EX-99.1 2 d820638dex991.htm EX-99.1 EX-99.1

 

Exhibit 99.1

Page  |  1

 

 

LOGO

Materialise Reports Third Quarter 2014 Results

Leuven, Belgium – November 12, 2014 - 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 ending September 30, 2014.

Highlights – Third Quarter 2014

 

    Revenue increased 16.9% year over year to 19,833 kEUR

 

    3D Printing software sales increased 29%

 

    Total software sales were 31% of total revenue

 

    R&D increased by 1,145 KEUR to 18.5% of total revenue

 

    Adjusted EBITDA, excluding non-cash stock based compensation expenses, was 2,055 kEUR for a 10.4% margin.

“Our second quarter as a public company was another very active and successful period for Materialise,” said Executive Chairman Peter Leys. “We delivered revenue growth of 17% while continuing to invest heavily in developing new products and expanding our sales reach. Consistent with the second quarter, we continued to drive growth of our 3D printing software. The capital we raised through our IPO has given us the flexibility to make buy or build decisions about the most efficient way to accelerate our growth, and our recent acquisition of OrthoView Holdings Limited, the world’s leading provider of 2D digital pre-operative planning and templating solutions for orthopedic surgeons, is an important step in expanding our distribution channels. In summary, we are executing well on both the company’s near- and our longer-term strategic objectives.”

Third Quarter 2014 Results

Total revenues for the third quarter of 2014 increased by 16.9% to 19,833 kEUR compared to 16,973 kEUR for the third quarter of 2013, driven by strong gains in the software and industrial production segments. Adjusted EBITDA, excluding stock-based compensation expenses, decreased from 2,460 kEUR to 2,055 kEUR reflecting ongoing investments in both research and development and sales and marketing. The adjusted EBITDA margin in the third quarter was 10.4% compared to 14.5% last year.

Revenues from the 3D Printing Software segment, which offers proprietary software worldwide through programs that enable and enhance the functionality of 3D printers and 3D printing operations, increased by 29.0 % to 4,438 kEUR for the third quarter of 2014 from 3,441 kEUR for the same quarter last year. Growth was fueled by a significant increase in new license sales across all regions, showing an accelerated growth in revenue generated with OEMs. EBITDA increased from 1,345 kEUR to 1,518 kEUR while the EBITDA margin declined to 34.2% from 39.1% last year due significant investments in S&M and R&D expenses, which collectively increased 46% year-over-year, in line with our announced strategy.


 

Page  |  2

 

 

Revenues from the Medical segment, which offers both a medical software platform and a portfolio of medical devices and clinical engineering services to our customers, increased by 3.8% to 7,090 kEUR for the third quarter of 2014 compared to 6,833 kEUR for the same quarter last year. Near-term growth was constrained by the conversion from perpetual to annual licenses and the maturation of the knee guide business. Sales of medical software decreased 2% to 1,748 kEUR from 1,791 kEUR due to the license conversion, as evidenced by the fact that the share of annual licenses increased to 29% of new license sales from 7% last year. Revenues from the direct sale of guides and implants increased by 53% from the previous year. EBITDA decreased from 1,213 kEUR to 677 kEUR and the EBITDA margin fell to 9.5% from 17.8% due to significant investments in R&D projects (up 50% versus Q3 of last year) including the investments in metal printing and X-ray guide technology, among others, which are directly impacting profitability.

Revenues from the Industrial Production segment, which primarily offers 3D printing services to industrial and commercial customers, increased 22.1% to 8,190 kEUR for the third quarter of 2014 from 6,708 kEUR for last year’s third quarter. Growth in the quarter was largely driven by higher sales of the company’s early-stage growth businesses (i.materialise and RapidFit), which collectively increased their revenue by 84%. Sales of end parts rose 37% in the 2014 third quarter from the prior-year period. EBITDA rose to 753 kEUR from 600 kEUR and the EBITDA margin improved to 9.2% from 8.9% for last year’s quarter. Excluding the growth businesses, the Q3 2014 EBITDA margin was 18.8% versus 16.3% the prior year.

Gross profit was 12,154 kEUR for the third quarter of 2014 compared to 10,691 kEUR for the 2013 quarter. The gross profit margin decreased to 61.3% for the third quarter of 2014 from 63.0% for the prior-year period. This decrease was largely due to the relatively high increase in revenue provided by RapidFit and i.materialise and some of our complex surgery product lines (Mobelife and OBL), which do not yet provide corresponding contributions to our margins.

Selling and marketing expenses were 6,382 kEUR for the third quarter of 2014 compared to 5,417 kEUR for the third quarter of 2013. This 965 kEUR increase resulted from additional investments, mainly in the 3D printing software and industrial production segments.

