EX-99.1 2 d241188dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Materialise Reports Second Quarter 2016 Results

Leuven, Belgium – August 11, 2016 - Materialise NV (NASDAQ: MTLS), a leading provider of additive manufacturing software and of sophisticated 3D printing services, today announced its financial results for the second quarter ended June 30, 2016.

Highlights – Second Quarter 2016

 

    Total revenue increased 11.4 % from the second quarter of 2015 to 27,597 kEUR, with increases in all three business segments.

 

    Adjusted EBITDA increased to 1,034 kEUR from (179) kEUR for the second quarter of 2015.

 

    Total deferred revenue from annual software sales and maintenance contracts increased 2,311 kEUR from 12,244 kEUR for the second quarter of 2015 to 14,555 kEUR for the second quarter of 2016.

Executive Chairman Peter Leys commented, “In the face of difficult industry conditions, with a number of market participants awaiting the introduction of the next generation of printers before making software purchases, Materialise continued to deliver double-digit revenue growth as well as an increase in Adjusted EBITDA. Total revenue rose 11.4% and Adjusted EBITDA increased from (179) kEUR to 1,034 kEUR. Importantly, all of our three segments Materialise Software, Materialise Medical and Materialise Manufacturing contributed to our revenue gains and our positive Adjusted EBITDA. During the quarter we launched several new initiatives to support our positioning as the ‘backbone’ of industrial 3D printing, including a collaboration with HP to develop a tailored software solution for its Multi Jet Fusion technology. We believe the entrance of this and other blue-chip companies into the additive manufacturing industry demonstrates the industry’s potential to transform manufacturing and supply chain dynamics, and we view our partnerships with these companies as validation of Materialise’s capabilities and industry positioning. We are developing additional meaningful partnerships and, although we expect certain parts of our industry to continue to show slow growth in the near term, our outlook for the year remains within our previous guidance range.”

Second Quarter 2016 Results

Total revenue for the second quarter of 2016 increased by 11.4% to 27,597 kEUR compared to 24,772 kEUR for the second quarter of 2015, with gains in all three of our segments. Adjusted EBITDA increased from (179) kEUR to 1,034 kEUR, as a result of the combination of continued revenue growth, an improvement in our gross margins and a moderate increase in operational expenses. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the second quarter was 3.7% compared to (0.7)% in the second quarter of last year.

Revenue from our Materialise Software segment, which offers a proprietary software backbone that enables and enhances the functionality of 3D printers and 3D printing operations worldwide, increased by 14.9% to 6,981 kEUR for the second quarter of 2016 from 6,078 kEUR for the same quarter last year, driven by the continued growth of recurring license revenue. Segment EBITDA declined to 1,602 kEUR from 2,015 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 22.9% compared to 33.2% in the prior-year period. This change reflects a significant increase in research and development (“R&D”) expenses for well-defined software projects we have recently undertaken.


Revenue from our Materialise Medical segment, which offers a unique platform consisting of medical planning and design software, clinical engineering services and patient specific devices, increased by 16.7% to 9,706 kEUR for the second quarter of 2016 compared to 8,315 kEUR for the same period in 2015. The increase was driven by direct sales of our complex surgery solutions, which increased by 41.7% from the prior-year period, and by sales from our collaborated medical device business, which increased 13.6%. Our medical software sales decreased by 2.0% compared to the same quarter in 2015. Segment EBITDA improved to 14 kEUR from (342) kEUR while the segment EBITDA margin improved to 0.1% from (4.1)% in the second quarter of 2015.

Revenue from our Materialise Manufacturing segment, which offers an integrated suite of 3D printing and engineering services to industrial and commercial customers, increased 5.1% to 10,907 kEUR for the second quarter of 2016 from 10,379 kEUR for the second quarter of 2015, primarily as a result of higher end part manufacturing. Segment EBITDA rose to 430 kEUR from (147) kEUR while the segment EBITDA margin increased to 3.9% from (1.4)% for the 2015 quarter. Excluding our growth businesses, i.materialise and RapidFit, the segment EBITDA margin for the second quarter was 13.0% compared to 8.4% for the same quarter of the prior year.

Gross profit was 16,253 kEUR, or 58.9% of total revenue, for the second quarter of 2016 compared to 14,327 kEUR, or 57.8% of total revenue, for the second quarter of 2015. The increase was primarily a result of the improvement in the gross margin of the Materialise Manufacturing segment.

