3D Systems Corporation (NYSE:DDD) announced today its
financial results for the second quarter ended June 30, 2023.
Second Quarter Financial Results and
Recent Business Highlights (All numbers are unaudited and
are presented in thousands, except per share amounts or as
otherwise noted)
- Q2 2023 revenue of $128,194 and
year-to-date revenue of $249,430 decreased from the prior year by
8.5% and 8.6% respectively, predominantly driven by expected
weakness in the dental orthodontics markets
- Excluding dental orthodontics
markets, year-to-date revenue increased by over 3% and
approximately 2% on a purely organic basis
- Net loss of $28,895, diluted loss
per share of $0.22, and diluted non-GAAP loss per
share(1) of $0.07
- Q2 2023 Adjusted
EBITDA(1) of negative $6,898 improved over 30%
sequentially, but declined year-over-year driven primarily by lower
total sales volume, inflationary impacts on our input costs, and
substantial investments in future organic growth
- First half 2023 discretionary
investments in Regenerative Medicine exceeded $4,000 as progress
and technology feasibility are increasingly demonstrated
- Revising annual revenue guidance to
$525-$545 million and updating Adjusted EBITDA(1)
guidance to attainment of positive Adjusted EBITDA in the fourth
quarter of 2023
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(in thousands, except per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
128,194 |
|
|
$ |
140,045 |
|
|
$ |
249,430 |
|
$ |
273,046 |
|
Operating (loss) |
|
|
(31,729 |
) |
|
|
(32,038 |
) |
|
|
(65,125 |
) |
|
(55,270 |
) |
Net (loss) income |
|
|
(28,895 |
) |
|
|
(32,961 |
) |
|
|
(58,316 |
) |
|
(59,760 |
) |
Diluted (loss) income per
share |
|
|
(0.22 |
) |
|
|
(0.26 |
) |
|
|
(0.45 |
) |
|
(0.47 |
) |
|
|
|
|
|
|
|
|
Non-GAAP measures for
year-over-year comparisons:(1) |
|
|
|
|
|
|
|
Non-GAAP gross profit
margin |
|
|
38.9 |
% |
|
|
38.0 |
% |
|
|
38.9 |
% |
|
39.3 |
% |
Adjusted EBITDA |
|
|
(6,898 |
) |
|
|
(2,578 |
) |
|
|
(16,993 |
) |
|
(651 |
) |
Non-GAAP diluted (loss) income
per share |
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.16 |
) |
$ |
(0.12 |
) |
(1) See “Presentation of
Information in this Press Release” below for a description, and the
Appendix for the reconciliation of non-GAAP measurements to the
most closely comparable GAAP measure.
Summary Comments on Results
Commenting on second quarter results, Dr.
Jeffrey Graves, President and CEO of 3D Systems stated, “Looking at
the state of the additive manufacturing market today, it is
increasingly clear to us that the industry is at an exciting
inflection point, with 3D printing now moving into factory
production environments world-wide. What we and many others in our
space agree upon is that scale is increasingly necessary, not only
to deliver sustainable profitability, but also to diversify end
markets and smooth out quarterly results, such that one market,
technology, or customer does not have an outsized impact on
consolidated financial results. For our company, the dramatic
success we have experienced in the dental orthodontics market over
many years has now translated into an outsized negative impact as
consumer discretionary spending on dental aligners has plummeted.
Over the last four quarters this has created a significant headwind
to our performance, with total revenues from this market declining
by over $50 million. While we are pleased to see this market now
showing signs of stabilization, the ultimate answer is to broaden
market exposure and continue to expand the sales, service and
technology expertise that our customers require. Unfortunately, our
3D printing industry today remains highly fragmented and, until
this is rectified, all companies will be exposed to similar
volatility over time.
Dr. Graves continued, “At 3D Systems, we see two
distinct paths to achieving scale. The first is an immediate
step-function change through our proposed combination with
Stratasys, which has the added benefits of significant short-term
cost synergies and an outstanding breadth of combined technology
platforms for sustained, long-term growth. The second path is to
attain scale organically, leveraging our current metal and polymer
technology portfolio, which is the broadest in the industry, and
our groundbreaking development efforts in regenerative medicine,
which you will hear much more about over time. Either path can be
successful, but the combination with Stratasys clearly accelerates
the benefits to our customers and shareholders, which is why we
have been working on this concept for the last two years, and so
passionately over the last two months. Candidly, we expected this
transaction to be announced by now and are frustrated by the pace
and the lack of any engagement on the merger agreement we delivered
to Stratasys signed in escrow on July 13. We remain committed to
pursuing this powerful combination for the benefit of our
collective shareholders, but can only conclude the merger if
Stratasys shares our commitment.”
“As it relates to our quarterly results, we felt
some of the challenges related to this lack of scale in the second
quarter. That said, we were pleased that, excluding our dental
orthodontics business, we continued to see organic revenue growth
of roughly 2% year-to-date, even in the midst of a difficult
macroeconomic environment. Most companies in our industry, given
their size and narrower focus, cannot make this same statement.
