Press Release:
ROCK HILL, S.C., Oct. 27, 2011 (GLOBE NEWSWIRE) -- 3D Systems Corporation (NYSE:DDD) announced today that it earned 14 cents per share for the third quarter of 2011. Gross profit rose by 48% on a 39% revenue increase compared to the third quarter of 2010.
The company generated $12.6 million cash from operations during the third quarter despite a $5.3 million increase in its operating expenses. The increase included $1.2 million of higher R&D expenditures compared to the 2010 period in support of a number of significant new product launches that occurred during the quarter and its consumer and design productivity growth initiatives.
"We are very pleased with our sustained growth and improved gross profit," said Abe Reichental, 3D Systems' President and Chief Executive Officer. "Importantly, we delivered record materials and services revenue, together with another record printer unit sales quarter."
The company entered the fourth quarter with positive sales momentum that is reflected in part by its September-end $11.3 million backlog including $6.3 million from its on-demand parts and the remainder from its printers and other products.
The table below summarizes the company's key 2011 financial results for the third quarter and nine months.
| (in millions, except per share amounts) | Third Quarter | First Nine Months | ||||
| Operating Highlights | 2011 | 2010 | % Change Favorable (Unfavorable) |
2011 | 2010 | % Change Favorable (Unfavorable) |
| Revenue | $57.5 | $41.5 | 39% | $160.6 | $108.3 | 48% |
| Gross profit | $27.8 | $18.8 | 48% | $76.2 | $49.1 | 55% |
| % of revenue | 48% | 45% | 47% | 45% | ||
| Operating expenses | $19.0 | $13.7 | (39%) | $52.0 | $37.9 | (37%) |
| % of revenue | 33% | 33% | 32% | 35% | ||
| Operating income | $8.8 | $5.2 | 70% | $24.2 | $11.2 | 116% |
| % of revenue | 15% | 13% | 15% | 10% | ||
| Net income | $7.2 | $5.4 | 35% | $27.4 | $10.1 | 171% |
| % of revenue | 13% | 13% | 17% | 9% | ||
| Diluted earnings per share | $0.14 | $0.11 | 27% | $0.54 | $0.22 | 145% |
| Available cash | $72.6 | $33.8 | 115% | $72.6 | $33.8 | 115% |
| Depreciation & amortization | $2.4 | $1.9 | (25%) | $7.4 | $5.4 | (38%) |
| % of revenue | 4% | 5% | 5% | 5% | ||
| - Percents are rounded to nearest whole number | ||||||
| - 2010 earnings per share are adjusted for the two-for-one stock split effected in the second quarter of 2011 | ||||||
During the third quarter, the company generated revenue growth from all its revenue categories. 3D printer units sold tripled over the 2010 period, but accounted for only a $0.3 million revenue increase as a result of continued mix shift toward the company's lower price printers. Print materials grew 30% to $18.5 million on strong user demand and an expanded installed base. Services, including on-demand custom parts, increased by $11.5 million over 2010.
Gross profit margin for the quarter rose by 290 basis points over the 2010 period on higher revenue and favorable contributions from effective acquisitions' integration over time, together with other ongoing operational improvements, resulting in sequential rebounding to 48.3%.
Net income for the quarter included $2.0 million of litigation and acquisition-related expenses, $0.6 million currency revaluation expense and $3.0 million of non-cash expenses related to depreciation, amortization and share-based compensation expense.
The company ended the third quarter with $72.6 million of available cash and cash equivalents. During the first nine months of 2011, the company generated $18.8 million of cash from operations, raised $62.1 million in a common stock offering and used $47.4 million to fund its strategic investing activities.
"We are pleased with the continued record printer unit sales and strong recurring revenue growth driven by our increasing user base. We believe that the marketplace for our expanded 3D content-to-print products and services is underpenetrated and that together with our diversified portfolio and growing geographic presence, positions us well for continued success. While we are concerned about the macro-economic uncertainty worldwide, we remain optimistic about our future and believe that we are on track to achieve our long-term objectives," 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 2011 on Thursday, October 27, 2011 at 11:30 a.m., Eastern Time.
- To access this conference call, dial 1-866-783-2140 from in the U.S. or 1-857-350-1599 from outside the U.S. and enter participant code 69090514.
- To access the webcast, log onto 3D Systems' web site at investor.3dsystems.com. To ensure timely participation and technical capability, we recommend logging on a few minutes prior to the conference call to activate your participation. The webcast will be available for replay beginning approximately two hours after completion of the call at: investor.3dsystems.com.
