Materialise NV (NASDAQ:MTLS), a leading provider of additive
manufacturing and medical software and of sophisticated 3D printing
services, today announced its financial results for the first
quarter ended March 31, 2020.
Highlights – First Quarter 2020
- Total revenue decreased 1.8% to 46,245 kEUR for the first
quarter of 2020 compared to the 2019 period, despite continued
revenue growth in our Materialise Software and Materialise Medical
segments of 5.0% and 15.3%, respectively.
- Total deferred revenues from annual software sales and
maintenance fees increased 2,037 kEUR to 29,703 kEUR compared to
December 31, 2019.
- Adjusted EBITDA decreased 38.2% to 3,603 kEUR for the first
quarter of 2020 compared to the 2019 period.
- Net loss for the first quarter of 2020 was (2,853) kEUR, or
(0.05) EUR per diluted share, compared to (304) kEUR, or (0.01) EUR
per diluted share, for the 2019 period.
- Total cash was 127,135 kEUR at the end of the quarter; net cash
was 2,433 kEUR, an increase of 1,474 kEUR compared to December 31,
2019.
Executive Chairman Peter Leys commented, “Fiscal 2020 began with
unexpected challenges for businesses worldwide as a result of the
COVID-19 virus. Materialise still performed relatively well during
the first quarter as sales began to be negatively impacted only
towards the end of the quarter. With the subsequent spread of the
COVID-19 crisis and the increased disruption to the global economy
and normal business operations, we expect the pandemic’s impact to
be much more pronounced during at least the second quarter of 2020.
Fortunately, our balance sheet remains strong with total cash of
127,135 kEUR and short-term debt of only 17,193 kEUR as of March
31, 2020.
“Our current view is that, after the crisis, market interest in
3D printing, in general, and in meaningful applications for 3D
printing, in particular, should pick up relatively quickly,
including as a result of the many 3D printed solutions that have
addressed new market needs so expeditiously during the crisis. We
believe Materialise will be uniquely positioned to capture some of
these opportunities. Accordingly, while we have implemented a
variety of health, safety and cost-saving measures, our focus is on
maintaining, as much as reasonably possible, our strategic
investments in the majority of the research and business
development projects currently in process throughout our three
segments. Supported by our strong balance sheet, this focus should
position us well to further expand our existing business and take
advantage of new growth opportunities when current conditions
improve.”
First Quarter 2020 Results
Total revenue for the first quarter of 2020 decreased 1.8% to
46,245 kEUR compared to 47,115 kEUR for the first quarter of 2019.
Adjusted EBITDA decreased to 3,603 kEUR from 5,827 kEUR. The
Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue)
for the first quarter of 2020 was 7.8% compared to 12.4% for the
first quarter of 2019.
Revenue from our Materialise Software segment increased 5.0% to
9,821 kEUR for the first quarter of 2020 from 9,350 kEUR for the
same quarter last year. Segment EBITDA decreased to 2,645 kEUR from
2,961 kEUR while the segment EBITDA margin was 26.9% compared to
31.7% for the prior-year period.
Revenue from our Materialise Medical segment increased 15.3% to
15,645 kEUR for the first quarter of 2020 compared to 13,566 kEUR
for the same period in 2019. Compared to the first quarter of 2019,
revenues from medical devices and services grew 18.2% and revenues
from our medical software grew 9.8%. Segment EBITDA increased to
2,455 kEUR compared to 1,773 kEUR while the segment EBITDA margin
was 15.7% compared to 13.1% for the first quarter of 2019.
Revenue from our Materialise Manufacturing segment decreased
13.9% to 20,815 kEUR for the first quarter of 2020 from 24,184 kEUR
for the first quarter of 2019. Segment EBITDA decreased to 1,118
kEUR from 3,695 kEUR while the segment EBITDA margin was 5.4%
compared to 15.3% for the first quarter of 2019.
Gross profit was 24,632 kEUR, or 53.3% of total revenue, for the
first quarter of 2020 compared to 25,579 kEUR, or 54.3% of total
revenue, for the first quarter of 2019.
Research and development (“R&D”), sales and marketing
(“S&M”) and general and administrative (“G&A”) expenses
increased, in the aggregate, 3.9% to 26,351 kEUR for the first
quarter of 2020 from 25,361 kEUR for the first quarter of 2019.
