3D Systems Corporation (NYSE: DDD) announced today its
financial results for the first quarter ended March 31, 2019.
For the first quarter of 2019, the company reported revenue of
$152.0 million, a decrease of 8 percent compared to $165.9 million
in the first quarter of the previous year. The company reported a
GAAP loss of $0.22 per share in the first quarter of 2019 and a
GAAP loss of $0.19 per share in the first quarter of 2018, and a
non-GAAP loss of $0.09 per share in the first quarter of 2019
compared to a non-GAAP loss of $0.03 per share in the first quarter
of 2018.
The company reported 90 percent higher printer unit sales, but
as a result of the mix of unit sales, printer revenue decreased 29
percent compared to the first quarter of the prior year. Healthcare
services and simulation increased, however timing of large customer
orders for printers and materials offset the increases, and total
healthcare revenue decreased 5 percent from the first quarter of
2018. During the first quarter, materials revenue decreased 3
percent, software decreased 8 percent and on demand services
decreased 12 percent.
The company reported GAAP gross profit margin of 43.2 percent
for the first quarter of 2019 compared to gross profit margin of
46.9 percent in the prior year period. Under absorption of overhead
driven by lower revenue and production combined with mix of sales
resulted in lower gross profit margin in the first quarter of
2019.
For the first quarter of 2019, GAAP operating expenses decreased
9 percent to $87.0 million compared to $95.3 million in the prior
year period. SG&A expenses decreased 6 percent to $65.1 million
and R&D expenses decreased 15 percent from the first quarter of
the prior year to $21.9 million.
The company used $15.2 million of cash in operations and ended
the quarter with $157.3 million of unrestricted cash on hand. The
use of cash during the first quarter was driven by lower than
anticipated sales during the quarter and higher inventory in
support of new product ramps.
“While we expected seasonality in our revenue this year from
ordering patterns of enterprise customers, the first quarter was
lower than anticipated as a result of shipment timing and
additional on demand weakness,” commented Vyomesh Joshi (VJ) chief
executive officer, 3D Systems. "We are taking actions to improve
performance for the balance of the year, including accelerating
cost reductions."
"With the breadth and strength of our portfolio, we continue to
have significant market opportunities to expand our market share
and are committed to executing our plans to drive long term
profitable growth," concluded Joshi.
Q1 2019 Conference Call and WebcastThe company
expects to file its Form 10-Q for the quarter ended March 31,
2019 with the Securities and Exchange Commission on May 7,
2019. 3D Systems plans to hold a conference call and simultaneous
webcast to discuss these results on Tuesday, May 7, 2019, at
4:30 p.m. Eastern Time.
Date: Tuesday, May 7, 2019Time: 4:30 p.m. Eastern
TimeListen via Internet: www.3dsystems.com/investorParticipate via
telephone:Within the U.S.: 1-877-407-8291Outside the
U.S.: 1-201-689-8345
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 SheetsMarch 31, 2019 and December 31,
2018
| (in thousands, except
par value) |
March 31, 2019 |
|
December 31, 2018 |
|
ASSETS |
|
|
|
| Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
157,260 |
|
|
$ |
109,998 |
|
|
Accounts receivable, net of reserves — $8,111 (2019) and $8,423
(2018) |
128,774 |
|
|
126,618 |
|
|
Inventories |
137,919 |
|
|
133,161 |
|
|
Prepaid expenses and other current assets |
29,345 |
|
|
27,697 |
|
|
Current deferred tax assets |
— |
|
|
— |
|
|
Total current assets |
453,298 |
|
|
397,474 |
|
| Property and equipment,
net |
100,171 |
|
|
103,252 |
|
| Intangible assets, net |
62,500 |
|
|
68,275 |
|
| Goodwill |
221,506 |
|
|
221,334 |
|
| Right of use assets |
39,570 |
|
|
4,466 |
