Materialise NV (NASDAQ:MTLS), a leading provider of additive
manufacturing software and of sophisticated 3D printing services,
today announced its financial results for the third quarter ended
September 30, 2017.
Highlights – Third Quarter 2017
- Total revenue increased 12.4% from the
third quarter of 2016 to 32,307 kEUR, with increases in all three
business segments.
- Adjusted EBITDA increased 15.0% from
2,833 kEUR for the third quarter of 2016 to 3,259 kEUR.
- Revenue and Adjusted EBITDA guidance
for 2017 updated to reflect the acquisition of ACTech on October 4,
2017.
Executive Chairman Peter Leys commented, “During the third
quarter, Materialise invested significantly in our future growth,
finishing our new production and office facilities in Poland and
Belgium and completing negotiations for the acquisition of ACTech
GmbH in Germany, a full-service manufacturer of complex metal
parts. The expertise and in-house infrastructure of ACTech GmbH
position us to accelerate the development of our existing metal
competence center, including our software suite for 3D metal
printing. Simultaneously, we continued to execute on other elements
of our strategy: we were the first to receive the U.S. green light
for our 3D-printed maxillofacial implants that will allow our
long-term collaborator DePuy Synthes to bring these products to
market in the United States. Meanwhile, our three segments all
continued to contribute to our topline growth and generated
positive EBITDA.”
Third Quarter 2017 Results
Total revenue for the third quarter of 2017 increased 12.4% to
32,307 kEUR compared to 28,736 kEUR for the third quarter
of 2016, with gains in all three of our segments. Total deferred
revenue from annual software sales and maintenance contracts
amounted to 16,607 kEUR at the end of the third quarter of
2017 compared 16,799 kEUR at the end of the fourth quarter of 2016.
Adjusted EBITDA, which in the third quarter of 2017 excludes 266
kEUR of expenses related to the acquisition of ACTech, increased to
3,259 kEUR from 2,833 kEUR as a result of the combination of
continued revenue growth (12.4%) and a lower increase in
operational expenses compared to the third quarter of 2016. The
Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue)
in the third quarter of 2017 was 10.1% compared to 9.9% in the
third quarter of 2016.
Revenue from our Materialise Software segment increased 10.4% to
8,422 kEUR for the third quarter of 2017 from 7,632 kEUR for
the same quarter last year. Segment EBITDA rose to 3,362 kEUR
from 2,814 kEUR while the segment EBITDA margin was 39.9%
compared to 36.9% for the prior-year period.
Revenue from our Materialise Medical segment increased 9.3% to
10,421 kEUR for the third quarter of 2017 compared to
9,537 kEUR for the same period in 2016. Compared to the same
quarter in 2016, revenues from our medical software grew 24.6%, and
revenues from medical devices and services grew 2.1%. Segment
EBITDA was 1,170 kEUR compared to 754 kEUR while the
segment EBITDA margin increased to 11.2% from 7.9% in the third
quarter of 2016.
Revenue from our Materialise Manufacturing segment increased
16.3% to 13,456 kEUR for the third quarter of 2017 from
11,567 kEUR for the third quarter of 2016. Segment EBITDA
decreased to 499 kEUR from 1,723 kEUR while the segment
EBITDA margin decreased to 3.7% from 14.9% for the same quarter in
2016. While last year’s third quarter segment EBITDA included 460
kEUR related to an updated accounting valuation of resin materials
stock, in the 2017 period, segment EBITDA was affected by higher
cost of sales from the sales of eyewear scanners.
Gross profit was 17,873 kEUR, or 55.3% of total revenue, for the
third quarter of 2017 compared to 16,937 kEUR, or 58.9% of
total revenue, for the third quarter of 2016.
Research and development (“R&D”), sales and marketing
(“S&M”) and general and administrative (“G&A”) expenses
increased, in the aggregate, 8.5% to 19,509 kEUR for the third
quarter of 2017 from 17,974 kEUR for the third quarter of
2016. R&D expenses increased from 4,389 kEUR to
4,701 kEUR while S&M expenses increased from
8,299 kEUR to 8,753 kEUR. G&A expenses increased from
5,286 kEUR to 6,055 kEUR. The G&A expenses for the
third quarter of 2017 included a portion of the expenses related to
the acquisition of ACTech, which are excluded from Adjusted
EBITDA.
Net other operating income increased by 45 kEUR to
1,414 kEUR compared to 1,369 kEUR for the third quarter
of 2016.
