3D Systems Corp 8-K, filed Mar 2, 2021
3D Systems Corp (DDD)
8-K
2021-03-02
For: 2021-03-01
View Original
Added on
April 09, 2026
About this 8-K
3D Systems Corp filed this 8-K on March 2, 2021, reporting on events of March 1, 2021.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported): March 2, 2021 (March 1, 2021 )
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
Registrant's telephone number, including area code: (803 ) 326-3900
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 2.02. Results of Operations and Financial Condition.
On March 1, 2021, 3D Systems Corporation (the “Company”) issued a press release setting forth certain unaudited financial results for its fourth quarter and year ended December 31, 2020 (the “Press Release”). A copy of the Press Release is furnished herewith as Exhibit 99.1 and is incorporated into this Item 2.02 by reference. The information in this Item 2.02 (and in the Press Release) shall not be deemed “filed” with the SEC for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended (the “Securities Act”).
Item 7.01. Regulation FD Disclosure.
Included in the Press Release is the Company’s announcement of a delay of the release of its audited financial results for the fourth quarter and year ended December 31, 2020 and the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Also included in the Press Release is an announcement that the Company plans to hold a conference call and webcast at 8:30 a.m., Eastern Time, on Tuesday, March 2, 2021, to discuss its anticipated fourth quarter and year ended December 31, 2020 financial results and other matters relating to the Company’s plans and operations. A copy of the Press Release, which contains additional information regarding how to access the conference call and webcast and how to listen to a recorded playback of the call after it is completed, is furnished herewith as Exhibit 99.1 and incorporated by reference herein. The slides to be presented on the webcast are furnished herewith as Exhibit 99.2 and incorporated into this Item 7.01 by reference.
The information in this Item 7.01 (and in the Press Release) shall not be deemed “filed” with the SEC for purposes of the Exchange Act, nor incorporated by reference in any registration statement filed by the Company under the Securities Act.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Press Release issued by 3D Systems Corporation, dated March 1, 2021. | ||||||||
| Investor information to be presented by 3D Systems Corporation on March 2, 2021. | ||||||||
| 104 | Cover Page Interactive Data File (embedded within Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| 3D SYSTEMS CORPORATION | ||||||||
Date: March 2, 2021 | /s/ Andrew M. Johnson | |||||||
| (Signature) | ||||||||
| Name: Andrew M. Johnson | ||||||||
Title: Executive Vice President, Chief Legal Officer and Secretary | ||||||||
EXHIBIT 99.1
3D Systems Reports
Fourth Quarter and Full Year 2020 Financial Results
(Unaudited), Reschedules Form 10-K Filing
ROCK HILL, South Carolina - March 1, 2021 - 3D Systems Corporation (NYSE:DDD) announced today that it will delay filing its Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The company will file a Form 12b-25, Notification of Late Filing, with the Securities and Exchange Commission, which extends the deadline to file the Form 10-K. The company confirms its plans to hold a fourth quarter and full year 2020 conference call on Tuesday, March 2, 2021.
The company noted the delay in filing is primarily related to the presentation of cash flows associated with the divestiture process for its Cimatron and GibbsCam software businesses. Based on preliminary analysis, the company believes that any financial impact resulting from this review is accounted for within its fourth quarter and full year 2020 results presented below. The delayed filing has no impact on the operations of the company’s business. 3D Systems CEO, Dr. Jeff Graves commented “While we were greatly disappointed that we were not able to conclude the audit in a timely fashion, we are pleased to provide our preliminary financial results for the fourth quarter and full year 2020, and look forward to discussing these results and our progress in positioning 3D Systems for sustained profitable growth on our conference call tomorrow.”
Fourth Quarter Financial and Operational Results (unaudited)
•Q4 2020 revenue of $172.7 million, compared to $168.2 million in Q4 2019 and $136.2 million in Q3 2020, representing growth of 2.6% and 26.8%, respectively
•Double-digit revenue growth in both Healthcare and Industrial on a consecutive quarter basis
•GAAP operating income of $0.7 million and GAAP net loss of $19.8 million
•Restructuring and efficiency improvements drove non-GAAP operating income of $16.1 million and adjusted EBITDA margins of 13%
Full Year 2020 and Recent Business Highlights (unaudited)
•Full year 2020 revenue of $557.2 million, compared to $636.4 million in FY 2019, impacted by the COVID-19 pandemic primarily in the first half of the year
•Introduced and began executing four-stage plan to Reorganize, Restructure, Divest, and Invest
•Achieved target of $60M run-rate cost savings in 2020
•Achieved significant milestone with regenerative medicine development partner, resulting in milestone payment that will be re-invested in this business
•Closed on previously announced sale of non-core software business and paid off outstanding debt
| Quarter Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (in millions, expect per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
| Revenue | $ | 172.7 | $ | 168.2 | $ | 557.2 | $ | 636.4 | ||||||||||||||||||
| Operating income (loss) | $ | 0.7 | $ | (4.7) | $ | (119.0) | $ | (57.1) | ||||||||||||||||||
| Net loss | $ | (19.8) | $ | (4.7) | $ | (149.6) | $ | (69.6) | ||||||||||||||||||
| Basic and diluted loss per share | $ | (0.16) | $ | (0.04) | $ | (1.27) | $ | (0.61) | ||||||||||||||||||
Non-GAAP measures for year-over-year comparisons (1) | ||||||||||||||||||||||||||
| Non-GAAP operating income | $ | 16.1 | $ | 5.7 | $ | 0.3 | $ | 1.2 | ||||||||||||||||||
| Non-GAAP net income (loss) | $ | 10.6 | $ | 5.5 | $ | (13.1) | $ | (9.6) | ||||||||||||||||||
| Non-GAAP basic and diluted income (loss) per share | $ | 0.09 | $ | 0.05 | $ | (0.11) | $ | (0.08) | ||||||||||||||||||
| Adjusted EBITDA | $ | 22.9 | $ | 12.9 | $ | 28.7 | $ | 31.2 | ||||||||||||||||||
(1) See Appendix for reconciliation of GAAP and non-GAAP operating income (loss), net income (loss) and basic and diluted income (loss) per share.
