Non-GAAP Discussion
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 Objet transaction-related expenses, amortization expenses and expenses associated with stock-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
Additional information on the Emma Lavelle story can be accessed at http://www.stratasys.com/Resources/Case-Studies/Medical-FDM-Technology-Case-Studies/Nemours.aspx
Important Information for Investors and Shareholders
In connection with the proposed combination of Objet and Stratasys pursuant to an Agreement and Plan of Merger (the “Merger”), Objet has filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form F-4, which includes a proxy statement of Stratasys and a prospectus of Objet, as well as other relevant materials in connection with the proposed transaction. Stratasys concurrently filed the same proxy statement/prospectus with the SEC and has mailed it to Stratasys shareholders for purposes of soliciting proxies for voting in favor of the Merger at a special meeting of Stratasys stockholders called for the purpose of approving the Merger Agreement and the Merger. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT MATERIALS, BECAUSE THESE MATERIALS CONTAIN IMPORTANT INFORMATION ABOUT STRATASYS, OBJET AND THE PROPOSED TRANSACTION. The proxy statement/prospectus and other relevant materials and any other related documents filed with the SEC may be obtained free of charge on the SEC’s website at www.sec.gov or via the Stratasys website at www.stratasys.com. Stockholders may also obtain a copy of the SEC filings free of charge upon written request to Stratasys, Attention: Shane Glenn, Director of Investor Relations, 7665 Commerce Way, Eden Prairie, Minnesota 55344.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
About Stratasys
Stratasys Inc., Minneapolis, is a maker of additive manufacturing machines for prototyping and producing plastic parts. The company markets under the brands Mojo, uPrint and Dimension 3D Printers and Fortus Production 3D Printers. The company also operates RedEye On Demand, a digital-manufacturing service for prototypes and production parts. In 2011 Stratasys acquired 3D printer maker Solidscape Inc. According to Wohlers Report 2012, Stratasys had a 41.5 percent market share in 2011, and has been the unit market leader for the tenth consecutive year. Stratasys patented and owns the Fused Deposition Modeling (FDM®) process. The process creates functional prototypes and manufactured goods directly from any 3D CAD program, using high-performance industrial thermoplastics. The company holds 380 granted or pending additive manufacturing patents globally. Stratasys products are used in the aerospace, defense, automotive, medical, business and industrial equipment, education, architecture, and consumer-product industries. Online at: www.Stratasys.com
Stratasys, Fortus, Dimension, and uPrint are registered trademarks, and Mojo is a trademark, of Stratasys Inc.
| STRATASYS, INC. AND SUBSIDIARIES | |||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||
| Net sales | |||||||||||||||||||||
| Products | $ | 41,317,863 | $ | 32,512,544 | $ | 120,301,057 | $ | 91,273,133 | |||||||||||||
| Services | 8,405,612 | 7,440,470 | 23,791,947 | 21,048,816 | |||||||||||||||||
| 49,723,475 | 39,953,014 | 144,093,004 | 112,321,949 | ||||||||||||||||||
| Cost of sales | |||||||||||||||||||||
| Products | 17,563,569 | 15,284,820 | 54,692,340 | 43,752,872 | |||||||||||||||||
| Services | 4,203,443 | 3,114,248 | 12,328,692 | 9,029,273 | |||||||||||||||||
| 21,767,012 | 18,399,068 | 67,021,032 | 52,782,145 | ||||||||||||||||||
| Gross profit | 27,956,463 | 21,553,946 | 77,071,972 | 59,539,804 | |||||||||||||||||
| Operating expenses | |||||||||||||||||||||
