10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________to____________

Commission File No. 001-34220

__________________________

3D SYSTEMS CORPORATION

(Exact name of Registrant as specified in its Charter)

__________________________

Delaware	95-4431352
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

333 Three D Systems Circle

Rock Hill, South Carolina 29730

(Address of Principal Executive Offices and Zip Code)

(Registrant’s Telephone Number, Including Area Code): (803) 326-3900

_________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	DDD	New York Stock Exchange

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Shares of Common Stock, par value $0.001, outstanding as of October 18, 2019: 118,420,818

1

3D SYSTEMS CORPORATION

Form 10-Q

For the Quarter and Nine Months Ended September 30, 2019

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	34
Item 4. Controls and Procedures.	34
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.	34
Item 1A. Risk Factors.	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	37
Item 6. Exhibits.	38
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

3D SYSTEMS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)	September 30, 2019 (unaudited)		December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	127,616	$	109,998
Accounts receivable, net of reserves — $8,182 (2019) and $8,423 (2018)	110,333		126,618
Inventories	122,706		133,161
Prepaid expenses and other current assets	30,945		27,697
Total current assets	391,600		397,474
Property and equipment, net (a)	92,935		103,252
Intangible assets, net	51,253		68,275
Goodwill	217,688		221,334
Right of use assets (a)	35,028		4,466
Deferred income tax asset	6,492		4,217
Other assets, net	27,767		26,814
Total assets	$	822,763	$	825,832
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long term debt	$	3,025	$	—
Current right of use liabilities (a)	10,797		654
Accounts payable	53,014		66,722
Accrued and other liabilities	62,701		59,265
Customer deposits	5,226		4,987
Deferred revenue	36,320		32,432
Total current liabilities	171,083		164,060
Long-term debt	55,421		25,000
Long-term right of use liabilities (a)	32,667		6,392
Deferred income tax liability	7,119		6,190
Other liabilities	41,178		39,331
Total liabilities	307,468		240,973
Redeemable noncontrolling interests	8,872		8,872
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, $0.001 par value, authorized 220,000 shares; issued 120,997 (2019) and 118,650 (2018)	120		117
Additional paid-in capital	1,367,198		1,355,503
Treasury stock, at cost — 3,583 shares (2019) and 2,946 shares (2018)	(18,601)		(15,572)
Accumulated deficit	(787,868)		(722,701)
Accumulated other comprehensive loss	(46,100)		(38,978)
Total 3D Systems Corporation stockholders' equity	514,749		578,369
Noncontrolling interests	(8,326)		(2,382)
Total stockholders’ equity	506,423		575,987
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	$	822,763	$	825,832

^(a) For comparative purposes, prior year finance lease assets have been reclassified from "Property and equipment, net" to "Right of use assets." Prior year finance lease liabilities have been reclassified as right of use liabilities.

See accompanying notes to condensed consolidated financial statements.

3

3D SYSTEMS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Revenue:
Products	$	94,506	$	99,922	$	280,611	$	316,153
Services	60,766		64,589		183,913		190,795
Total revenue	155,272		164,511		464,524		506,948
Cost of sales:
Products	58,044		54,444		166,809		168,062
Services	29,947		32,257		91,430		97,045
Total cost of sales	87,991		86,701		258,239		265,107
Gross profit	67,281		77,810		206,285		241,841
Operating expenses:
Selling, general and administrative	58,275		65,600		195,036		206,225
Research and development	20,940		23,194		63,654		71,788
Total operating expenses	79,215		88,794		258,690		278,013
Loss from operations	(11,934)		(10,984)		(52,405)		(36,172)
Interest and other (expense) income, net	(2,818)		1,027		(6,774)		1,135
Loss before income taxes	(14,752)		(9,957)		(59,179)		(35,037)
Provision for income taxes	(2,010)		(1,593)		(5,793)		(6,086)
Net loss	(16,762)		(11,550)		(64,972)		(41,123)
Less: net income attributable to noncontrolling interests	81		—		195		246
Net loss attributable to 3D Systems Corporation	$	(16,843)	$	(11,550)	$	(65,167)	$	(41,369)
Net loss per share available to 3D Systems Corporation common stockholders - basic and diluted	$	(0.15)	$	(0.10)	$	(0.57)	$	(0.37)

See accompanying notes to condensed consolidated financial statements.

4

3D SYSTEMS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Net loss	$	(16,762)	$	(11,550)	$	(64,972)	$	(41,123)
Other comprehensive income (loss), net of taxes:
Pension adjustments	91		57		207		204
Derivative financial instruments	(798)		—		(798)		—
Foreign currency translation	(8,101)		(1,894)		(6,854)		(13,090)
Total other comprehensive income (loss), net of taxes:	(8,808)		(1,837)		(7,445)		(12,886)
Total comprehensive loss, net of taxes	(25,570)		(13,387)		(72,417)		(54,009)
Comprehensive income attributable to noncontrolling interests	60		26		128		565
Comprehensive loss attributable to 3D Systems Corporation	$	(25,630)	$	(13,413)	$	(72,545)	$	(54,574)

See accompanying notes to condensed consolidated financial statements.

5

3D SYSTEMS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
(in thousands)	2019		2018
Cash flows from operating activities:
Net loss	$	(64,972)	$	(41,123)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	39,305		44,986
Stock-based compensation	19,221		21,082
Provision for bad debts	1,152		2,522
Loss on the disposition of property, equipment and other assets	1,620		—
Provision for deferred income taxes	(1,346)		(3,132)
Impairment of assets	1,728		1,411
Changes in operating accounts:
Accounts receivable	12,290		(1,509)
Inventories	6,481		(29,502)
Prepaid expenses and other current assets	(3,122)		41,589
Accounts payable	(12,885)		6,261
Deferred revenue and customer deposits	4,491		(37)
Accrued and other current liabilities	1,199		(45,309)
All other operating activities	4,922		(170)
Net cash provided by (used in) operating activities	10,084		(2,931)
Cash flows from investing activities:
Purchases of property and equipment	(18,265)		(28,323)
Proceeds from sale of assets	1,620		9
Other investing activities	(1,744)		(1,236)
Net cash used in investing activities	(18,389)		(29,550)
Cash flows from financing activities:
Proceeds from borrowings	100,000		—
Repayment of borrowings/long term debt	(66,013)		—
Payments related to net-share settlement of stock based compensation	(3,029)		(5,723)
Purchase of noncontrolling interest	(2,500)		—
Payments on earnout consideration	—		(2,675)
Other financing activities	(1,125)		(508)
Net cash provided by (used in) financing activities	27,333		(8,906)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1,400)		(2,417)
Net increase (decrease) in cash, cash equivalents and restricted cash	17,628		(43,804)
Cash, cash equivalents and restricted cash at the beginning of the period (a)	110,919		136,831
Cash, cash equivalents and restricted cash at the end of the period (a)	$	128,547	$	93,027

Supplemental cash flow information
Cash interest payments	$	3,020	$	353
Cash income tax payments, net	$	8,984	$	7,119
Transfer of equipment from inventory to property and equipment, net (b)	$	2,861	$	4,638
Transfer of equipment to inventory from property and equipment, net (c)	$	30	$	628

Noncash financing activity
Purchase of noncontrolling interest (d)	$	(11,000)	$	—

(a)The amounts for cash and cash equivalents shown above include restricted cash of $931 and $934 as of September 30, 2019 and 2018, respectively, and $921 and $487 as of December 31, 2018, and 2017, respectively, which were included in Other assets, net, in the condensed consolidated balance sheets.

(b)Inventory is transferred from inventory to property and equipment at cost when the Company requires additional machines for training or demonstration or for placement into on demand manufacturing services locations.

(c)In general, an asset is transferred from Property and equipment, net, into inventory at its net book value when the Company has identified a potential sale for a used machine.

(d)Purchase of noncontrolling interest to be paid in installments over a four-year period recorded to Accrued and other liabilities and Other liabilities on the condensed consolidated balance sheets.

See accompanying notes to condensed consolidated financial statements.

6

3D SYSTEMS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

	Quarters Ended
	Common Stock
(in thousands, except par value)	Par Value $0.001		Additional Paid In Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total 3D Systems Corporation Stockholders' Equity		Equity Attributable to Noncontrolling Interests		Total Stockholders' Equity
June 30, 2019	$	120	$	1,361,569	$	(16,519)	$	(771,025)	$	(37,313)	$	536,832	$	(8,386)	$	528,446
Issuance (repurchase) of stock	—		—		(2,082)		—		—		(2,082)		—		(2,082)
Acquisition of non-controlling interest	—		—		—		—		—		—		—		—
Stock-based compensation expense	—		5,629		—		—		—		5,629		—		5,629
Net income (loss)	—		—		—		(16,843)		—		(16,843)		81		(16,762)
Pension adjustment	—		—		—		—		91		91		—		91
Derivative financial instrument loss	—		—		—		—		(798)		(798)		—		(798)
Foreign currency translation adjustment	—		—		—		—		(8,080)		(8,080)		(21)		(8,101)
September 30, 2019	$	120	$	1,367,198	$	(18,601)	$	(787,868)	$	(46,100)	$	514,749	$	(8,326)	$	506,423
June 30, 2018	$	116	$	1,339,984	$	(10,007)	$	(707,015)	$	(32,878)	$	590,200	$	(2,367)	$	587,833
Issuance (repurchase) of stock	1		—		(3,919)		—		—		(3,918)		—		(3,918)
Acquisition of non-controlling interest	—		—		—		—		—		—		—		—
Stock-based compensation expense	—		7,348		—		—		—		7,348		—		7,348
Net income (loss)	—		—		—		(11,550)		—		(11,550)		—		(11,550)
Pension adjustment	—		—		—		—		57		57		—		57
Foreign currency translation adjustment	—		—		—		—		(1,601)		(1,601)		26		(1,575)
September 30, 2018	$	117	$	1,347,332	$	(13,926)	$	(718,565)	$	(34,422)	$	580,536	$	(2,341)	$	578,195

See accompanying notes to condensed consolidated financial statements.

7

3D SYSTEMS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)

(Unaudited)

	Nine Months Ended
	Common Stock
(in thousands, except par value)	Par Value $0.001		Additional Paid In Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total 3D Systems Corporation Stockholders' Equity		Equity Attributable to Noncontrolling Interests		Total Stockholders' Equity
December 31, 2018	$	117	$	1,355,503	$	(15,572)	$	(722,701)	$	(38,978)	$	578,369	$	(2,382)	$	575,987
Issuance (repurchase) of stock	3		—		(3,029)		—		—		(3,026)		—		(3,026)
Acquisition of non-controlling interest	—		(7,526)		—		—		256		(7,270)		(6,072)		(13,342)
Stock-based compensation expense	—		19,221		—		—		—		19,221		—		19,221
Net income (loss)	—		—		—		(65,167)		—		(65,167)		195		(64,972)
Pension adjustment	—		—		—		—		207		207		—		207
Derivative financial instrument loss	—		—		—		—		(798)		(798)		—		(798)
Foreign currency translation adjustment	—		—		—		—		(6,787)		(6,787)		(67)		(6,854)
September 30, 2019	$	120	$	1,367,198	$	(18,601)	$	(787,868)	$	(46,100)	$	514,749	$	(8,326)	$	506,423
December 31, 2017	$	115	$	1,326,250	$	(8,203)	$	(677,772)	$	(21,536)	$	618,854	$	(2,906)	$	615,948
Issuance (repurchase) of stock	2		—		(5,723)		—		—		(5,721)		—		(5,721)
Cumulative impact of change in accounting policy	—		—		—		576		—		576		—		576
Stock-based compensation expense	—		21,082		—		—		—		21,082		—		21,082
Net income (loss)	—		—		—		(41,369)		—		(41,369)		246		(41,123)
Pension adjustment	—		—		—		—		204		204		—		204
Foreign currency translation adjustment	—		—		—		—		(13,090)		(13,090)		319		(12,771)
September 30, 2018	$	117	$	1,347,332	$	(13,926)	$	(718,565)	$	(34,422)	$	580,536	$	(2,341)	$	578,195

See accompanying notes to condensed consolidated financial statements.

8

3D SYSTEMS CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of 3D Systems Corporation and

all majority-owned subsidiaries and entities in which a controlling interest is maintained (the “Company”). A non-controlling interest in a subsidiary is considered an ownership interest in a majority-owned subsidiary that is not attributable to the parent. The Company includes noncontrolling interests as a component of total equity in the condensed consolidated balance sheets and the net income attributable to noncontrolling interests are presented as an adjustment from net loss used to arrive at net loss attributable to 3D Systems Corporation in the condensed consolidated statements of operations and comprehensive loss. All significant intercompany transactions and balances have been eliminated in consolidation.

The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim reports. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”).

In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments, consisting of adjustments of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The results of operations for the quarter ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from those estimates and assumptions. Certain prior period amounts presented in the condensed consolidated financial statements and accompanying footnotes have been reclassified to conform to current year presentation.

All dollar amounts presented in the accompanying footnotes are presented in thousands, except for per share information.

Recently Adopted Accounting Standards

On January 1, 2019, the Company adopted the Financial Accounting Standards Board ("FASB") ASU No. 2016-02, “Leases (Topic 842),” which requires the recognition of right-of-use ("ROU") assets and related operating and finance lease liabilities on the balance sheet. The Company adopted ASU 2016-02 effective January 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented.

As permitted under ASU 2016-02, the Company applied practical expedients that allowed it to not (1) reassess historical lease classifications, (2) recognize short-term leases on the balance sheet, nor (3) separate lease and non-lease components for its real estate leases.

As a result of the adoption of ASU 2016-02 on January 1, 2019, the Company recorded operating lease liabilities and ROU assets of $38,415. The adoption of ASU 2016-02 had an immaterial impact on the Company's condensed consolidated statement of operations and condensed consolidated statement of cash flows for the nine months ended September 30, 2019. For additional information about leases, see Note 3.

Accounting Standards Issued But Not Yet Adopted

In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those of developing or obtaining internal-use software. This standard is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is evaluating the impact the new standard will have on its consolidated financial statements.

9

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The standard is effective for fiscal years beginning after December 15, 2019.  Early adoption is permitted for interim or annual impairment tests performed on testing dates after January 1, 2017. The Company has elected not to adopt the provisions of this standard early but will re-evaluate as part of performing its 2019 impairment analysis.

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which provides guidance regarding the measurement of credit losses for financial assets and certain other instruments that are not accounted for at fair value through net income, including trade and other receivables, debt securities, net investment in leases, and off-balance sheet credit exposures. The new guidance requires companies to replace the current incurred loss impairment methodology with a methodology that measures all expected credit losses for financial assets based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance expands the disclosure requirements regarding credit losses, including the credit loss methodology and credit quality indicators. In May 2019, the FASB issued ASU 2019-05, "Financial Instruments—Credit Losses (Topic 326)," which provides transition relief to entities adopting ASU 2016-13 by allowing entities to elect the fair value option on certain financial instruments. ASU 2016-13 will be effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2019. Early adoption is permitted for annual reporting periods, including interim periods after December 15, 2018 and will be applied using a modified retrospective approach. The Company is evaluating the impact of adoption of this standard on its consolidated financial statements.

No other new accounting pronouncements, issued or effective during 2019, have had or are expected to have a significant impact on the Company’s consolidated financial statements.

(2) Revenue

The Company accounts for revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers,” which it adopted on January 1, 2018, using the modified-retrospective method.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

At September 30, 2019, the Company had $107,486 of outstanding performance obligations. The Company expects to recognize approximately 93 percent of its remaining performance obligations as revenue within the next twelve months, an additional 3 percent by the end of 2020 and the balance thereafter.

Revenue Recognition

Revenue is recognized when control of the promised products or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Many of its contracts with customers include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative stand-alone selling price (“SSP”). Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The amount of consideration received and revenue recognized may vary based on changes in marketing incentive programs offered to our customers. The Company's marketing incentive programs take many forms, including volume discounts, trade-in allowances, rebates and other discounts.

A majority of the Company’s revenue is recognized at the point in time when products are shipped or services are delivered to customers. Please see below for further discussion.

10

Hardware and Materials

Revenue from hardware and material sales is recognized when control has transferred to the customer which typically occurs when the goods have been shipped to the customer, risk of loss has transferred to the customer and the Company has a present right to payment for the hardware. In limited circumstances when a printer or other hardware sales include substantive customer acceptance provisions, revenue is recognized either when customer acceptance has been obtained, customer acceptance provisions have lapsed, or the Company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied.

Software

The Company also markets and sells software tools that enable our customers to capture and customize content using our printers, design optimization and simulation software, and reverse engineering and inspection software. Software does not require significant modification or customization and the license provides the customer with a right to use the software as it exists when made available. Revenue from these software licenses is recognized either upon delivery of the product or of a key code which allows the customer to download the software. Customers may purchase post-sale support. Generally, the first year is included but subsequent years are optional. This optional support is considered a separate obligation from the software and is deferred at the time of sale and subsequently recognized ratably over future periods.

Services

The Company offers training, installation and non-contract maintenance services for its products. Additionally, the Company offers maintenance contracts customers can purchase at their option. For maintenance contracts, revenue is deferred at the time of sale based on the stand-alone selling prices of these services and costs are expensed as incurred. Deferred revenue is recognized ratably over the term of the maintenance period on a straight-line basis. Revenue from training, installation and non-contract maintenance services is recognized at the time of performance of the service.

On demand manufacturing and healthcare service sales are included within services revenue and revenue is recognized upon shipment or delivery of the parts or performance of the service, based on the terms of the arrangement.

