Non-GAAP Discussion Disclosure
The information discussed within this release includes financial results and projections that are in accordance with accounting principles generally accepted in the United States (GAAP). In addition, certain non-GAAP financial measures have been provided that exclude certain charges, expenses and income. The non-GAAP measures should be read in conjunction with the corresponding GAAP measures and should be considered in addition to, and not as an alternative or substitute for, the measures prepared in accordance with GAAP. The non-GAAP financial measures are provided in an effort to provide information that investors may deem relevant to evaluate results from the Company’s core business operations and to compare the Company’s performance with prior periods. The non-GAAP financial measures primarily identify and exclude certain discrete items, such as transaction-related expenses, amortization expenses and expenses associated with share-based compensation required under ASC 718. The Company uses these non-GAAP financial measures for evaluating comparable financial performance against prior periods.
This release is available on the Stratasys web site at www.stratasys.com
Stratasys Ltd. (Nasdaq: SSYS) is the corporate entity formed in 2012 by the merger of 3D printing companies Stratasys Inc. and Objet Ltd., based in Minneapolis, Minn. and Rehovot, Israel. The Company manufactures 3D printers and materials for prototyping and production. Its patented FDM® and PolyJet® processes produce prototypes and manufactured goods directly from 3D CAD files or other 3D content. Systems include affordable desktop 3D printers for idea development, a range of systems for prototyping, and large production systems for direct digital manufacturing. Since June 2012, the Company’s range of over 130 3D printing materials is the widest in the industry and includes in excess of 120 proprietary inkjet-based photopolymer materials and 10 proprietary FDM-based thermoplastic materials. Stratasys also manufactures Solidscape 3D Printers and operates the RedEye On Demand digital-manufacturing service. The Company has more than 1100 employees, holds more than 500 granted or pending additive manufacturing patents globally, and has received more than 20 awards for its technology and leadership. Online at: www.stratasys.com or http://blog.stratasys.com / www.objet.com or http://blog.objet.com.
| Stratasys Ltd. | ||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||
| (in thousands, except per share data) | ||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, 2011 | |||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| Net sales | ||||||||||||||
| Products | $ | 59,461 | $ | 36,203 | $ | 179,762 | $ | 127,476 | ||||||
| Services | 11,690 | 7,369 | 35,482 | 28,418 | ||||||||||
| 71,151 | 43,572 | 215,244 | 155,894 | |||||||||||
| Cost of sales | ||||||||||||||
| Products | 32,138 | 17,792 | 86,742 | 61,545 | ||||||||||
| Services | 6,175 | 2,916 | 18,591 | 11,945 | ||||||||||
| 38,313 | 20,708 | 105,333 | 73,490 | |||||||||||
| Gross profit | 32,838 | 22,864 | 109,911 | 82,404 | ||||||||||
| Operating expenses | ||||||||||||||
| Research and development, net | 7,083 | 3,672 | 19,659 | 14,360 | ||||||||||
| Selling, general and administrative | 30,764 | 10,300 | 73,130 | 39,038 | ||||||||||
| 37,847 | 13,972 | 92,789 | 53,398 | |||||||||||
| Operating income (loss) | (5,009 | ) | 8,892 | 17,122 | 29,006 | |||||||||
