3D Systems Reports Second Quarter Operating Results.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.--(BUSINESS WIRE)--July 22, 1999-- 3D Systems Corp. (Nasdaq NMS See NetWare Management System. : TDSC TDSC Thai Development Support Committee TDSC Time Domain Signal Coding TDSC Test Driver System - Charlie TDSC Time-Domain Spreading Code ) Thursday reported a net loss of $3.7 million, or 32 cents a share, for the second quarter ended July 2, which included non-recurring charges of $2.7 million, on revenue of $22 million. Without these non-recurring charges, the company would have reported a net loss of $1.7 million, or 15 cents a share. Last year, the company reported second quarter net income of $.5 million, or 4 cents a share, on revenue of $24.7 million. The non-recurring charges included in this year's second quarter related primarily to corporate 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). and previously announced management changes, the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of certain impaired assets Impaired Asset An asset with a market value that is worth less than its book value. Notes: If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair and idle facilities, and 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. and settlement costs. For the first six months of this year, the company posted a net loss of $5.9 million, or 52 cents a share, on revenue of $44.7 million. This compares to net income of $.9 million, equal to 8 cents a share, on revenue of $47.5 million a year ago. Arthur B. Sims, chairman and chief executive officer, stated: "3D Systems continues to confront challenging sales conditions in its domestic market. We are, however, encouraged by performance internationally. Both in Europe and Asia Pacific, quarterly product sales increased significantly, both sequentially and year-over-year." Gross Profit, Product Mix Sims indicated that total unit shipments rose substantially in the second quarter, owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de strong sales of the new ThermoJet(tm) 3D printer, which continues to gain market acceptance. However, he said overall gross profit was adversely impacted by product-mix issues, specifically a downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in shipments of the company's large-frame solid-imaging systems. "We are seeing indications of a product transition dilemma. The introduction earlier in the year of 3D Systems' flagship 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. (tm) 7000 has resulted in disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. of the order flow for our large-frame systems as customers pause to evaluate their hardware requirements," Sims stated. "We view this as a short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. occurrence and expect product-mix ratios to normalize normalize to convert a set of data by, for example, converting them to logarithms or reciprocals so that their previous non-normal distribution is converted to a normal one. moving forward. "The slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in large-frame units constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. service revenue and gross profit as well, by resulting in lower training and service revenue," he indicated. Operating Expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. Improvement Sims stated that, excluding special items, 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. were reduced by approximately $1.9 million from 1999's first quarter, which included significant sales and marketing costs for the launch of new products. He also indicated that the company continues to seek economies across the board. Balance Sheet With respect to the company balance sheet, 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 increased reflecting the higher percentage of sales to European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. customers, who traditionally have a longer payment cycle, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Sims. He continued: "Inventory levels increased due to lower than anticipated sales, which also has contributed to a decline in deferred revenue for maintenance and training. 3D Systems' cash balance, while still strong, reflects greater expenditures for operating the business, including trade accounts receivable and inventory." Outlook The company reported that 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. exiting the second quarter climbed solidly on a sequential basis. According to Sims, "We have recently launched a series of programs to stimulate demand for larger machines. These include attractive trade-in options for customers turning in SLA 500s for the flagship SLA 7000, as well as sales incentives Noun 1. sales incentive - remuneration offered to a salesperson for exceeding some predetermined sales goal bonus, incentive - an additional payment (or other remuneration) to employees as a means of increasing output on transitions from our entry-level SLA 250 to bigger systems. New sales prospecting programs are also expected to contribute to higher productivity. "The ThermoJet printer business has demonstrated real progress. In the first half of this year alone, 3D Systems shipped more office printers than in all of 1998," he said. "As well, we have introduced a number of new service options for customers -- part of a global customer support