For the quarter:
-- Revenue rose 15% to $44.1 million from $38.3 million in the 2004 quarter.
-- Operating income rose 3% to $4.5 million from $4.4 million in 2004.
-- Net income available to common stockholders rose to $6.0 million from $3.1 million in the 2004 quarter.
-- A $2.5 million non-cash tax benefit in the fourth quarter discussed below helped to increase net income available to common stockholders for the quarter and the full year. Another special item that affected the fourth quarter and the full year was the offsetting $1.2 million of relocation costs that we incurred in the fourth quarter related to our plans to move our headquarters to Rock Hill, South Carolina. The net effect of these two items accounted for $1.3 million or $0.06 per diluted share of the increase in net income available to common stockholders for the fourth quarter.
-- Diluted EPS rose to $0.32 per share compared to $0.20 per share in the 2004 quarter.
For the full year:
-- Revenue rose 11% to $139.7 million from $125.4 million in 2004.
-- Operating income rose 67% to $9.3 million from $5.6 million in 2004.
-- Net income available to common stockholders increased eight-fold to $8.4 million from $1.0 million in 2004.
-- The net effect of the $2.5 million non-cash tax benefit mentioned above and the offsetting $1.2 million of relocation costs mentioned above accounted for $1.3 million or $0.08 per diluted share of the increase in net income available to common stockholders for the full year.
-- Diluted EPS rose to $0.53 per share compared to $0.07 per share in 2004, a more than seven-fold increase.
"2005 was another outstanding year for 3D Systems with revenue, operating profit, net income and EPS once again reaching record amounts," said Abe Reichental, 3D Systems' president and chief executive officer. "We are particularly gratified that our 2005 revenue growth was driven by the new products that we have introduced since the latter part of 2003. As the year progressed, revenue from new products continually increased as a total share of our revenue mix, climbing to 38% of total revenue in the fourth quarter and ending at 28% of total revenue for the full year."
"Revenue from our 3-D Printing and Rapid Manufacturing initiatives more than offset our expected decrease in revenue from legacy products and services. For the second consecutive quarter, we ended the fourth quarter with a significant order backlog -- $6.8 million -- mostly for orders for large-frame systems for Rapid Manufacturing applications that we expect to ship in 2006. We believe that our 2005 results demonstrate that the strategic actions that we have taken since late 2003 to reshape our organization, transform our product portfolio and re-engineer our business model bore fruit in 2005."
Operating Highlights
Fourth-Quarter and Full-Year 2005
($ in millions except for per share amounts)
----------------------------------------------------------------------
Fourth Quarter Full Year
-------------------------------------------------
Operating Highlights 2005 2004 % Change 2005 2004 % Change
----------------------------------------------------------------------
Revenue $44.1 $38.3 15% $139.7 $125.4 11%
----------------------------------------------------------------------
Gross profit $20.9 $17.7 $63.1 $56.1
% of Revenue 47% 46% 18% 45% 45% 13%
----------------------------------------------------------------------
Operating expenses $16.4 $13.3 $53.8 $50.5
% of Revenue 37% 35% 23% 39% 40% 7%
----------------------------------------------------------------------
Operating income $4.5 $4.4 $9.3 $5.6
% of Revenue 10% 11% 3% 7% 4% 67%
----------------------------------------------------------------------
Net income to common $6.0 $3.1 $8.4 $1.0
stockholders
% of Revenue 14% 8% 96% 6% 1% NM
----------------------------------------------------------------------
----------------------------------------------------------------------
Diluted income per
share to common
stockholders $0.32 $0.20 60% $0.53 $0.07 NM
----------------------------------------------------------------------
Unrestricted cash $24.1 $26.3 (8%) $24.1 $26.3 (8%)
----------------------------------------------------------------------
Depreciation and $1.0 $1.8 $5.8 $7.0
amortization
% of Revenue 2% 5% (41%) 4% 6% (17%)
----------------------------------------------------------------------
NM = not meaningful
Revenue increases for both the fourth quarter and the year were driven by increases in unit volume of systems and materials, including InVision(TM) 3-D printers, the new-from-the-ground-up Sinterstation(R) Pro and Viper(TM) Pro systems and by favorable price/mix effects. Foreign currency translation adversely affected revenue by $1.2 million for the year and $2.2 million for the fourth quarter, reversing its positive effect in the 2004 periods.
