.9% for the same period last year.
- Non-GAAP gross margin was 52.5% for the quarter, compared to 54.0% for the same period last year.
- GAAP operating loss for the quarter was $6.9 million, compared to a loss of $19.4 million for the same period last year.
- Non-GAAP operating income for the quarter was $8.1 million, compared to $3.3 million for the same period last year.
- GAAP net loss for the quarter was $10.2 million, or ($0.19) per diluted share, compared to a loss of $20.8 million, or ($0.40) per diluted share, for the same period last year.
- Non-GAAP net income for the quarter was $4.1 million, or $0.08 per diluted share, compared to Non-GAAP net income of $0.1 million, or $0.00 per diluted share, reported for the same period last year.
- The Company generated $4.6 million in cash from operations during the third quarter and ended the period with $302.8 million in cash and cash equivalents.
- Net R&D expenses for the quarter amounted to $21.8 million, representing 14% of net revenues.
“We achieved significant improvements in operating profit during the third quarter compared to the prior year, driven by our continued focus on aligning our resources to support our long-term strategy of deepening customer engagement and developing high-value applications within our key vertical markets,” said Ilan Levin, Chief Executive Officer of Stratasys. ”Our revenue for the third quarter was partially impacted by several large, multi-system orders that were deferred until October. Driven by a more holistic approach to adopting our solutions, we are observing customer behavior characterized by orders for our products that are made up of multiple systems, which introduces higher quarter-to-quarter variations in order timing.”
Product Milestones:
- The H2000 Large Part FDM 3D Production System unveiled at IMTS 2016 as the Stratasys Infinite Build 3D Demonstrator, is transitioning into the commercializing phase. The system is designed for large parts made of engineering-grade thermoplastics, including aircraft interior panels, hybrid structures, composite tooling, and large prototypes. Following the successful early installations with our development partners, The Boeing Company and The Ford Motor Company, we recently completed a commercial delivery of an additional H2000 with a new customer.
- The F123 Series, launched in February 2017, continued to generate very positive traction in the marketplace in the third quarter, as customers increasingly adopt a workgroup oriented approach to design and rapid prototyping that requires a combination of ease-of-use, precision, repeatability, affordability, and material options.
- GrabCAD Print continues to show strong usage and adoption within our installed base, and has been installed by nearly 18,000 users to date. The software solution has been used to print over 116,000 trays of parts since launch of the product in November 2016, as it increasingly has become available across the Company’s installed base of 3D printing systems.
- Announced launch of GrabCAD Voxel Print, a new software solution for the J750 3D printing platform that is designed to take PolyJet’s unique full color, multi-material capabilities and add true voxel level control during the design and 3D printing process. The new solution provides users an unprecedented level of material control to facilitate the creation of advanced structures, digital materials, gradient color patterns, internal properties, and textures for applications that include Academic Research, Product Design, Biomedical, Art, Design and Animation.
- Announced availability of MakerBot Labs, an experimental platform for engineers and developers that gives advanced users the freedom and ability to experiment with new, innovative materials and software settings to develop new capabilities and applications while using MakerBot desktop 3D printing systems. The platform includes the MakerBot Experimental Extruder with interchangeable nozzles and access to custom print modes for experimenting with more advanced materials, the MakerBot Labs Community on Thingiverse, and access to MakerBot APIs for optimization and customization of MakerBot hardware.
“We continue to focus on growing our addressable market with new product introductions that meet the needs of customers within our key vertical markets,” continued Levin. “We are pleased with the positive traction that our F123 Series and GrabCAD Print are experiencing, and are encouraged by the continued progress towards further commercialization of our H2000 Large Part FDM 3D Production System. In addition, we have increased our earnings guidance to reflect the positive impact of our operating cost alignment initiatives and focus on our core strategy.”
Financial Guidance:
Stratasys today updated previously
provided guidance for 2017. The Company’s guidance for projected revenue
and net income (loss) for the fiscal year ending December 31, 2017 is as
follows:
- Revenue guidance of $655 to $670 million, compared to previous guidance of $645 to $680 million.
