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 Stratasys Releases Second Quarter 2017 Financial Results
   Wednesday, August 09, 2017 7:00:00 AM ET

--GAAP net loss of $6.0 million, or ($0.11) per diluted share, and non-GAAP net income of $9.2 million, or $0.17 per diluted share

--Generated $10.9 million of cash from operations during the quarter

Stratasys Ltd. (SSYS ), a global leader in applied additive technology solutions, announced financial results for the second quarter of 2017.

Q2-2017 Financial Results Summary:

Revenue for the second quarter of 2017 was $170.0 million, compared to $172.1 million for the same period last year.

-- GAAP gross margin was 49.1% for the quarter, compared to a GAAP gross margin of 46.2% for the same period last year, and 47.1% in the prior quarter.

-- Non-GAAP gross margin was 53.0% for the quarter, compared to 55.9% for the same period last year, and 51.2% in the prior quarter.

-- GAAP operating loss for the quarter was $5.0 million, compared to a loss of $17.1 million for the same period last year.

-- Non-GAAP operating income for the quarter was $11.1 million, compared to $10.2 million for the same period last year.

-- GAAP net loss for the quarter was $6.0 million, or ($0.11) per diluted share, compared to a loss of $18.5 million, or ($0.36) per diluted share, for the same period last year.

-- Non-GAAP net income for the quarter was $9.2 million, or $0.17 per diluted share, compared to Non-GAAP net income of $6.2 million, or $0.12 per diluted share, reported for the same period last year.

-- The Company generated $10.9 million in cash from operations during the second quarter and ended the period with $305.3 million in cash and cash equivalents.

-- Net R&D expenses for the quarter amounted to $23.3 million, representing 13.7% of net sales.

"We continue to allocate resources towards deepening customer engagement within our key vertical markets, and we are pleased with our progress in developing higher quality revenue opportunities," said Ilan Levin, Chief Executive Officer of Stratasys. "In addition to these vertical market initiatives, we are pleased with the market reception of our new F123 Series, launched in February of 2017, which has resulted in orders of over 1,000 units to date, and has generated significant interest for rapid prototyping applications among professional users."

Recent Business Highlights:

-- Announced new solution at the Paris Airshow for producing certifiable aircraft interior parts which leverages a qualification program underway with the FAA, National Institute of Aviation Research, and America Makes. The Fortus 900mc Aircraft Interiors Certification Solution consists of ULTEM 9085 thermoplastic, a new edition of the Fortus 900mc Production 3D Printer with specialized hardware and software designed to deliver highly repeatable mechanical properties appropriate for aircraft interior part applications, and the qualification processes and data to ease the certification process. -- Showcased focus on the aerospace market with announcements of Fortus 900mc Aircraft Interiors Certification Solution adoption by leading parts supplier Western Tool & Mold to produce certifiable aircraft cabin components, as well as collaborations to leverage Stratasys 3D printing solutions to accelerate development and production of next-generation aircraft with Boom Supersonic and Eviation Aircraft.

-- Stratasys Direct Manufacturing chosen by Airbus to produce 3D printed polymer parts for use on A350 XWB aircraft, including non-structural parts such as brackets, and other parts used for system installation.

-- Strengthened MakerBot’s leadership in 3D printing for the education segment with the announcement of My MakerBot, a Chromebook-compatible in-browser platform for managing networked 3D printers and connecting to Thingiverse, integration between My MakerBot and Autodesk Tinkercad, and the new MakerBot Educators Guidebook, the definitive how-to resource on 3D printing in the classroom.

"We have made significant progress in developing solutions that target high-value applications within our targeted markets, and we continue to focus on aligning our resources around this long term strategy," continued Levin. "We believe this strategy will allow us to help grow the adoption of our products and services over time."

Financial Guidance:

Stratasys today reiterated previously provided guidance for 2017. The Company’s guidance for projected revenue and net income (loss) for the fiscal year ending December 31, 2017 is as follows:

-- Revenue guidance of $645 to $680 million.

-- GAAP net loss guidance of $53 to $39 million, or ($1.00) to ($0.73) per diluted share.

-- Non-GAAP net income guidance of $10 to $20 million, or $0.19 to $0.37 per diluted share.

Stratasys provided the following additional guidance regarding the Company’s projected performance and strategic plans for 2017:

-- Non-GAAP operating margin guidance of 3% to 5%.

