3D Systems Announces Net Income of $0.05 per Share for the First Quarter of 2005.VALENCIA Valencia, region, Spain Valencia (välān`thēä), autonomous region (1990 pop. 3,902,429) and former kingdom, E Spain, on the Mediterranean. It now comprises the provinces of Alicante, Castellón, and Valencia. , Calif. -- 3D Systems Corporation (Nasdaq:TDSC TDSC Thai Development Support Committee TDSC Time Domain Signal Coding TDSC Test Driver System - Charlie TDSC Time-Domain Spreading Code ), a leading provider of rapid 3-D printing, prototyping (1) Creating a demo of a new system. Prototyping is essential for clarifying information requirements. The design of a system (functional specs) must be finalized before the system can be built. and manufacturing solutions, announced today that its trend of improving financial results had continued in the first quarter of 2005. The company reported: --$30.4 million of revenue for the first quarter of 2005, a 3% increase over the prior-year period; --$1.6 million of operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the 2005 quarter, reversing a $1.2 million loss in the corresponding 2004 quarter; and --$0.8 million of net income available to common stockholders for the quarter, resulting in $0.05 per share of fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings available to common stockholders, reversing a $0.19 per share loss in the 2004 period. "While revenue growth in the first quarter of 2005 was modest, it reflects positive underlying trends and successful early results from several fundamental changes in our business model that we implemented during the course of 2004," said Abe Reichental, 3D Systems' president and chief executive officer. "These include our efforts to accelerate product mix changes from our aging, large-frame systems and materials to new 3-D printing and rapid manufacturing Building parts out of plastic or metal one layer at a time using a method of additive fabrication such as 3D printing. Multiple pieces, either similar or dissimilar, can be built simultaneously. solutions, our initiatives to increase recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue from materials, composites and services, the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of our U.S. sales organization and our decision to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: quarter-end discounts," continued Reichental. "Sales of new products, which include the increasing revenue contributions of our InVision In`vi´sion n. 1. Lack of vision or of the power of seeing. (TM) 3-D printers, grew to 20% of total revenue in the quarter while revenue from our older products and in particular our mature equipment models declined by 7% compared to the first quarter of 2004," continued Reichental. "Late in this year's first quarter, we experienced a resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. of efforts by customers to place deeply discounted orders, a trend that was present in early 2004 but absent during the fourth quarter of 2004. Consistent with our earlier decision to discontinue quarter-end, deep discounting of systems, we rejected re·ject tr.v. re·ject·ed, re·ject·ing, re·jects 1. To refuse to accept, submit to, believe, or make use of. 2. To refuse to consider or grant; deny. 3. these efforts, which would have done little to improve our profitability. We believe that our resolve may have resulted in foregone fore·gone v. Past participle of forego1. adj. Having gone before; previous. Usage Note: The word foregone has recently developed a new meaning as a truncation of the phrase revenue in the first quarter in excess of $2.5 million. "At the same time, recurring revenue from materials and composites increased 16% in the quarter, and service revenue increased 4% in the quarter. The combination and timing of these underlying positive trends underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. the ongoing dramatic transformation in our business model and mix. Without the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. effect of foreign currency translation, revenue would have increased 1% for the first quarter of 2005.
Revenue By Class of Product and Service
($ Millions)
First Quarter
---------------------------------------- ------------------- ---------
2005 2004 % Change
---------------------------------------- --------- --------- ---------
Systems and other products $10.2 $11.0 (8%)
---------------------------------------- --------- --------- ---------
Materials $10.1 $8.7 16%
---------------------------------------- --------- --------- ---------
Services $10.2 $9.8 4%
---------------------------------------- --------- --------- ---------
Total $30.4 $29.5 3%
---------------------------------------- --------- --------- ---------
"Although we were not satisfied with our rate of revenue growth in the first quarter, we were very pleased with the accelerating growth from our new products and, in particular, the significant growth from new materials and composites. This favorable trend is consistent with our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategy of having these products constitute an increasing share of our total revenue. We were also gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. by the continuing improvement in the company's profitability," continued Reichental.
