A non-cash charge-off of stock for HP prevented Stratasys from posting a first quarter profit. But the deal will soon pay back for the market leader in additive manufacturing equipment.
Stratasys, Inc. (NASDAQ: SSYS) reported revenue of $23.0 million for the first quarter ended March 31, 2010. This figure includes a $5.0 million non-cash charge against revenue, for the fair value of the warrant issue to HP for 500,000 shares of Stratasys stock, in connection with their new distribution deal.
A row of Fortus high-end 3D production systems at Stratasys' RedEye service bureau. Photo courtesy Stratasys.
Excluding the charge, revenue would have been $28 million, up 21% from the first quarter of 2009. System shipments totaled 610 units for the first quarter of 2010, as compared with 591 for the same period last year.
The company reported a net loss of $443,000 for the first quarter, compared to a net loss of $704,000 for the same period last year. Without the charge for HP stock, Stratasys would have reported net income of $2.9 million.
Sales were led by a 140% revenue increase from the high-end Fortus 3D production systems. Product revenue in 1Q10 were $21.8 million, up from $17 million a year earlier.
Services revenue in 1Q10 was $6.2 million, flat when compared to 1Q-2009.
Consumable revenue grew by 22% during the quarter; CEO Scott Crump believe it could be a leading indicator of a sustainable growth trend.
Cash per share on March 31, 2010 was $3.30.
The Final Analysis
These results are mostly about the larger economic recovery in manufacturing than about any specific moves made by Stratasys. The one-quarter hit on revenue for the HP deal will pay back quickly as sales volume increases. The first shipment for HP started a few days before the end of the quarter.
During the quarter Stratasys also launched a new product, an eco-friendly, automated support removal system for the uPrint line called WaveWash. The new product platform is relatively office friendly; Stratasys says it will improve upon the whole product experience for uPrint customers “by providing a hands-free process to dissolve support material.” Anything to help make 3D printing less like science class is a welcome change.
