Second Quarter Revenue of $117.6 million

Second Quarter GAAP net loss of $28.0 million, or ($0.51) per diluted share, and non-GAAP net loss of $7.4 million, or ($0.13) per diluted share

Used $9.7 million of cash from operations - $313.0 million net cash position with no debt

Stratasys Ltd. (NASDAQ: SSYS) announced financial results for the second quarter of 2020.

Q2 2020 Financial Results Summary:

Revenue for the second quarter of 2020 was $117.6 million, compared to $163.2 million for the same period last year. The 27.9% reduction was primarily driven by the adverse impact of COVID-19 on the company’s customers throughout the industries into which the company sells its products and services.

  • GAAP gross margin was 37.2% for the quarter, compared to 49.7% for the same period last year.
  • Non-GAAP gross margin was 45.4% for the quarter, compared to 52.5% for the same period last year.
    • Gross margin decline is primarily due to the lower proportion of consumables out of the total revenue mix due to the COVID-19 crisis, not to discounting or material ASP reductions. The company strongly believes that gross margins will recover as our customers return to their pre-COVID utilization levels.
  • GAAP operating loss for the quarter was $29.3 million, compared to operating income of $0.8 million for the same period last year.
  • Non-GAAP operating loss for the quarter was $8.1 million, compared to non-GAAP operating income of $9.1 million for the same period last year.
  • Non-GAAP EBITDA was ($1.6) million for the quarter, compared to $15.5 million for the same period last year.
  • GAAP net loss for the quarter was $28.0 million, or ($0.51) per diluted share, compared to net income of $1.2 million, or $0.02 per diluted share, for the same period last year.
  • Non-GAAP net loss for the quarter was $7.4 million, or ($0.13) per diluted share, compared to non-GAAP net income of $8.5 million, or $0.16 per diluted share, for the same period last year.
  • The Company used $9.7 million of cash from operations during the second quarter and ended the period with $313.0 million in cash, cash equivalents and short-term deposits. The Company has no debt.

“3D Printing continues to penetrate further into manufacturing across every relevant business sector,” stated Yoav Zeif, CEO of Stratasys. “Despite the current macro slowdown due to COVID-19, we remain very optimistic about where our business and our industry is headed. The largest opportunity for us in 3D Printing is in Polymers, and the fastest-growing area is manufacturing. We are already a leader in Polymer additive manufacturing and expect to increase our presence through new offerings that will focus on delivering incremental customer value, especially in the fast-growing manufacturing applications, where we see the longest runway for growth through new technologies that we will offer,” continued Zeif. “We have the ecosystem, resources and strategy to further expand our leadership as we enhance and broaden our technology offerings to serve significantly more Polymer applications and offer a full suite of solutions. We believe that these efforts will reboot growth in the short to medium-term, provide us with access to a greater customer share of wallet, and leverage our core competencies to more than double our addressable market, driving our future profitable growth.”

Stratasys Ltd. Q2 2020 Conference Call Details

The Company plans to hold the conference call to discuss its second quarter 2020 financial results on Wednesday, August 5, 2020 at 8:30 a.m. (ET).

The investor conference call will be available via live webcast on the Stratasys Website at investors.stratasys.com, or directly at the following web address:

https://78449.themediaframe.com/dataconf/productusers/ssys/mediaframe/39720/indexl.html

To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is +1-412-902-1012. Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for 6 months at investors.stratasys.com, or by accessing the above-provided web address.

Stratasys (Nasdaq: SSYS) is a global leader in additive manufacturing or 3D printing technology and is the manufacturer of FDM®, PolyJet™, and stereolithography 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 more than 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.

To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, Twitter, LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including the company's websites, to share material, non-public information pursuant to the SEC's Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.

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 (or withdrawal of guidance) concerning its expected results for 2020, 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 our success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the duration of the global COVID-19 pandemic, which, if extensive, may continue to impact, in a material adverse manner, our operations, financial position and cash flows, and those of our customers and suppliers; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower-margin products or services; 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; to the extent of our success at successfully consummating acquisitions or investments in new businesses, technologies, products or services; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular (including risks related to the impact of coronavirus on our operations, supply chain, liquidity, cash flow and customer orders); costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; 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, 2019 (the “2019 Annual Report”), which we filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2020. Readers are urged to carefully review and consider the various disclosures made throughout our 2019 Annual Report and the Report of Foreign Private Issuer on Form 6-K that attaches Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly period ended June 30, 2020, which we are furnishing 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 on an ongoing basis after (i) excluding mergers, acquisitions and divestments related expense or gains and restructuring-related charges or gains, and (ii) 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,

