For the third quarter of 2017, the company reported revenue of $152.9M compared to $156.4M in the third quarter of the previous year.
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ROCK HILL, S.C., Oct. 31, 2017 /PRNewswire/ -- 3D Systems (NYSE: DDD) announced today its financial results for the third quarter and nine months ended September 30, 2017. http://mma.prnewswire.com/media/536537/3D_Systems_Logo.jpg For the third quarter of 2017, the company reported revenue of $152.9 million compared to $156.4 million in the third quarter of the previous year. The company reported a third quarter GAAP loss of $0.34 per share compared to a loss of $0.19 per share in the prior year and a non-GAAP loss of $0.20 per share compared to non-GAAP earnings of $0.14 per share in the third quarter of 2016. "While third quarter results did not meet our expectations, we believe actions taken during the quarter both organizationally and operationally better position the company for long term success," commented Vyomesh Joshi (VJ), Chief Executive Officer, 3D Systems. "During the quarter, we reorganized the go to market team, changing key leadership positions in both the Americas and the Asia Pacific region while shifting to a worldwide go to market structure. We also completed a deep and comprehensive review of our portfolio based on year to date demand, market trends and a solid understanding of where we meet and will continue to meet customers' expectations." Demand from healthcare and industrial customers as well as strong execution in EMEA was more than offset by softer sales in the Americas and Asia Pacific regions. The company reported gross profit margin of 38.3% for the third quarter of 2017, which included a $12.9 million charge to write down products and parts as a result of a comprehensive review of the portfolio and inventory. Gross profit margin in the third quarter of 2016 was 44.1%, which included $10.7 million of expenses related to discontinuation of projects and products. For the third quarter of 2017, operating expenses were $90.9 million compared to $91.0 million in the prior year. SG&A expenses increased 3% to $66.5 million, which included continued investment in go to market and IT transformation. R&D expenses decreased 7% over the third quarter of 2016 to $24.4 million. The third quarter of 2017 included accelerated investments in printers, materials and software for both plastic and metal solutions in support of products the company plans to launch over the next several months. R&D expenses in the third quarter of 2016 included $6.1 million of expenses related to portfolio realignment and discontinuation of projects. "We continued with our strategic investments in IT, go to market, quality, reliability and innovation, which we believe are critical to the company to drive long term growth," commented John McMullen, Executive Vice President and Chief Financial Officer. "While we are reducing expenses where appropriate, we continue to be focused on actions and decisions we believe are necessary to best-position the company for long term success." During the quarter, the company used $0.7 million of cash in operations and ended the quarter with $138.3 million of cash on hand. For the first nine months of 2017, revenue increased $1.8 million to $468.8 million compared to $467.0 million in the first nine months of 2016. The company reported a GAAP loss of $0.50 per share for the first nine months of 2017 compared to a loss of $0.39 per share in the same period of the prior year and reported a non-GAAP loss of $0.06 per share in the first nine months of 2017 compared to a non-GAAP earnings of $0.31 per share in the same period of 2016. "We have increased investments and resources to resolve legacy quality and reliability issues faster and have implemented organizational changes to continue to improve execution. We have made significant progress in many areas over the first nine months of this year and are taking additional actions necessary to position the company for long term success. At the same time, we continue to innovate for the future, and plan to bring to market a series of new and exciting products over the coming months," concluded Joshi. Full Year 2017 Guidance Q3 2017 Conference Call and Webcast Date: Tuesday, October 31, 2017 The recorded webcast will be available beginning approximately two hours after the live presentation at www.3dsystems.com/investor. Forward-Looking Statements Presentation of Information in This Press Release About 3D Systems More information on the company is available at www.3dsystems.com Tables Follow
