3D Systems Reports Fourth Quarter and Full Year 2023 Financial Results (Unaudited)
- Revenue for Q4 2023 decreased by 13.5% to $114,848 compared to Q4 2022, with gross profit margin at 40.4%. Net loss was $300,412, primarily due to impairment charges. Adjusted EBITDA decreased to a loss of $12,260.
- Full-year 2023 revenue of $488,069 decreased by 9.3% compared to 2022. Gross profit margin improved to 40.7%. Net loss increased to $370,432, driven by impairment charges. Adjusted EBITDA decreased to a loss of $24,525.
- The company repurchased $135,130 of Convertible Senior Notes in December 2023, reducing outstanding debt by nearly 30%. Cash and cash equivalents of $331,525 position the company well for restructuring and growth investments.
- 3D Systems aims to balance short-term profitability with essential R&D investments in 2024. The company expects relatively flat revenue growth due to economic uncertainties but remains optimistic about growth opportunities in the future.
- The company's 2024 financial guidance includes revenue of $475-$505 million, Non-GAAP Gross Profit Margin of 42%-44%, Non-GAAP Operating Expense of $223-$238 million, and aims for break-even or better Adjusted EBITDA.
- 3D Systems will delay filing its Form 10-K for 2023 due to additional time required for financial reporting close procedures.
- Revenue declines in both Q4 and full year 2023 due to softness in dental orthodontics and depressed printer sales.
- Significant increase in net loss in 2023, primarily driven by impairment charges.
- Adjusted EBITDA decreased in both Q4 and full year 2023, indicating financial challenges.
- Delay in filing Form 10-K for 2023 may raise concerns among investors about transparency and financial reporting accuracy.
Insights
An examination of 3D Systems Corporation's financials reveals a decline in revenue by 13.5% for Q4 and 9.3% for the full year, which can be attributed to a contraction in the dental orthodontics market and a slowdown in printer sales. The net loss has widened significantly, primarily due to non-cash impairments. However, it's worth noting the company's proactive debt management, as evidenced by the repurchase of Convertible Senior Notes at a discount, which reduced debt by nearly 30%. This indicates a strategic approach to capital structure optimization and could be seen as a positive by investors concerned with balance sheet strength.
The increase in both GAAP and non-GAAP gross profit margins, despite lower volumes, suggests that the company's cost control and efficiency measures are bearing fruit. However, investors should be cautious as the Adjusted EBITDA has turned negative, reflecting operational challenges. The company's guidance for 2024 with an expected revenue of $475 - $505 million and a break-even Adjusted EBITDA implies a cautious outlook, potentially due to ongoing macroeconomic uncertainty. This guidance will be critical for investors to monitor as it suggests a stabilization of the company's financial performance.
The 3D printing industry is highly sensitive to economic cycles, as seen in the macroeconomic headwinds impacting 3D Systems' performance. The company's restructuring initiatives, aimed at cost reduction and efficiency improvement, are a response to these challenges and may position the company for better profitability in the long term. However, the short-term impact on revenues, particularly in the dental orthodontics segment, indicates a vulnerability to market demand fluctuations.
3D Systems' diversified technology platforms across metals, polymers and biologics and its investments in Regenerative Medicine, suggest a long-term strategy focused on innovation and market differentiation. The company's emphasis on growth investments despite economic uncertainty reflects a commitment to maintaining a competitive edge, which could pay off as the market for additive manufacturing matures and expands.
The financial results of 3D Systems underscore the broader economic narrative of reduced capital expenditure in uncertain times. The company's significant net loss, driven by impairment charges, indicates a recalibration of asset values in response to market conditions. This could be seen as an alignment with the conservative investment behavior observed across industries during periods of economic volatility.
Moreover, the company's strategic decision to repurchase debt at a discount reflects a broader trend of corporations taking advantage of market conditions to optimize their debt portfolio. The cash and cash equivalents position of over $300 million provides the company with a buffer to navigate short-term economic turbulence while continuing to fund strategic initiatives. The company's outlook for 2024, with flat revenue expectations, mirrors the cautious sentiment prevalent in many sectors facing geopolitical and economic uncertainties.
ROCK HILL, S.C., Feb. 27, 2024 (GLOBE NEWSWIRE) -- 3D Systems Corporation (NYSE:DDD) announced today its financial results for the fourth quarter and full year ended December 31, 2023.
