3D Systems(US:DDD)2023-05-09 16:00Acquisitions and Investments - The Company completed the acquisition of dp polar for $25.2 million, which includes $19.6 million in cash and $7.1 million in common stock, aimed at enhancing high-speed mass production capabilities [122]. - The acquisition of Kumovis for $37.9 million focuses on utilizing PEEK materials for medical applications, with $3.6 million deferred for up to fifteen months [123]. - Titan was acquired for $39.0 million to address large build volume applications in the Industrial Solutions segment, with the acquisition's near-term impact being dilutive [124]. - A joint venture with the Saudi Arabian Industrial Investments Company was established to expand additive manufacturing in Saudi Arabia, with an initial investment of approximately $6.5 million [126]. - The Company invested $10.0 million for a 26.6% stake in Enhatch Inc., aimed at streamlining the design and delivery of patient-specific medical devices [127]. - The acquisition of Volumetric Biotechnologies for $40.2 million aims to develop bioprinting technologies for human organs, with potential additional payments of up to $355.0 million based on milestones [128]. - The acquisition of Oqton for $187.8 million enhances the Company's software capabilities in manufacturing operations systems, with a dilutive impact on financial results [129]. - Dussur and 3D Systems formed a joint venture in March 2022 to enhance additive manufacturing in Saudi Arabia, with an initial investment of approximately $6.5 million [187]. - As of March 31, 2023, the company holds 49% of the joint venture's common stock, with $3.4 million in escrow and an additional $3.1 million deposited for operations [187]. - Future investments in the joint venture are contingent upon achieving specific milestones [187]. Financial Performance - Total revenue for the three months ended March 31, 2023, was $121.236 million, a decrease of $11.8 million or 8.8% compared to $133.001 million for the same period in 2022 [148]. - Products revenue decreased by $16.2 million or 16.1% to $84.388 million, primarily due to a $19.1 million decrease in sales volume within the Healthcare Solutions segment [146]. - Services revenue increased by $4.4 million or 13.5% to $36.848 million, driven by higher sales volume in both Healthcare Solutions and Industrial Solutions segments [147]. - Gross profit for the three months ended March 31, 2023, was $47.098 million, down $6.697 million or 12.4% from $53.795 million in the same period in 2022 [149]. - Operating loss for the three months ended March 31, 2023, was $33.396 million, compared to a loss of $23.232 million for the same period in 2022 [154]. - Net loss attributable to 3D Systems Corporation for the three months ended March 31, 2023, was $29.421 million, compared to a net loss of $26.799 million for the same period in 2022 [158]. - Adjusted EBITDA decreased from $1.923 million for the three months ended March 31, 2022, to $(10.094) million for the same period in 2023, primarily due to an increase in operating loss [160]. - Selling, general and administrative expenses increased by $2.9 million or 5.2% to $58.285 million, influenced by acquisitions and higher professional services fees [153]. - Research and development expenses increased by $0.6 million or 2.8% to $22.209 million, primarily due to expenses related to acquisitions [153]. - Interest and other income, net for the three months ended March 31, 2023, was $3.875 million, compared to a net expense of $(2.283) million for the same period in 2022 [155]. - For the three months ended March 31, 2023, the company reported a net loss of $29.4 million, compared to a net loss of $26.8 million for the same period in 2022 [163]. - Total revenue for the company decreased by $11.8 million, or 8.8%, from $133.0 million in Q1 2022 to $121.2 million in Q1 2023 [166]. - Healthcare Solutions revenue decreased by $15.6 million, or 24.3%, primarily due to a 46.2% reduction in sales to the dental orthodontic market [167]. - Adjusted EBITDA for Healthcare Solutions decreased by $10.7 million, or 67.9%, driven by decreased revenue and a $2.5 million increase in operating expenses [168]. - Industrial Solutions revenue increased by $3.9 million, or 5.6%, with a 9.8% increase in sales volumes, partially offset by foreign exchange impacts [169]. - Adjusted EBITDA for Industrial Solutions increased by $0.3 million, or 5.1%, due to higher sales volumes, despite cost inflation and increased operating expenses [170]. Cash Flow and Financial Position - Cash and cash equivalents increased by $137.8 million, or 35.5%, from $388.1 million at December 31, 2022, to $525.9 million at March 31, 2023 [174]. - Cash used in operating activities was $27.7 million for Q1 2023, an increase of $12.6 million compared to $15.1 million in Q1 2022 [181]. - Cash provided by investing activities was $167.8 million in Q1 2023, primarily from proceeds of $176.9 million from sales and maturities of short-term investments [182]. - The company had $460 million of outstanding 0% convertible notes maturing in November 2026, with potential for additional long-term financing [185]. - The company believes it has sufficient financial resources to meet cash requirements for the next twelve months, dependent on profitability and working capital management [188]. - The company is in compliance with all covenants of the outstanding 0% convertible notes due November 2026 as of March 31, 2023 [189]. Risks and Internal Controls - Forward-looking statements are subject to risks including geopolitical events, supply chain disruptions, and the ability to meet customer needs [194]. - The company emphasizes the importance of maintaining effective internal controls over financial reporting and managing product inventory [195]. - The company has directors' and officers' insurance coverage to mitigate potential indemnification obligations [190]. - There were no material changes in market risk assessment from December 31, 2022, to March 31, 2023 [197]. - There have been no changes to critical accounting estimates that materially impact the financial statements as of the report date [192].