3D Systems Reports Fourth Quarter and Full Year 2015 Financial Results

ROCK HILL, S.C., March 14, 2016 (GLOBE NEWSWIRE) -- 3D Systems Corporation (NYSE:DDD) announced today its financial results for the fourth quarter and full year ended December 31, 2015.

For the fourth quarter of 2015, the company reported revenue of $183.4 million, a decrease of 2% over the comparable quarter in 2014. The company reported a GAAP loss of $5.32 per share and non-GAAP earnings of $0.19 per share.

“While market conditions remain challenging and uncertain, timing of healthcare and industrial customer orders as well as contributions from acquisitions supported revenue during the quarter,” commented Andrew Johnson, Interim President & Chief Executive Officer and Chief Legal Officer, 3D Systems.

Gross profit margin for the fourth quarter of 2015 was 32.8%, primarily as a result of a $27.4 million charge related to inventory and purchase commitments in connection with the company’s end-of-life of the Cube 3D printer and shift away from consumer products. Excluding the negative impact of this charge, gross profit margin was 47.7%, a decrease of 20 basis points from the fourth quarter of 2014.

For the fourth quarter of 2015, cash operating expenses of $66.7 million remained flat sequentially. Total operating expenses for the quarter were $626.1 million, including a $537.2 million goodwill and intangibles impairment charge. Excluding the impairment charge, operating expenses were $88.9 million inclusive of $22.4 million of R&D expense and $66.5 million of SG&A expense.

The company reported a fourth quarter GAAP net loss of $596.4 million, or a $5.32 loss per share. The company reported non-GAAP income of $20.9 million, or $0.19 earnings per share.

The company generated $7.5 million of cash for operations during the quarter and used $3.1 million during the full year. The company had $155.6 million of cash on hand at the end of December.

For the full year 2015, revenue grew 2% to $666.2 million, resulting in a GAAP loss of $5.85 per share and non-GAAP earnings of $0.27 per share.

“We believe that by leveraging our domain expertise, partner and customer relationships and advanced technology we are well positioned to capitalize on meaningful opportunities in key verticals,” continued Johnson. “We are continuing an extensive and comprehensive review of our business and strategy and taking steps to better prioritize our resources and focus our investments.”

Q4 Conference Call and Webcast
The company expects to file its 2015 annual report on Form 10-K with the Securities and Exchange Commission on March 14, 2016. 3D Systems plans to hold a conference call and simultaneous webcast to discuss these results on Monday, March 14, 2016, at 8:30 a.m. Eastern Time. 

Date: Monday, March 14, 2016
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 webcast will be available beginning 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 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.  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, an arbitration award related to litigation, 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 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
Unaudited Condensed Consolidated Statements of Operations and
Comprehensive Income (Loss)
Quarter and Year Ended December 31, 2015 and 2014
 Quarter Ended December 31,  Year Ended December 31,  
(in thousands, except per share amounts)2015 2014 2015 2014 
Products $   115,973  $   129,094  $   408,119  $   442,198  
Services     67,390      58,344      258,044      211,454  
Total revenue     183,363      187,438      666,163      653,652  
Cost of sales:            
Products     87,207      68,316      243,639      223,991  
Services     35,996      29,356      130,715      112,227  
Total cost of sales     123,203      97,672      374,354      336,218  
Gross profit     60,160      89,766      291,809      317,434  
Operating expenses:            
Selling, general and administrative     66,542      63,026      303,784      215,724  
Research and development     22,360      22,512      92,770      75,395  
Impairment of goodwill and other intangible assets    537,179    —      537,179    —  
Total operating expenses     626,081      85,538      933,733      291,119  
Income (loss) from operations     (565,921)     4,228      (641,924)     26,315  
Interest and other expense, net     9,000      2,449      13,029      8,928  
Income (loss) before income taxes     (574,921)     1,779      (654,953)     17,387  
Provision for income taxes     29,535      75      8,972      5,441  
Net income (loss)    (604,456)     1,704      (663,925)     11,946  
Less net income (loss) attributable to noncontrolling interests    (8,090)     153      (8,433)     309  
Net income (loss) attributable to 3D Systems Corporation$   (596,366) $   1,551  $   (655,492) $   11,637  
Net income (loss) per share available to 3D Systems Corporation common stockholders — basic and diluted$   (5.32) $   0.01  $   (5.85) $   0.11  
Other comprehensive income (loss):            
Pension adjustments, net of taxes$   62  $   (1,271) $   338  $   (1,135) 
Foreign currency gain (loss)    1,603    (19,920)     (16,300)     (29,183) 
Total other comprehensive income (loss)    1,665    (21,191)     (15,962)     (30,318) 
Less foreign currency translation gain (loss) attributable to noncontrolling interests    1,768    (52)     (820)     (123) 
Other comprehensive income (loss) attributable to 3D Systems Corporation    (103)   (21,139)     (15,142)     (30,195) 
Comprehensive income (loss)    (602,791)   (19,487)     (679,887)     (18,372) 
Less comprehensive income (loss) attributable to noncontrolling interests    (6,322)   101      (9,253)     186  
Comprehensive income (loss) attributable to 3D Systems Corporation$   (596,469) $ (19,588) $   (670,634) $   (18,558) 