R&D, sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, by 8.1% to 19,182 kEUR for the second quarter of 2016 from 17,738 kEUR for the second quarter of 2015. R&D expenses increased from 4,371 kEUR to 4,760 kEUR while S&M expenses declined slightly from 9,620 kEUR to 9,533 kEUR. G&A expenses increased from 3,747 kEUR to 4,889 kEUR. These changes compared to last year primarily reflected the managerial structure and support we have been implementing within our S&M and R&D groups to support their significant growth since our initial public offering (“IPO”). A number of employees with mixed roles within these groups have evolved into more managerial/administrative roles, and their cost as well as certain other expenses are now categorized into G&A.

Net other operating income increased by 304 kEUR to 1,778 kEUR, compared to 1,474 kEUR for the second quarter of 2015. Net other operating income consists primarily of withholding tax exemptions for qualifying researchers, development grants, partial funding of R&D projects and currency exchange results on purchase and sales transactions.

Net financial result was 207 kEUR, compared to (938) kEUR for the prior-year period, reflecting the variance in the currency exchange rate, primarily on the portion of the company’s IPO proceeds held in U.S. dollars versus the euro, a reported but mostly unrealized exchange gain

Net loss for the second quarter of 2016 was (436) kEUR, compared to a net loss of (3,013) kEUR for the same period in the prior year: an improvement of 2,577 kEUR, as a result of an increase of 786 kEUR of operating profit, an improvement of the financial result of 1,077 kEUR, and an improvement in income tax income of 714 kEUR primarily due to a decrease of tax liabilities. Total comprehensive loss for the second quarter of 2016, which reflects exchange differences on translation of foreign operations, was (911) kEUR compared to (2,850) kEUR for the same period in the prior year.


At June 30, 2016, we had cash and equivalents of 51,304 kEUR compared to 50,726 kEUR at December 31, 2015. Cash flow from operating activities in the second quarter of 2016 was 4,405 kEUR, compared to 543 kEUR in the same period last year.

Net shareholders’ equity at June 30, 2016 was 78,247 kEUR, a decrease of 4,708 kEUR since December 31, 2015.

Facility Expansion

To position Materialise for long-term growth based on expected continued adoption of additive manufacturing, we are planning to expand our production facilities in Poland and our corporate facilities in Belgium. Accordingly, we plan to invest approximately 17,000 kEUR in capital expenditures over approximately the next 12 months. We intend to finance the two new buildings entirely with debt and have received a conditional commitment letter from a bank for a 15-year term loan at fixed interest rates below 1.5%, and with amortization deferred until 2023 and 2019 for the Belgium and Poland portions of the loan, respectively. The closing of the loan is contingent on a number of conditions and there is no assurance we will be able to enter into the loan on the terms contemplated by the commitment letter or at all.

2016 Guidance

The company’s outlook for fiscal year 2016 remains within our previous guidance range, which was that management expects to report consolidated revenue between 115,000 - 120,000 kEUR; Adjusted EBITDA between 7,000 - 9,000 kEUR; and an increase of deferred revenue generated from annual licenses and maintenance by between 3,000 - 4,000 kEUR from 13,136 kEUR as of December 31, 2015.

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 non-recurring 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 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 1.1102, the 12:00 noon ET buying rate of the Federal Reserve Bank of New York for the euro on June 30, 2016.


Conference Call and Webcast

Materialise will hold a conference call and simultaneous webcast to discuss its financial results for the second quarter of 2016 today, August 11, 2016, at 8:30 a.m. ET/14:30 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 #51269170. 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 replay of the conference call will be available via telephone beginning approximately one hour after the call ends through Friday, August 12, 2016. 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 #51269170. A webcast of the conference call and slide presentation will be archived on the company’s website for one year.

About Materialise

Materialise incorporates more than 25 years of 3D printing experience into a range of software solutions and 3D printing services, which Materialise seeks to 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 2016 revenues, deferred revenue from annual licenses and maintenance and Adjusted EBITDA, 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 April 28, 2016. 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.