Fourth Quarter Financial Results (Unaudited)
(All numbers are unaudited and are presented in thousands, except per share amounts or otherwise noted)
- Q4 2023 revenue of
$114,848 decreased13.5% compared to Q4 2022 due to significant softness in dental orthodontics and depressed printer sales from delayed customer capex investments - Q4 2023 gross profit margin of
40.4% and Non-GAAP gross profit margin(1) of41.9% . Non-GAAP gross profit margin represents an increase from prior year primarily driven by product mix - Q4 2023 Net loss of
$300,412 , diluted loss per share of$2.30 , primarily driven by the non-cash impairment of goodwill and other intangible assets, and Non-GAAP diluted loss per share(1) was$0.11 - Q4 2023 Adjusted EBITDA(1) decreased by
$7,452 t o a loss of$12,260 , primarily driven by lower revenue and an increase in operating expenses associated with investments in Regenerative Medicine and a short-term increase in consulting and outside services expenses
Full Year 2023 Financial Results (Unaudited)
(All numbers are unaudited and are presented in thousands, except per share amounts or otherwise noted)
- 2023 revenue of
$488,069 decreased9.3% compared to 2022 revenue of$538,031 , primarily driven by the exceptional softness in dental orthodontics and slower printer hardware sales - 2023 gross profit margin of
40.7% increased from 2022 gross profit margin of39.8% . 2023 Non-GAAP gross profit margin(1) of41.1% increased from 2022 Non-GAAP gross profit margin of39.8% , primarily driven by improved operational efficiencies and favorable mix - 2023 net loss of
$370,432 , diluted loss per share of$2.85 , primarily driven in large part by the non-cash impairment of goodwill and other intangible assets, and Non-GAAP diluted loss per share(1) was$0.26 - 2023 Adjusted EBITDA(1) decreased by
$18,744 t o a loss of$24,525 , primarily driven by lower revenue and an increase in operating expenses associated with investments in Regenerative Medicine and an increase in consulting and outside services expenses - In December 2023, the company repurchased
$135,130 of its Convertible Senior Notes ("Convertible Notes") for$100,614 including transaction expenses, opportunistically reducing its outstanding debt by nearly30% at a substantial discount to par-value - Cash and cash equivalents of
$331,525 position the company well for support of restructuring and efficiency initiatives, as well as continuity in key growth investments
| Unaudited | Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
| (in thousands, expect per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue | $ | 114,848 | $ | 132,732 | $ | 488,069 | $ | 538,031 | ||||||||
| Gross profit margin | $ | 46,348 | $ | 54,630 | $ | 198,812 | $ | 214,233 | ||||||||
| Operating loss | $ | (335,594 | ) | $ | (28,044 | ) | $ | (414,303 | ) | $ | (117,019 | ) | ||||
| Net loss attributable to 3D Systems Corporation | $ | (300,412 | ) | $ | (25,553 | ) | $ | (370,432 | ) | $ | (122,711 | ) | ||||
| Diluted loss per share | $ | (2.30 | ) | $ | (0.20 | ) | $ | (2.85 | ) | $ | (0.96 | ) | ||||
| Non-GAAP measures for year-over-year comparisons (1) | ||||||||||||||||
| Non-GAAP gross profit margin | 41.9 | % | 40.9 | % | 41.1 | % | 39.8 | % | ||||||||
| Adjusted EBITDA | $ | (12,260 | ) | $ | (4,808 | ) | $ | (24,525 | ) | $ | (5,781 | ) | ||||
| Non-GAAP diluted loss per share | $ | (0.11 | ) | $ | (0.06 | ) | $ | (0.26 | ) | $ | (0.23 | ) | ||||
(1) See “Presentation of Information in this Press Release” below for a description, and the Appendix for the reconciliation of non-GAAP measurements to the most closely comparable GAAP measure.
Summary Comments on Results
Commenting on 2023 results and the outlook for 2024, Dr. Jeffrey Graves, president and CEO of 3D Systems said, “Our fourth quarter revenue results reflect the significant headwinds created by ongoing macroeconomic and geopolitical volatility. As we exited the third quarter, we had expected some of these broader pressures to moderate through year-end, as historical seasonality of increased consumption and year-end customer capex spending would typically translate to an acceleration of revenues in the fourth quarter. While customer-driven pre-sales activities did accelerate as expected in the quarter, the same cannot be said for revenue. Fortunately, based upon customer feedback, we view this as a market timing issue rather than any permanent trend in customer adoption rates for additive manufacturing, or a loss of market share for 3D Systems.”
