Stratasys Releases Fourth Quarter and Full Year 2020 Financial Results

  • Fourth quarter revenue of $142.4 million and $520.8 million for full year 2020
  • Fourth quarter GAAP net income of $11.0 million, or $0.20 per diluted share, and non-GAAP net income of $7.0 million, or $0.13 per diluted share
  • Produced 11% quarterly sequential revenue growth, improved gross margin and operating income
  • Generated $23.7 million of cash from operations in the fourth quarter resulting in $299.1 million net cash with no debt
  • Manufacturing revenue contribution in excess of 25% in 2020, expected to accelerate with growth initiatives

MINNEAPOLIS & REHOVOT, Israel--()--Stratasys Ltd. (NASDAQ: SSYS) announced financial results for the fourth quarter and full year 2020.

Fourth Quarter 2020 Financial Results Summary Compared to Fourth Quarter 2019:

  • Revenue was $142.4 million, compared to $160.2 million.
  • GAAP gross margin was 46.4%, compared to 49.1%.
  • Non-GAAP gross margin was 49.5%, compared to 52.4%.
  • GAAP operating loss was $2.5 million, compared to an operating loss of $3.3 million.
  • Non-GAAP operating income was $8.3 million, compared to $10.2 million.
  • GAAP net income was $11.0 million, or $0.20 per diluted share, compared to a net loss of $2.8 million, or $(0.05) per diluted share.
  • Non-GAAP net income was $7.0 million, or $0.13 per diluted share, compared to $10.0 million, or $0.18 per diluted share.
  • Adjusted EBITDA was $14.6 million, compared to $16.6 million.
  • Generated $23.7 million of cash from operations.

Dr. Yoav Zeif, Chief Executive Officer of Stratasys, commenting on the results, stated, “Our results reflect the resilience and diversification of our business model. We delivered sequential revenue growth in the back half of the year and this quarter produced the highest operating cash flow in almost three years. We believe both our industry and company are starting to enter a meaningful, sustained trajectory of unprecedented growth and are excited to capitalize on the opportunities ahead.”

Dr. Zeif continued, “In 2020, we implemented a new strategy to be the first choice for polymer 3D printing, with a specific focus on expanding into fast-growing manufacturing applications. We rightsized the company and enhanced our operating model to be application-centric, allowing our team to better leverage synergies. Stratasys is well-positioned to grow, armed with a strong balance sheet with no debt. This year we will add three new technology platforms and will continue to prudently execute on our capital allocation strategy to meaningfully accelerate revenue, earnings and cash flow as our investments begin to contribute in the years ahead and, in turn, drive value for our shareholders.”

2020 Financial Results Summary Compared to 2019:

  • Revenue for 2020 was $520.8 million compared to $636.1 million.
  • GAAP gross margin in 2020 was 42.1%, compared to 49.3%.
  • Non-GAAP gross margin in 2020 was 47.6%, compared to 52.3%.
  • GAAP operating loss for 2020 was $456.0 million, primarily due to $386.2 million goodwill impairment in the third quarter, compared to $11.7 million operating loss.
  • Non-GAAP operating loss for 2020 was $9.1 million, compared to $34.1 million operating income.
  • Adjusted EBITDA in 2020 was $16.0 million, compared to $60.0 million.
  • GAAP net loss for 2020 was $443.7 million, or ($8.08) per diluted share, primarily due to a $386.2 million goodwill impairment in the third quarter, compared to a loss of $10.8 million, or ($0.20) per diluted share.
  • Non-GAAP net loss for 2020 was $13.9 million, or $(0.25) per diluted share, compared to non-GAAP net income of $30.5 million, or $0.56 per diluted share.
  • Generated $27.8 million in cash from operations in 2020 compared to $11.2 million used.

Financial Outlook:

Given the dynamic and evolving impact of the pandemic on the Company's operations, and uncertainty around the timing and extent of an anticipated recovery, the Company is providing the following information based on its pipeline, current market and industry conditions, and previously communicated information:

  • First quarter 2021 revenue is anticipated to track relatively similar to the first quarter of 2020.
  • Second quarter 2021 revenue should approximate mid-teens percentage growth year-over-year, assuming current consumption trends and the impact of the pandemic persist.
  • Full year operating expense is expected to increase over 2020 by approximately $25 million primarily due to the return from a four-day to a five-day work week as of January 1st, 2021, as well as the impact of recent acquisitions. Longer term, the Company expects to realize significant leverage benefits from its investments as revenue growth accelerates in 2022 and beyond.
  • Capital expenditures are anticipated to range from $24 million to $30 million.