Summary Comments
Commenting on the company’s progress in 2020, Dr. Graves said, “With our singular focus on additive manufacturing, we were pleased to deliver strong growth at the end of what was an unprecedented year. The execution of our four-stage plan to deliver increased value to our customers and shareholders, initiated in the summer of 2020, took hold and rapidly gained momentum as we moved through the second half of the year. By the fourth quarter, the results of these efforts in our two focused businesses became very clear. Our Healthcare business delivered exceptional revenue growth of 48% year-over-year, driven strongly by both dental and medical applications, while also making a significant technological breakthrough in our emerging regenerative medicine area, which will be increasingly important to our Healthcare business in the years ahead. We were also very pleased with our Industrial performance during the fourth quarter, which recorded double-digit revenue growth on a consecutive quarter basis, continuing the recovery we have seen in our markets from the effects of the COVID-19 pandemic. Our Industrial business growth reflected broad-based wins, particularly in the metals application areas, pointing to increasing demand for our products in markets like aerospace, automotive, and consumer products.
Dr. Graves continued, “Executing on our plan to drive increased efficiencies, we achieved our target of $60M in run-rate cost savings by the end of 2020. In addition, our divestiture efforts for non-core assets have been an important step in our plans to refocus on our core mission to be the leader in enabling additive manufacturing solutions for applications in growing markets that demand high-reliability products. With proceeds from our initial divestitures and positive cash flow, we will continue to look for opportunities to invest in the business, as evidenced by our recent announcement regarding our expanding regenerative medicine program.”
Dr. Graves summarized, “While 2020 will always be known as a year of great challenges, I am very proud of our efforts to focus the business on the increasingly exciting opportunities we see ahead for additive manufacturing, across both Healthcare and Industrial markets. With the progress we have made over the last year, we can now clearly see a future of exciting growth, expanding applications, and increasing profitability that will allow us to invest for the future, creating true value for our customers, our employees and our shareholders.”
Summary of Fourth Quarter Results (unaudited)
Revenue for the fourth quarter of 2020 increased 2.6% compared to the same period last year and increased 26.8% compared to the third quarter of 2020. The results reflect a continuing rebound in customer activity from the worst of the pandemic-related shutdowns as well as an increasing number of new applications for additive manufacturing technology. Revenue from Healthcare increased 48.0% to $86.6 million, compared to the same period last year, driven by strong sales in both dental applications and medical applications. Industrial sales decreased 21.6% to $86.0 million, compared to the same period last year, as demand, while strengthening, has not yet returned to pre-pandemic levels. Compared to the third quarter of 2020, Healthcare increased 42.4% and Industrial increased 14.2% in the fourth quarter of 2020.
Gross profit margin in the fourth quarter of 2020 was 42.0% compared to 44.1% in the same period last year. Non-GAAP gross profit margin was 42.9% compared to 44.3% in the same period last year.
Operating expenses decreased 9.2% to $71.7 million in the fourth quarter of 2020, compared to the same period a year ago. On a non-GAAP basis, operating expenses were $58.0 million, a 15.8% decrease from the fourth quarter of the prior year. The lower non-GAAP operating expenses reflect savings achieved from cost restructuring activities as well as reduced hiring and lower travel expenses resulting from the coronavirus pandemic.
Summary of Full-Year 2020 Results (unaudited)
Revenue for the full year 2020 decreased 12.4% compared to the prior year, primarily due to the impacts of COVID-19, the effects of which occurred most severely at the onset of the pandemic with a strong return in activity in the latter half of the year. Revenue from Healthcare increased 9.1% to $245.4 million compared to the prior year, driven by stronger sales in both dental and medical applications. Industrial sales decreased 24.2% to $311.9 million compared to the prior year, as demand has not yet returned to pre-pandemic levels.
Gross profit margin for the full year 2020 was 40.1% compared to 44.1% in the prior year. Non-GAAP gross profit margin was 42.6% compared to 44.8% in the prior year. Gross profit margin decreased primarily due to the under absorption of supply chain overhead resulting from lower production, as well as an end-of-life inventory charge of $12.4 million.
Operating expenses for the full year 2020 increased 1.4% to $342.3 million compared to the prior year. On a non-GAAP basis, operating expenses were $236.9 million, a 16.2% decrease from the prior year. The lower non-GAAP operating expenses reflect savings achieved from cost restructuring activities as well as reduced hiring and lower travel expenses resulting from the coronavirus pandemic.
2021 Gross Profit Margin Outlook
On a non-GAAP basis, the company expects 2021 gross profit margins to be between 40% and 44%, taking into account businesses divested in 2020 and early 2021, as well as the impact of the company’s cost savings initiatives.
Financial Liquidity
At December 31, 2020, the company had cash on hand of $84.7 million, including cash in assets held for sale and restricted cash, total debt of $21.4 million and a $100 million unused revolving credit facility with approximately $62.0 million of availability based on the terms of the agreement. During the fourth quarter of 2020, the company did not issue any shares under its at-the-market equity program (“ATM Program”), which, as previously disclosed, has now been terminated.
The company closed on previously announced divestitures and used proceeds to eliminate outstanding debt, leaving its balance sheet in a net-cash position. The strengthened balance sheet and improved cost structure positions the company well to support future growth investments.
Preliminary Audit Results
In the course of preparing its financial results for the fourth quarter and full year 2020, the company discovered certain internal control deficiencies. As a result, the company will report material weaknesses in internal controls in its fiscal 2020 Annual Report on Form 10-K. As of the date of this release, there have been no material misstatements identified in prior year financial statements as a result of these deficiencies, and the company expects to file its 2020 Annual Report on Form 10-K no later than March 16, 2021. Please refer to the upcoming 2020 Annual Report on Form 10-K for more information.
The unaudited financial data above remains subject to audit, review or other procedures by the company’s independent registered public accounting firm. As a result, actual results may differ from the anticipated results shown above.
Q4 and FY 2020 Conference Call and Webcast
The company will host a conference call and simultaneous webcast to discuss these results tomorrow morning, which may be accessed as follows:
Date: Tuesday, March 2, 2021
Time: 8:30 a.m. Eastern Time
Listen via webcast: www.3dsystems.com/investor
Participate via telephone: 201-689-8345
A replay of the webcast will be available approximately two hours after the live presentation at www.3dsystems.com/investor.
