ROCK HILL, S.C., March 4, 2009 (GLOBE NEWSWIRE) -- 3D Systems Corporation (Nasdaq:TDSC), a leading provider of 3-D Printing, Rapid Prototyping and Manufacturing solutions, announced today its operating results for the fourth-quarter and year-end 2008. The company also announced the filing with the SEC today of its Annual Report on Form 10-K.
The company will hold a conference call to discuss these results tomorrow morning, March 5, 2009 at 9:00 a.m., Eastern Time. Additional information relating to that call is provided below.
The company reported improved gross profit margin and operating income for the fourth quarter of 2008 with lower revenue and lower operating expenses. The company also reported higher unrestricted cash than it had at September 30, 2008.
The table below summarizes the company's key financial results. They are within the ranges that the company preliminarily announced on February 17, and they include the effect of an increase in the company's bad debt expense in the fourth-quarter 2008 that the company made upon learning on February 25, 2009 that a large Japanese customer filed for financial reorganization under Japanese law. The net effect of this increase in the company's bad debt expense was to reduce E.P.S. for the fourth-quarter and full-year 2008 by $0.02.
Operating Highlights
Fourth Quarter and Full Year of 2008
($ in millions except for per share amounts)
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Fourth Quarter Full Year
---------------------------------------------
% %
Operating Highlights 2008 2007 Change 2008 2007 Change
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Revenue $34.9 $44.9 (22%) $138.9 $156.5 (11%)
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Gross profit $15.4 $18.1 $56.0 $63.5
% of Revenue 44% 40% (15%) 40% 41% (12%)
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Operating expenses $13.9 $16.7 $61.1 $68.6
% of Revenue 40% 37% (17%) 44% 44% (11%)
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Operating income (loss) $1.5 $1.4 ($5.1) ($5.1)
% of Revenue 4% 3% 5% NM NM (1%)
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Net income (loss) $1.8 $1.4 ($6.2) ($6.7)
% of Revenue 5% 3% 37% NM NM (9%)
=====================================================================
Diluted income (loss)
per share $0.08 $0.06 33% ($0.28) ($0.33) (15%)
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Unrestricted cash $22.2 $29.7 (25%) $22.2 $29.7 (25%)
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Depreciation and
amortization $1.7 $1.5 $6.7 $7.0
% of Revenue 5% 3% 13% 5% 4% (4%)
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NM = Not Meaningful
"I am grateful that amidst a broadening global economic crisis, during the fourth quarter, we were able to continue to reduce our operating expenses while improving our gross profit margin and unrestricted cash," said Abe Reichental, 3D Systems' president and chief executive officer. "For 2008, our total revenue deteriorated some 11% as a result of the worsening global recession and frozen credit markets, a very challenging operating environment that adversely impacted many of our automotive, aerospace and consumer electronics customers and their first-tier service providers. While these unprecedented global economic conditions resulted in a significant decline in large-frame systems' sales and slowed down our materials' revenue growth, our new lineup of 3-D Printers continued to generate revenue growth," continued Reichental.
During the fourth quarter, revenue from 3-D Printers increased by 64% over the comparable 2007 period. Additionally, half of the $1.4 million of backlog that the company had at December 31, 2008 was attributable to 3-D Printers. The increase in 3-D Printer sales was not enough to overcome the continued decline in revenue from large-frame and mid-frame systems. As a result, total systems revenue declined by 34% to $11.7 million in the fourth quarter of 2008 compared to the 2007 period.
The company's integrated materials' revenue grew to 28% of total materials' sales for the quarter. This increase continued the sequential trend experienced for each quarter in 2008, which started at 22% in the first quarter, but was not enough to counter the flattening of total materials' revenue over the course of 2008 and its decline to $14.8 million in the fourth quarter of 2008 from $17.1 million in the fourth quarter of 2007.
Although gross profit declined by 15% to $15.4 million for the fourth-quarter 2008 from $18.1 million in the 2007 quarter on lower revenue, gross profit margin increased to 44%, up almost 400 basis points year-over-year and up more than 500 basis points sequentially.
