- Unprecedented Advanced Manufacturing and Consumer Demand
- Revised Full-Year Guidance to Accelerate Growth Rate and Investments
ROCK HILL, S.C., Oct. 29, 2013 (GLOBE NEWSWIRE) -- 3D Systems Corporation (NYSE:DDD) announced today that its third quarter revenue grew 50% from the prior year to a record $135.7 million on a 76% increase in printers' and other products revenue and 30% overall organic growth, resulting in GAAP earnings of $0.17 per share and non-GAAP earnings of $0.26 per share.
Gross profit increased 52% and gross profit margin expanded 80 basis points to 52.6%, contributing to GAAP net income of $17.7 million, and non-GAAP net income of $26.2 million, representing a 44% improvement over the 2012 quarter.
For the nine months 2013, revenue grew 42% to $358.6 million, on an 81% increase in printers and other products revenue and 27% organic growth, resulting in GAAP earnings of $0.34 per share and non-GAAP earnings of $0.66 per share. Gross profit increased 46% and gross profit margin expanded 120 basis points to 52.3%.
"We are very pleased to report another record revenue quarter on unprecedented printer units demand that more than tripled last year's unit sales," said Avi Reichental, 3D Systems' President and Chief Executive Officer. "Stronger materials sales, increased advanced manufacturing activities and meaningful consumer products revenue contribution fueled our growth."
Third Quarter 2013 Revenue Highlights (compared to 2012 quarter):
- 3D printers and other products revenue increased 76% to $59.8 million.
- Print materials revenue grew 30% to $33.2 million.
- Services revenue rose 38% to $42.7 million.
- Healthcare revenue grew 39% and contributed $16.9 million to our total revenue.
- Consumer solutions contributed $13.5 million to our total revenue.
The company continued to increase its R&D and marketing expenditures, making investments in support of its near term opportunities and expanding product portfolio. For the third quarter in a row, the company expanded its manufacturing capacity to accommodate increasing demand for its products and services.
"We are accelerating developments of key products, channels and technologies to capture a broader share of upstream production applications and downstream consumer opportunities," continued Reichental."
To accelerate its growth rate, the company decided to further increase its R&D, marketing and retail field operations spending in connection with specific, near-term, new product introductions and retail channel expansion. Significant marketplace interest in its recently acquired, proprietary, Phenix direct metals 3D printers also compelled the company to accelerate new products development and capacity investments. As a result, the company updated its annual guidance for the full year 2013, increasing its revenue guidance to be in the range of $500 million to $530 million and, consistent with the step up in discretionary spending, reducing its non-GAAP earnings per share guidance to be in the range of $0.93 to $1.03.
"For the next few periods we are going for accelerated market-share expansion ahead of earnings per share. We believe that our portfolio's diversity, ranging from direct metal printers at the high end to desktop consumer printers at the low end, is best positioned to capture this unprecedented market opportunity, and expect that our decisive actions will extend our first mover advantage in key verticals. With the fundamentals of our business model remaining intact, we fully expect that the higher investments we are making currently will favorably influence our results in the coming periods," concluded Reichental.
Conference Call and Webcast Details
3D Systems will hold a conference call and webcast to discuss its operating results for the third quarter and nine months 2013 on Tuesday, October 29, 2013 at 9:00 a.m., Eastern Time.
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To access this webcast, log onto 3D Systems' web site at www.3dsystems.com/investor. To ensure timely participation and technical capability, we recommend logging on a few minutes prior to the conference call to activate your participation.
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To access this conference call, dial 1-800-706-7745 from in the U.S. or 1-617-614-3472 from outside the U.S. and enter participant code 86406937.
- The webcast will be also be available for replay beginning approximately two hours after completion of the call 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 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 or projections 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.
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, litigation settlements, loss on conversion of notes and stock-based compensation expense. A reconciliation of GAAP to non-GAAP results is provided in the accompanying schedule.
About 3D Systems Corporation
3D Systems is a leading provider of 3D content-to-print solutions including 3D printers, print materials and on-demand custom parts services for professionals and consumers alike with materials ranging from thermoplastics, metals, ceramics and edible sugar. The company also provides software design tools including CAD, reverse engineering and inspection and consumer 3D printers, apps and services. Its expertly integrated solutions replace and complement traditional methods and reduce the time and cost of designing new products by printing real parts directly from digital input. These solutions are used to rapidly design, create, communicate, prototype or produce real parts, empowering customers to manufacture the future.
More information on the company is available at www.3DSystems.com.
