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Press release from GlobeNewswire (a Nasdaq OMX company)

3D Systems Reports 2012 Results

Monday, February 25, 2013

3D Systems Reports 2012 Results05:36 EST Monday, February 25, 2013 - Delivers Record Quarterly and Annual Revenue and Gross Profit - Completes Three-for-Two Stock Split and Commences Post Split NYSE Trading - Expects 2013 Revenue of $440 million to $485 million and non-GAAP EPS of $1.00 to $1.15 ROCK HILL, S.C., Feb. 25, 2013 (GLOBE NEWSWIRE) -- 3D Systems Corporation (NYSE:DDD) announced today non-GAAP earnings of 39 cents per share for the fourth quarter of 2012 and GAAP earnings of 19 cents per share resulting in full year 2012 non-GAAP earnings of $1.25 and GAAP earnings of $0.71. The company reported that its fourth quarter revenue grew 45.4% from the prior year to $101.6 million on a 93% surge in printers' and other products revenue and 18.8% organic growth. Stronger printer demand bolstered quarter-end backlog to $11.4 million at year-end, a 23% sequential increase, which included $3.2 million related to current printers' sales. Gross profit increased 60% and gross profit margin expanded 460 basis points to 51.7% contributing to non-GAAP net income improvement of 64% over the 2011 quarter. For the full year 2012, revenue grew 53.5% to $353.6 million, on 90% printers' and other products revenue increase and 22.4% organic growth. Gross profit increased 66.2% and gross profit margin expanded 390 basis points to 51.2%. The company generated $53.0 million of cash from operations in 2012, and ended the year with $155.9 million of available cash, after incurring a $46.5 million increase in its annual operating expenses primarily from increased sales, marketing and acquisitions costs. The increase included $8.9 million of higher R&D expenditures in support of its expanded portfolio. "We are very pleased to report outstanding quarterly and annual results on accelerated printers' sales," said Avi Reichental, 3D Systems' President and Chief Executive Officer. "We believe that our results reflect the potency of our diversified portfolio, productivity of our channels and effectiveness of our strategic growth initiatives." The table below summarizes the company's key 2012 non-GAAP financial results for the fourth quarter and full year. Non-GAAP Operating Highlights Fourth Quarter Full Year ($ in millions, except per share amounts) 2012 2011 % Change Favorable (Unfavorable) 2012 2011 % Change Favorable (Unfavorable) Revenue (GAAP) $ 101.6 $ 69.9 45.4% $ 353.6 $ 230.4 53.5% Gross profit $ 52.6 $ 32.9  59.7%  $ 181.4   $ 109.3  66.0%  % of revenue 51.7% 47.1%   51.3% 47.4%   Operating expenses $ 28.2  $ 16.8  (67.5%) $ 99.8  $ 63.0  (58.3%) % of revenue 27.7% 24.1%   28.2% 27.4%   Operating income $ 24.4  $ 16.1  51.5%  $ 81.6   $ 46.3   76.5%  % of revenue 24.0% 23.0%   23.1% 20.1%   Net income $ 22.6  $ 13.8  63.6% $ 67.9  $ 41.0  65.7%  % of revenue 22.2% 19.8%   19.2% 17.8%   Diluted earnings per share $0.39 $ 0.27 44.4% $1.25 $0.81 54.3% Available cash & cash equivalents $ 155.9 $ 179.1 (13.0%) $ 155.9 $ 179.1 (13.0%) Depreciation & amortization  $ 2.4  $ 1.5  (63.3%) $ 10.1  $ 6.0  (67.4%)  % of revenue 2.3% 2.7%   2.9% 2.6%                 - Gross profit, operating expenses, operating income, net income and earnings per share have been adjusted to reflect non-GAAP operating results. See the reconciliation of non-GAAP data to GAAP net income and earnings per share at the end of this press release.             3D printers and other products revenue nearly doubled to $126.8 million on stronger demand as a result of the company's effective portfolio convergence, price point re-alignment and channel expansion. Print materials revenue grew 46.1% to $103.2 million on 124.2% higher printer units and services revenue increased by $30.5 million over 2011 to $123.7 million and included $79.2 million of on-demand parts. "We are thrilled with the progress we are making on our consumer growth initiative and expect revenue from our consumer products to be meaningful to our revenue in the second half of 2013," continued Reichental. The company announced that its three-for-two stock split was completed effective on the close of business Friday, February 22, 2013 by distributing a 50% stock dividend in the form of additional shares to its stockholders of record on February 15, 2013. Trading of the company's common stock on the New York Stock Exchange will begin this morning on a split-adjusted basis at approximately 66% of last Friday's closing price. The company announced its annual guidance for the full year 2013, expecting its revenue to be in the range of $440 million to $485 million and its non-GAAP earnings per share to be in the range of $1.00 to $1.15, on a post-split basis, inclusive of the acquisition of Geomagic, which the company expects to close by the end of February 2013.  "We entered 2013 with positive sales momentum shaped by increased demand from advanced manufacturing activities. While we may face lingering economic uncertainties in parts of the world, we expect to continue to benefit from robust R&D and manufacturing spending by our customers worldwide," concluded Reichental.Conference Call and Webcast Details 3D Systems will hold a conference call and webcast to discuss its operating results for the fourth quarter and full year 2012 on Monday, February 25, 2013 at 9:00 a.m., Eastern Time.   To access this 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.   To access this conference call, dial 1-800-295-3991 from in the U.S. or 1-617-614-3924 from outside the U.S. and enter participant code 68343877.   The webcast will be also be available for replay beginning approximately two hours after completion of the call at: investor.3dsystems.com. The company filed its Annual Report on Form 10-K today and copies are available free of charge upon request from Investor Relations.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.Presentation of Information in This Press release 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, non-recurring acquisition expenses, litigation settlements, loss on conversion of notes, stock-based compensation expense and releases of the valuation allowance on deferred tax assets. A reconciliation of GAAP to non-GAAP results is provided in the accompanying schedule.  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 affordable CAD modeling, reverse engineering and inspection software tools and consumer 3D printers, apps and services. Its expertly integrated solutions replace and complement traditional methods and reduce the time and cost of designing and manufacturing new products. 3D Systems' products and services are used to rapidly design, communicate, prototype or produce real functional, parts, empowering customers to create and make with confidence. More information on the company is available at www.3DSystems.com. The 3D Systems Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4537 Tables Follow    3D Systems CorporationAudited Consolidated Statements of Operations and Comprehensive IncomeQuarter and Year Ended December 31, 2012 and 2011            Quarter Ended December 31,Year Ended December 31,(in thousands, except per share amounts)2012 2011 2012 2011       Revenue:         Products  $ 68,757  $ 41,944  $ 229,980  $ 137,306 Services 32,814 27,916 123,653 93,117           Total revenue  101,571  69,860  353,633  230,423           Cost of sales:         Products  31,665  20,837  105,286  66,589 Services  17,410  16,158  67,151  54,806           Total cost of sales  49,075  36,995  172,437  121,395           Gross profit  52,496  32,865  181,196  109,028           Operating expenses:         Selling, general and administrative  26,524  17,572  97,422  59,795 Research and development  7,806  4,594  23,203  14,331           Total operating expenses  34,330  22,166  120,625  74,126           Income from operations  18,166  10,699  60,571  34,902           Interest and other expense (income), net  8,703  1,991  17,292  2,456           Income before income taxes  9,463  8,708  43,279  32,446 Provision for (benefit of) income taxes  (1,449)  703  4,338  (2,974)           Net income  $ 10,912  $ 8,005  $ 38,941  $ 35,420           Other comprehensive income         Unrealized gain (loss) on pension obligation (715) (275)  (714) (275) Foreign currency translation gain (loss) 1,499 (1,493) 1,640 (1,743)           Comprehensive income  $ 11,696  $ 6,237  $ 39,867  $ 33,402           Net income per share - basic  $ 0.19  $ 0.16  $ 0.72  $ 0.71           Net income per share - diluted  $ 0.19  $ 0.16  $ 0.71  $ 0.70    3D Systems CorporationAudited Consolidated Balance SheetsDecember 31, 2012 and 2011             (in thousands, except par value)20122011ASSETS     Current assets:     Cash and cash equivalents  $ 155,859 $ 179,120 Accounts receivable, net of allowance for doubtful accounts of $4,317 (2012) and $3,019 (2011)  79,869 51,195 Inventories, net of reserves of $3,534 (2012) and $2,542 (2011)  41,820 25,283 Prepaid expenses and other current assets  4,010 2,241 Current deferred income tax asset 5,867 3,528 Restricted cash  13 13 Total current assets  287,438 261,380 Property and equipment, net  34,353 29,594 Intangible assets, net  108,377 54,040 Goodwill  240,314 107,651 Long term deferred income tax asset 107 3,195 Other assets, net  6,853 7,114 Total assets  $ 677,442 $ 462,974      LIABILITIES AND EQUITY     Current liabilities:     Current portion of capitalized lease obligations  $ 174 $ 163 Accounts payable  32,095 25,911 Accrued and other liabilities  24,789 16,816 Customer deposits  2,786 3,398 Deferred revenue  15,309 11,260 Total current liabilities  75,153 57,548 Long term portion of capitalized lease obligations  7,443 7,609 Convertible senior notes, net  80,531 131,107 Deferred income tax liability  23,142 3,656 Other liabilities  10,840 8,266 Total liabilities  197,109 208,186 Commitments and Contingencies     Stockholders' equity:     Preferred stock, authorized 5,000 shares, none issued  — — Common stock, $0.001 par value, authorized 120,000 shares; 59,855 (2012) and 50,975 (2011) issued  60 51 Additional paid-in capital  460,237 274,542 Treasury stock, at cost: 355 (2012) and 324 shares (2011)  (240) (214) Accumulated earnings (deficit ) 16,410 (22,531) Accumulated other comprehensive income  3,866 2,940 Total stockholders' equity  480,333 254,788 Total liabilities and stockholders' equity $ 677,442 $ 462,974    3D Systems CorporationAudited Consolidated Statements of Cash FlowsYear Ended December 31, 2012 and 2011               (in thousands)20122011 Cash flows from operating activities:     Net income  $ 38,941 $ 35,420 Adjustments to reconcile net income to net cash provided by operating activities:     Benefit of deferred income taxes  (661) (5,140) Depreciation and amortization  21,229 11,093 Non-cash interest on convertible notes  3,876 409 Provision for bad debts  3,039 1,731 Stock-based compensation  5,118 2,637 (Gain) loss on the disposition of property and equipment and investments (674) 256 Loss on conversion of convertible debt 7,021 — Changes in operating accounts:     Accounts receivable  (19,246) (12,090) Inventories  (12,225) (2,608) Prepaid expenses and other current assets  (794) 45 Accounts payable  (238) (3,457) Accrued liabilities  9,081 141 Customer deposits  (1,336) 857 Deferred revenue  1,164 525 Other operating assets and liabilities  (1,251) (2,159) Net cash provided by operating activities  53,044 27,660 Cash flows from investing activities:     Purchases of property and equipment  (3,224) (2,870) Proceeds from disposition of property and equipment and other assets — 174 Additions to license and patent costs  (729) (336) Cash paid for acquisitions, net of cash assumed  (183,701) (92,677) Net cash used in investing activities  (187,654) (95,709) Cash flows from financing activities:     Proceeds from 5.50% convertible notes — 148,960 Convertible notes capitalized costs — (3,594) Proceeds from issuance of common stock  106,889 62,054 Proceeds from exercise of stock options and restricted stock, net 4,400 2,764 Repayment of capital lease obligations  (163) (221) Proceeds from capital lease obligations — —  Restricted cash  — 12 Net cash provided by financing activities  111,126 209,975 Effect of exchange rate changes on cash  223 (155) Net increase (decrease) in cash and cash equivalents  (23,261) 141,771 Cash and cash equivalents at the beginning of the period  179,120 37,349 Cash and cash equivalents at the end of the period  $ 155,859 $ 179,120    3D Systems CorporationSchedule 1Earnings Per Share           Following is a reconciliation of the numerator and denominator of the basic and diluted net earnings per share computations:          Quarter Ended December 31,Year Ended December 31,(in thousands, except per share amounts)2012 2011 2012 2011                Basic and diluted earnings per share:        Basic earnings per share:         Numerator:         Net income  $ 10,912  $ 8,005  $ 38,941  $ 35,420           Denominator:         Weighted average common shares outstanding  57,417  50,615  53,878  49,748                     Basic earnings per share  $ 0.19  $ 0.16  $ 0.72  $ 0.71          Diluted earnings per share:         Numerator:         Net income  $ 10,912  $ 8,005  $ 38,941  $ 35,420           Denominator:         Weighted average common shares outstanding  57,417  50,615  53,878  49,748 Effect of dilutive securities:          Stock options  36  838  604  975           Diluted weighted average shares outstanding  57,453  51,453  54,482  50,723           Diluted earnings per share  $ 0.19  $ 0.16  $ 0.71  $ 0.70    3D Systems CorporationSchedule 2Unaudited Reconciliation of GAAP Net Income to Non-GAAP Net IncomeQuarter and Year Ended December 31, 2012 and 2011            Quarter Ended December 31,Year Ended December 31,(in thousands, except per share amounts)2012 2011 2012 2011       GAAP Net Income  $ 10,912  $ 8,005  $ 38,941  $ 35,420           Adjustments:         Stock-based compensation 1,317 810 4,613 2,637 Amortization of intangibles (a) (b) 2,894 2,075 11,452 5,050 Acquisition and severance expenses 2,015 2,513 4,982 3,664 Non-cash interest expenses 857  400 3,489  400 Loss on convertible notes 5,199  --  6,295  --  Net gain on acquisitions and litigation settlements  --   --  (1,296)  --  Release of valuation allowance on deferred tax assets  (610)  --  (610) (6,221)           Non-GAAP adjusted net income  $ 22,584  $ 13,803  $ 67,866  $ 40,950           Non-GAAP adjusted income per share - basic   $ 0.39  $ 0.27  $ 1.26  $ 0.82 Non-GAAP adjusted income per share - diluted  $ 0.39  $ 0.27  $ 1.25  $ 0.81                     (a) Represents amortization expense for the quarters ended December 31, 2012 and 2011, of which $54 and $44, respectively, is included in the cost of sales and the remaining $2,840 and $2,031, respectively, is included in operating expenses.  (b) Represents amortization expense for the years ended December 31, 2012 and 2011, of which $193 and $237, respectively, is included in the cost of sales and the remaining $11,259 and $4,813, respectively, is included in operating expenses. CONTACT: Investor Contact: Stacey Witten 803-326-4010 Email: Stacey.Witten@3dsystems.com Media Contact: Cathy Lewis 781-852-5007 Email: Cathy.Lewis@3dsystems.com