Stratasys Releases First Quarter 2019 Financial Results

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 thousands shares; 54,048 thousands shares and 53,881 thousands shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively

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. (4)

$ (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
 

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