STRATASYS LTD.
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of May 2020

Commission File Number 001-35751

STRATASYS LTD.

(Translation of registrant’s name into English)

c/o Stratasys, Inc.

9600 West 76th Street

Eden Prairie, Minnesota 55344

1 Holtzman Street, Science Park

P.O. Box 2496

Rehovot, Israel  76124

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____


The contents of this Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”), including Exhibits 99.1, 99.2 and 101 annexed hereto, are incorporated by reference into the Registrant’s registration statements on Form S-8, SEC file numbers 333-190963 and 333-236880, filed by the Registrant with the SEC on September 3, 2013 and March 4, 2020, respectively, and shall be a part thereof from the date on which this Form 6-K is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

CONTENTS

On May 14, 2020, Stratasys Ltd., or Stratasys, released its financial results for the three months ended March 31, 2020.

Attached hereto as Exhibit 99.1 are the unaudited, condensed consolidated interim financial statements of Stratasys for the three months ended March 31, 2020 (including the notes thereto) (the “Q1 2020 Financial Statements”).

Attached hereto as Exhibit 99.2 is Stratasys’ review of its results of operations and financial condition for the three months ended March 31, 2020, including the following:

(i)

Operating and Financial Review and Prospects

(ii)

Quantitative and Qualitative Disclosures About Market Risk

(iii)

Legal Proceedings Update

Attached hereto as Exhibit 101 are the Q1 2020 Financial Statements, formatted in IXBRL (eXtensible Business Reporting Language), consisting of the following sub-exhibits:

Exhibit

Number

Document Description

EX-101.INS

IXBRL Taxonomy Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

EX-101.SCH

IXBRL Taxonomy Extension Schema Document

EX-101.CAL

IXBRL Taxonomy Calculation Linkbase Document

EX-101.DEF

IXBRL Taxonomy Extension Definition Linkbase Document

EX-101.LAB

IXBRL Taxonomy Label Linkbase Document

EX-101.PRE

IXBRL Taxonomy Presentation Linkbase Document

EX-104

Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

STRATASYS LTD.

Dated: May 14, 2020

By:

/s/ Lilach Payorski

Name:

Lilach Payorski

Title:

Chief Financial Officer


STRATASYS LTD.

Exhibit 99.1

STRATASYS LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED

March 31, 2020

(UNAUDITED)


INDEX TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2020

(UNAUDITED)

Item

 

Page

Consolidated Balance Sheets

2

Consolidated Statements of Operations and Comprehensive Loss

3

Consolidated Statements of Changes in Equity

4

Consolidated Statements of Cash Flows

5

Notes to Condensed Consolidated Interim Financial Statements

6-16

1


STRATASYS LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

Consolidated Balance Sheets

(in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

March 31, 2020

 

December 31, 2019

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

297,177

 

 

$

293,484

 

Short-term Deposits

 

 

28,300

 

 

 

28,300

 

Accounts receivable, net

 

 

115,093

 

 

 

132,558

 

Inventories

 

 

172,511

 

 

 

168,504

 

Prepaid expenses

 

 

7,327

 

 

 

6,567

 

Other current assets

 

 

25,424

 

 

 

29,659

 

Total current assets

 

 

645,832

 

 

 

659,072

 

Non-current assets

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

191,534

 

 

 

189,706

 

Goodwill

 

 

385,409

 

 

 

385,658

 

Other intangible assets, net

 

 

81,523

 

 

 

87,328

 

Operating lease right-of-use assets

 

 

19,887

 

 

 

20,936

 

Other non-current assets

 

 

35,259

 

 

 

38,819

 

Total non-current assets

 

 

713,612

 

 

 

722,447

 

Total assets

 

$

1,359,444

 

 

$

1,381,519

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

34,189

 

 

$

35,818

 

Accrued expenses and other current liabilities

 

 

33,750

 

 

 

28,528

 

Accrued compensation and related benefits

 

 

36,600

 

 

 

34,013

 

Deferred revenues

 

 

51,353

 

 

 

52,268

 

Operating lease liabilities - short term

 

 

9,254

 

 

 

9,292

 

Total current liabilities

 

 

165,146

 

 

 

159,919

 

Non-current liabilities

 

 

 

 

 

 

 

 

Deferred revenues - long-term

 

 

14,463

 

 

 

16,039

 

Operating lease liabilities - long term

 

 

11,057

 

 

 

12,445

 

Other non-current liabilities

 

 

28,988

 

 

 

35,343

 

Total non-current liabilities

 

 

54,508

 

 

 

63,827

 

Total liabilities

 

$

219,654

 

 

$

223,746

 

Contingencies (see note 11)

 

 

 

 

 

 

 

 

Redeemable non-controlling interests

 

 

537

 

 

 

622

 

Equity

 

 

 

 

 

 

 

 

Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 54,799 thousands shares and 54,441 thousands shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively

 

 

149

 

 

 

148

 

Additional paid-in capital

 

 

2,711,830

 

 

 

2,706,894

 

Accumulated other comprehensive loss

 

 

(8,848

)

 

 

(7,716

)

Accumulated deficit

 

 

(1,563,878

)

 

 

(1,542,175

)

Total equity

 

 

1,139,253

 

 

 

1,157,151

 

 

Total liabilities and equity

 

$

1,359,444

 

 

$

1,381,519

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

2


STRATASYS LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

Consolidated Statements of Operations and Comprehensive Loss

 

 

Three Months Ended March 31,

in thousands, except per share data

 

2020

 

2019

Net sales

 

 

 

 

 

 

 

 

Products

 

$

83,172

 

 

$

105,091

 

Services

 

 

49,735

 

 

 

50,209

 

 

 

 

132,907

 

 

 

155,300

 

Cost of sales

 

 

 

 

 

 

 

 

Products

 

 

39,248

 

 

 

44,169

 

Services

 

 

33,789

 

 

 

34,674

 

 

 

 

73,037

 

 

 

78,843

 

Gross profit

 

 

59,870

 

 

 

76,457

 

  

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Research and development, net

 

 

24,194

 

 

 

22,574

 

Selling, general and administrative

 

 

55,576

 

 

 

57,154

 

 

 

 

79,770

 

 

 

79,728

 

Operating loss

 

 

(19,900

)

 

 

(3,271

)

  

 

 

 

 

 

 

 

 

Financial income (expenses), net

 

 

(829

)

 

 

753

 

  

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(20,729

)

 

 

(2,518

)

  

 

 

 

 

 

 

 

 

Income tax expenses

 

 

221

 

 

 

1,218

 

  

 

 

 

 

 

 

 

 

Share in profits (losses) of associated companies

 

 

(838

)

 

 

1,423

 

  

 

 

 

 

 

 

 

 

Net loss

 

$

(21,788

)

 

$

(2,313

)

  

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling interests

 

 

(85

)

 

 

(43

)

  

 

 

 

 

 

 

 

 

Net loss attributable to Stratasys Ltd.

 

$

(21,703

)

 

$

(2,270

)

  

 

 

 

 

 

 

 

 

Net loss per ordinary share attributable to Stratasys Ltd - basic and diluted

 

$

(0.40

)

 

$

(0.04

)

  

 

 

 

 

 

 

 

 

Weighted average ordinary shares outstanding - basic and diluted

 

 

54,544

 

 

 

53,966

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

 

 

 

 

 

 

 

Net loss

 

 

(21,788

)

 

 

(2,313

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(1,954

)

 

 

(427

)

Unrealized gains on derivatives designated as cash flow hedges

 

 

822

 

 

 

995

 

Other comprehensive income (loss), net of tax

 

 

(1,132

)

 

 

568

 

Comprehensive loss

 

 

(22,920

)

 

 

(1,745

)

Less: comprehensive loss attributable to non-controlling interests

 

 

(85

)

 

 

(43

)

Comprehensive loss attributable to Stratasys Ltd.

 

$

(22,835

)

 

$

(1,702

)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

3


STRATASYS LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

Consolidated Statements of Changes in Equity

(in thousands )

Three Months Ended March 31, 2020 and 2019

Ordinary Shares

Additional

Paid-In

Accumulated

Accumulated

Other

Comprehensive

Total

Number of

Par

shares

Value

Capital

deficit

Loss

Equity

Balance as of December 31, 2019

54,441

148

2,706,894

(1,542,175

)

(7,716

)

1,157,151

 

Issuance of shares in connection with stock-based compensation plans

358

1

29

-

-

30

 

Stock-based compensation

-

-

4,907

-

-

4,907

 

Comprehensive loss

-

-

-

(21,703

)

(1,132

)

(22,835

)

Balance as of March 31, 2020

54,799

$

149

$

2,711,830

$

(1,563,878

)

$

(8,848

)

$

1,139,253

Accumulated

Ordinary Shares

Additional

Other

Number of

Par

Paid-In

Accumulated

Comprehensive

Total

shares

Value

Capital

deficit

Loss

Equity

Balance as of December 31, 2018

53,881

146

2,681,048

(1,531,326

)

(7,753

)

1,142,115

Issuance of shares in connection with stock-based compensation plans

167

*

2,222

-

-

2,222

Stock-based compensation

-

-

4,229

-

-

4,229

Comprehensive loss

-

-

-

(2,270

)

568

(1,702

)

Balance as of March 31, 2019

54,048

$

146

$

2,687,499

$

(1,533,596

)

$

(7,185

)

$

1,146,864

* Represents an amount less than 0.5 thousand

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

4


STRATASYS LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

Consolidated Statements of Cash Flows

Three Months Ended March 31,

in thousands

2020

2019

 

Cash flows from operating activities

Net loss

$

(21,788

)

$

(2,313

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

12,457

12,700

Stock-based compensation

4,907

4,229

Foreign currency transaction loss (gain)

3,428

(210

)

Deferred income taxes

(409

)

(685

)

Share in (profits) losses of associated companies

838

(1,423

)

Other non-cash items, net

201

1,018

 

Change in cash attributable to changes in operating assets and liabilities:

Accounts receivable, net

16,541

9,124

Inventories

(5,659

)

(9,598

)

Net investment in sales-type leases

400

1,052

Other current assets and prepaid expenses

3,119

(2,133

)

Other non-current assets

902

(219

)

Accounts payable

(3,086

)

(2,805

)

Other current liabilities

9,047

(5,172

)

Deferred revenues

(2,154

)

(781

)

Other non-current liabilities

(7,470

)

1,820

Net cash provided by operating activities

11,274

4,604

 

Cash flows from investing activities

Purchase of property and equipment

(6,291

)

(6,114

)

Net proceeds from divestitures of subsidiaries and associated companies

1,000

-

Investment in unconsolidated entities

-

(310

)

Proceeds from sale of plant and property

-

118

Purchase of intangible assets

(413

)

-

Other investing activities

206

577

Net cash used in investing activities

(5,498

)

(5,729

)

 

Cash flows from financing activities

Repayment of debt

-

(27,293

)

Proceeds from exercise of stock options

30

2,222

Net cash provided by (used in) financing activities

30

(25,071

)

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(2,116

)

878

 

Net change in cash, cash equivalents and restricted cash

3,690

(25,318

)

Cash, cash equivalents and restricted cash, beginning of period

293,597

393,734

 

Cash, cash equivalents and restricted cash, end of period

$

297,287

$

368,416

 

Supplemental disclosures of cash flow information:

Transfer of inventory to fixed assets

832

1,028

Transfer of fixed assets to inventory

5

97

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Business Description and Basis of Presentation

Stratasys Ltd. (collectively with its subsidiaries, the “Company”) is a global provider of applied additive technology solutions for a broad range of industries. The Company focuses on customers’ business requirements and seeks to create new value for its customers across their product lifecycle processes, from design prototypes to manufacturing tools and final production parts. The Company operates a 3D printing ecosystem of solutions and expertise, comprised of: 3D printers ranging from entry-level desktop 3D printers to systems for rapid prototyping (“RP”) and large production systems for direct digital manufacturing (“DDM”) based on precise fused deposition modeling (“FDM”) and PolyJet technologies; advanced materials for use with its 3D printers; software with voxel level control; application-based services; on-demand parts; and key partnerships.

The condensed consolidated interim financial statements include the accounts of Stratasys Ltd. and its subsidiaries. All intercompany accounts and transactions, including profits from intercompany sales not yet realized outside the Company, have been eliminated in consolidation.

The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year. Certain financial information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. The reader is referred to the audited consolidated financial statements and notes thereto for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission (the “SEC”) as part of the Company’s Annual Report on Form 20-F for such year on February 26, 2020.

Note 2. New Accounting Pronouncements

Accounting Pronouncements Adopted in the Current Period

In August 2018, the FASB issued an Accounting Standard update (“ASU”) that clarifies the accounting for implementation costs in cloud computing arrangements. This ASU requires the implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customers in a software licensing arrangement. The Company adopted this guidance effective January 1, 2020, with no material impact on its consolidated financial statements.

In June 2016, the FASB issued an ASU that supersedes the existing impairment model for most financial assets to a current expected credit loss model. The new guidance requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. The ASU also requires that credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses. The Company adopted this guidance effective January 1, 2020, with no material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of the adoption of the new guidance on its consolidated financial statements.