Net other operating income was 683 kEUR compared to 1,258 kEUR
for the first quarter of 2019.
Operating result decreased to (1,037) kEUR from 1,476 kEUR for
the first quarter of 2019.
Net financial result was (1,321) kEUR compared to (592) kEUR for
the first quarter of 2019. The share in loss of joint venture
amounted to (39) kEUR compared to (123) kEUR for the same period in
2019.
The first quarter of 2020 contained income tax expenses of (457)
kEUR, compared to (1,065) kEUR in the first quarter of 2019.
As a result of the above, net loss for the first quarter of 2020
was (2,853) kEUR, compared to (304) kEUR for the same period in
2019. Total comprehensive income for the first quarter of 2020,
which includes exchange differences on translation of foreign
operations, was (6,996) kEUR compared to 284 kEUR for the 2019
period.
At March 31, 2020, we had cash and equivalents of 127,135 kEUR
compared to 128,897 kEUR at December 31, 2019. Gross debt amounted
to 124,702 kEUR, compared to 127,939 kEUR at December 31, 2019. As
a result, our net cash position increased 1,474 kEUR during the
first quarter of 2020.
Cash flow from operating activities for the first quarter of
2020 was 7,273 kEUR compared to 4,081 kEUR for the same period in
2019. Total capital expenditures for the first quarter of 2020
amounted to 3,053 kEUR.
Net shareholders’ equity at March 31, 2020 was 135,679 kEUR
compared to 142,675 kEUR at December 31, 2019.
2020 Guidance
Mr. Leys concluded, “In this time of unprecedented uncertainty,
we are withdrawing the financial guidance we provided on March 4,
2020. As noted earlier, we currently expect the negative impact of
the COVID-19 crisis on our business to increase significantly
throughout the second quarter of 2020. While we anticipate today
that business should gradually pick up in the second half of the
year, our visibility on the timing and speed of the recovery of the
global economy in general and of our business in particular is
currently too limited to provide meaningful financial guidance at
this time. As our overall goal is to limit the impact of the
COVID-19 crisis and the associated cost-saving measures we take on
our long-term plans, in particular on our ongoing research and
business development programs, we do expect the short-term impact
of the crisis on our Adjusted EBITDA will be even more significant
than on our sales.”
Non-IFRS Measures
Materialise uses EBITDA and Adjusted EBITDA as supplemental
financial measures of its financial performance. EBITDA is
calculated as net profit plus income taxes, financial expenses
(less financial income), shares of loss in a joint venture and
depreciation and amortization. Adjusted EBITDA is determined by
adding non-cash stock-based compensation expenses and
acquisition-related expenses of business combinations to EBITDA.
Management believes these non-IFRS measures to be important
measures as they exclude the effects of items which primarily
reflect the impact of long-term investment and financing decisions,
rather than the performance of the company’s day-to-day operations.
As compared to net profit, these measures are limited in that they
do not reflect the periodic costs of certain capitalized tangible
and intangible assets used in generating revenues in the company’s
business, or the charges associated with impairments. Management
evaluates such items through other financial measures such as
capital expenditures and cash flow provided by operating
activities. The company believes that these measurements are useful
to measure a company’s ability to grow or as a valuation
measurement. The company’s calculation of EBITDA and Adjusted
EBITDA may not be comparable to similarly titled measures reported
by other companies. EBITDA and Adjusted EBITDA should not be
considered as alternatives to net profit or any other performance
measure derived in accordance with IFRS. The company’s presentation
of EBITDA and Adjusted EBITDA should not be construed to imply that
its future results will be unaffected by unusual or non-recurring
items.
Exchange Rate
This document contains translations of certain euro amounts into
U.S. dollars at specified rates solely for the convenience of
readers. Unless otherwise noted, all translations from euros to
U.S. dollars in this document were made at a rate of EUR 1.00 to
USD 1.104309, the reference rate of the European Central Bank on
March 31, 2020.
Conference Call and Webcast
Materialise will hold a conference call and simultaneous webcast
to discuss its financial results for the first quarter of 2020 on
Thursday, April 30, 2020, at 8:30 a.m. ET/2:30 p.m. CET. Company
participants on the call will include Wilfried Vancraen, Founder
and Chief Executive Officer; Peter Leys, Executive Chairman; and
Johan Albrecht, Chief Financial Officer. A question-and-answer
session will follow management’s remarks.
