3D Systems Reports Second Quarter and Six Months 2016 Financial Results


  • Revenue of $158.1 million and gross profit margin of 50.9% 
  • Continued strong demand and growth for healthcare solutions, software and materials
  • Generated $12.9 million of cash from operations

ROCK HILL, S.C., Aug. 03, 2016 (GLOBE NEWSWIRE) -- 3D Systems Corporation (NYSE:DDD) announced today its financial results for the second quarter and six months ended June 30, 2016.

For the second quarter of 2016, the company reported revenue of $158.1 million and a GAAP loss of $0.04 per share and non-GAAP earnings of $0.12 per share.

Quarterly revenue benefited from continued strong demand for the company’s healthcare solutions and software as well as higher materials orders from healthcare and industrial customers. However, these gains were not enough to offset the lower demand for 3D printers and on demand manufacturing in the quarter, resulting in a 7% decrease in revenue compared to the second quarter of 2015.

Gross profit margin for the second quarter of 2016 increased to 50.9% benefiting from the company’s shift away from consumer products and increased sales of higher margin materials, software and healthcare solutions. The comparable period of 2015 included charges in connection with the consolidation of production facilities that contributed to 47.9% gross profit margin.

For the second quarter of 2016, operating expenses were $84.1 million, including SG&A expenses of $63.2 million and R&D expenses of $20.9 million. Compared to the second quarter of 2015, SG&A expense decreased 21% on lower amortization and stock based compensation expenses and R&D expense decreased 19% due to timing of product development.

The company generated $12.9 million of cash from operations during the quarter and had $176.2 million of cash on hand at the end of June compared to $155.6 at December 2015.

For the first six months of 2016, revenue decreased 7% to $310.7 million resulting in a GAAP loss of $0.20 per share and non-GAAP earnings of $0.17 per share.

“We were pleased with continued strong demand for our healthcare solutions and software as well as increased materials sales into advanced industrial and healthcare applications,” commented Vyomesh Joshi (VJ), Chief Executive Officer, 3D Systems. “We see clear opportunities for improvements in 3D printers and on demand manufacturing services as we drive operational excellence and focus on providing reliable end-to-end solutions.”

“We are building a comprehensive strategy and assembling a world-class team and organizational structure we believe will enable us to deliver exceptional customer value, drive profitable growth and accelerate digital manufacturing,” concluded Joshi.

Q2 2016 Conference Call and Webcast
The company expects to file its second quarter 2016 Form 10-Q with the Securities and Exchange Commission on August 3, 2016. 3D Systems plans to hold a conference call and simultaneous webcast to discuss these results on Wednesday, August 3, 2016, at 8:30 a.m. Eastern Time. 

Date: Wednesday, August 3, 2016
Time: 8:30 a.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,” “estimates,” “intends,” “anticipates” or “plans” or the negative of these terms or other comparable terminology.  Forward-looking statements are based upon managements 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 several strategic acquisitions had on its financial results, the company reported non-GAAP measures that adjust net income and earnings per share by excluding the impact of amortization of intangibles, non-cash interest expense, acquisition and severance expenses and stock-based compensation expense. 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, 2016 and 2015
 
 Quarter Ended June 30,  Six Months Ended June 30, 
(in thousands, except per share amounts)2016 2015 2016 2015
Revenue:           
Products$ 94,899  $ 104,577  $ 185,863  $ 204,399 
Services  63,212    65,927    124,803    126,827 
Total revenue 158,111    170,504    310,666    331,226 
Cost of sales:          
Products 46,200    57,484    90,361    107,960 
Services  31,500    31,393    62,381    62,655 
Total cost of sales  77,700    88,877    152,742    170,615 
Gross profit 80,411    81,627    157,924    160,611 
Operating expenses:          
Selling, general and administrative 63,228    79,738    137,195    154,030 
Research and development  20,900    25,731    41,205    47,947 
Total operating expenses  84,128    105,469    178,400    201,977 
Loss from operations (3,717)   (23,842)   (20,476)   (41,366)
Interest and other (income) expense, net  (208)   89    (334)   2,656 
Loss before income taxes (3,509)   (23,931)   (20,142)   (44,022)
Provision (benefit) for income taxes  1,700    (10,096)   2,879    (17,039)
Net loss  (5,209)   (13,835)   (23,021)   (26,983)
Less: net loss attributable to noncontrolling interests  (561)   (139)   (585)   (106)
Net loss attributable to 3D Systems Corporation$ (4,648) $ (13,696) $ (22,436) $ (26,877)
            
Net loss per share available to 3D Systems Corporation common stockholders — basic
and diluted
$ (0.04) $ (0.12) $ (0.20) $ (0.24)
            
Other comprehensive income (loss):        
Pension adjustments$ 67  $ (3) $ 36  $ 262 
Foreign currency gain (loss) (6,654)   13,011    1,285    (7,946)
Total other comprehensive income (loss)  (6,587)   13,008    1,321    (7,684)
Less foreign currency translation gain (loss) attributable to noncontrolling interests  (43)   (1,581)   46    (1,706)
Other comprehensive income (loss) attributable to 3D Systems Corporation  (6,544)   14,589    1,275    (5,978)
            
Comprehensive loss (11,796)   (827)   (21,700)   (34,667)
Less comprehensive loss attributable to noncontrolling interests (604)   (1,720)   (539)   (1,812)
Comprehensive income (loss) attributable to 3D Systems Corporation$ (11,192) $ 893  $ (21,161) $ (32,855)
            

 

3D Systems Corporation
Unaudited Condensed Consolidated Balance Sheets
June 30, 2016 and December 31, 2015
 