Double-digit increases in sales of systems and materials drove revenue increases in the Americas and the Asia-Pacific region for both the year 2005 and the fourth quarter. Although poor economic conditions in Europe caused declines in systems' revenue in the quarter and the year, materials sales in Europe were strong. Service revenue was down in all geographies and in most service categories, reflecting our previously announced decision to curtail development and sale of upgrades for older, legacy systems and the increased reliability and useful life of laser assemblies.
"Just about one year ago, we shared with you that our planned realignment and recruitment in 2004 of our U.S. sales team came with short-term costs in order to meet medium-term and long-term goals," continued Reichental. "Today, we are pleased to share with you that our new U.S. sales team produced a 53% increase in revenue in the U.S. during the fourth quarter and a 27% increase in revenue for the full year 2005. We are also gratified that our higher investments in R&D during the past two years produced new products that captured $22.8 million of new revenue in 2005, more than offsetting a $12.0 million decline in revenue from core products and services that we are phasing out."
Revenue By Class of Product and Service
($ in millions)
----------------------------------------------------------------------
Fourth Quarter Full Year
---------------------------------------------
Product or Service 2005 2004 % Change 2005 2004 % Change
----------------------------------------------------------------------
Systems and other
products $21.7 $15.3 41% $55.7 $46.0 21%
----------------------------------------------------------------------
Materials $12.8 $11.6 11% $44.6 $38.0 18%
----------------------------------------------------------------------
Services $9.7 $11.4 (15%) $39.3 $41.4 (5%)
----------------------------------------------------------------------
Total $44.1 $38.3 15% $139.7 $125.4 11%
----------------------------------------------------------------------
"Fourth-quarter revenue was bolstered by our growing 3-D Printing business and shipments of our new Sinterstation(R) Pro and Viper(TM) Pro systems introduced in the latter half of 2005. Some 50% of our systems' sales in the fourth quarter were for Rapid Manufacturing applications, supporting our emphasis on developing and offering systems that effectively serve higher-growth rapid manufacturing applications," continued Reichental. "Materials' revenue grew as a result of certain tactical marketing initiatives to benefit our customers and produce favorable margins."
Gross Profit Margins
($ in millions)
----------------------------------------------------------------------
Fourth Quarter Full Year
---------------------------------------------
2005 2004 % Change 2005 2004 % Change
----------------------------------------------------------------------
Products $18.0 $13.1 $50.4 $40.1
% Revenue 52% 49% 38% 50% 48% 26%
----------------------------------------------------------------------
Services $3.0 $4.6 $12.7 $16.0
% Revenue 31% 41% (36%) 32% 39% (21%)
----------------------------------------------------------------------
Total $20.9 $17.7 $63.1 $56.1
% Revenue 47% 46% 18% 45% 45% 13%
----------------------------------------------------------------------
"Gross profit margin rose modestly in both the fourth quarter and full-year 2005, benefiting from higher product margins that were only partially offset by the lower margins we derived from our services."
"Product margins benefited from higher unit sales of new systems and materials, lower costs from our outsourcing activities and favorable price/mix effects. But, we did not realize the full benefit of those improvements because of unabsorbed manufacturing overhead arising from our outsourcing activities, additional costs associated with the rollout of two major new systems in 2005 and adverse foreign exchange transaction effects," continued Reichental.
"Service margins declined due to lower sales of upgrades for older legacy systems, higher training and field service activity and a special compensation-related charge. While we are disappointed with the absence of a noticeable improvement in profit margins in 2005, the factors that adversely affected them resulted primarily from deliberate strategic decisions we have made for long-term gain, and we expect to see additional margin improvements going forward," said Reichental.