Investor Contacts:

Harriet Fried/Jody Burfening

LHA

212-838-3777

hfried@lhai.com


Consolidated income statements (Unaudited)

 

     For the three months ended     For the six month  
     30 June     period ended 30 June  
(in thousands, except EPS)    2016     2016     2015     2016     2015  
     U.S.$     euros     euros     euros     euros  

Revenue

     30,638        27,597        24,772        54,264        48,120   

Cost of sales

     (12,594     (11,344     (10,445     (22,049     (20,326
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     18,044        16,253        14,327        32,215        27,794   
       58.9     57.8     59.4     57.8

Research and development expenses

     (5,285     (4,760     (4,371     (9,132     (8,878

Sales and marketing expenses

     (10,584     (9,533     (9,620     (18,348     (18,835

General and administrative expenses

     (5,428     (4,889     (3,747     (9,939     (7,322

Other operating income

     1,974        1,778        2,462        3,064        4,370   

Other operating expenses

     —          —          (988     —          (1,116
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     (1,279     (1,151     (1,937     (2,140     (3,987

Financial expenses

     (676     (609     (1,286     (1,506     (1,735

Financial income

     906        816        348        979        2,269   

Share in loss of joint venture

     (145     (131     (63     (299     (123
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss) before taxes

     (1,194     (1,075     (2,938     (2,966     (3,576

Income taxes

     709        639        (75     (621     (325
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net profit (loss)

     (485     (436     (3,013     (3,587     (3,901
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net profit (loss) attributable to:

          

The owners of the parent

     (485     (436     (3,013     (3,587     (3,848

Non-controlling interest

     —          —          —          —          (53

Earnings per share attributable to ordinary owners of the parent

          

Basic

     (0.01     (0.01     (0.06     (0.08     (0.08

Diluted

     (0.01     (0.01     (0.06     (0.08     (0.08

Weighted average basic

     47,325        47,325        47,227        47,325        47,199   

Weighted average with effect dilution

     47,325        47,325        47,227        47,325        47,199   


Consolidated statements of comprehensive income (Unaudited)

 

(in thousands, except EPS)                               
     For the three months ended     For the six month  
     30 June     period ended 30 June  
     2016     2016     2015     2016     2015  
     U.S.$     euros     euros     euros     euros  

Net profit (loss) for the period

     (485     (436     (3,013     (3,587     (3,901
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)

          

Exchange differences on translation of foreign operations

     (527     (475     163        (1,439     1,476   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss), net of taxes

     (527     (475     163        (1,439     1,476   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     (1,012     (911     (2,850     (5,026     (2,425
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income (loss) attributable to:

          

The owners of the parent

     (1,012     (911     (2,850     (5,026     (2,372

Non-controlling interest

     —          —          —          —          (53


Consolidated statements of financial position (Unaudited)

 

     30 June     31 December  
(in thousand euros)    2016     2015  

Assets

    

Non-current assets

    

Goodwill

     9,023        9,664   

Intangible assets

     8,801        9,657   

Property, plant & equipment

     41,180        38,400   

Investments in joint ventures

     719        1,018   

Deferred tax assets

     531        1,092   

Other financial assets

     339        356   
  

 

 

   

 

 

 

Total non-current assets

     60,593        60,187   

Current assets

    

Inventory

     5,392        5,387   

Trade receivables

     20,547        22,843   

Tax receivables

    

Held to maturity investments

     —          —     

Other current assets

     5,421        4,993   

Cash and cash equivalents

     51,304        50,726   
  

 

 

   

 

 

 

Total current assets

     82,664        83,949   
  

 

 

   

 

 

 

Total assets

     143,257        144,136   
  

 

 

   

 

 

 

Equity and liabilities

    

Equity

    

Share capital

     2,729        2,729   

Share premium

     78,411        78,098   

Consolidated reserves

     (2,175     1,407   

Treasury shares

       —     

Other comprehensive income

     (718     721   
  

 

 

   

 

 

 

Equity attributable to the owners of the parent

     78,247        82,955   

Non-controlling interest

     —          —     
  

 

 

   

 

 

 

Total equity

     78,247        82,955   

Non-current liabilities

    

Loans & borrowings

     18,197        16,607   

Deferred tax liabilities

     1,348        2,068   

Deferred income

     29        92   

Other non-current liabilities

     2,349        2,244   
  

 

 

   

 

 

 

Total non-current liabilities

     21,923        21,011   

Current liabilities

    

Loans & borrowings

     4,520        4,482   

Trade payables

     9,413        9,712   

Tax payables

     492        255   

Deferred income

     18,103        16,509   

Other current liabilities

     10,559        9,212   
  

 

 

   

 

 

 

Total current liabilities

     43,087        40,170   
  

 

 

   

 

 

 

Total equity and liabilities

     143,257        144,136   
  

 

 

   

 

 

 


Consolidated cash flow statements (Unaudited)

 

(in thousand euros)    For the six month period
ended

30 June
 
     2016     2015  
     euros     euros  

Operating activities

    

