Stratasys Releases Third 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)

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




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