Stratasys, Inc. (NASDAQ:SSYS) today announced second quarter financial results.
The company reported record revenue of $37.6 million for the second quarter ended June 30, 2011, compared to $30.1 million reported for the same period in 2010.
The second quarter results include two months of contribution from the company’s acquisition of Solidscape, Inc. The acquisition was completed in April of this year and contributed $2.1 million in revenue to the second quarter results. Excluding the contribution made by Solidscape, revenue was $35.5 million, an 18% increase over the same period last year.
System shipments, excluding Solidscape, totaled a record 690 units for the second quarter of 2011, compared to 682 units for the same period last year.
The company reported net income of $4.0 million for second quarter, or $0.18 per share, compared to net income of $2.3 million, or $0.11 per share, for the same period last year.
Non-GAAP net income, which excludes certain discrete items and stock-based compensation expense, was $5.0 million for the second quarter, or $0.23 per share, representing a 95% increase over the non-GAAP net income of $2.6 million, or $0.12 per share, for the same period last year.
Non-GAAP net income for the second quarter of 2011 excludes discrete items associated with the acquisition of Solidscape. These items amounted to $840,000 net of tax, or $0.04 per share. Non-GAAP net income for the second quarter of 2011 also excludes the impact of stock-based compensation expense, which amounted to $212,000 net of tax, or $0.01 per share.
The company reported revenue of $71.9 million for the six-month period ended June 30, 2011, compared to $53.1 million reported for the same period in 2010.
The six-month period in 2010 included a $5.0 million one-time non-cash charge against revenue. The charge against revenue was taken in the first quarter of 2010 and represents the fair value of a warrant issued to HP in connection with the distribution agreement signed in January 2010. Excluding the warrant charge in 2010 and the revenue generated by the company’s acquisition of Solidscape in 2011, revenue for the six-month period was $69.8 million, a 20% increase over the $58.1 million for the same period in 2010.
System shipments, excluding Solidscape, totaled 1,257 units for the six-month period in 2011, compared to 1,291 units for the same period last year.
The company reported net income of $9.0 million for the six-month period, or $0.41 per share, compared to net income of $1.9 million, or $0.09 per share, for the same period last year.
Non-GAAP net income, which excludes the warrant charge, discrete items and stock-based compensation expense, was $9.5 million or $0.44 per share for the six-month period of 2011, compared to non-GAAP net income of $5.5 million or $0.26 per share for the same period last year.
Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of this press release. The table provides itemized detail of the non-GAAP financial measures.
“Our record second quarter results reflect strong growth in Fortus system sales and consumable revenue,” said Scott Crump, chairman and chief executive officer of Stratasys. “The growth in these higher margin products, as well as a continued favorable product mix within 3D printing, contributed to significant margin expansion during the period. These factors combined to generate the highest level of quarterly operating profit in our company’s history.
“We continue to make incremental progress in expanding our agreement with HP for the sale and distribution of our proprietary 3D printers. We are pleased to report that we have mutually renewed the agreement for another year. In addition, HP plans to expand into new European markets beyond the five countries they currently serve later this year. Stratasys and HP continue to see a significant market opportunity within 3D printing and both parties remain committed to our collaboration.
“The full potential and ultimate success of our collaboration with HP will require sales and marketing programs that go beyond current commitments. Although we currently have no commitments from HP that the collaboration will expand beyond new European markets later this year, we believe HP can become the ideal partner to grow the sales of our 3D printers. Consequently, while we remain committed to the HP collaboration, we also intend to accelerate independent channel development strategies.
“Fortus system sales sustained strong momentum in the second quarter, expanding by 67% over last year. The growing expertise of our team in marketing the direct digital manufacturing, or DDM, capabilities of our Fortus line have been instrumental in this expansion. We believe the recent launch of the Fortus 250mc will add to this strategy with a product that combines the higher functionality of a Fortus 3D production system with the ease-of-use and affordability of a Dimension 3D printer. Initial bookings of the Fortus 250mc have been strong.
“Consumable revenue grew to a record level in the second quarter, increasing by 20% over last year. Our Fortus line is driving this growth, propelled by an expanding base of systems and the product line’s relatively higher utilization rates, particularly within DDM. We believe our recent introduction of a revolutionary new FDM material will create new DDM opportunities within the electronics industry. The new material, called ABS-ESD7, eliminates static electricity, which can be potentially damaging during the manufacture of sensitive electronic components. With our new material, manufacturers can now make static-free assembly aids and fabrication tools that improve the performance of their manufacturing processes.
“The acquisition of Solidscape was accretive to earnings for the second quarter after excluding any one-time charges and non-recurring expenses associated with closing the transaction. The acquisition adds to our strategy of expanding into DDM applications, as the subsidiary is well positioned for manufacturing applications serving the custom jewelry market. However, as we further develop the technology, we are more excited about the new opportunities that Solidscape provides within a broader set of industrial applications.
“We were pleased to see our leadership position within the additive manufacturing industry reconfirmed in the recently released Wohlers Report 2011. The report indicated that Stratasys had a 41 percent unit market share in 2010, and has maintained a market leading position for nine consecutive years. We believe our position within the industry will be strengthened over the coming quarters as we execute on our new product roadmap and further develop our channel with HP and our independent reseller network.
“We remain encouraged by the positive trends within our business and we begin the third quarter with an active pipeline of opportunities. In addition to our distribution agreement with HP, we are moving forward on new product and distribution initiatives, which we believe will greatly expand our sales. We are observing attractive growth opportunities on multiple fronts and look forward to a successful year,” Crump concluded.
Stratasys plans to hold a conference call to discuss its second quarter financial results on Wednesday, July 27, 2011 at 8:30 a.m. (ET).
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