3D Systems Reports Record Third-Quarter Revenue.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 revenue increased 9% in the third quarter of 2005 and 10% in the first nine months of 2005 compared to the corresponding 2004 periods. "Revenue growth in the third quarter of 2005 continues to reflect the strong underlying trends we mentioned in previous quarters as we move forward with the transformation of our business model, product mix and product portfolio with increasingly positive traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. ," said Abe Reichental, 3D Systems' president and chief executive officer. Revenue from systems and other products increased by more than 10% in both the third quarter and first nine months of 2005 compared with the prior-year periods. These increases reflected continuing strong unit demand from large-frame systems, further fueled by the introduction of new-generation selective laser sintering See laser sintering and 3D printer. and stereolithography The first 3D printing technology, which was pioneered by Chuck Hull of 3D Systems. See 3D printing. 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. systems and a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. price/mix effect. Revenue from engineered materials and composites increased by over 20% in both the third quarter and first nine months, primarily reflecting strong unit growth from VisiJet(R) 3-D printing materials, newly introduced SLA (1) (StereoLithography Apparatus) See 3D printing. (2) (Service Level Agreement) A contract between the provider and the user that specifies the level of service expected during its term. (R) and SLS (Selective Laser Sintering) See laser sintering and 3D printing. (R) plastic materials and the company's success in attracting additional customers to its growing portfolio of engineered materials and composites. Revenue from services declined by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 6% and 1% in the third quarter and first nine months, respectively, primarily due to lower revenue from customer training, maintenance and upgrade services, reflecting a deliberate Willful; purposeful; determined after thoughtful evaluation of all relevant factors; dispassionate. To act with a particular intent, which is derived from a careful consideration of factors that influence the choice to be made. shift in the company's marketing strategy to de-emphasize de-em·pha·size tr.v. de-em·pha·sized, de-em·pha·siz·ing, de-em·pha·siz·es To decrease the emphasis on; minimize the importance of. de-em its ongoing support of certain legacy systems.
Revenue By Class of Product and Service
($ in millions)
----------------------------------------------------------------------
Third Quarter First Nine Months
------------------------------------------
Product or Service 2005 2004 % Change 2005 2004 % Change
----------------------------------------------------------------------
Systems and other products $12.1 $10.9 11% $34.1 $30.6 11%
----------------------------------------------------------------------
Materials $10.9 $8.8 23% $31.9 $26.4 21%
----------------------------------------------------------------------
Services $9.3 $9.9 (6)% $29.6 $30.0 (1)%
----------------------------------------------------------------------
Total $32.3 $29.7 9% $95.5 $87.1 10%
----------------------------------------------------------------------
"While on the surface third-quarter revenue growth is somewhat disappointing, it is worth noting that we ended the third quarter with over $9.8 million of orders for shipments to be made in the fourth quarter and in subsequent periods, primarily for the purchase of systems. Over $6.4 million of those orders are scheduled for shipment in the fourth quarter of this year, and the balance of them are scheduled to be shipped in 2006. Given our relatively short lead times for delivery of our systems, we typically end every quarter with little or no backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. . The substantial backlog of orders at the end of the third quarter is of such magnitude magnitude, in astronomy, measure of the brightness of a star or other celestial object. The stars cataloged by Ptolemy (2d cent. A.D.), all visible with the unaided eye, were ranked on a brightness scale such that the brightest stars were of 1st magnitude and the that it gives us confidence that our business model is continuing to gain traction and momentum. "Notwithstanding our successes to date, the kind of business transformation that we are involved in does not come without corresponding investments and costs of the kind reflected in our third-quarter profitability," continued Reichental. With this higher level of revenue and corresponding investments and costs for the third quarter of 2005: --The company reported that 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. declined to $1.5 million in the third quarter from $2.3 million in the third quarter of 2004, primarily reflecting lower margins associated with its service business, higher R&D expenses, and higher SG&A expenses arising primarily from the absence this year of benefits that the company recognized in the 2004 quarter from reductions in various accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. . --The