3D Systems Corporation (NYSE: DDD) announced today its financial
results for the second quarter ended June 30, 2018.
For the second quarter of 2018, the company reported 11 percent
revenue growth to $176.6 million compared to $159.5 million in the
second quarter of the previous year. The company reported a GAAP
loss of $0.08 per share in the second quarter of 2018 and 2017, and
non-GAAP earnings of $0.06 per share in the second quarter of 2018
compared to non-GAAP earnings of $0.08 per share in the second
quarter of 2017.
"We are pleased with our results for the second quarter, which
were driven by strong revenue growth, including growth in both
printer revenue and units as we continue to improve execution and
are seeing the early returns on our investments in both innovation
and go-to-market," commented Vyomesh Joshi (VJ) chief executive
officer, 3D Systems.
The company reported 41 percent higher printer revenue on 37
percent higher printer unit sales, 26 percent growth in healthcare
solutions, and growth in materials and on demand manufacturing.
The company reported GAAP gross profit margin of 48.8 percent
for the second quarter of 2018 compared to 50.6 percent in the
second quarter of the prior year. The impact of mix of sales and
investment in services and on demand manufacturing offset cost
improvements from ongoing supply chain cost reduction
initiatives.
For the second quarter of 2018, GAAP operating expenses were
$93.9 million compared to $87.5 million in the prior year period.
SG&A expenses increased 13 percent to $71.2 million, which
included continued investment in go-to-market, IT transformation
and higher legal fees. R&D expenses decreased 7 percent from
the second quarter of the prior year to $22.7 million as the
company began to ship the previously announced new products. The
company expects to continue to roll out new products as planned
throughout 2018.
”We are very pleased with the progress we are seeing in the
first half of 2018 from both our investments and the hard work by
our employees,” commented John McMullen, executive vice president
and chief financial officer. “We continue to make the investments
we believe are critical for success while at the same time
improving our cost structure over the long term.”
During the quarter, the company generated $10.7 million of cash
in operations and ended the quarter with $119.3 million of
unrestricted cash on hand.
“In addition to our performance in the second quarter, we are
also very pleased to be partnering with Georg Fischer, a highly
regarded leader in machining solutions, to create new integrated
solutions and expand our global network and market opportunity.
With our product rollouts in 2018, we believe our portfolio is
second to none in regards to breadth and competitiveness, and we
continue to be keenly focused on execution and operational
efficiency to drive long-term growth and profitability,” concluded
Joshi.
Q2 2018 Conference Call and WebcastThe company
expects to file its Form 10-Q for the quarter ended June 30,
2018 with the Securities and Exchange Commission on August 7, 2018.
3D Systems plans to hold a conference call and simultaneous webcast
to discuss these results on Tuesday, August 7, 2018, at 4:30
p.m. Eastern Time.