Terms of sale

Shipping and handling activities are treated as fulfillment costs rather than as an additional promised service. The Company accrues the costs of shipping and handling when the related revenue is recognized. Costs incurred by the Company associated with shipping and handling are included in product cost of sales.

Credit is extended, and creditworthiness is determined, based on an evaluation of each customer’s financial condition. New customers are generally required to complete a credit application and provide references and bank information to facilitate an analysis of creditworthiness. Customers with a favorable profile may receive credit terms that differ from the Company’s general credit terms. Creditworthiness is considered, among other things, in evaluating the Company’s relationship with customers with past due balances.

The Company’s terms of sale generally provide payment terms that are customary in the countries where it transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require significant deposits or payment in full prior to shipment. For maintenance services, the Company either bills customers on a time-and-materials basis or sells maintenance contracts that provide for payment in advance on either an annual or other periodic basis.

See Note 12 for additional information related to revenue by reportable segment and major lines of business.

Significant Judgments

The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. For such arrangements, the Company allocates revenues to each performance obligation based on its relative SSP.

11

Judgment is required to determine the SSP for each distinct performance obligation in a contract. For the majority of items, the Company estimates SSP using historical transaction data. The Company uses a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when the product or service is not sold separately, the Company determines the SSP using information that may include market conditions and other observable inputs.

In some circumstances, the Company has more than one SSP for individual products and services due to the stratification of those products and services by customers, geographic region or other factors. In these instances, it may use information such as the size of the customer and geographic region in determining the SSP.

The determination of SSP is an ongoing process and information is reviewed regularly in order to ensure SSP reflects the most current information or trends.

The nature of the Company’s marketing incentives may lead to consideration that is variable. Judgment is exercised at contract inception to determine the most likely outcome of the contract and resulting transaction price. Ongoing assessments are performed to determine if updates are needed to the original estimates.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer deposits and deferred revenues (contract liabilities) on the consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized at the time of invoicing, or unbilled receivables when revenue is recognized prior to invoicing. For most of the Company’s contracts, customers are invoiced when products are shipped or when services are performed resulting in billed accounts receivables for the remainder of the owed contract price. Unbilled receivables generally result from items being shipped where the customer has not been charged, but for which revenue had been recognized. In the Company’s on demand manufacturing business, customers may be required to pay in full before work begins on their orders, resulting in customer deposits. The Company typically bills in advance for installation, training and maintenance contracts as well as extended warranties, resulting in deferred revenue. Changes in contract asset and liability balances were not materially impacted by any other factors for the period ended September 30, 2019.

Through September 30, 2019, the Company recognized revenue of $24,072 related to our contract liabilities at January 1, 2019.

Practical Expedients and Exemptions

The Company generally expenses sales commissions when incurred because the amortization period would be one year or less. These costs are recorded within selling, general and administrative expenses.

(3) Leases

The Company has various lease agreements for its facilities, equipment and vehicles with remaining lease terms ranging from one to seventeen years. The Company determines if an arrangement contains a lease at inception. Some leases include the options to purchase, terminate or extend for one or more years; these options are included in the ROU asset and liability lease term when it is reasonably certain an option will be exercised. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

Most of the Company’s leases do not provide an implicit rate, therefore the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the future lease payments.

Certain of the Company’s leases include variable costs. Variable costs include non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.

12

Components of lease cost (income) were as follows:

(in thousands)	Quarter ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	3,646	$	11,110
Finance lease cost - amortization expense	174		592
Finance lease cost - interest expense	114		344
Short-term lease cost	30		80
Variable lease cost	102		137
Sublease income	(33)		(33)
Total	$	4,033	$	12,230

Balance sheet classifications at September 30, 2019 are summarized below:

	September 30, 2019
(in thousands)	Right of use assets		Current right of use liabilities		Long-term right of use liabilities
Operating Leases	$	30,786	$	10,092	$	26,488
Finance Leases	4,242		705		6,179
Total	$	35,028	$	10,797	$	32,667

The Company’s future minimum lease payments as of September 30, 2019 under operating lease and finance leases, with initial or remaining lease terms in excess of one year, were as follows:

	September 30, 2019
(in thousands)	Operating Leases		Finance Leases
Years ending September 30:
2020	$	3,785	$	292
2021	10,514		1,103
2022	7,486		829
2023	6,227		832
2024	5,406		828
Thereafter	10,398		6,021
Total lease payments	43,816		9,905
Less: imputed interest	(7,236)		(3,021)
Present value of lease liabilities	$	36,580	$	6,884

Supplemental cash flow information related to our operating leases for the period ending September 30, 2019, was as follows:

(in thousands)	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	11,657
Operating cash outflow from finance leases	$	343
Financing cash outflow from finance leases	$	513

Weighted-average remaining lease terms and discount rate for our operating leases for the period ending September 30, 2019, were as follows:

	September 30, 2019
	Operating		Financing
Weighted-average remaining lease term	5.2 years		10.9 years
Weighted-average discount rate	6.47	%	6.74	%

13

(4) Inventories

Components of inventories at September 30, 2019 and December 31, 2018 are summarized as follows:

(in thousands)	2019		2018
Raw materials	$	49,130	$	49,624
Work in process	5,941		2,969
Finished goods and parts	67,635		80,568
Inventories	$	122,706	$	133,161

(5) Intangible Assets

Intangible assets, net, other than goodwill, at September 30, 2019 and December 31, 2018 are summarized as follows:

	2019						2018
(in thousands)	Gross (a)		Accumulated Amortization		Net		Gross (a)		Accumulated Amortization		Net		Weighted Average Useful Life Remaining (in years)
Intangible assets with finite lives:
Customer relationships	$	102,023	$	(74,349)	$	27,674	$	103,332	$	(67,129)	$	36,203	5
Acquired technology	54,067		(51,241)		2,826		52,691		(47,546)		5,145		2
Trade names	23,668		(18,402)		5,266		25,096		(17,669)		7,427		5
Patent costs	11,678		(9,079)		2,599		11,032		(8,382)		2,650		14
Trade secrets	19,296		(15,076)		4,220		19,374		(13,574)		5,800		3
Acquired patents	16,184		(14,340)		1,844		16,212		(13,160)		3,052		7
Other	25,712		(18,888)		6,824		26,551		(18,553)		7,998		1
Total intangible assets	$	252,628	$	(201,375)	$	51,253	$	254,288	$	(186,013)	$	68,275	5

^(a) Change in gross carrying amounts consists primarily of charges for license and patent costs and foreign currency translation.

Amortization expense related to intangible assets was $5,287 and $16,525 for the quarter and nine months ended September 30, 2019, respectively, compared to $7,811 and $23,714 for the quarter and nine months ended September 30, 2018, respectively.

(6) Accrued and Other Liabilities

Accrued liabilities at September 30, 2019 and December 31, 2018 are summarized as follows:

(in thousands)	2019		2018
Compensation and benefits	$	19,648	$	23,787
Accrued taxes	19,500		17,246
Vendor accruals	12,033		6,895
Product warranty liability	2,985		3,788
Arbitration awards	4,406		2,256
Accrued professional fees	2,116		1,657
Accrued other	779		2,219
Royalties payable	1,234		1,417
Total	$	62,701	$	59,265

14

Other liabilities at September 30, 2019 and December 31, 2018 are summarized as follows:

(in thousands)	2019		2018
Long term employee indemnity	$	14,105	$	13,609
Long term tax liability	3,246		4,168
Defined benefit pension obligation	8,083		8,518
Long term deferred revenue	6,804		8,121
Other long term liabilities	8,940		4,915
Total	$	41,178	$	39,331

(7) Borrowings

Credit Facility

On February 27, 2019, the Company, as borrower, and certain of its subsidiaries, as guarantors, entered into a 5-year $100,000 senior secured term loan facility (the “Term Facility”) and a 5-year $100,000 senior secured revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facility”). The Senior Credit Facility replaced the Company's prior $150,000 5-year revolving, unsecured credit facility (the “Prior Credit Agreement”), which was terminated on February 27, 2019 in connection with the entry into the Senior Credit Facility. The proceeds of the Senior Credit Facility were used to refinance existing indebtedness of $25,000 outstanding under the Prior Credit Agreement and will be used to support working capital and for general corporate purposes. Subject to certain terms and conditions contained in the Revolving Facility, the Company has the right to request up to four increases to the amount of the Revolving Facility in an aggregate amount not to exceed $100,000. The Senior Credit Facility is scheduled to mature on February 26, 2024, at which time all amounts outstanding thereunder will be due and payable. However, the maturity date of the Revolving Facility may be extended at the election of the Company with the consent of the lenders subject to the terms set forth in the Senior Credit Facility.

Pursuant to the Senior Credit Facility, the guarantors guarantee, among other things, all of the obligations of the Company and each other guarantor under the Senior Credit Facility. From time to time, the Company may be required to cause additional domestic subsidiaries to become guarantors under the Senior Credit Facility.

The Senior Credit Facility contains customary covenants, some of which require the Company to maintain certain financial ratios that determine the amounts available and terms of borrowings and events of default. The Company was in compliance with all covenants at September 30, 2019.

The payment of dividends on the Company’s common stock is restricted under provisions of the Senior Credit Facility, which limits the amount of cash dividends that the Company may pay in any one fiscal year to $30,000. The Company currently does not pay, and has not paid, any dividends on its common stock, and currently intends to retain any future earnings for use in its business.

The Company had a balance of $58,987 outstanding on the Term Facility at September 30, 2019 at an interest rate of 4.0%, with $3,025 in principal payments due in the next twelve months.

(8) Hedging Activities and Financial Instruments

Derivatives Designated as Hedging Instruments

On July 8, 2019, the Company entered into an interest rate swap contract, designated as a cash flow hedge, to minimize the risk associated with the variability of cash flows in interest payments from variable-rate debt due to fluctuations in the one-month USD-LIBOR, subject to a 0% floor, through February 26, 2024. Changes in the interest rate swap are expected to offset the changes in cash flows attributable to fluctuations of the one-month USD-LIBOR for the interest payments associated with the Company's variable-rate debt.

15

The notional amount and fair value of the derivative on our balance sheet at September 30, 2019 are disclosed below:

(in thousands)	Balance Sheet location	Notional amount		Fair value
Interest rate swap contract	Other liabilities	$	50,000	$	(798)

Amounts released from Accumulated Other Comprehensive Loss (AOCL) and reclassified into “Interest and other expense, net” did not have a material impact on our condensed consolidated statements of operations and comprehensive loss for the quarter and nine months ended September 30, 2019. The net amount of AOCL expected to be reclassified to earnings in the next 12 months is not expected to have material impact on our condensed consolidated statements of operations and comprehensive loss.

Derivatives Not Designated as Hedging Instruments

The Company conducts business in various countries using both the functional currencies of those countries and other currencies to effect cross border transactions. As a result, the Company is subject to the risk that fluctuations in foreign exchange rates between the dates that those transactions are entered into and their respective settlement dates will result in a foreign exchange gain or loss. When practicable, the Company endeavors to match assets and liabilities in the same currency on its balance sheet and those of its subsidiaries in order to reduce these risks. When appropriate, the Company enters into foreign currency contracts to hedge exposures arising from those transactions. The Company has elected not to prepare and maintain the documentation to qualify for hedge accounting treatment under ASC 815, “Derivatives and Hedging,” and therefore, all gains and losses (realized or unrealized) are recognized in “Interest and other expense, net” in the condensed consolidated statements of operations and comprehensive loss. Depending on their fair value at the end of the reporting period, derivatives are recorded either in prepaid expenses and other current assets or in accrued liabilities on the condensed consolidated balance sheet.

The Company had $105,923 and $75,304 in notional foreign exchange contracts outstanding as of September 30, 2019 and December 31, 2018, respectively. The fair values of these contracts were not material.

The Company translates foreign currency balance sheets from each international businesses’ functional currency (generally the respective local currency) to U.S. dollars at end-of-period exchange rates, and statements of earnings at average exchange rates for each period. The resulting foreign currency translation adjustments are a component of other comprehensive income (loss).

The Company does not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operations' results into U.S. dollars.

(9) Net Loss Per Share

The Company computes basic loss per share using net loss attributable to 3D Systems Corporation and the weighted average number of common shares outstanding during the applicable period. Diluted loss per share incorporates the additional shares issuable upon assumed exercise of stock options and the release of restricted stock and restricted stock units, except in such case when their inclusion would be anti-dilutive.

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Numerator for basic and diluted net loss per share:
Net loss attributable to 3D Systems Corporation	$	(16,843)	$	(11,550)	$	(65,167)	$	(41,369)
Denominator for basic and diluted net loss per share:
Weighted average shares	114,053		112,534		113,587		112,095
Net loss per share - basic and diluted	$	(0.15)	$	(0.10)	$	(0.57)	$	(0.37)

16

For the quarters ended September 30, 2019 and September 30, 2018, the effect of dilutive securities, including non-vested stock options and restricted stock awards/units, was excluded from the denominator for the calculation of diluted net loss per share because the Company recognized a net loss for the period and their inclusion would be anti-dilutive. Dilutive securities excluded for the quarter and nine months ended September 30, 2019 were 5,786 compared to 5,770 and 5,455, respectively, for the quarter ended and nine months ended September 30, 2018.

(10) Fair Value Measurements

ASC 820, “Fair Value Measurements and Disclosures,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities;

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

For the Company, the above standard applies to cash equivalents, Israeli severance funds and derivatives. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements as of September 30, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Description
Cash equivalents (a)	$	20,780	$	—	$	—	$	20,780
Israeli severance funds (b)	$	—	$	7,394	$	—	$	7,394
Derivative financial instruments(c)	$	—	$	(798)	$	—	$	(798)
	Fair Value Measurements as of December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Description
Cash equivalents (a)	$	6,141	$	—	$	—	$	6,141
Israeli severance funds (b)	$	—	$	6,822	$	—	$	6,822

(a)Cash equivalents include funds held in money market instruments and are reported at their current carrying value, which approximates fair value due to the short-term nature of these instruments and are included in cash and cash equivalents in the consolidated balance sheet.

(b)The Company partially funds the liability for its Israeli severance requirement through monthly deposits into fund accounts, the value of these contributions are recorded to non-current assets on the consolidated balance sheet.

(c)See Note 8 for additional information on the Company's derivative financial instruments.

The Company did not have any transfers of assets and liabilities between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy during the quarter and nine months ended September 30, 2019.

In addition to the assets and liabilities included in the above table, certain of our assets and liabilities are to be initially measured at fair value on a non-recurring basis. This includes goodwill and other intangible assets measured at fair value for impairment assessment, in addition to redeemable noncontrolling interests. For additional discussion, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Estimates” in the 2018 Form 10-K.

17

(11) Income Taxes

For the quarter and nine months ended September 30, 2019, the Company recorded expense of $2,010 and $5,793, resulting in effective tax rates of 13.6% and 9.8%, respectively. For the quarter and nine months ended September 30, 2018, the Company recorded expense of $1,593 and $6,086, resulting in effective tax rates of 16.0% and 17.4%, respectively. The difference between the statutory rate and the effective tax rate in 2019 is mainly driven by the Company recording a valuation allowance on one of its foreign subsidiaries in China, withholding tax expense, release of a liability for uncertain tax positions related to a German tax audit and expiration of statute of limitations for U.S. federal income tax purposes, foreign rate differential between the U.S. tax rate and foreign tax rates, as well as the impact of the change in valuation allowances that the Company has recorded in the U.S. and other foreign jurisdictions. In 2018 the impact was mainly driven by the change in valuation allowance that the Company has recorded in the U.S. and other foreign jurisdictions, foreign rate differential between the U.S. tax rate and foreign tax rates, and the completion of an audit in France.

Due to the one time transition tax, the majority of the Company’s previously unremitted earnings have now been subjected to U.S. federal income tax, although, other additional taxes such as withholding tax could be applicable. The Company continues to assert that its foreign earnings are indefinitely reinvested in our overseas operations. As such, it has not provided for any additional taxes on approximately $106,933 of unremitted earnings. The Company estimates the unrecognized deferred tax liability related to these earnings is approximately $16,000.

Tax years 2013 and 2014 remain subject to examination by the U.S. Internal Revenue Service ("IRS") for certain credit carryforwards, while tax years 2015 through 2017 remain open to examination by the IRS. State income tax returns are generally subject to examination for a period of three to four years after filing the respective tax returns. The Company files income tax returns (which are open to examination beginning in the year shown in parentheses) in Australia (2015), Belgium (2016), Brazil (2013), China (2016), France (2016), Germany (2015), India (2014), Israel (2014), Italy (2013), Japan (2014), Korea (2013), Mexico (2013), Netherlands (2014), Switzerland (2013), the United Kingdom (2017) and Uruguay (2014).