Operating result decreased to (222) kEUR from 332 kEUR
for the same period in the prior year. This decrease was the result
of the increase of 8.5% in R&D, S&M and G&A expenses,
which was offset in part by the increase in gross profit of 5.5%.
The operating result was also negatively affected by depreciation
cost, which increased to 2,918 kEUR from 2,144 kEUR for the third
quarter of 2016, and by the 266 kEUR of expenses related to the
acquisition of ACTech.
Net financial result was (593) kEUR compared to
(124) kEUR for the prior-year period, reflecting variances in
currency exchange rates, primarily on the portion of the company’s
IPO proceeds held in U.S. dollars versus the euro.
Net loss for the third quarter of 2017 was (1,413) kEUR
compared to net loss of (52) kEUR for the same period in 2016.
The 2016 period contained income tax expense of (191) kEUR
compared to (433) kEUR this quarter. The variance of
(242) kEUR in income tax, the decrease in the net financial
result of 469 kEUR, a decrease of (96) kEUR in the share in
the loss of a joint venture and the decrease of the operating
result by (554) kEUR explain the increase in the net loss for
the third quarter of 2017. Total comprehensive loss for the third
quarter of 2017, which includes exchange differences on translation
of foreign operations, was (1,568) kEUR compared to
(511) kEUR for the same period in 2016.
At September 30, 2017, we had cash and equivalents of
48,099 kEUR compared to 55,912 kEUR at December 31, 2016.
Cash flow from operating activities in the third quarter of 2017
was 2,518 kEUR compared to 4,315 kEUR in the same period
in 2016.
Net shareholders’ equity at September 30, 2017 was
76,060 kEUR compared to 79,033 kEUR at December 31,
2016.
2017 Guidance
Mr. Leys concluded, “We are adjusting our revenue and Adjusted
EBITDA guidance for 2017 to reflect our acquisition of ACTech in
the fourth quarter. For fiscal 2017, we now expect to report
consolidated revenue between 140,000 – 143,000 kEUR and Adjusted
EBITDA between 13,000 – 14,000 kEUR. Separately, based on
year-to-date software sales, we are revising our outlook for
deferred revenue from annual licenses and maintenance in 2017 and
now expect an increase between 2,000 – 3,000 kEUR as compared to
2016.”
The company previously expected to report consolidated revenue
between 128,000 - 134,000 kEUR and Adjusted EBITDA between 10,500 –
13,500 kEUR in 2017, with amounts closer to the high end of those
ranges. The amount of deferred revenue generated in 2017 from
annual licenses and maintenance was previously expected to increase
by an amount between 4,000 - 5,000 kEUR as compared to 2016.
Non-IFRS Measures
Materialise uses EBITDA and Adjusted EBITDA as supplemental
financial measures of its financial performance. EBITDA is
calculated as net profit plus income taxes, financial expenses
(less financial income), shares of loss in a joint venture and
depreciation and amortization. Adjusted EBITDA is determined by
adding non-cash stock-based compensation expenses and
acquisition-related expenses of business combinations to EBITDA.
Management believes these non-IFRS measures to be important
measures as they exclude the effects of items which primarily
reflect the impact of long-term investment and financing decisions,
rather than the performance of the company's day-to-day operations.
As compared to net profit, these measures are limited in that they
do not reflect the periodic costs of certain capitalized tangible
and intangible assets used in generating revenues in the company's
business, or the charges associated with impairments. Management
evaluates such items through other financial measures such as
capital expenditures and cash flow provided by operating
activities. The company believes that these measurements are useful
to measure a company's ability to grow or as a valuation
measurement. The company's calculation of EBITDA and Adjusted
EBITDA may not be comparable to similarly titled measures reported
by other companies. EBITDA and Adjusted EBITDA should not be
considered as alternatives to net profit or any other performance
measure derived in accordance with IFRS. The company's presentation
of EBITDA and Adjusted EBITDA should not be construed to imply that
its future results will be unaffected by unusual or non-recurring
items.
Exchange Rate
This press release contains translations of certain euro amounts
into U.S. dollars at specified rates solely for the convenience of
readers. Unless otherwise noted, all translations from euros to
U.S. dollars in this press release were made at a rate of EUR 1.00
to USD 1.1806, the reference rate of the European Central Bank on
September 30, 2017.
Conference Call and Webcast
Materialise will hold a conference call and simultaneous webcast
to discuss its financial results for the third quarter of 2017
today, Thursday, November 9, 2017, at 8:30 a.m. ET/2:30 p.m. CET.
