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Stratasys Releases Fourth Quarter and Full Year 2022 Financial Results

  • Fourth quarter revenue of $159.3 million, 4.6% lower versus fourth quarter 2021 but up 1.7% at constant currency and adjusted for divestitures
  • Fourth quarter GAAP net loss of $2.4 million, or $0.04 per diluted share, and non-GAAP net income of $4.6 million, or $0.07 per diluted share
  • Full year revenue of $651.5 million, 7.3% higher versus 2021 and up 11.4% at constant currency and adjusted for divestitures
  • Full year GAAP net loss of $29.0 million, or $0.44 per diluted share, and non-GAAP net income of $10.3 million, or $0.15 per diluted share
  • $327.8 million cash and equivalents and no debt at year end 2022

Stratasys Ltd. (Nasdaq: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the fourth quarter and full year 2022.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer stated, “Stratasys grew 11.4% in 2022, adjusting for divestitures and currency impacts, while delivering our sixth consecutive quarter of profitability on an adjusted basis against an increasingly challenging macroeconomic environment. Strong execution by our team and a relentless focus on controlling costs contributed to our effective efforts to overcome these challenges.”

Dr. Zeif continued, “We are encouraged by the strong future demand indicators from our customers for our additive manufacturing polymer systems and consumables. Our high engagement levels across our innovative products, along with the strength of our customer service revenues, provide us with the confidence that once capital spending restrictions are lifted and utilization levels increase, our efforts will be rewarded. With our broad-based technology portfolio and an unmatched go-to-market capability, we are positioned well to gain increased share when macroeconomic headwinds subside. Armed with a strong balance sheet and a disciplined approach to capital allocation, we are well prepared to build on our industry leadership in the coming years.”

Summary - Fourth Quarter 2022 Financial Results Compared to Fourth Quarter 2021:

  • Revenue of $159.3 million compared to $167.0 million.
  • GAAP gross margin of 43.1%, compared to 43.7%.
  • Non-GAAP gross margin of 48.4%, compared to 48.7%.
  • GAAP operating income of $1.6 million, compared to an operating loss of $16.2 million.
  • Non-GAAP operating income of $5.1 million, compared to non-GAAP operating income of $1.7 million.
  • GAAP net loss of $2.4 million, or $0.04 per diluted share, compared to a net loss of $4.8 million, or $0.07 per diluted share.
  • Non-GAAP net income of $4.6 million, or $0.07 per diluted share, compared to non-GAAP net income of $0.5 million, or $0.01 per diluted share.
  • Adjusted EBITDA of $10.7 million, compared to $7.9 million.
  • Planned inventory build resulted in cash used in operations of $18.1 million, compared to cash generated of $4.4 million year over year.

Summary - 2022 Financial Results Compared to 2021:

  • Revenue of $651.5 million compared to $607.2 million.
  • GAAP gross margin of 42.4%, compared to 42.8%.
  • Non-GAAP gross margin of 48.0%, compared to 47.8%.
  • GAAP operating loss of $57.2 million, compared to a $79.2 million operating loss.
  • Non-GAAP operating income of $13.5 million, compared to a $1.7 million non-GAAP operating loss.
  • Adjusted EBITDA of $36.1 million, compared to $22.6 million.
  • GAAP net loss of $29.0 million, or ($0.44) per diluted share, compared to a loss of $62.0 million, or ($0.98) per diluted share.
  • Non-GAAP net income of $10.3 million, or $0.15 per diluted share, compared to non-GAAP net loss of $4.3 million, or $(0.07) per diluted share.
  • Planned inventory build resulted in cash used in operations of $75.4 million, compared to cash provided by operations of $35.8 million.
Non-GAAP Adjustments:

Quarter Ended

December 31,

Year Ended

December 31,

Revenue Growth Rates (%) as reported

(4.6

%)

 

7.3

%

Adjusted Revenue Growth Rates (%) excluding divestitures

(0.3

%)

 

9.0

%

Adjusted Revenue Growth Rates (%) excluding divestitures and FX effects

1.7

%

 

11.4

%

Financial Outlook:

