Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Equity

v3.19.3.a.u2
Equity
12 Months Ended
Dec. 31, 2019
Equity [Abstract]  
Equity

Note 11. Equity

a. Share capital

The Company’s issued share capital is composed of ordinary shares NIS 0.01 par value per share. Ordinary shares confer upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right to receive dividends if declared.

The Company’s ordinary shares are traded in the United States on the Nasdaq Global Select Market under the ticker symbol “SSYS”. As of December 31, 2019 and 2018, there were 54,441 thousand ordinary shares and 53,881 thousand ordinary shares issued and outstanding, respectively. The increase in the outstanding and issued ordinary shares during 2019 was attributable to exercises of stock options and RSUs under the Company’s stock-based compensation plans. On January 1, 2020, the reserve pool under the 2012 plan was increased by 0.5 million shares.

b. Stock-based compensation plans

The Stratasys Ltd. 2012 Omnibus Equity Incentive Plan (the “2012 Plan”), which became effective upon closing of the Stratasys-Objet merger, provides for the grant of options, restricted shares, RSUs, PSUs and other share-based awards to the Company’s and its subsidiaries’ respective directors, employees, officers, consultants, and to any other person whose services are considered valuable to the Company or any of its affiliates. Under the 2012 plan, options, RSUs and PSUs generally have a contractual term of ten years from the grant date. Options granted become exercisable and RSUs are vested over the requisite service period, which is normally a four-year period beginning on the grant date, subject to continued service to the Company. PSUs are vested only upon the achievement of certain pre-determined performance metrics. Once the performance metrics are met, vesting of PSUs is subject to continued service to the Company over the requisite service period, which is normally a two-year to four-year period. As of December 31, 2019, 0.9 million shares were available for future equity awards under the 2012 plan.

Stock options

A summary of the stock option activity for the year ended December 31, 2019 is as follows:

 

 

 

 

 

Weighted Average

 

 

Number of Options

 

Exercise Price

Options outstanding as of December 31, 2018

 

2,551,743

 

 

$

30.82

Exercised

 

(249,956

)

 

 

20.54

Forfeited

 

(340,255

)

 

 

36.43

Options outstanding as of December 31, 2019

 

1,961,532

 

 

$

31.16

Options exercisable as of December 31, 2019

 

1,585,035

 

 

$

33.73

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STRATASYS LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes information about stock options outstanding at December 31, 2019:

Range of

Exercise Prices

 

Outstanding

options at

December 31,

2019

 

Weighted-

Average

Remaining

Contractual

Life in Years

 

Weighted-

Average

Exercise

Price

 

Exercisable

options at

December 31,

2019

 

Weighted-

Average

Exercise

Price

$

2.74

-

$

19.59

 

 

33,828

 

 

8.12

 

$

18.20

 

33,828

 

$

18.20

$

19.66

-

$

19.66

 

 

828,891

 

 

6.98

 

 

19.66

 

 

566,036

 

 

19.66

$

19.96

-

$

23.41

 

 

523,812

 

 

7.23

 

 

22.05

 

 

415,233

 

 

22.25

$

24.66

-

$

120.51

 

 

575,001

 

 

4.39

 

 

56.75

 

 

569,938

 

 

57.00

 

 

 

 

 

 

 

1,961,532

 

 

6.31

 

$

31.16

 

 

1,585,035

 

$

33.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aggregate intrinsic value

 (U.S. $ in thousands)

$

563

 

 

 

 

 

 

 

$

405

 

 

 

As of December 31, 2019, the weighted-average remaining contractual life of exercisable options was 6.1 years. The total intrinsic value of options exercised during 2019, 2018 and 2017 was approximately $1.0 million, $0.6 million and $7.2 million, respectively.

