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3D Systems Reports Fourth Quarter and Full Year 2022 Financial Results
المصدر: Nasdaq GlobeNewswire / 28 فبراير 2023 16:15:01 America/New_York
ROCK HILL, S.C., Feb. 28, 2023 (GLOBE NEWSWIRE) -- 3D Systems Corporation (NYSE:DDD) announced today its financial results for the fourth quarter and full year ended December 31, 2022.
Fourth Quarter Financial Results and Recent Business Highlights
(All numbers are unaudited and are presented in thousands, except per share amounts or otherwise noted)
- Q4 2022 revenue of $132,732 decreased 12.0% compared to Q4 2021; Non-GAAP Q4 2022 revenue on a constant currency basis(1) decreased 7.6%, reflecting weakness in the dental orthodontics market
- Net loss of $25,553, diluted loss per share of $0.20, and diluted non-GAAP loss per share of $0.06 (1)
- Negative adjusted EBITDA(1) of $4,808 reflects inflationary impacts on our input costs, unfavorable product mix, and continued investments in growth areas of our business and product portfolio
Full Year 2022 Financial Highlights
- 2022 revenue of $538,031 decreased 12.6% compared to 2021 revenue of $615,639; Non-GAAP revenue adjusted for divestitures and on a constant currency(1) basis increased 3.3%, reflecting solid demand in both the Industrial and Healthcare segments despite macroeconomic challenges, offset by lower sales to certain dental market customers
- Net loss of $122,711, diluted loss per share of $0.96, and diluted non-GAAP loss per share of $0.23(1)
- Negative adjusted EBITDA(1) of $5,781 reflects inflationary impacts on our input costs and continued investments in growth areas of our business and product portfolio
- Cash and short-term investments of $568,737 position the company for continued growth investments
2023 Outlook
- Continued softness in dental orthodontic market fully offset by strong performance in Industrial and non-dental Healthcare Solutions markets leading to mid-single digit revenue growth
- Positive full year Adjusted EBITDA and free cash flow support an already-strong balance sheet
- Sustained investments in core technologies and emerging regenerative medicine markets
(in thousands, expect per share data) Quarter Ended December 31, Year Ended
December 31,Revenue Growth Rates (%) as reported (12.0 )% (12.6 )% Non-GAAP Revenue Growth Rates (%) excluding divestitures (12.0 )% (1.1 )% Non-GAAP Revenue Growth Rates (%) excluding divestitures and FX effects (7.6 )% 3.3 % Quarter Ended December 31, Year Ended December 31, (in thousands, expect per share data) 2022 2021 2022 2021 Revenue $ 132,732 $ 150,870 $ 538,031 $ 615,639 Operating (loss) $ (28,044 ) $ (3,842 ) $ (117,019 ) $ (33,069 ) Net (loss) income $ (25,553 ) $ (6,200 ) $ (122,711 ) $ 322,052 Basic income (loss) per share $ (0.20 ) $ (0.05 ) $ (0.96 ) $ 2.62 Diluted income (loss) per share $ (0.20 ) $ (0.05 ) $ (0.96 ) $ 2.55 Quarter Ended December 31, Year Ended December 31, (in thousands, expect per share data) 2022 2021 2022 2021 Non-GAAP measures for year-over-year comparisons (1) Non-GAAP Revenue $ 132,732 $ 150,870 $ 538,031 $ 543,967 Non-GAAP operating (loss) income $ (9,912 ) $ 12,359 $ (26,877 ) $ 33,529 Non-GAAP net (loss) income $ (7,474 ) $ 11,570 $ (29,383 ) $ 41,473 Non-GAAP basic income (loss) per share $ (0.06 ) $ 0.09 $ (0.23 ) $ 0.34 Non-GAAP diluted income (loss) per share $ (0.06 ) $ 0.09 $ (0.23 ) $ 0.33 Adjusted EBITDA $ (4,808 ) $ 17,929 $ (5,781 ) $ 56,151 (1) See “Presentation of Information in this Press Release” below for a description and the Appendix for reconciliation of non-GAAP revenue, adjusted for divestitures, operating income (loss), net income (loss) and basic and diluted income (loss) per share to the most closely comparable GAAP measure.
Summary Comments on Results
Commenting on 2022 results and the outlook for 2023, Dr. Jeffrey Graves, President and CEO of 3D Systems said, "2022 was a year of strong investment in our development of next generation hardware, materials, and software platforms despite facing significant macroeconomic and geopolitical headwinds as well as softness in our key dental orthodontic market attributable to inflationary pressure on consumer discretionary spending. By sustaining this investment focus, we made major progress on the refresh of our printer portfolio, as evidenced in part by recent new product announcements. More such announcements will follow throughout 2023 as we complete the refresh of virtually our entire product portfolio. This organic development was complemented by our acquisition of three early-stage technology platforms over the last 18 months, which further broadened the range of customer applications we can now address. Continuity in these initiatives was essential given the continued momentum we are seeing in the adoption of additive manufacturing in production environments across both our Healthcare and Industrial Solutions markets. Sustaining these investments in the face of 2022's many headwinds required us to target our investment spending carefully, control operating costs, and leverage our strong balance sheet. This focus, combined with our improved operational execution gained through selective in-sourcing of manufacturing, has reinforced our industry-leading breadth of additive manufacturing technologies, our unparalleled applications expertise, and scale needed to meet our expanding customer needs for years to come."
"For 2023, given the continued inflationary environment and the pressure it inevitably puts on consumer discretionary spending, our revenue guidance assumes continued softness in the dental orthodontic market. On a positive note, we expect this softness in dental to be more than offset by the strong growth we currently anticipate in virtually all other key markets across our Healthcare and Industrial Solutions segments. This strength is being driven by a rapid expansion of new production applications and the accelerating efforts by our global customers to restructure their supply chains and reduce enterprise risk. The net result of these effects is an expected consolidated 2023 revenue growth rate in the mid-single digits, with mid-teens growth across all our non-dental markets."
"In 2023 we will place a high priority on profitability and cash performance as we increasingly harvest the gains in efficiency that our operations in-sourcing has provided. This focus will enable us to offset headwinds in our dental orthodontic market and to support our increasing investment in Systemic Bio and other regenerative medicine initiatives. From these investments, we expect to make meaningful announcements in these areas over the next 12 to 24 months as we move through pre-clinical trials for our biological applications and customer acceptance tests in the pharmaceutical markets. To further our gains in operating efficiency, this morning we announced a multi-pronged restructuring initiative designed to realize additional cost synergies in multiple parts of our business. We will complete these actions in the first half of this year. Based on our projected growth profile, combined with the cost actions completed last year and in early 2023, we expect to generate positive Adjusted EBITDA and positive free cash flow for full year 2023, excluding one-time restructuring costs."
"By executing on our strategic plan, we have positioned our Healthcare and Industrial Solutions segments for strong financial performance against the backdrop of an additive manufacturing industry that is poised for rapid future growth. In addition to this exciting trajectory for our current core business, we increasingly understand the remarkable potential of our long-term partnership with United Therapeutics to manufacture human organs for transplantation, and the growth benefits we expect from Systemic Bio, our early-stage business whose unique 3D printed organ-on-a-chip technology has the potential to revolutionize drug development in the pharmaceutical industry."
Dr. Graves concluded, "In designing our budget for 2023, we believe our investment strategy represents the best balance between short term profitability and sustained revenue growth in the current economic and geopolitical environment that we are experiencing. By delivering positive Adjusted EBITDA and free cash generation this year, which will further enhance our already strong balance sheet, while making the most critical investments in R&D and corporate infrastructure required to meet rapidly expanding adoption of additive manufacturing across our Industrial, Healthcare, and emerging biological markets, we believe we are well positioned to deliver sustained value creation to our customers and shareholders in 2023 and the years to follow."
Summary of Fourth Quarter Results
Revenue for the fourth quarter of 2022 decreased 12.0% to $132,732 compared to the same period last year, and non-GAAP revenue on a constant currency basis decreased 7.6%. The decline of non-GAAP revenue on a constant currency basis primarily reflects lower sales to certain dental market customers due to macroeconomic factors that are negatively impacting the demand for elective dental procedures, partially offset by continued solid product and service demand across other areas of the business.
Industrial Solutions revenue decreased 5.7% to $72,038 compared to the same period last year, however non-GAAP revenue on a constant currency basis increased 1.1% year over year. Healthcare Solutions revenue decreased 18.5% to $60,694 and non-GAAP revenue on a constant currency basis decreased 16.6% year over year.
Gross profit margin in the fourth quarter of 2022 was 41.2% compared to 43.9% in the same period last year. Non-GAAP gross profit margin was 40.9% compared to 44.1% in the same period last year. Gross profit margin decreased primarily due to input cost inflation and unfavorable product mix.
Operating expenses increased 18.0% to $82,674 in the fourth quarter of 2022 compared to the same period a year ago. On a non-GAAP basis, operating expenses were $64,144, an 18.2% increase from the same period a year ago. The increase in non-GAAP operating expenses primarily reflects spending in targeted areas to support future growth, including expenses from acquired businesses, research and development, and investments in corporate infrastructure.
Summary of Full-Year 2022 Results
Revenue for 2022 of $538,031 decreased 12.6% compared to the prior year. Non-GAAP revenue adjusted for divestitures and on a constant currency basis increased 3.3%. The increase in non-GAAP revenue reflects solid demand in both the Industrial and Healthcare Solutions segments despite macroeconomic challenges, offset by lower sales to certain dental market customers.
Industrial Solutions revenue decreased 10.5% to $277,043 compared to the prior year, and non-GAAP revenue adjusted for divestitures and on a constant currency basis increased 9.7%. Healthcare Solutions revenue decreased 14.8% to $260,988, and non-GAAP revenue adjusted for divestitures and on a constant currency basis decreased 2.9%.
Gross profit margin for the full year 2022 was 39.8% compared to 42.8% in the prior year. Non-GAAP gross profit margin was 39.8% for the full year 2022 compared to 42.5% in the prior year. Gross profit margin decreased primarily due to input cost inflation and unfavorable product mix.
Operating expenses for the full year 2022 increased 11.6% to $331,252 compared to the prior year. The higher operating expenses reflect spending in targeted areas to support future growth, including expenses from acquired businesses, research and development, and investments in corporate infrastructure, as well as a $19,888 increase in legal and other settlement costs, partially offset by the absence of expenses from divested businesses. Non-GAAP operating expenses were $241,124 in 2022, a 22.1% increase from the prior year. The higher non-GAAP operating expenses primarily reflect spending to support future growth.
2023 Outlook
The company is providing full-year 2023 financial guidance as follows:
Revenue: $545 - $575 million Non-GAAP Gross Profit Margin: 40% - 42% Adjusted EBITDA: Break even or better Free Cash Flow: Break even or better For purposes of the above guidance, Free Cash Flow is defined as Adjusted EBITDA less changes in working capital less capital expenditures.
Financial Liquidity
At December 31, 2022, the company had cash and cash equivalents and short-term investments of $568,737, a decrease of $220,920 since December 31, 2021. The decrease resulted primarily from cash paid for acquisitions and other investments of $103,647, cash used in operations of $68,395, capital expenditures of $22,499, and taxes paid related to net share settlement of equity awards $10,864. At December 31, 2022, the company had total debt net of deferred financing costs of $449,510.
Subsequent Events
Yesterday, the company resolved its ongoing export controls investigations with the U.S. Department of State, the U.S. Department of Commerce, and the U.S. Department of Justice. The company entered into individual settlement agreements which resulted in civil monetary penalties as well as certain remedial compliance measures to be completed as part of a three year consent agreement.
Q4 and FY 2022 Conference Call and Webcast
3D Systems will delay the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 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. As a result, the Company's independent registered public accounting firm has not yet completed its audits of the Company's financial statements as of December 31, 2022. It has no impact on the company's operations or on its ability to discuss its 2022 results and 2023 outlook.
The company will host a conference call and simultaneous webcast to discuss these results on March 1, 2023, which may be accessed as follows:
Date: Wednesday, March 1, 2023
Time: 8:30 a.m. Eastern Time
Listen via webcast: www.3dsystems.com/investor
Participate via telephone: 201-689-8345A 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 revenue, non-GAAP Gross profit, non-GAAP Gross profit margin, non-GAAP Operating expenses, non-GAAP Operating (loss)/income, non-GAAP Interest and other income/(expense), net, non-GAAP Net income (loss), non-GAAP Basic and Diluted Income (Loss) per Share, adjusted EBITDA and adjusted EBITDA Margin. These non-GAAP measures exclude certain special items that management does not view as part of 3D Systems’ underlying 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 a more meaningful 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 the same 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;
- restructuring charges (cost optimization plans), impairment charges, including goodwill, divestiture gains or losses, and severance charges pertaining to senior level employees;
- certain compensation expense related to the 2021 Volumetric acquisition; and
- revenue from divestitures included in current and comparable periods necessary to calculate revenue growth excluding the impact of divestitures.
Amortization of intangibles, 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 asset 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, 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. Restructuring charges (cost optimization plans), impairment charges, including goodwill, divestiture gains or losses, and severance charges pertaining to senior level employees, 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, 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 net income and basic and diluted earnings 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 intangibles, depreciation expense and other non-recurring and/or non-cash items 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 margins and non-GAAP operating expenses to the most directly comparable forward-looking GAAP measures without unreasonable effort because certain items, including legal, acquisition expenses, stock-compensation expense, intangible amortization expense, restructuring expenses, and goodwill impairment, 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 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 Solutions markets such as Medical and Dental, Aerospace & Defense, Automotive and Durable Goods. More information on the company is available at www.3dsystems.com.
Investor Contact:
Media Contact:investor.relations@3dsystems.com
press@3dsystems.comTables Follow
3D Systems Corporation
Unaudited Consolidated Balance Sheets
December 31, 2022 and December 31, 2021(in thousands, except par value) December 31, 2022 December 31, 2021 ASSETS Current assets: Cash and cash equivalents $ 388,134 $ 789,657 Short-term investments 180,603 — Accounts receivable, net of reserves — $3,114 and $2,445 93,886 106,540 Inventories 137,832 92,887 Prepaid expenses and other current assets 33,790 42,653 Total current assets 834,245 1,031,737 Property and equipment, net 58,072 57,257 Intangible assets, net 90,230 45,835 Goodwill 385,312 345,588 Right-of-use assets 43,655 46,356 Deferred income tax asset 7,038 5,054 Other assets 28,972 17,272 Total assets $ 1,447,524 $ 1,549,099 LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY Current liabilities: Current lease liabilities $ 10,075 $ 8,344 Accounts payable 53,826 57,366 Accrued and other liabilities 55,571 76,994 Customer deposits 6,911 7,281 Deferred revenue 26,464 28,027 Total current liabilities 152,847 178,012 Long-term debt, net of deferred financing costs 449,510 446,859 Long-term lease liabilities 41,650 47,420 Deferred income tax liability 7,631 2,173 Other liabilities 44,180 32,254 Total liabilities 695,818 706,718 Redeemable non-controlling interest 1,762 — Stockholders’ equity: Common stock, $0.001 par value, authorized 220,000 shares; shares issued 131,207 and 128,375 as of December 31, 2022 and 2021, respectively 131 128 Additional paid-in capital 1,547,597 1,501,210 Accumulated deficit (743,962 ) (621,251 ) Accumulated other comprehensive loss (53,822 ) (37,706 ) Total stockholders’ equity 749,944 842,381 Total liabilities, redeemable non-controlling interest and stockholders’ equity $ 1,447,524 $ 1,549,099 3D Systems Corporation
Unaudited Consolidated Statements of Operations
Year Ended December 31, 2022, 2021 and 2020Year Ended December 31, (in thousands, except per share amounts) 2022 2021 2020 Revenue: Products $ 395,396 $ 428,742 $ 332,799 Services 142,635 186,897 224,441 Total revenue 538,031 615,639 557,240 Cost of sales: Products 237,386 245,169 220,415 Services 86,412 106,692 113,450 Total cost of sales 323,798 351,861 333,865 Gross profit 214,233 263,778 223,375 Operating expenses: Selling, general and administrative 244,181 227,697 219,895 Research and development 87,071 69,150 74,143 Impairment of goodwill — — 48,300 Total operating expenses 331,252 296,847 342,338 (Loss) income from operations (117,019 ) (33,069 ) (118,963 ) Interest and other income (expense), net (3,790 ) 352,609 (24,447 ) (Loss) income before income taxes (120,809 ) 319,540 (143,410 ) (Provision) benefit for income taxes (2,140 ) 2,512 (6,184 ) Net (loss) income before redeemable non-controlling interest (122,949 ) 322,052 (149,594 ) Less: net (loss) attributable to redeemable non-controlling interest (238 ) — — Net (loss) income attributable to 3D Systems Corporation $ (122,711 ) $ 322,052 $ (149,594 ) Net (loss) income per common share Basic $ (0.96 ) $ 2.62 $ (1.27 ) Diluted $ (0.96 ) $ 2.55 $ (1.27 ) Weighted average shares outstanding: Basic 127,818 122,867 117,579 Diluted 127,818 126,334 117,579 3D Systems Corporation
Unaudited Consolidated Statements of Operations
Three Months Ended December 31, 2022, 2021 and 2020Three Months ended December 31, (in thousands, except per share amounts) 2022 2021 2020 Revenue: Products $ 94,734 $ 117,572 $ 112,552 Services 37,998 33,298 60,101 Total revenue 132,732 150,870 172,653 Cost of sales: Products 55,541 64,918 72,465 Services 22,561 19,734 27,739 Total cost of sales 78,102 84,652 100,204 Gross profit 54,630 66,218 72,449 Operating expenses: Selling, general and administrative 58,783 50,897 52,682 Research and development 23,891 19,163 19,036 Total operating expenses 82,674 70,060 71,718 Loss from operations (28,044 ) (3,842 ) 731 Interest and other (expense) income, net 1,666 (1,787 ) (16,849 ) (Loss) income before income taxes (26,378 ) (5,629 ) (16,118 ) (Provision) benefit for income taxes 771 (571 ) (3,712 ) Net (loss) income before redeemable non-controlling interest (25,607 ) (6,200 ) (19,830 ) Less: net (loss) attributable to redeemable non-controlling interest (54 ) — — Net (loss) income attributable to 3D Systems Corporation $ (25,553 ) $ (6,200 ) $ (19,830 ) Net income (loss) per share available to 3D Systems Corporation common stockholders Basic $ (0.20 ) $ (0.05 ) $ (0.16 ) Diluted $ (0.20 ) $ (0.05 ) $ (0.16 ) (1)Amounts in table may not foot due to rounding
3D Systems Corporation
Unaudited Consolidated Statements of Cash FlowsYear Ended
December 31,(in thousands) 2022 2021 2020 Cash flows from operating activities: Net (loss) income $ (122,949 ) $ 322,052 $ (149,594 ) Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation, amortization and accretion of debt discount 38,686 34,623 44,595 Stock-based compensation 42,415 55,153 17,725 Loss on short-term investments 3,146 — — Non-cash operating lease expense 6,296 — — Provision for inventory obsolescence and revaluation (356 ) (2,909 ) 12,373 Loss on hedge accounting de-designation and termination — 721 1,235 Provision for bad debts 562 232 457 Loss (gain) on the disposition of businesses, property, equipment and other assets 104 (350,846 ) 5,274 Benefit for deferred income taxes and reserve adjustments (2,518 ) (11,679 ) (1,206 ) Asset impairment 4,095 1,676 55,484 Changes in operating accounts: Accounts receivable 8,140 (11,912 ) (6,052 ) Inventories (48,140 ) 7,866 (9,901 ) Prepaid expenses and other current assets 8,223 (8,106 ) (16,218 ) Accounts payable (2,695 ) 27,159 (6,653 ) Deferred revenue and customer deposits (6,947 ) (3,325 ) 3,231 Accrued and other liabilities 11,231 (12,389 ) 28,286 All other operating activities (7,688 ) (169 ) 843 Net cash (used in) provided by operating activities (68,395 ) 48,147 (20,121 ) Cash flows from investing activities: Purchases of property and equipment (22,499 ) (18,791 ) (13,643 ) Purchases of short-term investments (384,388 ) — — Sales and maturities of short-term investments 200,314 — — Proceeds from sale of assets and businesses, net of cash sold 325 421,485 1,554 Acquisitions and other investments, net of cash acquired (103,647 ) (139,685 ) — Other investing activities — (2,454 ) 356 Net cash (used in) provided by investing activities (309,895 ) 260,555 (11,733 ) Cash flows from financing activities: Proceeds from revolving credit facilities — — 20,000 Payments on revolving credit facilities — — (20,000 ) Proceeds from borrowings — 460,000 — Debt issuance costs — (13,466 ) — Repayment of borrowings/long-term debt — (21,392 ) (26,840 ) Proceeds from issuance of common stock — — 24,702 Purchase of non-controlling interests (2,300 ) (6,300 ) (12,500 ) Taxes paid related to net-share settlement of equity awards (10,864 ) (12,619 ) (5,138 ) Other financing activities (660 ) (423 ) 296 Net cash (used in) provided by financing activities (13,824 ) 405,800 (19,480 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (5,881 ) (9,243 ) 1,428 Net (decrease) increase in cash, cash equivalents and restricted cash (397,995 ) 705,259 (49,906 ) Cash, cash equivalents and restricted cash at the beginning of the year a 789,970 84,711 134,617 Cash, cash equivalents and restricted cash at the end of the year a $ 391,975 $ 789,970 $ 84,711 (a)The amounts for cash and cash equivalents shown above include restricted cash of $114, $313 and $540 as of December 31, 2022, 2021 and 2020, respectively, which are included in prepaid expenses and other current assets. In addition, included in cash and cash equivalents above as of December 31, 2022 is $3,727 of restricted cash, which, is included in other non-current assets. Finally, included in cash and cash equivalents above as of December 31, 2020 is $9,161, which was included in current assets held for sale.
