- Revenue of $159.5 million on increased demand for production systems, software and healthcare solutions
(PRNewswire) — 3D Systems Corporation (NYSE: DDD) announced today its financial results for the second quarter and six months ended June 30, 2017.
For the second quarter of 2017, the company reported revenue growth of 1% to $159.5 million compared to $158.1 million in the second quarter of the previous year. The company reported a second quarter GAAP loss of $0.08 per share compared to a loss of $0.04 per share in the prior year and non-GAAP earnings of $0.08 per share compared to non-GAAP earnings of $0.12 per share in the second quarter of 2016.
Demand from healthcare and industrial customers as well as strength in EMEA was offset by softer sales in APAC and lower revenue from professional printers.
"We are pleased with the growth in production printers, materials, software and healthcare," commented Vyomesh Joshi (VJ), Chief Executive Officer, 3D Systems. "However, we have work to do in the second half of this year to improve our execution across the company and position ourselves well for long term success and profitable growth in 2018 and beyond."
Gross profit margin for the second quarter of 2017 was 50.6% compared to 50.9% in the second quarter of 2016 as cost savings from manufacturing and supply chain improvements continue to support strategic investments and competitive pricing.
For the second quarter of 2017, operating expenses were $87.5 million compared to $84.1 million in the prior year. SG&A expenses decreased less than 1% to $63.1 million and R&D expenses increased 17% over the second quarter of 2016 to $24.4 million, primarily from investments in production solutions including Figure 4, metals and materials.
"We continue to make strategic investments in IT, go to market and innovation. For the remainder of the year, we will also increase our focus on costs, including operating expenses, in support of 2017 and long term," commented John McMullen, Executive Vice President and Chief Financial Officer.
During the quarter, the company used $1.0 million of cash from operations and ended the quarter with $154.0 million of cash on hand.
For the first six months of 2017, revenue increased 2% to $315.9 million compared to $310.7 million in the first six months of 2016. The company reported a GAAP loss of $0.17 per share for the first six months of 2017 compared to a loss of $0.20 per share in the same period of the prior year and reported non-GAAP earnings of $0.14 per share in 2017 compared to non-GAAP earnings of $0.17 per share in the first six months of 2016.
"We are keenly focused on delivering production solutions that provide durability, repeatability, productivity and leadership in total cost of operations. We believe our investments, innovation and improved execution will position us well for the long term and enable us to drive the transition in 3D printing from prototyping to production," concluded Joshi.
Revised Full Year 2017 Guidance
Based on the results and plans for the remainder of the year, management revised full year 2017 guidance. For the full year 2017, management expects revenue growth of 2% to 6% resulting in a revenue range of $643 million to $671 million. Management expects GAAP earnings per share to be a loss of approximately 14 cents per share in 2017 compared to a loss of 35 cents per share in 2016. Management expects non-GAAP earnings per share to be approximately flat for the full year 2017 compared to non-GAAP earnings of 46 cents per share for the full year 2016. Additionally, management expects to generate positive cash flow from operations for the full year 2017.
Q2 2017 Conference Call and Webcast
The company expects to file its Form 10-Q for the quarter ended June 30, 2017 with the Securities and Exchange Commission on August 2, 2017. 3D Systems plans to hold a conference call and simultaneous webcast to discuss these results on Wednesday, August 2, 2017, at 4:30 p.m. Eastern Time.
