3D Systems Reports 2012 Results

Mon Feb 25, 2013 8:37am EST

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- Delivers Record Quarterly and Annual Revenue and Gross Profit

- Completes Three-for-Two Stock Split and Commences Post Split NYSE Trading

- Expects 2013 Revenue of $440 million to $485 million and non-GAAP EPS of $1.00 to $1.15

ROCK HILL, S.C., Feb. 25, 2013 (GLOBE NEWSWIRE) -- 3D Systems
http://www.globenewswire.com/newsroom/ctr?d=10022880&l=4&a=3D%20Systems&u=http%3A%2F%2Fwww.3dsystems.com%2F
 Corporation (NYSE:DDD) announced today non-GAAP earnings of 39 cents per share for the fourth
quarter of 2012 and GAAP earnings of 19 cents per share resulting in full year 2012 non-GAAP
earnings of $1.25 and GAAP earnings of $0.71.

The company reported that its fourth quarter revenue grew 45.4% from the prior year to $101.6
million on a 93% surge in printers' and other products revenue and 18.8% organic growth. Stronger
printer demand bolstered quarter-end backlog to $11.4 million at year-end, a 23% sequential
increase, which included $3.2 million related to current printers' sales. Gross profit increased
60% and gross profit margin expanded 460 basis points to 51.7% contributing to non-GAAP net income
improvement of 64% over the 2011 quarter.

For the full year 2012, revenue grew 53.5% to $353.6 million, on 90% printers' and other products
revenue increase and 22.4% organic growth. Gross profit increased 66.2% and gross profit margin
expanded 390 basis points to 51.2%.

The company generated $53.0 million of cash from operations in 2012, and ended the year with
$155.9 million of available cash, after incurring a $46.5 million increase in its annual operating
expenses primarily from increased sales, marketing and acquisitions costs. The increase included
$8.9 million of higher R&D expenditures in support of its expanded portfolio.

"We are very pleased to report outstanding quarterly and annual results on accelerated printers'
sales," said Avi Reichental, 3D Systems' President and Chief Executive Officer. "We believe that
our results reflect the potency of our diversified portfolio, productivity of our channels and
effectiveness of our strategic growth initiatives."

The table below summarizes the company's key 2012 non-GAAP financial results for the fourth
quarter and full year.

 Non-GAAP Operating Highlights              Fourth Quarter                                                                                                            Full Year                                                                                                                 
 ($ in millions, except per share amounts)  2012                                    2011                                    % Change                                2012                                    2011                                    % Change                                
                                                                                                                            Favorable                                                                                                               Favorable                               
                                                                                                                            (Unfavorable)                                                                                                           (Unfavorable)                           
 Revenue (GAAP)                             $ 101.6                                 $ 69.9                                  45.4%                                   $ 353.6                                 $ 230.4                                 53.5%                                   
 Gross profit                               $ 52.6                                  $ 32.9                                  59.7%                                   $ 181.4                                 $ 109.3                                 66.0%                                   
 % of revenue                               51.7%                                   47.1%                                                                           51.3%                                   47.4%                                                                           
 Operating expenses                         $ 28.2                                  $ 16.8                                  (67.5%)                                 $ 99.8                                  $ 63.0                                  (58.3%)                                 
 % of revenue                               27.7%                                   24.1%                                                                           28.2%                                   27.4%                                                                           
 Operating income                           $ 24.4                                  $ 16.1                                  51.5%                                   $ 81.6                                  $ 46.3                                  76.5%                                   
 % of revenue                               24.0%                                   23.0%                                                                           23.1%                                   20.1%                                                                           
 Net income                                 $ 22.6                                  $ 13.8                                  63.6%                                   $ 67.9                                  $ 41.0                                  65.7%                                   
 % of revenue                               22.2%                                   19.8%                                                                           19.2%                                   17.8%                                                                           
 Diluted earnings per share                 $0.39                                   $ 0.27                                  44.4%                                   $1.25                                   $0.81                                   54.3%                                   
 Available cash & cash equivalents          $ 155.9                                 $ 179.1                                 (13.0%)                                 $ 155.9                                 $ 179.1                                 (13.0%)                                 
 Depreciation & amortization                $ 2.4                                   $ 1.5                                   (63.3%)                                 $ 10.1                                  $ 6.0                                   (67.4%)                                 
 % of revenue                               2.3%                                    2.7%                                                                            2.9%                                    2.6%                                                                            
                                                                                                                                                                                                                                                                                                              