6


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

Note 3. Revenues

Disaggregation of Revenues

The following table presents the Company’s revenues disaggregated by geographical region (based on the Company's customers' locations) and revenue types for the three months ended March 31, 2020 and 2019:

Three months ended March 31,

2020

2019

(U.S. $ in thousands)

Americas

Products

$

48,244

$

58,054

Service

 

38,329

 

38,444

Total Americas

 

86,573

 

96,498

 

EMEA

Products

20,747

28,085

Service

 

6,173

 

6,698

Total EMEA

 

26,920

 

34,783

 

Asia Pacific

Products

14,181

18,952

Service

 

5,233

 

5,067

Total Asia Pacific

 

19,414

 

24,019

 

 

 

Total Revenues

$

132,907

$

155,300

The following table presents the Company’s revenues disaggregated based on the timing of revenue recognized for the three months ended March 31, 2020 and 2019:

Three months ended March 31,

2020

2019

(U.S. $ in thousands)

Revenues recognized in point in time from:

Products

$

83,172

$

105,091

Services

 

10,644

 

31,435

Total revenues recognized in point in time

 

93,816

 

136,526

 

Revenues recognized over time from:

Services

 

39,091

 

18,774

Total revenues recognized over time

 

39,091

 

18,774

 

Total Revenues

$

132,907

$

155,300

7


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Contract Assets and Contract Liabilities

Contract assets are recorded when the Company's right to consideration is conditional on constraints other than the passage of time. The Company had no material contract assets as of March 31, 2020.

Contract liabilities include advance payments and billings in excess of revenue recognized, which are primarily related to advanced billings for service type warranty. Contract liabilities are presented under deferred revenues. The Company's deferred revenues as of March 31, 2020 and December 31, 2019 were as follows:

 

March 31, 2020

 

December 31, 2019

 

U.S. $ in thousands

Deferred revenues*

65,816

 

68,307

*Includes $14.5 million and $16.0 million under long term deferred revenues in the Company's consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively.

Revenue recognized in the first quarter of 2020 that was included in the deferred revenue balance as of January 1, 2020 was $18.0 million.

Remaining Performance Obligations

Remaining Performance Obligations ("RPO") represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of March 31, 2020, the total RPO amounted to $90.8 million. The Company expects to recognize $74.4 million of this RPO during the next 12 months, $12.0 million over the subsequent 12 months and $4.4 million in the remainder thereafter.

Incremental Costs of Obtaining a Contract

Sales commissions earned mainly by the Company’s sales agents are considered incremental costs of obtaining a contract with a customer, as the Company expects the benefit of those commissions to be longer than one year. The majority of the sales commissions are not subject to capitalization, as the commission expense is recognized as the related revenue is recognized. Sales commissions for initial contracts related to the service type warranty are deferred and then amortized on a straight-line basis over the expected customer relationship period if the Company expects to recover those costs. Amortization expense is included in selling, general and administrative expenses in the consolidated statements of operations. As of March 31, 2020 and December 31, 2019, the deferred commissions amounted to $4.0 million and $3.9 million, respectively.

8


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Note 4. Inventories

Inventories consisted of the following:

March 31,

2020

December 31,

2019

U.S. $ in thousands

Finished goods

$

89,570

$

87,967

Work-in-process

2,271

3,106

Raw materials

 

80,670

 

77,431

 

 

172,511

 

168,504

Note 5. Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of the Company’s goodwill for the three-months ended March 31, 2020 were as follows:

U.S. $ in thousands

Goodwill as of January 1, 2020

$

385,658

Foreign currency translation adjustments

(249

)

Goodwill as of March 31, 2020

$

385,409

 

During the fourth quarter of 2019, as part of the annual impairment test, the Company performed a quantitative assessment for goodwill impairment for its Stratasys-Objet reporting unit.

Following its quantitative assessment, the Company concluded that the fair value of its Stratasys-Objet reporting unit exceeded its carrying amount by approximately 8.7%, with a carrying amount of goodwill assigned to this reporting unit in an amount of $386 million.

When evaluating the fair value of its Stratasys-Objet reporting unit the Company used a discounted cash flow model which utilized Level 3 measures that represent unobservable inputs into the valuation method. Key assumptions used to determine the estimated fair value include: (a) expected cash flows for five years following the assessment date which were based on, among other factors, expected revenue growth, costs to produce, operating profit margins and estimated capital needs; (b) an estimated terminal value that utilized a terminal year growth rate of 3.1% that was determined based on the growth prospects of the reporting unit; and (c) a discount rate of 13.5% based on management’s best estimate of the after-tax weighted average cost of capital. If any of these were to vary materially from the Company's estimates, the Company could face impairment of goodwill allocated to this reporting unit in the future.

Actual results may differ from those assumed in the Company's valuation method. It is reasonably possible that the Company's assumptions described above could change in future periods. If any of these were to vary materially from the Company's plans, it may record impairment of goodwill allocated to this reporting unit in the future.

A hypothetical decrease in the growth rate of 1% or an increase of 1% to the discount rate would have reduced the fair value of Stratasys-Objet reporting unit by approximately $45 million and $81 million, respectively.

Based on the Company’s assessment as of December 31, 2019, no goodwill was determined to be impaired.

During the first quarter of 2020, the Company performed an analysis of the impact of recent events, including business and industry specific considerations, on the fair value of Stratasys-Objet reporting unit. As part of this analysis the Company considered the potential impacts of COVID-19 and the sensitivity of estimates and assumptions used in the last annual impairment test as well as changes in market capitalization. While the goodwill of the reporting unit is not currently impaired, there can be no assurances that goodwill will not be impaired in future periods. The Company will continue to monitor the impact of COVID-19 as well as events and changes in circumstances such as a deterioration in the business climate or operating results, significant decline in the Company's share price, changes in management’s business strategy or downward changes of the Company's cash flows projections.

9


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Other Intangible Assets

Other intangible assets consisted of the following:

March 31, 2020

December 31, 2019

Carrying Amount,

Net of

Impairment

Accumulated

Amortization

Net

Book

Value

Carrying Amount,

Net of

Impairment

Accumulated

Amortization

Net

Book

Value

U.S. $ in thousands

Developed

technology

$

299,242

$

(256,077

)

$

43,165

$

299,100

$

(252,136

)

$

46,964

Patents

15,552

(7,421

)

8,131

15,142

(7,067

)

8,075

Trademarks and trade names

25,994

(20,256

)

5,738

25,991

(19,966

)

6,025

Customer

relationships

102,847

(78,358

)

24,489

102,936

(76,813

)

26,123

Capitalized software

development costs

18,489

(18,489

)

-

18,630

(18,489

)

141

 

$

462,124

$

(380,601

)

$

81,523

$

461,799

$

(374,471

)

$

87,328

Amortization expense relating to intangible assets for the three-month periods ended March 31, 2020 and 2019 was approximately $6.2 million and $6.1 million, respectively. As of March 31, 2020, the estimated amortization expense relating to intangible assets for each of the following periods was as follows:

Estimated

amortization expense

(U.S. $ in thousands)

Remaining 9 months of 2020

$

18,612

2021

24,699

2022

24,633

2023

7,698

Thereafter

5,881

Total

81,523

10


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Note 6. Loss Per Share

The following table presents the numerator and denominator of the basic and diluted net loss per share computations for the three months ended March 31, 2020 and 2019:

Three months ended March 31,

2020

2019

In thousands, except per share amounts

Numerator:

 

Net loss attributable to Stratasys Ltd. for basic and diluted loss per share

$

(21,703

)

$

(2,270

)

Denominator:

Weighted average shares - denominator for basic and diluted net loss per share

54,544

53,966

 

Net loss per share attributable to Stratasys Ltd.

Basic

$

(0.40

)

$

(0.04

)

Diluted

$

(0.40

)

$

(0.04

)

The computation of diluted net loss per share excluded share awards of 5.3 million shares and 5.1 million shares for the three months ended March 31, 2020 and 2019, respectively, because their inclusion would have had an anti-dilutive effect on the diluted net loss per share.

Note 7. Income Taxes

The Company had a negative effective tax rate of 1.1% for the three-month periods ended March 31, 2020 compared to a negative effective tax rate of 48.4% for the three-month periods ended March 31, 2019, the Company’s effective tax rate as of March 31, 2020 was primarily impacted by the geographic mix of its earnings and losses, as well as a valuation allowance on losses of the Company's US subsidiaries.

11


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Note 8. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs that are developed using market data, such as publicly available information about actual events or transactions, and that reflect the assumptions that market participants would use when pricing the asset or liability. Unobservable inputs are inputs for which market data are not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability.

The fair value hierarchy is categorized into three Levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 inputs include inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Financial instruments measured at fair value

The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, in its consolidated balance sheets:

March 31, 2020

December 31, 2019

(U.S. $ in thousands)

Assets:

Foreign exchange forward contracts not designated as hedging instruments

$

579

$

63

Foreign exchange forward contracts designated as hedging instruments

1,558

315

 

Liabilities:

Foreign exchange forward contracts not designated as hedging instruments

(351

)

(388

)

Foreign exchange forward contracts designated as hedging instruments

 

(747

)

 

(326

)

$

1,039

 

$

(336

)

The Company’s foreign exchange forward contracts are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward and spot prices for currencies (Level 2 inputs).

Other financial instruments consist mainly of cash and cash equivalents, current and non-current receivables, net investment in sales-type leases, bank loan, accounts payable and other current liabilities. The fair value of these financial instruments approximates their carrying values.

12


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Note 9. Derivative instruments and hedging activities

The Company carries out transactions involving foreign currency exchange derivative financial instruments. The transactions are designed to hedge the Company’s exposure in currencies other than the U.S. dollar. The Company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities and forecasted transactions denominated in the New Israeli Shekel (“NIS”), Euro, Korean Won, Chinese Yuan and the Japanese Yen. The gains and losses on the hedging instruments partially offset losses and gains on the hedged items. Financial markets and currency volatility may limit the Company’s ability to hedge these exposures.

The following table summarizes the consolidated balance sheets classification and fair values of the Company’s derivative instruments:

Fair Value

Notional Amount

Balance sheet location

March 31,

2020

December 31,

2019

March 31,

2020

December 31,

2019

U. S. $ in thousands

Assets derivatives - Foreign exchange contracts, not designated as hedging instruments

Other current assets

$

579

$

63

$

72,871

$

11,001

Assets derivatives-Foreign exchange contracts, designated as cash flow hedge

Other current assets

1,558

315

54,701

25,045

Liability derivatives -Foreign exchange contracts, not designated as hedging instruments

Accrued expenses and other

current liabilities

(351

)

(388

)

33,360

92,929

Liability derivatives - Foreign exchange contracts, designated as hedging instruments

Accrued expenses and other

current liabilities

(747

)

(326

)

32,870

45,262

$

1,039

$

(336

)

$

193,802

$

174,237

Foreign exchange contracts not designated as hedging instruments

As of March 31, 2020, the notional amounts of the Company’s outstanding exchange forward contracts, not designated as hedging instruments, were $106.2 million, and were used to reduce foreign currency exposures. With respect to such derivatives, gains of $1.5 million and of $1.2 million were recognized under financial income (expenses), net for the three-month periods ended March 31, 2020 and 2019, respectively. Such gains or losses partially offset the foreign currencies revaluation changes of the balance sheet items. These foreign currencies revaluation changes are also recognized under financial income (expenses), net.

Cash Flow Hedging—Hedges of Forecasted Foreign Currency Payroll

As of March 31, 2020, the Company had in effect foreign exchange forward contracts, designated as cash flow hedge for accounting purposes, for the conversion of $36.6 million into NIS. The Company uses short-term cash flow hedge contracts to reduce its exposure to variability in expected future cash flows resulting mainly from payroll costs denominated in NIS. The changes in fair value of those contracts are included in the Company’s accumulated other comprehensive loss. These contracts mature through March 2021.

Cash Flow Hedging—Hedges of Forecasted Foreign Currency Revenue

As of March 31, 2020, the Company had in effect foreign exchange forward contracts, designated as cash flow hedge for accounting purposes, for the conversion of Euro 45.0 million in USD. The Company transact business in U.S. Dollars and in various other currencies. The Company may use foreign exchange or forward contracts to hedge certain cash flow exposures resulting from changes in these foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities of up to twelve months. The Company enter into these foreign exchange contracts to hedge a portion of our forecasted foreign currency denominated revenue in the normal course of business and accordingly, they are not speculative in nature.

13


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Note 10. Equity

a. Stock-based compensation plans

Stock-based compensation expenses for equity-classified stock options, restricted share units (“RSUs”) and performance stock units ("PSUs") were allocated as follows:

Three Months Ended

March 31,

2020

2019

U.S. $ in thousands

Cost of sales

 

$

402

 

$

354

Research and development, net

$

1,556

759

Selling, general and administrative

$

2,949

3,116

Total stock-based compensation expenses

$

4,907

$

4,229

A summary of the Company’s stock option activity for the three months ended March 31, 2020 is as follows:

Number of Options

Weighted Average

Exercise Price

Options outstanding as of January 1, 2020

 

1,961,532

$

31.16

Granted

300,000

16.41

Forfeited

(49,371

)

32.64

Options outstanding as of March 31, 2020

2,212,161

$

29.13

Options exercisable as of March 31, 2020

1,625,889

$

33.04

As of March 31, 2020, the unrecognized compensation cost of $3.6 million related to all unvested, equity-classified stock options is expected to be recognized as an expense over a weighted-average period of 1.8 years.

