Business Wire | May 5, 2021 07:30AM EDT

Stratasys Releases First Quarter 2021 Financial Results

May 05, 2021

MINNEAPOLIS & REHOVOT, Israel--(BUSINESS WIRE)--May 05, 2021--Stratasys Ltd. (NASDAQ: SSYS) announced financial results for the first quarter of 2021.

First Quarter 2021 Financial Results Summary Compared to First Quarter 2020:

* Revenue of $134.2 million compared to $132.9 million. * GAAP gross margin was 41.4%, compared to 45.0%. * Non-GAAP gross margin was 46.7%, compared to 48.4%. * GAAP operating loss was $18.4 million, compared to an operating loss of $19.9 million. * Non-GAAP operating loss was $2.6 million, compared to an operating loss of $8.4 million. * GAAP net loss was $18.9 million, or $0.32 per diluted share, compared to a net loss of $21.7 million, or $0.40 per diluted share. * Non-GAAP net loss was $3.8 million, or $0.06 per diluted share, compared to a net loss of $10.6 million, or $0.19 per diluted share. * Adjusted EBITDA was $3.5 million, compared to $(2.1) million. * Cash from operations of $22.8 million, compared to $11.3 million.

"I am pleased with our performance in the first quarter that drove 41% growth in system revenues. Thanks to our team's dedication and successful execution, Stratasys delivered solid results and is well-positioned at the forefront of our industry, as end markets continue to recover and 3D printing industry growth accelerates," stated Dr. Yoav Zeif, Chief Executive Officer of Stratasys.

Dr. Zeif continued, "3D printing is migrating from being primarily a prototyping tool to providing full-scale, digital manufacturing platforms at mass production levels. With our focused business model, we continue to make progress on our strategy to grow our manufacturing applications, which will solidify our position as the first choice in polymer 3D printing. We recently hosted an unprecedented online event for over 4,500 customers, resellers and partners, where we introduced three next-generation manufacturing systems that address a large portion of the multibillion-dollar market opportunity in additive manufacturing of end-use parts and will play an integral role in positioning the business for future growth. Looking to the rest of 2021, we will continue to prioritize strategic investments that we expect to yield significant returns and sustained profitability in the years to come. With a fortress balance sheet and multiple growth opportunities in front of us, we are poised to build incremental value for our shareholders," concluded Dr. Zeif.

Financial Outlook:

The Company is reiterating and updating its outlook as follows:

* Second quarter 2021 revenue of mid-teens percentage growth year-over-year.

* Full year operating expenses expected to rise approximately $25 million to $30 million compared to 2020, likely closer to the high end of the range, primarily due to the return of employees to a full-time schedule starting January 1, 2021, as well as the impact of recent acquisitions. * Full year capital expenditures anticipated range from $24 million to $30 million. * Longer term, the Company continues to expect significant leverage benefit from its investments as revenue growth should accelerate in 2022 and beyond.

Stratasys Ltd. First Quarter 2021 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its first quarter 2021 financial results on Wednesday, May 5, 2021 at 8:30 a.m. (ET).

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

https://78449.themediaframe.com/dataconf/productusers/ssys/mediaframe/44880/indexl.html.

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 6 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 its projected future financial performance, including the financial guidance concerning its expected results for 2021, 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 acquisitions or investments in new businesses, technologies, products or services; the strength and duration of, and degree of recovery from, the COVID-19 pandemic in the markets in which we operate; 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 the 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, 2020, which we filed with the U.S. Securities and Exchange Commission, or SEC, on March 1, 2021 (the "2020 Annual Report"). Readers are urged to carefully review and consider the various disclosures made throughout our 2020 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 2021, which will be furnished to the SEC throughout 2021, 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, 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, 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) March 31, December 31,

2021 2020

ASSETS Current assetsCash and cash equivalents $ 421,398 $ 272,092

Short-term deposits 109,000 27,000

Accounts receivable, net of allowance for 102,780 106,068 credit losses of $0.9 million as of March 31,2021 and December 31, 2020Inventories 124,199 131,672

Prepaid expenses 10,345 6,717

Other current assets 16,745 16,943

Total current assets 784,467 560,492

Non-current assetsProperty, plant and equipment, net 199,382 201,232

Goodwill 38,074 35,694

Other intangible assets, net 131,619 131,569

Operating lease right-of-use assets 19,089 21,298

Other non-current assets 43,299 39,717

Total non-current assets 431,463 429,510

Total assets $ 1,215,930 $ 990,002

LIABILITIES AND EQUITY Current liabilitiesAccounts payable $ 28,062 $ 16,987

Accrued expenses and other current liabilities 29,283 31,061

Accrued compensation and related benefits 30,937 25,659

Deferred revenues - short term 49,413 49,165

Operating lease liabilities - short term 8,941 9,282

Total current liabilities 146,636 132,154

Non-current liabilitiesDeferred revenues - long term 14,074 14,227

Operating lease liabilities - long term 10,501 12,567

Contingent consideration 40,234 37,400

Other non-current liabilities 32,470 34,059

Total non-current liabilities 97,279 98,253

Total liabilities 243,915 230,407

Redeemable non-controlling interests 227 227

EquityOrdinary shares, NIS 0.01 nominal value,authorized 180,000 thousands shares; 65,218 181 155 thousands shares and 56,617 thousands sharesissued and outstanding at March 31, 2021 andDecember 31, 2020, respectivelyAdditional paid-in capital 2,984,048 2,753,955