Operating Highlights
($ Millions, except per share amounts)
First Quarter
-------------------------------------- --------------------- ---------
2005 2004 % Change
-------------------------------------- ---------- ---------- ---------
Revenue $30.4 $29.5 3%
-------------------------------------- ---------- ---------- ---------
Gross profit $13.0 $12.0
% of Revenue 43% 41% 8%
-------------------------------------- ---------- ---------- ---------
Operating expenses $11.4 $13.3
% of Revenue 37% 45% (14%)
-------------------------------------- ---------- ---------- ---------
Operating income $1.6 ($1.2)
% of Revenue 5% (4%) N/A
-------------------------------------- ---------- ---------- ---------
Net income (loss) to common
stockholders $0.8 ($2.5)
% of Revenue 3% (8%) N/A
-------------------------------------- ---------- ---------- ---------
Diluted income (loss) per share to
common stockholders $0.05 ($0.19) N/A
-------------------------------------- ---------- ---------- ---------
Depreciation and amortization $1.5 $1.7
% of Revenue 5% 6% (9%)
-------------------------------------- ---------- ---------- ---------
Revenue in the U.S. increased 6% in the first quarter of 2005 due to higher unit volume as the company began to realize benefits of the restructuring and realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of its U.S. sales organization that it carried out during 2004. Revenue from European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations decreased by $0.8 million, or 7%, reflecting a return to historical first-quarter seasonal weakness, which was absent in the 2004 quarter. Revenue from Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). operations increased 22% with strong growth from all product and service categories. Cost of sales was essentially flat in the first quarter of 2005 compared to the 2004 period as a modest decrease in cost of product sales was offset by a modest increase in cost of services. Gross profit increased 8% and gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. increased to 43% of total revenue in the 2005 quarter compared to 41% of total revenue in the 2004 quarter.
Gross Profit Margins
($ Millions)
First Quarter
------------------------------------ ----------------------- ---------
2005 2004 % Change
------------------------------------ ----------- ----------- ---------
Products $9.9 $8.8
% Revenue 49% 45% 13%
------------------------------------ ----------- ----------- ---------
Services $3.1 $3.2
% Revenue 30% 33% (5%)
------------------------------------ ----------- ----------- ---------
Total $13.0 12.0
% Revenue 43% 41% 8%
------------------------------------ ----------- ----------- ---------
The increase in gross profit margin for products arose from higher unit volumes and from lower product cost of sales as the company began to realize the benefit of the outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. activities that it began in the latter part of 2004. The decrease in service profit margin reflected added provisions for excess and obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. service-related inventories. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. continued to decline in the first quarter of 2005 compared to the 2004 quarter. Total operating costs operating costs npl → gastos mpl operacionales declined to 37% of total revenue in the first quarter of 2005 compared to 45% of total revenue in the 2004 quarter. Selling, general and administrative expenses declined by $2.1 million, primarily due to lower legal costs related to the absence in the 2005 period of legacy issues that were resolved in 2004 and lower selling expenses. SG&A cost reductions also included lower bad debt expense and other operating cost reductions that were partially offset by higher consulting expenses and professional fees related to compliance with the Sarbanes-Oxley Act's internal control requirements and by the company's $0.1 million contribution to its fund-raising campaign Noun 1. fund-raising campaign - a campaign to raise money for some cause fund-raising drive, fund-raising effort crusade, campaign, cause, drive, effort, movement - a series of actions advancing a principle or tending toward a particular end; "he supported for several designated tsunami relief organizations. Strategic and tactical R&D expenditures increased to $2.7 million in the first quarter of 2005 from $2.5 million in the 2004 quarter. "We continue to be extremely pleased with the significant improvement in our profitability," said Reichental. "We recognize the importance of continuing to work to improve our top-line growth with an unwavering commitment to R&D so that we can accelerate the development and introduction of significant new products. "We are continuing to focus on broadening broad·en tr. & intr.v. broad·ened, broad·en·ing, broad·ens