3D Systems Shares Nearly Double on Sale of Two Business Units and Preliminary Q4 Financial Data

Source: Streetwise Reports   01/07/2021

Shares of 3D Systems Corp. soared to a new 52-week high after the company reported it completed the sale of its Cimatron and GibbsCAM businesses and released preliminary Q4/20 financial results.

Three-dimensional (3D) printing solutions company 3D Systems Corp. (DDD:NYSE) today announced that “it has completed the sale of its Cimatron and GibbsCAM software businesses to a subsidiary of ST Acquisition Co., an affiliate of Battery Ventures, on January 1, 2021, resulting in purchase price proceeds of approximately $64.2 million, after certain adjustments and excluding $8.9 million of cash amounts transferred to the buyer.”

3D Systems advised that it utilized approximately $21 million from the proceeds of the sales to pay off all outstanding balances drawn on its senior secured term loan facility. The company noted that it still retains full access to its senior secured revolving credit facility to fund operations if needed. The firm added that it has also elected to terminate its at-the-market equity program (ATM Program).

The company offered some preliminary financial data for the fourth quarter of 2020 ended December 31, 2020. The firm stated that it expects that revenue in Q4/20 will be in the range of $170-176 million. The firm noted that the expected revenue estimates reflects strong organic growth more than 20% in both the Healthcare and Industrial business units compared to Q3/20.

3D Systems additionally reported that for Q4/20, it anticipates that non-GAAP operating income will come in the range of $11-19 million, up from $5.6 million in Q4/19. The firm said it expects that GAAP operating income in Q4/20 will range between a loss of $8.6 million to a gain of $0.5 million, compared to a loss of $4.7 million in Q4/19.

3D Systems’ President and CEO Dr. Jeffrey Graves stated, “In the summer of 2020, we laid out a four-stage plan to deliver increased value to our customers and shareholders. This plan included: reorganization into two business units, Healthcare and Industrial Solutions; restructuring of our operations to gain efficiencies; divesting of non-core assets; and investing for accelerated, profitable organic growth. We are pleased to now see significant progress from these efforts, as reflected in accelerated top-line growth and rapidly strengthening operating margins. Our Team’s ability to deliver over 20% consecutive-quarter revenue growth in both business units, while executing large scale restructuring, was particularly gratifying to see…Having surpassed our prior year, pre-COVID revenue performance in Q4, and with continued strong focus on operational execution, we are excited about the trajectory we are on as we enter the new year.”

“The divestiture of Cimatron and GibbsCAM, which were businesses focused on subtractive technologies, was an important step in our plans to refocus our company on our core mission – ‘to be the leader in enabling additive manufacturing solutions for applications in growing markets that demand high reliability products.’ These divestitures strengthened our balance sheet, enabling us to both pay off our debt and terminate the ATM Program much earlier than originally planned,” Dr. Graves added.

The company advised that it will release its complete Q4/20 and FY/20 financial results after U.S. markets close for trading on February 24, 2021.

3D Systems is a provider of three-dimensional (3D) printers, print materials, software, manufacturing services and digital design tools. The company is headquartered in Rock Hill, S.C., and stated that it was the first company to bring 3D printing to the manufacturing industry over 30 years ago. The firm’s application-specific solutions are developed by its team of application engineers in collaboration with its clients to meet their specific product and manufacturing needs and requirements. The company’s 3D system solutions are utilized in many different and unique applications in the automotive, aerospace & defense, medical and dental care and durable goods industries.

3D Systems started off the day with a market cap of around $1.3 billion with approximately 124.1 million shares outstanding and a short interest of about 27.6%. DDD shares opened nearly 10% higher today at $12.36 (+$1.12, +9.96%) over yesterday’s $11.24 closing price and reached a new 52-week high price this afternoon of $25.33. The stock has traded today between $12.36 and $25.33 per share and is currently trading at $19.71 (+$8.47, +75.36%).

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