Online at: www.stratasys.com, http://blog.stratasys.com and LinkedIn.
Stratasys and Fortus are registered trademarks 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 2017, 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: potential declines in the prices of our products and services, or volume of our sales, due to decreased demand in the 3D printing market; 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); changes in the overall global economic environment; the impact of competition and new technologies; changes in the general market, or in political and economic conditions in the countries in which we operate; any underestimates in projected capital expenditures and liquidity; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; changes in our strategy; changes in applicable government regulations and approvals; changes in customers’ budgeting priorities; reduction in our profitability due to shifting in our product mix into lower margin products or our shifting in our revenues mix significantly towards our AM services business; costs and potential liability relating to litigation and regulatory proceedings; and those factors referred to in Item 3.D “Key Information - Risk Factors”, Item 4, “Information on the Company”, and Item 5, “Operating and Financial Review and Prospects” in our 2016 Annual Report on Form 20-F, filed with the SEC on March 9, 2017, as well as in the 2016 Annual Report generally. Readers are urged to carefully review and consider the various disclosures made throughout (i) 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, 2017, 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, (ii) Stratasys’ 2016 Annual Report, and (iii) Stratasys’ 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 merger and acquisition related expense and reorganization-related charges, and (y) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, impairment of goodwill and other long-lived assets, changes in fair value of obligations in connection with acquisitions and the corresponding tax effect of those items. We also exclude, when applicable, non-recurring changes of non-cash valuation allowance on deferred tax assets, as well as, non-recurring significant tax charges or benefits that relate to prior periods which we do not believe are reflective of ongoing business and operating results. 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) | ||||||||
| Sep 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 302,795 | $ | 280,328 | ||||
| Accounts receivable, net | 120,504 | 120,411 | ||||||
| Inventories | 124,056 | 117,521 | ||||||
| Net investment in sales-type leases | 8,499 | 11,717 | ||||||
| Prepaid expenses | 7,167 | 7,571 | ||||||
| Other current assets | 19,635 | 15,491 | ||||||
| Total current assets | 582,656 | 553,039 | ||||||
| Non-current assets | ||||||||
| Net investment in sales-type leases - long term | 5,844 | 12,126 | ||||||
| Property, plant and equipment, net | 202,995 | 208,415 | ||||||
| Goodwill | 386,887 | 385,629 | ||||||
| Other intangible assets, net | 152,807 | 177,458 | ||||||
| Other non-current assets | 32,137 | 29,382 | ||||||
| Total non-current assets | 780,670 | 813,010 | ||||||
| Total assets | $ | 1,363,326 | $ | 1,366,049 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 44,490 | $ | 40,933 | ||||
|
Current portion of long-term debt |
3,714 | 3,714 | ||||||
| Accrued expenses and other current liabilities | 28,486 | 32,207 | ||||||
| Accrued compensation and related benefits | 34,338 | 34,186 | ||||||
| Obligations in connection with acquisitions | - | 3,619 | ||||||
| Deferred revenues | 51,834 | 49,952 | ||||||
| Total current liabilities | 162,862 | 164,611 | ||||||
| Non-current liabilities | ||||||||
| Long-term debt | 19,500 | 22,286 | ||||||
| Deferred tax liabilities | 2,625 | 5,952 | ||||||
| Deferred revenues - long-term | 14,181 | 12,922 | ||||||
