Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 25, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | 3D SYSTEMS CORP | |
Entity Filer Category | Large Accelerated Filer | |
Entity Central Index Key | 910,638 | |
Trading Symbol | ddd | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Fiscal Period Focus | Q1 | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 113,811,734 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 121,607 | $ 136,344 |
Accounts receivable, net of reserves — $11,246 (2018) and $10,258 (2017) | 134,470 | 129,879 |
Inventories | 110,383 | 103,903 |
Insurance proceeds receivable | 50,000 | 50,000 |
Prepaid expenses and other current assets | 22,761 | 18,296 |
Total current assets | 439,221 | 438,422 |
Property and equipment, net | 101,675 | 97,521 |
Intangible assets, net | 91,800 | 98,783 |
Goodwill | 235,323 | 230,882 |
Deferred income tax asset | 3,965 | 4,020 |
Other assets, net | 25,674 | 27,136 |
Total assets | 897,658 | 896,764 |
Current liabilities: | ||
Current portion of capitalized lease obligations | 661 | 644 |
Accounts payable | 55,405 | 55,607 |
Accrued and other liabilities | 66,442 | 65,899 |
Accrued litigation settlement | 50,000 | 50,000 |
Customer deposits | 5,718 | 5,765 |
Deferred revenue | 39,694 | 29,214 |
Total current liabilities | 217,920 | 207,129 |
Long term portion of capitalized lease obligations | 6,932 | 7,078 |
Deferred income tax liability | 8,031 | 8,983 |
Other liabilities | 46,665 | 48,754 |
Total liabilities | 279,548 | 271,944 |
Redeemable noncontrolling interests | 8,872 | 8,872 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value, authorized 220,000 shares; issued 117,180 (2018) and 117,025 (2017) | 116 | 115 |
Additional paid-in capital | 1,333,378 | 1,326,250 |
Treasury stock, at cost — 2,358 shares (2018) and 2,219 shares (2017) | (9,041) | (8,203) |
Accumulated deficit | (698,157) | (677,772) |
Accumulated other comprehensive loss | (14,137) | (21,536) |
Total 3D Systems Corporation stockholders' equity | 612,159 | 618,854 |
Noncontrolling interests | (2,921) | (2,906) |
Total stockholders’ equity | 609,238 | 615,948 |
Total liabilities, redeemable noncontrolling interests and stockholders’ equity | $ 897,658 | $ 896,764 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, reserves | $ 11,246 | $ 10,258 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 220,000,000 | 220,000,000 |
Common stock, shares issued (in shares) | 117,180,000 | 117,025,000 |
Treasury stock, at cost, shares (in shares) | 2,358,000 | 2,219,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Products | $ 105,125 | $ 97,039 |
Services | 60,763 | 59,392 |
Total revenue | 165,888 | 156,431 |
Cost of sales: | ||
Products | 55,093 | 47,257 |
Services | 32,913 | 28,988 |
Total cost of sales | 88,006 | 76,245 |
Gross profit | 77,882 | 80,186 |
Operating expenses: | ||
Selling, general and administrative | 69,497 | 66,405 |
Research and development | 25,883 | 22,852 |
Total operating expenses | 95,380 | 89,257 |
Loss from operations | (17,498) | (9,071) |
Interest and other (expense) income, net | (1,525) | 201 |
Loss before income taxes | (19,023) | (8,870) |
Provision for income taxes | 1,954 | 1,041 |
Net loss | (20,977) | (9,911) |
Less: net income (loss) attributable to noncontrolling interests | (16) | 60 |
Net loss attributable to 3D Systems Corporation | $ (20,961) | $ (9,971) |
Net loss per share available to 3D Systems Corporation common stockholders - basic and diluted | $ (0.19) | $ (0.09) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Statement - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (20,977) | $ (9,911) |
Other comprehensive income (loss), net of taxes: | ||
Pension adjustments | (17) | 20 |
Foreign currency translation | 7,416 | 8,392 |
Total other comprehensive income (loss), net of taxes: | 7,399 | 8,412 |
Total comprehensive income (loss), net of taxes | (13,578) | (1,499) |
Comprehensive income (loss) attributable to noncontrolling interests | (15) | 121 |
Comprehensive income (loss) attributable to 3D Systems Corporation | $ (13,563) | $ (1,620) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Cash flows from operating activities: | |||
Net loss | $ (20,977) | $ (9,911) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 15,186 | 14,973 | |
Stock-based compensation | 7,128 | 7,131 | |
Impairment of property and other assets | 38 | 53 | |
Impairment of cost method investments | 1,373 | 0 | |
Provision for bad debts | 1,017 | 155 | |
Provision for deferred income taxes | (898) | (1,069) | |
Changes in operating accounts, net of acquisitions: | |||
Accounts receivable | (3,774) | 5,672 | |
Inventories | (5,571) | (4,116) | |
Prepaid expenses and other current assets | (3,667) | 41 | |
Accounts payable | (647) | (691) | |
Accrued and other current liabilities | 12,597 | 12,403 | |
All other operating activities | (3,344) | (5,253) | |
Net cash (used in) provided by operating activities | (1,539) | 19,388 | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (10,764) | (5,620) | |
Additions to license and patent costs | (230) | (280) | |
Cash paid for acquisitions, net of cash assumed | 0 | (34,291) | |
Proceeds from disposition of property and equipment | 0 | 24 | |
Net cash used in investing activities | (10,994) | (40,167) | |
Cash flows from financing activities: | |||
Payments on earnout consideration | (2,675) | (3,206) | |
Payments related to net-share settlement of stock-based compensation | (837) | (1,088) | |
Repayment of capital lease obligations | (128) | (120) | |
Net cash used in financing activities | (3,640) | (4,414) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1,438 | 1,926 | |
Net decrease in cash, cash equivalents and restricted cash | (14,735) | (23,267) | |
Cash, cash equivalents and restricted cash at the beginning of the period (a) | [1] | 136,831 | 185,248 |
Cash, cash equivalents and restricted cash at the end of the period (a) | [1] | 122,096 | 161,981 |
Supplemental Cash Flow Information [Abstract] | |||
Cash interest payments | 119 | 200 | |
Cash income tax payments, net | 2,332 | 573 | |
Transfer of equipment from inventory to property and equipment, net (b) | [2] | 666 | 5,379 |
Transfer of equipment to inventory from property and equipment, net (c) | [3] | 360 | 718 |
Stock issued for acquisitions | 0 | 3,208 | |
Restricted cash included in other assets | $ 489 | $ 318 | |
[1] | The amounts for cash and cash equivalents shown above include restricted cash of $489 and $318 as of March 31, 2018 and 2017, respectively, and $487 and $301 as of December 31, 2017, and 2016, respectively, which were included in other assets, net in the condensed consolidated balance sheets. | ||
[2] | Inventory is transferred from inventory to property and equipment at cost when the Company requires additional machines for training or demonstration or for placement into on demand manufacturing services locations. | ||
[3] | In general, an asset is transferred from property and equipment, net, into inventory at its net book value when the Company has identified a potential sale for a used machine. |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total 3D Systems Corporation Stockholders' Equity | Equity Attributable to Noncontrolling Interests |
Cumulative impact of change in accounting policy | $ (10,206) | $ 10,206 | ||||||
Beginning Balance at Dec. 31, 2016 | $ 626,700 | $ 115 | 1,307,428 | $ (2,658) | (621,787) | $ (53,225) | $ 629,873 | $ (3,173) |
Issuance (repurchase) of stock | (1,088) | (1,088) | (1,088) | |||||
Issuance of stock for acquisitions | 3,208 | 3,208 | 3,208 | |||||
Stock-based compensation expense | 7,131 | 7,131 | 7,131 | |||||
Net loss | (9,911) | (9,971) | (9,971) | 60 | ||||
Pension adjustment | 20 | 20 | 20 | |||||
Foreign currency translation adjustment | 8,392 | 8,331 | 8,331 | 61 | ||||
Ending Balance at Mar. 31, 2017 | 634,452 | 115 | 1,307,561 | (3,746) | (621,552) | (44,874) | 637,504 | (3,052) |
Beginning Balance at Dec. 31, 2017 | 615,948 | 115 | 1,326,250 | (8,203) | (677,772) | (21,536) | 618,854 | (2,906) |
Issuance (repurchase) of stock | (837) | 1 | (838) | (837) | ||||
Issuance of stock for acquisitions | 0 | |||||||
Stock-based compensation expense | 7,128 | 7,128 | 7,128 | |||||
Net loss | (20,977) | (20,961) | (20,961) | (16) | ||||
Pension adjustment | (17) | (17) | (17) | |||||
Foreign currency translation adjustment | 7,417 | 7,416 | 7,416 | 1 | ||||
Ending Balance at Mar. 31, 2018 | 609,238 | $ 116 | $ 1,333,378 | $ (9,041) | (698,157) | $ (14,137) | 612,159 | $ (2,921) |
Cumulative impact of change in accounting policy | $ 576 | $ 576 | $ 576 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of 3D Systems Corporation and all majority-owned subsidiaries and entities in which a controlling interest is maintained (the “Company”). A non-controlling interest in a subsidiary is considered an ownership interest in a majority-owned subsidiary that is not attributable to the parent. The Company includes noncontrolling interests as a component of total equity in the condensed consolidated balance sheets and the net income (loss) attributable to noncontrolling interests are presented as an adjustment from net loss used to arrive at net loss attributable to 3D Systems Corporation in the condensed consolidated statements of operations and comprehensive loss. All significant intercompany transactions and balances have been eliminated in consolidation. The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim reports. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (“Form 10-K”). In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments, consisting of adjustments of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The results of operations for the quarter ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from those estimates and assumptions. Certain prior period amounts presented in the condensed consolidated financial statements and accompanying footnotes have been reclassified to conform to current year presentation. Beginning in 2018, the Company classifies standard product warranty revenue and related expenses within the "Products" line items of the Consolidated Statements of Operations. All dollar amounts presented in the accompanying footnotes are presented in thousands, except for per share information. Recently Adopted Accounting Standards In May 2017, the FASB issued ASU No. 2017-09, “ Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting ” (“ASU 2017-09”), in an effort to reduce diversity and clarify what constitutes a modification, as it relates to the change in terms or conditions of a share-based payment award. According to ASU 2017-09, the Company should account for the effects of a modification unless all of the following are met: (1) the fair value of the modified award is the same as the fair value the original award immediately before the original award is modified, (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified, and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in ASU 2017-09 are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU 2017-09 beginning January 1, 2018 and the implementation of this guidance did not have a material effect on its consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, “ Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ” (“ASU 2017-07”), which standardizes the presentation of net benefit cost in the income statement and on the components eligible for capitalization in assets. ASU 2017-07 is effective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods. The amendments in ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The Company adopted ASU 2017-07 in the first quarter of 2018 and the implementation of this guidance did not have a material effect on its consolidated financial statements. On January 1, 2018, the Company adopted ASC Topic 606, “ Revenue from Contracts with Customers. ” The standard outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition. The Company adopted the standard using the modified retrospective transition method and applied its guidance to contracts not completed at the adoption date. The cumulative effect of initial adoption was recorded as a $576 decrease to the January 1, 2018 opening Accumulated Deficit balance and driven primarily by the timing of recognition related to marketing incentives. The effect of this adoption was immaterial to the Consolidated Financial Statements, and the Company does not expect a material effect to its Consolidated Financial Statements on an ongoing basis. Information for comparative periods has not been restated and continues to be reported under the previously applicable revenue accounting guidance ("ASC 605"). Had ASC 605 been applied to the first quarter of 2018, the Consolidated Statements of Operations and Comprehensive Loss would have shown increased Revenue and a decrease in Net Loss Attributable to 3D Systems Corporation of $46 . On Consolidated Balance Sheets, Other Assets would have been $457 lower, Deferred Revenues would have been $73 higher and the Accumulated deficit would have increased by $530 . Accounting Standards Issued But Not Yet Adopted In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02), which provides companies with an option to reclassify stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently in the process of evaluating when it will adopt ASU 2018-02 and its impact on its consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”), in order to create more transparency around how economic results are presented within both the financial statements and in the footnotes and to better align the results of cash flow and fair value hedge accounting with risk management activities. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating when it will adopt ASU 2017-12 and its impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “ Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ” (“ASU 2017-04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The standard is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual impairment tests performed on testing dates after January 1, 2017. The Company is currently in the process of evaluating when it will adopt ASU 2017-04 and its impact on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) ” (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for all leases with terms longer than twelve months. The ASU also requires disclosure of key information about leasing arrangements. ASU 2016-02 is effective on January 1, 2019, using a modified retrospective method of adoption as of January 1, 2017. In January 2018, the FASB issued an exposure draft of the proposed ASU, Leases (Topic 842): Targeted Improvements. The proposed ASU provides an alternative transition method of adoption, permitting the recognition of a cumulative-effect adjustment to retained earnings on the date of adoption. The Company will adopt the standard on the effective date, but has not yet selected a transition method. The Company is reviewing its population of leased assets to determine potential impacts on its consolidated financial statements. Though its evaluation is ongoing, the Company expects changes to its balance sheet due to the recognition of right-of-use assets and lease liabilities related to its real estate leases, but it does not anticipate material impacts to its results of operations or liquidity. No other new accounting pronouncements, issued or effective during 2018, have had or are expected to have a significant impact on the Company’s consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue | Revenue The Company accounts for revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers,” which it adopted on January 1, 2018, using the modified-retrospective method. See Note 1 for further discussion of the adoption. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. At March 31, 2018, the Company had $157,531 of outstanding performance obligations. The Company expects to recognize approximately 95 percent of its remaining performance obligations as revenue within the next twelve months, an additional 3 percent by the end of 2019 and the balance thereafter. Revenue Recognition Revenue is recognized when control of the promised products or services is transferred to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Many of its contracts with customers include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price (“SSP”). Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The amount of consideration we receive and revenue we recognize varies with changes in marketing incentives we offer to our customers. Our marketing incentives take many forms, including volume discounts, trade-in allowances, rebates and other discounts. A majority of the Company’s revenue is recognized at the point in time when products are shipped or or services are delivered to customers. Please see below for further discussion. Systems and Materials Revenue from systems and material sales is recognized when control has transferred to the customer which typically occurs when the goods have been shipped to the customer, risk of loss has transferred to the customer and the company has a present right to payment for the hardware. In limited circumstances when a systems sale includes substantive customer acceptance provisions, revenue is recognized either when customer acceptance has been obtained, customer acceptance provisions have lapsed, or the company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied. Software The Company also markets and sells software tools that enable our customers to capture and customize content using our printers, as well as reverse engineering and inspection software. These software licenses do not require significant modification or customization and provide the customer with a right to use the software as it exists when made available. Revenue from these software licenses is recognized either upon delivery of the product or of a key code which allows the customer to download the software. Customers may purchase post sale support. Generally, the first year is included but subsequent years are optional. This optional support is considered a separate obligation from the software and is deferred at the time of sale and subsequently recognized ratably over future periods. Services The Company offers training, installation and non-contract maintenance services for its products. Additionally, the Company offers extended warranties and maintenance contracts customers can purchase at their option. For optional warranty or maintenance contracts, revenue is deferred at the time of sale based on the stand-alone selling prices of these services and costs are expensed as incurred. Deferred revenue is recognized ratably over the term of the warranty or maintenance period on a straight-line basis. Revenue from training, installation and non-contract maintenance services is recognized at the time of performance of the service. On demand manufacturing and healthcare service sales are included within services revenue and revenue is recognized upon shipment or delivery of the parts or performance of the service, based on the terms of the arrangement. Terms of sale Shipping and handling activities are treated as fulfillment costs rather than as an additional promised service. The Company accrues the costs of shipping and handling when the related revenue is recognized. Costs incurred by the Company associated with shipping and handling are included in product cost of sales. Credit is extended, and creditworthiness is determined, based on an evaluation of each customer’s financial condition. New customers are generally required to complete a credit application and provide references and bank information to facilitate an analysis of creditworthiness. Customers with a favorable profile may receive credit terms that differ from the Company’s general credit terms. Creditworthiness is considered, among other things, in evaluating the Company’s relationship with customers with past due balances. The Company’s terms of sale generally require payment within 30 to 60 days after shipment of a product, although the Company also recognizes that longer payment periods are customary in some countries where it transacts business. To reduce credit risk in connection with printer sales, the Company may, depending upon the circumstances, require significant deposits prior to shipment and may retain a security interest in a system sold until fully paid. In some circumstances, the Company may require payment in full for its products prior to shipment and may require international customers to furnish letters of credit. For maintenance services, the Company either bills customers on a time-and-materials basis or sells maintenance contracts that provide for payment in advance on either an annual or other periodic basis. See Note 12 for additional information related to revenue by reportable segment and major lines of business. Significant