ddd-20201105
0000910638false00009106382020-11-052020-11-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934

Date of Report (Date of earliest event reported): November 6, 2020 (November 5, 2020)

3D SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
001-34220
95-4431352
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
333 Three D Systems Circle
Rock Hill
South Carolina
29730
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: (803) 326-3900

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.001 per shareDDDNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 2.02. Results of Operations and Financial Condition.

On November 5, 2020, the Company issued a press release announcing the Company’s results of operations for the third quarter and nine months ended September 30, 2020 (the “Earnings Release”). A copy of the Earnings Release is furnished herewith as Exhibit 99.1 and is incorporated into this Item 2.02 by reference. The information in this Item 2.02 (and in the Earnings Release) shall not be deemed “filed” with the SEC for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor incorporated by reference in any registration statement filed by the Company under the Securities Act.

Item 7.01. Regulation FD Disclosure.

Included in the Earnings Release is an announcement that the Company plans to hold a conference call and webcast at 10:00 a.m., Eastern Time, Friday, November 6, 2020, to discuss its third quarter and nine months ended September 30, 2020 financial results and other matters relating to the Company’s plans and operations. A copy of this Earnings Release, which contains additional information regarding how to access the conference call and webcast and how to listen to a recorded playback of the call after it is completed, is furnished herewith as Exhibit 99.1. The slides to be presented on the webcast are furnished herewith as Exhibit 99.2 and incorporated into this Item 7.01 by reference.

The information in this Item 7.01 (including Exhibit 99.2) shall not be deemed “filed” with the SEC for purposes of the Exchange Act, nor incorporated by reference in any registration statement filed by the Company under the Securities Act.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Press Release issued by 3D Systems Corporation, dated November 5, 2020, announcing results for the third quarter and nine months ended September 30, 2020.
Investor information to be presented by 3D Systems Corporation on November 6, 2020.
104Cover Page Interactive Data File (embedded within Inline XBRL document).







SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 3D SYSTEMS CORPORATION
  
  /s/ Jagtar Narula
  (Signature)
  Name: Jagtar Narula
  
Title: Chief Financial Officer
Date: November 6, 2020

Document

EXHIBIT 99.1

3D Systems Reports
Third Quarter 2020 Financial Results



ROCK HILL, South Carolina - November 5, 2020 - 3D Systems Corporation (NYSE:DDD) announced today its financial results for the third quarter ended September 30, 2020.

Third Quarter Financial and Operational Results

Q3 2020 GAAP revenue of $135.1 million, compared to $155.3 million in Q3 2019 and $112.1 million in Q2 2020
Q3 2020 GAAP loss of $0.61 per share compared to a loss of $0.15 per share in Q3 2019; Included in the third quarter 2020 net loss was a $48.3 million ($0.41 per share) pre-tax non-cash goodwill impairment charge
Q3 2020 Non-GAAP loss of $0.03 per share compared to a loss of $0.04 per share in Q3 2019 and a loss of $0.13 per share in Q2 2020
Q3 2020 Non-GAAP operating income was break-even
$25 million of equity was issued in Q3 2020 under the company's at-the-market equity program; none is expected to be issued in Q4 2020


Quarter Ended September 30,Nine Months Ended September 30,
(in millions, expect per share data)2020201920202019
Revenue$135.1 $155.3 $381.9 $464.5 
Operating loss$(67.6)$(11.9)$(119.7)$(52.4)
Net Loss$(72.9)$(16.8)$(129.8)$(65.0)
Basic and Diluted Loss per Share$(0.61)$(0.15)$(1.12)$(0.57)
Non-GAAP measures for year-over-year comparisons (1)
Non-GAAP operating income (loss)$— $(0.3)$(15.8)$(4.4)
Non-GAAP loss$(4.1)$(4.5)$(23.7)$(15.1)
Non-GAAP Basic and Diluted Loss per Share$(0.03)$(0.04)$(0.20)$(0.13)
(1) See Appendix for reconciliation of GAAP and non-GAAP operating loss, net loss and net loss per share.


