3D Systems Corporation (NYSE:DDD) announced today its
financial results for the fourth quarter and full year ended
December 31, 2023.
Fourth Quarter Financial Results
(Unaudited)(All numbers are unaudited and are presented in
thousands, except per share amounts or otherwise noted)
- Q4 2023 revenue of $114,848
decreased 13.5% compared to Q4 2022 due to significant softness in
dental orthodontics and depressed printer sales from delayed
customer capex investments
- Q4 2023 gross profit margin of
40.4% and Non-GAAP gross profit margin(1) of
41.9%. Non-GAAP gross profit margin represents an increase from
prior year primarily driven by product mix
- Q4 2023 Net loss of $300,412,
diluted loss per share of $2.30, primarily driven by the non-cash
impairment of goodwill and other intangible assets, and Non-GAAP
diluted loss per share(1) was $0.11
- Q4 2023 Adjusted
EBITDA(1) decreased by $7,452 to a loss of
$12,260, primarily driven by lower revenue and an increase in
operating expenses associated with investments in Regenerative
Medicine and a short-term increase in consulting and outside
services expenses
Full Year 2023
Financial Results (Unaudited)(All numbers are
unaudited and are presented in thousands, except per share amounts
or otherwise noted)
- 2023 revenue of $488,069 decreased
9.3% compared to 2022 revenue of $538,031, primarily driven by the
exceptional softness in dental orthodontics and slower printer
hardware sales
- 2023 gross profit margin of 40.7%
increased from 2022 gross profit margin of 39.8%. 2023 Non-GAAP
gross profit margin(1) of 41.1% increased from
2022 Non-GAAP gross profit margin of 39.8%, primarily driven by
improved operational efficiencies and favorable mix
- 2023 net loss of $370,432, diluted
loss per share of $2.85, primarily driven in large part by the
non-cash impairment of goodwill and other intangible assets, and
Non-GAAP diluted loss per share(1) was $0.26
- 2023 Adjusted
EBITDA(1) decreased by $18,744 to a loss of
$24,525, primarily driven by lower revenue and an increase in
operating expenses associated with investments in Regenerative
Medicine and an increase in consulting and outside services
expenses
- In December 2023, the company
repurchased $135,130 of its Convertible Senior Notes ("Convertible
Notes") for $100,614 including transaction expenses,
opportunistically reducing its outstanding debt by nearly 30% at a
substantial discount to par-value
- Cash and cash equivalents of
$331,525 position the company well for support of restructuring and
efficiency initiatives, as well as continuity in key growth
investments
Unaudited |
|
Quarter Ended December 31, |
|
Year Ended December 31, |
(in thousands, expect per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
$ |
114,848 |
|
|
$ |
132,732 |
|
|
$ |
488,069 |
|
|
$ |
538,031 |
|
Gross profit margin |
|
$ |
46,348 |
|
|
$ |
54,630 |
|
|
$ |
198,812 |
|
|
$ |
214,233 |
|
Operating loss |
|
$ |
(335,594 |
) |
|
$ |
(28,044 |
) |
|
$ |
(414,303 |
) |
|
$ |
(117,019 |
) |
Net
loss attributable to 3D Systems Corporation |
|
$ |
(300,412 |
) |
|
$ |
(25,553 |
) |
|
$ |
(370,432 |
) |
|
$ |
(122,711 |
) |
Diluted loss per share |
|
$ |
(2.30 |
) |
|
$ |
(0.20 |
) |
|
$ |
(2.85 |
) |
|
$ |
(0.96 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP measures for year-over-year comparisons (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit margin |
|
|
41.9 |
% |
|
|
40.9 |
% |
|
|
41.1 |
% |
|
|
39.8 |
% |
Adjusted EBITDA |
|
$ |
(12,260 |
) |
|
$ |
(4,808 |
) |
|
$ |
(24,525 |
) |
|
$ |
(5,781 |
) |
Non-GAAP diluted loss per share |
|
$ |
(0.11 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.23 |
) |
(1) See “Presentation of
Information in this Press Release” below for a description, and the
Appendix for the reconciliation of non-GAAP measurements to the
most closely comparable GAAP measure.
Summary Comments on
ResultsCommenting on 2023 results and the outlook for
2024, Dr. Jeffrey Graves, president and CEO of 3D Systems said,
“Our fourth quarter revenue results reflect the significant
headwinds created by ongoing macroeconomic and geopolitical
volatility. As we exited the third quarter, we had expected some of
these broader pressures to moderate through year-end, as historical
seasonality of increased consumption and year-end customer capex
spending would typically translate to an acceleration of revenues
in the fourth quarter. While customer-driven pre-sales activities
did accelerate as expected in the quarter, the same cannot be said
for revenue. Fortunately, based upon customer feedback, we view
this as a market timing issue rather than any permanent trend in
customer adoption rates for additive manufacturing, or a loss of
market share for 3D Systems.”
“Reflecting on 2023 in its entirety, the most
influential driver to our revenue performance was our dental
orthodontic product line, with revenues declining 39% from 2022
levels and essentially cut in half from their peak in 2021.
