ROSH HA’AYIN, Israel, July 5, 2022 (GLOBE NEWSWIRE) — Kornit Digital Ltd. (“Kornit” or the “Company”) (Nasdaq: KRNT), a global market leader in sustainable digital on-demand fashionX and textile manufacturing technology, today announced preliminary results for the second quarter ended June 30, 2022. The information in this press release is approximate due to the preliminary nature of the announcement and remains subject to normal quarter-end review.
“The overall recalibration of e-commerce growth, combined with macro headwinds that accelerated significantly in the last few weeks of the quarter, as well as delays in the completion of customer manufacturing facilities, resulted in a significantly slower pace of direct-to-order apparel (DTG) in the second quarter in compared to our previous expectations,” said Ronen Samuel, CEO of Kornit Digital.
Mr Samuel continued: “We have entered a period where some of our customers are running on excess capacity that was built up during the two-year pandemic period, which we expect to continue in the near future. At the same time, based on our focused research and development investments over the past several years, we are working with our customers and prospects on several significant growth initiatives, including new product introductions, upgrades and new applications that we believe will open up new addressable markets. and help drive increased demand in their businesses. We see significant opportunities post-pandemic with major brands and retailers shifting production from mass analog off-shore production to short-term near-shore production, and we believe Kornit is well-positioned to capitalize on these trends.”
Mr. Samuel concluded: “Kornit is an extremely strong company with a profitable business model, a strong balance sheet, intimate customer relationships and a dedicated global team of professionals. We believe the industry will continue its long-term secular growth and are confident in our ability to successfully manage this near-term volatility. We remain committed to profitable growth and will continue to lead the digital transformation of the industry. We look forward to providing additional updates on our second quarter results and operations at our next earnings conference call in August.”
Preliminary results for the second quarter
Based on currently available information, for the second quarter ending June 30, 2022, the Company expects:
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Revenues will be in the range of $56.4 million to $59.4 million, excluding the impact of a non-cash order of approximately $4.6 million.
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Non-GAAP operating margin between -34% and -28% and adjusted EBITDA margin between -30% to -24%, both excluding the impact of a non-cash guarantee of approximately 10%.
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The company currently expects third-quarter revenue to be at or above second-quarter revenue and will provide additional details on its business outlook when it releases its full financial results.
The company has not yet completed its second quarter financial close and plans to release full financial results for the second quarter ended June 30, 2022, on Wednesday, August 10, 2022, before the market opens.
About Kornit Digital
Kornit Digital (NASDAQ: KRNT) is a world market leader in sustainable technologies for digital fashion and on-demand textile manufacturing. The company writes an operating system for fashion with end-to-end solutions including digital printing systems, inks, consumables and an entire global ecosystem that manages workflows and fulfillment. Headquartered in Israel with offices in the US, Europe and Asia Pacific, Kornit Digital serves customers in more than a hundred countries and territories around the world. To learn more about how Kornit Digital is boldly transforming the world of fashion and textiles, visit www.kornit.com.
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 US securities laws. Forward-looking statements are characterized by the use of forward-looking terminology such as “will,” “expects,” “anticipates,” “continue,” “believes,” “should,” “intends,” “guidelines,” ” preliminary “,” “future,” “planned” or other words. These forward-looking statements include, but are not limited to, statements related to the Company’s goals, plans and strategies, statements about preliminary or anticipated business results or financial condition and any statements related to activities, events or developments that the Company intends, expects , projects, believes or predicts 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 estimates made by management in light of their experience and perception of historical trends, current conditions, expected future developments and other factors it believes 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 others: the company’s degree of success in developing, introducing and selling new or improved products and product improvements, including in particular Poly The company’s Pro and Presto products; the extent of the Company’s ability to achieve sales to large accounts with multi-system delivery plans; the extent of the Company’s ability to fulfill orders for Kornit’s systems; the extent of the Company’s ability to continue to increase sales of Kornit systems, inks and consumables; the extent of the Company’s ability to leverage Kornit’s global infrastructure; development of the market of digital printing on textiles; availability of alternative ink; competition; sales concentration; changes in the Company’s relationships with suppliers; the degree of success of the Company in marketing; the duration and severity of adverse macroeconomic trends caused by the global COVID-19 pandemic, such as supply chain delays and inflationary pressures, which could potentially significantly adversely affect the Company’s operations, financial position and cash flows, and the Company’s customers and suppliers; and those additional factors set forth under “Risk Factors” in Item 3.D of the Company’s Annual Report on Form 20-F for the year ended December 31, 2021, filed with the SEC on March 30, 2022. All forward-looking statements in this release made to the public as of the date of this publication, whether as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Discussion Discussion Disclosure
Non-GAAP financial measures presented consist of GAAP financial measures adjusted to exclude the impact of stock-based compensation expense, amortization of acquired intangible assets and other and amortization. The purpose of such adjustments is to provide an indication of the Company’s performance excluding non-cash expenses and other items that management believes are outside of the Company’s core business results. These non-GAAP measures are among the primary factors used by management in planning and forecasting future periods. Furthermore, non-GAAP measures are regularly used internally to understand, manage and evaluate the Company’s business and make operating decisions, and the Company believes that they are useful to investors as a consistent and comparable measure of the Company’s ongoing business performance. . However, the Company’s non-GAAP financial measures are not intended to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in connection with the Company’s consolidated financial statements prepared in accordance with GAAP. In addition, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
The Company has reconciled Adjusted EBITDA to GAAP operating loss because net loss is not reasonably available at this time. The company is currently finalizing its provisions for taxes and financial charges for the second quarter and will provide a reconciliation to the net loss in connection with its August 10, 2022 press release. The Company believes that the information provided is useful to investors as it can be considered in the context of Kornit’s historical announcement of this measure.
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APPENDIX A(1)– Reconciliation of expected non-GAAP measures to GAAP for the second quarter of 2022. |
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Three months ended June 30, 2022 (unaudited) |
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US dollars in millions |
As a percentage of revenue |
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|
Low End of Range |
High End of Range |
Low End of Range |
High End of Range |
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|
Adjusted EBITDA |
$ |
(17.2 |
) |
$ |
(14.4 |
) |
(30.4 |
) |
% |
(24.2 |
) |
% |
||||
|
Depreciation |
2.1 |
2.4 |
3.7 |
4.0 |
||||||||||||
|
Non-GAAP operating loss |
$ |
(19.3 |
) |
$ |
(16.8 |
) |
(34.1 |
) |
% |
(28.2 |
) |
% |
||||
|
Stock-based compensation |
6.5 |
6.0 |
11.5 |
10.1 |
||||||||||||
|
Amortization of intangible assets and others |
1.4 |
1.0 |
2.5 |
1.7 |
||||||||||||
|
GAAP operating loss |
$ |
(27.2 |
) |
$ |
(23.8 |
) |
(48.1 |
) |
% |
(40.0 |
) |
% |
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(1) Reconciliation measures without impact on non-cash guarantees of approximately $4.6 million |
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Investor contact
Andrew G. Backman
Global Head of Investor Relations
andrew.backman@kornit.com
