3D Systems Posts Record Fourth Quarter Earnings Showing 129% Gain
17 February 2000
3D Systems Posts Record Fourth Quarter Earnings Showing 129% Gain; First Full Quarter Under New Executive Management
VALENCIA, Calif.--Feb. 16, 2000--3D Systems Corp. today reported earnings of $1.9 million, or 16 cents per fully diluted share, for the fourth quarter ended December 31, 1999, representing a 129% gain from the previous year's fourth-quarter net income of 7 cents per share.The results incorporate transition expenses and reorganization costs totaling $0.9 million (pre-tax) associated with the company's new operating plan announced last November. This plan, implemented by the company's new executive management team, is designed to stabilize the company, control expenses and grow the business.
Fourth quarter 1999 revenues hit an all-time high of $28.9 million, compared with $27.3 million for the like period one year ago.
For the year ended December 31, 1999, the company posted a loss of $5.3 million, or 47 cents per share, compared with net income of $2.1 million, or 18 cents per share, in 1998. Revenues for 1999 totaled $96.9 million, compared with $98.1 million in the prior year.
"After a lackluster three quarters, the company's executive management team implemented a new operating and restructuring plan to revive the company's performance and generate momentum," stated Brian Service, president and chief executive officer. "The fourth quarter results reflect the beneficial effects of our efforts to restructure and stabilize the company. Our primary focus moving forward is growth."
"Large-frame SLA(TM) system sales were strong, and improved gross profit margins," Service continued. "We also experienced significant growth in unit sales for our ThermoJet(TM) office printer -- up 277% from the prior year's fourth quarter and 138% for the year -- which we believe signals a viable, growing market for this product line."
Total unit shipments for the fourth quarter and full-year 1999 were 98 and 303, respectively -- up from 63 and 224 for the same periods of the prior year.
"Revenues from materials climbed in the fourth quarter as a by-product of a growing installed base; a renewed focus on applications; and a strengthened relationship with our partner, Ciba Specialty Chemicals," stated Service. "We are extremely encouraged by all of these trends."
As part of the year-end review, the company is restating its financial statements for the quarter ended July 2, 1999, and related impact to the nine-month period ended October 1, 1999. The net impact is an additional loss of less than 3 cents per share ($0.3 million) compared with the 32-cent loss previously reported, and relates to revenue timing, accrued restructuring reserves and other accruals recorded in the period. The full-year financial information contained herein includes this impact.
The balance sheet showed year-end cash and investments totaling $12.6 million, down 35% from the prior year, but up 17% from third to fourth quarter 1999 due to profitability and improvements in European collections. More effective management of finished goods and service parts stock led to a reduction in inventories of $2 million year-to-year, and $3.9 million from third to fourth quarter of 1999.
"We are vigorously pursuing new applications and markets for our products," added Chuck Hull, chief technology officer and company founder, "and as the worldwide leader and innovator in solid imaging, we feel we are well positioned to capture these opportunities."
"We believe our focus on continued cost containment, improved margins, and the development of new strategic business partnerships will further strengthen 3D Systems' position in the marketplace," concluded Service.
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 the 3D Keltool(R) process, 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. 724. For investor information, call the company's shareholder communications service at 800/757-1799.
Except for the historical information contained in this news release, the matters discussed include forward-looking statements that involve risks and uncertainties including: the ability of the company to successfully implement and carry out its new strategic operating plan, and the success of that plan, 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, industry-wide domestic and international economic conditions, and other risks detailed in the company's Securities and Exchange Commission reports on Form 10-K for the year ended December 31, 1998, and reports on Form 10-Q filed by the company with the SEC during the prior fiscal year.
Note to editors: 3D Systems, SLA and ThermoJet are trademarks, and 3D Keltool and the 3D logo are registered trademarks of 3D Systems.
3D SYSTEMS CORPORATION
Consolidated Statements of Operations
For the Three-Month Periods and Years Ended
December 31, 1999 and 1998
(in thousands except earnings per share)
For the Three-Month
Periods Ended For the Year Ended
1999 1998 1999 1998
Sales:
Products $21,057 $19,527 $66,806 $65,434
Services 7,848 7,739 30,143 32,683
Total sales 28,905 27,266 96,949 98,117
Cost of sales:
Products 10,355 9,520 35,938 33,477
Services 5,664 5,391 20,975 22,062
Total cost of sales 16,019 14,911 56,913 55,539
Gross profit 12,886 12,355 40,036 42,578
Operating expenses:
Selling, general and
administrative 7,961 8,771 35,273 30,448
Research and development 2,040 2,598 8,931 9,425
Other -- -- 3,384 --
Total operating expenses 10,001 11,369 47,588 39,873
Income (loss) from operations 2,885 986 (7,552) 2,705
Other income 10 300 415 949
Other expense (193) (154) (404) (467)
Income (loss) before
provision for income taxes 2,702 1,132 (7,541) 3,187
Provision for income taxes
(benefit) 792 357 (2,240) 1,055
Net income (loss) $ 1,910 $ 775 $(5,301) $ 2,132
Shares used to calculate
basic net income (loss)
per share 11,420 11,388 11,376 11,348
Basic net income (loss)
per share $ 0.17 $ 0.07 $ (0.47) $ 0.19
Shares used to calculate
diluted net income (loss)
per share 11,710 11,510 11,376 11,594
Diluted net income (loss)
per share $ 0.16 $ 0.07 $ (0.47) $ 0.18
3D SYSTEMS CORPORATION
Consolidated Balance Sheets
(in thousands)
December 31,
ASSETS 1999 1998
Current assets:
Cash and cash equivalents $ 12,553 $ 15,912
Short-term investments -- 3,485
Accounts receivable, less allowances
for doubtful accounts of $2,912 (1999)
and $944 (1998) 26,772 24,487
Current portion of lease receivables 607 2,069
Inventories 8,786 10,829
Deferred tax assets 2,355 2,063
Prepaid expenses and other current assets 2,028 1,916
Total current assets 53,101 60,761
Property and equipment, net 16,245 16,327
Licenses and patent costs, net 9,135 5,121
Deferred tax assets 7,658 5,070
Lease receivables, less current portion 2,436 5,802
Other assets 2,083 2,022
$ 90,658 $ 95,103
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,838 $ 4,850
Accrued liabilities 8,741 8,162
Current portion of long-term debt 110 100
Customer deposits 345 330
Deferred revenues 6,848 9,014
Total current liabilities 21,882 22,456
Other liabilities 4,673 1,485
Long-term debt, less current portion 4,495 4,605
31,050 28,546
Stockholders' equity:
Preferred stock, authorized 5,000
shares, none issued
Common stock, authorized 25,000 shares,
issued 11,658 and outstanding 11,433
(1999) and issued 11,614 and outstanding
11,389 (1998) 12 12
Capital in excess of par value 75,064 74,834
Notes receivable from officers (240) (360)
Accumulated deficit (12,067) (6,765)
Cumulative translation adjustment (1,621) 376
Treasury stock, at cost, 225 shares
(1999 and 1998) (1,540) (1,540)
Total stockholders' equity 59,608 66,557
$ 90,658 $ 95,103