Non-GAAP Discussion
The information discussed within this release includes financial results and forward-looking financial guidance that are in accordance with accounting principles generally accepted in the United States (GAAP). In addition, certain non-GAAP financial measures and guidance have been included that exclude certain expenses. The non-GAAP financial measures are provided in an effort to give information that investors may deem relevant to the company’s operations and comparative performance, primarily the identification and exclusion of expenses associated with stock-based compensation required under SFAS 123R, impairment charges and restructuring expenses. In addition, the company uses these non-GAAP financial measures for evaluating comparable financial performance against prior periods.
This release is also available on the Stratasys Web site at www.Stratasys.com.
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STRATASYS, INC.
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Three Months Ended December 31, |
Twelve Months Ended December 31, |
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2008
(unaudited) |
2007
(unaudited) |
2008
(unaudited) |
2007 | |||||||||||||
| Net Sales | ||||||||||||||||
| Product | $ | 25,050,071 | $ | 24,700,449 | $ | 98,969,152 | $ | 89,280,009 | ||||||||
| Services | $ | 6,892,902 | 5,510,306 | $ | 25,525,859 | 22,962,572 | ||||||||||
| $ | 31,942,973 | 30,210,755 | $ | 124,495,011 | 112,242,581 | |||||||||||
| Cost of goods sold | ||||||||||||||||
| Product | $ | 13,160,364 | 11,395,345 | $ | 47,672,443 | 40,540,564 | ||||||||||
| Services | $ | 2,856,974 | 2,902,707 | $ | 10,410,249 | 11,993,906 | ||||||||||
| $ | 16,017,338 | 14,298,052 | $ | 58,082,692 | 52,534,470 | |||||||||||
| Gross profit | $ | 15,925,635 | 15,912,703 | $ | 66,412,319 | 59,708,111 | ||||||||||
| Costs and expenses | ||||||||||||||||
| Research and development | $ | 2,131,381 | 1,894,080 | $ | 8,973,203 | 7,465,334 | ||||||||||
| Selling, general and administrative | $ | 9,837,854 | 9,102,640 | $ | 36,842,665 | 33,769,880 | ||||||||||
| $ | 11,969,235 | 10,996,720 | $ | 45,815,868 | 41,235,214 | |||||||||||
| Operating income | $ | 3,956,400 | 4,915,983 | $ | 20,596,451 | 18,472,897 | ||||||||||
| Other income (expense) | ||||||||||||||||
| Interest income, net | $ | 390,527 | 585,969 | $ | 2,037,257 | 2,316,001 | ||||||||||
| Foreign currency transaction losses | $ | (535,142 | ) | (157,491 | ) | $ | (834,762 | ) | (503,309 | ) | ||||||
| Other | $ | (778,868 | ) | 41,137 | $ | (1,065,459 | ) | 76,468 | ||||||||
| $ | (923,483 | ) | 469,615 | $ | 137,036 | 1,889,160 | ||||||||||
| Income before income taxes | $ | 3,032,917 | 5,385,598 | $ | 20,733,487 | 20,362,057 | ||||||||||
| Income taxes | $ | 1,021,623 | 1,089,527 | $ | 7,118,000 | 6,037,999 | ||||||||||
| Net income | $ | 2,011,294 | $ | 4,296,071 | $ | 13,615,487 | $ | 14,324,058 | ||||||||
| Earnings per common share | ||||||||||||||||
| Basic | $ | 0.10 | $ | 0.20 | $ | 0.66 | $ | 0.69 | ||||||||
| Diluted | $ | 0.10 | $ | 0.20 | $ | 0.65 | $ | 0.66 | ||||||||
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Weighted average number of common shares outstanding |
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| Basic | 20,221,071 | 21,003,272 | 20,676,436 | 20,771,656 | ||||||||||||
| Diluted | 20,250,483 | 21,877,225 | 21,079,265 | 21,565,618 | ||||||||||||
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STRATASYS, INC. AND SUBSIDIARIES
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December 31,
2008 (unaudited) |
December 31,
2007 |
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| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 27,945,799 | $ | 16,211,771 | ||||
| Short-term investments | 4,835,055 | 27,257,592 | ||||||
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Accounts receivable, less allowance for returns and doubtful accounts of $1,017,521 in 2008 and $1,205,621 in 2007 |
26,539,733 | 26,307,053 | ||||||
| Inventories | 19,889,351 | 12,771,235 | ||||||
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Net investment in sales-type leases, less allowance for returns and doubtful accounts of $324,642 in 2008 and $154,849 in 2007 |
3,870,472 | 3,256,953 | ||||||
| Prepaid expenses and other current assets | 2,608,080 | 2,507,316 | ||||||
| Deferred income taxes | 559,000 | 711,000 | ||||||
| Total current assets | $ | 86,247,490 | $ | 89,022,920 | ||||
| Property and equipment , net | $ | 29,749,921 | $ | 26,577,362 | ||||
| Other assets | ||||||||