|
| Deferred income tax asset |
5,840 |
|
|
4,217 |
|
| Other assets, net |
27,504 |
|
|
26,814 |
|
|
Total assets |
$ |
910,389 |
|
|
$ |
825,832 |
|
|
LIABILITIES AND EQUITY |
|
|
|
| Current liabilities: |
|
|
|
|
Current portion of long term debt |
$ |
5,000 |
|
|
$ |
— |
|
|
Current right of use liabilities |
12,184 |
|
|
654 |
|
|
Accounts payable |
54,503 |
|
|
66,722 |
|
|
Accrued and other liabilities |
56,336 |
|
|
59,265 |
|
|
Current deferred tax liabilities |
— |
|
|
— |
|
|
Customer deposits |
4,284 |
|
|
4,987 |
|
|
Deferred revenue |
44,954 |
|
|
32,432 |
|
|
Total current liabilities |
177,261 |
|
|
164,060 |
|
| Long-term debt |
94,387 |
|
|
25,000 |
|
| Long-term right of use
liabilities |
36,257 |
|
|
6,392 |
|
| Deferred income tax
liability |
7,315 |
|
|
6,190 |
|
| Other liabilities |
42,439 |
|
|
39,331 |
|
|
Total liabilities |
357,659 |
|
|
240,973 |
|
| Redeemable noncontrolling
interests |
8,872 |
|
|
8,872 |
|
| Commitments and
contingencies |
|
|
|
| Stockholders’ equity: |
|
|
|
|
Common stock, $0.001 par value, authorized 220,000 shares; issued
117,459 (2019) and 118,650 (2018) |
118 |
|
|
117 |
|
|
Additional paid-in capital |
1,354,683 |
|
|
1,355,503 |
|
|
Treasury stock, at cost — 2,219 shares (2019) and 2,946 shares
(2018) |
(16,056 |
) |
|
(15,572 |
) |
|
Accumulated deficit |
(747,095 |
) |
|
(722,701 |
) |
|
Accumulated other comprehensive loss |
(39,362 |
) |
|
(38,978 |
) |
|
Total 3D Systems Corporation stockholders' equity |
552,288 |
|
|
578,369 |
|
| Noncontrolling interests |
(8,430 |
) |
|
(2,382 |
) |
|
Total stockholders’ equity |
543,858 |
|
|
575,987 |
|
| Total liabilities, redeemable
noncontrolling interests and stockholders’ equity |
$ |
910,389 |
|
|
$ |
825,832 |
|
3D Systems
CorporationUnaudited Condensed Consolidated
Statements of OperationsQuarter Ended March 31,
2019 and 2018
| |
Quarter Ended March 31, |
| (in thousands, except
per share amounts) |
2019 |
|
2018 |
| Revenue: |
|
|
|
|
Products |
$ |
92,347 |
|
|
$ |
105,447 |
|
|
Services |
59,633 |
|
|
60,422 |
|
|
Total revenue |
151,980 |
|
|
165,869 |
|
| Cost of sales: |
|
|
|
|
Products |
55,760 |
|
|
56,118 |
|
|
Services |
30,515 |
|
|
31,882 |
|
|
Total cost of sales |
86,275 |
|
|
88,000 |
|
| Gross profit |
65,705 |
|
|
77,869 |
|
| Operating expenses: |
|
|
|
|
Selling, general and administrative |
65,107 |
|
|
69,452 |
|
|
Research and development |
21,903 |
|
|
25,882 |
|
| Total operating expenses |
87,010 |
|
|
95,334 |
|
| Loss from operations |
(21,305 |
) |
|
(17,465 |
) |
| Interest and other expense,
net |
(1,201 |
) |
|
(1,552 |
) |
| Loss before income taxes |
(22,506 |
) |
|
(19,017 |
) |
| Provision for income
taxes |
(1,844 |
) |
|
(1,954 |
) |
| Net loss |
(24,350 |
) |
|
(20,971 |
) |
| Less: net income (loss)
attributable to noncontrolling interests |
44 |
|
|
(16 |
) |
| Net loss attributable to 3D
Systems Corporation |
$ |
(24,394 |
) |
|
$ |
(20,955 |
) |
| |
|
|
|
| Net loss per share available
to 3D Systems Corporation common stockholders - basic and
diluted |
$ |
(0.22 |
) |
|
$ |
(0.19 |
) |
3D Systems
CorporationUnaudited Condensed Consolidated
Statements of Cash FlowsQuarter Ended March 31,
2019 and 2018
| |
Quarter Ended March 31, |
| (in
thousands) |
2019 |
|
2018 |
|
Cash flows from operating activities: |
|
|
|
|
Net loss |
$ |
(24,350 |
) |
|
$ |
(20,971 |
) |
|
Adjustments to reconcile net loss to net cash used in by operating
activities: |
|
|
|
|
Depreciation and amortization |
13,144 |
|
|
15,186 |
|
|
Stock-based compensation |
6,706 |
|
|
7,128 |
|
|
Lower of cost or market adjustment |
— |
|
|
— |
|
|
Provision for bad debts |
219 |
|
|
1,017 |
|
|
Provision for deferred income taxes |
(498 |
) |
|
(898 |
) |
|
Impairment of assets |
180 |
|
|
1,411 |
|
|
Changes in operating accounts: |
|
|
|
|
Accounts receivable |
(2,928 |
) |
|
(3,774 |
) |
|
Inventories |
(5,192 |
) |
|
(5,571 |
) |
|
