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 Stratasys Releases Fourth Quarter and Full Year 2015 Financial Results
   Thursday, March 03, 2016 7:00:02 AM ET

--Fourth quarter non-GAAP net loss of $0.7 million, or ($0.01) per diluted share; and GAAP net loss of $232.3 million, or ($4.46) per diluted share

--Company provides financial guidance for full year 2016

Stratasys Ltd. (SSYS ), the 3D printing and additive manufacturing solutions company, announced financial results for the fourth quarter and fiscal year 2015.

Q4-2015 Financial Results Summary:

-- Revenue for the fourth quarter of 2015 was $173.4 million.

-- GAAP net loss for the fourth quarter was $232.3 million, or ($4.46) per diluted share, compared to a loss of $92.0 million, or ($1.81) per diluted share, for the same period last year.



-- Non-GAAP net loss for the fourth quarter was $0.7 million, or ($0.01) per diluted share, compared to non-GAAP net income of $24.9 million, or $0.48 per diluted share, reported for the same period last year.

-- The Company generated $7.7 million in cash from operations during the fourth quarter, and finished the year with approximately $258.2 million in cash and cash equivalents and short-term bank deposits.

-- The Company invested a net amount of $22.2 million in R&D projects (non-GAAP basis) during the fourth quarter, representing 12.8% of net sales.

-- Non-GAAP EBITDA for the fourth quarter amounted to a loss of $1.4 million.

-- The Company sold 4,629 3D printing and additive manufacturing systems during the quarter, and on a pro-forma combined basis, has sold a total of 146,024 systems worldwide as of December 31, 2015.

-- The Company completed the goodwill impairment analysis of all of its reporting units that began in the third quarter, and recognized an additional non-cash goodwill, and other intangible assets impairment charges of $104 million, net of tax.

-- The Company also recorded a non-cash valuation allowance against its deferred tax assets in an amount of $95 million.

Fiscal 2015 Financial Results Summary:

-- Revenue for fiscal 2015 was $696.0 million compared to $750.1 million for fiscal 2014.

-- GAAP net loss for fiscal 2015 was $1.4 billion, or ($26.64) per diluted share, compared to a loss of $119.4 million, or ($2.39) per diluted share, for the same period last year.

-- Non-GAAP net income was $10.0 million for fiscal 2015, or $0.19 per diluted share, compared to non-GAAP net income of $103.6 million, or $2.00 per diluted share, reported for the same period last year.

-- Backlog at the end of fiscal 2015 amounted to $27.3 million, versus $14.3 million at the end of 2014.

"Our fourth quarter results reflect the impact of a market environment that is consistent with conditions we have observed throughout the year," said David Reis, chief executive officer of Stratasys. "Despite this challenging environment, we remain focused on our strategic initiatives. We are also making progress in optimizing our company’s cost structure and improving working capital management, and were satisfied to observe a favorable trend in operating expenses and positive cash flow from operations during the quarter."

Recent Business Highlights:

-- Initiated a restructuring plan to generate operational efficiencies and improvements in working capital management. -- Reduced global workforce by approximately 10% during the fourth quarter.

-- Initiated programs to reduce operating expenses and optimize manufacturing.

-- Impact of restructuring activities will be realized throughout 2016.

-- Introduced the updated Objet Connex3, which features the Creative Color Software powered by the Adobe 3D Color Print Engine that enables new color spectrum capabilities; and includes new software enhancements that simplify the design-to-3D print workflow.

-- Introduced the MakerBot Smart Extruder+, which is designed and tested to provide improved print performance over a longer period of time. The Smart Extruder+ features improved key components to promote longer-lasting reliability.

"We have entered a transformative new phase in our company’s development," continued Reis. "Our goal is to maintain our leadership position in prototyping, while developing a solutions-based business model that targets key vertical markets and emerging applications for end-use parts. We believe our comprehensive new strategy will help grow our markets and is essential for maintaining our leadership position."

Financial Guidance:

Stratasys today provided the following information regarding the company’s projected revenue and net income for the fiscal year ending December 31, 2016:

-- Revenue guidance of $700 to $730 million.

-- Non-GAAP net income of $9 to $23 million, or $0.17 to $0.43 per diluted share.

-- GAAP net loss of $84.0 to $67.0 million, or a ($1.60) to ($1.28) per diluted share.

Stratasys provided the following additional information regarding the company’s performance and strategic plans for 2016:

-- Gross margins to improve modestly to a range of 54% to 55%.