company reported that net income available to common stockholders declined to $0.7 million from $1.7 million in the 2004 quarter, primarily due to its lower operating income. And for the first nine months of 2005: --The company reported a fourfold fourfold Adjective 1. having four times as many or as much 2. composed of four parts Adverb by four times as many or as much Adj. 1. increase in operating income to $4.8 million from $1.2 million in the 2004 period. --The company reported that net income available to common stockholders grew to $2.4 million, a $4.4 million improvement over the company's $2.0 million loss in the 2004 period, primarily due to its higher operating income. Foreign currency translation had a slightly unfavorable effect on consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenue for the 2005 quarter and a 1.1% favorable impact on revenue for the first nine months. "Our newly introduced state-of-the-art rapid manufacturing systems, 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 and composites, continuing growth in our InVision In`vi´sion n. 1. Lack of vision or of the power of seeing. (TM) 3-D printing installed base and the 2004 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 all contributed to the higher level of revenue in the third quarter," added Reichental. "Sales of new products introduced within the last two years grew to almost 28% of total revenue in the quarter and over 23% of total revenue in the first nine months of the year, validating val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. our accelerated product mix transformation and the investments in R&D and other related field support activities that we have made during the past two years," continued Reichental. The company experienced strong revenue growth from its operations in the U.S., which rose almost 28% in the third quarter and 17% in the first nine months of 2005 as the company realized the benefits of the 2004 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. Revenue from European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations increased only modestly in the first nine months because of unfavorable economic conditions in several European countries and reflected a slight increase for the quarter. Although 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 in the first nine months was almost 8% ahead of last year's period, it decreased by 14% in the third quarter compared to 2004 levels, reflecting the lumpy lumpy characterized by the presence of a lump or lumps. lumpy disease see lumpy-skin disease (below). lumpy jaw see actinomycosis. effect that large-frame systems' sales can have on parts of our business in a given reporting period.
Operating Highlights
Third Quarter and First Nine Months of 2005
($ in millions except for per share amounts)
----------------------------------------------------------------------
Third Quarter First Nine Months
-------------------------------------------
Operating Highlights 2005 2004 % Change 2005 2004 % Change
----------------------------------------------------------------------
Revenue $32.3 $29.7 9% $95.5 $87.1 10%
----------------------------------------------------------------------
Gross profit $14.9 $14.1 $42.2 $38.4
% of Revenue 46% 47% 6% 44% 44% 10%
----------------------------------------------------------------------
Operating expenses $13.4 $11.7 $37.4 $37.2
% of Revenue 41% 40% 14% 39% 43% 1%
----------------------------------------------------------------------
Operating income $1.5 $2.3 $4.8 $1.2
% of Revenue 5% 8% (37)% 5% 1% 291%
----------------------------------------------------------------------
Net income (loss) to common
stockholders $0.7 $1.7 $2.4 ($2.0)
% of Revenue 2% 6% (56)% 2% (2)% NM
----------------------------------------------------------------------
Diluted income (loss) per
share to common
stockholders $0.05 $0.12 (58)% $0.15 ($0.16) NM
----------------------------------------------------------------------
Unrestricted cash $26.0 $19.9 31% $26.0 $19.9 31%
----------------------------------------------------------------------
Depreciation and
amortization $1.6 $1.8 $4.7 $5.2
% of Revenue 5% 6% (13)% 5% 6% (9)%
----------------------------------------------------------------------
NM=not meaningful
Gross profit increased by 6% to $14.9 million for the 2005 quarter and by 10% to $42.2 million in the first nine months of 2005. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. declined by 1.5 percentage points in the third quarter compared to last year's quarter reflecting primarily the effect of our shift in service strategy but increased by a modest amount in the first nine months of 2005 compared to the 2004 period. Product cost of sales continued to benefit from outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. activities but was adversely impacted during the nine-month period by the unfavorable effect of foreign currency transaction items and higher warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. costs. Service cost of sales was adversely affected by increased spending for field service and training activities associated with the significant number of new product introductions and a special compensation-related charge.
