Stratasys
Ltd. (NASDAQ: SSYS) announced financial results for the first
quarter of 2019.
Q1 2019 Financial Results Summary:
Revenue for the first
quarter of 2019 was $155.3 million, compared to $153.8 million for the
same period last year.
-
GAAP gross margin was 49.2% for the quarter, unchanged from the same
period last year. -
Non-GAAP gross margin was 52.0% for the quarter, compared to 52.8% for
the same period last year. -
GAAP operating loss for the quarter was $3.3 million, compared to
operating loss of $6.5 million for the same period last year. -
Non-GAAP operating income for the quarter was $6.8 million, compared
to non-GAAP operating income of $4.9 million for the same period last
year. -
GAAP net loss for the quarter was $2.3 million, or ($0.04) per diluted
share, compared to a net loss of $13.0 million, or ($0.24) per diluted
share, for the same period last year. -
Non-GAAP net income for the quarter was $5.7 million, or $0.10 per
diluted share, compared to non-GAAP net income of $2.7 million, or
$0.05 per diluted share, reported for the same period last year. -
The Company generated $4.6 million of cash from operations during the
first quarter and ended the period with $367.8 million of cash and
cash equivalents.
“We are pleased with our first quarter top-line results, and are
particularly encouraged by the continuation of the strong performance we
have seen in North America over the last several quarters, demonstrating
steady adoption of our systems and materials in our largest market,”
said Elchanan (Elan) Jaglom, Interim Chief Executive Officer of
Stratasys. “We are also pleased with our non-GAAP profitability in the
first quarter, demonstrating our continued commitment to controlling
expenses and delivering shareholder value. Our recent new product
introductions are generating significant interest from our customers and
expanding our addressable markets, and we look forward to additional
announcements as we move through 2019 and into 2020.”
Recent Product Announcements
At the recent Additive
Manufacturing User Group conference, the Company made the following
announcements of new products and features that it believes will expand
its addressable markets and strengthen its leadership in rapid
prototyping, manufacturing, and high-realism multi-color, multi-material
3D printing.
-
F120 3D Printer – an industrial-grade system targeting customers new
to additive manufacturing. Offering the benefits of the Stratasys F123
platform at an affordable price with reliable, accurate, and
repeatable 3D printing, it is specifically designed for designers,
engineers and educators. -
V650 Flex Stereolithography 3D Printer – Stratasys’ first
commercially-available entry into the stereolithography marketplace,
combining the power of a large-scale system with an open, configurable
environment and fine-tuning across a broad range of available resins. -
Stratasys J750 and J735 Printers are now the first and only 3D
printing systems with technology officially recognized as
“Pantone-Validated” – allowing for synchronized color communication
between designers, modelers and manufacturers.
Financial Guidance:
Stratasys today reiterated 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 reiterated 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 tax adjustments of ($3) to ($4) million on the
above non-GAAP items.
Stratasys Ltd. Q1 2019 Conference Call Details
The Company plans to hold the conference call to discuss its first
quarter financial results on Thursday, May 2, 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/m6/p/cwyibwsv.
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 2949608.
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 “Investor Relations” 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; 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 ended, March 31, 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) | ||||||||||
| March 31, | December 31, | |||||||||
| 2019 | 2018 | |||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | 367,843 | $ | 393,167 | ||||||
| Accounts receivable, net | 128,420 | 138,146 | ||||||||
| Inventories | 131,731 | 123,524 | ||||||||
| Net investment in sales-type leases | 2,193 | 2,658 | ||||||||
| Prepaid expenses | 7,750 | 6,398 | ||||||||
| Other current assets | 21,023 | 20,278 | ||||||||
| Total current assets | 658,960 | 684,171 | ||||||||
| Non-current assets | ||||||||||
| Net investment in sales-type leases – long term | 965 | 1,552 | ||||||||
| Property, plant and equipment, net | 188,255 | 188,150 | ||||||||
| Goodwill | 385,612 | 385,849 | ||||||||
| Other intangible assets, net | 101,486 | 107,274 | ||||||||
| Operating lease right-of-use assets | 27,408 | – | ||||||||
| Other non-current assets | 22,456 | 21,258 | ||||||||
| Total non-current assets | 726,182 | 704,083 | ||||||||
| Total assets | $ | 1,385,142 | $ | 1,388,254 | ||||||
| LIABILITIES AND EQUITY | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable | $ | 43,033 | $ | 45,855 | ||||||
