Company reports $163.2 million in revenue with
an increase in recurring revenues
GAAP net loss of $13.9 million, or ($0.26) per
diluted share, and non-GAAP net income of $2.4 million, or $0.05
per diluted share.
Generated $25.4 million of cash from operations
during the quarter
Stratasys Ltd. (Nasdaq: SSYS), the 3D printing and additive
manufacturing solutions company, announced financial results for
the first quarter of 2017.
Q1-2017 Financial Results Summary:
Revenue for the first quarter of 2017 was $163.2 million,
compared to $167.9 million for the same period last year with
consumable revenue increasing by 7% for the same period.
- GAAP gross margin was 47.1% for the
quarter, compared to a GAAP gross margin of 48.3% for the same
period last year.
- Non-GAAP gross margin was 51.2% for the
quarter, compared to 55.1% for the same period last year.
- GAAP operating loss for the quarter was
$12.6 million, compared to a loss of $21.1 million for the same
period last year.
- Non-GAAP operating income for the
quarter was $4.0 million, unchanged compared to non-GAAP operating
income for the same period last year.
- GAAP net loss for the quarter was $13.9
million, or ($0.26) per diluted share, compared to a loss of $23.1
million, or ($0.44) per diluted share, for the same period last
year.
- Non-GAAP net income for the quarter was
$2.4 million, or $0.05 per diluted share, compared to Non-GAAP net
income of $0.6 million, or $0.01 per diluted share, reported for
the same period last year.
- The Company generated $25.4 million in
cash from operations during the first quarter and ended the period
with $297.2 million in cash and cash equivalents.
- Net R&D expenses for the quarter
amounted to $24.6 million, representing 15.1% of net sales.
“We remain encouraged by our performance within our key vertical
markets during the first quarter, driven by our initiatives to
drive customer engagement,” said Ilan Levin, Chief Executive
Officer of Stratasys. “In addition, we believe that strong
utilization of our installed base of systems was demonstrated by
steady growth in consumables and customer support revenue during
the period, while improved focus resulted in reductions in our
operating expenses.”
Recent Business Highlights:
- Demonstrated continued traction in our
strategic focus on customer use cases and deepening collaboration
with many industry leaders:
- Siemens Mobility announced the
manufacture of customized production parts that include housing
covers for the couplers on the front of trams, utilizing Stratasys
FDM technology for German transport services provider Stadtwerke
Ulm/Neu Ulm (SWU) Verkehr GmbH, which resulted in a significant
reduction in lead times and tooling costs.
- McLaren Racing expanded its production
of final race-ready parts and manufacturing tools for the new
McLaren MCL32 Formula 1 race car, utilizing Stratasys FDM and
PolyJet 3D Printing Solutions.
- Announced a strategic agreement with
SIA Engineering Company (SIAEC), a major provider of aircraft
maintenance, repair, and overhaul services in the Asia-Pacific
region, to help accelerate the adoption of 3D printed production
parts for commercial aviation by establishing a Singapore-based
Additive Manufacturing Service Centre that offers design,
engineering, certification support, and part production to SIAEC’s
well-established network of partners and customers.
- Showcased the use of Stratasys PolyJet
3D printing technology, by Queen Elizabeth Hospital in the United
Kingdom, for the construction of advanced maxillofacial cutting
guides and anatomical models.
- Enhanced customer-centric solution
offerings with launch of the Stratasys Expert Services Group in
North America, to help manufacturers build their additive
manufacturing strategy and workflow to recognize the benefits of 3D
printing for improved production processes.
- Announced the Stratasys Continuous
Build 3D Demonstrator, a new additive manufacturing platform
demonstrating low volume production and mass customization,
featuring a modular multi-cell design and cloud-based architecture.
The new technology demonstrator targets applications that include
education Rapid Prototyping labs as well as volume manufacturing
environments that can benefit from part production without tooling
and from zero-inventory supply chains.
