March 3, 2016

Stratasys Releases Fourth Quarter and Full Year 2015 Financial Results

Company reports $173.4 million in revenue for the fourth quarter

Fourth quarter non-GAAP net loss of $0.7 million, or ($0.01) per diluted share; and GAAP net loss of $232.3 million, or ($4.46) per diluted share

Company provides financial guidance for full year 2016

MINNEAPOLIS & REHOVOT, Israel--(BUSINESS WIRE)-- Stratasys Ltd. (Nasdaq:SSYS), the 3D printing and additive manufacturing solutions company, announced financial results for the fourth quarter and fiscal year 2015.

Q4-2015 Financial Results Summary:

  • Revenue for the fourth quarter of 2015 was $173.4 million.
  • GAAP net loss for the fourth quarter was $232.3 million, or ($4.46) per diluted share, compared to a loss of $92.0 million, or ($1.81) per diluted share, for the same period last year.
  • Non-GAAP net loss for the fourth quarter was $0.7 million, or ($0.01) per diluted share, compared to non-GAAP net income of $24.9 million, or $0.48 per diluted share, reported for the same period last year.
  • The Company generated $7.7 million in cash from operations during the fourth quarter, and finished the year with approximately $258.2 million in cash and cash equivalents and short-term bank deposits.
  • The Company invested a net amount of $22.2 million in R&D projects (non-GAAP basis) during the fourth quarter, representing 12.8% of net sales.
  • Non-GAAP EBITDA for the fourth quarter amounted to a loss of $1.4 million.
  • The Company sold 4,629 3D printing and additive manufacturing systems during the quarter, and on a pro-forma combined basis, has sold a total of 146,024 systems worldwide as of December 31, 2015.
  • The Company completed the goodwill impairment analysis of all of its reporting units that began in the third quarter, and recognized an additional non-cash goodwill, and other intangible assets impairment charges of $104 million, net of tax.
  • The Company also recorded a non-cash valuation allowance against its deferred tax assets in an amount of $95 million.

Fiscal 2015 Financial Results Summary:

  • Revenue for fiscal 2015 was $696.0 million compared to $750.1 million for fiscal 2014.
  • GAAP net loss for fiscal 2015 was $1.4 billion, or ($26.64) per diluted share, compared to a loss of $119.4 million, or ($2.39) per diluted share, for the same period last year.
  • Non-GAAP net income was $10.0 million for fiscal 2015, or $0.19 per diluted share, compared to non-GAAP net income of $103.6 million, or $2.00 per diluted share, reported for the same period last year.
  • Backlog at the end of fiscal 2015 amounted to $27.3 million, versus $14.3 million at the end of 2014.

"Our fourth quarter results reflect the impact of a market environment that is consistent with conditions we have observed throughout the year," said David Reis, chief executive officer of Stratasys. "Despite this challenging environment, we remain focused on our strategic initiatives. We are also making progress in optimizing our company's cost structure and improving working capital management, and were satisfied to observe a favorable trend in operating expenses and positive cash flow from operations during the quarter."

Recent Business Highlights:

  • Initiated a restructuring plan to generate operational efficiencies and improvements in working capital management.
    • Reduced global workforce by approximately 10% during the fourth quarter.
    • Initiated programs to reduce operating expenses and optimize manufacturing.
    • Impact of restructuring activities will be realized throughout 2016.
  • Introduced the updated Objet Connex3, which features the Creative Color Software powered by the Adobe 3D Color Print Engine that enables new color spectrum capabilities; and includes new software enhancements that simplify the design-to-3D print workflow.
  • Introduced the MakerBot Smart Extruder+, which is designed and tested to provide improved print performance over a longer period of time. The Smart Extruder+ features improved key components to promote longer-lasting reliability.

"We have entered a transformative new phase in our company's development," continued Reis. "Our goal is to maintain our leadership position in prototyping, while developing a solutions-based business model that targets key vertical markets and emerging applications for end-use parts. We believe our comprehensive new strategy will help grow our markets and is essential for maintaining our leadership position."

Financial Guidance:

Stratasys today provided the following information regarding the company's projected revenue and net income for the fiscal year ending December 31, 2016:

  • Revenue guidance of $700 to $730 million.
  • Non-GAAP net income of $9 to $23 million, or $0.17 to $0.43 per diluted share.
  • GAAP net loss of $84.0 to $67.0 million, or a ($1.60) to ($1.28) per diluted share.

