Second Quarter Revenue of $163.2 million
Second Quarter GAAP net income of $1.2 million,
or $0.02 per diluted share, and non-GAAP net income of $8.5
million, or $0.16 per diluted share
Stratasys Ltd. (NASDAQ: SSYS) announced financial results for
the second quarter of 2019.
Q2 2019 Financial Results Summary: Revenue for the second
quarter of 2019 was $163.2 million, compared to $170.2 million for
the same period last year.
- GAAP gross margin was 49.7% for the quarter, compared to 49.1%
for the same period last year.
- Non-GAAP gross margin was 52.5% for the quarter, with no change
compared to the same period last year.
- GAAP operating income for the quarter was $0.8 million,
compared to an operating loss of $1.9 million for the same period
last year.
- Non-GAAP operating income for the quarter was $9.1 million,
compared to non-GAAP operating income of $10.6 million for the same
period last year.
- GAAP net income for the quarter was $1.2 million, or $0.02 per
diluted share, compared to a net loss of $3.6 million, or ($0.08)
per diluted share, for the same period last year.
- Non-GAAP net income for the quarter was $8.5 million, or $0.16
per diluted share, compared to non-GAAP net income of $8.1 million,
or $0.15per diluted share, for the same period last year.
- The Company used $3.8 million of cash from operations during
the second quarter and ended the period with $366.3 million of cash
and cash equivalents.
“Our second quarter results reflect continued strong performance
in the Americas, where we saw revenue growth across systems,
consumables, and services, which was offset mainly by significant
economic weakness in Europe that we believe is impacting capital
investments and general spending in the automotive and industrial
machinery markets in that region, as well as by the adverse impact
of foreign exchange rates in Europe and Asia Pacific,” said
Elchanan (Elan) Jaglom, Interim Chief Executive Officer of
Stratasys. “We believe that we are well positioned to return to
growth in Europe when macro conditions improve, and our new
products and platforms are launched and adopted in the market.
Additionally, despite relatively flat revenue growth after
excluding divestments, we are pleased that our emphasis on
operational efficiency delivered earnings and profitability while
we continue to invest in new products and strengthen our R&D
efforts to expand our addressable markets.”
Financial Guidance: Stratasys today issued the following
information regarding the Company’s guidance for the fiscal year
ending December 31, 2019:
- Revenue guidance of $670 to $700 million.
- GAAP net loss of $17 to $3million, or ($0.31) to ($0.05) per
diluted share, compared to previous guidance of a GAAP net loss of
$22 to $12million, or ($0.40) to ($0.22) per diluted share.
- Non-GAAP net income of $30 to $38 million, or $0.55 to $0.70
per diluted share.
- Non-GAAP operating margins of 5.5% to 6.5%.
- Capital expenditures are projected at $30 to $45 compared to
previous guidance of $45 to $60 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 is the best measure of its
performance.
Non-GAAP earnings guidance excludes $23 to $24 million of
projected amortization of intangible assets; $22 to $24 million of
share-based compensation expense; reorganization expenses and other
of ($1) to $1 million; and includes tax adjustments of ($2) to ($3)
million on the above non-GAAP items.
“We are excited about the market response to the new products
that we have recently launched, and about the several additional
product announcements we intend to make later this year and in
2020,” continued Jaglom. “We believe we are well positioned to
continue expanding in manufacturing, rapid prototyping, and
photo-realism design as well as in our target verticals of
aerospace, automotive, healthcare, and dental. Our focus on
innovation and select partnerships over the last several years is
opening new, incremental opportunities that along with our healthy
balance sheet will support our accelerated growth plan beginning in
2020.”
Stratasys Ltd. Q2 2019 Conference Call Details
The Company plans to hold the conference call to discuss its
second quarter financial results on Wednesday, July 31, 2019 at
8:30 a.m. (ET).
The investor conference call will be available via live webcast
on the Stratasys Web site at investors.stratasys.com; or directly
at the following web address:
https://edge.media-server.com/mmc/p/o8gp8wcb.
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 9771494.
