Stratasys Releases Third Quarter 2021 Financial Results

Stratasys Ltd. (NASDAQ: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the third quarter of 2021.

Third Quarter 2021 Financial Results Summary Compared to Third Quarter 2020:

  • Revenue of $159.0 million compared to $127.9 million.
  • GAAP gross margin was 42.9%, compared to 38.9%.
  • Non-GAAP gross margin was 48.2%, compared to 46.8%.
  • GAAP operating loss was $21.9 million, compared to an operating loss of $404.3 million.
  • Non-GAAP operating income was $1.8 million, compared to an operating loss of $1.0 million.
  • GAAP net loss was $18.1 million, or $0.28 per diluted share, compared to a net loss of $405.1 million, or $7.35 per diluted share.
  • Non-GAAP net income of $0.5 million, or $0.01 per diluted share, compared to a net loss of $3.0 million, or $0.05 per diluted share.
  • Adjusted EBITDA was $7.8 million, compared to $5.2 million.
  • Cash generated from operations of $3.0 million, compared to $2.6 million.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer stated, “We are at an inflection point for additive manufacturing. Industries appreciate the many benefits of our technologies and are increasingly adding 3D printing to their production plans, driving the shift from prototyping to mass production. Our third quarter was highlighted by revenue growth of 24.3% and systems sales growth of 34.7% year-over-year, with contributions across all regions and all business lines. We achieved a number of important manufacturing-focused milestones, including the securing of contracts with the US Navy and a major international OEM, specifically for end-use part production.”

Dr. Zeif continued, “Our vision of becoming the first choice for polymer 3D printing solutions with a focus on manufacturing continues to progress. We are executing on that goal by leveraging our outstanding reputation for excellence in both technology and service to help customers achieve true scaled production of end use parts. We expect the ongoing introduction of new product initiatives to further accelerate growth, complimented by our now 100% ownership of Xaar 3D and the new SAF technology, along with our recently announced open and enterprise-ready software platform that integrates with Industry 4.0 infrastructure and applications. We will continue to invest across our portfolio to further grow our sales and drive a return to sustained profitability.”

Financial Outlook:

Based on current market conditions and assuming that the impacts related to the pandemic or global supply chain constraints do not impede the economic environment further, the Company is reiterating and updating its outlook as follows:

  • Fourth quarter 2021 revenue approximately 16% higher year-over-year, driven by continued growth in systems relative to Q4 of both 2020 and 2019.
  • Full year-operating expenses expected to rise approximately $36 million compared to 2020, primarily due to fully owning Xaar 3D and higher operating costs associated with higher revenues.
  • Full year capital expenditures anticipated to range from $24 million to $30 million.
  • Longer term, the Company continues to expect significant leverage benefit from its investments as revenue growth should start to accelerate in 2022 and beyond.

Stratasys Ltd. Third Quarter 2021 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its third quarter 2021 financial results on Thursday, November 4, 2021 at 8:30 a.m. (ET).

The investor conference call will be available via live webcast on the Stratasys Web site at investors.stratasys.com, or directly at the following web address: https://78449.themediaframe.com/dataconf/productusers/ssys/mediaframe/47128/indexl.html.

To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is +1-412-902-1012. Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for six months at investors.stratasys.com, or by accessing the above-provided web address.

Stratasys is leading the global shift to additive manufacturing with innovative 3D printing solutions for industries such as aerospace, automotive, consumer products and healthcare. Through smart and connected 3D printers, polymer materials, a software ecosystem, and parts on demand, Stratasys solutions deliver competitive advantages at every stage in the product value chain. The world’s leading organizations turn to Stratasys to transform product design, bring agility to manufacturing and supply chains, and improve patient care.

To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, Twitter, LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including the company’s websites, to share material, non-public information pursuant to the SEC’s Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.

Stratasys is a registered trademark and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2021 and beyond, are forward-looking statements reflecting management's current expectations and beliefs. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys' business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: the degree of our success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower margin products or services; the impact of competition and new technologies; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; the extent of our success at successfully consummating acquisitions or investments in new businesses, technologies, products or services; the strength and duration of, and degree of recovery from, the COVID-19 pandemic in the markets in which we operate; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular (including risks related to the impact of coronavirus on our supply chain and business); costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; and those additional factors referred to in Item 3.D “Key Information - Risk Factors,” Item 4, “Information on the Company,” Item 5, “Operating and Financial Review and Prospects,” and all other parts of our Annual Report on Form 20-F for the year ended December 31, 2020, which we filed with the U.S. Securities and Exchange Commission, or SEC, on March 1, 2021 (the “2020 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2020 Annual Report and the Reports of Foreign Private Issuer on Form 6-K that attach Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly periods throughout 2021, which have been furnished to the SEC throughout 2021 (including on or about the date hereof), and our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward-looking statements made, in this press release are provided or made (as applicable) as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Use of Non-GAAP Financial Measures

