Stratasys Releases Third Quarter 2022 Financial Results

Use of Non-GAAP Financial Measures

The non-GAAP data included herein, which exclude 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 currency-related fluctuations, 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 factors eliminated in 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,

2022

2021

 
 
ASSETS
 
Current assets
Cash and cash equivalents

$

150,672

 

$

243,179

 

Short-term deposits

 

198,056

 

 

259,000

 

Accounts receivable, net of allowance for credit losses of $0.7 million and $0.5 million as of September 30, 2022 and December 31, 2021

 

140,258

 

 

129,382

 

Inventories

 

170,434

 

 

129,147

 

Prepaid expenses

 

8,146

 

 

6,871

 

Other current assets

 

26,838

 

 

33,123

 

 
Total current assets

 

694,404

 

 

800,702

 

 
Non-current assets
Property, plant and equipment, net

 

194,214

 

 

203,295

 

Goodwill

 

64,844

 

 

65,144

 

Other intangible assets, net

 

129,682

 

 

152,244

 

Operating lease right-of-use assets

 

19,010

 

 

14,651

 

Long-term investments

 

143,928

 

 

28,667

 

Other non-current assets

 

21,309

 

 

12,519

 

 
Total non-current assets

 

572,987

 

 

476,520

 

 
Total assets

$

1,267,391

 

$

1,277,222

 

 
LIABILITIES AND EQUITY
 
Current liabilities
Accounts payable

$

67,957

 

$

51,976

 

Accrued expenses and other current liabilities

 

55,152

 

 

55,358

 

Accrued compensation and related benefits

 

34,862

 

 

44,684

 

Deferred revenues - short term

 

48,735

 

 

51,174

 

Operating lease liabilities - short term

 

6,977

 

 

7,276

 

 
Total current liabilities

 

213,683

 

 

210,468

 

 
Non-current liabilities
Deferred revenues - long term

 

23,581

 

 

21,133

 

Deferred income taxes - long term

 

4,084

 

 

7,341

 

Operating lease liabilities - long term

 

11,738

 

 

7,693

 

Contingent consideration - long term

 

38,551

 

 

53,478

 

Other non-current liabilities

 

27,028

 

 

21,095

 

 
Total non-current liabilities

 

104,982

 

 

110,740

 

 
Total liabilities

 

318,665

 

 

321,208

 

 
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands
shares; 66,784 thousands shares and 65,677 thousands shares issued
and outstanding at September 30, 2022 and December 31, 2021, respectively

 

186

 

 

182

 

Additional paid-in capital

 

3,037,225

 

 

3,012,481

 

Accumulated other comprehensive loss

 

(14,223

)

 

(8,771

)

Accumulated deficit

 

(2,074,462

)

 

(2,047,878

)

 

948,726

 

 

956,014

 

 
Total liabilities and equity

$

1,267,391

 

$

1,277,222

 

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

2022

2021

2022

2021

(unaudited) (unaudited) (unaudited) (unaudited)
Net sales
Products

$

112,133

 

$

108,888

 

$

340,927

 

$

299,517

 

Services

 

50,059

 

 

50,121

 

 

151,297

 

 

140,686

 

 

162,192

 

 

159,009

 

 

492,224

 

 

440,203

 

 
Cost of sales
Products

 

55,916

 

 

54,820

 

 

176,421

 

 

151,471

 

Services

 

35,527

 

 

36,001

 

 

107,984

 

 

101,697

 

 

91,443

 

 

90,821

 

 

284,405

 

 

253,168

 

 
Gross profit

 

70,749

 

 

68,188

 

 

207,819

 

 

187,035

 

 
Operating expenses
Research and development, net

 

23,145

 

 

22,645

 

 

71,489

 

 

65,683

 

Selling, general and administrative

 

63,230

 

 

67,462

 

 

195,085

 

 

184,353

 

 

86,375

 

 

90,107

 

 

266,574

 

 

250,036

 

 
Operating loss

 

(15,626

)

 

(21,919

)

 

(58,755

)

 

(63,001

)

 
Gain from deconsolidation of subsidiary

 

39,136

 

 

-

 

 

39,136

 

 

-

 

Financial income (expense), net

 

452

 

 

(634

)

 

(2,080

)

 

(1,383

)

 
Income (loss) before income taxes

 

23,962

 

 

(22,553

)

 

(21,699

)

 

(64,384

)

 
Income tax expense (benefit)

 

3,298

 

 

699

 

 

2,796

 

 

6,009

 

 
Share in profit (losses) of associated companies

 

(1,915

)

 

3,778

 

 

(2,089

)

 

1,229

 

 
Net income (loss)

$

18,749

 

$

(18,076

)

$

(26,584

)

$

(57,146

)

 
Net income (loss) per share
Basic

$

0.28

 

$

(0.28

)

$

(0.40

)

$

(0.91

)

Diluted

$

0.28

 

$

(0.28

)

$

(0.40

)

$

(0.91

)