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 at investors.stratasys.com, 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 2019, 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 shifts in our overall strategy, including as related to
any reorganization activities and our capital expenditures;
potential shifts in our product mix to lower-margin products or in
our revenues mix towards our AM services business; the impact of
competition and new technologies; potential further charges against
earnings that we could be required to take due to impairment of
additional goodwill or other intangible assets; potential failure
to successfully consummate acquisitions or investments in new
businesses, technologies, products or services; 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, 2018 (the “2018 Annual Report”), filed
with the Securities and Exchange Commission (the “SEC”) on
March 7th, 2019. Readers are urged to carefully review and consider
the various disclosures made throughout our 2018 Annual Report and
the Report of Foreign Private Issuer on Form 6-K that attaches
Stratasys’ unaudited, condensed consolidated financial statements
as of, and for the quarter and six months ended, June 30, 2019, and
its review of its results of operations and financial condition for
that period, 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, 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)
June
30, December 31,
2019
2018
ASSETS Current assets Cash and cash
equivalents
$
366,327
$
393,167
Accounts receivable, net
131,546
138,146
Inventories
147,799
123,524
Prepaid expenses
8,117
6,398
Other current assets
29,686
22,936
Total current assets
683,475
684,171
Non-current assets Property, plant and equipment, net
189,794
188,150
Goodwill
385,803
385,849
Other intangible assets, net
96,001
107,274
Operating lease right-of-use assets
23,399
-
Other non-current assets
18,891
22,810
Total non-current assets
713,888
704,083
Total assets
$
1,397,363
$
1,388,254
LIABILITIES AND EQUITY Current
liabilities Accounts payable
$
54,662
$
45,855
Current portion of long term-debt
-
5,143
Accrued expenses and other current liabilities
29,942
39,115
Accrued compensation and related benefits
29,572
31,703
Deferred revenues
54,298
53,965
Operating lease liabilities - short term
9,106
-
Total current liabilities
177,580
175,781
Non-current liabilities Long-term debt
-
22,000
Deferred revenues - long-term
16,652
18,422
Operating lease liabilities - long term
14,702
-
Other non-current liabilities
31,409
29,084
Total non-current liabilities
62,763
69,506
Total liabilities
240,343
245,287
Redeemable non-controlling interests
742
852
Equity Ordinary shares, NIS 0.01 nominal value,
authorized 180,000 thousands shares; 54,344 thousands shares and
53,881 thousands shares issued and outstanding at June 30, 2019 and
December 31, 2018, respectively
147
146
Additional paid-in capital
2,695,622
2,681,048
Accumulated other comprehensive loss
(7,047
)
(7,753
)
Accumulated deficit
(1,532,444
)
(1,531,326
)
Total equity
1,156,278
1,142,115
Total liabilities and equity
$
1,397,363
$
1,388,254
Stratasys Ltd. Consolidated Statements of
Operations (in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2019
2018
2019
2018
(unaudited) (unaudited) (unaudited)
(unaudited) Net sales Products
$
110,341
$
118,403
$
215,432
$
222,320
Services
52,822
51,833
103,031
101,749
163,163
170,236
318,463
324,069
Cost of sales Products
47,095
53,262
91,264
98,480
Services
34,901
33,327
69,575
66,292
81,996
86,589
160,839
164,772
Gross profit
81,167
83,647
157,624
159,297
Operating expenses Research and development, net
24,040
23,689
46,614
48,799
Selling, general and administrative
56,322
61,887
113,476
118,892
80,362
85,576
160,090
167,691
Operating profit (loss)
805
(1,929
)
(2,466
)
(8,394
)
Financial income (expense), net
1,755
(83
)
2,508
(75
)
Income (loss) before income taxes
2,560
(2,012
)
42
(8,469
)
Income tax expenses
1,280
205
2,498
806
Share in profits (losses) of associated companies
(195
)
(1,360
)
1,228
(7,433
)
Net income (loss)
1,085
(3,577
)
(1,228
)
(16,708
)
Net loss attributable to non-controlling interests
(67
)
(26
)
(110
)
(116
)
Net income (loss) attributable to Stratasys Ltd.