  June 30, December 31,
(in thousands, except par value) 2016 2015
ASSETS      
Current assets:      
Cash and cash equivalents $ 176,248  $ 155,643 
Accounts receivable, net of reserves — $16,151 (2016) and $14,139 (2015)   125,095    157,406 
Inventories, net of reserves — $22,281 (2016) and $28,225 (2015)   123,157    105,877 
Prepaid expenses and other current assets   15,997    13,541 
Total current assets   440,497    432,467 
Property and equipment, net   87,258    85,995 
Intangible assets, net   141,081    157,466 
Goodwill   187,569    187,875 
Long term deferred income tax asset   2,789    3,216 
Other assets, net   25,117    26,256 
Total assets $ 884,311  $ 893,275 
LIABILITIES AND EQUITY      
Current liabilities:      
Current portion of capitalized lease obligations $ 564  $ 529 
Accounts payable   42,356    46,869 
Accrued and other liabilities   50,756    54,699 
Customer deposits   6,005    8,229 
Deferred revenue   43,706    35,145 
Total current liabilities   143,387    145,471 
Long term portion of capitalized lease obligations   7,917    8,187 
Long term deferred income tax liability   15,526    17,944 
Other liabilities   58,077    58,155 
Total liabilities   224,907    229,757 
Redeemable noncontrolling interests   8,872    8,872 
       
Stockholders’ equity:      
Common stock, $0.001 par value, authorized 220,000 shares; issued 113,559 (2016) and 113,115 (2015)   113    113 
Additional paid-in capital   1,298,631    1,279,738 
Treasury stock, at cost — 1,384 shares (2016) and 892 shares (2015)   (2,333)   (1,026)
Accumulated deficit   (605,804)   (583,368)
Accumulated other comprehensive loss   (38,273)   (39,548)
Total 3D Systems Corporation stockholders' equity   652,334    655,909 
Noncontrolling interests   (1,802)   (1,263)
Total stockholders’ equity   650,532    654,646 
Total liabilities, redeemable noncontrolling interests and stockholders’ equity $ 884,311  $ 893,275 
       

  

3D Systems Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2016 and 2015
 
 Six Months Ended June 30, 
(in thousands)  2016    2015 
Cash flows from operating activities:     
Net loss$ (23,021) $ (26,983)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:     
Benefit of deferred income taxes  (2,201)   (14,773)
Depreciation and amortization  30,435    41,895 
Impairment of investments  2,760     
Provision for bad debts  2,677    5,135 
(Benefit) provision for inventory obsolescence and revaluation     
Stock-based compensation  18,893    20,050 
(Gain) loss on the disposition of property and equipment  (51)   711 
Changes in operating accounts, net of acquisition activity:     
Accounts receivable  30,375    25,899 
Inventories  (16,153)   (34,117)
Prepaid expenses and other current assets  (2,463)   (13,332)
Accounts payable  (4,526)   (3,827)
Accrued and other current liabilities  (4,328)   (11,393)
All other operating activities  (1,357)   4,382 
Net cash provided by (used in) operating activities  31,040    (6,353)
Cash flows from investing activities:     
Purchases of property and equipment  (7,597)   (12,196)
Additions to license and patent costs  (790)   (560)
Proceeds from disposition of property and equipment  0     
Cash paid for acquisitions, net of cash assumed      (91,799)
Other investing activities  (1,000)   (1,750)
Net cash used in investing activities  (9,387)   (106,305)
Cash flows from financing activities:     
Tax benefits from share-based payment arrangements    547 
Proceeds (repurchase) — restricted stock  (1,307)   942 
Repayment of capital lease obligations  (524)   (526)
Net cash provided by (used in) financing activities  (1,831)   963 
Effect of exchange rate changes on cash  783    (1,950)
Net increase (decrease) in cash and cash equivalents  20,605    (113,645)
Cash and cash equivalents at the beginning of the period  155,643    284,862 
Cash and cash equivalents at the end of the period$ 176,248  $ 171,217 
      

 

3D Systems Corporation
Schedule 1
Earnings (Loss) Per Share
Quarter and Six Months Ended June 30, 2016 and 2015
 
 Quarter Ended June 30,  Six Months Ended June 30, 
(in thousands, except per share amounts)2016 2015 2016 2015
Numerator for basic and diluted net loss per share:           
Net loss attributable to 3D Systems Corporation$ (4,648) $ (13,696) $ (22,436) $ (26,877)
            
Denominator for basic and diluted net loss per share:           
Weighted average shares  111,166    112,017    111,288    111,875 
            
Net loss per share, basic and diluted$ (0.04) $ (0.12) $ (0.20) $ (0.24)
            

 

3D Systems Corporation
Schedule 2
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Quarter and Six Months Ended June 30, 2016 and 2015
 
  Quarter Ended June 30,   Six Months Ended June 30, 
(in thousands, except per share amounts) 2016 2015  2016 2015
GAAP net loss attributable to 3D Systems $ (4,648)  $ (13,696)  $ (22,436)    (26,877)
Cost of sales adjustments:               
Amortization of intangibles   81     76     165     151 
Operating expense adjustments:               
Amortization of intangibles   8,779     17,405     17,514     31,846 
Acquisition and severance expenses   1,771     1,936     2,710     5,176 
Non-cash stock-based compensation expense   7,226     9,721     18,893     20,050 
Tax effect (a)         (12,293)    1,519     (21,998)
Non-GAAP net income $ 13,209   $ 3,149   $ 18,365   $ 8,348 
                
Non-GAAP basic and diluted earnings per share $ 0.12   $ 0.03   $ 0.17   $ 0.07 
                

            

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