Last quarter, we forecasted a full-year decline of roughly 35% in
our dental business and our expectations remain unchanged for that
portion of our business at mid-year. In our non-dental business,
during the last few weeks of the quarter, we started to notice that
sales cycles for new, large printers had begun to extend as
customers began to be more cautious with their capital spending.
Countering these headwinds there were also pockets of strength
throughout the first half, particularly in our Personalized
Healthcare Solutions business where we have delivered over 15%
revenue growth year-to-date and are uniquely positioned versus our
competition. Additionally, in our Industrial segment, we continued
to see growth in our Aerospace & Defense, Consumer and Durable
Goods, Foundries and Semiconductor markets, as well as with our
Titan extrusion printing platform across virtually all industrial
markets. Lastly, we continued to make significant investments in
our emerging Regenerative Medicine development efforts, which we
believe has the ability to drive significant long-term growth and
value creation. Our core efforts, directed toward the manufacture
of human organs, are proceeding very well, in partnership with
United Therapeutics, and our newly established Systemic Bio
business, which is focused on acceleration of new drug therapies
for customers in the pharmaceutical industry continues meeting its
aggressive objectives. After announcing our first contract with a
major pharmaceutical company last quarter, we’ve also seen the FDA
announce that animal testing is no longer required prior to human
trials. This gives us even more confidence in the demand we expect
for our h-VIOS, or organ-on-a-chip, technology. We expect to close
our second major pharma contract later this year with many more now
in the pipeline. Finally, in non-organ tissues, earlier this week
we signed an exclusive partnership with Theradaptive, a protein
engineering company focused predominantly on orthopedic
regeneration, to combine our expertise in orthopedics and soft
tissue additive manufacturing with Theradaptive’s breakthrough
technology in material binding.”
Dr. Graves concluded, "Given all of these market
dynamics, we believe it is prudent to adjust our full year 2023
revenue expectation to $525 million to $545 million, and would now
expect positive adjusted EBITDA in Q4’23. This includes the full
year investment of roughly $10 million in our regenerative medicine
business. While our results in the first half of the year have been
more challenging than originally expected, we are encouraged by our
year over year organic revenue growth excluding our dental
business. We firmly believe that, with the steps we are taking to
manage our costs while scaling the business, the long-term future
at 3D Systems is incredibly bright."
Summary of Second Quarter and
Year-to-Date ResultsRevenue for the second quarter of 2023
decreased 8.5% to $128,194 compared to the same period last year,
and revenue on a constant currency basis decreased 8.7%. The
decline in revenue primarily reflects lower sales to certain dental
orthodontic market customers due to macroeconomic factors that are
negatively impacting demand for elective dental procedures. Second
quarter 2023 revenue from our non-dental markets decreased 2.1%,
and 2.4% on a constant currency basis, compared to second quarter
2022.
Revenue for the first half of 2023 decreased
8.6% to $249,430 compared to the same period last year, and revenue
on a constant currency basis decreased 7.7%. The decline of revenue
primarily reflects lower sales to certain dental orthodontic market
customers due to macroeconomic factors that are negatively
impacting demand for elective dental procedures, as expected.
Revenue from our non-dental markets increased 3.3%, and 4.7% on a
constant currency basis, compared to first half of 2022.
Healthcare Solutions revenue for the second
quarter 2023 decreased 15.2% to $60,874 compared to the same period
last year. Healthcare Solutions revenue decreased 15.4% year over
year on a constant currency basis due to continued softness in our
dental orthodontic market, as expected. Healthcare Solutions
revenue from our non-dental markets decreased 3.6%, and 3.9% on a
constant currency basis, versus the same period last year.
For the first half of 2023, Healthcare Solutions
revenue decreased 19.5% to $109,599 compared to the same period
last year due to continued softness in our dental orthodontic
markets, which was down 34.7% versus the first half of 2022.
Healthcare Solutions revenue for the first half of 2023 from our
non-dental markets increased 6.7%, and 7.1% on a constant currency
basis, versus the first half of 2022.
Industrial Solutions revenue for the second
quarter 2023 decreased 1.4% to $67,320 compared to the same period
last year. Industrial Solutions revenue on a constant currency
basis decreased 1.7% year over year.
For the first half of 2023, Industrial Solutions
revenue increased 2.1% to $139,831 compared to the same period last
year. Industrial Solutions revenue on a constant currency basis
increased 3.8% versus the first half of 2022.
Gross profit margin in the second quarter of
2023 was 39.0% compared to 37.9% in the same period last year.
Non-GAAP gross profit margin was 38.9% compared to 38.0% in the
same period last year. Gross profit margin increased primarily due
to favorable pricing, product mix and cost optimization efforts to
in source production.