While operating expenses increased $3.1 million in the fourth quarter and $3.3 million for the full year, as a percentage of revenue, they declined to 39% of revenue in the 2005 year from 40% in 2004. The increase in operating expenses for the year included $1.7 million of strategic and tactical R&D expenditures, which increased by 16% to $12.2 million for the full year, reflecting our accelerated pace of new product development and introductions.
The year's increase in operating expenses also included $1.2 million of severance and restructuring costs that, as mentioned above, we incurred in the fourth quarter 2005 in connection with our previously announced plans to relocate our corporate headquarters, principal R&D activities and corporate support functions to Rock Hill, South Carolina during 2006. These $1.2 million of costs were generally in line with our previously disclosed expectations.
Reflecting on these relocation costs, we estimate that, during 2006, the additional expenses to complete our relocation should be in the range of $6.4 million to $8.1 million. This amount includes an estimated $6.2 million of moving costs and other costs related to personnel, relocation and recruiting and $0.2 million to $1.9 million of facility exit costs. Included in the range of facility exit costs is an estimate of costs that we may incur if we encounter delays in disposing of our Grand Junction and Valencia facilities.
We continue to believe that, in addition to other significant operational and strategic improvements that we expect to achieve from our relocation project, we should realize facilities' and operating-cost savings in excess of $2.5 million per year beginning in 2007, the first full year of our planned operations in the Charlotte area.
Selling, general and administrative expenses increased 13% for the quarter, primarily reflecting our higher commissions on higher quarterly revenue. For the year, the $1.0 million increase in SG&A expenses resulted primarily from lower legal expenses that were more than offset by higher sales and marketing costs related to our higher revenue and by the absence in 2005 of the benefit of $1.5 million of healthcare cost and bad debt accrual reductions that reduced SG&A expenses in 2004.
"We are pleased that our profitability and continued favorable outlook permitted us to reduce the allowance on our deferred tax assets established in 2002 when we were suffering severe losses and realization of the benefit of our tax loss carry-forwards was uncertain. The $2.5 million allowance reduction is a non-cash tax benefit for U.S. taxes. We expect to reduce the allowance further in future periods as our outlook continues to improve, which would produce additional non-cash tax benefits. Aggregate gross deferred tax assets at the end of 2005 totaled $31.4 million, of which some $29.6 million are related to U.S. taxes and associated with $66.3 million of net operating loss carry-forwards in the U.S. Although we have now commenced recording U.S. tax provisions for financial reporting purposes, we do not expect to pay federal income taxes in the U.S. for several years until we have used the deferred tax assets associated with our U.S. loss carry-forwards.
"Because of our significant investments in working capital during 2005 to support sales, unrestricted cash declined by $2.2 million during the year to $24.1 million at year-end 2005. We expect that the unusually high accounts receivable occasioned by the concentration of fourth-quarter sales late in the quarter will reach normalized levels in the course of the first quarter. We also anticipate that progress payments to outsource assemblers should decline significantly over the course of 2006.
"Most importantly, the ability of our employees to act and operate like owners of the business is producing favorable trends in revenue, operating expenses, gross profit margin and cash flow. Reflecting on the significant progress we made throughout 2005, we believe that we are well positioned to transform the way our customers design, develop and manufacture their products and to improve our customer's bottom line," concluded Reichental.
3D Systems will discuss its operating results for the fourth quarter and full-year of 2005 on a conference call and audio Webcast today at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). Details are set forth below.
Fourth-quarter business highlights:
During the fourth quarter, 3D Systems:
-- Introduced 3 new products:
-- Accura(R) 25 material, an opaque, white engineered
material that mimics the look and feel of molded
polypropylene, delivers excellent accuracy, speed and
shape-memory, making it suitable for functional prototypes
as well as master patterns.
-- VisiJet(R) SR 200 plastic for the InVision(TM) SR 3-D
Printer that is designed to produce parts that are 2 to 3
times stiffer and stronger, mimicking the general
performance characteristics of high-volume thermoplastics
such as polypropylene and ABS.
-- DuraForm(R) EX plastic, which is designed for use in our
Sinterstation(R) Pro SLS(R) and Sinterstation(R) HiQ(TM)
systems, targets rapid manufacturing applications. This
material provides the toughness of injection-molded
plastic that aerospace, automotive and motorsports
customers require for demanding prototyping and low-volume
to mid-volume manufacturing applications.