(12) Segment Information

The Company operates as one segment and conducts its business through various offices and facilities located throughout the Americas region (United States, Canada, Brazil, Mexico and Uruguay), EMEA region (Belgium, France, Germany, Israel, Italy, the Netherlands, Switzerland and the United Kingdom), and Asia Pacific region (Australia, China, India, Japan and Korea). The Company has historically disclosed summarized financial information for the geographic areas of operations as if they were segments in accordance with ASC 280, “Segment Reporting.” Financial information concerning the Company’s geographical locations is based on the location of the selling entity. Such summarized financial information concerning the Company’s geographical operations is shown in the following tables:

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Revenue from unaffiliated customers:
United States	$	75,578	$	81,282	$	227,392	$	250,023
Other Americas	2,248		873		6,949		4,918
EMEA	60,356		55,020		175,776		169,300
Asia Pacific	17,090		27,336		54,407		82,707
Total revenue	$	155,272	$	164,511	$	464,524	$	506,948

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Revenue by class of product and service:
Products	$	53,117	$	59,648	$	156,564	$	188,016
Materials	41,389		40,274		124,047		128,137
Services	60,766		64,589		183,913		190,795
Total revenue	$	155,272	$	164,511	$	464,524	$	506,948

18

	Quarter ended September 30, 2019
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	371	$	7,730	$	4,731	$	12,832
EMEA	14,001		12,067		1,522		27,590
Asia Pacific	1,731		810		813		3,354
Total intercompany sales	$	16,103	$	20,607	$	7,066	$	43,776

	Quarter ended September 30, 2018
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	499	$	15,540	$	4,888	$	20,927
EMEA	18,259		6,939		1,551		26,749
Asia Pacific	1,134		15		923		2,072
Total intercompany sales	$	19,892	$	22,494	$	7,362	$	49,748

	Nine Months Ended September 30, 2019
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	1,361	$	33,193	$	13,188	$	47,742
EMEA	49,438		33,923		3,848		87,209
Asia Pacific	3,176		849		2,301		6,326
Total intercompany sales	$	53,975	$	67,965	$	19,337	$	141,277

	Nine Months Ended September 30, 2018
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	1,521	$	45,764	$	17,303	$	64,588
EMEA	51,471		18,691		4,687		74,849
Asia Pacific	3,779		16		2,696		6,491
Total intercompany sales	$	56,771	$	64,471	$	24,686	$	145,928

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
(Loss) income from operations:
Americas	$	(21,183)	$	(16,599)	$	(72,039)	$	(50,122)
EMEA	7,105		386		13,499		(2,948)
Asia Pacific	2,144		5,229		6,135		16,898
Total	$	(11,934)	$	(10,984)	$	(52,405)	$	(36,172)

19

(13) Commitments and Contingencies

Put Options

Owners of interests in a certain subsidiary have the right in certain circumstances to require the Company to acquire either a portion of or all of the remaining ownership interests held by them. The owners’ ability to exercise any such “put option” right is subject to the satisfaction of certain conditions, including conditions requiring notice in advance of exercise. In addition, these rights cannot be exercised prior to a specified exercise date. The exercise of these rights at their earliest contractual date would result in obligations of the Company to fund the related amounts in 2019.

Management estimates, assuming that the subsidiary owned by the Company at September 30, 2019, performs over the relevant future periods at its forecasted earnings levels, that these rights, if exercised, could require the Company, in future periods, to pay approximately $8,872 to the owners of such rights to acquire such ownership interests in the relevant subsidiary. This amount has been recorded as redeemable noncontrolling interests on the Consolidated Balance Sheet at September 30, 2019 and December 31, 2018. The ultimate amount payable relating to this transaction will vary because it is dependent on the future results of operations of the subject business.

Litigation

Derivative Litigation

Nine related derivative complaints have been filed by purported Company stockholders against certain of the Company’s former executive officers and members of its Board of Directors.  The Company is named as a nominal defendant in all nine actions. The derivative complaints are styled as follows: (1) Steyn v. Reichental, et al., Case No. 2015-CP-46-2225, filed on July 27, 2015 in the Court of Common Pleas for the 16th Judicial Circuit, County of York, South Carolina (“Steyn”); (2) Piguing v. Reichental, et al., Case No. 2015-CP-46-2396, filed on August 7, 2015 in the Court of Common Pleas for the 16th Judicial Circuit, County of York, South Carolina (“Piguing”); (3)Booth v. Reichental, et al., Case No. 15-692-RGA, filed on August 6, 2015 in the United States District Court for the District of Delaware; (4) Nally v. Reichental, et al., Case No. 15-cv-03756-MGL, filed on September 18, 2015 in the United States District Court for the District of South Carolina (“Nally”); (5) Gee v. Hull, et al., Case No. BC-610319, filed on February 17, 2016 in the Superior Court for the State of California, County of Los Angeles (“Gee”); (6) Foster v. Reichental, et al., Case No. 0:16-cv-01016-MGL, filed on April 1, 2016 in the United States District Court for the District of South Carolina (“Foster”); (7) Lu v. Hull, et al., Case No. BC629730, filed on August 5, 2016 in the Superior Court for the State of California, County of Los Angeles (“Lu”); (8) Howes v. Reichental, et al., Case No. 0:16-cv-2810-MGL, filed on August 11, 2016 in the United States District Court for the District of South Carolina (“Howes”); and (9) Ameduri v. Reichental, et al., Case No. 0:16-cv-02995-MGL, filed on September 1, 2016 in the United States District Court for the District of South Carolina (“Ameduri”). Steyn and Piguing were consolidated into one action styled as In re 3D Systems Corp. Shareholder Derivative Litig., Lead Case No. 2015-CP-46-2225 in the Court of Common Pleas for the 16th Judicial Circuit, County of York, South Carolina. Gee and Lu were consolidated into one action styled as Gee v. Hull, et al., Case No. BC610319 in the Superior Court for the State of California, County of Los Angeles. Nally, Foster, Howes, and Ameduri were consolidated into one action in the United States District Court for the District of South Carolina with Nally as the lead consolidated case.

The derivative complaints allege claims for breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment and seek, among other things, monetary damages and certain corporate governance actions. All of the derivative complaints listed above have been stayed.

Following negotiations with the assistance of a mediator, on September 20, 2019, the parties to the derivative actions listed above entered into a Stipulation of Settlement to resolve all nine related previously disclosed stockholder derivative complaints. On September 20, 2019, the plaintiffs filed a motion to seek approval of the global settlement in the derivative action captioned Nally v. Reichental, et al., Docket No. 0:15-cv-03756-MGL (D.S.C. Sept. 18, 2015), pending before Hon. Mary Geiger Lewis of the U.S. District Court for the District of South Carolina (the “Court”).

On October 2, 2019, the Court issued an order granting preliminary approval of the settlement, which consists of various corporate governance reforms and plaintiffs’ attorneys’ fees in the amount of $2,150. A hearing to determine whether the Court should issue an order finally approving the proposed settlement has been scheduled for December 19, 2019. If the settlement is approved by the Court, the Company’s insurance carrier will fund the entire monetary aspect of the settlement. A current liability of $2,150 was recorded for the preliminary approval amount and an offsetting receivable of $2,150 was recorded for related insurance proceeds.

20

Ronald Barranco and Print3D Corporation v. 3D Systems Corporation, et. al.

On August 23, 2013, Ronald Barranco, a former Company employee, filed two lawsuits against the Company and certain officers in the United States District Court for the District of Hawaii. The first lawsuit (“Barranco I”) is captioned Ronald Barranco and Print3D Corporation v. 3D Systems Corporation, 3D Systems, Inc., and Damon Gregoire, Case No. CV 13-411 LEK RLP, and alleges seven causes of action relating to the Company’s acquisition of Print3D Corporation (of which Mr. Barranco was a 50% shareholder) and the subsequent employment of Mr. Barranco by the Company. The second lawsuit (“Barranco II”) is captioned Ronald Barranco v. 3D Systems Corporation, 3D Systems, Inc., Abraham Reichental, and Damon Gregoire, Case No. CV 13-412 LEK RLP, and alleges the same seven causes of action relating to the Company’s acquisition of certain website domains from Mr. Barranco and the subsequent employment of Mr. Barranco by the Company.  Both Barranco I and Barranco II allege the Company breached certain purchase agreements in order to avoid paying Mr. Barranco additional monies pursuant to royalty and earn out provisions in the agreements.

With regard to Barranco I, the Hawaii district court, on February 28, 2014, denied the Company’s motion to dismiss and its motion to transfer venue to South Carolina for the convenience of the parties. However, the Hawaii court recognized that Barranco’s claims were all subject to mandatory and binding arbitration in Charlotte, North Carolina. The parties selected an arbitrator and arbitration took place in September 2015 in Charlotte, North Carolina.

On September 28, 2015, the arbitrator issued a final award in favor of Barranco with respect to two alleged breaches of contract and implied covenants arising out of the contract.  The arbitrator found that the Company did not commit fraud or make any negligent misrepresentations to Barranco. Pursuant to the award, the Company was directed to pay approximately $11,282, which includes alleged actual damages of $7,254, fees and expenses of $2,318 and prejudgment interest of $1,710.

On August 3, 2018, following an unsuccessful appeal to the federal court in the Western District of North Carolina and the United States Court of Appeals for the Fourth Circuit, the Company paid $9,127 of the Barranco I judgment, net setoff. On September 28, 2018, the parties filed a Consent Stipulation Resolving Motion for Setoff of Judgment, stipulating that subject only to vacatur or amendment reducing the Barranco II judgment in Barranco’s appeal to the Ninth Circuit related to the Barranco II action discussed below, the Barranco II judgment in the amount of $2,182 was setoff against the Barranco I judgment (“Stipulated Setoff”). The Company paid Barranco the $101 balance remaining due after the Stipulated Setoff.

With regard to Barranco II, the case was tried to a jury in Hawaii district court in May 2016, and on May 27, 2016 the jury found that the Company was not liable for either breach of contract or breach of the implied covenant of good faith and fair dealing.  Additionally, the jury found in favor of the Company on its counterclaim against Barranco and determined that Barranco violated his non-competition covenant with the Company. On March 30, 2018, the court entered Findings of Fact and Conclusions of Law and Order requiring Barranco to disgorge, and the Company recover, $523, representing all but four months of the full amount paid to Barranco as salary during his employment with the Company as well as a portion of the up front and buyout payments made to Barranco in connection with the purchase of certain web domains. In addition, the court ordered Barranco to pay pre-judgment interest to the Company to be calculated beginning as of his first breach of the non-competition covenant in August 2011. Judgment was entered thereafter on April 2, 2018.

On September 13, 2018, the Hawaii district court entered its Amended Judgment in a Civil Case, awarding the Company a final amended judgment of $2,182. On September 19, 2018, Barranco filed an Amended Notice of Appeal. On January 13, 2019, Barranco filed Appellant’s Opening Brief in the Ninth Circuit. On March 15, 2019, the Company filed its Answering Brief. On April 14, 2019, Barranco filed his Reply Brief. Oral Arguments took place on October 24, 2019. The Company intends to defend the appeal.

Export Controls and Government Contracts Compliance Matter

In October 2017 the Company received an administrative subpoena from the Bureau of Industry and Security of the Department of Commerce (“BIS”) requesting the production of records in connection with possible violations of U.S. export control laws, including with regard to the On Demand manufacturing business done by our subsidiary, Quickparts.com, Inc. In addition, while collecting information responsive to the above-referenced subpoena, the Company identified potential violations of the International Traffic in Arms Regulations (“ITAR”) administered by the Directorate of Defense Trade Controls of the Department of State (“DDTC”) and potential violations of the Export Administration Regulations administered by the BIS.

21

On June 8, 2018 and thereafter, the Company submitted voluntary disclosures to BIS and DDTC identifying numerous potentially unauthorized exports of technical data, which supplemented an initial notice of voluntary disclosure that the Company submitted to DDTC in February 2018. The Company has and will continue to implement compliance enhancements to export controls, trade sanctions, and government contracting compliance to address the issues identified through its internal investigation and cooperate with DDTC and BIS, as well as the U.S. Departments of Justice, Defense, and Homeland Security, in their reviews of these matters.

In addition, on July 19, 2019, the Company received a notice of immediate suspension of federal contracting from the United States Air Force, pending the outcome of an ongoing investigation. The suspension applied to 3D Systems, its subsidiaries and affiliates, and was related to the potential export controls violations involving the Company’s On Demand manufacturing business described above. Under the suspension, the Company was generally prohibited from receiving new federal government contracts or subcontracts from any executive branch agency as described in the provisions of 48 C.F.R Subpart 9.4 of the Federal Acquisition Regulation. The suspension allowed the Company to continue to perform current federal contracts, and also to receive awards of new subcontracts for items under $35 and for items considered commercially available off-the-shelf items. The Air Force lifted the suspension on September 6, 2019 following the execution of a two-year Administrative Agreement with the Company. The Company is now eligible to obtain and perform U.S. government contracts and subcontracts without restrictions. Under the Administrative Agreement, the Company will be monitored and evaluated by independent monitors who will report to the Air Force on the Company’s compliance with the terms of the Company’s Ethics & Compliance Program, including its overall culture, government contracting compliance program, and export controls compliance program.

Although the Company cannot predict the ultimate resolution of these matters, the Company has incurred and expects to continue to incur significant legal costs and other expenses in connection with responding to the U.S. government agencies.

Other

The Company is involved in various other legal matters incidental to its business. Although the Company cannot predict the results of the litigation with certainty, the Company believes that the disposition of all these various other legal matters will not have a material adverse effect, individually or in the aggregate, on its consolidated results of operations, consolidated cash flows or consolidated financial position.

(14) Accumulated Other Comprehensive Loss

The changes in the balances of accumulated other comprehensive loss by component are as follows:

(in thousands)	Foreign currency translation adjustment		Defined benefit pension plan		Derivative financial instruments		Liquidation of non-US entity and purchase of non-controlling interests		Total
Balance at December 31, 2018	$	(36,669)	$	(2,647)	$	—	$	338	$	(38,978)
Other comprehensive income (loss)	(6,787)		207		(798)		256		(7,122)
Balance at September 30, 2019	$	(43,456)	$	(2,440)	$	(798)	$	594	$	(46,100)

The amounts presented in the table above are in other comprehensive loss and are net of taxes. For additional information about foreign currency translation, see Note 8.

(15) Noncontrolling Interests

As of September 30, 2019, the Company owned approximately 70% of the capital and voting rights of Robtec, a service bureau and distributor of 3D printing and scanning products in Brazil. Robtec was acquired on November 25, 2014.

As of September 30, 2019, the Company owned 100% of the capital and voting rights of Easyway, a service bureau and distributor of 3D printing and scanning products in China. Approximately 65% of the capital and voting rights of Easyway were acquired on April 2, 2015, and an additional 5% of the capital and voting rights of Easyway were acquired on July 19, 2017 for $2,300. The remaining 30% of the capital and voting rights of Easyway were acquired on January 21, 2019 for $13,500 to be paid in installments over four years, with the first installment of $2,500 paid in March 2019.

22

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Item 1 (the “Financial Statements”) of this Quarterly Report on Form 10-Q (“Form 10-Q”). We are subject to a number of risks and uncertainties that may affect our future performance that are discussed in greater detail in the sections entitled “Forward-Looking Statements” at the end of this Item 2 and that are discussed or referred to in Item 1A of Part II of this Form 10-Q.

Business Overview

3D Systems Corporation (“3D Systems” or the “Company” or “we” or “us”) is a holding company incorporated in Delaware in 1993 that markets our products and services through subsidiaries in North America and South America (collectively referred to as “Americas”), Europe and the Middle East (collectively referred to as “EMEA”), and the Asia Pacific region (“APAC”). We provide comprehensive 3D printing solutions, including 3D printers, materials, software, on demand manufacturing services and digital design tools. Our solutions support advanced applications in a wide range of industries and key verticals including healthcare, aerospace, automotive and durable goods. Our precision healthcare capabilities include simulation, Virtual Surgical Planning (“VSP™”), and printing of medical and dental devices, models, surgical guides and instruments. Our solutions, experience and expertise provide an end-to-end digital workflow from design to prototyping to production. As the originator of 3D printing and a shaper of future 3D solutions, for over 30 years we have been enabling professionals and companies to optimize designs, transform workflows, bring innovative products to market and drive new business models.

Customers can use our 3D solutions to design and manufacture complex and unique parts, eliminate expensive tooling, produce parts locally or in small batches and reduce lead times and time to market. A growing number of customers are shifting from prototyping applications to also using 3D printing for production. We believe this shift will be further driven by our continued advancement and innovation of 3D printing solutions that improve durability, repeatability, productivity and total cost of operation.

Summary of Third Quarter 2019 Financial Results

Total consolidated revenue for the quarter ended September 30, 2019 decreased by 5.6%, or $9.2 million, to $155.3 million, compared to $164.5 million for the quarter ended September 30, 2018. These results reflect a decrease in printers revenue due to the ordering patterns of a large enterprise customer and the exit of our entertainment business, as well as industry decline in manufacturing activity.

Healthcare revenue includes sales of products, materials and services for healthcare-related applications, including simulation, training, planning, anatomical models, surgical guides and instruments and medical and dental devices. For the quarter ended September 30, 2019, healthcare revenue increased by 6.3%, to $56.4 million, and made up 36.3% of total revenue, compared to $53.1 million, or 32.2% of total revenue, for the quarter ended September 30, 2018. The results reflect an increase primarily in materials and services revenues.

For the quarter ended September 30, 2019, total software revenue from products and services increased slightly by 0.1% to $24.6 million, and made up 15.8% of total revenue, compared to $24.6 million, or 14.9% of total revenue, for the quarter ended September 30, 2018.

Gross profit for the quarter ended September 30, 2019 decreased by 13.5%, or $10.5 million, to $67.3 million, compared to $77.8 million for the quarter ended September 30, 2018. Gross profit margin for the quarters ended September 30, 2019 and 2018 was 43.3% and 47.3%, respectively.

