Stratasys Releases Fourth Quarter and Full Year 2021 Financial Results

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 2022 and beyond, 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 our success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower margin products or services; 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; the extent of our success at successfully consummating and integrating into our existing business acquisitions or investments in new businesses, technologies, products or services; the strength and duration of, and degree of recovery from, the COVID-19 pandemic in the markets in which we operate; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular (including risks related to the impact of coronavirus on our supply chain and business); costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; 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, 2021, which we are filing with the U.S. Securities and Exchange Commission, or SEC, on or about the date hereof (the “2021 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2021 Annual Report and the Reports of Foreign Private Issuer on Form 6-K that attach Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly periods throughout 2022, which will be furnished to the SEC throughout 2022, 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 provided or made (as applicable) 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 (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization-related charges or gains, legal provisions and (ii) 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 goodwill, revaluation of our investments 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
(in thousands, except share data)
 

December 31,

December 31,

 

2021

 

 

2020

 

 
ASSETS
 
Current assets
Cash and cash equivalents

$

243,179

 

$

272,092

 

Short-term deposits

 

259,000

 

 

27,000

 

Accounts receivable, net of allowance for credit losses of $0.5 and $0.9 million as of December 31, 2021 and December 31, 2020

 

129,382

 

 

106,068

 

Inventories

 

129,147

 

 

131,672

 

Prepaid expenses

 

6,871

 

 

6,717

 

Other current assets

 

33,123

 

 

16,943

 

 
Total current assets

 

800,702

 

 

560,492

 

 
Non-current assets
Property, plant and equipment, net

 

203,295

 

 

201,232

 

Goodwill

 

65,144

 

 

35,694

 

Other intangible assets, net

 

152,244

 

 

131,569

 

Operating lease right-of-use assets

 

14,651

 

 

21,298

 

Long-term investments

 

28,667

 

 

24,268

 

Other non-current assets

 

12,519

 

 

15,449

 

 
Total non-current assets

 

476,520

 

 

429,510

 

 
Total assets

$

1,277,222

 

$

990,002

 

 
LIABILITIES AND EQUITY
 
Current liabilities
Accounts payable

$

51,976

 

$

16,987

 

Accrued expenses and other current liabilities

 

55,358

 

 

31,061

 

Accrued compensation and related benefits

 

44,684

 

 

25,659

 

Deferred revenues - short term

 

51,174

 

 

49,165

 

Operating lease liabilities - short term

 

7,276

 

 

9,282

 

 
Total current liabilities

 

210,468

 

 

132,154

 

 
Non-current liabilities
Deferred revenues - long term

 

21,133

 

 

14,227

 

Deferred income taxes

 

7,341

 

 

42

 

Operating lease liabilities - long term

 

7,693

 

 

12,567

 

Contingent consideration

 

53,478

 

 

37,400

 

Other non-current liabilities

 

21,095

 

 

34,017

 

 
Total non-current liabilities

 

110,740

 

 

98,253

 

 
Total liabilities

 

321,208

 

 

230,407

 

 
Redeemable non-controlling interests

 

-

 

 

227

 

 
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands
shares; 65,667 thousands shares and 56,617 thousands shares issued
and outstanding at December 31, 2021 and December 31, 2020, respectively

 

182

 

 

155

 

Additional paid-in capital

 

3,012,481

 

 

2,753,955

 

Accumulated other comprehensive loss

 

(8,771

)

 

(8,846

)

Accumulated deficit

 

(2,047,878

)

 

(1,985,896

)

Total equity

 

956,014

 

 

759,368

 

 
Total liabilities and equity

$

1,277,222

 

$

990,002

 

Stratasys Ltd.
 
