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;
- charges related to restructuring and cost optimization plans, impairment charges, including goodwill, and divestiture gains or losses;
- certain compensation expense related to the 2021 Volumetric acquisition; and
- costs, including legal fees, related to significant or unusual litigation matters.
Amortization of intangibles and 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 assets 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, the expense is non-cash in nature, and 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. Charges related to restructuring and cost optimization plans, impairment charges, including goodwill, divestiture gains or losses, and the costs, including legal fees, related to significant or unusual litigation matters 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, the company believes the costs, including legal fees, related to significant or unusual litigation matters are not indicative of our core business' operations. Finally, 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 diluted income (loss) 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 intangible assets, depreciation expense, and other non-GAAP adjustments, 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 profit margin, Adjusted EBITDA, and non-GAAP operating expense to the most directly comparable forward-looking GAAP measures without unreasonable effort because certain items, including litigation costs, acquisition expenses, stock-based compensation expense, intangible assets amortization expense, restructuring expenses, and goodwill impairment charges 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 35 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
Tables Follow
3D Systems Corporation
Unaudited Condensed Consolidated Balance Sheets June 30, 2024 and December 31, 2023 | |||||||
(in thousands, except par value) | June 30, 2024 | December 31, 2023 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 192,732 | $ | 331,525 | |||
Accounts receivable, net of reserves — $3,089 and $3,389 | 97,447 | 101,497 | |||||
Inventories | 141,743 | 152,188 | |||||
Prepaid expenses and other current assets | 41,769 | 42,612 | |||||
Total current assets | 473,691 | 627,822 | |||||
Property and equipment, net | 60,267 | 64,461 | |||||
Intangible assets, net | 58,276 | 62,724 | |||||
Goodwill | 114,070 | 116,082 | |||||
Operating lease right-of-use assets | 53,547 | 58,406 | |||||
Finance lease right-of-use assets | 11,733 | 12,174 | |||||
Long-term deferred income tax assets | 3,474 | 4,230 | |||||
Other assets | 46,429 | 44,761 | |||||
Total assets | $ | 821,487 | $ | 990,660 | |||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY | |||||||
Current liabilities: | |||||||
Current operating lease liabilities | $ | 9,481 | $ | 9,924 | |||
Accounts payable | 41,272 | 49,757 | |||||
Accrued and other liabilities | 45,282 | 49,460 | |||||
Customer deposits | 7,456 | 7,599 | |||||
Deferred revenue | 33,580 | 30,448 | |||||
Total current liabilities | 137,071 | 147,188 | |||||
Long-term debt, net of deferred financing costs | 211,368 | 319,356 | |||||
Long-term operating lease liabilities | 52,536 | 56,795 | |||||
Long-term deferred income tax liabilities | 4,725 | 5,162 | |||||
Other liabilities | 32,043 | 33,400 | |||||
Total liabilities | 437,743 | 561,901 | |||||
Commitments and contingencies | |||||||
Redeemable non-controlling interest | 2,015 | 2,006 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value, authorized 220,000 shares; shares issued 133,587 and 133,619 as of June 30, 2024 and December 31, 2023, respectively | 134 | 134 | |||||
Additional paid-in capital | 1,584,145 | 1,577,519 | |||||
Accumulated deficit | (1,149,909 | ) | (1,106,650 | ) | |||
Accumulated other comprehensive loss | (52,641 | ) | (44,250 | ) | |||
Total stockholders’ equity | 381,729 | 426,753 | |||||
Total liabilities, redeemable non-controlling interest and stockholders’ equity | $ | 821,487 | $ | 990,660 |