Based on current market conditions and assuming that the impacts of global inflationary pressures, interest rate hikes and supply chain costs do not impede economic activity further, the Company is providing the following outlook for 2023:

  • Full year revenue of $620 million to $670 million.
  • Sequential quarterly revenue growth, notably higher in the second half
  • Based on current logistics and materials costs, full year gross margins of 48.0% to 49.0%, with improved year-over-year growth in the second half of 2023.
  • Full year-operating expenses of $290 million to $300 million.
  • Full year non-GAAP operating margins of 2.5% to 3.5% with improving profitable contribution through the year.
  • GAAP net loss of $78 million to $57 million, or ($1.12) to ($0.83) per diluted share.
  • Non-GAAP net income of $9 million to $17 million, or $0.12 to $0.24 per diluted share.
  • Adjusted EBITDA of $35 million to $50 million.
  • Capital expenditures of $20 million to $25 million.

Non-GAAP earnings guidance excludes $30 million to $32 million of projected amortization of intangible assets, $28 million to $30 million of share-based compensation expense, and reorganization and other expenses of $15 million to $22 million. Non-GAAP guidance includes tax adjustments of $2 million to $3 million on the above non-GAAP items.

Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of our press release and slide presentation, with itemized detail concerning the non-GAAP financial measures.

Stratasys Ltd. Fourth Quarter 2022 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its fourth quarter 2022 financial results on Thursday, March 2, 2023, 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://event.choruscall.com/mediaframe/webcast.html?webcastid=K6UFH5he

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 six 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, healthcare, fashion and education. 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 2023 and beyond, 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 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; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; the extent of our success at successfully consummating and integrating into our existing business acquisitions or investments in new businesses, technologies, products or services; the global macro-economic environment, including headwinds caused by inflation, rising interest rates, unfavorable currency exchange rates and potential recessionary conditions, 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; 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, 2022, which we are filing with the U.S. Securities and Exchange Commission, or SEC, on or about March 2, 2023 (the “2022 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2022 Annual Report and the Reports of Foreign Private Issuer on Form 6-K that attach Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly periods throughout 2023, which will be furnished to the SEC throughout 2023, 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 provided or made (as applicable) 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 (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization-related charges or gains, and legal provisions and (ii) 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 goodwill, revaluation of our investments 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
(in thousands, except share data)

December 31,

December 31,

2022

2021

 
 
ASSETS
 
Current assets
Cash and cash equivalents

$

150,470

 

$

243,179

 

Short-term deposits

 

177,367

 

 

259,000

 

Accounts receivable, net of allowance for credit losses of $0.9 million and $0.5 million as of December 31, 2022 and December 31, 2021

 

144,739

 

 

129,382

 

Inventories

 

194,054

 

 

129,147

 

Prepaid expenses

 

5,767

 

 

6,871

 

Other current assets

 

27,823

 

 

33,123

 

 
Total current assets

 

700,220

 

 

800,702

 

 
Non-current assets
Property, plant and equipment, net

 

195,063

 

 

203,295

 

Goodwill

 

64,953

 

 

65,144

 

Other intangible assets, net

 

121,402

 

 

152,244

 

Operating lease right-of-use assets

 

18,122

 

 

14,651

 

Long-term investments

 

141,610

 

 

28,667

 

Other non-current assets

 

18,420

 

 

12,519

 

 
Total non-current assets

 

559,570

 

 

476,520

 

 
Total assets

$

1,259,790

 

$

1,277,222

 

 
LIABILITIES AND EQUITY
 
Current liabilities
Accounts payable

$

72,921

 

$

51,976

 

Accrued expenses and other current liabilities

 

45,912

 

 

55,358

 

Accrued compensation and related benefits

 

34,432

 

 

44,684

 

Deferred revenues - short term

 

50,220

 

 

51,174

 

Operating lease liabilities - short term

 

7,169

 

 

7,276

 

 
Total current liabilities

 

210,654

 

 

210,468

 

 
Non-current liabilities
Deferred revenues - long term

 

25,214

 

 

21,133

 

Deferred income taxes - long term

 

5,638

 

 

7,341

 