- GAAP net loss of $39 to $31 million, or ($0.73) to ($0.59) per diluted share, compared to previous guidance of GAAP net loss of $53 to $39 million, or ($1.00) to ($0.73) per diluted share.
- Non-GAAP net income in the range of $22 to $26 million, or $0.40 to $0.48 per diluted share, compared to previous guidance of non-GAAP net income in the range of $10 to $20 million, or $0.19 to $0.37 per diluted share.
Stratasys provided the following additional guidance regarding the Company’s projected performance and strategic plans for 2017:
- Non-GAAP operating margin guidance of 5% to 6%, compared to previous guidance of non-GAAP operating margin of 3% to 5%.
- Capital expenditures guidance of $20 to $30 million.
Given the expected ongoing negative impact of not recording a tax benefit on U.S. tax losses on the Company’s non-GAAP net income, the Company believes that the rate of growth in its non-GAAP operating income will be the best measure of performance.
Non-GAAP earnings guidance for 2017 excludes $34 million of projected amortization of intangible assets; $17 to $18 million of share-based compensation expense; $3 to $4 million in merger and acquisition related expense; and $6 to $8 million in reorganization and other related costs; and includes $3 to $4 million in tax expenses related to non-GAAP adjustments.
Stratasys Ltd. Q3 2017 Conference Call Details
The Company plans to hold a conference call to discuss its third quarter financial results on Tuesday, November 14, 2017 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: https://edge.media-server.com/m6/p/cvm4w4jn.
To participate by telephone, the domestic dial-in number is (866) 394-5776 and the international dial-in is (409) 350-3596. The access code is 92508829.
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.
Stratasys
(NASDAQ:
SSYS) is a global leader in applied additive technology
solutions for industries including Aerospace, Automotive, Healthcare,
Consumer Products and Education. For nearly 30 years, a deep and ongoing
focus on customers’ business requirements has fueled purposeful
innovations—1,200 granted and pending additive technology patents to
date—that create new value across product lifecycle processes, from
design prototypes to manufacturing tools and final production parts. The
Stratasys 3D printing ecosystem of solutions and expertise—advanced
materials; software with voxel level control; precise, repeatable and
reliable FDM and PolyJet 3D printers; application-based expert services;
on-demand parts and industry-defining partnerships—works to ensure
seamless integration into each customer’s evolving workflow. Fulfilling
the real-world potential of additive, Stratasys delivers breakthrough
industry-specific applications that accelerate business processes,
optimize value chains and drive business performance improvements for
thousands of future-ready leaders around the world.
Corporate
Headquarters: Minneapolis, Minnesota and Rehovot, Israel.
Online
at:
www.stratasys.com,
http://blog.stratasys.com
and
LinkedIn.
Stratasys and Fortus are registered trademarks and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.
Cautionary Statement Regarding Forward-Looking Statements
The statements in this press release regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2017, 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: potential declines in the prices of our products and services, or volume of our sales, due to decreased demand in the 3D printing market; any failure to adequately adapt our infrastructure and properly integrate the internal and external sources of our growth to generate intended benefits (including from the companies that we recently acquired); changes in the overall global economic environment; the impact of competition and new technologies; changes in the general market, or in political and economic conditions in the countries in which we operate; any underestimates in projected capital expenditures and liquidity; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; changes in our strategy; changes in applicable government regulations and approvals; changes in customers’ budgeting priorities; reduction in our profitability due to shifting in our product mix into lower margin products or our shifting in our revenues mix significantly towards our AM services business; costs and potential liability relating to litigation and regulatory proceedings; and those factors referred to in Item 3.D “Key Information - Risk Factors”, Item 4, “Information on the Company”, and Item 5, “Operating and Financial Review and Prospects” in our 2016 Annual Report on Form 20-F, filed with the SEC on March 9, 2017, as well as in the 2016 Annual Report generally. Readers are urged to carefully review and consider the various disclosures made throughout (i) the Report on Form 6-K that attaches Stratasys’ unaudited, condensed consolidated financial statements as of, and for the quarter and nine months ended, September 30, 2017, and its review of its results of operations and financial condition for those periods, which has been furnished to the SEC on or about the date hereof, (ii) Stratasys’ 2016 Annual Report, and (iii) Stratasys’ other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward-looking statements made, 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.