Date: Wednesday, August 2, 2017
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
The recorded webcast will be available beginning 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 Statements of Operations and Comprehensive Income (Loss) | |||||||||||
|
Quarter and Six Months Ended June 30, 2017 and 2016 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, | ||||||||
|
(in thousands, except per share amounts) |
2017 |
|
2016 |
|
2017 |
|
2016 | ||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Products |
$ |
94,421 |
|
$ |
94,899 |
|
$ |
189,151 |
|
$ |
185,863 |
|
Services |
|
65,046 |
|
|
63,212 |
|
|
126,747 |
|
|
124,803 |
|
Total revenue |
|
159,467 |
|
|
158,111 |
|
|
315,898 |
|
|
310,666 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
46,554 |
|
|
46,200 |
|
|
91,302 |
|
|
90,361 |
|
Services |
|
32,240 |
|
|
31,500 |
|
|
63,737 |
|
|
62,381 |
|
Total cost of sales |
|
78,794 |
|
|
77,700 |
|
|
155,039 |
|
|
152,742 |
|
Gross profit |
|
80,673 |
|
|
80,411 |
|
|
160,859 |
|
|
157,924 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
63,088 |
|
|
63,228 |
|
|
129,493 |
|
|
137,195 |
|
Research and development |
|
24,449 |
|
|
20,900 |
|
|
47,301 |
|
|
41,205 |
|
Total operating expenses |
|
87,537 |
|
|
84,128 |
|
|
176,794 |
|
|
178,400 |
|
Loss from operations |
|
(6,864) |
|
|
(3,717) |
|
|
(15,935) |
|
|
(20,476) |
|
Interest and other income, net |
|
933 |
|
|
208 |
|
|
1,134 |
|
|
334 |
|
Loss before income taxes |
|
(5,931) |
|
|
(3,509) |
|
|
(14,801) |
|
|
(20,142) |
|
Provision for income taxes |
|
2,067 |
|
|
1,700 |
|
|
3,108 |
|
|
2,879 |
|
Net loss |
|
(7,998) |
|
|
(5,209) |
|
|
(17,909) |
|
|
(23,021) |
|
Less: net income (loss) attributable to noncontrolling interests |
|
418 |
|
|
(561) |
|
|
478 |
|
|
(585) |
|
Net loss attributable to 3D Systems Corporation |
$ |
(8,416) |
|
$ |
(4,648) |
|
$ |
(18,387) |
|
$ |
(22,436) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share available to 3D Systems Corporation common stockholders — basic and diluted |
$ |
(0.08) |
|
$ |
(0.04) |
|
$ |
(0.17) |
|
$ |
(0.20) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Pension adjustments, net of taxes |
$ |
(101) |
|
$ |
67 |
|
$ |
(81) |
|
$ |
36 |
|
Foreign currency translation gain (loss) |
|
12,489 |
|
|
(6,654) |
|
|
20,881 |
|
|
1,285 |
|
Total other comprehensive income (loss) |
|
12,388 |
|
|
(6,587) |
|
|
20,800 |
|
|
1,321 |
|
Less foreign currency translation gain attributable to noncontrolling interests |
|
74 |
|
|
(43) |
|
|
135 |
|
|
46 |
|
Other comprehensive income attributable to 3D Systems Corporation |
|
12,314 |
|
|
(6,544) |
|
|
20,665 |
|
|
1,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) |
|
4,390 |
|
|
(11,796) |
|
|
2,891 |
|
|
(21,700) |
|
Less comprehensive income (loss) attributable to noncontrolling interests |
|
492 |
|
|
(604) |
|
|
613 |
|
|
(539) |
|
Comprehensive income (loss) attributable to 3D Systems Corporation |
$ |
3,898 |
|
$ |
(11,192) |
|
$ |
2,278 |
|
$ |
(21,161) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3D Systems Corporation | ||||||
|
Unaudited Condensed Consolidated Balance Sheets | ||||||
|
June 30, 2017 and December 2016 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, | ||
|
(in thousands, except par value) |
|
2017 |
|
2016 | ||
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
153,991 |
|
$ |
184,947 |
|
Accounts receivable, net of reserves — $11,036 (2017) and $12,920 (2016) |
|
|
126,287 |
|
|
127,114 |
|
Inventories |
|
|
110,816 |
|
|
103,331 |
|
Prepaid expenses and other current assets |
|
|
20,748 |
|
|
17,558 |
|
Total current assets |
|
|
411,842 |
|
|
432,950 |
|
Property and equipment, net |
|
|
87,316 |
|
|
79,978 |
|
Intangible assets, net |
|
|
115,011 |
|
|
121,501 |
|
Goodwill |
|
|
225,104 |
|
|
181,230 |
|
Long term deferred income tax asset |
|
|
7,983 |
|
|
8,123 |
|
Other assets, net |
|
|
27,989 |
|
|
25,371 |
|
Total assets |
|
$ |
875,245 |
|
$ |
849,153 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Current portion of capitalized lease obligations |
|