14


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

A summary of the Company’s RSUs and PSUs activity for the three months ended March 31, 2020 is as follows:

Number of RSUs and PSUs

Weighted Average Grant

Date Fair Value

Unvested as of January 1, 2020

 

 

2,362,991

 

 

$

24.10

Granted

1,176,436

18.17

Vested

(361,118

)

25.97

Forfeited

(127,520

)

21.68

Unvested as of March 31, 2020

3,050,789

$

21.69

The fair value of RSUs and PSUs is determined based on the quoted price of the Company’s ordinary shares on the date of the grant.

As of March 31, 2020, the unrecognized compensation cost of $56.7 million related to all unvested, equity-classified RSUs and PSUs is expected to be recognized as expense over a weighted-average period of 3 years.

b. Accumulated other comprehensive loss

The following tables present the changes in the components of accumulated other comprehensive income (loss), net of taxes, for the three months ended March 31, 2020 and 2019, respectively:

 

 

Three months ended March 31, 2020

 

 

 

Net unrealized gain (loss) on cash flow hedges

 

Foreign currency translation adjustments

 

Total

 

 

 

U.S. $ in thousands

 

Balance as of January 1, 2020

 

$

(10

)

 

$

(7,706

)

 

$

(7,716

)

Other comprehensive income (loss) before reclassifications

 

 

849

 

 

 

(1,954

)

 

 

(1,105

)

Amounts reclassified from accumulated other comprehensive loss

 

 

(27

)

 

 

-

 

 

 

(27

)

Other comprehensive income (loss)

 

 

822

 

 

 

(1,954

)

 

 

(1,132

)

Balance as of March 31, 2020

 

$

812

 

 

$

(9,660

)

 

$

(8,848

)

15


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Three months ended March 31, 2019

Net unrealized gain

(loss) on cash flow

hedges

Foreign currency

translation

adjustments

Total

U.S. $ in thousands

Balance as of January 1, 2019

$

(627

)

$

(7,126

)

$

(7,753

)

Other comprehensive income (loss) before reclassifications

1,011

(427

)

584

Amounts reclassified from accumulated other comprehensive loss

(16

)

-

(16

)

Other comprehensive income (loss)

995

(427

)

568

Balance as of March 31, 2019

$

368

$

(7,553

)

$

(7,185

)

Note 11. Contingencies

Legal proceedings

The Company is a party to various legal proceedings from time to time, the outcome of which, in the opinion of management, will not have a significant effect on the financial position, profitability or cash flows of the Company.

 

16


EDGAR HTML

Exhibit 99.2

OPERATING AND FINANCIAL REVIEW AND PROSPECTS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes included as Exhibit 99.1 to the Report of Foreign Private Issuer on Form 6-K to which this Operating and Financial Review and Prospects is attached, or the Form 6-K. The discussion below contains forward-looking statements (within the meaning of the United States federal securities laws) that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in “Forward-Looking Statements and Factors that May Affect Future Results of Operations”, below, as well in the “Risk Factors” in Item 3.D of our Annual Report on Form 20-F for the year ended December 31, 2019, or our 2019 Annual Report.

Overview of Business and Trend Information

We are a leading global provider of applied additive technology solutions for industries including aerospace, automotive, healthcare, consumer products and education. We focus on customers’ business requirements and seek to create new value for our customers across their product lifecycle processes, from design prototypes to manufacturing tools and final production parts. We operate a 3D printing ecosystem of solutions and expertise, comprised of advanced materials; software with voxel level control; precise, repeatable and reliable fused deposition modeling 3D printers (utilizing proprietary FDM™ technology) and inkjet-based 3D printers (utilizing proprietary PolyJet™ technology); application-based services; on-demand parts and key partnerships. We strive to ensure that our solutions are integrated seamlessly into each customer’s evolving workflow. Our applications are industry-specific and geared towards accelerating business processes, optimizing value chains and driving business performance improvements. Our customers range from individuals and smaller businesses to large, global enterprises, and we include a number of Fortune 100 companies among our customers.

Our 3D printers include systems ranging from entry-level desktop 3D printers to systems for rapid prototyping, or RP, and large production systems for direct digital manufacturing, or DDM. We also develop, manufacture and sell materials for use with our systems and provide related services offerings. We offer a powerful range of additive manufacturing materials, including clear, rubberlike and biocompatible photopolymers, and tough high-performance thermoplastics. We believe that the range of 3D printing consumable materials that we offer, consisting of over 60 FDM™ spool-based filament materials, over 45 PolyJet cartridge-based resin materials, 158 non-color digital materials, and over 500,000 color variations, is the widest in the industry. Our service offerings include Stratasys Direct Manufacturing printed parts services, as well as our professional services.

We conduct our business globally and provide products and services to our global customer base through our offices in North America and internationally, including: Baden-Baden, Germany; Shanghai, China; and Tokyo, Japan, as well as through our worldwide network of approximately 160 agents and resellers. Additionally, through our MakerBot subsidiary, we deploy an online sales channel. We have approximately 2,300 employees and hold approximately 1,000 granted patents and have approximately 500 pending patent applications worldwide.

1


Our results of operations for the quarter ended March 31, 2020 should be understood in light of the global outbreak of COVID-19, which disrupted businesses on a global scale. On March 11, 2020, the World Health Organization classified the outbreak as a pandemic. The timing of our revenues in fiscal quarters tends to be late, with a significant portion of business traditionally occurring in the final few weeks of each quarter. Consequently, the impact of the global pandemic outbreak late in the quarter on our quarterly results was more notable. However, even earlier in the quarter, our business in Asia had been already affected by the pandemic, followed by Europe and then the United States.

As we entered this global crisis, our top priority was securing the well-being of our employees worldwide. Consequently, as early as February 3 we imposed travel restrictions on our staff and have tried to be ahead of the curve wherever possible. Soon thereafter, we also implemented work-from-home options. To help mitigate the economic impact of the pandemic, we began to implement cost-control measures at the end of February and continue to closely manage them. During the second quarter, all of our employees were effectively reduced to a four-day work-week, we have instituted a nonessential hiring freeze and we have adjusted our cost base and production plan accordingly.

In our efforts to support the global fight against the pandemic, we were quick to mobilize our additive manufacturing network, leverage our application expertise, our channel and partner network and our corporate-wide resources to help get a variety of printed parts quickly to where they were most needed.

Because of the unprecedented nature, scope and uncertainty associated with this global crisis, the full duration and extent of its ongoing impact on our business cannot be reasonably estimated at this time. We have therefore decided to withdraw our 2020 financial guidance. Nevertheless, in the near term, we currently anticipate that our revenues for the second quarter of 2020, ending June 30, 2020, could decline between 5%-10% relative to our revenues in the quarter ended March 31, 2020.

We will continue to monitor the situation, assessing further possible implications on our operations, supply chain, liquidity, cash flow and customer orders, and will act in an effort to mitigate adverse consequences if and as needed.

2


Summary of Financial Results

Our unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. In the opinion of our management, all adjustments considered necessary for a fair statement of the unaudited condensed consolidated interim financial statements have been included herein and are of a normal recurring nature. The following discussion compares the actual results, on a GAAP basis, for the three months ended March 31, 2020 with the corresponding period in 2019.

Results of Operations

Comparison of Three Months Ended March 31, 2020 to Three Months Ended March 31, 2019

The following table sets forth certain statement of operations data for the periods indicated:

Three Months Ended March 31,

2020

2019

U.S. $ in

thousands

% of

Revenues

U.S. $ in

thousands

% of

Revenues

Revenues

$

132,907

100.0

%

$

155,300

100.0

%

Cost of sales

73,037

55.0

%

78,843

50.8

%

Gross profit

59,870

45.0

%

76,457

49.2

%

Research and development, net

24,194

18.2

%

22,574

14.5

%

Selling, general and administrative

55,576

41.8

%

57,154

36.8

%

Operating loss

(19,900

)

-15.0

%

(3,271

)

-2.1

%

Financial income (expenses)

(829

)

-0.6

%

753

0.5

%

Loss before income taxes

(20,729

)

-15.6

%

(2,518

)

-1.6

%

Income tax expenses

221

0.2

%

1,218

0.8

%

Share in profits (losses) of associated companies

(838

)

-0.6

%

1,423

0.9

%

Net loss attributable to non-controlling interests

(85

)

-0.1

%

(43

)

0.0

%

Net loss attributable to Stratasys Ltd.

(21,703

)

-16.3

%

(2,270

)

-1.5

%

Discussion of Results of Operations

Revenues

Our products and services revenues in the first quarter of each of 2020 and 2019, as well as the percentage change reflected thereby, were as follows:

Three Months Ended March 31,

2020

2019

% Change

U.S. $ in thousands

Products

$

83,172

$

105,091

-20.9

%

Services

49,735

50,209

-0.9

%

$

132,907

$

155,300

-14.4

%

3


Products Revenues

Revenues derived from products (including AM systems and consumable materials) decreased by $21.9 million, or 20.9%, for the three months ended March 31, 2020, as compared to the three months ended March 31, 2019.

Systems revenues for the three months ended March 31, 2020 decreased by 39.5% as compared to the three months ended March 31, 2019. Consumables revenues for the three months ended March 31, 2020 decreased by 5.8% as compared to the three months ended March 31, 2019.

The decrease in product revenues was driven primarily by portion of our customer base being effectively shut down from a purchasing and consumption perspective due to the COVID-19 effects.

Services Revenues

Services revenues (including SDM, maintenance contracts, time and materials and other services decreased by $0.5 million for the three months ended March 31, 2020, or 0.9%, as compared to the three months ended March 31, 2019. Within services revenues, customer support revenue, which includes revenue generated mainly by maintenance contracts on our systems, increased by 2.2%, reflecting the growth in our installed base of systems.

Revenues by Region

Revenues and the percentage of revenues by region for the first quarter of each of 2020 and 2019, as well as the percentage change in revenues in each such region reflected thereby, were as follows:

Three Months Ended March 31,

2020

2019

% Change

U.S.$ in thousands

% of

Revenues

U.S.$ in

thousands

% of

Revenues

Americas*

$

86,573

65.1

%

$

96,498

62.1

%

-10.3

%

EMEA

26,920

20.3

%

34,783

22.4

%

-22.6

%

Asia Pacific

19,414

14.6

%

24,019

15.5

%

-19.2

%

$

132,907

100.0

%

$

155,300

100.0

%

-14.4

%

* Represent the United States, Canada and Latin America

Revenues in the Americas region decreased by $9.9 million, or 10.3%, to $86.6 million for the three months ended March 31, 2020, compared to $96.5 million for the three months ended March 31, 2019. The decrease was primarily driven by lower systems and consumables revenues, mainly due to the impact of COVID-19.

Revenues in the EMEA region decreased by $7.9 million, or 22.6%, to $26.9 million for the three months ended March 31, 2020, compared to $34.8 million for the three months ended March 31, 2019. The decrease was primarily driven by lower systems revenues, mainly due to the impact of COVID-19. On a constant currency basis when using the prior period’s exchange rates, revenues decreased by $7.2 million, or 20%.

Revenues in the Asia Pacific region decreased by $4.6 million, or 19.2%, to $19.4 million for the three months ended March 31, 2020, compared to $24.0 million for the three months ended March 31, 2019. The decrease was primarily driven by lower systems revenues, mainly due to the impact of COVID-19, which impacted certain territories in Asia starting January.

4


Gross Profit

Gross profit from our products and services, as well as the percentage change reflected thereby, was as follows:

Three Months Ended March 31,

2020

2019

U.S. $ in thousands

Change in %

Gross profit attributable to:

Products

$

43,924

$

60,922

-27.9

%

Services

15,946

15,535

2.6

%

$

59,870

$

76,457

-21.7

%

Gross profit as a percentage of revenues from our products and services was as follows:

Three Months Ended March 31,

2020

2019

Gross profit as a percentage of revenues from:

Products

52.8

%

58.0

%

Services

32.1

%

30.9

%

Total gross profit

45.0

%

49.2

%

Gross profit attributable to products revenues decreased by $17.0 million, or 27.9%, to $43.9 million for the three months ended March 31, 2020, compared to gross profit of $60.9 million for the three months ended March 31, 2019. Gross profit attributable to products revenues as a percentage of products revenues decreased to 52.8% in the three months ended March 31, 2020, compared to gross profit of 58.0% for the three months ended March 31, 2019.

Gross profit attributable to services revenues increased by $0.4 million, or 2.6%, to $15.9 million for the three months ended March 31, 2020, compared to $15.5 million for the three months ended March 31, 2019. Gross profit attributable to services revenues as a percentage of services revenues in the three months ended March 31, 2020 increased to 32.1%, as compared to 30.9% for the three months ended March 31, 2019. Our gross profit from services revenues was impacted by the mix of revenue sources, as well as an unfavorable impact of foreign currencies translation.

