3D Systems Corporation (NYSE: DDD) announced today its
financial results for the fourth quarter ended December 31,
2018.
For the fourth quarter of 2018, the company reported two percent
revenue growth to $180.7 million compared to $177.3 million in the
fourth quarter of the previous year with 17 percent higher printer
revenue on 113 percent increase in printer unit sales, 16 percent
growth in healthcare solutions and three percent growth in
software. The company reported a GAAP loss of $0.04 per share in
the fourth quarter of 2018, including a $4.9 million tax benefit
related to the release of reserves resulting from the expiration of
open tax periods, compared to a GAAP loss of $0.08 per share in the
fourth quarter of 2017. The company reported non-GAAP earnings of
$0.10 per share in the fourth quarter of 2018, including the tax
benefit, compared to non-GAAP earnings of $0.05 per share in the
fourth quarter of 2017.
For the full year 2018, revenue increased six percent to $687.7
million compared to $646.1 million in 2017, driven by 25 percent
printer revenue growth on a 76 percent increase in printer unit
sales, one percent growth in materials, five percent growth in
software, two percent growth in on demand manufacturing and 20
percent growth in healthcare solutions. The company reported a GAAP
loss of $0.41 per share for the full year 2018 compared to a loss
of $0.59 per share in the prior year, and reported non-GAAP
earnings of $0.15 per share for the full year 2018 compared to
a non-GAAP loss of $0.02 per share in the prior year.
"We are pleased with our continued strong growth in printer
revenue and units across platforms, in both plastics and metals, as
well as continued growth in healthcare and software solutions. We
are also pleased with the significant portfolio enhancements we
made throughout 2018, our improved execution and the cost structure
opportunities available to us as we enter 2019," commented Vyomesh
Joshi (VJ) president and chief executive officer, 3D Systems.
The company reported GAAP gross profit margin of 45.7 percent
during the fourth quarter compared to 48.2 percent in the fourth
quarter of 2017. For the full year, gross profit margin remained
flat compared to the prior year, with GAAP gross profit margin of
47.2 percent. Supply chain efficiencies and cost improvements were
offset by the impact of sales mix, costs to launch and ramp new
products and lower on demand manufacturing gross profit
margins.
For the fourth quarter of 2018, GAAP and non-GAAP operating
expenses decreased two percent compared to the prior year. GAAP
operating expenses were $89.6 million compared to $91.2 million in
the fourth quarter of the prior year. The company made significant
investments in new product development and launches, IT
infrastructure, go-to-market and operational improvements,
particularly in the first half of the year, while cost reduction
actions began to show results in the second half of 2018. For the
full year, the company reported a two percent increase in GAAP
operating expenses and a four percent increase in non-GAAP
operating expenses compared to the prior year.
"With multiple 2018 product launches now behind us, we are
shifting our investment focus to materials innovations and software
growth opportunities,” commented John McMullen, executive vice
president and chief financial officer. “We are very focused on
reducing our cost structure and driving cash generation during
2019.”
The company generated $7.7 million of cash from operations in
the fourth quarter and generated $4.8 million of cash from
operations during fiscal year 2018. The company, ended the year
with $110.0 million of unrestricted cash on hand, including $25
million of proceeds from the company's revolving credit
facility.
“We have made significant progress in our turn around and
transformation work for the company. Our improved operational
foundation, execution and unmatched portfolio focused on production
solutions, position the company very well to drive continued and
increasingly profitable growth in 2019 and beyond,” concluded
Joshi.
Q4 2018 Conference Call and WebcastThe company
expects to file its Form 10-K for the quarter ended
December 31, 2018 with the Securities and Exchange Commission
on February 28, 2019. 3D Systems also plans to hold a
conference call and simultaneous webcast to discuss these results
on Thursday, February 28, 2019, at 4:30 p.m. Eastern Time.
