SSYS Stratasys Ltd

• Fourth quarter revenue of $156.3 million, 1.3% higher than the fourth quarter 2022 excluding divestitures, and 1.9% lower than the actual fourth quarter 2022 revenues
• Record-level recurring revenue for consumables reflects continued strong printer utilization
• Fourth quarter GAAP net loss of $15.0 million, or $0.22 per diluted share, and non-GAAP net income of $1.6 million, or $0.02 per diluted share
• Tenth straight quarter of adjusted profitability
• Full year revenue of $627.6 million, 1.3% higher than 2022, excluding divestitures, and 3.7% lower than the actual full year 2022 revenues
• Full year GAAP net loss of $123.1 million, or $1.79 per diluted share, and non-GAAP net income of $7.7 million, or $0.11 per diluted share
• $162.6 million cash and equivalents and no debt at year-end 2023
• Stratasys board of directors continues its comprehensive strategic alternatives process
• Provides 2024 Outlook

Stratasys Ltd. (Nasdaq: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the fourth quarter and full year 2023.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer stated, “We continued to differentiate ourselves in 2023, achieving our tenth consecutive quarter of profitability on an adjusted basis. We also delivered 1.3% full year revenue growth when adjusted for divestitures despite a persistently challenging backdrop for our customers. Revenue in the fourth quarter was driven by another record for consumables sales, demonstrating how utilization of our systems remains strong, while a relentless focus on cost control contributed to improved margins.”

Dr. Zeif continued, “We are innovating and investing as we expand our leadership in additive manufacturing. Our newest and most advanced FDM offering, the F3300, is building a strong pipeline of interest after announcing Toyota as its first customer, and engagement across our entire suite of offerings remains robust. As macro-economic conditions normalize and capital spending constraints ease, we believe the pent-up demand for our best-in-class offerings will unlock, driving the next phase of outsized growth and increased profitability for our company.”

Summary - Fourth Quarter 2023 Financial Results Compared to Fourth Quarter 2022:

• Revenue of $156.3 million compared to $159.3 million.
• GAAP gross margin of 44.7%, compared to 43.1%.
• Non-GAAP gross margin of 48.8%, compared to 48.4%.
• GAAP operating income of $5.7 million, compared to operating income of $1.6 million.
• Non-GAAP operating income of $2.0 million, compared to operating income of $5.1 million.
• GAAP net loss of $15.0 million, or $0.22 per diluted share, compared to a net loss of $2.4 million, or $0.04 per diluted share.
• Non-GAAP net income of $1.6 million, or $0.02 per diluted share, compared to net income of $4.6 million, or $0.07 per diluted share.
• Adjusted EBITDA of $7.7 million, compared to $10.7 million.
• Cash used in operations of $7.7 million, compared to cash used in operations of $18.1 million.

Summary - 2023 Financial Results Compared to 2022:

• Revenue of $627.6 million compared to $651.5 million.
• GAAP gross margin of 42.5%, compared to 42.4%.
• Non-GAAP gross margin of 48.2%, compared to 48.0%.
• GAAP operating loss of $87.6 million, compared to an operating loss of $57.2 million.
• Non-GAAP operating income of $12.6 million, compared to operating income of $13.5 million.
• GAAP net loss of $123.1 million, or $1.79 per diluted share, compared to a loss of $29.0 million, or $0.44 per diluted share.
• Non-GAAP net income of $7.7 million, or $0.11 per diluted share, compared to net income of $10.3 million, or $0.15 per diluted share.
• Adjusted EBITDA of $35.0 million, compared to $36.1 million.
• Cash used in operations of $61.6 million, compared to cash used in operations of $75.4 million.