Stratasys provided the following additional information regarding the company's performance and strategic plans for 2016:

  • Gross margins to improve modestly to a range of 54% to 55%.
  • Operating margins of 3% to 5%.
  • Taxes expense of $10 to $11 million, which includes the negative impact of the planned accounting treatment for tax valuation allowance.
  • Capital expenditures are projected at $60 to $70 million, with approximately $45 million designated for completing the company's new facility in Israel.

The company believes that it can achieve a significant improvement in its operating structure in 2016 that will translate into improved operating profit compared to the prior year. Given the expected ongoing negative impact on net income of the planned accounting treatment for valuation of deferred tax assets, the company believes operating profit growth will be the best measure of performance in 2016.

"Given the current environment, we recognize the importance of optimizing our cost structure and improving our financial performance, and have made those goals a priority for 2016. In addition, we are committed to developing the many growth opportunities we have identified, including MakerBot, as well as investing aggressively in initiatives to support long-term growth, such as software, corporate IT infrastructure, and vertical market development. We remain excited about our company's future," Reis concluded.

Non-GAAP earnings guidance excludes $59.0 million of projected amortization of intangible assets; $25.0 to $27.0 million of share-based compensation expense; $7.0 million in merger and acquisition related expense; $4.0 to $5.0 million in reorganization and other related costs; and includes $5.0 million in tax expenses related to non-GAAP adjustments.

Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of this press release. The table provides itemized detail of the non-GAAP financial measures.

Stratasys Ltd. Q4 2015 Conference Call Details

The Company will hold a conference call to discuss its fourth quarter and full year financial results on Thursday, March 3, 2016 at 8:30 a.m. (ET).

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: http://edge.media-server.com/m/p/bp67mmzn.

To participate by telephone, the domestic dial-in number is 800-688-0836 and the international dial-in is 617-614-4072. The access code is 49835079.

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.

For more than 25 years, Stratasys Ltd. (NASDAQ:SSYS) has been a defining force and dominant player in 3D printing and additive manufacturing - shaping the way things are made. Headquartered in Minneapolis, Minnesota and Rehovot, Israel, the company empowers customers across a broad range of vertical markets by enabling new paradigms for design and manufacturing. The company's solutions provide customers with unmatched design freedom and manufacturing flexibility - reducing time-to-market and lowering development costs, while improving designs and communications. Stratasys subsidiaries include MakerBot and Solidscape, and the Stratasys ecosystem includes 3D printers for prototyping and production; a wide range of 3D printing materials; parts on-demand via Stratasys Direct Manufacturing; strategic consulting and professional services; and the Thingiverse and GrabCAD communities with over 2 million 3D printable files for free designs. With more than 2,700 employees and 800 granted or pending additive manufacturing patents, Stratasys has received more than 30 technology and leadership awards. Visit us online at: www.stratasys.com or http://blog.stratasys.com/, and follow us on LinkedIn.

Stratasys is a registered trademark of Stratasys Ltd. and/or its subsidiaries or affiliates.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys' belief that its comprehensive new strategy will help grow its markets, and the statements regarding its projected future financial performance, including under the heading "Financial Guidance," 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 overall global economic environment; the impact of competition and new technologies; general market, political and economic conditions in the countries in which Stratasys operates; changes in projected capital expenditures and liquidity; changes in Stratasys' strategy; changes in government regulations and approvals; changes in customers' budgeting priorities; and other factors referred to under "Risk Factors," "Information on the Company," "Operating and Financial Review and Prospects," and generally in Stratasys' annual report on Form 20-F for the year ended December 31, 2014, filed with the U.S. Securities and Exchange Commission (the "SEC"), and in other reports that Stratasys has filed with or furnished to the SEC from time to time. Readers are urged to carefully review and consider the various disclosures made in Stratasys' SEC reports, which are designed to advise investors as to the risks and other factors that may affect Stratasys' business, financial condition, results of operations and prospects. Any guidance and other forward-looking statements 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.

 
Stratasys Ltd.
         