Judgments The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. For such arrangements, the Company allocates revenues to each performance obligation based on its relative SSP. Judgment is required to determine the SSP for each distinct performance obligation in a contract. For the majority of items, the Company estimates SSP using historical transaction data. The Company uses a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when the product or service are not sold separately, the Company determines the SSP using information that may include market conditions and other observable inputs. In some circumstances, the Company has more than one SSP for individual products and services due to the stratification of those products and services by customers, geographic region or other factors. In these instances, it may use information such as the size of the customer and geographic region in determining the SSP. The determination of SSP is in ongoing process and information is reviewed regularly in order to ensure SSPs reflect the most current information or trends. Often, the nature of the Company’s marketing incentives lead to consideration that is variable. Judgment is exercised at contract inception to determine the most likely outcome of the contract and resulting transaction price. Ongoing assessments are performed to determine if updates are needed to the original estimates Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer deposits and deferred revenues (contract liabilities) on the Consolidated Balance Sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized at the time of invoicing, or unbilled receivables when revenue is recognized prior to invoicing. For most of the Company’s contracts, customers are invoiced when products are shipped or when services are performed resulting in billed accounts receivables where payment is generally required within 30 to 60 days. Unbilled receivables generally result from items being shipped where the customer has not been charged but for which revenue had been recognized. In the Company’s on-demand manufacturing business, customers may be required to pay in full before work begins on their orders, resulting in customer deposits. The Company typically bills in advance for installation, training and maintenance contracts as well as extended warranties, resulting in deferred revenue. Changes in contract asset and liability balances were not materially impacted by any other factors for the period ended March 31, 2018. In the first quarter of 2018, we recognized revenue of $15,318 related to our contract liabilities at January 1, 2018. Practical Expedients and Exemptions The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Components of inventories, net, at March 31, 2018 and December 31, 2017 are summarized as follows: (in thousands) 2018 2017 Raw materials $ 39,124 $ 37,660 Work in process 3,950 3,906 Finished goods and parts 67,309 62,337 Inventories $ 110,383 $ 103,903 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets, net, other than goodwill, at March 31, 2018 and December 31, 2017 are summarized as follows: 2018 2017 (in thousands) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Weighted Average Useful Life Remaining (in years) Intangible assets with finite lives: Customer relationships $ 107,094 $ (61,287 ) $ 45,807 $ 105,505 $ (57,796 ) $ 47,709 6 Acquired technology 50,370 (38,108 ) 12,262 54,716 (39,644 ) 15,072 2 Trade names 25,972 (16,381 ) 9,591 25,813 (15,552 ) 10,261 6 Patent costs 18,230 (8,069 ) 10,161 17,909 (7,338 ) 10,571 15 Trade secrets 19,601 (12,117 ) 7,484 19,431 (11,530 ) 7,901 4 Acquired patents 16,690 (12,390 ) 4,300 16,661 (11,969 ) 4,692 8 Other 20,270 (18,075 ) 2,195 20,012 (17,435 ) 2,577 2 Total intangible assets $ 258,227 $ (166,427 ) $ 91,800 $ 260,047 $ (161,264 ) $ 98,783 6 (a) Change in gross carrying amounts consists primarily of charges for license and patent costs and foreign currency translation. Amortization expense related to intangible assets was $8,067 and $8,832 for the quarters ended March 31, 2018 and 2017 , respectively. |
Accrued And Other Liabilities
Accrued And Other Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued And Other Liabilities | Accrued and Other Liabilities Accrued liabilities at March 31, 2018 and December 31, 2017 are summarized as follows: (in thousands) 2018 2017 Compensation and benefits $ 19,496 $ 20,432 Accrued taxes 16,457 13,861 Arbitration awards 11,282 11,282 Vendor accruals 7,078 7,044 Product warranty liability 5,855 5,564 Accrued earnouts related to acquisitions 2,556 2,772 Accrued other 1,350 2,485 Royalties payable 1,570 1,679 Accrued professional fees 686 742 Accrued interest 112 38 Total $ 66,442 $ 65,899 Other liabilities at March 31, 2018 and December 31, 2017 are summarized as follows: (in thousands) 2018 2017 Long term employee indemnity $ 13,900 $ 13,887 Defined benefit pension obligation 8,528 8,290 Long term deferred revenue 7,660 7,298 Other long term liabilities 7,237 7,596 Long term tax liability 9,340 9,340 Long term earnouts related to acquisitions — 2,343 Total $ 46,665 $ 48,754 |
Hedging Activities And Financia
Hedging Activities And Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging Activities and Financial Instruments | Hedging Activities and Financial Instruments The Company conducts business in various countries using both the functional currencies of those countries and other currencies to effect cross border transactions. As a result, the Company is subject to the risk that fluctuations in foreign exchange rates between the dates that those transactions are entered into and their respective settlement dates will result in a foreign exchange gain or loss. When practicable, the Company endeavors to match assets and liabilities in the same currency on its balance sheet and those of its subsidiaries in order to reduce these risks. When appropriate, the Company enters into foreign currency contracts to hedge exposures arising from those transactions. The Company has elected not to prepare and maintain the documentation to qualify for hedge accounting treatment under Accounting Standards Codification (“ASC”) 815, “ Derivatives and Hedging ,” and therefore, all gains and losses (realized or unrealized) are recognized in “Interest and other expense, net” in the condensed consolidated statements of operations and comprehensive loss. Depending on their fair value at the end of the reporting period, derivatives are recorded either in prepaid expenses and other current assets or in accrued liabilities on the condensed consolidated balance sheet. The Company had $40,752 and $39,600 in notional foreign exchange contracts outstanding as of March 31, 2018 and December 31, 2017 , respectively. The fair values of these contracts were not material. The Company translates foreign currency balance sheets from each international businesses' functional currency (generally the respective local currency) to U.S. dollars at end-of-period exchange rates, and statements of earnings at average exchange rates for each period. The resulting foreign currency translation adjustments are a component of other comprehensive income (loss). The Company does not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operations' results into U.S. dollars. The impact of translating the Company’s non-U.S. operations’ revenue and earnings into U.S. dollars was not material to the Company’s results of operations for the quarters ended March 31, 2018 and 2017 . |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Credit Facility As of March 31, 2018 , the Company had a $150,000 revolving, unsecured credit facility (the “Credit Agreement”) with a syndicate of banks, to be used for general corporate purposes and working capital needs. The Credit Agreement is scheduled to expire in October 2019 . The Credit Agreement includes provisions for the issuance of letters of credit and swingline loans and contains certain restrictive covenants, which include the maintenance of a maximum consolidated total leverage ratio. The Company was in compliance with those covenants at March 31, 2018 and December 31, 2017 . There were no outstanding borrowings as of March 31, 2018 . Capitalized Lease Obligations The Company’s capitalized lease obligations primarily include a lease agreement that was entered into during 2006 with respect to the Company’s corporate headquarters located in Rock Hill, SC. The change in capitalized lease obligations, as presented in the Condensed Consolidated Balance Sheets, was due to the normal scheduled timing of payments. |
Pension Benefits
Pension Benefits | 3 Months Ended |
Mar. 31, 2018 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension Benefits | Pension Benefits The components of the Company’s pension cost recognized in the condensed consolidated statements of operations and comprehensive loss for the quarters ended March 31, 2018 and 2017 were as follows: Quarter Ended March 31, (in thousands) 2018 2017 Service cost $ 52 $ 67 Interest cost 73 65 Amortization of actuarial loss 46 58 Total periodic cost $ 171 $ 190 |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The Company computes basic loss per share using net loss attributable to 3D Systems Corporation and the weighted average number of common shares outstanding during the applicable period. Diluted loss per share incorporates the additional shares issuable upon assumed exercise of stock options and the release of restricted stock and restricted stock units, except in such case when their inclusion would be anti-dilutive. Quarter Ended March 31, (in thousands, except per share amounts) 2018 2017 Numerator for basic and diluted net loss per share: Net loss attributable to 3D Systems Corporation $ (20,961 ) $ (9,971 ) Denominator for basic and diluted net loss per share: Weighted average shares 111,819 111,289 Net loss per share - basic and diluted $ (0.19 ) $ (0.09 ) For the quarters ended March 31, 2018 and 2017 , the effect of dilutive securities, including non-vested stock options and restricted stock awards/units, was excluded from the denominator for the calculation of diluted net loss per share because the Company recognized a net loss for the period and their inclusion would be anti-dilutive. Dilutive securities excluded were 4,345 and 3,396 for the quarters ended March 31, 2018 and 2017 , respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC 820, “ Fair Value Measurements and Disclosures ,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities; Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. For the Company, the above standard applies to cash equivalents and earnout consideration. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Assets and liabilities measured at fair value on a recurring basis are summarized below: Fair Value Measurements as of March 31, 2018 (in thousands) Level 1 Level 2 Level 3 Total Description Cash equivalents (a) $ 40,891 $ — $ — $ 40,891 Earnout consideration (b) $ — $ — $ 2,556 $ 2,556 Fair Value Measurements as of December 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Description Cash equivalents (a) $ 20,244 $ — $ — $ 20,244 Earnout consideration (b) $ — $ — $ 5,115 $ 5,115 (a) Cash equivalents include funds held in money market instruments and are reported at their current carrying value, which approximates fair value due to the short-term nature of these instruments and are included in cash and cash equivalents in the consolidated balance sheet. (b) The fair value of the earnout consideration, which is based on the present value of the expected future payments to be made to the sellers of the acquired businesses, was derived by analyzing the future performance of the acquired businesses using the earnout formula and performance targets specified in each purchase agreement and adjusting those amounts to reflect the ability of the acquired entities to achieve the stated targets. Given the significance of the unobservable inputs, the valuations are classified in Level 3 of the fair value hierarchy. The change in earnout consideration reflects a $2,675 payment, partially offset by $115 of accretion. The Company did not have any transfers of assets and liabilities between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy during the quarter ended March 31, 2018 . In addition to the assets and liabilities included in the above table, certain of our assets and liabilities are to be initially measured at fair value on a non-recurring basis. This includes goodwill and other intangible assets measured at fair value for impairment assessment, in addition to redeemable noncontrolling interests. For additional discussion, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Estimates” in the Company’s Form 10-K. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the quarters ended March 31, 2018 and 2017 , the Company recorded expense of $1,954 and $1,041 , respectively, resulting in effective tax rates of 10.3% and 11.7% , respectively. The difference between the statutory rate and the effective tax rate is driven from the impact of the change in valuation allowances that the Company has recorded in the US and other foreign jurisdictions for both quarters ended March 31, 2018 and 2017. In December 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings, as of December 31, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. As of December 31, 2017, the Company recorded provisional amounts, and additional work is still necessary for a more detailed analysis of the Company’s deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded in the quarter of 2018 when the analysis is complete. As the Company’s previously unremitted earnings have now been subjected to U.S. federal income tax, any repatriation of these earnings to the U.S. would not be expected to incur significant additional taxes related to such amounts. Tax years 2003 through 2017 remain subject to examination by the U.S. Internal Revenue Service, with most of the years open to examination due to the generation and utilization of various tax credits. The Company files income tax returns (which are open to examination beginning in the year shown in parentheses) in Australia ( 2013 ), Belgium ( 2014 ), Brazil ( 2012 ), China ( 2014 ), France ( 2014 ), Germany ( 2013 ), India ( 2013 ), Israel ( 2013 ), Italy ( 2012 ), Japan ( 2012 ), Korea ( 2012 ), Mexico ( 2012 ), Netherlands ( 2012 ), Switzerland ( 2012 ), the United Kingdom ( 2016 ) and Uruguay ( 2012 ). |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates as one segment and conducts its business through various offices and facilities located throughout the Americas region (United States, Canada, Brazil, Mexico and Uruguay), EMEA region (Belgium, France, Germany, Israel, Italy, the Netherlands, Switzerland and the United Kingdom), and Asia Pacific region (Australia, China, India, Japan and Korea). The Company has historically disclosed summarized financial information for the geographic areas of operations as if they were segments in accordance with ASC 280, “ Segment Reporting .” Financial information concerning the Company’s geographical locations is based on the location of the selling entity. Such summarized financial information concerning the Company’s geographical operations is shown in the following tables: Quarter Ended March 31, (in thousands) 2018 2017 Revenue from unaffiliated customers: United States $ 82,730 $ 77,872 Other Americas 1,817 2,419 EMEA 57,416 52,958 Asia Pacific 23,925 23,182 Total revenue $ 165,888 $ 156,431 Quarter Ended March 31, (in thousands) 2018 2017 Revenue by class of product and service: Products $ 62,629 $ 54,215 Materials 42,496 42,824 Services 60,763 59,392 Total revenue $ 165,888 $ 156,431 Quarter Ended March 31, 2018 Intercompany Sales to (in thousands) Americas EMEA Asia Pacific Total Americas $ 283 $ 15,498 $ 5,422 $ 21,203 EMEA 16,603 5,804 1,911 24,318 Asia Pacific 1,421 1 896 2,318 Total intercompany sales $ 18,307 $ 21,303 $ 8,229 $ 47,839 Quarter Ended March 31, 2017 Intercompany Sales to (in thousands) Americas EMEA Asia Pacific Total Americas $ 361 $ 12,745 $ 3,898 $ 17,004 EMEA 16,547 5,174 1,013 22,734 Asia Pacific 537 135 1,014 1,686 Total intercompany sales $ 17,445 $ 18,054 $ 5,925 $ 41,424 Quarter Ended March 31, (in thousands) 2018 2017 Loss from operations: Americas $ (18,924 ) $ (13,450 ) EMEA (2,005 ) 533 Asia Pacific 3,974 4,341 Subtotal (16,955 ) (8,576 ) Intercompany elimination (543 ) (495 ) Total $ (17,498 ) $ (9,071 ) |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company leases certain of its facilities and equipment under non-cancelable operating leases. For the quarters ended March 31, 2018 and 2017 , rent expense under operating leases was $4,267 and $3,682 , respectively. Certain of the Company’s acquisition agreements contain earnout provisions under which the sellers of the acquired businesses can earn additional amounts. The total liability recorded for these earnouts at March 31, 2018 and December 31, 2017 was $2,556 and $5,115 , respectively. See Note 5. Put Options Owners of interests in a certain subsidiary have the right in certain circumstances to require the Company to acquire either a portion of or all of the remaining ownership interests held by them. The owners’ ability to exercise any such “put option” right is subject to the satisfaction of certain conditions, including conditions requiring notice in advance of exercise. In addition, these rights cannot be exercised prior to a specified exercise date. The exercise of these rights at their earliest contractual date would result in obligations of the Company to fund the related amounts in 2019. Management estimates, assuming that the subsidiary owned by the Company at March 31, 2018 , performs over the relevant future periods at its forecasted earnings levels, that these rights, if exercised, could require the Company, in future periods, to pay approximately $8,872 to the owners of such rights to acquire such ownership interests in the relevant subsidiary. This amount has been recorded as redeemable noncontrolling interests on the Consolidated Balance Sheet at March 31, 2018 and December 31, 2017 . The ultimate amount payable relating to this transaction will vary because it is dependent on the future results of operations of the subject business. Litigation Securities and Derivative Litigation The Company and certain of its former executive officers have been named as defendants in a consolidated putative stockholder class action lawsuit pending in the United States District Court for the District of South Carolina. The consolidated action is styled KBC Asset Management NV v. 3D Systems Corporation, et al., Case No. 0:15-cv-02393-MGL. The Amended Consolidated Complaint (the “Complaint”), which was filed on December 9, 2015, alleges that defendants violated the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions and that the former officers are control persons under Section 20(a) of the Exchange Act. The Complaint was filed on behalf of stockholders who purchased shares of the Company’s common stock between October 29, 2013, and May 5, 2015 and seeks monetary damages on behalf of the purported class. Defendants filed a motion to dismiss the Complaint in its entirety on January 14, 2016, which was denied by Memorandum Opinion and Order dated July 25, 2016 (the “Order”). Defendants filed a motion for reconsideration of the Order on August 4, 2016, which was denied by Order dated February 24, 2017. On September 28, 2017, the Court granted Lead Plaintiff’s Motion for Class Certification. On February 14, 2018, following mediation, the parties entered into a Stipulation of Settlement that provides for, among other things, payment of $50 million by the Company’s insurance carriers and a mutual exchange of releases. The Stipulation of Settlement calls for a dismissal of all claims against the Company and the individual defendants with prejudice following Court approval, a denial by defendants of any wrongdoing, and no admission of liability. On February 15, 2018, Lead Plaintiff filed an Unopposed Motion for Preliminary Approval of Class Action Settlement. On February 21, 2018, the Court entered an Order Preliminarily Approving Settlement and Providing for Notice. The final approval hearing has been scheduled for June 25, 2018. A current liability of $50,000 was recorded for the agreed upon settlement amount and an offsetting receivable of $50,000 was recorded for related insurance proceeds. Nine related derivative complaints have been filed by purported Company stockholders against certain of the Company’s former executive officers and members of its Board of Directors. The Company is named as a nominal defendant in all nine actions. The derivative complaints are styled as follows: (1) Steyn v. Reichental, et al., Case No. 2015-CP-46-2225, filed on July 27, 2015 in the Court of Common Pleas for the 16th Judicial Circuit, County of York, South Carolina (“Steyn”); (2) Piguing v. Reichental, et al., Case No. 2015-CP-46-2396, filed on August 7, 2015 in the Court of Common Pleas for the 16th Judicial Circuit, County of York, South Carolina (“Piguing”); (3) Booth v. Reichental, et al., Case No. 15-692-RGA, filed on August 6, 2015 in the United States District Court for the District of Delaware; (4) Nally v. Reichental, et al., Case No. 15-cv-03756-MGL, filed on September 18, 2015 in the United States District Court for the District of South Carolina (“Nally”); (5) Gee v. Hull, et al., Case No. BC-610319, filed on February 17, 2016 in the Superior Court for the State of California, County of Los Angeles (“Gee”); (6) Foster v. Reichental, et al., Case No. 0:16-cv-01016-MGL, filed on April 1, 2016 in the United States District Court for the District of South Carolina (“Foster”); (7) Lu v. Hull, et al., Case No. BC629730, filed on August 5, 2016 in the Superior Court for the State of California, County of Los Angeles (“Lu”); (8) Howes v. Reichental, et al., Case No. 0:16-cv-2810-MGL, filed on August 11, 2016 in the United States District Court for the District of South Carolina (“Howes”); and (9) Ameduri v. Reichental, et al., Case No. 0:16-cv-02995-MGL, filed on September 1, 2016 in the United States District Court for the District of South Carolina (“Ameduri”). Steyn and Piguing were consolidated into one action styled as In re 3D Systems Corp. Shareholder Derivative Litig., Lead Case No. 2015-CP-46-2225 in the Court of Common Pleas for the 16th Judicial Circuit, County of York, South Carolina. Gee and Lu were consolidated into one action styled as Gee v. Hull, et al., Case No. BC610319 in the Superior Court for the State of California, County of Los Angeles. Nally, Foster, Howes, and Ameduri were consolidated into one action in the United States District Court for the District of South Carolina with Nally as the lead consolidated case. The derivative complaints allege claims for breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment and seek, among other things, monetary damages and certain corporate governance actions. All of the derivative complaints listed above have been stayed until the earlier of the close of discovery or the deadline for appealing a dismissal in the KBC Asset Management NV securities class action. The Company believes the claims alleged in the derivative lawsuits are without merit and intends to defend the Company and its officers and directors vigorously. Ronald Barranco and Print3D Corporation v. 3D Systems Corporation, et. al. On August 23, 2013, Ronald Barranco, a former Company employee, filed two lawsuits against the Company and certain officers in the United States District Court for the District of Hawaii. The first lawsuit (“Barranco I”) is captioned Ronald Barranco and Print3D Corporation v. 3D Systems Corporation, 3D Systems, Inc., and Damon Gregoire, Case No. CV 13-411 LEK RLP, and alleges seven causes of action relating to the Company’s acquisition of Print3D Corporation (of which Mr. Barranco was a 50% shareholder) and the subsequent employment of Mr. Barranco by the Company. The second lawsuit (“Barranco II”) is captioned Ronald Barranco v. 3D Systems Corporation, 3D Systems, Inc., Abraham Reichental, and Damon Gregoire, Case No. CV 13-412 LEK RLP, and alleges the same seven causes of action relating to the Company’s acquisition of certain website domains from Mr. Barranco and the subsequent employment of Mr. Barranco by the Company. Both Barranco I and Barranco II allege the Company breached certain purchase agreements in order to avoid paying Mr. Barranco additional monies pursuant to royalty and earn out provisions in the agreements. The Company and its officers timely filed responsive pleadings on October 22, 2013 seeking, inter alia, to dismiss Barranco I due to a mandatory arbitration agreement and for lack of personal jurisdiction and to dismiss Barranco II for lack of personal jurisdiction. With regard to Barranco I, the Hawaii district court, on February 28, 2014, denied the Company’s motion to dismiss and its motion to transfer venue to South Carolina for the convenience of the parties. However, the Hawaii court recognized that the plaintiff’s claims are all subject to mandatory and binding arbitration in Charlotte, North Carolina. Because the Hawaii court was without authority to compel arbitration outside of Hawaii, the court ordered that the case be transferred to the district court encompassing Charlotte (the United States District Court for the Western District of North Carolina) so that court could compel arbitration in Charlotte. On April 17, 2014, Barranco I was transferred to the United States District Court for the Western District of North Carolina. Plaintiff filed a demand for arbitration on October 29, 2014. On December 9, 2014, the Company filed its answer to plaintiff’s demand for arbitration. On February 2, 2015, plaintiff filed an amended demand that removed Mr. Gregoire as a defendant from the matter, and on February 4, 2015 the Company filed its amended answer. The parties selected an arbitrator and arbitration took place in September 2015 in Charlotte, North Carolina. On September 28, 2015, the arbitrator issued a final award in favor of Mr. Barranco with respect to two alleged breaches of contract and implied covenants arising out of the contract. The arbitrator found that the Company did not commit fraud or make any negligent misrepresentations to Mr. Barranco. Pursuant to the award, the Company is to pay approximately $11,282 , which includes alleged actual damages of $7,254 , fees and expenses of $2,318 and prejudgment interest of $1,710 . The Company disagrees with the single arbitrator’s findings and conclusions and believes the arbitrator’s decision exceeds his authority and disregards the applicable law. As an initial response, the Company filed a motion for modification on September 30, 2015, based on mathematical errors in the computation of damages and fees. On October 16, 2015, the arbitrator issued an order denying the Company’s motion and sua sponte issuing a modified final award in favor of Mr. Barranco in the same above-referenced amounts, but making certain substantive changes to the award, which changes the Company believes were improper and outside the scope of his authority and the American Arbitration Association rules. On November 20, 2015, the Company filed a motion to vacate the arbitration award in the federal court in the United States District Court for the Western District of North Carolina. Claimants also filed a motion to confirm the arbitration award. A hearing was held on the motions on September 29, 2016 in federal court in the Western District of North Carolina. The court requested supplemental briefing by the parties, which briefs were filed on July 11, 2016. On August 31, 2016, the court issued an order granting in part and denying in part Plaintiff’s motion to confirm the arbitration award and for judgment, entering judgment in the principal amount of the arbitration award and denying Plaintiff’s motion for fees and costs. The court denied the Company’s motion to vacate. On September 7, 2016, Plaintiff filed a motion to amend the judgment to include prejudgment interest. The Company opposed that motion and the parties submitted briefing. On September 28, 2016 the Company filed a motion to alter or amend the judgment. Plaintiff opposed the motion and the parties submitted briefing. On May 18, 2017, the court issued an opinion and order denying the Company’s motion to alter or amend and denying Plaintiff’s motion for prejudgment interest. On September 16, 2017, the Company filed a notice of appeal with the United States Court of Appeals for the Fourth Circuit. The appeal is pending. The Company filed its Opening Brief and the Joint Appendix on August 28, 2017. Plaintiff filed its Opening Brief on September 11, 2017. The Company filed its Reply Brief on September 25, 2017. Notwithstanding the Company’s right to appeal, given the arbitrator’s decision, the Company recorded an $11,282 expense provision for this matter in the quarter ended September 30, 2015. The provision is subject to adjustment based on the ultimate outcome of the Company’s appeal. If it is ultimately determined that money is owed following the full appellate process in federal court, the Company intends to fund any amounts to be paid from cash on hand. This amount has been classified as a current liability given the timeline of the appeals process. With regard to Barranco II, the Hawaii district court, on March 17, 2014, denied the Company’s motion to dismiss and its motion to transfer venue to South Carolina. However, the Hawaii court dismissed Count II in plaintiff’s complaint alleging breach of the employment agreement. The Company filed an answer to the complaint in the Hawaii district court on March 31, 2014. On November 19, 2014, the Company filed a motion for summary judgment on all claims which was heard on January 20, 2015. On January 30, 2015, the court entered an order granting in part and denying in part the Company’s motion for summary judgment. The Order narrowed the plaintiff’s claim for breach of contract and dismissed the plaintiff’s claims for fraud and negligent misrepresentation. As a result, Messrs. Reichental and Gregoire were dismissed from the lawsuit. The case was tried to a jury in May 2016, and on May 27, 2016 the jury found that the Company was not liable for either breach of contract or breach of the implied covenant of good faith and fair dealing. Additionally, the jury found in favor of the Company on its counterclaim against Mr. Barranco and determined that Mr. Barranco violated his non-competition covenant with the Company. On July 5, 2017, the court ordered a bench trial regarding causation and damages with respect to the equitable accounting on the Company’s prevailing counterclaim against Mr. Barranco. The bench trial took place on November 20, 2017. The court ordered the submission of proposed findings of fact and conclusions of law. The Company submitted its proposed Findings of Fact and Conclusions of Law on January 12, 2018. Barranco submitted his on February 2, 2018. The Company submitted its Reply on February 16, 2018. On March 30, 2018, the court entered Findings of Fact and Conclusions of Law and Order requiring Barranco to disgorge, and the Company to recover, $522.9 , representing all but four months of the full amount paid to Barranco as salary during his employment with the