Stratasys, Inc. (SSYS) Q2 2012 Earnings Call August 1, 2012 8:30 a.m. ET Executives Shane Glenn - Director of Investor Relations Scott Crump - Chief Executive Officer, President and Chairman Robert Gallagher - Chief Financial Officer Analysts Troy Jensen - Piper Jaffray Tim Mulrooney - William Blair & Company Andrea James - Dougherty & Company Steve Dyer - Craig-Hallum Presentation Operator
These and another applicable factors are discussed in the presentation and in Stratasys’ filing with the Securities and Exchange Commission, including its report on Form 10-K for the year ended 12/31/2011 and subsequent filings. Any forward-looking statements included in this presentation are as of the date they are given, and Stratasys does not intend to update them if its views later change, except as maybe required by law. These forward-looking statements should not be relied upon as representing Stratasys’ views as of any date subsequent to the date they are given.The information discussed in this conference call includes financial results in accordance with accounting principles generally accepted in the United States, or GAAP. In addition, certain non-GAAP financial measures have been provided that exclude certain charges, expenses and income. The non-GAAP measures should be read in conjunction with the corresponding GAAP measures and should be considered in addition to and not as an alternative or substitute for the measures prepared in accordance with GAAP. The non-GAAP financial measures are provided in an effort to provide financial information that investors may deem relevant to evaluate results from the company's core business operations and to compare the company's performance with prior periods. The non-GAAP financial measures primarily identify and exclude certain discrete items, such as amortization expenses, expenses associated with stock-based compensation, and the expenses related to completing the proposed combination with Objet. The company uses these non-GAAP financial measures for evaluating comparable financial performance against prior periods. Now, I’d like to turn the call over to Scott Crump, CEO of Stratasys. Scott Crump Good morning, and thank you for joining us to discuss our financial results. We are very pleased with our second quarter performance. Total revenue expanded to a record $49.4 million for the second quarter, an increase of 31% over last year. Non-GAAP operating profit was also impressive increasing by 38% over last year, and we just raised our revenue and non-GAAP earnings guidance for 2012.
As we observed in the past several quarters, the second quarter benefitted from a strong sales of our higher margin Fortus 3D production systems which grew by 126% compared to last year. This strong performance in our Fortus line also helped drive impressive consumable revenue growth of 34% year-over-year during the second quarter. Consumable revenue continues to benefit from the expanding use of direct digital manufacturing applications which maintain relatively higher consumable utilization rate. We continue to believe the emerging market for DDM applications is at the beginning of a multi-secular growth opportunity.Orders for our revolutionary new Mojo 3D printer were strong during the quarter, following the new products introduction in May. Mojo revenue during the quarter was minimal given customer ships that didn’t commence until the final days of the quarter, according to our plan. We believe Mojo is an ideal product to combine with our new channel development initiatives deemed at growing the sales of our most affordable products. We have now recruited and trained 120 new sales agents that will focus on our most affordable products including our uPrint line and our new Mojo 3D printer. We also introduced an exciting new product within our Solidscape subsidiary, which I will discuss in more detail later in the call. And of course we are most excited about our announced plan to combine with Objet, a leading global manufacturer and distributor of 3D printing and rapid prototyping systems. We have made substantial progress in planning for the combined organization and remain on track for a third quarter closing of the transaction. Combing with Objet will expand our reach and provide a complementary product line that we can leverage into a rapidly growing market opportunity. Read the rest of this transcript for free on seekingalpha.com