Gross profit margin in the first half of 2023
was 38.9% compared to 39.2% in the same period last year. Non-GAAP
gross profit margin was 38.9% compared to 39.3% in the same period
last year. Gross profit margin decreased primarily due to expected
dental orthodontics related volume, partially offset by price
increases and cost optimization efforts to in source
production.
Net loss attributable to 3D Systems Corporation
decreased by $4,066 to a loss of $28,895 in the second quarter of
2023 compared to the same period in the prior year. The decrease in
Net loss attributable to 3D Systems Corporation primarily reflects
an increase in interest income earned on cash and cash equivalents
resulting from increased interest rates.
Net loss attributable to 3D Systems Corporation
decreased by $1,444 to $58,316 in the first half of 2023 compared
to the same period in the prior year. The decrease in Net loss
attributable to 3D Systems Corporation primarily reflects an
increase in interest income earned on cash and cash equivalents
resulting from increased interest rates.
Adjusted EBITDA decreased by $4,320 to a loss of
$6,898 in the second quarter of 2023 compared to the same period
last year. The decrease in Adjusted EBITDA primarily reflects lower
total sales volume, inflationary impacts on our input costs, and
continued investments in future growth.
Adjusted EBITDA decreased by $16,342 to a loss
of $16,993 in the first half of 2023 compared to the same period
last year. The decrease in Adjusted EBITDA primarily reflects lower
total sales volume, inflationary impacts on our input costs, and
continued investments in future growth.
Updating 2023 Outlook3D Systems
is revising its full-year 2023 revenue and Adjusted EBITDA
financial guidance and confirming its 2023 non-GAAP gross profit
margin as follows:
Full Year 2023 Guidance as of: |
|
|
|
|
August 9, 2023 |
May 8, 2023 |
|
|
|
Revenue: |
$525 - $545 million |
$545 - $575 million |
|
|
|
Non-GAAP Gross Profit Margin: |
40% - 42% |
40% - 42% |
|
|
|
Adjusted EBITDA: |
Positive exiting Q4'23 |
$2 million or better |
Financial LiquidityAt June 30,
2023, the company had cash and cash equivalents and short-term
investments of $491,579, a decrease of $77,158 since December 31,
2022. The decrease resulted primarily due to cash used in
operations of $46,269, capital expenditures of $13,549,
acquisitions and other investments of $15,654, and taxes paid
related to net share settlement of equity awards of $4,564. At June
30, 2023, the company had total debt net of deferred financing
costs of $450,848.
Q2 2023
Conference Call and WebcastThe company will host a
conference call and simultaneous webcast to discuss these results
on August 9, 2023, which may be accessed as follows:
Date: August 9, 2023Time: 8:30 a.m. Eastern
TimeListen via webcast: www.3dsystems.com/investorParticipate via
telephone: 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
StatementsCertain 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. In
particular, we note that there is no assurance that a definitive
agreement for the transaction referenced in this report will be
entered into or consummated or that integration will be successful
or synergies will be realized if such transaction were to be
consummated. In addition, we note that Stratasys is not able to
countersign a merger agreement with 3D Systems without first
terminating Stratasys’ merger agreement with Desktop Metal and that
the mutual consent of both Stratasys and Desktop Metal is necessary
for termination of the Desktop Metal merger agreement. In addition,
we note that Stratasys continues to recommend in favor of the
Desktop Metal merger agreement, which remains in full force and
effect, and that the vote by Stratasys shareholders on the Desktop
Metal merger agreement has not yet occurred or been scheduled.
Business combination proposals, transactions and integrations are
subject to numerous risks and uncertainties. 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
revise any forward-looking statements made by management or on its
behalf, whether as a result of future developments, subsequent
events or circumstances or otherwise, except as required by
law.
All references to the binding nature of the
offer and merger agreement being proposed by 3D Systems, whether in
a press release, presentation, other document or public statement,
are subject to the contents of the escrow letter that was filed by
3D Systems on July 13, 2023 with the SEC on Form 8-K.
Additional Information
This communication does not constitute an offer
to buy or sell or the solicitation of an offer to sell or buy any
securities. This communication relates to a proposal which 3D
Systems has made for a business combination with Stratasys. In
furtherance of this proposal and subject to future developments, 3D
Systems and/or a new holding company to be formed by 3D Systems
(and, if a negotiated transaction is agreed, Stratasys) may file
one or more registration statements, proxy statements or other
documents with the SEC. This communication is not a substitute for
any proxy statement, registration statement, prospectus or other
document that 3D Systems and/or Stratasys may file with the SEC in
connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF 3D SYSTEMS AND
STRATASYS ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION
STATEMENT, PROSPECTUS AND/OR OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. ANY DEFINITIVE PROXY STATEMENT(S) OR PROSPECTUS(ES)
(IF AND WHEN AVAILABLE) WILL BE MAILED TO STOCKHOLDERS OF 3D
SYSTEMS AND/OR STRATASYS, AS APPLICABLE. Investors and security
holders will be able to obtain free copies of these documents (if
and when available) and other documents filed with the SEC by 3D
Systems through the web site maintained by the SEC at
http://www.sec.gov.