Company as well as a portion of the up front and buyout payments made to Barranco in connection with the purchase of certain web domains. In addition, the Court ordered Barranco to pay pre-judgment interest to the Company to be calculated beginning as of his first breach of the non-competition covenant in August 2011. Judgment entered thereafter on April 2, 2018. As the prevailing party, the Company has moved for recovery of its fees and costs. The motion is pending before the court. On April 19, 2018, Barranco filed a post-trial motion seeking to amend the findings and judgment. The Company will oppose that motion. Export Compliance Matter In October 2017 the Company received an administrative subpoena from the Bureau of Industry and Security of the Department of Commerce (“BIS”) requesting the production of records in connection with possible violations of U.S. export control laws, including with regard to its Quickparts.com, Inc. subsidiary. In addition, while collecting information responsive to the above-referenced subpoena, the Company identified potential violations of the International Traffic in Arms Regulations (“ITAR”) administered by the Directorate of Defense Trade Controls of the Department of State (“DDTC”) and potential violations of the Export Administration Regulations administered by the Bureau of Industry and Security of the Department of Commerce. On February 12, 2018, the Company submitted an initial notice of voluntary disclosure to DDTC in which the Company identified certain potentially unauthorized exports of technical data. The Company is continuing to conduct an internal review and cooperating fully with the investigation, but cannot predict the ultimate resolution of this matter. The Company expects to incur significant legal costs and other expenses in connection with responding to these inquiries. If the U.S. government finds that the Company has violated one or more export control laws or trade sanctions, the Company could be subject to various penalties. By statute, these penalties can include but are not limited to fines, which by statute may be significant, denial of export privileges, and debarment from participation in U.S. government contracts; and any assessment of penalties could also harm the Company’s reputation, create negative investor sentiment, and affect the Company’s share value. In connection with any resolution, the Company may also be required to undertake additional remedial compliance measures and program monitoring. The Company cannot at this time predict when BIS and/or DDTC will conclude their investigations or determine an estimated cost, if any, or range of costs, for any penalties or fines that may be incurred upon resolution of this matter. Indemnification In the normal course of business, the Company periodically enters into agreements to indemnify customers or suppliers against claims of intellectual property infringement made by third parties arising from the use of the Company’s products. Historically, costs related to these indemnification provisions have not been significant, and the Company is unable to estimate the maximum potential impact of these indemnification provisions on its future results of operations. To the extent permitted under Delaware law, the Company indemnifies its directors and officers for certain events or occurrences while the director or officer is, or was, serving at the Company’s request in such capacity, subject to limited exceptions. The maximum potential amount of future payments the Company could be required to make under these indemnification obligations is unlimited; however, the Company has directors and officers insurance coverage that may enable the Company to recover future amounts paid, subject to a deductible and the policy limits. There is no assurance that the policy limits will be sufficient to cover all damages, if any. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The changes in the balances of accumulated other comprehensive loss by component are as follows: (in thousands) Foreign currency translation adjustment Defined benefit pension plan Liquidation of non-US entity and purchase of non-controlling interests Total Balance at December 31, 2017 $ (19,319 ) $ (2,555 ) $ 338 $ (21,536 ) Other comprehensive income (loss) 7,416 (17 ) — 7,399 Balance at March 31, 2018 $ (11,903 ) $ (2,572 ) $ 338 $ (14,137 ) The amounts presented above are in other comprehensive loss and are net of taxes. For additional information about foreign currency translation, see Note 6. |
Noncontrolling Interests
Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2018 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests As of March 31, 2018 , the Company owned approximately 70% of the capital and voting rights of Robtec, a service bureau and distributor of 3D printing and scanning products in Brazil. Robtec was acquired on November 25, 2014 . As of March 31, 2018 , the Company owned approximately 70% of the capital and voting rights of Easyway, a service bureau and distributor of 3D printing and scanning products in China. Approximately 65% of the capital and voting rights of Easyway were acquired on April 2, 2015, and an additional 5% of the capital and voting rights of Easyway were acquired on July 19, 2017 for $2.3 million . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | Recently Adopted Accounting Standards In May 2017, the FASB issued ASU No. 2017-09, “ Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting ” (“ASU 2017-09”), in an effort to reduce diversity and clarify what constitutes a modification, as it relates to the change in terms or conditions of a share-based payment award. According to ASU 2017-09, the Company should account for the effects of a modification unless all of the following are met: (1) the fair value of the modified award is the same as the fair value the original award immediately before the original award is modified, (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified, and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in ASU 2017-09 are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU 2017-09 beginning January 1, 2018 and the implementation of this guidance did not have a material effect on its consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, “ Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ” (“ASU 2017-07”), which standardizes the presentation of net benefit cost in the income statement and on the components eligible for capitalization in assets. ASU 2017-07 is effective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods. The amendments in ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The Company adopted ASU 2017-07 in the first quarter of 2018 and the implementation of this guidance did not have a material effect on its consolidated financial statements. On January 1, 2018, the Company adopted ASC Topic 606, “ Revenue from Contracts with Customers. ” The standard outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition. The Company adopted the standard using the modified retrospective transition method and applied its guidance to contracts not completed at the adoption date. The cumulative effect of initial adoption was recorded as a $576 decrease to the January 1, 2018 opening Accumulated Deficit balance and driven primarily by the timing of recognition related to marketing incentives. The effect of this adoption was immaterial to the Consolidated Financial Statements, and the Company does not expect a material effect to its Consolidated Financial Statements on an ongoing basis. Information for comparative periods has not been restated and continues to be reported under the previously applicable revenue accounting guidance ("ASC 605"). Had ASC 605 been applied to the first quarter of 2018, the Consolidated Statements of Operations and Comprehensive Loss would have shown increased Revenue and a decrease in Net Loss Attributable to 3D Systems Corporation of $46 . On Consolidated Balance Sheets, Other Assets would have been $457 lower, Deferred Revenues would have been $73 higher and the Accumulated deficit would have increased by $530 . Accounting Standards Issued But Not Yet Adopted In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02), which provides companies with an option to reclassify stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently in the process of evaluating when it will adopt ASU 2018-02 and its impact on its consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”), in order to create more transparency around how economic results are presented within both the financial statements and in the footnotes and to better align the results of cash flow and fair value hedge accounting with risk management activities. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating when it will adopt ASU 2017-12 and its impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “ Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ” (“ASU 2017-04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The standard is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual impairment tests performed on testing dates after January 1, 2017. The Company is currently in the process of evaluating when it will adopt ASU 2017-04 and its impact on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) ” (“ASU 2016-02”). ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for all leases with terms longer than twelve months. The ASU also requires disclosure of key information about leasing arrangements. ASU 2016-02 is effective on January 1, 2019, using a modified retrospective method of adoption as of January 1, 2017. In January 2018, the FASB issued an exposure draft of the proposed ASU, Leases (Topic 842): Targeted Improvements. The proposed ASU provides an alternative transition method of adoption, permitting the recognition of a cumulative-effect adjustment to retained earnings on the date of adoption. The Company will adopt the standard on the effective date, but has not yet selected a transition method. The Company is reviewing its population of leased assets to determine potential impacts on its consolidated financial statements. Though its evaluation is ongoing, the Company expects changes to its balance sheet due to the recognition of right-of-use assets and lease liabilities related to its real estate leases, but it does not anticipate material impacts to its results of operations or liquidity. No other new accounting pronouncements, issued or effective during 2018, have had or are expected to have a significant impact on the Company’s consolidated financial statements. |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the promised products or services is transferred to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Many of its contracts with customers include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price (“SSP”). Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The amount of consideration we receive and revenue we recognize varies with changes in marketing incentives we offer to our customers. Our marketing incentives take many forms, including volume discounts, trade-in allowances, rebates and other discounts. A majority of the Company’s revenue is recognized at the point in time when products are shipped or or services are delivered to customers. Please see below for further discussion. |