Operating expenses for the quarter ended September 30, 2019 decreased by 10.8%, or $9.6 million, to $79.2 million, compared to $88.8 million for the quarter ended September 30, 2018. Selling, general and administrative expenses for the quarter ended September 30, 2019 decreased by 11.2%, or $7.3 million, to $58.3 million, compared to $65.6 million for the quarter ended September 30, 2018. Research and development expenses for the quarter ended September 30, 2019 decreased by 9.7%, or $2.3 million, to $20.9 million, compared to $23.2 million for the quarter ended September 30, 2018.

Our operating loss for the quarter ended September 30, 2019 was $11.9 million, compared to an operating loss of $11.0 million for the quarter ended September 30, 2018.

23

For the nine months ended September 30, 2019 and 2018, we generated $10.1 million and used $2.9 million of cash from operations, respectively, as further discussed below. In total, our unrestricted cash balance at September 30, 2019 and December 31, 2018, was $127.6 million and $110.0 million, respectively. The higher cash balance was the result of our borrowing on the Senior Credit Facility, offset by repayment of amounts outstanding on the Prior Credit Agreement as well as investments in our facilities and IT infrastructure. For information on the Senior Credit Facility and the Prior Credit Agreement, see Note 7.

Results of Operations

Comparison of revenue

Due to the relatively high price of certain 3D printers and a corresponding lengthy selling cycle and relatively low unit volume of the higher priced printers in any particular period, a shift in the timing and concentration of orders and shipments from one period to another can affect reported revenue in any given period.

In addition to changes in sales volumes, there are two other primary drivers of changes in revenue from one period to another: (1) the combined effect of changes in product mix and average selling prices and (2) the impact of fluctuations in foreign currencies. As used in this Management’s Discussion and Analysis, the price and mix effects relate to changes in revenue that are not able to be specifically related to changes in unit volume.

Comparison of revenue by geographic region

The following tables set forth changes in revenue by geographic region for the quarters and nine months ended September 30, 2019 and 2018.

Table 1

(Dollars in thousands)	Americas				EMEA				Asia Pacific				Total
Revenue — third quarter 2018	$	82,155	49.9	%	$	55,020	33.4	%	$	27,336	16.6	%	$	164,511	100.0	%
Change in revenue:
Volume	(8,506)		(10.4)	%	10,919		19.8	%	(9,875)		(36.1)	%	(7,462)		(4.5)	%
Price/Mix	4,227		5.1	%	(3,442)		(6.3)	%	(137)		(0.5)	%	648		0.4	%
Foreign currency translation	(50)		(0.1)	%	(2,141)		(3.9)	%	(234)		(0.9)	%	(2,425)		(1.5)	%
Net change	(4,329)		(5.3)	%	5,336		9.7	%	(10,246)		(37.5)	%	(9,239)		(5.6)	%
Revenue — third quarter 2019	$	77,826	50.1	%	$	60,356	38.9	%	$	17,090	11.0	%	$	155,272	100.0	%

Consolidated revenue decreased by 5.6%, predominantly driven by lower sales volume in the Asia Pacific and Americas regions driven by ordering patterns of a large enterprise customer, on demand solutions and exiting the entertainment business, partially offset by favorable sales volumes in the EMEA region primarily driven by healthcare.

For the quarters ended September 30, 2019 and 2018, revenue from operations outside the U.S. was 51.3% and 50.6% of total revenue, respectively.

Table 2

(Dollars in thousands)	Americas				EMEA				Asia Pacific				Total
Revenue — nine months 2018	$	254,941	50.3	%	$	169,300	33.4	%	$	82,707	16.3	%	$	506,948	100.0	%
Change in revenue:
Volume	(32,949)		(12.9)	%	21,379		12.6	%	(24,345)		(29.4)	%	(35,915)		(7.1)	%
Price/Mix	12,837		5.0	%	(5,448)		(3.2)	%	(2,143)		(2.6)	%	5,246		1.0	%
Foreign currency translation	(488)		(0.2)	%	(9,455)		(5.6)	%	(1,812)		(2.2)	%	(11,755)		(2.3)	%
Net change	(20,600)		(8.1)	%	6,476		3.8	%	(28,300)		(34.2)	%	(42,424)		(8.4)	%
Revenue — nine months 2019	$	234,341	50.5	%	$	175,776	37.8	%	$	54,407	11.7	%	$	464,524	100.0	%

24

Consolidated revenue decreased 8.4%, predominantly driven by lower sales volume in the Americas and Asia Pacific regions which was largely driven by driven by ordering patterns of a large enterprise customer in the prior year and the unfavorable impact of foreign currency, particularly in EMEA, partially offset by increased volume in the EMEA region primarily driven by healthcare and favorable price/mix in the Americas driven by materials and production printers.

For the nine months ended September 30, 2019 and 2018, revenue from operations outside the U.S. was 51.0% and 50.7% of total revenue, respectively.

Comparison of revenue by class

We earn revenue from the sale of products, materials and services. The products category includes 3D printers, healthcare simulators and digitizers, software licenses, 3D scanners and haptic devices. The materials category includes a wide range of materials to be used with our 3D printers, the majority of which are proprietary, as well as acquired conventional dental materials. The services category includes maintenance contracts and services on 3D printers and simulators, software maintenance, on demand solutions and healthcare services.

The following tables set forth the change in revenue by class for the quarters and nine months ended September 30, 2019 and 2018.

Table 3

(Dollars in thousands)	Products				Materials				Services				Total
Revenue — third quarter 2018	$	59,648	36.3	%	$	40,274	24.5	%	$	64,589	39.3	%	$	164,511	100.0	%
Change in revenue:
Volume	(6,093)		(10.2)	%	1,337		3.3	%	(2,706)		(4.2)	%	(7,462)		(4.5)	%
Price/Mix	264		0.4	%	384		1.0	%	—		—	%	648		0.4	%
Foreign currency translation	(702)		(1.2)	%	(606)		(1.5)	%	(1,117)		(1.7)	%	(2,425)		(1.5)	%
Net change	(6,531)		(10.9)	%	1,115		2.8	%	(3,823)		(5.9)	%	(9,239)		(5.6)	%
Revenue — third quarter 2019	$	53,117	34.2	%	$	41,389	26.7	%	$	60,766	39.1	%	$	155,272	100.0	%

Consolidated revenue decreased 5.6%, predominantly due to lower products volume which was driven by the impact of ordering patterns of a large enterprise customer, partially offset by revenue from healthcare and metal printers. For the quarters ended September 30, 2019 and 2018, revenue from printers contributed $30.4 million and $36.8 million, respectively. Software revenue included in the products category, including scanners and haptic devices, contributed $13.3 million and $13.6 million for the quarters ended September 30, 2019 and 2018, respectively.

Services revenue decreased due to lower revenue from on demand solutions and from the entertainment business, which the company exited in 2019, and the unfavorable impact of foreign currency translation, partially offset by increased revenue from healthcare. For the quarters ended September 30, 2019 and 2018, revenue from on demand manufacturing services contributed $23.1 million and $26.3 million, respectively. For the quarters ended September 30, 2019 and 2018, software services revenue contributed $11.3 million and $11.0 million, respectively.

Table 4

(Dollars in thousands)	Products				Materials				Services				Total
Revenue — nine months 2018	$	188,016	37.1	%	$	128,137	25.3	%	$	190,795	37.6	%	$	506,948	100.0	%
Change in revenue:
Volume	(30,148)		(16.0)	%	(3,614)		(2.8)	%	(2,153)		(1.1)	%	(35,915)		(19.9)	%
Price/Mix	2,674		1.4	%	2,572		2.0	%	—		—	%	5,246		3.4	%
Foreign currency translation	(3,978)		(2.1)	%	(3,048)		(2.4)	%	(4,729)		(2.5)	%	(11,755)		(7.0)	%
Net change	(31,452)		(16.7)	%	(4,090)		(3.2)	%	(6,882)		(3.6)	%	(42,424)		(8.4)	%
Revenue — nine months 2019	$	156,564	33.7	%	$	124,047	26.7	%	$	183,913	39.6	%	$	464,524	100.0	%

25

Consolidated revenue decreased 8.4%, predominantly driven by the products revenue category which was impacted by ordering patterns of a large enterprise customer and unfavorable impacts of foreign currency translation, only partially offset by revenue from recently launched printer models. For the nine months ended September 30, 2019 and 2018, revenue from printers contributed $90.3 million and $120.2 million, respectively. Software revenue included in the products category, including scanners and haptic devices, contributed $39.2 million and $39.5 million for the nine months ended September 30, 2019 and 2018, respectively.

Materials revenue decreased due to lower sales volume and the unfavorable impact of foreign currency, offset by a favorable impact from price/mix. The decline in volume is driven by weaker demand for materials utilized in older printer models, only partially offset by demand for new materials.

Services revenue decreased primarily due to the unfavorable impact of foreign currency translation. For the nine months ended September 30, 2019 and 2018, revenue from on demand manufacturing services contributed $69.7 million and $79.3 million, respectively. For the nine months ended September 30, 2019 and 2018, software services revenue contributed $33.5 million and $33.0 million, respectively.

Gross profit and gross profit margins

The following tables set forth gross profit and gross profit margins for the quarters and nine months ended September 30, 2019 and 2018.

Table 5

	Quarter Ended September 30,
	2019				2018				Change in Gross Profit				Change in Gross Profit Margin
(Dollars in thousands)	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		$		%		Percentage Points	%
Products	8,339		15.7	%	17,522		29.4	%	(9,183)		(52.4)	%	(13.7)	(46.6)	%
Materials	28,123		67.9	%	27,956		69.4	%	167		0.6	%	(1.5)	(2.2)	%
Services	30,819		50.7	%	32,332		50.1	%	(1,513)		(4.7)	%	0.6	1.2	%
Total	$	67,281	43.3	%	$	77,810	47.3	%	$	(10,529)	(13.5)	%	(4.0)	(8.5)	%

The decrease in total consolidated gross profit is due to the decrease in product sales, primarily lower sales of printers.

Products gross profit margin decreased primarily due to under absorption of supply chain overhead resulting from lower production, in addition to the impact of the mix of sales and inventory adjustments. A favorable mix of sales towards higher gross profit margin service offerings and improvements in printer service margins drove services gross profit margin improvements.

Table 6

	Nine Months Ended September 30,
	2019				2018				Change in Gross Profit				Change in Gross Profit Margin
(Dollars in thousands)	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		$		%		Percentage Points	%
Products	28,434		18.2	%	57,239		30.4	%	(28,805)		(50.3)	%	(12.2)	(40.1)	%
Materials	85,368		68.8	%	90,852		70.9	%	(5,484)		(6.0)	%	(2.1)	(3.0)	%
Services	92,483		50.3	%	93,750		49.1	%	(1,267)		(1.4)	%	1.2	2.4	%
Total	$	206,285	44.4	%	$	241,841	47.7	%	$	(35,556)	(14.7)	%	(3.3)	(6.9)	%

The decrease in total consolidated gross profit is due to the decrease in product sales, primarily lower sales of printers.

26

Products gross profit margin decreased primarily due to under absorption of supply chain overhead resulting from lower production and lower revenue, in addition to the impact of the mix of sales. Materials gross profit margin decreased as a result of the mix of sales. Services gross profit margin improved from a favorable mix of sales towards higher gross profit margin service offerings and improvements in printer service margin.

Operating expenses

The following tables set forth the components of operating expenses for the quarters and nine months ended September 30, 2019 and 2018.

Table 7

	Quarter Ended September 30,
	2019				2018				Change
(Dollars in thousands)	Amount		% Revenue		Amount		% Revenue		$		%
Selling, general and administrative expenses	58,275		37.5	%	65,600		39.9	%	(7,325)		(11.2)	%
Research and development expenses	20,940		13.5	%	23,194		14.1	%	(2,254)		(9.7)	%
Total operating expenses	$	79,215	51.0	%	$	88,794	54.0	%	$	(9,579)	(10.8)	%

Selling, general and administrative expenses decreased primarily due to ongoing reduced personnel and facility expenses related cost optimization efforts, lower amortization from previously acquired intangible assets and decreased legal expenses.

Research and development expenses decreased as we have completed projects related to new products and platforms brought to market in 2018, and prioritized investments in materials and software.

Table 8

	Nine Months Ended September 30,
	2019				2018				Change
(Dollars in thousands)	Amount		% Revenue		Amount		% Revenue		$		%
Selling, general and administrative expenses	195,036		42.0	%	206,225		40.7	%	(11,189)		(5.4)	%
Research and development expenses	63,654		13.7	%	71,788		14.2	%	(8,134)		(11.3)	%
Total operating expenses	$	258,690	55.7	%	$	278,013	54.8	%	$	(19,323)	(7.0)	%

Selling, general and administrative expenses decreased primarily due to ongoing reduced personnel and facility expenses related cost optimization efforts as well as lower amortization from previously acquired intangible assets.

Research and development expenses decreased as we have completed projects related to new products and platforms brought to market in 2018, and prioritized investments in materials and software.

27

Loss from operations

The following table sets forth (loss) income from operations by geographic region for the quarters and nine months ended September 30, 2019 and 2018.

Table 9

	Quarter Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2019		2018		2019		2018
(Loss) income from operations:
Americas	(21,183)		(16,599)		(72,039)		(50,122)
EMEA	7,105		386		13,499		(2,948)
Asia Pacific	2,144		5,229		6,135		16,898
Total	$	(11,934)	$	(10,984)	$	(52,405)	$	(36,172)

See “Comparison of revenue by geographic region,” “Gross profit and gross profit margins” and “Operating expenses” above.

Interest and other (expense) income, net

The following table sets forth the components of interest and other (expense) income, net, for the quarters and nine months ended September 30, 2019 and 2018.

Table 10

	Quarter Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2019		2018		2019		2018
Interest and other (expense) income, net
Foreign exchange (loss) gain	(1,095)		1,035		(2,204)		2,888
Interest expense, net	(953)		(40)		(2,393)		(35)
Other (expense) income, net	(770)		32		(2,177)		(1,718)
Total interest and other (expense) income, net	$	(2,818)	$	1,027	$	(6,774)	$	1,135

The increase in total interest and other expense, net for the quarter ended September 30, 2019 as compared to the quarter ended September 30, 2018 was primarily driven by unfavorable foreign currency impacts, higher interest expense resulting from the Senior Credit Facility and losses recorded on investments.

The increase in total interest and other expense, net for the nine months ended September 30, 2019, as compared to the nine months ended September 30, 2018, was primarily driven by unfavorable foreign currency impacts, higher interest expense resulting from the Senior Credit Facility put in place in the first quarter of 2019 and the impairment of assets sold with the Entertainment business recorded in the second quarter 2019; partially off-set by an adjustment to the fair value of certain cost method investments in the first quarter of 2018.

28

Net loss attributable to 3D Systems

The following tables set forth the primary components of net loss attributable to 3D Systems for the quarters and nine months ended September 30, 2019 and 2018.

Table 11

	Quarter Ended September 30,
(Dollars in thousands)	2019		2018		Change
Loss from operations	$	(11,934)	$	(10,984)	$	(950)
Other non-operating items:
Interest and other (expense) income, net	(2,818)		1,027		(3,845)
Provision for income taxes	(2,010)		(1,593)		(417)
Net loss	(16,762)		(11,550)		(5,212)
Less: net income attributable to noncontrolling interests	81		—		81
Net loss attributable to 3D Systems Corporation	$	(16,843)	$	(11,550)	$	(5,293)

Table 12

	Nine Months Ended September 30,
(Dollars in thousands)	2019		2018		Change
Loss from operations	$	(52,405)	$	(36,172)	$	(16,233)
Other non-operating items:					—
Interest and other (expense) income, net	(6,774)		1,135		(7,909)
Provision for income taxes	(5,793)		(6,086)		293
Net loss	(64,972)		(41,123)		(23,849)
Less: net income attributable to noncontrolling interests	195		246		(51)
Net loss attributable to 3D Systems Corporation	$	(65,167)	$	(41,369)	$	(23,798)

The increase in net loss for the quarter and nine months ended September 30, 2019, as compared to the quarter and nine months ended September 30, 2018, was primarily driven by an increase in loss from operations. See “Gross profit and gross profit margins” and “Operating expenses” above.

29

Liquidity and Capital Resources

Table 13

					Change
(Dollars in thousands)	September 30, 2019		December 31, 2018		$		%
Cash and cash equivalents	$	127,616	$	109,998	$	17,618	16.0	%
Accounts receivable, net	110,333		126,618		(16,285)		(12.9)	%
Inventories	122,706		133,161		(10,455)		(7.9)	%
	360,655		369,777		(9,122)
Less:
Current portion of long term debt	3,025		—		3,025		—	%
Current right of use liabilities	10,797		654		10,143		1550.9	%
Accounts payable	53,014		66,722		(13,708)		(20.5)	%
Accrued and other liabilities	62,701		59,265		3,436		5.8	%
	129,537		126,641		2,896
Operating working capital	$	231,118	$	243,136	$	(12,018)	(4.9)	%

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. In doing so, we review and analyze our current cash on hand, the number of days our sales are outstanding, inventory turns, capital expenditure commitments and accounts payable turns. Our cash requirements primarily consist of funding of working capital and funding of capital expenditures.

Cash flow from operations, cash and cash equivalents, and other sources of liquidity such as bank credit facilities and issuing equity or debt securities, are expected to be available and sufficient to meet foreseeable cash requirements. During the first quarter of 2019, we entered into a 5-year $100.0 million senior secured term loan facility (the “Term Facility”) and a 5-year $100.0 million senior secured revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facility”), which replaced the Company's prior $150.0 million 5-year revolving, unsecured credit facility (the "Prior Credit Agreement"), which was terminated in connection with entry into the Senior Credit Facility. Borrowings under the Senior Credit Facility were used to refinance existing indebtedness of $25,000 outstanding under the Prior Credit Agreement and will be used to support working capital and for general corporate purposes. For additional information on the Senior Credit Facility and the Prior Credit Agreement, see Note 7.