Consolidated Statements of Operations
 
(in thousands, except per share data)
 

Three Months Ended December 31,

Twelve Months Ended December 31,

 

2021

 

 

 

2020

 

 

2021

 

 

2020

 

(Unaudited)

 

(Unaudited)

Net sales
Products

$

118,040

 

$

99,185

 

$

417,557

 

$

339,782

 

Services

 

48,976

 

 

43,210

 

 

189,662

 

 

181,035

 

 

167,016

 

 

142,395

 

 

607,219

 

 

520,817

 

 
Cost of sales
Products

 

59,470

 

 

44,679

 

 

210,941

 

 

171,235

 

Services

 

34,503

 

 

31,697

 

 

136,200

 

 

130,188

 

 

93,973

 

 

76,376

 

 

347,141

 

 

301,423

 

 
Gross profit

 

73,043

 

 

66,019

 

 

260,078

 

 

219,394

 

 
Operating expenses
Research and development, net

 

22,620

 

 

18,953

 

 

88,303

 

 

84,012

 

Selling, general and administrative

 

66,584

 

 

49,595

 

 

250,937

 

 

205,224

 

Goodwill impairment

 

-

 

 

-

 

 

-

 

 

386,154

 

 

89,204

 

 

68,548

 

 

339,240

 

 

675,390

 

 
Operating loss

 

(16,161

)

 

(2,529

)

 

(79,162

)

 

(455,996

)

 
Gain from step acquisition

 

14,400

 

 

-

 

 

14,400

 

 

-

 

 
Financial income (expense), net

 

(692

)

 

273

 

 

(2,075

)

 

(575

)

 
Loss before income taxes

 

(2,453

)

 

(2,256

)

 

(66,837

)

 

(456,571

)

 
Income tax benefit (expenses)

 

(2,103

)

 

14,144

 

 

3,906

 

 

16,394

 

 
Share in profit (loss) of associated companies

 

(280

)

 

(1,200

)

 

949

 

 

(3,939

)

 
Net income (loss)

 

(4,836

)

 

10,688

 

 

(61,982

)

 

(444,116

)

 
Net loss attributable to non-controlling interests

 

-

 

 

(341

)

 

-

 

 

(395

)

 
Net income (loss) attributable to Stratasys Ltd.

$

(4,836

)

$

11,029

 

$

(61,982

)

$

(443,721

)

 
Net income (loss) per ordinary share attributable to Stratasys Ltd.
Basic

$

(0.07

)

$

0.20

 

$

(0.98

)

$

(8.08

)

Diluted

$

(0.07

)

$

0.20

 

$

(0.98

)

$

(8.08

)

 
Weighted average ordinary shares outstanding
Basic

 

65,196

 

 

55,118

 

 

63,471

 

 

54,918

 

Diluted

 

65,196

 

 

55,318

 

 

63,471

 

 

54,918

 

 

Three Months Ended December 31,

 

2021

 

 

Non-GAAP

 

 

2021

 

 

2020

 

 

Non-GAAP

 

 

2020

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

U.S. dollars and shares in thousands (except per share amounts)

 
Gross profit (1)

$

73,043

 

$

8,255

 

$

81,298

$

66,019

 

$

4,520

 

$

70,539

Operating income (loss) (1,2)

 

(16,161

)

 

17,822

 

 

1,661

 

(2,529

)

 

10,861

 

 

8,332

Net income (loss) attributable to
Stratasys Ltd. (1,2,3)

 

(4,836

)

 

5,355

 

 

519

 

11,029

 

 

(4,001

)

 

7,028

Net income (loss) per diluted share attributable
to Stratasys Ltd. (4)

$

(0.07

)

$

0.08

 

$

0.01

$

0.20

 

$

(0.07

)

$

0.13

 
 

(1)

Acquired intangible assets amortization expense

 

6,024

 

 

3,411

 

Non-cash stock-based compensation expense

 

866

 

 

347

 

Restructuring and other related costs

 

1,185

 

 

762

 

Impairment charges

 

180

 

 

-

 

 

8,255

 

 

4,520

 

 

(2)

Acquired intangible assets amortization expense

 

2,280

 

 