| Other non-current liabilities | 28,682 | 22,251 | ||||||
| Total non-current liabilities | 64,988 | 63,411 | ||||||
| Total liabilities | 227,850 | 228,022 | ||||||
| Redeemable non-controlling interests | 1,721 | 2,029 | ||||||
| Equity | ||||||||
|
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 53,202 thousands shares and 52,639 thousands shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively |
143 | 142 | ||||||
| Additional paid-in capital | 2,655,754 | 2,633,129 | ||||||
| Accumulated other comprehensive loss | (8,276 | ) | (13,479 | ) | ||||
| Accumulated deficit | (1,513,926 | ) | (1,483,925 | ) | ||||
| Equity attributable to Stratasys Ltd. | 1,133,695 | 1,135,867 | ||||||
| Non-controlling interests | 60 | 131 | ||||||
| Total equity | 1,133,755 | 1,135,998 | ||||||
| Total liabilities and equity | $ | 1,363,326 | $ | 1,366,049 | ||||
| Stratasys Ltd. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended Sep 30, | Nine Months Ended Sep 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Net sales | ||||||||||||||||
| Products | $ | 108,401 | $ | 110,083 | $ | 344,509 | $ | 352,475 | ||||||||
| Services | 47,466 | 47,093 | 144,510 | 144,680 | ||||||||||||
| 155,867 | 157,176 | 489,019 | 497,155 | |||||||||||||
| Cost of sales | ||||||||||||||||
| Products | 49,840 | 54,332 | 159,043 | 172,683 | ||||||||||||
| Services | 30,788 | 29,163 | 94,465 | 90,090 | ||||||||||||
| 80,628 | 83,495 | 253,508 | 262,773 | |||||||||||||
| Gross profit | 75,239 | 73,681 | 235,511 | 234,382 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development, net | 21,767 | 23,993 | 69,652 | 73,474 | ||||||||||||
| Selling, general and administrative | 60,280 | 69,069 | 189,028 | 218,340 | ||||||||||||
| Change in the fair value of obligations in connection with acquisitions | 65 | (24 | ) | 1,378 | 116 | |||||||||||
| 82,112 | 93,038 | 260,058 | 291,930 | |||||||||||||
| Operating loss | (6,873 | ) | (19,357 | ) | (24,547 | ) | (57,548 | ) | ||||||||
| Financial income, net | (305 | ) | 104 | 380 | 1,216 | |||||||||||
| Loss before income taxes | (7,178 | ) | (19,253 | ) | (24,167 | ) | (56,332 | ) | ||||||||
|
Income tax expenses |
2,571 | 1,538 | 5,205 | 6,283 | ||||||||||||
| Share in losses of associated company | (489 | ) | (182 | ) | (1,006 | ) | (182 | ) | ||||||||
| Net loss | (10,238 | ) | (20,973 | ) | (30,378 | ) | (62,797 | ) | ||||||||
| Net loss attributable to non-controlling interests | (81 | ) | (146 | ) | (377 | ) | (339 | ) | ||||||||
| Net loss attributable to Stratasys Ltd. | $ | (10,157 | ) | $ | (20,827 | ) | $ | (30,001 | ) | $ | (62,458 | ) | ||||
|
Net loss per ordinary share attributable to Stratasys Ltd. -basic and diluted |
$ | (0.19 | ) | $ | (0.40 | ) | $ | (0.57 | ) | $ | (1.20 | ) | ||||
| Weighted average ordinary shares outstanding - basic and diluted | 53,012 | 52,432 | 52,827 | 52,232 | ||||||||||||
| Stratasys Ltd. | ||||||||||||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Results of Operations | ||||||||||||||||||||||||||
| Three Months Ended Sep 30, | ||||||||||||||||||||||||||
| 2017 | Non-GAAP | 2017 | 2016 | Non-GAAP |
2016 |
|||||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||||
| Gross profit (1) | $ | 75,239 | $ | 6,598 | $ | 81,837 | $ | 73,681 | $ | 11,248 | $ | 84,929 | ||||||||||||||
| Operating income (loss) (1,2) | (6,873 | ) | 14,933 | 8,060 | (19,357 | ) | 22,651 | 3,294 | ||||||||||||||||||
|
Net income (loss) attributable to Stratasys Ltd. (1,2,3) |
(10,157 | ) | 14,299 | 4,142 | (20,827 | ) | 20,936 | 109 | ||||||||||||||||||
|
Net income (loss) per diluted share attributable to Stratasys Ltd. (4) |
$ | (0.19 | ) | $ | 0.27 | $ | 0.08 | $ | (0.40 | ) | $ | 0.40 | $ | 0.00 | ||||||||||||
| (1) | Acquired intangible assets amortization expense | 5,688 | 10,394 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 642 | 680 | ||||||||||||||||||||||||
| Reorganization and other related costs | 72 | 249 | ||||||||||||||||||||||||