Date: Tuesday, August 7, 2018Time: 4:30 p.m. Eastern
TimeListen via Internet:
www.3dsystems.com/investor Participate 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 SheetsJune 30, 2018 and December 31,
2017
|
|
|
|
(in thousands,
except par value) |
June 30, 2018 |
|
December 31, 2017 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
119,313 |
|
|
$ |
136,344 |
|
Accounts
receivable, net of reserves — $10,049 (2018) and $10,258
(2017) |
130,870 |
|
|
129,879 |
|
Inventories |
114,493 |
|
|
103,903 |
|
Insurance
proceeds receivable |
50,000 |
|
|
50,000 |
|
Prepaid
expenses and other current assets |
25,428 |
|
|
18,296 |
|
Total
current assets |
440,104 |
|
|
438,422 |
|
Property and equipment,
net |
104,679 |
|
|
97,521 |
|
Intangible assets,
net |
82,141 |
|
|
98,783 |
|
Goodwill |
224,955 |
|
|
230,882 |
|
Deferred income tax
asset |
7,216 |
|
|
4,020 |
|
Other assets, net |
26,217 |
|
|
27,136 |
|
Total
assets |
$ |
885,312 |
|
|
$ |
896,764 |
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Current
portion of capitalized lease obligations |
$ |
646 |
|
|
$ |
644 |
|
Accounts
payable |
58,019 |
|
|
55,607 |
|
Accrued
and other liabilities |
72,400 |
|
|
65,899 |
|
Accrued
litigation settlement |
50,000 |
|
|
50,000 |
|
Customer
deposits |
5,903 |
|
|
5,765 |
|
Deferred
revenue |
38,617 |
|
|
29,214 |
|
Total
current liabilities |
225,585 |
|
|
207,129 |
|
Long term portion of
capitalized lease obligations |
6,732 |
|
|
7,078 |
|
Deferred income tax
liability |
9,892 |
|
|
8,983 |
|
Other liabilities |
46,398 |
|
|
48,754 |
|
Total
liabilities |
288,607 |
|
|
271,944 |
|
Redeemable
noncontrolling interests |
8,872 |
|
|
8,872 |
|
Commitments and
contingencies |
|
|
|
Stockholders’
equity: |
|
|
|
Common
stock, $0.001 par value, authorized 220,000 shares; issued 117,249
(2018) and 117,025 (2017) |
116 |
|
|
115 |
|
Additional paid-in capital |
1,339,984 |
|
|
1,326,250 |
|
Treasury
stock, at cost — 2,503 shares (2018) and 2,219 shares (2017) |
(10,007 |
) |
|
(8,203 |
) |
Accumulated deficit |
(707,015 |
) |
|
(677,772 |
) |
Accumulated other comprehensive loss |
(32,878 |
) |
|
(21,536 |
) |
Total 3D
Systems Corporation stockholders' equity |
590,200 |
|
|
618,854 |
|
Noncontrolling
interests |
(2,367 |
) |
|
(2,906 |
) |
Total
stockholders’ equity |
587,833 |
|
|
615,948 |
|
Total liabilities,
redeemable noncontrolling interests and stockholders’ equity |
$ |
885,312 |
|
|
$ |
896,764 |
|
|
|
|
|
|
|
|
|
3D Systems
CorporationUnaudited Condensed Consolidated
Statements of OperationsQuarter and Six Months
Ended June 30, 2018 and 2017
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
(in thousands,
except per share amounts) |
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue: |
|
|
|
|
|
|
|
Products |
$ |
110,785 |
|
|
$ |
97,579 |
|
|
$ |
216,231 |
|
|
$ |
195,518 |
|
Services |
65,783 |
|
|
61,888 |
|
|
126,206 |
|
|
120,380 |
|
Total
revenue |
176,568 |
|
|
159,467 |
|
|
342,437 |
|
|
315,898 |
|
Cost of sales: |
|
|
|
|
|
|
|
Products |
57,500 |
|
|
49,840 |
|
|
113,618 |
|
|
97,948 |
|
Services |
32,906 |
|
|
28,954 |
|
|
64,788 |
|
|
57,091 |
|
Total
cost of sales |
90,406 |
|
|
78,794 |
|
|
178,406 |
|
|
155,039 |
|
Gross profit |
86,162 |
|
|
80,673 |
|
|
164,031 |
|
|
160,859 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling,
general and administrative |
71,172 |
