3D Systems is reporting revenue of $162.6 million in Q2 2021 (closed last June 30th), reflecting double-digit growth on a consecutive-quarter and year-over-year basis. Adjusted for divestitures, revenue was also 11.4% higher than second quarter 2019, reflecting acceleration beyond pre-pandemic performance levels, a key indicator of business strength.
Financial performance yielded a positive operating cash flow of $13.5 million to support ongoing investments for organic growth, while the announced agreements to sell remaining non-core assets are expected to be completed in Q3. Following the close of transactions, cash on the balance sheet is expected to rise from $131.8 million at quarter-end to over $500 million with no debt.
Manufacturing, especially additive manufacturing, is a tough business but, in the long run, it is proving to be a profitable one. The company is now well positioned for continued organic growth and profitability, with a strong balance sheet to support strategic investments. Commenting on the results, President and Chief Executive Officer, Dr. Jeffrey Graves said, “In our second quarter last year we were in the rapidly tightening grip of the COVID pandemic, with virtually no visibility into the magnitude or duration of the impact on our Company. It was in this tumultuous environment that we launched our four-phase transformation plan: reorganize into Healthcare and Industrial business units, restructure to gain operating efficiencies, divest non-core assets and then invest for the future. Today, after perhaps the most challenging 12 months that any of us has experienced—Graves continued—our world has changed for the better in several ways. Not only is the global economy rebounding, but additive manufacturing is being implemented at an increasing rate in production as companies seek a more capable and flexible supply chain for critical components. Our focus, and our performance over this past year, have validated our core purpose statement: To be leaders in enabling additive manufacturing solutions for applications in growing markets that demand high-reliability products.”
Dr. Graves continued, “Our second-quarter performance reflected continued positive momentum, with results that greatly surpassed those of a year ago from both a revenue and profitability perspective. Perhaps even more importantly, we also saw double-digit revenue growth on a consecutive quarter basis, an important indicator of the momentum we are now experiencing. Further evidence of our momentum is our results versus our 2019 pre-COVID second-quarter performance. We were pleased to deliver over 11% organic revenue growth against the second quarter 2019 results, which in this case means exclusive of businesses we have divested, along with a dramatic improvement in profitability.
Revenue for the second quarter of 2021 increased 44.1% compared to the same period last year and increased 59.3% when excluding businesses divested in 2020 and 2021. Revenue increased 11.3% compared to last quarter. The results reflect continued strength in Healthcare and an increase in demand from Industrial customers as compared to last quarter. Revenue from Healthcare increased 68.6% to $82.8 million, compared to the same period last year, and increased 14.2% compared to last quarter. This increase from last quarter included double-digit growth in medical applications, as well as strong demand for dental materials. Compared to the same period last year, Industrial sales increased 25.3% to $79.7 million, and increased 49.6% when excluding businesses divested in 2020 and 2021. Compared to last quarter, Industrial sales increased 8.3% with solid demand in both products and materials.
Dr. Graves further commented, “From a cash perspective, we again were pleased with our performance in the quarter, having generated $13.5 million in cash from operations. We believe this performance is the result of our exclusive focus on additive manufacturing, bringing together our printers, materials and software technologies to solve specific key customer applications that drive market adoption in both Healthcare and specific Industrial markets such as semiconductors, space systems, and advanced transportation systems.”
“From a divestment standpoint—Graves continued—we have announced the sale of both our On-Demand Parts business, which focused on the rapid production of components using a multitude of digital manufacturing methods, and Simbionix, a medical simulation business. We are pleased to confirm that these transactions complete our efforts to exit non-core businesses, enabling our entire focus and investment priority to be on additive manufacturing moving forward. Once completed, we believe the sale of these assets, combined with our cash generation from operations will leave us with a very strong balance sheet, with roughly $500 million in cash and no debt. We believe our consistent performance, and our balance sheet positions us well for future investment in our core business.”
Dr. Graves concluded, “We are excited about the tremendous progress we have made this past year, reinforcing our foundation in additive manufacturing and positioning ourselves for a very exciting future. From a strategic standpoint, as one of the largest companies in our industry, we have both the scale and the breadth of technologies, encompassing both polymers and metals, that our customers require for their success. We believe the magic for our company, and one that is increasingly evident in our results each quarter, is the intense organizational and operational focus we now have on delivering specific, market-leading customer applications, across both our Healthcare and Industrial businesses. Using this approach, we are successfully bringing together the hardware, materials and software technologies that our customers need for the successful adoption of additive manufacturing. This is translating each quarter into exciting growth and profitability, creating value for all of our stakeholders.”