| Merger and acquisition and other expense | 196 | (75 | ) | |||||||||||||||||||||||
| 6,598 | 11,248 | |||||||||||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 2,593 | 3,697 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 4,256 | 4,105 | ||||||||||||||||||||||||
| Change in fair value of obligations in connection with acquisitions | 65 | (24 | ) | |||||||||||||||||||||||
| Reorganization and other related costs | 383 | 1,959 | ||||||||||||||||||||||||
| Merger and acquisition and other expense | 1,038 | 1,666 | ||||||||||||||||||||||||
| 8,335 | 11,403 | |||||||||||||||||||||||||
| 14,933 | 22,651 | |||||||||||||||||||||||||
| (3) | Corresponding tax effect | (836 | ) | (1,998 | ) | |||||||||||||||||||||
| Amortization expense of associated company | 202 | 283 | ||||||||||||||||||||||||
| $ | 14,299 | $ | 20,936 | |||||||||||||||||||||||
| (4) |
Weighted average number of ordinary shares outstanding- Diluted |
53,012 | 53,664 | 52,432 | 53,168 | |||||||||||||||||||||
| Stratasys Ltd. | ||||||||||||||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Results of Operations | ||||||||||||||||||||||||||||
| Nine Months Ended Sep 30, | ||||||||||||||||||||||||||||
| 2017 | Non-GAAP | 2017 | 2016 | Non-GAAP | 2016 | |||||||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||||||
| Gross profit (1) | $ | 235,511 | $ | 19,996 | $ | 255,507 | $ | 234,382 | $ | 39,241 | $ | 273,623 | ||||||||||||||||
| Operating income (loss) (1,2) | (24,547 | ) | 47,708 | 23,161 | (57,548 | ) | 74,996 | 17,448 | ||||||||||||||||||||
|
Net income (loss) attributable to Stratasys Ltd. (1,2,3) |
(30,001 | ) | 45,729 | 15,728 | (62,458 | ) | 69,401 | 6,943 | ||||||||||||||||||||
|
Net income (loss) per diluted share attributable to Stratasys Ltd. (4) |
$ | (0.57 | ) | $ | 0.86 | $ | 0.29 | $ | (1.20 | ) | $ | 1.33 | $ | 0.13 | ||||||||||||||
| (1) | Acquired intangible assets amortization expense | 17,081 | 31,318 | |||||||||||||||||||||||||
| Impairment charges of other intangible assets | - | 1,779 | ||||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 2,084 | 2,132 | ||||||||||||||||||||||||||
| Reorganization and other related costs | 303 | 3,570 | ||||||||||||||||||||||||||
| Merger and acquisition and other expense | 528 | 442 | ||||||||||||||||||||||||||
| 19,996 | 39,241 | |||||||||||||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 7,725 | 11,079 | |||||||||||||||||||||||||
| Non-cash stock-based compensation expense | 12,049 | 13,755 | ||||||||||||||||||||||||||
| Change in fair value of obligations in connection with acquisitions | 1,378 | 116 | ||||||||||||||||||||||||||
| Reorganization and other related costs | 2,667 | 3,420 | ||||||||||||||||||||||||||
| Merger and acquisition and other expense | 3,893 | 7,385 | ||||||||||||||||||||||||||
| 27,712 | 35,755 | |||||||||||||||||||||||||||
| 47,708 | 74,996 | |||||||||||||||||||||||||||
| (3) | Corresponding tax effect | (2,571 | ) | (5,878 | ) | |||||||||||||||||||||||
| Amortization expense of associated company | 592 | 283 | ||||||||||||||||||||||||||
| $ | 45,729 | $ | 69,401 | |||||||||||||||||||||||||
| (4) |
Weighted average number of ordinary shares outstanding- Diluted |
52,827 | 53,521 | 52,232 | 53,182 | |||||||||||||||||||||||
| Stratasys Ltd. | ||
|
Reconciliation of GAAP to Non-GAAP Forward-Looking Guidance |
||
| Fiscal Year 2017 | ||
| (in millions, except per share data) | ||
| GAAP net loss | ($39) to ($31) | |
|
Adjustments |
||
| Stock-based compensation expense | $17 to $18 | |
| Intangible assets amortization expense | $34 | |
| Merger and acquisition related expense | $3 to $4 | |
| Reorganization and other related costs | $6-$8 | |
| Tax expense related to Non-GAAP adjustments | ($3) to ($4) | |
| Non-GAAP net income | $22 to $26 | |
| GAAP loss per share | ($0.73) to ($0.59) | |
| Non-GAAP diluted earnings per share | $0.40 to $0.48 | |
