Third Quarter Revenue of $162.0 million
Third Quarter GAAP net loss of $0.7 million, or
($0.01) per diluted share, and non-GAAP net income of $5.7 million,
or $0.11 per diluted share
Generated $5.0 million of cash from operations
during the quarter
Stratasys Ltd. (NASDAQ: SSYS) announced financial results for
the third quarter of 2018.
Q3 2018 Financial Results Summary:
Revenue for the third quarter of 2018 was $162.0 million,
compared to $155.9 million for the same period last year.
- GAAP gross margin was 48.7% for the
quarter, compared to 48.3% for the same period last year.
- Non-GAAP gross margin was 52.1% for the
quarter, compared to 52.5% for the same period last year.
- GAAP operating income for the quarter
was $3.4 million, compared to operating loss of $6.9 million for
the same period last year.
- Non-GAAP operating income for the
quarter was $8.2 million, compared to operating income of $8.1
million for the same period last year.
- GAAP net loss for the quarter was $0.7
million, or ($0.01) per diluted share, compared to a net loss of
$10.2 million, or ($0.19) per diluted share, for the same period
last year.
- Non-GAAP net income for the quarter was
$5.7 million, or $0.11 per diluted share, compared to Non-GAAP net
income of $4.1 million, or $0.08 per diluted share, reported for
the same period last year.
- GAAP R&D expenses, net for the
quarter amounted to $25.8 million, an increase of 18.5% compared to
the same period last year.
- The Company generated $5.0 million in
cash from operations during the third quarter and ended the period
with $348.9 million in cash and cash equivalents.
“We are pleased with our results this quarter, reflecting
continued strength in our high-end systems orders, utilization
rates and our parts services business,” said Elchanan (Elan)
Jaglom, Interim Chief Executive Officer of Stratasys. “The level of
engagement we are experiencing with customers in our key verticals
is encouraging, as we highlighted at the recent International
Manufacturing Technology Show. And we are excited about the
innovation we plan to bring to market to drive incremental,
long-term opportunities, as we continue to invest in new products
and materials across our portfolio of FDM and PolyJet technologies,
our new metal additive manufacturing platform, and advanced
composite materials.”
Financial Guidance:
Stratasys today updated the following information regarding the
Company’s guidance for projected revenue and net income for the
fiscal year ending December 31, 2018:
- Revenue guidance of $670 to $680
million, compared to previous guidance of $670 to $700
million.
- GAAP net loss of $10 to $2 million, or
($0.19) to ($0.04) per diluted share, compared to previous guidance
of net loss of $41 to $25 million, or ($0.75) to ($0.46) per
diluted share.
- Non-GAAP net income of $27 to $30
million, or $0.50 to $0.55 per diluted share, compared to previous
guidance of net income of $16 to $27 million, or $0.30 to $0.50 per
diluted share.
- Non-GAAP operating margins are
unchanged at 4.5% to 6%.
Stratasys also updated the following guidance regarding the
Company’s projected performance and strategic plans for 2018:
- Capital expenditures are projected at
$25 to $35 million, compared to previous projection of $30 to $40
million.
The Company’s guidance reflects increased investments in
R&D, tools, materials, and additional resources aimed at
expanding addressable markets by accelerating development efforts
for the new metal additive manufacturing platform, further
advancements based on its FDM and PolyJet technologies, and
specific go-to-market initiatives in order to deepen customer
engagement.
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 is the best measure of its
performance.
Non-GAAP earnings guidance excludes $34 million of projected
amortization of intangible assets; $16 to $17 million of
share-based compensation expense; net gains from divestitures of
$23 to $22 and reorganization related expense of $6 to $7 million;
and includes ($1) to $1 million in tax expenses (income) related to
non-GAAP adjustments.
“We ended the quarter with positive cash generation and expense
controls that drove efficiencies and maintained operational
discipline as we continue to invest in research and development to
expand our portfolio,” continued Jaglom. “We believe we have the
best go-to-market execution strategy in the industry and are
focused on delivering new, innovative solutions in the coming years
that will drive strong, profitable top and bottom-line growth.”
Stratasys Ltd. Q3 2018 Conference Call Details
The Company plans to hold the conference call to discuss its
third quarter financial results on Thursday, November 1, 2018 at
8:30 a.m. (ET).
The investor conference call will be available via live webcast
on the Stratasys Website at www.stratasys.com in the "Investor
Relations" section; or directly at the following web address:
https://edge.media-server.com/m6/p/a8omzkp4.
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 2963439.
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 Website or by
accessing the provided web address.
Stratasys is a global leader in additive manufacturing or
3D printing technology, and is the manufacturer of FDM® and
PolyJet™ 3D Printers. The Company’s technologies are used to create
prototypes, manufacturing tools, and production parts for
industries, including aerospace, automotive, healthcare, consumer
products and education. For 30 years, Stratasys products have
helped manufacturers reduce product-development time, cost, and
time-to-market, as well as reduce or eliminate tooling costs and
improve product quality. The Stratasys 3D printing ecosystem of
solutions and expertise includes: 3D printers, materials, software,
expert services, and on-demand parts production. Online
at: www.stratasys.com, http://blog.stratasys.com and
LinkedIn.
