Fourth Quarter Revenue of $177.1 million and
$663.2 million for full year 2018
Fourth Quarter GAAP net income of $6.3 million,
or $0.12 per diluted share, and non-GAAP net income of $11.3
million, or $0.21 per diluted share
Generated $18.7 million of cash from operations
during the quarter, and a record $63.7 million in cash from
operations in full year 2018
Company releases full year 2019 earnings
guidance
Stratasys Ltd. (NASDAQ: SSYS) announced financial results for
the fourth quarter and full year of 2018.
Q4 2018 Financial Results Summary:
Revenue for the fourth quarter of 2018 was $177.1 million,
compared to $179.3 million for the same period last year.
- GAAP gross margin was 49.1% for the
quarter, compared to 48.7% for the same period last year.
- Non-GAAP gross margin was 52.2% for the
quarter, compared to 52.5% for the same period last year.
- GAAP operating loss for the quarter was
$3.8 million, compared to operating loss of $6.0 million for the
same period last year.
- Non-GAAP operating income for the
quarter was $12.8 million, compared to operating income of $13.5
million for the same period last year.
- GAAP net income for the quarter was
$6.3 million, or $0.12 per diluted share, compared to a net loss of
$10.0 million, or ($0.19) per diluted share, for the same period
last year.
- Non-GAAP net income for the quarter was
$11.3 million, or $0.21 per diluted share, compared to Non-GAAP net
income of $8.4 million, or $0.16 per diluted share, reported for
the same period last year.
- The Company generated $18.7 million in
cash from operations during the fourth quarter and ended the period
with $393.2 million in cash and cash equivalents.
“We are pleased with our fourth quarter and full year
profitability, and finished 2018 with record cash flow from
operations as we continue to build a strong operational foundation
for future growth opportunities and to invest in accelerating new
product introductions to expand our addressable markets,” said
Elchanan (Elan) Jaglom, Interim Chief Executive Officer of
Stratasys. “Our consolidated top line results this quarter reflect
continued positive traction in high-end system and materials sales
for our PolyJet and FDM technology platforms, primarily in North
America, offset partially by the impact late in the quarter of the
government shutdown in the United States and what we believe is
temporary weakness in the Automotive sector in Europe.”
Fiscal 2018 Financial Results Summary:
- Revenue for fiscal 2018 was $663.2
million compared to $668.4 million for fiscal 2017.
- GAAP operating loss for fiscal 2018 was
$8.8 million, compared to a loss of $30.5 million for fiscal
2017.
- Non-GAAP operating income for fiscal
2018 was $36.5 million, compared to $36.7 million for fiscal
2017.
- GAAP net loss for fiscal 2018 was $11.0
million, or ($0.22) per diluted share, compared to a loss of $40.0
million, or ($0.75) per diluted share, for fiscal 2017.
- Non-GAAP net income for fiscal 2018 was
$27.8 million, or $0.52 per diluted share, compared to non-GAAP net
income of $24.2 million, or $0.45 per diluted share, reported for
fiscal 2017.
- The Company generated a record $63.7
million in cash from operations in fiscal 2018.
Financial Guidance:
Stratasys today provided the following information regarding the
Company’s guidance for projected revenue and net income for the
fiscal year ending December 31, 2019:
- Revenue guidance of $670 to $700
million.
- GAAP net loss of $22 to $12 million, 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.
Stratasys also provided the following guidance regarding the
Company’s projected performance and strategic plans for 2019:
- Non-GAAP operating margins of 5.5% to
6.5%.
- Capital expenditures are projected at
$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 $32 million of projected
amortization of intangible assets; $20 to $22 million of
share-based compensation expense; reorganization related and other
expense of $1 to $2 million; and includes ($3) to ($4) million in
tax expenses related to non-GAAP adjustments.
“We are entering into 2019 with an impressive roadmap of new
technology and products, and continued, steady progress in customer
adoption of our additive manufacturing solutions for advanced
applications in our target verticals of aerospace, automotive,
healthcare, and high-realism rapid prototyping,” continued Jaglom.