Summary Comments on Third Quarter Results

Commenting on the quarter, CEO, Dr. Jeffrey Graves, said, “While the challenges of the pandemic persist, we were pleased to deliver strong sequential quarterly growth in both our Healthcare and Industrial businesses of approximately 20%, as markets incrementally opened around the world. While volatility continues, we anticipate these trends continuing as we move forward through our fourth quarter. With our restructuring efforts on track to deliver our targeted $60 million in savings on a run-rate basis by year end, we are pleased with our progress in the quarter and believe we will exit the year a much more
efficient, highly focused additive manufacturing company that is well positioned as a market leader in this exciting industry.”

Dr. Graves continued, “From a balance sheet perspective, we have made substantial progress in our divestiture of non-core assets, and, earlier this week, were pleased to announce an agreement on the sale of our Cimatron and GibbsCAM software businesses, the focus of which is subtractive manufacturing technology. This sale, which we expect will close in the coming weeks, will strengthen our balance sheet and help ensure our ability to execute our planned restructuring activities, while maintaining critical investments for growth in our core businesses. We continue to pursue further divestitures of non-core assets to occur in the months ahead.”

Summary of Third Quarter Results

Revenue for the third quarter of 2020 decreased 13.0% compared to the same period last year and increased 20.6% compared to the second quarter of 2020. The results reflect a rebound in customer activity from the worst of the pandemic-related shutdowns. Revenue from Healthcare increased 6.1% to $59.8 million, compared to the same period last year, driven by stronger sales to the dental market. Industrial sales decreased 23.8% to $75.3 million, compared to the same period last year, as decreases were in all products, materials and services across all geographies.

Gross profit margin in the third quarter of 2020 was 43.4% compared to 43.3% in the same period last year. Non-GAAP gross profit margin was 43.5% compared to 44.4% in the same period last year. Products gross profit margin decreased primarily due to the under absorption of supply chain overhead, resulting from lower production, while services gross profit margin improved.

Operating expenses increased 59.4% to $126.2 million in the third quarter of 2020, compared to the same period a year ago. On a non-GAAP basis, operating expenses were $58.8 million, a 15.2% decrease from the third quarter of the prior year. The lower non-GAAP operating expenses reflect savings achieved from cost restructuring activities as well as reduced hiring and lower travel expenses resulting from the coronavirus pandemic.

Included in operating expenses is a $48.3 million pre-tax non-cash goodwill impairment charge. The goodwill impairment was identified in connection with an interim goodwill impairment test. The interim test was necessitated by our identification of certain impairment triggering events associated with the decline of the company’s share price ultimately due to the impact on the business environment from the COVID-19 pandemic. The impairment charge will not result in any cash expenditures and will not affect the company’s cash position, liquidity, availability or covenant test under its senior secured term loan facility and its senior secured revolving credit facility.

Financial Liquidity

At September 30, 2020, the company had cash on hand of $75.3 million, total debt of $21.7 million and a $100 million unused revolving credit facility with approximately $30.6 million of availability based on the terms of the agreement. Cash on hand has decreased $58.4 million since December 31, 2019. The uses of cash included $26.5 million for repayments of debt, $32.6 million for operations, $12.5 million for payments to purchase noncontrolling interests and $11.0 million for capital expenditures, partially offset by proceeds of $25.0 million from the issuance of common stock.

Under its at-the-market equity program (“ATM Program”), the company issued $25 million of common stock during the third quarter and has a further $125 million available. However, given the company's improving performance, the anticipated completion of the sale of the Cimatron and GibbsCAM businesses and receipt of proceeds from the sale, 3D Systems does not expect to issue shares of its common stock as part of its ATM Program during the fourth quarter of 2020. Following completion of the sale of the Cimatron and GibbsCAM businesses, 3D Systems plans to evaluate the continued need for the ATM Program and may ultimately elect to terminate such program.

Q3 2020 Conference Call and Webcast
3D Systems expects to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 with the Securities and Exchange Commission today, November 5, 2020. The company will host a conference call and simultaneous webcast to discuss these results tomorrow morning, which may be accessed as follows:

Date: Friday, November 6, 2020
Time: 10:00 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 review any forward-looking statements made by management or on its behalf, whether as a result of future developments, subsequent events or circumstances or otherwise.

