The company will hold a conference call to discuss its third quarter financial results on Thursday, October 29, 2009 at 8:30 a.m. (ET). The investor conference call will be available via live webcast on the Stratasys Web site at www.stratasys.com under the "Investors" tab. To participate by telephone, the domestic dial-in number is 866-783-2143, and the international dial-in is 857-350-1602. The access code is 36423313. Investors are advised to dial into the call at least ten minutes prior to the call to register.
The webcast will be available for 90 days on the "Investors" page of the Stratasys website.
(Financial tables follow)
Stratasys, Inc., Minneapolis, manufactures additive fabrication machines for prototyping and manufacturing plastic parts. The company also operates a service for part prototyping and production. According to Wohlers Report 2009, Stratasys supplied 43 percent of all additive fabrication systems installed worldwide in 2008, making it the unit market leader for the seventh consecutive year. Stratasys patented and owns the process known as FDM.® The process creates functional prototypes and end-use parts directly from any 3D CAD program, using high-performance industrial thermoplastics. The company holds more than 250 granted or pending additive fabrication patents globally. Stratasys products are used in the aerospace, defense, automotive, medical, business and industrial equipment, education, architecture, and consumer-product industries. Online at: www.Stratasys.com.
Forward Looking Statements
All statements herein that are not historical facts or that include such words as “expects,” “anticipates,” “projects,” “estimates,” “vision,” “planning” or “believes” or similar words constitute forward-looking statements covered by the safe harbor protection of the Private Securities Litigation Reform Act of 1995. Except for the historical information herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. These include statements regarding projected revenue and income in future quarters; the size of the 3D printing market; our objectives for the marketing and sale of our Dimension® 3D Printers and our FortusTM 3D Production Systems, particularly for use in direct digital manufacturing (DDM); the demand for our proprietary consumables; the expansion of our paid parts service; and our beliefs with respect to the growth in the demand for our products. Other risks and uncertainties that may affect our business include our ability to penetrate the 3D printing market; our ability to achieve the growth rates experienced in preceding quarters; our ability to introduce, produce and market new materials, such as ABSplus and ABS-M30, and the market acceptance of these and other materials; the impact of competitive products and pricing; our timely development of new products and materials and market acceptance of those products and materials; the success of our recent R&D initiative to expand the DDM capabilities of our core FDM technology; and the success of our RedEyeOnDemandTM and other paid parts services. Actual results may differ from those expressed or implied in our forward-looking statements. These statements represent beliefs and expectations only as of the date they were made. We may elect to update forward-looking statements, but we expressly disclaim any obligation to do so, even if our beliefs and expectations change. In addition to the statements described above, such forward-looking statements are subject to the risks and uncertainties described more fully in our reports filed or to be filed with the Securities and Exchange Commission, including our annual reports on Form 10-K and quarterly reports on Form 10-Q.
Financial Tables & Non-GAAP Discussion
The information discussed within this release includes financial results that are in accordance with accounting principles generally accepted in the United States (GAAP). Certain prior year balance sheet amounts shown in the financial tables have been reclassified to conform to the current year’s presentation. In addition, certain non-GAAP financial measures have been provided that exclude certain charges and expenses. The non-GAAP measures should be read in conjunction with the corresponding GAAP measures and should be considered in addition to, and not as an alternative or substitute for, the measures prepared in accordance with GAAP. The non-GAAP financial measures are provided in an effort to provide information that investors may deem relevant to evaluate results from the company’s core business operations and to compare the company’s performance with prior periods. The non-GAAP financial measures primarily identify and exclude certain discrete items, such as an impairment charge for certain auction rate securities, restructuring expenses, and expenses associated with stock-based compensation required under SFAS 123R. The company uses these non-GAAP financial measures for evaluating comparable financial performance against prior periods.