-- Operating margins of 3% to 5%.

-- Taxes expense of $10 to $11 million, which includes the negative impact of the planned accounting treatment for tax valuation allowance.

-- Capital expenditures are projected at $60 to $70 million, with approximately $45 million designated for completing the company’s new facility in Israel.

The company believes that it can achieve a significant improvement in its operating structure in 2016 that will translate into improved operating profit compared to the prior year. Given the expected ongoing negative impact on net income of the planned accounting treatment for valuation of deferred tax assets, the company believes operating profit growth will be the best measure of performance in 2016.

"Given the current environment, we recognize the importance of optimizing our cost structure and improving our financial performance, and have made those goals a priority for 2016. In addition, we are committed to developing the many growth opportunities we have identified, including MakerBot, as well as investing aggressively in initiatives to support long-term growth, such as software, corporate IT infrastructure, and vertical market development. We remain excited about our company’s future," Reis concluded.

Non-GAAP earnings guidance excludes $59.0 million of projected amortization of intangible assets; $25.0 to $27.0 million of share-based compensation expense; $7.0 million in merger and acquisition related expense; $4.0 to $5.0 million in reorganization and other related costs; and includes $5.0 million in tax expenses related to non-GAAP adjustments.

Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of this press release. The table provides itemized detail of the non-GAAP financial measures.

Stratasys Ltd. Q4 2015 Conference Call Details

The Company will hold a conference call to discuss its fourth quarter and full year financial results on Thursday, March 3, 2016 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; or directly at the following web address: http://edge.media-server.com/m/p/bp67mmzn .

To participate by telephone, the domestic dial-in number is 800-688-0836 and the international dial-in is 617-614-4072. The access code is 49835079.

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 Web site or by accessing the provided web address.

For more than 25 years, Stratasys Ltd. (SSYS ) has been a defining force and dominant player in 3D printing and additive manufacturing - shaping the way things are made. Headquartered in Minneapolis, Minnesota and Rehovot, Israel, the company empowers customers across a broad range of vertical markets by enabling new paradigms for design and manufacturing. The company’s solutions provide customers with unmatched design freedom and manufacturing flexibility - reducing time-to-market and lowering development costs, while improving designs and communications. Stratasys subsidiaries include MakerBot and Solidscape, and the Stratasys ecosystem includes 3D printers for prototyping and production; a wide range of 3D printing materials; parts on-demand via Stratasys Direct Manufacturing; strategic consulting and professional services; and the Thingiverse and GrabCAD communities with over 2 million 3D printable files for free designs. With more than 2,700 employees and 800 granted or pending additive manufacturing patents, Stratasys has received more than 30 technology and leadership awards. Visit us online at: www.stratasys.com or http://blog.stratasys.com/, and follow us on LinkedIn.

Stratasys is a registered trademark of Stratasys Ltd. and/or its subsidiaries or affiliates.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys’ belief that its comprehensive new strategy will help grow its markets, and the statements regarding its projected future financial performance, including under the heading "Financial Guidance," 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 overall global economic environment; the impact of competition and new technologies; general market, political and economic conditions in the countries in which Stratasys operates; changes in projected capital expenditures and liquidity; changes in Stratasys’ strategy; changes in government regulations and approvals; changes in customers’ budgeting priorities; and other factors referred to under "Risk Factors," "Information on the Company," "Operating and Financial Review and Prospects," and generally in Stratasys’ annual report on Form 20-F for the year ended December 31, 2014, filed with the U.S. Securities and Exchange Commission (the "SEC"), and in other reports that Stratasys has filed with or furnished to the SEC from time to time. Readers are urged to carefully review and consider the various disclosures made in Stratasys’ SEC reports, which are designed to advise investors as to the risks and other factors that may affect Stratasys’ business, financial condition, results of operations and prospects. Any guidance and other forward-looking statements in this press release 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.