Accumulated other comprehensive loss (7,634 ) (8,846 )

Accumulated deficit (2,004,807 ) (1,985,896 )

Total equity 971,788 759,368

Total liabilities and equity $ 1,215,930 $ 990,002

Stratasys Ltd.Consolidated Statements of Operations(in thousands, except per share data)Three Months Ended March 31,

2021

2020

(unaudited)

(unaudited)

Net salesProducts$

90,324

$

83,172

Services43,865

49,735

134,189

132,907

Cost of salesProducts46,920

39,248

Services31,692

33,789

78,612

73,037

Gross profit55,577

59,870

Operating expensesResearch and development, net20,601

24,194

Selling, general and administrative53,334

55,576

73,935

79,770

Operating loss(18,358

)

(19,900

)

Financial expense, net(377

)

(829

)

Loss before income taxes(18,735

)

(20,729

)

Income tax expenses (benefit)(942

)

221

Share in losses of associated companies(1,118

)

(838

)

Net loss(18,911

)

(21,788

)

Net loss attributable to non-controlling interests-

(85

)

Net loss attributable to Stratasys Ltd.$

(18,911

)

$

(21,703

)

Net loss per ordinary share attributable to Stratasys Ltd.Basic$

(0.32

)

$

(0.40

)

Diluted$

(0.32

)

$

(0.40

)

Weighted average ordinary shares outstandingBasic58,616

54,544

Diluted58,616

54,544

Stratasys Ltd. Consolidated Statements of Operations (in thousands, except per share data) Three Months Ended March 31,

2021 2020

(unaudited) (unaudited)

Net salesProducts $ 90,324 $ 83,172

Services 43,865 49,735

134,189 132,907

Cost of salesProducts 46,920 39,248

Services 31,692 33,789

78,612 73,037

Gross profit 55,577 59,870

Operating expensesResearch and development, net 20,601 24,194

Selling, general and administrative 53,334 55,576

73,935 79,770

Operating loss (18,358 ) (19,900 )

Financial expense, net (377 ) (829 )

Loss before income taxes (18,735 ) (20,729 )

Income tax expenses (benefit) (942 ) 221

Share in losses of associated companies (1,118 ) (838 )

Net loss (18,911 ) (21,788 )

Net loss attributable to non-controlling interests - (85 )

Net loss attributable to Stratasys Ltd. $ (18,911 ) $ (21,703 )

Net loss per ordinary share attributable toStratasys Ltd.Basic $ (0.32 ) $ (0.40 )

Diluted $ (0.32 ) $ (0.40 )

Weighted average ordinary shares outstandingBasic 58,616 54,544

Diluted 58,616 54,544

Three Months Ended March 31,

2021

Non-GAAP

2021

2020

Non-GAAP

2020

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

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

Gross profit (1)$

55,577

$

7,069

$

62,646

$

59,870

$

4,414

$

64,284

Operating income (loss) (1,2)(18,358

)

15,785

(2,573

)

(19,900

)

11,491

(8,409

)

Net income (loss) attributable to Stratasys Ltd. (1,2,3)(18,911

)

15,111

(3,800

)

(21,703

)

11,137

(10,566

)

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

(0.32

)

$

0.26

$

(0.06

)

$

(0.40

)

$

0.21

$

(0.19

)

(1

)

Acquired intangible assets amortization expense5,356

4,065

Non-cash stock-based compensation expense634

402

Restructuring and other related costs1,079

(53

)

7,069

4,414

(2

)

Acquired intangible assets amortization expense2,192

2,142

Non-cash stock-based compensation expense6,571

4,503

Restructuring and other related costs1,810

31

Revaluation of investments(3,670

)

-

Contingent consideration191

-

Other expenses1,622

401

8,716

7,077

15,785

11,491

(3

)

Corresponding tax effect(757

)

(431

)

Equity method related amortization, divestments and impairments83

77

$

15,111

$

11,137

(4

)

Weighted average number of ordinary shares outstanding- Diluted58,616

58,616

54,544

54,544

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CONTACT: Yonah Lloyd CCO, VP Investor Relations Yonah.Lloyd@stratasys.com