However, adding to the pressure from this market was a sluggishness
broadly in capex spending on new production capacity by both our
Healthcare and Industrial customers. These combined effects
resulted in a significant revenue headwind for 2023. In response to
this softness, we’ve undertaken a comprehensive restructuring
initiative to reduce costs, improve margins through greater
efficiencies, and keep the company solidly on a path for sustained
profitability and positive operating cash flow. The rise in gross
margins, even in the face of declining volumes in 2023, is an early
indicator of these efficiency improvements, which we expect to
continue throughout 2024.”
“It is important to note that we are different
from others in the additive manufacturing industry in that we have
the broadest range of technology platforms, which we bring to
market through two focused business units, Healthcare and
Industrial Solutions. These platforms span metals, polymers and
biologics, and, by necessity, require deep expertise in hardware,
software and materials development. This technology foundation, in
which we have been heavily investing for the last two years, along
with industry-leading operational scale and an outstanding global
reach, give us an ability to continue taking cost out of our
business while preserving the critical investments needed to
support the exciting growth opportunities we see ahead. Our goal is
to balance short-term profitability and cash performance in 2024,
with the need to ensure continuity in essential R&D investments
for growth. This balance is critical for two reasons. First, risks
remain in the world economic outlook, which could continue to
impact sales in the short term. However, offsetting this pressure
are a number of very targeted key-customer applications we expect
to bring to market over the next 12-18 months. Fortunately, to
execute these restructuring and investment plans, we have a strong
balance sheet with over $300 million in cash, and 0% interest debt
that is not due until late 2026. This gives us an ability to
thoughtfully restructure the business to drive profitability and
cash performance, while supporting key customer-driven development
programs that we believe will add meaningfully to our top line
revenues in the years ahead.”
Dr. Graves concluded, “Given the continuing
risks we see to the world economy, we expect moderating but
continued sales pressures, which we are translating into relatively
flat top line revenue expectations for the year. Given this, we
will prioritize completion of our previously announced
restructuring program, which includes headcount reductions,
significant site consolidations and a reduction in external
spending. We believe these efforts, which will largely be completed
by mid-year, will favorably impact both COGS and OPEX, further
improve gross margins, and deliver positive adjusted-EBITDA
performance and operating cash flow for the full year. In parallel,
we will continue our most important development programs that are
now, after over two years of increased R&D investment,
beginning to yield exciting results. We expect these new additive
solutions to materially change the way products are designed and
manufactured and healthcare is delivered. We believe the path
forward is very clear. In the short term, we will manage our costs
to deliver improving margins and cash performance in the face of
economic uncertainty. As these clouds then lift, the opportunities
for growth in our industry remain incredibly bright. We believe
that this focus on our strategic initiatives will harmonize the
ability to deliver sustainable profitability this year, while
preserving the exceptional opportunities we have to deliver
long-term shareholder value in the years ahead.”
Summary of Fourth Quarter Results
(Unaudited)
Revenue for the fourth quarter of 2023 decreased
13.5% to $114,848 compared to the same period last year, and
revenue on a constant currency basis decreased 14.7%. The decline
of revenue primarily reflects lower sales to certain dental
orthodontic market customers and lower printer sales more broadly
throughout the remaining portfolio due to macroeconomic factors
that are negatively impacting demand.
Healthcare Solutions revenue decreased 15.7% to
$51,188 compared to the prior year period, and revenue on a
constant currency basis decreased 16.4% year over year.
Industrial Solutions revenue decreased 11.6% to
$63,660 compared to the prior year period, and revenue on a
constant currency basis decreased 13.3% year over year.
Gross profit margin for the fourth quarter of
2023 was 40.4% compared to 41.2% in the same period last year.
Non-GAAP gross profit margin was 41.9% compared to 40.9% in the
same period last year and increased primarily due to favorable
mix.
Net loss attributable to 3D Systems Corporation
increased by $274,859 to a loss of $300,412 in the fourth quarter
of 2023 compared to the same period in the prior year. The increase
in net loss attributable to 3D Systems Corporation primarily
reflects $297,689 related to the impairment of goodwill and other
intangible assets.
Adjusted EBITDA decreased by $7,452 to a loss of
$12,260 in the fourth quarter of 2023 compared to the same period
last year primarily driven by lower revenue and an increase in
operating expenses associated with investments in Regenerative
Medicine and an increase in short-term consulting and outside
services expenses.
Summary of Full-Year
2023 Results (Unaudited)
Revenue for 2023 of $488,069 decreased 9.3%
compared to the prior year. Revenue on a constant currency basis
decreased 9.6%. The decline in revenue primarily reflects lower
sales to certain dental orthodontic market customers due to
macroeconomic factors that are negatively impacting demand.
Healthcare Solutions revenue decreased 18.3% to
$213,216, compared to the prior year, and revenue on a constant
currency basis decreased 18.6% year over year.
Industrial Solutions revenue decreased 0.8% to
$274,853 compared to the prior year, and revenue on a constant
currency basis decreased 1.1% year over year.
Gross profit margin for the full year 2023 was
40.7% compared to 39.8% in the prior year. Non-GAAP gross profit
margin was 41.1% for the full year 2023 compared to 39.8% in the
prior year. Gross profit margin increased primarily driven by
improved operational efficiencies and favorable mix.