The Company used the Black-Scholes option-pricing model to determine the fair value of options granted during 2018 and 2017. No options were granted during 2019. The following assumptions were applied in determining the options’ fair value on their grant date:

2018

2017

Risk-free interest rate

2.9%-3.1%

1.8%-2.2%

Expected option term (years)

5.3-5.5

5.1-6.0

Expected share price volatility

52.0%-52.2%

52.6%-54.0%

Dividend yield

Weighted average grant date fair value

$

11.49

$

11.10

As of December 31, 2019, the Company had 0.4 million unvested options. As of December 31, 2019, the unrecognized compensation cost related to all unvested, equity-classified stock options of $3.9 million is expected to be recognized as an expense on a straight-line basis over a weighted-average period of 1.2 years.

Restricted Stock Units and Performance Stock Units

A summary of the Company’s RSUs and PSUs activity for the year ended December 31, 2019 is as follows:

 

 

Number of RSUs

and PSUs

 

Weighted

Average

Grant Date Fair

Value

Unvested RSUs and PSUs outstanding as of December 31, 2018

 

1,422,887

 

 

$

20.17

Granted

 

1,613,282

 

 

 

26.50

Vested

 

(309,642

)

 

 

20.50

Forfeited

 

(363,536

)

 

 

22.32

Unvested RSUs and PSUs outstanding as of December 31, 2019

 

2,362,991

 

 

$

24.10

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STRATASYS LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The total vesting-date value of equity classified RSUs vested during 2019 was $7.4 million. As of December 31, 2019, the unrecognized compensation cost related to all unvested equity classified RSUs and PSUs of $41.6 million is expected to be recognized as an expense on a straight-line basis over a weighted-average period of 2.6 years.

Stock-based compensation expense for stock options and equity classified RSUs included in the Company’s Statements of Operations and Comprehensive Loss were allocated as follows:

2019

2018

2017

(U.S. $ in thousands)

Cost of sales

$

1,848

$

1,474

$

2,580

Research and development, net

5,167

3,215

3,503

Selling, general and administrative

13,549

10,997

11,639

Total stock-based compensation expenses

$

20,564

$

15,686

$

17,722

c. Accumulated other comprehensive loss

The following tables present the changes in the components of accumulated other comprehensive loss, net of taxes for the years ended December 31, 2019, 2018 and 2017:

 

 

Year ended December 31, 2019

 

 

Net unrealized gain

 

Foreign currency

 

 

 

 

(loss) on cash flow

 

translation

 

 

 

 

hedges

 

adjustments

 

Total

 

 

U.S. $ in thousands

Balance as of January 1, 2019

 

$

(627

)

 

$

(7,126

)

 

$

(7,753

)

Other comprehensive loss before reclassifications

 

 

1,548

 

 

 

(580

)

 

 

968

Amounts reclassified from accumulated other comprehensive loss

 

 

(931

)

 

 

 

 

 

(931

)

Other comprehensive income (loss)

 

 

617

 

 

 

(580

)

 

 

37

Balance as of December 31, 2019

 

$

(10

)

 

$

(7,706

)

 

$

(7,716

)

Year ended December 31, 2018

Net unrealized gain

Foreign currency

(loss) on cash flow

translation

hedges

adjustments

Total

U.S. $ in thousands

Balance as of January 1, 2018

$

330

$

(7,353

)

$

(7,023

)

Other comprehensive loss before reclassifications

(1,814

)

(2,691

)

(4,505

)

Amounts reclassified from accumulated other comprehensive loss

857

2,918

3,775

Other comprehensive income (loss)

(957

)

227

(730

)

Balance as of December 31, 2018

$

(627

)

$

(7,126

)

$

(7,753

)

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STRATASYS LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2017

Net unrealized gain

Foreign currency

(loss) on cash flow

translation

hedges

adjustments

Total

U.S. $ in thousands

Balance as of January 1, 2017

$

(24

)

$

(13,455

)

$

(13,479

)

Other comprehensive loss before reclassifications

1,315

5,834

7,149

Amounts reclassified from accumulated other comprehensive loss

(961

)

268

(693

)

Other comprehensive income (loss)

354

6,102

6,456

Balance as of December 31, 2017

$

330

$

(7,353

)

$

(7,023

)