“We are excited about our recent and upcoming new product
introductions and believe that we will see accelerated growth
beginning in 2020.”
Stratasys Ltd. Q4 2018 Conference Call Details
The Company plans to hold the conference call to discuss its
third quarter financial results on Thursday, March 7, 2019 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/znvsr248.
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 2462328.
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 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 product mix to lower-margin products or in
our revenues mix towards our AM services business; 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; 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, 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 that attaches Stratasys’
unaudited, condensed consolidated financial statements as of, and
for the quarter and full year ended, December 31, 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 (in thousands,
except share data)
December 31, December
31,
2018
2017 ASSETS
Current assets
Cash and cash equivalents $ 393,167 $ 328,761 Accounts receivable,
net 138,146 132,671 Inventories 123,524 115,717 Net investment in
sales-type leases 2,658 7,208 Prepaid expenses 6,398 7,696 Other
current assets
20,278
22,858 Total current assets
684,171 614,911
Non-current assets
Net investment in sales-type leases - long term 1,552 4,439
Property, plant and equipment, net 188,150 199,951 Goodwill 385,849
387,108 Other intangible assets, net 107,274 142,122 Other
non-current assets 21,258 31,219
Total non-current assets 704,083 764,839
Total assets $ 1,388,254 $ 1,379,750
LIABILITIES AND EQUITY
Current liabilities Accounts payable $ 45,855 $
39,849 Current portion of long term-debt 5,143 5,143 Accrued
expenses and other current liabilities 39,115 30,041 Accrued
compensation and related benefits 31,703 35,356 Deferred revenues
53,965 52,908 Total current
liabilities 175,781 163,297
Non-current liabilities Long-term debt 22,000 27,143
Deferred tax liabilities 1,662 7,069 Deferred revenues - long-term
18,422 15,200 Other non-current liabilities 27,422
32,899 Total non-current liabilities
69,506 82,311
Total liabilities
245,287 245,608
Redeemable non-controlling
interests
852 1,635
Equity
Ordinary shares, NIS 0.01 nominal value,
authorized 180,000 thousands shares; 53,881 thousands shares and
53,631 thousands shares issued and outstanding at December 31, 2018
and December 31, 2017, respectively
146
145
Additional paid-in capital 2,681,048
2,663,274
Accumulated other comprehensive loss (7,753 ) (7,023 ) Accumulated
deficit (1,531,326 ) (1,523,906 ) Equity attributable
to Stratasys Ltd. 1,142,115 1,132,490 Non-controlling interest - 17
Total equity 1,142,115 1,132,507
Total liabilities and equity $ 1,388,254 $
1,379,750
Stratasys Ltd.
Consolidated Statements of Operations (in thousands,
except per share data)
Three Months Ended December
31, Twelve Months Ended December 31, 2018
2017 2018 2017
Net sales
Products $ 124,537 $ 129,777 $ 456,504 $ 474,286 Services
52,582 49,566 206,733
194,076 177,119 179,343 663,237 668,362
Cost of
sales Products 56,502 59,977 203,622 219,020 Services
33,618 32,100 134,391
126,565 90,120 92,077 338,013 345,585
Gross profit 86,999 87,266 325,224 322,777
Operating expenses Research and development, net 24,379
26,585 98,964 96,237 Selling, general and administrative
66,423 66,657 235,107
257,063 90,802 93,242 334,071 353,300
Operating loss (3,803 ) (5,976 ) (8,847 ) (30,523 )
Financial income, net 747 667 633 1,047
Loss before income taxes (3,056 ) (5,309 )
(8,214 ) (29,476 ) Income taxes expense 3,626 4,102 4,736
9,273 Share in profits (losses) of associated companies
12,910 (704 ) 1,725
(1,710 )
Net income (loss) 6,228 (10,081 ) (11,225 )
(40,459 ) Net loss attributable to non-controlling interest
