3D Systems Reports First Quarter 2019 Financial Results

ROCK HILL, S.C., May 07, 2019 (GLOBE NEWSWIRE) -- 3D Systems Corporation (NYSE: DDD) announced today its financial results for the first quarter ended March 31, 2019.

For the first quarter of 2019, the company reported revenue of $152.0 million, a decrease of 8 percent compared to $165.9 million in the first quarter of the previous year. The company reported a GAAP loss of $0.22 per share in the first quarter of 2019 and a GAAP loss of $0.19 per share in the first quarter of 2018, and a non-GAAP loss of $0.09 per share in the first quarter of 2019 compared to a non-GAAP loss of $0.03 per share in the first quarter of 2018.

The company reported 90 percent higher printer unit sales, but as a result of the mix of unit sales, printer revenue decreased 29 percent compared to the first quarter of the prior year. Healthcare services and simulation increased, however timing of large customer orders for printers and materials offset the increases, and total healthcare revenue decreased 5 percent from the first quarter of 2018. During the first quarter, materials revenue decreased 3 percent, software decreased 8 percent and on demand services decreased 12 percent.

The company reported GAAP gross profit margin of 43.2 percent for the first quarter of 2019 compared to gross profit margin of 46.9 percent in the prior year period. Under absorption of overhead driven by lower revenue and production combined with mix of sales resulted in lower gross profit margin in the first quarter of 2019.

For the first quarter of 2019, GAAP operating expenses decreased 9 percent to $87.0 million compared to $95.3 million in the prior year period. SG&A expenses decreased 6 percent to $65.1 million and R&D expenses decreased 15 percent from the first quarter of the prior year to $21.9 million.

The company used $15.2 million of cash in operations and ended the quarter with $157.3 million of unrestricted cash on hand. The use of cash during the first quarter was driven by lower than anticipated sales during the quarter and higher inventory in support of new product ramps.

“While we expected seasonality in our revenue this year from ordering patterns of enterprise customers, the first quarter was lower than anticipated as a result of shipment timing and additional on demand weakness,” commented Vyomesh Joshi (VJ) chief executive officer, 3D Systems. "We are taking actions to improve performance for the balance of the year, including accelerating cost reductions."

"With the breadth and strength of our portfolio, we continue to have significant market opportunities to expand our market share and are committed to executing our plans to drive long term profitable growth," concluded Joshi.

Q1 2019 Conference Call and Webcast
The company expects to file its Form 10-Q for the quarter ended March 31, 2019 with the Securities and Exchange Commission on May 7, 2019. 3D Systems plans to hold a conference call and simultaneous webcast to discuss these results on Tuesday, May 7, 2019, at 4:30 p.m. Eastern Time.

Date: Tuesday, May 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
March 31, 2019 and December 31, 2018

(in thousands, except par value) March 31,
  December 31,
Current assets:   
Cash and cash equivalents$157,260  $109,998 
Accounts receivable, net of reserves — $8,111 (2019) and $8,423 (2018)128,774  126,618 
Inventories137,919  133,161 
Prepaid expenses and other current assets29,345  27,697 
Current deferred tax assets      
Total current assets 453,298     397,474  
Property and equipment, net 100,171     103,252  
Intangible assets, net 62,500     68,275  
Goodwill 221,506     221,334  
Right of use assets 39,570     4,466  
Deferred income tax asset 5,840     4,217  
Other assets, net 27,504     26,814  
Total assets $ 910,389     $ 825,832  
Current liabilities:      
Current portion of long term debt $ 5,000     $  
Current right of use liabilities 12,184     654  
Accounts payable 54,503     66,722  
Accrued and other liabilities 56,336     59,265  
Current deferred tax liabilities      
Customer deposits 4,284     4,987  
Deferred revenue 44,954     32,432  
Total current liabilities 177,261     164,060  
Long-term debt 94,387     25,000  
Long-term right of use liabilities 36,257     6,392  
Deferred income tax liability 7,315     6,190  
Other liabilities 42,439     39,331  
Total liabilities 357,659     240,973  
Redeemable noncontrolling interests 8,872     8,872  
Commitments and contingencies      
Stockholders’ equity:      
Common stock, $0.001 par value, authorized 220,000 shares; issued 117,459 (2019) and 118,650 (2018) 118     117  
Additional paid-in capital 1,354,683     1,355,503  
Treasury stock, at cost — 2,219 shares (2019) and 2,946 shares (2018) (16,056 )   (15,572 )
Accumulated deficit (747,095 )   (722,701 )
Accumulated other comprehensive loss (39,362 )   (38,978 )
Total 3D Systems Corporation stockholders' equity 552,288     578,369  
Noncontrolling interests (8,430 )   (2,382 )
Total stockholders’ equity 543,858     575,987  
Total liabilities, redeemable noncontrolling interests and stockholders’ equity $ 910,389     $ 825,832  

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