| Current portion of long term-debt | – | 5,143 | ||||||||
| Accrued expenses and other current liabilities | 29,831 | 39,115 | ||||||||
| Accrued compensation and related benefits | 35,516 | 31,703 | ||||||||
| Deferred revenues | 53,997 | 53,965 | ||||||||
| Operating lease liabilities – short term | 9,439 | – | ||||||||
| Total current liabilities | 171,816 | 175,781 | ||||||||
| Non-current liabilities | ||||||||||
| Long-term debt | – | 22,000 | ||||||||
| Deferred tax liabilities | 1,391 | 1,662 | ||||||||
| Deferred revenues – long-term | 17,307 | 18,422 | ||||||||
| Operating lease liabilities – long term | 18,481 | – | ||||||||
| Other non-current liabilities | 28,474 | 27,422 | ||||||||
| Total non-current liabilities | 65,653 | 69,506 | ||||||||
| Total liabilities | 237,469 | 245,287 | ||||||||
| Redeemable non-controlling interests | 809 | 852 | ||||||||
| Equity | ||||||||||
|
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 |
146 | 146 | ||||||||
| Additional paid-in capital | 2,687,499 | 2,681,048 | ||||||||
| Accumulated other comprehensive loss | (7,185 | ) | (7,753 | ) | ||||||
| Accumulated deficit | (1,533,596 | ) | (1,531,326 | ) | ||||||
| Total equity | 1,146,864 | 1,142,115 | ||||||||
| Total liabilities and equity | $ | 1,385,142 | $ | 1,388,254 | ||||||
| Stratasys Ltd. | ||||||||||
| Consolidated Statements of Operations | ||||||||||
| (in thousands, except per share data) | ||||||||||
| Three Months Ended March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| (unaudited) | (unaudited) | |||||||||
| Net sales | ||||||||||
| Products | $ | 105,091 | $ | 103,917 | ||||||
| Services | 50,209 | 49,916 | ||||||||
| 155,300 | 153,833 | |||||||||
| Cost of sales | ||||||||||
| Products | 44,169 | 45,218 | ||||||||
| Services | 34,674 | 32,965 | ||||||||
| 78,843 | 78,183 | |||||||||
| Gross profit | 76,457 | 75,650 | ||||||||
| Operating expenses | ||||||||||
| Research and development, net | 22,574 | 25,110 | ||||||||
| Selling, general and administrative | 57,154 | 57,005 | ||||||||
| 79,728 | 82,115 | |||||||||
| Operating loss | (3,271 | ) | (6,465 | ) | ||||||
| Financial income, net | 753 | 8 | ||||||||
| Loss before income taxes | (2,518 | ) | (6,457 | ) | ||||||
| Income tax expenses | 1,218 | 601 | ||||||||
| Share in profits (losses) of associated companies | 1,423 | (6,073 | ) | |||||||
| Net loss | (2,313 | ) | (13,131 | ) | ||||||
| Net loss attributable to non-controlling interests | (43 | ) | (90 | ) | ||||||
| Net loss attributable to Stratasys Ltd. | $ | (2,270 | ) | $ | (13,041 | ) | ||||
| Net loss per ordinary share attributable to Stratasys Ltd. | ||||||||||
| Basic | $ | (0.04 | ) | $ | (0.24 | ) | ||||
| Diluted | (0.04 | ) | (0.24 | ) | ||||||
| Basic | 53,966 | 53,657 | ||||||||
| Diluted | 53,966 | 53,657 | ||||||||
|
Stratasys Ltd. |
||||||||||||||||||||||||||
|
Reconciliation of GAAP to Non-GAAP Results of Operations |
||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2019 | Non-GAAP | 2019 | 2018 | Non-GAAP | 2018 | |||||||||||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||||
| Gross profit (1) | $ | 76,457 | $ | 4,252 | $ | 80,709 | $ | 75,650 | $ | 5,599 | $ | 81,249 | ||||||||||||||
| Operating income (loss) (1,2) | (3,271 | ) | 10,075 | 6,804 | (6,465 | ) | 11,387 | 4,922 | ||||||||||||||||||
|
Net income (loss) attributable to Stratasys Ltd. (1,2,3) |
(2,270 | ) | 7,927 | 5,657 | (13,041 | ) | 15,763 | 2,722 | ||||||||||||||||||
|
Net income (loss) per diluted share attributable to Stratasys Ltd. |
$ | (0.04 | ) | $ | 0.14 | $ | 0.10 | $ | (0.24 | ) | $ | 0.29 | $ | 0.05 | ||||||||||||
| (1) | Acquired intangible assets amortization expense | 3,898 | 5,204 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 354 | 387 | ||||||||||||||||||||||||
| Merger and acquisition related expense | – | 8 | ||||||||||||||||||||||||
| 4,252 | 5,599 | |||||||||||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 1,889 | 2,558 | |||||||||||||||||||||||
| Non-cash stock-based compensation expense | 3,875 | 3,028 | ||||||||||||||||||||||||
| Reorganization and other related costs | 59 | 1,671 | ||||||||||||||||||||||||
| Gain from sale of plant and property | – | (1,563 | ) | |||||||||||||||||||||||
| Merger and acquisition related expense | – | 94 | ||||||||||||||||||||||||
| 5,823 | 5,788 | |||||||||||||||||||||||||
| 10,075 | 11,387 | |||||||||||||||||||||||||
| (3) | Corresponding tax effect | (544 | ) | (792 | ) | |||||||||||||||||||||
|
Gain from equity method divestment, related write-offs and amortization |
(1,604 | ) | 5,168 | |||||||||||||||||||||||
| $ | 7,927 | $ | 15,763 | |||||||||||||||||||||||
| (4) |
Weighted average number of ordinary shares outstanding- Diluted |
53,966 | 54,477 | 52,690 | 53,341 | |||||||||||||||||||||
| 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 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/20190502005194/en/