$ |
613 |
|
$ |
572 |
|
Accounts payable |
|
|
46,448 |
|
|
40,514 |
|
Accrued and other liabilities |
|
|
45,812 |
|
|
49,968 |
|
Customer deposits |
|
|
5,139 |
|
|
5,857 |
|
Deferred revenue |
|
|
42,404 |
|
|
33,494 |
|
Total current liabilities |
|
|
140,416 |
|
|
130,405 |
|
Long term portion of capitalized lease obligations |
|
|
7,360 |
|
|
7,587 |
|
Long term deferred income tax liability |
|
|
17,250 |
|
|
17,601 |
|
Other liabilities |
|
|
56,068 |
|
|
57,988 |
|
Total liabilities |
|
|
221,094 |
|
|
213,581 |
|
Redeemable noncontrolling interests |
|
|
8,872 |
|
|
8,872 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
Common stock, $0.001 par value, authorized 220,000 shares;
|
115 |
|
|
115 | ||
|
Additional paid-in capital |
|
|
1,314,880 |
|
|
1,307,428 |
|
Treasury stock, at cost — 1,702 shares (2017) and 1,498 shares (2016) |
|
|
(4,628) |
|
|
(2,658) |
|
Accumulated deficit |
|
|
(629,968) |
|
|
(621,787) |
|
Accumulated other comprehensive loss |
|
|
(32,560) |
|
|
(53,225) |
|
Total 3D Systems Corporation stockholders' equity |
|
|
647,839 |
|
|
629,873 |
|
Noncontrolling interests |
|
|
(2,560) |
|
|
(3,173) |
|
Total stockholders' equity |
|
|
645,279 |
|
|
626,700 |
|
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
|
$ |
875,245 |
|
$ |
849,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3D Systems Corporation | |||||
|
Unaudited Condensed Consolidated Statements of Cash Flows | |||||
|
Six Months Ended June 30, 2017 and 2016 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, | ||||
|
(In thousands) |
|
2017 |
|
|
2016 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net loss |
$ |
(17,909) |
|
$ |
(23,021) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
30,575 |
|
|
30,435 |
|
Stock-based compensation |
|
14,450 |
|
|
18,893 |
|
Provision for bad debts |
|
166 |
|
|
2,677 |
|
Benefit of deferred income taxes |
|
(1,580) |
|
|
(2,201) |
|
Changes in operating accounts, net of acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
5,549 |
|
|
30,375 |
|
Inventories |
|
(9,766) |
|
|
(16,153) |
|
Prepaid expenses and other current assets |
|
(2,532) |
|
|
(2,463) |
|
Accounts payable |
|
4,343 |
|
|
(4,526) |
|
Accrued and other current liabilities |
|
(6,727) |
|
|
(4,328) |
|
Deferred revenue |
|
8,032 |
|
|
8,198 |
|
All other operating activities |
|
(6,209) |
|
|
(6,846) |
|
Net cash provided by operating activities |
|
18,392 |
|
|
31,040 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
Cash paid for acquisitions, net of cash assumed |
|
(34,291) |
|
|
- |
|
Purchases of property and equipment |
|
(11,243) |
|
|
(7,597) |
|
Additions to license and patent costs |
|
(571) |
|
|
(790) |
|
Other investing activities |
|
(1,650) |
|
|
(1,000) |
|
Proceeds from disposition of property and equipment |
|
271 |
|
|
- |
|
Net cash used in investing activities |
|
(47,484) |
|
|
(9,387) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
Payments on earnout consideration |
|
(3,206) |
|
|
- |
|
Repurchase of stock, net, and employer paid tax on employee awards |
|
(1,970) |
|
|
(1,307) |
|
Repayment of capital lease obligations |
|
(290) |
|
|
(524) |
|
Net cash used in financing activities |
|
(5,466) |
|
|
(1,831) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
3,602 |
|
|
783 |
|
Net (decrease) increase in cash and cash equivalents |
|
(30,956) |
|
|
20,605 |
|
Cash and cash equivalents at the beginning of the period |
|
184,947 |
|
|
155,643 |
|
Cash and cash equivalents at the end of the period |
$ |
153,991 |
|
$ |
176,248 |
|
|
|
|
|
|
|
|
Cash interest payments |
$ |
400 |
|
$ |
211 |
|
Cash income tax payments, net |
$ |
3,367 |
|
$ |
5,933 |
|
Transfer of equipment from inventory to property and equipment, net (a) |
$ |
7,689 |
|
$ |
7,529 |
|
Transfer of equipment to inventory from property and equipment, net (b) |
$ |
907 |
|
$ |
2,075 |
|
Stock issued for acquisitions |
$ |
3,208 |
|
$ |
— |
|
3D Systems Corporation | |||||||||||
|
Schedule 1 | |||||||||||
|
Earnings (Loss) Per Share | |||||||||||
|
