Stratasys' Board of Directors has authorised a share repurchase program allowing for the repurchase of up to $50 million of its ordinary shares.
The company's stock value has fallen from around 14.00 USD at the start of the year to around 7.00 USD as of Friday September 13.
A share repurchase program is normally carried out by a company to increase shareholder value by diluting the number of shares. It at once returns cash to shareholders and makes shares more attractive to other investors.
Stratasys has said the share repurchase program is one a of a number of strategic actions it plans to take to enhance shareholder value and 'build upon its previously restructuring plan.' That restructuring plan will see 15% of the company's workforce made redundant, contributing to an approximate 40 million USD cost saving, and an enhanced go-to-market strategy to focus on the 'highest growth potential products, materials and software solutions.'
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.”
A Stratasys press release continued:
"Under the Board-authorised 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 authorisation.
"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."
