3D Systems Corporation (NYSE:DDD) announced today its financial
results for the fourth quarter and full year ended December 31,
2019.
For the fourth quarter of 2019, the company
reported GAAP revenue of $164.6 million, compared to $180.7 million
in the same period last year. Printer revenue decreased by 22.8
percent due to the delay in factory metals printing shipments,
timing of large enterprise customer orders and the softer macro
industrial environment. Materials revenue increased 7.3 percent,
healthcare solutions revenue decreased 5.9 percent including a
large enterprise customer and decreased 2.3 percent excluding this
same customer, on demand services revenue decreased 17.2 percent
and software revenue decreased 10.2 percent. The company reported
fourth quarter 2019 GAAP loss of $0.04 per share compared to a GAAP
loss of $0.04 per share in the same period last year, and non-GAAP
earnings of $0.05 per share compared to non-GAAP earnings of $0.10
per share in the same period last year.
For the full year 2019, the company reported
GAAP revenue of $629.1 million compared to $687.7 million for the
prior year. Printer revenue decreased 24.3 percent, again due to
the delay in factory metals printing shipments, timing of large
enterprise customer orders and the softer macro industrial
environment. Materials revenue decreased 0.6 percent, healthcare
solutions revenue decreased 3.5 percent including a large
enterprise customer and increased 9.8 percent excluding this same
customer, on demand services revenue decreased 13.5 percent and
software revenue decreased 2.7 percent. The company reported full
year 2019 GAAP loss of $0.61 per share compared to a GAAP loss of
$0.41 per share in the prior year, and non-GAAP loss of $0.08 per
share compared to non-GAAP earnings of $0.15 per share in the prior
year.
"In 2019 we demonstrated how our digital
manufacturing strategy has come alive, with customers realizing the
benefits of our production solutions across a range of industries
and creating over 200 million production parts using 3D Systems’
solutions. Despite macroeconomic headwinds, I’m pleased with the
growth in materials in the second half and our continued focus on
cost structure," commented Vyomesh Joshi ("VJ"), president and
chief executive officer, 3D Systems. "Now in 2020 we believe we
have the right products and solutions, including our planned
shipment of factory metals printers in the second quarter, to
accelerate the adoption of additive manufacturing technology and
drive profitable revenue growth."
For the fourth quarter 2019, the company
reported GAAP gross profit margin of 43.6 percent compared to 45.7
percent in the same period last year. Non-GAAP gross profit margin
was 43.8 percent in the fourth quarter compared to 46.3 percent in
the same period last year.
For the full year, the company reported GAAP
gross profit margin of 44.2 percent compared to 47.2 percent in the
prior year. Non-GAAP gross profit margin was 45.0 percent for the
full year compared to 47.4 percent in the prior year.
For the fourth quarter of 2019, GAAP operating
expenses decreased 14.6 percent to $76.5 million compared to $89.6
million in the same period last year. GAAP SG&A expenses
decreased 10.3 percent to $59.3 million. GAAP R&D expenses
decreased 27.2 percent to $17.1 million. Non-GAAP operating
expenses in the fourth quarter decreased 12.3 percent to $66.4
million compared to $75.7 million in the same period last year, as
a result of execution of the company's cost reduction plans.
For the full year 2019, GAAP operating expenses
decreased 8.8 percent to $335.1 million compared to $367.6 million
in the prior year. GAAP SG&A expenses decreased 6.6 percent to
$254.4 million. GAAP R&D expenses decreased 15.2 percent to
$80.8 million. Non-GAAP operating expenses for the full year
decreased 9.0 percent to $280.3 million compared to $307.9 million
in the prior year, as a result of execution of the company's cost
reduction plans.
The company generated $21.5 million of cash from
operations during the fourth quarter. Cash generation was driven by
improvements in working capital, including planned reductions of
inventory.
The company had $133.7 million of unrestricted
cash on hand at December 31, 2019.