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 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 or projections expressed or implied by such forward-looking statements. In many cases, forward looking statements can be identified by terms such as “believes,” “belief,” “expects,” “may,” “will,” “estimates,” “intends,” “anticipates” or “plans” or the negative of these terms or other comparable terminology. Forward-looking statements are based upon management’s beliefs, assumptions and current expectations and may include comments as to the company’s beliefs and expectations as to future events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside the control of the company. The factors described under the headings “Forward-Looking Statements” and “Risk Factors” 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. Although management believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at which such performance or results will be achieved. The forward-looking statements included are made only as the date of the statement. 3D Systems undertakes no obligation to update or revise any forward-looking statements made by management or on its behalf, whether as a result of future developments, subsequent events or circumstances or otherwise.
Presentation of Information in this Press Release
3D Systems reports is financial results in accordance with GAAP. To facilitate a better understanding of the impact that strategic acquisitions, non-recurring charges and certain non-cash expenses had on its financial results, management reviews certain non-GAAP measures, including non-GAAP Operating Income, non-GAAP Net Income (Loss), non-GAAP Basic and Diluted Income (Loss) per Share, non-GAAP Gross Profit, non-GAAP Gross Profit Margin, non-GAAP SG&A Expenses and non-GAAP Operating Expenses, each of which exclude the impact of amortization of intangibles, acquisition and severance expenses, stock-based compensation expense, litigation settlements and charges related to strategic decisions and portfolio realignment, and Adjusted EBITDA, defined as non-GAAP Operating Income plus depreciation, and Adjusted EBITDA Margins to better evaluate period-over-period performance. A reconciliation of GAAP to non-GAAP results is provided in the accompanying schedule.
3D Systems does not provide forward-looking guidance on a GAAP basis. The company is unable to provide a quantitative reconciliation of these forward-looking non-GAAP measures to the most directly comparable forward-looking GAAP measures without unreasonable effort because 3D Systems cannot reliably forecast legal, acquisition and divestiture expenses, restructuring expenses, product end of life adjustments and goodwill impairment, which 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 30 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 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
December 31, 2020 and December 31, 2019
| (In thousands, except par value) | December 31, 2020 | December 31, 2019 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 75,010 | $ | 133,665 | |||||||
| Accounts receivable, net of reserves — $4,392 (2020) and $8,762 (2019) | 114,254 | 109,408 | |||||||||
| Inventories | 116,667 | 111,106 | |||||||||
| Prepaid expenses and other current assets | 33,145 | 18,991 | |||||||||
| Current assets held for sale | 18,439 | — | |||||||||
| Total current assets | 357,515 | 373,170 | |||||||||
| Property and equipment, net | 75,356 | 92,940 | |||||||||
| Intangible assets, net | 28,083 | 48,338 | |||||||||
| Goodwill | 161,765 | 223,176 | |||||||||
| Right of use assets | 48,620 | 36,890 | |||||||||
| Deferred income tax asset | 6,247 | 5,408 | |||||||||
| Assets held for sale | 31,684 | — | |||||||||
| Other assets, net | 23,785 | 27,390 | |||||||||
| Total assets | $ | 733,055 | $ | 807,312 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | 2,051 | $ | 2,506 | |||||||
| Current right of use liabilities | 9,534 | 9,569 | |||||||||
| Accounts payable | 45,174 | 49,851 | |||||||||
| Accrued and other liabilities | 69,812 | 63,095 | |||||||||
| Customer deposits | 7,750 | 5,712 | |||||||||
| Deferred revenue | 30,302 | 32,231 | |||||||||
| Current liabilities held for sale | 11,107 | — | |||||||||
| Total current liabilities | 175,730 | 162,964 | |||||||||
| Long-term debt, net of deferred financing costs | 19,218 | 45,215 | |||||||||
| Long-term right of use liabilities | 48,469 | 35,402 | |||||||||
| Deferred income tax liability | 4,716 | 4,027 | |||||||||
| Liabilities held for sale | 2,952 | — | |||||||||
| Other liabilities | 51,247 | 45,808 | |||||||||
| Total liabilities | 302,332 | 293,416 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity: | |||||||||||
| Common stock, $0.001 par value, authorized 220,000 shares; issued 127,626 (2020) and 121,266 (2019) | 128 | 120 | |||||||||
| Additional paid-in capital | 1,404,964 | 1,371,564 | |||||||||
| Treasury stock, at cost — 3,494 shares (2020) and 3,670 shares (2019) | (22,590) | (18,769) | |||||||||
| Accumulated deficit | (943,303) | (793,709) | |||||||||
| Accumulated other comprehensive loss | (8,476) | (37,047) | |||||||||
| Total 3D Systems Corporation stockholders' equity | 430,723 | 522,159 | |||||||||
| Noncontrolling interests | — | (8,263) | |||||||||
| Total stockholders’ equity | 430,723 | 513,896 | |||||||||
| Total liabilities, redeemable noncontrolling interests and stockholders’ equity | $ | 733,055 | $ | 807,312 | |||||||
3D Systems Corporation
Unaudited Condensed Consolidated Statements of Operations
Quarter and Year Ended December 31, 2020 and 2019
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| (in thousands, except per share amounts) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Products | $ | 112,551 | $ | 105,111 | $ | 332,799 | $ | 389,337 | |||||||||||||||
| Services | 60,101 | 63,104 | 224,441 | 247,017 | |||||||||||||||||||