“Reflecting on 2023 in its entirety, the most influential driver to our revenue performance was our dental orthodontic product line, with revenues declining
“It is important to note that we are different from others in the additive manufacturing industry in that we have the broadest range of technology platforms, which we bring to market through two focused business units, Healthcare and Industrial Solutions. These platforms span metals, polymers and biologics, and, by necessity, require deep expertise in hardware, software and materials development. This technology foundation, in which we have been heavily investing for the last two years, along with industry-leading operational scale and an outstanding global reach, give us an ability to continue taking cost out of our business while preserving the critical investments needed to support the exciting growth opportunities we see ahead. Our goal is to balance short-term profitability and cash performance in 2024, with the need to ensure continuity in essential R&D investments for growth. This balance is critical for two reasons. First, risks remain in the world economic outlook, which could continue to impact sales in the short term. However, offsetting this pressure are a number of very targeted key-customer applications we expect to bring to market over the next 12-18 months. Fortunately, to execute these restructuring and investment plans, we have a strong balance sheet with over
Dr. Graves concluded, “Given the continuing risks we see to the world economy, we expect moderating but continued sales pressures, which we are translating into relatively flat top line revenue expectations for the year. Given this, we will prioritize completion of our previously announced restructuring program, which includes headcount reductions, significant site consolidations and a reduction in external spending. We believe these efforts, which will largely be completed by mid-year, will favorably impact both COGS and OPEX, further improve gross margins, and deliver positive adjusted-EBITDA performance and operating cash flow for the full year. In parallel, we will continue our most important development programs that are now, after over two years of increased R&D investment, beginning to yield exciting results. We expect these new additive solutions to materially change the way products are designed and manufactured and healthcare is delivered. We believe the path forward is very clear. In the short term, we will manage our costs to deliver improving margins and cash performance in the face of economic uncertainty. As these clouds then lift, the opportunities for growth in our industry remain incredibly bright. We believe that this focus on our strategic initiatives will harmonize the ability to deliver sustainable profitability this year, while preserving the exceptional opportunities we have to deliver long-term shareholder value in the years ahead.”
Summary of Fourth Quarter Results (Unaudited)
Revenue for the fourth quarter of 2023 decreased
Healthcare Solutions revenue decreased
Industrial Solutions revenue decreased
Gross profit margin for the fourth quarter of 2023 was
Net loss attributable to 3D Systems Corporation increased by
Adjusted EBITDA decreased by
Summary of Full-Year 2023 Results (Unaudited)
Revenue for 2023 of
Healthcare Solutions revenue decreased
Industrial Solutions revenue decreased
Gross profit margin for the full year 2023 was
Net loss attributable to 3D Systems Corporation for the full year 2023 increased by
Adjusted EBITDA decreased by
2024 Outlook
The company is providing full-year 2024 financial guidance as follows:
| Revenue: | |
| Non-GAAP Gross Profit Margin: | |
| Non-GAAP Operating Expense: | |
| Adjusted EBITDA: | Break even or better |
Financial Liquidity (Unaudited)
At December 31, 2023, cash and cash equivalents and short-term investments totaled
Status of Audit; Delayed Form 10-K Filing
The unaudited financial data above remains subject to audit as the company continues its close process. Accordingly, actual results may differ from the anticipated results shown above.
3D Systems will delay the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and file a Form 12b-25, Notification of Late Filing, with the Securities and Exchange Commission, which extends the deadline to file the Form 10-K. The delay in filing is primarily due to additional time required by the company to complete its financial reporting close procedures. It has no impact on the company's operations or on its ability to discuss its anticipated 2023 results and 2024 outlook.
Q4 and FY 2023 Conference Call and Webcast
The company will host a conference call and simultaneous webcast to discuss these results on February 28, 2024, which may be accessed as follows:
Date: Wednesday, February 28, 2024
Time: 8:30 a.m. Eastern Time
Listen via webcast: www.3dsystems.com/investor
Participate via telephone: 201-689-8345
A replay of the webcast will be available approximately two hours after the live presentation at www.3dsystems.com/investor.
Forward-Looking Statements
Certain statements made in this release that are not statements of historical or current facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. In many cases, forward looking statements can be identified by terms such as “believes,” “belief,” “expects,” “may,” “will,” “estimates,” “intends,” “anticipates” or “plans” or the negative of these terms or other comparable terminology. Forward-looking statements are based upon management’s beliefs, assumptions and current expectations and may include comments as to the company’s beliefs and expectations as to future events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside the control of the company. The factors described under the headings “Forward-Looking Statements” and “Risk Factors” in the company’s periodic filings with the Securities and Exchange Commission, as well as other factors, could cause actual results to differ materially from those reflected or predicted in forward-looking statements. Although management believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at which such performance or results will be achieved. The forward-looking statements included are made only as the date of the statement. 3D Systems undertakes no obligation to update or revise any forward-looking statements made by management or on its behalf, whether as a result of future developments, subsequent events or circumstances or otherwise, except as required by law.