 
Stratasys Ltd.
                                                                                                                                
Consolidated Balance Sheets
                                                                                                                                                                                                                                 
(in thousands, except share data)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                     December 31,                                                                                   December 31,
                                                                                                                                                         2015                                                                                           2014
                                                                                                                                 -----------------------------------------------------                                          ----------------------------------------------------
                                                                                                                                                                                                                                 
ASSETS
                                                                                                                                                                                                                                 
Current assets
   Cash and cash equivalents                                                                                                                        $    257,592                                                                                   $   442,141
   Short-term bank deposits                                                                                                                                  571                                                                                           595
   Accounts receivable, net                                                                                                                              123,215                                                                                       150,806
   Inventories                                                                                                                                           123,658                                                                                       123,385
   Net investment in sales-type leases                                                                                                                    11,704                                                                                         8,170
   Prepaid expenses                                                                                                                                        8,469                                                                                         7,931
   Deferred income taxes                                                                                                                                       -                                                                                        25,697
   Other current assets                                                                                                                21,864                                                  37,903  
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
      Total current assets                                                                                                            547,073                                                 796,628  
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
Non-current assets
   Goodwill                                                                                                                                              383,853                                                                                     1,323,502
   Other intangible assets, net                                                                                                                          252,468                                                                                       597,903
   Property, plant and equipment, net                                                                                                                    201,934                                                                                       157,036
   Net investment in sales-type leases - long term                                                                                                        17,785                                                                                        14,822
   Deferred income taxes and other non-current assets                                                                                  11,243                                                   9,216  
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
      Total non-current assets                                                                                                        867,283                                               2,102,479  
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
Total assets                                                                                                                                        $  1,414,356                                                                $ 2,899,107  
                                                                                                                                 ==================== ========== ====================                                           ==================== ========= ====================
                                                                                                                                                                                                                                 
LIABILITIES AND EQUITY
                                                                                                                                                                                                                                 
Current liabilities
   Accounts payable                                                                                                                                 $     39,021                                                                                   $    37,359
   Short term debt                                                                                                                                             -                                                                                        50,000
   Accrued expenses and other current liabilities                                                                                                         31,314                                                                                        34,514
   Accrued compensation and related benefits                                                                                                              34,052                                                                                        42,332
   Income taxes payable                                                                                                                                   11,395                                                                                        13,246
   Obligations in connection with acquisitions                                                                                                             4,636                                                                                        28,092
   Deferred revenues                                                                                                                   52,309                                                  45,023  
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
      Total current liabilities                                                                                                       172,727                                                 250,566  
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
Non-current liabilities
   Obligations in connection with acquisitions - long term                                                                                                 4,354                                                                                        26,461
   Deferred tax liabilities                                                                                                                               16,040                                                                                        55,835
   Deferred revenues - long-term                                                                                                                           7,627                                                                                         5,946
   Other non-current liabilities                                                                                                       22,428                                                  25,091  
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
      Total non-current liabilities                                                                                                    50,449                                                 113,333  
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
Total liabilities                                                                                                                     223,176                                                 363,899  
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
Redeemable non-controlling interests                                                                                                                       2,379                                                                                         3,969
                                                                                                                                                                                                                                 
Equity
                                                                                                                                                             141                                                                                           139
   Ordinary shares, NIS 0.01 nominal value, authorized 180,000
   thousands shares; 52,082 thousands shares and 50,923 thousands
   shares issued and outstanding at December 31, 2015 and 2014,
   respectively
   Additional paid-in capital                                                                                                                          2,605,957                                                                                     2,568,149
   Accumulated deficit                                                                                                                                (1,406,706 )                                                                                     (33,871 )
   Accumulated other comprehensive loss                                                                                               (10,774 )                                                                   (3,647 )
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
   Equity attributable to Stratasys Ltd.                                                                                                               1,188,618                                                                                     2,530,770
   Non-controlling interest                                                                                                                                  183                                                                                           469
                                                                                                                                                                                                                                 
                                                                                                                                    1,188,801                                               2,531,239  
      Total equity
                                                                                                                                 -------------------- ---------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                 
Total liabilities and equity                                                                                                                        $  1,414,356                                                                $ 2,899,107  
                                                                                                                                 ==================== ========== ====================                                           ==================== ========= ====================
                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                         
Stratasys Ltd.
                                                                                                                                                                                                                                                                                                                                                                                                                      
Consolidated Statements of Operations
                                                                                                                                                                                                                                                                                                                                                                                                                      
(in thousands, except per share data)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                     Three Months Ended December 31,                                                                                                                                                           Twelve Months Ended December 31,
                                                                                                                             -----------------------------------------------------------------------------------------------------------------------------------------------                                          --------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                    2015                                                                                         2014                                                                                         2015                                                                                          2014
                                                                                                                                                 (unaudited)                                                               (unaudited)                                                                                                                       
                                                                                                                             -----------------------------------------------------------------------                      --------------------------------------------------                                          -------------------------------------------------------------------------                      ---------------------------------------------------
Net sales
   Products                                                                                                                                     $  124,316                                                                                   $ 168,595                                                                                   $    503,946                                                                                   $  612,138
   Services                                                                                                                      49,046                                                48,517                                                  192,049                                                137,991  
                                                                                                                             -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- -------- --------------------
                                                                                                                                                   173,362                                                                                     217,112                                                                                        695,995                                                                                      750,129
                                                                                                                                                                                                                                                                                                                                                                                                                      