Operating lease liabilities - long term

 

10,670

 

 

7,693

 

Contingent consideration - long term

 

23,707

 

 

53,478

 

Other non-current liabilities

 

24,475

 

 

21,095

 

 
Total non-current liabilities

 

89,704

 

 

110,740

 

 
Total liabilities

 

300,358

 

 

321,208

 

 
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands
shares; 67,086 thousands shares and 65,677 thousands shares issued

 

187

 

 

182

 

and outstanding at December 31, 2022 and December 31, 2021, respectively

 

3,048,915

 

 

3,012,481

 

Additional paid-in capital
Accumulated other comprehensive loss

 

(12,818

)

 

(8,771

)

Accumulated deficit

 

(2,076,852

)

 

(2,047,878

)

Total equity

 

959,432

 

 

956,014

 

 
Total liabilities and equity

$

1,259,790

 

$

1,277,222

 

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

Three Months Ended December 31,

Twelve Ended December 31,

2022

2021

2022

2021

(unaudited)

(unaudited)

Net sales
Products

$

111,197

 

$

118,040

 

$

452,124

 

$

417,557

 

Services

 

48,062

 

 

48,976

 

 

199,359

 

 

189,662

 

 

159,259

 

 

167,016

 

 

651,483

 

 

607,219

 

 
Cost of sales
Products

 

58,180

 

 

59,470

 

 

234,601

 

 

210,941

 

Services

 

32,431

 

 

34,503

 

 

140,415

 

 

136,200

 

 

90,611

 

 

93,973

 

 

375,016

 

 

347,141

 

 
Gross profit

 

68,648

 

 

73,043

 

 

276,467

 

 

260,078

 

 
Operating expenses
Research and development, net

 

21,387

 

 

22,620

 

 

92,876

 

 

88,303

 

Selling, general and administrative

 

45,665

 

 

66,584

 

 

240,750

 

 

250,937

 

 

67,052

 

 

89,204

 

 

333,626

 

 

339,240

 

 
Operating loss

 

1,596

 

 

(16,161

)

 

(57,159

)

 

(79,162

)

 
Gain from deconsolidation of subsidiary

 

-

 

 

-

 

 

39,136

 

 

-

 

Gain from step acquisition

 

-

 

 

14,400

 

 

-

 

 

14,400

 

Financial income (expense), net

 

2,309

 

 

(692

)

 

229

 

 

(2,075

)

 
Income (loss) before income taxes

 

3,905

 

 

(2,453

)

 

(17,794

)

 

(66,837

)

 
Income tax benefit (expense)

 

(2,658

)

 

(2,103

)

 

(5,454

)

 

3,906

 

 
Share in profit (losses) of associated companies

 

(3,637

)

 

(280

)

 

(5,726

)

 

949

 

 
Net income (loss)

$

(2,390

)

$

(4,836

)

$

(28,974

)

$

(61,982

)

 
Net income (loss) per share
Basic

$

(0.04

)

$

(0.07

)

$

(0.44

)

$

(0.98

)

Diluted

$

(0.04

)

$

(0.07

)

$

(0.44

)

$

(0.98

)

 
Weighted average ordinary shares outstanding
Basic

 

66,908

 

 

65,196

 

 

66,491

 

 

63,471

 

Diluted

 

66,908

 

 

65,196

 

 

66,491

 

 

63,471

 

Three Months Ended December 31,

 

2022

Non-GAAP

2022

2021

Non-GAAP

2021

 

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

 

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

 

Gross profit (1)

$

68,648

 

$

8,423

 

$

77,071

$

73,043

 

$

8,255

 

$

81,298

 

Operating income (loss) (1,2)

 

1,596

 

 

3,456

 

 

5,052

 

(16,161

)

 

17,822

 

 

1,661

 

Net income (loss) (1,2,3)

 

(2,390

)

 

6,940

 

 

4,550

 

(4,836

)

 

5,355

 

 

519

 

Net income (loss) per diluted share (4)

$

(0.04

)

$

0.11

 

$

0.07

$

0.07

 

$

0.08

 

$

0.01

 

 

 

(1)

