3D Systems Reports First Quarter 2024 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 non-GAAP operating expense 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 Condensed Consolidated Balance Sheets
March 31, 2024 and December 31, 2023
 
(in thousands, except par value) March 31, 2024  December 31, 2023
ASSETS   
Current assets:   
Cash and cash equivalents$212,040  $331,525 
Accounts receivable, net of reserves — $3,090 and $3,389  102,792       101,497  
Inventories   145,628       152,188  
Prepaid expenses and other current assets   45,405       42,612  
Total current assets   505,865       627,822  
Property and equipment, net   60,568       64,461  
Intangible assets, net   60,118       62,724  
Goodwill   114,559       116,082  
Operating lease right-of-use assets   56,010       58,406  
Finance lease right-of-use assets   12,046       12,174  
Long-term deferred income tax assets   3,292       4,230  
Other assets   44,778       44,761  
Total assets $ 857,236     $ 990,660  
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY      
Current liabilities:      
Current operating lease liabilities $ 9,877     $ 9,924  
Accounts payable   40,407       49,757  
Accrued and other liabilities   50,328       49,460  
Customer deposits   6,463       7,599  
Deferred revenue   38,844       30,448  
Total current liabilities   145,919       147,188  
Long-term debt, net of deferred financing costs   211,054       319,356  
Long-term operating lease liabilities   54,857       56,795  
Long-term deferred income tax liabilities   4,835       5,162  
Other liabilities   30,240       33,400  
Total liabilities   446,905       561,901  
Commitments and contingencies (Note 16)      
Redeemable non-controlling interest   1,966       2,006  
Stockholders’ equity:      
Common stock, $0.001 par value, authorized 220,000 shares; shares issued 133,803 and 133,619 as of March 31, 2024 and December 31, 2023, respectively   134       134  
Additional paid-in capital   1,582,325       1,577,519  
Accumulated deficit   (1,122,651 )     (1,106,650 )
Accumulated other comprehensive loss   (51,443 )     (44,250 )
Total stockholders’ equity   408,365       426,753  
Total liabilities, redeemable non-controlling interest and stockholders’ equity $ 857,236     $ 990,660  
               



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