Cost of sales
   Products                                                                                                                                         86,753                                                                                      82,985                                                                                        466,221                                                                                      302,838
   Services                                                                                                                      33,537                                                28,943                                                  127,602                                                 84,897  
                                                                                                                             -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- -------- --------------------
                                                                                                                                                   120,290                                                                                     111,928                                                                                        593,823                                                                                      387,735
                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                             ---------------------------------------------------                                          --------------------------------------------------                                          -----------------------------------------------------                                          ---------------------------------------------------
Gross profit                                                                                                                                        53,072                                                                                     105,184                                                                                        102,172                                                                                      362,394
                                                                                                                                                                                                                                                                                                                                                                                                                      
Operating expenses
   Research and development, net                                                                                                                    31,919                                                                                      23,189                                                                                        122,360                                                                                       82,270
   Selling, general and administrative                                                                                                             113,126                                                                                      95,646                                                                                        434,619                                                                                      351,993
   Goodwill impairment                                                                                                                              96,550                                                                                     102,470                                                                                        942,408                                                                                      102,470
   Change in the fair value of obligations in connection with                                                                      (714 )                                                                (24,862 )                                                                   (23,671 )                                                                 (26,150 )
   acquisitions
                                                                                                                             -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- -------- --------------------
                                                                                                                                                   240,881                                                                                     196,443                                                                                      1,475,716                                                                                      510,583
                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                             ---------------------------------------------------                                          --------------------------------------------------                                          -----------------------------------------------------                                          ---------------------------------------------------
Operating loss                                                                                                                                    (187,809 )                                                                                   (91,259 )                                                                                   (1,373,544 )                                                                                   (148,189 )
                                                                                                                                                                                                                                                                                                                                                                                                                      
Financial expense                                                                                                                                     (947 )                                                                                    (4,145 )                                                                                      (10,287 )                                                                                     (6,529 )
                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                             ---------------------------------------------------                                          --------------------------------------------------                                          -----------------------------------------------------                                          ---------------------------------------------------
Loss before income taxes                                                                                                                          (188,756 )                                                                                   (95,404 )                                                                                   (1,383,831 )                                                                                   (154,718 )
                                                                                                                                                                                                                                                                                                                                                                                                                      
   Income taxes                                                                                                                  43,770                                                (3,370 )                                                                   (10,320 )                                                                 (35,248 )
                                                                                                                             -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                      
Net loss                                                                                                                                          (232,526 )                                                                                   (92,034 )                                                                                   (1,373,511 )                                                                                   (119,470 )
                                                                                                                                                                                                                                                                                                                                                                                                                      
Net loss attributable to non-controlling interest                                                                                  (183 )                                                                    (25 )                                                                      (676 )                                                                     (50 )
                                                                                                                             -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                      
Net loss attributable to Stratasys Ltd.                                                                                                         $ (232,343 )                                                                                 $ (92,009 )                                                                                 $ (1,372,835 )                                                                                 $ (119,420 )
                                                                                                                             ==================== ======== ====================                                           ==================== ======= ====================                                           ==================== ========== ====================                                           ==================== ======== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                      
Net loss per ordinary share attributable to Stratasys Ltd.
      Basic                                                                                                                                     $    (4.46 )                                                                                 $   (1.81 )                                                                                 $     (26.64 )                                                                                 $    (2.39 )
      Diluted                                                                                                                                        (4.46 )                                                                                     (1.81 )                                                                                       (26.64 )                                                                                      (2.39 )
                                                                                                                                                                                                                                                                                                                                                                                                                      
