DDD - Earnings call transcript Q1 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to 3D Systems First Quarter 2019 Conference Call and Webcast. [Operator Instructions] Please note that this call is being recorded. I will now turn the conference over to your host Stacey Witten, Vice President of Investor Relations.

You may begin.

Stacey Witten

Good afternoon and welcome to 3D Systems conference call. Witten. Stacey I'm Officer. on and me President are Joshi, Chief Vyomesh Chief And Executive the Officer; President Legal Johnson, Andy Chief Officer; Vice John our Financial with and call McMullen, and Executive that The webcast portion to this call the we'll slide call. contains during refer a of presentation access our do following the so Those to Investor on website. of portion Relations phone the slide along of on this wish section who the presentation may related provided session matters Participants in the the slide issued like end we this who call discussed and today. that to at conference the would in questions using ask of the on in to should call release phone press numbers this

responses results discussion be include not streaming post and of questions to For The Actual those please slide. access as be and questions management's who delay web. via the statements only portion forward-looking to have the and today you few as able a second will views there to may will materially. be the your may differ this webcast, of on aware that following reflect described

factors report about are the release including our with financial recent our could in XX-K. today's information Additional press potentially included and most our SEC, on filings that Form annual impact results

Relations including non-GAAP non-GAAP GAAP comparable you we call, these this Investor these will available will measures. this regarding accompanying During press of find disclosures measures, discuss financial website, and both measures our our measures. on slides certain additional release In webcast, reconciliations are to which

of XXXX. our this will against period for all results the in comparisons unless comparable stated, call otherwise Finally, be

to Now, call Vyomesh I'm pleased CEO. over the VJ? turn Joshi, to our

Vyomesh Joshi

quarter of Revenue million, everyone. $XXX from X% afternoon Good XXXX. the an was first Stacey. the decrease in first quarter Thanks,

related experienced from outsourcing. orders adjustments sales decreased periods, result weaker export of customer in we XXXX, X%. compliance Through enterprise of revenue manufacturing business on-demand the to a and first quarter as large total Excluding both

the In the and DMP XXX, includes last Factory we industry XXX. Flex DMP the three fourth began in the year, Europe our XXX, Additionally, accessory to the quarter. lower automotive Factory from demand products, saw Unit ship the which quarter Management DMP we during of DMP Powder a new

During the Unit use, standards. the more reliability in our first level had identified XXX rigorous in we Factory issue and the Powder robustness systems a technical as resulting quarter, DMP Management of below

of As Powder metal a our first first use high-quality sales. $X XD printers. million we complete sales until result long-term of as shipments quarter, technical X, of mainly unit to Units over Unit, unique remains Powder the quality and Figure repeatability we DMP result, printer. negatively in challenges Revenue and SLA stopped shipments and quarter the enhancements the a platform year-over-year, in increased approximately a customers. by Management Separate are highly ensure higher printer issue the timing volume XX% printer of impacted driven metals was increased the and the revenue by the reliable, by to Despite Management DMP of

strong We printer metals growth plastics. both with across are in and pleased continued units our

particular we result year, year-over-year quarter. Gross We the XX.X% under and first operating of introduced the impacted and and products from was absorption overhead received, lower expect this both a of margin products negatively sequentially. profit revenue to in well new Our revenue increase by as the in year. production reduced of as for expenses been materials throughout in later printers have these plastics additional we

cost in productivity completed, in actions and structure areas. our are multiple are compliance organization in and improving making by IT we and While efficiency parallel go-to-market, improvements streamlining in investments not the

the the and loss John of share. reported a detail of over provides the XXXX, discuss per of $X.XX we I performance XXXX. of loss After on our cost improve For to first over will additional $X.XX our taking results the John But the John? first it let GAAP quarter non-GAAP balance are year, turn to including reductions. to me discuss share accelerating of we of quarter first, actions a per quarter, the