| Total revenue | 172,652 | 168,215 | 557,240 | 636,354 | |||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Products | 74,610 | 64,157 | 227,681 | 234,581 | |||||||||||||||||||
| Services | 25,593 | 29,802 | 106,184 | 121,232 | |||||||||||||||||||
| Total cost of sales | 100,203 | 93,959 | 333,865 | 355,813 | |||||||||||||||||||
| Gross profit | 72,449 | 74,256 | 223,375 | 280,541 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative | 52,682 | 59,319 | 219,895 | 254,355 | |||||||||||||||||||
| Research and development | 19,036 | 19,636 | 74,143 | 83,290 | |||||||||||||||||||
| Impairment of goodwill | — | — | 48,300 | — | |||||||||||||||||||
| Total operating expenses | 71,718 | 78,955 | 342,338 | 337,645 | |||||||||||||||||||
| Income (loss) from operations | 731 | (4,699) | (118,963) | (57,104) | |||||||||||||||||||
| Interest and other (expense) income, net | (16,849) | (1,222) | (24,447) | (7,996) | |||||||||||||||||||
| Loss before income taxes | (16,118) | (5,921) | (143,410) | (65,100) | |||||||||||||||||||
| Provision for income taxes | (3,712) | 1,260 | (6,184) | (4,532) | |||||||||||||||||||
| Net loss | (19,830) | (4,661) | (149,594) | (69,632) | |||||||||||||||||||
| Less: net income attributable to noncontrolling interests | — | 53 | — | 248 | |||||||||||||||||||
| Net loss attributable to 3D Systems Corporation | $ | (19,830) | $ | (4,714) | $ | (149,594) | $ | (69,880) | |||||||||||||||
| Net loss per share available to 3D Systems Corporation common stockholders - basic and diluted | $ | (0.16) | $ | (0.04) | $ | (1.27) | $ | (0.61) | |||||||||||||||
3D Systems Corporation
Unaudited Loss Per Share
Quarter and Year Ended December 31, 2020 and 2019
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| (in thousands, except per share amounts) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
| Numerator for basic and diluted net loss per share: | |||||||||||||||||||||||
| Net loss attributable to 3D Systems Corporation | $ | (19,830) | $ | (4,714) | $ | (149,594) | $ | (69,880) | |||||||||||||||
| Denominator for basic and diluted net loss per share: | |||||||||||||||||||||||
| Weighted average shares | 121,638 | 114,476 | 117,579 | 113,811 | |||||||||||||||||||
| Net loss per share - basic and diluted | $ | (0.16) | $ | (0.04) | $ | (1.27) | $ | (0.61) | |||||||||||||||
Appendix
3D Systems Corporation
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Quarter and Year Ended December 31, 2020 and 2019
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| (in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
| GAAP Revenue - as reported | $ | 172.7 | $ | 168.2 | $ | 557.2 | $ | 636.4 | |||||||||||||||
| Legal, acquisition and divestiture related | — | — | — | (2.8) | |||||||||||||||||||
| Non-GAAP Revenue | 172.7 | 168.2 | 557.2 | 633.5 | |||||||||||||||||||
| GAAP Cost of sales - as reported | 100.2 | 94.0 | 333.9 | 355.8 | |||||||||||||||||||
| Amortization, stock-based compensation & other | 0.1 | 0.1 | 0.4 | 0.4 | |||||||||||||||||||
| Legal, acquisition and divestiture related | 0.1 | 0.1 | 0.4 | 4.1 | |||||||||||||||||||
| Cost optimization plan, including severance costs | 1.5 | — | 2.2 | 1.8 | |||||||||||||||||||
| Product end-of-life adjustment | — | — | 10.9 | — | |||||||||||||||||||
| Non-GAAP Cost of sales | 98.5 | 93.7 | 320.1 | 349.5 | |||||||||||||||||||
| GAAP Gross Profit - as reported | 72.5 | 74.3 | 223.3 | 280.5 | |||||||||||||||||||
| Amortization, stock-based compensation & other | 0.1 | 0.1 | 0.4 | 0.4 | |||||||||||||||||||
| Legal, acquisition and divestiture related | 0.1 | 0.1 | 0.4 | 1.2 | |||||||||||||||||||
| Cost optimization plan, including severance costs | 1.5 | — | 2.2 | 1.8 | |||||||||||||||||||
| Product end-of-life adjustment | — | — | 10.9 | — | |||||||||||||||||||
| Non-GAAP Gross Profit | 74.1 | 74.5 | 237.2 | 284.0 | |||||||||||||||||||
| GAAP Gross Profit Margin | 42.0 | % | 44.1 | % | 40.1 | % | 44.1 | % | |||||||||||||||
| Non-GAAP Gross Profit Margin | 42.9 | % | 44.3 | % | 42.6 | % | 44.8 | % | |||||||||||||||
| GAAP Selling, general and administrative - as reported | 52.7 | 59.3 | 219.9 | 254.4 | |||||||||||||||||||
| Amortization, stock-based compensation & other | 4.0 | 8.1 | 33.0 | 43.4 | |||||||||||||||||||
| Legal, acquisition and divestiture related | 3.7 | 1.4 | 4.1 | 5.5 | |||||||||||||||||||
| Cost optimization plan, including severance costs | 6.1 | 0.6 | 19.9 | 5.6 | |||||||||||||||||||
| Non-GAAP Selling, general and administrative | 38.9 | 49.2 | 162.8 | 199.8 | |||||||||||||||||||
| GAAP Research and development - as reported | 19.0 | 19.6 | 74.1 | 83.3 | |||||||||||||||||||
| Cost optimization plan, including severance costs | — | — | 0.1 | 0.3 | |||||||||||||||||||
| Non-GAAP Research and development | 19.0 | 19.6 | 74.0 | 83.0 | |||||||||||||||||||
| GAAP Goodwill impairment - as reported | — | — | 48.3 | — | |||||||||||||||||||
| Goodwill impairment | — | — | 48.3 | — | |||||||||||||||||||
| Non-GAAP Goodwill impairment | — | — | — | — | |||||||||||||||||||
| GAAP Operating Expenses - as reported | 71.7 | 79.0 | 342.3 | 337.6 | |||||||||||||||||||
| Amortization, stock-based compensation & other | 4.0 | 8.1 | 33.0 | 43.4 | |||||||||||||||||||
| Legal, acquisition and divestiture related | 3.7 | 1.4 | 4.1 | 5.5 | |||||||||||||||||||
| Cost optimization plan, including severance costs | 6.1 | 0.6 | 20.1 | 5.9 | |||||||||||||||||||
| Goodwill impairment | — | — | 48.3 | — | |||||||||||||||||||
| Non-GAAP Operating expenses | 58.0 | 68.9 | 236.9 | 282.8 | |||||||||||||||||||
| GAAP Operating Income - as reported | 0.7 | (4.7) | (119.0) | (57.1) | |||||||||||||||||||
| Amortization, stock-based compensation & other | 4.1 | 8.2 | 33.4 | 43.8 | |||||||||||||||||||
| Legal, acquisition and divestiture related | 3.8 | 1.5 | 4.5 | 6.7 | |||||||||||||||||||