Financial Outlook:

Based on current market conditions and assuming that the impacts of global inflationary pressures, relatively high interest rates and supply chain costs do not impede economic activity further, the Company is providing the following outlook for 2024:

• Full year revenue of $630 million to $645 million, improving sequentially through the year.
  • Compare to 2023 revenue of approximately $616 million excluding divestments and annualizing Covestro.
• Based on current logistics and materials costs, full year gross margins of 49.0%-49.5%, improving sequentially through the year.
• Full year operating expenses in a range of $292 million to $297 million.
• Full year non-GAAP operating margins in a range of 2.5% to 3.5%.
• GAAP net loss of $88 million to $72 million, or ($1.24) to ($1.01) per diluted share.
• Non-GAAP net income of $9 million to $14 million, or $0.12 to $0.19 per diluted share.
• Adjusted EBITDA of $40 million to $45 million.
• Capital expenditures of $20 million to $25 million.
• Positive cash flow from operating activities.

Non-GAAP earnings guidance excludes $29 million to $31 million of projected amortization of intangible assets, $26 million to $28 million of share-based compensation expense, and reorganization and other expenses of $29 million to $35 million. Non-GAAP guidance includes tax adjustments of $2 million to $3 million on the above non-GAAP items.

Appropriate reconciliations between historical 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 2023 Webcast and Conference Call Details

The Company plans to webcast its conference call to discuss its fourth quarter 2023 financial results on Thursday, March 7, 2024, 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=cZzaGlQr

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 extent of our success at introducing new or improved products and solutions that gain market share; the extent of growth of the 3D printing market generally; the global macro-economic environment, including headwinds caused by inflation, relatively high interest rates, unfavorable currency exchange rates and uncertain economic conditions; changes in our overall strategy, including as related to any restructuring activities and our capital expenditures; 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 outcome of our board of directors’ comprehensive process to explore strategic alternatives for our company; 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 potential adverse impact of recent global interruptions and delays involving freight carriers and other third parties on our supply chain and distribution network; global market, political and economic conditions, and in the countries in which we operate in particular; potential adverse effects of Israel’s retaliatory war against the terrorist organization Hamas; 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, 2023, which we expect to file with the U.S. Securities and Exchange Commission, or SEC, in the coming days (the “2023 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2023 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 2024, which will be furnished to the SEC throughout 2024, 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, (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, (iii) for certain non-GAAP measures, after eliminating the impact of changes attributable to currency exchange rate fluctuations, and (iv) after excluding changes in revenues solely attributable to divestitures of former subsidiary companies. 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) (Unaudited) December 31, December 31,

2023

2022

    ASSETS   Current assets Cash and cash equivalents

$

82,585

 

$

150,470

 

Short-term bank deposits

 

80,000

 

 

177,367

 

Accounts receivable, net of allowance for credit losses of $1,449 and $861 as of December 31, 2023 and December 31, 2022, respectively

 

172,009

 

 

144,739

 

Inventories

 

192,976

 

 

194,054

 

Prepaid expenses

 

7,929

 

 

5,767

 

Other current assets

 

24,596

 

 

27,823

 

  Total current assets

 

560,095

 

 

700,220

 

  Non-current assets Property, plant and equipment, net

 

197,552

 

 

195,063

 

Goodwill

 

100,051

 

 

64,953

 

Other intangible assets, net

 

127,781

 

 

121,402

 

Operating lease right-of-use assets

 

18,895

 

 

18,122

 

Long-term investments

 

115,083

 

 

141,610

 

Other non-current assets

 

14,448

 

 

18,420

 

  Total non-current assets

 

573,810

 

 

559,570

 

  Total assets

$

1,133,905

 

$

1,259,790

 

  LIABILITIES AND EQUITY   Current liabilities Accounts payable

$

46,785

 

$

72,921

 

Accrued expenses and other current liabilities

 

36,656

 

 

45,912

 

Accrued compensation and related benefits

 

33,877

 

 

34,432

 

Deferred revenues - short-term

 

52,610

 

 

50,220

 

Operating lease liabilities - short-term

 

6,498

 

 

7,169

 

  Total current liabilities

 

176,426

 

 

210,654

 

  Non-current liabilities Deferred revenues - long-term

 

23,655

 

 

25,214

 

Deferred income taxes

 

