Stratasys Releases First Quarter 2018 Financial Results
First Quarter Revenue decreased 6% to
First Quarter GAAP net loss of
Q1 2018 Financial Results Summary:
Revenue for the first quarter of 2018 was
- GAAP gross margin was 49.2% for the quarter, compared to a GAAP gross margin of 47.1% for the same period last year.
- Non-GAAP gross margin was 52.8% for the quarter, compared to 51.2% for the same period last year.
GAAP operating loss for the quarter was
$6.5 million, compared to a loss of $12.6 millionfor the same period last year.
Non-GAAP operating income for the quarter was
$4.9 million, compared to $4.0 millionfor the same period last year.
GAAP net loss for the quarter was
$13.0 million, or ($0.24)per diluted share, compared to a loss of $13.9 million, or ($0.26)per diluted share, for the same period last year.
Non-GAAP net income for the quarter was
$2.7 million, or $0.05per diluted share, compared to Non-GAAP net income of $2.4 million, or $0.05per diluted share, reported for the same period last year.
Net R&D expenses for the quarter amounted to
$25.1 million, an increase of 1.9% compared the same period last year.
The Company generated
$27.1 millionin cash from operations during the first quarter and ended the period with $346.5 millionin cash and cash equivalents.
“We are disappointed with our revenue for the first quarter, which is
primarily attributed to underperformance in
New Product Announcements
At the RAPID + TCT 3D
Extending the capabilities and broadening the Company’s product line for the prototyping market:
- Enhancements to the PolyJet portfolio that include an upgraded version of the multi-material, full-color J750 3D printing platform that adds increased reliability via hardware and software enhancements, as well as the new J735 3D printer with a smaller build size.
- New Vivid Colors for GrabCAD Print on the J750 and J735, featuring over 500,000 color combinations, highly accurate color matching, and advanced clear materials with texture functionality.
- Expanding GrabCAD Print support to include the Connex3 line of multi-material 3D printers.
New materials offerings, certification solutions, and software capabilities for the manufacturing market:
- Antero 800NA, a PEKK-based thermoplastic that allows aerospace and other high-performance vehicle makers to produce high-temperature, chemical-exposed parts.
- F900 Production 3D Printer with manufacturing-focused upgrades including support for Carbon Fiber Filled Nylon 12, as well as the specialized F900 Aircraft Interiors Certification Solution (AICS), and the F900 Pro edition that extends the high repeatability developed for AICS to all industries.
- Specialized F380 Production 3D Printer dedicated to Carbon Fiber Filled Nylon 12, providing users with the high strength and stiffness of Stratasys FDM Nylon 12CF on a proven platform with soluble supporting material, consistent quality, yield, and throughput of an industrial solution at a competitive price point.
- GrabCAD Print Jigs & Fixtures, a new software package that significantly improves the production of jigs, fixtures, and other manufacturing tooling.
The Company provided further details regarding its new metal additive manufacturing platform:
- New approach to metal 3D printing that incorporates proprietary jetting technology and results in 80% reduction in cost per part for aluminum components compared to other additive technologies.
- Ability to 3D print “green state” parts with standard metal powders, beginning with aluminum, that are post processed via industry standard powder metallurgy processes and workflows.
- Part properties achievable with the technology include final parts with density and isotropy that is significantly higher than existing additive solutions, and near identical chemical composition compared to parts created by conventional methods.
- The solution has been optimized for production rather than prototyping, making it highly efficient and commercially viable for a wide range of applications.
- For the first time, showcased end-use production parts produced on the new metal platform.
A growing number of companies are moving through the adoption cycle of additive manufacturing technologies as they transition from early adoption to certification and qualification, and then onto final production applications. Recent examples include:
Stratasystechnology for production applications demonstrated by the establishment of a Singapore-based additive manufacturing service center in a joint venture with SIA Engineering Companyto provide 3D printed parts for use in commercial aviation and to service the maintenance, repair, and overhaul (MRO) market. Eckhart Inc.and Stratasyscollaborating to advance the adoption of 3D printing for factory tooling in North America. Eckhart has been developing factory tools for over 60 years, and is utilizing Stratasys’ FDM technology and advanced materials to pursue weight-savings, simplified bills of material, and enhanced operator visibility.
- Stratasys’ recently launched J700 Dental 3D Printer has been adopted for production applications by leading dental labs that include DynaFlex and Ortoplus.
“We are encouraged by the growing number of companies that are making significant progress in pursuing certifications for specific high value applications,” continued Levin. “Our recent collaborations deepen these efforts as our customers move towards production applications, designing and manufacturing with confidence.”
Revenue guidance of
$670 to $700 million.
GAAP net loss of
$41 to $25 million, or ($0.75) to ($0.46)per diluted share.
Non-GAAP net income of
$16 to $27 million, or $0.30 to $0.50per diluted share.
- Non-GAAP operating margins of 4.5% to 6%.
Capital expenditures are projected at
$40 to $50 million.