| Other income (expense) | 871 | (187 | ) | 1,388 | 2,346 | |||||||||
| Income (loss) before income taxes | (4,138 | ) | 8,705 | 18,510 | 31,352 | |||||||||
| Income taxes (benefit) | (239 | ) | 2,919 | 9,687 | 10,726 | |||||||||
| Net income (loss) | $ | (3,899 | ) | $ | 5,786 | $ | 8,823 | $ | 20,626 | |||||
| Net income attributable to non-controlling interest | $ | 332 | $ | - | $ | 332 | $ | - | ||||||
| Net income (loss) attributable to Stratasys Ltd. | $ | (4,231 | ) | $ | 5,786 | $ | 8,491 | $ | 20,626 | |||||
| Net income (loss) per ordinary share attributable to Stratasys Ltd. | ||||||||||||||
| Basic | $ | (0.16 | ) | $ | 0.27 | $ | 0.37 | $ | 0.98 | |||||
| Diluted | (0.16 | ) | 0.27 | 0.36 | 0.95 | |||||||||
| Weighted average ordinary shares outstanding | ||||||||||||||
| Basic | 27,261 | 21,207 | 22,812 | 21,133 | ||||||||||
| Diluted | 27,261 | 21,588 | 23,776 | 21,653 | ||||||||||
| Stratasys Ltd. | |||||||||
| Consolidated Balance Sheets | |||||||||
| (in thousands) | |||||||||
| December 31, | 2012 | 2011 | |||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 133,826 | $ | 20,092 | |||||
| Short-term bank deposits | 20,063 | - | |||||||
| Restricted deposits | 929 | - | |||||||
| Short-term investments | - | 14,602 | |||||||
| Accounts receivable: | |||||||||
|
Trade, less allowance for doubtful accounts of $654 at December 31, 2012 and $1,089 at December 31, 2011 |
64,678 | 24,642 | |||||||
| Other | 22,934 | 1,589 | |||||||
| Inventories | 67,995 | 22,771 | |||||||
|
Net investment in sales-type leases, less allowance for doubtful accounts of $301 at December 31, 2012 and $230 at December 31, 2011 |
5,134 | 3,295 | |||||||
| Prepaid expenses | 2,751 | 3,259 | |||||||
| Deferred income taxes | 4,968 | 2,973 | |||||||
| Total current assets | 323,278 | 93,223 | |||||||
| Property, plant and equipment, net | 62,070 | 39,669 | |||||||
| Other assets | |||||||||
| Goodwill | 822,475 | 25,394 | |||||||
| Other intangible assets, net | 510,372 | 25,295 | |||||||
| Net investment in sales-type leases | 7,872 | 5,495 | |||||||
| Long-term investments | 1,634 | 32,581 | |||||||
|
Amounts funded in respect of employees rights upon retirement |
2,628 | - | |||||||
| Other non-current assets | 1,184 | 113 | |||||||
| Total other assets | 1,346,165 | 88,878 | |||||||
| Total assets | $ | 1,731,513 | $ | 221,770 | |||||
| LIABILITIES AND EQUITY | |||||||||
| Current liabilities | |||||||||
| Accounts payable | $ | 35,235 | $ | 8,541 | |||||
| Other current liabilities | 40,179 | 10,827 | |||||||
| Deferred tax liabilities | 945 | - | |||||||
| Unearned revenues | 18,068 | 9,769 | |||||||
| Total current liabilities | 94,427 | 29,137 | |||||||
| Non-current liabilities | |||||||||
| Employee rights upon retirement | 4,188 | - | |||||||
| Deferred tax liabilities | 54,693 | 6,760 | |||||||
| Unearned revenues - long-term | 3,181 | 2,562 | |||||||
| Other non-current liabilities | 2,868 | - | |||||||
| Total liabilities | 159,357 | 38,459 | |||||||
| Commitments and contingencies | |||||||||
| Equity | |||||||||
|
Ordinary shares, NIS 0.01 nominal value, authorized 60,000 shares; 38,372 and 21,246 shares issued and outstanding at December 31, 2012 and 2011, respectively |
101 | 55 | |||||||
| Additional paid-in capital | 1,459,294 | 79,343 | |||||||
| Retained earnings | 112,503 | 104,012 | |||||||
| Accumulated other comprehensive loss | (238 | ) | (99 | ) | |||||