This document shall not constitute an offer to
buy or sell or the solicitation of an offer to sell or buy any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933, as
amended.
This communication is neither a solicitation of
a proxy nor a substitute for any proxy statement or other filings
that may be made with the SEC. Nonetheless, 3D Systems and its
directors and executive officers and other members of management
and employees may be deemed to be participants in the solicitation
of proxies in respect of the proposed transaction. You can find
information about 3D Systems’ executive officers and directors in
3D Systems’ definitive proxy statement filed with the SEC on April
5, 2023. Additional information regarding the interests of such
potential participants will be included in one or more registration
statements, proxy statements or other documents filed with the SEC
if and when they become available. These documents (if and when
available) may be obtained free of charge from the SEC’s website at
http://www.sec.gov.
Presentation of Information in this
Press Release3D Systems reports its financial results in
accordance with GAAP. Management also reviews and reports certain
non-GAAP measures, including: non-GAAP gross profit, non-GAAP gross
profit margin, non-GAAP diluted income (loss) per share, and
Adjusted EBITDA. These non-GAAP measures exclude certain items that
management does not view as part of 3D Systems’ core results as
they may be highly variable, may be unusual or infrequent, are
difficult to predict and can distort underlying business trends and
results. Management believes that the non-GAAP measures provide
useful additional insight into underlying business trends and
results and provide meaningful information regarding the comparison
of period-over-period results. Additionally, management uses the
non-GAAP measures for planning, forecasting and evaluating business
and financial performance, including allocating resources and
evaluating results relative to employee compensation targets. 3D
Systems’ non-GAAP measures are not calculated in accordance with or
as required by GAAP and may not be calculated in the same manner as
similarly titled measures used by other companies. These non-GAAP
measures should thus be considered as supplemental in nature and
not considered in isolation or as a substitute for the related
financial information prepared in accordance with GAAP.
To calculate the non-GAAP measures, 3D Systems
excludes the impact of the following items:
- amortization of intangible assets,
a non-cash expense, as 3D Systems’ intangible assets were primarily
acquired in connection with business combinations;
- costs incurred in connection with
acquisitions and divestitures, such as legal, consulting and
advisory fees;
- stock-based compensation expenses,
a non-cash expense;
- charges related to restructuring
and cost optimization plans, impairment charges, including
goodwill, and divestiture gains or losses;
- certain compensation expense
related to the 2021 Volumetric acquisition; and
- costs, including legal fees,
related to significant or unusual litigation matters.
Amortization of intangibles and acquisition and
divestiture-related costs are excluded from non-GAAP measures as
the timing and magnitude of business combination transactions are
not predictable, can vary significantly from period to period and
the purchase price allocated to amortizable intangible assets and
the related amortization period are unique to each acquisition.
Amortization of intangible assets will recur in future periods
until such intangible assets have been fully amortized. While
intangible assets contribute to the company’s revenue generation,
the amortization of intangible assets does not directly relate to
the sale of the company’s products or services. Additionally,
intangible assets amortization expense typically fluctuates based
on the size and timing of the company’s acquisition activity.
Accordingly, the company believes excluding the amortization of
intangible assets enhances the company’s and investors’ ability to
compare the company’s past financial performance with its current
performance and to analyze underlying business performance and
trends. Although stock-based compensation is a key incentive
offered to certain of our employees, the expense is non-cash in
nature, and we continue to evaluate our business performance
excluding stock-based compensation; therefore, it is excluded from
non-GAAP measures. Stock-based compensation expenses will recur in
future periods. Charges related to restructuring and cost
optimization plans, impairment charges, including goodwill,
divestiture gains or losses, and the costs, including legal fees,
related to significant or unusual litigation matters are excluded
from non-GAAP measures as the frequency and magnitude of these
activities may vary widely from period to period. Additionally,
impairment charges, including goodwill, are non-cash. Furthermore,
the company believes the costs, including legal fees, related to
significant or unusual litigation matters are not indicative of our
core business' operations. Finally, 3D Systems excludes contingent
consideration recorded as compensation expense related to the 2021
Volumetric acquisition from non-GAAP measures as management
evaluates financial performance excluding this expense, which is
viewed by management as similar to acquisition consideration.
The matters discussed above are tax effected, as
applicable, in calculating non-GAAP diluted income (loss) per
share.
Adjusted EBITDA, defined as net income, plus
income tax (provision) benefit, interest and other income
(expense), net, stock-based compensation expense, amortization of
intangible assets, depreciation expense, and other non-GAAP
adjustments, all as described above, is used by management to
evaluate performance and helps measure financial performance
period-over-period.
A reconciliation of GAAP to non-GAAP financial
measures is provided in the accompanying schedules.