Appendix
3D Systems Corporation
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Three Months and Year Ended
December 31, 2022Three Months Ended December 31, (in thousands, except per share amounts) 2022 2022 GAAP Amortization, stock-based compensation & other Legal, acquisition and divestiture-related Cost optimization plan Impairment of cost-method investments Non-GAAP Revenue $ 132,732 $ — $ — $ — $ — $ 132,732 Gross Profit 54,630 $ (398 ) $ — $ — $ — 54,231 Gross Profit Margin 41.2 % 40.9 % Operating expenses 82,674 $ (14,596 ) $ (3,553 ) $ (377 ) $ (3 ) 64,144 Operating income (loss) (28,044 ) $ 14,198 $ 3,553 $ 377 $ 3 (9,912 ) Interest and other income (expense), net 1,666 $ — $ (52 ) $ — $ — 1,614 Net income (loss) (25,553 ) $ 14,188 $ 3,511 $ 377 $ 3 (7,474 ) Net income (loss) EPS - basic (0.20 ) 0.11 0.03 — — (0.06 ) Net income (loss) EPS - diluted $ (0.20 ) $ 0.11 $ 0.03 $ — $ — $ (0.06 ) Weighted Average Shares - basic 128,828 128.828 Weighted Average Shares - diluted 128,828 128.828 (1)Amounts in table may not foot due to rounding Year Ended
December 31,(in thousands, except per share amounts) 2022 2022 GAAP Amortization, stock-based compensation & other Legal, acquisition and divestiture-related Cost optimization plan Impairment of cost-method investments Non-GAAP Revenue $ 538,031 $ — $ — $ — $ — $ 538,031 Gross Profit 214,233 14 — — — 214,247 Gross Profit Margin 39.8 % 39.8 % Operating expenses 331,252 (49,995 ) (39,476 ) (638 ) (18 ) 241,124 Operating income (loss) (117,019 ) 50,009 39,476 638 18 (26,877 ) Interest and other income (expense), net (3,790 ) — 287 — 2,900 (603 ) Net income (loss) (122,711 ) 49,999 39,773 638 2,918 (29,383 ) Net income EPS - basic (0.96 ) 0.39 0.31 — 0.02 (0.23 ) Net income EPS - diluted $ (0.96 ) $ 0.39 $ 0.31 $ — $ 0.02 $ (0.23 ) Weighted Average Shares - basic 127,818 127,818 Weighted Average Shares - diluted 127,818 127,818 (1)Amounts in table may not foot due to rounding 3D Systems Corporation
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Three Months and Year Ended December 31, 2021Three Months Ended December 31, (in thousands, except per share amounts) 2021 2021 GAAP Amortization, stock-based compensation & other Legal, acquisition and divestiture-related (1) Cost optimization plan Product end of life adjustment Divestitures Non-GAAP Revenue $ 150,870 $ — $ — $ — $ — $ — $ 150,870 Gross Profit 66,218 200 — — 200 — 66,620 Gross Profit Margin 43.9 % 44.1 % Operating expenses 70,060 (13,169 ) (1,136 ) (1,494 ) — — 54,261 Operating income (loss) (3,840 ) 13,369 1,136 1,494 200 — 12,359 Interest and other income (expense), net (1,787 ) — 1,098 — — — (689 ) Net income (loss) (6,200 ) 13,369 2,707 1,494 200 — 11,570 Net income (loss) EPS - basic (0.05 ) 0.11 0.02 0.01 — — 0.09 Net income (loss) EPS - diluted $ (0.05 ) $ 0.10 $ 0.02 $ 0.01 $ — $ — $ 0.09 Weighted Average Shares - basic 124,874 124,874 Weighted Average Shares - diluted 127,884 127,884 (1)Amounts in table may not foot due to rounding Year Ended December 31, (in thousands, except per share amounts) 2021 2021 GAAP Amortization, stock-based compensation & other Legal, acquisition and divestiture-related (1) Cost optimization plan Impairment of cost-method investments Product end of life adjustment Divestitures Non-GAAP Revenue $ 615,639 $ — $ — $ — $ — $ — $ (71,672 ) $ 543,967 Gross Profit 263,778 500 — — 200 (33,499 ) 230,979 Gross Profit Margin 42.8 % 42.5 % Operating expenses 296,847 (64,366 ) (16,284 ) (1,494 ) — — (17,253 ) 197,450 Operating income (loss) (33,069 ) 64,866 16,284 1,494 — 200 (16,246 ) 33,529 Interest and other income (expense), net 352,609 — (353,809 ) — (43 ) — 1,100 (143 ) Net income (loss) 322,052 64,866 (331,950 ) 1,494 (43 ) 200 (15,146 ) 41,473 Net (loss) EPS - basic 2.62 0.53 (2.70 ) 0.01 — — (0.12 ) 0.34 Net (loss) EPS - diluted $ 2.55 $ 0.51 $ (2.63 ) $ 0.01 $ — $ — $ (0.12 ) $ 0.33 Weighted Average Shares - basic 122,867 122,867 Weighted Average Shares - diluted 126,334 126,334 (1)Amounts in table may not foot due to rounding 3D Systems Corporation