$
1,152
$
(3,551
)
$
(1,118
)
$
(16,592
)
Net income (loss) per ordinary share attributable to
Stratasys Ltd. Basic
$
0.02
$
(0.08
)
$
(0.02
)
$
(0.33
)
Diluted
$
0.02
$
(0.08
)
$
(0.02
)
$
(0.33
)
Basic
54,231
53,722
54,102
53,689
Diluted
54,687
53,722
54,102
53,689
Stratasys Ltd. Reconciliation of GAAP to Non-GAAP
Results of Operations Three Months Ended June 30,
2019
Non-GAAP
2019
2018
Non-GAAP
2018
GAAP Adjustments Non-GAAP GAAP
Adjustments Non-GAAP U.S. dollars and shares in
thousands (except per share amounts) Gross profit (1)
$
81,167
$
4,441
$
85,608
$
83,647
$
5,708
$
89,355
Operating income (loss) (1,2)
805
8,246
9,051
(1,929
)
12,548
10,619
Net income (loss) attributable to Stratasys Ltd. (1,2,3)
1,152
7,372
8,524
(3,551
)
11,643
8,092
Net income (loss) per diluted share attributable to Stratasys Ltd.
(4)
$
0.02
$
0.14
$
0.16
$
(0.08
)
$
0.23
$
0.15
(1)
Acquired intangible assets amortization expense
3,900
5,220
Non-cash stock-based compensation expense
541
442
Reorganization and other related costs
-
46
4,441
5,708
(2)
Acquired intangible assets amortization expense
1,783
2,539
Non-cash stock-based compensation expense
5,552
3,836
Reorganization expenses and other
(3,530
)
465
3,805
6,840
8,246
12,548
(3)
Corresponding tax effect
(874
)
(1,119
)
Amortization of acquired intangibles assets related to equity
method investments
-
214
$
7,372
$
11,643
(4)
Weighted average number of ordinary shares outstanding- Diluted
54,687
54,687
53,722
53,745
Stratasys Ltd. Reconciliation of GAAP to Non-GAAP
Results of Operations Six Months Ended June 30,
2019
Non-GAAP
2019
2018
Non-GAAP
2018
GAAP Adjustments Non-GAAP GAAP
Adjustments Non-GAAP U.S. dollars and shares in
thousands (except per share amounts) Gross profit (1)
$
157,624
$
8,693
$
166,317
$
159,297
$
11,307
$
170,604
Operating income (loss) (1,2)
(2,466
)
18,321
15,855
(8,394
)
23,935
15,541
Net income (loss) attributable to Stratasys Ltd. (1,2,3)
(1,118
)
15,299
14,181
(16,592
)
27,406
10,814
Net income (loss) per diluted share attributable to Stratasys Ltd.
(4)
$
(0.02
)
$
0.28
$
0.26
$
(0.33
)
$
0.53
$
0.20
(1)
Acquired intangible assets amortization expense
7,798
10,424
Non-cash stock-based compensation expense
895
829
Reorganization and other related costs
-
54
8,693
11,307
(2)
Acquired intangible assets amortization expense
3,672
5,097
Non-cash stock-based compensation expense
9,427
6,864
Reorganization expenses and other
(3,471
)
2,230
Gain from sale of plant and property
-
(1,563
)
9,628
12,628
18,321
23,935
(3)
Corresponding tax effect
(1,418
)
(1,911
)
Gain from equity method divestment, related write-offs and
amortization
(1,604
)
5,382
$
15,299
$
27,406
(4)
Weighted average number of ordinary shares outstanding- Diluted
54,102
54,585
53,689
53,732
Stratasys Ltd. Reconciliation of GAAP to Non-GAAP
Forward Looking Guidance Fiscal Year 2019
(in millions, except per share data)
GAAP net
loss ($17) to ($3)
Adjustments Stock-based compensation expense
$22 to $24 Intangible assets amortization expense $23 to $24
Reorganization and other related costs ($1) to $1 Tax expense
related to Non-GAAP adjustments ($2) to ($3)
Non-GAAP net
income $30 to $38
GAAP loss per share ($0.31) to
($0.05)
Non-GAAP diluted earnings per share $0.55 to
$0.70
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190731005260/en/
Stratasys Investor Relations Yonah Lloyd Vice President -
Investor Relations Yonah.Lloyd@stratasys.com
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