Company participants on the call will include Wilfried Vancraen,
Founder and Chief Executive Officer; Peter Leys, Executive
Chairman; and Johan Albrecht, Chief Financial Officer. A
question-and-answer session will follow management’s remarks.
To access the conference call, please dial 844-469-2530 (U.S.)
or 765-507-2679 (international), passcode #98716965. The conference
call will also be broadcast live over the Internet with an
accompanying slide presentation, which can be accessed on the
company’s website at http://investors.materialise.com.
A webcast of the conference call will be archived on the
company's website for one year.
About Materialise
Materialise incorporates 27 years of 3D printing experience into
a range of software solutions and 3D printing services, which
together form the backbone of the 3D printing industry.
Materialise’s open and flexible solutions enable players in a wide
variety of industries, including healthcare, automotive, aerospace,
art and design, and consumer goods, to build innovative 3D printing
applications that aim to make the world a better and healthier
place. Headquartered in Belgium, with branches worldwide,
Materialise combines one of the largest groups of software
developers in the industry with one of the largest 3D printing
facilities in the world. For additional information, please visit:
www.materialise.com.
Cautionary Statement on Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, regarding, among other things, our intentions, beliefs,
assumptions, projections, outlook, analyses or current
expectations, plans, objectives, strategies and prospects, both
financial and business, including statements concerning, among
other things, current estimates of fiscal 2017 revenues, deferred
revenue from annual licenses and maintenance and Adjusted EBITDA,
the benefits of the ACTech acquisition, completion of start-up
activities associated with our new manufacturing facilities,
results of operations, cash needs, capital expenditures, expenses,
financial condition, liquidity, prospects, growth and strategies,
and the trends and competition that may affect the markets,
industry or us. Such statements are subject to known and unknown
uncertainties and risks. When used in this press release, the words
“estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,”
“believe,” “forecast,” “will,” “may,” “could,” “might,” “aim,”
“should,” and variations of such words or similar expressions are
intended to identify forward-looking statements. These
forward-looking statements are based upon the expectations of
management under current assumptions at the time of this press
release. These expectations, beliefs and projections are expressed
in good faith and the company believes there is a reasonable basis
for them. However, the company cannot offer any assurance that our
expectations, beliefs and projections will actually be achieved. By
their nature, forward-looking statements involve risks and
uncertainties because they relate to events, competitive dynamics
and industry change, and depend on economic circumstances that may
or may not occur in the future or may occur on longer or shorter
timelines than anticipated. We caution you that forward-looking
statements are not guarantees of future performance and involve
known and unknown risks, uncertainties and other factors that are
in some cases beyond our control. All of the forward-looking
statements are subject to risks and uncertainties that may cause
the company's actual results to differ materially from our
expectations, including risk factors described in the company's
annual report on Form 20-F filed with the U.S. Securities and
Exchange Commission on May 1, 2017. There are a number of risks and
uncertainties that could cause the company's actual results to
differ materially from the forward-looking statements contained in
this press release.
The company is providing this information as of the date of this
press release and does not undertake any obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise, unless it
has obligations under the federal securities laws to update and
disclose material developments related to previously disclosed
information.
Consolidated income statement
(Unaudited)
For the three months
endedSeptember 30
For the nine monthsended