Gross Profit Margins
($ in millions)
----------------------------------------------------------------------
Third Quarter First Nine Months
------------------------------------------
2005 2004 % Change 2005 2004 % Change
----------------------------------------------------------------------
Products $12.1 $9.9 $32.5 $27.0
% Revenue 53% 50% 22% 49% 47% 20%
----------------------------------------------------------------------
Services $2.8 $4.1 $9.7 $11.4
% Revenue 30% 42% (34)% 33% 38% (14)%
----------------------------------------------------------------------
Total $14.9 $14.1 $42.2 $38.4
% Revenue 46% 47% 6% 44% 44% 10%
----------------------------------------------------------------------
Total operating costs operating costs npl → gastos mpl operacionales increased by 1.8 percentage points to 41% of revenue in the third quarter but declined by 3.6 percentage points to 39% of revenue in the first nine months of 2005 compared to the corresponding period of 2004. Selling, general and administrative expenses increased $1.2 million in the third quarter primarily due to the absence in the 2005 period of the benefit in 2004 of reductions in certain accruals. The $0.4 million decrease during the first nine months arose predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. from lower legal fees. Strategic and tactical R&D expenditures increased to $3.4 million in the third quarter of 2005 from $2.6 million in 2004, and increased by $1.1 million for the first nine months of 2005. In both periods, these costs related to activity with selected R&D projects and R&D costs associated with new products. The company expects R&D expenditures to be in the range of 7.5% to 8.5% of total revenue for the full year 2005. "We believe that we are benefiting increasingly from our strategic initiatives, and it is worth noting that on a year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. basis we are achieving far greater results from comparable expenditures," continued Reichental. "We are very pleased with the positive and enthusiastic reception we experienced from early adopters of our new Sinterstation(R) Pro and Viper(TM) Pro systems and with the continued strong top-line growth in the third quarter from our rapid manufacturing and 3-D printing initiatives, validating our ongoing investments in R&D and other related field service operations. We believe that the continued strong growth of our materials' revenue justifies the cost of our investment in previous quarters in connection with marketing campaigns to attract additional customers to our new and differentiated dif·fer·en·ti·ate v. dif·fer·en·ti·at·ed, dif·fer·en·ti·at·ing, dif·fer·en·ti·ates v.tr. 1. To constitute the distinction between: value proposition," said Reichental. Despite investments of $9.5 million during the quarter in inventory, progress payments to contract manufacturers and R&D associated with new product roll-out and development, cash and cash equivalents declined only $2.1 million during the quarter to $26.0 million at September September: see month. 30, 2005. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying days' sales outstanding Days' sales outstanding Average collection period. increased by less than one day compared to 2004's third-quarter. "We are very fortunate to have the resources that enable us to make substantial investments to enhance our overall business model, further optimize optimize - optimisation our cost structure and continue to improve our customer's overall satisfaction and bottom line. "In keeping with our objectives, we are announcing separately today that we are embarking on a program to move to a new headquarters and R&D facility that will combine our Valencia, California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). and Grand Junction, Colorado The City of Grand Junction is a home rule municipality located in Mesa County, Colorado, USA. According to 2006 Census Bureau estimates, the population of the city is 45,299. facilities. This program should enable us to effect cost savings, gain further efficiencies and enhance customer responsiveness responsiveness Medtalk The ability to respond to a stimulus. See Airway responsiveness. . We are also currently devoting significant resources to converting our global information technology systems to an Oracle-based ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. system. We expect this system to be implemented during the first and second quarters of 2006. And we are continuing with substantial R&D spending for new systems and new engineered materials and composites," concluded Reichental. 3D Systems will discuss its operating results for the third quarter and first nine months of 2005, as well as its relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. plans, on a conference call and audio web cast to be held at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) today. Details are set forth below. Third-quarter business highlights: --Announced the availability of Viper(TM) Pro SLA(R) system, an advanced, flexible, high-capacity stereolithography manufacturing system. The modular Viper Pro SLA system enables customers to mass customize and produce high-quality, end-use parts, patterns, wind tunnel wind tunnel, apparatus for studying the interaction between a solid body and an airstream. A wind tunnel simulates the conditions of an aircraft in flight by causing a high-speed stream of air to flow past a model of the aircraft (or part of an aircraft) being tested. models, fixtures and tools consistently and economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: . The modular system is available in three configurations, including a "dual vat" configuration, that enables customers to build parts from different materials simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics , and a single, extra-large vat configuration, that enables customers to build parts as large as 1.5 meters. --Announced a company-wide campaign to raise disaster relief funds for victims of Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. .
--Announced that a major Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and automaker purchased a Sinterstation(R) Pro SLS(R) system, model 230, to create fully functional parts and assemblies to test and incorporate into concept vehicles. --Settled pending patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with Objet Geometries, Ltd. on a favorable basis that is not material to 3D Systems. Under the terms of the settlement, 3D Systems and Objet waived all claims for damages with respect to the pending litigation. Both companies licensed various patents relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 3-D printing to each other. --Announced the purchase of a Sinterstation(R) Pro SLS(R) system, model 230, by Butler Butler, city (1990 pop. 15,714), seat of Butler co., W Pa.; inc. as a borough 1817, as a city 1917. It is located in an area with coal, natural gas, oil, and limestone resources. Glass and plastic products, machinery, and abrasives are made. Tool & Design. Conference Call and Webcast Details
Subject: Third-quarter and nine-month 2005 financial results and
relocation plans
Date: November 3, 2005
Time: 8:00 a.m. PST (11:00 a.m. EST)
Access: To access the conference call, dial 877-791-4796 (or
706-679-6014 from outside the United States). The conference
call will be webcast live on 3D Systems' web site at
www.3dsystems.com under the Investor Relations' section.
