voxeljet AG Reports Financial Results for the First Quarter Ended March 31, 2018
FRIEDBERG, Germany--(BUSINESS WIRE)--May 17, 2018--voxeljet AG (NYSE:VJET) (the “Company”, or “voxeljet”), a leading provider of high-speed, large-format 3D printers and on-demand parts services to industrial and commercial customers, today announced consolidated financial results for the first quarter ended March 31, 2018.
Highlights - First Quarter 2018Total revenues for the first quarter increased 11.5% to kEUR 5,052 from kEUR 4,530 Gross profit margin improved to 44.9% from 34.9% Systems revenues decreased 18.8% to kEUR 1,375 from kEUR 1,693 Services revenues increased 29.6% to kEUR 3,677 from kEUR 2,837 Reaffirm full year 2018 guidance
Dr. Ingo Ederer, Chief Executive Officer of voxeljet, commented, “2018 is off to an excellent start with the best quarter in both Services revenue and gross profit in our company’s history. We see these metrics as leading indicators of the ongoing strength of our industrial 3D printing technology. Our goal of becoming a critical supply chain partner and solutions provider is gaining traction. As downstream processes become more automated, we are very confident this will in medium term translate into significantly improved Systems revenue.”
First Quarter 2018 Results
Revenues for the first quarter of 2018 increased by 11.5% to kEUR 5,052 compared to kEUR 4,530 in the first quarter of 2017.
Revenues from our Systems segment, which focuses on the development, production and sale of 3D printers, decreased 18.8% to kEUR 1,375 in the first quarter of 2018 from kEUR 1,693 in last year’s first quarter. This was mainly due to lower revenues based on the mix of printer sales during the quarter. The Company delivered two used and refurbished 3D printers in the first quarter of 2018, compared to two new printers delivered in last year’s first quarter. Systems revenues also include all revenues from consumables, spare parts and maintenance, which almost remained on the same level compared to the last year’s same period. Systems revenues represented 27.2% of total revenues in the first quarter of 2018 compared to 37.4% in last year’s first quarter.
Revenues from our Services segment, which focuses on the printing of on-demand parts for our customers, increased 29.6% to kEUR 3,677 in the first quarter of 2018 from kEUR 2,837 in the comparative period of 2017. This was due to higher revenue contributions mainly from our subsidiary voxeljet America Inc. (“voxeljet America”). The increase in revenue at our American service center resulted from a growing market penetration in the North American sales region which is accompanied by a larger customer base.
Cost of sales was kEUR 2,785 for the first quarter of 2018 compared to kEUR 2,949 for the first quarter of 2017.
Gross profit and gross profit margin were kEUR 2,267 and 44.9%, respectively, in the first quarter of 2018 compared to kEUR 1,581 and 34.9% in the first quarter of 2017.
Gross profit for our Systems segment increased to kEUR 429 in the first quarter of 2018 from kEUR 353 in the first quarter of 2017. The improvement was mainly related to the reduction in the reserve for slow-moving inventory with a positive impact of kEUR 226 compared to a release amounting to kEUR 60 in the comparative period. The release was mainly due to the increase in order backlog and higher sales forecast. Gross profit margin for this segment increased to 31.2% in the first quarter of 2018 compared to 20.9% in the first quarter of 2017.
Gross profit for our Services segment significantly increased to kEUR 1,838 in the first quarter of 2018 compared to kEUR 1,228 in the first quarter of 2017. This is mainly due to the increase in revenues. The gross profit margin for this segment increased to 50.0% in the first quarter of 2018 from 43.3% in the first quarter of 2017. This was mainly related to stronger gross profit margin contributions from our subsidiary voxeljet America. voxeljet UK still provided negative gross profit contributions, but improved significantly. This was partially offset by weaker gross profit margin from voxeljet China. The improvement regarding voxeljet America and voxeljet UK resulted from a higher utilization of these service centers. Gross profit margin from the German operation remained almost unchanged.
Selling expenses were kEUR 1,736 for the first quarter of 2018 compared to kEUR 1,385 in the first quarter of 2017. The increase is mainly due to higher personnel expenses resulting from higher headcount especially regarding the German operation as well as our subsidiary voxeljet America compared to the last year’s first quarter.