Presentation of Information in this Press Release
To facilitate a better understanding of the impact that strategic acquisitions, non-recurring charges and certain non-cash expenses had on its financial results, the company reported non-GAAP measures excluding the impact of amortization of intangibles, acquisition and severance expenses, stock-based compensation expense, litigation settlements and charges related to strategic decisions and portfolio realignment. A reconciliation of GAAP to non-GAAP results is provided in the accompanying schedule.

About 3D Systems
More than 30 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 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 Condensed Consolidated Balance Sheets
September 30, 2020 and December 31, 2019

(In thousands, except par value) September 30, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents$75,264 $133,665 
Accounts receivable, net of reserves — $8,243 and $8,76298,755 109,408 
Inventories126,882 111,106 
Prepaid expenses and other current assets34,671 18,991 
Total current assets335,572 373,170 
Property and equipment, net81,433 92,940 
Intangible assets, net36,888 48,338 
Goodwill179,536 223,176 
Right of use assets44,366 36,890 
Deferred income tax asset6,502 5,408 
Other assets, net22,985 27,390 
Total assets$707,282 $807,312 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt$1,758 $2,506 
Current right of use liabilities9,431 9,569 
Accounts payable41,674 49,851 
Accrued and other liabilities66,749 63,095 
Customer deposits4,463 5,712 
Deferred revenue36,353 32,231 
Total current liabilities160,428 162,964 
Long-term debt, net of deferred financing costs19,804 45,215 
Long-term right of use liabilities44,521 35,402 
Deferred income tax liability5,121 4,027 
Other liabilities48,890 45,808 
Total liabilities278,764 293,416 
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value, authorized 220,000 shares; issued 127,664 and 121,266128 120 
Additional paid-in capital1,404,265 1,371,564 
Treasury stock, at cost — 3,456 shares and 3,670 shares(22,590)(18,769)
Accumulated deficit(923,473)(793,709)
Accumulated other comprehensive loss(29,812)(37,047)
Total 3D Systems Corporation stockholders' equity428,518 522,159 
Noncontrolling interests— (8,263)
Total stockholders’ equity428,518 513,896 
Total liabilities, redeemable noncontrolling interests and stockholders’ equity$707,282 $807,312 






3D Systems Corporation
Unaudited Condensed Consolidated Statements of Operations
Quarter and Nine Months Ended September 30, 2020 and 2019

Quarter Ended September 30,Nine Months Ended September 30,
(in thousands, except per share amounts)2020201920202019
Revenue:
Products$77,267 $94,506 $217,572 $280,611 
Services57,880 60,766 164,340 183,913 
Total revenue135,147 155,272 381,912 464,524 
Cost of sales:
Products49,010 58,044 150,395 166,809 
Services27,510 29,947 80,591 91,430 
Total cost of sales76,520 87,991 230,986 258,239 
Gross profit58,627 67,281 150,926 206,285 
Operating expenses:
Selling, general and administrative59,065 58,275 167,213 195,036 
Research and development18,866 20,940 55,107 63,654 
Impairment of goodwill48,300 — 48,300 — 
Total operating expenses126,231 79,215 270,620 258,690 
Loss from operations(67,604)(11,934)(119,694)(52,405)
Interest and other (expense) income, net(2,419)(2,818)(7,598)(6,774)
Loss before income taxes(70,023)(14,752)(127,292)(59,179)
Provision for income taxes(2,866)(2,010)(2,472)(5,793)
Net loss(72,889)(16,762)(129,764)(64,972)
Less: net income attributable to noncontrolling interests— 81 — 195 
Net loss attributable to 3D Systems Corporation$(72,889)$(16,843)$(129,764)$(65,167)
Net loss per share available to 3D Systems Corporation common stockholders - basic and diluted$(0.61)$(0.15)$(1.12)$(0.57)