Consolidated Balance Sheets
 
(in thousands, except share data)
December 31, December 31,
2015 2014
 
ASSETS
 
Current assets
Cash and cash equivalents $ 257,592 $ 442,141
Short-term bank deposits 571 595
Accounts receivable, net 123,215 150,806
Inventories 123,658 123,385
Net investment in sales-type leases 11,704 8,170
Prepaid expenses 8,469 7,931
Deferred income taxes - 25,697
Other current assets   21,864     37,903  
 
Total current assets   547,073     796,628  
 
Non-current assets
Goodwill 383,853 1,323,502
Other intangible assets, net 252,468 597,903
Property, plant and equipment, net 201,934 157,036
Net investment in sales-type leases - long term 17,785 14,822
Deferred income taxes and other non-current assets   11,243     9,216  
 
Total non-current assets   867,283     2,102,479  
 
Total assets $ 1,414,356   $ 2,899,107  
 
LIABILITIES AND EQUITY
 
Current liabilities
Accounts payable $ 39,021 $ 37,359
Short term debt - 50,000
Accrued expenses and other current liabilities 31,314 34,514
Accrued compensation and related benefits 34,052 42,332
Income taxes payable 11,395 13,246
Obligations in connection with acquisitions 4,636 28,092
Deferred revenues   52,309     45,023  
 
Total current liabilities   172,727     250,566  
 
Non-current liabilities
Obligations in connection with acquisitions - long term 4,354 26,461
Deferred tax liabilities 16,040 55,835
Deferred revenues - long-term 7,627 5,946
Other non-current liabilities   22,428     25,091  
 
Total non-current liabilities   50,449     113,333  
 
Total liabilities   223,176     363,899  
 
Redeemable non-controlling interests 2,379 3,969
 
Equity

Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 52,082 thousands shares and 50,923 thousands shares issued and outstanding at December 31, 2015 and 2014, respectively

141 139
Additional paid-in capital 2,605,957 2,568,149
Accumulated deficit (1,406,706 ) (33,871 )
Accumulated other comprehensive loss   (10,774 )   (3,647 )
Equity attributable to Stratasys Ltd. 1,188,618 2,530,770
Non-controlling interest 183 469
 

Total equity

  1,188,801     2,531,239  
 
Total liabilities and equity $ 1,414,356   $ 2,899,107  
 
                 
Stratasys Ltd.
 
Consolidated Statements of Operations
 
(in thousands, except per share data)
 
Three Months Ended December 31, Twelve Months Ended December 31,
2015 2014 2015 2014
(unaudited)   (unaudited)      
Net sales
Products $ 124,316 $ 168,595 $ 503,946 $ 612,138
Services   49,046     48,517     192,049     137,991  
173,362 217,112 695,995 750,129
 
Cost of sales
Products 86,753 82,985 466,221 302,838
Services   33,537     28,943     127,602     84,897  
120,290 111,928 593,823 387,735
       
Gross profit 53,072 105,184 102,172 362,394
 
Operating expenses
Research and development, net 31,919 23,189 122,360 82,270
Selling, general and administrative 113,126 95,646 434,619 351,993
Goodwill impairment 96,550 102,470 942,408 102,470
Change in the fair value of obligations in connection with acquisitions   (714 )   (24,862 )   (23,671 )   (26,150 )
240,881 196,443 1,475,716 510,583
       
Operating loss (187,809 ) (91,259 ) (1,373,544 ) (148,189 )
 
Financial expense (947 ) (4,145 ) (10,287 ) (6,529 )
       
Loss before income taxes (188,756 ) (95,404 ) (1,383,831 ) (154,718 )
 
Income taxes   43,770     (3,370 )   (10,320 )   (35,248 )
 
Net loss (232,526 ) (92,034 ) (1,373,511 ) (119,470 )
 
Net loss attributable to non-controlling interest   (183 )   (25 )   (676 )   (50 )
 
Net loss attributable to Stratasys Ltd. $ (232,343 ) $ (92,009 ) $ (1,372,835 ) $ (119,420 )
 
Net loss per ordinary share attributable to Stratasys Ltd.
Basic $ (4.46 ) $ (1.81 ) $ (26.64 ) $ (2.39 )
Diluted (4.46 ) (1.81 ) (26.64 ) (2.39 )
 
Weighted average ordinary shares outstanding
Basic 52,046 50,912 51,592 50,019
Diluted 52,046 50,912 51,592 50,019
 
                         
Stratasys Ltd.
 