Use of non-GAAP financial measures
The non-GAAP data included herein, which excludes certain items as described below, are non-GAAP financial measures. Our management believes that these non-GAAP financial measures are useful information for investors and shareholders of our Company in gauging our results of operations (x) on an ongoing basis after excluding merger and acquisition related expense and reorganization-related charges, and (y) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, impairment of goodwill and other long-lived assets, changes in fair value of obligations in connection with acquisitions and the corresponding tax effect of those items. We also exclude, when applicable, non-recurring changes of non-cash valuation allowance on deferred tax assets, as well as, non-recurring significant tax charges or benefits that relate to prior periods which we do not believe are reflective of ongoing business and operating results. These non-GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non-recurring impact on the statement of operations, as assessed by management. These non-GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table below.
| Stratasys Ltd. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (in thousands, except share data) | ||||||||
| Sep 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 302,795 | $ | 280,328 | ||||
| Accounts receivable, net | 120,504 | 120,411 | ||||||
| Inventories | 124,056 | 117,521 | ||||||
| Net investment in sales-type leases | 8,499 | 11,717 | ||||||
| Prepaid expenses | 7,167 | 7,571 | ||||||
| Other current assets | 19,635 | 15,491 | ||||||
| Total current assets | 582,656 | 553,039 | ||||||
| Non-current assets | ||||||||
| Net investment in sales-type leases - long term | 5,844 | 12,126 | ||||||
| Property, plant and equipment, net | 202,995 | 208,415 | ||||||
| Goodwill | 386,887 | 385,629 | ||||||
| Other intangible assets, net | 152,807 | 177,458 | ||||||
| Other non-current assets | 32,137 | 29,382 | ||||||
| Total non-current assets | 780,670 | 813,010 | ||||||
| Total assets | $ | 1,363,326 | $ | 1,366,049 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 44,490 | $ | 40,933 | ||||
|
Current portion of long-term debt |
3,714 | 3,714 | ||||||
| Accrued expenses and other current liabilities | 28,486 | 32,207 | ||||||
| Accrued compensation and related benefits | 34,338 | 34,186 | ||||||
| Obligations in connection with acquisitions | - | 3,619 | ||||||
| Deferred revenues | 51,834 | 49,952 | ||||||
| Total current liabilities | 162,862 | 164,611 | ||||||
| Non-current liabilities | ||||||||
| Long-term debt | 19,500 | 22,286 | ||||||
| Deferred tax liabilities | 2,625 | 5,952 | ||||||
| Deferred revenues - long-term | 14,181 | 12,922 | ||||||
| Other non-current liabilities | 28,682 | 22,251 | ||||||
| Total non-current liabilities | 64,988 | 63,411 | ||||||
| Total liabilities | 227,850 | 228,022 | ||||||
| Redeemable non-controlling interests | 1,721 | 2,029 | ||||||
| Equity | ||||||||
|
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 53,202 thousands shares and 52,639 thousands shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively |
143 | 142 | ||||||
| Additional paid-in capital | 2,655,754 | 2,633,129 | ||||||
| Accumulated other comprehensive loss | (8,276 | ) | (13,479 | ) | ||||
| Accumulated deficit | (1,513,926 | ) | (1,483,925 | ) | ||||
| Equity attributable to Stratasys Ltd. | 1,133,695 | 1,135,867 | ||||||
| Non-controlling interests | 60 | 131 | ||||||
| Total equity | 1,133,755 | 1,135,998 | ||||||
| Total liabilities and equity | $ | 1,363,326 | $ | 1,366,049 | ||||