3D Systems Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2020 and 2019
Nine Months Ended September 30,
(in thousands)20202019
Cash flows from operating activities:
Net loss$(129,764)$(64,972)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization34,830 39,305 
Stock-based compensation16,621 19,221 
Provision for inventory obsolescence and revaluation10,894 — 
Loss on hedge accounting de-designation1,235 — 
Provision for bad debts1,039 1,152 
Loss on the disposition of property, equipment and other assets434 1,620 
Provision for deferred income taxes— (1,346)
Impairment of goodwill and assets54,072 1,728 
Changes in operating accounts:
Accounts receivable12,668 12,290 
Inventories(23,987)6,481 
Prepaid expenses and other current assets(15,376)(3,122)
Accounts payable(9,166)(12,885)
Deferred revenue and customer deposits2,714 4,491 
Accrued and other current liabilities6,309 1,199 
All other operating activities4,828 4,922 
Net cash (used in) provided by operating activities(32,649)10,084 
Cash flows from investing activities:
Purchases of property and equipment(11,015)(18,265)
Proceeds from sale of assets552 1,620 
Purchase of noncontrolling interest(12,500)(2,500)
Other investing activities504 (1,744)
Net cash used in investing activities(22,459)(20,889)
Cash flows from financing activities:
Proceeds from revolving credit facilities20,000 — 
Payments on revolving credit facilities(20,000)— 
Proceeds from borrowings/long-term debt— 100,000 
Repayment of borrowings/long-term debt(26,547)(66,013)
Proceeds from issuance of common stock25,003 — 
Proceeds from inventory financing agreements2,509 — 
Payments related to net-share settlement of stock-based compensation(5,034)(3,029)
Other financing activities296 (1,125)
Net cash (used in) provided by financing activities(3,773)29,833 
Effect of exchange rate changes on cash, cash equivalents and restricted cash526 (1,400)
Net (decrease) increase in cash, cash equivalents and restricted cash(58,355)17,628 
Cash, cash equivalents and restricted cash at the beginning of the period (a)134,617 110,919 
Cash, cash equivalents and restricted cash at the end of the period (a)$76,262 $128,547 

(a)The amounts for cash and cash equivalents shown above include restricted cash of $998 and $931 as of September 30, 2020 and 2019, respectively, and $952 and $921 as of December 31, 2019, and 2018, respectively, which were included in Other assets, net, in the condensed consolidated balance sheets.

3D Systems Corporation
Loss Per Share
Quarter and Nine Months Ended September 30, 2020 and 2019


Quarter Ended September 30,Nine Months Ended September 30,
(in thousands, except per share amounts)2020201920202019
Numerator for basic and diluted net loss per share:
Net loss attributable to 3D Systems Corporation$(72,889)$(16,843)$(129,764)$(65,167)
Denominator for basic and diluted net loss per share:
Weighted average shares118,527 114,053 116,216 113,587 
Net loss per share - basic and diluted$(0.61)$(0.15)$(1.12)$(0.57)


3D Systems Corporation
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Quarter and Nine Months Ended September 30, 2020 and 2019

Quarter Ended September 30,Nine Months Ended September 30,
(in millions, except per share amounts)2020201920202019
GAAP Operating income (loss)$(67.6)$(11.9)$(119.7)$(52.4)
Adjustments:
Amortization, stock-based compensation & other (1)
7.2 10.9 29.3 35.7 
Legal, acquisition and divestiture related (2)
0.2 (0.7)0.7 5.2 
Cost optimization plan, including severance costs (3)
11.9 1.4 14.7 7.1 
Product end-of-life adjustment (5)
— — 10.9 — 
Goodwill impairment (6)
48.3 — 48.3 — 
Non-GAAP Operating income (loss)$— $(0.3)$(15.8)$(4.4)

