Stratasys Ltd 6-K, filed Mar 2, 2023
Stratasys Ltd. (SSYS)
About this 6-K
Stratasys Ltd filed this 6-K on March 2, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of March 2023
Commission File Number 001-35751
STRATASYS LTD.
(Translation of registrant’s name into English)
| c/o Stratasys, Inc. 7665 Commerce Way Eden Prairie, Minnesota 55344 |
1 Holtzman Street, Science Park P.O. Box 2496 Rehovot, Israel 76124 | |
| (Addresses of principal executive offices) | ||
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
CONTENTS
Quarterly and Annual Results of Operations
On March 2, 2023, Stratasys Ltd. (“we” or “us”) announced our financial results for the fourth quarter and fiscal year ended December 31, 2022. A copy of our press release announcing our results is furnished as Exhibit 99.1 to this Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”) and is incorporated herein by reference.
In conjunction with the conference call being held on March 2, 2023 to discuss our results, we are furnishing a copy of the slide presentation that provides supplemental information regarding our business and our financial results, and which will be referenced on that conference call. We have attached that presentation to this Form 6-K as Exhibit 99.2, which exhibit is incorporated herein by reference.
The information in this Form 6-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| STRATASYS LTD. | ||
| Dated: March 2, 2023 | By: | /s/ Eitan Zamir |
| Name: | Eitan Zamir | |
| Title: | Chief Financial Officer | |
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EXHIBIT INDEX
The following exhibits are furnished as part of this Form 6-K:
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Exhibit 99.1
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 |
MINNEAPOLIS & REHOVOT, Israel - (BUSINESS WIRE) - March 2, 2023 - 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. |
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| ● | 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.
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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.
Yonah Lloyd
CCO, VP Investor Relations
Yonah.Lloyd@stratasys.com
Source: Stratasys Ltd.
4
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 and outstanding at December 31, 2022 and December 31, 2021, respectively | 187 | 182 | ||||||
| Additional paid-in capital | 3,048,915 | 3,012,481 | ||||||
| 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 | ||||
5
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 | ||||||||||||
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| 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 | |||||||||||
| 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 | |||||||||||||||||||||||
| 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 | |||||||||||||||||||||||
| 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 | |||||||||||||||||||||
| Weighted average number of ordinary shares outstanding - Diluted | 66,908 | 67,231 | 65,196 | 66,820 | ||||||||||||||||||||
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| 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 | ) | |||||||||
| 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 | |||||||||||||||||||||||
| 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 | |||||||||||||||||||||||
| 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 | |||||||||||||||||||||
| Weighted average number of ordinary shares outstanding - Diluted | 66,491 | 67,068 | 63,471 | 63,471 | ||||||||||||||||||||
8
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 |
9
Exhibit 99.2
Q4 and FY2022 Results Speakers Dr. Yoav Zeif, CEO Eitan Zamir, CFO Yonah Lloyd, CCO & VP IR March 2, 2023
Conference Call and Webcast Details US Toll - Free Dial - In 1 - 877 - 407 - 0619 International Dial - In 1 - 412 - 902 - 1012 Live Webcast and Replay https://event.choruscall.com/mediaframe/webcast.htm l?webcastid=K6UFH5he 2 2