This release is also available on the Stratasys Web site at www.Stratasys.com.
| STRATASYS, INC. | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
| Net sales | ||||||||||||||||||||
| Product | $ | 18,046,184 | $ | 23,965,510 | $ | 53,197,716 | $ | 73,919,081 | ||||||||||||
| Services | 6,283,212 | 6,603,918 | 18,924,759 | 18,632,957 | ||||||||||||||||
| 24,329,396 | 30,569,428 | 72,122,475 | 92,552,038 | |||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||
| Product | 9,918,263 | 12,048,155 | 30,883,158 | 34,512,079 | ||||||||||||||||
| Services | 2,542,879 | 2,706,835 | 8,225,489 | 7,553,275 | ||||||||||||||||
| 12,461,142 | 14,754,990 | 39,108,647 | 42,065,354 | |||||||||||||||||
| Gross profit | 11,868,254 | 15,814,438 | 33,013,828 | 50,486,684 | ||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Research and development | 1,983,420 | 2,100,349 | 5,510,385 | 6,841,822 | ||||||||||||||||
| Selling, general and administrative | 7,481,311 | 8,415,988 | 25,257,138 | 27,004,811 | ||||||||||||||||
| 9,464,731 | 10,516,337 | 30,767,523 | 33,846,633 | |||||||||||||||||
| Operating income | 2,403,523 | 5,298,101 | 2,246,305 | 16,640,051 | ||||||||||||||||
| Other income (expense) | ||||||||||||||||||||
| Interest income, net | 230,429 | 498,831 | 754,695 | 1,646,730 | ||||||||||||||||
| Foreign currency transaction losses, net | (5,930 | ) | (83,794 | ) | (169,148 | ) | (299,620 | ) | ||||||||||||
| Other | (9,021 | ) | (33,560 | ) | 16,780 | (286,592 | ) | |||||||||||||
| 215,478 | 381,477 | 602,327 | 1,060,518 | |||||||||||||||||
| Income before income taxes | 2,619,001 | 5,679,578 | 2,848,632 | 17,700,569 | ||||||||||||||||
| Income taxes | 1,040,201 | 1,970,011 | 1,124,191 | 6,096,378 | ||||||||||||||||
| Net income | $ | 1,578,800 | $ | 3,709,567 | $ | 1,724,441 | $ | 11,604,191 | ||||||||||||
| Earnings per common share | ||||||||||||||||||||
| Basic | $ | 0.08 | $ | 0.18 | $ | 0.09 | $ | 0.56 | ||||||||||||
| Diluted | $ | 0.08 | $ | 0.18 | $ | 0.09 | $ | 0.54 | ||||||||||||
|
Weighted average number of common shares outstanding |
||||||||||||||||||||
| Basic | 20,229,357 | 20,616,338 | 20,224,889 | 20,829,338 | ||||||||||||||||
| Diluted | 20,231,033 | 21,021,417 | 20,233,234 | 21,354,073 | ||||||||||||||||
| STRATASYS, INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| September 30, | December 31, | |||||||||
| 2009 | 2008 | |||||||||
| (unaudited) | ||||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | 34,993,140 | $ | 27,945,799 | ||||||
| Short-term investments - held to maturity | 12,207,926 | 4,835,055 | ||||||||
|
Accounts receivable, less allowance for doubtful accounts of $1,099,442 and $1,017,521 in 2009 and 2008, respectively |
20,887,758 | 26,539,733 | ||||||||
| Inventories | 15,388,102 | 19,889,351 | ||||||||
|
Net investment in sales-type leases, less allowance for doubtful accounts of $199,709 and $324,642 in 2009 and 2008, respectively |
4,064,467 | 3,870,472 | ||||||||
| Prepaid expenses and other current assets | 2,702,167 | 2,608,080 | ||||||||
| Deferred income taxes | 2,168,000 | 2,168,000 | ||||||||
| Total current assets | 92,411,560 | 87,856,490 | ||||||||
| Property and equipment, net | 26,871,099 | 29,749,921 | ||||||||
| Other assets | ||||||||||
| Intangible assets, net | 7,886,767 | 8,347,200 | ||||||||