 - Gross profit, operating expenses, operating income, net income and earnings per share have been adjusted to reflect non-GAAP operating results. See the reconciliation of non-GAAP data to GAAP net income and earnings per share at the end of this press release.                                        


3D printers and other products revenue nearly doubled to $126.8 million on stronger demand as a
result of the company's effective portfolio convergence, price point re-alignment and channel
expansion. Print materials revenue grew 46.1% to $103.2 million on 124.2% higher printer units and
services revenue increased by $30.5 million over 2011 to $123.7 million and included $79.2 million
of on-demand parts.

"We are thrilled with the progress we are making on our consumer growth initiative and expect
revenue from our consumer products to be meaningful to our revenue in the second half of 2013,"
continued Reichental.

The company announced that its three-for-two stock split was completed effective on the close of
business Friday, February 22, 2013 by distributing a 50% stock dividend in the form of additional
shares to its stockholders of record on February 15, 2013. Trading of the company's common stock
on the New York Stock Exchange will begin this morning on a split-adjusted basis at approximately
66% of last Friday's closing price.

The company announced its annual guidance for the full year 2013, expecting its revenue to be in
the range of $440 million to $485 million and its non-GAAP earnings per share to be in the range
of $1.00 to $1.15, on a post-split basis, inclusive of the acquisition of Geomagic, which the
company expects to close by the end of February 2013. 

"We entered 2013 with positive sales momentum shaped by increased demand from advanced
manufacturing activities. While we may face lingering economic uncertainties in parts of the
world, we expect to continue to benefit from robust R&D and manufacturing spending by our
customers worldwide," concluded Reichental.

Conference Call and Webcast Details

3D Systems will hold a conference call and webcast to discuss its operating results for the fourth
quarter and full year 2012 on Monday, February 25, 2013 at 9:00 a.m., Eastern Time.

* To access this webcast, log onto 3D Systems' web site at investor.3dsystems.com
http://www.globenewswire.com/newsroom/ctr?d=10022880&l=16&a=investor.3dsystems.com&u=http%3A%2F%2Finvestor.3dsystems.com%2F
. To ensure timely participation and technical capability, we recommend logging on a few minutes
prior to the conference call to activate your participation.
 
* To access this conference call, dial 1-800-295-3991 from in the U.S. or 1-617-614-3924 from
outside the U.S. and enter participant code 68343877.
 
* The webcast will be also be available for replay beginning approximately two hours after
completion of the call at: investor.3dsystems.com
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.

The company filed its Annual Report on Form 10-K today and copies are available free of charge
upon request from Investor Relations.

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 may involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or achievements of the company to be
materially different from historical results or from any future results or projections expressed
or implied by such forward-looking statements.  In addition to statements that explicitly describe
such risks and uncertainties, readers are urged to consider statements in the conditional or
future tenses or that include terms such as "believes," "belief," "expects," "estimates,"
"intends," "anticipates" or "plans" to be uncertain and forward-looking.  Forward-looking
statements 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," "Cautionary Statements and Risk Factors," 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.

Presentation of Information in This Press release

The company reported non-GAAP measures that adjust net income and earnings per share by excluding
the impact of amortization of intangibles, non-cash interest expense, non-recurring acquisition
expenses, litigation settlements, loss on conversion of notes, stock-based compensation expense
and releases of the valuation allowance on deferred tax assets. A reconciliation of GAAP to
non-GAAP results is provided in the accompanying schedule.  

About 3D Systems Corporation

3D Systems is a leading provider of 3D content-to-print solutions including 3D printers, print
materials and on-demand custom parts services for professionals and consumers alike. The company
also provides affordable CAD modeling, reverse engineering and inspection software tools and
consumer 3D printers, apps and services. Its expertly integrated solutions replace and complement
traditional methods and reduce the time and cost of designing and manufacturing new products. 3D
Systems' products and services are used to rapidly design, communicate, prototype or produce real
functional, parts, empowering customers to create and make with confidence.

