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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