3D Systems does not provide forward-looking
guidance for certain measures on a GAAP basis. The company is
unable to provide a quantitative reconciliation of forward-looking
non-GAAP gross profit margin, Adjusted EBITDA, and free cash flow
to the most directly comparable forward-looking GAAP measures
without unreasonable effort because certain items, including
litigation costs, acquisition expenses, stock-based compensation
expense, intangible assets amortization expense, restructuring
expenses, and goodwill impairment charges are difficult to predict
and estimate. These items are inherently uncertain and depend on
various factors, many of which are beyond the company’s control,
and as such, any associated estimate and its impact on GAAP
performance could vary materially.
About 3D Systems
More than 30 years ago, 3D Systems brought the
innovation of 3D printing to the manufacturing industry. Today, as
the leading Additive Manufacturing solutions partner, we bring
innovation, performance, and reliability to every interaction -
empowering our customers to create products and business models
never before possible. Thanks to our unique offering of hardware,
software, materials and services, each application-specific
solution is powered by the expertise of our application engineers
who collaborate with customers to transform how they deliver their
products and services. 3D Systems’ solutions address a variety of
advanced applications in Healthcare and Industrial Solutions
markets such as Medical and Dental, Aerospace & Defense,
Automotive and Durable Goods. More information on the company is
available at www.3dsystems.com
Tables Follow
3D Systems CorporationUnaudited
Consolidated Balance SheetsJune 30, 2023 and
December 31, 2022 |
(in thousands, except
par value) |
June 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
490,444 |
|
|
$ |
388,134 |
|
Short-term investments |
|
1,135 |
|
|
|
180,603 |
|
Accounts receivable, net of reserves — $3,009 and $3,114 |
|
96,786 |
|
|
|
93,886 |
|
Inventories |
|
156,153 |
|
|
|
137,832 |
|
Prepaid expenses and other current assets |
|
40,395 |
|
|
|
33,790 |
|
Total current assets |
|
784,913 |
|
|
|
834,245 |
|
Property and equipment,
net |
|
62,789 |
|
|
|
58,072 |
|
Intangible assets, net |
|
85,130 |
|
|
|
90,230 |
|
Goodwill |
|
387,934 |
|
|
|
385,312 |
|
Right-of-use assets |
|
66,076 |
|
|
|
42,746 |
|
Deferred income tax asset |
|
4,805 |
|
|
|
7,038 |
|
Other assets |
|
40,050 |
|
|
|
28,970 |
|
Total assets |
$ |
1,431,697 |
|
|
$ |
1,446,613 |
|
LIABILITIES,
REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current lease liabilities |
$ |
10,286 |
|
|
$ |
9,036 |
|
Accounts payable |
|
59,023 |
|
|
|
53,826 |
|
Accrued and other liabilities |
|
47,239 |
|
|
|
55,571 |
|
Customer deposits |
|
7,330 |
|
|
|
6,911 |
|
Deferred revenue |
|
30,032 |
|
|
|
26,464 |
|
Total current liabilities |
|
153,910 |
|
|
|
151,808 |
|
Long-term debt, net of
deferred financing costs |
|
450,848 |
|
|
|
449,510 |
|
Long-term lease
liabilities |
|
64,451 |
|
|
|
41,779 |
|
Deferred income tax
liability |
|
7,923 |
|
|
|
7,631 |
|
Other liabilities |
|
41,610 |
|
|
|
44,181 |
|
Total liabilities |
|
718,742 |
|
|
|
694,909 |
|
Redeemable non-controlling
interest |
|
1,951 |
|
|
|
1,760 |
|
Stockholders’ equity: |
|
|
|
Common stock, $0.001 par
value, authorized 220,000 shares; shares issued 133,504 and 131,207
as of June 30, 2023 and December 31, 2022, respectively |
|
133 |
|
|
|
131 |
|
Additional paid-in
capital |
|
1,562,529 |
|
|
|
1,547,597 |
|
Accumulated deficit |
|
(802,278 |
) |
|
|
(743,962 |
) |
Accumulated other comprehensive loss |
|
(49,380 |
) |
|
|
(53,822 |
) |
Total stockholders’ equity |
|
711,004 |
|
|
|
749,944 |
|
Total liabilities, redeemable non-controlling interest and
stockholders’ equity |
$ |
1,431,697 |
|
|
$ |
1,446,613 |
|
3D Systems CorporationUnaudited
Consolidated Statements of OperationsThree and Six
Months Ended June 30, 2023 and 2022. |
|
Three Months Ended |
|
Six Months Ended |
(in thousands, except
per share amounts) |
June 30, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
Revenue: |
|
|
|
|
|
|
|
Products |
$ |
89,165 |
|
|
$ |
103,774 |
|
|
$ |
173,553 |