- To access the conference call, please dial 844-469-2530 (U.S.)
or 765-507-2679 (international), passcode 1698319#.
The conference call will also be broadcast live over the
Internet with an accompanying slide presentation, which can be
accessed on the company’s website at
http://investors.materialise.com. A webcast of the conference call
will be archived on the company's website for one year.
About Materialise
Materialise incorporates 30 years of 3D printing experience into
a range of software solutions and 3D printing services, which form
the backbone of the 3D printing industry. Materialise’s open and
flexible solutions enable players in a wide variety of industries,
including healthcare, automotive, aerospace, art and design, and
consumer goods, to build innovative 3D printing applications that
aim to make the world a better and healthier place. Headquartered
in Belgium, with branches worldwide, Materialise combines one of
the largest groups of software developers in the industry with one
of the largest 3D printing facilities in the world. For additional
information, please visit: www.materialise.com.
Cautionary Statement on Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, regarding, among other things, our intentions, beliefs,
assumptions, projections, outlook, analyses or current
expectations, plans, objectives, strategies and prospects, both
financial and business, including statements concerning, among
other things, , our results of operations, cash needs, capital
expenditures, expenses, financial condition, liquidity, prospects,
growth and strategies (including how our business, results of
operations and financial condition could be impacted by the
COVID-19 pandemic and related public health measures, as well as
the related actions we are taking in response), and the trends and
competition that may affect the markets, industry or us. Such
statements are subject to known and unknown uncertainties and
risks. When used in this press release, the words “estimate,”
“expect,” “anticipate,” “project,” “plan,” “intend,” “believe,”
“forecast,” “will,” “may,” “could,” “might,” “aim,” “should,” and
variations of such words or similar expressions are intended to
identify forward-looking statements. These forward-looking
statements are based upon the expectations of management under
current assumptions at the time of this press release. These
expectations, beliefs and projections are expressed in good faith
and the company believes there is a reasonable basis for them.
However, the company cannot offer any assurance that our
expectations, beliefs and projections will actually be achieved. By
their nature, forward-looking statements involve risks and
uncertainties because they relate to events, competitive dynamics
and industry change, and depend on economic circumstances that may
or may not occur in the future or may occur on longer or shorter
timelines than anticipated. We caution you that forward-looking
statements are not guarantees of future performance and involve
known and unknown risks, uncertainties and other factors that are
in some cases beyond our control. All of the forward-looking
statements are subject to risks and uncertainties that may cause
the company's most recent actual results to differ materially from
our expectations, including risk factors described in the company's
most recent annual report on Form 20-F filed with the U.S.
Securities and Exchange Commission. There are a number of risks and
uncertainties that could cause the company's actual results to
differ materially from the forward-looking statements contained in
this press release.
The company is providing this information as of the date of this
press release and does not undertake any obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise, unless it
has obligations under the federal securities laws to update and
disclose material developments related to previously disclosed
information.
