Stratasys Releases Fourth Quarter and Full Year 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)  

December 31,

 

December 31,

2019

 

2018

   
ASSETS  
   
Current assets  
Cash and cash equivalents

$

293,484

 

 

$

393,167

 

Short-term deposits

$

28,300

 

 

 

-

 

Accounts receivable, net

 

132,558

 

 

 

138,146

 

Inventories

 

168,504

 

 

 

123,524

 

Prepaid expenses

 

6,567

 

 

 

6,398

 

Other current assets

 

29,659

 

 

 

22,936

 

   
Total current assets

 

659,072

 

 

 

684,171

 

   
Non-current assets  
Property, plant and equipment, net

 

189,706

 

 

 

188,150

 

Goodwill

 

385,658

 

 

 

385,849

 

Other intangible assets, net

 

87,328

 

 

 

107,274

 

Operating lease right-of-use assets

 

20,936

 

 

 

-

 

Other non-current assets

 

38,819

 

 

 

22,810

 

   
Total non-current assets

 

722,447

 

 

 

704,083

 

   
Total assets

$

1,381,519

 

 

$

1,388,254

 

   
LIABILITIES AND EQUITY  
   
Current liabilities  
Accounts payable

$

35,818

 

 

$

45,855

 

Current portion of long term-debt

 

-

 

 

 

5,143

 

Accrued expenses and other current liabilities

 

28,528

 

 

 

39,115

 

Accrued compensation and related benefits

 

34,013

 

 

 

31,703

 

Deferred revenues

 

52,268

 

 

 

53,965

 

Operating lease liabilities - short term

 

9,292

 

 

 

-

 

   
Total current liabilities

 

159,919

 

 

 

175,781

 

   
Non-current liabilities  
Long-term debt

 

-

 

 

 

22,000

 

Deferred revenues - long-term

 

16,039

 

 

 

18,422

 

Operating lease liabilities - long term

 

12,445

 

 

 

-

 

Other non-current liabilities

 

35,343

 

 

 

29,084

 

   
Total non-current liabilities

 

63,827

 

 

 

69,506

 

   
Total liabilities

 

223,746

 

 

 

245,287

 

   
Redeemable non-controlling interests

 

622

 

 

 

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

 

150

 

 

 

146

 

Additional paid-in capital

 

2,706,892

 

 

 

2,681,048

 

Accumulated other comprehensive loss

 

(7,716

)

 

 

(7,753

)

Accumulated deficit

 

(1,542,175

)

 

 

(1,531,326

)

Total equity

 

1,157,151

 

 

 

1,142,115

 

   
Total liabilities and equity

$

1,381,519

 

 

$

1,388,254

 

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

Three Months Ended December 31,

 

Twelve Months Ended December 31,

2019

 

2018

 

2019

 

2018

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Net sales
Products

$

108,968

 

$

124,537

 

$

430,746

 

$

456,504

 

Services

 

51,189

 

 

52,582

 

 

205,334

 

 

206,733

 

 

160,157

 

 

177,119

 

 

636,080

 

 

663,237

 

 
Cost of sales
Products

 

46,825

 

 

56,502

 

 

182,430

 

 

203,622

 

Services

 

34,673

 

 

33,618

 

 

139,958

 

 

134,391

 

 

81,498

 

 

90,120

 

 

322,388

 

 

338,013

 

 
Gross profit

 

78,659

 

 

86,999

 

 

313,692

 

 

325,224

 

 
Operating expenses
Research and development, net

 

24,019

 

 

24,379

 

 

94,253

 

 

98,964

 

Selling, general and administrative

 

57,921

 

 

66,423

 

 

231,138

 

 

235,107

 

 

81,940

 

 

90,802

 

 

325,391

 

 

334,071

 

 
Operating profit (loss)

 

(3,281

)

 

(3,803

)

 

(11,699

)

 

(8,847

)

 
Financial income (expense), net

 

1,760

 

 

747

 

 

4,555

 

 

633

 

 
Income (loss) before income taxes

 

(1,521

)

 

(3,056

)

 

(7,144

)

 

(8,214

)

 
Income tax expenses

 

439

 

 

3,626

 

 

3,523

 

 

4,736

 

 
Share in profits (losses) of associated companies

 

(907

)

 

12,910

 

 

(412

)

 

1,725

 

 
Net income (loss)

 

(2,867

)

 

6,228

 

 

(11,079

)

 

(11,225

)

 
Net loss attributable to non-controlling interests

 

(78

)

 

(79

)

 

(230

)

 

(261

)

 
Net income (loss) attributable to Stratasys Ltd.