| Net investment in sales-type leases | 3,560,840 | 4,545,977 | ||||||||
| Long-term investments - available for sale securities | 1,109,250 | 1,109,250 | ||||||||
| Long-term investments - held to maturity | 11,363,730 | 13,825,981 | ||||||||
| Other non-current assets | 1,613,154 | 2,308,214 | ||||||||
| Total other assets | 25,533,741 | 30,136,622 | ||||||||
| Total assets | $ | 144,816,400 | $ | 147,743,033 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable and other current liabilities | $ | 8,379,196 | $ | 11,795,238 | ||||||
| Unearned revenues | 10,242,116 | 12,765,396 | ||||||||
| Total current liabilities | 18,621,312 | 24,560,634 | ||||||||
| Non-current liabilities | ||||||||||
| Deferred tax liabilities | 620,000 | 620,000 | ||||||||
| Total non-current liabilities | 620,000 | 620,000 | ||||||||
| Total liabilities | 19,241,312 | 25,180,634 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders' equity | ||||||||||
|
Common stock, $.01 par value, authorized 30,000,000 shares, issued 25,925,503 shares as of September 30, 2009 and 25,909,603 shares as of December 31, 2008 |
259,255 | 259,096 | ||||||||
| Capital in excess of par value | 92,719,350 | 91,611,078 | ||||||||
| Retained earnings | 71,624,111 | 69,899,669 | ||||||||
| Accumulated other comprehensive loss | (23,203 | ) | (203,019 | ) | ||||||
| Less cost of treasury stock, 5,687,631 shares in 2009 and 2008 | (39,004,425 | ) | (39,004,425 | ) | ||||||
| Total stockholders' equity | 125,575,088 | 122,562,399 | ||||||||
| Total liabilities and stockholders' equity | $ | 144,816,400 | $ | 147,743,033 | ||||||
| STRATASYS, INC. | |||||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS | |||||||||||||||||||||||||
| Non-GAAP Adjustments for the Three Months Ended September 30, 2009 | Non-GAAP Adjustments for the Three Months Ended September 30, 2008 | ||||||||||||||||||||||||
|
Consolidated
(unaudited) As Reported |
Stock-Based
|
Consolidated
(unaudited) Non-GAAP |
Consolidated
(unaudited) As Reported |
Stock-Based
|
Auction Rate
|
Consolidated
(unaudited) Non-GAAP |
|||||||||||||||||||
| Selling, general and administrative expenses | $ | 7,481,311 | $ | (238,032 | ) | $ | 7,243,279 | $ | 8,415,988 | $ | (321,285 | ) | $ | - | $ | 8,094,703 | |||||||||
| Total operating expenses | 9,464,731 | (238,032 | ) | 9,226,699 | 10,516,337 | (321,285 | ) | - | 10,195,052 | ||||||||||||||||
| Operating income | 2,403,523 | 238,032 | 2,641,555 | 5,298,101 | 321,285 | - | 5,619,386 | ||||||||||||||||||
| Other income (loss) | (9,021 | ) | - | (9,021 | ) | (33,560 | ) | - | 50,000 | 16,440 | |||||||||||||||
| Total other income | 215,478 | - | 215,478 | 381,477 | - | 50,000 | 431,477 | ||||||||||||||||||
| Income before income taxes | 2,619,001 | 238,032 | 2,857,033 | 5,679,578 | 321,285 | 50,000 | 6,050,863 | ||||||||||||||||||
| Income taxes | 1,040,201 | 28,000 | 1,068,201 | 1,970,011 | 83,000 | 19,000 | 2,072,011 | ||||||||||||||||||
| Net income | $ | 1,578,800 | $ | 210,032 | $ | 1,788,832 | $ | 3,709,567 | $ | 238,285 | $ | 31,000 | $ | 3,978,852 | |||||||||||
| Earnings per common share | |||||||||||||||||||||||||
| Basic | $ | 0.08 | $ | 0.01 | $ | 0.09 | $ | 0.18 | $ | 0.01 | $ | 0.00 | $ | 0.19 | |||||||||||
| Diluted | $ | 0.08 | $ | 0.01 | $ | 0.09 | $ | 0.18 | $ | 0.01 | $ | 0.00 | $ | 0.19 | |||||||||||
|