John McMullen

afternoon, VJ. Good everyone. Thanks,

in For compared to X% GAAP expenses including first impact $XX XX.X% of profit in million. of the of first a to a the we reported X% the loss million of compared share XXXX. $X.X million XXXX, $XXX a quarter compared to reported XX.X% revenue share of the decrease of share foreign per quarter $X.XX compared $X.XX operating X% in of quarter, XXXX of currency. million, GAAP or $X.XX XXXX We We to first from per loss in quarter XXXX. $X.XX loss of decreased was loss the the margin a of first first of per non-GAAP GAAP in share per first reported quarter gross $XX.X quarter non-GAAP a negative XXXX. a to or

our headwinds unchanged. While and expect year, growth we believe the enterprise remain from customers' of the opportunities the we large orders drivers throughout timing

printers, growth. and materials, to expect fuel to continue long-term healthcare We software

the in is revenue to revenue at of from prices, a million. scaling continue $XX.X Materials timing XX% During ramp unit and of to wide likely a enterprise fluctuate sales, large quarters $XX $X,XXX quarter, products range customer. sales revenue increased selling average price unit will of to credit decreased mix selling utilization between time first sales A a printer primarily overall XX%, prices million, with X% new to two decreased we first as million of orders materials mix lag the over three printer of and to but Printer unit typical. by unit quarter. result sale specifically $X of as driven

and to offset a we this services healthcare growth to revenue simulation million. accelerated. rate to orders' to to increases, total and increased, Healthcare materials new decreased improve the the at XXXX. those half a second discussed decline X% core the materials of of experiencing customer expect are quarter, impact rates large We systems continue but we than revenue also in faster trends and legacy those we timing $XX are related year, begin materials in and last believe As cross

Excluding from increased revenues the each orders customers larger year, approximately enterprise healthcare XX%.

NextDent demand overall be for XXXX We pleased our including trends healthcare, the printer. continue with XD to

revenue $XX.X to first revenue. in million product primarily of result Software Cimatron lower the a X% quarter, as decreased

performance term are may continue decreased revenue expect to million we quarterly rates long taking to quarter. $XX.X our the fluctuate, software and On-demand software improve growth actions portfolio. services While from to growth enhance software and XX% in

of and of first a We XXXX, Europe gross XX.X% of additional reported to within year. second profit driven we customers through expected supply related lower compared to overhead GAAP categories. in quarter, business of as gross points absorption XX.X% profit the under quarter. the the experienced first of related related sales the of production basis the compliance headwinds in XXX during weakness by We impact And from as was to chain revenue export mix to margin Non-GAAP quarter decrease margin in automotive adjustments, last first and outsourcing. the of quarter in XX.X% the well XXXX quarter

Non-GAAP believe X% bad to a million $XXX.X decreased and result million, and the focused of quarter to of and from million quarter in costs operations Compared by and million, an drive legal of Company year. with quarter manufacturing continue fees. year improvements, year of R&D and for $XX used phase production were first optimization, and XXXX, reduction manufacturing million mid-XXs XXXX the on actions of compensation expenses inventory to reducing higher decrease of heavy the the profit million, $XX a the as operating with X% expect in balance profitability. operating a higher decreased efficiencies quarter focus supply cash first We to the The we unrestricted $XX.X decrease expenses sequentially. turn of SG&A of the use are but inventory. expenses lower-than-anticipated with to the the investments We $XX.X software were compared are year. process to first beyond as results this We on during XX% driven in was R&D building the margins costs, prior quarter. and quarter gross by SG&A cash debt and offset lower the the our during non-GAAP facilities, of including materials of hand. chain lower a lower expenses X% GAAP compensation to decrease of commissions decrease X% R&D $XX.X expenses. we we expenses quarter in materials we Non-GAAP expenses first from driving begin in development the XX% and a the the needed partially ended decrease quarter, costs X% cash around this on We impact at

year and I'll we the While expect of flow to capital cash will inventory compared in turn expenditures through we the the end With to fluctuate to from generation call that, and organic prior cash free VJ? generate VJ. the back year. as continue significantly reduce use XXXX to reduce period-to-period,