Quarter Ended September 30,Nine Months Ended September 30,
(in millions, except per share amounts)2020201920202019
GAAP Net loss$(72.9)$(16.8)$(129.8)$(65.2)
Adjustments:
Amortization, stock-based compensation & other (1)
7.2 10.9 29.3 35.7 
Legal, acquisition and divestiture related (2)
0.4 (0.2)0.8 7.0 
Cost optimization plan, including severance costs (3)
11.9 1.4 14.7 7.1 
Impairment of cost-method investments (4)
1.1 0.3 2.2 0.3 
Product end-of-life adjustment (5)
— — 10.9 — 
Goodwill impairment (6)
48.3 — 48.3 — 
Non-GAAP net loss$(4.1)$(4.5)$(23.7)$(15.1)
Non-GAAP net income per share available to 3D Systems common stock holders - basic and diluted (7)
$(0.03)$(0.04)$(0.20)$(0.13)

(1) For the quarter ended September 30, 2020, the adjustment included $0.1 in COGS and $7.1 in SG&A. For the quarter ended September 30, 2019, the adjustment included $0.1 in COGS and $10.8 in SG&A. For the nine months ended September 30, 2020, the adjustment included $0.3 in COGS and $29.0 in SG&A. For the nine months ended September 30, 2019, the adjustment included $0.3 in COGS and $35.4 in SG&A.
(2) For the quarter ended September 30, 2020, the adjustment included $0.1 in COGS, $0.1 in SG&A; the net loss adjustment also included $0.2 in other income (expense). For the quarter ended September 30, 2019 the adjustment included $(0.2) in Revenue, $0.7 in COGS, $(1.2) in SG&A; the net loss adjustment also included $0.5 in other income (expense). For the nine months ended September 30, 2020, the adjustment included $0.3 in COGS, $0.4 in SG&A; the net loss adjustment also included $— in other income (expense). For the nine months ended September 30, 2019, the adjustment included $(2.9) in Revenues, $4.0 in COGS, $4.1 in SG&A; and the net loss adjustment also included $1.8 in other income (expense).
(3) For the quarter ended September 30, 2020, the adjustment included $11.9 in SG&A. For the quarter ended September 30, 2019, the adjustment included $1.0 in COGS and $0.4 in SG&A. For the nine months ended September 30, 2020, the adjustment included $0.7 in COGS, $13.8 in SG&A, $0.1 in R&D. For the nine months ended September 30, 2019, the adjustment included $1.7 in COGS, $5.0 in SG&A and $0.3 in R&D.
(4) For the quarter and nine months ended September 30, 2020 the net loss adjustment included $1.1 and $2.2, respectively, in interest and other income (expense), net. For the quarter and nine months ended September 30, 2019 the net loss adjustment included $0.3 in interest and other income (expense), net.
(5) For the nine months ended September 30, 2020 , the adjustment included $10.9 in COGS.
(6) For the quarter and nine months ended September 30, 2020, the adjustment included $48.3 in Impairment of goodwill.
(7) Denominator based on weighted average shares used in the GAAP EPS calculation.

* Tables may not foot due to rounding; amounts calculated based on dollars in thousands.

ddd2020-09x30supportingm
EXHIBIT 99.2 Third Quarter 2020 Financial Results November 6, 2020 ©2019 3D Systems, Inc. | All Rights Reserved.


 
Welcome and Participants Dr. Jeffrey Graves President and Chief Executive Officer Jagtar Narula To participate via phone, Chief Financial Officer please dial: Andrew Johnson 1-201-689-8345 Executive Vice President and Chief Legal Officer Melanie Solomon Investor Relations 2


