ROCK HILL, South Carolina - February 28, 2019 - 3D Systems Corporation (NYSE: DDD) announced today its financial results for the fourth quarter ended December 31, 2018.
For the fourth quarter of 2018, the company reported two percent revenue growth to $180.7 million compared to $177.3 million in the fourth quarter of the previous year with 17 percent higher printer revenue on 113 percent increase in printer unit sales, 16 percent growth in healthcare solutions and three percent growth in software. The company reported a GAAP loss of $0.04 per share in the fourth quarter of 2018, including a $4.9 million tax benefit related to the release of reserves resulting from the expiration of open tax periods, compared to a GAAP loss of $0.08 per share in the fourth quarter of 2017. The company reported non-GAAP earnings of $0.10 per share in the fourth quarter of 2018, including the tax benefit, compared to non-GAAP earnings of $0.05 per share in the fourth quarter of 2017.
For the full year 2018, revenue increased six percent to $687.7 million compared to $646.1 million in 2017, driven by 25 percent printer revenue growth on a 76 percent increase in printer unit sales, one percent growth in materials, five percent growth in software, two percent growth in on demand manufacturing and 20 percent growth in healthcare solutions. The company reported a GAAP loss of $0.41 per share for the full year 2018 compared to a loss of $0.59 per share in the prior year, and reported non-GAAP earnings of $0.15 per share for the full year 2018 compared to a non-GAAP loss of $0.02 per share in the prior year.
"We are pleased with our continued strong growth in printer revenue and units across platforms, in both plastics and metals, as well as continued growth in healthcare and software solutions. We are also pleased with the significant portfolio enhancements we made throughout 2018, our improved execution and the cost structure opportunities available to us as we enter 2019," commented Vyomesh Joshi (VJ) president and chief executive officer, 3D Systems.
The company reported GAAP gross profit margin of 45.7 percent during the fourth quarter compared to 48.2 percent in the fourth quarter of 2017. For the full year, gross profit margin remained flat compared to the prior year, with GAAP gross profit margin of 47.2 percent. Supply chain efficiencies and cost improvements were offset by the impact of sales mix, costs to launch and ramp new products and lower on demand manufacturing gross profit margins.
For the fourth quarter of 2018, GAAP and non-GAAP operating expenses decreased two percent compared to the prior year. GAAP operating expenses were $89.6 million compared to $91.2 million in the fourth quarter of the prior year. The company made significant investments in new product development and launches, IT infrastructure, go-to-market and operational improvements, particularly in the first half of the year, while cost reduction actions began to show results in the second half of 2018. For the full year, the company reported a two percent increase in GAAP operating expenses and a four percent increase in non-GAAP operating expenses compared to the prior year.
"With multiple 2018 product launches now behind us, we are shifting our investment focus to materials innovations and software growth opportunities," commented John McMullen, executive vice president and chief financial officer. "We are very focused on reducing our cost structure and driving cash generation during 2019."
The company generated $7.7 million of cash from operations in the fourth quarter and generated $4.8 million of cash from operations during fiscal year 2018. The company, ended the year with $110.0 million of unrestricted cash on hand, including $25 million of proceeds from the company's revolving credit facility.
"We have made significant progress in our turn around and transformation work for the company. Our improved operational foundation, execution and unmatched portfolio focused on production solutions, position the company very well to drive continued and increasingly profitable growth in 2019 and beyond," concluded Joshi.
Q4 2018 Conference Call and Webcast
The company expects to file its Form 10-K for the quarter ended December 31, 2018 with the Securities and Exchange Commission on February 28, 2019. 3D Systems also plans to hold a conference call and simultaneous webcast to discuss these results on Thursday, February 28, 2019, at 4:30 p.m. Eastern Time.
- Date: Thursday, February 28, 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
Consolidated Balance Sheets
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Consolidated Statements of Operations
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Consolidated Statements of Cash Flows
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Loss Per Share
(a) The amounts for cash and cash equivalents shown above include restricted cash of $921, $487 and, $301 as of December 31, 2018, 2017 and 2016, respectively, which were included in other assets, net, in the Consolidated Balance Sheets.
3D Systems Corporation
Unaudited Reconciliations of GAAP to Non-GAAP Measures
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For the quarter ended December 31, 2018, the adjustment included $(0.2) in COGS and $14.1 in SG&A. For the quarter ended December 31, 2017, the adjustment included $0.1 in COGS and $15.0 in SG&A. For the twelve months ended December 31, 2018, the adjustment included $0.1 in COGS and $58.6 in SG&A. For the twelve months ended December 31, 2017, the adjustment included $0.4 in COGS and $62.5 in SG&A.
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For the quarter ended December 31, 2018, the adjustment included $0.6 in COGS $(1.0) in SG&A and $0.5 in interest and other income (expense), net. For the quarter ended December 31, 2017, the adjustment included ($1.4) in SG&A. For the twelve months ended December 31, 2018, the adjustment included $0.6 in COGS, $(1.7) in SG&A and $(0.9) in interest and other income (expense), net. For the twelve months ended December 31, 2017, the adjustment included $(0.3) in SG&A and $0.2 in interest and other income (expense), net.
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For the quarter ended December 31, 2018, the adjustment included $0.7 in COGS and $0.8 in SG&A. For the twelve months ended December 31, 2018, the adjustment included $1.1 in COGS, $2.4 in SG&A, and approximately $0.5 in R&D.
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The Company has minority investments of less than 20% ownership in enterprises that benefit from, or are powered by its technology portfolio. The value of each of these investments is assessed periodically, and impairment recorded when required. For the quarter and twelve months ended December 31, 2017, the adjustment included $1.7 in interest and other income (expense), net. The Company excluded this amount as it is not related to on-going operations, and intends to exclude these impairment amounts from non-GAAP net income going forward.
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Denominator based on weighted average shares used in the GAAP EPS calculation.