Fair Value Measurements | ASC 820, “ Fair Value Measurements and Disclosures ,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities; Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. For the Company, the above standard applies to cash equivalents and earnout consideration. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Components Of Inventories | (in thousands) 2018 2017 Raw materials $ 39,124 $ 37,660 Work in process 3,950 3,906 Finished goods and parts 67,309 62,337 Inventories $ 110,383 $ 103,903 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Other Than Goodwill | Intangible assets, net, other than goodwill, at March 31, 2018 and December 31, 2017 are summarized as follows: 2018 2017 (in thousands) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Weighted Average Useful Life Remaining (in years) Intangible assets with finite lives: Customer relationships $ 107,094 $ (61,287 ) $ 45,807 $ 105,505 $ (57,796 ) $ 47,709 6 Acquired technology 50,370 (38,108 ) 12,262 54,716 (39,644 ) 15,072 2 Trade names 25,972 (16,381 ) 9,591 25,813 (15,552 ) 10,261 6 Patent costs 18,230 (8,069 ) 10,161 17,909 (7,338 ) 10,571 15 Trade secrets 19,601 (12,117 ) 7,484 19,431 (11,530 ) 7,901 4 Acquired patents 16,690 (12,390 ) 4,300 16,661 (11,969 ) 4,692 8 Other 20,270 (18,075 ) 2,195 20,012 (17,435 ) 2,577 2 Total intangible assets $ 258,227 $ (166,427 ) $ 91,800 $ 260,047 $ (161,264 ) $ 98,783 6 |
Accrued And Other Liabilities (
Accrued And Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule Of Accrued Liabilities | Accrued liabilities at March 31, 2018 and December 31, 2017 are summarized as follows: (in thousands) 2018 2017 Compensation and benefits $ 19,496 $ 20,432 Accrued taxes 16,457 13,861 Arbitration awards 11,282 11,282 Vendor accruals 7,078 7,044 Product warranty liability 5,855 5,564 Accrued earnouts related to acquisitions 2,556 2,772 Accrued other 1,350 2,485 Royalties payable 1,570 1,679 Accrued professional fees 686 742 Accrued interest 112 38 Total $ 66,442 $ 65,899 |
Schedule Of Other Liabilities | Other liabilities at March 31, 2018 and December 31, 2017 are summarized as follows: (in thousands) 2018 2017 Long term employee indemnity $ 13,900 $ 13,887 Defined benefit pension obligation 8,528 8,290 Long term deferred revenue 7,660 7,298 Other long term liabilities 7,237 7,596 Long term tax liability 9,340 9,340 Long term earnouts related to acquisitions — 2,343 Total $ 46,665 $ 48,754 |
Pension Benefits (Tables)
Pension Benefits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule Of Components Of Pension Cost | The components of the Company’s pension cost recognized in the condensed consolidated statements of operations and comprehensive loss for the quarters ended March 31, 2018 and 2017 were as follows: Quarter Ended March 31, (in thousands) 2018 2017 Service cost $ 52 $ 67 Interest cost 73 65 Amortization of actuarial loss 46 58 Total periodic cost $ 171 $ 190 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule Of Net Loss Per Share Reconciliation | Quarter Ended March 31, (in thousands, except per share amounts) 2018 2017 Numerator for basic and diluted net loss per share: Net loss attributable to 3D Systems Corporation $ (20,961 ) $ (9,971 ) Denominator for basic and diluted net loss per share: Weighted average shares 111,819 111,289 Net loss per share - basic and diluted $ (0.19 ) $ (0.09 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary Of Assets And Liabilities Measured At Fair Value On Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below: Fair Value Measurements as of March 31, 2018 (in thousands) Level 1 Level 2 Level 3 Total Description Cash equivalents (a) $ 40,891 $ — $ — $ 40,891 Earnout consideration (b) $ — $ — $ 2,556 $ 2,556 Fair Value Measurements as of December 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Description Cash equivalents (a) $ 20,244 $ — $ — $ 20,244 Earnout consideration (b) $ — $ — $ 5,115 $ 5,115 (a) Cash equivalents include funds held in money market instruments and are reported at their current carrying value, which approximates fair value due to the short-term nature of these instruments and are included in cash and cash equivalents in the consolidated balance sheet. (b) The fair value of the earnout consideration, which is based on the present value of the expected future payments to be made to the sellers of the acquired businesses, was derived by analyzing the future performance of the acquired businesses using the earnout formula and performance targets specified in each purchase agreement and adjusting those amounts to reflect the ability of the acquired entities to achieve the stated targets. Given the significance of the unobservable inputs, the valuations are classified in Level 3 of the fair value hierarchy. The change in earnout consideration reflects a $2,675 payment, partially offset by $115 of accretion. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule Of Revenue From Unaffiliated Customers By Product And Service | Such summarized financial information concerning the Company’s geographical operations is shown in the following tables: Quarter Ended March 31, (in thousands) 2018 2017 Revenue from unaffiliated customers: United States $ 82,730 $ 77,872 Other Americas 1,817 2,419 EMEA 57,416 52,958 Asia Pacific 23,925 23,182 Total revenue $ 165,888 $ 156,431 Quarter Ended March 31, (in thousands) 2018 2017 Revenue by class of product and service: Products $ 62,629 $ 54,215 Materials 42,496 42,824 Services 60,763 59,392 Total revenue $ 165,888 $ 156,431 |
Schedule Of Intercompany Sales By Geographic Area | Quarter Ended March 31, 2018 Intercompany Sales to (in thousands) Americas EMEA Asia Pacific Total Americas $ 283 $ 15,498 $ 5,422 $ 21,203 EMEA 16,603 5,804 1,911 24,318 Asia Pacific 1,421 1 896 2,318 Total intercompany sales $ 18,307 $ 21,303 $ 8,229 $ 47,839 Quarter Ended March 31, 2017 Intercompany Sales to (in thousands) Americas EMEA Asia Pacific Total Americas $ 361 $ 12,745 $ 3,898 $ 17,004 EMEA 16,547 5,174 1,013 22,734 Asia Pacific 537 135 1,014 1,686 Total intercompany sales $ 17,445 $ 18,054 $ 5,925 $ 41,424 Quarter Ended March 31, (in thousands) 2018 2017 Loss from operations: Americas $ (18,924 ) $ (13,450 ) EMEA (2,005 ) 533 Asia Pacific 3,974 4,341 Subtotal (16,955 ) (8,576 ) Intercompany elimination (543 ) (495 ) Total $ (17,498 ) $ (9,071 ) |
Schedule Of Income (Loss) From Operations By Geographic Area) | Quarter Ended March 31, (in thousands) 2018 2017 Loss from operations: Americas $ (18,924 ) $ (13,450 ) EMEA (2,005 ) 533 Asia Pacific 3,974 4,341 Subtotal (16,955 ) (8,576 ) Intercompany elimination (543 ) (495 ) Total $ (17,498 ) $ (9,071 ) |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule Of Accumulated Other Comprehensive Loss By Component | The changes in the balances of accumulated other comprehensive loss by component are as follows: (in thousands) Foreign currency translation adjustment Defined benefit pension plan Liquidation of non-US entity and purchase of non-controlling interests Total Balance at December 31, 2017 $ (19,319 ) $ (2,555 ) $ 338 $ (21,536 ) Other comprehensive income (loss) 7,416 (17 ) — 7,399 Balance at March 31, 2018 $ (11,903 ) $ (2,572 ) $ 338 $ (14,137 ) |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accumulated deficit | $ 698,157 | $ 677,772 | |
Total revenue | 165,888 | $ 156,431 | |
Net loss attributable to 3D Systems Corporation | (20,961) | $ (9,971) | |
Other assets | (25,674) | (27,136) | |
Difference Between Revenue Guidance In Effect Before And After Topic 606 | Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accumulated deficit | $ (576) | ||
Net loss attributable to 3D Systems Corporation | (46) | ||
Calculated Under Revenue Guidance In Effect Before Topic 606 | Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accumulated deficit | 530 | ||
Total revenue | 46 | ||
Other assets | 457 | ||
Deferred revenue | $ 73 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Contract With Customer, Asset And Liability [Line Items] | |
Total backlog | $ 157,531 |
Amounts included in contract liability at the beginning of period | $ 15,318 |
Within Next Twelve Months | |
Contract With Customer, Asset And Liability [Line Items] | |
Remaining performance obligation (as a precentage) | 95.00% |
By End of 2019 | |
Contract With Customer, Asset And Liability [Line Items] | |
Remaining performance obligation (as a precentage) | 3.00% |
Inventories (Components Of Inve
Inventories (Components Of Inventories) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 39,124 | $ 37,660 |
Work in process | 3,950 | 3,906 |
Finished goods and parts | 67,309 | 62,337 |
Inventories | $ 110,383 | $ 103,903 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 8,067 | $ 8,832 |
Intangible Assets (Intangible A
Intangible Assets (Intangible Assets Other Than Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with finite lives: Gross | $ 258,227 | $ 260,047 |
Intangible assets with finite lives: Accumulated Amortization | (166,427) | (161,264) |
Intangible assets with finite lives: Net | $ 91,800 | 98,783 |
Weighted average useful life remaining (in years) | 6 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with finite lives: Gross | $ 107,094 | 105,505 |
Intangible assets with finite lives: Accumulated Amortization | (61,287) | (57,796) |
Intangible assets with finite lives: Net | $ 45,807 | 47,709 |
Weighted average useful life remaining (in years) | 6 years | |
Acquired technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with finite lives: Gross | $ 50,370 | 54,716 |
Intangible assets with finite lives: Accumulated Amortization | (38,108) | (39,644) |