| Cost optimization plan, including severance costs | 7.6 | 0.6 | 22.3 | 7.7 | |||||||||||||||||||
| Product end-of-life adjustment | — | — | 10.9 | — | |||||||||||||||||||
| Goodwill impairment | — | — | 48.3 | — | |||||||||||||||||||
| Non-GAAP Operating Income | 16.1 | 5.7 | 0.3 | 1.2 | |||||||||||||||||||
| Depreciation | 6.8 | 7.3 | 28.4 | 30.0 | |||||||||||||||||||
| Adjusted EBITDA | 22.9 | 12.9 | 28.7 | 31.2 | |||||||||||||||||||
| GAAP Other Income and expense, net - as reported | (16.8) | (1.2) | (24.4) | (8.0) | |||||||||||||||||||
| Amortization, stock-based compensation & other | 1.0 | — | 1.0 | — | |||||||||||||||||||
| Legal, acquisition and divestiture related | 14.0 | (1.0) | 14.1 | 0.7 | |||||||||||||||||||
| Impairment of cost-method investments | — | 0.9 | 2.2 | 1.2 | |||||||||||||||||||
| Non-GAAP Other Income and expense, net | (1.8) | (1.3) | (7.2) | (6.0) | |||||||||||||||||||
| GAAP Net Income (loss) - as reported | (19.8) | (4.7) | (149.6) | (69.9) | |||||||||||||||||||
| Amortization, stock-based compensation & other | 5.1 | 8.2 | 34.4 | 43.9 | |||||||||||||||||||
| Legal, acquisition and divestiture related | 17.8 | 0.5 | 18.6 | 7.4 | |||||||||||||||||||
| Cost optimization plan, including severance costs | 7.6 | 0.7 | 22.3 | 7.7 | |||||||||||||||||||
| Impairment of cost-method investments | — | 0.9 | 2.2 | 1.2 | |||||||||||||||||||
| Product end-of-life adjustment | — | — | 10.9 | — | |||||||||||||||||||
| Goodwill impairment | — | — | 48.3 | — | |||||||||||||||||||
| Non-GAAP Net Income (loss) | $ | 10.6 | $ | 5.5 | $ | (13.1) | $ | (9.6) | |||||||||||||||
3D Systems Corporation
Unaudited Reconciliations of GAAP to Non-GAAP Measures
Quarter and Year Ended December 31, 2020 and 2019
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
GAAP Net loss per share per share available to 3D Systems common stock holders - basic and diluted | $ | (0.16) | $ | (0.04) | $ | (1.27) | $ | (0.61) | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
Amortization, stock-based compensation & other | 0.05 | 0.07 | 0.30 | 0.39 | |||||||||||||||||||
Legal, acquisition and divestiture related | 0.15 | — | 0.15 | 0.07 | |||||||||||||||||||
Cost optimization plan, including severance costs | 0.06 | 0.01 | 0.19 | 0.07 | |||||||||||||||||||
Impairment of cost-method investments | — | 0.01 | 0.02 | 0.01 | |||||||||||||||||||
| Product end-of-life adjustment | — | — | 0.09 | — | |||||||||||||||||||
| Goodwill impairment | — | — | 0.41 | — | |||||||||||||||||||
Non-GAAP Net income (loss) per share per share available to 3D Systems common stock holders - basic and diluted | $ | 0.09 | $ | 0.05 | $ | (0.11) | $ | (0.08) | |||||||||||||||
•Amounts in table may not foot due to rounding
©2021 3D Systems, Inc. | All Rights Reserved. Fourth Quarter and Full Year 2020 Financial Results (Unaudited) March 2, 2021 EXHIBIT 99.2
2 Welcome and Participants Dr. Jeffrey Graves President and Chief Executive Officer Jagtar Narula Executive VP and Chief Financial Officer Andrew Johnson Executive Vice President and Chief Legal Officer John Nypaver Vice President, Treasurer Melanie Solomon Investor Relations To participate via phone, please dial: 1-201-689-8345
3 Forward Looking Statements Certain statements made in this presentation 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 include statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance or products, underlying assumptions, and other statements which are other than statements of historical facts. In some cases, you can identify forward-looking statements by terms such as “believes,” “beliefs,” ''may,'' ''will,'' ''should,'' expects,'' ''intends,'' ''plans,'' ''anticipates,'' ''estimates,'' ''predicts,'' ''projects,'' ''potential,'' ''continue,'' and other similar terminology or the negative of these terms. From time to time, we may publish or otherwise make available forward-looking statements of this nature. All such forward- looking statements, whether written or oral, and whether made by us or on our behalf, are expressly qualified by the cautionary statements described in this message including those set forth below. Forward-looking statements are based upon management’s beliefs, assumptions and current expectations concerning future events and trends, using information currently available, and are necessarily subject to uncertainties, many of which are outside our control. In addition, we undertake no obligation to update or revise any forward-looking statements made by us or on our behalf, whether as a result of future developments, subsequent events or circumstances, or otherwise, or to reflect the occurrence or likelihood of unanticipated events, and we disclaim any such obligation. Forward-looking statements are only predictions that relate to future events or our future performance and are subject to known and unknown risks, uncertainties, assumptions, and other factors, many of which are beyond our control, that may cause actual results, outcomes, levels of activity, performance, developments, or achievements to be materially different from any future results, outcomes, levels of activity, performance, developments, or achievements expressed, anticipated, or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. 3D Systems' actual results could differ materially from those stated or implied in forward-looking statements. Past performance is not necessarily indicative of future results. We do not undertake any obligation to and do not intend to update any forward-looking statements whether as a result of future developments, subsequent events or circumstances or otherwise. Further, we encourage you to review “Risk Factors” in Part 1 of our Annual Report on Form 10-K and Part II of our Quarterly Reports on Form 10-Q filed with the SEC as well as other information about us in our filings with the SEC. These are available at www.SEC.gov.