Weighted average ordinary shares outstanding
      Basic                                                                                                                                         52,046                                                                                      50,912                                                                                         51,592                                                                                       50,019
      Diluted                                                                                                                                       52,046                                                                                      50,912                                                                                         51,592                                                                                       50,019
                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                     
Stratasys Ltd.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Reconciliation of GAAP to Non-GAAP Results of Operations
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
(in thousands, except per share data)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                  Three Months Ended December 31, 2015                                                                                                                                                                                                                                                 Three Months Ended December 31, 2014
                                                                                                                              ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                     GAAP                                                                                                                                                                                    Non-GAAP                                                                                      GAAP                                                                                                                                                                                   Non-GAAP
                                                                                                                                                  (unaudited)                                                              Adjustments*                                                               (unaudited)                                                                                 (unaudited)                                                             Adjustments*                                                               (unaudited)
                                                                                                                              -----------------------------------------------------------------------                      -----------------------------------------------------------------------                      --------------------------------------------------                                          ----------------------------------------------------------------------                      -----------------------------------------------------------------------                      --------------------------------------------------
Net sales
   Products                                                                                                                                      $  124,316                                                                                   $        -                                                                                   $ 124,316                                                                                   $ 168,595                                                                                   $        -                                                                                   $ 168,595
   Services                                                                                                                       49,046                                                      -                                                49,046                                                48,517                                                      -                                                48,517  
                                                                                                                              -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                    173,362                                                                                            -                                                                                     173,362                                                                                     217,112                                                                                            -                                                                                     217,112
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Cost of sales
   Products                                                                                                                                          86,753                                                                                      (28,080 )                                                                                    58,673                                                                                      82,985                                                                                      (14,490 )                                                                                    68,495
   Services                                                                                                                       33,537                                                 (2,229 )                                                                 31,308                                                28,943                                                 (1,915 )                                                                 27,028  
                                                                                                                              -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                    120,290                                                                                      (30,309 )                                                                                    89,981                                                                                     111,928                                                                                      (16,405 )                                                                                    95,523
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                              ---------------------------------------------------                                          ---------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------                                          ---------------------------------------------------                                          --------------------------------------------------
Gross profit                                                                                                                                         53,072                                                                                       30,309                                                                                      83,381                                                                                     105,184                                                                                       16,405                                                                                     121,589
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Operating expenses
   Research and development, net                                                                                                                     31,919                                                                                       (9,741 )                                                                                    22,178                                                                                      23,189                                                                                       (1,822 )                                                                                    21,367
   Selling, general and administrative                                                                                                              113,126                                                                                      (43,041 )                                                                                    70,085                                                                                      95,646                                                                                      (20,368 )                                                                                    75,278
   Goodwill impairment                                                                                                                               96,550                                                                                      (96,550 )                                                                                         -                                                                                     102,470                                                                                     (102,470 )                                                                                         -
   Change in the fair value of obligations in connection with                                                                       (714 )                                                                     714                                                     -                                               (24,862 )                                                                  24,862                                                     -  
   acquisitions
                                                                                                                              -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                    240,881                                                                                     (148,618 )                                                                                    92,263                                                                                     196,443                                                                                      (99,798 )                                                                                    96,645
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                              ---------------------------------------------------                                          ---------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------                                          ---------------------------------------------------                                          --------------------------------------------------
Operating income (loss)                                                                                                                            (187,809 )                                                                                    178,927                                                                                      (8,882 )                                                                                   (91,259 )                                                                                    116,203                                                                                      24,944
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Financial expense                                                                                                                                      (947 )                                                                                          -                                                                                        (947 )                                                                                    (4,145 )                                                                                          -                                                                                      (4,145 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                              ---------------------------------------------------                                          ---------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------                                          ---------------------------------------------------                                          --------------------------------------------------
Income (loss) before income taxes                                                                                                                  (188,756 )                                                                                    178,927                                                                                      (9,829 )                                                                                   (95,404 )                                                                                    116,203                                                                                      20,799
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
   Income taxes                                                                                                                   43,770                                                (52,720 )                                                                 (8,950 )                                                                 (3,370 )                                                                    (750 )                                                                 (4,120 )
                                                                                                                              -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Net income (loss)                                                                                                                                  (232,526 )                                                                                    231,647                                                                                        (879 )                                                                                   (92,034 )                                                                                    116,953                                                                                      24,919
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Net loss attributable to non-controlling interest                                                                                   (183 )                                                                       -                                                  (183 )                                                                    (25 )                                                                       -                                                   (25 )
                                                                                                                              -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Net income (loss) attributable to Stratasys Ltd.                                                                                                 $ (232,343 )                                                                                 $  231,647                                                                $    (696 )                                                                                 $ (92,009 )                                                                                 $  116,953                                                                $  24,944  
                                                                                                                              ==================== ======== ====================                                           ==================== ======== ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======== ====================                                           ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Net income (loss) per ordinary share attributable to Stratasys
Ltd.
      Basic                                                                                                                                      $    (4.46 )                                                                                                                                                                              $   (0.01 )                                                                                 $   (1.81 )                                                                                                                                                                              $    0.49
      Diluted                                                                                                                                         (4.46 )                                                                                                                                                                                  (0.01 )                                                                                     (1.81 )                                                                                                                                                                                   0.48
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Weighted average ordinary shares outstanding
      Basic                                                                                                                                          52,046                                                                                                                                                                                   52,046                                                                                      50,912                                                                                                                                                                                   50,912
      Diluted                                                                                                                                        52,046                                                                                                                                                                                   52,046                                                                                      50,912                                                                                                                                                                                   52,491
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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.
 