Forward - Looking Statements Cautionary Statement Regarding Forward - Looking Statements 3 3 The statements in this slide presentation regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2023, 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 extent of growth of the 3D printing market generally; the duration and severity of headwinds caused by current macro - economic trends that have been adversely affecting, and may continue to adversely affect, our results, including unfavorable currency exchange rates, supply - chain delays, inflationary pressures and rising interest rates; 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 extent of our success at successfully integrating into our existing business, or making additional, acquisitions or investments in new businesses, technologies, products or services; 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 (including risks stemming from Russia’s invasion of Ukraine); potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets that we have recently acquired or may acquire in the future; 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, to be filed with the 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 Stratasys will be furnishing to the SEC over the course of 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 slide presentation are made 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 Information 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, 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. The items eliminated via 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 later in this slide presentation. 4
Welcome ▪ Performed well against a challenging environment ▪ Delivered sixth consecutive quarter of positive earnings ▪ Executing on our strategy to be the leading innovator and provider of polymer additive manufacturing solutions ▪ Broad, global, diverse offerings ▪ Unique go - to - market capabilities ▪ Growing partnerships and ecosystem CEO Dr. Yoav Zeif
6 Full Year Summary ▪ Revenue growth of 7.3% y/y, or 11.4% adjusted for MakerBot and constant currency ▪ Gross margin slightly higher than 2021 and poised to grow ▪ Manufacturing contributed 32.5% of total revenues ▪ Adjusted EPS of $0.15 ▪ Strong balance sheet with no debt
Helping Customers Succeed in a Challenging Environment 7 ▪ Uncertain economy still affecting purchase behavior - Sales cycles are longer with some order deferrals ▪ Business benefits of 3D printing – production efficiency, better products, reduced logistics costs, faster time to market – becomes more apparent in times like these ▪ 2022 recurring revenue growth reflects the value of our systems ▪ Consumables up 7.7%, adjusted for MakerBot and constant currency ▪ Customer support up 11.0%, adjusted for constant currency
We Executed On Our Growth Strategy in 2022 Investments for Growth ▪ Riven acquisition – AI software ▪ Axial3D investment – AI medical cloud software ▪ Covestro AM acquisition (closure expected in Q2’23) ▪ MakerBot - Ultimaker – immediately accretive Materials Innovations ▪ First Validated 3 rd party materials for FDM printers ▪ Open Materials License for FDM and Origin P3 printers ▪ Advanced Antero material for space applications ▪ Anatomic modeling material for CT scans and other images GrabCAD Software Expansion ▪ Customers with multiple technologies across a single software platform ▪ New SDK partners ▪ GrabCAD Print expansion to H350, Origin One, and Origin One Dental printers
9 Creating New Growth Opportunities in $50B Dental Parts Industry First Monolithic, Multi - Color 3D Printed Dentures Solution ▪ TrueDent FDA - cleared resin works exclusively with J5 DentaJet printer ▪ Dentures represent $5B+ opportunity and only 5% are created digitally today ▪ Digital workflow integration with 3Shape New Entry - Level Printer for Smaller Dental Labs ▪ J3 DentaJet 3D printer gives Stratasys strong entry into SMB labs representing two - thirds of dental labs ▪ Move labs off low - accuracy, single - material desktop printers
