ROSH HA’AYIN, Israel, 05 July. 2022 (GLOBE NEWSWIRE) — Kornit Digital Ltd. (“Kornit” or “The Company”) (KRNT), a global market leader in sustainable digital on-demand fashionX and textile production technologies, today announced its preliminary results for the second quarter ended June 30, 2022. The information contained in this press release is approximate due to the preliminary nature of the announcement and remains subject to normal closing examination at the end of the term.
“The global recalibration of e-commerce growth, combined with macro headwinds that accelerated significantly in the final weeks of the quarter, as well as delays in the completion of customer production facilities, resulted in a pace significantly slower direct-garment (DTG) system orders in the second quarter 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 working with excess capacity built up throughout the two-year pandemic period, which we expect to continue in the short term. At the same time, based on our targeted R&D investments over the past few years, we are working with our customers and prospects on several significant growth initiatives, including the introduction of new products, upgrades and new applications. who we believe will open up new market opportunities and help drive additional demand in their businesses. We see significant post-pandemic opportunities with major brands and retailers shifting production from mass analog offshore production to near-shore, near-term production, and believe Kornit is well positioned to capitalize on these trends. .
Mr. Samuel concluded, “Kornit is an extremely strong company with a profitable business model, strong balance sheet, intimate client relationships and a global team of dedicated professionals. We believe the sector will continue its long-term secular growth and are confident in our ability to successfully navigate 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 regarding our second quarter results and operations on our upcoming earnings conference call in August. »
Preliminary results for the second quarter
Based on currently available information, for the second quarter ended June 30, 2022, the Company expects:
- Revenue is expected to be between $56.4 million and $59.4 million, net of the non-cash impact on warrants of approximately $4.6 million.
- Non-GAAP operating margin of -34% to -28% and Adjusted EBITDA margin of -30% to -24%, both net of non-cash warrant impact of approximately 10 %.
- The company currently expects third quarter revenue to match or exceed second quarter revenue and will provide further details regarding its business outlook when it releases its full financial results.
The Company has not yet completed the second quarter financial close and expects to release its full financial results for the second quarter ended June 30, 2022 on Wednesday, August 10, 2022, before market open.
About Kornit Digital
Kornit Digital (KRNT) is a global market leader in on-demand digital sustainable textile and fashion production technologies. The company writes the operating system of fashion with end-to-end solutions including digital printing systems, inks, consumables and a complete global ecosystem that manages workflows and fulfillment. Headquartered in Israel with offices in the United States, Europe, and Asia-Pacific, Kornit Digital serves customers in over one hundred countries and states 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 contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other United States securities laws. Forward-looking statements are characterized by the use of forward-looking terminology such as “will”, “expect”, “anticipate”, “continue”, “believe”, “should”, “intend” , “direction”, ” ,” “future”, “planned” or other words. Such forward-looking statements include, but are not limited to, statements relating to the Company’s objectives, plans and strategies, statements of results preliminary or projected operating or financial statements and all statements that address activities, events or developments that the Company intends, expects, projects, believes or anticipates will or may occur. 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 its experience and s a perception of historical trends, current conditions, expected future developments and other factors it deems 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 enhancements, including specifically the Company’s Poly Pro and Presto products; the extent of the Company’s ability to achieve large account sales with multi-system delivery plans; the Company’s degree of ability to fulfill orders for Kornit’s systems; the extent of the Company’s ability to continue to increase sales of Kornit’s systems, inks and consumables; the extent of the Company’s ability to benefit from building Kornit’s global infrastructure; the development of the digital textile printing market; the availability of alternative inks; competition; concentration of sales; changes in the Company’s relationships with suppliers; the extent of the company’s marketing success; the duration and severity of adverse macroeconomic trends triggered by the global COVID-19 pandemic, such as supply chain delays and inflationary pressures, which could potentially have a material adverse impact on operations, financial condition and the Company’s cash flows, and those of the Company’s customers and suppliers; and the additional factors referred to under “Risk Factors” in Item 3.D of the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2021, filed with the SEC on March 30, 2022. 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.
Disclosure of Non-GAAP Discussions
The non-GAAP financial measures presented consist of GAAP financial measures adjusted to exclude the impact of stock-based compensation expense, amortization of acquired and other intangible assets and impairment. The purpose of these adjustments is to provide an indication of the Company’s performance excluding non-cash charges and other items that management considers to be outside of the Company’s key operating results. These non-GAAP measures are among the primary factors used by management in planning and forecasting future periods. In addition, non-GAAP measures are regularly used internally to understand, manage and evaluate the Company’s business and to make operational decisions, and the Company believes they are useful to investors as a consistent and comparable measure of the continued performance of the Company’s business. . 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 conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP. In addition, these non-GAAP financial measures may differ materially from non-GAAP financial measures used by other companies.
The Company has reconciled Adjusted EBITDA to GAAP operating loss as net loss is not reasonably available at this time. The Company is currently finalizing its tax provision and finance charges for the second quarter and will provide a reconciliation to net loss as part of its August 10, 2022 earnings press release. The Company believes the information provided is useful to investors. as they can be viewed in the context of Kornit’s historical disclosures on this measure.
| ANNEX A(1)– Reconciliation of non-GAAP and GAAP measures expected for the second quarter of 2022 | ||||||||||||||||
| Quarter ended June 30, 2022 (unaudited) | ||||||||||||||||
| U.S. dollars to millions | As a % of turnover | |||||||||||||||
| Low end |
Top of the line |
Low end | Top of the line | |||||||||||||
| 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 other | 1.4 | 1.0 | 2.5 | 1.7 | ||||||||||||
| GAAP Business interruption | $ | (27.2 | ) | $ | (23.8 | ) | (48.1 | ) | % | (40.0 | ) | % | ||||
| (1) Net reconciliation measures of the impact of non-cash warrants of approximately $4.6 million | ||||||||||||||||
Contact Investor
Andrew G. Backman
Global Head of Investor Relations
[email protected]
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