September30
(in thousands, except per share amounts)
2017
2017 2016 2017 2016
U.S.$ € € € € Revenue
38,142 32,307 28,736 97,840 83,000 Cost of sales (17,041 ) (14,434
) (11,799 ) (42,102 ) (33,848 )
Gross profit
21,101 17,873 16,937 55,738
49,152 Gross profit as % of revenue 55.3 % 55.3 % 58.9 %
57.0 % 59.2 % Research and development expenses (5,550 )
(4,701 ) (4,389 ) (14,424 ) (13,521 ) Sales and marketing expenses
(10,334 ) (8,753 ) (8,299 ) (28,370 ) (26,647 ) General and
administrative expenses (7,149 ) (6,055 ) (5,286 ) (17,205 )
(15,225 ) Net other operating income (expenses) 1,669 1,414 1,369
3,660 4,433
Operating (loss) profit (263 )
(222 ) 332 (601 ) (1,808
) Financial expenses (1,249 ) (1,058 ) (182 ) (3,294
) (1,688 ) Financial income 549 465 58 2,132 1,037 Share in loss of
joint venture (195 ) (165 ) (69 ) (596 ) (368 )
(Loss) profit
before taxes (1,158 ) (980 )
139 (2,359 ) (2,827 )
Income taxes (511 ) (433 ) (191 ) (825 ) (812 )
Net (loss)
profit of the period (1,669 ) (1,413
) (52 ) (3,184 ) (3,639
) Net (loss) profit attributable to: The owners of the
parent (1,669 ) (1,413 ) (52 ) (3,184 ) (3,639 ) Non-controlling
interest − − − − −
Earnings per share attributable to
ordinary owners of the parent Basic (0.04 ) (0.03 ) (0.00 )
(0.07 ) (0.08 ) Diluted (0.04 ) (0.03 ) (0.00 ) (0.07 ) (0.08 )
Weighted average basic shares outstanding 47,325 47,325
47,325 47,325 47,325 Weighted average diluted shares outstanding
47,325 47,325 47,325 47,325 47,325
Consolidated statements of
comprehensive income (Unaudited)
For the three months
endedSeptember 30
For the nine monthsended
September30
(in thousands)
2017 2017 2016
2017 2016 U.S.$ € €
€ € Net profit (loss) for the period
(1,669 ) (1,413 ) (52 )
(3,184 ) (3,639 ) Other comprehensive
income Exchange difference on translation of foreign operations
(183 ) (155 ) (459 ) (481 ) (1,898 ) Other comprehensive income
(loss), net of taxes (183 ) (155 ) (459 ) (481 ) (1,898 )
Total
comprehensive income (loss) for the year, net of taxes
(1,852 ) (1,568 ) (511 )
(3,665 ) (5,537 ) Total comprehensive
income (loss) attributable to: The owners of the parent (1,852 )
(1,568 ) (511 ) (3,665 ) (5,537 ) Non-controlling interest − − − −
−
Consolidated statement of financial
position (Unaudited)
As ofSeptember30
As ofDecember31
(in thousands)
2017 2016 € €
Assets
Non-current assets
Goodwill 8,743 8,860 Intangible assets 11,219 9,765 Property, plant
& equipment 62,643 45,063 Investments in joint ventures − −
Deferred tax assets 408 336 Other non-current assets 2,740 2,154
Total non-current assets 85,753 66,178
Current assets
Inventories 8,642 7,870 Trade receivables 30,656 27,479 Held to
maturity investments − − Other current assets 6,991 4,481 Cash and
cash equivalents 48,099 55,912
Total current assets
94,388 95,742 Total assets 180,141
161,920
As ofSeptember30
As ofDecember31
(in thousands)
2017 2016 € €
Equity and liabilities
Equity Share capital 2,729 2,729 Share premium 79,703 79,019
Consolidated reserves (4,779 ) (1,603 ) Other comprehensive income
(1,593 ) (1,112 )
Equity attributable to the owners of the
parent 76,060 79,033 Non-controlling interest − −
Total
equity 76,060 79,033
Non-current liabilities
Loans & borrowings 46,532 28,267 Deferred tax liabilities 932
1,325 Deferred income 3,728 3,588 Other non-current liabilities
2,220 1,873
Total non-current liabilities 53,412
35,053
Current liabilities
Loans & borrowings 7,033 5,539 Trade payables 14,171 13,400 Tax
payables 967 926 Deferred income 18,130 17,822 Other current
liabilities 10,368 10,147
Total current liabilities
50,669 47,834 Total equity and liabilities
180,141 161,920
Consolidated statement of cash flows
(Unaudited)
For the nine monthsended
September 30
(in thousands)
2017 2016 € €
Operating activities Net (loss) profit of the period (3,184
) (3,639 ) Non-cash and operational adjustments Depreciation of
property, plant & equipment 6,008 4,669 Amortization of
intangible assets 2,134 1,425 Share-based payment expense 997 718
Loss (gain) on disposal of property, plant & equipment (7 )
(147 ) Fair value contingent liabilities − 54 Movement in
provisions 21 − Movement reserve for bad debt 191 (2 ) Financial
income (416 ) (126 ) Financial expense 957 668 Impact of foreign
currencies 621 55 Share in loss of a joint venture (equity method)
