Stratasys Ltd. — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone fourth-quarter filing; quarterly Q4 results are not clearly provided in the supplied filing text. Figures are U.S. dollars unless stated otherwise.
Business context
Stratasys develops and sells polymer-based 3D printing systems, consumables, software and services, including on-demand printed parts. Its strategy emphasizes production and manufacturing applications. The company acquired RPS in February 2021 and acquired the remaining 55% of Xaar 3D in November 2021; it had acquired Origin in December 2020. Stratasys reported one operating segment and approximately 2,039 full-time-equivalent employees at year-end.
Financial results and liquidity
| Metric | FY2021 | FY2020 | Change / context |
|---|---|---|---|
| Revenue | $607.2 million | $520.8 million | Up 16.6%; 2021 remained below 2019 revenue of $636.1 million |
| Product revenue | $417.6 million | $339.8 million | Up 22.9%; systems revenue rose 32.3%, consumables 15.3% |
| Services revenue | $189.7 million | $181.0 million | Up 4.8% |
| Gross profit / margin | $260.1 million / 42.8% | $219.4 million / 42.1% | Margin improved 0.7 percentage points |
| Operating loss | $79.2 million | $456.0 million | Improved largely because 2020 included a $386.2 million goodwill impairment |
| Net loss attributable to Stratasys | $62.0 million; $0.98 per share | $443.7 million; $8.08 per share | Loss narrowed substantially; 2021 included a $14.4 million Xaar step-acquisition gain |
| Operating cash flow | $35.8 million | $27.8 million | Positive in both years |
| Cash, cash equivalents and restricted cash | $243.3 million | $272.2 million | Down $28.9 million |
| Cash, cash equivalents and short-term deposits | Approximately $502.2 million | Not stated on a comparable basis here | Includes $259.0 million of short-term bank deposits |
| Debt | No debt reported | No debt reported | Company stated it ended 2021 with no debt |
Operating expenses were $339.2 million, including $250.9 million of selling, general and administrative expense and $88.3 million of R&D. Excluding the prior-year goodwill impairment, operating expenses increased, reflecting renewed operations, acquisitions and other costs. The 2021 net loss also reflected higher acquired-intangible amortization and operating costs.
Current assets were $800.7 million and current liabilities $210.5 million at year-end. Investing activities used $291.2 million, including $232.0 million net investment in short-term bank deposits, $25.0 million for property and equipment, and cash used for acquisitions and investments. Financing activities provided $227.3 million, primarily from a March 2021 share offering that raised $218.9 million net. Shares outstanding increased to 65.7 million from 56.6 million at year-end 2020.
Material changes versus the prior comparable period
- Revenue recovered 16.6% from pandemic-affected 2020, led by systems and consumables; regional revenue increased in the Americas, EMEA and Asia Pacific.
- Total gross margin rose to 42.8% from 42.1%; product gross margin was nearly flat at 49.5% versus 49.6% amid logistics, raw-material and new-product ramp-up costs.
- Net loss narrowed from $443.7 million to $62.0 million, principally because 2020 included the $386.2 million goodwill impairment. The 2021 result included the Xaar acquisition gain.
- Stratasys issued shares in a follow-on offering, increasing weighted-average shares to 63.5 million from 54.9 million and providing substantial financing proceeds.
- Acquisitions expanded the product portfolio and added goodwill and intangible assets. Goodwill was $65.1 million at year-end versus $35.7 million a year earlier; no goodwill impairment was recorded in 2021.
Outlook, risks and unusual items
- Outlook: The filing provides no quantified FY2022 revenue or earnings guidance. It says the company had returned to limited guidance in 2021 after suspending quarterly and annual guidance in 2020. Management described recovery as positive but noted continuing uncertainty around COVID-19, economic conditions and customer behavior.
- Operations and supply chain: Freight delays, component availability, higher input and shipping costs, and reliance on certain single-source suppliers—including Ricoh for PolyJet printer heads—could constrain deliveries or pressure margins.
- Acquisition obligations: Potential future contingent payments related to Origin, RPS and Xaar could total up to $63.7 million. The balance sheet reports $53.5 million of contingent consideration. Amount and timing depend on future conditions; Xaar also carries potential royalties on sales for up to 15 years.
- Currency and taxes: The company identified exposure to shekel and euro movements and used foreign-exchange hedges. It waived its Approved/Beneficiary Enterprise regime beginning in tax year 2021 and was assessing eligibility for Israeli technology-enterprise tax benefits. Tax benefits and deferred tax asset realization remain uncertain.
- Other risks: Competition and product acceptance, dependence on recurring consumables and service revenue, margin effects from product mix, talent retention and wage inflation, cybersecurity, intellectual-property disputes, and political or security conditions in Israel.
- Legal and audit matters: The company recorded a provision for a preliminary settlement of a U.S. employee-related matter reached in Q4 2021; the amount is not clearly stated in the filing text. The auditor identified Xaar purchase-price allocation as a critical audit matter because of judgment in valuing acquired technology and contingent consideration. The audit opinion was unqualified, and management and the auditor reported effective internal control over financial reporting.
- Shareholder returns: Stratasys does not anticipate cash dividends in the foreseeable future. The filing also says a Bank of America credit agreement restricts dividends, although the filing states the company had no debt at year-end.
Most important facts for investors to verify
- Check the audited financial statements and acquisition disclosures for the final Xaar and RPS purchase-price allocations, contingent consideration and any subsequent remeasurement.
- Reconcile the reported $243.3 million of cash and restricted cash with approximately $502.2 million of cash, cash equivalents and short-term deposits, including deposit availability and maturities.
- Assess whether revenue recovery, system growth and consumables growth continued after 2021, and whether margin improvement persisted despite cost pressures.
- Review the share offering’s dilution alongside the use of proceeds, acquisition spending and any further equity issuance.
- Monitor delivery and ramp-up of Origin, Neo and SAF/H350 products, and determine whether acquired technologies contribute as expected.
- Review the employee settlement provision, potential acquisition payments and royalties, Israeli tax-benefit status, and any updates to material legal or regulatory contingencies.