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Stratasys Releases Financial Guidance for 2014

Stratasys Ltd. (NASDAQ:SSYS) today announced financial guidance for 2014.

Stratasys provided the following information regarding the company’s projected revenue and net income for the fiscal year ending December 31, 2014:

  • Revenue guidance of $660 to $680 million.
  • Non-GAAP net income of $113 to $119 million, or $2.15 to $2.25 per diluted share.
  • GAAP net income of $10.5 to $19.9 million, or a $0.20 to $0.38 per diluted share.
  • The company expects organic sales, which exclude MakerBot sales, to grow at least 25% over 2013, with additional growth coming from MakerBot, which is expected to grow at a higher rate.

“We enter the new year with positive momentum and an expectation of continued strong growth for our industry-leading products and services,” said David Reis, chief executive officer of Stratasys. “Revenue synergies continue to develop from the merger between Stratasys and Objet, which is reflected in our outlook for organic sales growth of at least 25%. In addition, the performance of MakerBot, which we acquired in August of 2013, is exceeding our expectations, and is on track to be accretive by the end of the year. We expect 2014 will be another exciting year for Stratasys and our shareholders.”

Stratasys provided the following additional information regarding the company’s performance and strategic plans for 2014:

  • Operating expenses are projected to expand significantly in 2014 driven by investments in sales and marketing programs to drive future market adoption, as well as by higher R&D investments to fund technology innovation and new product development.
  • Incremental sales and marketing investments will focus on expanding sales channels, as well as building unique go-to-market programs targeting certain market verticals and customer applications.
  • Non-GAAP operating margins in 2014 are projected to remain relatively consistent with levels recognized in 2013, as margin expansion in the company’s core business is offset by a full year contribution from MakerBot, which maintains lower operating margins.
  • Projected Non-GAAP net income is expected to be derived disproportionately from the second half of fiscal 2014, driven by the projected timing of operating expenses, as well as the projected timing and success of new product introductions and their corresponding ramp in sales.
  • Capital expenditures are projected at $50 to $70 million, which includes significant investments in manufacturing capacity in anticipation of future growth.

“The marketplace for 3D printing and additive manufacturing solutions continues to develop very rapidly. Stratasys is positioned to address a full spectrum of opportunities by providing solutions that help foster innovation, accelerate design processes, and transform the way things are made. In addition to actively evaluating new acquisitions, we will continue to invest aggressively in sales, marketing and R&D initiatives in 2014 to better capitalize on these opportunities and drive future growth. We look forward to executing our plan in 2014,” Reis concluded.

Non-GAAP earnings guidance excludes $64.8 million of projected amortization of intangible assets; $25.1 million to $28.2 million of share-based compensation expense; and $8.8 million to $9.8 million in non-recurring expenses related to M&A transactions.

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.

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” in the prospectus and prospectus supplements included in the company’s registration statement on Form F-3, as well as those described 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, which have been filed with the U.S. Securities and Exchange Commission and in other documents that the company has filed or may file 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), headquartered in Minneapolis, Minn. and Rehovot, Israel, manufactures 3D printers and materials for personal use, prototyping and production. The company's patented FDM® and PolyJetTM 3D Printing technologies produce prototypes and manufactured goods directly from 3D CAD files or other 3D content. Systems include 3D printers for idea development, prototyping and direct digital manufacturing. Stratasys subsidiaries include MakerBot and Solidscape, and the company operates the RedEye digital-manufacturing service. Stratasys has more than 1700 employees, holds over 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

 
Stratasys Ltd.
   
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
 
Fiscal Year 2014
 
(in millions, except per share data)
 
GAAP net income $10.5 to $19.9
 

Adjustments

Stock-based compensation expense $25.1 to $28.2
Intangible assets amortization expense $64.8
Merger related expense $8.8 to $9.8
 
Non-GAAP net income $113.3 to $118.6
 
GAAP diluted earnings per share $0.20 to $0.38
Non-GAAP diluted earnings per share $2.15 to $2.25
 

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