 
Forward Looking Statements Certain statements made in this presentation 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 include statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance or products, underlying assumptions, and other statements which are other than statements of historical facts. In some cases, you can identify forward-looking statements by terms such as “believes,” “beliefs,” ''may,'' ''will,'' ''should,'' expects,'' ''intends,'' ''plans,'' ''anticipates,'' ''estimates,'' ''predicts,'' ''projects,'' ''potential,'' ''continue,'' and other similar terminology or the negative of these terms. From time to time, we may publish or otherwise make available forward-looking statements of this nature. All such forward- looking statements, whether written or oral, and whether made by us or on our behalf, are expressly qualified by the cautionary statements described in this message including those set forth below. Forward-looking statements are based upon management’s beliefs, assumptions and current expectations concerning future events and trends, using information currently available, and are necessarily subject to uncertainties, many of which are outside our control. In addition, we undertake no obligation to update or revise any forward-looking statements made by us or on our behalf, whether as a result of future developments, subsequent events or circumstances, or otherwise, or to reflect the occurrence or likelihood of unanticipated events, and we disclaim any such obligation. Forward-looking statements are only predictions that relate to future events or our future performance and are subject to known and unknown risks, uncertainties, assumptions, and other factors, many of which are beyond our control, that may cause actual results, outcomes, levels of activity, performance, developments, or achievements to be materially different from any future results, outcomes, levels of activity, performance, developments, or achievements expressed, anticipated, or implied by these forward-looking statements. Although we believe 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 or by which any such performance or results will be achieved. 3D Systems' actual results could differ materially from those stated or implied in forward-looking statements. Past performance is not necessarily indicative of future results. We do not undertake any obligation to and do not intend to update any forward-looking statements whether as a result of future developments, subsequent events or circumstances or otherwise. Further, we encourage you to review “Risk Factors” in Part 1 of our Annual Report on Form 10-K and Part II of our quarterly reports on Form 10-Q filed with the SEC as well as other information about us in our filings with the SEC. These are available at www.SEC.gov. 3


 
Dr. Jeffrey Graves President & Chief Executive Officer 4


 
3D Systems' Purpose Statement We are the leaders in enabling additive manufacturing solutions for applications in growing markets that demand high reliability products. 5


 
Transformation Framework 6


 
Reorganize Focus on Key Applications within Healthcare and Industrial Markets Management Team Complete 7


 
Restructure On Track to Achieve $60M Run-Rate Cost Savings by End of 2020 Key Operating Principles Guide Our Company 8


 
Divest/Invest Divest Non-Core Assets and Invest for Growth Agreement Signed to Divest Cimatron and GibbsCAM Subtractive Manufacturing Software Businesses 9


 
Healthcare Case Study 3D Systems will assist the VA with establishing additive manufacturing production capabilities for medical devices to improve treatment for U.S. Veteran patients 10


 
Applications Approach 3D Systems enables additive manufacturing applications through its unique capabilities and advancements in hardware, software and materials technology 11


 
Jagtar Narula Chief Financial Officer 12


 
Third Quarter Summary Third Quarter (in millions, except per share amounts) 2020 2019 Revenue $ 135.1 $ 155.3 • Revenue decrease 13% YoY Operating Loss (67.6) (11.9) • Revenue increase 21% vs Q2 2020 Net Loss (72.9) (16.8) • $11.9M of restructuring related charges Loss Per Share $ (0.61) $ (0.15) • 3Q20 Net Loss includes $48.3M impairment charge Non-GAAP Operating Loss $ — $ (0.3) Non-GAAP Net Loss (4.1) (4.5) Non-GAAP Loss Per Share $ (0.03) $ (0.04) 13 * See Appendix for reconciliation of GAAP and non-GAAP operating loss, net loss and net loss per share.


 
Revenue by Market $ in millions 19.7% 21.3% 6.1% (23.8)% 14


 
Gross Profit Margin • Q3 GAAP gross profit margin was 43.4% • Q3 non-GAAP gross profit margin was 43.5% 15 See appendix for a reconciliation of non-GAAP gross profit.


 
Operating Expenses • GAAP operating expenses increased 59.4% due to one-time costs, including $11.9 million of restructuring costs • Non-GAAP operating expenses decreased 15.2% compared to the third quarter of the prior year as cost actions are implemented 16 See appendix for a reconciliation of non-GAAP operating expenses.


 
Cash and Liquidity at September 30, 2020 • $75 million of cash and cash equivalents • Term Loan of $22 million • $100 million undrawn revolver with $31 million of availability • Continue to focus on reducing inventories • ATM Update ◦ Not planning to issue additional shares under ATM in Q4 ◦ Following the closure of the sale of Cimatron and GibbsCAM and the receipt of proceeds we plan to evaluate the continued need for the ATM program and may elect to terminate 17


 
Dr. Jeffrey Graves President & Chief Executive Officer 18


 
Summary Our Transformation Journey: • Reorganization complete • Restructuring continues, on track to achieve $60M run-rate cost savings by end of 2020 • Strengthening balance sheet • Sales improving and expect continued strength of the business moving forward 19


 
Q&A Session 1-201-689-8345 20


 
Thank You Find out more at: www.3dsystems.com 2 21 1 ©2019 3D Systems, Inc. | All Rights Reserved.


