3D Systems Corporation (NYSE:DDD) announced today its financial
results for the third quarter ended September 30, 2019.
For the third quarter of 2019, the company reported GAAP revenue
of $155.3 million, compared to $164.5 million in the third quarter
of the previous year. The company reported a GAAP loss of $0.15 per
share in the third quarter of 2019 compared to a GAAP loss of $0.10
per share in the third quarter of 2018, and non-GAAP loss of $0.04
per share in the third quarter of 2019 compared to non-GAAP
earnings of $0.02 per share in the third quarter of 2018.
Printer revenue decreased 17.2 percent compared to the third
quarter of the prior year, driven by timing of large enterprise
customer orders and the softer macro industrial environment.
Materials revenue increased 2.8 percent, healthcare solutions
revenue increased 6.3 percent including a large enterprise customer
and 15.0 percent excluding this same customer. On demand services
decreased 12.0 percent and software increased 0.1 percent compared
to the prior year.
"Despite continued headwinds in the industry, we achieved modest
growth in Materials and Healthcare this quarter, driven by customer
demand for our core and new product solutions," commented Vyomesh
Joshi ("VJ"), president and chief executive officer, 3D Systems.
"We remain focused on cost reductions, cash generation and
profitability in the near-term and driving long-term growth with
the opportunities we have in our product portfolio and target
markets."
The company reported GAAP gross profit margin of 43.3 percent
for the third quarter of 2019 compared to 47.3 percent in the third
quarter of 2018. Non-GAAP gross profit margin was 44.4 percent in
the third quarter of 2019 compared to 47.4 percent in the third
quarter of the prior year.
For the third quarter of 2019, GAAP operating expenses decreased
10.8 percent to $79.2 million compared to $88.8 million in the
prior year period. GAAP SG&A expenses decreased 11.2 percent to
$58.3 million. GAAP R&D expenses decreased 9.7 percent from the
third quarter of the prior year to $20.9 million. The company
continues to execute its cost reduction plans, and as a result of
these actions, non-GAAP operating expenses decreased 6.0 percent to
$69.3 million compared to $73.7 million in the third quarter of
2018.
The company generated $6.5 million of cash from operations
during the quarter and had $127.6 million of unrestricted cash on
hand at September 30, 2019. Cash generation during the third
quarter was driven by improvements in working capital, including
planned reductions of inventory.
Q3 2019 Conference Call and WebcastThe company
expects to file its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2019 with the Securities and Exchange
Commission on October 30, 2019. 3D Systems plans to hold a
conference call and simultaneous webcast to discuss these results
today, Wednesday, October 30, 2019, which may be accessed as
follows:
Date: Wednesday, October 30, 2019 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
Investor Contact: |
Melanie Solomon |
|
Email: investor.relations@3dsystems.com |
Media Contact: |
Nicole York |
|
Email: press@3dsystems.com |
Tables Follow
3D Systems
CorporationUnaudited Condensed Consolidated
Balance SheetsSeptember 30, 2019 and December 31,
2018
(in thousands, except
par value) |
September 30, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
127,616 |
|
$ |
109,998 |
Accounts receivable, net of reserves — $8,182 (2019) and $8,423
(2018) |
110,333 |
|
126,618 |
Inventories |
122,706 |
|
133,161 |
Prepaid expenses and other current assets |
30,945 |
|
27,697 |
Total current assets |
391,600 |
|
397,474 |
Property and equipment, net
(a) |
92,935 |
|
103,252 |
Intangible assets, net |
51,253 |
|
68,275 |
Goodwill |
217,688 |
|
221,334 |
Right of use assets (a) |
35,028 |
|
4,466 |
Deferred income tax asset |
6,492 |
|
4,217 |
Other assets, net |
27,767 |
|
26,814 |
Total assets |
$ |
822,763 |
|
$ |
825,832 |
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of long term debt |
$ |
3,025 |
|
$ |
— |
Current right of use liabilities (a) |
10,797 |
|
654 |
Accounts payable |
53,014 |
|
66,722 |
Accrued and other liabilities |
62,701 |
|
59,265 |
Customer deposits |
5,226 |
|
4,987 |
Deferred revenue |
36,320 |
|
32,432 |
Total current liabilities |
171,083 |
|
164,060 |
Long-term debt |
55,421 |
|
25,000 |
Long-term right of use
liabilities (a) |
32,667 |
|
6,392 |
Deferred income tax
liability |
7,119 |
|
6,190 |
Other liabilities |
41,178 |
|
39,331 |
Total liabilities |
307,468 |
|
240,973 |
Redeemable noncontrolling
interests |
8,872 |
|
8,872 |
Commitments and contingencies
(Note 13) |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, $0.001 par value, authorized 220,000 shares; issued
120,997 (2019) and 118,650 (2018) |
120 |
|
117 |
Additional paid-in capital |
1,367,198 |
|
1,355,503 |
Treasury stock, at cost — 3,583 shares (2019) and 2,946 shares
(2018) |
(18,601) |
|
(15,572) |
Accumulated deficit |
(787,868) |
|
(722,701) |
Accumulated other comprehensive loss |
(46,100) |
|
(38,978) |
Total 3D Systems Corporation stockholders' equity |
514,749 |
|
578,369 |
Noncontrolling interests |
(8,326) |
|
(2,382) |
Total stockholders’ equity |
506,423 |
|
575,987 |
Total liabilities, redeemable
noncontrolling interests and stockholders’ equity |
$ |
822,763 |
|
$ |
825,832 |
(a) For comparative purposes, prior year finance
lease assets have been reclassified from "Property and equipment,
net" to "Right of use assets". Prior year finance lease liabilities
have been reclassified as right of use liabilities.