Vyomesh Joshi

John. Thanks,

improving continue focused cost to are our on operations and organization the growth. drive We profitable and to structure refine

original to planned reduce to expenses year. and million our We approximately which business will total additional $XX to overall improve XXXX XXXX, actions have by year effective accelerate quarters top on reductions revenue we for million exiting reduce QX of over this will profitability. for coming be $XX plans steps our the cost $XX We're the will but entertainment taken taking by previously the million

this, services; and to metals within healthcare to businesss second our Radhika the refinement materials and under costs to structure hardware leadership leverage move to solutions. one metals and and and us the Phil and includes synergies within team group We will organizations on move the are enables businesses' opportunities. each well With and software enables which two healthcare align our growth and better this primary reduce believe demand as as Krishnan, We under resources. streamline Schultz migrating workflow provides the which one, plastics structure with to will to us Company:

actions, we to more continue platforms to cost market and sales overall growth expect In continued units addition new improvements. and to our aggressive share see of ramp

over we fuel to will year, sales we growth later and second launch new unit materials help of year, we the into XXXX XXXX. result which plastics growth plan a year of to As materials additional this this in and the expect half for improve believe last

Unit continue export-related we place the in growth Powder launched online our expect helps printers of month, DMP for services. and processes, portal Last We to services. automates standardizes portal sales believe we our in and on-demand year. to demand us return an ramp this enhancements technical on which to Management The put for

we workflow software solution growth. opportunities accelerate With our believe the further we combination to are expanding of and healthcare,

that, With Stacey to our who to on the strength call continue Stacey? remain will profitable back driving market executing opportunities we portfolio, we would growth. breadth like questions. And to with and our significant for floor have open long-term committed of I and and the strategy turn to the

Stacey Witten

a As call. Instructions) Thanks, now VJ. (Operator open portion teleconference call the slide. this please questions of We'll numbers direct The this on the are all reminder, telephone questions. for to again provided

calling If number you're inside and the you're calling XXX-XXX-XXXX. X-XXX-XXX-XXXX is the the of US, number the outside U.S., if

Operator

you. At from time, ahead. go Thank conducting will this Loop of question-and-answer Our session. [Operator first Please we Instructions] Ananda question Baruah today Capital. comes a be

Ananda Baruah

good afternoon. Hi,

John McMullen

Hey, Ananda.

Ananda Baruah

Thank with the Hey, of in through quick, auto could referenced then, Powder you just times. VJ softness. there guys, also two, of a revenue I the just of on dynamics if the John. so of question. customers dynamic couple timing slowing for you large really Management enterprise talked is clarification there orders And metals. taking Yeah, seeing

coming that than secular we sounds too? is think about suggest -- put sort less does what here auto that of and I'm so, And softness? so that the that to then, foot, in timing like that different or the Thanks. are trying it of some just how just these of you you think those Powder that's orders, And and could structural? -- do back? if And those So Management

Vyomesh Joshi

Yeah.

building the to So be building enterprise my well. yeah, It's they'll the not than are support And that growth. order And about how coming how is that I thing. a how factories customer is business quarter the to into going factory. different is is customer really view think secular they they're the extremely -- -- doing the be their basically

that a issue. secular a this the Now, not still but is we headwind do see XXXX, for

quality on In the and a I because reason core to standards. view ship able till of we working terms and want it's our priority, ship of one of are quality/reliability our to we is the is technical issue. solutions the my anything we reliability don't metals, number technical will And really issue, understand we couple and meet be and

Ananda Baruah

when you do that it? And of would sense us to have you will rectified? be a think like How about

Vyomesh Joshi

be we because I think think we make into we able second solution, want half. sure will to and that second to introduce should test the about half our I in

Ananda Baruah

action, now And some think about that's follow-up, guys. of levels it. how Thanks. given for you're then quick we then me should the OpEx Got cost Okay. just that a accelerating John and it

John McMullen

Yeah.

to the in QX, our increases the think I linearity the think at by that second second of QX plans driven quarter. the we of also about annual I salary out but partially rolled our quarter, directionally from little upwards, because bit beginning of

bit pretty cost in the general balance as So flattish of the out to uptick, we maybe of but take of number a year the of dimensions. then an continue throughout

Vyomesh Joshi

I think important Company. that This the to taking business the cost now organize right model it's to very are the and we in out. will understand important Company trying that the with for enabler really is become the also

we great I are the platforms. think

half. structure. second We to We materials cost to start on in now need the the work the are going seeing growth

Ananda Baruah

a it. Got lot. Thanks

John McMullen

you. Thank

Operator

G. next Your ahead. Please Hendi Research. of comes go Susanto question from

Hendi Susanto

VJ evening, and Good John.