 
Appendix ©2019 3D Systems, Inc. | All Rights Reserved.


 
Non-GAAP Reconciliation - Operating Loss Third Quarter Non-GAAP Operating Loss Quarter Ended September 30, Nine Months Ended September 30, (in millions, except per share amounts) 2020 2019 2020 2019 GAAP Operating income (loss) $ (67.6) $ (11.9) $ (119.7) $ (52.4) Adjustments: Amortization, stock-based compensation & other (1) 7.2 10.9 29.3 35.7 Legal, acquisition and divestiture related (2) 0.2 (0.7) 0.7 5.2 Cost optimization plan, including severance costs (3) 11.9 1.4 14.7 7.1 Product end of life adjustment (4) — — 10.9 — Goodwill impairment (5) 48.3 — 48.3 — Non-GAAP Operating income (loss) $ — $ (0.3) $ (15.8) $ (4.4) (1) For the quarter ended September 30, 2020, the adjustment included $0.1 in COGS and $7.1 in SG&A. For the quarter ended September 30, 2019, the adjustment included $0.1 in COGS and $10.8 in SG&A. For the nine months ended September 30, 2020, the adjustment included $0.3 in COGS and $29.0 in SG&A. For the nine months ended September 30, 2019, the adjustment included $0.3 in COGS and $35.4 in SG&A. (2) For the quarter ended September 30, 2020, the adjustment included $0.1 in COGS and $0.1 in SG&A. For the quarter ended September 30, 2019, the adjustment included $(0.2) in Revenue, $0.7 in COGS and $(1.2) in SG&A. For the nine months ended September 30, 2020, the adjustment included $0.3 in COGS and $0.4 in SG&A. For the nine months ended September 30, 2019, the adjustment included $(2.9) in Revenues, $4.0 in COGS and $4.1 in SG&A. (3) For the quarter ended September 30, 2020, the adjustment included $11.9 in SG&A. For the quarter ended September 30, 2019, the adjustment included $1.0 in COGS and $0.4 in SG&A. For the nine months ended September 30, 2020, the adjustment included $0.7 in COGS, $13.8 in SG&A, $0.1 in R&D. For the nine months ended September 30, 2019, the adjustment included $1.7 in COGS, $5.0 in SG&A and $0.3 in R&D. (4) For the nine months ended September 30, 2020, the adjustment included $10.9 in COGS. (5) For the quarter and nine months ended September 30, 2020, the adjustment included $48.3 in Impairment of goodwill. * Tables may not foot due to rounding; amounts calculated based on dollars in thousands. 23


 
Non-GAAP Reconciliation - EPS Third Quarter Non-GAAP Earnings (Loss) per Share Quarter Ended September 30, Nine Months Ended September 30, (in millions, except per share amounts) 2020 2019 2020 2019 GAAP Net loss $ (72.9) $ (16.8) $ (129.8) $ (65.2) Adjustments: Amortization, stock-based compensation & other 7.2 10.9 29.3 35.7 Legal, acquisition and divestiture related (1) 0.4 (0.2) 0.8 7.0 Cost optimization plan, including severance costs 11.9 1.4 14.7 7.1 Impairment of cost-method investments (2) 1.1 0.3 2.2 0.3 Product end of life adjustment — — 10.9 — Goodwill impairment 48.3 — 48.3 — Non-GAAP net loss $ (4.1) $ (4.5) $ (23.7) $ (15.1) Non-GAAP net loss per share - basic and diluted (3) $ (0.03) $ (0.04) $ (0.20) $ (0.13) (1) In addition to the adjustments for operating income (loss), the net loss adjustments also included $0.2 and $— in other income (expense) for the quarter and nine months ended September 30, 2020 and $0.5 and $1.8 in other income (expense) for the quarter and nine months ended September 30, 2019. (2) For the quarter and nine months ended September 30, 2020, the net loss adjustment included $1.1 and $2.2, respectively, in interest and other income (expense), net. For the quarter and nine months ended September 30, 2019 the net loss adjustment included $0.3 in interest and other income (expense), net. (3) Denominator based on weighted average shares used in the GAAP EPS calculation. 24 * Tables may not foot due to rounding; amounts calculated based on dollars in thousands.