Acquired intangible assets amortization expense

 

7,297

 

 

6,024

 

 

Non-cash stock-based compensation expense

 

1,041

 

 

866

 

 

Restructuring and other related costs

 

85

 

 

1,185

 

 

Impairment charges

 

-

 

 

180

 

 

 

8,423

 

 

8,255

 

 

(2)

Acquired intangible assets amortization expense

 

2,370

 

 

2,280

 

 

Non-cash stock-based compensation expense

 

7,664

 

 

6,971

 

 

Restructuring and other related costs

 

874

 

 

373

 

 

Revaluation of investments

 

560

 

 

(1,861

)

 

Contingent consideration

 

(19,490

)

 

(20

)

 

Other expenses

 

3,056

 

 

1,824

 

 

 

(4,967

)

 

9,568

 

 

 

3,456

 

 

17,822

 

 

(3)

Corresponding tax effect

 

1,770

 

 

1,906

 

 

Equity method related amortization, divestments and impairments

 

1,714

 

 

27

 

 

Gain from obtaining control

 

-

 

 

(14,400

)

 

$

6,940

 

$

5,355

 

 

(4)

Weighted average number of ordinary

shares outstanding - Diluted

 

66,908

 

 

67,231

 

65,196

 

 

66,820

 

Twelve Months Ended December 31,

 

2022

Non-GAAP

2022

2021

Non-GAAP

2021

 

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

 

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

 

Gross profit (1)

$

276,467

 

$

36,016

 

$

312,483

$

260,078

 

$

30,447

 

$

290,525

 

 

Operating income (loss) (1,2)

 

(57,159

)

 

70,691

 

 

13,532

 

(79,162

)

 

77,479

 

 

(1,683

)

 

Net income (loss) (1,2,3)

 

(28,974

)

 

39,235

 

 

10,261

 

(61,982

)

 

57,639

 

 

(4,343

)

 

Net income (loss) per diluted share (4)

$

(0.44

)

$

0.59

 

$

0.15

$

(0.98

)

$

0.91

 

$

(0.07

)

 

 

 

(1)

Acquired intangible assets amortization expense

 

28,158

 

 

22,392

 

 

Non-cash stock-based compensation expense

 

4,082

 

 

3,093

 

 

Restructuring and other related costs

 

(174

)

 

1,642

 

 

Impairment charges

 

3,949

 

 

3,320

 

 

 

36,016

 

 

30,447

 

 

(2)

Acquired intangible assets amortization expense

 

8,950

 

 

8,878

 

 

Non-cash stock-based compensation expense

 

29,378

 

 

27,885

 

 

Impairment of long-lived assets

 

-

 

 

1,447

 

 

Restructuring and other related costs

 

2,737

 

 

2,743

 

 

Revaluation of investments

 

3,777

 

 

(1,303

)

 

Contingent consideration

 

(18,293

)

 

570

 

 

Other expenses

 

8,126

 

 

6,812

 

 

 

34,676

 

 

47,032

 

 

 

70,691

 

 

77,479

 

 

(3)

Corresponding tax effect

 

4,988

 

 

(864

)

 

Equity method related amortization, divestments and impairments

 

2,285

 

 

(4,576

)

 

Finance expenses

 

406

 

 

-

 

 

Gain from deconsolidation of subsidiary

 

(39,136

)

 

Gain from obtaining control

 

(14,400

)

 

 

$

39,235

 

$

57,639

 

 

(4)

Weighted average number of ordinary

shares outstanding - Diluted

 

66,491

 

 

67,068

 

63,471

 

 

63,471

 

Stratasys Ltd.
 
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
 
Fiscal Year 2023
 
(in millions, except per share data)
 
 
GAAP net loss ($78) to ($57)
 
Adjustments
Stock-based compensation expense $28 to $30
Intangible assets amortization expense $30 to $32
Reorganization and other $15 to $22
Tax expense (benefit) related to Non-GAAP adjustments $2 to $3
 
Non-GAAP net income $9 to $17
 
GAAP loss per share ($1.12) to ($0.83)
 
Non-GAAP diluted earnings per share $0.12 to $0.24

 

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