John McMullen

evening. Good

Hendi Susanto

margin mid-XX% like of margin materials anticipate for margin assumptions in due the year. your please half to across mentioned of XXXX? the in margin balance products, printer recover I'm to be as the we you the services? second Would John, share the in is of gross that wondering gross you gross whether weakness what and will growth gross

John McMullen

on Yeah. materials, the factories under first mid-XXs we own our roughly for we the in in the we see assumption margins internal QX mix talked in as prepared The to forward of of and that absorption we issues production have and we're year business Materials projections, driven in the at basis gross And did lower in our margins side were as of where really balance saying some were the in because -- hardware our wasn't. the our production about quarter. through business still going is of where and internal was that factories. look XX% of

mid-XXs that. bodes growth in that of margins, for see on kind So well we're the That as talked about VJ increasing materials the with but with we going anything different. stick second half to until

Vyomesh Joshi

our why manage inventory reduce into significantly. I a product that what right is utilization kind are portfolio, is want sure do the in want the think managing production bring cash Company manage inventory to because be the really want to dealing when that do and balancing is then that we of game we transition products to production we generating the make and and what important. a margin trying talking and we're That's about. you And the to utilization the able to will to we get also to for inventories our we that's do our of and will game because you the down really we Company that second XX% allow because here that And in I'm the place half balancing that, you're start that's from do growth having then, again really right this the us that to. materials have reduce having will

Hendi Susanto

trend printer wondering second you unit we product some --. ASP some growth, think seeing revenue whether high question, should mix had then and product decline. about but there's like I'm how still And mix

Vyomesh Joshi

Yeah. things. There two are

have and when market different. of that Four Here, we talked growth on Figure that you that of will one when XX%, those the and compared point are the dental products, customer very a units and the the of the that like enterprise enterprise metals shipped the that be number is MJPs. units ASP SLA But those about, lot customer low you metals end price the units have when and very of to different unit our we

continue will we ASP market confidently growth, range very say we're have gaining smooth share. talked about think -- And to a in that the $X,XXX to can which as from we land, going that unit out. that then really it'll always market means going product see to but the -- say what we're unit to need John million, $X to hard we because the see share be of So the I where

Hendi Susanto

Thank Thank you, VJ. you, John.

John McMullen

you. Thank

Vyomesh Joshi

Thank you.

Operator

The David from ahead. Ryzhik Group. Susquehanna Financial next go comes of question Please

John McMullen

David. Hey,

Vyomesh Joshi

David. Hey,

David Ryzhik

question. thank you so the taking for much Hi,

any the of didn't customer. $X of to wanted clarify metal And just enterprise related to million enterprise in related customer, I really provide the That's that, printers. For or I on the back estimates not you to those timing assume quarter? come rest going timing should believe that So to my $X shipments metal shipped not? are is of orders whether we the printers, million second the in

Vyomesh Joshi

No.

So would answer be questions. two that

with first the has to The customer customer. right. customer, million are $X Enterprise do that's so you enterprise yes, we a thing. nothing about So metal talked is the plastics printers,

happen. in seasonality in certain As of they units. to will This in metals in really is It's about. solved will many QX you're a to are building able QX. of we that not customer, something then, getting terms quarters, we going in see you And continue and talked far second quarter all factory, the just I of then units technical more will as you certain the pattern issue ship issues order And be a the to order that not. the the enterprise that are are when ordering half,

So on It's going pattern It's how are I be depending really we from. that different the not think they're their they to factory. that's is headwind what going not having their build ordering. to just are that

David Ryzhik

into The price like (inaudible) it per X, can the And Understood. lower-priced there we Thank and materials of you some Is about anyway the then year? you. some to think is that Figure can the of utilization XX% offer insight for XX% --. units?