2,290

 

Non-cash stock-based compensation expense

 

6,971

 

 

3,962

 

Restructuring and other related costs

 

373

 

 

449

 

Revaluation of investments

 

(1,859

)

 

-

 

Contingent consideration

 

(20

)

 

-

 

Legal and other expenses (income)

 

1,823

 

 

(360

)

 

9,568

 

 

6,341

 

 

17,822

 

 

10,861

 

 

(3)

Corresponding tax effect

 

1,906

 

 

(15,009

)

Equity method related amortization, divestments and impairments

 

27

 

 

483

 

Adjustments attributable to non-controlling interest

 

-

 

 

(336

)

Gain from obtaining control

 

(14,400

)

 

-

 

$

5,355

 

$

(4,001

)

(4)

Weighted average number of ordinary
shares outstanding- Diluted

 

65,196

 

 

66,820

 

55,318

 

 

55,318

 

Twelve Months Ended December 31,

 

2021

 

 

Non-GAAP

 

 

2021

 

 

 

2020

 

 

Non-GAAP

 

 

2020

 

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

U.S. dollars and shares in thousands (except per share amounts)

 
Gross profit (1)

$

260,078

 

$

30,447

 

$

290,525

 

$

219,394

 

$

28,582

 

$

247,976

 

Operating income (loss) (1,2)

 

(79,162

)

 

77,479

 

 

(1,683

)

 

(455,996

)

 

446,848

 

 

(9,148

)

Net income (loss) attributable to
Stratasys Ltd. (1,2,3)

 

(61,982

)

 

57,639

 

 

(4,343

)

 

(443,721

)

 

429,820

 

 

(13,901

)

Net income (loss) per diluted share attributable
to Stratasys Ltd. (4)

$

(0.98

)

$

0.91

 

$

(0.07

)

$

(8.08

)

$

7.83

 

$

(0.25

)

 
 

(1)

Acquired intangible assets amortization expense

 

22,392

 

 

15,607

 

Non-cash stock-based compensation expense

 

3,092

 

 

1,771

 

Restructuring and other related costs

 

1,642

 

 

5,948

 

Impairment charges

 

3,321

 

 

5,256

 

 

30,447

 

 

28,582

 

 

(2)

Acquired intangible assets amortization expense

 

8,878

 

 

8,720

 

Non-cash stock-based compensation expense

 

27,885

 

 

18,433

 

Goodwill impairment

 

-

 

 

386,154

 

Impairment of long-lived assets

 

1,447

 

 

-

 

Restructuring and other related costs

 

2,743

 

 

4,312

 

Revaluation of investments

 

(1,303

)

 

-

 

Contingent consideration

 

570

 

 

-

 

Legal and other expenses

 

6,812

 

 

647

 

 

47,032

 

 

418,266

 

 

77,479

 

 

446,848

 

 

(3)

Corresponding tax effect

 

(864

)

 

(17,405

)

Equity method related amortization, divestments and impairments

 

(4,576

)

 

713

 

Adjustments attributable to non-controlling interest

 

-

 

 

(336

)

Gain from obtaining control

 

(14,400

)

 

-

 

$

57,639

 

$

429,820

 

 

(4)

Weighted average number of ordinary
shares outstanding- Diluted

 

63,471

 

 

63,471

 

 

54,918

 

 

54,918

 

Stratasys Ltd.
 
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
 
Fiscal Year 2022
 
(in millions, except per share data)
 
 
GAAP net loss

($74) to ($67)

 

Adjustments

 

Stock-based compensation expense

$31 to $33

Intangible assets amortization expense

$37 to $38

Reorganization Related Expense

$14 to $15

Tax expense (benefit) related to Non-GAAP adjustments

($2) to ($1)

 

Non-GAAP net income

$10 to $13

 

GAAP diluted loss per share

($1.11) to ($1.00)

 

Non-GAAP diluted earnings per share

$0.14 to $0.19





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