Net loss attributable to 3D Systems Corporation
for the full year 2023 increased by $247,721 to a loss of $370,432
compared to the prior year. The increase in net loss attributable
to 3D Systems Corporation primarily reflects an impairment of
goodwill and other intangible assets, lower revenue and an increase
in operating expenses associated with investments in our
Regenerative Medicine business and an increase in consulting and
outside services expenses.
Adjusted EBITDA decreased by $18,744 to a loss
of $24,525 in 2023 compared to last year primarily driven by the
unfavorable impact of lower volumes from dental orthodontics
markets and an increase in operating expenses associated with
investments in Regenerative Medicine and an increase in consulting
and outside services expenses.
2024 Outlook
The company is providing full-year 2024
financial guidance as follows:
Revenue: |
$475 - $505
million |
Non-GAAP Gross Profit Margin: |
42% - 44% |
Non-GAAP Operating Expense: |
$223 - $238 million |
Adjusted EBITDA: |
Break even or better |
|
|
Financial Liquidity
(Unaudited)
At December 31, 2023, cash and cash equivalents
and short-term investments totaled $331,525 and decreased $237,212
since December 31, 2022. This decrease resulted primarily from the
repurchase of our Convertible Notes of $100,614, cash used in
operations of $80,671, acquisitions and other investments, net of
cash acquired, of $29,152, capital expenditures of $27,183, and
taxes paid related to net-share settlement of equity awards of
$5,211, offset by a $3,492 effect of exchange rate changes on cash,
cash equivalents and restricted cash. At December 31, 2023, the
company had total debt, net of deferred financing costs of
$319,356.
Status of Audit; Delayed Form 10-K
Filing
The unaudited financial data above remains
subject to audit as the company continues its close process.
Accordingly, actual results may differ from the anticipated results
shown above.
3D Systems will delay the filing of its Annual
Report on Form 10-K for the fiscal year ended December 31, 2023 and
file a Form 12b-25, Notification of Late Filing, with the
Securities and Exchange Commission, which extends the deadline to
file the Form 10-K. The delay in filing is primarily due to
additional time required by the company to complete its financial
reporting close procedures. It has no impact on the company's
operations or on its ability to discuss its anticipated 2023
results and 2024 outlook.
Q4 and FY 2023
Conference Call and Webcast
The company will host a conference call and
simultaneous webcast to discuss these results on February 28, 2024,
which may be accessed as follows:
Date: Wednesday, February 28, 2024 Time: 8:30
a.m. Eastern TimeListen via webcast:
www.3dsystems.com/investorParticipate 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 revise any forward-looking statements
made by management or on its behalf, whether as a result of future
developments, subsequent events or circumstances or otherwise,
except as required by law.
Presentation of Information in this
Press Release
3D Systems reports its financial results in
accordance with GAAP. Management also reviews and reports certain
non-GAAP measures, including: non-GAAP gross profit, non-GAAP gross
profit margin, non-GAAP diluted income (loss) per share, and
Adjusted EBITDA. These non-GAAP measures exclude certain items that
management does not view as part of 3D Systems’ core results as
they may be highly variable, may be unusual or infrequent, are
difficult to predict and can distort underlying business trends and
results. Management believes that the non-GAAP measures provide
useful additional insight into underlying business trends and
results and provide meaningful information regarding the comparison
of period-over-period results. Additionally, management uses the
non-GAAP measures for planning, forecasting and evaluating business
and financial performance, including allocating resources and
evaluating results relative to employee compensation targets. 3D
Systems’ non-GAAP measures are not calculated in accordance with or
as required by GAAP and may not be calculated in the same manner as
similarly titled measures used by other companies. These non-GAAP
measures should thus be considered as supplemental in nature and
not considered in isolation or as a substitute for the related
financial information prepared in accordance with GAAP.
To calculate the non-GAAP measures, 3D Systems
excludes the impact of the following items:
- amortization of intangible assets,
a non-cash expense, as 3D Systems’ intangible assets were primarily
acquired in connection with business combinations;
- costs incurred in connection with
acquisitions and divestitures, such as legal, consulting and
advisory fees;
- stock-based compensation expenses,
a non-cash expense;
- charges related to restructuring
and cost optimization plans, impairment charges, including
goodwill, and divestiture gains or losses;
- certain compensation expense
related to the 2021 Volumetric acquisition; and
- costs, including legal fees,
related to significant or unusual litigation matters.
Amortization of intangibles and acquisition and
divestiture-related costs are excluded from non-GAAP measures as
the timing and magnitude of business combination transactions are
not predictable, can vary significantly from period to period and
the purchase price allocated to amortizable intangible assets and
the related amortization period are unique to each acquisition.
Amortization of intangible assets will recur in future periods
until such intangible assets have been fully amortized. While
intangible assets contribute to the company’s revenue generation,
the amortization of intangible assets does not directly relate to
the sale of the company’s products or services. Additionally,
intangible assets amortization expense typically fluctuates based
on the size and timing of the company’s acquisition activity.
