Thursday, Aug 6, 2015 5:00 AM
ROCK HILL, South Carolina – August 6, 2015 - 3D Systems Corporation (NYSE: DDD) announced today its financial results for the second quarter and first six months of 2015.
For the second quarter of 2015, the company reported revenue of $170.5 million, an increase of 13% over the comparable quarter in 2014, or a 22% increase on a constant currency basis. The company reported a GAAP loss of $0.12 per share and non-GAAP earnings of $0.03 per share.
A challenging operating environment contributed to an overall decline in organic revenue of 5% compared with the second quarter of 2014. At constant currency rates, organic growth was 2% for the second quarter.
Strengthening demand for the company's products and services resulted in a 25% increase in revenue in EMEA, compared to the second quarter of 2014. Continued macroeconomic weaknesses in APAC compressed revenue by 9%. Moderate recovery in the Americas held revenue growth to 15%.
Overall, the company experienced sequential growth in its SLA, SLS and DMP 3D printers as industrial customers, including aerospace and healthcare, began to resume purchasing. MJP and CJP 3D printer units leveled off sequentially after several periods of progressive decline.
Gross profit margin remained flat at 47.9% compared to the second quarter of 2014. While gross profit margins from materials and services increased, an inventory write-off and higher than normal manufacturing variances attributable to consolidation of production facilities restricted total gross profit margin expansion.
For the second quarter of 2015, the company reported operating expenses of $105.5 million, inclusive of $25.7 million of R&D expenditures, resulting in a sequential cash operating expenses increase of 11% primarily from the integration of acquisitions. The company used $6.4 million of cash in operations during the second quarter and had $171.2 million of cash on hand at the end of June.
For the second quarter of 2015, the company reported a GAAP net loss of $13.7 million, or a $0.12 loss per share, and non-GAAP net income of $3.1 million, or $0.03 earnings per share.
For the first six months of 2015, revenue grew 11% to $331.2 million, or a 19% increase on a constant currency basis, resulting in a GAAP loss of $0.24 per share and non-GAAP earnings of $0.07 per share.
"We are disappointed with our overall results," said Avi Reichental, President and Chief Executive Officer, 3DS. "While a period of high growth enabled us to acquire strategic assets and build critical expertise, our rapid expansion permitted certain operating inefficiencies that we are currently addressing. Specifically, we are enhancing the quality of our products and services, accelerating synergy and cost reduction measures, driving process improvements and working closely with our channel partners to improve our sales operations and worldwide coverage."
Recent Business Highlights
The company is focusing on leveraging its domain expertise in key verticals into new products and partnerships that it believes will drive incremental adoption, including:
- Expanded its presence and coverage in China through the acquisition of Easyway
- Broadened its partner network with the addition of Konica Minolta Australia, HK 3D in the United Kingdom, and MLC CAD Systems in the United States
- Entered into additional agreements with the Air Force Research Laboratory, Honeywell and the U.S. Navy, expanding the company's relevance in aerospace and defense research and development activities
- Expanded its CubePro™ 3D printer capabilities with Infinity™ rinse-away water soluble support material
- Extended its education coverage by entering new distribution agreements with Douglas Stewart EDU and Thermo Fisher Scientific and strengthened its K-12 offering by integrating STEAMtrax's curricula into its education kits
"While industry conditions may constrain growth rates in the near term, we believe our focus on quality, innovation, operational excellence and partner friendliness will enhance our customer attractiveness and deliver greater earnings power as industry growth resumes," concluded Reichental.
Q2 Conference Call and Webcast
The company expects to release second quarter results and to file its Form 10-Q with the Securities and Exchange Commission on August 6, 2015. 3D Systems plans to hold a conference call and simultaneous webcast to discuss these results on Thursday, August 6, 2015, at 8:30 a.m. Eastern Time.
Date: Thursday, August 6, 2015
Time: 8:30 a.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
The recorded webcasts will be available beginning approximately two hours after each live presentation at www.3dsystems.com/investor.
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, including but not limited to, statements about management's expectations regarding the company's performance, initiatives and strategies. 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. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. 3D Systems undertakes no obligation to update or revise any forward-looking statements, even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized, except as may be required by law.
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
3D Systems provides the most advanced and comprehensive 3D digital design and fabrication solutions available today, including 3D printers, print materials and cloud-sourced custom parts. Its powerful ecosystem transforms entire industries by empowering professionals and consumers everywhere to bring their ideas to life using our vast material selection, including plastics, metals, ceramics and edibles. 3DS' leading personalized medicine capabilities save lives and include end-to-end simulation, training and planning, and printing of surgical instruments and devices for personalized surgery and patient specific medical and dental devices. Its democratized 3D digital design, fabrication and inspection products provide seamless interoperability and incorporate the latest immersive computing technologies. 3DS' products and services disrupt traditional methods, deliver improved results and empower our customers to manufacture the future now.
Leadership Through Innovation and Technology
•3DS invented 3D printing with its Stereolithography (SLA) printer and was the first to commercialize it in 1989.
•3DS invented Selective Laser Sintering (SLS) printing and was the first to commercialize it in 1992.
•3DS invented the ColorJet Printing (CJP) class of 3D printers and was the first to commercialize 3D powder-based systems in 1994.
•3DS invented MultiJet Printing (MJP) printers and was the first to commercialize it in 1996.
•3DS' Medical Modeling pioneered virtual surgical planning (VSP) and its services are world-leading, helping many thousands of patients on an annual basis.
Today its comprehensive range of 3D printers is the industry's benchmark for production-grade manufacturing in aerospace, automotive, patient specific medical device and a variety of consumer, electronic and fashion accessories.
More information on the company is available at www.3dsystems.com.