| Intangible assets, net | $ | 8,347,200 | $ | 8,063,319 | ||||
| Net investment in sales-type leases | 4,545,977 | 4,101,682 | ||||||
| Deferred income taxes | 989,000 | 719,000 | ||||||
| Long-term investments - Available for sale securities | 1,109,250 | - | ||||||
| Long-term investments | 13,825,981 | 17,965,489 | ||||||
| Other | 2,308,214 | 2,307,250 | ||||||
| Total other assets | $ | 31,125,622 | $ | 33,156,740 | ||||
| $ | 147,123,033 | $ | 148,757,022 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and other current liabilities | $ | 11,795,238 | $ | 13,959,022 | ||||
| Unearned revenues | 12,765,396 | 10,964,471 | ||||||
| Total current liabilities | $ | 24,560,634 | $ | 24,923,493 | ||||
| Stockholders' equity | ||||||||
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Common stock, $.01 par value, authorized 30,000,000 shares, issued 25,909,603 shares in 2008 and 25,610,654 shares in 2007 |
$ | 259,096 | $ | 256,108 | ||||
| Capital in excess of par value | 91,611,078 | 87,023,541 | ||||||
| Retained earnings | 69,899,669 | 56,284,182 | ||||||
| Accumulated other comprehensive Income (loss) | (203,019 | ) | 172,073 | |||||
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Less cost of treasury stock, 5,687,631 shares in 2008 and 4,600,056 shares in 2007 |
(39,004,425 | ) | (19,902,375 | ) | ||||
| Total stockholders' equity | $ | 122,562,399 | $ | 123,833,529 | ||||
| $ | 147,123,033 | $ | 148,757,022 | |||||
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STRATASYS, INC.
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| Non-GAAP Reconciliation for the Three Months Ended December 31, 2008 | |||||||||||||||||||||||
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Consolidated
As Reported (unaudited) |
Stock-Based
Compensation (1) |
Auction Rate
Security (2) |
Sales and Marketing
Reorganization (3) |
Consolidated
Non-GAAP (unaudited) |
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| Selling, general and administrative expenses | $ | 9,837,854 | $ | (360,682 | ) | $ | - | $ | (545,417 | ) | $ | 8,931,755 | |||||||||||
| Total operating expenses | 11,969,235 | (360,682 | ) | - | (545,417 | ) | 11,063,136 | ||||||||||||||||
| Operating income | 3,956,400 | 360,682 | - | 545,417 | 4,862,499 | ||||||||||||||||||
| Other income (expense) - other | (778,868 | ) | 830,750 | 51,882 | |||||||||||||||||||
| Total other income (expense) | (923,483 | ) | - | 830,750 | - | (92,733 | ) | ||||||||||||||||
| Income before income taxes | 3,032,917 | 360,682 | 830,750 | 545,417 | 4,769,766 | ||||||||||||||||||
| Income taxes | 1,021,623 | 20,000 | 319,000 | 188,169 | 1,548,792 | ||||||||||||||||||
| Net income | $ | 2,011,294 | $ | 340,682 | $ | 511,750 | $ | 357,248 | $ | 3,220,974 | |||||||||||||
| Earnings per common share | |||||||||||||||||||||||
| Basic | $ | 0.10 | $ | 0.02 | $ | 0.03 | $ | 0.02 | $ | 0.16 | |||||||||||||
| Diluted | $ | 0.10 | $ | 0.02 | $ | 0.03 | $ | 0.02 | $ | 0.16 | |||||||||||||
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Weighted average number of common shares outstanding |
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| Basic | 20,221,071 | 20,221,071 | |||||||||||||||||||||
| Diluted | 20,250,483 | 20,250,483 | |||||||||||||||||||||
| Non-GAAP Reconciliation for the Three Months Ended December 31, 2007 | |||||||||||||||||||||||
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Consolidated
As Reported (unaudited) |
Stock-Based
Compensation (1) |
R&D Tax
Credits (5) |
Consolidated
Non-GAAP (unaudited) |
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| Selling, general and administrative expenses | $ | 9,102,640 | $ | (231,783 | ) | $ | - | $ | 8,870,857 | ||||||||||||||
| Total operating expenses | 10,996,720 | (231,783 | ) | - | 10,764,937 | ||||||||||||||||||
| Operating income | 4,915,983 | 231,783 | - | 5,147,766 | |||||||||||||||||||
| Other income (expense) - other | 41,137 | - | - | 41,137 | |||||||||||||||||||
| Total other income (expense) | 469,615 | - | - | 469,615 | |||||||||||||||||||
| Income before income taxes | 5,385,598 | 231,783 | - | 5,617,381 | |||||||||||||||||||
| Income taxes | 1,089,527 | 30,188 | 710,000 | 1,829,715 | |||||||||||||||||||
| Net income | $ | 4,296,071 | $ | 201,595 | $ | (710,000 | ) | $ | 3,787,666 | ||||||||||||||
| Earnings per common share | |||||||||||||||||||||||
| Basic | $ | 0.20 | $ | 0.01 | $ | (0.03 | ) | $ | 0.18 | ||||||||||||||
| Diluted | $ | 0.20 | $ | 0.01 | $ | (0.03 | ) | $ | 0.17 | ||||||||||||||
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Weighted average number of common shares outstanding |