Listeners should go to the web site prior to the call to
register and to download and install any necessary audio
software.
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 9428384, the conference call ID number. The
recorded webcast will also be available at www.3dsystems.com.
3D Systems' complete suite of customer solutions includes: --3-D Printing systems, which accept digital input from a three-dimensional three-di·men·sion·al adj. 1. Of, relating to, having, or existing in three dimensions. 2. Having or appearing to have extension in depth. 3. CAD CAD: see computer-aided design. (Computer-Aided Design) Using computers to design products. CAD systems are high-speed workstations or desktop computers with CAD software. station, convert the digital file one horizontal horizontal /hor·i·zon·tal/ (hor?i-zon´t'l) 1. parallel to the plane of the horizon. 2. occupying or confined to a single level in a hierarchy. horizontal parallel to the plane of the horizon. slice at a time. The standard (SR) and high-resolution high-res·o·lu·tion adj. 1. Relating to an image that has fine detail. 2. a. Of or relating to an output device that produces images that contain a large number of dots per unit of area and are therefore sharp and (HR) printers jet hot-melted plastic material in an additive additive In foods, any of various chemical substances added to produce desirable effects. Additives include such substances as artificial or natural colourings and flavourings; stabilizers, emulsifiers, and thickeners; preservatives and humectants (moisture-retainers); and layer-by-layer build-up build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. to create a solid part. The LD unit uses layered deposition Deposition Christ is taken from the cross and enshrouded. [N.T.: Matthew 27:57–60; Christian Art: Appleton, 55] See : Passion of Christ (LD) technology to build complex geometrical ge·o·met·ric also ge·o·met·ri·cal adj. 1. a. Of or relating to geometry and its methods and principles. b. Increasing or decreasing in a geometric progression. 2. shapes one slice thickness thickness (thik´nes) a measurement across the smallest dimension of an object. triceps skinfold (TSF) thickness at a time. 3-D Printers enable designers, engineers, architects and marketers to communicate their concepts frequently, and to substantially reduce the time it takes to bring new products to market. --Stereolithography or SLA(R) systems convert proprietary 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 Building prototypes and finished parts in a machine from powdered thermoplastics and metals that are cured by heat from a laser. From CAD drawings that have been cross sectioned into thousands of layers, the machine builds up the part by curing one layer at a time. or SLS(R) systems use heat to melt and fuse, or sinter sinter Mineral deposit with a porous or vesicular texture (having small cavities). Siliceous sinter is a deposit of opaline or amorphous silica that occurs as an incrustation around hot springs and geysers and sometimes forms conical mounds (geyser cones) or terraces. , powdered pow·der n. 1. A substance consisting of ground, pulverized, or otherwise finely dispersed solid particles. 2. Any of various preparations in the form of powder, as certain cosmetics and medicines. 3. 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 the company's 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), LaserForm(TM) and CastForm(TM) brands, and 3-D printing materials under the VisiJet(R) brand. The company also distributes additional materials and composites that are manufactured by DSM 1. DSM - Data Structure Manager. An object-oriented language by J.E. Rumbaugh and M.E. Loomis of GE, similar to C++. It is used in implementation of CAD/CAE software. DSM is written in DSM and C and produces C as output. 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 warranties, n.pl the details of a contract; considered less important than the conditions. Whereas the penalty for breach of conditions is the termination of the contract, the penalty for breach of warranties is payment of damages to the innocent party. , 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 visualizing, v 1., holding an image in one's mind. 2., forming an image of a goal or destination in one's mind before undertaking it, so as to facilitate success. 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 Building a part one layer at a time using a method of additive fabrication such as 3D printing. Such parts are used for concept modeling to determine if the product design meets the customer's expectations. 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 cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. 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. 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 that are not statements of historical or current facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. In addition to statements which explicitly ex·plic·it adj. 1. a. Fully and clearly expressed; leaving nothing implied. b. Fully and clearly defined or formulated: "generalizations that are powerful, precise, and explicit" describe such risks and uncertainties, readers are urged to consider statements in the future tenses future tense n. A verb tense expressing future time. Noun 1. future tense - a verb tense that expresses actions or states in the future future or that include the terms "believes," "belief," "expects," "intends," "anticipates" or "plans" to be uncertain and forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . Forward-looking statements may include comments as to the company's beliefs and expectations as to future events and trends affecting its business. 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 results of operations and financial condition, 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 those reflected or predicted in forward-looking statements. About 3D Systems Corporation 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 for production of 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 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. ), or via email at moreinfo@3dsystems.com.