| Equity attributable to Stratasys Ltd. | 1,571,660 | 183,311 | |||||||
| Non-controlling interest | 496 | - | |||||||
| Total equity | 1,572,156 | 183,311 | |||||||
| Total liabilities and equity | $ | 1,731,513 | $ | 221,770 | |||||
| Note: Certain reclassifications have been made to prior period balances to conform to current period presentation. | |||||||||
| Stratasys Ltd. | |||||||||||||||||||||||
| Reconciliation of Pro Forma GAAP to Pro Forma Non-GAAP Results of Operations | |||||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| Three Months Ended December 31, 2012 | Three Months Ended December 31, 2011 | ||||||||||||||||||||||
| Pro Forma | Pro Forma | Pro Forma | Pro Forma | ||||||||||||||||||||
| GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||
| (unaudited) | Adjustments* | (unaudited) | (unaudited) | Adjustments* | (unaudited) | ||||||||||||||||||
| Net sales | |||||||||||||||||||||||
| Products | $ | 81,651 | $ | - | $ | 81,651 | $ | 66,512 | $ | - | $ | 66,512 | |||||||||||
| Services | 14,711 | - | 14,711 | 11,778 | - | 11,778 | |||||||||||||||||
| 96,362 | - | 96,362 | 78,290 | - | 78,290 | ||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Products | 41,641 | (10,936 | ) | 30,705 | 38,039 | (10,519 | ) | 27,520 | |||||||||||||||
| Services | 10,329 | (397 | ) | 9,932 | 6,656 | (438 | ) | 6,218 | |||||||||||||||
| 51,970 | (11,333 | ) | 40,637 | 44,695 | (10,957 | ) | 33,738 | ||||||||||||||||
| Gross profit | 44,392 | 11,333 | 55,725 | 33,595 | 10,957 | 44,552 | |||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Research and development, net | 10,210 | (988 | ) | 9,222 | 8,241 | (879 | ) | 7,362 | |||||||||||||||
| Selling, general and administrative | 38,200 | (10,059 | ) | 28,141 | 29,166 | (7,399 | ) | 21,767 | |||||||||||||||
| 48,410 | (11,047 | ) | 37,363 | 37,407 | (8,278 | ) | 29,129 | ||||||||||||||||
| Operating income (loss) | (4,018 | ) | 22,380 | 18,362 | (3,812 | ) | 19,235 | 15,423 | |||||||||||||||
| Other income (expense) | 1,408 | - | 1,408 | (77 | ) | - | (77 | ) | |||||||||||||||
| Income (loss) before income taxes | (2,610 | ) | 22,380 | 19,770 | (3,889 | ) | 19,235 | 15,346 | |||||||||||||||
| Income taxes | 747 | 2,606 | 3,353 | 2,408 | 1,285 | 3,693 | |||||||||||||||||
| Net income (loss) | $ | (3,357 | ) | $ | 19,774 | $ | 16,417 | $ | (6,297 | ) | $ | 17,950 | $ | 11,653 | |||||||||
| Net income attributable to non-controlling interest | $ | 158 | $ | - | $ | 158 | $ | - | $ | - | $ | - | |||||||||||
| Net income (loss) attributable to Stratasys Ltd. | $ | (3,515 | ) | $ | 19,774 | $ | 16,259 | $ | (6,297 | ) | $ | 17,950 | $ | 11,653 | |||||||||
| Net income (loss) per ordinary share attributable to Stratasys Ltd. | |||||||||||||||||||||||
| Basic | $ | (0.09 | ) | $ | 0.43 | $ | (0.17 | ) | $ | 0.32 | |||||||||||||
| Diluted | (0.09 | ) | 0.40 | (0.17 | ) | 0.30 | |||||||||||||||||
| Weighted average ordinary shares outstanding | |||||||||||||||||||||||
| Basic | 37,557 | 37,557 | 36,652 | 36,652 | |||||||||||||||||||
| Diluted | 37,557 | 40,327 | 36,652 | 39,480 | |||||||||||||||||||
|
The Company considers these non-GAAP measures to be indicative of
its core operating results and facilitates a comparison of operating
results across reporting periods. The Company uses these non-GAAP
measures when evaluating its financial results as well as for
internal planning and forecasting purposes, however these measures
should not be viewed as a substitute for the Company’s GAAP results.