 
Weighted average ordinary shares outstanding
Basic

 

66,772

 

 

65,018

 

 

66,356

 

 

62,888

 

Diluted

 

67,038

 

 

65,018

 

 

66,356

 

 

62,888

 

 
  Three Months Ended June 30,
 

2022

Non-GAAP

2022

2021

Non-GAAP

2021

  GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
  U.S. dollars and shares in thousands (except per share amounts)
  Gross profit (1)

$

70,749

 

$

7,990

 

$

78,739

$

68,188

 

$

8,507

 

$

76,695

  Operating income (loss) (1,2)

 

(15,626

)

 

20,149

 

 

4,523

 

(21,919

)

 

23,739

 

 

1,820

  Net income (loss) (1,2,3)

 

18,749

 

 

(15,423

)

 

3,326

 

(18,076

)

 

18,592

 

 

516

  Net income (loss) per diluted share (4)

$

0.28

 

$

(0.23

)

$

0.05

$

(0.28

)

$

0.28

 

$

0.01

   
   
   

(1)

  Acquired intangible assets amortization expense

 

6,941

 

 

5,495

 

  Non-cash stock-based compensation expense

 

1,061

 

 

804

 

  Restructuring and other related costs

 

(12

)

 

67

 

  Impairment charges

 

-

 

 

2,141

 

 

 

7,990

 

 

8,507

 

   

(2)

  Acquired intangible assets amortization expense

 

2,138

 

 

2,205

 

  Non-cash stock-based compensation expense

 

6,330

 

 

7,154

 

  Impairment of long-lived assets

 

-

 

 

1,242

 

  Restructuring and other related costs

 

1,309

 

 

210

 

  Revaluation of investments

 

901

 

 

2,025

 

  Contingent consideration

 

394

 

 

197

 

  Other expenses

 

1,087

 

 

2,199

 

 

 

12,158

 

 

15,232

 

 

 

20,149

 

 

23,739

 

   

(3)

  Gain from deconsolidation of subsidiary

 

(39,136

)

 

-

 

  Corresponding tax effect and other expenses

 

3,564

 

 

(5,147

)

 

$

(15,423

)

$

18,592

 

   

(4)

  Weighted average number of ordinary
shares outstanding - Diluted

 

67,038

 

 

67,038

 

65,018

 

 

65,950

   
  Six Months Ended June 30,
 

2022

Non-GAAP

2022

2021

Non-GAAP

2021

  GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
  U.S. dollars and shares in thousands (except per share amounts)
  Gross profit (1)

$

207,819

 

$

27,593

 

$

235,412

$

187,035

 

$

22,192

 

$

209,227

 

  Operating income (loss) (1,2)

 

(58,755

)

 

67,235

 

 

8,480

 

(63,001

)

 

59,657

 

 

(3,344

)

  Net income (loss) (1,2,3)

 

(26,584

)

 

32,295

 

 

5,711

 

(57,146

)

 

52,284

 

 

(4,862

)

  Net income (loss) per diluted share (4)

$

(0.40

)

$

0.49

 

$

0.09

$

(0.91

)

$

0.83

 

$

(0.08

)

   
   
   

(1)

  Acquired intangible assets amortization expense

 

20,861

 

 

16,368

 

  Non-cash stock-based compensation expense

 

3,041

 

 

2,226

 

  Restructuring and other related costs

 

(174

)

 

1,457

 

  Impairment charges

 

3,865

 

 

2,141

 

 

 

27,593

 

 

22,192

 

   

(2)

  Acquired intangible assets amortization expense

 

6,581

 

 

6,598

 

  Non-cash stock-based compensation expense

 

21,714

 

 

20,914

 

  Impairment of long-lived assets

 

-

 

 

2,664

 

  Restructuring and other related costs

 

1,864

 

 

2,370

 

  Revaluation of investments

 

3,217

 

 

556

 

  Contingent consideration

 

1,197

 

 

590

 

  Other expenses

 

5,069

 

 

3,773

 

 

 

39,642

 

 

37,465

 

 

 

67,235

 

 

59,657

 

   

(3)

  Gain from deconsolidation of subsidiary

 

(39,136

)

 

-

 

  Corresponding tax effect and other expenses

 

4,196

 

 

(7,373

)

 

$

32,295

 

$

52,284

 

   

(4)

  Weighted average number of ordinary
shares outstanding - Diluted

 

66,356

 

 

67,007

 

62,888

 

 

62,888

 

   
Stratasys Ltd.
 
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
 
Fiscal Year 2022
 
(in millions, except per share data)
 
 
GAAP net loss ($48) to ($39)
 
Adjustments
Stock-based compensation expense $33 to $35
Intangible assets amortization expense $37 to $38
Reorganization and other $14 to $16
Tax expense (benefit) related to Non-GAAP adjustments $3 to $5
 
Non-GAAP net income $6 to $8
 
GAAP loss per share ($0.72) to ($0.59)
 
Non-GAAP diluted earnings per share $0.09 to $0.12
 

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