Net income (loss) for the fourth-quarter and full-year 2008 included the benefit of a favorable foreign tax settlement amounting to $1.2 million or $0.05 per fully diluted earnings per share.
For the full-year 2008, systems' revenue declined by 29% to $41.3 million. Sales of 3-D Printers increased by 51% for the 2008 year compared to 2007. Materials' revenue remained relatively flat at $62.3 million in 2008 and $62 million in 2007. Service revenue decreased modestly by 3% to $35.3 million for the full-year 2008 primarily as a result of the decline in systems revenue.
Notwithstanding its lower 2008 revenue, the company reported that, as a result of its continuing improvements in its gross profit margins and lower operating expenses, its net loss for 2008 improved to $6.2 million from $6.7 million for the full-year 2007.
The company also reported that at year-end 2008 it had $22.2 million of unrestricted cash on hand.
"Having recognized the effects of the contracting economy earlier in the year, I am pleased that we were able to implement a series of focused, cost-reduction and profit-improvement programs without impairing any of our critical, new product-development programs. As a result, the company's profitability improved in this difficult business environment," continued Reichental. "While the future effect of this broadening recession on our business is difficult to predict, we expect to continue to strengthen our cost-control program and our operating results throughout 2009."
"I believe that our new and improved lineup of 3-D Printers and Direct Rapid Manufacturing Systems and Materials can help our existing and prospective customers reduce their development costs, shorten their time to market and provide real, economic cost-saving alternatives to their traditional design and manufacturing processes at a time when all can benefit from tangible, here and now cost savings. As evidenced by the positive traction we are getting from our new 3-D Printers, I believe that even within the current elongated capital spending cycle, it is reasonable to expect that our cost-saving system solutions could help drive demand for our products during this uncertain economic period," continued Reichental.
"In line with this expectation, we plan to move forward with two of our previously announced 3-D Printer commercial introductions. During the second quarter of 2009, we expect to commence commercial shipments of our long anticipated V-Flash(r) Modeler, our first sub-ten-thousand dollar desktop modeler, and in the third quarter, we plan to begin shipping the Projet(tm) 5000, our new large-format 3-D Printer," added Reichental.
"I am pleased that, even during a period of lower demand among our automotive, aerospace and consumer electronics customers and their tier-one service providers for paid parts, our integrated materials' revenue continued to grow in 2008 albeit at a slower rate, indicating that our integrated materials' strategy is working," continued Reichental.
"Our year-end cash position reflects in part our continued progress to conserve cash by reducing our cost of sales and our operating expenses and the ongoing improvement of our working capital management," continued Reichental. "We believe that our financial resources remain adequate for our current and anticipated needs during this unprecedented economic period."
"However, recognizing that several of our current customers may experience solvency difficulties or have already taken steps to obtain reorganization protection available to them by law, we remain very vigilant in our credit and collection activities," continued Reichental. "Our pro-active approach toward reducing future potential bad debt exposure may in some instances result in curtailment of our recurring revenue generation opportunities as we elect to take specific steps to balance risk and exposure against additional revenue opportunities. We are planning, if marketplace conditions deteriorate further, to be ready to act on additional cost control and working capital management improvements as needed to see us through this trying period," concluded Reichental.
Conference Call and Audio Webcast Details
3D Systems will hold a conference call and audio webcast to discuss its operating results for the quarter and the year-ended December 31, 2008 on March 5, 2009 at 9:00 a.m., Eastern Time.
* To access the March 5, 2009 Conference Call, dial 1-888-336-3485 (or 706-634-0653 from outside the United States). The confirmation code is 85493285. * To access the audio webcast on March 5, 2009, log onto 3D Systems' Web site at www.3dsystems.com/ir. To ensure timely participation and technical capability, we recommend logging on a few minutes prior to the conference call to activate your participation. The webcast will be available for replay beginning approximately three hours after completion of the call at: www.3dsystems.com/ir.
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 may 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 expressed or implied by such forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements in the conditional or future tenses or that include terms such as "believes," "belief," "expects," "estimates," "intends," "anticipates" or "plans" to be uncertain and forward-looking. Forward-looking statements 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," "Cautionary Statements and Risk Factors," 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.
