Third Quarter Revenue of $157.5 million
Third Quarter GAAP net loss of $6.9 million, or
($0.13) per diluted share, and non-GAAP net income of $6.3 million,
or $0.12 per diluted share
Stratasys Ltd. (NASDAQ: SSYS) announced financial results for
the third quarter of 2019.
Q3 2019 Financial Results Summary:
Revenue for the third quarter of 2019 was $157.5 million,
compared to $162.0 million for the same period last year.
- GAAP gross margin was 49.2% for the quarter, compared to 48.7%
for the same period last year.
- Non-GAAP gross margin was 52.4% for the quarter, compared to
52.1% for the same period last year.
- GAAP operating loss for the quarter was $6.0 million, compared
to an operating income of $3.4 million for the same period last
year.
- Non-GAAP operating income for the quarter was $8.1 million,
compared to non-GAAP operating income of $8.2 million for the same
period last year.
- GAAP net loss for the quarter was $6.9 million, or ($0.13) per
diluted share, compared to a net loss of $0.7 million, or ($0.01)
per diluted share, for the same period last year.
- Non-GAAP net income for the quarter was $6.3 million, or $0.12
per diluted share, compared to net income of $5.7 million, or $0.11
per diluted share, for the same period last year.
- The Company used $8.6 million of cash from operations during
the third quarter and ended the period with $347.1 million of cash
and cash equivalents.
“Our results in the third quarter reflect a continuation of our
track record of delivering earnings and profitability, despite
challenging global economic conditions that have impacted customer
investments in our target verticals in Europe and Asia. In the
third quarter we continued to observe strong performance in our
core professional and production-focused business in the Americas,
our largest market, with specific strength in high-end FDM and
PolyJet systems, our F123 Series, and our target verticals of
automotive and aerospace,” said Elchanan (Elan) Jaglom, Interim
Chief Executive Officer of Stratasys. “We continue to believe that
when macro conditions improve we will see a return to growth in
Europe and Asia, and believe we are well positioned with an
impressive portfolio of new products as we finish 2019.”
Financial Guidance:
Stratasys today updated the following information regarding the
Company’s guidance for the fiscal year ending December 31,
2019:
- Revenue guidance of $640 million to $655 million, compared to
previous guidance of $670 million to $700 million.
- GAAP net loss of $17 million to $3 million, or ($0.31) to
($0.05) per diluted share.
- Non-GAAP net income of $30 million 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 million to $45
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 million to $24 million
of projected amortization of intangible assets; $22 million to $24
million of share-based compensation expense; reorganization and
other expenses of ($1 million) to $1 million. Non-GAAP guidance
includes negative tax adjustments of $2 million to $3 million on
the above non-GAAP items.
Stratasys Ltd. Q3 2019 Conference Call Details
The Company plans to hold the conference call to discuss its
third quarter financial results on Wednesday, November 13, 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/gt9wb79u.
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 9983069.
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 nine months ended, September 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)
September 30, 2019
December 31, 2018
ASSETS Current assets Cash and cash
equivalents
$
347,082
$
393,167
Accounts receivable, net
133,743
138,146
Inventories
164,742
123,524
Prepaid expenses
7,646
6,398
Other current assets
29,765
22,936
Total current assets
682,978
684,171
Non-current assets Property, plant and equipment, net
187,712
188,150
Goodwill
385,332
385,849
Other intangible assets, net
90,297
107,274
Operating lease right-of-use assets
21,757
-
Other non-current assets
22,977
22,810
Total non-current assets
708,075
704,083
Total assets
$
1,391,053
$
1,388,254
LIABILITIES AND EQUITY Current
liabilities Accounts payable
$
43,139
$
45,855
Current portion of long term-debt
-
5,143
Accrued expenses and other current liabilities
33,176
39,115
Accrued compensation and related benefits
35,413
31,703
Deferred revenues
53,214
53,965
Operating lease liabilities - short term
9,016
-
Total current liabilities
173,958
175,781
Non-current liabilities Long-term debt
-
22,000
Deferred revenues - long-term
15,742
18,422
Operating lease liabilities - long term
13,303
-
Other non-current liabilities
32,580
29,084
Total non-current liabilities
61,625
69,506
Total liabilities
235,583
245,287
Redeemable non-controlling interests
700
852
Equity Ordinary shares, NIS 0.01 nominal value,
authorized 180,000 thousands shares; 54,428 thousands shares and
53,881 thousands shares issued and outstanding at September 30,
2019 and December 31, 2018, respectively
148
146
Additional paid-in capital
2,701,974
2,681,048
Accumulated other comprehensive loss
(7,967
)
(7,753
)
Accumulated deficit
(1,539,385
)
(1,531,326
)
Total equity
1,154,770
1,142,115
Total liabilities and equity
$
1,391,053
$
1,388,254
Stratasys Ltd. Consolidated Statements of
Operations (in thousands, except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Net sales Products
$
106,346
$
109,647
$
321,778
$
331,967
Services
51,114
52,402
154,145
154,151
157,460
162,049
475,923
486,118
Cost of sales Products
44,341
48,640
135,605
147,120
Services
35,710
34,481
105,285
100,773
80,051
83,121
240,890
247,893
Gross profit
77,409
78,928
235,033
238,225
Operating expenses Research and development, net
23,620
25,786
70,234
74,585
Selling, general and administrative
59,741
49,792
173,217
168,684
83,361
75,578
243,451
243,269
Operating profit (loss)
(5,952
)
3,350
(8,418
)
(5,044
)
Financial income (expense), net
289
(39
)
2,796
(114
)
Income (loss) before income taxes
(5,663
)
3,311
(5,622
)
(5,158
)
Income tax expenses
586
304
3,084
1,110
Share in profits (losses) of associated companies
(733
)
(3,752
)
495
(11,185
)
Net income (loss)
(6,982
)
(745
)
(8,211
)
(17,453
)
Net loss attributable to non-controlling interests
(41
)
(66
)
(152
)
(182
)
Net income (loss) attributable to Stratasys Ltd.
