Business Wire | Nov 4, 2021 07:30AM EDT

Stratasys Releases Third Quarter 2021 Financial Results

Nov. 04, 2021

MINNEAPOLIS & REHOVOT, Israel--(BUSINESS WIRE)--Nov. 04, 2021--Stratasys Ltd. (NASDAQ: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the third quarter of 2021.

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

* Revenue of $159.0 million compared to $127.9 million. * GAAP gross margin was 42.9%, compared to 38.9%. * Non-GAAP gross margin was 48.2%, compared to 46.8%. * GAAP operating loss was $21.9 million, compared to an operating loss of $404.3 million. * Non-GAAP operating income was $1.8 million, compared to an operating loss of $1.0 million. * GAAP net loss was $18.1 million, or $0.28 per diluted share, compared to a net loss of $405.1 million, or $7.35 per diluted share. * Non-GAAP net income of $0.5 million, or $0.01 per diluted share, compared to a net loss of $3.0 million, or $0.05 per diluted share. * Adjusted EBITDA was $7.8 million, compared to $5.2 million. * Cash generated from operations of $3.0 million, compared to $2.6 million.

Dr. Yoav Zeif, Stratasys' Chief Executive Officer stated, "We are at an inflection point for additive manufacturing. Industries appreciate the many benefits of our technologies and are increasingly adding 3D printing to their production plans, driving the shift from prototyping to mass production. Our third quarter was highlighted by revenue growth of 24.3% and systems sales growth of 34.7% year-over-year, with contributions across all regions and all business lines. We achieved a number of important manufacturing-focused milestones, including the securing of contracts with the US Navy and a major international OEM, specifically for end-use part production."

Dr. Zeif continued, "Our vision of becoming the first choice for polymer 3D printing solutions with a focus on manufacturing continues to progress. We are executing on that goal by leveraging our outstanding reputation for excellence in both technology and service to help customers achieve true scaled production of end use parts. We expect the ongoing introduction of new product initiatives to further accelerate growth, complimented by our now 100% ownership of Xaar 3D and the new SAF technology, along with our recently announced open and enterprise-ready software platform that integrates with Industry 4.0 infrastructure and applications. We will continue to invest across our portfolio to further grow our sales and drive a return to sustained profitability."

Financial Outlook:

Based on current market conditions and assuming that the impacts related to the pandemic or global supply chain constraints do not impede the economic environment further, the Company is reiterating and updating its outlook as follows:

* Fourth quarter 2021 revenue approximately 16% higher year-over-year, driven by continued growth in systems relative to Q4 of both 2020 and 2019. * Full year-operating expenses expected to rise approximately $36 million compared to 2020, primarily due to fully owning Xaar 3D and higher operating costs associated with higher revenues. * 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. Third Quarter 2021 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its third quarter 2021 financial results on Thursday, November 4, 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/47128/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 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 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 have been 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, 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) September 30, December 31,

2021 2020

ASSETS Current assets Cash and cash equivalents $ 332,871 $ 272,092

187,000 Short-term deposits 27,000

Accounts receivable, net ofallowance for credit losses 121,848 of $0.7 and $0.9 million as 106,068of September 30, 2021 andDecember 31, 2020 119,925 Inventories 131,672

8,634 Prepaid expenses 6,717

27,317 Other current assets 16,943

797,595 Total current assets 560,492

Non-current assets Property, plant and 199,668 equipment, net 201,232

39,750 Goodwill 35,694

Other intangible assets, 117,010 net 131,569

Operating lease 15,624 right-of-use assets 21,298

58,365 Other non-current assets 39,717

430,417 Total non-current assets 429,510

Total assets $ 1,228,012 $ 990,002

LIABILITIES AND EQUITY Current liabilities Accounts payable $ 48,292 $ 16,987

Accrued expenses and other 30,875 current liabilities 31,061

Accrued compensation and 36,983 related benefits 25,659

Deferred revenues - short 49,104 term 49,165

Operating lease liabilities 7,514 - short term 9,282

Total current liabilities 172,768 132,154

Non-current liabilities Deferred revenues - long 17,980 term 14,227

Operating lease liabilities 8,353 - long term 12,567

40,589 Contingent consideration 37,400

Other non-current 37,869 liabilities 34,059

Total non-current 104,791 98,253 liabilities Total liabilities 277,559 230,407

Redeemable non-controlling interests - 227

Equity Ordinary shares, NIS 0.01nominal value, authorized180,000 thousands shares;65,467 thousands shares and 182 155 56,617 thousands sharesissued and outstanding atSeptember 30, 2021 andDecember 31, 2020,respectively 3,001,685 Additional paid-in capital 2,753,955