Vyomesh Joshi

No.

that. be don't me let just -- yes, give We But are very specific. not we

an a participating in important consumer not a segment are We and industrial distinction. very in That's segment.

again, profitable business materials specifically the annuity can after give in you second of number, second -- we build I in the we you're Dental dental, the clearly very going on substantial And build 'XX, and see talk usage. example, annuity the we to exact the for growth. say, -- materials absolutely have where can -- very there the of X between -- has material. very And are can products and positive very, been about won't quarter but -- believe that very Figure fourth on 'XX these a is meaning third products I dental half, thing I've dental. Second second (inaudible).

David Ryzhik

much, it. VJ. so Thanks Got

Vyomesh Joshi

Thank you.

Operator

Your of Mohan of Bank go Merrill next America from question comes Lynch. Please ahead. Wamsi

Vyomesh Joshi

Hey, Wamsi.

Wamsi Mohan

the Hey, John. Thanks questions. VJ. Hey, for taking

rough how comment some half. about in this that a related sense materials here of, you're confident happen much the sales how us and you the base give declining Can the because of areas in-period the crossover of also sort imminently, a in it the of split is pretty and across your seem times the that made you've growth some sort revenue? So of can to couple pickup is older maybe us versus going maybe you even second on, sense give of expecting percent? to materials the growth declining fairly is dependent you How magnitude growth areas versus printer

Vyomesh Joshi

Yeah.

give So the about percentage, let materials me -- you you we way basically, give think but growth. I to be the won't the able

portion assumptions of that is the usage and are replaced. have are old many that a or coming where And which legacy them still are competitive are big The we're seeing some printers down some having. it materials consistent we We printers using they years of printers, them has with either growth that new retired legacy down. essentially or are because that was usage for gone of

Figure about our machines; to continue SLA talking is core core XXXX, there business, machines, is grow. MJP unit. then also And I'm Four, these our dental our SLS are our what So machines, which the

by why being that's half as core growth. materials we're our that positive decline confident going and legacy see second we we get to of are XXXX, materials, So offset new in our

John McMullen

little about once And this, I bit last a we quarter I think think typically. talked

We have pretty built we to and update that this. models year past have analytical good over around track the

here. So predictability, it's -- capability we have decent

Wamsi Mohan

of that $XX think into And Okay. that to some that or I Thanks you exit from and exiting there happen? think thinking even going the EPS also how about is into gross sort the a you some this the business, of and the Is of lot. you that give margin entirety next going this million. And year of the for said then will be like year, you're this just or magnitude entertainment sense the is soon that exit? exit impact hit us do business can profitability

John McMullen

Yeah.

for non-GAAP -- we've QX. pulled out already purposes, numbers our effective of pulled we've -- already that For

that nature focus will and to kind but the around exiting more of revenue, didn't made this for we've believe specifically of this core of annual order was the and a things we decision on the what Company. of estimate think profitability, in our So profitability on us do mention, which an over materials that magnitude there nor for to We will of that prepared the comes It's we (inaudible) at ability out I million. year. point time the impact $XX

Wamsi Mohan

you. Thank Yeah.

Vyomesh Joshi

Wamsi. Thanks,

Operator

& go Your ahead. next from Needham Please question Jim comes Ricchiuti Company. of

Jim Ricchiuti

Hi.

a revenues as this Just of? of missed follow-up. million it, but did I $XX may areas what characterize coming you have out

Vyomesh Joshi

will be Well, a we And the that this with business we is digital. studios. work

I talking business think we that's about. the are

Jim Ricchiuti

makes I for the it, it. That VJ. sense. clarification. Thank you Got missed

Just healthcare... regarding the

Vyomesh Joshi

a services primarily It's business. Go It's services ahead please. business. a primarily