2020

 

2019

    ASSETS   Current assets Cash and cash equivalents

$

284,742

 

$

293,484

 

Short-term deposits

$

28,300

 

$

28,300

 

Accounts receivable, net

 

102,212

 

 

132,558

 

Inventories

 

164,588

 

 

168,504

 

Prepaid expenses

 

7,056

 

 

6,567

 

Other current assets

 

19,969

 

 

29,659

 

  Total current assets

 

606,867

 

 

659,072

 

  Non-current assets Property, plant and equipment, net

 

194,437

 

 

189,706

 

Goodwill

 

385,636

 

 

385,658

 

Other intangible assets, net

 

75,638

 

 

87,328

 

Operating lease right-of-use assets

 

17,738

 

 

20,936

 

Other non-current assets

 

33,744

 

 

38,819

 

  Total non-current assets

 

707,193

 

 

722,447

 

  Total assets

$

1,314,060

 

$

1,381,519

 

  LIABILITIES AND EQUITY   Current liabilities Accounts payable

$

30,600

 

$

35,818

 

Accrued expenses and other current liabilities

 

23,743

 

 

28,528

 

Accrued compensation and related benefits

 

29,548

 

 

34,013

 

Deferred revenues

 

48,617

 

 

52,268

 

Operating lease liabilities - short term

 

8,667

 

 

9,292

 

  Total current liabilities

 

141,175

 

 

159,919

 

  Non-current liabilities Deferred revenues - long-term

 

13,489

 

 

16,039

 

Operating lease liabilities - long term

 

9,493

 

 

12,445

 

Other non-current liabilities

 

31,576

 

 

35,343

 

  Total non-current liabilities

 

54,558

 

 

63,827

 

  Total liabilities

 

195,733

 

 

223,746

 

  Redeemable non-controlling interests

 

572

 

 

622

 

  Equity Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 55,030 thousands shares and 54,441 thousands shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

 

150

 

 

148

 

Additional paid-in capital

 

2,717,963

 

 

2,706,894

 

Accumulated other comprehensive loss

 

(8,494

)

 

(7,716

)

Accumulated deficit

 

(1,591,864

)

 

(1,542,175

)

Total equity

 

1,117,755

 

 

1,157,151

 

  Total liabilities and equity

$

1,314,060

 

$

1,381,519

 

Stratasys Ltd. Consolidated Statements of Operations (in thousands, except per share data)  

Three Months Ended June 30,

 

Six Months Ended June 30,

2020

 

2019

 

2020

 

2019

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Net sales Products

$

73,877

 

$

110,341

 

$

157,049

 

$

215,432

 

Services

 

43,746

 

 

52,822

 

 

93,481

 

 

103,031

 

 

117,623

 

 

163,163

 

 

250,530

 

 

318,463

 

  Cost of sales Products

 

39,969

 

 

47,095

 

 

79,217

 

 

91,264

 

Services

 

33,918

 

 

34,901

 

 

67,707

 

 

69,575

 

 

73,887

 

 

81,996

 

 

146,924

 

 

160,839

 

  Gross profit

 

43,736

 

 

81,167

 

 

103,606

 

 

157,624

 

  Operating expenses Research and development, net

 

21,303

 

 

24,040

 

 

45,497

 

 

46,614

 

Selling, general and administrative

 

51,711

 

 

56,322

 

 

107,287

 

 

113,476

 

 

73,014

 

 

80,362

 

 

152,784

 

 

160,090

 

  Operating (loss) income

 

(29,278

)

 

805

 

 

(49,178

)

 

(2,466

)

  Financial income (expense), net

 

149

 

 

1,754

 

 

(680

)

 

2,508

 

  Income (loss) before income taxes

 

(29,129

)

 

2,559

 

 

(49,858

)

 

42

 

  Income tax (benefit) expenses

 

(2,128

)

 

1,280

 

 

(1,907

)

 

2,498

 

  Share in profits (losses) of associated companies

 

(950

)

 

(195

)

 

(1,788

)

 

1,228

 

  Net income (loss)

 

(27,951

)

 

1,084

 

 

(49,739

)

 

(1,228

)

  Net income (loss) attributable to non-controlling interests

 

35

 

 

(68

)

 

(50

)

 

(110

)

  Net income (loss) attributable to Stratasys Ltd.