Accumulated other (8,372 ) )comprehensive loss (8,846

(2,043,042 ) )Accumulated deficit (1,985,896

950,453 Total equity 759,368

Total liabilities and $ 1,228,012 $ 990,002 equityStratasys Ltd.Consolidated Statements of Operations(in thousands, except per share data)Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Net salesProducts$

108,888

$

83,548

$

299,517

$

240,597

Services50,121

44,344

140,686

137,825

159,009

127,892

440,203

378,422

Cost of salesProducts54,820

47,339

151,471

126,556

Services36,001

30,784

101,697

98,491

90,821

78,123

253,168

225,047

Gross profit68,188

49,769

187,035

153,375

Operating expensesResearch and development, net22,645

19,562

65,683

65,059

Selling, general and administrative67,462

48,343

184,353

155,630

Goodwill impairment-

386,154

-

386,154

90,107

454,059

250,036

606,843

Operating loss(21,919

)

(404,290

)

(63,001

)

(453,468

)

Financial expenses, net(634

)

(167

)

(1,383

)

(847

)

Loss before income taxes(22,553

)

(404,457

)

(64,384

)

(454,315

)

Income tax benefit699

343

6,009

2,250

Share in profit (loss) of associated companies3,778

(952

)

1,229

(2,740

)

Net loss(18,076

)

(405,066

)

(57,146

)

(454,805

)

Net loss attributable to non-controlling interests-

(4

)

-

(54

)

Net loss attributable to Stratasys Ltd.$

(18,076

)

$

(405,062

)

$

(57,146

)

$

(454,751

)

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

(0.28

)

$

(7.35

)

$

(0.91

)

$

(8.29

)

Diluted$

(0.28

)

$

(7.35

)

$

(0.91

)

$

(8.29

)

Weighted average ordinary shares outstandingBasic65,018

55,086

62,888

54,851

Diluted65,018

55,086

62,888

54,851

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

2021 2020 2021 2020

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

Net sales Products $ 108,888 $ 83,548 $ 299,517 $ 240,597

50,121 44,344 140,686 Services 137,825

159,009 127,892 440,203 378,422

Cost of sales 54,820 47,339 151,471 Products 126,556

36,001 30,784 101,697 Services 98,491

90,821 78,123 253,168 225,047

68,188 49,769 187,035 Gross profit 153,375

Operating expensesResearch and 22,645 19,562 65,683 development, 65,059netSelling, 67,462 48,343 184,353 general and 155,630administrativeGoodwill 386,154 impairment - - 386,154

90,107 454,059 250,036 606,843

Operating loss (21,919 ) (404,290 ) (63,001 ) (453,468 )

Financial ) ) (1,383 ) )expenses, net (634 (167 (847

Loss before (22,553 ) (404,457 ) (64,384 ) (454,315 )income taxes Income tax 6,009 benefit 699 343 2,250

Share in profit (loss) of 3,778 (952 ) 1,229 (2,740 )associatedcompanies Net loss (18,076 ) (405,066 ) (57,146 ) (454,805 )

Net loss attributable to - (4 ) - (54 )non-controllinginterests Net loss $ (18,076 ) $ (405,062 ) $ (57,146 ) $ (454,751 )attributable to Stratasys Ltd. Net loss perordinary share attributable toStratasys Ltd.Basic $ (0.28 ) $ (7.35 ) $ (0.91 ) $ (8.29 )

Diluted $ (0.28 ) $ (7.35 ) $ (0.91 ) $ (8.29 )

Weightedaverage ordinary sharesoutstanding 65,018 55,086 62,888 Basic 54,851

65,018 55,086 62,888 Diluted 54,851

Three Months Ended September 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)$

68,188

$

8,507

$

76,695

$

49,769

$

10,036

$

59,805

Operating income (loss) (1,2)(21,919

)