The decrease in gross profit was primarily driven by product mix which was based on the lower proportion of hardware and consumables out of the total revenue due to the impact of COVID-19 and unfavorable impact of foreign currencies translation.

5


Operating Expenses

The amount of each type of operating expense for the first quarter of each of 2020 and 2019, as well as the percentage change reflected thereby, and total operating expenses as a percentage of our total revenues in each quarter, were as follows:

Three Months Ended March 31,

2020

2019

% Change

U.S. $ in thousands

Research and development, net

$

24,194

$

22,574

7.2

%

Selling, general & administrative

55,576

57,154

-2.8

%

$

79,770

$

79,728

0.1

%

 

Percentage of revenues

60.0

%

51.3

%

Research and development expenses, net increased by $1.6 million, or 7.2%, to $24.2 million for the three months ended March 31, 2020, compared to $22.6 million for the three months ended March 31, 2019. The amount of research and development expenses constituted 18.2% of our revenues for the three months ended March 31, 2020, as compared to 14.5% for the three months ended March 31, 2019.

Our research and development expenses were impacted by the timing of project spending and product launches. Our research and development expenses, net reflects our commitment to invest in long-term initiatives that include advancements in our core FDM and PolyJet technologies, as well as our new metal additive manufacturing platform, advanced composite materials, and software and application development.

Selling, general and administrative expenses decreased by $1.6 million, or 2.8%, to $55.6 million for the three months ended March 31, 2020, compared to $57.2 million for the three months ended March 31, 2019, partially due to cost reduction measures taken by the Company. The amount of selling, general and administrative expenses constituted 41.8% of our revenues for the three months ended March 31, 2020, as compared to 36.8% for the three months ended March 31, 2019.

Operating Loss

Operating loss and operating loss as a percentage of our total revenues were as follows:

Three Months Ended March 31,

2020

2019

U.S. $ in thousands

Operating loss

$

(19,900

)

$

(3,271

)

 

Percentage of revenues

-15.0

%

-2.1

%

Operating loss amounted to $19.9 million for the three months ended March 31, 2020, compared to an operating loss of $3.3 million for the three months ended March 31, 2019. The increase in operating loss was primarily attributable to lower gross profit for the three months ended March 31, 2020 compared to the three months ended March 31, 2019, mainly resulted from COVID-19, as discussed above.

Financial Income (Expenses), net

Financial expenses, net, which were primarily comprised of foreign currencies effects, interest income and interest expenses, were $0.8 million for the three months ended March 31, 2020, compared to financial income, net of $0.8 million for the three months ended March 31, 2019.

6


Income Taxes

Income taxes and income taxes as a percentage of net loss before taxes, as well as the percentage change in each reflected thereby, were as follows:

Three Months Ended

March 31,

2020

2019

U.S. $ in thousands

Change in %

Income tax expense

$

221

$

1,218

-81.9

%

 

As a percent of loss before income taxes

-1.1

%

-48.4

%

-97.8

%

We had a negative effective tax rate of 1.1% for the three-month period ended March 31, 2020, compared to a negative effective tax rate of 48.4% for the three-month period ended March 31, 2019. Our effective tax rate was primarily impacted by different geographic mixes of earnings and losses, as well as a valuation allowance on losses of our US subsidiaries.

Share in Profits (Losses) of Associated Companies

Share in profit (losses) of associated companies reflects our proportionate share of the earnings of unconsolidated entities accounted for by using the equity method of accounting. During the three months ended March 31, 2020, the loss from our proportionate share of the earnings of our equity method investments was $0.8 million, compared to a profit of $1.4 million in the three months ended March 31, 2019. The difference is primarily due to gains resulting from the divestment of one of our equity method investments during the first quarter of 2019.

Net Loss Attributable to Stratasys Ltd. and Net Loss Per Share

Net loss attributable to Stratasys Ltd., and diluted net loss per share were as follows:

Three Months Ended March 31,

2020

2019

U.S. $ in thousands

Net loss attributable to Stratasys Ltd.

$

(21,703

)

$

(2,270

)

Percentage of revenues

-16.3

%

-1.5

%

Basic and diluted net loss per share

$

(0.40

)

$

(0.04

)

Net loss attributable to Stratasys Ltd. was $21.7 million for the three months ended March 31, 2020 compared to net loss of $2.3 million for the three months ended March 31, 2019. The increase in the net loss attributable to Stratasys Ltd. was primarily attributable to decreased gross profit, mainly resulted from COVID-19, as described above.

Diluted net loss per share was $0.4 and $0.04 for the three months ended March 31, 2020 and 2019, respectively. The weighted average fully diluted share count was 54.5 million for the three months ended March 31, 2020, compared to 54.0 million for the three months ended March 31, 2019.

7


Supplemental Operating Results on a Non-GAAP Basis

The following non-GAAP data, 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 (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization-related charges or gains, and (ii) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity method investments, impairment of long-lived assets and the corresponding tax effect of those items. 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.

8


Reconciliation of GAAP to Non-GAAP Results of Operations

The following tables present the GAAP measures, the corresponding non-GAAP amounts and the related non-GAAP adjustments for the applicable periods:

Three Months Ended March 31,

2020

Non-GAAP

2020

2019

Non-GAAP

2019

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

S. dollars and shares in thousands (except per share amounts)

Gross profit (1)

$

59,870

$

4,414

$

64,284

$

76,457

$

4,252

$

80,709

Operating income (loss) (1,2)

$

(19,900

)

$

11,491

$

(8,409

)

(3,271

)

10,075

6,804

Net income (loss) attributable to

    Stratasys Ltd. (1,2,3)

$

(21,703

)

$

11,137

$

(10,566

)

(2,270

)

7,927

5,657

Net income (loss) per diluted share

    attributable to Stratasys Ltd. (4)

$

(0.40

)

$

0.21

$

(0.19

)

$

(0.04

)

$

0.14

$

0.10

 

(1)

Acquired intangible assets amortization

    expense

4,065

3,898

Non-cash stock-based compensation

    expense

402

354

Reorganization and other related costs

(53

)

4,414

4,252

 

(2)

Acquired intangible assets amortization

    expense

2,142

1,889

Non-cash stock-based compensation

    expense

4,503

3,875

Reorganization and other related costs

31

59

Merger and acquisition and other

    expense

401

-

7,077

5,823

11,491

10,075

 

(3)

Corresponding tax effect

(431

)

(544

)

Gain from equity method divestment,

    related write-offs and amortization

77

(1,604

)

$

11,137

$

7,927

 

(4)

Weighted average number of ordinary

    shares outstanding- Diluted

54,544

54,544

53,966

54,477

9


Liquidity and Capital Resources

A summary of our statement of cash flows is as follows:

Three Months Ended March 31,

2020

2019

U.S $ in thousands

Net loss

$

(21,788

)

$

(2,313

)

Depreciation and amortization

12,457

12,700

Deferred income taxes

(409

)

(685

)

Stock-based compensation

4,907

4,229

Other non-cash item, net

4,467

(615

)

Change in working capital and other items

11,640

(8,712

)

Net cash provided by operating activities

11,274

4,604

Net cash provided by (used in) investing activities

(5,498

)

(5,729

)

Net cash provided by (used in) by financing activities

30

(25,071

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(2,116

)

878

Net change in cash, cash equivalents and restricted cash

3,690

(25,318

)

Cash, cash equivalents and restricted cash, beginning of period

293,597

393,734

Cash, cash equivalents and restricted cash, end of period

$

297,287

$

368,416

Our cash, cash equivalents and restricted cash balance increased to $297.3 million as of March 31, 2020 from $293.6 million as of December 31, 2019. The increase in cash and cash equivalents in the three months ended March 31, 2020 was primarily due to net cash provided by operating activities in an amount of $11.3 million, partially offset by net cash used in by investing activities of $5.5 million.

Cash flows from operating activities

We generated $11.3 million of cash from operating activities during the three months ended March 31, 2020. That cash generation reflects our $21.8 million net loss, as adjusted upwards to eliminate non-cash charges included in net loss, including $12.5 million of depreciation and amortization and $4.9 million of stock-based compensation expense. Favorable changes in our working capital balances were mainly driven by decrease in our accounts receivables balances.

Cash flows from investing activities

We used $5.5 million of cash in our investing activities during the three months ended March 31, 2020. Cash was primarily used to invest $6.3 million to purchase property and equipment. Our principal property and equipment purchases were for our new buildings complex under construction in Rehovot, Israel. The new facility in Rehovot, Israel, which will contain two buildings, houses our Israeli headquarters, research and development facilities and certain marketing activities.

Cash flows from financing activities

Amounts provided by financing activities for the first three months ended March 31, 2020, were immaterial.

10


Capital resources and capital expenditures

Our total current assets amounted to $645.8 million as of March 31, 2020, of which $297.3 million consisted of cash, cash equivalents and restricted cash and $28.3 million of short term deposits. Total current liabilities amounted to $165.1 million. Most of our cash and cash equivalents are held in banks in Israel and the U.S.

The credit risk related to our accounts receivable is limited due to the relatively large number of customers and their wide geographic distribution. In addition, we seek to reduce the credit exposure related to our accounts receivable by imposing credit limits, by conducting ongoing credit evaluation, and by implementing account monitoring procedures, as well as credit insurance for many of our customers.

We believe that we will have adequate cash and cash equivalents to fund our ongoing operations and that these sources of liquidity will be sufficient to satisfy our capital expenditure and working capital needs for the next twelve months.

Repayment of Long-Term Bank Loan and Credit Line

In December 2016, our company entered into a secured loan agreement with Bank Hapoalim Ltd. in connection with our new office facility in Israel, which agreement we refer to as the Bank Loan Agreement. Pursuant to the Bank Loan Agreement, our company borrowed $26 million initially in December 2016, which we refer to as the Bank Loan, and secured a credit line for an additional $24 million, or the Credit Line. Any loans to be drawn upon the Credit Line were to be under similar terms as the Bank Loan. The Bank Loan was to mature in December 2023 and was payable in equal consecutive quarterly principal installments of principal and accrued interest. Any early repayment of the Bank Loan was subject to, within the initial three year term of the Bank Loan, a maximum 1% penalty of the amount prepaid. The repayment of the Bank Loan was secured by a first-priority lien on all of our company’s rights in the property of our new office facility in Israel. The Bank Loan bore interest at the rate of LIBOR plus 3.35%. The Bank Loan Agreement contained customary representations and warranties, affirmative covenants and negative covenants, which included, without limitation, restrictions on indebtedness, liens, investments, and certain dispositions with respect to the property secured by the lien.

The Bank Loan Agreement also contained customary events of default that entitled the lender to cause any or all of our company's indebtedness to become immediately due and payable and to foreclose on the lien, and included customary grace periods before certain events were to be deemed events of default. Borrowings under the Bank Loan Agreement were available mainly for the financing of our new facility in Israel.

In the first quarter of 2019, we repaid the full outstanding principal amount of the Bank Loan, in an aggregate amount of $27.3 million, plus all interest accrued thereon, thereby fulfilling all of our remaining obligations under the Bank Loan Agreement. In connection with the repayment, the first-priority lien on all of our rights with respect to the property of our new office facility in Israel was removed.

Critical Accounting Policies

We have prepared our consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America. This has required us to make estimates, judgments, and assumptions that affected the amounts we reported. Actual results may differ from those estimates. To facilitate the understanding of our business activities, certain accounting policies that are important to the presentation of our financial condition and results of operations and that require management’s subjective judgments are described in our 2019 Annual Report. We base our judgments on our experience and various assumptions that we believe to be reasonable under the circumstances.

11


Forward-Looking Statements and Factors That May Affect Future Results of Operations

Certain information included in or incorporated by reference into the Report of Foreign Private Issuer on Form 6-K to which this Operating and Financial Review is appended, or the Form 6-K, 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 those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words “may,” “will,” “could,” “should,” “expect,” “anticipate,” “intend,” “estimate,” “believe,” “project,” “plan,” “assume” or other similar expressions, or negatives of those expressions, although not all forward-looking statements contain these identifying words.

These forward-looking statements may include, but are not limited to, statements regarding our future strategy, future operations, projected financial position, proposed products, estimated future revenues, projected costs, future prospects, the future of our industry and results that might be obtained by pursuing management’s current plans and objectives.

You should not place undue reliance on our forward-looking statements because the matters they describe are subject to certain risks, uncertainties and assumptions that are difficult to predict. Our forward-looking statements are based on the information currently available to us and speak only as of the date of this Form 6-K. Over time, our actual results, performance or achievements may differ from those expressed or implied by our forward-looking statements, and such difference might be significant and materially adverse to our shareholders. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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 extent of our success at introducing new or improved products and solutions that gain market share;

the extent of growth of the 3D printing market generally;

the duration of the global COVID-19 pandemic, which may continue to have material adverse consequences for our operations, financial position, cash flows, and those of our customers and suppliers;

changes in our overall strategy, including as related to any reorganization activities and our capital expenditures;

the impact of shifts in prices or margins of the products that we sell or services we provide;

the impact of competition and new technologies;

impairments of goodwill or other intangible assets in respect of companies that we acquire;

the extent of our success at efficiently and successfully integrating the operations of various companies that we have acquired or may acquire;

global market, political and economic conditions, and in the countries in which we operate in particular;

government regulations and approvals;

litigation and regulatory proceedings;

infringement of our intellectual property rights by others (including for replication and sale of consumables for use in our systems), or infringement of others’ intellectual property rights by us;

the extent of our success at maintaining our liquidity and financing our operations and capital needs;

impact of tax regulations on our results of operations and financial conditions; and

12


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 2019 Annual Report, as supplemented herein as well as in the 2019 Annual Report generally.