Presentation of Information in this Press Release
3D Systems reports its financial results in accordance with GAAP. Management also reviews and reports certain non-GAAP measures, including: non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP diluted income (loss) per share, and Adjusted EBITDA. These non-GAAP measures exclude certain items that management does not view as part of 3D Systems’ core results as they may be highly variable, may be unusual or infrequent, are difficult to predict and can distort underlying business trends and results. Management believes that the non-GAAP measures provide useful additional insight into underlying business trends and results and provide meaningful information regarding the comparison of period-over-period results. Additionally, management uses the non-GAAP measures for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets. 3D Systems’ non-GAAP measures are not calculated in accordance with or as required by GAAP and may not be calculated in the same manner as similarly titled measures used by other companies. These non-GAAP measures should thus be considered as supplemental in nature and not considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP.
To calculate the non-GAAP measures, 3D Systems excludes the impact of the following items:
- amortization of intangible assets, a non-cash expense, as 3D Systems’ intangible assets were primarily acquired in connection with business combinations;
- costs incurred in connection with acquisitions and divestitures, such as legal, consulting and advisory fees;
- stock-based compensation expenses, a non-cash expense;
- charges related to restructuring and cost optimization plans, impairment charges, including goodwill, and divestiture gains or losses;
- certain compensation expense related to the 2021 Volumetric acquisition; and
- costs, including legal fees, related to significant or unusual litigation matters.
Amortization of intangibles and acquisition and divestiture-related costs are excluded from non-GAAP measures as the timing and magnitude of business combination transactions are not predictable, can vary significantly from period to period and the purchase price allocated to amortizable intangible assets and the related amortization period are unique to each acquisition. Amortization of intangible assets will recur in future periods until such intangible assets have been fully amortized. While intangible assets contribute to the company’s revenue generation, the amortization of intangible assets does not directly relate to the sale of the company’s products or services. Additionally, intangible assets amortization expense typically fluctuates based on the size and timing of the company’s acquisition activity. Accordingly, the company believes excluding the amortization of intangible assets enhances the company’s and investors’ ability to compare the company’s past financial performance with its current performance and to analyze underlying business performance and trends. Although stock-based compensation is a key incentive offered to certain of our employees, the expense is non-cash in nature, and we continue to evaluate our business performance excluding stock-based compensation; therefore, it is excluded from non-GAAP measures. Stock-based compensation expenses will recur in future periods. Charges related to restructuring and cost optimization plans, impairment charges, including goodwill, divestiture gains or losses, and the costs, including legal fees, related to significant or unusual litigation matters are excluded from non-GAAP measures as the frequency and magnitude of these activities may vary widely from period to period. Additionally, impairment charges, including goodwill, are non-cash. Furthermore, the company believes the costs, including legal fees, related to significant or unusual litigation matters are not indicative of our core business' operations. Finally, 3D Systems excludes contingent consideration recorded as compensation expense related to the 2021 Volumetric acquisition from non-GAAP measures as management evaluates financial performance excluding this expense, which is viewed by management as similar to acquisition consideration.
The matters discussed above are tax effected, as applicable, in calculating non-GAAP diluted income (loss) per share.
Adjusted EBITDA, defined as net income, plus income tax (provision) benefit, interest and other income (expense), net, stock-based compensation expense, amortization of intangible assets, depreciation expense, and other non-GAAP adjustments, all as described above, is used by management to evaluate performance and helps measure financial performance period-over-period.
A reconciliation of GAAP to non-GAAP financial measures is provided in the accompanying schedules.
3D Systems does not provide forward-looking guidance for certain measures on a GAAP basis. The company is unable to provide a quantitative reconciliation of forward-looking non-GAAP gross profit margin, Adjusted EBITDA, and non-GAAP operating expense to the most directly comparable forward-looking GAAP measures without unreasonable effort because certain items, including litigation costs, acquisition expenses, stock-based compensation expense, intangible assets amortization expense, restructuring expenses, and goodwill impairment charges are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially.