4 Dr. Jeffrey Graves President & Chief Executive Officer
5 3D Systems' Purpose Statement We are the leaders in enabling additive manufacturing solutions for applications in growing markets that demand high reliability products.
6 Transformation is Yielding Results Double-digit consecutive quarter revenue growth in Healthcare and Industrial Company returned to profitability and positive cash flow in Q4 First quarter of YoY growth since 2018
7 Reorganize Focus on key applications within Healthcare and Industrial markets Combined hardware, materials, software and services into an application- oriented and customer-driven integrated unit Customer success team created to focus on aftermarket efforts
8 Restructure Achieved $60M run-rate cost savings in 2020 Expect additional cost reduction of $20M in 2021 and another $20M related to divestitures and other future actions
9 Divest Divest non-core assets and Invest for growth and profitability Closed divestiture of non-core assets including Cimatron and GibbsCAM subtractive manufacturing software businesses
10 Invest Investing in 2021 to accelerate future growth • Organizational ◦ Solution selling capability ◦ People and Talent • Materials • Programs ◦ Regenerative Medicine ◦ High Speed Fusion ◦ Product Enhancements
11 Regenerative Medicine Human vasculature model created using Print to Perfusion process (Image courtesy of United Therapeutics) • VISION: Through bioprinting, we have an opportunity to positively impact the world in a more meaningful way than we ever have before, by addressing patient needs for organs and soft tissue development using Additive Manufacturing. • MISSION: To create a sustainable business to address patient outcomes through bioprinting revenue and growth. • STRATEGY: Accelerate efforts in 2021 by leveraging the progress on United Therapeutics funded Lung Program and our foundation in Healthcare to pursue a range of applications.
12 Roadrunner 'High Speed Fusion' Specific Applications – Direct Printing: aerospace interiors and ducting, drone components, automotive under dash and under hood, and other general industrial applications. – Tooling & Fixtures: manufacturing aids, automation and robotics tooling, lift assist tooling, as well as molds and sacrificial tools. – Prototyping Parts: automotive, aerospace, medical, heavy equipment, and general industry support. • VISION: To provide the most advanced platform of any high throughput industrial fused-filament offering in the market today. • MISSION: To address demanding aerospace and advanced automotive applications with size, speed and precision that exceeds current market offerings. • STRATEGY: Work with Jabil to offer a broad range of materials for this new 3D printing platform to accelerate adoption in the market.
13 Jagtar Narula Chief Financial Officer
14 Q4 and FY 2020 Summary (Unaudited) Fourth Quarter Year Ended (in millions, except per share amounts) 2020 2019 2020 2019 Revenue $ 172.7 $ 168.2 $ 557.2 $ 636.4 Operating Income (Loss) 0.7 (4.7) (119.0) (57.1) Net Loss (19.8) (4.7) (149.6) (69.6) Loss Per Share $ (0.16) $ (0.04) $ (1.27) $ (0.61) Non-GAAP Operating Income $ 16.1 $ 5.7 $ 0.3 $ 1.2 Non-GAAP Net Income (Loss) 10.6 5.5 (13.1) (9.6) Non-GAAP Income (Loss) Per Share $ 0.09 $ 0.05 $ (0.11) $ (0.08) * See Appendix for reconciliation of GAAP and non-GAAP operating loss, net loss and net loss per share. Highlights • Q4 Revenue increase 2.6% YoY and 26.8% QoQ • FY20 Revenue impacted by pandemic in 1H • 2020 baseline revenue $512.8M, excluding $44.4M from divestitures
15 Revenue by Market (Unaudited) Industrial Revenue Q4 YoY $109.7 $86.0 Q4 2019 Q4 2020 Healthcare Revenue Q4 YoY $58.5 $86.6 Q4 2019 Q4 2020 48.0% (21.6)% 42.4% Industrial Revenue Q4 QoQ $75.3 $86.0 Q3 2020 Q4 2020 14.2% $ in millions Healthcare Revenue Q4 QoQ $60.8 $86.6 Q3 2020 Q4 2020
16 Gross Profit Margin (Unaudited) • Q4 GAAP gross profit margin was 42.0% • Q4 non-GAAP gross profit margin was 42.9% 43% 46% 43% 44% 42% 31% 43% 42% 44 47% 44% 44% 43% 41% 43% 43% GAAP GPM Non-GAAP GPM Q1 2019 Q2 2019 3Q 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 0% 10% 20% 30% 40% 50% See appendix for a reconciliation of non-GAAP gross profit.
