Stratasys, Inc. : Stratasys Reports Record First Quarter Financial Results
05/09/2012| 07:00am US/Eastern
Recommend:
0
Company Raises 2012 Financial Guidance
Stratasys, Inc. (NASDAQ: SSYS) today announced first quarter financial
results.
The company reported record revenue of $45.0 million for the first
quarter ended March 31, 2012, a 30% increase from the $34.6 million for
the same period last year.
System shipments totaled 822 units for the first quarter of 2012,
compared to 567 units for the same period last year.
Non-GAAP net income was $6.1 million for the first quarter, or $0.28 per
share, representing a 38% increase over the non-GAAP net income of $4.4
million, or $0.21 per share, for the same period last year.
The company reported net income of $4.5 million for first quarter, or
$0.21 per share, compared to net income of $5.0 million, or $0.23 per
share, for the same period last year.
Solidscape Inc., acquired by Stratasys in May of 2011, contributed $3.4
million to revenue and 71 system sales, and was accretive to net income
during the first quarter of 2012.
"We are pleased to begin 2012 with another record quarterly
performance," said Scott Crump, chairman and chief executive officer of
Stratasys. "The primary drivers behind our growth remained consistent
from prior periods, with consumable revenue expanding by 30%, and Fortus
3D production system sales growing by 61%, over the same period last
year. This growth continues to be driven by the expanding use of our
systems for new direct digital manufacturing applications and their
relatively higher consumable usage patterns.
"The announcement of our revolutionary new low-cost Mojo 3D printer this
week represents a significant milestone in our goal of accelerating the
sales of our 3D printers worldwide. Priced at $9,500 to the end user, we
believe the system represents the first commercially-viable whole
product 3D printer available for under $10,000. The printer is small
enough to fit on a desktop and comes with everything the commercial user
needs to begin printing models, including an innovative new support
removal system and start-up materials.
"We believe Mojo's attractive price point will allow us to capitalize on
a price elastic market and capture new customers that had previously
viewed 3D printing as unaffordable. The product was well received
following its confidential introduction to our channel partners in late
April and we are excited about the new product's potential. We would
encourage you to access the link provided at the end of our first
quarter press release to learn more about this exciting new product.
"We are pleased to report that we have completed our initial goal to
recruit and train 90 sales agents that are focused exclusively on
selling our uPrint and Mojo 3D printer lines in the U.S. We believe the
addition of Mojo will allow us to further leverage our new channel
development programs that are aimed at expanding the sales of our most
affordable systems.
"We are most excited about the potential opportunities that will arise
from our recently announced plan to combine with Objet Ltd, a privately
held global company that manufactures 3D printers for rapid prototyping.
Objet maintains a highly complementary portfolio of products that will
allow the combined company to offer customers a broad array of
innovative 3D printing and direct digital manufacturing solutions from a
single destination. In addition, our combined sales and marketing
organization will be impressive, providing for market expansion and
cross-selling opportunities for the combined product portfolio.
"We have begun to develop a 100-day integration plan that we will
initiate upon the closing of the Objet transaction. We continue to
target a third quarter closing of the transaction following customary
regulatory reviews and shareholder approval. We expect the transaction
to be accretive to cash earnings per share within the first 12 months of
closing and provide for significant incremental long-term earnings
accretion based upon a higher revenue growth rate and operational
synergies. In short, we believe the combination of Stratasys and Objet
will drive significant shareholder value.
"We are pleased with our performance, and we are very excited about the
future. We believe our technology is reshaping the way new products are
designed and manufactured. We also believe our recent introduction of
Mojo, a revolutionary new 3D printer, combined with our game-changing
proposed combination with Objet represent two critical events that will
define the future of Stratasys and position the company to be a leader
within a market that has only begun to develop," Crump concluded.
Stratasys revised its financial guidance for the fiscal year ending
December 31, 2012:
Revenue guidance of $183 million to $193 million, versus previous
guidance of $175 million to $190 million.
Non-GAAP earnings guidance of $1.29 to $1.38 per share, versus
previous guidance of $1.17 to $1.28 per share.