As a result of the Term Facility, the Company has exposure to floating interest rates. To manage interest expense, the Company evaluates an appropriate mix of fixed and floating rate debt. In July 2019, the Company entered into a floating to fixed interest rate swap to reduce exposure to changes in floating interest rates on the Term Facility. The interest rate swap has a notional value of $50,000 and will expire on February 26, 2024, concurrent with the Term Facility. The notional value will decline over the term of the interest rate swap as amortization payments reduce the principal amount of the Term Facility. As a result of the interest rate swap, the percentage of total principal debt (excluding capital leases) that is subject to floating interest rates is approximately 15%. The Company designated the swap as a cash flow hedge for accounting treatment.

Cash held outside the U.S. at September 30, 2019 was $85.0 million, or 66.6% of total cash and equivalents, compared to $73.3 million, or 66.7% of total cash and equivalents at December 31, 2018. As our previously unremitted earnings have been subjected to U.S. federal income tax, we expect any repatriation of these earnings to the U.S. would not incur significant additional taxes related to such amounts. However, our estimates are provisional and subject to further analysis. Cash equivalents are comprised of funds held in money market instruments and are reported at their current carrying value, which approximates fair value due to the short term nature of these instruments. We strive to minimize our credit risk by investing primarily in investment grade, liquid instruments and limit exposure to any one issuer depending upon credit quality. See “Cash flow” discussion below.

Days’ sales outstanding (DSO) was 65 at September 30, 2019, compared to 69 days for the year at December 31, 2018. Accounts receivable more than 90 days past due increased to 12.0% of gross receivables at September 30, 2019, from 8.9% at December 31, 2018. We review specific receivables periodically to determine the appropriate reserve for accounts receivable.

30

The majority of our inventory consists of finished goods, including products, materials and service parts. Inventory also consists of raw materials for certain printers and service products. Inventory balances may fluctuate during cycles of new product launch, commercialization and timing of ramp of production and sales of products.

The changes that make up the other components of working capital not discussed above resulted from the ordinary course of business. Differences between the amounts of working capital item changes in the cash flow statement and the balance sheet changes for the corresponding items are primarily the result of foreign currency translation adjustments.

Cash flow

The following tables set forth components of cash flow for the nine months ended September 30, 2019 and 2018.

Table 14

	Nine Months Ended September 30,
(Dollars in thousands)	2019		2018
Net cash provided by (used in) operating activities	$	10,084	$	(2,931)
Net cash used in investing activities	(18,389)		(29,550)
Net cash provided by (used in) financing activities	27,333		(8,906)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1,400)		(2,417)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	17,628	$	(43,804)

Cash flow from operations

Table 15

	Nine Months Ended September 30,
(Dollars in thousands)	2019		2018
Net loss	$	(64,972)	$	(41,123)
Non-cash charges	61,680		66,869
Changes in working capital and all other operating assets	13,376		(28,677)
Net cash provided by (used in) operating activities	$	10,084	$	(2,931)

Cash provided by operating activities for the nine months ended September 30, 2019 was $10.1 million and cash used in operating activities for the nine months ended September 30, 2018 was $2.9 million. Excluding non-cash charges, the net loss resulted in a use of cash of $3.3 million for the nine months ended September 30, 2019 and provided cash of $25.7 million for the nine months ended September 30, 2018. Non-cash charges generally consist of depreciation, amortization, and stock-based compensation.

Improvements in working capital provided cash of $13.4 million for the nine months ended September 30, 2019 and working capital requirements used cash of $28.7 million for the nine months ended September 30, 2018. In the nine months ended September 30, 2019, drivers of working capital related to cash inflows were a decrease in accounts receivable, inventory and an increase in deferred revenues; partially offset by a decrease in accounts payable and accrued and other current liabilities. In the nine months ended September 30, 2018, cash outflows were driven by increases in inventory, prepaid expenses and a decreases in accrued and other current liabilities; partially offset by an increase in accounts payable and a decrease in accounts receivable.

31

Cash flow from investing activities

Table 16

	Nine Months Ended September 30,
(Dollars in thousands)	2019		2018
Purchases of property and equipment	$	(18,265)	$	(28,323)
Proceeds from sale of assets	1,620		9
Other investing activities	(1,744)		(1,236)
Net cash used in investing activities	$	(18,389)	$	(29,550)

The primary outflow of cash relates to investments in our facilities including our customer innovation centers and healthcare and on-demand facilities as well as continued investments in our IT infrastructure.

Cash flow from financing activities

Table 17

	Nine Months Ended September 30,
(Dollars in thousands)	2019		2018
Proceeds from borrowings	$	100,000	$	—
Repayment of borrowings/long term debt	(66,013)		—
Payments related to net-share settlement of stock based compensation	(3,029)		(5,723)
Purchase of noncontrolling interest	(2,500)		—
Payments on earnout consideration	—		(2,675)
Other financing activities	(1,125)		(508)
Net cash provided by (used in) financing activities	$	27,333	$	(8,906)

Cash provided by financing activities was $27.3 million for the nine months ended September 30, 2019 and cash used in financing activities was $8.9 million for the nine months ended September 30, 2018. The primary inflow of cash for the nine months ended September 30, 2019 relates to borrowing on the Term Facility, partially offset by repayments of the Prior Credit Facility and Term Facility.

Recent Accounting Pronouncements

Refer to Note 1 - Basis of Presentation of the Notes to Financial Statements (Part I, Item 1 of this Form 10-Q) for further discussion.

Critical Accounting Policies and Significant Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.

Except for the accounting policies related to lease accounting that were updated as a result of adopting ASC Topic 842, there have been no changes to our critical accounting policies and estimates described in the Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”), filed with the Securities and Exchange Commission (“SEC”) on February 28, 2019, that have had a material impact on our condensed consolidated financial statements and related notes, other than the following:

32

Our EMEA, APAC and Americas reporting units carry approximately $182.2 million, $35.5 million and $0 of goodwill, respectively, as of September 30, 2019. Goodwill in the Americas region was written off in 2015. The net carrying values of our long-lived assets in the EMEA, APAC, and Americas regions are approximately $67.5 million, $7.4 million, and $69.3 million, respectively. In our 2018 impairment testing, we determined the EMEA and APAC reporting units had fair values substantially in excess of their carrying values (>100%). Our 2018 impairment testing also indicated no impairment of long-lived assets in the Americas region as the undiscounted cash flows were substantially in excess of the carrying value of long-lived assets (>59%). This headroom and recoverability were driven by our forecasts of future operating performance as well as external market indicators.

Our operating performance through September 30, 2019 has been negatively impacted by macroeconomic factors, the decrease and mix of sales, and the ordering patterns of a large enterprise customer. The Company is taking actions to counter these factors, including reducing our cost structure by focusing on cost of sales and operating expenses to drive future profitability. Based on currently available information, the Company continues to believe the fair value of the reporting units exceeds their carrying values and the carrying value of our long-lived assets is recoverable. In the event that these matters are not satisfactorily resolved, the Company could experience a triggering event or impairment of its goodwill or long-lived asset balances in future periods.

Forward-Looking Statements

Certain statements made in this Form 10-Q that are not statements of historical or current facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. In many cases, you can identify forward-looking statements by terms such as “believes,” “belief,” “expects,” “estimates,” “intends,” “anticipates,” or “plans” or the negative of these terms or other comparable terminology.

Forward-looking statements are based upon management’s beliefs, assumptions and current expectations concerning future events and trends, using information currently available, and are necessarily subject to uncertainties, many of which are outside our control. Although we believe that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. These factors include without limitation:

•competitive industry pressures;

•our ability to deliver products that meet changing technology and customer needs;

•our ability to identify strategic acquisitions, to integrate such acquisitions into our business without disruption and to realize the anticipated benefits of such acquisitions;

•impact of future write-off or write-downs of intangible assets;

•our ability to acquire and enforce intellectual property rights and defend such rights against third party claims;

•our ability to protect our intellectual property rights and confidential information, including our digital content, from third-party infringers or unauthorized copying, use or disclosure;

•failure of our information technology infrastructure or inability to protect against cyber-attack;

•our ability to generate net cash flow from operations;

•our ability to obtain additional financing on acceptable terms;

•our ability to comply with the covenants in our borrowing agreements;

•impact of global economic, political and social conditions and financial markets on our business;

•fluctuations in our gross profit margins, operating income or loss and/or net income or loss;

•our ability to efficiently conduct business outside the U.S.;

•our dependence on our supply chain for components and sub-assemblies used in our 3D printers and other products and for raw materials used in our print materials;

•our ability to manage the costs and effects of litigation, investigations or similar matters involving us or our subsidiaries;

•product quality problems that result in decreased sales and operating margin, product returns, product liability, warranty or other claims;

•our ability to retain our key employees and to attract and retain new qualified employees, while controlling our labor costs;

•our exposure to product liability claims and other claims and legal proceedings;

•disruption in our management information systems for inventory management, distribution, and other key functions;

33

•compliance with U.S. and other anti-corruption laws, data privacy laws, trade controls, economic sanctions, and similar laws and regulations;

•our ability to comply with the terms of the Administrative Agreement with the U.S. Air Force and to maintain our status as a responsible contractor under federal rules and regulations;

•changes in, or interpretation of, tax rules and regulations; and

•compliance with, and related expenses and challenges concerning, conflict-free minerals regulations; and

•the other factors discussed in the reports we file with or furnishes to the SEC from time to time, including the risks and important factors set forth in additional detail in Item 1A. “Risk Factors” in the 2018 Form 10-K and in Part II, Item 1A. “Risk Factors” in the Quarterly Reports on Form 10-Q for the quarter ended March 31, 2019 (the “2019 Q1 Form 10-Q”) and the quarter ended June 30, 2019 (the “2019 Q2 Form 10-Q” and, together with the 2019 Q1 Form 10-Q and this Form 10-Q, the “2019 Quarterly Reports”).

Certain of these and other factors are discussed in more detail in Item 1A. “Risk Factors” in the 2018 Form 10-K and in the 2019 Quarterly Reports. Readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included herein are made only as of the date of this Form 10-Q and we undertake no obligation to publicly update or review any forward-looking statement made by us or on our behalf, whether as a result of new information, future developments, subsequent events or circumstances or otherwise. All subsequent written or oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by the cautionary statements referenced above.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

For a discussion of market risks at December 31, 2018, refer to Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” in the 2018 Form10-K. During the first nine months of 2019, there were no material changes or developments that would materially alter the market risk assessment performed as of December 31, 2018.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures

As of September 30, 2019, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) pursuant to Rules 13a-15 and 15d-15 under the Exchange Act. These controls and procedures were designed to provide reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner to allow timely decisions regarding required disclosures. Based on this evaluation, management has concluded that our disclosure controls and procedures were effective as of September 30, 2019.

Changes in Internal Controls over Financial Reporting

There were no material changes in our internal controls over financial reporting during the period covered by this Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

The information set forth in “Litigation” and “Export Compliance Matter” in Note 13 – Commitments and Contingencies to the Financial Statements in Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

34

Item 1A. Risk Factors.

We disclosed potential violations of U.S. export controls laws to the U.S. federal government that resulted in multiple investigations. We have implemented compliance processes and procedures to identify and prevent potential future violations of export control laws, trade sanctions, and government contracting laws and regulations, and continue to review our government contracting compliance risks and potential violations. Based on the disclosures and investigations, the U.S. Air Force temporarily suspended us from certain new federal contracts and orders in July 2019 and lifted that suspension in September 2019 following the execution of an Administrative Agreement with the Company. Failure to comply with the terms of the Administrative Agreement or the commencement of a separate action by another governmental agency would result in decreased revenues and additional harm to our reputation and otherwise adversely affect our business, operating results and financial condition.

In October 2017, we received an administrative subpoena from the Bureau of Industry and Security (“BIS”) requesting the production of records in connection with possible violations of U.S. export control laws, including with regard to the On Demand manufacturing business done by our subsidiary, Quickparts.com, Inc. In addition, while collecting information responsive to the above-referenced subpoena, our internal investigation identified potential violations of the International Traffic in Arms Regulations (“ITAR”) administered by the State Department’s Directorate of Defense Trade Controls (“DDTC”) and potential violations of the Export Administration Regulations administered by BIS. On June 8, 2018 and thereafter, we submitted voluntary disclosures to BIS and DDTC identifying numerous potentially unauthorized exports of technical data, which supplemented an initial notice of voluntary disclosure that we submitted to DDTC in February 2018. We have and will continue to implement compliance enhancements to our export controls, trade sanctions, and government contracting compliance to address the issues identified through our internal investigation and cooperate with DDTC and BIS, as well as the U.S. Departments of Justice, Defense, and Homeland Security, in their reviews of these matters.

In addition, on July 19, 2019, we received a notice of immediate suspension of federal contracting from the United States Air Force, pending the outcome of an ongoing investigation. The suspension applied to 3D Systems, its subsidiaries and affiliates, and was related to export controls violations involving 3D Systems’ On Demand manufacturing business described above. Under the suspension, we were generally prohibited from receiving new federal government contracts or subcontracts from any executive branch agency as described in the provisions of 48 C.F.R Subpart 9.4 of the Federal Acquisition Regulation. The suspension allowed us to continue to perform current federal contracts, and also to receive awards of new subcontracts for items under $35,000 and for items considered commercially available off-the-shelf items. The Air Force lifted the suspension on September 6, 2019 following the execution of a two-year Administrative Agreement with the Company. The Company is now eligible to obtain and perform U.S. government contracts and subcontracts without restrictions. Under the Administrative Agreement, the Company will be monitored and evaluated by independent monitors who will report to the Air Force on the Company’s compliance with the terms of the Company’s Ethics & Compliance Program, including its overall culture, government contracting compliance program, and export controls compliance program. The Company’s failure to comply fully with the terms of the Administrative Agreement or the commencement of separate actions by other agencies of the federal government could result in reinstatement of the suspension or debarment from future federal contracting, which would result in decreased revenues and additional harm to our reputation and otherwise adversely affect our business, operating results and financial condition,

Although we cannot predict the ultimate resolution of these matters, we have incurred and expect to continue to incur significant legal costs and other expenses in connection with responding to the U.S. government agencies.

Throughout 2018, we implemented new compliance procedures to identify and prevent potential violations of export controls laws, trade sanctions, and government contracting laws and regulations and created a Compliance Committee of the Board of Directors to further enhance board oversight of compliance risks. As a result of these compliance enhancements, we identified additional potential violations of ITAR, and submitted related voluntary disclosures to DDTC. As we continue to implement additional compliance enhancements throughout 2019, we may discover additional potential violations of export controls laws, trade sanctions, and/or government contracting laws in the future. If we identify any additional potential violations, we will submit voluntary disclosures to the relevant agencies and cooperate with such agencies on any related investigations. Independent monitors will observe and evaluate the Company’s continued compliance with its Ethics & Compliance Program during the term of the Administrative Agreement.

35

If the U.S. government finds that we have violated one or more export controls laws, trade sanctions, or government contracting laws, we could be subject to various civil or criminal penalties. By statute, these penalties can include but are not limited to fines, which by statute may be significant, denial of export privileges, and suspension or debarment from participation in U.S. government contracts. We may also be subject to contract claims based upon such violations. Any assessment of penalties or other liabilities incurred in connection with these matters could harm our reputation and customer relationships, create negative investor sentiment, and affect our share value. In connection with any resolution, we may also be required to undertake additional remedial compliance measures and program monitoring. We cannot at this time predict when the U.S. government agencies will conclude their investigations or determine an estimated cost, if any, or range of costs, for any penalties, fines or other liabilities to third parties that may be incurred in connection with these matters.

Our common stock price has been and may continue to be volatile.

The market price of our common stock has experienced, and may continue to experience, considerable volatility. Between January 1, 2018 and October 17, 2019, the trading price of our common stock has ranged from a low of $6.47 per share to a high of $21.78 per share. Numerous factors could have a significant effect on the price of our common stock, including those described or referred to in the “Risk Factors” section of the Form 10-K, the 2019 Q1 Form 10-Q, and the 2019 Q2 Form 10-Q, as well as, among other things:

•Our perceived value in the securities markets;

•Overall trends in the stock market;

•Announcements of changes in our forecasted operating results or the operating results of one or more of our competitors;

•Compliance with the terms of our Administrative Agreement with the U.S. Air Force;

•The impact of changes in our results of operations, our financial condition or our prospects;

•Future sales of our common stock or other securities (including any shares issued in connection with earn-out obligations for any past or future acquisition);

•Market conditions for providers of products and services such as ours;

•Executive level management uncertainty or change;

•Changes in recommendations or revenue or earnings estimates by securities analysts; and

•Announcements of acquisitions by us or one of our competitors.

There have been no other material changes to the risk factors as previously disclosed in the 2018 Form 10-K, the 2019 Q1 Form 10-Q, and the 2019 Q2 Form 10-Q.

36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Issuances of Unregistered Securities

None.

Issuer Purchases of Equity Securities

The following table provides information about purchases of equity securities that are registered pursuant to Section 12 of the Exchange Act for the quarter ended September 30, 2019:

	Total number of shares (or units) purchased		Average price paid per share (or unit)
Shares delivered or withheld pursuant to restricted stock awards
July 1, 2019 - July 31, 2019	83,033		$	9.08
August 1, 2019 - August 31, 2019	189,398		$	6.56
September 1, 2019 - September 30, 2019	11,384		$	7.02
	283,815	(a)	$	7.32	(b)

(a)Reflects shares of common stock surrendered to the Company for payment of tax withholding obligations in connection with the vesting of restricted stock.

