3D Systems Reports Third Quarter 2023 Financial Results

Presentation of Information in this Press Release
3D Systems reports its financial results in accordance with GAAP. Management also reviews and reports certain non-GAAP measures, including: non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP diluted income (loss) per share, and Adjusted EBITDA. These non-GAAP measures exclude certain items that management does not view as part of 3D Systems’ core results as they may be highly variable, may be unusual or infrequent, are difficult to predict and can distort underlying business trends and results. Management believes that the non-GAAP measures provide useful additional insight into underlying business trends and results and provide meaningful information regarding the comparison of period-over-period results. Additionally, management uses the non-GAAP measures for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets. 3D Systems’ non-GAAP measures are not calculated in accordance with or as required by GAAP and may not be calculated in the same manner as similarly titled measures used by other companies. These non-GAAP measures should thus be considered as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP.

To calculate the non-GAAP measures, 3D Systems excludes the impact of the following items:

  • amortization of intangible assets, a non-cash expense, as 3D Systems’ intangible assets were primarily acquired in connection with business combinations;
  • costs incurred in connection with acquisitions and divestitures, such as legal, consulting and advisory fees;
  • stock-based compensation expenses, a non-cash expense;
  • charges related to restructuring and cost optimization plans, impairment charges, including goodwill, and divestiture gains or losses;
  • certain compensation expense related to the 2021 Volumetric acquisition; and
  • costs, including legal fees, related to significant or unusual litigation matters.

Amortization of intangibles and acquisition and divestiture-related costs are excluded from non-GAAP measures as the timing and magnitude of business combination transactions are not predictable, can vary significantly from period to period and the purchase price allocated to amortizable intangible assets and the related amortization period are unique to each acquisition. Amortization of intangible assets will recur in future periods until such intangible assets have been fully amortized. While intangible assets contribute to the company’s revenue generation, the amortization of intangible assets does not directly relate to the sale of the company’s products or services. Additionally, intangible assets amortization expense typically fluctuates based on the size and timing of the company’s acquisition activity. Accordingly, the company believes excluding the amortization of intangible assets enhances the company’s and investors’ ability to compare the company’s past financial performance with its current performance and to analyze underlying business performance and trends. Although stock-based compensation is a key incentive offered to certain of our employees, the expense is non-cash in nature, and we continue to evaluate our business performance excluding stock-based compensation; therefore, it is excluded from non-GAAP measures. Stock-based compensation expenses will recur in future periods. Charges related to restructuring and cost optimization plans, impairment charges, including goodwill, divestiture gains or losses, and the costs, including legal fees, related to significant or unusual litigation matters are excluded from non-GAAP measures as the frequency and magnitude of these activities may vary widely from period to period. Additionally, impairment charges, including goodwill, are non-cash. Furthermore, the company believes the costs, including legal fees, related to significant or unusual litigation matters are not indicative of our core business' operations. Finally, 3D Systems excludes contingent consideration recorded as compensation expense related to the 2021 Volumetric acquisition from non-GAAP measures as management evaluates financial performance excluding this expense, which is viewed by management as similar to acquisition consideration.

The matters discussed above are tax effected, as applicable, in calculating non-GAAP diluted income (loss) per share.

Adjusted EBITDA, defined as net income, plus income tax (provision) benefit, interest and other income (expense), net, stock-based compensation expense, amortization of intangible assets, depreciation expense, and other non-GAAP adjustments, all as described above, is used by management to evaluate performance and helps measure financial performance period-over-period.

A reconciliation of GAAP to non-GAAP financial measures is provided in the accompanying schedules.

3D Systems does not provide forward-looking guidance for certain measures on a GAAP basis. The company is unable to provide a quantitative reconciliation of forward-looking non-GAAP gross profit margin, Adjusted EBITDA, and free cash flow to the most directly comparable forward-looking GAAP measures without unreasonable effort because certain items, including litigation costs, acquisition expenses, stock-based compensation expense, intangible assets amortization expense, restructuring expenses, and goodwill impairment charges are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially.

About 3D Systems

More than 35 years ago, 3D Systems brought the innovation of 3D printing to the manufacturing industry. Today, as the leading additive manufacturing solutions partner, we bring innovation, performance, and reliability to every interaction - empowering our customers to create products and business models never before possible. Thanks to our unique offering of hardware, software, materials and services, each application-specific solution is powered by the expertise of our application engineers who collaborate with customers to transform how they deliver their products and services. 3D Systems’ solutions address a variety of advanced applications in healthcare and industrial Solutions markets such as medical and dental, aerospace & defense, automotive and durable goods. More information on the company is available at www.3dsystems.com

Tables Follow


3D Systems Corporation
Unaudited Consolidated Balance Sheets
September 30, 2023 and December 31, 2022
 
(in thousands, except par value) September 30, 2023  December 31, 2022
ASSETS   
Current assets:   
Cash and cash equivalents$445,554  $388,134 
Short-term investments     180,603  
Accounts receivable, net of reserves — $3,315 and $3,114   104,516       93,886  
Inventories   153,005       137,832  
Prepaid expenses and other current assets   36,638       33,790  
Total current assets   739,713       834,245  
Property and equipment, net   63,535       58,072  
Intangible assets, net   71,536       90,230  
Goodwill   391,325       385,312  
Right-of-use assets   73,020       42,746  
Deferred income tax asset   7,042       7,038  
Other assets   46,583       28,970  
Total assets $ 1,392,754     $ 1,446,613  
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY      
Current liabilities:      
Current lease liabilities $ 10,684     $ 9,036  
Accounts payable   46,108       53,826  
Accrued and other liabilities   43,575       55,571  
Customer deposits   6,793       6,911  
Deferred revenue   30,768       26,464  
Total current liabilities   137,928       151,808  
Long-term debt, net of deferred financing costs   451,520       449,510  
Long-term lease liabilities   71,295       41,779  
Deferred income tax liability   10,178       7,631  
Other liabilities   20,367       44,181  
Total liabilities   691,288       694,909  
Redeemable non-controlling interest   1,928       1,760  
Stockholders’ equity:      
Common stock, $0.001 par value, authorized 220,000 shares; shares issued 133,575 and 131,207 as of September 30, 2023 and December 31, 2022, respectively   133       131  
Additional paid-in capital   1,570,150       1,547,597  
Accumulated deficit   (813,982 )     (743,962 )
Accumulated other comprehensive loss   (56,763 )     (53,822 )
Total stockholders’ equity   699,538       749,944  
Total liabilities, redeemable non-controlling interest and stockholders’ equity $ 1,392,754     $ 1,446,613  



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