3D SYSTEMS CORPORATION
Condensed Consolidated Statements of Operations
Three Months and Nine Months Ended September 30, 2005
and September 30, 2004
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2005 2004 2005 2004
-------- -------- -------- --------
(Unaudited) (Unaudited)
Revenue:
Products $23,005 $19,730 $65,908 $57,072
Services 9,319 9,921 29,617 29,987
-------- -------- -------- --------
Total revenue 32,324 29,651 95,525 87,059
Cost of sales:
Products 10,909 9,820 33,438 30,045
Services 6,562 5,774 19,884 18,620
-------- -------- -------- --------
Total cost of sales 17,471 15,594 53,322 48,665
-------- -------- -------- --------
Gross profit 14,853 14,057 42,203 38,394
-------- -------- -------- --------
Operating expenses:
Selling, general and
administrative 9,917 8,751 28,513 28,883
Research and development 3,429 2,613 8,805 7,754
Severance and restructuring 42 380 49 521
-------- -------- -------- --------
Total operating expenses 13,388 11,744 37,367 37,158
-------- -------- -------- --------
Income from operations 1,465 2,313 4,836 1,236
Interest and other expense, net 204 418 734 1,399
-------- -------- -------- --------
Income (loss) before provision
for income taxes 1,261 1,895 4,102 (163)
Provision (benefit) for income
taxes 100 (231) 447 752
-------- -------- -------- --------
Net income (loss) 1,161 2,126 3,655 (915)
Preferred stock dividends 412 413 1,268 1,123
-------- -------- -------- --------
Net income (loss) available to
common stockholders $749 $1,713 $2,387 $(2,038)
======== ======== ======== ========
Shares used to calculate basic
net income (loss) available
to common stockholders
per share (1) 15,146 13,249 14,838 13,116
======== ======== ======== ========
Basic net income (loss)
available to common
stockholders per share (1) $0.05 $0.13 $0.16 $(0.16)
======== ======== ======== ========
Shares used to calculate
fully diluted net income
(loss) available to common
stockholders per share (1) 16,222 14,098 15,979 13,116
======== ======== ======== ========
Diluted net income (loss)
available to common
stockholders per share (1) $0.05 $0.12 $0.15 $(0.16)
======== ======== ======== ========
(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
September 30, 2005 and December 31, 2004
(in thousands)
Sept. 30, Dec. 31,
2005 2004
(Unaudited) (2)
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $25,991 $26,276
Accounts receivable, net 21,631 22,209
Inventories, net 13,417 9,512
Prepaid expenses and other current assets 10,195 5,507
--------- ---------
Total current assets 71,234 63,504
Property and equipment, net 10,449 9,500
Goodwill 44,790 45,135
Intangible assets, net 9,201 10,808
Restricted cash 1,200 1,200
Other assets, net 852 1,349
--------- ---------
$137,726 $131,496
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $200 $180
Accounts payable 7,866 6,937
Accrued liabilities 9,996 13,447
Customer deposits 2,040 819
Deferred revenue 12,008 13,797
--------- ---------
Total current liabilities 32,110 35,180
Long-term debt, less current portion 3,545 3,745
Convertible subordinated debentures 22,604 22,704
Other liabilities 1,018 1,607
--------- ---------
Total liabilities 59,277 63,236
Series B convertible redeemable preferred stock 15,226 15,196
Stockholders' equity:
Common stock, authorized 60,000 shares, issued and
outstanding 15,284 (2005) and 14,490 (2004) 15 14
Additional paid-in capital 107,041 97,859
Deferred compensation (1,647) (45)
Treasury stock, at cost (71) (68)
Accumulated deficit in earnings (41,226) (44,881)
Accumulated other comprehensive income (loss) (889) 185
--------- ---------
Total stockholders' equity 63,223 53,064
--------- ---------
$137,726 $131,496
========= =========
(2) The condensed 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 Statements of Cash Flows
Nine Months Ended September 30, 2005 and September 30, 2004
(in thousands)
Nine Months Ended
September 30,
-----------------
2005 2004
-------- --------
(Unaudited)
Cash flows from operating activities:
Net income (loss) $3,655 $(915)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 4,715 5,178
Bad debt provision 16 10
Stock-based compensation expense 699 356
Payment of interest on employee note with stock - (4)
(Gain) loss on disposition of property
and equipment (54) 141
Changes in operating accounts:
Accounts receivable (909) 2,944
Inventories, net (5,909) (4,975)
Prepaid expenses and other current assets (4,534) (1,620)
Other assets 229 140
Accounts payable 1,044 455
Accrued liabilities (2,599) (2,263)
Customer deposits 1,228 (16)
Deferred revenue (1,131) (2,534)
Other liabilities (460) (821)
