First Quarter Revenue decreased 6% to $153.8 million compared to same period last year
First Quarter GAAP net loss of $13.0 million, or ($0.24) per diluted share, and non-GAAP net income of $2.7 million, or $0.05 per diluted share
Generated $27.1 million of cash from operations during the quarter
MINNEAPOLIS & REHOVOT, Israel — (BUSINESS WIRE) — May 2, 2018 — Stratasys Ltd. (NASDAQ: SSYS), a global leader in additive technology solutions, announced financial results for the first quarter of 2018.
Q1 2018 Financial Results Summary:
Revenue for the first quarter of 2018 was $153.8 million, compared to $163.2 million for the same period last year.
- GAAP gross margin was 49.2% for the quarter, compared to a GAAP gross margin of 47.1% for the same period last year.
- Non-GAAP gross margin was 52.8% for the quarter, compared to 51.2% for the same period last year.
- GAAP operating loss for the quarter was $6.5 million, compared to a loss of $12.6 million for the same period last year.
- Non-GAAP operating income for the quarter was $4.9 million, compared to $4.0 million for the same period last year.
- GAAP net loss for the quarter was $13.0 million, or ($0.24) per diluted share, compared to a loss of $13.9 million, or ($0.26) per diluted share, for the same period last year.
- Non-GAAP net income for the quarter was $2.7 million, or $0.05 per diluted share, compared to Non-GAAP net income of $2.4 million, or $0.05 per diluted share, reported for the same period last year.
- Net R&D expenses for the quarter amounted to $25.1 million, an increase of 1.9% compared the same period last year.
- The Company generated $27.1 million in cash from operations during the first quarter and ended the period with $346.5 million in cash and cash equivalents.
“We are disappointed with our revenue for the first quarter, which is primarily attributed to underperformance in North America related to high end system orders, specifically from customers in government and other key verticals such as aerospace and automotive,” said Ilan Levin, Chief Executive Officer of Stratasys. “We do not believe that our first quarter revenue represents a fundamental change in the demand environment in the North American market. We continue to maintain a strong pipeline of opportunities, and are not modifying the full year guidance we issued earlier this year. Despite our revenue results in the period we continued our positive trend of operational discipline and cash generation. We remain committed to our investments in long-term initiatives that include advancements in our core FDM and PolyJet technologies, new metal additive manufacturing platform, advanced composite materials, and software and application development.”
New Product Announcements
At the RAPID + TCT 3D Printing and Additive Manufacturing Conference, the Company showcased multiple product announcements reaffirming leadership in prototyping and manufacturing.
Extending the capabilities and broadening the Company’s product line for the prototyping market:
- Enhancements to the PolyJet portfolio that include an upgraded version of the multi-material, full-color J750 3D printing platform that adds increased reliability via hardware and software enhancements, as well as the new J735 3D printer with a smaller build size.
- New Vivid Colors for GrabCAD Print on the J750 and J735, featuring over 500,000 color combinations, highly accurate color matching, and advanced clear materials with texture functionality.
- Expanding GrabCAD Print support to include the Connex3 line of multi-material 3D printers.
New materials offerings, certification solutions, and software capabilities for the manufacturing market:
- Antero 800NA, a PEKK-based thermoplastic that allows aerospace and other high-performance vehicle makers to produce high-temperature, chemical-exposed parts.
- F900 Production 3D Printer with manufacturing-focused upgrades including support for Carbon Fiber Filled Nylon 12, as well as the specialized F900 Aircraft Interiors Certification Solution (AICS), and the F900 Pro edition that extends the high repeatability developed for AICS to all industries.
- Specialized F380 Production 3D Printer dedicated to Carbon Fiber Filled Nylon 12, providing users with the high strength and stiffness of Stratasys FDM Nylon 12CF on a proven platform with soluble supporting material, consistent quality, yield, and throughput of an industrial solution at a competitive price point.
- GrabCAD Print Jigs & Fixtures, a new software package that significantly improves the production of jigs, fixtures, and other manufacturing tooling.
The Company provided further details regarding its new metal additive manufacturing platform:
- New approach to metal 3D printing that incorporates proprietary jetting technology and results in 80% reduction in cost per part for aluminum components compared to other additive technologies.
- Ability to 3D print “green state” parts with standard metal powders, beginning with aluminum, that are post processed via industry standard powder metallurgy processes and workflows.
- Part properties achievable with the technology include final parts with density and isotropy that is significantly higher than existing additive solutions, and near identical chemical composition compared to parts created by conventional methods.
- The solution has been optimized for production rather than prototyping, making it highly efficient and commercially viable for a wide range of applications.
- For the first time, showcased end-use production parts produced on the new metal platform.
New Partnership and Customer Announcements
A growing number of companies are moving through the adoption cycle of additive manufacturing technologies as they transition from early adoption to certification and qualification, and then onto final production applications. Recent examples include:
- Adoption of Stratasys technology for production applications demonstrated by the establishment of a Singapore-based additive manufacturing service center in a joint venture with SIA Engineering Company to provide 3D printed parts for use in commercial aviation and to service the maintenance, repair, and overhaul (MRO) market.
- Eckhart Inc. and Stratasys collaborating to advance the adoption of 3D printing for factory tooling in North America. Eckhart has been developing factory tools for over 60 years, and is utilizing Stratasys’ FDM technology and advanced materials to pursue weight-savings, simplified bills of material, and enhanced operator visibility.
- Stratasys’ recently launched J700 Dental 3D Printer has been adopted for production applications by leading dental labs that include DynaFlex and Ortoplus.
“We are encouraged by the growing number of companies that are making significant progress in pursuing certifications for specific high value applications,” continued Levin. “Our recent collaborations deepen these efforts as our customers move towards production applications, designing and manufacturing with confidence.”
Stratasys today reiterated the following information regarding the company’s guidance for projected revenue and net income for the fiscal year ending December 31, 2018:
- Revenue guidance of $670 to $700 million.
- GAAP net loss of $41 to $25 million, or ($0.75) to ($0.46) per diluted share.
- Non-GAAP net income of $16 to $27 million, or $0.30 to $0.50 per diluted share.
Stratasys reiterated the following additional guidelines regarding the company’s projected performance and strategic plans for 2018:
- Non-GAAP operating margins of 4.5% to 6%.
- Capital expenditures are projected at $40 to $50 million.
The Company’s guidance reflects increased investments in R&D, tools, materials, and additional resources aimed at expanding addressable markets by accelerating development efforts for the new metal additive manufacturing platform, further advancements based on our FDM and PolyJet technologies, and specific go-to-market initiatives in order to deepen customer engagement.
Given the expected ongoing negative impact of not recording a tax benefit on U.S. tax losses on the Company’s non-GAAP net income, the Company believes that the rate of growth in its non-GAAP operating income will be the best measure of performance.
Non-GAAP earnings guidance excludes $32 to $34 million of projected amortization of intangible assets; $17 to $19 million of share-based compensation expense; and $7 to $9 million in reorganization and other related costs; and includes $4 to $5 million in tax expenses related to non-GAAP adjustments.