Q4 and FY 2019
Conference Call and WebcastThe company expects to file its
Annual Report on Form 10-K for the year ended December 31, 2019
with the Securities and Exchange Commission on February 26,
2020. 3D Systems plans to hold a conference call and simultaneous
webcast to discuss these results today, Wednesday,
February 26, 2020, which may be accessed as follows:
Date: Wednesday, February 26, 2020 Time:
4:30 p.m. Eastern TimeListen via webcast:
www.3dsystems.com/investorParticipate via telephone:
201-689-8345
A replay of the webcast will be available
approximately two hours after the live presentation at
www.3dsystems.com/investor.
Forward-Looking
StatementsCertain statements made in this release that are
not statements of historical or current facts are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of the company to
be materially different from historical results or from any future
results or projections expressed or implied by such forward-looking
statements. In many cases, forward looking statements can be
identified by terms such as “believes,” “belief,” “expects,” “may,”
“will,” “estimates,” “intends,” “anticipates” or “plans” or the
negative of these terms or other comparable terminology.
Forward-looking statements are based upon management’s beliefs,
assumptions and current expectations and may include comments as to
the company’s beliefs and expectations as to future events and
trends affecting its business and are necessarily subject to
uncertainties, many of which are outside the control of the
company. The factors described under the headings
“Forward-Looking Statements” and “Risk Factors” in the company’s
periodic filings with the Securities and Exchange Commission, as
well as other factors, could cause actual results to differ
materially from those reflected or predicted in forward-looking
statements. Although management believes that the expectations
reflected in the forward-looking statements are reasonable,
forward-looking statements are not, and should not be relied upon
as a guarantee of future performance or results, nor will they
necessarily prove to be accurate indications of the times at which
such performance or results will be achieved. The forward-looking
statements included are made only as the date of the statement. 3D
Systems undertakes no obligation to update or review any
forward-looking statements made by management or on its behalf,
whether as a result of future developments, subsequent events or
circumstances or otherwise.
Presentation of Information in this
Press ReleaseTo facilitate a better understanding of the
impact that strategic acquisitions, non-recurring charges and
certain non-cash expenses had on its financial results, the company
reported non-GAAP measures excluding the impact of amortization of
intangibles, non-cash interest expense, acquisition and severance
expenses, stock-based compensation expense, litigation settlements
and charges related to strategic decisions and portfolio
realignment. A reconciliation of GAAP to non-GAAP results is
provided in the accompanying schedule.
About 3D Systems3D Systems
provides comprehensive 3D products and services, including 3D
printers, print materials, on-demand manufacturing services and
digital design tools. Its ecosystem supports advanced applications
from the product design shop to the factory floor to the operating
room. 3D Systems’ precision healthcare capabilities include
simulation, Virtual Surgical Planning, and printing of medical and
dental devices as well as patient-specific surgical
instruments. As the originator of 3D printing and a shaper of
future 3D solutions, 3D Systems has spent its 30 year history
enabling professionals and companies to optimize their designs,
transform their workflows, bring innovative products to market and
drive new business models.
