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 (x) on an ongoing basis after excluding merger and acquisition related expense and reorganization-related charges, and (y) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, impairment of goodwill and other long-lived assets, changes in fair value of obligations in connection with acquisitions and the corresponding tax effect of those items. We also exclude, when applicable, non-recurring changes of non-cash valuation allowance on deferred tax assets, as well as, non-recurring significant tax charges or benefits that relate to prior periods which we do not believe are reflective of ongoing business and operating results. 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 | ||||||||||
(in thousands, except share data) | ||||||||||
March 31, | December 31, | |||||||||
2017 | 2016 | |||||||||
(unaudited) | ||||||||||
ASSETS | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 297,246 | $ | 280,328 | ||||||
Accounts receivable, net | 115,099 | 120,411 | ||||||||
Inventories | 116,018 | 117,521 | ||||||||
Net investment in sales-type leases | 10,844 | 11,717 | ||||||||
Prepaid expenses | 6,371 | 7,571 | ||||||||
Other current assets | 19,411 | 15,491 | ||||||||
Total current assets | 564,989 | 553,039 | ||||||||
Non-current assets | ||||||||||
Net investment in sales-type leases - long term | 9,655 | 12,126 | ||||||||
Property, plant and equipment, net | 206,722 | 208,415 | ||||||||
Goodwill | 385,808 | 385,629 | ||||||||
Other intangible assets, net | 169,302 | 177,458 | ||||||||
Other non-current assets | 31,626 | 29,382 | ||||||||
Total non-current assets | 803,113 | 813,010 | ||||||||
Total assets | $ | 1,368,102 | $ | 1,366,049 | ||||||
LIABILITIES AND EQUITY | ||||||||||
Current liabilities | ||||||||||
Accounts payable | $ | 44,805 | $ | 40,933 | ||||||
Current portion of long term-debt | 3,714 | 3,714 | ||||||||
Accrued expenses and other current liabilities | 28,582 | 32,207 | ||||||||
Accrued compensation and related benefits | 42,797 | 34,186 | ||||||||
Obligations in connection with acquisitions | 4,315 | 3,619 | ||||||||
Deferred revenues | 50,673 | 49,952 | ||||||||
Total current liabilities | 174,886 | 164,611 | ||||||||
Non-current liabilities | ||||||||||
Long-term debt | 21,357 | 22,286 | ||||||||
Deferred tax liabilities | 4,916 | 5,952 | ||||||||
Deferred revenues - long-term | 12,942 | 12,922 | ||||||||
Other non-current liabilities | 24,293 | 22,251 | ||||||||
Total non-current liabilities | 63,508 | 63,411 | ||||||||
Total liabilities | 238,394 | 228,022 | ||||||||
Redeemable non-controlling interests | 1,939 | 2,029 | ||||||||
Equity | ||||||||||
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 52,728 thousands shares and 52,639 thousands shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively |
142 | 142 | ||||||||
Additional paid-in capital | 2,637,561 | 2,633,129 | ||||||||
Accumulated other comprehensive loss | (12,243 | ) | (13,479 | ) | ||||||
Accumulated deficit | (1,497,782 | ) | (1,483,925 | ) | ||||||
Equity attributable to Stratasys Ltd. | 1,127,678 | 1,135,867 | ||||||||
Non-controlling interest | 91 | 131 | ||||||||
Total equity | 1,127,769 | 1,135,998 | ||||||||
Total liabilities and equity | $ | 1,368,102 | $ | 1,366,049 | ||||||
Stratasys Ltd. | ||||||||||
Consolidated Statements of Operations | ||||||||||
(in thousands, except per share data) | ||||||||||
Three Months Ended March 31, | ||||||||||
2017 | 2016 | |||||||||
(unaudited) | (unaudited) | |||||||||
Net sales | ||||||||||
Products | $ | 115,087 | $ | 118,634 | ||||||
Services | 48,075 | 49,272 | ||||||||
163,162 | 167,906 | |||||||||
Cost of sales | ||||||||||
Products | 54,480 | 56,938 | ||||||||
Services | 31,802 | 29,799 | ||||||||
86,282 | 86,737 | |||||||||
Gross profit | 76,880 | 81,169 | ||||||||
Operating expenses | ||||||||||
Research and development, net | 24,634 | 25,115 | ||||||||