|
|
63,088 |
|
|
140,625 |
|
|
129,493 |
|
Research
and development |
22,712 |
|
|
24,449 |
|
|
48,594 |
|
|
47,301 |
|
Total operating
expenses |
93,884 |
|
|
87,537 |
|
|
189,219 |
|
|
176,794 |
|
Loss from
operations |
(7,722 |
) |
|
(6,864 |
) |
|
(25,188 |
) |
|
(15,935 |
) |
Interest and other
(expense) income, net |
1,661 |
|
|
933 |
|
|
108 |
|
|
1,134 |
|
Loss before income
taxes |
(6,061 |
) |
|
(5,931 |
) |
|
(25,080 |
) |
|
(14,801 |
) |
Provision for income
taxes |
2,539 |
|
|
2,067 |
|
|
4,493 |
|
|
3,108 |
|
Net loss |
(8,600 |
) |
|
(7,998 |
) |
|
(29,573 |
) |
|
(17,909 |
) |
Less: net income
attributable to noncontrolling interests |
262 |
|
|
418 |
|
|
246 |
|
|
478 |
|
Net loss attributable
to 3D Systems Corporation |
$ |
(8,862 |
) |
|
$ |
(8,416 |
) |
|
$ |
(29,819 |
) |
|
$ |
(18,387 |
) |
|
|
|
|
|
|
|
|
Net loss per share
available to 3D Systems Corporation common stockholders - basic and
diluted |
$ |
(0.08 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3D Systems
CorporationUnaudited Condensed Consolidated
Statements of Cash FlowsSix Months Ended June 30,
2018 and 2017
|
|
|
Six Months Ended June 30, |
(in
thousands) |
2018 |
|
2017 |
Cash
flows from operating activities: |
|
|
|
Net
loss |
$ |
(29,573 |
) |
|
$ |
(17,909 |
) |
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
29,948 |
|
|
30,575 |
|
Stock-based compensation |
13,734 |
|
|
14,450 |
|
Impairment of assets |
1,411 |
|
|
— |
|
Provision
for bad debts |
1,356 |
|
|
166 |
|
Provision
for deferred income taxes |
(2,287 |
) |
|
(1,580 |
) |
Changes
in operating accounts, net of acquisitions: |
|
|
|
Accounts
receivable |
(3,384 |
) |
|
5,549 |
|
Inventories |
(14,937 |
) |
|
(9,766 |
) |
Prepaid
expenses and other current assets |
(6,739 |
) |
|
(2,345 |
) |
Accounts
payable |
2,762 |
|
|
4,343 |
|
Accrued
and other current liabilities |
19,208 |
|
|
(6,727 |
) |
All other
operating activities |
(2,328 |
) |
|
1,823 |
|
Net cash
provided by operating activities |
9,171 |
|
|
18,579 |
|
Cash
flows from investing activities: |
|
|
|
Cash paid
for acquisitions, net of cash assumed |
— |
|
|
(34,291 |
) |
Purchases
of property and equipment |
(18,095 |
) |
|
(11,243 |
) |
Additions
to license and patent costs |
(523 |
) |
|
(571 |
) |
Other
investing activities |
— |
|
|
(1,650 |
) |
Proceeds
from disposition of property and equipment |
9 |
|
|
271 |
|
Net cash
used in investing activities |
(18,609 |
) |
|
(47,484 |
) |
Cash
flows from financing activities: |
|
|
|
Payments
on earnout consideration |
(2,675 |
) |
|
(3,206 |
) |
Payments
related to net-share settlement of stock-based compensation |
(1,804 |
) |
|
(1,970 |
) |
Repayment
of capital lease obligations |
(344 |
) |
|
(290 |
) |
Net cash
used in financing activities |
(4,823 |
) |
|
(5,466 |
) |
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
(2,502 |
) |
|
3,602 |
|
Net
decrease in cash, cash equivalents and restricted cash |
(16,763 |
) |
|
(30,769 |
) |
Cash,
cash equivalents and restricted cash at the beginning of the period
(a) |
136,831 |
|
|
185,248 |
|
Cash,
cash equivalents and restricted cash at the end of the period
(a) |
$ |
120,068 |
|
|
$ |
154,479 |
|
|
|
|
|
|
|
|
|
- The amounts for cash and cash equivalents shown above include
restricted cash of $755 and $488 as of June 30, 2018 and 2017,