596 368 Deferred tax expense (income) (395 ) 225 Income taxes 1,219
587 Other (42 ) 7
Working capital adjustment & income tax
paid Increase in trade receivables and other receivables (5,916
) (2,394 ) Decrease (increase) in inventories (804 ) (828 )
Increase in trade payables and other payables 1,789 3,203 Income
tax paid (1,251 ) (528 )
Net cash flow from operating
activities 2,518 4,315
For the nine monthsended
September 30
(in thousands)
2017 2016 € €
Investing activities Purchase of property, plant &
equipment (22,245 ) (6,816 ) Purchase of intangible assets (3,739 )
(871 ) Proceeds from the sale of property, plant & equipment
(net) 54 192 Proceeds from the sale of intangible assets (net) 36 −
Acquisition of subsidiary − − Investments in joint-ventures (500 )
− Interest received 267 7
Net cash flow used in investing
activities (26,127 ) (7,488 )
Financing activities
Proceeds from loans & borrowings 22,794 7,004 Repayment of
loans & borrowings (2,827 ) (2,116 ) Repayment of finance
leases (2,081 ) (1,293 ) Interest paid (502 ) (406 ) Other
financial income (expense) (251 ) (7 )
Net cash flow from (used
in) financing activities 17,133 3,182
Net increase of cash & cash equivalents (6,476
) 9 Cash & cash equivalents at beginning of the
year 55,912 50,726 Exchange rate differences on cash & cash
equivalents (1,337 ) (245 )
Cash & cash equivalents at end
of the year 48,099 50,490
Reconciliation of Net Profit (Loss) to
EBITDA and Adjusted EBITDA (Unaudited)
For the threemonths
endedSeptember 30
For the nine monthsended
September30
(in thousands)
2017 2016 2017
2016 € € € € Net
profit (loss) for the period (1,413 ) (52
) (3,184 ) (3,639 )
Income taxes 433 191 825 812 Financial expenses 1,058 181 3,294
1,688 Financial income (465 ) (58 ) (2,132 ) (1,037 ) Share in loss
of joint venture 165 69 596 368 Depreciation and amortization 2,918
2,144 8,142 6,094
EBITDA 2,696 2,475
7,541 4,286 Non-cash stock-based compensation
expense (1) 297 358 997 717 Acquisition-related expenses (2) 266 −
266 −
ADJUSTED EBITDA 3,259 2,833
8,804 5,003 (1) Non-cash stock-based
compensation expenses represent the cost of equity-settled and
cash-settled share-based payments to employees. (2)
Acquisition-related expenses of business combinations represent
expenses incurred in connection with the ACTech acquisition.
Segment P&L (Unaudited)
(in thousands)
MaterialiseSoftware
MaterialiseMedical
MaterialiseManufact-uring
Totalsegments
Unallocated
Consoli-dated
€ € € € € € For
the three months ended September 30, 2017 Revenues 8,422 10,421
13,456 32,299 8 32,307 Segment EBITDA 3,362 1,170 499 5,031 (2,335
) 2,696
Segment EBITDA %
39.9 % 11.2 % 3.7 % 15.6 % 8.3 %
For the three months
ended September 30, 2016 Revenues 7,632 9,537 11,567 28,736 −
28,736 Segment EBITDA 2,814 754 1,723 5,291 (2,816 ) 2,475
Segment EBITDA %
36.9 % 7.9 % 14.9 % 18.4 % 8.6 %
(in thousands)
MaterialiseSoftware
MaterialiseMedical
MaterialiseManufact-uring
Totalsegments
Unallocated
Consoli-dated
€ € € € € € For
the nine months ended September 30, 2017 Revenues 25,302 30,999
41,318 97,619 221 97,840 Segment EBITDA 9,307 2,242 3,062 14,611
(7,070 ) 7,541
Segment EBITDA %
36.8 % 7.2 % 7.4 % 15.0 % 7.7 %
For the nine months ended
September 30, 2016 Revenues 22,044 27,849 33,080 82,973 27
83,000 Segment EBITDA 7,181 238 2,410 9,829 (5,543 ) 4,286
Segment EBITDA %
32.6 % 0.9 % 7.3 % 11.8 % 5.2 %
Reconciliation of Net Profit (Loss) to
Segment EBITDA (Unaudited)
For the three monthsended
September 30
For the nine monthsended
September 30
(in thousands)
2017 2016 2017
2016 € € € € Net
profit (loss) for the period (1,413 ) (52
) (3,184 ) (3,639 ) Income taxes
433 191 825 812 Financial expenses 1,058 182 3,294 1,688 Financial
income (465 ) (58 ) (2,132 ) (1,037 ) Share in loss of joint
venture 165 69 596 368
Operating profit (222
) 332 (601 ) (1,808 )
Depreciation and amortization 2,918 2,144 8,142 6,094
Corporate research and development 502 242 1,527 1,201 Corporate
headquarter costs 2,447 3,326 6,984 6,865 Other operating income
(expense) (614 ) (753 ) (1,441 ) (2,523 )
Segment
EBITDA 5,031 5,291 14,611 9,829
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171109005172/en/
Investor:LHAHarriet Fried/Jody
Burfening212-838-3777hfried@lhai.com
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