| Stratasys Ltd. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended Sep 30, | Nine Months Ended Sep 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Net sales | ||||||||||||||||
| Products | $ | 108,401 | $ | 110,083 | $ | 344,509 | $ | 352,475 | ||||||||
| Services | 47,466 | 47,093 | 144,510 | 144,680 | ||||||||||||
| 155,867 | 157,176 | 489,019 | 497,155 | |||||||||||||
| Cost of sales | ||||||||||||||||
| Products | 49,840 | 54,332 | 159,043 | 172,683 | ||||||||||||
| Services | 30,788 | 29,163 | 94,465 | 90,090 | ||||||||||||
| 80,628 | 83,495 | 253,508 | 262,773 | |||||||||||||
| Gross profit | 75,239 | 73,681 | 235,511 | 234,382 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development, net | 21,767 | 23,993 | 69,652 | 73,474 | ||||||||||||
| Selling, general and administrative | 60,280 | 69,069 | 189,028 | 218,340 | ||||||||||||
| Change in the fair value of obligations in connection with acquisitions | 65 | (24 | ) | 1,378 | 116 | |||||||||||
| 82,112 | 93,038 | 260,058 | 291,930 | |||||||||||||
| Operating loss | (6,873 | ) | (19,357 | ) | (24,547 | ) | (57,548 | ) | ||||||||
| Financial income, net | (305 | ) | 104 | 380 | 1,216 | |||||||||||
| Loss before income taxes | (7,178 | ) | (19,253 | ) | (24,167 | ) | (56,332 | ) | ||||||||
|
Income tax expenses |
2,571 | 1,538 | 5,205 | 6,283 | ||||||||||||
| Share in losses of associated company | (489 | ) | (182 | ) | (1,006 | ) | (182 | ) | ||||||||
| Net loss | (10,238 | ) | (20,973 | ) | (30,378 | ) | (62,797 | ) | ||||||||
| Net loss attributable to non-controlling interests | (81 | ) | (146 | ) | (377 | ) | (339 | ) | ||||||||
| Net loss attributable to Stratasys Ltd. | $ | (10,157 | ) | $ | (20,827 | ) | $ | (30,001 | ) | $ | (62,458 | ) | ||||
|
Net loss per ordinary share attributable to Stratasys Ltd. - basic and diluted |
$ | (0.19 | ) | $ | (0.40 | ) | $ | (0.57 | ) | $ | (1.20 | ) | ||||
| Weighted average ordinary shares outstanding - basic and diluted | 53,012 | 52,432 | 52,827 | 52,232 | ||||||||||||
| Stratasys Ltd. | ||||||||||||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Results of Operations | ||||||||||||||||||||||||||
| Three Months Ended Sep 30, | ||||||||||||||||||||||||||
| 2017 | Non-GAAP | 2017 | 2016 | Non-GAAP |
2016 |
|||||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||||
| Gross profit (1) | $ | 75,239 | $ | 6,598 | $ | 81,837 | $ | 73,681 | $ | 11,248 | $ | 84,929 | ||||||||||||||
| Operating income (loss) (1,2) | (6,873 | ) | 14,933 | 8,060 | (19,357 | ) | 22,651 | 3,294 | ||||||||||||||||||
|
Net income (loss) attributable to Stratasys Ltd. (1,2,3) |
(10,157 | ) | 14,299 | 4,142 | (20,827 | ) | 20,936 | 109 | ||||||||||||||||||
|
Net income (loss) per diluted share attributable to Stratasys Ltd. (4) |
$ | (0.19 | ) | $ | 0.27 | $ | 0.08 | $ | (0.40 | ) | $ | 0.40 | $ | 0.00 | ||||||||||||
| (1) | Acquired intangible assets amortization expense | 5,688 | 10,394 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 642 | 680 | ||||||||||||||||||||||||
| Reorganization and other related costs | 72 | 249 | ||||||||||||||||||||||||
| Merger and acquisition and other expense | 196 | (75 | ) | |||||||||||||||||||||||
| 6,598 | 11,248 | |||||||||||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 2,593 | 3,697 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 4,256 | 4,105 | ||||||||||||||||||||||||
| Change in fair value of obligations in connection with acquisitions | 65 | (24 | ) | |||||||||||||||||||||||
| Reorganization and other related costs | 383 | 1,959 | ||||||||||||||||||||||||