3D Systems
CorporationUnaudited Condensed Consolidated
Statements of OperationsQuarter and Nine Months
Ended September 30, 2019 and 2018
|
Quarter Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands, except
per share amounts) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenue: |
|
|
|
|
|
|
|
Products |
$ |
94,506 |
|
$ |
99,922 |
|
$ |
280,611 |
|
$ |
316,153 |
Services |
60,766 |
|
64,589 |
|
183,913 |
|
190,795 |
Total revenue |
155,272 |
|
164,511 |
|
464,524 |
|
506,948 |
Cost of sales: |
|
|
|
|
|
|
|
Products |
58,044 |
|
54,444 |
|
166,809 |
|
168,062 |
Services |
29,947 |
|
32,257 |
|
91,430 |
|
97,045 |
Total cost of sales |
87,991 |
|
86,701 |
|
258,239 |
|
265,107 |
Gross profit |
67,281 |
|
77,810 |
|
206,285 |
|
241,841 |
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
58,275 |
|
65,600 |
|
195,036 |
|
206,225 |
Research and development |
20,940 |
|
23,194 |
|
63,654 |
|
71,788 |
Total operating expenses |
79,215 |
|
88,794 |
|
258,690 |
|
278,013 |
Loss from operations |
(11,934) |
|
(10,984) |
|
(52,405) |
|
(36,172) |
Interest and other (expense)
income, net |
(2,818) |
|
1,027 |
|
(6,774) |
|
1,135 |
Loss before income taxes |
(14,752) |
|
(9,957) |
|
(59,179) |
|
(35,037) |
Provision for income
taxes |
(2,010) |
|
(1,593) |
|
(5,793) |
|
(6,086) |
Net loss |
(16,762) |
|
(11,550) |
|
(64,972) |
|
(41,123) |
Less: net income attributable
to noncontrolling interests |
81 |
|
— |
|
195 |
|
246 |
Net loss attributable to 3D
Systems Corporation |
$ |
(16,843) |
|
$ |
(11,550) |
|
$ |
(65,167) |
|
$ |
(41,369) |
|
|
|
|
|
|
|
|
Net loss per share available
to 3D Systems Corporation common stockholders - basic and
diluted |
$ |
(0.15 |
|
$ |
(0.10) |
|
$ |
(0.57) |
|
$ |
(0.37) |
3D Systems
CorporationUnaudited Condensed Consolidated
Statements of Cash FlowsNine Months Ended
September 30, 2019 and 2018
|
Nine Months Ended September 30, |
(in
thousands) |
2019 |
|
2018 |
Cash flows from operating
activities: |
|
|
|
Net loss |
$ |
(64,972) |
|
$ |
(41,123) |
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
Depreciation and amortization |
39,305 |
|
44,986 |
Stock-based compensation |
19,221 |
|
21,082 |
Provision for bad debts |
1,152 |
|
2,522 |
Loss on the disposition of property, equipment and other
assets |
1,620 |
|
— |
Provision for deferred income taxes |
(1,346) |
|
(3,132) |
Impairment of assets |
1,728 |
|
1,411 |
Changes in operating accounts: |
|
|
|
Accounts receivable |
12,290 |
|
(1,509) |
Inventories |
6,481 |
|
(29,502) |
Prepaid expenses and other current assets |
(3,122) |
|
41,589 |
Accounts payable |
(12,885) |
|
6,261 |
Deferred revenue and customer deposits |
4,491 |
|
(37) |
Accrued and other current liabilities |
1,199 |
|
(45,309) |
All other operating activities |
4,922 |
|
(170) |
Net cash provided by (used in) operating activities |
10,084 |
|
(2,931) |
Cash flows from investing
activities: |
|
|
|
Purchases of property and equipment |
(18,265) |
|
(28,323) |
Proceeds from sale of assets |
1,620 |
|
9 |
Other investing activities |
(1,744) |
|
(1,236) |
Net cash used in investing activities |
(18,389) |
|
(29,550) |
Cash flows from financing
activities: |
|
|
|
Proceeds from borrowings |
100,000 |
|
— |
Repayment of borrowings/long term debt |
(66,013) |
|
— |
Payments related to net-share settlement of stock based
compensation |
(3,029) |
|
(5,723) |
Purchase of noncontrolling interest |
(2,500) |
|
— |
Payments on earnout consideration |
— |
|
(2,675) |
Other financing activities |
(1,125) |
|
(508) |
Net cash provided by (used in) financing activities |
