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
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/
Stratasys Investor RelationsShane Glenn, 952-294-3416Vice
President - Investor Relationsshane.glenn@stratasys.com
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