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CST: 24/08/2019 11:47:16   

3D Systems Reports First Quarter 2019 Financial Results

108 Days ago

ROCK HILL, S.C., May 07, 2019 (GLOBE NEWSWIRE) -- 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 Webcast
The 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, 2019
Time: 4:30 p.m. Eastern Time
Listen via Internet: www.3dsystems.com/investor
Participate via telephone:
Within the U.S.:  1-877-407-8291
Outside 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 Statements
Certain 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 Release
To 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 Systems
3D 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 Corporation
Unaudited Condensed Consolidated Balance Sheets
March 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 Corporation
Unaudited Condensed Consolidated Statements of Operations
Quarter 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 Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
Quarter 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 Corporation
Schedule 1
Loss Per Share
Quarter 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 Corporation
Schedule 2
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Quarter 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 Witten
Investor.relations@3dsystems.com

Media Contact:
Nicole York
press@3dsystems.com 

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