Accordingly, the company believes excluding the amortization of
intangible assets enhances the company’s and investors’ ability to
compare the company’s past financial performance with its current
performance and to analyze underlying business performance and
trends. Although stock-based compensation is a key incentive
offered to certain of our employees, the expense is non-cash in
nature, and we continue to evaluate our business performance
excluding stock-based compensation; therefore, it is excluded from
non-GAAP measures. Stock-based compensation expenses will recur in
future periods. Charges related to restructuring and cost
optimization plans, impairment charges, including goodwill,
divestiture gains or losses, and the costs, including legal fees,
related to significant or unusual litigation matters are excluded
from non-GAAP measures as the frequency and magnitude of these
activities may vary widely from period to period. Additionally,
impairment charges, including goodwill, are non-cash. Furthermore,
the company believes the costs, including legal fees, related to
significant or unusual litigation matters are not indicative of our
core business' operations. Finally, 3D Systems excludes contingent
consideration recorded as compensation expense related to the 2021
Volumetric acquisition from non-GAAP measures as management
evaluates financial performance excluding this expense, which is
viewed by management as similar to acquisition consideration.
The matters discussed above are tax effected, as
applicable, in calculating non-GAAP diluted income (loss) per
share.
Adjusted EBITDA, defined as net income, plus
income tax (provision) benefit, interest and other income
(expense), net, stock-based compensation expense, amortization of
intangible assets, depreciation expense, and other non-GAAP
adjustments, all as described above, is used by management to
evaluate performance and helps measure financial performance
period-over-period.
A reconciliation of GAAP to non-GAAP financial
measures is provided in the accompanying schedules.
3D Systems does not provide forward-looking
guidance for certain measures on a GAAP basis. The company is
unable to provide a quantitative reconciliation of forward-looking
non-GAAP gross profit margin, Adjusted EBITDA, and non-GAAP
operating expense to the most directly comparable forward-looking
GAAP measures without unreasonable effort because certain items,
including litigation costs, acquisition expenses, stock-based
compensation expense, intangible assets amortization expense,
restructuring expenses, and goodwill impairment charges are
difficult to predict and estimate. These items are inherently
uncertain and depend on various factors, many of which are beyond
the company’s control, and as such, any associated estimate and its
impact on GAAP performance could vary materially.
About 3D Systems
More than 35 years ago, 3D Systems brought the
innovation of 3D printing to the manufacturing industry. Today, as
the leading additive manufacturing solutions partner, we bring
innovation, performance, and reliability to every interaction -
empowering our customers to create products and business models
never before possible. Thanks to our unique offering of hardware,
software, materials and services, each application-specific
solution is powered by the expertise of our application engineers
who collaborate with customers to transform how they deliver their
products and services. 3D Systems’ solutions address a variety of
advanced applications in Healthcare and Industrial Solutions
markets such as medical and dental, aerospace & defense,
automotive and durable goods. More information on the company is
available at www.3dsystems.com
Tables Follow
3D Systems CorporationUnaudited
Consolidated Balance SheetsDecember 31,
2023 and December 31,
2022 |
|
(in
thousands, except par value) |
December 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
331,525 |
|
|
$ |
388,134 |
|
Short-term investments |
|
— |
|
|
|
180,603 |
|
Accounts receivable, net of reserves — $3,389 and $3,114 |
|
102,104 |
|
|
|
93,886 |
|
Inventories |
|
152,412 |
|
|
|
137,832 |
|
Prepaid expenses and other current assets |
|
36,701 |
|
|
|
33,790 |
|
Total current assets |
|
622,742 |
|
|
|
834,245 |
|
Property and
equipment, net |
|
64,461 |
|
|
|
58,072 |
|
Intangible
assets, net |
|
62,724 |
|
|
|
90,230 |
|
Goodwill |
|
107,200 |
|
|
|
385,312 |
|