-- Capital expenditures guidance of $40 to $50 million.

Given the expected ongoing negative impact of not recording a tax benefit on U.S. tax losses on the Company’s non-GAAP net income, the Company believes that the rate of growth in its non-GAAP operating income will be the best measure of performance.

Non-GAAP earnings guidance for 2017 excludes $34 million of projected amortization of intangible assets; $18 to $20 million of share-based compensation expense; $2 to $3 million in merger and acquisition related expense; and $8 to $10 million in reorganization and other related costs; and includes $3 to $4 million in tax expenses related to non-GAAP adjustments.

Stratasys Ltd. Q2 2017 Conference Call Details

The Company plans to hold the conference call to discuss its second quarter financial results on Wednesday, August 9, 2017 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/6iz9y7m8 .

To participate by telephone, the domestic dial-in number is (866) 394-5776 and the international dial-in is (409) 350-3596. The access code is 48312906.

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.

Stratasys (SSYS ) is a global leader in applied additive technology solutions for industries including Aerospace, Automotive, Healthcare, Consumer Products and Education. For nearly 30 years, a deep and ongoing focus on customers’ business requirements has fueled purposeful innovations--1,200 granted and pending additive technology patents to date--that create new value across product lifecycle processes, from design prototypes to manufacturing tools and final production parts. The Stratasys 3D printing ecosystem of solutions and expertise--advanced materials; software with voxel level control; precise, repeatable and reliable FDM and PolyJet 3D printers; application-based expert services; on-demand parts and industry-defining partnerships--works to ensure seamless integration into each customer’s evolving workflow. Fulfilling the real-world potential of additive, Stratasys delivers breakthrough industry-specific applications that accelerate business processes, optimize value chains and drive business performance improvements for thousands of future-ready leaders around the world.

Corporate Headquarters: Minneapolis, Minnesota and Rehovot, Israel.

Online at: www.stratasys.com, http://blog.stratasys.com and LinkedIn.

Stratasys and Fortus are registered trademarks and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.

Cautionary Statement Regarding Forward-Looking Statements

The statements in this press release regarding Stratasys’ strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2017, 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: potential declines in the prices of our products and services, or volume of our sales, due to decreased demand in the 3D printing market; any failure to adequately adapt our infrastructure and properly integrate the internal and external sources of our growth to generate intended benefits (including from the companies that we recently acquired); changes in the overall global economic environment; the impact of competition and new technologies; changes in the general market, or in political and economic conditions in the countries in which we operate; any underestimates in projected capital expenditures and liquidity; changes in our strategy; changes in applicable government regulations and approvals; changes in customers’ budgeting priorities; reduction in our profitability due to shifting in our product mix into lower margin products or our shifting in our revenues mix significantly towards our AM services business; costs and potential liability relating to litigation and regulatory proceedings; and those factors referred to in Item 3.D "Key Information - Risk Factors", Item 4, "Information on the Company", and Item 5, "Operating and Financial Review and Prospects" in our 2016 Annual Report on Form 20-F, filed with the SEC on March 9, 2017, as well as in the 2016 Annual Report generally. Readers are urged to carefully review and consider the various disclosures made throughout (i) the Report on Form 6-K that attaches Stratasys’ unaudited, condensed consolidated financial statements as of, and for the quarter and six months ended, June 30, 2017, and its review of its results of operations and financial condition for those periods, which has been furnished to the SEC on or about the date hereof, (ii) Stratasys’ 2016 Annual Report, and (iii) Stratasys’ other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward-looking statements made, in this press release are made as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Use of non-GAAP financial measures

The non-GAAP data included herein, which excludes certain items as described below, are non-GAAP financial measures. Our management believes that these non-GAAP financial measures are useful information for investors and shareholders of our Company in gauging our results of operations (x) on an ongoing basis after excluding merger and acquisition related expense and reorganization-related charges, and (y) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, impairment of goodwill and other long-lived assets, changes in fair value of obligations in connection with acquisitions and the corresponding tax effect of those items. We also exclude, when applicable, non-recurring changes of non-cash valuation allowance on deferred tax assets, as well as, non-recurring significant tax charges or benefits that relate to prior periods which we do not believe are reflective of ongoing business and operating results. These non-GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non-recurring impact on the statement of operations, as assessed by management. These non-GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table below.