About 3D Systems
More than 35 years ago, 3D Systems brought the innovation of 3D printing to the manufacturing industry. Today, as the leading additive manufacturing solutions partner, we bring innovation, performance, and reliability to every interaction - empowering our customers to create products and business models never before possible. Thanks to our unique offering of hardware, software, materials and services, each application-specific solution is powered by the expertise of our application engineers who collaborate with customers to transform how they deliver their products and services. 3D Systems’ solutions address a variety of advanced applications in Healthcare and Industrial Solutions markets such as medical and dental, aerospace & defense, automotive and durable goods. More information on the company is available at www.3dsystems.com
Tables Follow
| 3D Systems Corporation Unaudited Consolidated Balance Sheets December 31, 2023 and December 31, 2022 | |||||||
| (in thousands, except par value) | December 31, 2023 | December 31, 2022 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 331,525 | $ | 388,134 | |||
| Short-term investments | — | 180,603 | |||||
| Accounts receivable, net of reserves — | 102,104 | 93,886 | |||||
| Inventories | 152,412 | 137,832 | |||||
| Prepaid expenses and other current assets | 36,701 | 33,790 | |||||
| Total current assets | 622,742 | 834,245 | |||||
| Property and equipment, net | 64,461 | 58,072 | |||||
| Intangible assets, net | 62,724 | 90,230 | |||||
| Goodwill | 107,200 | 385,312 | |||||
| Operating lease right-of-use assets | 58,406 | 39,502 | |||||
| Finance lease right-of-use assets | 12,174 | 3,244 | |||||
| Long-term deferred income tax assets | 4,230 | 7,038 | |||||
| Other assets | 48,251 | 28,970 | |||||
| Total assets | $ | 980,188 | $ | 1,446,613 | |||
| LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY | |||||||
| Current liabilities: | |||||||
| Current operating lease liabilities | $ | 9,924 | $ | 8,343 | |||
| Accounts payable | 49,757 | 53,826 | |||||
| Accrued and other liabilities | 46,631 | 56,264 | |||||
| Customer deposits | 8,206 | 6,911 | |||||
| Deferred revenue | 30,448 | 26,464 | |||||
| Total current liabilities | 144,966 | 151,808 | |||||
| Long-term debt, net of deferred financing costs | 319,356 | 449,510 | |||||
| Long-term operating lease liabilities | 56,795 | 38,499 | |||||
| Long-term deferred income tax liabilities | 5,162 | 7,631 | |||||
| Other liabilities | 33,399 | 47,461 | |||||
| Total liabilities | 559,678 | 694,909 | |||||
| Commitments and contingencies (Note 23) | |||||||
| Redeemable non-controlling interest | 2,006 | 1,760 | |||||
| Stockholders’ equity: | |||||||
| Common stock, | 134 | 131 | |||||
| Additional paid-in capital | 1,577,382 | 1,547,597 | |||||
| Accumulated deficit | (1,114,394 | ) | (743,962 | ) | |||
| Accumulated other comprehensive loss | (44,618 | ) | (53,822 | ) | |||
| Total stockholders’ equity | 418,504 | 749,944 | |||||
| Total liabilities, redeemable non-controlling interest and stockholders’ equity | $ | 980,188 | $ | 1,446,613 | |||
| 3D Systems Corporation Unaudited Consolidated Statements of Operations Year Ended December 31, 2023, 2022 and 2021 | |||||||||||
| Year Ended December 31, | |||||||||||
| (in thousands, except per share amounts) | 2023 | 2022 | 2021 | ||||||||
| Revenue: | |||||||||||
| Products | $ | 328,731 | $ | 395,396 | $ | 428,742 | |||||
| Services | 159,338 | 142,635 | 186,897 | ||||||||
| Total revenue | 488,069 | 538,031 | 615,639 | ||||||||
| Cost of sales: | |||||||||||
| Products | 200,616 | 237,386 | 245,169 | ||||||||
| Services | 88,641 | 86,412 | 106,692 | ||||||||
| Total cost of sales | 289,257 | 323,798 | 351,861 | ||||||||
| Gross profit | 198,812 | 214,233 | 263,778 | ||||||||
| Operating expenses: | |||||||||||
| Selling, general and administrative | 212,101 | 244,181 | 227,697 | ||||||||
| Research and development | 89,728 | 87,071 | 69,150 | ||||||||
| Impairments of goodwill and intangible assets | 311,286 | — | — | ||||||||
| Total operating expenses | 613,115 | 331,252 | 296,847 | ||||||||
| Loss from operations | (414,303 | ) | (117,019 | ) | (33,069 | ) | |||||
| Interest and other income (expense), net | 44,362 | (3,790 | ) | 352,609 | |||||||
| (Loss) income before income taxes | (369,941 | ) | (120,809 | ) | 319,540 | ||||||