Operating
lease right-of-use assets |
|
58,406 |
|
|
|
39,502 |
|
Finance
lease right-of-use assets |
|
12,174 |
|
|
|
3,244 |
|
Long-term
deferred income tax assets |
|
4,230 |
|
|
|
7,038 |
|
Other
assets |
|
48,251 |
|
|
|
28,970 |
|
Total assets |
$ |
980,188 |
|
|
$ |
1,446,613 |
|
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND
EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Current operating lease liabilities |
$ |
9,924 |
|
|
$ |
8,343 |
|
Accounts payable |
|
49,757 |
|
|
|
53,826 |
|
Accrued and other liabilities |
|
46,631 |
|
|
|
56,264 |
|
Customer deposits |
|
8,206 |
|
|
|
6,911 |
|
Deferred revenue |
|
30,448 |
|
|
|
26,464 |
|
Total current liabilities |
|
144,966 |
|
|
|
151,808 |
|
Long-term
debt, net of deferred financing costs |
|
319,356 |
|
|
|
449,510 |
|
Long-term
operating lease liabilities |
|
56,795 |
|
|
|
38,499 |
|
Long-term
deferred income tax liabilities |
|
5,162 |
|
|
|
7,631 |
|
Other
liabilities |
|
33,399 |
|
|
|
47,461 |
|
Total liabilities |
|
559,678 |
|
|
|
694,909 |
|
Commitments
and contingencies (Note 23) |
|
|
|
Redeemable
non-controlling interest |
|
2,006 |
|
|
|
1,760 |
|
Stockholders’ equity: |
|
|
|
Common stock, $0.001 par value, authorized 220,000 shares; shares
issued 133,619 and 131,207 as of December 31, 2023 and 2022,
respectively |
|
134 |
|
|
|
131 |
|
Additional paid-in capital |
|
1,577,382 |
|
|
|
1,547,597 |
|
Accumulated deficit |
|
(1,114,394 |
) |
|
|
(743,962 |
) |
Accumulated other comprehensive loss |
|
(44,618 |
) |
|
|
(53,822 |
) |
Total stockholders’ equity |
|
418,504 |
|
|
|
749,944 |
|
Total liabilities, redeemable non-controlling interest and
stockholders’ equity |
$ |
980,188 |
|
|
$ |
1,446,613 |
|
3D Systems CorporationUnaudited
Consolidated Statements of OperationsYear Ended
December 31, 2023,
2022 and
2021 |
|
|
Year Ended December 31, |
(in thousands, except per share amounts) |
|
2023 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue: |
|
|
|
|
|
Products |
$ |
328,731 |
|
|
$ |
395,396 |
|
|
$ |
428,742 |
|
Services |
|
159,338 |
|
|
|
142,635 |
|
|
|
186,897 |
|
Total revenue |
|
488,069 |
|
|
|
538,031 |
|
|
|
615,639 |
|
Cost of sales: |
|
|
|
|
|
Products |
|
200,616 |
|
|
|
237,386 |
|
|
|
245,169 |
|
Services |
|
88,641 |
|
|
|
86,412 |
|
|
|
106,692 |
|
Total cost of sales |
|
289,257 |
|
|
|
323,798 |
|
|
|
351,861 |
|
Gross profit |
|
198,812 |
|
|
|
214,233 |
|
|
|
263,778 |
|
Operating expenses: |
|
|
|
|
|
Selling, general and administrative |
|
212,101 |
|
|
|
244,181 |
|
|
|
227,697 |
|
Research and development |
|
89,728 |
|
|
|
87,071 |
|
|
|
69,150 |
|
Impairments of goodwill and intangible assets |
|
311,286 |
|
|
|
— |
|
|
|
— |
|
Total operating expenses |
|
613,115 |
|
|
|
331,252 |
|
|
|
296,847 |
|
Loss from operations |
|
(414,303 |
) |
|
|
(117,019 |
) |
|
|
(33,069 |
) |
Interest and other income (expense), net |
|
44,362 |
|
|
|
(3,790 |
) |
|
|
352,609 |
|
(Loss) income before income taxes |
|
(369,941 |
) |
|
|
(120,809 |
) |
|
|
319,540 |
|
Benefit (provision) for income taxes |
|
526 |
|
|
|
(2,140 |
) |
|
|
2,512 |
|
Loss on equity method investment, net of income taxes |
|
(1,282 |
) |
|
|
— |
|
|
|
— |
|
Net
(loss) income before redeemable non-controlling interest |
|
(370,697 |
) |
|
|
(122,949 |
) |
|
|
322,052 |
|
Less: net loss attributable to redeemable non-controlling
interest |
|
(265 |
) |
|
|
(238 |
) |
|
|
— |
|
Net
(loss) income attributable to 3D Systems Corporation |
$ |
(370,432 |
) |
|
$ |
(122,711 |
) |
|
$ |
322,052 |
|
|
|
|
|
|
|
Net
(loss) income per common share |
|
|
|
|
|
Basic |
$ |
(2.85 |
) |
|
$ |
(0.96 |
) |
|
$ |
2.62 |
|
Diluted |
$ |
(2.85 |
) |
|
$ |
(0.96 |
) |
|
$ |
2.55 |
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
Basic |
|
129,944 |
|
|
|
127,818 |
|
|
|
122,867 |
|
Diluted |
|
129,944 |
|
|
|
127,818 |
|
|
|
126,334 |
|
3D Systems CorporationUnaudited
Consolidated Statements of OperationsThree Months
Ended December 31, 2023,
2022 and
2021 |
|
|
Three Months Ended December 31, |
(in thousands, except per share amounts) |
|
2023 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue: |
|
|
|
|
|
Products |
$ |
74,763 |
|
|
$ |
94,734 |
|
|
$ |
117,572 |
|
Services |
|
40,085 |
|
|
|
37,998 |
|
|
|
33,298 |
|
Total revenue |
|
114,848 |
|
|
|
132,732 |
|
|
|
150,870 |
|
Cost of sales: |
|
|
|
|
|
Products |
|
47,174 |
|
|
|
55,541 |
|
|
|
64,918 |
|
Services |
|
