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

Stratasys Releases Second Quarter 2021 Financial Results

Aug. 05, 2021

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

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

* Revenue of $147.0 million compared to $117.6 million. * GAAP gross margin was 43.0%, compared to 37.2%. * Non-GAAP gross margin was 47.5%, compared to 45.4%. * GAAP operating loss was $22.7 million, compared to an operating loss of $29.3 million. * Non-GAAP operating loss was $2.6 million, compared to an operating loss of $8.1 million. * GAAP net loss was $20.2 million, or $0.31 per diluted share, compared to a net loss of $28.0 million, or $0.51 per diluted share. * Non-GAAP net loss was $1.6 million, or $0.02 per diluted share, compared to a net loss of $7.4 million, or $0.13 per diluted share. * Adjusted EBITDA was $3.5 million, compared to $(1.6) million. * Cash provided by operations of $5.6 million, compared to cash use of $9.7 million.

Dr. Yoav Zeif, Stratasys's Chief Executive Officer stated, "Our strong second quarter results were highlighted by a 25% year over year revenue improvement with growth from all regions and all business lines. Our focus on manufacturing gained further traction, we increased the monetization and ecosystem partnerships of our software business, and we expanded our medical and dental offerings, advancing our plans for further penetration in the healthcare industry."

Dr. Zeif continued, "The transition of the 3D printing industry from prototyping to mass production is ongoing, and our commitment to being the first choice in polymer 3D printing positions us to be the main benefactor. We are investing across technology, software, materials, and talent to capture increased market share that we expect will yield significant returns and sustained profitability in the years to come."

Financial Outlook: (TBD)

Based on current market conditions and assuming that the impact related to the pandemic does not impede the economic environment further, the Company is reiterating and updating its outlook as follows:

* Third quarter 2021 revenue of approximately 17% - 18% growth year-over-year. Fourth quarter revenue is expected to be sequentially higher than third quarter. * Full year operating expenses expected to rise approximately $30 million compared to 2020, primarily due to the return of employees to a full-time schedule starting January 1, 2021, as well as operating costs as the markets gradually re-open. * Full year capital expenditures anticipated to range from $24 million to $30 million. * Longer term, the Company continues to expect significant leverage benefit from its investments as revenue growth should start to accelerate in 2022 and beyond.

Stratasys Ltd. Second Quarter 2021 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its second quarter 2021 financial results on Thursday, August 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/46027/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 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 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 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 (including on or about the date hereof), 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 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,

2021 2020

ASSETS Current assets Cash and cash equivalents $ 343,733 $ 272,092

Short-term deposits 179,000 27,000

Accounts receivable, net of allowance for 109,969 106,068 credit losses of $0.8 and $0.9 million as ofJune 30, 2021 and December 31, 2020Inventories 124,227 131,672

Prepaid expenses 7,288 6,717

Other current assets 21,189 16,943

Total current assets 785,406 560,492

Non-current assets Property, plant and equipment, net 201,080 201,232

Goodwill 39,686 35,694

Other intangible assets, net 124,257 131,569

Operating lease right-of-use assets 17,514 21,298

Other non-current assets 55,081 39,717

Total non-current assets 437,618 429,510

Total assets $ 1,223,024 $ 990,002

LIABILITIES AND EQUITY Current liabilities Accounts payable $ 42,001 $ 16,987

Accrued expenses and other current 30,134 31,061 liabilitiesAccrued compensation and related benefits 29,270 25,659

Deferred revenues - short term 48,943 49,165

Operating lease liabilities - short term 8,248 9,282

Total current liabilities 158,596 132,154

Non-current liabilities Deferred revenues - long term 15,661 14,227

Operating lease liabilities - long term 9,553 12,567

Contingent consideration 40,436 37,400

Other non-current liabilities 37,206 34,059

Total non-current liabilities 102,856 98,253

Total liabilities 261,452 230,407

Redeemable non-controlling interests 227 227

Equity Ordinary shares, NIS 0.01 nominal value,authorized 180,000 thousands shares; 65,396 181 155 thousands shares and 56,617 thousands sharesissued and outstanding at June 30, 2021 andDecember 31, 2020, respectivelyAdditional paid-in capital 2,992,833 2,753,955