-- Announced and began to execute plans to relocate our corporate
headquarters to a new facility in Rock Hill, South Carolina,
to enhance our effectiveness and customer responsiveness and
to reduce overall costs. This new facility will feature a
rapid manufacturing center to showcase our product line and an
advanced research and development center.
-- Began to develop a world-class training center -- in
partnership with York Technical College -- adjacent to our new
headquarters that will provide training to our customers,
resellers and employees.
Full-Year 2005 business highlights:
In 2005, 3D Systems:
-- Introduced 12 new products, including the 3 new products
mentioned above and the following:
-- Viper(TM) Pro SLA(R) system, an advanced, flexible,
high-capacity stereolithography system to enable customers
to mass customize and produce high-quality, end-use parts,
patterns, wind tunnel models, fixtures and tools
consistently and economically using our proprietary
stereolithography materials.
-- Sinterstation(R) Pro SLS(R) system, an automated selective
laser sintering manufacturing system designed as an
alternative rapid manufacturing solution to traditional
injection molding, casting and machining methods.
-- Entered into an OEM supply agreement with Solidimension
Ltd. under which we began offering the InVision(TM) LD 3-D
Printer. This desk-top 3-D Printer uses a layered
deposition technology that builds complex geometrical
shapes for communication and concept modeling
applications.
-- Introduced the ProCure(TM) System. This stainless steel
system cures parts produced on certain of the company's
SLA(R) systems.
-- Introduced 3D Lightyear(TM) 1.5 build preparation software
and Buildstation(TM) 5.5 machine control software. This
enhanced software gives customers new capabilities that
make the company's SLA(R) systems more productive and
enhance part quality.
-- New materials, including:
-- DuraForm(R) Flex Plastic, a rubber-like,
tear-resistant, flexible plastic.
-- DuraForm(R) AF Plastic, a cast-aluminum-like
engineered composite that has the appearance of
aluminum, the excellent surface finish and fine
feature definition and the superior stiffness of an
engineered composite.
-- DuraForm(R) FR plastic, a new flame-retardant material
for use in our selective laser sintering systems that
has passed FAA and airline burn, smoke and toxicity
tests. This plastic provides our customers with
materials suited for applications such as aerodynamic
models, jigs and fixtures, household appliances,
casting patterns and functional prototypes such as
cases and metal enclosures.
-- VisiJet(R) HR material for the InVision(TM) HR 3-D
Printer for applications such as jewelry manufacturing
and dental labs that require intricate,
high-resolution capability to produce feature-rich
models, patterns and parts that are used as master
patterns for casting into gold, white gold or silver.
-- Expanded our network of systems outsourcing partners and
suppliers to include materials and service providers.
-- Focused on core value-added activities and stepped up our
investment in new product development, applications
development, sales and marketing activities, customer service
and field support.
-- Deliberately and innovatively began outsourcing certain
non-core activities such as spare parts' distribution and
training activities and began pruning our older products,
including curtailing development and sale of upgrades to old,
legacy systems.
-- Began implementing a new ERP system in order to streamline our
operations, enhance customer service and provide more timely
and effective management information.
3D Systems' complete suite of customer solutions includes:
-- 3-D Printing systems, which accept digital input from a three-dimensional CAD station, convert the digital file one horizontal slice at a time and jet hot-melted plastic material or use other plastic materials in an additive layer-by-layer build-up to create a solid part. 3-D Printers enable designers, engineers, architects and marketers to communicate their concepts frequently, and substantially reduce the time it takes to bring new products to market.
-- Stereolithography or SLA(R) systems, which convert proprietary materials and composites into solid cross-sections, layer by layer, until building desired parts. SLA(R) systems enable users to create multiple parts of different geometries and shapes at the same time and to produce prototypes, patterns or end-use parts that have a wide range of sizes and shapes.
-- Selective Laser Sintering or SLS(R) systems that use heat to melt and fuse, or sinter, powdered materials into solid cross-sections, layer by layer, until the desired parts are complete. SLS(R) systems create parts from a variety of plastic and metal materials and composites and have the capability to process multiple parts within the same build cycle.