21,326 |
|
|
|
22,561 |
|
|
|
19,734 |
|
Total cost of sales |
|
68,500 |
|
|
|
78,102 |
|
|
|
84,652 |
|
Gross profit |
|
46,348 |
|
|
|
54,630 |
|
|
|
66,218 |
|
Operating expenses: |
|
|
|
|
|
Selling, general and administrative |
|
61,478 |
|
|
|
58,783 |
|
|
|
50,897 |
|
Research and development |
|
22,775 |
|
|
|
23,891 |
|
|
|
19,163 |
|
Impairments of goodwill and intangible assets |
|
297,689 |
|
|
|
— |
|
|
|
— |
|
Total operating expenses |
|
381,942 |
|
|
|
82,674 |
|
|
|
70,060 |
|
Loss from operations |
|
(335,594 |
) |
|
|
(28,044 |
) |
|
|
(3,842 |
) |
Interest and other income (expense), net |
|
34,671 |
|
|
|
1,666 |
|
|
|
(1,787 |
) |
Loss before income taxes |
|
(300,923 |
) |
|
|
(26,378 |
) |
|
|
(5,629 |
) |
Benefit (provision) for income taxes |
|
930 |
|
|
|
771 |
|
|
|
(571 |
) |
Loss on equity method investment, net of income taxes |
|
(535 |
) |
|
|
— |
|
|
|
— |
|
Net
loss before redeemable non-controlling interest |
|
(300,528 |
) |
|
|
(25,607 |
) |
|
|
(6,200 |
) |
Less: net loss attributable to redeemable non-controlling
interest |
|
(116 |
) |
|
|
(54 |
) |
|
|
— |
|
Net
loss attributable to 3D Systems Corporation |
$ |
(300,412 |
) |
|
$ |
(25,553 |
) |
|
$ |
(6,200 |
) |
|
|
|
|
|
|
Net
loss per share available to 3D Systems Corporation common
stockholders |
|
|
|
|
|
Basic |
$ |
(2.30 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.05 |
) |
Diluted |
$ |
(2.30 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.05 |
) |
3D Systems CorporationUnaudited
Consolidated Statements of Cash Flows |
|
|
Year EndedDecember 31, |
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
|
|
|
|
|
Net (loss) income before redeemable non-controlling interest |
$ |
(370,697 |
) |
|
$ |
(122,949 |
) |
|
$ |
322,052 |
|
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities: |
|
|
|
|
|
Depreciation, amortization and accretion of debt discount |
|
36,053 |
|
|
|
38,686 |
|
|
|
34,623 |
|
Stock-based compensation |
|
23,367 |
|
|
|
42,415 |
|
|
|
55,153 |
|
Loss on short-term investments |
|
6 |
|
|
|
3,146 |
|
|
|
— |
|
Non-cash operating lease expense |
|
9,267 |
|
|
|
6,366 |
|
|
|
5,681 |
|
Provision for inventory obsolescence and revaluation |
|
6,350 |
|
|
|
2,586 |
|
|
|
(2,909 |
) |
Loss on hedge accounting de-designation and termination |
|
— |
|
|
|
— |
|
|
|
721 |
|
Provision for bad debts |
|
595 |
|
|
|
562 |
|
|
|
232 |
|
Loss (gain) on the disposition of businesses, property, equipment
and other assets |
|
6 |
|
|
|
104 |
|
|
|
(350,846 |
) |
Gain on debt extinguishment |
|
(32,181 |
) |
|
|
— |
|
|
|
— |
|
Provision for deferred income taxes and reserve adjustments |
|
(2,412 |
) |
|
|
(2,518 |
) |
|
|
(11,679 |
) |
Loss on equity method investment |
|
1,282 |
|
|
|
— |
|
|
|
— |
|
Impairments of assets |
|
313,204 |
|
|
|
4,095 |
|
|
|
1,676 |
|
Changes in operating accounts: |
|
|
|
|
|
Accounts receivable |
|
(6,793 |
) |
|
|
8,144 |
|
|
|
(11,912 |
) |
Inventories |
|
(20,779 |
) |
|
|
(51,082 |
) |
|
|
7,866 |
|
Prepaid expenses and other current assets |
|
(2,049 |
) |
|
|
8,229 |
|
|
|
(8,106 |
) |
Accounts payable |
|
(5,526 |
) |
|
|
(3,787 |
) |
|
|
27,159 |
|
Deferred revenue and customer deposits |
|
1,852 |
|
|
|
(6,947 |
) |
|
|
(3,325 |
) |
Accrued and other liabilities |
|
(15,744 |
) |
|
|
10,702 |
|
|
|
(12,389 |
) |
All other operating activities |
|
(16,472 |
) |
|
|
(7,773 |
) |
|
|
(5,850 |
) |
Net
cash (used in) provided by operating activities |
|
(80,671 |
) |
|
|
(70,021 |
) |
|
|
48,147 |
|
Cash flows from investing activities: |
|
|
|
|
|
Purchases of property and equipment |
|
(27,183 |
) |
|
|
(20,907 |
) |
|
|
(18,791 |
) |
Purchases of short-term investments |
|
— |
|
|
|
(384,388 |
) |
|
|
— |
|
Sales and maturities of short-term investments |
|
180,925 |
|
|
|
200,314 |
|
|
|
— |
|
Proceeds from sale of assets and businesses, net of cash sold |
|
194 |
|
|
|
325 |
|
|
|
421,485 |
|
Acquisitions and other investments, net of cash acquired |
|
(29,152 |
) |
|
|
(103,699 |
) |
|
|
(139,685 |
) |
Other investing activities |
|
— |
|
|
|
— |
|
|
|
(2,454 |
) |
Net
cash provided by (used in) investing activities |
|
124,784 |
|
|
|
(308,355 |
) |
|
|
260,555 |
|
Cash flows from financing activities: |
|
|
|
|
|
Proceeds from borrowings |
|
— |
|
|
|
— |
|
|
|
460,000 |
|
Debt issuance costs |
|
— |
|
|
|
— |
|
|
|
(13,466 |
) |
Repayment of borrowings/long-term debt |
|