Research and development expenses increased by 45% to 3,672 kEUR for the third quarter of 2014 from 2,527 kEUR for the prior-year period, reflecting continued heavy investment with a number of active projects in various stages of development, including metal printing and X-ray. All of the company’s research and development spending is expensed and none is capitalized.

Other operating income increased by 271 kEUR to 1,464 kEUR from 1,193 kEUR for the prior-year period. For the three months ended September 30, 2014, 915 kEUR out of the 1,464 kEUR consisted of withholding tax exemptions for qualifying researchers and partial funding of R&D projects, as compared to 810 kEUR for the three months ended September 30, 2013. Financial income for the third quarter of 2014 rose to 2,396 kEUR from 40 kEUR in the prior-year quarter due to a foreign exchange gain on the portion of IPO proceeds kept in USD.

Net profit for the third quarter of 2014 was 2,559 kEUR, versus 1,380 kEUR for the prior-year period, an increase of 1,179 kEUR or 85%. Total comprehensive income for the third quarter of 2014, which reflects exchange differences on translation of foreign operations, was 2,830 kEUR, an increase of 1,471 kEUR versus the prior-year period.

At September 30, 2014, the Company had cash and equivalents of 75,044 kEUR, an increase of 62,446 kEUR since December 31, 2013, largely due to cash received from the company’s initial public offering. Cash flow from operations in the third quarter of 2014 was 28 kEUR.


 

Page  |  3

 

 

Net shareholder’s equity at September 30, 2014 was 85,284 kEUR, an increase of 67,549 kEUR since December 31, 2013.

2014 Guidance

For fiscal 2014, management expects to report consolidated revenue between 79,000 kEUR and 81,000 kEUR. Management intends to continue investing aggressively invest in research and development and sales and marketing initiatives. Depending on the pace of investments, management expects consolidated Adjusted EBITDA for fiscal 2014 to be between 5,000 kEUR and 6,000 kEUR.

Non IFRS Measures

Materialise uses EBITDA and Adjusted EBITDA as supplemental financial measures of its operational performance. EBITDA is calculated as net income before finance costs, income taxes and depreciation and amortization. Adjusted EBITDA is determined by adding stock-based compensation expense and one-time IPO related expenses 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 income, 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.

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 1.2583, the 12:00 noon ET buying rate of the Federal Reserve Bank of New York for the euro on September 30, 2014.


 

Page  |  4

 

 

Webcast and Conference Call

Materialise will hold a conference call and simultaneous webcast to discuss its financial results for the third quarter of 2014 today, November 12, 2014 at 8:30a.m. ET/14:30 CET. Company participants on the call will include Wilfried Vancraen, Founder and Chief Executive Officer, Peter Leys, Executive Chairman, and Frederic Merckx, 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) and passcode is #20109601. The conference call will also be broadcast live over the Internet with an accompanying slide presentation, which can be accessed via the Investor Relations tab of Materialise’s website, www.materialise.com, in the News and Events section. A replay of the conference call will be available via telephone beginning approximately one hour after the call ends through Thursday, November 13, 2014. U.S. participants can access the replay by dialing 855-859-2056 and international participants can dial 404-537-3406. The access code for the replay is 20109601. A webcast of the conference call and slide presentation will be archived on the company’s website for one year.

About Materialise

With its headquarters in Leuven, Belgium, and branches worldwide, Materialise is a provider of Additive Manufacturing (AM) software solutions and sophisticated 3D printing services in a wide variety of industries, including healthcare, automotive, aerospace, art and design and consumer products. Materialise has been playing an active role in the field of AM since 1990, through its involvement in AM for industrial and medical applications; by providing biomedical and clinical solutions such as medical image processing and surgical simulations and by developing unique solutions for its customers’ prototyping, production, and medical needs.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements 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, our research and development projects, 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 presentation, the words “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “forecast,” “will”, “may”, “could”, “might”, “aim”, “should” “guidance,” “objectives,” “optimistic,” “potential,” “future,” “continue,” “drive,” “strategy,” “potentially,” “growth,” “long-term,” “goals,” “sees,” “seek,” “develop” “possible” “new,” “emerging,” “opportunity,” “pursue” 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 we believe there is a reasonable basis for them. However, we 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 our forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from our expectations, including risk factors described under the heading “Risk Factors” in the Amendment No. 5 to our Registration Statement on Form F-1 filed with the SEC on June 23, 2014. There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this press release.


 

Page  |  5

 

 

We are providing this information as of the date of this press release and do not undertake any obligation to update any forward-looking statements contained in this presentation as a result of new information, future events or otherwise, unless we have obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.