| Research and development | 4,066,846 | 3,613,668 | 12,576,094 | 10,687,578 | |||||||||||||||||
| Selling, general and administrative | 14,780,526 | 10,083,451 | 42,365,253 | 28,738,325 | |||||||||||||||||
| 18,847,372 | 13,697,119 | 54,941,347 | 39,425,903 | ||||||||||||||||||
| Operating income | 9,109,091 | 7,856,827 | 22,130,625 | 20,113,901 | |||||||||||||||||
| Other income (expense) | |||||||||||||||||||||
| Interest income, net | 229,003 | 276,089 | 672,052 | 698,469 | |||||||||||||||||
| Foreign currency transaction losses, net | (72,586 | ) | (217,857 | ) | (265,141 | ) | (429,840 | ) | |||||||||||||
| Other, net | 7,021 | 755,030 | 109,922 | 2,264,307 | |||||||||||||||||
| 163,438 | 813,262 | 516,833 | 2,532,936 | ||||||||||||||||||
| Income before income taxes | 9,272,529 | 8,670,089 | 22,647,458 | 22,646,837 | |||||||||||||||||
| Income tax expense | 4,089,393 | 2,812,920 | 9,924,615 | 7,806,524 | |||||||||||||||||
| Net income | $ | 5,183,136 | $ | 5,857,169 | $ | 12,722,843 | $ | 14,840,313 | |||||||||||||
| Earnings per common share | |||||||||||||||||||||
| Basic | $ | 0.24 | $ | 0.28 | $ | 0.60 | $ | 0.70 | |||||||||||||
| Diluted | $ | 0.24 | $ | 0.27 | $ | 0.58 | $ | 0.68 | |||||||||||||
|
Weighted average number of common shares outstanding |
|||||||||||||||||||||
| Basic | 21,467,606 | 21,165,401 | 21,348,967 | 21,107,474 | |||||||||||||||||
| Diluted | 22,008,471 | 21,542,674 | 21,856,719 | 21,669,848 | |||||||||||||||||
| Note: Certain reclassifications have been made to prior period balances to conform to current period presentation. | |||||||||||||||||||||
| STRATASYS, INC. AND SUBSIDIARIES | |||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||
| September 30, | December 31, | ||||||||||
| 2012 | 2011 | ||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 27,899,789 | $ | 20,092,200 | |||||||
| Short-term investments - held to maturity | 23,900,469 | 14,602,408 | |||||||||
|
Accounts receivable, less allowance for doubtful accounts of $773,000 at September 30, 2012 and $1,089,000 at December 31, 2011 |
35,865,540 | 26,230,289 | |||||||||
| Inventories | 32,079,430 | 22,771,460 | |||||||||
|
Net investment in sales-type leases, less allowance for doubtful accounts of $302,000 at September 30, 2012 and $230,000 at December 31, 2011 |
4,249,410 | 3,295,039 | |||||||||
| Prepaid expenses and other current assets | 2,193,015 | 3,259,012 | |||||||||
| Deferred income taxes | 2,973,000 | 2,973,000 | |||||||||
| Total current assets | 129,160,653 | 93,223,408 | |||||||||
| Property and equipment, net | 44,887,880 | 39,669,433 | |||||||||
| Other assets | |||||||||||
| Goodwill | 25,388,731 | 25,393,967 | |||||||||
| Other Intangible assets, net | 24,150,718 | 25,295,032 | |||||||||
| Net investment in sales-type leases | 7,249,832 | 5,494,753 | |||||||||
| Long-term investments - held to maturity | 13,915,821 | 32,581,472 | |||||||||
| Other non-current assets | 145,652 | 112,300 | |||||||||
| Total other assets | 70,850,754 | 88,877,524 | |||||||||
| Total assets | $ | 244,899,287 | $ | 221,770,365 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and other current liabilities | $ | 21,628,011 | $ | 19,368,197 | |||||||
| Unearned revenues | 9,968,263 | 9,768,610 | |||||||||
| Total current liabilities | 31,596,274 | 29,136,807 | |||||||||
| Non-current liabilities | |||||||||||
| Deferred tax liabilities | 6,760,000 | 6,760,000 | |||||||||
| Unearned revenues - long-term | 2,662,953 | 2,562,195 | |||||||||
| Total liabilities | 41,019,227 | 38,459,002 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' equity | |||||||||||
|
Common stock, $.01 par value, authorized 30,000,000 shares; 27,501,216 and 26,933,301 issued at September 30, 2012 and December 31, 2011, respectively |
