3D Systems Corporation announced non-GAAP adjusted earnings of 27 cents per share for the second quarter of 2012 and GAAP earnings of 16 cents per share.
Revenue increased 52% to $83.6 million over the second quarter of 2011 on 20% organic growth. The company reported growth from all its revenue categories, led by a 112% increase in its printer units sold. Backlog increased 28% sequentially to $12.3 million at the end of the quarter on continued strong demand for its printers, materials and on-demand parts services.
For the second quarter, gross profit grew 71% on higher revenue and gross profit margin expansion of 570 basis points to 51.4% over the 2011 quarter, driven by significant on-demand parts services and printers gross profit margin improvement.
The company reported non-GAAP adjusted net income of $13.9 million for the second quarter, up 44% compared to the 2011 quarter, resulting in $0.27 earnings per share. The company reported GAAP net income of $8.3 million, resulting in $0.16 earnings per share.
The company reports non-GAAP measures that adjust net income and earnings per share by excluding the impact of amortization of intangibles, non-cash interest expense, non-recurring acquisition expenses, stock-based compensation and any release of the valuation allowance on deferred tax assets. A reconciliation of GAAP to non-GAAP results is provided in the accompanying schedule.
The company generated $21.4 million of cash from operations in the first six months of 2012, and ended the second quarter of 2012 with $158.5 million of available cash, after incurring a $11.8 million increase in its operating expenses primarily from acquisition and higher sales and marketing costs. The increase included $1.9 million of higher R&D expenditures in support of its expanded consumer and healthcare solutions portfolio.
“We are very pleased to report another record revenue quarter driven by doubling printer units and balanced organic and acquisitions growth,” said Abe Reichental, 3D Systems’ President and Chief Executive Officer. “We believe that our continued sequential gross profit margin expansion reflects solid execution and validates our business model and potential earnings power.”
Gross profit, operating expenses, operating income, net income and earnings per share have been adjusted to reflect non-GAAP operating results. See the reconciliation of non-GAAP data to GAAP net income and earnings per share at the end of this press release.
3D printer units sold more than doubled compared to the 2011 period, and accounted for a $9.9 million revenue increase. Print materials revenue grew 60% to a new record of $26.2 million, driven by strong printer units sales as a result of the company’s effective portfolio and price point re-alignment and channel expansion. Services revenue increased by $8.8 million over the 2011 period to $31.3 million and included $20.5 million of on-demand parts.
“Since its launch later in the quarter, Cube 3D printer orders topped our expectations,” continued Reichental. “While we don’t expect revenue from Cube or Cubify.com to be material to our revenue for the remainder of 2012, we are very pleased with the overall marketplace reception and have already increased capacity to stay ahead of growing demand.”
The company affirmed its annual guidance for the full year 2012 after increasing its R&D spending in connection with its Bespoke Innovations acquisition and expanded portfolio, expecting its revenue to be in the range of $330 million to $360 million and its non-GAAP adjusted earnings per share to be in the range of $1.00 to $1.25.
“We entered the third quarter with positive sales momentum reflecting continued strong demand and record backlog. While we may face lingering economic uncertainties in parts of the world, we expect to continue to benefit from robust R&D spending by our customers worldwide,” concluded Reichental.