Intangible assets with finite lives: Net | $ 12,262 | 15,072 |
Weighted average useful life remaining (in years) | 2 years | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with finite lives: Gross | $ 25,972 | 25,813 |
Intangible assets with finite lives: Accumulated Amortization | (16,381) | (15,552) |
Intangible assets with finite lives: Net | $ 9,591 | 10,261 |
Weighted average useful life remaining (in years) | 6 years | |
Patent costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with finite lives: Gross | $ 18,230 | 17,909 |
Intangible assets with finite lives: Accumulated Amortization | (8,069) | (7,338) |
Intangible assets with finite lives: Net | $ 10,161 | 10,571 |
Weighted average useful life remaining (in years) | 15 years | |
Trade secrets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with finite lives: Gross | $ 19,601 | 19,431 |
Intangible assets with finite lives: Accumulated Amortization | (12,117) | (11,530) |
Intangible assets with finite lives: Net | $ 7,484 | 7,901 |
Weighted average useful life remaining (in years) | 4 years | |
Acquired patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with finite lives: Gross | $ 16,690 | 16,661 |
Intangible assets with finite lives: Accumulated Amortization | (12,390) | (11,969) |
Intangible assets with finite lives: Net | $ 4,300 | 4,692 |
Weighted average useful life remaining (in years) | 8 years | |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets with finite lives: Gross | $ 20,270 | 20,012 |
Intangible assets with finite lives: Accumulated Amortization | (18,075) | (17,435) |
Intangible assets with finite lives: Net | $ 2,195 | $ 2,577 |
Weighted average useful life remaining (in years) | 2 years |
Accrued And Other Liabilities38
Accrued And Other Liabilities (Schedule Of Accrued Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Compensation and benefits | $ 19,496 | $ 20,432 |
Accrued taxes | 16,457 | 13,861 |
Arbitration awards | 11,282 | 11,282 |
Vendor accruals | 7,078 | 7,044 |
Product warranty liability | 5,855 | 5,564 |
Accrued earnouts related to acquisitions | 2,556 | 2,772 |
Accrued other | 1,350 | 2,485 |
Royalties payable | 1,570 | 1,679 |
Accrued professional fees | 686 | 742 |
Accrued interest | 112 | 38 |
Total | $ 66,442 | $ 65,899 |
Accrued And Other Liabilities39
Accrued And Other Liabilities (Schedule Of Other Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Long term employee indemnity | $ 13,900 | $ 13,887 |
Defined benefit pension obligation | 8,528 | 8,290 |
Long term deferred revenue | 7,660 | 7,298 |
Other long term liabilities | 7,237 | 7,596 |
Long term tax liability | 9,340 | 9,340 |
Long term earnouts related to acquisitions | 0 | 2,343 |
Total | $ 46,665 | $ 48,754 |
Hedging Activities And Financ40
Hedging Activities And Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Foreign currency contracts | $ 40,752 | $ 39,600 |
Borrowings (Narrative) (Details
Borrowings (Narrative) (Details) - Revolving Credit Facility | Mar. 31, 2018USD ($) |
Line of Credit Facility [Line Items] | |
Credit Agreement, maximum borrowing capacity | $ 150,000,000 |
Outstanding borrowings | $ 0 |
Pension Benefits (Schedule Of C
Pension Benefits (Schedule Of Components Of Pension Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | ||
Service cost | $ 52 | $ 67 |
Interest cost | 73 | 65 |
Amortization of actuarial loss | 46 | 58 |
Total periodic cost | $ 171 | $ 190 |
Net Loss Per Share (Schedule Of
Net Loss Per Share (Schedule Of Net Loss Per Share Reconciliation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net loss attributable to 3D Systems Corporation | $ (20,961) | $ (9,971) |
Weighted average shares | 111,819 | 111,289 |
Net loss per share — basic and diluted (in dollars per share) | $ (0.19) | $ (0.09) |
Net Loss Per Share (Narrative)
Net Loss Per Share (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Effect of dilutive securities excluded | $ 4,345 | $ 3,396 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value Disclosures [Abstract] | |
Deferred purchase payment provision | $ 2,675 |
Earnout accretion | $ 115 |
Fair Value Measurements (Summar
Fair Value Measurements (Summary Of Assets And Liabilities Measured At Fair Value On Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 40,891 | $ 20,244 |
Earnout consideration | 2,556 | 5,115 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 40,891 | 20,244 |
Earnout consideration | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Earnout consideration | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Earnout consideration | $ 2,556 | $ 5,115 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 1,954 | $ 1,041 |
Effective income tax rate (as a percentage) | 10.30% | 11.70% |
Segment Information (Schedule O
Segment Information (Schedule Of Revenue From Unaffiliated Customers By Geographic Area) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Number of reportable segments | segment | 1 | |
Revenue from unaffiliated customers | $ 165,888 | $ 156,431 |
United States | ||
Revenue from unaffiliated customers | 82,730 | 77,872 |
Other Americas | ||
Revenue from unaffiliated customers | 1,817 | 2,419 |
EMEA | ||
Revenue from unaffiliated customers | 57,416 | 52,958 |
Asia Pacific | ||
Revenue from unaffiliated customers | $ 23,925 | $ 23,182 |
Segment Information (Schedule49
Segment Information (Schedule Of Revenue From Unaffiliated Customers By Product And Service) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Total revenue | $ 165,888 | $ 156,431 |
Products | ||
Total revenue | 62,629 | 54,215 |
Materials | ||
Total revenue | 42,496 | 42,824 |
Services | ||
Total revenue | $ 60,763 | $ 59,392 |
Segment Information (Schedule50
Segment Information (Schedule Of Intercompany Sales By Geographic Area) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Intercompany sales | $ 165,888 | $ 156,431 |
Intercompany Sales | ||
Intercompany sales | 47,839 | 41,424 |
Americas | Intercompany Sales | ||
Intercompany sales | 18,307 | 17,445 |
EMEA | Intercompany Sales | ||
Intercompany sales | 21,303 | 18,054 |
Asia Pacific | Intercompany Sales | ||
Intercompany sales | 8,229 | 5,925 |
Americas | Intercompany Sales | ||
Intercompany sales | 21,203 | 17,004 |
Americas | Americas | Operating Segments | ||
Intercompany sales | 283 | 361 |
Americas | EMEA | Operating Segments | ||
Intercompany sales | 15,498 | 12,745 |
Americas | Asia Pacific | Operating Segments | ||
Intercompany sales | 5,422 | 3,898 |
EMEA | ||
Intercompany sales | 57,416 | 52,958 |
EMEA | Intercompany Sales | ||
Intercompany sales | 24,318 | 22,734 |
EMEA | Americas | Operating Segments | ||
Intercompany sales | 16,603 | 16,547 |
EMEA | EMEA | Operating Segments | ||
Intercompany sales | 5,804 | 5,174 |
EMEA | Asia Pacific | Operating Segments | ||
Intercompany sales | 1,911 | 1,013 |
Asia Pacific | ||
Intercompany sales | 23,925 | 23,182 |
Asia Pacific | Intercompany Sales | ||
Intercompany sales | 2,318 | 1,686 |
Asia Pacific | Americas | Operating Segments | ||
Intercompany sales | 1,421 | 537 |
Asia Pacific | EMEA | Operating Segments | ||
Intercompany sales | 1 | 135 |
Asia Pacific | Asia Pacific | Operating Segments | ||
Intercompany sales | 896 | 1,014 |
United States | ||
Intercompany sales | $ 82,730 | $ 77,872 |
Segment Information (Schedule51
Segment Information (Schedule Of Income (Loss) From Operations By Geographic Area) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Loss from operations | $ (17,498) | $ (9,071) |
Reportable Geographical Components | ||
Loss from operations | (16,955) | (8,576) |
Intercompany Sales | ||
Loss from operations | (543) | (495) |
Americas | Operating Segments | ||
Loss from operations | (18,924) | (13,450) |
EMEA | Operating Segments | ||
Loss from operations | (2,005) | 533 |
Asia Pacific | Operating Segments | ||
Loss from operations | $ 3,974 | $ 4,341 |
Commitments And Contingencies (
Commitments And Contingencies (Narrative) (Details) | Mar. 30, 2018USD ($) | Sep. 28, 2015USD ($) | Aug. 23, 2013lawsuit | Mar. 31, 2018USD ($)lawsuit | Mar. 31, 2017USD ($) | Feb. 15, 2018USD ($) | Dec. 31, 2017USD ($) |
Loss Contingencies [Line Items] | |||||||
Rent expense under operating leases | $ 4,267,000 | $ 3,682,000 | |||||
Total liabilities recorded for earnouts | 2,556,000 | $ 5,115,000 | |||||
Redeemable noncontrolling interests | 8,872,000 | 8,872,000 | |||||
Estimate of possible loss | $ 50,000,000 | ||||||
Accrued litigation settlement | 50,000,000 | 50,000,000 | |||||
Insurance proceeds receivable | $ 50,000,000 | $ 50,000,000 | |||||
Number of stockholder class action lawsuits | lawsuit | 2 | 9 | |||||
Provision for arbitration award | $ 11,282,000 | ||||||
Alleged actual damages | 7,254,000 | ||||||
Fees and expenses | 2,318,000 | ||||||
Prejudgment interest | $ 1,710,000 | ||||||
Barranco II vs. 3D Systems Corporation | |||||||
Loss Contingencies [Line Items] | |||||||
Damages awarded to 3D Systems | $ 522,900 |
Accumulated Other Comprehensi53
Accumulated Other Comprehensive Loss (Schedule Of Accumulated Other Comprehensive Loss By Component) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | $ 615,948 |
Ending Balance | 609,238 |
Foreign currency translation adjustment | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (19,319) |
Other comprehensive income (loss) | 7,416 |
Ending Balance | (11,903) |
Defined benefit pension plan | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (2,555) |
Other comprehensive income (loss) | (17) |
Ending Balance | (2,572) |
Liquidation of non-US entity and purchase of non-controlling interests | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 338 |
Other comprehensive income (loss) | 0 |
Ending Balance | 338 |
Accumulated Other Comprehensive Income (Loss) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | (21,536) |
Other comprehensive income (loss) | 7,399 |
Ending Balance | $ (14,137) |
Noncontrolling Interests (Narra
Noncontrolling Interests (Narrative) (Details) - USD ($) $ in Millions | Jul. 19, 2017 | Mar. 31, 2018 | Apr. 02, 2015 |
Robtec | |||
Business Acquisition [Line Items] | |||
Acquired ownership percentage | 70.00% | ||
Easyway | |||
Business Acquisition [Line Items] | |||
Acquired ownership percentage | 5.00% | 70.00% | 65.00% |
Value of voting rights acquired | $ 2.3 |
Uncategorized Items - ddd-20180
Label | Element | Value |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 301,000 |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 487,000 |