Quarter and Six Months Ended June 30, 2017 and 2016 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, | ||||||||
|
(in thousands, except per share amounts) |
2017 |
|
2016 |
|
2017 |
|
2016 | ||||
|
Numerator for basic and diluted net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to 3D Systems Corporation |
$ |
(8,416) |
|
$ |
(4,684) |
|
$ |
(18,387) |
|
$ |
(22,436) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic and diluted net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares |
|
111,398 |
|
|
111,166 |
|
|
111,350 |
|
|
111,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic and diluted |
$ |
(0.08) |
|
$ |
(0.04) |
|
$ |
(0.17) |
|
$ |
(0.20) |
|
3D Systems Corporation | |||||||||||
|
Schedule 2 | |||||||||||
|
Unaudited Reconciliations of GAAP to Non-GAAP Measures | |||||||||||
|
Quarter and Six Months Ended June 30, 2017 and 2016 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions, except per share amounts) |
Quarter Ended June 30, |
|
|
Six Months Ended June 30, | |||||||
|
2017 |
|
2016 |
|
2017 |
|
2016 | |||||
|
GAAP Net loss attributable to 3D Systems Corporation |
$ |
(8.4) |
|
$ |
(4.6) |
|
$ |
(18.4) |
|
$ |
(22.4) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization, stock-based compensation & other1 |
|
16.3 |
|
|
16.1 |
|
|
32.3 |
|
|
36.6 |
|
Legal and acquisiton-related2 |
|
0.7 |
|
|
1.8 |
|
|
1.7 |
|
|
2.7 |
|
Portfolio restructuring3 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Tax effect of adjustments3 |
|
- |
|
|
- |
|
- |
|
1.5 | ||
|
Non-GAAP net income attributable to 3D Systems Corporation |
$ |
8.6 |
|
$ |
13.2 |
|
$ |
15.6 |
|
$ |
18.4 |
|
Non-GAAP net income per share available to 3D Systems
|
$ |
0.08 |
|
$ |
0.12 |
|
$ |
0.14 |
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 For the quarter ended June 30, 2017, the adjustment included $0.1 in COGS and $16.2 in SG&A. For the quarter ended June 30, 2016, the adjustment included $0.1 in COGS and $16.0 SG&A. For the six months ended June 30, 2017, the adjustment included $0.2 in COGS and $32.1 in SG&A. For the six months ended June 30, 2016, the adjustment included $0.2 in COGS and $36.4 in SG&A. | |||||||||||
|
| |||||||||||
|
2 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 quarter ended June 30, 2016 the adjustment included included $1.8 in SG&A. 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. For the six months ended June 30, 2016 the adjustment included $2.7 in SG&A. | |||||||||||
|
| |||||||||||
|
3Tax effect for the quarter ended March 31, 2016 was calculated quarterly based on the Company's overall tax rate. Tax effect for the quarters ended after March 31, 2016 were calculated based on the Company's quarterly U.S. tax rate of 0%, which is due to valuation allowances in connection with GAAP net losses. | |||||||||||
|
| |||||||||||
|
4 Denominator based on diluted shares used in the GAAP EPS calculation. | |||||||||||
|
3D Systems Corporation | |||||
|
Schedule 3 | |||||
|
Unaudited Reconciliations of GAAP to Non-GAAP Measures | |||||
|
Expected Full Year Ended December 31, 2017 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year Ended
| ||||
|
GAAP Earnings per Share |
|
$ |
(0.14) |
|
|
|
Estimated adjustments to arrive at non-GAAP Earnings per Share: |
|
|
| ||
|
Amortization |
|
|
0.30 |
|
|
|
Stock Based Compensation |
|
|
0.25 |
|
|
|
Acquisition, severance and settlements |
|
|
0.05 |
|
|
|
Total Adjustments |
|
$ |
0.60 |
|
|
|
Non-GAAP Earnings per Share |
|
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
- Tax effect is calculated based on the Company's quarterly U.S. tax rate. As a result of the valuation allowance previously recorded in connection with GAAP net losses, tax effect is expected to be 0% in 2017.
| |||||
View original content with multimedia: http://www.prnewswire.com/news-releases/3d-systems-reports-second-quarter-2017-financial-results-300498509.html
SOURCE 3D Systems Corporation
| Contact: |
| 3D Systems Corporation
Investor Contact: Stacey Witten, Email: Email Contact Media Contact: Diane Parrish, Email: Email Contact Web: https://www.3dsystems.com |