Stratasys Releases Second Quarter 2016 Financial Results


Stratasys Ltd.

Reconciliation of GAAP to Non-GAAP Results of Operations

(in thousands)
		Three Months Ended June 30,
		2016			Non-GAAP			2016		2015			Non-GAAP			2015
		GAAP			Adjustments			Non-GAAP		GAAP			Adjustments			Non-GAAP
		U.S. dollars and shares in thousands (except per share amounts)

	Gross profit (1)	$	79,532		$	16,715		$	96,247	$	82,908		$	16,816		$	99,724
	Operating income (loss) (1,2)		(17,131	)		27,332			10,201		(33,499	)		37,172			3,673
	Net income (loss) attributable to Stratasys Ltd. (1,2,3)		(18,490	)		24,728			6,238		(22,931	)		30,893			7,962
	Net income (loss) per diluted share attributable to Stratasys Ltd. (4)	$	(0.36	)	$	0.48		$	0.12	$	(0.55	)	$	0.70		$	0.15


(1)	Acquired intangible assets amortization expense					10,510								12,301
	Impairment charges of other intangible assets					1,779								-
	Non-cash stock-based compensation expense					729								1,797
	Reorganization and other related costs					3,543								2,512
	Merger and acquisition and other expense					154								206
						16,715								16,816

(2)	Acquired intangible assets amortization expense					3,621								5,684
	Non-cash stock-based compensation expense					4,750								7,767
	Change in fair value of obligations in connection with acquisitions					(587	)							(6,680	)
	Reorganization and other related costs					956								6,755
	Merger and acquisition and other expense					1,877								6,830
						10,617								20,356
						27,332								37,172

(3)	Corresponding tax effect and other tax adjustments					(2,604	)							(6,279	)
					$	24,728							$	30,893

(4)	Weighted average number of ordinary shares outstanding- Diluted		52,496						53,238		51,870						52,705


Stratasys Ltd.

Reconciliation of GAAP to Non-GAAP Results of Operations

(in thousands)
		Six Months Ended June 30,
		2016			Non-GAAP			2016		2015			Non-GAAP			2015
		GAAP			Adjustments			Non-GAAP		GAAP			Adjustments			Non-GAAP
		U.S. dollars and shares in thousands (except per share amounts)

	Gross profit (1)	$	160,701		$	27,993			188,694	$	128,996		$	64,137		$	193,133
	Operating income (loss) (1,2)		(38,191	)		52,345			14,154		(254,401	)		257,298			2,897
	Net income (loss) attributable to Stratasys Ltd. (1,2,3)		(41,631	)		48,465			6,834		(239,219	)		249,205			9,986
	Net income (loss) per diluted share attributable to Stratasys Ltd. (4)	$	(0.80	)	$	0.93		$	0.13		(4.77	)		4.96			0.19


(1)	Acquired intangible assets amortization expense					20,924								27,206
	Impairment of other intangible assets					1,779								29,782
	Non-cash stock-based compensation expense					1,452								3,630
	Reorganization and other related costs					3,321								2,512
	Merger and acquisition and other expense					517								1,007
						27,993								64,137

(2)	Goodwill impairment					-								150,400
	Impairment of other intangible assets					-								13,423
	Acquired intangible assets amortization expense					7,382								12,140
	Non-cash stock-based compensation expense					9,650								15,694
	Change in fair value of obligations in connection with acquisitions					140								(19,936	)
	Reorganization and other related costs					1,461								6,756
	Merger and acquisition and other expense					5,719								14,684
						24,352								193,161
						52,345								257,298

(3)	Corresponding tax effect and other tax adjustments					(3,880	)							(8,093	)
					$	48,465							$	249,205

(4)	Weighted average number of ordinary shares outstanding- Diluted		52,133						53,201		51,413						52,524


Stratasys Ltd.

Reconciliation of GAAP to Non-GAAP Forward Looking Guidance

Fiscal Year 2016

(in millions, except per share data)

GAAP net loss		($84) to ($67)

Adjustments
Stock-based compensation expense		$25 to $27
Intangible assets amortization expense		$59
Merger and acquisition related expense		$7
Reorganization and other related costs		$4 to $5
Tax expense related to Non-GAAP adjustments		($5)

Non-GAAP net income		$9 to $23

GAAP loss per share		($1.60) to ($1.28)

Non-GAAP diluted earnings per share		$0.17 to $0.43