$
(6,941
)
$
(679
)
$
(8,059
)
$
(17,271
)
Net income (loss) per ordinary share attributable to
Stratasys Ltd. Basic
$
(0.13
)
$
(0.01
)
$
(0.15
)
$
(0.34
)
Diluted
$
(0.13
)
$
(0.01
)
$
(0.15
)
$
(0.34
)
Basic
54,394
53,769
54,201
53,716
Diluted
54,394
53,769
54,201
53,716
Three Months Ended September 30,
2019 GAAP
Non-GAAP Adjustments
2019 Non-GAAP
2018 GAAP
Non-GAAP Adjustments
2018 Non-GAAP
U.S. dollars and shares in thousands (except per share
amounts) Gross profit (1)
$
77,409
$
5,087
$
82,496
$
78,928
$
5,545
$
84,473
Operating income (loss) (1,2)
$
(5,952
)
$
14,055
$
8,103
$
3,350
$
4,815
$
8,165
Net income (loss) attributable to Stratasys Ltd. (1,2,3)
$
(6,941
)
$
13,275
$
6,334
$
(679
)
$
6,383
$
5,704
Net income (loss) per diluted share attributable to Stratasys Ltd.
(4)
$
(0.13
)
$
0.25
$
0.12
$
(0.01
)
$
0.12
$
0.11
(1)
Acquired intangible assets amortization expense
3,916
5,221
Non-cash stock-based compensation expense
475
351
Reorganization and other related costs
696
(27
)
5,087
5,545
(2)
Acquired intangible assets amortization expense
2,016
2,532
Non-cash stock-based compensation expense
4,960
3,662
Reorganization and other related costs
1,992
-
Merger and acquisition and other expense
-
(6,924
)
8,968
(730
)
14,055
4,815
(3)
Corresponding tax effect
(780
)
(750
)
Gain from equity method divestment and related amortization and
impairments
-
2,318
13,275
$
6,383
(4)
Weighted average number of ordinary shares outstanding- Diluted
54,394
54,940
53,769
53,992
Nine Months Ended September
30,
2019 GAAP
Non-GAAP Adjustments
2019 Non-GAAP
2018 GAAP
Non-GAAP Adjustments
2018 Non-GAAP
U.S. dollars and shares in
thousands (except per share amounts)
Gross profit (1)
$
235,033
$
13,780
$
248,813
$
238,225
$
16,852
$
255,077
Operating income (loss) (1,2)
$
(8,418
)
$
32,376
$
23,958
$
(5,044
)
$
28,750
$
23,706
Net income (loss) attributable to Stratasys Ltd. (1,2,3)
$
(8,059
)
$
28,574
$
20,515
$
(17,271
)
$
33,789
$
16,518
Net income (loss) per diluted share attributable to Stratasys Ltd.
(4)
$
(0.15
)
$
0.53
$
0.38
$
(0.34
)
$
0.65
$
0.31
(1)
Acquired intangible assets amortization expense
11,714
15,645
Non-cash stock-based compensation expense
1,370
1,180
Reorganization and other related costs
696
27
13,780
16,852
(2)
Acquired intangible assets amortization expense
5,688
7,629
Non-cash stock-based compensation expense
14,387
10,526
Reorganization and other related costs
(1,479
)
2,230
Merger and acquisition and other expense
-
(6,926
)
Gain from sale of plant and property
-
(1,563
)
18,596
11,898
32,376
28,750
(3)
Corresponding tax effect
(2,198
)
(2,661
)
Gain from equity method divestment, related write-offs and
amortization
(1,604
)
7,700
$
28,574
$
33,789
(4)
Weighted average number of ordinary shares outstanding- Diluted
54,201
54,705
53,716
53,820
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/20191113005372/en/
Stratasys Investor Relations Yonah Lloyd Vice President -
Investor Relations Yonah.Lloyd@stratasys.com
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