More information on the company is available at www.3DSystems.com
http://www.globenewswire.com/newsroom/ctr?d=10022880&l=24&a=www.3DSystems.com&u=http%3A%2F%2Fwww.3dsystems.com%2F
.

The 3D Systems Corporation logo is available at
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Tables Follow

                                                                                                               
                                                                                                               
 3D Systems Corporation                                                                                        
 Audited Consolidated Statements of Operations and Comprehensive Income                                        
 Quarter and Year Ended December 31, 2012 and 2011                                                             
                                                                                                           
                                               Quarter Ended December 31,       Year Ended December 31,      
 (in thousands, except per share amounts)      2012            2011            2012          2011          
                                                                                                             
 Revenue:                                                                                                  
 Products                                      $ 68,757        $ 41,944        $ 229,980     $ 137,306     
 Services                                      32,814          27,916          123,653       93,117        
                                                                                                           
 Total revenue                                 101,571         69,860          353,633       230,423       
                                                                                                           
 Cost of sales:                                                                                            
 Products                                      31,665          20,837          105,286       66,589        
 Services                                      17,410          16,158          67,151        54,806        
                                                                                                           
 Total cost of sales                           49,075          36,995          172,437       121,395       
                                                                                                           
 Gross profit                                  52,496          32,865          181,196       109,028       
                                                                                                           
 Operating expenses:                                                                                       
 Selling, general and administrative           26,524          17,572          97,422        59,795        
 Research and development                      7,806           4,594           23,203        14,331        
                                                                                                           
 Total operating expenses                      34,330          22,166          120,625       74,126        
                                                                                                           
 Income from operations                        18,166          10,699          60,571        34,902        
                                                                                                           
 Interest and other expense (income), net      8,703           1,991           17,292        2,456         
                                                                                                           
 Income before income taxes                    9,463           8,708           43,279        32,446        
 Provision for (benefit of) income taxes       (1,449)         703             4,338         (2,974)       
                                                                                                           
 Net income                                    $ 10,912        $ 8,005         $ 38,941      $ 35,420      
                                                                                                           
 Other comprehensive income                                                                                
 Unrealized gain (loss) on pension obligation  (715)           (275)           (714)         (275)         
 Foreign currency translation gain (loss)      1,499           (1,493)         1,640         (1,743)       
                                                                                                           
 Comprehensive income                          $ 11,696        $ 6,237         $ 39,867      $ 33,402      
                                                                                                           
 Net income per share - basic                  $ 0.19          $ 0.16          $ 0.72        $ 0.71        
                                                                                                           
 Net income per share - diluted                $ 0.19          $ 0.16          $ 0.71        $ 0.70        


                                                                                                                            
                                                                                                                            
 3D Systems Corporation                                                                                                     
 Audited Consolidated Balance Sheets                                                                                        
 December 31, 2012 and 2011                                                                                                 
                                                                                                                          
                                                                                                                          
 (in thousands, except par value)                                                                   2012       2011       
 ASSETS                                                                                                                   
 Current assets:                                                                                                          
 Cash and cash equivalents                                                                          $ 155,859  $ 179,120  
 Accounts receivable, net of allowance for doubtful accounts of $4,317 (2012) and $3,019 (2011)     79,869     51,195     
 Inventories, net of reserves of $3,534 (2012) and $2,542 (2011)                                    41,820     25,283     
 Prepaid expenses and other current assets                                                          4,010      2,241      
 Current deferred income tax asset                                                                  5,867      3,528      
 Restricted cash                                                                                    13         13         
 Total current assets                                                                               287,438    261,380    
 Property and equipment, net                                                                        34,353     29,594     
 Intangible assets, net                                                                             108,377    54,040     
 Goodwill                                                                                           240,314    107,651    
 Long term deferred income tax asset                                                                107        3,195      
 Other assets, net                                                                                  6,853      7,114      
 Total assets                                                                                       $ 677,442  $ 462,974  
                                                                                                                          