Date: Thursday, February 28, 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
CorporationConsolidated Balance
Sheets
(in thousands,
except par value) |
December 31,2018 |
|
December 31,2017 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
109,998 |
|
|
$ |
136,344 |
|
Accounts
receivable, net of reserves — $8,423 (2018) and $10,258 (2017) |
126,618 |
|
|
129,879 |
|
Inventories |
133,161 |
|
|
103,903 |
|
Insurance
proceeds receivable |
— |
|
|
50,000 |
|
Prepaid
expenses and other current assets |
27,697 |
|
|
18,296 |
|
Total
current assets |
397,474 |
|
|
438,422 |
|
Property and equipment,
net |
107,718 |
|
|
97,521 |
|
Intangible assets,
net |
68,275 |
|
|
98,783 |
|
Goodwill |
221,334 |
|
|
230,882 |
|
Deferred income tax
asset |
4,217 |
|
|
4,020 |
|
Other assets, net |
26,814 |
|
|
27,136 |
|
Total
assets |
$ |
825,832 |
|
|
$ |
896,764 |
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Current
portion of capitalized lease obligations |
$ |
654 |
|
|
$ |
644 |
|
Accounts
payable |
66,722 |
|
|
55,607 |
|
Accrued
and other liabilities |
59,265 |
|
|
65,899 |
|
Accrued
litigation settlement |
— |
|
|
50,000 |
|
Customer
deposits |
4,987 |
|
|
5,765 |
|
Deferred
revenue |
32,432 |
|
|
29,214 |
|
Total
current liabilities |
164,060 |
|
|
207,129 |
|
Long-term debt |
25,000 |
|
|
— |
|
Long-term portion of
capitalized lease obligations |
6,392 |
|
|
7,078 |
|
Deferred income tax
liability |
6,190 |
|
|
8,983 |
|
Other liabilities |
39,331 |
|
|
48,754 |
|
Total
liabilities |
240,973 |
|
|
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 118,650
(2018) and 117,025 (2017) |
117 |
|
|
115 |
|
Additional paid-in capital |
1,355,503 |
|
|
1,326,250 |
|
Treasury
stock, at cost — 2,946 shares (2018) and 2,219 shares (2017) |
(15,572 |
) |
|
(8,203 |
) |
Accumulated deficit |
(722,701 |
) |
|
(677,772 |
) |
Accumulated other comprehensive loss |
(38,978 |
) |
|
(21,536 |
) |
Total 3D
Systems Corporation stockholders' equity |
578,369 |
|
|
618,854 |
|
Noncontrolling
interests |
(2,382 |
) |
|
(2,906 |
) |
Total
stockholders’ equity |
575,987 |
|
|
615,948 |
|
Total liabilities,
redeemable noncontrolling interests and stockholders’ equity |
$ |
825,832 |
|
|
$ |
896,764 |
|
|
|
|
|
|
|
|
|
3D Systems
CorporationConsolidated Statements of
Operations
|
|
Quarter endedDecember 31, |
|
Year endedDecember
31, |
(in thousands,
except per share amounts) |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue: |
|
|
|
|
|
|
|
|
Products |
|
$ |
113,062 |
|
|
$ |
102,349 |
|
|
$ |
429,215 |
|
|
$ |
391,596 |
|
Services |
|
67,650 |
|
|
74,915 |
|
|
258,445 |
|
|
254,473 |
|
Total
revenue |
|
180,712 |
|
|
177,264 |
|
|
687,660 |
|
|
646,069 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
Products |
|
61,731 |
|
|
52,758 |
|
|
229,793 |
|
|
216,446 |
|
Services |
|
36,428 |
|
|
39,048 |
|
|
133,473 |
|
|
124,784 |
|
Total
cost of sales |
|
98,159 |
|
|
91,806 |
|
|
363,266 |
|
|
341,230 |
|
Gross profit |
|
82,553 |
|
|
85,458 |
|
|
324,394 |
|
|
304,839 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Selling,
general and administrative |
|
66,062 |
|
|
68,195 |
|
|
272,287 |
|
|
264,185 |
|
Research
and development |
|
23,510 |
|
|
22,966 |
|
|
95,298 |
|
|
94,627 |
|
Total operating
expenses |
|
89,572 |
|
|
91,161 |
|
|
367,585 |
|
|
358,812 |
|
Loss from
operations |
|
(7,019 |
) |
|
(5,703 |
) |
|
(43,191 |
) |
|
(53,973 |
) |
