3D Systems Reports Third Quarter 2017 Financial Results

ROCK HILL, S.C., Oct. 31, 2017 /PRNewswire/ -- 3D Systems Corporation (NYSE: DDD) announced today its financial results for the third quarter and nine months ended September 30, 2017.

For the third quarter of 2017, the company reported revenue of $152.9 million compared to $156.4 million in the third quarter of the previous year. The company reported a third quarter GAAP loss of $0.34 per share compared to a loss of $0.19 per share in the prior year and a non-GAAP loss of $0.20 per share compared to non-GAAP earnings of $0.14 per share in the third quarter of 2016.

"While third quarter results did not meet our expectations, we believe actions taken during the quarter both organizationally and operationally better position the company for long term success," commented Vyomesh Joshi (VJ), Chief Executive Officer, 3D Systems. "During the quarter, we reorganized the go to market team, changing key leadership positions in both the Americas and the Asia Pacific region while shifting to a worldwide go to market structure. We also completed a deep and comprehensive review of our portfolio based on year to date demand, market trends and a solid understanding of where we meet and will continue to meet customers' expectations."

Demand from healthcare and industrial customers as well as strong execution in EMEA was more than offset by softer sales in the Americas and Asia Pacific regions.

The company reported gross profit margin of 38.3% for the third quarter of 2017, which included a $12.9 million charge to write down products and parts as a result of a comprehensive review of the portfolio and inventory. Gross profit margin in the third quarter of 2016 was 44.1%, which included $10.7 million of expenses related to discontinuation of projects and products.  

For the third quarter of 2017, operating expenses were $90.9 million compared to $91.0 million in the prior year. SG&A expenses increased 3% to $66.5 million, which included continued investment in go to market and IT transformation. R&D expenses decreased 7% over the third quarter of 2016 to $24.4 million. The third quarter of 2017 included accelerated investments in printers, materials and software for both plastic and metal solutions in support of products the company plans to launch over the next several months. R&D expenses in the third quarter of 2016 included $6.1 million of expenses related to portfolio realignment and discontinuation of projects.

"We continued with our strategic investments in IT, go to market, quality, reliability and innovation, which we believe are critical to the company to drive long term growth," commented John McMullen, Executive Vice President and Chief Financial Officer. "While we are reducing expenses where appropriate, we continue to be focused on actions and decisions we believe are necessary to best-position the company for long term success."

During the quarter, the company used $0.7 million of cash in operations and ended the quarter with $138.3 million of cash on hand.

For the first nine months of 2017, revenue increased $1.8 million to $468.8 million compared to $467.0 million in the first nine months of 2016. The company reported a GAAP loss of $0.50 per share for the first nine months of 2017 compared to a loss of $0.39 per share in the same period of the prior year and reported a non-GAAP loss of $0.06 per share in the first nine months of 2017 compared to a non-GAAP earnings of $0.31 per share in the same period of 2016.

"We have increased investments and resources to resolve legacy quality and reliability issues faster and have implemented organizational changes to continue to improve execution. We have made significant progress in many areas over the first nine months of this year and are taking additional actions necessary to position the company for long term success. At the same time, we continue to innovate for the future, and plan to bring to market a series of new and exciting products over the coming months," concluded Joshi.

Full Year 2017 Guidance
Management is focused on building the company for long term growth, profitability and success. This includes significant transformational work in solving for legacy issues while at the same time addressing current and go forward execution. Predictability has been difficult in this environment, and therefore, management believes it is prudent to withdraw guidance at this time.

Q3 2017 Conference Call and Webcast
The company expects to file its Form 10-Q for the quarter ended September 30, 2017 with the Securities and Exchange Commission on October 31, 2017. 3D Systems plans to hold a conference call and simultaneous webcast to discuss these results on Tuesday, October 31, 2017, at 4:30 p.m. Eastern Time. 

Date: Tuesday, October 31, 2017
Time: 4:30 p.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 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

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SOURCE 3D Systems