* Refer to the "Reconciliation of Non-GAAP Adjustments" herein for further information regarding adjustments. |
|||||||||||||||||||||||
| Stratasys Ltd. | |||||||||||||||||||||||
| Reconciliation of Pro Forma GAAP to Pro Forma Non-GAAP Results of Operations | |||||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| Twelve Months Ended December 31, 2012 | Twelve Months Ended December 31, 2011 | ||||||||||||||||||||||
| Pro Forma | Pro Forma | ||||||||||||||||||||||
| Pro Forma | Non-GAAP | Pro Forma | Non-GAAP | ||||||||||||||||||||
| (unaudited) | Adjustments* | (unaudited) | (unaudited) | Adjustments* | (unaudited) | ||||||||||||||||||
| Net sales | |||||||||||||||||||||||
| Products | $ | 306,043 | $ | - | $ | 306,043 | $ | 233,235 | $ | - | $ | 233,235 | |||||||||||
| Services | 53,011 | - | 53,011 | 43,755 | - | 43,755 | |||||||||||||||||
| 359,054 | - | 359,054 | 276,990 | - | 276,990 | ||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Products | 158,828 | (42,964 | ) | 115,864 | 137,556 | (41,826 | ) | 95,730 | |||||||||||||||
| Services | 36,303 | (1,475 | ) | 34,828 | 26,395 | (1,504 | ) | 24,891 | |||||||||||||||
| 195,131 | (44,439 | ) | 150,692 | 163,951 | (43,330 | ) | 120,621 | ||||||||||||||||
| Gross profit | 163,923 | 44,439 | 208,362 | 113,039 | 43,330 | 156,369 | |||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Research and development, net | 36,923 | (3,597 | ) | 33,326 | 31,934 | (3,005 | ) | 28,929 | |||||||||||||||
| Selling, general and administrative | 141,232 | (40,354 | ) | 100,878 | 104,928 | (28,287 | ) | 76,641 | |||||||||||||||
| 178,155 | (43,951 | ) | 134,204 | 136,862 | (31,292 | ) | 105,570 | ||||||||||||||||
| Operating income (loss) | (14,232 | ) | 88,390 | 74,158 | (23,823 | ) | 74,622 | 50,799 | |||||||||||||||
| Other income (expense) | 2,124 | - | 2,124 | 1,118 | (1,831 | ) | (713 | ) | |||||||||||||||
| Income (loss) before income taxes | (12,108 | ) | 88,390 | 76,282 | (22,705 | ) | 72,791 | 50,086 | |||||||||||||||
| Income taxes | 9,407 | 7,225 | 16,632 | 8,148 | 4,768 | 12,916 | |||||||||||||||||
| Net income (loss) | $ | (21,515 | ) | $ | 81,165 | $ | 59,650 | $ | (30,853 | ) | $ | 68,023 | $ | 37,170 | |||||||||
| Net income attributable to non-controlling interest | $ | 62 | $ | - | $ | 62 | $ | - | $ | - | $ | - | |||||||||||
| Net income (loss) attributable to Stratasys Ltd. | $ | (21,577 | ) | $ | 81,165 | $ | 59,588 | $ | (30,853 | ) | $ | 68,023 | $ | 37,170 | |||||||||
| Net income (loss) per ordinary share attributable to Stratasys Ltd. | |||||||||||||||||||||||
| Basic | $ | (0.58 | ) | $ | 1.61 | $ | (0.84 | ) | $ | 1.02 | |||||||||||||
| Diluted | (0.58 | ) | 1.49 | (0.84 | ) | 0.94 | |||||||||||||||||
| Weighted average ordinary shares outstanding | |||||||||||||||||||||||
| Basic | 36,987 | 36,987 | 36,577 | 36,577 | |||||||||||||||||||
| Diluted | 36,987 | 39,970 | 36,577 | 39,656 | |||||||||||||||||||
|
The Company considers these non-GAAP measures to be indicative of
its core operating results and facilitates a comparison of operating
results across reporting periods. The Company uses these non-GAAP
measures when evaluating its financial results as well as for
internal planning and forecasting purposes, however these measures
should not be viewed as a substitute for the Company’s GAAP results.