| Merger and acquisition and other expense | 1,038 | 1,666 | ||||||||||||||||||||||||
| 8,335 | 11,403 | |||||||||||||||||||||||||
| 14,933 | 22,651 | |||||||||||||||||||||||||
| (3) | Corresponding tax effect | (836 | ) | (1,998 | ) | |||||||||||||||||||||
| Amortization expense of associated company | 202 | 283 | ||||||||||||||||||||||||
| $ | 14,299 | $ | 20,936 | |||||||||||||||||||||||
| (4) |
Weighted average number of ordinary shares outstanding- Diluted |
53,012 | 53,664 | 52,432 | 53,168 | |||||||||||||||||||||
| Stratasys Ltd. | ||||||||||||||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Results of Operations | ||||||||||||||||||||||||||||
| Nine Months Ended Sep 30, | ||||||||||||||||||||||||||||
| 2017 | Non-GAAP | 2017 | 2016 | Non-GAAP | 2016 | |||||||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||||||
| Gross profit (1) | $ | 235,511 | $ | 19,996 | $ | 255,507 | $ | 234,382 | $ | 39,241 | $ | 273,623 | ||||||||||||||||
| Operating income (loss) (1,2) | (24,547 | ) | 47,708 | 23,161 | (57,548 | ) | 74,996 | 17,448 | ||||||||||||||||||||
|
Net income (loss) attributable to Stratasys Ltd. (1,2,3) |
(30,001 | ) | 45,729 | 15,728 | (62,458 | ) | 69,401 | 6,943 | ||||||||||||||||||||
|
Net income (loss) per diluted share attributable to Stratasys Ltd. (4) |
$ | (0.57 | ) | $ | 0.86 | $ | 0.29 | $ | (1.20 | ) | $ | 1.33 | $ | 0.13 | ||||||||||||||
| (1) | Acquired intangible assets amortization expense | 17,081 | 31,318 | |||||||||||||||||||||||||
| Impairment charges of other intangible assets | - | 1,779 | ||||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 2,084 | 2,132 | ||||||||||||||||||||||||||
| Reorganization and other related costs | 303 | 3,570 | ||||||||||||||||||||||||||
| Merger and acquisition and other expense | 528 | 442 | ||||||||||||||||||||||||||
| 19,996 | 39,241 | |||||||||||||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 7,725 | 11,079 | |||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 12,049 | 13,755 | ||||||||||||||||||||||||||
| Change in fair value of obligations in connection with acquisitions | 1,378 | 116 | ||||||||||||||||||||||||||
| Reorganization and other related costs | 2,667 | 3,420 | ||||||||||||||||||||||||||
| Merger and acquisition and other expense | 3,893 | 7,385 | ||||||||||||||||||||||||||
| 27,712 | 35,755 | |||||||||||||||||||||||||||
| 47,708 | 74,996 | |||||||||||||||||||||||||||
| (3) | Corresponding tax effect | (2,571 | ) | (5,878 | ) | |||||||||||||||||||||||
| Amortization expense of associated company | 592 | 283 | ||||||||||||||||||||||||||
| $ | 45,729 | $ | 69,401 | |||||||||||||||||||||||||
| (4) |
Weighted average number of ordinary shares outstanding- Diluted |
52,827 | 53,521 | 52,232 | 53,182 | |||||||||||||||||||||||
| Stratasys Ltd. | ||
|
Reconciliation of GAAP to Non-GAAP Forward-Looking Guidance |
||
| Fiscal Year 2017 | ||
| (in millions, except per share data) | ||
| GAAP net loss | ($39) to ($31) | |
|
Adjustments |
||
| Stock-based compensation expense | $17 to $18 | |
| Intangible assets amortization expense | $34 | |
| Merger and acquisition related expense | $3 to $4 | |
| Reorganization and other related costs | $6-$8 | |
| Tax expense related to Non-GAAP adjustments | ($3) to ($4) | |
| Non-GAAP net income | $22 to $26 | |
| GAAP loss per share | ($0.73) to ($0.59) | |
| Non-GAAP diluted earnings per share | $0.40 to $0.48 | |
View source version on businesswire.com: http://www.businesswire.com/news/home/20171114005331/en/
Contact:
Stratasys Investor Relations
Shane Glenn, 952-294-3416
Vice
President - Investor Relations
Email Contact