More information on the company is available
at www.3dsystems.com
Tables Follow
3D Systems
CorporationUnaudited Condensed Consolidated
Balance SheetsDecember 31, 2019 and December 31,
2018
(In thousands, except
par value) |
December 31, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
133,665 |
|
|
$ |
109,998 |
|
Accounts receivable, net of reserves — $8,762 (2019) and $8,423
(2018) |
109,408 |
|
|
126,618 |
|
Inventories |
111,106 |
|
|
133,161 |
|
Prepaid expenses and other current assets |
18,991 |
|
|
27,697 |
|
Total current assets |
373,170 |
|
|
397,474 |
|
Property and equipment, net
a |
92,940 |
|
|
107,718 |
|
Intangible assets, net |
48,338 |
|
|
68,275 |
|
Goodwill |
223,176 |
|
|
221,334 |
|
Right of use assets |
36,890 |
|
|
— |
|
Deferred income tax asset |
5,408 |
|
|
4,217 |
|
Other assets |
27,390 |
|
|
26,814 |
|
Total assets |
$ |
807,312 |
|
|
$ |
825,832 |
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of long term debt |
$ |
2,506 |
|
|
$ |
— |
|
Current right of use liabilities |
9,569 |
|
|
— |
|
Current portion of capitalized lease obligations |
— |
|
|
654 |
|
Accounts payable |
49,851 |
|
|
66,722 |
|
Accrued and other liabilities |
63,095 |
|
|
59,265 |
|
Customer deposits |
5,712 |
|
|
4,987 |
|
Deferred revenue |
32,231 |
|
|
32,432 |
|
Total current liabilities |
162,964 |
|
|
164,060 |
|
Long-term debt, net of
deferred financing costs |
45,215 |
|
|
25,000 |
|
Long-term right of use
liabilities |
35,402 |
|
|
— |
|
Long-term portion of
capitalized lease obligations |
— |
|
|
6,392 |
|
Deferred income tax
liability |
4,027 |
|
|
6,190 |
|
Other liabilities |
45,808 |
|
|
39,331 |
|
Total liabilities |
293,416 |
|
|
240,973 |
|
Redeemable noncontrolling
interests ("RNCI") |
— |
|
|
8,872 |
|
Commitments and
contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, $0.001 par value, authorized 220,000 shares; issued
121,266 (2019) and 118,650 (2018) |
120 |
|
|
117 |
|
Additional paid-in capital |
1,371,564 |
|
|
1,355,503 |
|
Treasury stock, at cost — 3,670 shares (2019) and 2,946 shares
(2018) |
(18,769 |
) |
|
(15,572 |
) |
Accumulated deficit |
(793,709 |
) |
|
(722,701 |
) |
Accumulated other comprehensive loss |
(37,047 |
) |
|
(38,978 |
) |
Total 3D Systems Corporation stockholders' equity |
522,159 |
|
|
578,369 |
|
Noncontrolling interests |
(8,263 |
) |
|
(2,382 |
) |
Total stockholders’ equity |
513,896 |
|
|
575,987 |
|
Total liabilities, redeemable
noncontrolling interests and stockholders’ equity |
$ |
807,312 |
|
|
$ |
825,832 |
|
(a) Prior year balance includes $4,466 of
capitalized lease assets accounted for under ASC 840.
3D Systems
CorporationUnaudited Condensed Consolidated
Statements of OperationsQuarter and Year Ended
December 31, 2019 and 2018
|
Quarter Ended December 31, |
|
Year Ended December 31, |
(in thousands, except
per share amounts) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenue: |
|
|
|
|
|
|
|
Products |
$ |
103,966 |
|
|
$ |
113,062 |
|
|
$ |
384,577 |
|
|
$ |
429,215 |
|
Services |
60,604 |
|
|
67,650 |
|
|
244,517 |
|
|
258,445 |
|
Total revenue |
164,570 |
|
|
180,712 |
|
|
629,094 |
|
|
687,660 |
|
Cost of sales: |
|
|
|
|
|
|
|
Products |
63,012 |
|
|
61,731 |
|
|
229,821 |
|
|
229,793 |
|
Services |
29,802 |
|
|
36,428 |
|
|
121,232 |
|
|
133,473 |
|
Total cost of sales |
92,814 |
|
|
98,159 |
|
|
351,053 |
|
|
363,266 |
|
Gross profit |
71,756 |
|
|
82,553 |
|
|
278,041 |
|
|
324,394 |
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
59,319 |
|
|
66,062 |
|
|
254,355 |
|
|
272,287 |
|
Research and development |