 LIABILITIES AND EQUITY                                                                                                   
 Current liabilities:                                                                                                     
 Current portion of capitalized lease obligations                                                   $ 174      $ 163      
 Accounts payable                                                                                   32,095     25,911     
 Accrued and other liabilities                                                                      24,789     16,816     
 Customer deposits                                                                                  2,786      3,398      
 Deferred revenue                                                                                   15,309     11,260     
 Total current liabilities                                                                          75,153     57,548     
 Long term portion of capitalized lease obligations                                                 7,443      7,609      
 Convertible senior notes, net                                                                      80,531     131,107    
 Deferred income tax liability                                                                      23,142     3,656      
 Other liabilities                                                                                  10,840     8,266      
 Total liabilities                                                                                  197,109    208,186    
 Commitments and Contingencies                                                                                            
 Stockholders' equity:                                                                                                    
 Preferred stock, authorized 5,000 shares, none issued                                              -          -          
 Common stock, $0.001 par value, authorized 120,000 shares; 59,855 (2012) and 50,975 (2011) issued  60         51         
 Additional paid-in capital                                                                         460,237    274,542    
 Treasury stock, at cost: 355 (2012) and 324 shares (2011)                                          (240)      (214)      
 Accumulated earnings (deficit )                                                                    16,410     (22,531)   
 Accumulated other comprehensive income                                                             3,866      2,940      
 Total stockholders' equity                                                                         480,333    254,788    
 Total liabilities and stockholders' equity                                                         $ 677,442  $ 462,974  


                                                                                                            
                                                                                                            
 3D Systems Corporation                                                                                     
 Audited Consolidated Statements of Cash Flows                                                              
 Year Ended December 31, 2012 and 2011                                                                      
                                                                                                          
                                                                                                          
                                                                                                           
 (in thousands)                                                                     2012       2011       
 Cash flows from operating activities:                                                                    
 Net income                                                                         $ 38,941   $ 35,420   
 Adjustments to reconcile net income to net cash provided by operating activities:                        
 Benefit of deferred income taxes                                                   (661)      (5,140)    
 Depreciation and amortization                                                      21,229     11,093     
 Non-cash interest on convertible notes                                             3,876      409        
 Provision for bad debts                                                            3,039      1,731      
 Stock-based compensation                                                           5,118      2,637      
 (Gain) loss on the disposition of property and equipment and investments           (674)      256        
 Loss on conversion of convertible debt                                             7,021      -          
 Changes in operating accounts:                                                                           
 Accounts receivable                                                                (19,246)   (12,090)   
 Inventories                                                                        (12,225)   (2,608)    
 Prepaid expenses and other current assets                                          (794)      45         
 Accounts payable                                                                   (238)      (3,457)    
 Accrued liabilities                                                                9,081      141        
 Customer deposits                                                                  (1,336)    857        
 Deferred revenue                                                                   1,164      525        
 Other operating assets and liabilities                                             (1,251)    (2,159)    
 Net cash provided by operating activities                                          53,044     27,660     
 Cash flows from investing activities:                                                                    
 Purchases of property and equipment                                                (3,224)    (2,870)    
 Proceeds from disposition of property and equipment and other assets               -          174        
 Additions to license and patent costs                                              (729)      (336)      
 Cash paid for acquisitions, net of cash assumed                                    (183,701)  (92,677)   
 Net cash used in investing activities                                              (187,654)  (95,709)   
 Cash flows from financing activities:                                                                    
 Proceeds from 5.50% convertible notes                                              -          148,960    
 Convertible notes capitalized costs                                                -          (3,594)    
 Proceeds from issuance of common stock                                             106,889    62,054     
 Proceeds from exercise of stock options and restricted stock, net                  4,400      2,764      
 Repayment of capital lease obligations                                             (163)      (221)      
 Proceeds from capital lease obligations                                            -          -          
 Restricted cash                                                                    -          12         
 Net cash provided by financing activities                                          111,126    209,975    
 Effect of exchange rate changes on cash                                            223        (155)      
 Net increase (decrease) in cash and cash equivalents                               (23,261)   141,771    
 Cash and cash equivalents at the beginning of the period                           179,120    37,349     
 Cash and cash equivalents at the end of the period                                 $ 155,859  $ 179,120  