17 $ in m ill io ns GAAP $79.0 $75.4 $69.0 $126.2 $71.7 R&D SG&A GWI Q4 20 19 Q1 20 20 Q2 20 20 Q3 20 20 Q4 20 20 $0 $20 $40 $60 $80 $100 $120 Operating Expenses (Unaudited) • GAAP operating expenses decreased 9.2% compared to fourth quarter of 2019 due to savings achieved from cost restructuring activities as well as reduced hiring and lower travel expenses, offset by restructuring costs • Non-GAAP operating expenses decreased 15.8% compared to the fourth quarter of the prior year as we saw benefits of restructuring efforts See appendix for a reconciliation of non-GAAP operating expenses. $ in m ill io ns Non-GAAP $68.9 $63.0 $57.1 $58.8 $58.0 R&D SG&A Q4 20 19 Q1 20 20 Q2 20 20 Q3 20 20 Q4 20 20 $0 $20 $40 $60 $80 $100
18 Adjusted EBITDA • Defined as non-GAAP Operating Income plus Depreciation • Q4 improvement as a result of business growth and restructuring efforts See appendix for a reconciliation of Non-GAAP Operating Profit and Adjusted EBITDA. 0.7% 6.4% 4.5% 7.7% 4.9% 1.7% (3.2)% 5.3% 13.3% 5.2% 2019 2020 Q1 Q2 Q3 Q4 FY (5.0)% —% 5.0% 10.0% 15.0%
19 Cash and Liquidity at December 31, 2020 • $84.7 million cash, cash equivalents, restricted cash and cash in assets-held- for-sale • Term Loan of $21.4 million • $100 million undrawn revolver with approximately $62 million of availability • Paid off term loan following sale of Cimatron/GibbsCAM, now debt-free • No shares issued under ATM in Q4, program terminated
20 Dr. Jeffrey Graves President & Chief Executive Officer
21 Summary Our Transformation Journey Continues: • Reorganization and Restructuring complete • Exploring additional divestitures of non-core assets • Selectively investing for growth in regenerative medicine, materials development and product line improvement • Expect growth in core business of additive manufacturing • Focus on operational execution
22 Q&A Session 1-201-689-8345
2 323 ©2021 3D Systems, Inc. | All Rights Reserved. Thank You Find out more at: www.3dsystems.com
©2021 3D Systems, Inc. | All Rights Reserved. Appendix
25 Presentation of Information 3D Systems reports is financial results in accordance with GAAP. To facilitate a better understanding of the impact that strategic acquisitions, non-recurring charges and certain non-cash expenses had on its financial results, management reviews certain non-GAAP measures, including non-GAAP Operating Income, non-GAAP Net Income (Loss), non-GAAP Basic and Diluted Income (Loss) per Share, non-GAAP Gross Profit, non-GAAP Gross Profit Margin, non-GAAP SG&A Expenses and non-GAAP Operating Expenses, each of which exclude the impact of amortization of intangibles, acquisition and severance expenses, stock-based compensation expense, litigation settlements and charges related to strategic decisions and portfolio realignment, and Adjusted EBITDA, defined as non-GAAP Operating Income plus depreciation, and Adjusted EBITDA Margins to better evaluate period-over-period performance. A reconciliation of GAAP to non-GAAP results is provided in the accompanying schedule. 3D Systems does not provide forward-looking guidance on a GAAP basis. The company is unable to provide a quantitative reconciliation of these forward-looking non-GAAP measures to the most directly comparable forward- looking GAAP measures without unreasonable effort because 3D Systems cannot reliably forecast legal, acquisition and divestiture expenses, restructuring expenses, product end of life adjustments and goodwill impairment, which 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.
26 Non-GAAP Reconciliation - Operating Income (Loss) (Unaudited) Fourth Quarter and Full Year Non-GAAP Operating Loss Quarter Ended December 31, Year Ended December 31, (in millions, except per share amounts) 2020 2019 2020 2019 GAAP Operating income (loss) $ 0.7 $ (4.7) $ (119.0) $ (57.1) Adjustments: Amortization, stock-based compensation & other (1) 4.1 8.2 33.4 43.9 Legal, acquisition and divestiture related (2) 3.8 1.5 4.5 6.7 Cost optimization plan, including severance costs (3) 7.6 0.7 22.3 7.7 Product end of life adjustment (4) — — 10.9 — Goodwill impairment (5) — — 48.3 — Non-GAAP Operating income (loss) $ 16.1 $ 5.7 $ 0.3 $ 1.2 Depreciation (6) 6.8 7.3 28.4 30.0 Adjusted EBITDA $ 22.9 $ 12.9 $ 28.7 $ 31.2 (1) For the quarter ended December 31, 2020, the adjustment included $0.1 in COGS and $4.0 in SG&A. For the quarter ended December 31, 2019, the adjustment included $0.1 in COGS and $8.1 in SG&A. For the twelve months ended December 31, 2020, the adjustment included $0.4 in COGS and $33.0 in SG&A. For the twelve months ended December 31, 2019, the adjustment included $0.4 in COGS and $43.4 in SG&A. (2) For the quarter ended December 31, 2020, the adjustment included $0.1 in COGS and $3.7 in SG&A. For the quarter ended December 31, 2019, the adjustment included $0.1 in COGS and $1.4 in SG&A. For the twelve months ended December 31, 2020, the adjustment included $0.4 in COGS and $4.1 in SG&A. For the twelve months ended December 31, 2019, the adjustment included $(2.9) in Revenues, $4.1 in COGS and $5.5 in SG&A. (3) For the quarter ended December 31, 2020, the adjustment included $1.5 in COGS and $6.1 in SG&A. For the quarter ended December 31, 2019, the adjustment included $0.1 in COGS and $0.6 in SG&A. For the twelve months ended December 31, 2020, the adjustment included $2.2 in COGS, $19.9 in SG&A and $0.1 in R&D. For the twelve months ended December 31, 2019, the adjustment included $1.8 in COGS, $5.6 in SG&A and $0.3 in R&D. (4) For the twelve months ended December 31, 2020, the adjustment included $10.9 in COGS. (5) For the twelve months ended December 31, 2020, the adjustment included $48.3 in Impairment of goodwill. (6) For the quarter ended December 31, 2020, the adjustment included $3.0 in COGS, $2.5 in SG&A and $1.3 in R&D. For the quarter ended December 31, 2019, the adjustment included $3.1 in COGS, $2.5 in SG&A and $1.8 in R&D. For the twelve months ended December 31, 2020, the adjustment included $12.2 in COGS, $9.8 in SG&A and $6.4 in R&D. For the twelve months ended December 31, 2019, the adjustment included $12.6 in COGS, $10.4 in SG&A and $7.0 in R&D. * Tables may not foot due to rounding; amounts calculated based on dollars in thousands.
27 Non-GAAP Reconciliation - Net Income (Loss) (Unaudited) Fourth Quarter and Full Year Non-GAAP Earnings (Loss) Quarter Ended December 31, Year Ended December 31, (in millions) 2020 2019 2020 2019 GAAP Net loss $ (19.8) $ (4.7) $ (149.6) $ (69.9) Adjustments: Amortization, stock-based compensation & other 5.1 8.2 34.4 43.9 Legal, acquisition and divestiture related (1) 17.8 0.5 18.6 7.4 Cost optimization plan, including severance costs 7.6 0.7 22.3 7.7 Impairment of cost-method investments (2) — 0.9 2.2 1.2 Product end of life adjustment — — 10.9 — Goodwill impairment — — 48.3 — Non-GAAP net income (loss) $ 10.6 $ 5.5 $ (13.1) $ (9.6) (1) In addition to the adjustments for operating income (loss), the net loss adjustments also included $14.0 in other income (expense) for the quarter and twelve months ended December 31, 2020 and $(1.0) and $0.7 in other income (expense) for the quarter and twelve months ended December 31, 2019. (2) For the twelve months ended December 31, 2020, the net loss adjustment included $2.2 in interest and other income (expense), net. For the quarter and twelve months ended December 31, 2019 the net loss adjustment included $0.9 and $1.2, respectively, in interest and other income (expense), net. * Tables may not foot due to rounding; amounts calculated based on dollars in thousands.