17,136 |
|
|
23,510 |
|
|
80,790 |
|
|
95,298 |
|
Total operating expenses |
76,455 |
|
|
89,572 |
|
|
335,145 |
|
|
367,585 |
|
Loss from operations |
(4,699 |
) |
|
(7,019 |
) |
|
(57,104 |
) |
|
(43,191 |
) |
Interest and other (expense)
income, net |
(1,222 |
) |
|
(1,172 |
) |
|
(7,996 |
) |
|
(37 |
) |
Loss before income taxes |
(5,921 |
) |
|
(8,191 |
) |
|
(65,100 |
) |
|
(43,228 |
) |
Benefit (provision) for income
taxes |
1,260 |
|
|
4,051 |
|
|
(4,532 |
) |
|
(2,035 |
) |
Net loss |
(4,661 |
) |
|
(4,140 |
) |
|
(69,632 |
) |
|
(45,263 |
) |
Less: net income attributable
to noncontrolling interests |
53 |
|
|
(4 |
) |
|
248 |
|
|
242 |
|
Net loss attributable to 3D
Systems Corporation |
$ |
(4,714 |
) |
|
$ |
(4,136 |
) |
|
$ |
(69,880 |
) |
|
$ |
(45,505 |
) |
|
|
|
|
|
|
|
|
Net loss per share available
to 3D Systems Corporation common stockholders - basic and
diluted |
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.61 |
) |
|
$ |
(0.41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3D Systems
CorporationUnaudited Condensed Consolidated
Statements of Cash FlowsYear Ended December 31,
2019 and 2018
|
Year Ended December 31, |
(in
thousands) |
2019 |
|
2018 |
Cash flows from operating
activities: |
|
|
|
Net loss |
$ |
(69,632 |
) |
|
$ |
(45,263 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
50,396 |
|
|
59,293 |
|
Stock-based compensation |
23,587 |
|
|
29,253 |
|
Provision for bad debts |
1,308 |
|
|
1,824 |
|
Loss on the disposition of property, equipment and other
assets |
2,282 |
|
|
— |
|
Provision for deferred income taxes |
(3,354 |
) |
|
(2,990 |
) |
Impairment of assets |
1,728 |
|
|
1,998 |
|
Changes in operating accounts: |
|
|
|
Accounts receivable |
15,071 |
|
|
599 |
|
Inventories |
18,447 |
|
|
(34,035 |
) |
Prepaid expenses and other current assets |
9,150 |
|
|
40,922 |
|
Accounts payable |
(16,846 |
) |
|
11,559 |
|
Deferred revenue and customer deposits |
677 |
|
|
(2,383 |
) |
Accrued and other current liabilities |
960 |
|
|
(47,851 |
) |
All other operating activities |
(2,193 |
) |
|
(8,130 |
) |
Net cash provided by operating activities |
31,581 |
|
|
4,796 |
|
Cash flows from investing
activities: |
|
|
|
Purchases of property and equipment |
(23,985 |
) |
|
(40,694 |
) |
Proceeds from sale of assets |
1,620 |
|
|
333 |
|
Purchase of noncontrolling interest |
(2,500 |
) |
|
— |
|
Other investing activities |
(2,007 |
) |
|
(1,466 |
) |
Net cash used in investing activities |
(26,872 |
) |
|
(41,827 |
) |
Cash flows from financing
activities: |
|
|
|
Proceeds from borrowings |
100,000 |
|
|
25,000 |
|
Repayment of borrowings/long term debt |
(76,768 |
) |
|
— |
|
Payments related to net-share settlement of stock based
compensation |
(3,194 |
) |
|
(7,367 |
) |
Payments on earnout consideration |
— |
|
|
(2,675 |
) |
Other financing activities |
(1,338 |
) |
|
(694 |
) |
Net cash provided by financing activities |
18,700 |
|
|
14,264 |
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
289 |
|
|
(3,145 |
) |
Net increase (decrease) in
cash, cash equivalents and restricted cash |
23,698 |
|
|
(25,912 |
) |
Cash, cash equivalents and
restricted cash at the beginning of the period a |
110,919 |
|
|
136,831 |
|
Cash, cash equivalents and
restricted cash at the end of the period a |
$ |
134,617 |
|
|
$ |
110,919 |
|
(a) The amounts for cash and cash equivalents
shown above include restricted cash of $952 and $921 as of December
31, 2019 and 2018, respectively, which were included in other
assets, net in the condensed consolidated balance sheets.
