Slide 1: Q4 2014 Financial Results Conference Call
1 Q4 2014 Financial Results Conference Call
Slide 2: Q4 2014 Conference and webcast details
2 Q4 2014 Conference and webcast details Live Dial-in Information Primary Dial-in: 800-510-9691 International Dial-in: 617-614-3453 Participant Passcode: 23883766 Live webcast and replay: http://edge.media-server.com/m/p/fsefp4qi Speakers David Reis CEO Erez Simha COO & CFO Shane Glenn VP, Investor
Slide 3: Forward looking statement
3 Stratasys Forward looking statement The statements in this press release regarding business and operating expectations, projections and goals, as well as its financial guidance and projections under the caption are "forward-looking statements" within the meaning of the Private Securities Litigatio
Slide 4: Summary & Outlook
4 Summary & Outlook Core business growth in the fourth quarter driven by design and manufacturing solutions for the enterprise Successful launch of 25 major new products in 2014, including 11 new 3D printing systems and materials in the fourth quarter Competed over six strategic acquisitions includi
Slide 5: Quarter Highlights Financial Results
5 Quarter Highlights Financial Results Stratasys Ltd. Non-GAAP Q4-13 Q4-14 Change YOY Unit Sales 10,963 11,214 +2.3% Total Revenue $155.8 $217.1 +39.4% Revenue/ Employee 0.086 0.073 -15.1% Gross Profit % margin 93.7 60.2% 121.6 56.0% +29.7% Operating Expenses % of sales 62.3 40.0% 96.6 44.5% +55.2%
Slide 6: Quarter Highlights Financial Results: Revenue
6 Quarter Highlights Financial Results Revenue Stratasys Ltd. Non-GAAP $129.5 $154.1 $160.2 $168.6 $21.7 $24.4 $43.4 $48.5 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Total Revenue - Quarter Total Revenue Quarterly Trend Product Service Product Service System Revenue 28% YOY Consumable Revenue 27% YOY Customer Supp
Slide 7: Quarter Highlights Financial Results: System Unit Sales
7 Quarter Highlights Financial Results Demand for design and manufacturing solutions driven by enterprise level prototyping and direct digital manufacturing applications New solutions introduced at Euromold 2014 well received by market Stratasys Ltd. System Unit Sales 8,802 14,909 10,965 11,214 Q1 '
Slide 8: Quarter Highlights Financial Results: Gross Profit
8 Quarter Highlights Financial Results Excluding impact of acquisitions and charges and reserves related to MakerBot, gross margins flat YOY Sequential gross margin decline driven by product mix Gross Profit Stratasys Ltd. Non-GAAP Q4-13 Q4-14 % Change YOY Product Revenue % of sales $135.6 87.1% $16
Slide 9: Quarter Highlights Financial Results: Operating Profit
9 Quarter Highlights Financial Results SG&A expansion driven primarily by the inclusion of Solid Concepts and Harvest Technologies, and the expansion of regional go-to-market infrastructure R&D expansion primarily driven by increased headcount, and the acceleration of product development initiatives
Slide 10: Quarter Highlights Financial Results: Balance Sheet Summary
10 Quarter Highlights Financial Results $442.7M in cash and cash equivalents & bank deposits Generated $14.9M in cash from operating activities in Q4 2014 DSO on 12-month trailing revenue was 73, compared to 74 in the third quarter Balance Sheet Summary Stratasys Ltd. Selected balance sheet items ($
Slide 11: Quarter Highlights: Projections
11 Quarter Highlights $277 $359 $487 $750 $940 $960 $0.94 $1.49 $1.84 $2.00 $2.07 $2.24 $- $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 FY11 FY12 FY13 FY14 FY15 (guidance) $0.75 $0.95 $1.15 $1.35 $1.55 $1.75 $1.95 $2.15 $2.35 Financial Results Ongoing organic and inorganic sales growth Demand
Slide 12: Financial Guidance: Revenue & Earnings Guidance
