Stratasys Reports Record Second Quarter Financial Results

Recent Business Highlights:

  • Completed the acquisitions of Solid Concepts and Harvest Technologies, which are intended to create a leading strategic platform to meet customers’ additive manufacturing needs through an expanded technology and business offering.
  • Recognized strong demand for high-end systems, driven by manufacturing applications, as well as ongoing strong demand for the Objet500 Connex3 Color Multi-material 3D Printer.
  • Began shipping the MakerBot Replicator Mini Compact Desktop 3D Printer and MakerBot Replicator Z18 Desktop 3D Printer; and announced multiple new software tools and content agreements for the MakerBot 3D Printing Ecosystem.
  • Expanded the MakerBot sales channel to include Home Depot and Tech Data, as well as Stratasys Japan in Asia and the creation of MakerBot Europe.
  • Observed strong growth for dental solutions, supported by the establishment of a Dental Advisory Board, as well as the introduction of two low-cost entry-level systems targeting dental applications.

“We expect our positive momentum to continue as we begin the second half of 2014,” continued Reis. “Reflecting our favorable outlook, we are increasing our projection for organic revenue growth in 2014 to at least 30%, and we are raising our financial guidance accordingly. In addition, we are adjusting our outlook to account for the recent acquisitions of Solid Concepts and Harvest Technologies, acquisitions that we now believe will be modestly accretive to non-GAAP earnings per share in 2014. Longer term, we believe these acquisitions will enable us to better serve our customers, ultimately providing synergies for our combined organization. We are excited about our many opportunities, and believe we are well positioned within our rapidly growing industry.”

Financial Guidance:

Stratasys updated the following information regarding the company’s projected revenue and net income for the fiscal year ending December 31, 2014:

  • Revenue guidance was increased to $750 – $770 million; versus previous guidance of $660 – $680 million.
  • Non-GAAP net income guidance was increased to $117 – $122 million, or $2.25 – $2.35 per diluted share; versus previous guidance of $113 – $119 million, or $2.15 – $2.25 per diluted share.
  • The acquisitions of Solid Concepts and Harvest Technologies are expected to be modestly accretive to Stratasys’ non-GAAP earnings per share in 2014.
  • The company expects organic revenue growth, excluding acquisitions, of at least 30% in 2014 over 2013; versus the previous guidance of at least 25% growth.

GAAP financial guidance is not provided in this release given the initial accounting for the business combination of Solid Concepts and Harvest Technologies is incomplete, thus making the supplemental information required to calculate GAAP earnings unavailable. GAAP financial guidance will be calculated and communicated upon the completion of that analysis.

Stratasys updated the following information regarding the company’s long-term operating model:

  • Annual organic revenue growth of at least 25%; versus the previous projection of at least 20%.
  • Non-GAAP operating income as a percent of sales of 18% to 23%, versus the previous projection of 20% to 25%.
  • Non-GAAP effective tax rate of 10% to 15%; versus the previous projection of 15% to 20%.
  • Non-GAAP net income as a percent of sales projection remains unchanged at 16% to 21%.

Stratasys provided the following additional information regarding the company’s performance and strategic plans for 2014:

  • Operating expenses are projected to expand materially in 2014 compared to 2013, driven by significant investments to support MakerBot product development and sales expansion; other investments in sales and marketing to drive future market adoption; and increased R&D investments to fund technology innovation and new product development.
  • Growth in operating expenses in 2014 will include significant investments to support the integration and alignment of the recent acquisitions of Solid Concepts and Harvest Technologies.
  • Capital expenditures are projected at $50 million to $70 million, which includes significant investments in manufacturing capacity in anticipation and support of future growth.

Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of this press release. The table provides itemized detail of the non-GAAP financial measures.

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