(b)The average price paid reflects the average market value of shares withheld for tax purposes.

37

Item 6. Exhibits.

3.1	Certificate of Incorporation of Registrant. (Incorporated by reference to Exhibit 3.1 to Form 8-B filed on August 16, 1993, and the amendment thereto, filed on Form 8-B/A on February 4, 1994.)
3.2	Amendment to Certificate of Incorporation filed on May 23, 1995. (Incorporated by reference to Exhibit 3.2 to Registrant’s Registration Statement on Form S-2/A, filed on May 25, 1995.)
3.3	Certificate of Amendment of Certificate of Incorporation filed with Secretary of State of Delaware on May 19, 2004. (Incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, filed on August 5, 2004.)
3.4	Certificate of Amendment of Certificate of Incorporation filed with Secretary of State of Delaware on May 17, 2005. (Incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005, filed on August 1, 2005.)
3.5	Certificate of Amendment of Certificate of Incorporation filed with the Secretary of State of Delaware on October 7, 2011.  (Incorporated by reference to Exhibit 3.1 to Form 8-K filed on October 7, 2011.)
3.6	Certificate of Amendment of Certificate of Incorporation filed with the Secretary of State of Delaware on May 21, 2013. (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed on May 22, 2013.)
3.7	Amended and Restated By-Laws of 3D Systems Corporation. (Incorporated by reference to Exhibit 3.1 of Registrant’s Current Report on Form 8-K filed on March 15, 2018.)
10.1*	Employment Agreement between 3D Systems Corporation and Todd Booth, dated August 15, 2019. (Incorporated by reference to Exhibit 10.1 to Registrant’s current report on Form 8-K filed on August 19, 2019.)
10.2	First Amendment, dated September 30, 2019, to the Credit Agreement, dated February 27, 2019, among 3D Systems Corporation, HSBC Bank USA, National Association, as Administrative Agent, Sole Lead Arranger and Sole Bookrunner, the guarantors party thereto, and the other lenders party thereto.
31.1	Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated October 30, 2019.
31.2	Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated October 30, 2019.
32.1	Certification of Principal Executive Officer filed pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated October 30, 2019.
32.2	Certification of Principal Financial Officer filed pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated October 30, 2019.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File - this data file does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document.

* Management contract or compensatory plan or arrangement

38

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

3D Systems Corporation
By	/s/ Todd A. Booth
	Todd A. Booth
	Executive Vice President and Chief Financial Officer
	(principal financial and accounting officer)

Date: October 30, 2019

39

EX-10.2

EXECUTION COPY

AMENDMENT NO. 1

This AMENDMENT NO. 1 (this “Amendment”) dated as of September 30, 2019, by and among 3D Systems Corporation, a Delaware corporation (the “Borrower”), 3D Systems, Inc., a California corporation, and 3D Holdings, LLC, a Delaware limited liability company, as guarantors (the “Guarantors”, and, together with the Borrower, each a “Loan Party”, and, collectively, the “Loan Parties”), HSBC Bank USA, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”), as Swing Loan Lender and as an Issuing Lender, PNC Bank, National Association, as an Issuing Lender, and the lenders party hereto, is entered into in connection with that certain Credit Agreement, dated as of February 27, 2019 (as amended, amended and restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”), by and among the Borrower, the Guarantors, the lenders party thereto, the Administrative Agent, the Swing Loan Lender and the Issuing Lenders.

WHEREAS, the Borrower, the lenders party hereto, the Administrative Agent, the Issuing Lenders, and the Swing Loan Lender have agreed to certain amendments to the Credit Agreement.

NOW, THEREFORE, in consideration of their mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1 Defined Terms. Unless otherwise defined herein, capitalized terms used herein (including in the preliminary statements hereto) shall have the same meaning assigned to such terms in the Credit Agreement.

Section 2 Amendments. As of the Amendment Effective Date (as defined below), the parties hereto agree that the Credit Agreement shall hereby be amended as follows:

Section 2.1  References Generally. References in the Credit Agreement (including references to the Credit Agreement as amended hereby) to “this Agreement” (and indirect references such as “hereunder”, “herein” and “hereof”) and references in the other Loan Documents to the “Credit Agreement” shall be deemed to be references to the Credit Agreement as amended hereby.

Section 2.2 Defined Terms. Section 1.1 of the Credit Agreement shall be amended by amending the following definitions and replacing them in their entirety to read as follows:

“Consolidated Total Funded Indebtedness” shall mean, as of any date of determination, with respect to the Borrower and its Subsidiaries on a consolidated basis, without duplication, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business but including any earn out or similar obligations to the extent such obligation would be reflected as a liability on the balance sheet in accordance with GAAP), (e) Indebtedness in respect of capital leases and Synthetic Lease Obligations, (f) net obligations of such Person under any Hedge Agreement, (g)

any Guaranty with respect to outstanding Indebtedness of the types specified in clauses (a) through (f) above of Persons other than the Borrower or any Subsidiary, and (h) all Indebtedness of the types referred to in clauses (a) through (g) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary. For purposes of clarity, Consolidated Total Funded Indebtedness shall not include contingent obligations arising under surety bonds, letters of credit (including undrawn letters of credit or undrawn surety bonds) or unrealized obligations under Hedge Agreements.

“Letter of Credit Sublimit” shall mean the Issuing Lender’s commitment to issue Letters of Credit to the Borrower pursuant to Section 2.9.1 hereof in an aggregate principal amount up to $20,000,000.

Section 3 Representations and Warranties. Each Loan Party represents and warrants to the Administrative Agent, the Swing Loan Lender, the Issuing Lenders and the Lenders that:

Section 3.1 This Amendment (a) has been authorized by all necessary corporation or other entity action, (b) has been duly and validly executed and delivered by such Loan Party, and (c) constitutes, or will constitute, legal, valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

Section 3.2 The representations and warranties of such Loan Party in the Credit Agreement and the other Loan Documents to which it is a party are true and correct in all material respects (except to the extent already qualified by materiality, in which case any such representation or warranty is true and correct in all respects), other than to the extent that such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects (except to the extent already qualified by materiality, in which case any such representation or warranty were true and correct in all respects) as of such earlier date; and

Section 3.3 As of the date of this Amendment and immediately after giving effect to this Amendment, no Default or Event of Default has occurred or is continuing.

Section 4 Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent (the “Amendment Effective Date”):

Section 4.1 The Administrative Agent shall have received counterparts of this Amendment duly executed by the Loan Parties, the Swing Loan Lender, the Issuing Lenders and the Required Lenders.

Section 4.1 The Borrower shall have paid (or made arrangements for the payment of) all reasonable and documented out-of-pocket fees and expenses incurred by the Administrative Agent in connection with this Amendment payable as required by the Credit Agreement or any other Loan Document (including the reasonable and documented out-of-pocket fees, charges and disbursements of its counsel).

- 2 - 

Section 5 Miscellaneous.

Section 5.1  Governing Law. This Amendment and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Amendment and the transactions contemplated hereby shall be governed by, and construed in accordance with, the law of the State of New York, without regard to conflicts of law principles except Title 14 of Article 5 of the New York General Obligations law.

Section 5.3 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 5.4 Severability. The provisions of this Amendment are intended to be severable. If any provision of this Amendment shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.

Section 5.5 Execution in Counterparts; Etc. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or e-mail shall be effective as delivery of a manually executed counterpart of this Amendment.

Section 5.6 Credit Agreement. Except as amended hereby, the Credit Agreement shall continue in full force and effect in accordance with the provisions thereof. This Amendment is a Loan Document executed under the Credit Agreement and shall be construed in accordance with the Credit Agreement.

[Signature Pages Follow]

- 3 - 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

BORROWER: 3D SYSTEMS CORPORATION,

a Delaware corporation

By: /s/ Andrew M. Johnson 

Name: Andrew M. Johnson

Title: Executive Vice President, Chief Legal Officerand Secretary

GUARANTORS: 3D SYSTEMS, INC.,

a California corporation

By: /s/ Andrew M. Johnson 

Name: Andrew M. Johnson

Title: Executive Vice President, Chief Legal Officerand Secretary

3D HOLDINGS, LLC,

a Delaware limited liability company

By: 3D Systems Corporation, its Manager

By: /s/ Andrew M. Johnson 

Name: Andrew M. Johnson

Title: Executive Vice President, Chief Legal Officerand Secretary

[Signature Page to Amendment No. 1]

HSBC BANK USA, NATIONAL ASSOCIATION,

as Administrative Agent

By: /s/ Keisha McLaughlin 

Name: Keisha McLaughlin 

Title: AVP 

HSBC BANK USA, NATIONAL ASSOCIATION,

as Swing Loan Lender, Issuing Lender and Lender

By: /s/ Chris Burns 

Name: Chris Burns 

Title: Senior Vice President 

PNC BANK, NATIONAL ASSOCIATION,

as Issuing Lender and Lender

By: /s/ Dawn M. Kondrat 

Name: Dawn M. Kondrat 

Title: SVP, Credit Products Specialist 

[Signature Page to Amendment No. 1] 

SUNTRUST BANK,

as Lender

By: /s/ Katie Lundin 

Name:Katie Lundin

Title: Director 

FIRST TENNESSEE BANK NATIONAL ASSOCIATION,

as Lender

By: /s/ Michael Privette 

Name:Michael Privette

Title: Vice President 

FIFTH THIRD BANK,

as Lender

By: /s/ Christopher Griffin 

Name:Christopher Griffin

Title: Vice President 

[Signature Page to Amendment No. 1]

EX-31.1

Exhibit 31.1

໿

Certification of

Principal Executive Officer of

3D Systems Corporation

I, Vyomesh I. Joshi, certify that:  

1.I have reviewed this report on Form 10-Q of 3D Systems Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2019

By:	/s/ Vyomesh I. Joshi
	Vyomesh I. Joshi
Title:	President & Chief Executive Officer
	(principal executive officer)

EX-31.2

Exhibit 31.2

໿

Certification of

Principal Executive Officer of

3D Systems Corporation

I, Todd A. Booth, certify that:  

1.I have reviewed this report on Form 10-Q of 3D Systems Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2019

By:	/s/ Todd A. Booth
	Todd A. Booth
Title:	Executive Vice President and Chief Financial Officer
	(principal financial and accounting officer)

EX-32.1

Exhibit 32.1

໿

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and accompanies the Quarterly Report on Form 10-Q (the “Form 10-Q”) for the quarter ended September 30, 2019 of 3D Systems Corporation (the “Issuer”).

I, Vyomesh I. Joshi, the President and Chief Executive Officer (principal executive officer) of the Issuer, certify that, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(i)the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date: October 30, 2019

/s/ Vyomesh I. Joshi

Name: Vyomesh I. Joshi

(principal executive officer)

EX-32.2

Exhibit 32.2

໿

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and accompanies the Quarterly Report on Form 10-Q (the “Form 10-Q”) for the quarter ended September 30, 2019 of 3D Systems Corporation (the “Issuer”).

I, Todd A. Booth, the President and Chief Executive Officer (principal executive officer) of the Issuer, certify that, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(i)the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(ii)The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date: October 30, 2019

/s/ Todd A. Booth

Name: Todd A. Booth

(principal financial and accounting officer)

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid In Capital	Treasury Stock	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total 3D Systems Corporation Stockholders' Equity	Equity Attributable to Noncontrolling Interests
Beginning Balance at Dec. 31, 2017	$ 615,948	$ 115	$ 1,326,250	$ (8,203)	$ (677,772)	$ (21,536)	$ 618,854	$ (2,906)
Issuance (repurchase) of stock	(5,721)	2		(5,723)			(5,721)
Stock-based compensation expense	21,082		21,082				21,082
Net income (loss)	(41,123)				(41,369)		(41,369)	246
Pension adjustment	204					204	204
Derivative financial instruments	0
Foreign currency translation adjustment	(12,771)					(13,090)	(13,090)	319
Ending Balance at Sep. 30, 2018	578,195	117	1,347,332	(13,926)	(718,565)	(34,422)	580,536	(2,341)
Beginning Balance at Jun. 30, 2018	587,833	116	1,339,984	(10,007)	(707,015)	(32,878)	590,200	(2,367)
Issuance (repurchase) of stock	(3,918)			(3,919)			(3,918)
Stock-based compensation expense	7,348		7,348				7,348
Net income (loss)	(11,550)				(11,550)		(11,550)
Pension adjustment	57					57	57
Derivative financial instruments	0
Foreign currency translation adjustment	(1,575)					(1,601)	(1,601)	26
Ending Balance at Sep. 30, 2018	$ 578,195	117	1,347,332	(13,926)	(718,565)	(34,422)	580,536	(2,341)
Common stock, par value (in dollars per share)	$ 0.001
Beginning Balance at Dec. 31, 2018	$ 575,987	117	1,355,503	(15,572)	(722,701)	(38,978)	578,369	(2,382)
Issuance (repurchase) of stock	(3,026)	3		(3,029)			(3,026)
Acquisition of non-controlling interest	(13,342)		(7,526)			256	(7,270)	(6,072)
Stock-based compensation expense	19,221		19,221				19,221
Net income (loss)	(64,972)				(65,167)		(65,167)	195
Pension adjustment	207					207	207
Derivative financial instruments	(798)					(798)	(798)
Foreign currency translation adjustment	(6,854)					(6,787)	(6,787)	(67)
Ending Balance at Sep. 30, 2019	506,423	120	1,367,198	(18,601)	(787,868)	(46,100)	514,749	(8,326)
Beginning Balance at Jun. 30, 2019	528,446	120	1,361,569	(16,519)	(771,025)	(37,313)	536,832	(8,386)
Issuance (repurchase) of stock	(2,082)	1		(2,082)			(2,082)
Stock-based compensation expense	5,629		5,629				5,629
Net income (loss)	(16,762)				(16,843)		(16,843)	81
Pension adjustment	91					91	91
Derivative financial instruments	(798)					(798)	(798)
Foreign currency translation adjustment	(8,101)					(8,080)	(8,080)	(21)
Ending Balance at Sep. 30, 2019	$ 506,423	$ 120	$ 1,367,198	$ (18,601)	$ (787,868)	$ (46,100)	$ 514,749	$ (8,326)
Common stock, par value (in dollars per share)	$ 0.001

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue:
Total revenue	$ 155,272	$ 164,511	$ 464,524	$ 506,948
Cost of sales:
Total cost of sales	87,991	86,701	258,239	265,107
Gross profit	67,281	77,810	206,285	241,841
Operating expenses:
Selling, general and administrative	58,275	65,600	195,036	206,225
Research and development	20,940	23,194	63,654	71,788
Total operating expenses	79,215	88,794	258,690	278,013
Loss from operations	(11,934)	(10,984)	(52,405)	(36,172)
Interest and other (expense) income, net	(2,818)	1,027	(6,774)	1,135
Loss before income taxes	(14,752)	(9,957)	(59,179)	(35,037)
Provision for income taxes	(2,010)	(1,593)	(5,793)	(6,086)
Net loss	(16,762)	(11,550)	(64,972)	(41,123)
Less: net income attributable to noncontrolling interests	81	0	195	246
Net loss attributable to 3D Systems Corporation	$ (16,843)	$ (11,550)	$ (65,167)	$ (41,369)
Net loss per share available to 3D Systems Corporation common stockholders - basic and diluted (in dollars per share)	$ (0.15)	$ (0.10)	$ (0.57)	$ (0.37)
Products
Revenue:
Total revenue	$ 94,506	$ 99,922	$ 280,611	$ 316,153
Cost of sales:
Total cost of sales	58,044	54,444	166,809	168,062
Services
Revenue:
Total revenue	60,766	64,589	183,913	190,795
Cost of sales:
Total cost of sales	$ 29,947	$ 32,257	$ 91,430	$ 97,045

XML

Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 5,287	$ 7,811	$ 16,525	$ 23,714

XML

Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 576,000
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	576,000
Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 576,000

XML

Borrowings (Narrative) (Details)			9 Months Ended
	Feb. 27, 2019 USD ($) credit_increase	Oct. 10, 2014 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Line of Credit Facility [Line Items]
Limit on annual cash dividends paid			$ 30,000,000
Current portion of long term debt			3,025,000	$ 0
Revolving Credit Facility
Line of Credit Facility [Line Items]
Credit agreement term	5 years	5 years
Credit agreement, maximum borrowing capacity	$ 100,000,000
Outstanding borrowings	$ 25,000,000		$ 58,987,000
Number of credit increases | credit_increase	4
Interest rate (as a percentage)			4.00%
Term Loan Facility
Line of Credit Facility [Line Items]
Credit agreement term	5 years
Credit agreement, maximum borrowing capacity	$ 100,000,000
Credit Agreement | Revolving Credit Facility
Line of Credit Facility [Line Items]
Credit agreement, maximum borrowing capacity		$ 150,000,000

XML

Inventories (Tables)

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Components Of Inventories

Components of inventories at September 30, 2019 and December 31, 2018 are summarized as follows:

(in thousands)	2019		2018
Raw materials	$	49,130	$	49,624
Work in process	5,941		2,969
Finished goods and parts	67,635		80,568
Inventories	$	122,706	$	133,161

XML

Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2019

Stockholders' Equity Note [Abstract]

Accumulated Other Comprehensive Loss

(14) Accumulated Other Comprehensive Loss

The changes in the balances of accumulated other comprehensive loss by component are as follows:

(in thousands)	Foreign currency translation adjustment		Defined benefit pension plan		Derivative financial instruments		Liquidation of non-US entity and purchase of non-controlling interests		Total
Balance at December 31, 2018	$	(36,669)	$	(2,647)	$	—	$	338	$	(38,978)
Other comprehensive income (loss)	(6,787)		207		(798)		256		(7,122)
Balance at September 30, 2019	$	(43,456)	$	(2,440)	$	(798)	$	594	$	(46,100)

The amounts presented in the table above are in other comprehensive loss and are net of taxes. For additional information about foreign currency translation, see Note 8.