-------- --------
Net cash used in operating activities (4,010) (3,924)
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (1,873) (314)
Proceeds from sale of property and equipment 98 -
Additions to licenses and patents (504) (269)
Software development costs (635) (62)
Payment of accumulated earnings to OptoForm
minority owner - (49)
-------- --------
Net cash used in investing activities (2,914) (694)
-------- --------
Cash flows from financing activities:
Stock option, stock purchase plan and
restricted stock proceeds 8,020 2,951
Repayment of long-term debt (180) (165)
Payments under obligation to former 3D Systems
S.A. stockholders (585) (625)
Payment of preferred stock dividends (785) (632)
Stock registration costs (211) (388)
Payment of accrued liquidated damages (36) (433)
-------- --------
Net cash provided by financing activities 6,223 708
Effect of exchange rate changes on cash 416 (190)
-------- --------
Net decrease in cash and cash equivalents (285) (4,100)
Cash and cash equivalents at the beginning
of the period 26,276 23,954
-------- --------
Cash and cash equivalents at the end
of the period $25,991 $19,854
======== ========
Selected Supplemental Cash Flow Information:
Interest payments $762 $1,274
Income tax payments 1,296 1,178
Non-cash items:
Conversion of 6% convertible subordinated
debentures $100 $-
Conversion of convertible preferred stock 26 44
Accrued dividends on preferred stock 1,211 1,123
Accrued liquidated damages - 393
Transfer of equipment from inventory to
property and equipment, net 2,066 1,653
Transfer of equipment to inventory from
property and equipment, net 586 558
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 Nine Months Ended
September 30, September 30,
----------------- -----------------
2005 2004 2005 2004
-------- -------- -------- --------
(Unaudited) (Unaudited)
Basic net income (loss) available to common
stockholders per share:
Numerator:
Net income (loss) available
to common stockholders $749 $1,713 $2,387 $(2,038)
======== ======== ======== ========
Denominator:
Weighted average common
shares outstanding 15,146 13,249 14,838 13,116
======== ======== ======== ========
Basic net income (loss)
available to common
stockholders, per share $0.05 $0.13 $0.16 $(0.16)
======== ======== ======== ========
Diluted net income (loss) available
to common stockholders per share:
Numerator:
Net income (loss) available
to common stockholders $749 $1,713 $2,387 $(2,038)
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 $749 $1,713 $2,387 $(2,038)
======== ======== ======== ========
Denominator:
Weighted average common
shares outstanding 15,146 13,249 14,838 13,116
Add: Effect of assumed
exercise of options and
vesting of restricted stock 1,076 849 1,141 -
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 16,222 14,098 15,979 13,116
======== ======== ======== ========
Diluted net income (loss) per
common share $0.05 $0.12 $0.15 $(0.16)
======== ======== ======== ========
(a) All outstanding 7% convertible subordinated debentures had
been converted into Common Stock as of December 31, 2004.
For the three months and nine months ended September 30, 2005,
shares of common stock issuable upon the conversion of outstanding
convertible preferred stock and convertible subordinated
debentures 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 for the quarterly and
year-to-date periods used to calculate diluted net income per
share include the effect of the assumed exercise of 1,753 and
1,978, respectively, of in-the-money stock options outstanding
throughout each respective period together with the dilutive
effect of those in-the-money stock options that were canceled or
exercised in each period, prorated for the period of time they
remained outstanding. Pursuant to the treasury-stock method, the
assumed exercise of these options resulted in the inclusion of a
net 1,076 and 1,141 diluted shares of common stock, respectively.
At September 30, 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 and nine months ended September 30, 2004, shares of
common stock issuable upon the conversion of convertible preferred
stock and convertible subordinated debentures were excluded from
the calculation of diluted net income (loss) per share because
their effects would have been anti-dilutive; that is, they would
have increased net income per share or reduced net loss per share
available to common stockholders. In-the-money stock options were
included for the three months ended September 30, 2004, but were
excluded for the nine-month period then ended.
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