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 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.
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. The company also provides creative content development, design productivity tools and curation services and downloads. Its expertly integrated solutions replace displace 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, communicate, prototype and produce functional end-use parts empowering our customers to create with confidence.
| 3D SYSTEMS CORPORATION | ||||
| Unaudited Consolidated Statements of Operations and Comprehensive Income | ||||
| Quarters and Nine Months Ended September 30, 2011 and 2010 | ||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||
| (in thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 |
| Revenue: | ||||
| Products | $ 33,248 | $ 28,742 | $ 95,002 | $ 75,783 |
| Services | 24,290 | 12,761 | 65,561 | 32,490 |
| Total revenue | 57,538 | 41,503 | 160,563 | 108,273 |
| Cost of sales: | ||||
| Products | 16,010 | 14,765 | 45,732 | 38,381 |
| Services | 13,765 | 7,910 | 38,667 | 20,787 |
| Total cost of sales | 29,775 | 22,675 | 84,399 | 59,168 |
| Gross profit | 27,763 | 18,828 | 76,164 | 49,105 |
| Operating expenses: | ||||
| Selling, general and administrative | 15,100 | 10,960 | 42,224 | 29,894 |
| Research and development | 3,872 | 2,708 | 9,737 | 7,979 |
| Total operating expenses | 18,972 | 13,668 | 51,961 | 37,873 |
| Income from operations | 8,791 | 5,160 | 24,203 | 11,232 |
| Interest and other expense (income), net | 654 | (492) | 465 | 342 |
| Income before income taxes | 8,137 | 5,652 | 23,738 | 10,890 |
| Provision for (benefit of) income taxes | 917 | 284 | (3,677) | 767 |
| Net income | $ 7,220 | $ 5,368 | $ 27,415 | $ 10,123 |
| Other comprehensive income | ||||
| Unrealized gain (loss) on pension obligation | (5) | 14 | -- | (6) |
| Foreign currency translation adjustments | (2,873) | 1,831 | (250) | 557 |
| Comprehensive income | $ 4,342 | $ 7,213 | $ 27,165 | $ 10,674 |
| Net income per share - basic (1) | $ 0.14 | $ 0.12 | $ 0.55 | $ 0.22 |
| Net income per share - diluted (1) | $ 0.14 | $ 0.11 | $ 0.54 | $ 0.22 |
| (1) See Schedule 1 for the calculation of basic and diluted earnings per share. 2010 per share data have been adjusted to reflect the two-for-one stock split effected in the second quarter of 2011 | ||||
| 3D SYSTEMS CORPORATION | ||
| Unaudited Consolidated Balance Sheets | ||
| September 30, 2011 and December 31, 2010 | ||
| September 30, | December 31, | |
| (in thousands) | 2011 | 2010 |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 72,617 | $ 37,349 |
| Accounts receivable, net | 42,576 | 35,800 |
| Inventories, net | 27,841 | 23,811 |
| Prepaid expenses and other current assets | 2,434 | 1,295 |
| Current deferred income tax assets | 2,975 | 1,874 |
| Restricted cash | 214 | 11 |
| Total current assets | 148,657 | 100,140 |
| Property and equipment, net | 28,704 | 27,669 |
| Other intangible assets, net | 39,658 | 18,275 |
| Goodwill | 82,076 | 58,978 |
| Long term deferred tax assets | 4,002 | -- |
| Other assets, net | 3,833 | 3,738 |
| Total assets | $ 306,930 | $ 208,800 |
| LIABILITIES AND EQUITY | ||
| Current liabilities: | ||
| Current portion of capitalized lease obligations | $ 155 | $ 224 |
| Accounts payable | 25,457 | 26,556 |
| Accrued and other liabilities | 19,565 | 17,969 |
| Customer deposits | 3,183 | 2,298 |
| Deferred revenue | 11,189 | 10,618 |
| Total current liabilities | 59,549 | 57,665 |
| Long-term portion of capitalized lease obligations | 7,585 | 8,055 |
| Other liabilities | 10,233 | 9,961 |
| Total liabilities | 77,367 | 75,681 |
| Commitments and contingencies | -- | -- |
| Shareholders' equity: | ||
| Preferred stock, authorized 5,000 shares, none issued | -- | -- |
| Common stock, authorized 60,000 shares, issued and outstanding 50,842 shares (2011) and 46,948 shares (2010) * | 51 | 23 |
| Additional paid-in capital | 255,555 | 186,252 |
| Treasury stock, at cost; 324 shares (2011) and 268 shares (2010) * | (215) | (189) |