GAAP earnings guidance of $0.97 to $1.13 per share, versus previous
guidance of $1.02 to $1.13 per share.
GAAP earnings guidance includes the estimated impact of Objet Ltd.
transaction-related expenses. Financial guidance does not reflect the
potential combined performance of Stratasys, Inc. and Objet Ltd, nor
does it include the estimated incremental transaction-related costs that
would be incurred upon closing of the Objet transaction. In addition to
excluding the impact of expenses associated with the proposed
combination with Objet Ltd., non-GAAP earnings guidance excludes the
impact of stock-based compensation expense and the amortization expense
of acquired Solidscape intangibles.
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.
Stratasys plans to hold a conference call to discuss its first quarter
financial results on Wednesday, May 9, 2012 at 8:30 a.m. (ET).
To participate by telephone, the domestic dial-in number is
888-396-2384, and the international dial-in is 617-847-8711. The access
code is 31219947. Investors are advised to dial into the call at least
ten minutes prior to the call to register.
The webcast will be available for 90 days on the "Investors" page of the
Stratasys Web site or by accessing the provided web address.
All statements herein that are not historical facts or that include such
words as "expects," "anticipates," "projects," "estimates," "vision,"
"could," "potential," "plan", "intends", "desires", "assume" or
"believes" or similar words constitute forward-looking statements
covered by the safe harbor protection of the Private Securities
Litigation Reform Act of 1995. Except for the historical information
herein, the matters discussed in this news release are forward-looking
statements that involve risks and uncertainties. These include
statements regarding the expected timing and ultimate closing of the
merger with Objet, as well as the financial and operating results of the
combined company after, and the anticipated benefits of, the merger; the
size of the 3D printing market; our objectives for the marketing and
sale of our Dimension® , uPrint® and Mojo 3D
Printers; our support removal systems; and our Fortus® 3D
Production Systems, particularly for use in direct digital manufacturing
(DDM); the demand for our proprietary consumables; the expansion of our
paid parts service; and our beliefs with respect to the growth in the
demand for our products. Actual results may differ from those expressed
or implied in our forward-looking statements. Such forward-looking
statements involve and are subject to certain risks and uncertainties,
which may cause our actual results to differ materially from those
discussed in a forward-looking statement. Risks and uncertainties that
may affect our business include our ability to penetrate the 3D printing
market; the success of our distribution agreement with HP; our ability
to achieve the growth rates experienced in preceding quarters; our
ability to introduce, produce and market consumable materials, and the
market acceptance of these materials; the impact of competitive products
and pricing; our timely development of new products and materials and
market acceptance of those products and materials; the success of our
recent R&D initiative to expand the DDM capabilities of our core FDM
technology; the success of our RedEye On Demand™and other paid
parts services; our ability to obtain the necessary approvals, including
the affirmative vote of the Stratasys shareholders, and to satisfy the
necessary closing conditions in order to successfully close the proposed
merger with Objet; our ability to successfully integrate and market the
combined company's products; the combined company's ability to achieve
the expected revenue targets, the combined company's ability to attract
and retain management; and the combined company's ability to protect and
defend intellectual property. These statements represent beliefs and
expectations only as of the date they were made. We may elect to update
forward-looking statements, but we expressly disclaim any obligation to
do so, even if our beliefs and expectations change. In addition to the
statements described above, such forward-looking statements are subject
to the risks and uncertainties described more fully in our reports filed
or to be filed with the Securities and Exchange Commission, including
our annual reports on Form 10-K and quarterly reports on Form 10-Q.
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
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 will
file with the Securities and Exchange Commission (the "SEC") a
registration statement on Form F-4, which will include a proxy
statement/prospectus of Stratasys and a prospectus of Objet, as well as
other relevant materials in connection with the proposed transaction.
Stratasys will concurrently file the same proxy statement/prospectus
with the SEC and will mail 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 SHAREHOLDERS ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT
MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THESE MATERIALS WILL
CONTAIN IMPORTANT INFORMATION ABOUT STRATASYS, OBJET AND THE PROPOSED
TRANSACTION. The proxy statement/prospectus and other relevant materials
(when they become available) 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.