XML

Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2019

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Loss

The changes in the balances of accumulated other comprehensive loss by component are as follows:

(in thousands)	Foreign currency translation adjustment		Defined benefit pension plan		Derivative financial instruments		Liquidation of non-US entity and purchase of non-controlling interests		Total
Balance at December 31, 2018	$	(36,669)	$	(2,647)	$	—	$	338	$	(38,978)
Other comprehensive income (loss)	(6,787)		207		(798)		256		(7,122)
Balance at September 30, 2019	$	(43,456)	$	(2,440)	$	(798)	$	594	$	(46,100)

XML

Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 3,646	$ 11,110
Finance lease cost - amortization expense	174	592
Finance lease cost - interest expense	114	344
Short-term lease cost	30	80
Variable lease cost	102	137
Sublease income	(33)	(33)
Total	$ 4,033	$ 12,230

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

(10) Fair Value Measurements

ASC 820, “Fair Value Measurements and Disclosures,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities;

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

For the Company, the above standard applies to cash equivalents, Israeli severance funds and derivatives. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements as of September 30, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Description
Cash equivalents (a)	$	20,780	$	—	$	—	$	20,780
Israeli severance funds (b)	$	—	$	7,394	$	—	$	7,394
Derivative financial instruments(c)	$	—	$	(798)	$	—	$	(798)
	Fair Value Measurements as of December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Description
Cash equivalents (a)	$	6,141	$	—	$	—	$	6,141
Israeli severance funds (b)	$	—	$	6,822	$	—	$	6,822

(a)Cash equivalents include funds held in money market instruments and are reported at their current carrying value, which approximates fair value due to the short-term nature of these instruments and are included in cash and cash equivalents in the consolidated balance sheet.

(b)The Company partially funds the liability for its Israeli severance requirement through monthly deposits into fund accounts, the value of these contributions are recorded to non-current assets on the consolidated balance sheet.

(c)See Note 8 for additional information on the Company's derivative financial instruments.

The Company did not have any transfers of assets and liabilities between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy during the quarter and nine months ended September 30, 2019.

In addition to the assets and liabilities included in the above table, certain of our assets and liabilities are to be initially measured at fair value on a non-recurring basis. This includes goodwill and other intangible assets measured at fair value for impairment assessment, in addition to redeemable noncontrolling interests. For additional discussion, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Estimates” in the 2018 Form 10-K.

XML

Accrued And Other Liabilities

9 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Accrued And Other Liabilities

(6) Accrued and Other Liabilities

Accrued liabilities at September 30, 2019 and December 31, 2018 are summarized as follows:

(in thousands)	2019		2018
Compensation and benefits	$	19,648	$	23,787
Accrued taxes	19,500		17,246
Vendor accruals	12,033		6,895
Product warranty liability	2,985		3,788
Arbitration awards	4,406		2,256
Accrued professional fees	2,116		1,657
Accrued other	779		2,219
Royalties payable	1,234		1,417
Total	$	62,701	$	59,265

Other liabilities at September 30, 2019 and December 31, 2018 are summarized as follows:

(in thousands)	2019		2018
Long term employee indemnity	$	14,105	$	13,609
Long term tax liability	3,246		4,168
Defined benefit pension obligation	8,083		8,518
Long term deferred revenue	6,804		8,121
Other long term liabilities	8,940		4,915
Total	$	41,178	$	39,331

XML

Revenue

9 Months Ended

Sep. 30, 2019

Revenue Recognition [Abstract]

Revenue

(2) Revenue

The Company accounts for revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers,” which it adopted on January 1, 2018, using the modified-retrospective method.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

At September 30, 2019, the Company had $107,486 of outstanding performance obligations. The Company expects to recognize approximately 93 percent of its remaining performance obligations as revenue within the next twelve months, an additional 3 percent by the end of 2020 and the balance thereafter.

Revenue Recognition

Revenue is recognized when control of the promised products or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Many of its contracts with customers include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative stand-alone selling price (“SSP”). Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The amount of consideration received and revenue recognized may vary based on changes in marketing incentive programs offered to our customers. The Company's marketing incentive programs take many forms, including volume discounts, trade-in allowances, rebates and other discounts.

A majority of the Company’s revenue is recognized at the point in time when products are shipped or services are delivered to customers. Please see below for further discussion.

Hardware and Materials

Revenue from hardware and material sales is recognized when control has transferred to the customer which typically occurs when the goods have been shipped to the customer, risk of loss has transferred to the customer and the Company has a present right to payment for the hardware. In limited circumstances when a printer or other hardware sales include substantive customer acceptance provisions, revenue is recognized either when customer acceptance has been obtained, customer acceptance provisions have lapsed, or the Company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied.

Software

The Company also markets and sells software tools that enable our customers to capture and customize content using our printers, design optimization and simulation software, and reverse engineering and inspection software. Software does not require significant modification or customization and the license provides the customer with a right to use the software as it exists when made available. Revenue from these software licenses is recognized either upon delivery of the product or of a key code which allows the customer to download the software. Customers may purchase post-sale support. Generally, the first year is included but subsequent years are optional. This optional support is considered a separate obligation from the software and is deferred at the time of sale and subsequently recognized ratably over future periods.

Services

The Company offers training, installation and non-contract maintenance services for its products. Additionally, the Company offers maintenance contracts customers can purchase at their option. For maintenance contracts, revenue is deferred at the time of sale based on the stand-alone selling prices of these services and costs are expensed as incurred. Deferred revenue is recognized ratably over the term of the maintenance period on a straight-line basis. Revenue from training, installation and non-contract maintenance services is recognized at the time of performance of the service.

On demand manufacturing and healthcare service sales are included within services revenue and revenue is recognized upon shipment or delivery of the parts or performance of the service, based on the terms of the arrangement.

Terms of sale

Shipping and handling activities are treated as fulfillment costs rather than as an additional promised service. The Company accrues the costs of shipping and handling when the related revenue is recognized. Costs incurred by the Company associated with shipping and handling are included in product cost of sales.

Credit is extended, and creditworthiness is determined, based on an evaluation of each customer’s financial condition. New customers are generally required to complete a credit application and provide references and bank information to facilitate an analysis of creditworthiness. Customers with a favorable profile may receive credit terms that differ from the Company’s general credit terms. Creditworthiness is considered, among other things, in evaluating the Company’s relationship with customers with past due balances.

The Company’s terms of sale generally provide payment terms that are customary in the countries where it transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require significant deposits or payment in full prior to shipment. For maintenance services, the Company either bills customers on a time-and-materials basis or sells maintenance contracts that provide for payment in advance on either an annual or other periodic basis.

See Note 12 for additional information related to revenue by reportable segment and major lines of business.

Significant Judgments

The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. For such arrangements, the Company allocates revenues to each performance obligation based on its relative SSP.

Judgment is required to determine the SSP for each distinct performance obligation in a contract. For the majority of items, the Company estimates SSP using historical transaction data. The Company uses a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when the product or service is not sold separately, the Company determines the SSP using information that may include market conditions and other observable inputs.

In some circumstances, the Company has more than one SSP for individual products and services due to the stratification of those products and services by customers, geographic region or other factors. In these instances, it may use information such as the size of the customer and geographic region in determining the SSP.

The determination of SSP is an ongoing process and information is reviewed regularly in order to ensure SSP reflects the most current information or trends.

The nature of the Company’s marketing incentives may lead to consideration that is variable. Judgment is exercised at contract inception to determine the most likely outcome of the contract and resulting transaction price. Ongoing assessments are performed to determine if updates are needed to the original estimates.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer deposits and deferred revenues (contract liabilities) on the consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized at the time of invoicing, or unbilled receivables when revenue is recognized prior to invoicing. For most of the Company’s contracts, customers are invoiced when products are shipped or when services are performed resulting in billed accounts receivables for the remainder of the owed contract price. Unbilled receivables generally result from items being shipped where the customer has not been charged, but for which revenue had been recognized. In the Company’s on demand manufacturing business, customers may be required to pay in full before work begins on their orders, resulting in customer deposits. The Company typically bills in advance for installation, training and maintenance contracts as well as extended warranties, resulting in deferred revenue. Changes in contract asset and liability balances were not materially impacted by any other factors for the period ended September 30, 2019.

Through September 30, 2019, the Company recognized revenue of $24,072 related to our contract liabilities at January 1, 2019.

Practical Expedients and Exemptions

The Company generally expenses sales commissions when incurred because the amortization period would be one year or less. These costs are recorded within selling, general and administrative expenses.

XML

Segment Information (Schedule Of Income (Loss) From Operations By Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Loss from operations	$ (11,934)	$ (10,984)	$ (52,405)	$ (36,172)
Reportable Geographical Components
Loss from operations	(11,934)	(10,984)	(52,405)	(36,172)
Americas | Operating Segments
Loss from operations	(21,183)	(16,599)	(72,039)	(50,122)
EMEA | Operating Segments
Loss from operations	7,105	386	13,499	(2,948)
Asia Pacific | Operating Segments
Loss from operations	$ 2,144	$ 5,229	$ 6,135	$ 16,898

XML

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 2,010	$ 1,593	$ 5,793	$ 6,086
Effective income tax rate (as a percentage)	13.60%	16.00%	9.80%	17.40%
Unremitted earnings			$ 106,933
Unrecognized deferred tax liability	$ 16,000		$ 16,000

XML

Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Schedule of Revenue from Unaffiliated Customers by Product and Service

Such summarized financial information concerning the Company’s geographical operations is shown in the following tables:

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Revenue from unaffiliated customers:
United States	$	75,578	$	81,282	$	227,392	$	250,023
Other Americas	2,248		873		6,949		4,918
EMEA	60,356		55,020		175,776		169,300
Asia Pacific	17,090		27,336		54,407		82,707
Total revenue	$	155,272	$	164,511	$	464,524	$	506,948

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Revenue by class of product and service:
Products	$	53,117	$	59,648	$	156,564	$	188,016
Materials	41,389		40,274		124,047		128,137
Services	60,766		64,589		183,913		190,795
Total revenue	$	155,272	$	164,511	$	464,524	$	506,948

Schedule of Intercompany Sales by Geographic Area

	Quarter ended September 30, 2019
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	371	$	7,730	$	4,731	$	12,832
EMEA	14,001		12,067		1,522		27,590
Asia Pacific	1,731		810		813		3,354
Total intercompany sales	$	16,103	$	20,607	$	7,066	$	43,776

	Quarter ended September 30, 2018
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	499	$	15,540	$	4,888	$	20,927
EMEA	18,259		6,939		1,551		26,749
Asia Pacific	1,134		15		923		2,072
Total intercompany sales	$	19,892	$	22,494	$	7,362	$	49,748

	Nine Months Ended September 30, 2019
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	1,361	$	33,193	$	13,188	$	47,742
EMEA	49,438		33,923		3,848		87,209
Asia Pacific	3,176		849		2,301		6,326
Total intercompany sales	$	53,975	$	67,965	$	19,337	$	141,277

	Nine Months Ended September 30, 2018
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	1,521	$	45,764	$	17,303	$	64,588
EMEA	51,471		18,691		4,687		74,849
Asia Pacific	3,779		16		2,696		6,491
Total intercompany sales	$	56,771	$	64,471	$	24,686	$	145,928

Schedule of Income (Loss) from Operations by Geographic Area

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
(Loss) income from operations:
Americas	$	(21,183)	$	(16,599)	$	(72,039)	$	(50,122)
EMEA	7,105		386		13,499		(2,948)
Asia Pacific	2,144		5,229		6,135		16,898
Total	$	(11,934)	$	(10,984)	$	(52,405)	$	(36,172)

XML

Leases - Narrative (Details)	9 Months Ended
	Sep. 30, 2019
Lessee, Lease, Description [Line Items]
Lease renewal term	1 year
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	17 years

XML

Borrowings

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Borrowings

(7) Borrowings

Credit Facility

On February 27, 2019, the Company, as borrower, and certain of its subsidiaries, as guarantors, entered into a 5-year $100,000 senior secured term loan facility (the “Term Facility”) and a 5-year $100,000 senior secured revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Credit Facility”). The Senior Credit Facility replaced the Company's prior $150,000 5-year revolving, unsecured credit facility (the “Prior Credit Agreement”), which was terminated on February 27, 2019 in connection with the entry into the Senior Credit Facility. The proceeds of the Senior Credit Facility were used to refinance existing indebtedness of $25,000 outstanding under the Prior Credit Agreement and will be used to support working capital and for general corporate purposes. Subject to certain terms and conditions contained in the Revolving Facility, the Company has the right to request up to four increases to the amount of the Revolving Facility in an aggregate amount not to exceed $100,000. The Senior Credit Facility is scheduled to mature on February 26, 2024, at which time all amounts outstanding thereunder will be due and payable. However, the maturity date of the Revolving Facility may be extended at the election of the Company with the consent of the lenders subject to the terms set forth in the Senior Credit Facility.

Pursuant to the Senior Credit Facility, the guarantors guarantee, among other things, all of the obligations of the Company and each other guarantor under the Senior Credit Facility. From time to time, the Company may be required to cause additional domestic subsidiaries to become guarantors under the Senior Credit Facility.

The Senior Credit Facility contains customary covenants, some of which require the Company to maintain certain financial ratios that determine the amounts available and terms of borrowings and events of default. The Company was in compliance with all covenants at September 30, 2019.

The payment of dividends on the Company’s common stock is restricted under provisions of the Senior Credit Facility, which limits the amount of cash dividends that the Company may pay in any one fiscal year to $30,000. The Company currently does not pay, and has not paid, any dividends on its common stock, and currently intends to retain any future earnings for use in its business.

The Company had a balance of $58,987 outstanding on the Term Facility at September 30, 2019 at an interest rate of 4.0%, with $3,025 in principal payments due in the next twelve months.

XML

Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

(3) Leases

The Company has various lease agreements for its facilities, equipment and vehicles with remaining lease terms ranging from one to seventeen years. The Company determines if an arrangement contains a lease at inception. Some leases include the options to purchase, terminate or extend for one or more years; these options are included in the ROU asset and liability lease term when it is reasonably certain an option will be exercised. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

Most of the Company’s leases do not provide an implicit rate, therefore the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the future lease payments.

Certain of the Company’s leases include variable costs. Variable costs include non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.

Components of lease cost (income) were as follows:

(in thousands)	Quarter ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	3,646	$	11,110
Finance lease cost - amortization expense	174		592
Finance lease cost - interest expense	114		344
Short-term lease cost	30		80
Variable lease cost	102		137
Sublease income	(33)		(33)
Total	$	4,033	$	12,230

Balance sheet classifications at September 30, 2019 are summarized below:

	September 30, 2019
(in thousands)	Right of use assets		Current right of use liabilities		Long-term right of use liabilities
Operating Leases	$	30,786	$	10,092	$	26,488
Finance Leases	4,242		705		6,179
Total	$	35,028	$	10,797	$	32,667

The Company’s future minimum lease payments as of September 30, 2019 under operating lease and finance leases, with initial or remaining lease terms in excess of one year, were as follows:

	September 30, 2019
(in thousands)	Operating Leases		Finance Leases
Years ending September 30:
2020	$	3,785	$	292
2021	10,514		1,103
2022	7,486		829
2023	6,227		832
2024	5,406		828
Thereafter	10,398		6,021
Total lease payments	43,816		9,905
Less: imputed interest	(7,236)		(3,021)
Present value of lease liabilities	$	36,580	$	6,884

Supplemental cash flow information related to our operating leases for the period ending September 30, 2019, was as follows:

(in thousands)	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	11,657
Operating cash outflow from finance leases	$	343
Financing cash outflow from finance leases	$	513

Weighted-average remaining lease terms and discount rate for our operating leases for the period ending September 30, 2019, were as follows:

	September 30, 2019
	Operating		Financing
Weighted-average remaining lease term	5.2 years		10.9 years
Weighted-average discount rate	6.47	%	6.74	%

Leases

(3) Leases

The Company has various lease agreements for its facilities, equipment and vehicles with remaining lease terms ranging from one to seventeen years. The Company determines if an arrangement contains a lease at inception. Some leases include the options to purchase, terminate or extend for one or more years; these options are included in the ROU asset and liability lease term when it is reasonably certain an option will be exercised. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

Most of the Company’s leases do not provide an implicit rate, therefore the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the future lease payments.

Certain of the Company’s leases include variable costs. Variable costs include non-lease components that were incurred based upon actual terms rather than contractually fixed amounts. In addition, variable costs are incurred for lease payments that are indexed to a change in rate or index. Because the right of use asset recorded on the balance sheet was determined based upon factors considered at the commencement date, subsequent changes in the rate or index that were not contemplated in the right of use asset balances recorded on the balance sheet result in variable expenses being incurred when paid during the lease term.