3D Systems Corporation
Unaudited Condensed Consolidated Balance Sheets
September 30, 2017 and December 2016
September 30, December 31,
(in thousands, except par value) 2017 2016
---- ----
ASSETS
Current assets:
Cash and cash equivalents $138,332 $184,947
Accounts receivable, net of reserves -$11,607
(2017) and $12,920 (2016) 122,420 127,114
Inventories 100,578 103,331
Prepaid expenses and other current assets 21,344 17,558
Total current assets 382,674 432,950
Property and equipment, net 91,473 79,978
Intangible assets, net 106,632 121,501
Goodwill 227,820 181,230
Long term deferred income tax asset 5,173 8,123
Other assets, net 27,602 25,371
Total assets $841,374 $849,153
======== ========
LIABILITIES AND EQUITY
Current liabilities:
Current portion of capitalized lease obligations $632 $572
Accounts payable 46,388 40,514
Accrued and other liabilities 55,866 49,968
Customer deposits 5,249 5,857
Deferred revenue 37,311 33,494
Total current liabilities 145,446 130,405
Long term portion of capitalized lease
obligations 7,230 7,587
Long term deferred income tax liability 16,644 17,601
Other liabilities 48,529 57,988
Total liabilities 217,849 213,581
Redeemable noncontrolling interests 8,872 8,872
----- -----
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value, authorized
220,000 shares; issued 115,798 (2017) 115 115
and 115,113 (2016)
Additional paid-in capital 1,320,074 1,307,428
Treasury stock, at cost -1,982 shares (2017) and
1,498 shares (2016) (7,153) (2,658)
Accumulated deficit (667,638) (621,787)
Accumulated other comprehensive loss (27,706) (53,225)
Total 3D Systems Corporation stockholders' equity 617,692 629,873
Noncontrolling interests (3,039) (3,173)
------ ------
Total stockholders' equity 614,653 626,700
Total liabilities, redeemable noncontrolling
interests and stockholders' equity $841,374 $849,153
======== ========
3D Systems Corporation
Unaudited Condensed Consolidated Statements of Operations
and Comprehensive Income (Loss)
Quarter and Nine Months Ended September 30, 2017 and 2016
Quarter Ended Nine Months Ended
September 30, September 30,
------------- -------------
(in thousands, except per
share amounts) 2017 2016 2017 2016
---- ---- ---- ----
Revenue:
Products $87,626 $94,543 $276,777 $280,406
Services 65,281 61,819 192,028 186,622
Total revenue 152,907 156,362 468,805 467,028
Cost of sales:
Products 59,467 56,321 150,769 146,682
Services 34,918 31,104 98,655 93,485
Total cost of sales 94,385 87,425 249,424 240,167
Gross profit 58,522 68,937 219,381 226,861
Operating expenses:
Selling, general and administrative 66,497 64,814 195,990 202,009
Research and development 24,360 26,140 71,661 67,345
Total operating expenses 90,857 90,954 267,651 269,354
Loss from operations (32,335) (22,017) (48,270) (42,493)
Interest and other income, net (1,257) (1,624) (123) (1,290)
Loss before income taxes (33,592) (23,641) (48,393) (43,783)
Provision (benefit) for income taxes 3,723 (2,214) 6,831 665
Net loss (37,315) (21,427) (55,224) (44,448)
Less: net income (loss) attributable to
noncontrolling interests 355 (214) 833 (799)
Net loss attributable to 3D
Systems Corporation $(37,670) $(21,213) $(56,057) $(43,649)
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Net loss per share available
to 3D Systems Corporation
common stockholders -basic
and diluted $(0.34) $(0.19) $(0.50) $(0.39)
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Other comprehensive income (loss):
Pension adjustments, net of
taxes $(24) $18 $(105) $54
Foreign currency translation gain 4,904 4,282 25,785 5,567
Total other comprehensive income (loss) 4,880 4,300 25,680 5,621
Less foreign currency translation gain
attributable 26 22 161 68
to noncontrolling interests
Other comprehensive income (loss)
attributable to 4,854 4,278 25,519 5,553
3D Systems Corporation
Comprehensive income (loss) (32,435) (17,127) (29,544) (38,827)
Less comprehensive income (loss)
attributable to 381 (192) 994 (731)
noncontrolling interests
Comprehensive income (loss)
attributable to 3D Systems
Corporation $(32,816) $(16,935) $(30,538) $(38,096)
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3D Systems Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2017 and 2016
Nine Months Ended September 30,
-------------------------------
(In thousands) 2017 2016
---- ----
Cash flows from
operating activities:
Net loss $(55,224) $(44,448)
Adjustments to
reconcile net loss to
net cash provided by