3D Systems Corporation
Unaudited Condensed Consolidated Balance Sheets
December 31, 2015 and December 31, 2014
  December 31, December 31, 
 (in thousands, except par value) 2015 2014 
Current assets:       
Cash and cash equivalents  $ 155,643  $ 284,862  
Accounts receivable, net of reserves of $14,139 (2015) and $10,300 (2014)    157,406    168,441  
Inventories, net of reserves of $28,225 (2015) and $6,675 (2014)   105,877    96,645  
Prepaid expenses and other current assets    13,541    15,769  
Current deferred income tax asset     14,973  
Total current assets    432,467    580,690  
Property and equipment, net    85,995    81,881  
Intangible assets, net    157,466    251,561  
Goodwill    187,875    589,537  
Long term deferred income tax asset   3,216    816  
Other assets, net    26,256    25,825  
Total assets  $ 893,275  $ 1,530,310  
Current liabilities:       
Current portion of debt and capitalized lease obligations  $ 529  $ 684  
Accounts payable    46,869    64,378  
Accrued and other liabilities    54,699    43,554  
Customer deposits    8,229    6,946  
Deferred revenue    35,145    32,264  
Total current liabilities    145,471    147,826  
Long term portion of capitalized lease obligations    8,187    8,905  
Long term deferred income tax liability    17,944    30,679  
Other liabilities    58,155    39,903  
Total liabilities    229,757    227,313  
Redeemable noncontrolling interests   8,872    8,872  
Stockholders’ equity:       
Common stock, $0.001 par value, authorized 220,000 shares; issued 113,115 (2015) and 112,233 (2014)   113    112  
Additional paid-in capital    1,279,738    1,245,462  
Treasury stock, at cost: 892 shares (2015) and 709 shares (2014)    (1,026)   (374) 
Accumulated earnings (deficit)   (583,368)   72,124  
Accumulated other comprehensive loss   (39,548)   (24,406) 
Total 3D Systems Corporation stockholders' equity   655,909    1,292,918  
Noncontrolling interests   (1,263)   1,207  
Total stockholders’ equity    654,646    1,294,125  
Total liabilities, redeemable noncontrolling interests and stockholders’ equity $ 893,275  $ 1,530,310  