$

(27,986

)

$

1,152

 

$

(49,689

)

$

(1,118

)

  Net income (loss) per ordinary share attributable to Stratasys Ltd. Basic

$

(0.51

)

$

0.02

 

$

(0.91

)

$

(0.02

)

Diluted

$

(0.51

)

$

0.02

 

$

(0.91

)

$

(0.02

)

  Basic

 

54,917

 

 

54,231

 

 

54,733

 

 

54,102

 

Diluted

54,917

54,687

54,733

54,102

Three Months Ended June 30,

2020

 

Non-GAAP

 

2020

 

2019

 

Non-GAAP

 

2019

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

U.S. dollars and shares in thousands (except per share amounts)

  Gross profit (1)

$

43,736

 

$

9,612

 

$

53,348

 

$

81,167

 

$

4,441

 

$

85,608

Operating income (loss) (1,2)

 

(29,278

)

 

21,228

 

 

(8,050

)

 

(805

)

 

8,246

 

 

9,051

Net income (loss) attributable to Stratasys Ltd. (1,2,3)

 

(27,986

)

 

20,634

 

 

(7,353

)

 

1,152

 

 

7,372

 

 

8,524

Net income (loss) per diluted share attributable to Stratasys Ltd. (4)

$

(0.51

)

$

0.38

 

$

(0.13

)

$

0.02

 

$

0.14

 

$

0.16

 

(1)

Acquired intangible assets amortization expense

 

4,065

 

 

3,900

 

Non-cash stock-based compensation expense

 

497

 

 

541

 

Restructuring and other related costs

 

5,050

 

 

-

 

 

9,612

 

 

4,441

 

 

(2)

Acquired intangible assets amortization expense

 

2,125

 

 

1,783

 

Non-cash stock-based compensation expense

 

5,614

 

 

5,552

 

Restructuring and other related costs

 

3,798

 

 

(3,530

)

Other expenses

 

79

 

 

-

 

 

11,616

 

 

3,805

 

 

21,228

 

 

8,246

 

 

(3)

Corresponding tax effect

 

(669

)

 

(874

)

Equity method related amortization, divestments and impairments

 

75

 

 

-

 

$

20,634

 

$

7,372

 

 

(4)

Weighted average number of ordinary shares outstanding- Diluted

 

54,917

 

 

54,917

 

 

54,687

 

 

54,687

Six Months Ended June 30,

2020

 

Non-GAAP

 

2020

 

2019

 

Non-GAAP

 

2019

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

U.S. dollars and shares in thousands (except per share amounts)

  Gross profit (1)

$

103,606

 

$

14,026

 

$

117,632

 

$

157,624

 

$

8,693

 

$

166,317

Operating income (loss) (1,2)

 

(49,178

)

 

32,719

 

 

(16,459

)

 

(2,466

)

 

18,321

 

 

15,855

Net income (loss) attributable toStratasys Ltd. (1,2,3)

 

(49,689

)

 

31,771

 

 

(17,919

)

 

(118

)

 

15,299

 

 

14,181

Net income (loss) per diluted share attributableto Stratasys Ltd. (4)

$

(0.91

)

$

0.58

 

$

(0.33

)

$

(0.02

)

$

0.28

 

$

0.26

     

(1)

Acquired intangible assets amortization expense

 

8,130

 

 

7,798

 

Non-cash stock-based compensation expense

 

899

 

 

895

 

Restructuring and other related costs

 

4,997

 

 

-

 

 

14,026

 

 

8,693

 

 

(2)

Acquired intangible assets amortization expense

 

4,267

 

 

3,672

 

Non-cash stock-based compensation expense

 

10,119

 

 

9,427

 

Restructuring and other related costs

 

3,829

 

 

(3,471

)

Other expenses

 

478

 

 

-

 

 

18,693

 

 

9,628

 

 

32,719

 

 

18,321

 

 

(3)

Corresponding tax effect

 

(1,100

)

 

(1,418

)

Equity method related amortization, divestments and impairments

 

152

 

 

(1,604

)

$

31,771

 

$

15,299

 

 

(4)

Weighted average number of ordinary shares outstanding- Diluted

 

54,733

 

 

54,733

 

 

54,102

 

 

54,585

 

Stratasys Investor Relations Yonah Lloyd Vice President - Investor Relations Yonah.Lloyd@stratasys.com

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