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3D Systems Reports Operating Results for First Quarter 2007

Submitted by: John Warner on May 31, 2007 at 11:36 am Tagged with: Miscellany Source:

ROCK HILL, S.C.--(BUSINESS WIRE)--3D Systems Corporation (NASDAQ: TDSC), a leading provider of 3-D Modeling, Rapid Prototyping and Manufacturing solutions, announced today its operating results for the first quarter of 2007. These results were generally in line with the previously announced expectations that the company issued on May 10. The company also filed its Form 10-Q for the first quarter of 2007 with the SEC today.

The company will hold a conference call and simultaneous webcast to discuss its first quarter results tomorrow morning, May 31, 2007, at 9:00 a.m., Eastern Time. Additional information relating to that call and webcast is provided below.

For the first quarter of 2007, revenue increased 9.8% to a first-quarter record of $36.9 million from $33.6 million for the first quarter of 2006. This increase was led by revenue from engineered materials and composites, which increased 29.4% to $15.4 million from $11.9 million in the 2006 quarter. Revenue from systems and other products increased 6.6% to $13.2 million from $12.4 million for the first quarter of 2006. Revenue from services decreased 10.8% to $8.4 million from $9.4 million in the 2006 quarter.

On a consolidated basis, gross profit for the current quarter increased to $15.9 million from $13.6 million for the first quarter of 2006. Gross profit margin increased to 43.1% of total revenue from 40.4% of total revenue for the 2006 quarter, reflecting the company’s higher profit margins on sales of engineered materials and systems, but partially offset by a decline in profit margins on service revenue. For the first quarter of 2007, cost of sales increased 4.9%, a rate less than the rate of increase in total revenue, to $21.0 million from $20.0 million for the first quarter of 2006.

Operating expenses were $3.0 million higher in the first quarter of 2007 than in the first quarter of 2006 primarily due to $4.8 million of higher selling, general and administrative expenses. The increase in SG&A was due primarily to $2.3 million of costs associated with the company’s restatement of its financial statements and year-end audit, $1.0 million of severance and stock-based compensation expense primarily related to the departure of its former chief financial officer and $0.4 million of additional depreciation expense related to the Rock Hill facility and ERP equipment.

Operating expenses for the three months ended March 31, 2007, were aided by the absence of $1.6 million of restructuring costs that the company incurred in the first quarter of 2006 related to its relocation to Rock Hill, South Carolina.

While research and development expenses declined by $0.2 million in the first quarter of 2007, the company continues to work on selected new product developments and expects to incur $12 million to $13 million of research and development expenses in 2007.

Net loss available to the common stockholders increased to $3.1 million in the first quarter of 2007 from $1.9 million for the first quarter of 2006, primarily reflecting the company’s operating loss, higher interest expenses and higher tax provisions. Diluted net loss per share available to common stockholders was $0.16 and $0.13 for the quarters ended March 31, 2007 and 2006, respectively.

The company ended its first quarter of 2007 with $7.0 million of unrestricted cash, which primarily reflected borrowings under its Silicon Valley Bank credit facility that comes due at the beginning of July. The company expects to repay or refinance those borrowings when they become due out of available cash, the renewal or replacement of that credit facility or other sources of financing. Borrowings under that credit facility were $8.2 million at March 31, 2007.

“I am very pleased that we are finally catching up in our financial reporting and are able to share with you our first quarter’s financial results,” said Abe Reichental, 3D Systems’ president and chief executive officer. “We are working very hard to return to timely reporting of our operating results.”