3D Systems Reports Second Quarter 2019 Financial Results

ROCK HILL, S.C., Aug. 07, 2019 (GLOBE NEWSWIRE) -- 3D Systems Corporation (NYSE: DDD) announced today its financial results for the second quarter ended June 30, 2019.

For the second quarter of 2019, the company reported GAAP revenue of $157.3 million, compared to $176.6 million in the second quarter of the previous year. The company reported a GAAP loss of $0.21 per share in the second quarter of 2019 compared to a GAAP loss of $0.08 per share in the second quarter of 2018, and non-GAAP earnings of $0.00 per share in the second quarter of 2019 compared to $0.06 per share in the second quarter of 2018.

"We continue to see strength in customer demand for our core and new products and solutions, but as expected, year over year revenue growth was impacted by ordering patterns of a large enterprise customer, the delay in shipping Factory metals systems as we complete technical enhancements and weaker macro-economic conditions in some areas of our market," commented Vyomesh Joshi ("VJ"), president and chief executive officer, 3D Systems.

The company reported 46.4 percent higher printer unit sales, driven by sales of the Figure 4 platform. Printer revenue decreased 27.4 percent compared to the second quarter of the prior year driven by year over year timing of large enterprise customer orders and the softer macro industrial environment. Excluding the impact of the large enterprise customer's order patterns, healthcare solutions revenue increased 11.4 percent in the second quarter compared to the prior year. During the second quarter, materials revenue decreased 8.5 percent, on demand services decreased 12.4 percent and software decreased 0.5 percent compared to the second quarter of the prior year.

The company reported GAAP gross profit margin of 46.6 percent for the second quarter of 2019, a decrease of 220 basis points compared to the second quarter of 2018. Non-GAAP gross profit margin was 47.4 percent in the second quarter of 2019 compared to 48.9 percent in the second quarter of the prior year.

For the second quarter of 2019, GAAP operating expenses decreased 1.5 percent to $92.5 million compared to $93.9 million in the prior year period. GAAP SG&A expenses increased 0.7 percent to $71.7 million, including a $3.5 million dollar litigation settlement during the second quarter of 2019. GAAP R&D expenses decreased 8.4 percent from the second quarter of the prior year to $20.8 million. The company continues to execute its cost reduction plans, and as a result of these actions, non-GAAP operating expenses decreased 9.3 percent to $71.7 million compared to $79.0 million in the second quarter of 2018.

"I am pleased with the progress we are making on our cost structure, and we will continue to be laser focused on additional reduction opportunities in the second half of the year," continued Joshi.

The company generated $18.7 million of cash from operations during the quarter and had $150.4 million of unrestricted cash on hand at June 30, 2019. Cash generation during the second quarter was driven by improvements in working capital, including planned reductions of inventory.

"We remain confident in our broad portfolio of additive capabilities, workflow solutions and overall market opportunities; and we remain keenly focused on executing on our strategy, reducing costs and driving long-term profitable growth," concluded Joshi.

Q2 2019 Conference Call and Webcast
The company expects to file its Form 10-Q for the quarter ended June 30, 2019 with the Securities and Exchange Commission on August 7, 2019. 3D Systems plans to hold a conference call and simultaneous webcast to discuss these results on Wednesday, August 7, 2019, at 4:30 p.m. Eastern Time.

Date: Wednesday, August 7, 2019
Time: 4:30 p.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

A replay of the webcast will be available 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,” “may,” “will,” “estimates,” “intends,” “anticipates” or “plans” or the negative of these terms or other comparable terminology.  Forward-looking statements are based upon management’s 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 strategic acquisitions, non-recurring charges and certain non-cash expenses had on its financial results, the company reported non-GAAP measures excluding the impact of amortization of intangibles, non-cash interest expense, acquisition and severance expenses, stock-based compensation expense, litigation settlements and charges related to strategic decisions and portfolio realignment. 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 Balance Sheets
June 30, 2019 and December 31, 2018

(in thousands, except par value) June 30,
  December 31,
Current assets:   
Cash and cash equivalents$150,397   $ 109,998  
Accounts receivable, net of reserves — $8,509 (2019) and $8,423 (2018) 114,093     126,618  
Inventories 133,936     133,161  
Prepaid expenses and other current assets 29,471     27,697  
Total current assets 427,897     397,474  
Property and equipment, net (1) 97,664     103,252  
Intangible assets, net 57,267     68,275  
Goodwill 222,293     221,334  
Right of use assets (1) 37,626     4,466  
Deferred income tax asset 5,420     4,217  
Other assets, net 29,384     26,814  
Total assets $ 877,551     $ 825,832  
Current liabilities:      
Current portion of long term debt $ 4,050     $  
Current right of use liabilities (1) 11,451     654  
Accounts payable 59,197     66,722  
Accrued and other liabilities 59,730     59,265  
Customer deposits 4,882     4,987  
Deferred revenue 41,690     32,432  
Total current liabilities 181,000     164,060  
Long-term debt 75,378     25,000  
Long-term right of use liabilities (1) 35,273     6,392  
Deferred income tax liability 6,541     6,190  
Other liabilities 42,041     39,331  
Total liabilities 340,233     240,973  
Redeemable noncontrolling interests 8,872     8,872  
Commitments and contingencies (Note 13)      
Stockholders’ equity:      
Common stock, $0.001 par value, authorized 220,000 shares; issued 120,506 (2019) and 118,650 (2018) 120     117  
Additional paid-in capital 1,361,569     1,355,503  
Treasury stock, at cost — 3,182 shares (2019) and 2,946 shares (2018) (16,519 )   (15,572 )
Accumulated deficit (771,025 )   (722,701 )
Accumulated other comprehensive loss (37,313 )   (38,978 )
Total 3D Systems Corporation stockholders' equity 536,832     578,369  
Noncontrolling interests (8,386 )   (2,382 )
Total stockholders’ equity 528,446     575,987  
Total liabilities, redeemable noncontrolling interests and stockholders’ equity $ 877,551     $ 825,832  


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