Shareholders 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.
Stratasys' executive officers and directors may be deemed to be
participants in the solicitation of proxies from the shareholders of
Stratasys in connection with the Merger. Information about Stratasys'
executive officers and directors and their ownership of Stratasys common
stock is set forth in Amendment No. 1 to Stratasys' Annual Report on
Form 10-K for the year ended December 31, 2011, which was filed with the
SEC on April 27, 2012.
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. is a maker of additive-manufacturing machines for
prototyping and producing plastic parts. The company markets under the
brands uPrint, Mojo 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.
Stratasys manufactures 3D printers for Hewlett Packard, which it sells
under the brand Designjet3D. In 2011 Stratasys acquired 3D printer maker
Solidscape Inc. According to Wohlers Report 2011, Stratasys had a
41-percent market share in 2010, and has been the unit market leader for
the ninth 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 more than 350 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
FDM, Dimension, Fortus, uPrint, Mojo and Stratasys are registered
trademarks of Stratasys Inc. Fused Deposition Modeling is a trademark of
Stratasys Inc.
STRATASYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
2012
2011
(unaudited)
(unaudited)
Net sales
Products
$
37,545,792
$
28,096,205
Services
7,418,309
6,481,924
44,964,101
34,578,129
Cost of sales
Products
17,810,559
13,485,265
Services
4,198,599
2,842,412
22,009,158
16,327,677
Gross profit
22,954,943
18,250,452
Operating expenses
Research and development
4,352,160
3,348,093
Selling, general and administrative
11,374,792
8,736,231
15,726,952
12,084,324
Operating income
7,227,991
6,166,128
Other income (expense)
Interest income, net
250,426
205,781
Foreign currency transaction losses, net
(52,337
)
(131,115
)
Other, net
97,625
1,396,606
295,714
1,471,272
Income before income taxes
7,523,705
7,637,400
Income tax expense
3,001,370
2,647,905
Net income
$
4,522,335
$
4,989,495
Earnings per common share
Basic
$
0.21
$
0.24
Diluted
$
0.21
$
0.23
Weighted average number of common shares outstanding
Basic
21,265,772
21,009,871
Diluted
21,802,393
21,647,691
Note: Certain reclassifications have been made to prior period
balances to conform to current period presentation.
STRATASYS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31,
December 31,
2012
2011
(unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
24,427,680
$
20,092,200
Short-term investments - held to maturity
17,621,567
14,602,408
Accounts receivable, less allowance for doubtful accounts of
$1,010,000 at March 31, 2012 and $1,089,000 at December 31, 2011
28,149,480
26,230,289
Inventories
21,619,711
22,771,460
Net investment in sales-type leases, less allowance for doubtful
accounts of $258,000 at March 31, 2012 and $230,000 at December
31, 2011
3,846,831
3,295,039
Prepaid expenses and other current assets
2,617,025
3,259,012
Deferred income taxes
2,973,000
2,973,000
Total current assets
101,255,294
93,223,408
Property and equipment, net
41,494,535
39,669,433
Other assets
Goodwill
25,417,558
25,393,967
Other Intangible assets, net
25,020,741
25,295,032
Net investment in sales-type leases
5,500,508
5,494,753
Long-term investments - held to maturity
29,904,534
32,581,472
Other non-current assets
145,332
112,300
Total other assets
85,988,673
88,877,524
Total assets
$
228,738,502
$
221,770,365
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and other current liabilities
$
19,404,542
$
19,368,197
Unearned revenues
10,486,025
9,768,610
Total current liabilities
29,890,567
29,136,807
Non-current liabilities
Deferred tax liabilities
6,760,000
6,760,000
Unearned revenues - long-term