-- Engineered materials and composites that the company blends and markets under a variety of brand names for use in all of its systems to produce high-quality models, prototypes and parts. 3D Systems markets stereolithography materials under the Accura(R) brand, selective laser sintering materials under the DuraForm(R), LaserForm(TM) and CastForm(TM) brands, and 3-D Printing materials under the VisiJet(R) brand. The company also distributes additional materials and composites manufactured by DSM Somos(R) and Dreve in order to enhance the portfolio of solutions available to its customers.
-- Software used for proprietary part preparation for use on personal computers and engineering workstations. These proprietary software packages generate the information required by the company's SLS(R), SLA(R) and 3-D Printing systems to create three-dimensional models and parts.
-- Services that the company provides include a suite of comprehensive customer services and local field support on a worldwide basis for all of the company's systems. Such services and support include extended system warranties, an extensive menu of annual service agreement options, a wide variety of software and hardware upgrades, and performance enhancement packages for legacy systems.
Broad Applications and End-Uses:
-- 3-D Printing system solutions provide users with concept-modeling and three-dimensional printing applications. 3-D printed parts enable users to primarily visualize and communicate mechanical design applications. Other applications for 3-D Printing include supply-chain management, architecture, art, surgical modeling, marketing and entertainment.
-- Rapid Prototyping system solutions, used for rapid prototyping applications, enable users to generate product concept models, functional prototypes and master-casting and tooling patterns. These applications often create efficient, cost-effective means for evaluating product designs.
-- Rapid Manufacturing system solutions, used for rapid manufacturing applications, enable users to manufacture end-use parts, jigs, fixtures, tools and patterns directly from a digital image. The company's rapid manufacturing customers produce end-use parts without the need for expensive tooling or molds and without lengthy set-ups, resulting in significant savings, flexibility and mass customization capabilities.
Conference Call and Audio Webcast Details
3D Systems will hold a conference call and audio Webcast to discuss its fourth-quarter and full-year 2005 financial results today at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time).
-- To access the Conference Call, dial 877-791-4796 (or 706-679-6014 from outside the United States). A recording will be available two hours after completion of the call for seven days. To access the recording, dial 800-642-1687 (or 706-645-9291 from outside the United States) and enter 5562158, the conference call ID number.
-- To access the audio Webcast, users can log onto 3D Systems' website at www.3dsystems.com. 3D Systems will provide a link to the Webcast on the website home page. 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 at: http://www.3dsystems.com/company/investor/index.asp
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 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," "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 expectations and are necessarily subject to uncertainties, many of which are outside the control of the company. The factors stated under the heading "Forward-Looking Statements" and "Cautionary Statements and Risk Factors" in management's discussion and analysis of results of operations and financial condition, which appear 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 rapid 3-D printing, prototyping and manufacturing solutions. Its systems and materials reduce the time and cost of designing products and facilitate direct and indirect manufacturing by creating actual parts directly from digital input. These solutions are used for design communication and prototyping as well as for production of functional end-use parts: Transform your products.
More information on the company is available at www.3dsystems.com, or via email at moreinfo@3dsystems.com.
3D SYSTEMS CORPORATION
Condensed Consolidated Statements of Operations
Three Months and Twelve Months Ended December 31, 2005 and
December 31, 2004
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- ---------------------
2005 2004 2005 2004
----------- -------- ----------- --------
(Unaudited) (Unaudited)
Revenue:
Products $34,488 $26,904 $100,396 $83,976
Services 9,657 11,416 39,274 41,403
----------- -------- ----------- --------
Total revenue 44,145 38,320 139,670 125,379
Cost of sales:
Products 16,535 13,853 49,973 43,898
Services 6,683 6,770 26,567 25,390
----------- -------- ----------- --------
Total cost of sales 23,218 20,623 76,540 69,288
----------- -------- ----------- --------
Gross profit 20,927 17,697 63,130 56,091
----------- -------- ----------- --------
Operating expenses:
Selling, general and
administrative 11,869 10,528 40,382 39,411
Research and development 3,371 2,720 12,176 10,474
Severance and
restructuring 1,178 84 1,227 605
----------- -------- ----------- --------
Total operating expenses 16,418 13,332 53,785 50,490
----------- -------- ----------- --------
Income from operations 4,509 4,365 9,345 5,601
Interest and other expense,
net 28 580 762 1,979
----------- -------- ----------- --------
Income before provisions for
income taxes 4,481 3,785 8,583 3,622
Provisions for (benefit of)
income taxes (1,947) 309 (1,500) 1,061
----------- -------- ----------- --------
Net income 6,428 3,476 10,083 2,561
Preferred stock dividends 411 411 1,679 1,534
----------- -------- ----------- --------
Net income available to
common stockholders $6,017 $3,065 $8,404 $1,027
=========== ======== =========== ========
Shares used to calculate
basic net income available
to common stockholders per
share 15,146 13,559 14,928 13,226
=========== ======== =========== ========
Basic net income available
to common stockholders per
share $0.40 $0.23 $0.56 $0.08
=========== ======== =========== ========
Shares used to calculate
fully diluted net income
available to common
stockholders per share 20,861 20,139 16,004 14,149
=========== ======== =========== ========
Diluted net income available
to common stockholders per
share $0.32 $0.20 $0.53 $0.07
=========== ======== =========== ========
Note: The condensed consolidated statements of operations for the
fourth quarter and twelve months ended December 31, 2005 and
2004 have been derived from the audited financial statements
for the years then ended but omit certain information required
by generally accepted accounting principles for complete
financial statements.
3D SYSTEMS CORPORATION
Condensed Consolidated Balance Sheets
December 31, 2005 and 2004
(in thousands)
December December
31, 2005 31, 2004
-------------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $24,112 $26,276
Accounts receivable, net 33,172 22,209
Inventories, net 13,960 9,512
Deferred tax asset 2,500 -
Prepaid expenses and other current assets 9,523 5,507
--------- ---------
Total current assets 83,267 63,504
Property and equipment, net 12,166 9,500
Goodwill 44,747 45,135
Intangible assets, net 7,990 10,224
Restricted cash 1,200 1,200
Other assets, net 1,572 1,933
--------- ---------
$150,942 $131,496
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $200 $180
Accounts payable 10,949 6,937
Accrued liabilities 12,174 13,447
Customer deposits 1,945 819
Deferred revenue 13,768 13,797
--------- ---------
Total current liabilities 39,036 35,180
Long-term debt, less current portion 3,545 3,745
Convertible subordinated debentures 22,604 22,704
Other liabilities 1,039 1,607
--------- ---------
Total liabilities 66,224 63,236
Series B convertible redeemable preferred stock 15,242 15,196
Stockholders' equity:
Common stock, authorized 60,000 shares, issued and
outstanding 15,302 (2005) and 14,490 (2004) 15 14
Additional paid-in capital 106,883 97,859
Deferred compensation (1,461) (45)
Treasury stock, at cost (154) (68)
Accumulated deficit in earnings (34,798) (44,881)
Accumulated other comprehensive income (loss) (1,009) 185
--------- ---------
Total stockholders' equity 69,476 53,064
--------- ---------
$150,942 $131,496
========= =========
Note: The condensed consolidated balance sheets at December 31,
2005 and 2004 have been derived from the audited financial
statements at those dates but omit certain information
required by generally accepted accounting principles for
complete financial statements.