Investor Contacts:

Harriet Fried/Jody Burfening

LHA

212-838-3777

hfried@lhai.com


 

Page  |  6

 

 

Materialise NV

Consolidated income statements

 

     For the quarter ended Sept. 30     For the nine months
ended September 30
 
     2014     2014     2013     2014     2013  
(In thousands, except EPS)    U.S. $     euros     euros     euros     euros  

Revenue

     24,956        19,833        16,973        57,764        49,217   

Cost of Sales

     (9,662     (7,679     (6,282     (22,853     (18,697
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit

     15,294        12,154        10,691        34,911        30,520   

Research and development expenses

     (4,620     (3,672     (2,527     (10,414     (7,675

Sales and marketing expenses

     (8,030     (6,382     (5,417     (18,218     (15,676

General and administrative expenses

     (3,470     (2,758     (2,350     (8,470     (7,045

Other operating income

     1,842        1,464        1,193        3,823        3,013   

Other operating expenses

     (79     (63     88        (401     (179
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Profit

     937        743        1,678        1,231        2,958   

Financial expenses

     (518     (412     (221     (821     (608

Financial income

     3,015        2,396        40        2,463        112   

Share in profit of joint venture

     (35     (28     —          (28     —     
  

 

 

   

 

 

     

 

 

   

Profit before taxes

     3,399        2,699        1,497        2,845        2,462   

Income Taxes

     (176     (140     (117     (427     (274
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net profit (loss)

     3,223        2,559        1,380        2,418        2,188   

Net profit (loss) attributable to:

          

The owners of the parent

     3,275        2,601        1,412        2,546        2,268   

Non-controlling interest

     (53     (42     (32     (128     (80

EPS attributable to the owners of the parent

          

Basic

     0.07        0.06        0.04        0.06        0.06   

Diluted

     0.07        0.05        0.04        0.06        0.06   

Weighted average shares outstanding

          

Basic

     47,072        47,072        37,781        41,088        37,758   

Diluted

     49,142        49,142        38,057        42,602        38,034   

Consolidated statements of comprehensive income

 

     For the quarter ended Sept. 30     For the nine months
ended September 30
 
     2014     2014     2013     2014     2013  
(In thousands, except EPS)    U.S. $     euros     Euros     euros     Euros  

Net profit (loss) for the year

     3,223        2,559        1,380        2,418        2,188   

Other comprehensive income

          

Exchange differences on translation of foreign operations*

     288        229        (53     237        (110

Other comprehensive income (loss), net of taxes

     288        229        (53     237        (110

Total comprehensive income (loss) for the year, net of taxes

     3,511        2,788        1,327        2,655        2,078   

Total comprehensive income (loss) attributable to:

          

The owners of the parent

     3,564        2,830        1,359        2,783        2,158   

Non-controlling interest

     (53     (42     (32     (128     (80

 

* May be reclassified subsequently to profit & loss


 

Page  |  7

 

 

Materialise NV

Consolidated statements of financial position

 

(in thousands of euros)    09/30/2014     12/31/2013  

Assets

    

Current assets

    

Inventory

     3,471        3,328   

Trade receivables

     14,087        12,382   

Other current assets

     3,801        3,053   

Cash and cash equivalent

     75,044        12,598   
  

 

 

   

 

 

 

Total current assets

     96,403        31,361   

Non-current assets

    

Goodwill

     2,432        1,612   

Intangible assets

     1,728        1,439   

Property, plant & equipment

     26,107        20,167   

Investments in joint ventures

     472        —     

Deferred tax assets

     216        406   

Other financial assets

     324        253   

Total non-current assets

     31,279        24,327   
  

 

 

   

 

 

 

Total assets

     127,682        55,688   

Equity and liabilities

    

Current liabilities

    

Loans & borrowings

     5,380        4,640   

Trade Payables

     7,253        6,794   

Tax Payables

     218        43   

Deferred income

     8,629        6,773   

Other current liabilities

     7,439        5,841   
  

 

 

   

 

 

 

Total current liabilities

     28,919        24,091   

Non-current liabilities

    

Loans & borrowings

     11,863        11,676   

Deferred tax liabilities

     227        212   

Deferred income

     990        1,634   

Other non-current liabilities

     399        340   
  

 

 

   

 

 

 

Total non-current liabilities

     13,479        13,862   

Net equity

    

Share capital

     2,715        2,235   

Share premium

     76,691        12,321   

Consolidated reserves

     5,748        3,198   

Other comprehensive income

     208        (29

Equity attributable to the owners of the parent

     85,362        17,725   
  

 

 

   

 

 

 

Non-controlling interest

     (78     10   
  

 

 

   

 

 

 

Total equity

     85,284        17,735   

Total equity and liabilities

     127,682        55,688   


 

Page  |  8

 

 

Materialise NV

Consolidated cash flow statements

 

(in thousands of euros)         For the nine months ended  
     Notes    2014     2013  