| Benefit (provision) for income taxes | 526 | (2,140 | ) | 2,512 | |||||||
| Loss on equity method investment, net of income taxes | (1,282 | ) | — | — | |||||||
| Net (loss) income before redeemable non-controlling interest | (370,697 | ) | (122,949 | ) | 322,052 | ||||||
| Less: net loss attributable to redeemable non-controlling interest | (265 | ) | (238 | ) | — | ||||||
| Net (loss) income attributable to 3D Systems Corporation | $ | (370,432 | ) | $ | (122,711 | ) | $ | 322,052 | |||
| Net (loss) income per common share | |||||||||||
| Basic | $ | (2.85 | ) | $ | (0.96 | ) | $ | 2.62 | |||
| Diluted | $ | (2.85 | ) | $ | (0.96 | ) | $ | 2.55 | |||
| Weighted average shares outstanding: | |||||||||||
| Basic | 129,944 | 127,818 | 122,867 | ||||||||
| Diluted | 129,944 | 127,818 | 126,334 | ||||||||
| 3D Systems Corporation Unaudited Consolidated Statements of Operations Three Months Ended December 31, 2023, 2022 and 2021 | |||||||||||
| Three Months Ended December 31, | |||||||||||
| (in thousands, except per share amounts) | 2023 | 2022 | 2021 | ||||||||
| Revenue: | |||||||||||
| Products | $ | 74,763 | $ | 94,734 | $ | 117,572 | |||||
| Services | 40,085 | 37,998 | 33,298 | ||||||||
| Total revenue | 114,848 | 132,732 | 150,870 | ||||||||
| Cost of sales: | |||||||||||
| Products | 47,174 | 55,541 | 64,918 | ||||||||
| Services | 21,326 | 22,561 | 19,734 | ||||||||
| Total cost of sales | 68,500 | 78,102 | 84,652 | ||||||||
| Gross profit | 46,348 | 54,630 | 66,218 | ||||||||
| Operating expenses: | |||||||||||
| Selling, general and administrative | 61,478 | 58,783 | 50,897 | ||||||||
| Research and development | 22,775 | 23,891 | 19,163 | ||||||||
| Impairments of goodwill and intangible assets | 297,689 | — | — | ||||||||
| Total operating expenses | 381,942 | 82,674 | 70,060 | ||||||||
| Loss from operations | (335,594 | ) | (28,044 | ) | (3,842 | ) | |||||
| Interest and other income (expense), net | 34,671 | 1,666 | (1,787 | ) | |||||||
| Loss before income taxes | (300,923 | ) | (26,378 | ) | (5,629 | ) | |||||
| Benefit (provision) for income taxes | 930 | 771 | (571 | ) | |||||||
| Loss on equity method investment, net of income taxes | (535 | ) | — | — | |||||||
| Net loss before redeemable non-controlling interest | (300,528 | ) | (25,607 | ) | (6,200 | ) | |||||
| Less: net loss attributable to redeemable non-controlling interest | (116 | ) | (54 | ) | — | ||||||
| Net loss attributable to 3D Systems Corporation | $ | (300,412 | ) | $ | (25,553 | ) | $ | (6,200 | ) | ||
| Net loss per share available to 3D Systems Corporation common stockholders | |||||||||||
| Basic | $ | (2.30 | ) | $ | (0.20 | ) | $ | (0.05 | ) | ||
| Diluted | $ | (2.30 | ) | $ | (0.20 | ) | $ | (0.05 | ) | ||
| 3D Systems Corporation Unaudited Consolidated Statements of Cash Flows | |||||||||||
| Year Ended December 31, | |||||||||||
| (in thousands) | 2023 | 2022 | 2021 | ||||||||
| Cash flows from operating activities: | |||||||||||
| Net (loss) income before redeemable non-controlling interest | $ | (370,697 | ) | $ | (122,949 | ) | $ | 322,052 | |||
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||
| Depreciation, amortization and accretion of debt discount | 36,053 | 38,686 | 34,623 | ||||||||
| Stock-based compensation | 23,367 | 42,415 | 55,153 | ||||||||
| Loss on short-term investments | 6 | 3,146 | — | ||||||||
| Non-cash operating lease expense | 9,267 | 6,366 | 5,681 | ||||||||
| Provision for inventory obsolescence and revaluation | 6,350 | 2,586 | (2,909 | ) | |||||||
| Loss on hedge accounting de-designation and termination | — | — | 721 | ||||||||
| Provision for bad debts | 595 | 562 | 232 | ||||||||
| Loss (gain) on the disposition of businesses, property, equipment and other assets | 6 | 104 | (350,846 | ) | |||||||
| Gain on debt extinguishment | (32,181 | ) | — | — | |||||||
| Provision for deferred income taxes and reserve adjustments | (2,412 | ) | (2,518 | ) | (11,679 | ) | |||||
| Loss on equity method investment | 1,282 | — | — | ||||||||
| Impairments of assets | 313,204 | 4,095 | 1,676 | ||||||||
| Changes in operating accounts: | |||||||||||
| Accounts receivable | (6,793 | ) | 8,144 | (11,912 | ) | ||||||
| Inventories | (20,779 | ) | (51,082 | ) | 7,866 | ||||||
| Prepaid expenses and other current assets | (2,049 | ) | 8,229 | (8,106 | ) | ||||||