Accumulated other comprehensive loss (6,703 ) (8,846 )

Accumulated deficit (2,024,966 ) (1,985,896 )

Total equity 961,345 759,368

Total liabilities and equity $ 1,223,024 $ 990,002

Stratasys Ltd.Consolidated Statements of Operations(in thousands, except per share data)Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Net salesProducts$

100,305

$

73,877

$

190,629

$

157,049

Services46,700

43,746

90,565

93,481

147,005

117,623

281,194

250,530

Cost of salesProducts49,731

39,969

96,651

79,217

Services34,004

33,918

65,696

67,707

83,735

73,887

162,347

146,924

Gross profit63,270

43,736

118,847

103,606

Operating expensesResearch and development, net22,437

21,303

43,038

45,497

Selling, general and administrative63,557

51,711

116,891

107,287

85,994

73,014

159,929

152,784

Operating loss(22,724

)

(29,278

)

(41,082

)

(49,178

)

Financial income (expenses), net(372

)

149

(749

)

(680

)

Loss before income taxes(23,096

)

(29,129

)

(41,831

)

(49,858

)

Income tax benefit(4,368

)

(2,128

)

(5,310

)

(1,907

)

Share in losses of associated companies(1,431

)

(950

)

(2,549

)

(1,788

)

Net loss(20,159

)

(27,951

)

(39,070

)

(49,739

)

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

35

-

(50

)

Net loss attributable to Stratasys Ltd.$

(20,159

)

$

(27,986

)

$

(39,070

)

$

(49,689

)

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

(0.31

)

$

0.51

$

(0.63

)

$

(0.91

)

Diluted$

(0.31

)

$

0.51

$

(0.63

)

$

(0.91

)

Weighted average ordinary shares outstandingBasic64,908

54,917

61,796

54,733

Diluted64,908

54,917

61,796

54,733

Stratasys Ltd. Consolidated Statements of Operations (in thousands, except per share data) Three Months Ended June Six Months Ended June 30, 30,

2021 2020 2021 2020

(unaudited) (unaudited) (unaudited) (unaudited)

Net sales Products $ 100,305 $ 73,877 $ 190,629 $ 157,049

Services 46,700 43,746 90,565 93,481

147,005 117,623 281,194 250,530

Cost of sales Products 49,731 39,969 96,651 79,217

Services 34,004 33,918 65,696 67,707

83,735 73,887 162,347 146,924

Gross profit 63,270 43,736 118,847 103,606

Operating expenses Research and 22,437 21,303 43,038 45,497 development, netSelling, general and 63,557 51,711 116,891 107,287 administrative 85,994 73,014 159,929 152,784

Operating loss (22,724 ) (29,278 ) (41,082 ) (49,178 )

Financial income (372 ) 149 (749 ) (680 )(expenses), net Loss before income (23,096 ) (29,129 ) (41,831 ) (49,858 )taxes Income tax benefit (4,368 ) (2,128 ) (5,310 ) (1,907 )

Share in losses of (1,431 ) (950 ) (2,549 ) (1,788 )associated companies Net loss (20,159 ) (27,951 ) (39,070 ) (49,739 )

Net income (loss)attributable to - 35 - (50 )non-controllinginterests Net loss attributable $ (20,159 ) $ (27,986 ) $ (39,070 ) $ (49,689 )to Stratasys Ltd. Net loss per ordinary share attributable to Stratasys Ltd.Basic $ (0.31 ) $ 0.51 $ (0.63 ) $ (0.91 )

Diluted $ (0.31 ) $ 0.51 $ (0.63 ) $ (0.91 )

Weighted averageordinary shares outstandingBasic 64,908 54,917 61,796 54,733

Diluted 64,908 54,917 61,796 54,733

Three Months Ended June 30,2021

Non-GAAP2021

2020

Non-GAAP2020

GAAPAdjustmentsNon-GAAPGAAPAdjustmentsNon-GAAPU.S. dollars and shares in thousands (except per share amounts)Gross profit (1)$

