Anticipates revenue in the range of $171 to $173 million
Expects non-GAAP net income in the range of $1.0 to $2.0 million, or $0.02 to $0.04 per diluted share and a GAAP net loss in the range of $208 to $173 million, or ($4.09) to ($3.40) per share
Immediate plan to reduce 2015 operating and capital expenditures
Remains committed to long-term investment plan
Provides updated 2015 guidance
Company to announce final first quarter 2015 financial results on May 11, 2015 at 8:30 a.m. (ET)
MINNEAPOLIS & REHOVOT, Israel — (BUSINESS WIRE) — April 28, 2015 — Stratasys Ltd. (NASDAQ: SSYS) today announced preliminary first quarter 2015 results as well as updated 2015 financial guidance. The Company expects to report first quarter revenue in the range of $171 to $173 million; these results reflect negative impact of a stronger U.S. dollar in the amount of approximately $8.7 million when compared to foreign currency exchange rates last year. This represents an increase of approximately 14% over revenues for the first quarter of 2014, or 20% on a constant currency basis.
The Company expects non-GAAP net income in the range of $1.0 to $2.0 million or $0.02 to $0.04 per diluted share. The Company expects to report a GAAP net loss in the range of $208 to $173 million or ($4.09) to ($3.40) per share. Gross margin on a non-GAAP basis is expected to fall by approximately 190 basis points in the first quarter over the fourth quarter of last year, mainly due to mix change; and the Company is expected to generate a small non-GAAP operating loss for the period. These are preliminary results based on current expectations and are subject to quarter-end closing adjustments; actual results may differ.
The Company’s first quarter results were lower than expected across most geographies and industries compared to growth levels the Company has experienced historically, excluding revenues for both consumables and customer support, which grew as expected. The Company believes that the overall shortfall was due primarily to the following:
- A decline in relevant capital spending within certain regions and industries, particularly in North America;
- Negative impact from foreign currency exchange, which impacted revenue in the first quarter by approximately $8.7 million when calculating revenue utilizing the comparable exchange rate from last year;
- Increased M&A activity among a few of the company’s largest channel partners in North America, which contributed to a slower than expected sales ramp up amongst those partners;
- The introduction of eight additional products over the course of the second half of 2014 to complete the Connex Triple Jetting Technology portfolio resulted in slower than expected adoption of the high-end Connex platforms within the channel, and delays in customer purchases;
- Following accelerated growth in Asia Pacific and Japan over the past several years, a slower than expected channel ramp up in certain parts of the region.
“We are disappointed with our first quarter results,” said David Reis, Chief Executive Officer of Stratasys. “Our industry still remains in the early phases of adoption, and our belief in the long-term opportunity remains unchanged. Despite these first quarter challenges, we remain focused on our current strategies to drive sales growth and adoption, and are committed to our multi-year investment plan. As we look to the future, the 3D printing market presents an attractive opportunity that is ripe for expansion over the next several years. We are observing an attractive pipeline of future opportunities, as lead generation is increasing. As we look forward, we continue to see additive manufacturing being used to transform manufacturing and design processes across a widening range of sectors.”
Reduction in Capital and Operating Expenditures
While the Company remains confident in its long-term market prospects, in light of the current growth environment, management has re-examined its 2015 operating plans and has taken immediate action to adjust near-term operating expenditures for the remainder of 2015, and is reducing 2015 capital expenditures plans to a level of $80 to $110 million. The Company expects to see a bottom-line benefit of these actions throughout 2015. The Company continues to expect total operating expenses, as a percent of revenues, to be in the range of 46% to 47% for 2015.
The Company’s commitment to its multi-year investment plan that focuses on enhancing vertical industry solutions, expands customer support services, accelerates product development, and builds an enhanced sales and marketing infrastructure will remain unchanged.
MakerBot revenue declined by 18% in the first quarter over last year.
The Company has initiated a reorganization within MakerBot that is
intended to focus efforts at MakerBot on improving and iterating
products, growing the 3D ecosystem, and expanding the focus on
professional, education and consumer markets. As the reorganization
progresses, MakerBot growth rates are expected to ramp up to, or exceed,
overall company averages by 2016.