(79 ) (101 ) (261 ) (478 ) Net loss attributable to
Stratasys Ltd. $ 6,307 $ (9,980 ) $ (10,964 ) $ (39,981 )
Net loss per ordinary share attributable to Stratasys
Ltd. Basic $ 0.12 $ (0.19 ) $ (0.22 ) $ (0.75 ) Diluted 0.12
(0.19 ) (0.22 ) (0.75 ) Basic 53,854 53,356 53,751
52,959 Diluted 54,132 53,356 53,751 52,959
Stratasys Ltd. Reconciliation of GAAP to Non-GAAP
Results of Operations Three Months Ended
December 31, 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) $ 86,999 $ 5,499 $ 92,498 $
87,266 $ 6,864 $ 94,130 Operating income (loss) (1,2) (3,803 )
16,574 12,771 (5,976 ) 19,518 13,542
Net income (loss) attributable to
Stratasys Ltd. (1,2,3)
6,307 4,993 11,300 (9,980 ) 18,429 8,449
Net income (loss) per diluted share
attributable to Stratasys Ltd. (4)
$ 0.12 $ 0.09 $ 0.21 $ (0.19 ) $ 0.35 $ 0.16 (1)
Acquired intangible assets amortization expense 5,221 5,687
Non-cash stock-based compensation expense 294 497 Impairment
charges of other intangible assets - 646 Reorganization and other
related costs (16 ) 34 5,499 6,864 (2)
Acquired intangible assets amortization expense 2,532 2,594
Non-cash stock-based compensation expense 3,686 3,092
Impairment charges of intangible assets
and other long lived assets
4,797
3,742
Reorganization and other related costs 60 3,136 Merger and
acquisition related expense - 90
11,075 12,654 16,574
19,518 (3) Corresponding tax effect 1,853
(1,295 )
Gain from equity method divestment,
related write-offs and amortization
(13,434
)
206
$ 4,993 $ 18,429 (4)
Weighted average number of ordinary shares
outstanding- Diluted
54,132 54,132 53,356 53,584
Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Results of
Operations Twelve Months Ended December
31, 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) $ 325,224 $ 22,351 $ 347,575 $
322,777 $ 26,860 $ 349,637 Operating income (loss) (1,2) (8,847 )
45,324 36,477 (30,523 ) 67,226 36,703
Net income (loss) attributable to
Stratasys Ltd. (1,2,3)
(10,964 ) 38,782 27,818 (39,981 ) 64,158 24,177
Net income (loss) per diluted share
attributable to Stratasys Ltd. (4)
$ (0.22 ) $ 0.74 $ 0.52 $ (0.75 ) $ 1.20 $ 0.45 (1)
Acquired intangible assets amortization expense 20,866 22,768
Non-cash stock-based compensation expense 1,474 2,581 Impairment
charges of other intangible assets - 646 Reorganization and other
related costs 11 337 Merger and acquisition related expense
- 528 22,351 26,860 (2) Acquired
intangible assets amortization expense 10,161 10,319
Impairment charges of intangible assets
and other long-lived assets
4,797
3,742
Non-cash stock-based compensation expense 14,212 15,141 Gain from
divestiture, net of transaction costs (7,016 ) -
Change in fair value of obligations in
connection with acquisitions
-
1,378
Reorganization and other related costs 691 5,803 Merger and
acquisition related expense 128 3,983
22,973 40,366 45,324
67,226 (3) Corresponding tax effect
(808 ) (3,866 )
Gain from equity method divestment,
related write-offs and amortization
(5,734
)
798
$ 38,782 $ 64,158 (4)
Weighted average number of ordinary shares
outstanding- Diluted
53,751 53,898 52,959 53,536
Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Forward Looking
Guidance Fiscal Year 2019 (in millions,
except per share data)
GAAP net loss
($22) to ($12)
Adjustments
Stock-based compensation expense $20 to $22 Intangible assets
amortization expense $32 Reorganization Related Expense $1 to $2
Tax expense (Income) related to Non-GAAP
adjustments
($4) to ($3)
Non-GAAP net income $30 to $38
GAAP diluted
loss per share ($0.40) to ($0.22)
Non-GAAP diluted
earnings per share $0.55 to $0.70
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190307005297/en/
Stratasys Investor RelationsYonah LloydVice President -
Investor RelationsYonah.Lloyd@stratasys.com
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