Stratasys is a registered trademark 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 2018, 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 degree of market acceptance of
our 3D printers, high-performance systems and consumables, and the
software and technology included in those systems; potential
declines in the demand for, or the prices of, our products and
services, or volume of our sales, due to decreased demand either
for them specifically or in the 3D printing market generally;
potential further charges against earnings that we could be
required to take due to impairment of additional goodwill or other
intangible assets; potential shifts in our product mix to
lower-margin products or in our revenues mix towards our AM
services business; 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); the impact of competition
and new technologies; risks related to our relationships with our
suppliers, resellers and independent sales agents, and our
operations at our manufacturing sites; risks related to the
international scope of our operations and regulatory compliance
(including reporting, environmental, anti-corruption and other
regulatory compliance) related to that scope of operations; risks
related to the security of our information systems (including risks
related to potential cyber-attacks); changes in the overall global
economic environment or in political and economic conditions in the
countries in which we operate; changes in our strategy; costs and
potential liability relating to litigation and regulatory
proceedings; and those additional factors referred to in Item 3.D
“Key Information - Risk Factors”, Item 4, “Information on the
Company”, Item 5, “Operating and Financial Review and Prospects,”
and all other parts of our Annual Report on Form 20-F for the year
ended December 31, 2017 (the “2017 Annual Report”), filed
with the Securities and Exchange Commission (the “SEC”) on
February 28th, 2018. Readers are urged to carefully review and
consider the various disclosures made throughout our 2017 Annual
Report, and 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, 2018, 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, and our 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 mergers, acquisitions and divestments related expense or
gains and reorganization-related charges or gains, and (y)
excluding non-cash items such as stock-based compensation expenses,
acquired intangible assets amortization, including intangible
assets amortization related to equity method investments,
impairment of long-lived assets, changes in fair value of
obligations in connection with acquisitions and the corresponding
tax effect of those items. 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 (Unaudited)
(in thousands, except share data)
September 30,
December 31, 2018 2017
ASSETS Current
assets Cash and cash equivalents $ 348,887 $ 328,761 Accounts
receivable, net 129,477 132,671 Inventories 118,075 115,717 Net
investment in sales-type leases 3,489 7,208 Prepaid expenses 5,932
7,696 Other current assets 41,870 22,858
Total current assets 647,730
614,911
Non-current assets Net investment in
sales-type leases - long term 2,038 4,439 Property, plant and
equipment, net 191,437 199,951 Goodwill 386,728 387,108 Other
intangible assets, net 117,448 142,122 Other non-current assets
20,428 31,219 Total non-current
assets 718,079 764,839
Total
assets $ 1,365,809 $ 1,379,750
LIABILITIES AND EQUITY Current liabilities
Accounts payable $ 38,944 $ 39,849 Current portion of long
term-debt 5,143 5,143 Accrued expenses and other current
liabilities 34,257 30,041 Accrued compensation and related benefits
32,382 35,356 Deferred revenues 53,102 52,908
Total current liabilities 163,828
163,297
Non-current liabilities
Long-term debt 23,286 27,143 Deferred tax liabilities 1,836 7,069
Deferred revenues - long-term 16,009 15,200 Other non-current
liabilities 30,459 32,899 Total
non-current liabilities 71,590 82,311
Total liabilities 235,418
245,608
Redeemable non-controlling interests
931 1,635
Equity
Ordinary shares, NIS 0.01 nominal value,
authorized 180,000 thousandsshares; 53,810 thousands shares and
53,631 thousands sharesissued and outstanding at September 30, 2018
and December 31, 2017, respectively
146 145 Additional paid-in capital 2,675,762 2,663,274
Accumulated other comprehensive loss (8,815 ) (7,023 ) Accumulated
deficit (1,537,633 ) (1,523,906 ) Equity attributable
to Stratasys Ltd. 1,129,460 1,132,490 Non-controlling interest - 17
Total equity 1,129,460 1,132,507
Total liabilities and equity $ 1,365,809 $
1,379,750
Stratasys Ltd.
Consolidated
Statements of Operations (in thousands, except per share
data)
Three Months Ended September 30, Nine Months
Ended September 30, 2018 2017 2018
2017 (unaudited) (unaudited)
(unaudited) (unaudited) Net
sales Products $ 109,647 $ 108,401 $ 331,967 $ 344,509 Services
52,402 47,466 154,151
144,510 162,049 155,867 486,118 489,019
Cost of sales Products 48,640 49,840 147,120 159,043
Services 34,481 30,788 100,773
94,465 83,121 80,628 247,893 253,508
Gross profit 78,928 75,239 238,225
235,511
Operating expenses Research and development,
net 25,786 21,767 74,585 69,652 Selling, general and administrative
49,792 60,345 168,684
190,406 75,578 82,112 243,269 260,058
Operating loss 3,350 (6,873 ) (5,044 ) (24,547
)
Financial income (expense), net (39 ) (305 ) (114 )
380
Loss before income taxes
3,311 (7,178 ) (5,158 ) (24,167 ) Income tax expenses 304
2,571 1,110 5,205 Share in losses of associated companies
(3,752 ) (489 ) (11,185 ) (1,006 )
Net loss (745 ) (10,238 ) (17,453 ) (30,378 )
Net loss attributable to non-controlling interests (66 ) (81 ) (182
) (377 ) Net loss attributable to Stratasys Ltd. $ (679 ) $
(10,157 ) $ (17,271 ) $ (30,001 )
Net loss per ordinary
share attributable to Stratasys Ltd. Basic $ (0.01 ) $ (0.19 )
$ (0.34 ) $ (0.57 ) Diluted (0.01 ) (0.19 ) (0.34 ) (0.57 )
Basic 53,769 53,012 53,716 52,827 Diluted 53,769 53,012
53,716 52,827
Stratasys Ltd.