Jim Ricchiuti

weak visibility enterprise interested you to business, from there enough may That's this you like there you're And balance had -- suggest at to characterizing have least into characterization? helpful. it -- ordering initially that of 'XX. to patterns the a to perhaps the respect into be over be No. not healthcare While customer, in still it continue at is with levels sounds it, it what the Is I'm ordering that fair that anticipated? may they're ordering,

Vyomesh Joshi

No. are is order different. The very we is pattern thing the that seeing

order. in quarter, last Some had In a in quarters big QX, year had they this order. we a smaller like

about. and way machines I'm make they just their extremely grow. want when factory, on It's It's build are how the marketplace. be part overall choppy. they that's on started talking to not continuing significant They're on line. to (inaudible) in turn make sure could printer they sure And order and impact what revenue model sure our we what the and because about that are make that's that's going what that you all understand have of the those growth want to be hardware well doing you they we wanted a will think their here trying that continue QX. talking I But not in That going that QX QX the will some they different. that I And to we overall, think think to order trying clean Meaning in depending those of be of machines, that's that. So all things I also are to explain. and amount they will products what that and so -- -- to will that, we're be the just and we to production

Jim Ricchiuti

in -- your this thinking I that ex it even this it healthcare this grow be Is this year? terms good the just so. growth. business a showed overall. with sounds to customer expectations pretty with Was like think your you the of It healthcare able would customer, business Okay. I'm -- these choppiness

Vyomesh Joshi

Yeah.

business been we in will very, well healthcare you is. out, take order way seeing business. we enterprise of continue and that has -- is do to that's the customers business. to nothing that But their last are business. we very is continue much all grow grow. pattern basically That business to that, of will years growing If we healthcare just The healthcare gyration are the really extremely just that It's with because customer, this doing the these

Jim Ricchiuti

Thank you.

John McMullen

you. Thank

Operator

go Please Jaffray. Piper of Jensen Troy from is ahead. question next Your

Troy Jensen

Hey. gentlemen. Hey,

the working go just series? if XXX platform on So on does the that powder problem, back management you

Vyomesh Joshi

XXX powder XXX and you approach the XXX XXX -- the because integration unit powder both of on But the robust. the work with a It's the powder with very which XXX, problem They management is is management, or issue management is either powder No. and on could buy for management. just XXX.

Troy Jensen

Can it.... metal talk have the pipeline? you the attached or percentage the powder a of to it Okay. just maybe like Is management about sales that

Vyomesh Joshi

It's new product. a

is It's do we about XXX. product. Unit to -- sure thorough We sure the more to metals ship. call in XXX and -- the approach we new issue want we and really customers In Powder on. factory The before want we But it what and wanted Frankly, for right both of characterized. hear kind that make to factory there our make testing our -- core you make So working make with Management we that's for was just a we do the to XXX QX, our sure is what that we're we want XXX, I for sure characterization.

Troy Jensen

I I'm look forward opportunities to it? this metal So management the powder people we percentage pipeline, attached little you what is if platform? will revenues the guess no asking (inaudible) into your have buy assume still what metal to of Should

Vyomesh Joshi

no, No, no.

Let's be clear on this.

platform, XXX Flex grew the all, XXX XXX category. of extremely First the doing of is kind year-over-year well. in We revenue

just Powder actually make I sure XXX to want extremely shipment So except the well metal business Management that for about. Unit our did I talked

So that's very important to understand.

other $X talking metal expected that that be about. able the So that where million units I'm to our metal we is we business is absolutely What ship had will growing year-over-year. problem

John McMullen

so good demand seen Troy. that for early far, We've

Troy Jensen

All right.