Readers are urged to carefully review and consider the various disclosures made throughout the Form 6-K, our 2019 Annual Report, and in our 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.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Reference is made to Item 11, “Quantitative and Qualitative Disclosures about Market Risk” in our 2019 Annual Report.

LEGAL PROCEEDINGS

We are subject to various litigation and other legal proceedings from time to time. For a discussion of our litigation status, see Note 11-“Contingencies” in the notes to our unaudited condensed consolidated interim financial statements attached as Exhibit 99.1 to the form 6-K.

RISK FACTORS

The global COVID-19 health pandemic has been adversely affecting and could potentially severely adversely affect, our business, results of operations and financial condition due to impacts on the industries in which our customers operate, as well as impacts from remote work arrangements, actions taken to contain the disease or treat its impact, and the speed and extent of the recovery from the disease.

COVID-19, which was discovered in Wuhan, China in December 2019 and which was declared by the World Health Organization to be a global pandemic on March 11, 2020, has had numerous adverse effects on the global economy. Governmental authorities around the world have implemented measures to reduce the spread of COVID-19. These measures, including shutdowns and “shelter-in-place” orders suggested or mandated by governmental authorities or otherwise elected by companies as a preventative measure, have adversely affected workforces, customers, consumer sentiment, economies and financial markets, and, along with decreased consumer spending, have led to an economic downturn in many of the markets into which we sell our products and services.

Those effects of the pandemic have been adversely impacting our financial results, beginning already in the first quarter of 2020. While the global outbreak of the pandemic occurred relatively late in that quarter, its impact on our quarterly results was nevertheless substantial, as the timing of our revenues in fiscal quarters tends to be late, with a significant portion of business traditionally occurring in the final few weeks of each quarter. Moreover, our business in Asia was already affected by the pandemic early in the quarter, followed by Europe and then the United States.

While we have imposed counter-measures to try to mitigate the impact of the pandemic on our operating results, there is no certainty that those measures will succeed. As early as February 3, 2020, we imposed travel restrictions on our staff and have tried to proactively prevent any harm to our workforce wherever possible. Soon thereafter we also implemented work-from-home options. In order to try to lessen the impact of the pandemic on our profitability, we began to implement cost-control measures at the end of February 2020 and continue to closely manage them. All of our employees were effectively reduced to a four-day work-week during the second quarter of 2020, and we have instituted a nonessential hiring freeze and have adjusted our cost base and production plan accordingly.

While we will continue to monitor the situation, assessing further possible implications for our operations, supply chain, liquidity, cash flow and customer orders, and will act in an effort to mitigate adverse consequences if and as needed, while simultaneously abiding by any government-imposed restrictions, market by market, there is no assurance that we can succeed at doing so. For example, our remote work arrangements could negatively impact the execution of our business plans and operations. If a natural disaster, power outage, connectivity issue, or other event occurs that impacts our employees’ ability to work remotely, it may be difficult for us to allow our employees to continue to work in that manner. The increase in remote working also raises potential IT security and fraud concerns.

In addition to the adverse impact of the COVID-19 pandemic on our business and operating results, we furthermore face uncertainty as to the degree and duration of that impact going forward. We do not know the length of time that the pandemic and related disruptions will continue, the impact of governmental regulations or easement of regulations in response to the strengthening or weakening of the pandemic, and the degree of overall potentially permanent changes in consumer behavior that may be caused by the pandemic. The pandemic may furthermore even lead to a global economic downturn that is more than temporary and that could adversely affect demand for our products and services generally. A downturn could also have a material adverse impact on our business partners’ stability and financial strength. Given the uncertainties associated with COVID-19, it is difficult to fully predict the magnitude of effects on our, and our business partners’, business, financial condition and results of operations.

As a result of the disruption in the industries into which we sell our products and services, and the lack of visibility as to the severity and duration of the pandemic, we have withdrawn our full-year guidance for 2020. We cannot predict whether we will be able to restore our guidance later in 2020.

The COVID-19 pandemic may also have the effect of amplifying many of the other risks described under the caption “Item 3. Key Information— D. Risk Factors” in our 2019 Form 20-F.

13


v3.20.1
Derivative instruments and hedging activities (Narrative) (Details)
€ in Millions, ₪ in Millions, $ in Millions
3 Months Ended
Mar. 31, 2020
USD ($)
Mar. 31, 2019
USD ($)
Mar. 31, 2020
ILS (₪)
Mar. 31, 2020
EUR (€)
Derivatives, Fair Value [Line Items]        
Notional amount of derivative asset $ 106.2      
Gain (Loss) on derivative instrument $ 1.5 $ 1.2    
Other current assets [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Conversion To NIS [Member]        
Derivatives, Fair Value [Line Items]        
Notional amount of derivative asset | ₪     ₪ 36.6  
Other current assets [Member] | Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Conversion To Euro [Member]        
Derivatives, Fair Value [Line Items]        
Notional amount of derivative asset | €       € 45.0
v3.20.1
Loss Per Share (Narrative) (Details) - shares
shares in Millions
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Earnings Per Share [Abstract]    
Antidilutive securities excluded from computation of net loss per share 5.3 5.1
v3.20.1
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Mar. 31, 2019
Goodwill $ 385,409 $ 385,658  
Amortization of intangible assets $ 62   $ 61
Stratasys-Objet reporting unit [Member]      
Percentage of fair value exceeding carrying value of reporting units   8.70%  
Goodwill   $ 386  
Expected cash flow period   5 years  
Discount rate (as a percent)   13.50%  
Growth rate (as a percent)   3.10%  
Percentage of decrease in terminal year growth rate   1.00%  
Percentage of increase in terminal year growth rate   1.00%  
Change in fair value due to 1% decrease in terminal year growth rate   $ 45  
Change in fair value due to 1% increase in terminal year growth rate   $ 81  
v3.20.1
Loss Per Share
3 Months Ended
Mar. 31, 2020
Earnings Per Share [Abstract]  
Loss Per Share

Note 6. Loss Per Share

The following table presents the numerator and denominator of the basic and diluted net loss per share computations for the three months ended March 31, 2020 and 2019:

Three months ended March 31,

2020

2019

In thousands, except per share amounts

Numerator:

 

Net loss attributable to Stratasys Ltd. for basic and diluted loss per share

$

(21,703

)

$

(2,270

)

Denominator:

Weighted average shares - denominator for basic and diluted net loss per share

54,544

53,966

 

Net loss per share attributable to Stratasys Ltd.

Basic

$

(0.40

)

$

(0.04

)

Diluted

$

(0.40

)

$

(0.04

)

The computation of diluted net loss per share excluded share awards of 5.3 million shares and 5.1 million shares for the three months ended March 31, 2020 and 2019, respectively, because their inclusion would have had an anti-dilutive effect on the diluted net loss per share.

v3.20.1
Equity
3 Months Ended
Mar. 31, 2020
Equity [Abstract]  
Equity

Note 10. Equity

a. Stock-based compensation plans

Stock-based compensation expenses for equity-classified stock options, restricted share units (“RSUs”) and performance stock units ("PSUs") were allocated as follows:

Three Months Ended

March 31,

2020

2019

U.S. $ in thousands

Cost of sales

 

$

402

 

$

354

Research and development, net

$

1,556

759

Selling, general and administrative

$

2,949

3,116

Total stock-based compensation expenses

$

4,907

$

4,229

A summary of the Company’s stock option activity for the three months ended March 31, 2020 is as follows:

Number of Options

Weighted Average

Exercise Price

Options outstanding as of January 1, 2020

 

1,961,532

$

31.16

Granted

300,000

16.41

Forfeited

(49,371

)

32.64

Options outstanding as of March 31, 2020

2,212,161

$

29.13

Options exercisable as of March 31, 2020

1,625,889

$

33.04

As of March 31, 2020, the unrecognized compensation cost of $3.6 million related to all unvested, equity-classified stock options is expected to be recognized as an expense over a weighted-average period of 1.8 years.

14


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

A summary of the Company’s RSUs and PSUs activity for the three months ended March 31, 2020 is as follows:

Number of RSUs and PSUs

Weighted Average Grant

Date Fair Value

Unvested as of January 1, 2020

 

 

2,362,991

 

 

$

24.10

Granted

1,176,436

18.17

Vested

(361,118

)

25.97

Forfeited

(127,520

)

21.68

Unvested as of March 31, 2020

3,050,789

$

21.69

The fair value of RSUs and PSUs is determined based on the quoted price of the Company’s ordinary shares on the date of the grant.

As of March 31, 2020, the unrecognized compensation cost of $56.7 million related to all unvested, equity-classified RSUs and PSUs is expected to be recognized as expense over a weighted-average period of 3 years.

b. Accumulated other comprehensive loss

The following tables present the changes in the components of accumulated other comprehensive income (loss), net of taxes, for the three months ended March 31, 2020 and 2019, respectively:

 

 

Three months ended March 31, 2020

 

 

 

Net unrealized gain (loss) on cash flow hedges

 

Foreign currency translation adjustments

 

Total

 

 

 

U.S. $ in thousands

 

Balance as of January 1, 2020

 

$

(10

)

 

$

(7,706

)

 

$

(7,716

)

Other comprehensive income (loss) before reclassifications

 

 

849

 

 

 

(1,954

)

 

 

(1,105

)

Amounts reclassified from accumulated other comprehensive loss

 

 

(27

)

 

 

-

 

 

 

(27

)

Other comprehensive income (loss)

 

 

822

 

 

 

(1,954

)

 

 

(1,132

)

Balance as of March 31, 2020

 

$

812

 

 

$

(9,660

)

 

$

(8,848

)

15


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Three months ended March 31, 2019

Net unrealized gain

(loss) on cash flow

hedges

Foreign currency

translation

adjustments

Total

U.S. $ in thousands

Balance as of January 1, 2019

$

(627

)

$

(7,126

)

$

(7,753

)

Other comprehensive income (loss) before reclassifications

1,011

(427

)

584

Amounts reclassified from accumulated other comprehensive loss

(16

)

-

(16

)

Other comprehensive income (loss)

995

(427

)

568

Balance as of March 31, 2019

$

368

$

(7,553

)

$

(7,185

)

v3.20.1
Inventories (Tables)
3 Months Ended
Mar. 31, 2020
Inventory Disclosure [Abstract]  
Schedule of Inventories

Inventories consisted of the following:

March 31,

2020

December 31,

2019

U.S. $ in thousands

Finished goods

$

89,570

$

87,967

Work-in-process

2,271

3,106

Raw materials

 

80,670

 

77,431

 

 

172,511

 

168,504

v3.20.1
Derivative instruments and hedging activities (Tables)
3 Months Ended
Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of balance sheet classification and fair values of derivative instruments

The following table summarizes the consolidated balance sheets classification and fair values of the Company’s derivative instruments:

Fair Value

Notional Amount

Balance sheet location

March 31,

2020

December 31,

2019

March 31,

2020

December 31,

2019

U. S. $ in thousands

Assets derivatives - Foreign exchange contracts, not designated as hedging instruments

Other current assets

$

579

$

63

$

72,871

$

11,001

Assets derivatives-Foreign exchange contracts, designated as cash flow hedge

Other current assets

1,558

315

54,701

25,045

Liability derivatives -Foreign exchange contracts, not designated as hedging instruments

Accrued expenses and other

current liabilities

(351

)

(388

)

33,360

92,929

Liability derivatives - Foreign exchange contracts, designated as hedging instruments

Accrued expenses and other

current liabilities

(747

)

(326

)

32,870

45,262

$

1,039

$

(336

)