Coming in 2023: Clinical Trial ▪ Designed to determine the clinical and economical value of patient - specific anatomic models as pre - operative surgical tools ▪ Stratasys will be the first 3D printing manufacturer to run such a trial Patient Specific Solution Delivered as Cloud Service Shipped to customer Axial3D slicer Upload scan Ricoh printing on Stratasys systems
▪ Solid results in a challenging environment ▪ Q4 OEM business growth of 3.2% year/year (constant currency) ▪ Efficiency helping improve OpEx as percentage of revenue to lowest level in eight quarters ▪ Achieved 2022 operating income guidance above 2.0% CFO Eitan Zamir CFO Remarks
Financial Results Note: $ in millions unless noted otherwise. All numbers and percentages rounded GAAP Non - GAAP Q4 - 21 Q4 - 22 Change Y/Y Q4 - 21 Q - 22 Change Y/Y Total Revenue 167.0 159 3 - 4.6% 167.0 159.3 - 4.6% Gross Profit 73.0 68 . 6 (4 . 4) 81.3 77.1 (4.2) ▪ % Margin 43.7% 4 .1 % - 0 . 6% 48.7% 48.4% - 0 . 3% Operating Income (Loss) (16.2) 1.6 (17 . 8) 1.7 5.1 3.4 ▪ % Margin - 9.7% 1.0% 10 . 7% 1.0% 3.2% 2.2% Gain from step acquisition 14.4 - (14.4) - - - Net Income (Loss) attributed to SSYS Ltd. (4.8) (2.4) 2.4 0.5 4.6 4.0 ▪ % Margin - 2.9% - 1.5% 1.4% 0.3% 2.9% 2.6% Diluted EPS (0.07) (0.04) (0.04) 0.01 0.07 0.06 Diluted Shares 6 5 . 2 6 6 . 9 2.6% 66.8 67.2 0.6% GAAP Non - GAAP FY - 21 FY - 22 Change Y/Y FY - 21 FY - 22 Change Y/Y Total Revenue 607.2 651 5 7.3% 607.2 651.5 7.3% Gross Profit 260.1 76 . 5 16 . 4 290.5 312.5 7 . 6% ▪ % Margin 42.8% 4 .4 % - 0 . 4% 47.8% 48.0% 0 . 3% Operating Income (Loss) (79.2) (57.2) 22.0 (1.7) 13.5 15.2 ▪ % Margin - 13.0% - 8.8% 4 . 3% - 0.3% 2.1% 2.4% Gain from deconsolidation of subsidiary - 39.1 39.1 - - - Gain from step acquisition 14.4 - (14.4) - - - Net Income (Loss) attributed to SSYS Ltd. (62.0) (29.0) 33.0 (4.3) 10.3 14.6 ▪ % Margin - 10.2% - % % - 0.7% 1.6% - 2.3% Diluted EPS (0.98) (0.44) 0.54 (0.07) 0.15 (0.23) Diluted Shares 63.4 6 6 . 5 3.07 63.5 67.1 (3.60) Q 4 2022 FY 2022
Revenues – Q4 2022 * Reflects only 2 months of MakerBot revenue. Note: $ in millions unless noted otherwise. All numbers and percentages rounded Quarterly Trend Revenues - Q4’22 118.0 113.1 115.7 112.1 111.2 49.0 50.3 50.9 50.1 48.1 167.0 163.4 166.6 162.2* 159.3 Q4' 21 Q1' 22 Q2' 22 Q3' 22 Q4' 22 Product Service Revenue Y/Y Y/Y (exc. FX and divestitures) Product - 5 . 8 % 1 . 6 % ▪ System - 11 . 1 % - 1 . 1 % ▪ Consumables 0.04% .4 % Service - 1.9% . % ▪ Customer Support 1.9% . % Revenue of $159.3 million down 4.6 % YoY, up 1.7% adjusted for MakerBot and constant currency Product revenue of $ 111.2 million, down 5.8 % vs. Q 4 2021 , up 1.6 % adjusted for MakerBot and constant currency S ervices revenue of $ 48.1 million down 1.9 %, up 1.4 % adjusted for MakerBot and constant currency
Revenues – FY 2022 * Reflects only 8 months of MakerBot revenue. Note: $ in millions unless noted otherwise. All numbers and percentages rounded Annual Trend 456.6 430.7 339.8 417.6 452.1 206.7 205.3 181.0 189.7 199.4 663.2 636.1 520.8 607.2 651.5 2018 2019 2020 2021 2022 Product Service Revenue of $651.5 million up 7 .3 % YoY, up 11.4% adjusted for MakerBot and constant currency Product revenue of $452.1 million, up 8.3% vs. 2021, up 13.7% adjusted for MakerBot and constant currency S ervices revenue of $199.4 million, up 5 .1 % vs. 2021, up 7 .1 % adjusted for MakerBot and constant currency * Revenues - FY’22 Revenue Y/Y Y/Y (exc. FX and divestitures) Product 8.3 % 13 . 7 % ▪ System 12 . 6 % 20 . 9 % ▪ Consumables 4.3% 7.7% Service 5.1% 7.1% ▪ Customer Support 6.3% 11 . 0 %