About 3D Systems Corporation
3D Systems is a leading provider of 3-D Printing, Rapid Prototyping and Manufacturing solutions. Its systems and materials reduce the time and cost of designing products and facilitate direct and indirect manufacturing by creating actual parts directly from digital input. These solutions are used for design communication and prototyping as well as for production of functional end-use parts: Transform your products.
More information on the company is available at www.3dsystems.com, or via email at moreinfo@3dsystems.com.
The 3D Systems Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4537
3D SYSTEMS CORPORATION
Condensed Consolidated Statements of Operations
Three Months and Twelve Months Ended December 31, 2008
and December 31, 2007
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
(Unaudited) (Unaudited)
Revenue:
Products $ 26,576 $ 34,855 $103,613 $120,147
Services 8,344 10,075 35,327 36,369
-------- -------- -------- --------
Total revenue 34,920 44,930 138,940 156,516
Cost of sales:
Products 13,279 20,183 55,975 65,633
Services 6,207 6,607 26,997 27,423
-------- -------- -------- --------
Total cost of sales 19,486 26,790 82,972 93,056
-------- -------- -------- --------
Gross profit 15,434 18,140 55,968 63,460
-------- -------- -------- --------
Operating expenses:
Selling, general and
administrative 9,826 12,512 45,859 54,159
Research and development 4,108 4,192 15,199 14,430
-------- -------- -------- --------
Total operating expenses 13,934 16,704 61,058 68,589
-------- -------- -------- --------
Income (loss) from operations 1,500 1,436 (5,090) (5,129)
Interest expense and other, net 413 21 770 1,120
-------- -------- -------- --------
Income (loss) before provision
(benefit) for income taxes 1,087 1,415 (5,860) (6,249)
Provision (benefit)
for income taxes (762) 62 294 491
-------- -------- -------- --------
Net income (loss) $ 1,849 $ 1,353 $ (6,154) $ (6,740)
======== ======== ======== ========
Shares used to calculate
basic net income (loss)
per share 22,366 22,163 22,352 20,631
======== ======== ======== ========
Basic net income (loss)
per share (1) $ 0.08 $ 0.06 $ (0.28) $ (0.33)
======== ======== ======== ========
Shares used to calculate
diluted net income (loss)
available to common
stockholder per share (1) 22,469 22,759 22,352 20,631
======== ======== ======== ========
Diluted net income (loss) $ 0.08 $ 0.06 $ (0.28) $ (0.33)
======== ======== ======== ========
(1) See Schedule 1 for the calculation of basic and diluted net
income (loss) per share.
3D SYSTEMS CORPORATION
Condensed Consolidated Balance Sheets
December 31, 2008 and December 31, 2007
(in thousands)
2008 2007
------------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 22,164 $ 29,689
Accounts receivable, net 25,166 31,115
Inventories, net 21,018 20,041
Prepaid expenses and other current assets 1,711 4,429
Deferred income tax assets 935 693
Restricted cash - short-term 3,309 1,200
Assets held for sale, net -- 3,454
-------- --------
Total current assets 74,303 90,621
Property and equipment, net 24,072 21,331
Intangible assets, net 3,663 5,170
Goodwill 48,010 47,682
Other assets, net 2,954 2,581
-------- --------
$153,002 $167,385
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Industrial development bonds related to assets
held for sale $ 3,085 $ 3,325
Current portion of capitalized lease obligations 195 181
Accounts payable 17,133 20,712
Accrued liabilities 8,057 12,248
Customer deposits 1,136 1,537
Deferred revenue 9,418 11,712
-------- --------
Total current liabilities 39,024 49,715
Long-term portion of capitalized lease obligations 8,467 8,663
Other liabilities 3,277 4,238
-------- --------
Total liabilities 50,768 62,616
-------- --------
Stockholders' equity:
Common stock, $0.001 par value, authorized
60,000 shares; 22,424 (2008) and 22,224 (2007)
issued 22 22
Additional paid-in capital 176,180 173,645
Treasury stock, at cost; 59 shares (2008) and
