3D Systems Corp (DDD) 10-Q Quarterly Report August 2020

For the first quarter of 2020, the company reported GAAP revenue of $134.7 million, compared to $152.0 million in the same period last year. The COVID-19 pandemic had a negative impact on these results. Printer revenue decreased by 35.5 percent. Materials revenue decreased 0.1 percent, healthcare solutions revenue decreased 7.3 percent, on demand services revenue decreased 12.8 percent and software revenue decreased 7.7 percent. The company reported first quarter 2020 GAAP loss of $0.17 per share compared to a GAAP loss of $0.22 per share in the same period last year, and non-GAAP loss of $0.04 per share compared to non-GAAP loss of $0.09 per share in the same period last year. In the first quarter of 2020, the company recorded a tax benefit of approximately $3.2 million from utilizing net operating losses allowed as part of tax legislation enacted on March 27, 2020 under the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act.

"COVID-19 has presented unprecedented challenges globally, so we asked our customers and partners to help address these challenges with 3D printing. Over the last several weeks we have seen applications of our technology and software being used to assist COVID-19 efforts, from ventilator parts to personal protection equipment to nasal swabs, which are all able to go from prototype to production in mere days, compared to what would normally take months using traditional supply chain and showcasing our true value proposition," commented Vyomesh Joshi ("VJ"), president and chief executive officer, 3D Systems. "Amid this uncertain environment we have managed the company by continuing to reduce expenses and preserving cash, and we believe we will be well-positioned when the market comes back."

For the first quarter of 2020, the company reported GAAP gross profit margin of 42.4 percent compared to 43.2 percent in the same period last year. Non-GAAP gross profit margin was 43.1 percent in the first quarter compared to 44.2 percent in the same period last year.

For the first quarter of 2020, GAAP operating expenses decreased 13.4 percent to $75.4 million compared to $87.0 million in the same period last year. GAAP SG&A expenses decreased 13.8 percent

to $56.1 million. GAAP R&D expenses decreased 12.1 percent to $19.2 million. Non-GAAP operating expenses in the first quarter decreased 13.6 percent to $63.0 million compared to $72.9 million in the same period last year, as a result of execution of the company's cost reduction plans.

The company used $2.3 million of cash from operations during the first quarter and had $112.8 million of cash and cash equivalents at March 31, 2020.

Q1 2020 Conference Call and Webcast

The company expects to file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 with the Securities and Exchange Commission on May 6, 2020. 3D Systems plans to hold a conference call and simultaneous webcast to discuss these results today, Wednesday, May 6, 2020, which may be accessed as follows:

Date: Wednesday, May 6, 2020

Time: 4:30 p.m. Eastern Time

Listen via webcast: www.3dsystems.com/investor

Participate 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 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

The following information was filed by 3D Systems Corp (DDD) on Wednesday, May 6, 2020 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside 3D Systems Corp's 10-Q Quarterly Report:

Financial - Expense Highlight
Research and development expenses decreased due to an employee furlough program in the second quarter of 2020, current year savings achieved from cost structuring activities, including personnel reductions, originating in 2019, as well as lower overall program spend.

Financial - Expense Highlight
Table 6 Selling, general and administrative expenses decreased due to an employee furlough program in the second quarter of 2020, reduced hiring and lower travel expenses incurred in the current year, resulting from the COVID-19 pandemic; savings achieved in the current year from cost structuring activities, including personnel and marketing activities, originating in 2019; and the run-out of certain intangible amortization.
Revenue - Product Highlight
As of March 31, 2020, we experienced a triggering event due to our operating performance, which had been negatively impacted by macroeconomic factors, the decrease and mix of sales, and the effect of the COVID-19 pandemic, and performed a quantitative analysis for potential impairment of our goodwill or long-lived asset balances.
Other - Other Highlight
For the six months ended June 30, 2020, we used $21.0 million of cash from operations, primarily driven by the increase in inventories.
Other - Other Highlight
Our balance sheet is well positioned and had $63.9 million of cash and cash equivalents at June 30, 2020, and a $100.0 million committed revolving credit facility, with $10.0 million of outstanding letters of credit and $24.1 million of available borrowings under the revolving facility.
Financial - Expense
Table 5 Selling, general and...Read more
Financial - Earnings
This should enable the company...Read more
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Lower operating expenses reflect executive...Read more
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Table 3 The decrease in...Read more
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25 Table 4 The decrease...Read more
Other - Other
27 Net loss attributable to...Read more
Financial - Expense
In the six months ended...Read more
Financial - Expense
We implemented an employee furlough...Read more
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Research and development expenses for...Read more
Other - Other
We intend to use the...Read more
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We intend to use the...Read more
Financial - Expense
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Revenue - Product
24 Table 2 Consolidated revenue...Read more
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Summary of Second Quarter 2020...Read more
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In addition to changes in...Read more
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Industrial sales decreased 38.5% to...Read more
Other - Other
This plan considers the varying...Read more
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We believe these actions and...Read more
Revenue - Product
In doing so, we review...Read more
Other - Other
As of June 30, 2020,...Read more
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The additional safety measures and...Read more
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We have a multi-phase plan...Read more
Financial - Earnings
Products gross profit decreased primarily...Read more
Financial - Earnings
Products gross profit decreased primarily...Read more
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Our solutions support markets and...Read more
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Revenue from Healthcare decreased 11.4%...Read more
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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

3D Systems Corp provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: DDD
CIK: 910638
Form Type: 10-Q Quarterly Report
Accession Number: 0000910638-20-000025
Submitted to the SEC: Wed Aug 05 2020 4:13:23 PM EST
Accepted by the SEC: Wed Aug 05 2020
Period: Tuesday, June 30, 2020
Industry: Prepackaged Software