To make or become broad or broader. broad our product portfolio consistent with our key initiatives to grow our rapid manufacturing and 3-D printing base," continued Reichental. "At the beginning of the second quarter, we announced the introduction of our Sinterstation(R) Pro SLS (Selective Laser Sintering) See laser sintering and 3D printing. (R) systems, an advanced new line of automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. selective laser sintering See laser sintering and 3D printer. manufacturing systems that we expect to begin shipping in the current quarter. "We also recently announced the availability of two new SLS(R) materials: DuraForm(R) Flex A development system for Flash-based applications from Adobe. Introduced in 2004 as a J2EE application, Flex compiles ActionScript code and XML-based user interface descriptions (MXML) into binary Flash files (SWF files). Plastic, a new rubber-like, tear-resistant, flexible plastic, and DuraForm(R) AF Plastic, a new cast-aluminum-like engineered composite composite, alternate common name for Asteraceae or Compositae, the aster family. composite - aggregate for use in our selective laser sintering systems. "During the first quarter, we announced the appointment of Cary Car·y A town of east-central North Carolina, an industrial suburb of Raleigh. Population: 98,000. Love as Vice President, Global 3-D Printing. Cary brings to the company years of related channel sales and marketing experience from Xerox (Xerox Corporation, Stamford, CT, www.xerox.com) A major manufacturer of analog and digital copy machines, computer printers and document management systems. Corporate headquarters are in Stamford, CT, while manufacturing and marketing is in Rochester, NY. that we expect will benefit our 3-D printing channel development and expansion plans. A few weeks ago, we also announced our plans to introduce later this year the InVision(TM) LD 3-D Printer, an affordable desk-top 3-D printer. We believe that the addition of this printer would nicely complement our growing family of InVision(TM) 3-D Printers. "We were pleased with the continuing improvement in our balance-sheet management during the first quarter of 2005. Our net working capital rose by $1.9 million to $30.2 million while we reduced inventories and trade receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , and our cash balance increased by $0.2 million," concluded Reichental. 3D Systems will discuss its operating results for the first quarter of 2005 on a conference call and audio webcast to be held at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) today. Details are set forth below. First-quarter business highlights: During the first quarter, 3D Systems:
-- Completed a company-wide campaign for tsunami relief
foundations that raised over $0.1 million.
-- Announced the appointment of Cary Love as Vice President,
Global 3-D Printing.
-- Introduced Sinterstation(R) Pro SLS(R) systems, an advanced
new line of automated selective laser sintering manufacturing
systems.
-- Announced the availability of DuraForm(R) Flex Plastic, a new,
rubber-like, tear-resistant, flexible plastic for use in its
selective laser sintering systems.
-- Announced plans to introduce the InVision(TM) LD 3-D Printer,
an affordable desk-top 3-D printer, subject to the completion
of an OEM supply agreement.
-- Introduced DuraForm(R) AF Plastic, a new cast-aluminum-like
engineered composite for use in its SLS(R) systems.
-- Introduced the ProCure(TM) system, a new part-curing system
for use with its SLA(R) systems.
3D Systems' complete suite of customer solutions includes:
-- 3-D Printing systems, which accept digital three-dimensional
data, including CAD data, convert the digital file one
horizontal slice at a time, and either jet hot-melted plastic
material or laminate sheets of engineered plastic material in
an additive layer-by-layer build-up to create a solid part.
3-D Printers enable designers, engineers, architects and
marketers to communicate their concepts frequently and
substantially reduce the time it takes to bring new products
to market.
-- Stereolithography or SLA(R) systems, which convert proprietary
plastic materials and composites into solid cross-sections,
layer by layer, until the desired parts are built.
SLA(R) systems are capable of making multiple parts of
different geometries and shapes at the same time and are
designed to produce prototypes, patterns or end-use parts that
have a wide range of sizes and shapes.
-- Selective Laser Sintering or SLS(R) systems, which use heat to
melt and fuse, or "sinter", powdered materials into solid
cross-sections, layer by layer, until the desired parts are
complete. SLS(R) systems can create parts from a variety of
plastic and metal materials and composites and are capable of
processing multiple parts within the same build cycle.