2,656,101
2,562,195
Total liabilities
39,306,668
38,459,002
Commitments and contingencies
Stockholders' equity
Common stock, $.01 par value, authorized 30,000,000 shares;
26,978,696 and 26,933,301 issued at March 31, 2012 and December
31, 2011, respectively
269,787
269,333
Additional paid-in capital
119,619,707
118,134,006
Retained earnings
108,534,193
104,011,848
Accumulated other comprehensive loss
12,572
(99,399
)
Treasury stock at cost, 5,687,631 shares at March 31, 2012 and
December 31, 2011
(39,004,425
)
(39,004,425
)
Total stockholders' equity
189,431,834
183,311,363
Total liabilities and stockholders' equity
$
228,738,502
$
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 March 31, 2012
Three Months Ended March 31, 2011
As Reported
Non-GAAP
As Reported
Non-GAAP
(unaudited)
Adjustments
(unaudited)
(unaudited)
Adjustments
(unaudited)
Net sales
Products
$
37,545,792
$
-
$
37,545,792
$
28,096,205
$
-
$
28,096,205
Services
7,418,309
-
7,418,309
6,481,924
-
6,481,924
44,964,101
-
44,964,101
34,578,129
-
34,578,129
Cost of sales
Products
17,810,559
(436,012
)
(a)
17,374,547
13,485,265
-
13,485,265
Services
4,198,599
-
4,198,599
2,842,412
-
2,842,412
22,009,158
(436,012
)
21,573,146
16,327,677
-
16,327,677
Gross profit
22,954,943
436,012
23,390,955
18,250,452
-
18,250,452
Operating expenses
Research and development
4,352,160
-
4,352,160
3,348,093
-
3,348,093
Selling, general and administrative
11,374,792
(1,595,002
)
(b)
9,779,790
8,736,231
(323,598
)
(d)
8,412,633
15,726,952
(1,595,002
)
14,131,950
12,084,324
(323,598
)
11,760,726
Operating income
7,227,991
2,031,014
9,259,005
6,166,128
323,598
6,489,726
Other income (expense)
Interest income, net
250,426
-
250,426
205,781
-
205,781
Foreign currency transaction losses, net
(52,337
)
-
(52,337
)
(131,115
)
-
(131,115
)
Other, net
97,625
-
97,625
1,396,606
(1,204,408
)
(e)
192,198
295,714
-
295,714
1,471,272
(1,204,408
)
266,864
Income before income taxes
7,523,705
2,031,014
9,554,719
7,637,400
(880,810
)
6,756,590
Income tax expense
3,001,370
417,170
(c)
3,418,540
2,647,905
(330,197
)
(c)
2,317,708
Net income
$
4,522,335
$
1,613,844
$
6,136,179
$
4,989,495
$
(550,613
)
$
4,438,882
Earnings per common share
Basic
$
0.21
$
0.08
$
0.29
$
0.24
$
(0.03
)
$
0.21
Diluted
$
0.21
$
0.07
$
0.28
$
0.23
$
(0.03
)
$
0.21
Weighted average number of common
shares outstanding
Basic
21,265,772
21,265,772
21,009,871
21,009,871
Diluted
21,802,393
21,802,393
21,647,691
21,647,691
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.
(a) Represents amortization expense related to acquired Solidscape,
Inc. intangible assets.
(b) Represents non-cash stock-based compensation expense of
$480,639, amortization expense of $133,333 related to acquired
Solidscape, Inc. intangible assets and expense of 981,030
associated with the Company's current efforts to combine with
Objet Ltd.
(c) Represents the tax benefit (expense) related to non-GAAP
adjustments.
(e) Represents gain on the sale of an equity investment during the
first quarter of 2011.
The Company considers these non-GAAP measures to be indicative of
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 these
measures should not be viewed as a substitute for the Company's
GAAP results.
STRATASYS, INC. AND SUBSIDIARIES
FISCAL YEAR 2012
RECONCILIATION OF NON-GAAP TO GAAP FORWARD LOOKING GUIDANCE
Earnings Per Diluted Share Range
U.S. GAAP measure
$0.97 to $1.13
Adjustments
Stock-based compensation expense
$0.04 to $0.08
Solidscape, Inc. intangible amortization expense
$ 0.07
Objet-related transaction expense
$0.14 to $0.17
Non-GAAP estimate
$1.29 to $1.38
Forward looking guidance does not reflect the potential combined
performance of Stratasys, Inc. and Objet Ltd, nor does it include
the estimated costs that would be incurred upon closing the
transaction.
Recommend:
