ROCK HILL, South Carolina – July 28, 2011 - 3D Systems Corporation (NYSE: DDD) announced today that it earned 26 cents per share diluted, for the second quarter of 2011 on a 57% revenue increase and a 58% gross profit improvement compared to the second quarter of 2010. The company’s quarterly and annual earnings benefitted by 12 cents per share from releasing a portion of its valuation allowance on deferred tax assets.
Net income included $0.4 million of restructuring expenses, $2.2 million of legal expenses and $3.4 million of non-cash expenses related to depreciation, amortization and share-based compensation expense for the 2011 quarter compared to $2.4 million of non-cash expenses and $1.2 million of legal expenses for the 2010 period.
“We are pleased with our organic growth, record printer units sold and the continued strong revenue expansion from all our products and services,” said Abe Reichental, 3D Systems’ President and Chief Executive Officer.
(See the attached PDF for a table that summarizes the company’s key second quarter and six months 2011 financial results.)
For the second quarter 2011 the company delivered record revenue growth from all its revenue categories. 3D printer units sold tripled over the comparable period and accounted for a $5.5 million revenue increase. During the second quarter the company recruited 27 new resellers to its global distribution network that aggregated to 167 channel partners. Print materials grew by $2.4 million on strong user demand and an expanded installed base. Services, including custom parts, increased by $12.0 million compared to the second quarter of 2010. Healthcare solutions grew 32% over the prior year and organic growth accounted for 25% of the company’s total revenue increase.
Gross profit margin for the quarter expanded 30 basis points over the 2010 period, to 45.7%. Print materials gross profit margin improved 530 basis points over the comparable 2010 quarter and 150 basis points sequentially to 65%. Printers’ gross profit margin expanded 220 basis points over the comparable period from increased volume, but compressed 370 basis points sequentially as a result of unfavorable printers’ mix. Services gross profit margin improved 60 basis points compared to 2010 on significantly higher revenue, but decreased 360 basis points sequentially. Custom parts services gross profit margin increased 1,290 basis points over the comparable 2010 quarter, but decreased 690 basis points sequentially on a seasonal revenue shortfall of higher margin 3Dproparts™ Italy revenue and higher Quickparts® revenue at lower margin.
The company ended the first six months of 2011 with $79.0 million of available cash and cash equivalents. During the first six months of 2011 the company generated $6.2 million of cash from operations, used $29.2 million to fund strategic investing activities and completed a common stock offering with net proceeds of $62.1 million.
“We remain focused on democratizing access to affordable and viable 3D content-to-print solutions for professionals and consumers alike. We believe that the marketplace for our products and services is largely underpenetrated and that our diversified portfolio makes us more attractive to broader audiences. While the rapid growth rate of our custom parts and printers revenue outpaced our margin expansion rate for the quarter, we remain optimistic about our future and believe that we are on track to achieve our long-term target operating model,” concluded Reichental.
Conference Call and Webcast Details
3D Systems will hold a conference call and webcast to discuss its operating results for the second quarter and six months 2011 on Thursday, July 28, 2011 at 11:30 a.m., Eastern Time.
To access this Conference Call, dial 1-(800) 798-2864 from in the U.S. or 1(617) 614-6206 from outside the U.S. and enter participant code 19161462.
To access the webcast, log onto 3D Systems’ Web site at www.3dsystems.com/ir. To ensure timely participation and technical capability, we recommend logging on a few minutes prior to the conference call to activate your participation. The webcast will be available for replay beginning approximately two hours after completion of the call at: www.3dsystems.com/ir.
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 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.
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 creative content development, design productivity tools and curation services and downloads. Its expertly integrated solutions replace displace and complement traditional methods and reduce the time and cost of designing new products by printing real parts directly from digital input. These solutions are used to rapidly design, communicate, prototype and produce functional end-use parts empowering our customers to create with confidence.
(See the attached PDF for additional tables.)