                                                                                                              
                                                                                                              
 3D Systems Corporation                                                                                       
 Schedule 1                                                                                                   
 Earnings Per Share                                                                                           
                                                                                                          
 Following is a reconciliation of the numerator and denominator of the basic and diluted net earnings per share computations: 
                                                                                                           
                                              Quarter Ended December 31,       Year Ended December 31,      
 (in thousands, except per share amounts)     2012            2011            2012          2011          
                                                                                                            
                                                                                                          
 Basic and diluted earnings per share:                                                                    
 Basic earnings per share:                                                                                
 Numerator:                                                                                               
 Net income                                   $ 10,912        $ 8,005         $ 38,941      $ 35,420      
                                                                                                          
 Denominator:                                                                                             
 Weighted average common shares outstanding   57,417          50,615          53,878        49,748        
                                                                                                          
                                                                                                          
 Basic earnings per share                     $ 0.19          $ 0.16          $ 0.72        $ 0.71        
                                                                                                          
 Diluted earnings per share:                                                                              
 Numerator:                                                                                               
 Net income                                   $ 10,912        $ 8,005         $ 38,941      $ 35,420      
                                                                                                          
 Denominator:                                                                                             
 Weighted average common shares outstanding   57,417          50,615          53,878        49,748        
 Effect of dilutive securities:                                                                           
 Stock options                                36              838             604           975           
                                                                                                          
 Diluted weighted average shares outstanding  57,453          51,453          54,482        50,723        
                                                                                                          
 Diluted earnings per share                   $ 0.19          $ 0.16          $ 0.71        $ 0.70        


                                                                                                                        
                                                                                                                        
 3D Systems Corporation                                                                                                 
 Schedule 2                                                                                                             
 Unaudited Reconciliation of GAAP Net Income to Non-GAAP Net Income                                                     
 Quarter and Year Ended December 31, 2012 and 2011                                                                      
                                                                                                                    
                                                        Quarter Ended December 31,       Year Ended December 31,      
 (in thousands, except per share amounts)               2012            2011            2012          2011          
                                                                                                                      
 GAAP Net Income                                        $ 10,912        $ 8,005         $ 38,941      $ 35,420      
                                                                                                                    
 Adjustments:                                                                                                       
 Stock-based compensation                               1,317           810             4,613         2,637         
 Amortization of intangibles (a) (b)                    2,894           2,075           11,452        5,050         
 Acquisition and severance expenses                     2,015           2,513           4,982         3,664         
 Non-cash interest expenses                             857             400             3,489         400           
 Loss on convertible notes                              5,199           --              6,295         --            
 Net gain on acquisitions and litigation settlements    --              --              (1,296)       --            
 Release of valuation allowance on deferred tax assets  (610)           --              (610)         (6,221)       
                                                                                                                    
 Non-GAAP adjusted net income                           $ 22,584        $ 13,803        $ 67,866      $ 40,950      
                                                                                                                    
 Non-GAAP adjusted income per share - basic             $ 0.39          $ 0.27          $ 1.26        $ 0.82        
 Non-GAAP adjusted income per share - diluted           $ 0.39          $ 0.27          $ 1.25        $ 0.81        
                                                                                                                    
                                                                                                                    
 (a) Represents amortization expense for the quarters ended December 31, 2012 and 2011, of which $54 and $44, respectively, is included in the cost of sales and the remaining $2,840 and $2,031, respectively, is included in operating expenses. 
 (b) Represents amortization expense for the years ended December 31, 2012 and 2011, of which $193 and $237, respectively, is included in the cost of sales and the remaining $11,259 and $4,813, respectively, is included in operating expenses. 


CONTACT: Investor Contact:
         Stacey Witten
         803-326-4010
         Email: Stacey.Witten@3dsystems.com
         
         Media Contact:
         Cathy Lewis
         781-852-5007
         Email: Cathy.Lewis@3dsystems.com