The non-GAAP data included herein, which excludes 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 (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 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,

 

2021

 

2020

    
    
ASSETS   
   
Current assets   
Cash and cash equivalents

 $

        332,871

 

 $

        272,092

Short-term deposits

           187,000

 

             27,000

Accounts receivable, net of allowance for credit losses of $0.7 and $0.9 million as of September 30, 2021 and December 31, 2020

           121,848

 

           106,068

Inventories

           119,925

 

           131,672

Prepaid expenses

              8,634

 

              6,717

Other current assets

             27,317

 

             16,943

   
Total current assets

           797,595

 

           560,492

    
Non-current assets   
Property, plant and equipment, net 

           199,668

 

           201,232

Goodwill

             39,750

 

             35,694

Other intangible assets, net

           117,010

 

           131,569

Operating lease right-of-use assets 

             15,624

 

             21,298

Other non-current assets

             58,365

 

             39,717

   
Total non-current assets

           430,417

 

           429,510

   
Total assets

 $

     1,228,012

 

 $

        990,002

   
LIABILITIES AND EQUITY   
   
Current liabilities 
Accounts payable

 $

          48,292

 

 $

          16,987

Accrued expenses and other current liabilities

             30,875

 

             31,061

Accrued compensation and related benefits

             36,983

 

             25,659

Deferred revenues - short term

             49,104

 

             49,165

Operating lease liabilities - short term

              7,514

 

              9,282

   
Total current liabilities

172,768

 

132,154

   
Non-current liabilities   
Deferred revenues - long term

             17,980

 

             14,227

Operating lease liabilities - long term

              8,353

 

             12,567

Contingent consideration

             40,589

 

             37,400

Other non-current liabilities

             37,869

 

             34,059

   
Total non-current liabilities

104,791

 

98,253

   
Total liabilities

277,559

 

230,407

    
Redeemable non-controlling interests 

                    -

 

                 227

   
Equity   
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 65,467 thousands shares and 56,617 thousands shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

182

155

Additional paid-in capital

        3,001,685

 

        2,753,955

Accumulated other comprehensive loss 

             (8,372

)

 

             (8,846

)

Accumulated deficit

       (2,043,042

)

 

       (1,985,896

)

Total equity

           950,453

 

           759,368

   
Total liabilities and equity

 $

     1,228,012

 

 $

        990,002

 
 
 
 
 
Stratasys Ltd.    
      
Consolidated Statements of Operations    
      
(in thousands, except per share data)        
          
   

Three Months Ended September 30,

Nine Months Ended September 30,

   

2021

 

2020

 

2021

 

2020

   

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Net sales        
Products 

 $

                         108,888

 

 $

     83,548

 

 $

       299,517

 

 $

               240,597

Services 

                              50,121

 

        44,344

 

          140,686

 

                  137,825

 

                            159,009

 

      127,892

 

          440,203

 

                  378,422

        
Cost of sales        
Products 

                              54,820

 

        47,339

 

          151,471

 

                  126,556

Services 

                              36,001

 

        30,784

 

          101,697

 

                   98,491

  

                              90,821

 

        78,123

 

          253,168

 

                  225,047

        
Gross profit 

                              68,188

 

        49,769

 

          187,035

 

                  153,375

        
Operating expenses        
Research and development, net 

                              22,645

 

        19,562

 

            65,683

 

                   65,059

Selling, general and administrative 

                              67,462

 

        48,343

 

          184,353

 

                  155,630

Goodwill impairment 

                                     -

 

      386,154

 

                   -

 

                  386,154

 

                              90,107

 

      454,059

 

          250,036

 

                  606,843

        
Operating loss 

                            (21,919

)

 

     (404,290

)

 

          (63,001

)

 

                (453,468

)

        
Financial expenses, net 

                                 (634

)

 

           (167

)

 

            (1,383

)

 

                       (847

)

        
Loss before income taxes 

                            (22,553

)

 

     (404,457

)

 

          (64,384

)

 

                (454,315

)

         
Income tax benefit 

                                  699

 

            343

 

             6,009

 

                     2,250

        
Share in profit (loss) of associated companies 

                                3,778

 

           (952

)

 

             1,229

 

                    (2,740

)

         
Net loss 

                            (18,076

)

 

     (405,066

)

 

          (57,146

)

 

                (454,805

)

        
Net loss attributable to non-controlling interests 

                                     -

 

               (4

)

 

                   -

 

                         (54

)

        
Net loss attributable to Stratasys Ltd. 