 
Non-GAAP Reconciliation - GP and GPM Quarterly 2019 and 2020 Non-GAAP Gross Profit & Margin 2019 2020 Quarter Ended Quarter Ended (in millions) March 31 June 30 September 30 December 31 March 31 June 30 September 30 GAAP Gross Profit $ 65.7 $ 73.3 $ 67.3 $ 71.8 $ 57.1 $ 35.2 $ 58.6 GAAP Gross Profit Margin 43.2 % 46.6 % 43.3 % 43.6 % 42.4 % 31.4 % 43.4 % Adjustments: Amortization, stock-based compensation & other 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Legal and acquisition-related 0.1 0.4 0.5 0.1 0.1 0.1 0.1 Cost optimization plan 0.4 0.3 1.0 — 0.7 — — Product end of life adjustment — — — — — 10.9 — Non-GAAP Gross Profit $ 66.4 $ 74.2 $ 68.9 $ 72.0 $ 58.0 $ 46.3 $ 58.8 Non-GAAP Gross Profit Margin 44.2 % 47.4 % 44.4 % 43.8 % 43.1 % 41.3 % 43.5 % 25 * Tables may not foot due to rounding; amounts calculated based on dollars in thousands.


 
Non-GAAP Reconciliation - Operating Expense Quarterly 2019 and 2020 Non-GAAP Operating Expenses 2019 2020 Quarter Ended Quarter Ended (in millions) March 31 June 30 September 30 December 31 March 31 June 30 September 30 GAAP SG&A Expenses $ 65.1 $ 71.7 $ 58.3 $ 59.3 $ 56.1 $ 52.0 $ 59.1 GAAP R&D Expenses 21.9 20.8 20.9 17.1 19.2 17.0 18.9 GAAP Goodwill Impairment — — — — — — 48.3 GAAP Operating Expenses 87.0 92.5 79.2 76.5 75.4 69.0 126.2 Adjustments to R&D Expenses: Cost optimization plan — 0.3 — — 0.1 — — Non-GAAP R&D Expenses 21.9 20.5 20.9 17.1 19.1 17.0 18.9 Adjustments to SG&A Expenses: Amortization, stock-based compensation & other 12.1 12.5 10.8 8.1 10.6 11.3 7.1 Legal and acquisition-related 0.7 4.6 (1.2) 1.4 0.2 0.1 0.1 Cost optimization plan 1.2 3.3 0.4 0.6 1.5 0.5 11.9 Total Adjustments to SG&A Expenses 14.1 20.4 10.0 10.1 12.2 12.0 19.1 Non-GAAP SG&A Expenses 51.0 51.2 48.3 49.2 43.9 40.1 40.0 Goodwill impairment adjustment — — — — — — 48.3 Non-GAAP Operating Expenses $ 72.9 $ 71.7 $ 69.3 $ 66.4 $ 63.0 $ 57.1 $ 58.8 26 * Tables may not foot due to rounding; amounts calculated based on dollars in thousands.


 
v3.20.2
Document and Entity Information Document
Nov. 05, 2020
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 05, 2020
Entity Registrant Name 3D SYSTEMS CORP
Entity Central Index Key 0000910638
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 001-34220
Entity Tax Identification Number 95-4431352
Entity Address, Address Line One 333 Three D Systems Circle
Entity Address, City or Town Rock Hill
Entity Address, State or Province SC
Entity Address, Postal Zip Code 29730
City Area Code 803
Local Phone Number 326-3900
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.001 per share
Trading Symbol DDD
Security Exchange Name NYSE
Entity Emerging Growth Company false