 
Stratasys Ltd.
 
Consolidated Balance Sheets
 
(in thousands, except share data)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             June 30,                                               December 31,
                                                                                                                                     2017                                                                                           2016
                                                                                                                                  (unaudited)                          
                                                                                                             ------------------------------------------------------------------------- -------------------- -----------------------------------------------------
                                                                                                                                                                                                             
ASSETS
                                                                                                                                                                                                             
Current assets
   Cash and cash equivalents                                                                                           $             305,345                                                                          $             280,328
   Accounts receivable, net                                                                                                          120,342                                                                                        120,411
   Inventories                                                                                                                       116,486                                                                                        117,521
   Net investment in sales-type leases                                                                                                 9,921                                                                                         11,717
   Prepaid expenses                                                                                                                    6,701                                                                                          7,571
   Other current assets                                                                                            17,557                                                   15,491  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
      Total current assets                                                                                        576,352                                                  553,039  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
Non-current assets
   Net investment in sales-type leases - long term                                                                                     7,406                                                                                         12,126
   Property, plant and equipment, net                                                                                                207,689                                                                                        208,415
   Goodwill                                                                                                                          386,513                                                                                        385,629
   Other intangible assets, net                                                                                                      160,926                                                                                        177,458
   Other non-current assets                                                                                        32,335                                                   29,382  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
      Total non-current assets                                                                                    794,869                                                  813,010  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
Total assets                                                                                                           $           1,371,221                                                       $           1,366,049  
                                                                                                             ==================== ========== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                             
LIABILITIES AND EQUITY
                                                                                                                                                                                                             
Current liabilities
   Accounts payable                                                                                                    $              46,087                                                                          $              40,933
   Current portion of long term-debt                                                                                                   3,714                                                                                          3,714
   Accrued expenses and other current liabilities                                                                                     28,910                                                                                         32,207
   Accrued compensation and related benefits                                                                                          39,744                                                                                         34,186
   Obligations in connection with acquisitions                                                                                         4,932                                                                                          3,619
   Deferred revenues                                                                                               50,464                                                   49,952  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
      Total current liabilities                                                                                   173,851                                                  164,611  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
Non-current liabilities
   Long-term debt                                                                                                                     20,429                                                                                         22,286
   Deferred tax liabilities                                                                                                            4,197                                                                                          5,952
   Deferred revenues - long-term                                                                                                      14,087                                                                                         12,922
   Other non-current liabilities                                                                                   25,984                                                   22,251  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
      Total non-current liabilities                                                                                64,697                                                   63,411  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
Total liabilities                                                                                                 238,548                                                  228,022  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
Redeemable non-controlling interests                                                                                                   1,811                                                                                          2,029
                                                                                                                                                                                                             
Equity
                                                                                                                                         142                                                                                            142
   Ordinary shares, NIS 0.01 nominal value, authorized 180,000
   thousands shares; 52,854 thousands shares and 52,639 thousands
   shares issued and outstanding at June 30, 2017 and December 31,
   2016, respectively
   Additional paid-in capital                                                                                                      2,644,579                                                                                      2,633,129
   Accumulated other comprehensive loss                                                                                              (10,143 )                                                                                      (13,479 )
   Accumulated deficit                                                                                         (1,503,769 )                                                                (1,483,925 )
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
      Equity attributable to Stratasys Ltd.                                                                                        1,130,809                                                                                      1,135,867
   Non-controlling interest                                                                                                               53                                                                                            131
                                                                                                                                                                                                             
         Total equity                                                                                           1,130,862                                                1,135,998  
                                                                                                             -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
                                                                                                                                                                                                             
Total liabilities and equity                                                                                           $           1,371,221                                                       $           1,366,049  
                                                                                                             ==================== ========== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                             
 
Stratasys Ltd.
 