$

(2,789

)

$

6,307

 

$

(10,849

)

$

(10,964

)

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

$

(0.05

)

$

0.12

 

$

(0.20

)

$

(0.22

)

Diluted

$

(0.05

)

 

0.12

 

$

(0.20

)

 

(0.22

)

 
 
Basic

 

54,435

 

 

53,854

 

 

54,260

 

 

53,751

 

Diluted

 

54,435

 

 

54,132

 

 

54,260

 

 

53,751

 

   

Three Months Ended December 31,

2019

 

Non-GAAP

 

2019

 

2018

 

Non-GAAP

 

2018

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

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

   
Gross profit (1)

$

78,659

 

$

5,294

 

$

83,953

 

$

86,999

 

$

5,499

 

$

92,498

Operating income (loss) (1,2)

$

(3,281

)

$

13,436

 

$

10,155

 

$

(3,803

)

$

16,574

 

$

12,771

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

$

(2,789

)

$

12,741

 

$

9,952

 

$

6,307

 

$

4,993

 

$

11,300

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

$

(0.05

)

$

0.23

 

$

0.18

 

$

0.12

 

$

0.09

 

$

0.21

   
   

(1)

Acquired intangible assets amortization expense

 

4,770

 

 

 

5,221

 

Non-cash stock-based compensation expense

 

478

 

 

 

294

 

Reorganization and other related costs

 

46

 

 

 

(16

)

 

5,294

 

 

 

5,499

 

   

(2)

Acquired intangible assets amortization expense

 

2,985

 

 

 

2,532

 

Non-cash stock-based compensation expense

 

4,325

 

 

 

3,686

 

Impairment charges of intangible assets and other long-lived assets

 

-

 

 

 

4,797

 

Reorganization and other related costs

 

556

 

 

 

60

 

Merger and acquisition and other expense

 

276

 

 

 

-

 

 

8,142

 

 

 

11,075

 

 

13,436

 

 

 

16,574

 

   

(3)

Corresponding tax effect

 

(721

)

 

 

1,853

 

Gain from equity method divestment and related amortization and impairments

 

26

 

 

 

(13,434

)

 

12,741

 

 

$

4,993

 

(4)

Weighted average number of ordinary shares outstanding- Diluted

 

54,435

 

 

54,738

 

 

54,132

 

 

54,132

Twelve Months Ended December 31,

2019

 

Non-GAAP

 

2019

 

2018

 

Non-GAAP

 

2018

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

U.S. dollars and shares in thousands (except per share amounts)
   
Gross profit (1)

$

313,692

 

$

19,074

 

$

332,766

 

$

325,224

 

$

22,351

 

$

347,575

Operating income (loss) (1,2)

$

(11,699

)

$

45,812

 

$

34,113

 

$

(8,847

)

$

45,324

 

$

36,477

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

$

(10,849

)

$

41,315

 

$

30,466

 

$

(10,964

)

$

38,782

 

$

27,818

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

$

(0.20

)

$

0.76

 

$

0.56

 

$

(0.22

)

$

0.74

 

$

0.52

   
   

(1)

Acquired intangible assets amortization expense

 

16,484

 

 

 

20,866

 

Non-cash stock-based compensation expense

 

1,848

 

 

 

1,474

 

Reorganization and other related costs

 

742

 

 

 

11

 

 

19,074

 

 

 

22,351

 

   

(2)

Acquired intangible assets amortization expense

 

8,673

 

 

 

10,161

 

Impairment charges of intangible assets and other long-lived assets

 

-

 

 

 

4,797

 

Non-cash stock-based compensation expense

 

18,712

 

 

 

14,212

 

Gain from divestiture, net of transaction costs

 

(3,578

)

 

 

(7,016

)

Reorganization and other related costs

 

2,655

 

 

 

691

 

Merger and acquisition and other expense

 

276

 

 

 

128

 

 

26,738

 

 

 

22,973

 

 

45,812

 

 

 

45,324

 

   

(3)

Corresponding tax effect

 

(2,919

)

 

 

(808

)

Gain from equity method divestment, related write-offs and amortization

 

(1,578

)

 

 

(5,734

)

$

41,315

 

 

$

38,782

 

   

(4)

Weighted average number of ordinary shares outstanding- Diluted

 

54,260

 

 

54,713

 

 

53,751

 

 

53,898

Stratasys Ltd.
 
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
 
Fiscal Year 2019
 
(in millions, except per share data)
 
 
GAAP net loss

($30) to ($18)

 

Adjustments

 

Stock-based compensation expense

$26 to $28

Intangible assets amortization expense

$25 to $26

Reorganization and other related costs

$3 to $4

Tax expense related to Non-GAAP adjustments

($3) to ($4)

 

Non-GAAP net income

$25 to $34

 

GAAP loss per share

($0.54) to ($0.33)

 

Non-GAAP diluted earnings per share

$0.45 to $0.60





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