|
|
$ |
204,325 |
|
Services |
|
39,029 |
|
|
|
36,271 |
|
|
|
75,877 |
|
|
|
68,721 |
|
Total revenue |
|
128,194 |
|
|
|
140,045 |
|
|
|
249,430 |
|
|
|
273,046 |
|
Cost of sales: |
|
|
|
|
|
|
|
Products |
|
56,135 |
|
|
|
65,331 |
|
|
|
106,015 |
|
|
|
123,803 |
|
Services |
|
22,043 |
|
|
|
21,576 |
|
|
|
46,301 |
|
|
|
42,310 |
|
Total cost of sales |
|
78,178 |
|
|
|
86,907 |
|
|
|
152,316 |
|
|
|
166,113 |
|
Gross profit |
|
50,016 |
|
|
|
53,138 |
|
|
|
97,114 |
|
|
|
106,933 |
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
58,983 |
|
|
|
64,404 |
|
|
|
117,268 |
|
|
|
119,819 |
|
Research and development |
|
22,762 |
|
|
|
20,772 |
|
|
|
44,971 |
|
|
|
42,384 |
|
Total operating expenses |
|
81,745 |
|
|
|
85,176 |
|
|
|
162,239 |
|
|
|
162,203 |
|
Loss from operations |
|
(31,729 |
) |
|
|
(32,038 |
) |
|
|
(65,125 |
) |
|
|
(55,270 |
) |
Interest and other income
(expense), net |
|
3,214 |
|
|
|
329 |
|
|
|
7,089 |
|
|
|
(1,954 |
) |
(Loss) income before income
taxes |
|
(28,515 |
) |
|
|
(31,709 |
) |
|
|
(58,036 |
) |
|
|
(57,224 |
) |
(Provision) benefit for income
taxes |
|
(222 |
) |
|
|
(1,289 |
) |
|
|
(230 |
) |
|
|
(2,573 |
) |
(Loss) on equity method
investment |
|
(142 |
) |
|
|
— |
|
|
|
(142 |
) |
|
|
— |
|
Net (loss) income before
redeemable non-controlling interest |
|
(28,879 |
) |
|
|
(32,998 |
) |
|
|
(58,408 |
) |
|
|
(59,797 |
) |
Less: net (loss) income
attributable to redeemable non-controlling interest |
|
16 |
|
|
|
(37 |
) |
|
|
(92 |
) |
|
|
(37 |
) |
Net (loss) income attributable
to 3D Systems Corporation |
$ |
(28,895 |
) |
|
$ |
(32,961 |
) |
|
$ |
(58,316 |
) |
|
$ |
(59,760 |
) |
|
|
|
|
|
|
|
|
Net (loss) income per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
(0.22 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.47 |
) |
Diluted |
$ |
(0.22 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.47 |
) |
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
129,907 |
|
|
|
127,703 |
|
|
|
129,535 |
|
|
|
127,218 |
|
Diluted |
|
129,907 |
|
|
|
127,703 |
|
|
|
129,535 |
|
|
|
127,218 |
|
3D Systems CorporationUnaudited
Consolidated Statements of Cash FlowsSix Months
Ended June 30, 2023, 2022 |
|
Six Months Ended |
(in
thousands) |
June 30, 2023 |
|
June 30, 2022 |
Cash flows from operating
activities: |
|
|
|
Net (loss) income before redeemable non-controlling interest |
$ |
(58,408 |
) |
|
$ |
(59,797 |
) |
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities: |
|
|
|
Depreciation, amortization and accretion of debt discount |
|
18,442 |
|
|
|
18,198 |
|
Stock-based compensation |
|
18,282 |
|
|
|
20,061 |
|
Loss on short-term investments |
|
6 |
|
|
|
— |
|
Non-cash operating lease expense |
|
4,025 |
|
|
|
— |
|
Provision for inventory obsolescence and revaluation |
|
4,550 |
|
|
|
97 |
|
Provision for bad debts |
|
100 |
|
|
|
1,042 |
|
Loss (gain) on the disposition of businesses, property, equipment
and other assets |
|
57 |
|
|
|
— |
|
Benefit for deferred income taxes and reserve adjustments |
|
— |
|
|
|
628 |
|
Loss on equity method investment |
|
142 |
|
|
|
— |
|
Asset impairment |
|
1,187 |
|
|
|
24 |
|
Changes in operating accounts: |
|
|
|
Accounts receivable |
|
(2,597 |
) |
|
|
(6,173 |
) |
Inventories |
|
(24,469 |
) |
|
|
(16,609 |
) |
Prepaid expenses and other current assets |
|
(4,556 |
) |
|
|
(2,981 |
) |
Accounts payable |
|
4,381 |
|
|
|
6,168 |
|
Deferred revenue and customer deposits |
|
1,870 |
|
|
|
(704 |
) |
Accrued and other liabilities |
|
(6,836 |
) |
|
|
1,618 |
|
All other operating activities |
|
(2,445 |
) |
|
|
217 |
|
Net cash (used in) provided by operating activities |
|
(46,269 |
) |
|
|
(38,211 |
) |
Cash flows from investing
activities: |
|
|
|
Purchases of property and equipment |
|
(13,549 |
) |
|
|
(10,368 |
) |
Purchases of short-term investments |
|
— |
|
|
|
(384,450 |
) |
Sales and maturities of short-term investments |
|
179,790 |
|
|
|
41,044 |
|
Acquisitions and other investments, net of cash acquired |
|
(15,654 |
) |
|
|
(83,312 |
) |
Net cash provided by (used in) investing activities |
|
150,587 |
|
|
|
(437,086 |
) |
Cash flows from financing
activities: |
|
|
|
Debt issuance costs |
|
— |
|
|
|
(16 |