Interest and other
expense, net |
|
(1,172 |
) |
|
(3,425 |
) |
|
(37 |
) |
|
(3,548 |
) |
Loss before income
taxes |
|
(8,191 |
) |
|
(9,128 |
) |
|
(43,228 |
) |
|
(57,521 |
) |
Provision for income
taxes |
|
(4,051 |
) |
|
971 |
|
|
2,035 |
|
|
7,802 |
|
Net loss |
|
(4,140 |
) |
|
(10,099 |
) |
|
(45,263 |
) |
|
(65,323 |
) |
Less: net income (loss)
attributable to noncontrolling interests |
|
(4 |
) |
|
35 |
|
|
242 |
|
|
868 |
|
Net loss attributable
to 3D Systems Corporation |
|
$ |
(4,136 |
) |
|
$ |
(10,134 |
) |
|
$ |
(45,505 |
) |
|
$ |
(66,191 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share
available to 3D Systems Corporation common stockholders - basic and
diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.59 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3D Systems
CorporationConsolidated Statements of Cash
Flows
|
|
Years ended December 31, |
(in thousands) |
|
2018 |
|
2017 |
|
Cash flows from operating activities: |
|
|
|
|
|
Net loss |
|
$ |
(45,263 |
) |
|
$ |
(65,323 |
) |
|
Adjustments to reconcile net loss
to net cash provided by operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
59,293 |
|
|
62,041 |
|
|
Stock-based compensation |
|
29,253 |
|
|
27,260 |
|
|
Lower of cost or market
adjustment |
|
— |
|
|
12,883 |
|
|
Impairment of assets |
|
1,998 |
|
|
2,427 |
|
|
Provision for bad debts |
|
1,824 |
|
|
1,051 |
|
|
Provision for deferred income
taxes |
|
(2,990 |
) |
|
(5,567 |
) |
|
Changes in operating accounts, net
of acquisitions: |
|
|
|
|
|
Accounts receivable |
|
599 |
|
|
3,987 |
|
|
Inventories |
|
(34,035 |
) |
|
(17,716 |
) |
|
Prepaid expenses and other current
assets |
|
40,922 |
|
|
(49,834 |
) |
|
Accounts payable |
|
11,559 |
|
|
12,448 |
|
|
Accrued and other current
liabilities |
|
(50,234 |
) |
|
50,209 |
|
|
All other operating activities |
|
(8,130 |
) |
|
(7,739 |
) |
|
Net cash provided by operating
activities |
|
4,796 |
|
|
26,127 |
|
|
Cash flows from investing activities: |
|
|
|
|
|
Cash paid for acquisitions, net of
cash assumed |
|
— |
|
|
(34,291 |
) |
|
Purchases of property and
equipment |
|
(40,694 |
) |
|
(30,881 |
) |
|
Additions to license and patent
costs |
|
(970 |
) |
|
(1,159 |
) |
|
Proceeds from disposition of
property and equipment |
|
333 |
|
|
273 |
|
|
Purchase of noncontrolling
interest |
|
— |
|
|
(2,250 |
) |
|
Other investing activities |
|
(496 |
) |
|
(2,351 |
) |
|
Net cash used in investing
activities |
|
(41,827 |
) |
|
(70,659 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
Proceeds from short-term debt |
|
25,000 |
|
|
— |
|
|
Payments related to net-share
settlement of stock-based compensation |
|
(7,367 |
) |
|
(5,545 |
) |
|
Payments on earnout
consideration |
|
(2,675 |
) |
|
(3,206 |
) |
|
Repayment of capital lease
obligations |
|
(694 |
) |
|
(437 |
) |
|
Net cash provided by (used in)
financing activities |
|
14,264 |
|
|
(9,188 |
) |
|
Effect of exchange rate changes on cash and cash
equivalents |
|
(3,145 |
) |
|
5,303 |
|
|
Net (decrease) in cash and cash equivalents |
|
(25,912 |
) |
|
(48,417 |
) |
|
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) |
|
$ |
110,919 |
|
|
$ |
136,831 |
|
|
(a) The amounts for cash and cash equivalents shown above
include restricted cash of $921, $487 and, $301 as of
December 31, 2018, 2017 and 2016, respectively, which
were included in other assets, net, in the Consolidated Balance
Sheets.