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| Basic | 21,003,272 | 21,003,272 | |||||||||||||||||||||
| Diluted | 21,877,225 | 21,877,225 | |||||||||||||||||||||
| Non-GAAP Reconciliation for the Twelve Months Ended December 31, 2008 | |||||||||||||||||||||||
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Consolidated
As Reported (unaudited) |
Stock-Based
Compensation (1) |
Auction Rate
Security (2) |
Sales and Marketing
Reorganization (3) |
Workforce
Reductions (4) |
Consolidated
Non-GAAP (unaudited) |
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| Selling, general and administrative | $ | 36,842,665 | $ | (1,317,185 | ) | $ | - | $ | (545,417 | ) | $ | (181,416 | ) | $ | 34,798,647 | ||||||||
| Total operating expenses | 45,815,868 | (1,317,185 | ) | - | (545,417 | ) | (181,416 | ) | 43,771,851 | ||||||||||||||
| Operating income | 20,596,451 | 1,317,185 | - | 545,417 | 181,416 | 22,640,468 | |||||||||||||||||
| Other income (expense) - other | (1,065,459 | ) | - | 1,270,750 | - | - | 205,291 | ||||||||||||||||
| Total other income (expense) | 137,036 | - | 1,270,750 | - | - | 1,407,786 | |||||||||||||||||
| Income before income taxes | 20,733,487 | 1,317,185 | 1,270,750 | 545,417 | 181,416 | 24,048,254 | |||||||||||||||||
| Income taxes | 7,118,000 | 209,218 | 488,000 | 188,169 | 62,589 | 8,065,976 | |||||||||||||||||
| Net income | $ | 13,615,487 | $ | 1,107,967 | $ | 782,750 | $ | 357,248 | $ | 118,827 | $ | 15,982,278 | |||||||||||
| Earnings per common share | |||||||||||||||||||||||
| Basic | $ | 0.66 | $ | 0.05 | $ | 0.04 | $ | 0.02 | $ | 0.01 | $ | 0.77 | |||||||||||
| Diluted | $ | 0.65 | $ | 0.05 | $ | 0.04 | $ | 0.02 | $ | 0.01 | $ | 0.76 | |||||||||||
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Weighted average number of common shares outstanding |
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| Basic | 20,676,436 | 20,676,436 | |||||||||||||||||||||
| Diluted | 21,079,265 | 21,079,265 | |||||||||||||||||||||
| Non-GAAP Reconciliation for the Twelve Months Ended December 31, 2007 | |||||||||||||||||||||||
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Consolidated
As Reported |
Stock-Based
Compensation (1) |
R&D Tax
Credits (5) |
Consolidated
Non-GAAP |
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| Selling, general and administrative | $ | 33,769,880 | $ | (954,783 | ) | $ | - | $ | 32,815,097 | ||||||||||||||
| Total operating expenses | 41,235,214 | (954,783 | ) | - | 40,280,431 | ||||||||||||||||||
| Operating income | 18,472,897 | 954,783 | - | 19,427,680 | |||||||||||||||||||
| Other income (expense) - other | - | - | - | - | |||||||||||||||||||
| Total other income (expense) | - | - | - | - | |||||||||||||||||||
| Income before income taxes | 20,362,057 | 954,783 | - | 21,316,840 | |||||||||||||||||||
| Income taxes | 6,037,999 | 207,000 | 753,000 | 6,997,999 | |||||||||||||||||||
| Net income | $ | 14,324,058 | $ | 747,783 | $ | (753,000 | ) | $ | 14,318,841 | ||||||||||||||
| Earnings per common share | |||||||||||||||||||||||
| Basic | $ | 0.69 | $ | 0.04 | $ | (0.04 | ) | $ | 0.69 | ||||||||||||||
| Diluted | $ | 0.66 | $ | 0.03 | $ | (0.03 | ) | $ | 0.66 | ||||||||||||||
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Weighted average number of common shares outstanding |
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| Basic | 20,771,656 | 20,771,656 | |||||||||||||||||||||
| Diluted | 21,565,618 | 21,565,618 | |||||||||||||||||||||
| These adjustments reconcile the Company’s GAAP results of operations to its non-GAAP results of operations. The Company believes that presentation of results adjusted for the non-GAAP items described below provides meaningful supplemental information to both management and investors. |
| (1) - Represents non-cash stock-based compensation expense recognized in accordance with FAS 123R. |
| (2) - Represents a reduction in the assessed fair value of an auction rate security investment that the Company considers to be other than temporary. |
| (3) - Represents reorganization costs associated with the Company's North American sales and marketing operations. |
| (4) - Represents severance and other related employee costs associated with the Company's workforce reduction in the third quarter of 2008. |
| (5) - Represents tax benefits recognized in 2007 for Research and Development tax credits from prior years. |
| The Company considers these non-GAAP measures to be indicative of the 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 they should not be viewed as a substitute for the Company’s GAAP results. |