-- Engineered materials and composites that the company blends
and markets under a variety of brand names for use in all of
its systems to produce high-quality models, prototypes and
parts. Stereolithography materials are marketed under the
Accura(R) brand, selective laser sintering materials under the
DuraForm(R) brand, and 3-D printing materials under the
VisiJet(R) brand. The company also distributes additional
materials and composites that are manufactured by DSM Somos(R)
and Dreve in order to enhance the portfolio of solutions
available from the company.
-- Software for proprietary part preparation for use on personal
computers and engineering workstations. These proprietary
software packages generate the information required by the
company's SLS(R), SLA(R) and 3-D printing systems to create
three-dimensional models and parts.
-- Services that the company provides include a suite of
comprehensive customer services and local field support that
are provided on a worldwide basis for all of the company's
systems. Such services and support include extended system
warranties, an extensive menu of annual service agreement
options, and a wide variety of software and hardware upgrades
and performance enhancement packages for legacy systems.
Broad Applications and End-Uses:
-- 3-D Printing system solutions are used for concept-modeling
and three-dimensional printing applications. 3-D printed parts
are used primarily for visualizing and communicating
mechanical design applications. They are also used for other
applications including supply-chain management, architecture,
art, surgical modeling, marketing and entertainment.
-- Rapid prototyping system solutions are used for rapid
prototyping applications, including the generation of product
concept models, functional prototypes and master-casting and
tooling patterns that are often used as an efficient,
cost-effective means of evaluating product designs.
-- Rapid manufacturing system solutions are used for rapid
manufacturing applications to manufacture end-use parts, jigs,
fixtures, tools and patterns directly from a digital image.
The company's rapid manufacturing customers produce end-use
parts without the need for expensive tooling or molds and
without lengthy set-ups, resulting in significant savings,
flexibility and mass customization capabilities.
Conference Call and Audio Webcast Details 3D Systems will hold a conference call and audio webcast to discuss its first-quarter 2005 financial results today at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). --To access the Conference Call, dial 877-791-4796 (or 706-679-6014 from outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ). A recording will be available two hours after completion of the call for seven days. To access the recording, dial 800-642-1687 (or 706-645-9291 from outside the United States) and enter 5672259, the conference call ID number. --To access the audio webcast, log onto 3D Systems' website at www.3dsystems.com. The link to the webcast is provided on the home page of the website. To ensure timely participation and technical capability, we recommend logging on a few minutes prior to the conference call to activate your participation. The webcast will be available for replay at: http://www.3dsystems.com/company/investor/index.asp. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements made in this release are forward-looking statements. These statements include comments as to the company's beliefs and expectations as to future events and trends affecting its business. These forward-looking statements are based upon management's current expectations concerning future events and trends and are necessarily subject to uncertainties, many of which are outside the control of the company. The factors stated under the heading "Forward-Looking Statements" and "Cautionary Statements and Risk Factors" in management's discussion and analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of financial condition and results of operations, which appear 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 such statements. About 3D Systems 3D Systems is a leading provider of rapid 3-D printing, prototyping and manufacturing solutions. Its systems and materials reduce the time and cost of designing products and facilitate direct and indirect manufacturing by creating actual parts directly from digital input. These solutions are used for design communication and prototyping as well as to produce functional end-use parts: Transform your products. More information on the Company is available at www.3dsystems.com, or by phoning 888-337-9786, ext. 2882 (or 661-295-5600, ext. 2882 from outside the United States), or via email at moreinfo@3dsystems.com
3D SYSTEMS CORPORATION
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2005 and March 31, 2004
(in thousands, except per share amounts)
Three Months Ended
-------------------------------
March 31, 2005 March 31, 2004
---------------- --------------
(Unaudited)
Revenue:
Products $20,246 $19,729
Services 10,186 9,786
---------------- --------------
Total revenue 30,432 29,515
Cost of sales:
Products 10,298 10,907
Services 7,129 6,574
---------------- --------------
Total cost of sales 17,427 17,481
---------------- --------------
Gross profit 13,005 12,034
---------------- --------------
Operating expenses:
Selling, general and administrative 8,696 10,761
Research and development 2,675 2,497
---------------- --------------
Total operating expenses 11,371 13,258
---------------- --------------
Income (loss) from operations 1,634 (1,224)
Interest and other expense, net 345 467
---------------- --------------
Income (loss) before provision for
income taxes 1,289 (1,691)
Provision for income taxes 94 482
---------------- --------------
Net income (loss) 1,195 (2,173)
Preferred stock dividends 412 329
---------------- --------------
Net income (loss) available to common
stockholders $783 $(2,502)
================ ==============
Shares used to calculate basic net
income (loss) available to common
stockholders per share(1) 14,575 12,955
================ ==============
Basic net income (loss) available to
common stockholders per share(1) $0.05 $(0.19)
================ ==============
Shares used to calculate fully diluted
net income (loss) available to common
stockholders per share(1) 15,813 12,955
================ ==============
Diluted net income (loss) available to
common stockholders per share(1) $0.05 $(0.19)
================ ==============
(1) See Schedule 1 for the calculation of basic and diluted net income
(loss) available to common stockholders per share.