3D Systems Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
Year Ended December 31, 2015 and 2014
 Year Ended December 31,  
(in thousands)  2015    2014  
Cash flows from operating activities:      
Net income (loss)$ (663,925) $ 11,946  
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:      
Benefit of deferred income taxes   (2,875)   (24,555) 
Depreciation and amortization   83,069    55,188  
Provision for litigation award  11,282    
Impairment of goodwill, other intangible assets and investments  544,611    
Non-cash interest on convertible notes     224  
Provision for bad debts   3,766    8,699  
Provision for inventory obsolescence and revaluation  21,550    2,334  
Stock-based compensation   34,733    32,793  
(Gain) loss on the disposition of property and equipment  (43)   (227) 
Loss on conversion of convertible debt    1,806  
Changes in operating accounts:      
Accounts receivable   20,890    (55,977) 
Inventories   (31,241)   (33,088) 
Prepaid expenses and other current assets   2,197    (9,235) 
Accounts payable   (18,904)   23,482  
Accrued and other liabilities   624    15,406  
Customer deposits   1,466    1,921  
Deferred revenue   (576)   8,686  
Other operating assets and liabilities   (9,752)   11,708  
Net cash provided by (used in) operating activities   (3,128)   51,111  
Cash flows from investing activities:      
Purchases of property and equipment   (22,399)   (22,727) 
Additions to license and patent costs   (907)   (753) 
Cash paid for acquisitions, net of cash assumed   (91,799)   (345,361) 
Other investing activities  (5,750)   (6,600) 
Net cash used in investing activities   (120,855)   (375,441) 
Cash flows from financing activities:      
Tax benefits (provision) from share-based payment arrangements  (1,243)   7,653  
Proceeds from issuance of common stock    299,729  
Proceeds from exercise of restricted stock, net  135    1,896  
Repayment of capital lease obligations   (1,049)   (696) 
Net cash provided by (used in) financing activities   (2,157)   308,582  
Effect of exchange rate changes on cash   (3,079)   (5,706) 
Net increase (decrease) in cash and cash equivalents   (129,219)   (21,454) 
Cash and cash equivalents at the beginning of the period   284,862    306,316  
Cash and cash equivalents at the end of the period $ 155,643  $ 284,862  


3D Systems Corporation
Schedule 1
Earnings (Loss) Per Share
Year Ended December 31, 2015 and 2014
 Quarter Ended December 31,  Year Ended December 31,  
(in thousands, except per share amounts)2015 2014 2015 2014 
Numerator for basic and diluted net earnings per share:            
Net income (loss) attributable to 3D Systems Corporation$   (596,366) $1,551 $ (655,492) $  11,637 
Denominator for basic and diluted net earnings per share:            
Weighted average shares    112,115   111,287   111,969     108,023 
Earnings (loss) per share, basic and diluted$ (5.32) $0.01 $ (5.85) $0.11 
Restricted stock units excluded from diluted earnings per share calculation(a)  88      270    
(a) Average outstanding diluted earnings (loss) per share calculation excludes restricted stock units since the effect of their inclusion would have been anti-dilutive. 


3D Systems Corporation
Schedule 2
Unaudited Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
Quarter and Year Ended December 31, 2015 and 2014
  Quarter Ended December 31,   Year Ended December 31, 
(in thousands, except per share amounts) 2015 2014  2015 2014
GAAP net income (loss) attributable to 3D Systems Corporation$ (596,366)  $ 1,551   $ (655,492)  $ 11,637 
Cost of sales adjustments:               
Amortization of intangibles    71     72     303     281 
Charges related to shift away from consumer products and services — cash   8,771        8,771    
Charges related to shift away from consumer products and services — non-cash   18,619        18,619    
Operating expense adjustments:               
Amortization of intangibles    13,155     10,892     60,763     39,193 
Acquisition and severance expenses    3,409     3,158     9,274     7,994 
Impairment of goodwill and other intangible assets  537,179        537,179    
Non-cash stock-based compensation expense   5,883     9,055     34,733     32,793 
Arbitration award           11,282    
Interest and other expense adjustments:               
Non-cash interest expense             225 
Loss on convertible notes            1,806 
Tax effect (a)    30,160     (971)    4,578     (18,810)
Non-GAAP net income $ 20,881   $ 23,757   $ 30,010   $ 75,119 
Non-GAAP basic and diluted earnings per share $ 0.19   $ 0.21   $ 0.27   $ 0.70 
(a) tax effect is calculated quarterly, based on the actual tax rate for each quarter.            



Investor Contact: Stacey Witten
Email: Investor.relations@3dsystems.com

Media Contact:  Timothy Miller
Email: Press@3dsystems.com

The following information was filed by 3D Systems Corp (DDD) on Monday, March 14, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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