23,739

1,820

(404,290

)

403,268

(1,022

)

Net income (loss) attributable to Stratasys Ltd. (1,2,3)(18,076

)

18,592

516

(405,061

)

402,050

(3,011

)

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

(0.28

)

$

0.28

$

0.01

$

(7.35

)

$

7.30

$

(0.05

)

(1)

Acquired intangible assets amortization expense 5,495

4,065

Non-cash stock-based compensation expense 804

524

Restructuring and other related costs 67

191

Impairment charges2,141

5,256

8,507

10,036

(2)

Acquired intangible assets amortization expense 2,205

2,162

Non-cash stock-based compensation expense 7,154

4,352

Goodwill impairment-

386,154

Impairment of long-lived assets1,242

-

Restructuring and other related costs 210

34

Revaluation of investments2,025

-

Contingent consideration197

-

Legal and other expenses 2,199

530

15,232

393,232

23,739

403,268

(3)

Corresponding tax effect(376

)

(1,296

)

Equity method related amortization, divestments and impairments(4,771

)

78

$

18,592

$

402,050

(4)

Weighted average number of ordinary shares outstanding- Diluted65,018

65,950

55,086

55,086

Three Months Ended September 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)

$ $ 8,507 $ 76,695 $ $ 10,036 $ Gross profit (1) 68,188 49,769 59,805

Operating income ) 23,739 ) 403,268 ) (loss) (1,2) (21,919 1,820 (404,290 (1,022

Net income (loss) attributable to (18,076 ) 18,592 516 (405,061 ) 402,050 (3,011 ) Stratasys Ltd. (1,2,3) Net income (loss) per diluted share $ ) $ 0.28 $ $ ) $ 7.30 $ ) attributable to (0.28 0.01 (7.35 (0.05 Stratasys Ltd. (4) Acquired (1) intangible assets 5,495 4,065 amortization expense Non-cash stock-based 804 524 compensation expense Restructuring and other related 67 191 costs Impairment charges 2,141 5,256

10,036 8,507



Acquired (2) intangible assets 2,205 2,162 amortization expense Non-cash stock-based 7,154 4,352 compensation expense Goodwill 386,154 impairment -

Impairment of long-lived assets 1,242 -

Restructuring and other related 210 34 costs Revaluation of investments 2,025 -

Contingent consideration 197 -

Legal and other expenses 2,199 530

15,232 393,232

23,739 403,268



(3) Corresponding tax ) (1,296 ) effect (376

Equity method related (4,771 ) amortization, 78 divestments and impairments $ 18,592 $ 402,050

Weighted average(4) number of ordinary shares 65,018 65,950 55,086 55,086 outstanding- DilutedNine Months Ended September 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)$

187,035

$

22,192

$

209,227

$

153,375

$

24,062

$

177,437

Operating income (loss) (1,2)$

(63,001

)

$

59,657

$

(3,344

)

$

(453,468

)

$

435,987

$

(17,481

)

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

(57,146

)

$

52,284

$

(4,862

)

$

(454,751

)

$

433,821

$

(20,930

)

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

(0.91

)

$

0.83

$

(0.08

)

$

(8.29

)

$

7.91

$

(0.38

)

(1)

Acquired intangible assets amortization expense 16,368

12,196

Non-cash stock-based compensation expense 2,226

1,424

Impairment charges2,141

5,256

Restructuring and other related costs 1,457

5,187

22,192

24,062

(2)

Acquired intangible assets amortization expense 6,598

6,430

Non-cash stock-based compensation expense 20,914

14,470

Goodwill impairment-

386,154

Impairment of long-lived assets2,664

-

Restructuring and other related costs 2,370

3,863

Revaluation of investments556

-

Contingent consideration590

-

Legal and other expenses 3,773

1,007

37,465

411,925

59,657

435,987

(3)

Corresponding tax effect(2,770

)

(2,396

)

Equity method related amortization, divestments and impairments(4,603

)

230

$

52,284

$

433,821

(4)

Weighted average number of ordinary shares outstanding- Diluted62,888

62,888

54,851

54,851

View source version on businesswire.com: https://www.businesswire.com/news/home/20211104005134/en/

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