* Refer to the "Reconciliation of Non-GAAP Adjustments" herein for
further information regarding adjustments.
 
                                                                                                                                                                                                                                                                                                                                                          
Stratasys Ltd.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Reconciliation of GAAP to Non-GAAP Results of Operations
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
(in thousands, except per share data)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                    Twelve Months Ended December 31, 2015                                                                                                                                                                                                                                                   Twelve Months Ended December 31, 2014
                                                                                                                              ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                      GAAP                                                                    Adjustments*                                                                 Non-GAAP                                                                                      GAAP                                                                  Adjustments*                                                                Non-GAAP
                                                                                                                                                                                                        -------------------- -------------------------------------------------------------------------                                                                                                                                                                                          -------------------- -----------------------------------------------------------------------
Net sales
   Products                                                                                                                                      $    503,946                                                                                   $          -                                                                                   $ 503,946                                                                                   $  612,138                                                                                   $      235                                                                                   $ 612,373
   Services                                                                                                                        192,049                                                        -                                               192,049                                                137,991                                                      -                                               137,991  
                                                                                                                              -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                      695,995                                                                                              -                                                                                     695,995                                                                                      750,129                                                                                          235                                                                                     750,364
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Cost of sales
   Products                                                                                                                                           466,221                                                                                       (254,494 )                                                                                   211,727                                                                                      302,838                                                                                      (69,717 )                                                                                   233,121
   Services                                                                                                                        127,602                                                   (5,051 )                                                                122,551                                                 84,897                                                 (6,925 )                                                                 77,972  
                                                                                                                              -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                      593,823                                                                                       (259,545 )                                                                                   334,278                                                                                      387,735                                                                                      (76,642 )                                                                                   311,093
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                              -----------------------------------------------------                                          -----------------------------------------------------                                          --------------------------------------------------                                          ---------------------------------------------------                                          ---------------------------------------------------                                          --------------------------------------------------
Gross profit                                                                                                                                          102,172                                                                                        259,545                                                                                     361,717                                                                                      362,394                                                                                       76,877                                                                                     439,271
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Operating expenses
   Research and development, net                                                                                                                      122,360                                                                                        (28,198 )                                                                                    94,162                                                                                       82,270                                                                                       (8,813 )                                                                                    73,457
   Selling, general and administrative                                                                                                                434,619                                                                                       (151,097 )                                                                                   283,522                                                                                      351,993                                                                                      (94,442 )                                                                                   257,551
   Goodwill impairment                                                                                                                                942,408                                                                                       (942,408 )                                                                                         -                                                                                      102,470                                                                                     (102,470 )                                                                                         -
   Change in the fair value of obligations in connection with                                                                      (23,671 )                                                                    23,671                                                     -                                                (26,150 )                                                                  26,150                                                     -  
   acquisitions
                                                                                                                              -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                    1,475,716                                                                                     (1,098,032 )                                                                                   377,684                                                                                      510,583                                                                                     (179,575 )                                                                                   331,008
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                              -----------------------------------------------------                                          -----------------------------------------------------                                          --------------------------------------------------                                          ---------------------------------------------------                                          ---------------------------------------------------                                          --------------------------------------------------
Operating income (loss)                                                                                                                            (1,373,544 )                                                                                    1,357,577                                                                                     (15,967 )                                                                                   (148,189 )                                                                                    256,452                                                                                     108,263
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Financial income (expense)                                                                                                                            (10,287 )                                                                                        2,705                                                                                      (7,582 )                                                                                     (6,529 )                                                                                          -                                                                                      (6,529 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                              -----------------------------------------------------                                          -----------------------------------------------------                                          --------------------------------------------------                                          ---------------------------------------------------                                          ---------------------------------------------------                                          --------------------------------------------------
Income (loss) before income taxes                                                                                                                  (1,383,831 )                                                                                    1,360,282                                                                                     (23,549 )                                                                                   (154,718 )                                                                                    256,452                                                                                     101,734
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
   Income taxes                                                                                                                    (10,320 )                                                                   (22,507 )                                                                (32,827 )                                                                 (35,248 )                                                                  33,403                                                (1,845 )
                                                                                                                              -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Net income (loss)                                                                                                                                  (1,373,511 )                                                                                    1,382,789                                                                                       9,278                                                                                     (119,470 )                                                                                    223,049                                                                                     103,579
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Net loss attributable to non-controlling interest                                                                                     (676 )                                                                         -                                                  (676 )                                                                     (50 )                                                                       -                                                   (50 )
                                                                                                                              -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- -------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Net income (loss) attributable to Stratasys Ltd.                                                                                                 $ (1,372,835 )                                                                                 $  1,382,789                                                                $   9,954                                                                $ (119,420 )                                                                                 $  223,049                                                                $ 103,629  
                                                                                                                              ==================== ========== ====================                                           ==================== ========== ====================                                           ==================== ======= ====================                                           ==================== ======== ====================                                           ==================== ======== ====================                                           ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Net income (loss) per ordinary share attributable to Stratasys
Ltd.
      Basic                                                                                                                                      $     (26.64 )                                                                                                                                                                                $    0.19                                                                                   $    (2.39 )                                                                                                                                                                              $    2.07
      Diluted                                                                                                                                          (26.64 )                                                                                                                                                                                     0.19                                                                                        (2.39 )                                                                                                                                                                                   2.00
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Weighted average ordinary shares outstanding
      Basic                                                                                                                                            51,592                                                                                                                                                                                     51,592                                                                                       50,019                                                                                                                                                                                   50,019
      Diluted                                                                                                                                          51,592                                                                                                                                                                                     52,824                                                                                       50,019                                                                                                                                                                                   51,805
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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.
 
