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3D Systems (DDD) Prelim. Q1 Results Miss Expectations

April 24, 2015 8:01 AM EDT

3D Systems (NYSE: DDD) announced that it anticipates its first quarter revenue to be in the range of $158 million to $160 million. The company expects to report a GAAP loss in the range of $0.13 per share to $0.15 per share and non-GAAP earnings in the range of $0.02 per share to $0.04 per share. The company expects to report that it ended the quarter with approximately $200 million of available cash.

*** The Street sees Q1 revenue of $182.8 million and EPS of $0.17.

These preliminary results are based on current expectations, subject to quarter-end closing adjustments, and actual results may differ.

The company believes that economic weaknesses attributable to several factors, including the decline in the Euro and Yen relative to the U.S. Dollar and the aftershock of lower oil prices, caused the majority of its aerospace, automotive and healthcare customers to curb new printer purchases during the quarter and curtail their materials and service purchases. In addition, certain metal and nylon applications and performance issues delayed the company's ability to sell additional printers during the quarter. The combined impact of these factors compressed the company's expected revenue growth for the quarter to 9% over the comparable quarter of 2014, or 17% at first quarter 2014 exchange rates. A stronger U.S. Dollar reduced total quarterly revenues by approximately $12 million at comparable Q1 2014 currency rates.

"We were surprised and disappointed by the abrupt interruption in customer demand late in the quarter from several economic factors that we believe caused our industrial customers to defer their planned investments," said Avi Reichental, President and Chief Executive Officer, 3DS. "We believe the combination of our expanding international business and growing concentration of manufacturing customers made us more vulnerable to the steep currencies decline relative to the U.S. Dollar and the aftermath of lower oil prices that curbed aerospace and automotive expenditures."

The company expects to report positive contributions from most of its revenue categories, including software, services and consumer, over the comparable 2014 period. However, stronger consumer products performance that yielded a 169% consumer printer units increase and continued direct metal demand that generated 46% metal printer units growth, were not enough to make up for the revenue shortfall from postponed industrial customers' purchases.

"Several weeks into the second quarter, bookings are ahead of the same period in the first quarter," continued Reichental. "Specifically, OEMs that paused to assess their own exposure to foreign currency and macroeconomic impacts are beginning to resume their capital investments and are making the purchases they deferred during the first quarter."

The company expects to report that its consolidated gross profit margin for the quarter expanded 110 basis points sequentially to approximately 49.0% despite drag from lower revenue and adverse mix and rate.

Given current uncertainties from continued macroeconomic pressures and foreign currency headwinds, management is undertaking a comprehensive evaluation of its full year guidance and plans to update investors during its scheduled first quarter 2015 earnings conference call on May 6, 2015.

"While the current economic climate disrupted our planned cadence for 2015, we believe that the fundamentals of our business and the strength of our portfolio remained intact. We are encouraged by the overall strengthening of our order patterns thus far during the second quarter and are accelerating our planned integration, productivity and efficiency measures without impairing future growth," concluded Reichental.

Preliminary Q1 2015 Results Conference Call

3D Systems plans to hold a conference call to discuss its preliminary financial results for the first quarter of 2015 on Friday, April 24, 2015, at 8:30 a.m. Eastern Time.

Date: Friday, April 24, 2015

Time: 8:30 a.m. Eastern Time

Listen via Internet: www.3dsystems.com/investor

Participate via telephone:

Within the U.S.: 1-877-407-8291 Outside the U.S.: 1-201-689-8345



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