Stratasys Announces Board Authorization of $50 Million Share Repurchase Program

Rhea-AI Summary

Stratasys (Nasdaq: SSYS) has announced a $50 million share repurchase program authorized by its Board of Directors. This move is part of the company's strategy to maximize shareholder value and demonstrates confidence in its long-term growth prospects. The repurchase program complements Stratasys' ongoing restructuring efforts, which aim to generate $40 million in annual cost savings by Q1 2025. These initiatives include reducing the workforce by 15% and focusing on high-growth potential products. Stratasys is also implementing operational improvements and asset optimization to strengthen its balance sheet and drive cash generation. The share repurchases will be funded through existing cash and ongoing cash flow, with the timing and volume dependent on market conditions and other factors.

Positive

• Authorization of $50 million share repurchase program, potentially increasing shareholder value
• Expected $40 million annual cost savings from restructuring efforts starting Q1 2025
• Focus on high-growth potential products, materials, and software solutions
• Operational improvements and asset optimization to strengthen balance sheet and drive cash generation

Negative

• Workforce reduction of approximately 15% by the end of the year
• Potential short-term financial impact due to restructuring costs

Insights

Financial Analyst

Stratasys' $50 million share repurchase program signals management's confidence in the company's future prospects and commitment to shareholder value. This move, coupled with the $40 million annual cost savings from restructuring, demonstrates a strategic shift towards financial optimization. The 15% workforce reduction, while potentially challenging in the short term, aims to streamline operations and boost profitability. Investors should note that the repurchase program's execution will be tied to cash position and market conditions, indicating a cautious approach to capital allocation. This balanced strategy of cost-cutting, operational improvements and shareholder returns could potentially enhance Stratasys' financial health and stock performance in the medium to long term.

Market Research Analyst

Stratasys' decision to implement a share repurchase program amidst industry challenges reflects a strategic pivot towards value creation. The 3D printing market has faced headwinds and this move suggests Stratasys is adapting its strategy to current market dynamics. By focusing on high-growth potential products and solutions, the company is positioning itself to capture emerging opportunities in the evolving 3D printing landscape. The emphasis on cash flow generation and working capital improvement aligns with investor expectations in the current economic climate. This balanced approach of cost optimization and strategic reinvestment could potentially strengthen Stratasys' competitive position and appeal to value-oriented investors looking for companies with strong cash management practices.

Tech Expert

Stratasys' restructuring and share repurchase program highlight a pivotal moment in the 3D printing industry. The focus on high-growth potential products, materials and software solutions indicates a shift towards more specialized, high-value applications. This strategic realignment could position Stratasys to capitalize on emerging trends in additive manufacturing, such as industrial-scale production and advanced materials. The company's emphasis on operational improvements and asset optimization suggests a move towards a leaner, more agile business model. This could enhance Stratasys' ability to innovate and respond quickly to market demands. While the restructuring may pose short-term challenges, it could ultimately lead to a more robust and competitive Stratasys in the rapidly evolving 3D printing landscape.

Further Strengthens Company’s Commitment to Cash Flow Generation and Optimization

MINNEAPOLIS & REHOVOT, Israel--(BUSINESS WIRE)-- Stratasys Ltd. (Nasdaq: SSYS) (“Stratasys” or the “Company”), a leader in polymer 3D printing solutions, today announced that its Board of Directors has authorized a share repurchase program allowing for the repurchase of up to $50 million of its ordinary shares.

Dr. Yoav Zeif, Stratasys’ Chief Executive Officer, said, “We are committed to maximizing shareholder value and believe that maintaining a strong balance sheet and improving our working capital are critical elements of this effort. Our focus is on generating significantly higher profit and cash flow by driving revenue, aligning costs and reinvesting in growth initiatives. In addition, we intend to return value to shareholders through a share repurchase program that reflects the Board’s confidence in our strategy and ability to deliver long-term profitable growth. The program will be tied to our cash position and market conditions in order to ensure Stratasys retains financial strength and flexibility to support ongoing investment in the key growth areas of our business, while identifying and capturing additional value enhancing market opportunities.”

The authorization is part of a number of strategic actions the Company is taking to enhance shareholder value and builds upon its previously announced restructuring plan designed to maintain its industry leadership and better align with evolving market conditions. Stratasys’ previously announced restructuring efforts are expected to produce approximately $40 million in annual cost savings beginning in the first quarter of 2025. These initiatives include rightsizing the Company’s workforce by approximately 15% by the end of the year and enhancing its go-to-market strategy to focus on the highest growth potential products, materials and software solutions. In addition to these restructuring efforts, the Company continues to focus on operational improvements, efficiencies and asset optimization, including monetizing underutilized assets, to further strengthen its balance sheet and drive cash generation.

Under the Board-authorized repurchase plan, the Company’s ordinary shares may be repurchased from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with U.S. securities laws and regulations, including Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company may also, from time to time, enter into plans that are compliant with Rule 10b5-1 under the Exchange Act to facilitate repurchases of its shares under this authorization.

The actual timing, number, and value of shares to be repurchased will depend on a number of factors, including the market price of the Company’s ordinary shares, general market and economic conditions, the Company’s financial results and liquidity, and other considerations. The Company expects to fund repurchases with cash on its balance sheet and ongoing cash flow generation.

About Stratasys

Stratasys is leading the global shift to additive manufacturing with innovative 3D printing solutions for industries such as aerospace, automotive, consumer products, healthcare, fashion and education. Through smart and connected 3D printers, polymer materials, a software ecosystem, and parts on demand, Stratasys solutions deliver competitive advantages at every stage in the product value chain. The world’s leading organizations turn to Stratasys to transform product design, bring agility to manufacturing and supply chains, and improve patient care.

To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, X.com (formerly Twitter), LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including the Company’s websites, to share material, non-public information pursuant to the SEC’s Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.

Stratasys is a registered trademark and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other U.S. securities laws. Forward-looking statements are characterized by the use of forward-looking terminology such as “will,” “expects,” “anticipates,” “believes,” “intends,” “planned,” or other similar words. These forward-looking statements include, but are not limited to, statements relating to the Company’s objectives, plans and strategies, including with respect to the Company’s authorized share repurchase plan, statements regarding the Company’s results of operations and financial condition and all statements that address developments that the Company expects or anticipates will or may occur in the future. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. The Company has based these forward-looking statements on assumptions and assessments made by its management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. 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: potential objection to the share repurchase plan by the Company’s creditors and/or failure to receive Israeli court approval after any such objection; the Company’s degree of success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the impact of competition and new technologies; and those additional factors referred to under “Risk Factors” in Item 3.D of the Company’s Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 11, 2024. Any forward-looking statements in this press release are made as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240916552259/en/

Yonah Lloyd

CCO & VP Investor Relations

Yonah.Lloyd@stratasys.com

Source: Stratasys Ltd.

FAQ

What is the value of Stratasys' (SSYS) newly announced share repurchase program?

Stratasys (SSYS) has announced a $50 million share repurchase program authorized by its Board of Directors.

How much annual cost savings does Stratasys (SSYS) expect from its restructuring efforts?

Stratasys (SSYS) expects to achieve approximately $40 million in annual cost savings beginning in the first quarter of 2025 through its restructuring efforts.

What percentage of its workforce is Stratasys (SSYS) planning to reduce?

Stratasys (SSYS) is planning to reduce its workforce by approximately 15% by the end of the year as part of its restructuring efforts.

How will Stratasys (SSYS) fund the share repurchase program?

Stratasys (SSYS) expects to fund the share repurchases with cash on its balance sheet and ongoing cash flow generation.