- Announced a strategic investment in LPW
Technologies, a developer of metal powders and metal powder
management systems; and entered into a strategic partnership with
Desktop Metal, a manufacturer of metal 3D printing systems, that
will enable leveraging Stratasys’ distribution channels for the
sale of their innovative solutions.
“We are pleased with the progress we are making in developing
applications that are driven by the specific needs of our
customers,” continued Levin. “We believe that this deeper customer
engagement will help us to provide significant value and grow the
adoption our products and services. Our recent announcements with
Siemens Mobility and SIA Engineering, as well as the early success
of our collaboration with McLaren Racing, illustrate the potential
value that can be created by our extensive knowledge and
capabilities.”
Financial Guidance:Stratasys today reiterated 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 $645 to $680
million.
- GAAP net loss guidance of $53 to $39
million, or ($1.00) to ($0.73) per diluted share.
- Non-GAAP net income guidance of $10 to
$20 million, or $0.19 to $0.37 per diluted share.
Stratasys provided the following additional guidelines regarding
the Company’s projected performance and strategic plans for
2017:
- Non-GAAP operating margin guidance of
3% to 5%.
- Capital expenditures guidance of $40 to
$50 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; $18 to $20 million of
share-based compensation expense; $2 to $3 million in merger and
acquisition related expense; and $8 to $10 million in
reorganization and other related costs; and includes $3 to $4
million in tax expenses related to non-GAAP adjustments.
Stratasys Ltd. Q1 2017 Conference Call Details
The Company plans to hold a conference call to discuss its first
quarter financial results on Tuesday, May 16, 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:
http://edge.media-server.com/m/p/j59trooi.
To participate by telephone, the domestic dial-in number is
(855) 319-2216 and the international dial-in is (503) 343-6033. The
access code is 10010178.
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 nearly 30 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 approximately 2,400 employees and 1,200 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 and FDM are registered trademarks, and the Stratasys
signet, PolyJet and Continuous Build 3D Demonstrator are trademarks
of Stratasys Ltd. and/or its subsidiaries or affiliates. All other
trademarks belong to 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: any failure to efficiently and
successfully integrate the operations of Stratasys Ltd. and various
entities that it has acquired, including MakerBot, Solid Concepts,
Harvest and GrabCAD, or to successfully establish and execute
effective post-acquisition integration plans; 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;
changes in our strategy; changes in applicable government
regulations and approvals; changes in customers’ budgeting
priorities; lower than expected demand for our products and
services; 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 ended, March 31, 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)
March
31, December 31, 2017 2016
(unaudited) ASSETS
Current assets Cash and cash equivalents $ 297,246 $ 280,328
Accounts receivable, net 115,099 120,411 Inventories 116,018
117,521 Net investment in sales-type leases 10,844 11,717 Prepaid
expenses 6,371 7,571 Other current assets 19,411
15,491 Total current assets 564,989
553,039
Non-current assets Net
investment in sales-type leases - long term 9,655 12,126 Property,
plant and equipment, net 206,722 208,415 Goodwill 385,808 385,629
Other intangible assets, net 169,302 177,458 Other non-current
assets 31,626 29,382 Total
non-current assets 803,113 813,010
Total assets $ 1,368,102 $ 1,366,049
LIABILITIES AND EQUITY Current
liabilities Accounts payable $ 44,805 $ 40,933 Current portion
of long term-debt 3,714 3,714 Accrued expenses and other current
liabilities 28,582 32,207 Accrued compensation and related benefits