Consolidated income statements
(Unaudited)
For the three months ended
March 31,
For the three months ended
March 31,
In 000
2020
2020
2019
2020
2019
U.S.$
€
€
€
€
Revenue
51,069
46,245
47,155
46,245
47,115
Cost of sales
(23,867)
(21,613)
(21,536)
(21,613)
(21,536)
Gross profit
27,201
24,632
25,579
24,632
25,579
Gross profit as % of revenue
53.3%
53.3%
54.3%
53.3%
54.3%
Research and development expenses
(7,208)
(6,527)
(5,686)
(6,527)
(5,686)
Sales and marketing expenses
(13,945)
(12,627)
(12,079)
(12,627)
(12,079)
General and administrative expenses
(7,948)
(7,197)
(7,596)
(7,197)
(7,596)
Net other operating income (expenses)
754
683
1,258
683
1,258
Operating (loss) profit
(1,145)
(1,037)
1,476
(1,037)
1,476
Financial expenses
(2,011)
(1,821)
(1,196)
(1,821)
(1,196)
Financial income
552
500
604
500
604
Share in loss of joint venture
(43)
(39)
(123)
(39)
(123)
(Loss) profit before taxes
(2,646)
(2,396)
761
(2,396)
761
Income taxes
(505)
(457)
(1,065)
(457)
(1,065)
Net (loss) profit for the
period
(3,151)
(2,853)
(304)
(2,853)
(304)
Net (loss) profit attributable to:
The owners of the parent
(3,100)
(2,807)
(304)
(2,807)
(304)
Non-controlling interest
(51)
(47)
–
(47)
–
Earnings per share attributable to
owners of the parent
Basic
(0.06)
(0.05)
(0.01)
(0.05)
(0.01)
Diluted
(0.06)
(0.05)
(0.01)
(0.05)
(0.01)
Weighted average basic shares
outstanding
53,173
53,173
52,891
53,173
52,891
Weighted average diluted shares
outstanding
53,173
53,173
52,891
53,173
52,891
Consolidated statements of
comprehensive income (Unaudited)
For the three months ended
March 31,
For the three months ended
March 31,
In 000
2020
2020
2019
2020
2019
U.S.$
€
€
€
€
Net profit (loss) for the
period
(3,151)
(2,853)
(304)
(2,853)
(304)
Other comprehensive income
Exchange difference on translation of
foreign operations
(4.575)
(4,143)
588
(4,143)
588
Other comprehensive income (loss), net of
taxes
(4,575)
(4,143)
588
(4,143)
588
Total comprehensive income (loss) for
the year, net of taxes
(7,726)
(6,996)
284
(6,996)
284
Total comprehensive income (loss)
attributable to:
The owners of the parent
(6,997)
(6,336)
284
(6,336)
284
Non-controlling interest
(729)
(660)
–
(660)
–
Consolidated statement of financial
position (Unaudited)
As of March 31,
As of
December
31,
In 000
2020
2019
€
€
Assets
Non-current assets
Goodwill
19,424
20,174
Intangible assets
26,092
27,395
Property, plant & equipment
88,682
90,331
Right-of-Use assets
10,057
10,586
Investments in joint ventures
-
39
Deferred tax assets
257
192
Other non-current assets
10,053
9,391
Total non-current assets
154,565
158,108
Current assets
Inventories
12,674
12,696
Trade receivables
37,174
40,322
Other current assets
10,080
9,271
Cash and cash equivalents
127,135
128,897
Total current assets
187,063
191,186
Total assets
341,628
349,294
As of March 31,
As of December
31,
In 000
2020
2019
€
€
Equity and liabilities
Equity
Share capital
3,066
3,066
Share premium
138,090
138,090
Consolidated reserves
(3,007)
(195)
Other comprehensive income
(4,918)
(1.394)
Equity attributable to the owners of
the parent
133,231
139,567
Non-controlling interest
2,447
3,107
Total equity
135,679
142,675
Non-current liabilities
Loans & borrowings
100,999
104,673
Lease liabilities
6,510
6,427
Deferred tax liabilities
5,906
5,747
Deferred income
5,418
5,031
Other non-current liabilities
584
696
Total non-current
liabilities
119,418
122,575
Current liabilities
Loans & borrowings
13,821
13,389
Lease liabilities
3,372
3,449
Trade payables
18,166
18,516
Tax payables
3,048
3,363
Deferred income
29,471
27,641
Other current liabilities
18,653
17,686
Total current
liabilities
86,531
84,044
Total equity and liabilities
341,628
349,294
Consolidated statement of cash flows
(Unaudited)
For the three months ended
March 31,
in 000
2020
2019
€
€
Operating activities
Net (loss) profit for the period
(2,853)
(304)
Non-cash and operational adjustments
Depreciation of property, plant &
equipment
3,600
3,429
Amortization of intangible assets
1,115
1,101
Share-based payment expense
(75)
(177)
Loss (gain) on disposal of property, plant
& equipment
16
51
Movement in provisions
(3)
14
Movement reserve for bad debt
