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Stratasys Releases Second Quarter 2022 Financial Results

  • Second quarter revenue of $166.6 million, 13.3% growth over second quarter 2021 (16.4% on a constant currency basis), highest second quarter revenue in four years
  • Second quarter GAAP net loss of $24.4 million, or $0.37 per diluted share, and non-GAAP net income of $1.2 million, or $0.02 per diluted share
  • $441.5 million cash and equivalents and no debt as of June 30, 2022
  • Updates 2022 full-year outlook adjusted for currency exchange impact

Stratasys Ltd. (Nasdaq: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the second quarter of 2022.

Summary - Second Quarter 2022 Financial Results Compared to Second Quarter 2021:

  • Revenue of $166.6 million, compared to $147.0 million.
  • GAAP gross margin of 40.5%, compared to 43.0%.
  • Non-GAAP gross margin of 47.6%, compared to 47.5%.
  • GAAP operating loss of $23.5 million, compared to a GAAP operating loss of $22.7 million.
  • Non-GAAP operating income of $1.9 million, compared to non-GAAP operating loss of $2.6 million.
  • GAAP net loss of $24.4 million, or ($0.37) per diluted share, compared to net loss of $20.2 million, or ($0.31) per diluted share.
  • Non-GAAP net income of $1.2 million, or $0.02 per diluted share, compared to non-GAAP net loss of $1.6 million, or ($0.02) per diluted share.
  • Adjusted EBITDA of $7.4 million, compared to $3.5 million.
  • $22.8 million of cash used by, compared to $5.6 million of cash generated from, operating activities, reflecting a continued augmentation of inventories.

“Our continued focus on execution delivered strong growth in revenue, margin, and earnings per share,” commented Dr. Yoav Zeif, Stratasys’ Chief Executive Officer. “Systems was again the main driver of robust performance, growing 29.2% from the prior year period and 9.7% over the same period in 2019. Our new Origin P3 and H350 SAF mass production manufacturing systems continue to ramp, with excellent customer engagement across all of our new technology offerings.”

Dr. Zeif continued, “We are advancing our leadership position by executing on our strategic initiatives and steadily expanding our reach into Fortune 500 manufacturing facilities worldwide. We continue to provide best-in-class, full-scale 3D printing solutions through our innovative and growing ecosystem of polymer additive manufacturing systems, expanding variety of materials, end-to-end software and top quality service. With our robust balance sheet and leading go-to-market strategy, we are well-positioned to navigate challenging supply issues and global inflation in our efforts to create long-term value for all of our shareholders.”

Financial Outlook:

Based on current market conditions and assuming that the impact of the COVID-19 pandemic, global supply chain costs, currency risk and inflation do not impede economic activity further, the Company is updating its outlook for 2022 as follows:

  • Full year revenue of $675 million to $685 million, as compared to a previous range of $685 million to $695 million. The reduction is primarily due to unexpected and adverse currency exchange rates which are expected to impact third and fourth quarter results relatively equally.
  • Revenue growth in the second half of the year approximately 6%-7% higher than the second half of 2021, with fourth quarter anticipated to grow at a higher rate than third quarter.
  • Based on current logistics and materials costs, third quarter gross margins relatively flat compared to third quarter of 2021, and full-year gross margins of flat to slightly higher than 2021.
  • Full year-operating expenses that are $18 million to $23 million higher than 2021, primarily due to ongoing investments in new products to drive higher revenue.
  • Full year non-GAAP operating margins slightly above 2%.
  • GAAP net loss of $78 million to $69 million, or ($1.17) to ($1.04) per diluted share.
  • Non-GAAP net income of $10 million to $13 million, or $0.14 to $0.19 per diluted share.
  • Adjusted EBITDA of $38 million to $41 million.
  • Capital expenditures of $20 million to $25.

Non-GAAP earnings guidance excludes $37 million to $38 million of projected amortization of intangible assets, $33 million to $35 million of share-based compensation expense, and reorganization and other expenses of $14 million to $16 million. Non-GAAP guidance includes tax adjustments of $2 million to $1 million on the above non-GAAP items.

Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of our press release and slide presentation, with itemized detail concerning the non-GAAP financial measures.

Stratasys Ltd. Second Quarter 2022 Webcast and Conference Call Details:

The Company plans to webcast its conference call to discuss its second quarter 2022 financial results on Wednesday, August 3, 2022, at 8:30 a.m. (ET).

The investor conference call will be available via live webcast on the Stratasys website at investors.stratasys.com, or directly at the following web address:

https://event.choruscall.com/mediaframe/webcast.html?webcastid=mUfZ38Qo

To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is +1-412-902-1012. Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for six months at investors.stratasys.com, or by accessing the above-provided web address.

Stratasys is leading the global shift to additive manufacturing with innovative 3D printing solutions for industries such as aerospace, automotive, consumer products and healthcare. Through smart and connected 3D printers, polymer materials, a software ecosystem, and parts on demand, Stratasys solutions deliver competitive advantages at every stage in the product value chain. The world’s leading organizations turn to Stratasys to transform product design, bring agility to manufacturing and supply chains, and improve patient care.

To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, Twitter, LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including the Company’s websites, to share material, non-public information pursuant to the SEC’s Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.

Stratasys is a registered trademark and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys' strategy, and the statements regarding Stratasys’ 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 degree of our success at locating and acquiring additional value-enhancing, inorganic technology that furthers our business plan to lead in the realm of polymers; the potential adverse impact that recent global interruptions and delays involving freight carriers and other third parties (including due to the Russian invasion of Ukraine) may have on our supply chain and distribution network, and, consequently, our ability to successfully sell both our existing and newly-launched 3D printing products; the strength and duration of, and degree of recovery from and resilience to, the COVID-19 pandemic and/or adverse macro-economic trends that are, in part, by-products of that pandemic, such as inflation, which may have significant consequences for our operations, financial position, cash flows, and those of our customers and suppliers going forward; 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 filed with the U.S. Securities and Exchange Commission, or SEC, on February 24, 2022 (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
(Unaudited)
(in thousands, except share data)

June 30,

 

December 31,

 

2022

 

 

 

2021

 

 
 
ASSETS
 
Current assets
Cash and cash equivalents

$

255,886

 

$

243,179

 

Short-term deposits

 

182,429

 

 

259,000

 

Accounts receivable, net of allowance for credit losses of $1.0 million and $0.5 million

as of June 30, 2022 and December 31, 2021

 

132,343

 

 

129,382

 

Inventories

 

153,702

 

 

129,147

 

Prepaid expenses

 

8,225

 

 

6,871

 

Other current assets

 

49,615

 

 

33,123

 

 
Total current assets

 

782,200

 

 

800,702

 

 
Non-current assets
Property, plant and equipment, net

 

192,630

 

 

203,295

 

Goodwill

 

64,959

 

 

65,144

 

Other intangible assets, net

 

133,657

 

 

152,244

 

Operating lease right-of-use assets

 

12,319

 

 

14,651

 

Long-term investments

 

31,191

 

 

28,667

 

Other non-current assets

 

12,886

 

 

12,519

 

 
Total non-current assets

 

447,642

 

 

476,520

 

 
Total assets

$

1,229,842

 

$

1,277,222

 

 
LIABILITIES AND EQUITY
 
Current liabilities
Accounts payable

$

61,316

 

$

51,976

 

Accrued expenses and other current liabilities

 

52,049

 

 

55,358

 

Accrued compensation and related benefits

 

30,513

 

 

44,684

 

Deferred revenues - short term

 

49,511

 

 

51,174

 

Operating lease liabilities - short term

 

6,111

 

 

7,276

 

 
Total current liabilities

 

199,500

 

 

210,468

 

 
Non-current liabilities
Deferred revenues - long term

 

22,727

 

 

21,133

 

Deferred income taxes - long term

 

4,511

 

 

7,341

 

Operating lease liabilities - long term

 

6,165

 

 

7,693

 

Contingent consideration - long term

 

50,299

 

 

53,478

 

Other non-current liabilities

 

22,931

 

 

21,095

 

 
Total non-current liabilities

 

106,633

 

 

110,740

 

 
Total liabilities

 

306,133

 

 

321,208

 

 
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands
shares; 66,744 thousands shares and 65,677 thousands shares issued
and outstanding at June 30, 2022 and December 31, 2021, respectively

 

186

 

 

182

 

Additional paid-in capital

 

3,030,088

 

 

3,012,481

 

Accumulated other comprehensive loss

 

(13,354

)

 

(8,771

)

Accumulated deficit

 

(2,093,211

)

 

(2,047,878

)

 

923,709

 

 

956,014

 

 
Total liabilities and equity

$

1,229,842

 

$

1,277,222

 

 

Stratasys Ltd.

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

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Net sales
Products

$

115,721

 

$

100,305

 

$

228,794

 

$

190,629

 

Services

 

50,882

 

 

46,700

 

 

101,238

 

 

90,565

 

 

166,603

 

 

147,005

 

 

330,032

 

 

281,194

 

 
Cost of sales
Products

 

61,132

 

 

49,731

 

 

120,505

 

 

96,651

 

Services

 

38,078

 

 

34,004

 

 

72,457

 

 

65,696

 

 

99,210

 

 

83,735

 

 

192,962

 

 

162,347

 

 
Gross profit

 

67,393

 

 

63,270

 

 

137,070

 

 

118,847

 

 
Operating expenses
Research and development, net

 

24,346

 

 

22,437

 

 

48,344

 

 

43,038

 

Selling, general and administrative

 

66,592

 

 

63,557

 

 

131,855

 

 

116,891

 

 

90,938

 

 

85,994

 

 

180,199

 

 

159,929

 

 
Operating loss

 

(23,545

)

 

(22,724

)

 

(43,129

)

 

(41,082

)

 
Financial expenses, net

 

(1,170

)

 

(372

)

 

(2,532

)

 

(749

)

 
Loss before income taxes

 

(24,715

)

 

(23,096

)

 

(45,661

)

 

(41,831

)

 
Income tax benefit

 

429

 

 

4,368

 

 

502

 

 

5,310

 