Selling, general and administrative | 64,179 | 76,387 | ||||||||
Change in the fair value of obligations in connection with acquisitions | 696 | 727 | ||||||||
89,509 | 102,229 | |||||||||
Operating loss | (12,629 | ) | (21,060 | ) | ||||||
Financial income, net | 256 | 180 | ||||||||
Loss before income taxes | (12,373 | ) | (20,880 | ) | ||||||
Income tax expenses |
1,326 | 2,291 | ||||||||
Share in losses of associated company | (288 | ) | - | |||||||
Net loss | (13,987 | ) | (23,171 | ) | ||||||
Net loss attributable to non-controlling interest | (130 | ) | (30 | ) | ||||||
Net loss attributable to Stratasys Ltd. | $ | (13,857 | ) | $ | (23,141 | ) | ||||
Net loss per ordinary share attributable to Stratasys Ltd. | ||||||||||
Basic | $ | (0.26 | ) | $ | (0.44 | ) | ||||
Diluted | (0.26 | ) | (0.44 | ) | ||||||
Weighted average ordinary shares outstanding | ||||||||||
Basic | 52,690 | 52,098 | ||||||||
Diluted | 52,690 | 52,098 | ||||||||
Stratasys Ltd. | ||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Results of Operations | ||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||||||
2017 | Non-GAAP | 2017 | 2016 | Non-GAAP | 2016 | |||||||||||||||||||||||||
GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||||||||
U.S. dollars and shares in thousands (except per share amounts) | ||||||||||||||||||||||||||||||
Gross profit (1) | $ | 76,880 | $ | 6,614 | $ | 83,494 | $ | 81,169 | $ | 11,278 | $ | 92,447 | ||||||||||||||||||
Operating income (loss) (1,2) | (12,629 | ) | 16,658 | 4,029 | (21,060 | ) | 25,013 | 3,953 | ||||||||||||||||||||||
Net income (loss) attributable to Stratasys Ltd. (1,2,3) |
(13,857 | ) | 16,265 | 2,408 | (23,141 | ) | 23,737 | 596 | ||||||||||||||||||||||
Net income (loss) per diluted share attributable to Stratasys Ltd. (4) |
$ | (0.26 | ) | $ | 0.31 | $ | 0.05 | $ | (0.44 | ) | $ | 0.45 | $ | 0.01 | ||||||||||||||||
(1) | Acquired intangible assets amortization expense | 5,705 | 10,414 | |||||||||||||||||||||||||||
Non-cash stock-based compensation expense | 643 | 723 | ||||||||||||||||||||||||||||
Reorganization and other related costs | 94 | - | ||||||||||||||||||||||||||||
Merger and acquisition and other expense | 172 | 141 | ||||||||||||||||||||||||||||
6,614 | 11,278 | |||||||||||||||||||||||||||||
(2) | Acquired intangible assets amortization expense | 2,544 | 3,760 | |||||||||||||||||||||||||||
Non-cash stock-based compensation expense | 3,261 | 4,900 | ||||||||||||||||||||||||||||
Change in fair value of obligations in connection with acquisitions | 696 | 727 | ||||||||||||||||||||||||||||
Reorganization and other related costs | 1,686 | - | ||||||||||||||||||||||||||||
Merger and acquisition and other expense | 1,857 | 4,348 | ||||||||||||||||||||||||||||
10,044 | 13,735 | |||||||||||||||||||||||||||||
16,658 | 25,013 | |||||||||||||||||||||||||||||
(3) | Corresponding tax effect | (585 | ) | (1,276 | ) | |||||||||||||||||||||||||
Amortization expense of associated company | 192 | - | ||||||||||||||||||||||||||||
$ | 16,265 | $ | 23,737 | |||||||||||||||||||||||||||
(4) |
Weighted average number of ordinary shares outstanding- Diluted |
52,690 | 53,341 | 52,098 | 53,143 | |||||||||||||||||||||||||
Stratasys Ltd. | |||
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance | |||
Fiscal Year 2017 | |||
(in millions, except per share data) | |||
GAAP net loss | ($53) to ($39) | ||
Adjustments |
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Stock-based compensation expense | $18 to $20 | ||
Intangible assets amortization expense | $34 | ||
Merger and acquisition related expense | $2 to $3 | ||
Reorganization and other related costs | $8-$10 | ||
Tax expense related to Non-GAAP adjustments | ($3) to ($4) | ||
Non-GAAP net income | $10 to $20 | ||
GAAP loss per share | ($1.00) to ($0.73) | ||
Non-GAAP diluted earnings per share | $0.19 to $0.37 | ||