$

193,802

$

174,237

v3.20.1
Revenues (Schedule of Disaggregation of Revenues Based on Time) (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Disaggregation of Revenue [Line Items]    
Total Revenues $ 132,907 $ 155,300
Revenues recognized in point in time [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 93,816 136,526
Revenues recognized over time [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 39,091 18,774
Products [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 83,172 105,091
Products [Member] | Revenues recognized in point in time [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 83,172 105,091
Services [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 49,735 50,209
Services [Member] | Revenues recognized in point in time [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 10,644 31,435
Services [Member] | Revenues recognized over time [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues $ 39,091 $ 18,774
v3.20.1
Consolidated Statements of Operations and Comprehensive Loss - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Net sales    
Total net sales $ 132,907 $ 155,300
Cost of sales    
Total cost of sales 73,037 78,843
Gross profit 59,870 76,457
Operating expenses    
Research and development, net 24,194 22,574
Selling, general and administrative 55,576 57,154
Total operating expenses 79,770 79,728
Operating income (loss) (19,900) (3,271)
Financial income (expense), net (829) 753
Income (loss) before income taxes (20,729) (2,518)
Income tax expenses 221 1,218
Share in profits (losses) of associated companies (838) 1,423
Net loss (21,788) (2,313)
Net loss attributable to non-controlling interests (85) (43)
Net loss attributable to Stratasys Ltd. $ (21,703) $ (2,270)
Net loss per ordinary share attributable to Stratasys Ltd. - basic and diluted $ (0.40) $ (0.04)
Weighted average ordinary shares outstanding. - basic and diluted 54,544 53,966
Comprehensive loss    
Net loss $ (21,788) $ (2,313)
Other comprehensive income (loss), net of tax:    
Foreign currency translation adjustments (1,954) (427)
Unrealized gains (losses) on derivatives designated as cash flow hedges 822 995
Other comprehensive income (loss), net of tax (1,132) 568
Comprehensive loss (22,920) (1,745)
Less: comprehensive loss attributable to non-controlling interests (85) (43)
Comprehensive loss attributable to Stratasys Ltd. (22,835) (1,702)
Products [Member]    
Net sales    
Total net sales 83,172 105,091
Cost of sales    
Total cost of sales 39,248 44,169
Services [Member]    
Net sales    
Total net sales 49,735 50,209
Cost of sales    
Total cost of sales $ 33,789 $ 34,674
v3.20.1
Equity (Schedule of Accumulated other comprehensive income (loss) (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Balance as of beginning of period $ (7,716) $ (7,753)
Other comprehensive income (loss) before reclassifications (1,105) 584
Amounts reclassified from accumulated other comprehensive loss (27) (16)
Other comprehensive income (loss) (1,132) 568
Balance as of end of period (8,848) (7,185)
Net unrealized gain (loss) on cash flow hedges [Member]    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Balance as of beginning of period (10) (627)
Other comprehensive income (loss) before reclassifications 849 1,011
Amounts reclassified from accumulated other comprehensive loss (27) (16)
Other comprehensive income (loss) 822 995
Balance as of end of period 812 368
Foreign currency translation adjustments [Member]    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Balance as of beginning of period (7,706) (7,126)
Other comprehensive income (loss) before reclassifications (1,954) (427)
Amounts reclassified from accumulated other comprehensive loss
Other comprehensive income (loss) (1,954) (427)
Balance as of end of period $ (9,660) $ (7,553)
v3.20.1
Equity (Narrative) (Details)
$ in Millions
3 Months Ended
Mar. 31, 2020
USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Unrecognized compensation cost $ 3.6
Weighted average period for recognition 1 year 9 months 18 days
RSUs and PSUs [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Unrecognized compensation cost $ 56.7
Weighted average period for recognition 3 years
v3.20.1
New Accounting Pronouncements
3 Months Ended
Mar. 31, 2020
Comprehensive Income Loss Net of Tax Including Portion Attributable to Noncontrolling Interest  
New Accounting Pronouncements

Note 2. New Accounting Pronouncements

Accounting Pronouncements Adopted in the Current Period

In August 2018, the FASB issued an Accounting Standard update (“ASU”) that clarifies the accounting for implementation costs in cloud computing arrangements. This ASU requires the implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customers in a software licensing arrangement. The Company adopted this guidance effective January 1, 2020, with no material impact on its consolidated financial statements.

In June 2016, the FASB issued an ASU that supersedes the existing impairment model for most financial assets to a current expected credit loss model. The new guidance requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. The ASU also requires that credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses. The Company adopted this guidance effective January 1, 2020, with no material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of the adoption of the new guidance on its consolidated financial statements.

v3.20.1
Revenues (Schedule of Changes in Deferred Revenue) (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Dec. 31, 2019
Revenue Recognition [Abstract]    
Deferred revenues $ 65,816 $ 68,307
v3.20.1
Goodwill and Other Intangible Assets (Tables)
3 Months Ended
Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Changes in the Carrying Amount of Goodwill

Changes in the carrying amount of the Company’s goodwill for the three-months ended March 31, 2020 were as follows:

U.S. $ in thousands

Goodwill as of January 1, 2020

$

385,658

Foreign currency translation adjustments

(249

)

Goodwill as of March 31, 2020

$

385,409

 

Schedule of Other Intangible Assets

Other intangible assets consisted of the following:

March 31, 2020

December 31, 2019

Carrying Amount,

Net of

Impairment

Accumulated

Amortization

Net

Book

Value

Carrying Amount,

Net of

Impairment

Accumulated

Amortization

Net

Book

Value

U.S. $ in thousands

Developed

technology

$

299,242

$

(256,077

)

$

43,165

$

299,100

$

(252,136

)

$

46,964

Patents

15,552

(7,421

)

8,131

15,142

(7,067

)

8,075

Trademarks and trade names

25,994

(20,256

)

5,738

25,991

(19,966

)

6,025

Customer

relationships

102,847

(78,358

)

24,489

102,936

(76,813

)

26,123

Capitalized software

development costs

18,489

(18,489

)

-

18,630

(18,489

)

141

 

$

462,124

$

(380,601

)

$

81,523

$

461,799

$

(374,471

)

$

87,328

Schedule of Estimated Amortization Expense Relating to Intangible Assets

Estimated

amortization expense

(U.S. $ in thousands)

Remaining 9 months of 2020

$

18,612

2021

24,699

2022

24,633

2023

7,698

Thereafter

5,881

Total

81,523

v3.20.1
Equity (Tables)
3 Months Ended
Mar. 31, 2020
Equity [Abstract]  
Schedule of Share-based Compensation Expense

Stock-based compensation expenses for equity-classified stock options, restricted share units (“RSUs”) and performance stock units ("PSUs") were allocated as follows:

Three Months Ended

March 31,

2020

2019

U.S. $ in thousands

Cost of sales

 

$

402

 

$

354

Research and development, net

$

1,556

759

Selling, general and administrative

$

2,949

3,116

Total stock-based compensation expenses

$

4,907

$

4,229

Summary of Stock Options Activity

A summary of the Company’s stock option activity for the three months ended March 31, 2020 is as follows:

Number of Options

Weighted Average

Exercise Price

Options outstanding as of January 1, 2020

 

1,961,532

$

31.16

Granted

300,000

16.41

Forfeited

(49,371

)

32.64

Options outstanding as of March 31, 2020

2,212,161

$

29.13

Options exercisable as of March 31, 2020

1,625,889

$

33.04

Summary of RSUs and PSUs activity

A summary of the Company’s RSUs and PSUs activity for the three months ended March 31, 2020 is as follows:

Number of RSUs and PSUs

Weighted Average Grant

Date Fair Value

Unvested as of January 1, 2020

 

 

2,362,991

 

 

$

24.10

Granted

1,176,436

18.17

Vested

(361,118

)

25.97

Forfeited

(127,520

)

21.68

Unvested as of March 31, 2020

3,050,789

$

21.69

Schedule of Accumulated other comprehensive income (loss)

The following tables present the changes in the components of accumulated other comprehensive income (loss), net of taxes, for the three months ended March 31, 2020 and 2019, respectively:

 

 

Three months ended March 31, 2020

 

 

 

Net unrealized gain (loss) on cash flow hedges

 

Foreign currency translation adjustments

 

Total

 

 

 

U.S. $ in thousands

 

Balance as of January 1, 2020

 

$

(10

)

 

$

(7,706

)

 

$

(7,716

)

Other comprehensive income (loss) before reclassifications

 

 

849

 

 

 

(1,954

)

 

 

(1,105

)

Amounts reclassified from accumulated other comprehensive loss

 

 

(27

)

 

 

-

 

 

 

(27

)

Other comprehensive income (loss)

 

 

822

 

 

 

(1,954

)

 

 

(1,132

)

Balance as of March 31, 2020

 

$

812

 

 

$

(9,660

)

 

$

(8,848

)

15


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Three months ended March 31, 2019

Net unrealized gain

(loss) on cash flow

hedges

Foreign currency

translation

adjustments

Total

U.S. $ in thousands

Balance as of January 1, 2019

$

(627

)

$

(7,126

)

$

(7,753

)

Other comprehensive income (loss) before reclassifications

1,011

(427

)

584

Amounts reclassified from accumulated other comprehensive loss

(16

)

-

(16

)

Other comprehensive income (loss)

995

(427

)

568

Balance as of March 31, 2019

$

368

$

(7,553

)

$

(7,185

)

v3.20.1
Equity (Summary of RSUs and PSUs Activity) (Details) - RSUs and PSUs [Member]
3 Months Ended
Mar. 31, 2020
$ / shares
shares
Number of RSUs and PSUs  
Unvested as of January 1, 2020 | shares 2,362,991
Granted | shares 1,176,436
Vested | shares (127,520)
Forfeited | shares (361,118)
Unvested as of March 31, 2020 | shares 3,050,789
Weighted Average Grant Date Fair Value  
Unvested as of January 1, 2020 | $ / shares $ 24.10
Granted | $ / shares 18.17
Vested | $ / shares 21.68
Forfeited | $ / shares 25.97
Unvested as of March 31, 2020 | $ / shares $ 21.69
v3.20.1
Revenues
3 Months Ended
Mar. 31, 2020
Revenue Recognition [Abstract]  
Revenues

Note 3. Revenues

Disaggregation of Revenues

The following table presents the Company’s revenues disaggregated by geographical region (based on the Company's customers' locations) and revenue types for the three months ended March 31, 2020 and 2019:

Three months ended March 31,

2020

2019

(U.S. $ in thousands)

Americas

Products

$

48,244

$

58,054

Service

 

38,329

 

38,444

Total Americas

 

86,573

 

96,498

 

EMEA

Products

20,747

28,085

Service

 

6,173

 

6,698

Total EMEA

 

26,920

 

34,783

 

Asia Pacific

Products

14,181

18,952

Service

 

5,233

 

5,067

Total Asia Pacific

 

19,414

 

24,019

 

 

 

Total Revenues

$

132,907

$

155,300

The following table presents the Company’s revenues disaggregated based on the timing of revenue recognized for the three months ended March 31, 2020 and 2019:

Three months ended March 31,

2020

2019

(U.S. $ in thousands)

Revenues recognized in point in time from:

Products

$

83,172

$

105,091

Services

 

10,644

 

31,435

Total revenues recognized in point in time

 

93,816

 

136,526

 

Revenues recognized over time from:

Services

 

39,091

 

18,774

Total revenues recognized over time

 

39,091

 

18,774

 

Total Revenues

$

132,907

$

155,300

7


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Contract Assets and Contract Liabilities

Contract assets are recorded when the Company's right to consideration is conditional on constraints other than the passage of time. The Company had no material contract assets as of March 31, 2020.

Contract liabilities include advance payments and billings in excess of revenue recognized, which are primarily related to advanced billings for service type warranty. Contract liabilities are presented under deferred revenues. The Company's deferred revenues as of March 31, 2020 and December 31, 2019 were as follows:

 

March 31, 2020

 

December 31, 2019

 

U.S. $ in thousands

Deferred revenues*

65,816

 

68,307

*Includes $14.5 million and $16.0 million under long term deferred revenues in the Company's consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively.

Revenue recognized in the first quarter of 2020 that was included in the deferred revenue balance as of January 1, 2020 was $18.0 million.

Remaining Performance Obligations

Remaining Performance Obligations ("RPO") represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of March 31, 2020, the total RPO amounted to $90.8 million. The Company expects to recognize $74.4 million of this RPO during the next 12 months, $12.0 million over the subsequent 12 months and $4.4 million in the remainder thereafter.