28 Non-GAAP Reconciliation - EPS (Unaudited) Fourth Quarter and Full Year Non-GAAP Net Income (Loss) per Share Quarter Ended December 31, Year Ended December 31, 2020 2019 2020 2019 GAAP Net loss per share per share available to 3D Systems common stock holders - basic and diluted $ (0.16) $ (0.04) $ (1.27) $ (0.61) Adjustments: Amortization, stock-based compensation & other 0.05 0.07 0.30 0.39 Legal, acquisition and divestiture related 0.15 — 0.15 0.07 Cost optimization plan, including severance costs 0.06 0.01 0.19 0.07 Impairment of cost-method investments — 0.01 0.02 0.01 Product end-of-life adjustment — — 0.09 — Goodwill impairment — — 0.41 — Non-GAAP Net income (loss) per share per share available to 3D Systems common stock holders - basic and diluted $ 0.09 $ 0.05 $ (0.11) $ (0.08) * Amounts in table may not foot due to rounding
29 Non-GAAP Reconciliation - GP and GPM (Unaudited) Quarterly 2019 and 2020 Non-GAAP Gross Profit & Margin 2019 2020 Quarter Ended Quarter Ended (in millions) March 31 June 30 September 30 December 31 March 31 June 30 September 30 December 31 GAAP Gross Profit $ 65.7 $ 73.3 $ 67.3 $ 74.3 $ 57.1 $ 35.2 $ 58.6 $ 72.4 GAAP Gross Profit Margin 42.9 % 46.2 % 43.1 % 44.1 % 42.1 % 31.2 % 43.1 % 42.0 % Adjustments: Amortization, stock-based compensation & other 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Legal and acquisition-related 0.1 0.4 0.5 0.1 0.1 0.1 0.1 0.1 Cost optimization plan 0.4 0.3 1.0 — 0.7 — — 1.5 Product end of life adjustment — — — — — 10.9 — — Non-GAAP Gross Profit $ 66.4 $ 74.2 $ 68.9 $ 74.5 $ 57.9 $ 46.3 $ 58.9 $ 74.1 Non-GAAP Gross Profit Margin 43.8 % 47.0 % 44.2 % 44.3 % 42.7 % 41.0 % 43.2 % 42.9 % * Tables may not foot due to rounding; amounts calculated based on dollars in thousands.
30 Non-GAAP Reconciliation - Operating Expense (Unaudited) Quarterly 2019 and 2020 Non-GAAP Operating Expenses 2019 2019 2020 2020 Quarter Ended Full Quarter Ended Full (in millions) Mar 31 Jun 30 Sep 30 Dec 31 Year Mar 31 Jun 30 Sep 30 Dec 31 Year GAAP SG&A Expenses $ 65.1 $ 71.7 $ 58.3 $ 59.3 $ 254.4 $ 56.1 $ 52.0 $ 59.1 $ 52.7 $ 219.9 GAAP R&D Expenses 21.9 20.8 20.9 19.6 83.3 19.2 17.0 18.9 19.0 74.1 GAAP Goodwill Impairment — — — — — — — 48.3 — 48.3 GAAP Operating Expenses 87.0 92.5 79.2 79.0 337.6 75.4 69.0 126.2 71.7 342.3 Adjustments to R&D Expenses: Cost optimization plan — 0.3 — — 0.3 0.1 — — — 0.1 Non-GAAP R&D Expenses 21.9 20.5 20.9 19.6 83.0 19.1 17.0 18.9 19.0 74.0 Adjustments to SG&A Expenses: Amortization, stock-based compensation & other 12.1 12.5 10.8 8.1 43.4 10.6 11.3 7.1 4.0 33.0 Legal and acquisition-related 0.7 4.6 (1.2) 1.4 5.5 0.2 0.1 0.1 3.7 4.1 Cost optimization plan 1.2 3.3 0.4 0.6 5.6 1.5 0.5 11.9 6.1 19.9 Total Adjustments to SG&A Expenses 14.1 20.4 10.0 10.1 54.5 12.2 12.0 19.1 13.7 57.1 Non-GAAP SG&A Expenses 51.0 51.2 48.3 49.2 199.8 43.9 40.1 40.0 38.9 162.8 Goodwill impairment adjustment — — — — — — — 48.3 — 48.3 Non-GAAP Operating Expenses $ 72.9 $ 71.7 $ 69.3 $ 68.9 $ 282.8 $ 63.0 $ 57.1 $ 58.8 $ 58.0 $ 236.9 * Tables may not foot due to rounding; amounts calculated based on dollars in thousands.
31 Regenerative Medicine Recast Year Ended December 31, 2019 2018 As reported Change Revised As reported Change Revised Revenue: Products $ 384,577 $ 4,760 $ 389,337 $ 429,215 $ 3,885 $ 433,100 Services 244,517 2,500 247,017 258,445 — 258,445 Total revenue 629,094 7,260 636,354 687,660 3,885 691,545 Cost of sales: Products 229,821 4,760 234,581 229,793 3,885 233,678 Services 121,232 — 121,232 133,473 — 133,473 Total cost of sales 351,053 4,760 355,813 363,266 3,885 367,151 Gross profit 278,041 2,500 280,541 324,394 — 324,394 Operating expenses: Selling, general and administrative 254,355 — 254,355 272,287 — 272,287 Research and development 80,790 2,500 83,290 95,298 — 95,298 Total operating expenses 335,145 2,500 337,645 367,585 — 367,585 Loss from operations (57,104) — (57,104) (43,191) — (43,191)