) |
Purchase of non-controlling interests |
|
— |
|
|
|
(2,300 |
) |
Taxes paid related to net-share settlement of equity awards |
|
(4,564 |
) |
|
|
(10,047 |
) |
Other financing activities |
|
(362 |
) |
|
|
(324 |
) |
Net cash (used in) provided by financing activities |
|
(4,926 |
) |
|
|
(12,687 |
) |
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
645 |
|
|
|
(2,047 |
) |
Net (decrease) increase in
cash, cash equivalents and restricted cash |
|
100,037 |
|
|
|
(490,031 |
) |
Cash, cash equivalents and
restricted cash at the beginning of the year(a) |
|
391,975 |
|
|
|
789,970 |
|
Cash, cash equivalents and
restricted cash at the end of the period (a) |
$ |
492,012 |
|
|
$ |
299,939 |
|
(a) The amounts for cash and cash equivalents and restricted
cash shown above include restricted cash of $1,277 and $114 as of
June 30, 2023 and December 31, 2022, respectively, which are
included in prepaid expenses and other current assets. In addition,
included in cash and cash equivalents and restricted cash above as
of June 30, 2023 and December 31, 2022 is $291 and $3,727,
respectively, of restricted cash, which, is included in other
non-current assets. The amounts for cash and cash equivalents and
restricted cash shown above include restricted cash of $1,105 and
$313 as of June 30, 2022 and December 31, 2021, respectively.
Appendix3D Systems
CorporationUnaudited Reconciliations of GAAP to
Non-GAAP MeasuresThree and Six Months
Ended June 30, 2023
and 2022. |
|
|
Constant
Currency Revenue (4) |
|
|
|
Three Months Ended June 30, |
|
|
Constant Currency(1) |
|
(in
thousands) |
|
2023 |
|
|
2022 |
|
$ Change |
|
% Change |
|
|
FX Effect(2) |
|
% Change(3) |
|
Healthcare Solutions |
$ |
60,874 |
|
|
71,746 |
|
$ |
(10,872 |
) |
|
(15.2 |
)% |
|
$ |
181 |
|
(15.4 |
)% |
Industrial Solutions |
|
67,320 |
|
|
68,299 |
|
|
(979 |
) |
|
(1.4 |
)% |
|
|
193 |
|
(1.7 |
)% |
Total revenue |
$ |
128,194 |
|
$ |
140,045 |
|
$ |
(11,851 |
) |
|
(8.5 |
)% |
|
$ |
374 |
|
(8.7 |
)% |
(1) To assist in the analysis of the Company’s revenue trends,
the Company estimated the impact of foreign exchange on
year-over-year revenue growth by recasting revenue for the three
months ended June 30, 2023 by applying the foreign exchange rates
used to translate 2022 non-US functional currency revenue to 2023
non-US functional currency revenue.(2) Represents the estimated
impact on "as reported" revenue due to changes in foreign currency
exchange rates(3) Represents the % increase or decrease in revenue
excluding the estimated "FX effect"(4)Amounts in table may not foot
due to rounding
|
Six Months Ended June 30, |
|
Constant Currency(1) |
(in
thousands) |
|
2023 |
|
|
2022 |
|
$ Change |
|
% Change |
|
FX Effect(2) |
|
% Change(3) |
Healthcare Solutions |
$ |
109,599 |
|
$ |
136,091 |
|
$ |
(26,492 |
) |
|
(19.5 |
)% |
|
$ |
(383 |
) |
|
(19.2 |
)% |
Industrial Solutions |
|
139,831 |
|
|
136,955 |
|
|
2,876 |
|
|
2.1 |
% |
|
|
(2,303 |
) |
|
3.8 |
% |
Total revenue |
$ |
249,430 |
|
$ |
273,046 |
|
$ |
(23,616 |
) |
|
(8.6 |
)% |
|
$ |
(2,686 |
) |
|
(7.7 |
)% |
(1) To assist in the analysis of the Company’s revenue trends,
the Company estimated the impact of foreign exchange on
year-over-year revenue growth by recasting revenue for the six
months ended June 30, 2023 by applying the foreign exchange rates
used to translate 2022 non-US functional currency revenue to 2023
non-US functional currency revenue.(2) Represents the estimated
impact on "as reported" revenue due to changes in foreign currency
exchange rates(3) Represents the % increase or decrease in revenue
excluding the estimated "FX effect"(4)Amounts in table may not foot
due to rounding
Gross Profit and Gross Profit Margin
(1)
|
Three Months Ended June 30, |
(in
thousands) |
|
2023 |
|
|
|
2022 |
|
|
Gross Profit |
|
Gross Profit Margin |
|
Gross Profit |
|
Gross Profit Margin |
GAAP |
$ |
50,016 |
|
|
39.0 |
% |
|
$ |
53,138 |
|
37.9 |
% |
Amortization expense included in Cost of sales |
|
(122 |
) |
|
|
|
|
136 |
|
|
Non-GAAP (2) |
$ |
49,894 |
|
|
38.9 |
% |
|
$ |
53,274 |
|
38.0 |
% |
(1)Amounts in table may not foot due to rounding(2) Calculated
as non-GAAP gross profit as a percentage of total revenue.