initiative -- that we expect to gain strength in this year's second half." About 3D Systems 3D Systems provides solid imaging products and services that allow users to move quickly from three-dimensional designs to finished parts, at a significantly lower cost and higher quality than more traditional methods. The company's systems utilize patented technologies, which fabricate solid objects from digital input. These processes offer significant competitive advantages by substantially reducing the time and cost required to design, develop, and manufacture products. The company also licenses 3D Keltool(R), a commercially proven moldmaking solution that produces prototype, bridge, and production tooling inserts. Based in Valencia, 3D Systems was founded in 1986 and is recognized as the world technology and market leader in solid imaging. For additional information, visit the company's Web site at www.3dsystems.com or phone 888/337-9786, ext. 711. For investor information, call the company's shareholder communications service at 800/757-1799. Note to editors: 3D Systems and SLA are trademarks, and 3D Keltool and the 3D logo are registered trademarks, of 3D Systems. Except for the historical information contained in this news release, the matters discussed include 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. that involve risks and uncertainties including the availability and acceptance of new products, the impact of competitive products and pricing, the ability of the company to continue to contain expenses, dependence on key personnel, industrywide in·dus·try·wide adv. & adj. Throughout an entire industry: sales that have decreased industrywide; industrywide cooperation. domestic and international economic conditions, and other risks detailed in the company's Securities and Exchange Commission report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 1998. -0-
3D SYSTEMS CORPORATION
Consolidated Statements of Operations
(Unaudited)
For the Three-Month For the Six-Month
Periods Ended Periods Ended
June 26, July 2, June 26, July 2,
1998 1999 1998 1999
Sales:
Products $16,715,008 $14,757,079 $31,242,357 $30,035,115
Services 7,957,544 7,255,901 16,266,552 14,661,557
Total sales 24,672,552 22,012,980 47,508,909 44,696,672
Cost of sales:
Products 8,436,977 8,614,677 16,328,577 17,149,657
Services 5,484,087 5,019,259 11,039,896 9,974,289
Total cost
of sales 13,921,064 13,633,936 27,368,473 27,123,946
Gross profit 10,751,488 8,379,044 20,140,436 17,572,726
Operating expenses:
Selling, general and
administrative 7,480,037 8,331,440 14,118,569 18,561,509
Research and
development 2,568,411 2,432,463 4,880,045 4,875,387
Other 2,700,000 2,700,000
Total operating
expenses 10,048,448 13,463,903 18,998,614 26,136,896
Income (loss) from
operations 703,040 (5,084,859) 1,141,822 (8,564,170)
Other income 205,757 85,819 384,642 263,177
Other expense (100,128) (82,925) (172,583) (133,733)
Income (loss)
before provision
for income taxes 808,669 (5,081,965) 1,353,881 (8,434,726)
Provision for
income taxes
(benefit) 283,034 (1,422,949) 473,858 (2,495,829)
Net income (loss) $ 525,635 $(3,659,016) $ 880,023 $(5,938,897)
Weighted average
shares
outstanding 11,347,277 11,405,789 11,318,001 11,397,775
Net income (loss)
per common share $ 0.05 $ (0.32) $ 0.08 $ (0.52)
Weighted average
shares outstanding
and dilutive
shares 11,756,144 11,405,789 11,726,868 11,397,775
Net income (loss)
per common share
assuming dilution $ 0.04 $ (0.32) $ 0.08 $ (0.52)
3D SYSTEMS CORPORATION
Consolidated Balance Sheets
(Unaudited)
ASSETS December 31, 1998 July 2, 1999
Current assets:
Cash and cash equivalents $ 15,911,793 $ 8,831,686
Short-term investments 3,484,641 2,000,000
Accounts receivable, less
allowances for doubtful
accounts of $944,144 (1998)
and $1,376,883 (1999) 24,486,730 25,956,575
Current portion of
lease receivables 2,069,126 1,090,310
Inventories 10,829,346 13,012,133
Deferred tax assets 2,063,163 2,063,163
Prepaid expenses and
other current assets 1,916,149 2,450,285
Total current assets 60,760,948 55,404,152
Property and equipment, net 16,327,078 15,133,764
Licenses and patent costs, net 5,120,672 9,423,057
Deferred tax assets 5,069,796 6,369,796
Lease receivables, less
current portion 5,801,788 2,158,062
Other assets 2,022,316 1,760,251
$ 95,102,598 $ 90,249,082
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,849,905 $ 5,245,722
Accrued liabilities 8,161,684 8,773,130
Current portion of long-term debt 100,000 105,000
Customer deposits 330,162 471,563
Deferred revenues 9,013,559 7,574,636
Total current liabilities 22,455,310 22,170,051
Other liabilities 1,485,378 4,562,925
Long-term debt, less
current portion 4,605,000 4,550,000
28,545,688 31,282,976
Stockholders' equity:
Preferred stock, $.001 par value.
Authorized 5,000,000 shares;
none issued
Common stock, $.001 par value.
Authorized 25,000,000 shares;
issued 11,614,317 and
outstanding 11,389,317 (1998)
and issued 11,637,065 and
outstanding 11,412,065 (1999) 11,614 11,637
Capital in excess of par value 74,834,225 74,932,464
Notes receivable from officers (360,000) (300,000)
Accumulated deficit (6,765,447) (12,704,344)
Accumulated other comprehensive
income (loss) 376,459 (1,433,710)
Treasury stock, at cost,
225,000 shares (1998) and
225,000 shares (1999) (1,539,941) (1,539,941)
Total stockholders' equity 66,556,910 58,966,106
$ 95,102,598 $ 90,249,082
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