50 shares (2007) (120) (111)
Accumulated deficit in earnings (78,557) (72,403)
Accumulated other comprehensive income 4,709 3,616
-------- --------
Total stockholders' equity 102,234 104,769
-------- --------
$153,002 $167,385
======== ========
3D SYSTEMS CORPORATION
Condensed Consolidated Statements of Cash Flows
Twelve Months Ended December 31, 2008 and December 31, 2007
(in thousands)
Twelve Months Ended
December 31,
------------------
2008 2007
-------- --------
(Unaudited)
Cash flows from operating activities:
Net loss $ (6,154) $ (6,740)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities :
Provision for (benefit of) deferred income taxes (243) (268)
Depreciation and amortization 6,676 6,970
Provision for bad debts 849 109
Stock-based compensation 1,437 2,668
Loss on disposition of property and equipment 167 6
Changes in operating accounts:
Accounts receivable 3,484 4,988
Inventories (2,461) 6,055
Prepaid expenses and other current assets 2,592 2,000
Accounts payable (2,802) (7,141)
Accrued liabilities (3,228) (683)
Customer deposits (383) (4,977)
Deferred revenue (2,023) (160)
Other operating assets and liabilities (1,390) (202)
-------- --------
Net cash provided by (used in) operating
activities (3,479) 2,625
-------- --------
Cash flows used in investing activities:
Purchase of property and equipment (5,811) (946)
Proceeds from disposition of property and
equipment 3,454 21
Additions to license and patent costs (297) (683)
Software development costs -- (597)
-------- --------
Net cash used in investing activities (2,654) (2,205)
-------- --------
Cash flows provided by (used in)
financing activities:
Bank (repayments) borrowings -- (8,200)
Proceeds from issuance of common stock -- 20,367
Stock option and restricted stock proceeds 1,098 2,890
Repayment of long-term debt (423) (388)
Restricted cash (2,109) --
-------- --------
Net cash provided by (used in) financing
activities (1,434) 14,669
Effect of exchange rate changes on cash 42 269
-------- --------
Net increase (decrease) in cash and cash
equivalents (7,525) 15,358
Cash and cash equivalents at the beginning of
the period 29,689 14,331
-------- --------
Cash and cash equivalents at the end of the period $ 22,164 $ 29,689
======== ========
Supplemental Cash Flow Information:
Interest payments $ 939 $ 1,833
Income tax payments 692 1,776
Non-cash items:
Conversion of 6% convertible subordinated
debentures -- 15,354
Transfer of equipment from inventory to
property and equipment 4,615 1,644
Transfer of equipment to inventory from
property and equipment 2,395 946
Schedule 1
Following is a reconciliation of the numerator and denominator of the
basic and diluted net loss available to common stockholders per share
computations:
Three Months Twelve Months
Ended December 31 Ended December 31
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
(Unaudited) (Unaudited)
Basic and diluted earnings
(loss) per share:
Basic earnings (loss) per share:
Numerator:
Net income (loss) available
to common stockholders $ 1,849 $ 1,353 $ (6,154) $ (6,740)
======== ======== ======== ========
Denominator:
Weighted average common
shares outstanding 22,366 22,163 22,352 20,631
======== ======== ======== ========
Basic net income (loss)
available to common
stockholders, per share $ 0.08 $ 0.06 $ (0.28) $ (0.33)
======== ======== ======== ========
Diluted earnings (loss)
per share:
Numerator:
Net income (loss) available
to common stockholders $ 1,849 $ 1,353 $ (6,154) $ (6,740)
======== ======== ======== ========
Denominator:
Weighted average common
shares outstanding 22,366 22,163 22,352 20,631
Effect of dilutive securities:
Stock options and restricted
stock awards 103 596 -- --
-------- -------- -------- --------
Diluted weighted average
shares outstanding 22,469 22,759 22,352 20,631
======== ======== ======== ========
Diluted net income (loss)
available to common
stockholders, per share $ 0.08 $ 0.06 $ (0.28) $ (0.33)
======== ======== ======== ========