Consolidated Statements of Operations
 
(in thousands, except per share data)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                   
                                                                                                                                                                  Three Months Ended June 30,                                                                                                                                                              Six Months Ended June 30,
                                                                                                        --------------------------------------------------------------------------------------------------------------------------------------                                                  --------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               2017                                                  2016                                                                                        2017                                                  2016
                                                                                                                            (unaudited)                                           (unaudited)                                                                                 (unaudited)                                           (unaudited)
                                                                                                        ---------------------------------------------------------------------- -------------------- --------------------------------------------------                                          ---------------------------------------------------------------------- -------------------- --------------------------------------------------
Net sales
   Products                                                                                                       $          121,021                                                                          $          123,758                                                                          $          236,108                                                                          $          242,392
   Services                                                                                                48,969                                                48,315                                                97,044                                                97,587  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                             169,990                                                                                     172,073                                                                                     333,152                                                                                     339,979
                                                                                                                                                                                                                                                                                                                                                                                             
Cost of sales
   Products                                                                                                                   54,723                                                                                      61,413                                                                                     109,203                                                                                     118,351
   Services                                                                                                31,875                                                31,128                                                63,677                                                60,927  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                              86,598                                                                                      92,541                                                                                     172,880                                                                                     179,278
                                                                                                                                                                                                                                                                                                                                    
                                                                                                        --------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------
Gross profit                                                                                                                  83,392                                                                                      79,532                                                                                     160,272                                                                                     160,701
                                                                                                                                                                                                                                                                                                                                                                                             
Operating expenses
   Research and development, net                                                                                              23,251                                                                                      24,366                                                                                      47,885                                                                                      49,481
   Selling, general and administrative                                                                                        64,569                                                                                      72,884                                                                                     128,748                                                                                     149,271
   Change in the fair value of obligations in connection with                                                 617                                                  (587 )                                                                  1,313                                                   140  
   acquisitions
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                              88,437                                                                                      96,663                                                                                     177,946                                                                                     198,892
                                                                                                                                                                                                                                                                                                                                    
                                                                                                        --------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------
Operating loss                                                                                                                (5,045 )                                                                                   (17,131 )                                                                                   (17,674 )                                                                                   (38,191 )
                                                                                                                                                                                                                                                                                                                                                                                             
Financial income, net                                                                                                            429                                                                                         932                                                                                         685                                                                                       1,112
                                                                                                                                                                                                                                                                                                                                    
                                                                                                        --------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------                                          --------------------------------------------------
Loss before income taxes                                                                                                      (4,616 )                                                                                   (16,199 )                                                                                   (16,989 )                                                                                   (37,079 )
                                                                                                                                                                                                                                                                                                                                                                                             
   Income taxe expenses                                                                                                        1,308                                                                                       2,454                                                                                       2,634                                                                                       4,745
                                                                                                                                                                                                                                                                                                                                                                                             
Share in losses of associated company                                                                        (229 )                                                                      -                                                  (517 )                                                                      -  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                             
Net loss                                                                                                                      (6,153 )                                                                                   (18,653 )                                                                                   (20,140 )                                                                                   (41,824 )
                                                                                                                                                                                                                                                                                                                                                                                             
Net loss attributable to non-controlling interest                                                                               (166 )                                                                                      (163 )                                                                                      (296 )                                                                                      (193 )
                                                                                                                                                                                                                                                                                                                                                                                             
Net loss attributable to Stratasys Ltd.                                                                           $           (5,987 )                                                                        $          (18,490 )                                                                        $          (19,844 )                                                                        $          (41,631 )
                                                                                                        ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                             
Net loss per ordinary share attributable to Stratasys Ltd.
   Basic                                                                                                          $            (0.11 )                                                                        $            (0.35 )                                                                        $            (0.38 )                                                                        $            (0.80 )
   Diluted                                                                                                                     (0.11 )                                                                                     (0.36 )                                                                                     (0.38 )                                                                                     (0.80 )
                                                                                                                                                                                                                                                                                                                                                                                             
   Basic                                                                                                                      52,778                                                                                      52,169                                                                                      52,733                                                                                      52,133
   Diluted                                                                                                                    52,778                                                                                      52,496                                                                                      52,733                                                                                      52,133
                                                                                                                                                                                                                                                                                                                                                                                                                          
 
Stratasys Ltd.
 
