Yoav Zeif and Jeffrey Graves, CEOs of Stratasys and 3D Systems respectively, both addressed ongoing merger discussions in the companies’ Q2 earnings calls on Wednesday.
“While we had hoped to be in a position to announce a deal with Stratasys today, we're not in a position to do so. However, with the end of the process in sight, we will see it through to its ultimate conclusion,” said Graves in the Q2 earnings call.
The July 13 proposal from 3D Systems is to acquire Stratasys for $7.50 in cash and 1.5444 newly issued shares of 3D Systems common stock per ordinary share of Stratasys. Previously, Stratasys announced that the company had entered into a merger agreement with Desktop Metal, to which Stratasys remains bound. In a July 28 statement, Stratasys said it will continue to abide by all of the terms and provisions of the Desktop Metal agreement.
“I want to be very clear. We have been meeting with and exchanging significant information with 3D (Systems) as part of our deciding if a 3D combination can result in a superior proposal to the one we signed with Desktop Metal. We have had a number of joint meetings and exchanges of information and have more already scheduled so we can arrive at an informed decision as soon as practical… We believe these things are best done privately and constructively,” Zeif said in the Stratasys earnings call.
Stratasys announced revenue of $159.8 million in its Q2 earnings call, compared to $166.6 million in Q2 2022. GAAP gross margin was 41.5%, compared to 40.5%, and non-GAAP gross margin was 48.5%, compared to 47.6%.
Stratasys also reported a GAAP operating loss of $33.7 million, which “includes one-time extraordinary costs related to prospective and potential mergers and acquisitions, defense against hostile tender offer, proxy contest and related professional fees.” That’s compared to an operating loss of $23.5 million in Q2 2022. The company reported a GAAP net loss of $38.6 million, or $0.56 per diluted share, compared to a net loss of $24.4 million, or $0.37 per diluted share.
3D Systems announced a Q2 revenue of $128.2 million compared to $140 million last year, citing expected weakness in the dental orthodontics markets. Last week, Desktop Metal announced Q2 revenue of $53.3 million, very similar to its Q2 2022 revenue of $57.7 million.
On Tuesday, following its 2023 annual meeting of shareholders, Stratasys shareholders voted to re-elect all eight of the company’s director nominees—S. Scott Crump; John J. McEleney; Dov Ofer; Ziva Patir; David Reis; Michael Schoellhorn; Yair Seroussi; Adina Shorr—to the company’s board of directors.
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