42,797 34,186 Obligations in connection with acquisitions 4,315
3,619 Deferred revenues 50,673 49,952
Total current liabilities 174,886
164,611
Non-current liabilities Long-term debt
21,357 22,286 Deferred tax liabilities 4,916 5,952 Deferred
revenues - long-term 12,942 12,922 Other non-current liabilities
24,293 22,251 Total non-current
liabilities 63,508 63,411
Total liabilities 238,394 228,022
Redeemable non-controlling interests 1,939
2,029
Equity
Ordinary shares, NIS 0.01 nominal value,
authorized 180,000 thousands shares; 52,728 thousands shares and
52,639 thousands shares issued and outstanding at March 31, 2017
and December 31, 2016, respectively
142 142 Additional paid-in capital 2,637,561 2,633,129 Accumulated
other comprehensive loss (12,243 ) (13,479 ) Accumulated deficit
(1,497,782 ) (1,483,925 ) Equity attributable to
Stratasys Ltd. 1,127,678 1,135,867 Non-controlling interest 91 131
Total equity 1,127,769 1,135,998
Total liabilities and equity $ 1,368,102 $
1,366,049
Stratasys
Ltd. Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended March 31,
2017 2016 (unaudited)
(unaudited) Net sales Products $ 115,087 $ 118,634
Services 48,075 49,272 163,162 167,906
Cost of sales Products 54,480 56,938 Services
31,802 29,799 86,282 86,737
Gross profit 76,880 81,169
Operating expenses
Research and development, net 24,634 25,115 Selling, general and
administrative 64,179 76,387 Change in the fair value of
obligations in connection with acquisitions 696
727 89,509 102,229
Operating
loss (12,629 ) (21,060 )
Financial income, net
256 180
Loss before income taxes (12,373 )
(20,880 )
Income tax expenses
1,326 2,291 Share in losses of associated company
(288 ) -
Net loss (13,987 ) (23,171 )
Net loss attributable to non-controlling interest (130 ) (30
) Net loss attributable to Stratasys Ltd. $ (13,857 ) $
(23,141 )
Net loss per ordinary share attributable to
Stratasys Ltd. Basic $ (0.26 ) $ (0.44 ) Diluted (0.26 ) (0.44
)
Weighted average ordinary shares outstanding Basic
52,690 52,098 Diluted 52,690 52,098
Stratasys Ltd. Reconciliation of GAAP to Non-GAAP
Results of Operations Three
Months Ended March 31, 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) $ 76,880 $ 6,614 $
83,494 $ 81,169 $ 11,278 $ 92,447 Operating income (loss) (1,2)
(12,629 ) 16,658 4,029 (21,060 ) 25,013 3,953
Net income (loss) attributable to
Stratasys Ltd. (1,2,3)
(13,857 ) 16,265 2,408 (23,141 ) 23,737 596
Net income (loss) per diluted share
attributable to Stratasys Ltd. (4)
$ (0.26 ) $ 0.31 $ 0.05 $ (0.44 ) $ 0.45 $ 0.01 (1)
Acquired intangible assets amortization expense 5,705 10,414
Non-cash stock-based compensation expense 643 723 Reorganization
and other related costs 94 - Merger and acquisition and other
expense 172 141 6,614 11,278 (2)
Acquired intangible assets amortization expense 2,544 3,760
Non-cash stock-based compensation expense 3,261 4,900 Change in
fair value of obligations in connection with acquisitions 696 727
Reorganization and other related costs 1,686 - Merger and
acquisition and other expense 1,857 4,348
10,044 13,735 16,658
25,013 (3) Corresponding tax
effect (585 ) (1,276 ) Amortization expense of associated company
192 - $ 16,265 $ 23,737
(4)
Weighted average number of ordinary shares
outstanding- Diluted
52,690 53,341 52,098 53,143
Stratasys
Ltd. Reconciliation of GAAP to Non-GAAP Forward
Looking Guidance Fiscal Year 2017 (in
millions, except per share data)
GAAP net loss ($53) to ($39)
Adjustments
Stock-based compensation expense $18 to $20 Intangible assets
amortization expense $34 Merger and acquisition related expense $2
to $3 Reorganization and other related costs $8-$10 Tax expense
related to Non-GAAP adjustments ($3) to ($4)
Non-GAAP net
income $10 to $20
GAAP loss per share ($1.00) to
($0.73)
Non-GAAP diluted earnings per share $0.19 to
$0.37
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170516005272/en/
Stratasys Investor RelationsShane Glenn, 952-294-3416Vice
President - Investor Relationsshane.glenn@stratasys.com
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