221
(136)
Financial income
(500)
(60)
Financial expense
1,821
583
Impact of foreign currencies
83
Share in loss of a joint venture (equity
method)
39
124
(Deferred) income taxes
454
1,065
Other
147
35
Working capital adjustment & income
tax paid
Decrease (increase) in trade receivables
and other receivables
1,582
(2,393)
Decrease (increase) in inventories
(3)
(1,200)
Increase (decrease) in trade payables and
other payables
2,300
2,251
Income tax paid
(588)
(385)
Net cash flow from operating
activities
7.273
4,081
For the three months ended
March 31,
in 000
2020
2019
€
€
Investing activities
Purchase of property, plant &
equipment
(2,575)
(2,657)
Purchase of intangible assets
(478)
(575)
Proceeds from the sale of property, plant
& equipment & intangible assets
69
–
Convertible loan to third party
(300)
(2,500)
Investments in joint-ventures
–
–
Interest received
–
53
Net cash flow used in investing
activities
(3,284)
(5,679)
Financing activities
Proceeds from loans & borrowings
1,500
Repayment of loans & borrowings
(2,585)
(2,543)
Repayment of finance leases
(1,016)
(1,399)
Interest paid
(634)
(503)
Other financial income (expense)
(138)
(110)
Net cash flow from (used in) financing
activities
(4,373)
(3,055)
Net increase of cash & cash
equivalents
(383)
(4,653)
Cash & cash equivalents at beginning
of the year
128,897
115,506
Exchange rate differences on cash &
cash equivalents
(1,379)
199
Cash & cash equivalents at end of
the year
127,135
111,052
Reconciliation of Net Profit (Loss) to
EBITDA and Adjusted EBITDA (Unaudited)
For the three months ended
March 31,
For the three months
ended March 31,
In 000
2020
2019
2020
2019
€
€
€
€
Net profit (loss) for the
period
(2,853)
(304)
(2,853)
(304)
Income taxes
457
1,065
457
1,065
Financial expenses
1,821
1,196
1,821
1,196
Financial income
(500
)
(604
)
(500)
(604
Share in loss of joint venture
39
123
39
123
Depreciation and amortization
4,715
4,530
4,715
4,530
EBITDA
3,678
6,006
3,678
6,006
Non-cash stock-based compensation expense
(1)
(75)
(177)
(75)
(177)
Acquisition-related expenses business
combinations
–
–
–
–
ADJUSTED EBITDA
3,603
5,829
3,603
5,829
(1)
Non-cash share-based compensation expenses
represent the cost of equity-settled and cash-settled share-based
payments to employees.
Segment P&L
(Unaudited)
In 000
Materialise
Software
Materialise
Medical
Materialise
Manufact-
uring
Total
segments
Unallocated
(1)(2)
Consoli-
dated
€
€
€
€
€
€
For the three months ended March 31,
2020
Revenues
9,821
15,645
20,815
46,281
(36)
46,245
Segment adjusted EBITDA
2,645
2,455
1,118
6,218
(2,615)
3,603
Segment adjusted EBITDA %
26.9%
15.7%
5.4%
13.4%
7.8%
For the three months ended March 31,
2019
Revenues
9,350
13,566
24,184
47,100
15
47,115
Segment adjusted EBITDA
2,961
1,773
3,695
8,429
(2,600)
5,829
Segment adjusted EBITDA %
31.7%
13.1%
15.3%
17.9%
12.4%
(1)
Unallocated Revenues consist of occasional one-off sales by our
core competencies not allocated to any of our segments.
(2)
Unallocated segment EBITDA consists of corporate research and
development, corporate headquarter costs and other operating income
(expense), and the added non-cash share-based compensation expenses
and acquisition related expenses of business combinations that are
included in Adjusted EBITDA.
Reconciliation of Net Profit (Loss) to
Segment EBITDA (Unaudited)
For the three months
ended March 31,
For the three months
ended March 31,
In 000
2020
2019
2020
2019
€
€
€
€
Net profit (loss) for the
period
(2,853)
(304)
(2,853)
(304)
Income taxes
457
1,065
457
1,065
Financial cost
1,821
1,196
1,821
1,196
Financial income
(500)
(604)
(500)
(604)
Share in loss of joint venture
39
123
39
123
Operating profit
(1,037)
1,476
(1,037)
1,476
Depreciation and amortization
4,715
4,530
4,715
4,530
Corporate research and development
747
464
747
464
Corporate headquarter costs
2,368
2,565
2,368
2,565
Other operating (income) expense
(575)
(606)
(575)
(606)
Segment EBITDA
6,218
8,429
6,218
8,429
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200430005081/en/
Investor Relations Harriet Fried LHA 212.838.3777
hfried@lhai.com
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