| Accounts payable | (5,526 | ) | (3,787 | ) | 27,159 | ||||||
| Deferred revenue and customer deposits | 1,852 | (6,947 | ) | (3,325 | ) | ||||||
| Accrued and other liabilities | (15,744 | ) | 10,702 | (12,389 | ) | ||||||
| All other operating activities | (16,472 | ) | (7,773 | ) | (5,850 | ) | |||||
| Net cash (used in) provided by operating activities | (80,671 | ) | (70,021 | ) | 48,147 | ||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | (27,183 | ) | (20,907 | ) | (18,791 | ) | |||||
| Purchases of short-term investments | — | (384,388 | ) | — | |||||||
| Sales and maturities of short-term investments | 180,925 | 200,314 | — | ||||||||
| Proceeds from sale of assets and businesses, net of cash sold | 194 | 325 | 421,485 | ||||||||
| Acquisitions and other investments, net of cash acquired | (29,152 | ) | (103,699 | ) | (139,685 | ) | |||||
| Other investing activities | — | — | (2,454 | ) | |||||||
| Net cash provided by (used in) investing activities | 124,784 | (308,355 | ) | 260,555 | |||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from borrowings | — | — | 460,000 | ||||||||
| Debt issuance costs | — | — | (13,466 | ) | |||||||
| Repayment of borrowings/long-term debt | (100,614 | ) | — | (21,392 | ) | ||||||
| Purchase of non-controlling interests | — | (2,300 | ) | (6,300 | ) | ||||||
| Taxes paid related to net-share settlement of equity awards | (5,211 | ) | (10,864 | ) | (12,619 | ) | |||||
| Other financing activities | (644 | ) | (651 | ) | (423 | ) | |||||
| Net cash (used in) provided by financing activities | (106,469 | ) | (13,815 | ) | 405,800 | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,492 | (5,804 | ) | (9,243 | ) | ||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (58,864 | ) | (397,995 | ) | 705,259 | ||||||
| Cash, cash equivalents and restricted cash at the beginning of the year a | 391,975 | 789,970 | 84,711 | ||||||||
| Cash, cash equivalents and restricted cash at the end of the year a | $ | 333,111 | $ | 391,975 | $ | 789,970 | |||||
(a)The amounts for cash and cash equivalents shown above include restricted cash of
(b) Inventory is transferred to property and equipment at cost when we require additional machines for training or demonstration or for placement into on demand manufacturing services locations
Appendix
3D Systems Corporation
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Three Months Ended December 31, 2023 and 2022.
Constant Currency Revenue (4)
| Three Months Ended December 31, | Constant Currency (1) | |||||||||||||||||
| (in thousands) | 2023 | 2022 | $ Change | % Change | FX Effect (2) | % Change (3) | ||||||||||||
| Healthcare Solutions | $ | 51,188 | $ | 60,694 | $ | (9,506 | ) | (15.7 | )% | $ | 454 | (16.4 | )% | |||||
| Industrial Solutions | 63,660 | 72,038 | (8,378 | ) | (11.6 | )% | 1,196 | (13.3 | )% | |||||||||
| Total revenue | $ | 114,848 | $ | 132,732 | $ | (17,884 | ) | (13.5 | )% | $ | 1,650 | (14.7 | )% | |||||
(1) To assist in the analysis of the Company’s revenue trends, the Company estimated the impact of foreign exchange on year-over-year revenue growth by recasting revenue for the three months ended December 31, 2023 by applying the foreign exchange rates used to translate 2022 non-US functional currency revenue to 2023 non-US functional currency revenue.
(2) Represents the estimated impact on "as reported" revenue due to changes in foreign currency exchange rates
(3) Represents the % increase or decrease in revenue excluding the estimated "FX effect"
(4)Amounts in table may not foot due to rounding
| Year Ended December 31, | Constant Currency (1) | |||||||||||||||||
| (in thousands) | 2023 | 2022 | $ Change | % Change | FX Effect (2) | % Change (3) | ||||||||||||
| Healthcare Solutions | $ | 213,216 | $ | 260,988 | $ | (47,772 | ) | (18.3 | )% | $ | 817 | (18.6 | )% | |||||
| Industrial Solutions | 274,853 | 277,043 | (2,190 | ) | (0.8 | )% | 971 | (1.1 | )% | |||||||||
| Total revenue | $ | 488,069 | $ | 538,031 | $ | (49,962 | ) | (9.3 | )% | $ | 1,788 | (9.6 | )% | |||||
(1) To assist in the analysis of the Company’s revenue trends, the Company estimated the impact of foreign exchange on year-over-year revenue growth by recasting revenue for the year ended December 31, 2023 by applying the foreign exchange rates used to translate 2022 non-US functional currency revenue to 2023 non-US functional currency revenue.