3D Systems
CorporationLoss Per Share
|
|
Quarter endedDecember 31, |
|
Years endedDecember 31, |
(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 |
|
$ |
(4,136 |
) |
|
$ |
(10,134 |
) |
|
$ |
(45,505 |
) |
|
$ |
(66,191 |
) |
|
|
|
|
|
|
|
|
|
Denominator for basic
and diluted net loss per share: |
|
|
|
|
|
|
|
|
Weighted average
shares |
|
113,016 |
|
|
111,817 |
|
|
112,327 |
|
|
111,554 |
|
|
|
|
|
|
|
|
|
|
Net loss per share,
basic and diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.59 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3D Systems
CorporationUnaudited Reconciliations of GAAP to
Non-GAAP Measures
|
Quarter Ended December 31, |
|
Years ended December 31, |
(in millions,
except per share amounts) |
2018 |
|
2017 |
|
2018 |
|
2017 |
GAAP Net loss
attributable to 3D Systems Corporation |
$ |
(4,136 |
) |
|
$ |
(10,134 |
) |
|
$ |
(45,513 |
) |
|
$ |
(66,200 |
) |
Adjustments: |
|
|
|
|
|
|
|
Amortization,
stock-based compensation & other 1 |
13,883 |
|
|
15,100 |
|
|
58,682 |
|
|
62,900 |
|
Legal and
acquisition-related 2 |
86 |
|
|
(1,400 |
) |
|
(2,026 |
) |
|
(100 |
) |
Cost optimization plan
3 |
1,538 |
|
|
— |
|
|
3,958 |
|
|
— |
|
Impairment of
cost-method investments 4 |
— |
|
|
1,700 |
|
|
1,373 |
|
|
1,700 |
|
Non-GAAP net income
attributable to 3D Systems Corporation |
$ |
11,371 |
|
|
$ |
5,266 |
|
|
$ |
16,474 |
|
|
$ |
(1,700 |
) |
Non-GAAP net income per
share available to 3D Systems common stock holders - basic and
diluted 5 |
$ |
0.10 |
|
|
$ |
0.05 |
|
|
$ |
0.15 |
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
1 For the quarter ended December 31, 2018, the adjustment
included $(0.2) in COGS and $14.1 in SG&A. For the quarter
ended December 31, 2017, the adjustment included $0.1 in COGS
and $15.0 in SG&A. For the twelve months ended December 31,
2018, the adjustment included $0.1 in COGS and $58.6 in SG&A.
For the twelve months ended December 31, 2017, the adjustment
included $0.4 in COGS and $62.5 in SG&A.2 For the quarter ended
December 31, 2018, the adjustment included $0.6 in COGS $(1.0)
in SG&A and $0.5 in interest and other income (expense), net.
For the quarter ended December 31, 2017, the adjustment
included ($1.4) in SG&A. For the twelve months ended December
31, 2018, the adjustment included $0.6 in COGS, $(1.7) in SG&A
and $(0.9) in interest and other income (expense), net. For the
twelve months ended December 31, 2017, the adjustment included
$(0.3) in SG&A and $0.2 in interest and other income (expense),
net.3 For the quarter ended December 31, 2018, the adjustment
included $0.7 in COGS and $0.8 in SG&A. For the twelve months
ended December 31, 2018, the adjustment included $1.1 in COGS, $2.4
in SG&A, and approximately $0.5 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 twelve
months ended December 31, 2017, the adjustment included $1.7 in
interest and other income (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.
Investor Contact: Stacey
Witteninvestor.relations@3dsystems.com
Media Contact: Nicole
Yorkpress@3dsystems.com
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