Administrative expenses were kEUR 1,232 for the first quarter of 2018 compared to kEUR 1,194 in the first quarter of 2017 and therefore almost unchanged.
Research and development (“R&D”) expenses increased to kEUR 1,597 in the first quarter of 2018 from kEUR 1,497 in the first quarter of 2017. The increase of kEUR 100 was mainly due to higher personnel expenses related to a slight increase in headcount.
Other operating expenses in the first quarter of 2018 were kEUR 358 compared to kEUR 190 in the prior year period. This was mainly due to higher losses from foreign currency transaction for the first quarter of 2018 compared to the first quarter of 2017.
The losses from foreign currency transactions were primarily driven by the valuation of the intercompany loans granted by the parent company to our US and UK subsidiaries.
Other operating income was kEUR 402 for the first quarter of 2018 compared to kEUR 297 in the first quarter of 2017. The increase was mainly due to higher gains from foreign currency transactions.
Operating loss was kEUR 2,254 in the first quarter of 2018, compared to an operating loss of kEUR 2,388 in the comparative period in 2017. The slight improvement was primarily related to a significant increase in gross profit partially offset by higher operating expenses within the functions Sales and research and development, compared to the first quarter of 2017.
Financial result was positive kEUR 678 in the first quarter of 2018, compared to a financial result of negative kEUR 43 in the comparative period in 2017. The significant increase was mainly related to the revaluation of derivative financial instruments resulting in a finance income of kEUR 941 partially offset by interest expense for long term debt of kEUR 232.
Net loss for the first quarter of 2018 was kEUR 1,582 or EUR 0.42 per share, as compared to net loss of kEUR 2,431, or EUR 0.65 per share, in the first quarter of 2017.
Based on a conversion rate of five American Depositary Shares (“ADSs”) per ordinary share, net loss was at EUR 0.08 per ADS for the first quarter of 2018, compared to a net loss of EUR 0.13 per ADS for the first quarter of 2017. Earnings per share is computed by dividing net income attributable to stockholders of the parent by the weighted-average number of ordinary shares outstanding during the periods. Earnings per ADS is calculated by dividing the above earnings per share by five as each ordinary share represents five ADSs.
Our revenue guidance for the second quarter of 2018 is in the range of kEUR 5,250 to kEUR 7,250.
We reaffirm our guidance for the full year ended December 31, 2018Full year revenue is expected to be in the range of kEUR 28,000 and kEUR 30,000 Gross margin is expected to be above 40% Operating expenses for the full year are expected as follows: SG&A expenses expected to be in the range of kEUR 11,000 and kEUR 12,000 and R&D expenses projected to be approximately kEUR 5,000 to kEUR 6,000. Depreciation and amortization expense is expected to be between kEUR 3,750 and kEUR 4,000. Adjusted EBITDA is expected to be neutral-to-positive in 2018. Adjusted EBITDA is defined as net income (loss), as calculated under IFRS accounting principles before interest (income) expense, provision (benefit) for income taxes, depreciation and amortization, and excluding other (income) expense resulting from foreign exchange gains or losses on the intercompany loans granted to the subsidiaries. Capital expenditures are projected to be in the range of kEUR 5,500 to kEUR 6,500, which primarily includes ongoing investments in our global subsidiaries.
Our total backlog of 3D printer orders at March 31, 2018 was kEUR 4,899, which represents eight 3D printers. This compares to a backlog of kEUR 2,770 representing four 3D printers, at December 31, 2017. As production and delivery of our printers is generally characterized by lead times ranging between three to nine months, the conversion rate of order backlog into revenue is dependent on the equipping process for the respective 3D printer as well as the timing of customers’ requested deliveries.
At March 31, 2018, we had cash and cash equivalents of kEUR 3,140 and held kEUR 17,688 of investments in bond funds, which are included in current financial assets on our consolidated statements of financial position.