* Refer to the "Reconciliation of Non-GAAP Adjustments" herein for further information regarding adjustments. |
|||||||||||||||||||||||
| Stratasys Ltd. | ||||||||||||||||
| Reconciliation of Non-GAAP Adjustments | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Cost of sales, products | ||||||||||||||||
| Objet intangible assets amortization expense | (9,824 | ) | (9,824 | ) | (39,294 | ) | (39,294 | ) | ||||||||
| Solidscape intangible assets amortization expense | (436 | ) | (436 | ) | (1,744 | ) | (1,163 | ) | ||||||||
| Non-cash stock-based compensation expense | (361 | ) | (259 | ) | (1,190 | ) | (808 | ) | ||||||||
| Merger related expense | (194 | ) | - | (265 | ) | - | ||||||||||
|
Expense related to the revaluation of Solidscape, Inc. and Fasotech Co., Ltd inventory at acquisition |
(121 | ) | - | (471 | ) | (561 | ) | |||||||||
| (10,936 | ) | (10,519 | ) | (42,964 | ) | (41,826 | ) | |||||||||
| Cost of sales, services | ||||||||||||||||
| Non-cash stock-based compensation expense | (397 | ) | (438 | ) | (1,475 | ) | (1,504 | ) | ||||||||
| Research and development, net | ||||||||||||||||
| Non-cash stock-based compensation expense | (988 | ) | (879 | ) | (3,597 | ) | (3,005 | ) | ||||||||
| Selling, general and administrative | ||||||||||||||||
| Objet intangible assets amortization expense | (2,242 | ) | (2,242 | ) | (8,967 | ) | (8,967 | ) | ||||||||
| Solidscape intangible assets amortization expense | (133 | ) | (133 | ) | (533 | ) | (356 | ) | ||||||||
| Non-cash stock-based compensation expense | (5,187 | ) | (5,024 | ) | (21,592 | ) | (18,349 | ) | ||||||||
| Solidscape acquisition expense | - | - | - | (615 | ) | |||||||||||
| Merger related expense | (2,497 | ) | - | (9,262 | ) | - | ||||||||||
| (10,059 | ) | (7,399 | ) | (40,354 | ) | (28,287 | ) | |||||||||
| Other income | ||||||||||||||||
| Sale of an auction rate security | - | - | - | (626 | ) | |||||||||||
| Sale of an equity investment | - | - | - | (1,205 | ) | |||||||||||
| - | - | - | (1,831 | ) | ||||||||||||
| Income taxes | ||||||||||||||||
| Tax expense related to non-GAAP adjustments | 2,606 | 1,285 | 7,225 | 4,768 | ||||||||||||
| Net income | $ | 19,774 | $ | 17,950 | $ | 81,165 | $ | 68,023 | ||||||||
| Stratasys Ltd. | ||||
| Reconciliation of GAAP to Non-GAAP Forward Looking Guidance | ||||
| Fiscal Year 2013 | Earnings (loss) Per Diluted Share Range | |||
| U.S. GAAP measure | ($0.41) to ($0.16) | |||
|
Adjustments |
||||
| Stock-based compensation expense | $0.49 to $0.55 | |||
| Intangible assets amortization expense | $1.45 | |||
| Merger related expense | $0.17 to $0.21 | |||
| Non-GAAP estimate | $1.80 to $1.95 | |||