The Company’s guidance reflects increased investments in R&D, tools, materials, and additional resources aimed at expanding addressable markets by accelerating development efforts for the new metal additive manufacturing platform, further advancements based on our FDM and PolyJet technologies, and specific go-to-market initiatives in order to deepen customer engagement.
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 will be the best measure of performance.
Non-GAAP earnings guidance excludes
The Company plans to hold the conference call to discuss its first
quarter financial results on
The investor conference call will be available via live webcast on the Stratasys Web site at www.stratasys.com under the "Investors" tab; or directly at the following web address: https://edge.media-server.com/m6/p/6zpd5mm6.
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 2128479.
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 "Investors" page of the Stratasys Web site or by accessing the provided web address.
Cautionary Statement Regarding Forward-Looking Statements
The statements in this press release regarding
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 merger and acquisition related expense 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. We also exclude, when applicable, non-recurring significant tax charges or benefits that relate to prior periods which we do not believe are reflective of ongoing business and operating results. 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.
|Consolidated Balance Sheets|
|(in thousands, except share data)|
|March 31,||December 31,|
|Cash and cash equivalents||$||346,531||$||328,761|
|Accounts receivable, net||119,844||132,671|
|Net investment in sales-type leases||5,980||7,208|
|Other current assets||19,295||22,858|
|Total current assets||619,976||614,911|
|Net investment in sales-type leases - long term||3,423||4,439|
|Property, plant and equipment, net||197,554||199,951|
|Other intangible assets, net||132,811||142,122|
|Other non-current assets||34,475||31,219|
|Total non-current assets||755,679||764,839|
|LIABILITIES AND EQUITY|
|Current portion of long term-debt||5,143||5,143|
|Accrued expenses and other current liabilities||33,390||30,041|
|Accrued compensation and related benefits||35,541||35,356|
|Total current liabilities||169,743||163,297|
|Deferred tax liabilities||4,141||7,069|
|Deferred revenues - long-term||15,139||15,200|
|Other non-current liabilities||30,785||32,899|
|Total non-current liabilities||75,922||82,311|
|Redeemable non-controlling interests||1,579||1,635|
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 53,710 thousands shares and 53,631 thousands shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
|Additional paid-in capital||2,667,023||2,663,274|
|Accumulated other comprehensive loss||(5,337||)||(7,023||)|
|Equity attributable to Stratasys Ltd.||1,128,428||1,132,490|
|Total liabilities and equity||$||1,375,655||$||1,379,750|
|Consolidated Statements of Operations|
|(in thousands, except per share data)|
|Three Months Ended March 31,|
|Cost of sales|
|Research and development, net||25,110||24,634|
|Selling, general and administrative||57,005||64,875|
|Financial income, net||8||256|
|Loss before income taxes||(6,457||)||(12,373||)|
|Income tax expenses||601||1,326|
|Share in losses of associated companies||(6,073||)||(288||)|
|Net loss attributable to non-controlling interests||(90||)||(130||)|
|Net loss attributable to Stratasys Ltd.||$||(13,041||)||$||(13,857||)|
|Net loss per ordinary share attributable to Stratasys Ltd.|
|Reconciliation of GAAP to Non-GAAP Results of Operations|
|Three Months Ended March 31,|
|U.S. dollars and shares in thousands (except per share amounts)|
|Gross profit (1)||$||75,650||$||5,599||$||81,249||$||76,880||$||6,614||$||83,494|
|Operating income (loss) (1,2)||
Net income (loss) attributable to Stratasys Ltd. (1,2,3)
Net income (loss) per diluted share attributable to Stratasys Ltd. (4)
|(1)||Acquired intangible assets amortization expense||5,204||5,705|
|Non-cash stock-based compensation expense||387||643|
|Reorganization and other related costs||18||94|
|Merger and acquisition related expense||(10||)||172|
|(2)||Acquired intangible assets amortization expense||2,558||2,544|
|Non-cash stock-based compensation expense||3,028||3,261|
|Change in fair value of obligations in connection with acquisitions||-||696|
|Reorganization and other related costs||1,671||1,686|
|Gain from sale of plant and property||(1,563||)||-|
|Merger and acquisition related expense||94||1,857|
|(3)||Corresponding tax effect||(792||)||(585||)|
|Amortization of acquired intangibles assets related to equity method investments||5,168||192|
Weighted average number of ordinary shares outstanding- Diluted
|Reconciliation of GAAP to Non-GAAP Forward Looking Guidance|
|Fiscal Year 2018|
|(in millions, except per share data)|
|GAAP net loss||($41) to ($25)|
|Stock-based compensation expense||$17 to $19|
|Intangible assets amortization expense||$32 to $34|
|Reorganization and other related costs||$7 to $9|
|Tax expense related to Non-GAAP adjustments||($4) to ($5)|
|Non-GAAP net income||$16 to $27|
|GAAP loss per share||($0.75) to ($0.46)|
|Non-GAAP diluted earnings per share||$0.30 to $0.50|
Stratasys Investor Relations
Vice President - Investor Relations