Tables Follow
| 3D Systems Corporation | ||||
| Unaudited Consolidated Statements of Operations and Comprehensive Income | ||||
| Quarter and Nine Months Ended September 30, 2013 and 2012 | ||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||
| (in thousands, except per share amounts) | 2013 | 2012 | 2013 | 2012 |
| Revenue: | ||||
| Products | $93,020 | $59,551 | $244,937 | $161,223 |
| Services | 42,697 | 30,981 | 113,646 | 90,839 |
| Total revenue | 135,717 | 90,532 | 358,583 | 252,062 |
| Cost of sales: | ||||
| Products | 41,609 | 26,729 | 108,569 | 73,621 |
| Services | 22,671 | 16,924 | 62,517 | 49,741 |
| Total cost of sales | 64,280 | 43,653 | 171,086 | 123,362 |
| Gross profit | 71,437 | 46,879 | 187,497 | 128,700 |
| Operating expenses: | ||||
| Selling, general and administrative | 32,054 | 22,900 | 97,697 | 70,898 |
| Research and development | 10,813 | 5,543 | 26,915 | 15,397 |
| Total operating expenses | 42,867 | 28,443 | 124,612 | 86,295 |
| Income from operations | 28,570 | 18,436 | 62,885 | 42,405 |
| Interest and other expense, net | 2,651 | 2,167 | 15,380 | 8,589 |
| Income before income taxes | 25,919 | 16,269 | 47,505 | 33,816 |
| Provision for income taxes | 8,279 | 2,752 | 14,639 | 5,787 |
| Net income | 17,640 | 13,517 | 32,866 | 28,029 |
| Net loss attributable to noncontrolling interest | 17 | — | 17 | — |
| Net income attributable to 3D Systems Corporation | $17,657 | $13,517 | $32,883 | $28,029 |
| Other comprehensive income: | ||||
| Unrealized gain (loss) on pension obligation | $6 | $(6) | $22 | $1 |
| Foreign currency translation gain | 5,821 | 2,016 | 100 | 191 |
| Comprehensive income | $23,484 | $15,527 | $33,005 | $28,221 |
| Net income per share available to 3D System's common stockholders' — basic | $0.17 | $0.16 | $0.34 | $0.35 |
| Net income per share available to 3D System's common stockholders' — diluted | $0.17 | $0.16 | $0.34 | $0.35 |
| 3D Systems Corporation | ||
| Unaudited Consolidated Balance Sheets | ||
| September 30, 2013 and December 31, 2012 | ||
| September 30, | December 31, | |
| (in thousands, except par value) | 2013 | 2012 |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $345,356 | $155,859 |
| Accounts receivable, net of allowance for doubtful accounts of $7,505 (2013) and $4,317 (2012) | 113,993 | 79,869 |
| Inventories, net | 66,110 | 41,820 |
| Prepaid expenses and other current assets | 9,830 | 4,010 |
| Current deferred income taxes | 5,887 | 5,867 |
| Restricted cash | 14 | 13 |
| Total current assets | 541,190 | 287,438 |
| Property and equipment, net | 41,038 | 34,353 |
| Intangible assets, net | 145,073 | 108,377 |
| Goodwill | 324,389 | 240,314 |
| Long term deferred income taxes | 327 | 107 |
| Other assets, net | 11,465 | 6,853 |
| Total assets | $1,063,482 | $677,442 |
| LIABILITIES AND EQUITY | ||
| Current liabilities: | ||
| Current portion of capitalized lease obligations | $184 | $174 |
| Accounts payable | 46,534 | 32,095 |
| Accrued and other liabilities | 32,045 | 24,789 |
| Customer deposits | 4,280 | 2,786 |
| Deferred revenue | 21,331 | 15,309 |
| Total current liabilities | 104,374 | 75,153 |
| Long term portion of capitalized lease obligations | 7,329 | 7,443 |
| Convertible senior notes, net | 11,335 | 80,531 |
| Deferred income tax liability | 27,303 | 23,142 |
| Other liabilities | 11,354 | 10,840 |
| Total liabilities | 161,695 | 197,109 |
| Commitments and Contingencies | ||
| Stockholders' equity: | ||
| Common stock, $0.001 par value, authorized 220,000 shares (2013) and 120,000 (2012); issued 103,348 (2013) and 89,783 (2012) | 103 | 60 |
| Additional paid-in capital | 845,003 | 460,237 |
| Treasury stock, at cost: 566 shares (2013) and 533 shares (2012) | (262) | (240) |
| Accumulated earnings | 49,262 | 16,410 |
| Accumulated other comprehensive income | 3,988 | 3,866 |
| Total 3D Systems Corporation stockholders' equity | 898,094 | 480,333 |
| Noncontrolling interest | 3,693 | — |
| Total stockholders' equity | 901,787 | 480,333 |
| Total liabilities and stockholders' equity | $1,063,482 | $677,442 |
| 3D Systems Corporation | ||
| Unaudited Consolidated Statements of Cash Flows | ||
| Nine Months Ended September 30, 2013 and 2012 | ||
|
Nine Months Ended September 30, |
||
| (in thousands) | 2013 | 2012 |
| Cash flows from operating activities: | ||
| Net income | $32,866 | $28,029 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Provision for (benefit of) deferred income taxes | (4,274) | 2,941 |
| Depreciation and amortization | 22,086 | 15,804 |
| Non-cash interest on convertible notes | 880 | 2,923 |
