Stratasys Reports Third Quarter 2015 Financial Results

Company reports $167.6 million in revenue for the third quarter

Third quarter non-GAAP net income of $0.7 million, or $0.01 per diluted share; and GAAP net loss of $938.0 million, or ($18.06) per basic share

Company provides financial guidance for fourth quarter of 2015

MINNEAPOLIS & REHOVOT, Israel — (BUSINESS WIRE) — November 4, 2015Stratasys Ltd. (Nasdaq: SSYS), the 3D printing and additive manufacturing solutions company, today announced financial results for the third quarter of 2015.

Q3-2015 Financial Results Summary:

  • Revenue for the third quarter of 2015 was $167.6 million, compared to $203.6 million for the same period last year;
  • GAAP net loss for the third quarter was $938.0 million, or ($18.06) per basic share, compared to GAAP net loss of $31.3 million, or ($0.62) per basic share, for the same period last year.
  • Non-GAAP net income for the third quarter was $0.7 million, or $0.01 per diluted share, compared to non-GAAP net income of $30.1 million, or $0.58 per diluted share, reported for the same period last year.
  • The Company invested a net amount of $25.1 million in R&D projects (non-GAAP basis) during the third quarter, representing 15% of revenues.
  • The Company used $17.9 million in cash for operations during the third quarter, and currently holds approximately $262.4 million in cash and cash equivalents, and short term bank deposits.
  • Non-GAAP EBITDA for the third quarter amounted to a loss of $1.5 million.
  • The Company sold 5,467 3D printing and additive manufacturing systems during the third quarter, and has sold a total of 141,395 systems worldwide as of September 30, 2015, on a pro forma combined basis.

The Company updated the goodwill impairment analysis of all of its reporting units. On the basis of its preliminary analysis, the Company recognized a non-cash goodwill and other intangible assets impairment expense of $910 million in the third quarter, primarily as a result of changes of the Company's near-term cash flows projections which reflect, among other things, the increased uncertainty in the 3D printing environment. The impairment expense is subject to further adjustments pursuant to conclusion of the preliminary impairment test, which is expected to be completed within the next week and disclosed in the Company’s third quarter financial statements to be filed on Form 6-K. Finalization of the impairment analysis is expected to occur later in the fourth quarter.

“Our third quarter results are a reflection of the difficult global macro-economic environment we have observed throughout the year that is negatively impacting most of our product lines,” said David Reis, chief executive officer of Stratasys. ”We believe the current environment is primarily a result of weak investment in capital equipment, which has combined with the negative impact of excess capacity that we believe was created during a period of extraordinary growth for Stratasys, and the overall industry, during 2013 and 2014. Additionally, although we believe that overall penetration in the prototyping market remains low, the segment has matured to an extent that our customers now have a wide selection of technology offerings to evaluate, resulting in lengthened sales cycles. Despite these near-term challenges, we continue to observe significant market potential, and remain confident in our long-term growth prospects.”

Business Highlights:

  • Launched a new branding initiative which reinforces Stratasys’ status as the leader within the additive manufacturing and 3D printing market.
  • Released an in-depth industry survey, conducted through Stratasys Direct Manufacturing, which supports the Company’s longer-term growth opportunities.
  • Further developed Go-to-Market strategies that focus on providing specialized expertise and tailored 3D printing solutions, including expansion of the Vertical Solutions and Strategic Accounts Management programs.
  • Progressed in the ongoing reorganization of MakerBot, which include organizational enhancements and initiatives designed to improve operational efficiencies.
  • Announced plans to showcase the Stratasys additive manufacturing ecosystem at the Formnext 2015 exhibition in Frankfurt, Germany this November.

“We are focused on long-term objectives and remain confident we will overcome near-term challenges,” continued Reis. “We will respond to the current market environment by implementing adjustments to our costs and operating structure, while remaining committed to a plan that we believe will help unlock the significant potential within our industry for our innovative solutions. In addition to transforming our brand and go-to-market strategies, we are working on significant advancements for existing platforms, as well as the development of new capabilities and business models. We are positioning our Company for the future, and remain confident of the significant opportunity ahead.”

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