Stratasys Ltd. Fourth Quarter 2020 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its fourth quarter and full year 2020 financial results on Monday, March 1, 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/43687/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 6 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, 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 duration and degree of severity of, and strength of recovery from, the global COVID-19 pandemic; 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; the extent of our success at successfully integrating into our existing business, or making additional, acquisitions or investments in new businesses, technologies, products or services; 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); potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets that we have recently acquired or may acquire in the future; 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 (the “2020 Annual Report”), which we expect to file with the Securities and Exchange Commission (the “SEC”) on March 1, 2021. 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 will 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 will be furnished to the SEC over the course of 2021, 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 made 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 (x) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization-related charges or gains, and (y) 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 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)

December 31,

 

December 31,

 

2020

 

 

 

2019

 

 
 
ASSETS
 
Current assets
Cash and cash equivalents

$

272,092

 

$

293,484

 

Short-term deposits

 

27,000

 

 

28,300

 

Accounts receivable, net

 

106,068

 

 

132,558

 

Inventories

 

131,672

 

 

168,504

 

Prepaid expenses

 

6,717

 

 

6,567

 

Other current assets

 

16,943

 

 

29,659

 

 
Total current assets

 

560,492

 

 

659,072

 

 
Non-current assets
Property, plant and equipment, net

 

201,232

 

 

189,706

 

Goodwill

 

35,694

 

 

385,658

 

Other intangible assets, net

 

131,569

 

 

87,328

 

Operating lease right-of-use assets

 

21,298

 

 

20,936

 

Other non-current assets

 

39,717

 

 

38,819

 

 
Total non-current assets

 

429,510

 

 

722,447

 

 
Total assets

$

990,002

 

$

1,381,519

 

 
LIABILITIES AND EQUITY
 
Current liabilities
Accounts payable

$

16,987

 

$

35,818

 

Accrued expenses and other current liabilities

 

31,061

 

 

28,528

 

Accrued compensation and related benefits

 

25,659

 

 

34,013

 

Deferred revenues - short-term

 

49,165

 

 

52,268

 

Operating lease liabilities - short-term

 

9,282

 

 

9,292

 

 
Total current liabilities

 

132,154

 

 

159,919

 

 
Non-current liabilities
Deferred revenues - long-term

 

14,227

 

 

16,039

 

Operating lease liabilities - long term

 

12,567

 

 

12,445

 

Other non-current liabilities

 

71,459

 

 

35,343

 

 
Total non-current liabilities

 

98,253

 

 

63,827

 

 
Total liabilities

 

230,407

 

 

223,746

 

 
Redeemable non-controlling interests

 

227

 

 

622

 

 
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands
shares; 56,617 thousands shares and 54,441 thousands shares issued
and outstanding at December 31, 2020 and 2019, respectively

 

155

 

 

148

 

Additional paid-in capital

 

2,753,955

 

 

2,706,894

 

Accumulated other comprehensive loss

 

(8,846

)

 

(7,716

)

Accumulated deficit

 

(1,985,896

)

 

(1,542,175

)

Total equity

 

759,368

 

 

1,157,151

 

 
Total liabilities and equity

$

990,002

 

$

1,381,519

 

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

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Net sales
Products

$

99,185

 

$

108,968

 

$

339,782

 

$

430,746

 

Services

 

43,210

 

 

51,189

 

 

181,035

 

 

205,334

 

 

142,395

 

 

160,157

 

 

520,817

 

 

636,080

 

 
Cost of sales
Products

 

44,679

 

 

46,825

 

 

171,235

 

 

182,430

 

Services

 

31,697

 

 

34,673

 

 

130,188

 

 

139,958

 

 

76,376

 

 

81,498

 

 

301,423

 

 

322,388

 

 
Gross profit

 

66,019

 

 

78,659

 

 

219,394

 

 

313,692

 

 
Operating expenses
Research and development, net

 

18,953

 

 

24,019

 

 

84,012

 

 

94,253

 

Selling, general and administrative

 

49,595

 

 

57,921

 

 

205,224

 

 

231,138

 

Goodwill impairment

 

-

 

 

-

 

 

386,154

 

 

-

 

 

68,548

 

 

81,940

 

 

675,390

 

 

325,391

 

 
Operating loss

 

(2,529

)

 

(3,281

)

 

(455,996

)

 

(11,699

)

 
Financial income (expense), net

 

273

 

 

1,760

 

 

(575

)

 

4,555

 

 
Loss before income taxes

 

(2,256

)

 

(1,521

)

 

(456,571

)

 

(7,144

)

 
Income tax expenses (benefit)

 

(14,144

)

 

439

 

 

(16,394

)

 

3,523

 

 
Share in profits (losses) of associated companies

 

(1,200

)

 

(907

)

 

(3,939

)

 

(412

)

 
Net income (loss)

 

10,688

 

 

(2,867

)

 

(444,116

)

 

(11,079

)

 
Net loss attributable to non-controlling interests

 

(341

)

 

(78

)

 

(395

)

 

(230

)

 
Net income (loss) attributable to Stratasys Ltd.