Reconciliation of GAAP to Non-GAAP Results of Operations
 
(in thousands, except per share data)
 
Three Months Ended December 31, 2015 Three Months Ended December 31, 2014
 
GAAP Non-GAAP GAAP Non-GAAP
(unaudited)   Adjustments*   (unaudited) (unaudited)   Adjustments*   (unaudited)
Net sales
Products $ 124,316 $ - $ 124,316 $ 168,595 $ - $ 168,595
Services   49,046     -     49,046     48,517     -     48,517  
173,362 - 173,362 217,112 - 217,112
 
Cost of sales
Products 86,753 (28,080 ) 58,673 82,985 (14,490 ) 68,495
Services   33,537     (2,229 )   31,308     28,943     (1,915 )   27,028  
120,290 (30,309 ) 89,981 111,928 (16,405 ) 95,523
           
Gross profit 53,072 30,309 83,381 105,184 16,405 121,589
 
Operating expenses
Research and development, net 31,919 (9,741 ) 22,178 23,189 (1,822 ) 21,367
Selling, general and administrative 113,126 (43,041 ) 70,085 95,646 (20,368 ) 75,278
Goodwill impairment 96,550 (96,550 ) - 102,470 (102,470 ) -
Change in the fair value of obligations in connection with acquisitions   (714 )   714     -     (24,862 )   24,862     -  
240,881 (148,618 ) 92,263 196,443 (99,798 ) 96,645
           
Operating income (loss) (187,809 ) 178,927 (8,882 ) (91,259 ) 116,203 24,944
 
Financial expense (947 ) - (947 ) (4,145 ) - (4,145 )
           
Income (loss) before income taxes (188,756 ) 178,927 (9,829 ) (95,404 ) 116,203 20,799
 
Income taxes   43,770     (52,720 )   (8,950 )   (3,370 )   (750 )   (4,120 )
 
Net income (loss) (232,526 ) 231,647 (879 ) (92,034 ) 116,953 24,919
 
Net loss attributable to non-controlling interest   (183 )   -     (183 )   (25 )   -     (25 )
 
Net income (loss) attributable to Stratasys Ltd. $ (232,343 ) $ 231,647   $ (696 ) $ (92,009 ) $ 116,953   $ 24,944  
 
Net income (loss) per ordinary share attributable to Stratasys Ltd.
Basic $ (4.46 ) $ (0.01 ) $ (1.81 ) $ 0.49
Diluted (4.46 ) (0.01 ) (1.81 ) 0.48
 
Weighted average ordinary shares outstanding
Basic 52,046 52,046 50,912 50,912
Diluted 52,046 52,046 50,912 52,491
 

The Company considers these non-GAAP measures to be indicative of its core operating results and facilitates a comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes, however these measures should not be viewed as a substitute for the Company's GAAP results.

 

* Refer to the "Reconciliation of Non-GAAP Adjustments" herein for further information regarding adjustments.

 
                         
Stratasys Ltd.
 
Reconciliation of GAAP to Non-GAAP Results of Operations
 
(in thousands, except per share data)
 
Twelve Months Ended December 31, 2015 Twelve Months Ended December 31, 2014
 
 
GAAP   Adjustments*   Non-GAAP GAAP   Adjustments*   Non-GAAP
Net sales
Products $ 503,946 $ - $ 503,946 $ 612,138 $ 235 $ 612,373
Services   192,049     -     192,049     137,991     -     137,991  
695,995 - 695,995 750,129 235 750,364
 
Cost of sales
Products 466,221 (254,494 ) 211,727 302,838 (69,717 ) 233,121
Services   127,602     (5,051 )   122,551     84,897     (6,925 )   77,972  
593,823 (259,545 ) 334,278 387,735 (76,642 ) 311,093
           
Gross profit 102,172 259,545 361,717 362,394 76,877 439,271
 
Operating expenses
Research and development, net 122,360 (28,198 ) 94,162 82,270 (8,813 ) 73,457
Selling, general and administrative 434,619 (151,097 ) 283,522 351,993 (94,442 ) 257,551
Goodwill impairment 942,408 (942,408 ) - 102,470 (102,470 ) -
Change in the fair value of obligations in connection with acquisitions   (23,671 )   23,671     -     (26,150 )   26,150     -  
1,475,716 (1,098,032 ) 377,684 510,583 (179,575 ) 331,008
           
Operating income (loss) (1,373,544 ) 1,357,577 (15,967 ) (148,189 ) 256,452 108,263
 
Financial income (expense) (10,287 ) 2,705 (7,582 ) (6,529 ) - (6,529 )
           
Income (loss) before income taxes (1,383,831 ) 1,360,282 (23,549 ) (154,718 ) 256,452 101,734
 
Income taxes   (10,320 )   (22,507 )   (32,827 )   (35,248 )   33,403     (1,845 )
 