12 Financial Guidance Stratasys Ltd. Revenue & Earnings Guidance Non-GAAP $940-960 $2.07-$2.24 Revenue (M) Non-GAAP Diluted EPS Fiscal 2015 Financial Guidance Reconciliation of GAAP to Non-GAAP Guidance ($ in millions, except per share data) Revenue $940 to $960 Non-GAAP Net Income $109.0 to $118.0
Slide 13: Financial Guidance: Long-Term Target Operating Model
13 Financial Guidance Stratasys Ltd. Long-Term Target Operating Model Non-GAAP +25% Revenue growth 18%23% Operating margin 10%15% Effective tax rate 16%21% Net income margin of sales of sales
Slide 14: MakerBot Update
14 MakerBot Update Impressive Growth Over Last Two Years Sales expanded over 600% from 2012 to 2014 Sold approximately 80,000 units to date Market leading brand and ecosystem Scaling and introduction of new product platform Evolution of distribution model Transitioning to a more mature business mode
Slide 15: Strategic Investment Plan
15 Strategic Investment Plan Industry Focus 01 Services 02 Products 04 Sales and Marketing Infrastructure 03 Support $3 Billion in revenue by 2020
Slide 16: Industry Focus
16 Industry Focus Accelerate Efforts Around Vertical Applications and Solutions: Aerospace Automotive Healthcare Education 2014 Vertical Business Unit Accomplishments Completed initial phase of three year plan Supported the closure of 50+ manufacturing deals Co-developed industry-specific materials
Slide 17: Services: Stratasys Direct Manufacturing
17 Services Stratasys Direct Manufacturing Supported by 8 advanced manufacturing facilities throughout United States Includes complete range of AM manufacturing technologies Stratasys Direct Manufacturing 2014 PMI Update Three organizations rebranded as Stratasys Direct Manufacturing Single integrat
Slide 18: Services: Stratasys Services Group
18 Services Stratasys Services Group Professional Services Customer Support Units New Stratasys Strategic Consulting Division Econolyst, a UK-based additive manufacturing and 3D printing consultancy and research firm, will join Stratasys to form new consulting division Will offer a broad range of te
Slide 19: Products and Innovation
19 Products and Innovation Increased investments in: New products Long term innovation projects Software development Ecosystem Euromold product introductions met with strong demand ROI from accelerated investments generally expected in 1-2 year timeframe Acceleration of New Product to Market Multipl
Slide 20: Sales & Marketing Infrastructure
20 Sales & Marketing Infrastructure Initiative to create singe point of contact for large, strategic accounts 65 Global Accounts, 35 in North America Fulfillment by channel or direct (varies depending on geography) For top 10 accounts, revenue growth of 158% in 2014 compared to 2013 Strategic Accoun
Slide 21: Summary & Outlook
21 Summary & Outlook Core business is growing and company is well positioned to maintain industry leadership position Positive trends emerging from go-to-market investments, including our Vertical Business Unit and Strategic Accounts Management initiatives Solid Concepts, Harvest Technologies, and R
Slide 22: We are Stratasys
22 We are Stratasys We are innovation We are fearless leaders We are customer driven Our quality matters Our people make the difference
Slide 23: Reconciliation of GAAP to Non-GAAP Results of Operations
23 Reconciliation of GAAP to Non-GAAP Results of Operations Stratasys Ltd. ($ in thousands except per share data) Q4-13 Q4-14 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP Net sales Products $134,943 $668 $135,611 $168,595 $ - $168,595 Services 20,142 - 20,142 48,517 - 48,517 Cost of sales Pro
Slide 24: Reconciliation of Non-GAAP Adjustments
24 Reconciliation of Non-GAAP Adjustments Stratasys Ltd. ($ in thousands) Q4-13 Q4-14 Net sales, products Deferred revenue purchase price $668 $- Cost of sales, products Acquired intangible assets amortization (14,233) (14,654) Non-cash stock-based compensation expense (496) 164 Merger related expen