|
Six Months Ended June 30, |
(in
thousands) |
|
2023 |
|
|
|
2022 |
|
|
Gross Profit |
|
Gross Profit Margin |
|
Gross Profit |
|
Gross Profit Margin |
GAAP |
$ |
97,114 |
|
38.9 |
% |
|
$ |
106,933 |
|
39.2 |
% |
Amortization expense included in Cost of sales |
|
14 |
|
|
|
|
276 |
|
|
Non-GAAP (2) |
$ |
97,128 |
|
38.9 |
% |
|
$ |
107,209 |
|
39.3 |
% |
(1)Amounts in table may not foot due to rounding(2) Calculated
as non-GAAP gross profit as a percentage of total revenue.
Appendix3D Systems
CorporationUnaudited Reconciliations of GAAP to
Non-GAAP MeasuresThree and Six Months
Ended June 30, 2023
and 2022. |
Net
(Loss) Income to Adjusted EBITDA(1) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net (loss) income
attributable to 3D Systems Corporation |
$ |
(28,895 |
) |
|
$ |
(32,961 |
) |
|
$ |
(58,316 |
) |
|
$ |
(59,760 |
) |
Interest (income) expense,
net |
|
(4,404 |
) |
|
|
(1,825 |
) |
|
|
(8,209 |
) |
|
|
(1,990 |
) |
Provision for income taxes |
|
222 |
|
|
|
1,289 |
|
|
|
230 |
|
|
|
2,573 |
|
Depreciation expense |
|
5,294 |
|
|
|
5,032 |
|
|
|
10,606 |
|
|
|
10,850 |
|
Amortization expense |
|
3,258 |
|
|
|
3,303 |
|
|
|
6,497 |
|
|
|
5,980 |
|
EBITDA |
|
(24,525 |
) |
|
|
(25,162 |
) |
|
|
(49,192 |
) |
|
|
(42,347 |
) |
Stock-based compensation
expense |
|
7,990 |
|
|
|
7,403 |
|
|
|
18,282 |
|
|
|
20,061 |
|
Acquisition and
divestiture-related expense |
|
1,512 |
|
|
|
2,972 |
|
|
|
4,188 |
|
|
|
6,654 |
|
Legal expense |
|
2,656 |
|
|
|
10,760 |
|
|
|
2,735 |
|
|
|
10,773 |
|
Restructuring expense |
|
4,121 |
|
|
|
(10 |
) |
|
|
5,824 |
|
|
|
301 |
|
Redeemable non-controlling
interest |
|
16 |
|
|
|
(37 |
) |
|
|
(92 |
) |
|
|
(37 |
) |
Loss on equity method
investment |
|
142 |
|
|
|
— |
|
|
|
142 |
|
|
|
— |
|
Other non-operating (income)
expense, net |
|
1,190 |
|
|
|
1,496 |
|
|
|
1,120 |
|
|
|
3,944 |
|
Adjusted EBITDA |
$ |
(6,898 |
) |
|
$ |
(2,578 |
) |
|
$ |
(16,993 |
) |
|
$ |
(651 |
) |
(1) Amounts in table may not foot due to rounding
Appendix3D Systems
CorporationUnaudited Reconciliations of GAAP to
Non-GAAP MeasuresThree and Six Months
Ended June 30, 2023
and 2022. |
Diluted
(Loss) Income per Share(1) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(in dollars) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Diluted (loss) income per
share |
$ |
(0.22 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.47 |
) |
Stock-based compensation expense |
|
0.06 |
|
|
|
0.06 |
|
|
|
0.14 |
|
|
|
0.16 |
|
Amortization expense |
|
0.03 |
|
|
|
0.03 |
|
|
|
0.05 |
|
|
|
0.05 |
|
Acquisition and divestiture-related expense |
|
0.01 |
|
|
|
0.02 |
|
|
|
0.03 |
|
|
|
0.05 |
|
Legal expense |
|
0.02 |
|
|
|
0.08 |
|
|
|
0.02 |
|
|
|
0.08 |
|
Restructuring expense |
|
0.03 |
|
|
|
— |
|
|
|
0.05 |
|
|
|
— |
|
Non-GAAP diluted (loss) income
per share |
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.12 |
) |
(1)Amounts in table may not foot due to rounding
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