| Provision for bad debts | 3,254 | 2,369 |
| Stock-based compensation | 8,464 | 3,656 |
| (Gain) loss on the disposition of property and equipment | 133 | (631) |
| Deferred interest income | (1,018) | — |
| Loss on conversion of convertible debt | 11,275 | 1,245 |
| Changes in operating accounts: | ||
| Accounts receivable | (25,962) | (11,270) |
| Inventories | (21,752) | (10,582) |
| Prepaid expenses and other current assets | (4,695) | 237 |
| Accounts payable | 6,439 | (4,488) |
| Accrued liabilities | 15,838 | 14,298 |
| Customer deposits | 1,256 | (1,347) |
| Deferred revenue | 4,282 | 815 |
| Other operating assets and liabilities | (4,637) | 12 |
| Net cash provided by operating activities | 44,435 | 44,011 |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (5,728) | (1,902) |
| Additions to license and patent costs | (1,502) | (535) |
| Proceeds from disposition of property and equipment | 1,882 | — |
| Cash paid for acquisitions, net of cash assumed | (113,069) | (148,278) |
| Other investing activities | (4,101) | — |
| Net cash used in investing activities | (122,518) | (150,715) |
| Cash flows from financing activities: | ||
| Proceeds from issuance of common stock | 272,116 | 106,890 |
| Proceeds from exercise of stock options and restricted stock, net | 545 | 4,582 |
| Cash disbursed in lieu of fractional shares related to stock split | (177) | — |
| Repayment of capital lease obligations | (3,680) | (121) |
| Net cash provided by financing activities | 268,804 | 111,351 |
| Effect of exchange rate changes on cash | (1,224) | 164 |
| Net increase in cash and cash equivalents | 189,497 | 4,811 |
| Cash and cash equivalents at the beginning of the period | 155,859 | 179,120 |
| Cash and cash equivalents at the end of the period | $345,356 | $183,931 |
| 3D Systems Corporation | ||||
| Schedule 1 | ||||
| Earnings Per Share | ||||
|
Quarter Ended September 30, |
Nine Months Ended September 30, |
|||
| (in thousands, except per share amounts) | 2013 | 2012 | 2013 | 2012 |
| Numerator: | ||||
| Net income attributable to 3D Systems – numerator for basic net earnings per share | $17,657 | $13,517 | $32,883 | $28,029 |
| Add: Effect of dilutive securities | ||||
| Interest expense on 5.50% convertible notes (after-tax) | — | — | — | — |
| Stock options and other equity compensation | — | — | — | — |
| Numerator for diluted earnings per share | $17,657 | $13,517 | $32,883 | $28,029 |
| Denominator: | ||||
| Weighted average shares – denominator for basic net earnings per share | 102,437 | 83,903 | 96,874 | 79,034 |
| Add: Effect of dilutive securities | ||||
| Stock options and other equity compensation | — | 944 | — | 1,176 |
| 5.50% convertible notes (after-tax) | — | — | — | — |
| Denominator for diluted earnings per share | 102,437 | 84,847 | 96,874 | 80,210 |
| Earnings per share | ||||
| Basic | $0.17 | $0.16 | $0.34 | $0.35 |
| Diluted | $0.17 | $0.16 | $0.34 | $0.35 |
| Interest expense excluded from diluted earnings per share calculation (a) | $243 | $2,508 | $1,751 | $7,578 |
| 5.50% Convertible notes shares excluded from diluted earnings per share calculation (a) | 876 | 6,548 | 2,060 | 5,303 |
| (a) Average outstanding diluted earnings per share calculation excludes shares that may be issued upon conversion of the outstanding senior convertible notes since the effect of their inclusion would have been anti-dilutive. | ||||
| 3D Systems Corporation | ||||
| Schedule 2 | ||||
| Unaudited Reconciliation of GAAP Net Income to Non-GAAP Net Income | ||||
| Quarter and Nine Months Ended September 30, 2013 and 2012 | ||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||
| (in thousands, except per share amounts) | 2013 | 2012 | 2013 | 2012 |
| GAAP net income | $17,657 | $13,517 | $32,883 | $28,029 |
| Cost of sales adjustments: | ||||
| Amortization of intangibles | 65 | 54 | 190 | 154 |
| Operating expense adjustments: | ||||
| Amortization of intangibles | 6,141 | 3,024 | 14,912 | 9,365 |
| Acquisition and severance expenses | 655 | 264 | 5,357 | 3,323 |
| Non-cash stock-based compensation expense | 3,118 | 1,177 | 8,464 | 3,656 |
| Other expense adjustments: | ||||
| Non-cash interest expense | 127 | 981 | 880 | 2,924 |
| Loss on convertible notes | 2,022 | 1,245 | 11,275 | 1,245 |
| (Gain) loss on litigation and tax settlements | 457 | (1,473) | 2,457 | (1,473) |
| Tax effect | (4,027) | (633) | (12,402) | (1,941) |
| Non-GAAP net income | $26,215 | $18,156 | $64,016 | $45,282 |
| Non-GAAP basic earnings per share | $0.26 | $0.22 | $0.66 | $0.57 |
| Non-GAAP diluted earnings per share | $0.26 | $0.21 | $0.66 | $0.57 |