* Refer to the "Reconciliation of Non-GAAP Adjustments" herein for
further information regarding adjustments.
 
 
Stratasys Ltd.
                                                                                                                                                                                                                                           
Reconciliation of Non-GAAP Adjustments
                                                                                                                                                                                                                                                                                                                                                                                                                        
(in thousands)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                          Three Months Ended December                                                                                                                                                              Twelve Months Ended December
                                                                                                                                                                                                      31,                                                                                                                                                                                       31,
                                                                                                                                ---------------------------------------------------------------------------------------------------------------------------------------                                                  -----------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                       2015                                                                                        2014                                                                                          2015                                                                                         2014
                                                                                                                                --------------------------------------------------                                          ---------------------------------------------------                                          ----------------------------------------------------                                          ---------------------------------------------------
Net sales, products
      Deferred revenue step-up                                                                                                                     $       -                                                                                   $        -                                                                                   $         -                                                                                   $      235
                                                                                                                                                                                                                                                                                                                                                                                                                        
Cost of sales, products
      Acquired intangible assets amortization                                                                                                        (10,830 )                                                                                    (14,654 )                                                                                     (50,353 )                                                                                    (56,235 )
      Acquired intangible assets impairment                                                                                                          (10,779 )                                                                                          -                                                                                      (191,534 )                                                                                    (11,636 )
      Non-cash stock-based compensation expense                                                                                                         (675 )                                                                                        164                                                                                        (3,508 )                                                                                     (1,846 )
      Reorganization and other related costs                                                                                       (5,796 )                                                                       -                                                  (9,099 )                                                                       -  
                                                                                                                                -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- --------- --------------------                                           -------------------- -------- --------------------
                                                                                                                                                     (28,080 )                                                                                    (14,490 )                                                                                    (254,494 )                                                                                    (69,717 )
Cost of sales, services
      Acquired intangible assets amortization                                                                                                              -                                                                                          537                                                                                             -                                                                                            -
      Non-cash stock-based compensation expense                                                                                                         (338 )                                                                                     (1,430 )                                                                                      (1,873 )                                                                                     (2,647 )
      Reorganization and other related costs                                                                                                          (1,726 )                                                                                          -                                                                                        (1,850 )                                                                                          -
      Merger and acquisition related expense                                                                                         (165 )                                                                  (1,022 )                                                                   (1,328 )                                                                  (4,278 )
                                                                                                                                -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- --------- --------------------                                           -------------------- -------- --------------------
                                                                                                                                                      (2,229 )                                                                                     (1,915 )                                                                                      (5,051 )                                                                                     (6,925 )
Research and development, net
      Non-cash stock-based compensation expense                                                                                                       (1,400 )                                                                                     (1,942 )                                                                                      (5,758 )                                                                                     (4,862 )
      Acquired intangible assets impairment                                                                                                           (7,900 )                                                                                          -                                                                                       (17,746 )                                                                                     (3,000 )
      Reorganization and other related costs                                                                                                            (249 )                                                                                          -                                                                                        (1,593 )                                                                                          -
      Merger and acquisition related expense                                                                                         (192 )                                                                     120                                                  (3,101 )                                                                    (951 )
                                                                                                                                -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- --------- --------------------                                           -------------------- -------- --------------------
                                                                                                                                                      (9,741 )                                                                                     (1,822 )                                                                                     (28,198 )                                                                                     (8,813 )
                                                                                                                                                                                                                                                                                                                                                                                                                        