Incremental Costs of Obtaining a Contract

Sales commissions earned mainly by the Company’s sales agents are considered incremental costs of obtaining a contract with a customer, as the Company expects the benefit of those commissions to be longer than one year. The majority of the sales commissions are not subject to capitalization, as the commission expense is recognized as the related revenue is recognized. Sales commissions for initial contracts related to the service type warranty are deferred and then amortized on a straight-line basis over the expected customer relationship period if the Company expects to recover those costs. Amortization expense is included in selling, general and administrative expenses in the consolidated statements of operations. As of March 31, 2020 and December 31, 2019, the deferred commissions amounted to $4.0 million and $3.9 million, respectively.

v3.20.1
Derivatives and Hedging Activities (Schedule of Balance Sheet Classification and Fair Values of Derivative Instruments) (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Dec. 31, 2019
Derivatives, Fair Value [Line Items]    
Notional amount of derivative asset $ 106,200  
Fair value 1,039 $ (336)
Notional amount 193,802 174,237
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Other current assets [Member]    
Derivatives, Fair Value [Line Items]    
Fair value derivative asset 579 63
Notional amount of derivative asset 72,871 11,001
Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument [Member] | Accrued expenses and other current liabilities [Member]    
Derivatives, Fair Value [Line Items]    
Fair value derivative liability (351) (388)
Notional amount of derivative liability 33,360 92,929
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Other current assets [Member] | Cash Flow Hedge [Member]    
Derivatives, Fair Value [Line Items]    
Fair value derivative asset 1,558 315
Notional amount of derivative asset 54,701 25,045
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | Accrued expenses and other current liabilities [Member] | Cash Flow Hedge [Member]    
Derivatives, Fair Value [Line Items]    
Fair value derivative liability (747) (326)
Notional amount of derivative liability $ 32,870 $ 45,262
v3.20.1
Document and Entity Information
3 Months Ended
Mar. 31, 2020
Document and Entity Information [Abstract]  
Entity Registrant Name STRATASYS LTD.
Entity Central Index Key 0001517396
Current Fiscal Year End Date --12-31
Document Type 6-K
Amendment Flag false
Document Period End Date Mar. 31, 2020
Entity File Number 001-35751
Entity Address, Address Line One 1 Holtzman Street
Entity Address, Address Line Two Science Park
Entity Address, Address Line Three P.O. Box 2496
Entity Address, City or Town Rehovot
Entity Address Country IL
Entity Address, Postal Zip Code 76124
v3.20.1
Consolidated Statements of Changes in Equity - USD ($)
shares in Thousands, $ in Thousands
Ordinary Shares [Member]
Additional Paid-In Capital [Member]
Accumulated deficit [Member]
Accumulated Other Comprehensive Loss [Member]
Total
Beginning Balance at Dec. 31, 2018 $ 146 $ 2,681,048 $ (1,531,326) $ (7,753) $ 1,142,115
Beginning Balance (in shares) at Dec. 31, 2018 53,881        
Issuance of shares in connection with stock-based compensation plans 2,222     2,222
Issuance of shares in connection with stock-based compensation plans (in shares) 167        
Stock-based compensation   4,229     4,229
Comprehensive loss     (2,270) 568 (1,702)
Ending Balance at Mar. 31, 2019 $ 146 2,687,499 (1,533,596) (7,185) 1,146,864
Ending Balance (in shares) at Mar. 31, 2019 54,048        
Beginning Balance at Dec. 31, 2019 $ 148 2,706,894 (1,542,175) (7,716) 1,157,151
Beginning Balance (in shares) at Dec. 31, 2019 54,441        
Issuance of shares in connection with stock-based compensation plans $ 1 29     30
Issuance of shares in connection with stock-based compensation plans (in shares) 358        
Stock-based compensation   4,907     4,907
Comprehensive loss     (21,703) (1,132) (22,835)
Ending Balance at Mar. 31, 2020 $ 149 $ 2,711,830 $ (1,563,878) $ (8,848) $ 1,139,253
Ending Balance (in shares) at Mar. 31, 2020 54,799        
v3.20.1
Goodwill and Other Intangible Assets (Schedule of Estimated Amortization Expense Relating to Intangible Assets) (Details)
$ in Thousands
Mar. 31, 2020
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Remaining 9 months of 2020 $ 18,612
2021 24,699
2022 24,633
2023 7,698
Thereafter 5,881
Total $ 81,523
v3.20.1
Inventories (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Dec. 31, 2019
Inventory Disclosure [Abstract]    
Finished goods $ 89,570 $ 87,967
Work-in-process 2,271 3,106
Raw materials 80,670 77,431
Total Inventory $ 172,511 $ 168,504
v3.20.1
Fair Value Measurements (Schedule of Fair Value Measurements) (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset (liabilities) $ 1,039 $ (336)
Foreign Exchange Future [Member] | Recurring [Member] | Not Designated as Hedging Instrument [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative assets 579 63
Derivative liabilities (351) (388)
Foreign Exchange Future [Member] | Recurring [Member] | Designated as Hedging Instrument [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative assets 1,558 315
Derivative liabilities $ (747) $ (326)
v3.20.1
Income Taxes
3 Months Ended
Mar. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

Note 7. Income Taxes

The Company had a negative effective tax rate of 1.1% for the three-month periods ended March 31, 2020 compared to a negative effective tax rate of 48.4% for the three-month periods ended March 31, 2019, the Company’s effective tax rate as of March 31, 2020 was primarily impacted by the geographic mix of its earnings and losses, as well as a valuation allowance on losses of the Company's US subsidiaries.

v3.20.1
Contingencies
3 Months Ended
Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Contingencies

Note 11. Contingencies

Legal proceedings

The Company is a party to various legal proceedings from time to time, the outcome of which, in the opinion of management, will not have a significant effect on the financial position, profitability or cash flows of the Company.

v3.20.1
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Carried at Fair Value on a Recurring Basis

The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, in its consolidated balance sheets:

March 31, 2020

December 31, 2019

(U.S. $ in thousands)

Assets:

Foreign exchange forward contracts not designated as hedging instruments

$

579

$

63

Foreign exchange forward contracts designated as hedging instruments

1,558

315

 

Liabilities:

Foreign exchange forward contracts not designated as hedging instruments

(351

)

(388

)

Foreign exchange forward contracts designated as hedging instruments

 

(747

)

 

(326

)

$

1,039

 

$

(336

)

v3.20.1
Revenues (Schedule of Disaggregation of Revenues) (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Disaggregation of Revenue [Line Items]    
Total Revenues $ 132,907 $ 155,300
Products [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 83,172 105,091
Services [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 49,735 50,209
Americas [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 86,573 96,498
Americas [Member] | Products [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 48,244 58,054
Americas [Member] | Services [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 38,329 38,444
EMEA [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 26,920 34,783
EMEA [Member] | Products [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 20,747 28,085
EMEA [Member] | Services [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 6,173 6,698
Asia Pacific [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 19,414 24,019
Asia Pacific [Member] | Products [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues 14,181 18,952
Asia Pacific [Member] | Services [Member]    
Disaggregation of Revenue [Line Items]    
Total Revenues $ 5,233 $ 5,067
v3.20.1
Equity (Schedule of Stock-based Compensation) (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]    
Total stock-based compensation expenses $ 4,907 $ 4,229
Cost of sales [Member]    
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]    
Total stock-based compensation expenses 402 354
Research and development, net [Member]    
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]    
Total stock-based compensation expenses 1,556 759
Selling, general and administrative [Member]    
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]    
Total stock-based compensation expenses $ 2,949 $ 3,116
v3.20.1
Consolidated Balance Sheets (Parenthetical) - ₪ / shares
shares in Thousands
Mar. 31, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Common stock, par value (in NIS per share) ₪ 0.01 ₪ 0.01
Common stock, shares authorized 180,000 180,000
Common stock, shares issued 54,799 54,441
Common stock, shares outstanding 54,799 54,441
v3.20.1
Business Description and Basis of Presentation
3 Months Ended
Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business Description and Basis of Presentation

Note 1. Business Description and Basis of Presentation

Stratasys Ltd. (collectively with its subsidiaries, the “Company”) is a global provider of applied additive technology solutions for a broad range of industries. The Company focuses on customers’ business requirements and seeks to create new value for its customers across their product lifecycle processes, from design prototypes to manufacturing tools and final production parts. The Company operates a 3D printing ecosystem of solutions and expertise, comprised of: 3D printers ranging from entry-level desktop 3D printers to systems for rapid prototyping (“RP”) and large production systems for direct digital manufacturing (“DDM”) based on precise fused deposition modeling (“FDM”) and PolyJet technologies; advanced materials for use with its 3D printers; software with voxel level control; application-based services; on-demand parts; and key partnerships.

The condensed consolidated interim financial statements include the accounts of Stratasys Ltd. and its subsidiaries. All intercompany accounts and transactions, including profits from intercompany sales not yet realized outside the Company, have been eliminated in consolidation.

The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year. Certain financial information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. The reader is referred to the audited consolidated financial statements and notes thereto for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission (the “SEC”) as part of the Company’s Annual Report on Form 20-F for such year on February 26, 2020.

v3.20.1
Goodwill and Other Intangible Assets
3 Months Ended
Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets

Note 5. Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of the Company’s goodwill for the three-months ended March 31, 2020 were as follows:

U.S. $ in thousands

Goodwill as of January 1, 2020

$

385,658

Foreign currency translation adjustments

(249

)

Goodwill as of March 31, 2020

$

385,409

 

During the fourth quarter of 2019, as part of the annual impairment test, the Company performed a quantitative assessment for goodwill impairment for its Stratasys-Objet reporting unit.

Following its quantitative assessment, the Company concluded that the fair value of its Stratasys-Objet reporting unit exceeded its carrying amount by approximately 8.7%, with a carrying amount of goodwill assigned to this reporting unit in an amount of $386 million.

When evaluating the fair value of its Stratasys-Objet reporting unit the Company used a discounted cash flow model which utilized Level 3 measures that represent unobservable inputs into the valuation method. Key assumptions used to determine the estimated fair value include: (a) expected cash flows for five years following the assessment date which were based on, among other factors, expected revenue growth, costs to produce, operating profit margins and estimated capital needs; (b) an estimated terminal value that utilized a terminal year growth rate of 3.1% that was determined based on the growth prospects of the reporting unit; and (c) a discount rate of 13.5% based on management’s best estimate of the after-tax weighted average cost of capital. If any of these were to vary materially from the Company's estimates, the Company could face impairment of goodwill allocated to this reporting unit in the future.

Actual results may differ from those assumed in the Company's valuation method. It is reasonably possible that the Company's assumptions described above could change in future periods. If any of these were to vary materially from the Company's plans, it may record impairment of goodwill allocated to this reporting unit in the future.

A hypothetical decrease in the growth rate of 1% or an increase of 1% to the discount rate would have reduced the fair value of Stratasys-Objet reporting unit by approximately $45 million and $81 million, respectively.

Based on the Company’s assessment as of December 31, 2019, no goodwill was determined to be impaired.

During the first quarter of 2020, the Company performed an analysis of the impact of recent events, including business and industry specific considerations, on the fair value of Stratasys-Objet reporting unit. As part of this analysis the Company considered the potential impacts of COVID-19 and the sensitivity of estimates and assumptions used in the last annual impairment test as well as changes in market capitalization. While the goodwill of the reporting unit is not currently impaired, there can be no assurances that goodwill will not be impaired in future periods. The Company will continue to monitor the impact of COVID-19 as well as events and changes in circumstances such as a deterioration in the business climate or operating results, significant decline in the Company's share price, changes in management’s business strategy or downward changes of the Company's cash flows projections.

9


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Other Intangible Assets

Other intangible assets consisted of the following:

March 31, 2020

December 31, 2019

Carrying Amount,

Net of

Impairment

Accumulated

Amortization

Net

Book

Value

Carrying Amount,

Net of

Impairment

Accumulated

Amortization

Net

Book

Value

U.S. $ in thousands

Developed

technology

$

299,242

$

(256,077

)

$

43,165

$

299,100

$

(252,136

)

$

46,964

Patents

15,552

(7,421

)

8,131

15,142

(7,067

)

8,075

Trademarks and trade names

25,994

(20,256

)

5,738

25,991

(19,966

)

6,025

Customer

relationships

102,847

(78,358

)

24,489

102,936

(76,813

)

26,123

Capitalized software

development costs

18,489

(18,489

)

-

18,630

(18,489

)

141

 

$

462,124

$

(380,601

)

$

81,523

$

461,799

$

(374,471

)

$

87,328

Amortization expense relating to intangible assets for the three-month periods ended March 31, 2020 and 2019 was approximately $6.2 million and $6.1 million, respectively. As of March 31, 2020, the estimated amortization expense relating to intangible assets for each of the following periods was as follows:

Estimated

amortization expense

(U.S. $ in thousands)

Remaining 9 months of 2020

$

18,612

2021

24,699

2022

24,633

2023

7,698

Thereafter

5,881

Total

81,523

v3.20.1
Derivative instruments and hedging activities
3 Months Ended
Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative instruments and hedging activities

Note 9. Derivative instruments and hedging activities

The Company carries out transactions involving foreign currency exchange derivative financial instruments. The transactions are designed to hedge the Company’s exposure in currencies other than the U.S. dollar. The Company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities and forecasted transactions denominated in the New Israeli Shekel (“NIS”), Euro, Korean Won, Chinese Yuan and the Japanese Yen. The gains and losses on the hedging instruments partially offset losses and gains on the hedged items. Financial markets and currency volatility may limit the Company’s ability to hedge these exposures.

The following table summarizes the consolidated balance sheets classification and fair values of the Company’s derivative instruments:

Fair Value

Notional Amount

Balance sheet location

March 31,

2020

December 31,

2019

March 31,

2020

December 31,

2019

U. S. $ in thousands

Assets derivatives - Foreign exchange contracts, not designated as hedging instruments

Other current assets

$

579

$

63

$

72,871

$

11,001

Assets derivatives-Foreign exchange contracts, designated as cash flow hedge

Other current assets

1,558

315

54,701

25,045

Liability derivatives -Foreign exchange contracts, not designated as hedging instruments

Accrued expenses and other

current liabilities

(351

)

(388

)

33,360

92,929

Liability derivatives - Foreign exchange contracts, designated as hedging instruments

Accrued expenses and other

current liabilities

(747

)

(326

)

32,870

45,262

$

1,039

$

(336

)

$

193,802

$

174,237

Foreign exchange contracts not designated as hedging instruments

As of March 31, 2020, the notional amounts of the Company’s outstanding exchange forward contracts, not designated as hedging instruments, were $106.2 million, and were used to reduce foreign currency exposures. With respect to such derivatives, gains of $1.5 million and of $1.2 million were recognized under financial income (expenses), net for the three-month periods ended March 31, 2020 and 2019, respectively. Such gains or losses partially offset the foreign currencies revaluation changes of the balance sheet items. These foreign currencies revaluation changes are also recognized under financial income (expenses), net.