 
Share in losses of associated companies

 

(99

)

 

(1,431

)

 

(174

)

 

(2,549

)

 
Net loss

$

(24,385

)

$

(20,159

)

$

(45,333

)

$

(39,070

)

 
Net loss per share
Basic

$

(0.37

)

$

(0.31

)

$

(0.69

)

$

(0.63

)

Diluted

$

(0.37

)

$

(0.31

)

$

(0.69

)

$

(0.63

)

 
Weighted average ordinary shares outstanding
Basic

 

66,568

 

 

64,908

 

 

66,151

 

 

61,796

 

Diluted

 

66,568

 

 

64,908

 

 

66,151

 

 

61,796

 

 

 

Three Months Ended June 30,

 

2022

 

 

Non-GAAP

 

 

2022

 

 

 

2021

 

 

Non-GAAP

 

 

2021

 

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

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

Gross profit (1)

$

67,393

 

$

11,914

$

79,307

$

63,270

 

$

6,616

 

$

69,886

 

Operating income (loss) (1,2)

 

(23,545

)

 

25,479

 

$

1,934

 

 

(22,724

)

 

20,133

 

$

(2,591

)

Net income (loss) (1,2,3)

 

(24,385

)

 

25,560

 

$

1,175

 

 

(20,159

)

 

18,581

 

$

(1,578

)

Net income (loss) per diluted share (4)

$

(0.37

)

$

0.39

 

$

0.02

 

$

(0.31

)

$

0.29

 

$

(0.02

)

 
 

(1)

Acquired intangible assets amortization expense

 

6,954

 

 

5,518

 

 

Non-cash stock-based compensation expense

 

1,080

 

 

788

 

 

Restructuring and other related costs

 

15

 

 

310

 

 

Impairment charges

 

3,865

 

 

-

 

 

 

11,914

 

 

6,616

 

 

(2)

Acquired intangible assets amortization expense

 

2,218

 

 

2,200

 

 

Non-cash stock-based compensation expense

 

7,751

 

 

7,189

 

 

Restructuring and other related costs

 

-

 

 

350

 

 

Revaluation of investments

 

1,255

 

 

2,201

 

 

Contingent consideration

 

596

 

 

202

 

 

Other expenses

 

1,745

 

 

1,375

 

 

 

13,565

 

 

13,517

 

 

 

25,479

 

 

20,133

 

 

(3)

Corresponding tax effect and other expenses

 

81

 

 

(1,552

)

 

$

25,560

 

$

18,581

 

 

(4)

Weighted average number of ordinary
shares outstanding - Diluted

 

66,568

 

 

67,070

 

 

64,908

 

 

64,908

 

 

 

Six Months Ended June 30,

 

2022

 

 

Non-GAAP

 

 

2022

 

 

2021

 

 

Non-GAAP

 

 

2021

 

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

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

Gross profit (1)

$

137,070

 

$

19,603

$

156,673

$

118,847

 

$

13,685

 

$

132,532

 

Operating income (loss) (1,2)

 

(43,129

)

 

47,086

 

$

3,957

 

(41,082

)

 

35,918

 

$

(5,164

)

Net income (loss) (1,2,3)

 

(45,333

)

 

47,718

 

$

2,385

 

(39,070

)

 

33,692

 

$

(5,378

)

Net income (loss) per diluted share (4)

$

(0.69

)

$

0.73

 

$

0.04

$

(0.63

)

$

0.54

 

$

(0.09

)

 
 

(1)

Acquired intangible assets amortization expense

 

13,920

 

 

10,873

 

 

Non-cash stock-based compensation expense

 

1,980

 

 

1,422

 

 

Restructuring and other related costs

 

(162

)

 

1,390

 

 

Impairment charges

 

3,865

 

 

-

 

 

 

19,603

 

 

13,685

 

 

(2)

Acquired intangible assets amortization expense

 

4,443

 

 

4,393

 

 

Non-cash stock-based compensation expense

 

15,384

 

 

13,760

 

 

Restructuring and other related costs

 

555

 

 

2,159

 

 

Revaluation of investments

 

2,316

 

 

(1,469

)

 

Contingent consideration

 

803

 

 

393

 

 

Other expenses

 

3,982

 

 

2,997

 

 

 

27,483

 

 

22,233

 

 

 

47,086

 

 

35,918

 

 

(3)

Corresponding tax effect and other expenses

 

632

 

 

(2,226

)

 

$

47,718

 

$

33,692

 

 

(4)

Weighted average number of ordinary

 

 

 

 

 

 

 

 

 

 

 

shares outstanding - Diluted

66,151

67,071

61,796

61,796

Stratasys Ltd.

 

 

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

($78) to ($69)

 

Adjustments

 

Stock-based compensation expense

$33 to $35

Intangible assets amortization expense

$37 to $38

Reorganization and other

$14 to $16

Tax expense (benefit) related to Non-GAAP adjustments

($2) to ($1)

 

Non-GAAP net income

$10 to $13

 

GAAP loss per share

($1.17) to ($1.04)

 

Non-GAAP diluted earnings per share

$0.14 to $0.19

 

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