| Accumulated deficit | (30,536) | (57,925) |
| Accumulated other comprehensive income | 4,708 | 4,958 |
| Total equity | 229,563 | 133,119 |
| Total liabilities and equity | $ 306,930 | $ 208,800 |
| *2010 share and per share data have been adjusted to reflect the two-for-one stock split effected in the second quarter of 2011 | ||
| 3D SYSTEMS CORPORATION | ||
| Unaudited Consolidated Statements of Cash Flows | ||
| Nine Months Ended September 30, 2011 and 2010 | ||
| Nine Months Ended September 30, | ||
| (in thousands) | 2011 | 2010 |
| Cash flows from operating activities: | ||
| Net income | $ 27,415 | $ 10,123 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Provision for (benefit of) deferred income taxes | (4,833) | 212 |
| Depreciation and amortization | 7,402 | 5,355 |
| Provision for (recovery of) bad debts, net | 929 | (118) |
| Share-based compensation | 1,827 | 1,057 |
| Loss on the disposition of property and equipment | 82 | 49 |
| Changes in operating accounts: | ||
| Accounts receivable | (2,568) | (155) |
| Inventories | (5,000) | (2,160) |
| Prepaid expenses and other current assets | (293) | 920 |
| Accounts payable | (4,777) | (1,308) |
| Accrued liabilities | 37 | 1,892 |
| Customer deposits | 608 | 1,973 |
| Deferred revenue | (1,106) | 317 |
| Other operating assets and liabilities | (940) | 315 |
| Net cash provided by operating activities | 18,783 | 18,472 |
| Cash flows from in investing activities: | ||
| Purchases of property and equipment | (2,295) | (1,019) |
| Proceeds from disposition of property and equipment | -- | 6 |
| Cash paid for acquisitions, net of cash assumed | (44,830) | (9,086) |
| Additions to license and patent costs | (305) | (243) |
| Net cash used in investing activities | (47,430) | (10,342) |
| Cash flows from financing activities: | ||
| Proceeds from issuance of common stock | 62,054 | -- |
| Proceeds from exercise of stock options and restricted stock | 2,378 | 262 |
| Repayment of capital lease obligations | (172) | (159) |
| Restricted cash | (189) | -- |
| Net cash provided by financing activities | 64,071 | 103 |
| Effect of exchange rate changes on cash | (156) | 665 |
| Net increase in cash and cash equivalents | 35,268 | 8,898 |
| Cash and cash equivalents at the beginning of the period | 37,349 | 24,913 |
| Cash and cash equivalents at the end of the period | $ 72,617 | $ 33,811 |
| Supplemental Cash Flow Information: | ||
| Interest payments | $ 418 | $ 442 |
| Income tax payments | 994 | 274 |
| Non-cash items: | ||
| Transfer of equipment from inventory to property and equipment, net | 2,721 | 1,419 |
| Transfer of equipment to inventory from property and equipment, net | 779 | 392 |
| Stock issued for acquisition of businesses | 3,042 | 3,915 |
| 3D SYSTEMS CORPORATION | ||||
| Schedule 1 | ||||
| Following is a reconciliation of the numerator and denominator of the basic and diluted net earnings per share computations: | ||||
| Quarter Ended September 30, | Nine Months Ended September 30, | |||
| (in thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 |
| Basic and diluted earnings per share: | ||||
| Basic earnings per share: | ||||
| Numerator: | ||||
| Net income | $ 7,220 | $ 5,368 | $ 27,415 | $ 10,123 |
| Denominator: | ||||
| Weighted average common shares outstanding* | 50,450 | 46,294 | 49,455 | 46,020 |
| Basic earnings per share* | $ 0.14 | $ 0.12 | $ 0.55 | $ 0.22 |
| Diluted earnings per share: | ||||
| Numerator: | ||||
| Net income | $ 7,220 | $ 5,368 | $ 27,415 | $ 10,123 |
| Denominator: | ||||
| Weighted average common shares outstanding* | 50,450 | 46,294 | 49,455 | 46,020 |
| Effect of dilutive securities: | ||||
| Stock options * | 952 | 588 | 1,020 | 584 |
| Diluted weighted average shares outstanding* | 51,402 | 46,882 | 50,475 | 46,604 |
| Diluted earnings per share* | $ 0.14 | $ 0.11 | $ 0.54 | $ 0.22 |
| *2010 share and per share data has been adjusted to reflect the two-for-one stock split effected in the second quarter of 2011 | ||||
Source: 3dsystems
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