Reconciliation of GAAP to Non-GAAP Results of Operations
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                              Three Months Ended June 30,
                                                                                                                                       ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           2017                             Non-GAAP                             2017             2016                             Non-GAAP                                       2016
                                                                                                                                           GAAP                                                                  Adjustments                                                               Non-GAAP                                                 GAAP                                                                  Adjustments                                                                         Non-GAAP
                                                                                                                                       -------------                                          -------------------------------------------------                                          ------------                                          --------------                                          -------------------------------------------------                                          --------------------------------
                                                                                                                                                                                                                                                                                                     U.S. dollars and shares in thousands (except per share amounts)
                                                                                                                                       ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                         Gross profit (1)                                                                                               $ 83,392                                                        $           6,784                                                                  $  90,176                                            $  79,532                                                        $          16,715                                                                     $                   96,247
                         Operating income (loss) (1,2)                                                                                    (5,045 )                                                                 16,117                                                                     11,072                                              (17,131 )                                                                 27,332                                                                                         10,201
                         Net income (loss) attributable to Stratasys Ltd. (1,2,3)                                                         (5,987 )                                                                 15,165                                                                      9,178                                              (18,490 )                                                                 24,728                                                                                          6,238
                         Net income (loss) per diluted share attributable to Stratasys Ltd.                                             $  (0.11 )                                                      $            0.28                                                                  $    0.17                                            $   (0.36 )                                                      $            0.48                                                                     $                     0.12
                         (4)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
(1)                      Acquired intangible assets amortization expense                                                                                                                                            5,688                                                                                                                                                                                                   10,510
                         Impairment charges of other intangible assets                                                                                                                                                  -                                                                                                                                                                                                    1,779
                         Non-cash stock-based compensation expense                                                                                                                                                    799                                                                                                                                                                                                      729
                         Reorganization and other related costs                                                                                                                                                       137                                                                                                                                                                                                    3,543
                         Merger and acquisition and other expense                                                                                                                                  160                                                                                                                                                                154  
                                                                                                                                                                                              -------------------- ------ --------------------                                                                                                                                                         -------------------- ------ --------------------
                                                                                                                                                                                                                    6,784                                                                                                                                                                                                   16,715
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
(2)                      Acquired intangible assets amortization expense                                                                                                                                            2,588                                                                                                                                                                                                    3,621
                         Non-cash stock-based compensation expense                                                                                                                                                  4,532                                                                                                                                                                                                    4,750
                         Change in fair value of obligations in connection with acquisitions                                                                                                                          617                                                                                                                                                                                                     (587 )
                         Reorganization and other related costs                                                                                                                                                       598                                                                                                                                                                                                      956
                         Merger and acquisition and other expense                                                                                                                                  998                                                                                                                                                              1,877  
                                                                                                                                                                                              -------------------- ------ --------------------                                                                                                                                                         -------------------- ------ --------------------
                                                                                                                                                                                                 9,333                                                                                                                                                             10,617  
                                                                                                                                                                                              -------------------- ------ --------------------                                                                                                                                                         -------------------- ------ --------------------
                                                                                                                                                                                                16,117                                                                                                                                                             27,332  
                                                                                                                                                                                              -------------------- ------ --------------------                                                                                                                                                         -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
(3)                      Corresponding tax effect                                                                                                                                                                  (1,150 )                                                                                                                                                                                                 (2,604 )
                         Amortization expense of associated company                                                                                                                                198                                                                                                                                                                  -  
                                                                                                                                                                                              -------------------- ------ --------------------                                                                                                                                                         -------------------- ------ --------------------
                                                                                                                                                                                                                 $ 15,165                                                                                                                                                                              $ 24,728  
                                                                                                                                                                                              ==================== ====== ====================                                                                                                                                                         ==================== ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
(4)                                                                                                                                       52,778                                                                                                                                              53,473                                               52,496                                                                                                                                                                  53,238
                           Weighted average number of ordinary shares outstanding- Diluted
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
 
Stratasys Ltd.
 