Operating activities

       

Net profit (loss) for the nine months

        2,418        2,188   

Non-cash and operating adjustments

       

Depreciation of property, plant & equipment

        2,534        2,035   

Amortization of intangible assets

        497        302   

Share-based payment expense

        464        17   

Loss (gain) on disposal of property, plant & equipment

        15        61   

Movement in provisions and allowance for bad debt

        (16     52   

Movement in provision for impairment receivables

        105        227   

Financial income

        (98     (112

Financial expense

        342        538   

Impact of foreign currencies

        (1,886     70   

Share of loss (profit) of an associate or JV (equity method)

        28        —     

Deferred tax expense (income)

        161        79   

Income taxes

        266        195   

Other

        33        29   

Working capital adjustments

       

Increase in trade receivables and other receivables

        (2,523     (1,264

Decrease (increase) in inventories

        (122     (180

Increase in trade payables and other payables

        3,127        2,040   

Interest received

        4        10   

Income taxes paid

        (91     —     
     

 

 

   

 

 

 

Net cash flow from operating activities

        5,258        6,287   

Investing activities

       

Purchase of property, plant & equipment

        (5,828     (1,403

Purchase of intangible assets

        (582     (363

Proceeds from the sale of property, plant & equipment, net

        137        —     

Proceeds from the sale of intangibles

        —          8   

Acquisition of subsidiary

        (1,161     (365

Investments in joint-ventures

        (500     —     

Net cash flow used in investing activities

        (7,934     (2,123

Financing activities

       

Proceeds from loans & borrowings and convertible debt

        1,911        1,566   

Repayment of loans & borrowings

        (2,273     (2,985

Repayment of finance leases

        (608     (472

Proceeds from the exercise of warrants

        —          56   

Contribution unpaid capital non-controlling interest

        34        51   

Capital increase in subsidiary by non-controlling interest

        —          1,001   

Capital increase in parent company

        70,484        —     

Direct attributable expense capital increase

        (6,046     —     

Interest paid

        (373     (351

Other financial income (expense)

        (221     (227
     

 

 

   

 

 

 

Net cash flow from financing activities

        62,908        (1,361

Net increase of cash and cash equivalents

        60,232        2,803   

Cash and cash equivalents at beginning of year

        12,598        6,417   

Exchange rate differences on cash & cash equivalents

        2,214        79   
     

 

 

   

 

 

 

Cash & cash equivalents at end of period

        75,044        9,299   


 

Page  |  9

 

 

Materialise NV

SEGMENT P&L

 

(In thousands of euros)   3D Printing
Software
    Medical     Industrial
Production
    Total
segments
    Adjustments &
eliminations
    Consolidated  

For the three month period ended 30 September, 2014

           

Revenues

    4,438        7,090        8,190        19,718        115        19,833   

Segment EBITDA

    1,518        677        753        2,948        (1,175     1,773   

Segment EBITDA %

    34.2     9.5     9.2     15.0       8.9

For the three month period ended 30 September, 2013

           

Revenues

    3,441        6,833        6,708        16,982        (9     16,973   

Segment EBITDA

    1,345        1213        600        3,158        (698     2,460   

Segment EBITDA %

    39.1     17.8     8.9     18.6       14.5

 

(In thousands of euros)   3D Printing
Software
    Medical     Industrial
Production
    Total
segments
    Adjustments &
eliminations
    Consolidated  

For the nine month period ended 30 September, 2014

           

Revenues

    12,671        21,221        23,659        57,552        213        57,764   

Segment EBITDA

    4,921        2,416        1,182        8,520        (4,284     4,236   

Segment EBITDA %

    38.8     11.4     5.0     14.8       7.3

For the nine month period ended 30 September, 2013

           

Revenues

    9,835        20,522        18,850        49,207        10        49,217   

Segment EBITDA

    3,858        3,853        733        8,444        (3,149     5,295   

Segment EBITDA %

    39.2     18.8     3.9     17.2       10.8


 

Page  |  10

 

 

Materialise NV

Adjusted EBITDA Reconciliation

 

     For the quarter
ended September 30
    For the nine months
ended September 30
 
(in thousands of euros)    2014     2013     2014     2013  

Net profit/(loss)

     2,559        1,380        2,418        2,188   

Income taxes

     140        117        427        274   

Financial expense

     412        221        821        608   

Financial income

     (2,395     (40     (2,462     (112

Depreciation & amortization

     1,057        782        3,032        2,337   

EBITDA

     1,773        2,460        4,236        5,295   

Non-recurring IPO Expenses

     0        0        182        0   

Non-cash stock-based compensation expenses

     282        0        407        0   

Adjusted EBITDA

     2,055        2,460        4,825        5,295