3D SYSTEMS CORPORATION
Condensed Consolidated Statements of Cash Flows
Twelve Months Ended December 31, 2005 and December 31, 2004
(in thousands)
Twelve Months Ended
December 31,
--------------------
2005 2004
----------- --------
(Unaudited)
Cash flows from operating activities:
Net income $10,083 $2,561
Adjustments to reconcile net income to net cash
used in operating activities:
Valuation allowance for deferred income taxes (2,500)
Depreciation and amortization 5,764 6,956
Adjustments to inventory reserves (733) (310)
Adjustment to allowance accounts (48) (216)
Stock-based compensation expense 941 634
Payment of interest on employee note with stock - (4)
(Gain) loss on disposition of property and
equipment (262) 231
Changes in operating accounts:
Deposits (13) 338
Accounts receivable, net (13,008) 1,537
Inventories, net (7,907) (189)
Prepaid expenses and other current assets (4,207) (2,908)
Other assets 517 337
Accounts payable 4,211 (448)
Accrued liabilities (148) (2,849)
Customer deposits 1,157 48
Deferred revenue 763 (2,340)
Other liabilities (418) (450)
----------- --------
Net cash used in operating activities (5,808) 2,928
----------- --------
Cash flows from investing activities:
Purchase of property and equipment (2,603) (781)
Proceeds from sale of property and equipment 727 -
Additions to licenses and patents (372) (417)
Software development costs (598) (737)
----------- --------
Net cash used in investing activities (2,846) (1,935)
----------- --------
Cash flows from financing activities:
Stock option, stock purchase plan and restricted
stock proceeds 8,135 4,898
Repayment of long-term debt (180) (165)
Payments under obligation to former 3D Systems
S.A. stockholders (585) (852)
Payment of preferred stock dividends (1,617) (1,420)
Stock registration costs - (428)
Payment to OptoForm Sarl minority interest
shareholder - (49)
Payment of accrued liquidated damages (36) (837)
----------- --------
Net cash provided by financing activities 5,717 1,147
----------- --------
Effect of exchange rate changes on cash 773 182
----------- --------
Net decrease in cash and cash equivalents (2,164) 2,322
Cash and cash equivalents at the beginning of the
period 26,276 23,954
----------- --------
Cash and cash equivalents at the end of the period $24,112 $26,276
=========== ========
Note: The condensed consolidated statements of cash flows for the
twelve months ended December 31, 2005 and 2004 have been
derived from the audited financial statements for those
periods but omits certain information required by generally
accepted accounting principles for complete financial
statements.
Schedule 1
The following is a reconciliation of the numerator and denominator of
the basic and diluted net income available to common stockholders per
share computations:
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2005 2004 2005 2004
----------- ------- ----------- -------
(Unaudited) (Unaudited)
Basic net income available to
common stockholders per share:
Numerator:
Net income available to common
stockholders $6,017 $3,065 $8,404 $1,027
=========== ======= =========== =======
Denominator:
Weighted average common shares
outstanding 15,146 13,559 14,928 13,226
=========== ======= =========== =======
Basic net income available to
common stockholders, per share $0.40 $0.23 $0.56 $0.08
=========== ======= =========== =======
Diluted net income available to
common stockholders per share:
Numerator:
Net income available to common
stockholders $6,017 $3,065 $8,404 $1,027
Add: Preferred stock dividend 411 411 - -
Add: Interest on 6% convertible
subordinated debentures 315 358 - -
Add: Interest on 7% convertible
subordinated debentures (a) - 175 - -
----------- ------- ----------- -------
Diluted net income available to
common stockholders, per share $6,743 $4,009 $8,404 $1,027
=========== ======= =========== =======
Denominator:
Weighted average common shares
outstanding 15,146 13,559 14,928 13,226
Add: Effect of assumed exercise
of options and vesting of
restricted stock 878 898 1,076 923
Add: Effect of assumed
conversion of 6% subordinated
convertible debentures 2,220 2,230 - -
Add: Effect of assumed
conversion of 7% subordinated
convertible debentures (a) - 829 - -
Add: Effect of assumed
conversion of preferred stock 2,617 2,623 - -
----------- ------- ----------- -------
Diluted weighted average common
shares outstanding 20,861 20,139 16,004 14,149
=========== ======= =========== =======
Diluted net income per common
share $0.32 $0.20 $0.53 $0.07
=========== ======= =========== =======
(a) All outstanding 7% convertible subordinated debentures had been
converted into Common Stock as of December 31, 2004.
Contact:
3D Systems Corporation Fred Jones (Investor Contact), 661-295-5600 ext. 2142 Email Contact or Katharina Hayes (Media Contact), 803-326-3941 Email Contact