3D Systems
CorporationLoss Per ShareQuarter
and Year Ended December 31, 2019 and 2018
|
Quarter Ended December 31, |
|
Year Ended December 31, |
(in thousands, except
per share amounts) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Numerator for basic and
diluted net loss per share: |
|
|
|
|
|
|
|
Net loss attributable to 3D Systems Corporation |
$ |
(4,714 |
) |
|
$ |
(4,136 |
) |
|
$ |
(69,880 |
) |
|
$ |
(45,505 |
) |
|
|
|
|
|
|
|
|
Denominator for basic and
diluted net loss per share: |
|
|
|
|
|
|
|
Weighted average shares |
114,476 |
|
|
113,016 |
|
|
113,811 |
|
|
112,327 |
|
|
|
|
|
|
|
|
|
Net loss per share - basic and
diluted |
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.61 |
) |
|
$ |
(0.41 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3D Systems
CorporationUnaudited Reconciliations of GAAP to
Non-GAAP MeasuresQuarter and Year Ended December
31, 2019 and 2018
|
Quarter Ended December 31, |
|
Year Ended December 31, |
(in millions, except
per share amounts) |
2019 |
|
2018 |
|
2019 |
|
2018 |
GAAP Net loss attributable to 3D Systems Corporation |
$ |
(4.7 |
) |
|
$ |
(4.1 |
) |
|
$ |
(69.9 |
) |
|
$ |
(45.5 |
) |
Adjustments: |
|
|
|
|
|
|
|
Amortization, stock-based compensation & other (1) |
8.2 |
|
|
13.9 |
|
|
43.9 |
|
|
58.7 |
|
Legal, acquisition and divestiture related (2) |
0.5 |
|
|
0.1 |
|
|
7.4 |
|
|
(2.0 |
) |
Cost optimization plan, including severance costs (3) |
0.7 |
|
|
1.5 |
|
|
7.7 |
|
|
4.0 |
|
Impairment of cost-method investments (4) |
0.9 |
|
|
— |
|
|
1.2 |
|
|
1.4 |
|
Non-GAAP net income
attributable to 3D Systems Corporation |
$ |
5.5 |
|
|
$ |
11.4 |
|
|
$ |
(9.6 |
) |
|
$ |
16.5 |
|
Non-GAAP net income per share
available to 3D Systems common stock holders - basic and diluted
(5) |
$ |
0.05 |
|
|
$ |
0.10 |
|
|
$ |
(0.08 |
) |
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
(1) For the quarter ended December 31, 2019, the
adjustment included $0.1 in COGS and $8.1 in SG&A. For the
quarter ended December 31, 2018, the adjustment included $(0.2) in
COGS and $14.1 in SG&A. For the year ended December 31, 2019,
the adjustment included $0.4 in COGS and $43.4 in SG&A. For the
year ended December 31, 2018, the adjustment included $0.1 in COGS
and $58.6 in SG&A.(2) For the quarter ended December 31, 2019,
the adjustment included $0.1 in COGS and $1.4 in SG&A . For the
year ended December 31, 2019, the adjustment included $(2.8) in
Revenues, $4.1 in COGS, $5.5 in SG&A, and $0.7 in other income
(expense). For the quarter ended December 31, 2018 the adjustment
included $0.6 in COGS,$(1.0) in SG&A, and $0.5 in other income
(expense) and for the year ended December 31, 2018, the
adjustment included $0.6 in COGS, in SG&A $(1.7) and $(0.9) in
other income (expense).(3) For the quarter ended December 31, 2019,
the adjustment included $0.6 in SG&A. For the quarter ended
December 31, 2018, the adjustment included $0.7 in COGS and $0.8 in
SG&A. For the year ended December 31, 2019, the adjustment
included $1.8 in COGS, $5.6 in SG&A and $0.3 in R&D. For
the year ended December 31, 2018, the adjustment included $1.1 in
COGS, $2.4 in SG&A and $0.5 in R&D. (4) For the
quarter and year ended December 31, 2019 the adjustment included
$0.9 and $1.2 in interest and other income (expense), net,
respectively. For the year ended December 31, 2018, the adjustment
included $1.4 in interest and other income (expense), net.(5)
Denominator based on weighted average shares used in the GAAP EPS
calculation.
* Tables may not foot due to rounding; amounts
calculated based on dollars in thousands.
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