Gross Margins GAAP Non - GAAP 43.7% 42.6% 40.5% 43.6% 43.1% 49.6% 47.5% 47.2 % 50.1% 47.7% 29.6% 31.7% 25.2% 29.0% 32.5% Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 48.7 % 47.3% 47.6% 48.5% 48.4% 56.2% 53.7% 53.6% 56.7 % 54.7% 30.6% 33.1% 34.0% 30.3% 33.7% Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Service Gross Margin Product Gross Margin Total Gross Margin All percentages rounded GAAP and Non - GAAP margins negatively impacted by FX, positively impacted by MakerBot carve - out
Operating Expenses Reduction Reflecting Scalability GAAP operating expenses (absolute and as a percentage of revenues) Non - GAAP operating expenses (absolute and as a percentage of revenues) Operational efficiency improvements paying off; OpEx as percentage of revenue lowest in 8 quarters 89.2 67.1 Q4'21 Q4'22 42.1% - 11.3% 79.6 72.0 Q4'21 Q4'22 45.2% - 2.5% Note: $ in millions unless noted otherwise. All numbers and percentages rounded 53.4% 47.7%
Profitable Results Note: $ in millions unless noted otherwise. All numbers and percentages rounded GAAP operating income (loss) Non - GAAP operating income Improving operating income and net income reflect business scalability and operational efficiencies, resulting in lower operating expenses GAAP net loss Non - GAAP net income 1.7 5.1 Q4'21 Q4'22 ( 16.2 ) 1.6 Q4'21 Q4'22 0.5 4.6 Q4'21 Q4'22 (4.8) (2.4) Q4'21 Q4'22
Fortified Balance Sheet and Responsible Cash Use Note: $ in millions unless noted otherwise. All numbers and percentages rounded Strong balance sheet at $328M cash and equivalents after recent strategic investments Cash use tied to deliberately increased inventory purchases Balance sheet items Cash flow from operating activities Q 4 - 21 Q3 - 22 Q4 - 22 Cash and Cash Equivalents and Short - term deposits 502.2 348 7 327.8 Accounts Receivable 129.4 40 144.7 Inventories 129.2 170 4 194.1 Net Working Capital 590.2 480.7 351.8 4.4 (18.1) 35.8 Q4' 21 Q4' 22 2021 2022 (75.4)
2023 Outlook ▪ 2023 range: $290M - $300M Operating Expe nses Gross Margins ▪ 2023 range: 48.0% - 49.0% ▪ Targeting 50%+ in next few years ▪ GAAP net loss of ($1.12) - ($0.83) per d iluted share ▪ Non - GAAP net income $0.12 - $0.24 per diluted share ▪ Adjusted EBITDA of $35M - $ 50 M, improving to 13% - 15% of revenues longer term Earnings ▪ 2023 range: $620M - $670M ▪ 2H notably stronger than 1H ▪ 2022 revenue without MakerBot: $625M Revenue Operating Margins ▪ Non - GAAP operating margins 2 .5% - 3.5% 1 9 Capital Expenses Positive Operating Cash Flow Sequential growth through the year Improving, with stronger 2H Improving as a percent of revenue I mproving through the year ▪ 2023 range: $20M - $25M Improvement momentum continues
▪ Profitable growth with a sharpened focus on core OEM offerings ▪ Today’s business challenges reinforce additive manufacturing’s benefits ▪ Balance sheet strength to continue to invest in hardware, materials and software to broaden our market presence ▪ Relentless focus on execution and investment for growth, profitability and shareholder value CEO Summary CEO Dr. Yoav Zeif
Thank You 2 1
Appendix Note: $ in millions unless noted otherwise. All numbers and percentages rounded Three months ended December 31 , 2022 Three months ended December 31, 2021 GAAP Adjustments Non - GAAP GAAP Adjustments Non - GAAP Gross Profit (1) $ 68,648 $ 8,423 $ , $ 73,043 $ 8,255 $ 81,298 Operating income (Loss) (1,2) 1,596 3,456 5,052 ( , 61 ) , 22 1,661 Net income (Loss) (1,2,3) ( 2,390 ) 6,940 4,550 ( 4,836 ) 5,355 9 Net income (Loss) per diluted share ( 4) ) $ 11 $ 0.07 $ 0.08 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 over related costs 874 373 Revaluation of investment 560 (1,861) Contingent consideration (19,490) (20) Other expenses 3,056 1,824 (4,967) 9,567 3,456 17,822 3) Gain from deconsolidation of subsidiary - (14,400) Corresponding tax effect and other expenses 1,770 1,906 Equity method related amortization, divestments and impairments 1,714 27 $6,940 $5,355 4) Weighted average number or ordinary shares outstanding – Diluted 66,908 67,262 65,196 66,820