Webcast and Conference Call Details
The Company will host a conference call and webcast to review the results for the first quarter on Friday, May 18, 2018 at 8:30 a.m. Eastern Time. Participants from voxeljet will include its Chief Executive Officer, Dr. Ingo Ederer, and its Chief Financial Officer, Rudolf Franz, who will provide a general business update and respond to investor questions.
Interested parties may access the live audio broadcast by dialing 1-877-705-6003 in the United States/Canada, or 1-201-493-6725 for international, Conference Title “voxeljet AG First Quarter 2018 Financial Results Conference Call”. Investors are requested to access the call at least five minutes before the scheduled start time in order to complete a brief registration. An audio replay will be available approximately two hours after the completion of the call at 1-844-512-2921 or 1-412-317-6671, Replay Conference ID number 13679191. The recording will be available for replay through May 25, 2018.
A live webcast of the call will also be available on the investor relations section of the Company’s website. Please go to the website https://event.webcasts.com/starthere.jsp?ei=1191083&tp_key=35bcb63183 at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. A replay will also be available as a webcast on the investor relations section of the Company’s website.
The Company uses Adjusted EBITDA as a supplemental financial measure of its financial performance. Adjusted EBITDA is defined as net income (loss), as calculated under IFRS accounting principles, interest (income) expense, provision (benefit) for income taxes, depreciation and amortization, and excluding other (income) expense resulting from foreign exchange gains or losses on the intercompany loans granted to the subsidiaries. Management believes Adjusted EBITDA to be an important financial measure because it excludes the effects of fluctuating foreign exchange gains or losses on the intercompany loans granted to its subsidiaries which are difficult to forecast for future periods. Management regularly uses both IFRS and non-IFRS results and expectations internally to assess its overall performance of the business, making operating decisions, and forecasting and planning for future periods. Management believes that Adjusted EBITDA is a useful financial measure to the Company’s investors as it helps investors better understand and evaluate the projections our management board provides. The Company’s calculation of Adjusted EBITDA may not be comparable to similarly titled financial measures reported by other peer companies. Adjusted EBITDA should not be considered as a substitute to financial measures prepared in accordance with IFRS.
This press release contains translations of certain U.S. dollar amounts into euros at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from U.S. dollars to euros in this press release were made at a rate of USD 1.2321 to EUR 1.00, the noon buying rate of the Federal Reserve Bank of New York for the euro on March 31, 2018.
voxeljet is a leading provider of high-speed, large-format 3D printers and on-demand parts services to industrial and commercial customers. The Company’s 3D printers employ a powder binding, additive manufacturing technology to produce parts using various material sets, which consist of particulate materials and proprietary chemical binding agents. The Company provides its 3D printers and on-demand parts services to industrial and commercial customers serving the automotive, aerospace, film and entertainment, art and architecture, engineering and consumer product end markets. For more information, visit http://www.voxeljet.de/en/.
Cautionary Statement on Forward-Looking Statements
This press release contains forward-looking statements concerning our business, operations and financial performance. Any statements that are not of historical facts may be deemed to be forward-looking statements. You can identify these forward-looking statements by words such as ‘‘believes,’’ ‘‘estimates,’’ ‘‘anticipates,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘may,’’ ‘‘could,’’ ‘‘might,’’ ‘‘will,’’ ‘‘should,’’ ‘‘aims,’’ or other similar expressions that convey uncertainty of future events or outcomes. Forward-looking statements include statements regarding our intentions, beliefs, assumptions, projections, outlook, analyses or current expectations concerning, among other things, our results of operations, financial condition, business outlook, the industry in which we operate and the trends that may affect the industry or us. Although we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that forward-looking statements are not guarantees of future performance. All of our forward-looking statements are subject to known and unknown risks, uncertainties and other factors that are in some cases beyond our control and that may cause our actual results to differ materially from our expectations, including those risks identified under the caption “Risk Factors” in the Company’s Annual Report on Form 20-F and in other reports the Company files with the U.S. Securities and Exchange Commission, as well as the risk that our revenues may fall short of the guidance we have provided in this press release. Except as required by law, the Company undertakes no obligation to publicly update any forward-looking statements for any reason after the date of this press release whether as a result of new information, future events or otherwise.
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