Stratasys Reports Record Financial Results for the Third Quarter of 2013

AsiaNet 54940

MINNEAPOLIS, Minn. and REHOVOT, Israel, Nov. 8, 2013 /PRN=KYODO JBN/ --

-- Company reports $126.1 million in non-GAAP revenue and generates 26%

   organic revenue growth over last year's Stratasys and Objet pro forma

   combined revenue as merger synergies accelerate

-- Non-GAAP earnings of $0.45 per diluted share and a GAAP loss of ($0.16) per

   share

-- Company raises fiscal 2013 non-GAAP revenue and EPS guidance

   Stratasys Ltd. (NASDAQ: SSYS) today announced record financial results for

the third quarter of 2013.

   (Logo: http://www.prnasia.com/sa/2012/12/05/20121205155959811273-l.jpg )

   Q3 Financial Results Summary:

   -- Non-GAAP revenue (including MakerBot from August 15th) of $126.1 million

for the third quarter of 2013 represents a 39% increase over the $90.9 million

Stratasys and Objet pro forma combined revenue for the same period last year.  

GAAP revenue (including MakerBot) for the third quarter of 2013 was $125.6

million.

   -- Non-GAAP revenue (excluding MakerBot) increased organically by 26% for

the third quarter over last year's Stratasys and Objet pro forma combined

revenue.

   -- Non-GAAP revenue from MakerBot was $11.6 million for the third quarter

representing the period following the transaction's close on August 15, 2013.  

GAAP revenue contribution from MakerBot for the third quarter was $11.4

million.

   -- Non-GAAP net income (including MakerBot) was $20.0 million for the third

quarter, or $0.45 per diluted share, compared to Stratasys and Objet pro forma

combined $16.6 million, or $0.41 per diluted share, reported for the same

period last year.

   -- GAAP net income (including MakerBot) for the third quarter was a loss of

$6.6 million, or ($0.16) per share, versus a Stratasys and Objet pro forma loss

of $2.8 million, or ($0.07) per share, for the same period last year.

   -- The company invested a net amount of $12.0 million in R&D during the

third quarter, representing 9.5% of net sales.

   -- Cash, investments and bank deposits balance at the end of the third

quarter was $616.5 million, or $12.65 per share.

   -- On a combined pro forma basis, including MakerBot, the company has

shipped a cumulative 64,855 systems worldwide as of September 30, 2013.

   "Organic revenue growth accelerated in the third quarter as synergies

resulting from the merger between Stratasys and Objet continued to develop,"

said David Reis, chief executive officer of Stratasys.  "We observed strong

growth across multiple product lines that address an expanding range of

applications.  We also sustained strong gross margins during the period, which

was a contributing factor to our record profitability.  We are especially

pleased by the contribution made by MakerBot, which added $11.6 million in

revenue during the period.  We are very pleased with our third quarter results."

   Business Highlights:

   -- Completed the acquisition of MakerBot, a leading manufacturer within the

rapidly growing desktop 3D printing category.

   -- Introduced two new systems, the Solidscape 3Z MAX 3D printer and the

MakerBot Digitizer Desktop 3D Scanner; as well as two new materials for the

MakerBot platform, including flexible filament and a dissolvable support

material.

   -- Recognized tangible revenue synergies from the sales, marketing and

service team integration initiatives that resulted from the merger of Stratasys

and Objet.

   -- Initiated a pilot program with the UPS Store, placing uPrints in six

locations, enabling UPS Store customers to have 3D designs printed onsite.

   -- Invested heavily in global sales, marketing and channel infrastructure,

including the opening of a local sales office in Singapore, and the signing of

a distribution agreement with Aurora Group, a leading provider of office

automation equipment in China.

   -- Exercised an option to acquire the remaining holdings from Fasotec in

Stratasys Japan, with Stratasys Japan becoming wholly owned and operated by

Stratasys Ltd.

   -- Completed a public offering of 5,175,000 ordinary shares at a public

offering price of $93.00 per share, with net offering proceeds to Stratasys

approximating $462.9 million.

   "With the completion of the MakerBot acquisition in the third quarter, we

believe Stratasys is now the clear leader in the desktop 3D printer category,

one of the fastest growing segments within our industry," continued Reis. "The

third quarter also demonstrated our commitment to internal product development,

as well as our goal of expanding our global customer reach.  In addition, as

the mainstream adoption of 3D printing continues to gain momentum, we have

strengthened our balance sheet, improving our ability to capitalize on

additional growth initiatives and acquisitions."

   Financial Guidance

   The company's overall outlook has improved for the fourth quarter of 2013,

which is reflected in an upward revision to 2013 revenue guidance.  In

addition, earnings guidance incorporates a $0.06 per share positive impact from

the improved outlook; offset by $0.06 per share of earnings dilution resulting

from the company's public offering of 5,175,000 ordinary shares on September

18, 2013.  The earnings impact of the offering on 2013 results had not been

previously incorporated into financial guidance.  GAAP earnings guidance has

been revised principally to reflect higher estimates for stock compensation

expense; revised amortization expense related to acquired MakerBot intangible

assets; and higher expenses related to the MakerBot performance bonus plan.    

   Accordingly, Stratasys is updating its following financial guidance for the

fiscal year ending December 31, 2013 as follows:

   -- Revenue guidance of $470 million to $490 million; versus previous

guidance of $455 million to $480 million.

   -- Non-GAAP earnings guidance of $1.75 to $1.90 per diluted share.

   -- GAAP earnings guidance of a ($0.83) to ($0.55) per share loss; versus

previous guidance of ($0.76) to ($0.49) per share loss.