3D SYSTEMS CORPORATION
Condensed Consolidated Balance Sheets
March 31, 2005 and December 31, 2004
(in thousands)
ASSETS March 31, December 31,
2005 2004(2)
(Unaudited)
---------------- --------------
Current assets:
Cash and cash equivalents $26,507 $26,276
Accounts receivable, net 19,871 22,209
Inventories, net 8,505 9,512
Prepaid expenses and other current
assets 7,735 5,507
---------------- --------------
Total current assets 62,618 63,504
Property and equipment, net 9,737 9,500
Goodwill 44,978 45,135
Intangible assets, net 10,247 10,808
Restricted cash 1,200 1,200
Other assets, net 1,423 1,349
---------------- --------------
$130,203 $131,496
================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $190 $180
Accounts payable 6,848 6,937
Accrued liabilities 10,570 13,447
Customer deposits 793 819
Deferred revenue 13,991 13,797
---------------- --------------
Total current liabilities 32,392 35,180
Long-term debt, less current portion 3,645 3,745
Convertible subordinated debentures 22,604 22,704
Other liabilities 1,457 1,607
---------------- --------------
Total liabilities 60,098 63,236
Series B convertible redeemable
preferred stock 15,195 15,196
Stockholders' equity:
Common stock, authorized 25,000
shares, issued and outstanding
14,656 (2005) and 14,490 (2004) 15 14
Additional paid-in capital 99,714 97,859
Deferred compensation (949) (45)
Treasury stock, at cost (68) (68)
Accumulated deficit in earnings (43,686) (44,881)
Accumulated other comprehensive
income (loss) (116) 185
---------------- --------------
Total stockholders' equity 54,910 53,064
---------------- --------------
$130,203 $131,496
================ ==============
(2) The balance sheet at December 31, 2004 has been derived from the
audited financial statements at that date but omits certain of
the information required by generally accepted accounting
principles for complete financial statements.