Net profit for the period

     (3,587     (3,901

Non-cash and operational adjustments

    

Depreciation of property, plant & equipment

     3,012        2,373   

Amortization of intangible assets

     938        678   

Share-based payment expense

     360        472   

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

     (62     (54

Fair value adjustment contingent liabilities

     54        —     

Movement in provisions and allowance for bad debt

     111        101   

Financial income

     (87     (211

Financial expense

     483        498   

Impact of foreign currencies

     131        (1,153

Share of loss / (profit) of an associate or joint venture (equity method)

     299        123   

Deferred tax expense (income)

     (159     (81

Income taxes

     781        406   

Other

     (40     (4

Working capital adjustments

    

Increase in trade receivables and other receivables

     1,654        (1,943

Decrease (Increase) in inventories

     (5     (879

Increase in trade payables and other payables

     2,442        5,274   

Income tax paid

     (544     (338
  

 

 

   

 

 

 

Net cash flow from operating activities

     5,781        1,361   
  

 

 

   

 

 

 

Investing activities

    

Purchase of property, plant & equipment

     (5,831     (3,558

Purchase of intangible assets

     (526     (674

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

     708        139   

Proceeds from the sale of intangibles

     19        —     

Acquisition of subsidiary

     —          (1,602

Investments in joint-ventures

     —          (500

Proceeds from held to maturity investments

     —          10,000   

Interest received

     6        7   
  

 

 

   

 

 

 

Net cash flow used in investing activities

     (5,624     3,812   
  

 

 

   

 

 

 

Financing activities

    

Proceeds from loans & borrowings and convertible debt

     2,812        319   

Repayment of loans & borrowings

     (1,346     (3,410

Repayment of finance leases

     (843     (731

Purchase of non-controlling interest

     —          (1,377

Capital increase in parent company

     —          580   

Interest paid

     (328     (252

Other financial income / (expense)

     (32     14   
  

 

 

   

 

 

 

Net cash flow from financing activities

     263        (4,857
  

 

 

   

 

 

 

Net increase of cash and cash equivalents

     420        316   

Cash and cash equivalents at beginning of period

     50,726        51,019   

Exchange rate differences on cash & cash equivalents

     158        1,364   
  

 

 

   

 

 

 

Cash & cash equivalents at end of period

     51,304        52,699   
  

 

 

   

 

 

 


Segment P&L (Unaudited)

 

     Materialise     Materialise     Materialise           Adjustments &        
In thousands euros    Software     Medical     Manufacturing     Total segments     eliminations     Consolidated  

For the three month period ended 30 June 2016

            

Revenues

     6,981        9,706        10,907        27,594        3        27,597   

Segment EBITDA

     1,602        14        430        2,046        (1,157     889   

Segment EBITDA %

     22.9     0.1     3.9     7.4       3.2

For the three month period ended 30 June 2015

            

Revenues

     6,078        8,315        10,379        24,772        —          24,772   

Segment EBITDA

     2,015        (342     (147     1,526        (1,957     (431
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA %

     33.2     -4.1     -1.4     6.2       -1.7

For the six month period ended 30 June 2016

            

Revenues

     14,412        18,312        21,513        54,237        27        54,264   

Segment EBITDA

     4,367        (516     687        4,538        (2,728     1,810   

Segment EBITDA %

     30.3     -2.8     3.2     8.4       3.3

For the six month period ended 30 June 2015

            

Revenues

     12,194        16,163        19,763        48,120        —          48,120   

Segment EBITDA

     4,230        (1,088     (187     2,955        (3,894     (939
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA %

     34.7     -6.7     -0.9     6.1       -2.0

Reconciliation of Net Profit/(Loss) to EBITDA and Adjusted EBITDA (Unaudited)

 

     For the three months  
     ended  
(in thousands)    30 June  
     2016      2015  
     euros      euros  

Net profit / (loss)

     (436      (3,013
  

 

 

    

 

 

 

Income taxes

     (639      75   

Financial expenses

     609         1,286   

Financial income

     (816      (348

Share in loss of a joint venture

     131         63   

Depreciation & amortization

     2,040         1506   

EBITDA

     889         (431
  

 

 

    

 

 

 

Non-cash stock-based compensation expenses (1)

     145         252   

Adjusted EBITDA

     1,034         (179
  

 

 

    

 

 

 

 

(1) Non-cash stock-based compensation expenses represent the cost of equity-settled and cash-settled share-based payments to employees.