Weighted average number of common shares outstanding |
|||||||||||||||||||||||||
| Basic | 20,229,357 | 20,229,357 | 20,616,338 | 20,616,338 | |||||||||||||||||||||
| Diluted | 20,231,033 | 20,231,033 | 21,021,417 | 21,021,417 | |||||||||||||||||||||
| Non-GAAP Adjustments for the Nine Months Ended September 30, 2009 | Non-GAAP Adjustments for the Nine Months Ended September 30, 2008 | ||||||||||||||||||||||||
|
Consolidated
(unaudited) As Reported |
Stock-Based
|
Restructuring (2) |
Consolidated
(unaudited) Non-GAAP |
Consolidated
(unaudited) As Reported |
Stock-Based
Compensation (1) |
Auction Rate
Security (3) |
Consolidated
(unaudited) Non-GAAP |
||||||||||||||||||
| Selling, general and administrative expenses | $ | 25,257,138 | $ | (670,959 | ) | $ | (778,840 | ) | $ | 23,807,339 | $ | 27,004,811 | $ | (956,503 | ) | $ | - | $ | 26,048,308 | ||||||
| Total operating expenses | 30,767,523 | (670,959 | ) | (778,840 | ) | 29,317,724 | 33,846,633 | (956,503 | ) | - | 32,890,130 | ||||||||||||||
| Operating income | 2,246,305 | 670,959 | 778,840 | 3,696,104 | 16,640,051 | 956,503 | - | 17,596,554 | |||||||||||||||||
| Other income (loss) | 16,780 | - | - | 16,780 | (286,592 | ) | - | 440,000 | 153,408 | ||||||||||||||||
| Total other income | 602,327 | - | - | 602,327 | 1,060,518 | - | 440,000 | 1,500,518 | |||||||||||||||||
| Income before income taxes | 2,848,632 | 670,959 | 778,840 | 4,298,431 | 17,700,569 | 956,503 | 440,000 | 19,097,072 | |||||||||||||||||
| Income taxes | 1,124,191 | 102,000 | 266,907 | 1,493,098 | 6,096,378 | 189,218 | 152,000 | 6,437,596 | |||||||||||||||||
| Net income | $ | 1,724,441 | $ | 568,959 | $ | 511,933 | $ | 2,805,333 | $ | 11,604,191 | $ | 767,285 | $ | 288,000 | $ | 12,659,476 | |||||||||
| Earnings per common share | |||||||||||||||||||||||||
| Basic | $ | 0.09 | $ | 0.03 | $ | 0.03 | $ | 0.14 | $ | 0.56 | $ | 0.04 | $ | 0.01 | $ | 0.61 | |||||||||
| Diluted | $ | 0.09 | $ | 0.03 | $ | 0.03 | $ | 0.14 | $ | 0.54 | $ | 0.04 | $ | 0.01 | $ | 0.59 | |||||||||
|
Weighted average number of common shares outstanding |
|||||||||||||||||||||||||
| Basic | 20,224,889 | 20,224,889 | 20,829,338 | 20,829,338 | |||||||||||||||||||||
| Diluted | 20,233,234 | 20,233,234 | 21,354,073 | 21,354,073 | |||||||||||||||||||||
|
These adjustments reconcile the Company’s GAAP results of operations to its non-GAAP results of operations. The Company believes that presentation of results adjusted for the non-GAAP items described below provides meaningful supplemental information to both management and investors. |
|||||||||||||||||||||||||
| (1) - Represents non-cash stock-based compensation expense. | |||||||||||||||||||||||||
| (2) - Represents severance and other related costs associated with the Company's restructuring in the first quarter of 2009. | |||||||||||||||||||||||||
|
(3) - Represents a reduction in the assessed fair value of an auction rate security investment that the Company considered to be other than temporary. |
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|
The Company considers these non-GAAP measures to be indicative of its core operating results and facilitates a comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes, however these measures should not be viewed as a substitute for the Company’s GAAP results. |
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