$

11,029

 

$

(2,789

)

$

(443,721

)

$

(10,849

)

 
Net income (loss) per ordinary share attributable to Stratasys Ltd.
Basic

$

0.20

 

$

(0.05

)

$

(8.08

)

$

(0.20

)

Diluted

$

0.20

 

$

(0.05

)

$

(8.08

)

$

(0.20

)

 
 
Basic

 

55,118

 

 

54,435

 

 

54,918

 

 

54,260

 

Diluted

 

55,318

 

 

54,435

 

 

54,918

 

 

54,260

 

Three Months Ended December 31,

 

2020

 

 

Non-GAAP

 

 

2020

 

 

2019

 

 

Non-GAAP

 

 

2019

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

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

 
Gross profit (1)

$

66,019

 

$

4,520

 

$

70,539

$

78,659

 

$

5,294

 

$

83,953

Operating income (loss) (1,2)

 

(2,529

)

 

10,861

 

 

8,332

 

(3,281

)

 

13,436

 

 

10,155

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

 

11,029

 

 

(4,001

)

 

7,028

 

(2,789

)

 

12,741

 

 

9,952

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

$

0.20

 

$

(0.07

)

$

0.13

$

(0.05

)

$

0.23

 

$

0.18

 
 

(1)

Acquired intangible assets amortization expense

 

3,411

 

 

4,770

 

 

Non-cash stock-based compensation expense

 

347

 

 

478

 

 

Restructuring and other related costs

 

762

 

 

46

 

 

 

4,520

 

 

5,294

 

 

 

(2)

Acquired intangible assets amortization expense

 

2,290

 

 

2,985

 

 

Non-cash stock-based compensation expense

 

3,962

 

 

4,325

 

 

Restructuring and other related costs

 

449

 

 

556

 

 

Other expenses (income)

 

(360

)

 

276

 

 

 

6,341

 

 

8,142

 

 

 

10,861

 

 

13,436

 

 

 

(3)

Corresponding tax effect

 

(1,002

)

 

(721

)

 

Release of valuation allowance

 

(14,007

)

 

-

 

 

Equity method related amortization, divestments and impairments

 

483

 

 

26

 

 

Adjustments attributable to non-controlling interest

 

(336

)

 

-

 

 

$

(4,001

)

$

12,741

 

(4)

Weighted average number of ordinary
shares outstanding- Diluted

 

55,318

 

 

55,318

 

54,435

 

 

54,738

 

Twelve Months Ended December 31,

 

2020

 

 

Non-GAAP

 

 

2020

 

 

 

2019

 

 

Non-GAAP

 

 

2019

 

GAAP

 

 

 

Adjustments

 

 

 

Non-GAAP

 

 

 

GAAP

 

 

 

 

Adjustments

 

 

 

Non-GAAP

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

         
Gross profit (1)

$

219,394

 

 

$

28,582

 

 

$

247,976

 

 

$

313,692

 

 

$

 

19,074

 

$

 

332,766

Operating income (loss) (1,2)

 

(455,996

)

 

 

446,848

 

 

 

(9,148

)

 

 

(11,699

)

 

 

 

45,812

 

 

 

34,113

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

 

(443,721

)

 

 

429,820

 

 

 

(13,901

)

 

 

(10,849

)

 

 

 

41,315

 

 

 

30,466

Net income (loss) per diluted share attributable

           

to Stratasys Ltd. (4)

$

(8.08

)

 

$

7.83

 

 

$

(0.25

)

 

$

(0.20

)

 

$

 

0.76

 

$

 

0.56

         
         

(1)

Acquired intangible assets amortization expense  

 

15,607

 

     

 

 

16,484

 

 

Non-cash stock-based compensation expense  

 

1,771

 

     

 

 

1,848

 

 

Restructuring and other related costs  

 

5,948

 

     

 

 

742

 

 

Impairment charges of intangible assets  

 

5,256

 

     

 

 

-

 

 

 

 

28,582

 

     

 

 

19,074

 

 

       

(2)

Acquired intangible assets amortization expense  

 

8,720

 

     

 

 

8,673

 

 

Non-cash stock-based compensation expense  

 

18,433

 

     

 

 

18,716

 

 

Goodwill impairment  

 

386,154

 

     

 

 

-

 

 

Gain from divestiture, net of transaction costs  

 

-

 

     

 

 

(3,578

)

 

Restructuring and other related costs  

 

4,312

 

     

 

 

2,655

 

 

Other expenses  

 

647

 

     

 

 

272

 

 

 

 

418,266

 

     

 

 

26,738

 

 

 

 

446,848

 

     

 

 

45,812

 

 

       

(3)

Corresponding tax effect  

 

(3,398

)

     

 

 

(2,919

)

 

Release of valuation allowance  

 

(14,007

)

     

 

 

-

 

 

Equity method related amortization, divestments and impairments  

 

713

 

     

 

 

(1,578

)

 

Adjustments attributable to non-controlling interest  

 

(336

)

     

 

 

-

 

 

 

$

429,820

 

     

$

 

41,315

 

 

       

(4)

Weighted average number of ordinary

         

 

shares outstanding- Diluted

 

54,918

 

   

 

54,918

 

 

 

54,260

 

 

 

 

54,713

 

Contacts

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

Release Summary

Stratasys Releases Fourth Quarter and Full Year 2020 Financial Results

Contacts

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