respectively, and $487 and $301 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 Six Months Ended June 30, 2018
and 2017
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
(in thousands,
except per share amounts) |
2018 |
|
2017 |
|
2018 |
|
2017 |
Numerator for basic and
diluted net loss per share: |
|
|
|
|
|
|
|
Net loss attributable
to 3D Systems Corporation |
$ |
(8,862 |
) |
|
$ |
(8,416 |
) |
|
$ |
(29,819 |
) |
|
$ |
(18,387 |
) |
|
|
|
|
|
|
|
|
Denominator for basic
and diluted net loss per share: |
|
|
|
|
|
|
|
Weighted average
shares |
111,920 |
|
|
111,398 |
|
|
111,870 |
|
|
111,350 |
|
|
|
|
|
|
|
|
|
Net loss per share -
basic and diluted |
$ |
(0.08 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3D Systems
CorporationSchedule 2Unaudited
Reconciliations of GAAP to Non-GAAP
MeasuresQuarter and Six Months Ended June 30, 2018
and 2017
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
(in millions,
except per share amounts) |
2018 |
|
2017 |
|
2018 |
|
2017 |
GAAP net loss
attributable to 3D Systems Corporation |
$ |
(8.9 |
) |
|
$ |
(8.4 |
) |
|
$ |
(29.8 |
) |
|
$ |
(18.4 |
) |
Adjustments: |
|
|
|
|
|
|
|
Amortization, stock-based compensation & other 1 |
14.5 |
|
|
16.3 |
|
|
29.6 |
|
|
32.3 |
|
Legal and
acquisition-related 2 |
(0.4 |
) |
|
0.7 |
|
|
— |
|
|
1.7 |
|
Cost
optimization plan 3 |
1.0 |
|
|
— |
|
|
1.6 |
|
|
— |
|
Impairment of cost-method investments 4 |
— |
|
|
— |
|
|
1.4 |
|
|
— |
|
Non-GAAP net income
(loss) attributable to 3D Systems Corporation |
$ |
6.2 |
|
|
$ |
8.6 |
|
|
$ |
2.8 |
|
|
$ |
15.6 |
|
Non-GAAP net income
(loss) per share available to 3D Systems common stock holders -
basic and diluted 5 |
$ |
0.06 |
|
|
$ |
0.08 |
|
|
$ |
0.02 |
|
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
1 For the
quarter ended June 30, 2018, the adjustment included $0.1 in COGS
and $14.4 in SG&A. For the quarter ended June 30, 2017, the
adjustment included $0.1 in COGS and $16.2 in SG&A. For the six
months ended June 30, 2018, the adjustment included $0.2 in COGS
and $29.4 in SG&A. For the six months ended June 30, 2017, the
adjustment included $0.2 in COGS and $32.1 in SG&A. |
2 For the
quarter ended June 30, 2018, the adjustment included ($0.4) in
SG&A. For the quarter ended June 30, 2017, the adjustment
included $0.5 in SG&A and $0.2 in interest and other income,
net. For the six months ended June 30, 2017, the adjustment
included $1.5 in SG&A and $0.2 in interest and other income,
net. |
3 For the
quarter ended June 30, 2018, the adjustment included $0.2 in COGS,
$0.7 in SG&A and $0.1 in R&D. For the six months ended June
30, 2018, the adjustment included $0.3 in COGS, $1.1 in SG&A,
and approximately $0.2 in R&D. |
4 The
Company has minority investments of less than 20% ownership in
enterprises that benefit from, or are powered by its technology
portfolio. The value of each of these investments is assessed
periodically, and impairment recorded when required. For the
quarter and six months ended June 30, 2018, the adjustment included
zero and $1.4, respectively, in interest and other expense, net.
The Company excluded this amount as it is not related to on-going
operations, and intends to exclude these impairment amounts from
non-GAAP net income going forward. |
5 Denominator based on weighted average shares used in
the GAAP EPS calculation. |
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