Prepaid expenses and other current assets |
354 |
|
|
(3,667 |
) |
|
Accounts payable |
(11,987 |
) |
|
(647 |
) |
|
Deferred revenue and customer deposits |
11,811 |
|
|
10,018 |
|
|
Accrued and other current liabilities |
(5,531 |
) |
|
2,579 |
|
|
All other operating activities |
2,914 |
|
|
(3,350 |
) |
|
Net cash used in operating activities |
(15,158 |
) |
|
(1,539 |
) |
|
Cash flows from investing activities: |
|
|
|
|
Purchases of property and equipment |
(8,837 |
) |
|
(10,764 |
) |
|
Other investing activities |
(37 |
) |
|
(230 |
) |
|
Net cash used in investing activities |
(8,874 |
) |
|
(10,994 |
) |
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from borrowings |
100,000 |
|
|
— |
|
|
Repayment of borrowings/long term debt |
(25,000 |
) |
|
— |
|
|
Purchase of noncontrolling interest |
(2,500 |
) |
|
— |
|
|
Payments on earnout consideration |
— |
|
|
(2,675 |
) |
|
Other financing activities |
(1,263 |
) |
|
(965 |
) |
|
Net cash provided by (used in) financing activities |
71,237 |
|
|
(3,640 |
) |
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
57 |
|
|
1,438 |
|
|
Net increase (decrease) in cash, cash equivalents and restricted
cash |
47,262 |
|
|
(14,735 |
) |
|
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) |
$ |
158,181 |
|
|
$ |
122,096 |
|
(a) The amounts for cash and cash equivalents shown above
include restricted cash of $921 and $794 as of March 31, 2019 and
2018, respectively, and $921 and $487 as of December 31, 2017,
and 2016, respectively, which were included in other assets, net in
the condensed consolidated balance sheets.
3D Systems
CorporationSchedule 1Loss Per
ShareQuarter Ended March 31, 2019 and
2018
| |
Quarter Ended March 31, |
| (in thousands, except
per share amounts) |
2019 |
|
2018 |
| Numerator for basic and
diluted net loss per share: |
|
|
|
|
Net loss attributable to 3D Systems Corporation |
$ |
(24,394 |
) |
|
$ |
(20,955 |
) |
| |
|
|
|
| Denominator for basic and
diluted net loss per share: |
|
|
|
| Weighted average shares |
113,267 |
|
|
111,819 |
|
| |
|
|
|
| Net loss per share - basic and
diluted |
$ |
(0.22 |
) |
|
$ |
(0.19 |
) |
3D Systems
CorporationSchedule 2Unaudited
Reconciliations of GAAP to Non-GAAP
MeasuresQuarter Ended March 31, 2019 and
2018
| |
Quarter Ended March 31, |
| (in millions, except
per share amounts) |
2019 |
|
2018 |
|
GAAP Net loss attributable to 3D Systems Corporation |
$ |
(24.4 |
) |
|
$ |
(21.0 |
) |
| Adjustments: |
|
|
|
|
Amortization, stock-based compensation & other 1 |
12.2 |
|
|
15.2 |
|
|
Legal, acquisition and divestiture related 2 |
0.4 |
|
|
0.5 |
|
|
Cost optimization plan, including severance costs 3 |
1.7 |
|
|
0.5 |
|
|
Impairment of cost-method investments 4 |
— |
|
|
1.4 |
|
| Non-GAAP net income
attributable to 3D Systems Corporation |
$ |
(10.1 |
) |
|
$ |
(3.4 |
) |
| Non-GAAP net income per share
available to 3D Systems common stock holders - basic and diluted
5 |
$ |
(0.09 |
) |
|
$ |
(0.03 |
) |
| |
|
|
|
1 For the quarter ended March 31, 2019, the adjustment included
$0.1 in COGS and $12.1 in SG&A. For the quarter ended March 31,
2018, the adjustment included $0.1 in COGS and $15.1 in SG&A.2
For the quarter ended March 31, 2019, the adjustment included
$(1.8) in Revenues $1.9 in COGS and $0.7 in SG&A and $(0.5) in
other income (expense). For the quarter ended March 31, 2018, the
adjustment included $0.5 in SG&A.3 For the quarter ended March
31, 2019, the adjustment included $0.4 in COGS, $1.2 in SG&A.
For the quarter ended March 31, 2018, the adjustment included $0.2
in COGS and $0.3 in SG&A.4 For the quarter ended March 31,
2018, the adjustment included $1.4 in interest and other income
(expense), net. No impairment was recorded in 2019.5 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.
Investor Contact:Stacey
WittenInvestor.relations@3dsystems.com
Media Contact:Nicole Yorkpress@3dsystems.com
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