John McMullen

of But that and we $X between million. characterize orders that's how we characterize how timing that of kind XXX

Vyomesh Joshi

business So is I think doing in summary, overall metal extremely our well.

we for of We units not technical the because revenue that the growing in orders would year-over-year. issue. ship able to metal are business We these had

Troy Jensen

Understood.

follow-up all one shipping four Figure just or VJ platforms for is And are you you. Okay. now still update, a are X coming? couple there of

Vyomesh Joshi

The modular will and which not shipping June. is shipping in that yet we're the one, start

Troy Jensen

right And the end. the (inaudible)? that's That's with one RobotiX big the higher

Vyomesh Joshi

one... the No, big not one, but the

John McMullen

able In ship to the But actually, production. middle. we're

Vyomesh Joshi

already. The production have unit, we shipped

Troy Jensen

Okay. going Hi, Good forward. guys. luck

Vyomesh Joshi

Thanks.

Troy Jensen

Thanks.

Operator

go Research. question Shannon Cross The of Please Cross from next is ahead.

Shannon Cross

much. Hello. very you Thank

Vyomesh Joshi

Shannon. Hey,

Shannon Cross

basis, of just we the to pricing think materials more there a couple be that behind understand just a I when whatever, not on want of but device also we to little you. aftermarket, and supplies pressure about some the from dynamics specifically? when -- then revenue of Thank So if materials think to questions, of bit any just per the is course like-for-like a the about usage

Vyomesh Joshi

category depending the and usage will on be the on depending different. the So price,

Okay. That's I understands. want the everybody sure first that thing that to make

we every has The we we able have annuity materials. will I'm so saying share actually of participating That segment. the in market the to means only our have proprietary that is make. we're our industrial that want we own ship I second point substantial our in printer thing That's the Because stream. enjoy other confidence materials, important to usage,

in Now some seeing cases, we competition. are

we're and Specifically, wax older some legacy I talked seeing the competition. especially competition about of products seeing (inaudible) and are in that in for MJP, materials that's where our we China

Shannon Cross

mean share those lose I there, is it to you having you are And to itself over not of manifesting prices willing down, to some take go -- or you just are time? so players

Vyomesh Joshi

are some at because we in pricing, -- to overall, our competition approach we of look view to we that the In system but from pricing we adjust make materials. we -- some a But are But and as that not materials much a the have point looking seeing third-party at we that's take. cases, pricing. did hardware sure need

Shannon Cross

I have then, And Okay. --.

Vyomesh Joshi

new you give competition. seeing that I specific examples are we

Shannon Cross

core. you. part I just the the moving And separate any maybe Thank of which if reductions curious then, or vesting, away the at from understand looking as businesses really are from Hollywood cost I'm Okay. are that? is that business, there other

Vyomesh Joshi

at going healthcare. be what to those want and software make and we I'm the synergistically I there And materials and doing we're not where models, businesses our that. figure around want to is make is I out two business will always take I that thing our now, wanted what business make I to first then, And to Company, decision. mentioning that key at for organize was to and pillars think are looking workflow-based we're look aligned really to see want And sure And then a that on-demand do Company. hardware, two I turn what want that workflow-based the around So we printer our production, sure are then and is I and portfolio.

to think the I really it's important We platforms. great Company. got now focus the

We are getting our place. materials into the right

Our export materials we we're grow out. cost to that need business ODM compliance, with to now. addressing our and stay do is then our What

think I we So what do. want to that's

Shannon Cross

more can as you customers terms repeat just to And color Okay. [indiscernible] in lot getting You're Just a curious about. any are of terms who Figure of finally, in certain of seeing you then, X, talk verticals? I'm

Vyomesh Joshi

is dental. X Figure for segment one number So

dental extremely business doing is Our well.

the and globalizing penetrating are it. are dental We labs now we

Figure grow growth going be is very X and crucial our to materials the that business. for materials growing business So also continue if view see XXXX you're my in to dental will

The market I the be the evaluate additive segment what in we we X the -- design really customer technology. enterprise at manufacturing will where Figure is on the verification that will really labs R&D to that are able call their buying second looking be

development game. this continue is As going new in segments we materials, happen. other into it's But -- our a to of really the it's mind, my penetration material to technology develop

platform. We more just robust need have very to offer a materials. We

Shannon Cross

Thank very much. you Right.

John McMullen

Thanks, Shannon.

Operator

Palm of Group. next is Capital Craig-Hallum ahead. question Your Greg from Please go

Vyomesh Joshi

Hey, Greg.