Reconciliation of GAAP to Non-GAAP Results of Operations
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                              Six Months Ended June 30,
                                                                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                             2017                             Non-GAAP                             2017              2016                             Non-GAAP                                       2016
                                                                                                                                                             GAAP                                                                  Adjustments                                                               Non-GAAP                                                  GAAP                                                                  Adjustments                                                                         Non-GAAP
                                                                                                                                                        --------------                                          -------------------------------------------------                                          -------------                                          --------------                                          -------------------------------------------------                                          --------------------------------
                                                                                                                                                                                                                                                                                                                       U.S. dollars and shares in thousands (except per share amounts)
                                                                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                          Gross profit (1)                                                                                               $ 160,272                                                        $          13,398                                                                  $  173,670                                            $ 160,701                                                        $          27,993                                                                     $                  188,694
                                          Operating income (loss) (1,2)                                                                                    (17,674 )                                                                 32,775                                                                      15,101                                              (38,191 )                                                                 52,345                                                                                         14,154
                                          Net income (loss) attributable to Stratasys Ltd. (1,2,3)                                                         (19,844 )                                                                 31,430                                                                      11,586                                              (41,631 )                                                                 48,465                                                                                          6,834
                                          Net income (loss) per diluted share attributable to Stratasys Ltd.                                             $   (0.38 )                                                      $            0.60                                                                  $     0.22                                            $   (0.80 )                                                      $            0.93                                                                     $                     0.13
                                          (4)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                 (1)                      Acquired intangible assets amortization expense                                                                                                                                            11,393                                                                                                                                                                                                    20,924
                                          Impairment charges of other intangible assets                                                                                                                                                   -                                                                                                                                                                                                     1,779
                                          Non-cash stock-based compensation expense                                                                                                                                                   1,442                                                                                                                                                                                                     1,452
                                          Reorganization and other related costs                                                                                                                                                        231                                                                                                                                                                                                     3,321
                                          Merger and acquisition and other expense                                                                                                                                   332                                                                                                                                                                 517  
                                                                                                                                                                                                                -------------------- ------ --------------------                                                                                                                                                          -------------------- ------ --------------------
                                                                                                                                                                                                                                     13,398                                                                                                                                                                                                    27,993
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                 (2)                      Acquired intangible assets amortization expense                                                                                                                                             5,132                                                                                                                                                                                                     7,382
                                          Non-cash stock-based compensation expense                                                                                                                                                   7,793                                                                                                                                                                                                     9,650
                                          Change in fair value of obligations in connection with acquisitions                                                                                                                         1,313                                                                                                                                                                                                       140
                                          Reorganization and other related costs                                                                                                                                                      2,284                                                                                                                                                                                                     1,461
                                          Merger and acquisition and other expense                                                                                                                                 2,855                                                                                                                                                               5,719  
                                                                                                                                                                                                                -------------------- ------ --------------------                                                                                                                                                          -------------------- ------ --------------------
                                                                                                                                                                                                                  19,377                                                                                                                                                              24,352  
                                                                                                                                                                                                                -------------------- ------ --------------------                                                                                                                                                          -------------------- ------ --------------------
                                                                                                                                                                                                                  32,775                                                                                                                                                              52,345  
                                                                                                                                                                                                                -------------------- ------ --------------------                                                                                                                                                          -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                 (3)                      Corresponding tax effect                                                                                                                                                                   (1,735 )                                                                                                                                                                                                  (3,880 )
                                          Amortization expense of associated company                                                                                                                                 390                                                                                                                                                                   -  
                                                                                                                                                                                                                -------------------- ------ --------------------                                                                                                                                                          -------------------- ------ --------------------
                                                                                                                                                                                                                                   $ 31,430                                                                                                                                                                               $ 48,465  
                                                                                                                                                                                                                ==================== ====== ====================                                                                                                                                                          ==================== ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                 (4)                                                                                                                                        52,733                                                                                                                                               53,406                                               52,133                                                                                                                                                                  53,201
                                            Weighted average number of ordinary shares outstanding- Diluted
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 
Stratasys Ltd.
 
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
 
Fiscal Year 2017
 
(in millions, except per share data)
--------------------------------------------------------------------------------------------------------------
                                                  
GAAP net loss                                                                               ($53) to ($39)
                                                                                          
Adjustments
----------------------------------------------
   Stock-based compensation expense                                                           $18 to $20
   Intangible assets amortization expense                                                         $34
   Merger and acquisition related expense                                                      $2 to $3
   Reorganization and other related costs                                                       $8-$10
   Tax expense related to Non-GAAP adjustments                                               ($3) to ($4)
                                                                                          
Non-GAAP net income                                                                           $10 to $20
                                                                                          
GAAP loss per share                                                                       ($1.00) to ($0.73)
                                                                                          
Non-GAAP diluted earnings per share                                                         $0.19 to $0.37
                                                                                          

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170809005085r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170809005085/en/

SOURCE: Stratasys Ltd.

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


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