(100,614 |
) |
|
|
— |
|
|
|
(21,392 |
) |
Purchase of non-controlling interests |
|
— |
|
|
|
(2,300 |
) |
|
|
(6,300 |
) |
Taxes paid related to net-share settlement of equity awards |
|
(5,211 |
) |
|
|
(10,864 |
) |
|
|
(12,619 |
) |
Other financing activities |
|
(644 |
) |
|
|
(651 |
) |
|
|
(423 |
) |
Net
cash (used in) provided by financing activities |
|
(106,469 |
) |
|
|
(13,815 |
) |
|
|
405,800 |
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
3,492 |
|
|
|
(5,804 |
) |
|
|
(9,243 |
) |
Net
(decrease) increase in cash, cash equivalents and restricted
cash |
|
(58,864 |
) |
|
|
(397,995 |
) |
|
|
705,259 |
|
Cash, cash equivalents and restricted cash at the beginning of the
year a |
|
391,975 |
|
|
|
789,970 |
|
|
|
84,711 |
|
Cash, cash equivalents and restricted cash at the end of the year
a |
$ |
333,111 |
|
|
$ |
391,975 |
|
|
$ |
789,970 |
|
(a)The amounts for cash and cash equivalents shown above include
restricted cash of $119, $114 and $313 as of December 31, 2023,
2022 and 2021, respectively, which are included in prepaid expenses
and other current assets. In addition, included in cash and cash
equivalents above as of December 31, 2023 and 2022 is 1,467 and
$3,727 of restricted cash, which, is included in other non-current
assets.(b) Inventory is transferred to property and equipment at
cost when we require additional machines for training or
demonstration or for placement into on demand manufacturing
services locations
Appendix3D Systems
CorporationUnaudited Reconciliations of GAAP to
Non-GAAP MeasuresThree Months Ended December
31, 2023 and
2022.
Constant Currency Revenue
(4)
|
Three Months Ended December 31, |
|
|
Constant Currency (1) |
|
(in thousands) |
2023 |
|
2022 |
|
$ Change |
|
% Change |
|
|
FX Effect (2) |
|
% Change (3) |
|
Healthcare Solutions |
$ |
51,188 |
|
$ |
60,694 |
|
$ |
(9,506 |
) |
|
(15.7 |
)% |
|
$ |
454 |
|
(16.4 |
)% |
Industrial Solutions |
|
63,660 |
|
|
72,038 |
|
|
(8,378 |
) |
|
(11.6 |
)% |
|
|
1,196 |
|
(13.3 |
)% |
Total revenue |
$ |
114,848 |
|
$ |
132,732 |
|
$ |
(17,884 |
) |
|
(13.5 |
)% |
|
$ |
1,650 |
|
(14.7 |
)% |
(1) To assist in the analysis of the Company’s revenue trends,
the Company estimated the impact of foreign exchange on
year-over-year revenue growth by recasting revenue for the three
months ended December 31, 2023 by applying the foreign exchange
rates used to translate 2022 non-US functional currency revenue to
2023 non-US functional currency revenue.(2) Represents the
estimated impact on "as reported" revenue due to changes in foreign
currency exchange rates(3) Represents the % increase or decrease in
revenue excluding the estimated "FX effect"(4)Amounts in table may
not foot due to rounding
|
Year Ended December 31, |
|
|
Constant Currency (1) |
|
(in thousands) |
2023 |
|
2022 |
|
$ Change |
|
% Change |
|
|
FX Effect (2) |
|
% Change (3) |
|
Healthcare Solutions |
$ |
213,216 |
|
$ |
260,988 |
|
$ |
(47,772 |
) |
|
(18.3 |
)% |
|
$ |
817 |
|
(18.6 |
)% |
Industrial Solutions |
|
274,853 |
|
|
277,043 |
|
|
(2,190 |
) |
|
(0.8 |
)% |
|
|
971 |
|
(1.1 |
)% |
Total revenue |
$ |
488,069 |
|
$ |
538,031 |
|
$ |
(49,962 |
) |
|
(9.3 |
)% |
|
$ |
1,788 |
|
(9.6 |
)% |
(1) To assist in the analysis of the Company’s revenue trends,
the Company estimated the impact of foreign exchange on
year-over-year revenue growth by recasting revenue for the year
ended December 31, 2023 by applying the foreign exchange rates used
to translate 2022 non-US functional currency revenue to 2023 non-US
functional currency revenue.(2) Represents the estimated impact on
"as reported" revenue due to changes in foreign currency exchange
rates(3) Represents the % increase or decrease in revenue excluding
the estimated "FX effect"(4)Amounts in table may not foot due to
rounding
Gross Profit and Gross Profit Margin
(1)
|
Three Months Ended December 31, |
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
Gross Profit |
|
Gross Profit Margin (2) |
|
Gross Profit |
|
Gross Profit Margin (2) |
GAAP |
$ |
46,348 |
|
40.4 |
% |
|
$ |
54,630 |
|
|
41.2 |
% |
Amortization expense included in Cost of sales |
|
382 |
|
|
|
|
(398 |
) |
|
|
Restructuring expense included in Cost of sales |
|
1,427 |
|
|
|
|
— |
|
|
|
Non-GAAP |
$ |
48,157 |
|
41.9 |
% |
|
$ |
54,232 |
|
|
40.9 |
% |
(1)Amounts in table may not foot due to rounding(2) Calculated
as non-GAAP gross profit as a percentage of total revenue.