723

 

 

5,638

 

Operating lease liabilities - long-term

 

12,162

 

 

10,670

 

Contingent consideration

 

11,900

 

 

23,707

 

Other non-current liabilities

 

24,200

 

 

24,475

 

  Total non-current liabilities

 

72,640

 

 

89,704

 

  Total liabilities

 

249,066

 

 

300,358

 

  Equity Ordinary shares, NIS 0.01 nominal value, authorized 180,000 shares; 69,656 shares and 67,086 shares issued

 

195

 

 

187

 

and outstanding at December 31, 2023 and December 31, 2022, respectively

 

3,091,649

 

 

3,048,915

 

Additional paid-in capital Accumulated other comprehensive loss

 

(7,079

)

 

(12,818

)

Accumulated deficit

 

(2,199,926

)

 

(2,076,852

)

Total Equity

 

884,839

 

 

959,432

 

  Total liabilities and equity

$

1,133,905

 

$

1,259,790

 

Stratasys Ltd.   Consolidated Statements of Operations (in thousands, except per share data) (Unaudited)   Three Months Ended December 31, Twelve Ended December 31,

2023

 

2022

 

2023

 

2022

  Revenues Products

$

110,388

 

$

111,197

 

$

433,741

 

$

452,124

 

Services

 

45,949

 

 

48,062

 

 

193,857

 

 

199,359

 

 

156,337

 

 

159,259

 

 

627,598

 

 

651,483

 

  Cost of revenues Products

 

58,275

 

 

58,180

 

 

226,510

 

 

234,601

 

Services

 

28,304

 

 

32,431

 

 

134,064

 

 

140,415

 

 

86,579

 

 

90,611

 

 

360,574

 

 

375,016

 

  Gross profit

 

69,758

 

 

68,648

 

 

267,024

 

 

276,467

 

  Operating expenses Research and development, net

 

25,078

 

 

21,387

 

 

94,425

 

 

92,876

 

Selling, general and administrative

 

39,006

 

 

45,665

 

 

260,179

 

 

240,750

 

 

64,084

 

 

67,052

 

 

354,604

 

 

333,626

 

  Operating income (loss)

 

5,674

 

 

1,596

 

 

(87,580

)

 

(57,159

)

  Gain from deconsolidation of subsidiary

 

-

 

 

-

 

 

-

 

 

39,136

 

Financial income, net

 

846

 

 

2,309

 

 

2,993

 

 

229

 

  Income (loss) before income taxes

 

6,520

 

 

3,905

 

 

(84,587

)

 

(17,794

)

  Income tax expense

 

(637

)

 

(2,658

)

 

(5,782

)

 

(5,454

)

  Share in losses of associated companies

 

(20,839

)

 

(3,637

)

 

(32,705

)

 

(5,726

)

  Net loss

$

(14,956

)

$

(2,390

)

$

(123,074

)

$

(28,974

)

  Net loss per share Basic

$

(0.22

)

$

(0.04

)

$

(1.79

)

$

(0.44

)

Diluted

$

(0.22

)

$

(0.04

)

$

(1.79

)

$

(0.44

)

  Weighted average ordinary shares outstanding Basic

 

69,375

 

 

66,908

 

 

68,666

 

 

66,491

 

Diluted

 

69,375

 

 

66,908

 

 

68,666

 

 

66,491

 

Three Months Ended December 31,

2023

 

Non-GAAP

 

2023

 

2022

 

Non-GAAP

 

2022

GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP U.S. dollars and shares in thousands (except per share amounts) Gross profit (1)

$

69,758

 

$

6,565

 

$

76,323

$

68,648

 

$

8,423

 

$

77,071

Operating income (1,2)

 

5,674

 

(3,659

)

 

2,015

 

1,596

 

 

3,456

 

 

5,052

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

 

(14,956

)

 

16,604

 

 

1,648

 

(2,390

)

 

6,940

 

 

4,550

Net income (loss) per diluted share (4)

$

(0.22

)