(2) Represents the estimated impact on "as reported" revenue due to changes in foreign currency exchange rates
(3) Represents the % increase or decrease in revenue excluding the estimated "FX effect"
(4)Amounts in table may not foot due to rounding
Gross Profit and Gross Profit Margin (1)
| Three Months Ended December 31, | ||||||||||||
| (in thousands) | 2023 | 2022 | ||||||||||
| Gross Profit | Gross Profit Margin (2) | Gross Profit | Gross Profit Margin (2) | |||||||||
| GAAP | $ | 46,348 | 40.4 | % | $ | 54,630 | 41.2 | % | ||||
| Amortization expense included in Cost of sales | 382 | (398 | ) | |||||||||
| Restructuring expense included in Cost of sales | 1,427 | — | ||||||||||
| Non-GAAP | $ | 48,157 | 41.9 | % | $ | 54,232 | 40.9 | % | ||||
(1)Amounts in table may not foot due to rounding
(2) Calculated as non-GAAP gross profit as a percentage of total revenue.
| Year Ended December 31, | |||||||||||
| (in thousands) | 2023 | 2022 | |||||||||
| Gross Profit | Gross Profit Margin (2) | Gross Profit | Gross Profit Margin(2) | ||||||||
| GAAP | $ | 198,812 | 40.7 | % | $ | 214,233 | 39.8 | % | |||
| Amortization expense included in Cost of sales | 506 | 14 | |||||||||
| Restructuring expense included in Cost of sales | 1,427 | — | |||||||||
| Non-GAAP | $ | 200,745 | 41.1 | % | $ | 214,247 | 39.8 | % | |||
(1)Amounts in table may not foot due to rounding
(2) Calculated as non-GAAP gross profit as a percentage of total revenue.
Appendix
3D Systems Corporation
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Three and Twelve Months Ended December 31, 2023 and 2022
Net Loss to Adjusted EBITDA (1)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Net loss attributable to 3D Systems Corporation | $ | (300,412 | ) | $ | (25,553 | ) | $ | (370,432 | ) | $ | (122,711 | ) | |||
| Interest income, net | (3,778 | ) | (2,522 | ) | (16,896 | ) | (6,541 | ) | |||||||
| (Benefit) provision for income taxes | (930 | ) | (771 | ) | (526 | ) | 2,140 | ||||||||
| Depreciation expense | 5,656 | 5,104 | 21,346 | 21,096 | |||||||||||
| Amortization expense | 2,391 | 5,207 | 12,067 | 15,480 | |||||||||||
| Stock-based compensation expense | 8,224 | 10,980 | 23,367 | 42,489 | |||||||||||
| Acquisition and divestiture-related expense | 468 | 2,978 | 600 | 12,360 | |||||||||||
| Legal expense | 3,174 | (1,418 | ) | 8,053 | 19,062 | ||||||||||
| Restructuring expense | 4,774 | 381 | 11,487 | 733 | |||||||||||
| Redeemable non-controlling interest | (116 | ) | (54 | ) | (265 | ) | (238 | ) | |||||||
| Loss (income) on equity method investment | 535 | (90 | ) | 1,282 | (90 | ) | |||||||||
| Goodwill and other assets impairment charges | 298,647 | 3 | 312,858 | 18 | |||||||||||
| Gain on repurchase of debt | (32,181 | ) | — | (32,181 | ) | — | |||||||||
| Other non-operating (income) expense | 1,288 | 947 | 4,715 | 10,421 | |||||||||||
| Adjusted EBITDA | $ | (12,260 | ) | $ | (4,808 | ) | $ | (24,525 | ) | $ | (5,781 | ) | |||
(1) Amounts in table may not foot due to rounding
Appendix
3D Systems Corporation
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Three and Twelve Months Ended December 31, 2023 and 2022
Non-GAAP Diluted Loss per Share (1)(2)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| (in dollars) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Diluted loss per share | $ | (2.30 | ) | $ | (0.20 | ) | $ | (2.85 | ) | $ | (0.96 | ) | |||
| Amortization expense | 0.02 | 0.04 | 0.09 | 0.12 | |||||||||||
| Stock-based compensation expense | 0.06 | 0.09 | 0.18 | 0.33 | |||||||||||
| Acquisition and divestiture-related expense | — | 0.02 | — | 0.10 | |||||||||||
| Legal expense | 0.02 | (0.01 | ) | 0.06 | 0.17 | ||||||||||
| Restructuring expense | 0.04 | — | 0.09 | 0.01 | |||||||||||
| Goodwill and other assets impairment charges | 2.30 | — | 2.42 | — | |||||||||||
| Gain on repurchase of debt | (0.25 | ) | — | (0.25 | ) | — | |||||||||
| Non-GAAP diluted loss per share | $ | (0.11 | ) | $ | (0.06 | ) | $ | (0.26 | ) | $ | (0.23 | ) | |||
(1)Amounts in table may not foot due to rounding
(2)Amounts in table are stated per share
FAQ
What was 3D Systems' revenue for Q4 2023?
What was the net loss for 3D Systems in Q4 2023?
What were the key reasons for the decrease in revenue for 3D Systems in 2023?
What is 3D Systems' financial guidance for full-year 2024 revenue?
Why is 3D Systems delaying the filing of its Form 10-K for 2023?