Cash Flow Hedging—Hedges of Forecasted Foreign Currency Payroll

As of March 31, 2020, the Company had in effect foreign exchange forward contracts, designated as cash flow hedge for accounting purposes, for the conversion of $36.6 million into NIS. The Company uses short-term cash flow hedge contracts to reduce its exposure to variability in expected future cash flows resulting mainly from payroll costs denominated in NIS. The changes in fair value of those contracts are included in the Company’s accumulated other comprehensive loss. These contracts mature through March 2021.

Cash Flow Hedging—Hedges of Forecasted Foreign Currency Revenue

As of March 31, 2020, the Company had in effect foreign exchange forward contracts, designated as cash flow hedge for accounting purposes, for the conversion of Euro 45.0 million in USD. The Company transact business in U.S. Dollars and in various other currencies. The Company may use foreign exchange or forward contracts to hedge certain cash flow exposures resulting from changes in these foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities of up to twelve months. The Company enter into these foreign exchange contracts to hedge a portion of our forecasted foreign currency denominated revenue in the normal course of business and accordingly, they are not speculative in nature.

13


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

v3.20.1
Revenues (Tables)
3 Months Ended
Mar. 31, 2020
Revenue Recognition [Abstract]  
Schedule of Disaggregation of Revenues

The following table presents the Company’s revenues disaggregated by geographical region (based on the Company's customers' locations) and revenue types for the three months ended March 31, 2020 and 2019:

Three months ended March 31,

2020

2019

(U.S. $ in thousands)

Americas

Products

$

48,244

$

58,054

Service

 

38,329

 

38,444

Total Americas

 

86,573

 

96,498

 

EMEA

Products

20,747

28,085

Service

 

6,173

 

6,698

Total EMEA

 

26,920

 

34,783

 

Asia Pacific

Products

14,181

18,952

Service

 

5,233

 

5,067

Total Asia Pacific

 

19,414

 

24,019

 

 

 

Total Revenues

$

132,907

$

155,300

Schedule of Disaggregation of Revenues Based on Time

The following table presents the Company’s revenues disaggregated based on the timing of revenue recognized for the three months ended March 31, 2020 and 2019:

Three months ended March 31,

2020

2019

(U.S. $ in thousands)

Revenues recognized in point in time from:

Products

$

83,172

$

105,091

Services

 

10,644

 

31,435

Total revenues recognized in point in time

 

93,816

 

136,526

 

Revenues recognized over time from:

Services

 

39,091

 

18,774

Total revenues recognized over time

 

39,091

 

18,774

 

Total Revenues

$

132,907

$

155,300

Schedule of Changes in Deferred Revenue

Contract liabilities include advance payments and billings in excess of revenue recognized, which are primarily related to advanced billings for service type warranty. Contract liabilities are presented under deferred revenues. The Company's deferred revenues as of March 31, 2020 and December 31, 2019 were as follows:

 

March 31, 2020

 

December 31, 2019

 

U.S. $ in thousands

Deferred revenues*

65,816

 

68,307

*Includes $14.5 million and $16.0 million under long term deferred revenues in the Company's consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively.

v3.20.1
Loss Per Share (Schedule of Basic and Diluted Loss Per Share) (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Numerator:    
Net loss attributable to Stratasys Ltd. for basic and diluted loss per share $ (21,703) $ (2,270)
Denominator:    
Weighted average shares - denominator for basic and diluted net loss per share 54,544 53,966
Net loss per share attributable to Stratasys Ltd.    
Basic $ (0.40) $ (0.04)
Diluted $ (0.40) $ (0.04)
v3.20.1
Goodwill and Other Intangible Assets (Schedule of Changes in the Carrying Amount of Goodwill) (Details)
$ in Thousands
3 Months Ended
Mar. 31, 2020
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill as of January 1, 2020 $ 385,658
Foreign currency translation adjustments (249)
Goodwill as of March 31, 2020 $ 385,409
v3.20.1
New Accounting Pronouncements (Policies)
3 Months Ended
Mar. 31, 2020
Comprehensive Income Loss Net of Tax Including Portion Attributable to Noncontrolling Interest  
Accounting Pronouncements Adopted in the Current Period

Accounting Pronouncements Adopted in the Current Period

In August 2018, the FASB issued an Accounting Standard update (“ASU”) that clarifies the accounting for implementation costs in cloud computing arrangements. This ASU requires the implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customers in a software licensing arrangement. The Company adopted this guidance effective January 1, 2020, with no material impact on its consolidated financial statements.

In June 2016, the FASB issued an ASU that supersedes the existing impairment model for most financial assets to a current expected credit loss model. The new guidance requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. The ASU also requires that credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses. The Company adopted this guidance effective January 1, 2020, with no material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of the adoption of the new guidance on its consolidated financial statements.

v3.20.1
Inventories
3 Months Ended
Mar. 31, 2020
Inventory Disclosure [Abstract]  
Inventories

Note 4. Inventories

Inventories consisted of the following:

March 31,

2020

December 31,

2019

U.S. $ in thousands

Finished goods

$

89,570

$

87,967

Work-in-process

2,271

3,106

Raw materials

 

80,670

 

77,431

 

 

172,511

 

168,504

v3.20.1
Fair Value Measurements
3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements

11


STRATASYS LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Note 8. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs that are developed using market data, such as publicly available information about actual events or transactions, and that reflect the assumptions that market participants would use when pricing the asset or liability. Unobservable inputs are inputs for which market data are not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability.

The fair value hierarchy is categorized into three Levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 inputs include inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Financial instruments measured at fair value

The following tables summarize the Company’s financial assets and liabilities that are carried at fair value on a recurring basis, in its consolidated balance sheets:

March 31, 2020

December 31, 2019

(U.S. $ in thousands)

Assets:

Foreign exchange forward contracts not designated as hedging instruments

$

579

$

63

Foreign exchange forward contracts designated as hedging instruments

1,558

315

 

Liabilities:

Foreign exchange forward contracts not designated as hedging instruments

(351

)

(388

)

Foreign exchange forward contracts designated as hedging instruments

 

(747

)

 

(326

)

$

1,039

 

$

(336

)

The Company’s foreign exchange forward contracts are classified as Level 2, as they are not actively traded and are valued using pricing models that use observable market inputs, including interest rate curves and both forward and spot prices for currencies (Level 2 inputs).

Other financial instruments consist mainly of cash and cash equivalents, current and non-current receivables, net investment in sales-type leases, bank loan, accounts payable and other current liabilities. The fair value of these financial instruments approximates their carrying values.

v3.20.1
Income Taxes (Details)
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Income Tax Disclosure [Abstract]    
Effective Income Tax Rate, Continuing Operations 1.10% 48.40%
v3.20.1
Goodwill and Other Intangible Assets (Schedule of Other Intangible Assets) (Details) - USD ($)
$ in Thousands
Mar. 31, 2020
Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 462,124 $ 461,799
Accumulated Amortization (380,601) (374,471)
Net Book Value 81,523 87,328
Developed technology [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 299,242 299,100
Accumulated Amortization (256,077) (252,136)
Net Book Value 43,165 46,964
Patents [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 15,552 15,142
Accumulated Amortization (7,421) (7,067)
Net Book Value 8,131 8,075
Trademarks and trade names [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 25,994 25,991
Accumulated Amortization (20,256) (19,966)
Net Book Value 5,738 6,025
Customer relationships [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 102,847 102,936
Accumulated Amortization (78,358) (76,813)
Net Book Value 24,489 26,123
Capitalized software development costs [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 18,489 18,630
Accumulated Amortization (18,489) (18,489)
Net Book Value $ 141
v3.20.1
Loss Per Share (Tables)
3 Months Ended
Mar. 31, 2020
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted Loss Per Share

The following table presents the numerator and denominator of the basic and diluted net loss per share computations for the three months ended March 31, 2020 and 2019:

Three months ended March 31,

2020

2019

In thousands, except per share amounts

Numerator:

 

Net loss attributable to Stratasys Ltd. for basic and diluted loss per share

$

(21,703

)

$

(2,270

)

Denominator:

Weighted average shares - denominator for basic and diluted net loss per share

54,544

53,966

 

Net loss per share attributable to Stratasys Ltd.

Basic

$

(0.40

)

$

(0.04

)

Diluted

$

(0.40

)

$

(0.04

)

v3.20.1
Revenues (Narrative) (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2020
Dec. 31, 2019
Revenue Recognition [Abstract]    
Revenue recognized $ 180  
Deferred revenue noncurrent portion 14,463 $ 16,039
Remaining performance obligations 908  
Expected remaining performance obligations recognized during next 12 months 744  
Expected remaining performance obligations recognized subsequent to next 12 months 120  
Expected remaining performance obligations recognized remainder thereafter 44  
Deferred sales commissions $ 40 $ 39
v3.20.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2020
Dec. 31, 2019
Current assets    
Cash and cash equivalents $ 297,177 $ 293,484
Short-term Deposits 28,300 28,300
Accounts receivable, net 115,093 132,558
Inventories 172,511 168,504
Prepaid expenses 7,327 6,567
Other current assets 25,424 29,659
Total current assets 645,832 659,072
Non-current assets    
Property, plant and equipment, net 191,534 189,706
Goodwill 385,409 385,658
Other intangible assets, net 81,523 87,328
Operating lease right-of-use assets 19,887 20,936
Other non-current assets 35,259 38,819
Total non-current assets 713,612 722,447
Total assets 1,359,444 1,381,519
Current liabilities    
Accounts payable 34,189 35,818
Accrued expenses and other current liabilities 33,750 28,528
Accrued compensation and related benefits 36,600 34,013
Deferred revenues 51,353 52,268
Operating lease liabilities - short term 9,254 9,292
Total current liabilities 165,146 159,919
Non-current liabilities    
Deferred revenues - long-term 14,463 16,039
Operating lease liabilities - long term 11,057 12,445
Other non-current liabilities 28,988 35,343
Total non-current liabilities 54,508 63,827
Total liabilities 219,654 223,746
Redeemable non-controlling interests 537 622
Equity    
Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 54,799 thousands shares and 54,441 thousands shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively 149 148
Additional paid-in capital 2,711,830 2,706,894
Accumulated other comprehensive loss (8,848) (7,716)
Accumulated deficit (1,563,878) (1,542,175)
Total equity 1,139,253 1,157,151
Total liabilities and equity $ 1,359,444 $ 1,381,519
v3.20.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Cash flows from operating activities    
Net loss $ (21,788) $ (2,313)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 12,457 12,700
Stock-based compensation 4,907 4,229
Foreign currency transaction loss (gain) 3,428 (210)
Deferred income taxes (409) (685)
Share in (profits) losses of associated companies 838 (1,423)
Other non-cash items, net 201 1,018
Change in cash attributable to changes in operating assets and liabilities:    
Accounts receivable, net 16,541 9,124
Inventories (5,659) (9,598)
Net investment in sales-type leases 400 1,052
Other current assets and prepaid expenses 3,119 (2,133)
Other non-current assets 902 (219)
Accounts payable (3,086) (2,805)
Other current liabilities 9,047 (5,172)
Deferred revenues (2,154) (781)
Other non-current liabilities (7,470) 1,820
Net cash provided by operating activities 11,274 4,604
Cash flows from investing activities    
Purchase of property and equipment (6,291) (6,114)
Net proceeds from divestitures of subsidiaries and associated companies 1,000
Investment in unconsolidated entities (310)
Proceeds from sale of plant and property   118
Purchase of intangible assets (413)
Other investing activities 206 577
Net cash used in investing activities (5,498) (5,729)
Cash flows from financing activities    
Repayment of debt (27,293)
Proceeds from exercise of stock options 30 2,222
Net cash used in financing activities 30 (25,071)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (2,116) 878
Net change in cash, cash equivalents and restricted cash 3,690 (25,318)
Cash, cash equivalents and restricted cash, beginning of period 293,597 393,734
Cash, cash equivalents and restricted cash, end of period 297,287 368,416
Supplemental disclosures of cash flow information:    
Transfer of inventory to fixed assets 832 1,028
Transfer of fixed assets to inventory $ 5 $ 97
v3.20.1
Equity (Schedule of Stock Option Activity) (Details)
3 Months Ended
Mar. 31, 2020
$ / shares
shares
Number of Options  
Options outstanding as of January 1, 2020 | shares 1,961,532
Granted | shares 300,000
Forfeited | shares (49,371)
Options outstanding as of March 31, 2020 | shares 2,212,161
Options exercisable as of March 31, 2020 | shares 1,625,889
Weighted Average Exercise Price  
Options outstanding as of January 1, 2020 | $ / shares $ 31.16
Granted | $ / shares 16.41
Forfeited | $ / shares 32.64
Options outstanding as of March 31, 2020 | $ / shares 29.13
Options exercisable as of March 31, 2020 | $ / shares $ 33.04