Selling, general and administrative
      Acquired intangible assets amortization                                                                                                         (4,464 )                                                                                     (7,607 )                                                                                     (22,436 )                                                                                    (24,952 )
      Non-cash stock-based compensation expense                                                                                                       (3,437 )                                                                                     (5,589 )                                                                                     (18,871 )                                                                                    (20,852 )
      Merger and acquisition related expense                                                                                                          (2,624 )                                                                                     (7,172 )                                                                                     (25,238 )                                                                                    (48,638 )
      Reorganization and other related costs                                                                                                          (9,117 )                                                                                          -                                                                                       (15,361 )                                                                                          -
      Acquired intangible assets impairment                                                                                       (23,399 )                                                                       -                                                 (69,191 )                                                                       -  
                                                                                                                                -------------------- ------- --------------------                                           -------------------- -------- --------------------                                           -------------------- --------- --------------------                                           -------------------- -------- --------------------
                                                                                                                                                     (43,041 )                                                                                    (20,368 )                                                                                    (151,097 )                                                                                    (94,442 )
                                                                                                                                                                                                                                                                                                                                                                                                                        
Goodwill impairment                                                                                                                                  (96,550 )                                                                                   (102,470 )                                                                                    (942,408 )                                                                                   (102,470 )
                                                                                                                                                                                                                                                                                                                                                                                                                        
Change in the fair value of obligations in connection with
acquisitions
      Change in the fair value of obligations in connection with                                                                                         714                                                                                       24,862                                                                                        23,671                                                                                       26,150
      acquisitions
                                                                                                                                                                                                                                                                                                                                                                                                                        
Financial expense
      Credit facility extinguishment related costs                                                                                                         -                                                                                            -                                                                                        (2,705 )                                                                                          -
                                                                                                                                                                                                                                                                                                                                                                                                                        
Income taxes
      Corresponding tax effect and other tax adjustments                                                                                             (52,720 )                                                                                       (750 )                                                                                     (22,507 )                                                                                     33,403
                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                --------------------------------------------------                                          ---------------------------------------------------                                          ----------------------------------------------------                                          ---------------------------------------------------
Net income                                                                                                                                         $ 231,647                                                                $  116,953                                                                $ 1,382,789                                                                $  223,049  
                                                                                                                                ==================== ======= ====================                                           ==================== ======== ====================                                           ==================== ========= ====================                                           ==================== ======== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                      
 
Stratasys Ltd.
                                                         
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
                                                                                                                                       
Fiscal Year 2016
                                                                                                                                       
(in millions, except per share data)
-----------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                       
GAAP net loss                                                                                                                            ($84) to ($67)
                                                                                                                                       
Adjustments
-------------------------------------------------
      Stock-based compensation expense                                                                                                     $25 to $27
      Intangible assets amortization expense                                                                                                   $59
      Merger and acquisition related expense                                                                                                   $7
      Reorganization and other related costs                                                                                                $4 to $5
      Tax expense related to Non-GAAP adjustments                                                                                             ($5)
                                                                                                                                       
Non-GAAP net income                                                                                                                         $9 to $23
                                                                                                                                       
GAAP loss per share                                                                                                                    ($1.60) to ($1.28)
                                                                                                                                       
Non-GAAP diluted earnings per share                                                                                                      $0.17 to $0.43

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160303005494r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160303005494/en/

SOURCE: Stratasys Ltd.

Stratasys Investor Relations 
Shane Glenn, 952-294-3416 
Vice President - Investor Relations 
shane.glenn@stratasys.com


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