Danny Eggerichs

This is Danny Palm actually Eggerichs, today. taking Greg Thanks for the questions. for John

John McMullen

Hey, David.

Danny Eggerichs

materials had mentioned you your XX% margins around quarter. gross were know I this

for you the As we year half the the you second materials? like would how us look to faster come -- margins of up at as you accelerating mentioned, how gross in do you the with expect cross declining new to legacy, like

Vyomesh Joshi

having to that continued I should think XX% be gross margin. we

Danny Eggerichs

and forward into to the demand demand Okay. as Then, looking year see in weaknesses where well. in just the just you possible of second looking I areas, half strength are guess

Vyomesh Joshi

Well, if you metals overall I look very think at strong. is portfolio,

that's have the I demand. think going continue to to

and mind, -- see are very world-class we're SLA going Our continue in my SLA. platforms to to very,

to the be X very, very dental to will the And more new dental The next good Our with Figure is business. very we're materials. strong. feel the growth business going continue I about drive that. in

machine grow X,XXX. MJP with SLS to our printer and our one the continue will We last then, wax-based is

Danny Eggerichs

the Okay. color. I appreciate

Operator

is from Ananda go Capital. Baruah Please Loop Your question ahead. next of

Vyomesh Joshi

Yeah.

Second question.

Ananda Baruah

of in and I the year management comments the last that to for grow still quarter, think business feel rest you you on sort powder grow question, of sort answer I the of the the you When that you then, of are think of business Yeah. sort second would sort is a Once business thought listening year-over-year? issue think these the do just and to expected of guys Do with the call. to no. items that you sort you said you this questions, I to overall. VJ of normalizing then, there, do rest get -- -- talking that's the the follow-up possible you denied, Two

Vyomesh Joshi

growing. the start And half, should is I my to by in think grow think able second business we ODM be will I then, business. our opinion

quarters, at portal. be in couple you our If export of Hopefully, in look to a year-over-year business. in that should decline business, compliance able we grow QX with that

technical our We solve metal will issues.

We is already dental will grow that growing. business and

is our said, very business SLA strong. I As strong. business SLS is

I that able of we provided second expect half So to XXXX. grow solve we these things, be will in

Ananda Baruah

Great. Okay.

Thanks. for I that's guys. it me. Okay, great. appreciate it That's

John McMullen

Thanks.

Operator

G. Research. [Operator Hendi question Susanto from go Our comes Please next of ahead. Instructions]

Vyomesh Joshi

Hendi, yeah.

ahead. go question, Second

Hendi Susanto

will Third charm. to much how cost target, be we reduction with regard should cost-saving time bottom line reinvestment? and the is higher the toward cost much how expect versus John,

John McMullen

Yeah.

this comments, I to about VJ's what planned. $XX million of throughout he the think course prepared we $XX year beyond in million had talked

the majority this be majority will OpEx, cost would that performance the made P&L. would certainly would improve reductions of in goods of in those investing be significant to that costs be So cost the parts be but of We year. of of the part won't the those and that not be expectation sold of

Hendi Susanto

like much toward XXXX? will million overall how $XX for of restructuring additional to then, And costs million $XX special be savings cost that

John McMullen

Yeah. I taking those it's to non-GAAP would been a we've taken costs. are we reconciliation. actions, say, GAAP the We but number, people-related show in specific as not

GAAP reconciliation look was you sense we at non-GAAP what will quarter. if this will a every So of information example, impact for quarter. that you And get that the to provide

Hendi Susanto

Thank it. you. Got

John McMullen

Take Thank you. care.

Operator

the to call questions closing at over remarks. turn now for There I'll time. are further Witten this Stacey no

Stacey Witten

section the Systems. replay of you. for for you this joining webcast call of Thank be support of continued A Investor your Relations today available and Thank our website, www.Xdsystems.com/investor. us will the on after XD made

Operator

conference. concludes This today's

your disconnect for may you lines participation.+ time. at You your this Thank

3D Systems (DDD) 7 May 192019 Q1 Earnings call transcript