275,012 | 269,333 | |||||||||
| Additional paid-in capital | 125,951,072 | 118,134,006 | |||||||||
| Retained earnings | 116,734,701 | 104,011,848 | |||||||||
| Accumulated other comprehensive loss | (76,300 | ) | (99,399 | ) | |||||||
|
Treasury stock at cost, 5,687,631 shares at September 30, 2012 and December 31, 2011 |
(39,004,425 | ) | (39,004,425 | ) | |||||||
| Total stockholders' equity | 203,880,060 | 183,311,363 | |||||||||
| Total liabilities and stockholders' equity | $ | 244,899,287 | $ | 221,770,365 | |||||||
| Note: Certain reclassifications have been made to prior period balances to conform to current period presentation. | |||||||||||
| STRATASYS, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS | |||||||||||||||||||||||||||||
| Three Months Ended September 30, 2012 | Three Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
| As Reported | Non-GAAP | As Reported | Non-GAAP | ||||||||||||||||||||||||||
| (unaudited) | Adjustments | (unaudited) | (unaudited) | Adjustments | (unaudited) | ||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||
| Products | $ | 41,317,863 | $ | - | $ | 41,317,863 | $ | 32,512,544 | $ | - | $ | 32,512,544 | |||||||||||||||||
| Services | 8,405,612 | - | 8,405,612 | 7,440,470 | - | 7,440,470 | |||||||||||||||||||||||
| 49,723,475 | - | 49,723,475 | 39,953,014 | - | 39,953,014 | ||||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||
| Products | 17,563,569 | (507,012 | ) | (a) | 17,056,557 | 15,284,820 | (436,012 | ) | (d) | 14,848,808 | |||||||||||||||||||
| Services | 4,203,443 | - | 4,203,443 | 3,114,248 | - | 3,114,248 | |||||||||||||||||||||||
| 21,767,012 | (507,012 | ) | 21,260,000 | 18,399,068 | (436,012 | ) | 17,963,056 | ||||||||||||||||||||||
| Gross profit | 27,956,463 | 507,012 | 28,463,475 | 21,553,946 | 436,012 | 21,989,958 | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||
| Research and development | 4,066,846 | - | 4,066,846 | 3,613,668 | - | 3,613,668 | |||||||||||||||||||||||
| Selling, general and administrative | 14,780,526 | (3,410,994 | ) | (b) | 11,369,532 | 10,083,451 | (574,162 | ) | (e) | 9,509,289 | |||||||||||||||||||
| 18,847,372 | (3,410,994 | ) | 15,436,378 | 13,697,119 | (574,162 | ) | 13,122,957 | ||||||||||||||||||||||
| Operating income | 9,109,091 | 3,918,006 | 13,027,097 | 7,856,827 | 1,010,174 | 8,867,001 | |||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||||||||
| Interest income, net | 229,003 | - | 229,003 | 276,089 | - | 276,089 | |||||||||||||||||||||||
| Foreign currency transaction losses, net | (72,586 | ) | - | (72,586 | ) | (217,857 | ) | - | (217,857 | ) | |||||||||||||||||||
| Other, net | 7,021 | - | 7,021 | 755,030 | (626,188 | ) | (f) | 128,842 | |||||||||||||||||||||
| 163,438 | - | 163,438 | 813,262 | (626,188 | ) | 187,074 | |||||||||||||||||||||||
| Income before income taxes | 9,272,529 | 3,918,006 | 13,190,535 | 8,670,089 | 383,986 | 9,054,075 | |||||||||||||||||||||||
| Income tax expense | 4,089,393 | 376,723 | (c) | 4,466,116 | 2,812,920 | 89,362 | (c) | 2,902,282 | |||||||||||||||||||||
| Net income | $ | 5,183,136 | $ | 3,541,283 | $ | 8,724,419 | $ | 5,857,169 | $ | 294,624 | $ | 6,151,793 | |||||||||||||||||
| Earnings per common share | |||||||||||||||||||||||||||||
| Basic | $ | 0.24 | $ | 0.16 | $ | 0.41 | $ | 0.28 | $ | 0.01 | $ | 0.29 | |||||||||||||||||
| Diluted | $ | 0.24 | $ | 0.16 | $ | 0.40 | $ | 0.27 | $ | 0.01 | $ | 0.29 | |||||||||||||||||
|
Weighted average number of common shares outstanding |
|||||||||||||||||||||||||||||
| Basic | 21,467,606 | 21,467,606 | 21,165,401 | 21,165,401 | |||||||||||||||||||||||||
| Diluted | 22,008,471 | 22,008,471 | 21,542,674 | 21,542,674 | |||||||||||||||||||||||||