27,333 |
|
(8,906) |
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
(1,400) |
|
(2,417) |
Net increase (decrease) in
cash, cash equivalents and restricted cash |
17,628 |
|
(43,804) |
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) |
$ |
128,547 |
|
$ |
93,027 |
(a) The amounts for cash and cash
equivalents shown above include restricted cash of $931 and $934 as
of September 30, 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 and Nine Months Ended September 30,
2019 and 2018
|
Quarter Ended September 30, |
|
Nine Months Ended September 30, |
(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 |
$ |
(16,843) |
|
$ |
(11,550) |
|
$ |
(65,167) |
|
$ |
(41,369) |
|
|
|
|
|
|
|
|
Denominator for basic and
diluted net loss per share: |
|
|
|
|
|
|
|
Weighted average shares |
114,053 |
|
112,534 |
|
113,587 |
|
112,095 |
|
|
|
|
|
|
|
|
Net loss per share - basic and
diluted |
$ |
(0.15) |
|
$ |
(0.10) |
|
$ |
(0.57) |
|
$ |
(0.37) |
3D Systems
CorporationSchedule 2Unaudited
Reconciliations of GAAP to Non-GAAP
MeasuresQuarter and Nine Months Ended September
30, 2019 and 2018
|
Quarter Ended September 30, |
|
Nine Months Ended September 30, |
(in millions, except
per share amounts) |
2019 |
|
2018 |
|
2019 |
|
2018 |
GAAP Net loss attributable to 3D Systems Corporation |
$ |
(16.8) |
|
$ |
(11.6) |
|
$ |
(65.2) |
|
$ |
(41.4) |
Adjustments: |
|
|
|
|
|
|
|
Amortization, stock-based compensation & other 1 |
10.9 |
|
15.2 |
|
35.7 |
|
44.8 |
Legal, acquisition and divestiture related 2 |
(0.2) |
|
(2.1) |
|
7.0 |
|
(2.1) |
Cost optimization plan, including severance costs 3 |
1.4 |
|
0.9 |
|
7.1 |
|
2.4 |
Impairment of cost-method investments 4 |
0.3 |
|
— |
|
0.3 |
|
1.4 |
Non-GAAP net income
attributable to 3D Systems Corporation |
$ |
(4.5) |
|
$ |
2.4 |
|
$ |
(15.1) |
|
$ |
5.1 |
Non-GAAP net income per share
available to 3D Systems common stock holders - basic and diluted
5 |
$ |
(0.04) |
|
$ |
0.02 |
|
$ |
(0.13) |
|
$ |
0.05 |
|
|
|
|
|
|
|
|
1 For the quarter ended September 30, 2019, the adjustment
included $0.1 in COGS and $10.8 in SG&A. For the quarter ended
September 30, 2018, the adjustment included $0.1 in COGS and $15.1
in SG&A. For the nine months ended September 30, 2019, the
adjustment included $0.3 in COGS and $35.4 in SG&A. For the
nine months ended September 30, 2018, the adjustment included $0.3
in COGS and $44.5 in SG&A.2 For the quarter ended September 30,
2019, the adjustment included $(0.2) in Revenues, $0.7 in COGS,
$(1.2) in SG&A and $0.5 in other income (expense). For the nine
months ended September 30, 2019, the adjustment included $(2.9) in
Revenues, $4.0 in COGS, $4.1 in SG&A, and $1.8 in other income
(expense). For the quarter and nine months ended September
30, 2018, the adjustment included $(0.7) in SG&A and $(1.4) in
other income (expense).3 For the quarter ended September 30, 2019,
the adjustment included $1.0 in COGS and $0.4 in SG&A. For the
quarter ended September 30, 2018, the adjustment included $0.1 in
COGS, $0.4 in SG&A and $0.3 in R&D. For the nine months
ended September 30, 2019, the adjustment included $1.7 in COGS,
$5.0 in SG&A and $0.3 in R&D. For the nine months ended
September 30, 2018, the adjustment included $0.4 in COGS, $1.5 in
SG&A and $0.5 in R&D. 4 For the quarter and
nine months ended September 30, 2019, the adjustment included $0.3
in interest and other income (expense), net. For the nine months
ended September 30, 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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