63,270

$

6,616

$

69,886

$

43,736

$

9,612

$

53,348

Operating income (loss) (1,2)(22,724

)

20,133

(2,591

)

(29,278

)

21,228

(8,050

)

Net income (loss) attributable to Stratasys Ltd. (1,2,3)(20,159

)

18,581

(1,578

)

(27,986

)

20,634

(7,352

)

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

(0.31

)

$

0.29

$

(0.02

)

$

(0.51

)

$

0.38

$

(0.13

)

(1)

Acquired intangible assets amortization expense5,518

4,065

Non-cash stock-based compensation expense788

497

Restructuring and other related costs310

5,050

6,616

9,612

(2)

Acquired intangible assets amortization expense2,200

2,125

Non-cash stock-based compensation expense7,189

5,614

Restructuring and other related costs350

3,798

Revaluation of investments2,201

-

Contingent consideration202

-

Other expenses1,375

79

13,517

11,616

20,133

21,228

(3)

Corresponding tax effect(1,637

)

(669

)

Equity method related amortization, divestments and impairments85

75

$

18,581

$

20,634

(4)

Weighted average number of ordinary shares outstanding- Diluted64,908

64,908

54,917

54,917

Three Months Ended June 30, 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 $ 63,270 $ 6,616 $ 69,886 $ 43,736 $ 9,612 $ 53,348 (1) Operating (22,724 ) 20,133 (2,591 ) (29,278 ) 21,228 (8,050 ) income (loss) (1,2) Net income (loss) (20,159 ) 18,581 (1,578 ) (27,986 ) 20,634 (7,352 ) attributable to Stratasys Ltd. (1,2,3) Net income (loss) per diluted share $ (0.31 ) $ 0.29 $ (0.02 ) $ (0.51 ) $ 0.38 $ (0.13 ) attributable to Stratasys Ltd. (4) Acquired(1) intangible 5,518 4,065 assets amortization expense Non-cash stock-based 788 497 compensation expense Restructuring 310 5,050 and other related costs 6,616 9,612

Acquired(2) intangible 2,200 2,125 assets amortization expense Non-cash stock-based 7,189 5,614 compensation expense Restructuring 350 3,798 and other related costs Revaluation 2,201 - of investments Contingent 202 - consideration Other 1,375 79 expenses 13,517 11,616

20,133 21,228

(3) Corresponding (1,637 ) (669 ) tax effect Equity method related amortization, 85 75 divestments and impairments $ 18,581 $ 20,634

Weighted average(4) number of 64,908 64,908 54,917 54,917 ordinary shares outstanding- DilutedSix Months Ended June 30,2021

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)$

118,847

$

13,685

$

132,532

$

103,606

$

14,026

$

117,632

Operating income (loss) (1,2)(41,082

)

35,918

(5,164

)

(49,178

)

32,719

(16,459

)

Net income (loss) attributable to Stratasys Ltd. (1,2,3)(39,070

)

33,692

(5,378

)

(49,689

)

31,771

(17,919

)

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

(0.63

)

$

0.55

$

(0.09

)

$

(0.91

)

$

0.58

$

(0.33

)

(1)

Acquired intangible assets amortization expense10,873

8,130

Non-cash stock-based compensation expense1,422

899

Restructuring and other related costs1,390

4,997

13,685

14,026

(2)

Acquired intangible assets amortization expense4,393

4,267

Non-cash stock-based compensation expense13,760

10,119

Restructuring and other related costs2,159

3,829

Revaluation of investments(1,469

)

-

Contingent consideration393

-

Other expenses2,997

478

22,233

18,693

35,918

32,719

(3)

Corresponding tax effect(2,394

)

(1,100

)

Equity method related amortization, divestments and impairments168

152

$

33,692

$

31,771

(4)

Weighted average number of ordinary shares outstanding- Diluted61,796

61,796

54,733

54,733

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