$

0.24

 

$

0.02

$

(0.04

)

$

0.11

 

$

0.07

 

(1

)

Acquired intangible assets amortization expense

 

5,446

 

 

7,297

 

Non-cash stock-based compensation expense

 

879

 

 

1,041

 

Restructuring and other related costs

 

240

 

 

85

 

 

6,565

 

 

8,423

 

 

(2

)

Acquired intangible assets amortization expense

 

1,688

 

 

2,370

 

Non-cash stock-based compensation expense

 

6,997

 

 

7,664

 

Restructuring and other related costs

 

461

 

 

874

 

Revaluation of investments

 

-

 

 

560

 

Contingent consideration

 

(23,206

)

 

(19,490

)

Legal, consulting and other expenses

 

3,836

 

 

3,056

 

 

(10,224

)

 

(4,967

)

 

(3,659

)

 

3,456

 

 

(3

)

Corresponding tax effect and other expenses

 

489

 

 

1,770

 

Equity method related amortization, divestments and impairments

 

19,790

 

 

1,714

 

Finance expenses

 

(16

)

 

-

 

$

16,604

 

$

6,940

 

 

(4

)

Weighted average number of ordinaryshares outstanding - Diluted

 

69,375

 

 

69,801

 

66,908

 

 

67,231

Twelve Months Ended December 31,

2023

 

Non-GAAP

 

2023

 

2022

 

Non-GAAP

 

2022

GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP U.S. dollars and shares in thousands (except per share amounts) Gross profit (1)

$

267,024

$

35,764

 

$

302,788

$

276,467

 

$

36,016

 

$

312,483

Operating income (loss) (1,2)

 

(87,580

)

 

100,207

 

 

12,627

 

(57,159

)

 

70,691

 

 

13,532

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

 

(123,074

)

 

130,783

 

 

7,709

 

(28,974

)

 

39,235

 

 

10,261

Net income (loss) per diluted share (4)

$

(1.79

)

$

1.90

 

$

0.11

$

(0.44

)

$

0.59

 

$

0.15

     

(1

)

Acquired intangible assets amortization expense

 

19,603

 

 

28,158

 

Non-cash stock-based compensation expense

 

3,701

 

 

4,082

 

Restructuring and other related costs

 

12,460

 

 

(174

)

Impairment charges

 

-

 

 

3,949

 

 

35,764

 

 

36,016

 

 

(2

)

Acquired intangible assets amortization expense

 

9,167

 

 

8,950

 

Non-cash stock-based compensation expense

 

27,917

 

 

29,378

 

Restructuring and other related costs

 

7,087

 

 

2,737

 

Revaluation of investments

 

4,880

 

 

3,777

 

Contingent consideration

 

(22,329

)

 

(18,293

)

Legal, consulting and other expenses

 

37,721

 

 

8,126

 

 

64,443

 

 

34,676

 

 

100,207

 

 

70,691

 

 

(3

)

Corresponding tax effect

 

3,894

 

 

4,988

 

Equity method related amortization, divestments and impairments

 

24,871

 

 

2,285

 

Finance expenses

 

1,811

 

 

406

 

Net gain from sale of business

 

-

 

 

(39,136

)

$

130,783

 

$

39,235

 

 

(4

)

Weighted average number of ordinaryshares outstanding - Diluted

 

68,666

 

 

69,233

 

66,491

 

 

67,068

Stratasys Ltd.   Reconciliation of GAAP to Non-GAAP Forward Looking Guidance   Fiscal Year 2024   (in millions, except per share data)     GAAP net loss ($88) to ($72)   Adjustments Stock-based compensation expense $29 to $31 Intangible assets amortization expense $26 to $28 Reorganization and other $29 to $35 Tax expense (benefit) related to Non-GAAP adjustments $2 to $3   Non-GAAP net income $9 to $14   GAAP loss per share ($1.24) to ($1.01)   Non-GAAP diluted earnings per share $0.12 to $0.19

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240307647578/en/

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