   -- Earnings guidance incorporates a $0.06 per share positive impact from the

company's improved outlook; and $0.06 per share of earnings dilution from the

company's ordinary share offering completed on September 18, 2013.

   Non-GAAP earnings guidance excludes $67.2 million of projected amortization

of intangible assets; $22.2 million to $24.9 million of share-based

compensation expense; and $18.1 million to $20.7 million in merger-related

expenses.  

   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.

   "As we enter the fourth quarter, we believe the acceleration in our organic

growth rate, combined with the positive impact from our recent acquisition of

MakerBot, will contribute to a strong finish to the year.  Looking beyond 2013,

we are well positioned to sustain our positive momentum as we accelerate our

rate of new product introductions, and prepare to capitalize on additional

inorganic growth opportunities. In addition, our industry remains ripe for

growth as new and innovative applications continue to emerge for our

technology.  We are very excited about the future," Reis concluded.

   Stratasys Ltd. Q3-2013 Conference Call Details

   Stratasys will hold a conference call to discuss its third quarter financial

results on Thursday, November 7, 2013 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://www.media-server.com/m/p/ceszzn6u.

   To participate by telephone, the domestic dial-in number is 866 578-5771 and

the international dial-in is 617 213-8055.  The access code is 58071751.  

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.

   To view financial tables:

   http://www.prnasia.com/sa/attachment/2013/11/20131107220056378.pdf

   Cautionary Statement Regarding Forward-Looking Statements

   Certain information included or incorporated by reference in this press may

be deemed to be "forward-looking statements" within the meaning of the Private

Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of

1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking

statements are often characterized by the use of forward-looking terminology

such as "may," "will," "expect," "anticipate," "estimate," "continue,"

"believe," "should," "intend," "project" or other similar words, but are not

the only way these statements are identified.  These forward-looking statements

may include, but are not limited to, statements relating to the company's

objectives, plans and strategies, statements that contain projections of

results of operations or of financial condition (including, with respect to the

MakerBot acquisition) and all statements (other than statements of historical

facts) that address activities, events or developments that the company

intends, expects, projects, believes or anticipates will or may occur in the

future.  Forward-looking statements are not guarantees of future performance

and are subject to risks and uncertainties. The company has based these

forward-looking statements on assumptions and assessments made by its

management in light of their experience and their perception of historical

trends, current conditions, expected future developments and other factors they

believe to be appropriate.  Important factors that could cause actual results,

developments and business decisions to differ materially from those anticipated

in these forward-looking statements include, among other things: the company's

ability to efficiently and successfully integrate the operations of Stratasys,

Inc. and Objet Ltd. after their merger as well as the ability to complete the

MakerBot acquisition and to successfully put in place and execute an effective

post-merger integration plan; the overall global economic environment; the

impact of competition and new technologies; general market, political and

economic conditions in the countries in which the company operates; projected

capital expenditures and liquidity; changes in the company's strategy;

government regulations and approvals; changes in customers' budgeting

priorities; litigation and regulatory proceedings; and those factors referred

to under "Risk Factors", "Information on the Company", "Operating and Financial

Review and Prospects", and  generally in the company's annual report on Form

20-F for the year ended December 31, 2012 filed with the U.S. Securities and

Exchange Commission and in other reports that the Company has filed with the

SEC. Readers are urged to carefully review and consider the various disclosures

made in the company's SEC reports, which are designed to advise interested

parties of the risks and factors that may affect its business, financial

condition, results of operations and prospects. Any forward-looking statements

in this press release are made as of the date hereof, and the company

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.

   Non-GAAP Discussion Disclosure

   The information discussed within this release includes financial results and

projections that are in accordance with accounting principles generally

accepted in the United States (GAAP).  In addition, certain non-GAAP financial

measures have been provided that exclude certain charges, expenses and income.  

The non-GAAP measures should be read in conjunction with the corresponding GAAP

measures and should be considered in addition to, and not as an alternative or

substitute for, the measures prepared in accordance with GAAP.  The non-GAAP

financial measures are provided in an effort to provide information that

investors may deem relevant to evaluate results from the company's core

business operations and to compare the company's performance with prior

periods.  The non-GAAP financial measures primarily identify and exclude

certain discrete items, such as merger-related expenses, amortization expenses

and expenses associated with share-based compensation required under ASC 718.  

The company uses these non-GAAP financial measures for evaluating comparable

financial performance against prior periods.  

   This release is available on the Stratasys web site at www.stratasys.com

   Stratasys Ltd. (Nasdaq: SSYS) is the corporate entity formed in 2012 by the

merger of 3D printing companies Stratasys Inc. and Objet Ltd., based in

Minneapolis, Minn. and Rehovot, Israel. Stratasys manufactures 3D printers and

materials for prototyping and production. The company's patented FDM(R) and

PolyJet(R) processes produce prototypes and manufactured goods directly from 3D

CAD files or other 3D content. Systems include affordable desktop 3D printers

for idea development, a range of systems for prototyping, and large production

systems for direct digital manufacturing. Since June 2012, the company's range

of over 130 3D printing materials has been the widest in the industry and

includes more than 120 proprietary inkjet-based photopolymer materials and 10

proprietary FDM-based thermoplastic materials. Stratasys also manufactures

Solidscape 3D Printers and operates the RedEye On Demand digital-manufacturing

service. The company has more than 1100 employees, holds more than 500 granted

or pending additive manufacturing patents globally, and has received more than

20 awards for its technology and leadership. Online at: www.stratasys.com or

http://blog.stratasys.com

   CONTACT: Shane Glenn

            Vice President of Investor Relations

            +1-952-294-3416

            shane.glenn@stratasys.com

    SOURCE: Stratasys Ltd.