 $

                          (18,076

)

 

 $

  (405,062

)

 

 $

       (57,146

)

 

 $

             (454,751

)

        
Net loss per ordinary share attributable to Stratasys Ltd.        
Basic 

 $

                             (0.28

)

 

 $

       (7.35

)

 

 $

           (0.91

)

 

 $

                   (8.29

)

Diluted 

 $

                             (0.28

)

 

 $

       (7.35

)

 

 $

           (0.91

)

 

 $

                   (8.29

)

        
Weighted average ordinary shares outstanding        
Basic 

                              65,018

 

        55,086

 

            62,888

 

                   54,851

Diluted 

                              65,018

 

        55,086

 

            62,888

 

                   54,851

 
 
 
 
    

Three Months Ended September 30,

    

2021

Non-GAAP

2021

2020

Non-GAAP

2020

    

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

    

U.S. dollars and shares in thousands (except per share amounts)

               
  Gross profit (1) 

 $

       68,188

 $

         8,507

 $

       76,695

 $

              49,769

 $

       10,036

 $

           59,805

  Operating income (loss) (1,2) 

        (21,919

)

          23,739

            1,820

             (404,290

)

        403,268

              (1,022

)

  Net income (loss) attributable to Stratasys Ltd. (1,2,3) 

        (18,076

)

          18,592

               516

             (405,061

)

        402,050

              (3,011

)

  Net income (loss) per diluted share attributable to Stratasys Ltd. (4) 

 $

         (0.28

)

 $

           0.28

 $

           0.01

 $

                (7.35

)

 $

           7.30

 $

             (0.05

)

            
            

(1)

 Acquired intangible assets amortization expense      

            5,495

     

            4,065

  

 Non-cash stock-based compensation expense      

               804

     

               524

  

 Restructuring and other related costs      

                 67

     

               191

  

 Impairment charges   

            2,141

     

            5,256

  

     

            8,507

     

          10,036

  

            

(2)

 Acquired intangible assets amortization expense      

            2,205

     

            2,162

  

 Non-cash stock-based compensation expense      

            7,154

     

            4,352

  

 Goodwill impairment   

                 -

     

        386,154

  

 Impairment of long-lived assets   

            1,242

     

                 -

  

 Restructuring and other related costs      

               210

     

                 34

  

 Revaluation of investments   

            2,025

     

                 -

  

 Contingent consideration   

               197

     

                 -

  

 Legal and other expenses      

            2,199

     

               530

  

     

          15,232

     

        393,232

  

     

          23,739

     

        403,268

  

            

(3)

 Corresponding tax effect   

             (376

)

     

          (1,296

)

  

 Equity method related amortization, divestments and impairments   

          (4,771

)

     

                 78

  

     

 $

       18,592

     

 $

     402,050

  

(4)

  Weighted average number of ordinary shares outstanding- Diluted 

          65,018

   

          65,950

 

                 55,086

   

              55,086

 
 
 
 
 
    

Nine Months Ended September 30,

    

2021

Non-GAAP

2021

2020

Non-GAAP

2020

    

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

    

U.S. dollars and shares in thousands (except per share amounts)

               
  Gross profit (1) 

 $

187,035

 $

    22,192

 $

     209,227

 

 $

    153,375

 $

    24,062

 $

     177,437

  Operating income (loss) (1,2) 

 $

(63,001

)

 $

    59,657

 $

       (3,344

)

 

 $

  (453,468

)

 $

  435,987

 $

      (17,481

)

  Net income (loss) attributable to Stratasys Ltd. (1,2,3) 

 $

(57,146

)

 $

    52,284

 $

       (4,862

)

 

 $

  (454,751

)

 $

  433,821

 $

      (20,930

)

  Net income (loss) per diluted share attributable to Stratasys Ltd. (4) 

 $

     (0.91

)

 $

        0.83

 $

         (0.08

)

 

 $

        (8.29

)

 $

        7.91

 $

          (0.38

)

       
        

(1)

 Acquired intangible assets amortization expense      

       16,368

 

       12,196

 Non-cash stock-based compensation expense      

         2,226

 

         1,424

 Impairment charges   

         2,141

 

         5,256

 Restructuring and other related costs      

         1,457

 

         5,187

     

       22,192

 

       24,062

      

(2)

 Acquired intangible assets amortization expense      

         6,598

 

         6,430

 Non-cash stock-based compensation expense      

       20,914

 

       14,470

 Goodwill impairment   

              -

 

     386,154

 Impairment of long-lived assets   

         2,664

 

               -

 Restructuring and other related costs      

         2,370

 

         3,863

 Revaluation of investments   

            556

 

               -

 Contingent consideration   

            590

 

               -

 Legal and other expenses      

         3,773

 

         1,007

     

       37,465

 

     411,925

     

       59,657

 

     435,987

      

(3)

 Corresponding tax effect   

       (2,770

)

 

        (2,396

)

 Equity method related amortization, divestments and impairments   

       (4,603

)

 

            230

     

 $

    52,284

 

 $

  433,821

            

(4)

 Weighted average number of ordinary shares outstanding- Diluted 

62,888

62,888

54,851

54,851

 
 

Contacts:

Yonah Lloyd
CCO, VP Investor Relations
Yonah.Lloyd@stratasys.com

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