Net income (loss) (1,373,511 ) 1,382,789 9,278 (119,470 ) 223,049 103,579
 
Net loss attributable to non-controlling interest   (676 )   -     (676 )   (50 )   -     (50 )
 
Net income (loss) attributable to Stratasys Ltd. $ (1,372,835 ) $ 1,382,789   $ 9,954   $ (119,420 ) $ 223,049   $ 103,629  
 
Net income (loss) per ordinary share attributable to Stratasys Ltd.
Basic $ (26.64 ) $ 0.19 $ (2.39 ) $ 2.07
Diluted (26.64 ) 0.19 (2.39 ) 2.00
 

Weighted average ordinary shares outstanding

Basic 51,592 51,592 50,019 50,019
Diluted 51,592 52,824 50,019 51,805
 

The Company considers these non-GAAP measures to be indicative of its core operating results and facilitates a comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes, however these measures should not be viewed as a substitute for the Company's GAAP results.

 
* Refer to the "Reconciliation of Non-GAAP Adjustments" herein for further information regarding adjustments.
 
 
Stratasys Ltd.
                 
Reconciliation of Non-GAAP Adjustments
 
(in thousands)
 

Three Months Ended December
31,

Twelve Months Ended December
31,

2015 2014 2015 2014
Net sales, products
Deferred revenue step-up $ - $ - $ - $ 235
 
Cost of sales, products
Acquired intangible assets amortization (10,830 ) (14,654 ) (50,353 ) (56,235 )
Acquired intangible assets impairment (10,779 ) - (191,534 ) (11,636 )
Non-cash stock-based compensation expense (675 ) 164 (3,508 ) (1,846 )
Reorganization and other related costs   (5,796 )   -     (9,099 )   -  
(28,080 ) (14,490 ) (254,494 ) (69,717 )
Cost of sales, services
Acquired intangible assets amortization - 537 - -
Non-cash stock-based compensation expense (338 ) (1,430 ) (1,873 ) (2,647 )
Reorganization and other related costs (1,726 ) - (1,850 ) -
Merger and acquisition related expense   (165 )   (1,022 )   (1,328 )   (4,278 )
(2,229 ) (1,915 ) (5,051 ) (6,925 )
Research and development, net
Non-cash stock-based compensation expense (1,400 ) (1,942 ) (5,758 ) (4,862 )
Acquired intangible assets impairment (7,900 ) - (17,746 ) (3,000 )
Reorganization and other related costs (249 ) - (1,593 ) -
Merger and acquisition related expense   (192 )   120     (3,101 )   (951 )
(9,741 ) (1,822 ) (28,198 ) (8,813 )
 
Selling, general and administrative
Acquired intangible assets amortization (4,464 ) (7,607 ) (22,436 ) (24,952 )
Non-cash stock-based compensation expense (3,437 ) (5,589 ) (18,871 ) (20,852 )
Merger and acquisition related expense (2,624 ) (7,172 ) (25,238 ) (48,638 )
Reorganization and other related costs (9,117 ) - (15,361 ) -
Acquired intangible assets impairment   (23,399 )   -     (69,191 )   -  
(43,041 ) (20,368 ) (151,097 ) (94,442 )
 
Goodwill impairment (96,550 ) (102,470 ) (942,408 ) (102,470 )
 
Change in the fair value of obligations in connection with acquisitions
Change in the fair value of obligations in connection with acquisitions 714 24,862 23,671 26,150
 
Financial expense
Credit facility extinguishment related costs - - (2,705 ) -
 
Income taxes
Corresponding tax effect and other tax adjustments (52,720 ) (750 ) (22,507 ) 33,403
 
       
Net income $ 231,647   $ 116,953   $ 1,382,789   $ 223,049  
 
 
Stratasys Ltd.
       
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
 
Fiscal Year 2016
 
(in millions, except per share data)
 
GAAP net loss ($84) to ($67)
 

Adjustments

Stock-based compensation expense $25 to $27
Intangible assets amortization expense $59
Merger and acquisition related expense $7
Reorganization and other related costs $4 to $5
Tax expense related to Non-GAAP adjustments ($5)
 
Non-GAAP net income $9 to $23
 
GAAP loss per share ($1.60) to ($1.28)
 
Non-GAAP diluted earnings per share $0.17 to $0.43

Stratasys Investor Relations
Shane Glenn, 952-294-3416
Vice President - Investor Relations
shane.glenn@stratasys.com

Source: Stratasys Ltd.

News Provided by Acquire Media


Close window | Back to top

Copyright 2016 Stratasys