operating activities:
Depreciation and
amortization 46,146 45,731
Stock-based
compensation 21,084 28,405
Lower of cost or
market adjustment 12,883 10,723
Provision for bad
debts 1,297 1,488
Provision for (benefit
of) deferred income
taxes 1,674 (5,464)
Impairment of assets 324 8,590
Changes in operating
accounts, net of
acquisitions:
Accounts receivable 10,777 36,357
Inventories (13,959) (26,236)
Prepaid expenses and
other current assets (2,939) (1,619)
Accounts payable 3,463 (9,938)
Accrued and other
current liabilities (4,734) (10,841)
Deferred revenue 2,869 1,763
All other operating
activities (5,985) 3,729
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Net cash provided by
operating activities 17,676 38,240
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Cash flows from
investing activities:
Cash paid for
acquisitions, net of
cash assumed (36,541) -
Purchases of property
and equipment (21,072) (12,014)
Additions to license
and patent costs (875) (790)
Other investing
activities (2,350) (1,000)
Proceeds from
disposition of
property and
equipment 271 -
Net cash used in
investing activities (60,567) (13,804)
------- -------
Cash flows from
financing activities:
Payments on earnout
consideration (3,206) -
Payments related to
net-share settlement
of stock-based
compensation (4,494) (1,507)
Repayment of capital
lease obligations (297) (786)
----
Net cash used in
financing activities (7,997) (2,293)
------ ------
Effect of exchange
rate changes on cash
and cash equivalents 4,273 1,572
----- -----
Net (decrease)
increase in cash and
cash equivalents (46,615) 23,715
------- ------
Cash and cash
equivalents at the
beginning of the
period 184,947 155,643
------- -------
Cash and
cash
equivalents
at the end
of the
period $138,332 $179,358
======== ========
Cash
interest
payments $378 $633
Cash income
tax
payments,
net $4,715 $8,040
Transfer of
equipment
from
inventory
to
property
and
equipment,
net $8,964 $9,395
Transfer of
equipment
to
inventory
from
property
and
equipment,
net $364 $349
Stock
issued for
acquisitions $3,208 $ -
3D Systems Corporation
Schedule 1
Loss Per Share
Quarter and Nine Months Ended September 30, 2017 and 2016
Quarter Ended September 30, Nine Months Ended September 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 $(37,670) $(21,213) $(56,057) $(43,649)
Denominator for basic and
diluted net loss per share:
Weighted average shares 111,697 111,008 111,467 111,194
Net loss per
share, basic and
diluted $(0.34) $(0.19) $(0.50) $(0.39)
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3D Systems Corporation
Schedule 2
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Quarter and Nine Months Ended September 30, 2017 and 2016
Quarter Ended September 30, Nine Months Ended
September 30,
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($ in millions, except
per share amounts) 2017 2016 2017 2016
---- ---- ---- ----
GAAP Net loss
attributable to 3D
Systems Corporation $(37.7) $(21.2) $(56.1) $(43.6)
Adjustments:
Amortization, stock-based
compensation & other (1) 15.5 29.1 47.7 65.6
Legal and acquisition-related (2) (0.4) 1.8 1.4 4.5
Portfolio restructuring (3) - 6.1 - 6.1
Tax effect of adjustments 4 - - - 1.5
Non-GAAP net income
attributable to 3D
Systems Corporation $(22.6) $15.8 $(7.0) $34.1
Non-GAAP net income per
share available to 3D
Systems $(0.20) $0.14 $(0.06) $0.31
common stock holders -basic and
diluted 5
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1 For the quarter ended September 30, 2017, the adjustment included $0.1 in COGS and $15.4 in SG&A. For the quarter ended September 30, 2016, the adjustment included $10.8
in COGS and $18.3 SG&A. For the nine months ended September 30, 2017, the adjustment included $0.3 in COGS and $47.4 in SG&A. For the nine months ended September 30,
2016, the adjustment included $10.9 in COGS and $54.7 in SG&A.
2 For the quarter ended September 30, 2017, the adjustment included ($0.4) in SG&A. For the quarter ended September 30, 2016 the adjustment included $1.8 in SG&A. For the
nine months ended September 30, 2017, the adjustment included $1.2 in SG&A and $0.2 in interest and other income, net. For the nine months ended September 30, 2016 the
adjustment included $4.5 in SG&A.
3 For the quarter and nine months ended September 30, 2016, the adjustment included $6.1 in R&D.
4 Tax 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.
5 Denominator based on diluted shares used in the GAAP EPS calculation.
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Company Codes: NYSE:DDD |