Unaudited Non-GAAP Operating Income to Adjusted EBITDA Reconciliation
Three Months and Year Ended December 31, 2022 and 2021Three Months Ended December 31,(1) Year Ended December 31,(1) (in thousands) 2022 2021 2022 2021 Revenue $ 132,732 $ 150,870 $ 538,031 $ 543,967 Non-GAAP Operating Income (9,912 ) 12,359 (26,877 ) 33,529 Depreciation 5,104 5,570 21,096 22,622 Adjusted EBITDA $ (4,808 ) $ 17,929 $ (5,781 ) $ 56,151 Adjusted EBITDA Margin (3.6 )% 11.9 % (1.1)% 10.3 % (1) Amounts in table may not foot due to rounding 3D Systems Corporation
Unaudited Reconciliation of Prior Years Revenue Excluding Divestitures (Non-GAAP)
2021 by Quarter2021 Three Months Ended (in thousands) March 31 June 30 September 30 December 31 Total Revenue Healthcare $ 72,521 $ 82,826 $ 76,365 $ 74,472 $ 306,184 Industrial 73,595 79,731 79,731 76,398 309,455 Total Revenue $ 146,116 $ 162,557 $ 156,096 $ 150,870 $ 615,639 Revenue From Divestitures: Healthcare $ 11,008 $ 13,135 $ 7,652 $ — $ 31,795 Industrial 14,195 13,931 11,751 — 39,877 Total Revenue $ 25,203 $ 27,066 $ 19,403 $ — $ 71,672 Total Revenue (Excl. Divest.): Healthcare $ 61,513 $ 69,691 $ 68,713 $ 74,472 $ 274,389 Industrial 59,400 65,800 67,980 76,398 269,578 Total Revenue (Excl. Divest.): $ 120,913 $ 135,491 $ 136,693 $ 150,870 $ 543,967 (1)Amounts in table may not foot due to rounding 3D Systems Corporation
Unaudited Reconciliation of Revenue to Non-GAAP Revenue (1)
Three Months and Year Ended December 31,Table 4
Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 % Change Constant Currency (2) (in thousands) FX Effect (3) B(W)% Revenue, as reported Healthcare $ 60,694 $ 74,472 (18.5 )% Industrial 72,038 76,398 (5.7 )% Total Revenue, as reported $ 132,732 $ 150,870 (12.0 )% Revenue From Divestitures: Healthcare $ — $ — Industrial — — Total Revenue $ — $ — Total Revenue (Excl. Divest. and FX Effect): Healthcare $ 60,694 $ 74,472 (18.5 )% $ (1,432 ) (16.6 )% Industrial 72,038 76,398 (5.7 )% (5,168 ) 1.1 % Total Revenue (Excl. Divest. and FX Effect): $ 132,732 $ 150,870 (12.0 )% $ (6,600 ) (7.6 )% Year Ended December 31, 2022 Year Ended December 31, 2021 % Change Constant Currency (2) (in thousands) FX Effect (3) B(W)% Revenue, as reported Healthcare $ 260,988 $ 306,184 (14.8 )% Industrial 277,043 309,455 (10.5 )% Total Revenue, as reported $ 538,031 $ 615,639 (12.6 )% Revenue From Divestitures: Healthcare $ — $ 31,795 Industrial 39,877 Total Revenue $ — $ 71,672 Total Revenue (Excl. Divest. and FX Effect): Healthcare $ 260,988 $ 274,389 (4.9 )% $ (5,564 ) (2.9 )% Industrial 277,043 269,578 2.8 % (18,567 ) 9.7 % Total Revenue (Excl. Divest. and FX Effect): $ 538,031 $ 543,967 (1.1 )% $ (24,131 ) 3.3 % (1)Amounts in table may not foot due to rounding and percent changes have been calculated based upon rounded amounts
(2) 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, excluding divestitures, for the three months and year ended December 31, 2022 by applying the foreign exchange rates used to translate 2021 non-US functional currency revenue to 2022 non-US functional currency revenue.
(3) FX effect is the estimated impact on “as reported” net revenue due to changes in foreign currency exchange rates