3D SYSTEMS CORPORATION
Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 2005 and March 31, 2004
(in thousands)
Three Months Ended
-------------------------------
March 31, 2005 March 31, 2004
---------------- --------------
(Unaudited)
Cash flows from operating activities:
Net income (loss) $1,195 $(2,173)
Adjustments to reconcile net
income (loss) to net cash used
in operating activities:
Depreciation and amortization 1,549 1,711
Bad debt provision (benefit) (39) 117
Stock-based compensation expense 75 408
Payment of interest on employee's
note with stock - (4)
Loss on disposition of property and
equipment 1 39
Changes in operating accounts:
Accounts receivable 1,754 2,939
Inventories, net 556 (999)
Prepaid expenses and other
current assets (2,193) 291
Other assets (105) (137)
Accounts payable (40) 704
Accrued liabilities (2,818) (3,543)
Customer deposits (26) 165
Deferred revenue 494 214
Other liabilities (91) (508)
---------------- --------------
Net cash provided by (used in)
operating activities 312 (776)
---------------- --------------
Cash flows from investing activities:
Purchase of property and
equipment (764) (183)
Additions to licenses and patents (132) (93)
Software development costs (222) (62)
---------------- --------------
Net cash used in investing
activities (1,118) (338)
---------------- --------------
Cash flows from financing activities:
Stock option, stock purchase plan
and restricted stock proceeds 1,115 1,054
Repayment of long-term debt (90) (80)
Payments under obligation to
former RPC stockholders (219) (191)
Payment of accrued liquidated
damages (36) -
Stock registration costs - (392)
---------------- --------------
Net cash provided by financing
activities 770 391
Effect of exchange rate changes on
cash 267 (367)
---------------- --------------
Net increase (decrease) in cash and
cash equivalents 231 (1,090)
Cash and cash equivalents at the
beginning of the period 22,276 23,954
---------------- --------------
Cash and cash equivalents at the end
of the period $22,507 $22,864
================ ==============
Selected Supplemental Cash Flow
Information:
Interest payments $61 $11
Income tax payments 602 898
Non-cash items:
Conversion of 6% convertible
subordinated debentures $100 $-
Conversion of convertible
preferred stock 26 -
Accrued dividends on preferred
stock 387 329
Accrued liquidated damages - 257
Receipt of treasury stock to
settle employee note receivable - 19
Transfer of equipment from
inventory to property and
equipment, net 545 566
Transfer of equipment to
inventory from property and
equipment, net 307 381
Schedule 1
The following is a reconciliation of the numerator and denominator of
the basic and diluted net income (loss) available to common
stockholders per share computations:
Three Months Ended
-------------------------------
March 31, 2005 March 31, 2004
---------------- --------------
(Unaudited)
Basic net income (loss) available to
common stockholders per share:
Numerator:
Net income (loss) available to common
stockholders $783 $(2,502)
================ ==============
Denominator:
Weighted average common shares
outstanding 14,575 12,955
================ ==============
Basic net income (loss) available to
common stockholders, per share $0.05 $(0.19)
================ ==============
Diluted net income (loss) available to
common stockholders per share:
Numerator:
Net income (loss) available to common
stockholders $783 $(2,502)
Add: Preferred stock dividend - -
Add: Interest on 6% convertible
subordinated debentures - -
Add: Interest on 7% convertible
subordinated debentures(a) - -
---------------- --------------
Diluted net income (loss) available to
common stockholders, per share $783 $(2,502)
================ ==============
Denominator:
Weighted average common shares
outstanding 14,575 12,955
Add: Effect of assumed exercise of
options 1,238 -
Add: Effect of assumed conversion of
6% subordinated convertible
debentures - -
Add: Effect of assumed conversion of
7% subordinated convertible
debentures(a) - -
Add: Effect of assumed conversion of
preferred stock - -
---------------- --------------
Diluted weighted average common shares
outstanding 15,813 12,955
================ ==============
Diluted net income (loss) per common
share $0.05 $(0.19)
================ ==============
(a) All outstanding 7% convertible subordinated debentures had been
converted into Common Stock as of December 31, 2004.
For the three months ended March 31, 2005, shares of common stock
issuable upon the conversion of outstanding convertible preferred
stock and convertible debt were excluded from the calculation of
diluted net income per share because their effects would have been
anti-dilutive; that is, they would have increased net income per
share. Weighted average shares outstanding used to calculate diluted
net income per share include the effect of the assumed exercise of
2,294 outstanding in-the-money stock options which, pursuant to the
treasury-stock method, would have resulted in the inclusion of 1,238
diluted shares of common stock. At March 31, 2005, there were 4,887
potentially dilutive securities that were not included in the diluted
calculation comprised of 50 out-of-the-money stock options, 2,617
shares issuable upon conversion of preferred stock and 2,220 shares
issuable upon conversion of the 6% convertible subordinated
debentures.
For the three months ended March 31, 2004, shares of common stock
issuable upon the conversion of convertible preferred stock,
convertible debt and the exercise of stock options were excluded from
the calculation of diluted net loss per share because their effects
would have been anti-dilutive; that is, they would have reduced net
loss per share.
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