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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
Revenue:
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
ASSETS
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
LIABILITIES AND EQUITY
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

Source:3D Systems Corporation