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
(Unaudited)
(in thousands, except share data)
							September 30,							December 31,
								2018						2017
ASSETS
Current assets
Cash and cash equivalents							$	348,887						$	328,761
Accounts receivable, net								129,477							132,671
Inventories								118,075							115,717
Net investment in sales-type leases								3,489							7,208
Prepaid expenses								5,932							7,696
Other current assets								41,870							22,858
Total current assets								647,730							614,911
Non-current assets
Net investment in sales-type leases - long term								2,038							4,439
Property, plant and equipment, net								191,437							199,951
Goodwill								386,728							387,108
Other intangible assets, net								117,448							142,122
Other non-current assets								20,428							31,219
Total non-current assets								718,079							764,839
Total assets							$	1,365,809						$	1,379,750
LIABILITIES AND EQUITY
Current liabilities
Accounts payable							$	38,944						$	39,849
Current portion of long term-debt								5,143							5,143
Accrued expenses and other current liabilities								34,257							30,041
Accrued compensation and related benefits								32,382							35,356
Deferred revenues								53,102							52,908
Total current liabilities								163,828							163,297
Non-current liabilities
Long-term debt								23,286							27,143
Deferred tax liabilities								1,836							7,069
Deferred revenues - long-term								16,009							15,200
Other non-current liabilities								30,459							32,899
Total non-current liabilities								71,590							82,311
Total liabilities								235,418							245,608
Redeemable non-controlling interests								931							1,635
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 53,810 thousands shares and 53,631 thousands shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively
								146							145
Additional paid-in capital								2,675,762							2,663,274
Accumulated other comprehensive loss								(8,815	)						(7,023	)
Accumulated deficit								(1,537,633	)						(1,523,906	)
Equity attributable to Stratasys Ltd.								1,129,460							1,132,490
Non-controlling interest								-							17
Total equity								1,129,460							1,132,507
Total liabilities and equity							$	1,365,809						$	1,379,750

Stratasys Ltd.
Consolidated Statements of Operations
(in thousands, except per share data)
					Three Months Ended September 30,										Nine Months Ended September 30,
					2018					2017					2018					2017
					(unaudited)					(unaudited)					(unaudited)					(unaudited)
Net sales
Products					$	109,647				$	108,401				$	331,967				$	344,509
Services						52,402					47,466					154,151					144,510
						162,049					155,867					486,118					489,019
Cost of sales
Products						48,640					49,840					147,120					159,043
Services						34,481					30,788					100,773					94,465
						83,121					80,628					247,893					253,508
Gross profit						78,928					75,239					238,225					235,511
Operating expenses
Research and development, net						25,786					21,767					74,585					69,652
Selling, general and administrative						49,792					60,345					168,684					190,406
						75,578					82,112					243,269					260,058
Operating loss						3,350					(6,873	)				(5,044	)				(24,547	)
Financial income (expense), net						(39	)				(305	)				(114	)				380
Loss before income taxes						3,311					(7,178	)				(5,158	)				(24,167	)
Income tax expenses						304					2,571					1,110					5,205
Share in losses of associated companies						(3,752	)				(489	)				(11,185	)				(1,006	)
Net loss						(745	)				(10,238	)				(17,453	)				(30,378	)
Net loss attributable to non-controlling interests						(66	)				(81	)				(182	)				(377	)
Net loss attributable to Stratasys Ltd.					$	(679	)			$	(10,157	)			$	(17,271	)			$	(30,001	)
Net loss per ordinary share attributable to Stratasys Ltd.
Basic					$	(0.01	)			$	(0.19	)			$	(0.34	)			$	(0.57	)
Diluted						(0.01	)				(0.19	)				(0.34	)				(0.57	)
Basic						53,769					53,012					53,716					52,827
Diluted						53,769					53,012					53,716					52,827

Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Results of Operations
							Three Months Ended September 30,
							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)			$	78,928					$	5,545					$	84,473				$	75,239					$	6,598						$	81,837
				Operating income (loss) (1,2)				3,350						4,815						8,165					(6,873	)					14,933							8,060
				Net income (loss) attributable to Stratasys Ltd. (1,2,3)				(679	)					6,383						5,704					(10,157	)					14,299							4,142
				Net income (loss) per diluted share attributable to Stratasys Ltd. (4)			$	(0.01	)				$	0.12					$	0.11				$	(0.19	)				$	0.27						$	0.08
(1	)			Acquired intangible assets amortization expense										5,221																	5,688
				Non-cash stock-based compensation expense										351																	642
				Reorganization and other related costs										(27	)																72
				Merger and acquisition related expense										-																	196
														5,545																	6,598
(2	)			Acquired intangible assets amortization expense										2,532																	2,593
				Non-cash stock-based compensation expense										3,662																	4,256
				Change in fair value of obligations in connection with acquisitions										-																	65
				Gain from divestiture, net of transaction costs										(7,016	)																-
				Reorganization and other related costs										92																	383
				Merger and acquisition related expense										-																	1,038
														(730	)																8,335
														4,815																	14,933
(3	)			Corresponding tax effect										(750	)																(836	)
				Acquired intangible assets amortization and write-off related to equity method investments										2,318																	202
													$	6,383																$	14,299
(4	)			Weighted average number of ordinary shares outstanding- Diluted				53,769												53,992					53,012													53,664

Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Results of Operations
							Nine Months Ended September 30,
							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)			$	238,225					$	16,852					$	255,077				$	235,511					$	19,996					$	255,507
				Operating income (loss) (1,2)				(5,044	)					28,750						23,706					(24,547	)					47,708						23,161
				Net income (loss) attributable to Stratasys Ltd. (1,2,3)				(17,271	)					33,789						16,518					(30,001	)					45,729						15,728
				Net income (loss) per diluted share attributable to Stratasys Ltd. (4)			$	(0.34	)				$	0.65					$	0.31				$	(0.57	)				$	0.86					$	0.29
(1	)			Acquired intangible assets amortization expense										15,645																	17,081
				Non-cash stock-based compensation expense										1,180																	2,084
				Reorganization and other related costs										27																	303
				Merger and acquisition related expense										-																	528
														16,852																	19,996
(2	)			Acquired intangible assets amortization expense										7,629																	7,725
				Non-cash stock-based compensation expense										10,526																	12,049
				Change in fair value of obligations in connection with acquisitions										-																	1,378
				Gain from divestiture, net of transaction costs										(7,016	)
				Reorganization and other related costs										631																	2,667
				Merger and acquisition related expense										128																	3,893
														11,898																	27,712
														28,750																	47,708
(3	)			Corresponding tax effect										(2,661	)																(2,571	)
				Acquired intangible assets amortization and write-off related to equity method investments										7,700																	592
													$	33,789																$	45,729
(4	)			Weighted average number of ordinary shares outstanding- Diluted				53,716												53,820					52,827												53,521

Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
Fiscal Year 2018
(in millions, except per share data)
GAAP net loss					($10) to ($2)
Adjustments
Stock-based compensation expense					$16 to $17
Intangible assets amortization expense					$34
Net Gains for Divestitures					($23) to ($22)
Reorganization Related Expense					$6 to $7
Tax expense (Income) related to Non-GAAP adjustments					($1) to $1
Non-GAAP net income					$27 to $30
GAAP loss per share					($0.19) to ($0.04)
Non-GAAP diluted earnings per share					$0.50 to $0.55

« Previous Page 1 | 2 | 3 | 4  Next Page »