Reconciliation
of GAAP to Non-GAAP Results of Operations
Three Months Ended September 30,
2018 Non-GAAP 2018 2017 Non-GAAP
2017 GAAP Adjustments Non-GAAP
GAAP Adjustments Non-GAAP U.S. dollars and
shares in thousands (except per share amounts) Gross
profit (1) $ 78,928 $ 5,545 $ 84,473 $ 75,239 $ 6,598 $ 81,837
Operating income (loss) (1,2) 3,350 4,815 8,165 (6,873 ) 14,933
8,060
Net income (loss) attributable to
Stratasys Ltd. (1,2,3)
(679 ) 6,383 5,704 (10,157 ) 14,299 4,142
Net income (loss) per diluted share
attributable
to Stratasys Ltd. (4)
$ (0.01 ) $ 0.12 $ 0.11 $ (0.19 ) $ 0.27 $ 0.08 (1 )
Acquired intangible assets amortization expense 5,221 5,688
Non-cash stock-based compensation expense 351 642 Reorganization
and other related costs (27 ) 72 Merger and acquisition related
expense - 196 5,545 6,598 (2 )
Acquired intangible assets amortization expense 2,532 2,593
Non-cash stock-based compensation expense 3,662 4,256 Change in
fair value of obligations in connection with acquisitions - 65 Gain
from divestiture, net of transaction costs (7,016 ) -
Reorganization and other related costs 92 383
Merger and acquisition related expense
- 1,038 (730 ) 8,335
4,815 14,933 (3 )
Corresponding tax effect (750 ) (836 )
Acquired intangible assets amortization
and write-off related to equity
method investments
2,318 202 $ 6,383 $ 14,299
(4 ) Weighted average number of ordinary
shares outstanding- Diluted
53,769 53,992 53,012 53,664
Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Results of Operations
Nine Months
Ended September 30, 2018 Non-GAAP 2018
2017 Non-GAAP 2017 GAAP
Adjustments Non-GAAP GAAP Adjustments
Non-GAAP U.S. dollars and shares in thousands (except per
share amounts) Gross profit (1) $ 238,225 $ 16,852 $
255,077 $ 235,511 $ 19,996 $ 255,507 Operating income (loss) (1,2)
(5,044 ) 28,750 23,706 (24,547 ) 47,708 23,161 Net income (loss)
attributable to
Stratasys Ltd. (1,2,3)
(17,271 ) 33,789 16,518 (30,001 ) 45,729 15,728 Net income (loss)
per diluted share attributable
to Stratasys Ltd. (4)
$ (0.34 ) $ 0.65 $ 0.31 $ (0.57 ) $ 0.86 $ 0.29 (1 )
Acquired intangible assets amortization expense 15,645 17,081
Non-cash stock-based compensation expense 1,180 2,084
Reorganization and other related costs 27 303 Merger and
acquisition related expense - 528
16,852 19,996 (2 ) Acquired intangible assets amortization
expense 7,629 7,725 Non-cash stock-based compensation expense
10,526 12,049 Change in fair value of obligations in connection
with acquisitions - 1,378 Gain from divestiture, net of transaction
costs (7,016 ) Reorganization and other related costs 631 2,667
Merger and acquisition related expense 128
3,893 11,898 27,712
28,750 47,708 (3 ) Corresponding
tax effect (2,661 ) (2,571 )
Acquired intangible assets amortization
and write-off related to equity
method investments
7,700 592 $ 33,789 $ 45,729
(4 )
Weighted average number of ordinary
shares outstanding- Diluted
53,716 53,820 52,827 53,521
Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Forward
Looking Guidance Fiscal Year 2018 (in
millions, except per share data)
GAAP net loss
($10) to ($2)
Adjustments
Stock-based compensation expense $16 to $17 Intangible assets
amortization expense $34 Net Gains for Divestitures ($23) to ($22)
Reorganization Related Expense $6 to $7 Tax expense (Income)
related to Non-GAAP adjustments ($1) to $1
Non-GAAP net
income $27 to $30
GAAP loss per share ($0.19) to
($0.04)
Non-GAAP diluted earnings per share $0.50 to
$0.55
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181101005446/en/
Stratasys Investor RelationsYonah LloydVice President -
Investor RelationsYonah.Lloyd@stratasys.com
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