|
Year Ended December 31, |
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
Gross Profit |
|
Gross Profit Margin (2) |
|
Gross Profit |
|
Gross Profit Margin(2) |
GAAP |
$ |
198,812 |
|
40.7 |
% |
|
$ |
214,233 |
|
39.8 |
% |
Amortization expense included in Cost of sales |
|
506 |
|
|
|
|
14 |
|
|
Restructuring expense included in Cost of sales |
|
1,427 |
|
|
|
|
— |
|
|
Non-GAAP |
$ |
200,745 |
|
41.1 |
% |
|
$ |
214,247 |
|
39.8 |
% |
|
|
|
|
|
|
|
|
(1)Amounts in table may not foot due to rounding(2) Calculated
as non-GAAP gross profit as a percentage of total revenue.
Appendix3D Systems
CorporationUnaudited Reconciliations of GAAP to
Non-GAAP MeasuresThree and Twelve
Months Ended December 31,
2023 and
2022
Net Loss to Adjusted EBITDA
(1)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net loss attributable to 3D Systems
Corporation |
$ |
(300,412 |
) |
|
$ |
(25,553 |
) |
|
$ |
(370,432 |
) |
|
$ |
(122,711 |
) |
Interest income, net |
|
(3,778 |
) |
|
|
(2,522 |
) |
|
|
(16,896 |
) |
|
|
(6,541 |
) |
(Benefit) provision for income taxes |
|
(930 |
) |
|
|
(771 |
) |
|
|
(526 |
) |
|
|
2,140 |
|
Depreciation expense |
|
5,656 |
|
|
|
5,104 |
|
|
|
21,346 |
|
|
|
21,096 |
|
Amortization expense |
|
2,391 |
|
|
|
5,207 |
|
|
|
12,067 |
|
|
|
15,480 |
|
Stock-based compensation expense |
|
8,224 |
|
|
|
10,980 |
|
|
|
23,367 |
|
|
|
42,489 |
|
Acquisition and divestiture-related expense |
|
468 |
|
|
|
2,978 |
|
|
|
600 |
|
|
|
12,360 |
|
Legal expense |
|
3,174 |
|
|
|
(1,418 |
) |
|
|
8,053 |
|
|
|
19,062 |
|
Restructuring expense |
|
4,774 |
|
|
|
381 |
|
|
|
11,487 |
|
|
|
733 |
|
Redeemable non-controlling interest |
|
(116 |
) |
|
|
(54 |
) |
|
|
(265 |
) |
|
|
(238 |
) |
Loss (income) on equity method investment |
|
535 |
|
|
|
(90 |
) |
|
|
1,282 |
|
|
|
(90 |
) |
Goodwill and other assets impairment charges |
|
298,647 |
|
|
|
3 |
|
|
|
312,858 |
|
|
|
18 |
|
Gain on repurchase of debt |
|
(32,181 |
) |
|
|
— |
|
|
|
(32,181 |
) |
|
|
— |
|
Other non-operating (income) expense |
|
1,288 |
|
|
|
947 |
|
|
|
4,715 |
|
|
|
10,421 |
|
Adjusted EBITDA |
$ |
(12,260 |
) |
|
$ |
(4,808 |
) |
|
$ |
(24,525 |
) |
|
$ |
(5,781 |
) |
(1) Amounts in table may not foot due to rounding
Appendix3D Systems
CorporationUnaudited Reconciliations of GAAP to
Non-GAAP MeasuresThree and Twelve
Months Ended December 31,
2023 and
2022
Non-GAAP
Diluted Loss per Share
(1)(2)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
(in dollars) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Diluted loss per share |
$ |
(2.30 |
) |
|
$ |
(0.20 |
) |
|
$ |
(2.85 |
) |
|
$ |
(0.96 |
) |
Amortization expense |
|
0.02 |
|
|
|
0.04 |
|
|
|
0.09 |
|
|
|
0.12 |
|
Stock-based compensation expense |
|
0.06 |
|
|
|
0.09 |
|
|
|
0.18 |
|
|
|
0.33 |
|
Acquisition and divestiture-related expense |
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
0.10 |
|
Legal expense |
|
0.02 |
|
|
|
(0.01 |
) |
|
|
0.06 |
|
|
|
0.17 |
|
Restructuring expense |
|
0.04 |
|
|
|
— |
|
|
|
0.09 |
|
|
|
0.01 |
|
Goodwill and other assets impairment charges |
|
2.30 |
|
|
|
— |
|
|
|
2.42 |
|
|
|
— |
|
Gain on repurchase of debt |
|
(0.25 |
) |
|
|
— |
|
|
|
(0.25 |
) |
|
|
— |
|
Non-GAAP diluted loss per share |
$ |
(0.11 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.23 |
) |
(1)Amounts in table may not foot due to rounding(2)Amounts in
table are stated per share
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