Components of lease cost (income) were as follows:

(in thousands)	Quarter ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	3,646	$	11,110
Finance lease cost - amortization expense	174		592
Finance lease cost - interest expense	114		344
Short-term lease cost	30		80
Variable lease cost	102		137
Sublease income	(33)		(33)
Total	$	4,033	$	12,230

Balance sheet classifications at September 30, 2019 are summarized below:

	September 30, 2019
(in thousands)	Right of use assets		Current right of use liabilities		Long-term right of use liabilities
Operating Leases	$	30,786	$	10,092	$	26,488
Finance Leases	4,242		705		6,179
Total	$	35,028	$	10,797	$	32,667

The Company’s future minimum lease payments as of September 30, 2019 under operating lease and finance leases, with initial or remaining lease terms in excess of one year, were as follows:

	September 30, 2019
(in thousands)	Operating Leases		Finance Leases
Years ending September 30:
2020	$	3,785	$	292
2021	10,514		1,103
2022	7,486		829
2023	6,227		832
2024	5,406		828
Thereafter	10,398		6,021
Total lease payments	43,816		9,905
Less: imputed interest	(7,236)		(3,021)
Present value of lease liabilities	$	36,580	$	6,884

Supplemental cash flow information related to our operating leases for the period ending September 30, 2019, was as follows:

(in thousands)	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	11,657
Operating cash outflow from finance leases	$	343
Financing cash outflow from finance leases	$	513

Weighted-average remaining lease terms and discount rate for our operating leases for the period ending September 30, 2019, were as follows:

	September 30, 2019
	Operating		Financing
Weighted-average remaining lease term	5.2 years		10.9 years
Weighted-average discount rate	6.47	%	6.74	%

XML

Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

(11) Income Taxes

For the quarter and nine months ended September 30, 2019, the Company recorded expense of $2,010 and $5,793, resulting in effective tax rates of 13.6% and 9.8%, respectively. For the quarter and nine months ended September 30, 2018, the Company recorded expense of $1,593 and $6,086, resulting in effective tax rates of 16.0% and 17.4%, respectively. The difference between the statutory rate and the effective tax rate in 2019 is mainly driven by the Company recording a valuation allowance on one of its foreign subsidiaries in China, withholding tax expense, release of a liability for uncertain tax positions related to a German tax audit and expiration of statute of limitations for U.S. federal income tax purposes, foreign rate differential between the U.S. tax rate and foreign tax rates, as well as the impact of the change in valuation allowances that the Company has recorded in the U.S. and other foreign jurisdictions. In 2018 the impact was mainly driven by the change in valuation allowance that the Company has recorded in the U.S. and other foreign jurisdictions, foreign rate differential between the U.S. tax rate and foreign tax rates, and the completion of an audit in France.

Due to the one time transition tax, the majority of the Company’s previously unremitted earnings have now been subjected to U.S. federal income tax, although, other additional taxes such as withholding tax could be applicable. The Company continues to assert that its foreign earnings are indefinitely reinvested in our overseas operations. As such, it has not provided for any additional taxes on approximately $106,933 of unremitted earnings. The Company estimates the unrecognized deferred tax liability related to these earnings is approximately $16,000.

Tax years 2013 and 2014 remain subject to examination by the U.S. Internal Revenue Service ("IRS") for certain credit carryforwards, while tax years 2015 through 2017 remain open to examination by the IRS. State income tax returns are generally subject to examination for a period of three to four years after filing the respective tax returns. The Company files income tax returns (which are open to examination beginning in the year shown in parentheses) in Australia (2015), Belgium (2016), Brazil (2013), China (2016), France (2016), Germany (2015), India (2014), Israel (2014), Italy (2013), Japan (2014), Korea (2013), Mexico (2013), Netherlands (2014), Switzerland (2013), the United Kingdom (2017) and Uruguay (2014).

XML

Commitments and Contingencies (Narrative) (Details)								3 Months Ended	9 Months Ended
	Sep. 06, 2019	Sep. 28, 2018 USD ($)	Sep. 13, 2018 USD ($)	Aug. 03, 2018 USD ($)	Mar. 30, 2018 USD ($)	Sep. 28, 2015 USD ($)	Aug. 23, 2013 lawsuit	Mar. 31, 2019	Sep. 30, 2019 USD ($) lawsuit	Oct. 02, 2019 USD ($)	Jul. 19, 2019 USD ($)	Dec. 31, 2018 USD ($)
Loss Contingencies [Line Items]
Redeemable noncontrolling interests									$ 8,872,000			$ 8,872,000
Number of stockholder class action lawsuits | lawsuit									9
Maximum of awards allowed to be received											$ 35,000
Agreement term (in years)	2 years
Derivative Litigation | Subsequent Event
Loss Contingencies [Line Items]
Preliminary approval of settlement										$ 2,150,000
Current liability										2,150,000
Offsetting receivable										$ 2,150,000
Ronald Barranco and Print3D Corporation v. 3D Systems Corporation, et. al.
Loss Contingencies [Line Items]
Number of stockholder class action lawsuits | lawsuit							2
Percentage of ownership for officer (percent)								50.00%
Provision for arbitration award						$ 11,282,000
Amount awarded		$ 2,182,000				7,254,000
Fees and expenses						2,318,000
Prejudgment interest						$ 1,710,000
Settlement paid		$ 101,000		$ 9,127,000
Damages awarded to 3D Systems					$ 523,000
Judicial Ruling | Ronald Barranco and Print3D Corporation v. 3D Systems Corporation, et. al.
Loss Contingencies [Line Items]
Amount awarded			$ 2,182,000

XML

Segment Information (Schedule Of Revenue From Unaffiliated Customers By Geographic Area) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) segment	Sep. 30, 2018 USD ($)
Number of reportable segments | segment			1
Revenue from unaffiliated customers	$ 155,272	$ 164,511	$ 464,524	$ 506,948
United States
Revenue from unaffiliated customers	75,578	81,282	227,392	250,023
Other Americas
Revenue from unaffiliated customers	2,248	873	6,949	4,918
EMEA
Revenue from unaffiliated customers	60,356	55,020	175,776	169,300
Asia Pacific
Revenue from unaffiliated customers	$ 17,090	$ 27,336	$ 54,407	$ 82,707

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 18, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	001-34220
Entity Registrant Name	3D SYSTEMS CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-4431352
City Area Code	803
Local Phone Number	326-3900
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business Company	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	DDD
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		118,420,818
Entity Central Index Key	0000910638
Amendment Flag	false
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019
Current Fiscal Year End Date	--12-31
Entity Address, Address Line One	333 Three D Systems Circle
Entity Address, City or Town	Rock Hill
Entity Address, State or Province	SC
Entity Address, Postal Zip Code	29730

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net loss	$ (16,762)	$ (11,550)	$ (64,972)	$ (41,123)
Other comprehensive income (loss), net of taxes:
Pension adjustments	91	57	207	204
Derivative financial instruments	(798)	0	(798)	0
Foreign currency translation	(8,101)	(1,894)	(6,854)	(13,090)
Total other comprehensive income (loss), net of taxes:	(8,808)	(1,837)	(7,445)	(12,886)
Total comprehensive loss, net of taxes	(25,570)	(13,387)	(72,417)	(54,009)
Comprehensive income attributable to noncontrolling interests	60	26	128	565
Comprehensive loss attributable to 3D Systems Corporation	$ (25,630)	$ (13,413)	$ (72,545)	$ (54,574)

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of 3D Systems Corporation and

all majority-owned subsidiaries and entities in which a controlling interest is maintained (the “Company”). A non-controlling interest in a subsidiary is considered an ownership interest in a majority-owned subsidiary that is not attributable to the parent. The Company includes noncontrolling interests as a component of total equity in the condensed consolidated balance sheets and the net income attributable to noncontrolling interests are presented as an adjustment from net loss used to arrive at net loss attributable to 3D Systems Corporation in the condensed consolidated statements of operations and comprehensive loss. All significant intercompany transactions and balances have been eliminated in consolidation.

The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim reports. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”).

In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments, consisting of adjustments of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The results of operations for the quarter ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from those estimates and assumptions. Certain prior period amounts presented in the condensed consolidated financial statements and accompanying footnotes have been reclassified to conform to current year presentation.

All dollar amounts presented in the accompanying footnotes are presented in thousands, except for per share information.

Recently Adopted Accounting Standards

On January 1, 2019, the Company adopted the Financial Accounting Standards Board ("FASB") ASU No. 2016-02, “Leases (Topic 842),” which requires the recognition of right-of-use ("ROU") assets and related operating and finance lease liabilities on the balance sheet. The Company adopted ASU 2016-02 effective January 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented.

As permitted under ASU 2016-02, the Company applied practical expedients that allowed it to not (1) reassess historical lease classifications, (2) recognize short-term leases on the balance sheet, nor (3) separate lease and non-lease components for its real estate leases.

As a result of the adoption of ASU 2016-02 on January 1, 2019, the Company recorded operating lease liabilities and ROU assets of $38,415. The adoption of ASU 2016-02 had an immaterial impact on the Company's condensed consolidated statement of operations and condensed consolidated statement of cash flows for the nine months ended September 30, 2019. For additional information about leases, see Note 3.

Accounting Standards Issued But Not Yet Adopted

In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those of developing or obtaining internal-use software. This standard is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is evaluating the impact the new standard will have on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The standard is effective for fiscal years beginning after December 15, 2019.  Early adoption is permitted for interim or annual impairment tests performed on testing dates after January 1, 2017. The Company has elected not to adopt the provisions of this standard early but will re-evaluate as part of performing its 2019 impairment analysis.

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which provides guidance regarding the measurement of credit losses for financial assets and certain other instruments that are not accounted for at fair value through net income, including trade and other receivables, debt securities, net investment in leases, and off-balance sheet credit exposures. The new guidance requires companies to replace the current incurred loss impairment methodology with a methodology that measures all expected credit losses for financial assets based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance expands the disclosure requirements regarding credit losses, including the credit loss methodology and credit quality indicators. In May 2019, the FASB issued ASU 2019-05, "Financial Instruments—Credit Losses (Topic 326)," which provides transition relief to entities adopting ASU 2016-13 by allowing entities to elect the fair value option on certain financial instruments. ASU 2016-13 will be effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2019. Early adoption is permitted for annual reporting periods, including interim periods after December 15, 2018 and will be applied using a modified retrospective approach. The Company is evaluating the impact of adoption of this standard on its consolidated financial statements.

No other new accounting pronouncements, issued or effective during 2019, have had or are expected to have a significant impact on the Company’s consolidated financial statements.

XML

Inventories (Components Of Inventories) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 49,130	$ 49,624
Work in process	5,941	2,969
Finished goods and parts	67,635	80,568
Inventories	$ 122,706	$ 133,161

XML

Accrued And Other Liabilities (Schedule Of Other Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Long term employee indemnity	$ 14,105	$ 13,609
Long term tax liability	3,246	4,168
Defined benefit pension obligation	8,083	8,518
Long term deferred revenue	6,804	8,121
Other long term liabilities	8,940	4,915
Total	$ 41,178	$ 39,331

XML

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Other Than Goodwill

Intangible assets, net, other than goodwill, at September 30, 2019 and December 31, 2018 are summarized as follows:

	2019						2018
(in thousands)	Gross (a)		Accumulated Amortization		Net		Gross (a)		Accumulated Amortization		Net		Weighted Average Useful Life Remaining (in years)
Intangible assets with finite lives:
Customer relationships	$	102,023	$	(74,349)	$	27,674	$	103,332	$	(67,129)	$	36,203	5
Acquired technology	54,067		(51,241)		2,826		52,691		(47,546)		5,145		2
Trade names	23,668		(18,402)		5,266		25,096		(17,669)		7,427		5
Patent costs	11,678		(9,079)		2,599		11,032		(8,382)		2,650		14
Trade secrets	19,296		(15,076)		4,220		19,374		(13,574)		5,800		3
Acquired patents	16,184		(14,340)		1,844		16,212		(13,160)		3,052		7
Other	25,712		(18,888)		6,824		26,551		(18,553)		7,998		1
Total intangible assets	$	252,628	$	(201,375)	$	51,253	$	254,288	$	(186,013)	$	68,275	5

^(a) Change in gross carrying amounts consists primarily of charges for license and patent costs and foreign currency translation.

XML

Noncontrolling Interests

9 Months Ended

Sep. 30, 2019

Noncontrolling Interest [Abstract]

Noncontrolling Interests

(15) Noncontrolling Interests

As of September 30, 2019, the Company owned approximately 70% of the capital and voting rights of Robtec, a service bureau and distributor of 3D printing and scanning products in Brazil. Robtec was acquired on November 25, 2014.

As of September 30, 2019, the Company owned 100% of the capital and voting rights of Easyway, a service bureau and distributor of 3D printing and scanning products in China. Approximately 65% of the capital and voting rights of Easyway were acquired on April 2, 2015, and an additional 5% of the capital and voting rights of Easyway were acquired on July 19, 2017 for $2,300. The remaining 30% of the capital and voting rights of Easyway were acquired on January 21, 2019 for $13,500 to be paid in installments over four years, with the first installment of $2,500 paid in March 2019.

XML

Net Loss Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Net Loss Per Share

(9) Net Loss Per Share

The Company computes basic loss per share using net loss attributable to 3D Systems Corporation and the weighted average number of common shares outstanding during the applicable period. Diluted loss per share incorporates the additional shares issuable upon assumed exercise of stock options and the release of restricted stock and restricted stock units, except in such case when their inclusion would be anti-dilutive.

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Numerator for basic and diluted net loss per share:
Net loss attributable to 3D Systems Corporation	$	(16,843)	$	(11,550)	$	(65,167)	$	(41,369)
Denominator for basic and diluted net loss per share:
Weighted average shares	114,053		112,534		113,587		112,095
Net loss per share - basic and diluted	$	(0.15)	$	(0.10)	$	(0.57)	$	(0.37)

For the quarters ended September 30, 2019 and September 30, 2018, the effect of dilutive securities, including non-vested stock options and restricted stock awards/units, was excluded from the denominator for the calculation of diluted net loss per share because the Company recognized a net loss for the period and their inclusion would be anti-dilutive. Dilutive securities excluded for the quarter and nine months ended September 30, 2019 were 5,786 compared to 5,770 and 5,455, respectively, for the quarter ended and nine months ended September 30, 2018.

XML

Intangible Assets

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

(5) Intangible Assets

Intangible assets, net, other than goodwill, at September 30, 2019 and December 31, 2018 are summarized as follows:

	2019						2018
(in thousands)	Gross (a)		Accumulated Amortization		Net		Gross (a)		Accumulated Amortization		Net		Weighted Average Useful Life Remaining (in years)
Intangible assets with finite lives:
Customer relationships	$	102,023	$	(74,349)	$	27,674	$	103,332	$	(67,129)	$	36,203	5
Acquired technology	54,067		(51,241)		2,826		52,691		(47,546)		5,145		2
Trade names	23,668		(18,402)		5,266		25,096		(17,669)		7,427		5
Patent costs	11,678		(9,079)		2,599		11,032		(8,382)		2,650		14
Trade secrets	19,296		(15,076)		4,220		19,374		(13,574)		5,800		3
Acquired patents	16,184		(14,340)		1,844		16,212		(13,160)		3,052		7
Other	25,712		(18,888)		6,824		26,551		(18,553)		7,998		1
Total intangible assets	$	252,628	$	(201,375)	$	51,253	$	254,288	$	(186,013)	$	68,275	5

^(a) Change in gross carrying amounts consists primarily of charges for license and patent costs and foreign currency translation.

Amortization expense related to intangible assets was $5,287 and $16,525 for the quarter and nine months ended September 30, 2019, respectively, compared to $7,811 and $23,714 for the quarter and nine months ended September 30, 2018, respectively.

XML

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule Of Net Loss Per Share Reconciliation

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Numerator for basic and diluted net loss per share:
Net loss attributable to 3D Systems Corporation	$	(16,843)	$	(11,550)	$	(65,167)	$	(41,369)
Denominator for basic and diluted net loss per share:
Weighted average shares	114,053		112,534		113,587		112,095
Net loss per share - basic and diluted	$	(0.15)	$	(0.10)	$	(0.57)	$	(0.37)

XML

Basis of Presentation (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating leases, ROU assets	$ 30,786
Operating leases, liabilities	$ 36,580
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating leases, ROU assets		$ 38,415
Operating leases, liabilities		$ 38,415

XML

Leases - Balance Sheet Classifications (Details) - USD ($) $ in Thousands		Sep. 30, 2019	Dec. 31, 2018
Leases [Abstract]
Operating leases, ROU assets		$ 30,786
Right of use assets		4,242
Right of use assets	[1]	35,028	$ 4,466
Operating leases, current ROU liabilities		10,092
Current right of use liabilities		705
Current right of use liabilities	[1]	10,797
Operating leases, noncurrent ROU liabilities		26,488
Long-term right of use liabilities		6,179
Long-term right of use liabilities	[1]	$ 32,667

[1] For comparative purposes, prior year finance lease assets have been reclassified from "Property and equipment, net" to "Right of use assets." Prior year finance lease liabilities have been reclassified as right of use liabilities.

XML

Noncontrolling Interests (Narrative) (Details) - USD ($) $ in Millions			1 Months Ended
	Jan. 21, 2019	Jul. 19, 2017	Mar. 31, 2019	Sep. 30, 2019	Apr. 02, 2015
Robtec
Business Acquisition [Line Items]
Acquired ownership percentage				70.00%
Easyway
Business Acquisition [Line Items]
Acquired ownership percentage	30.00%	5.00%		100.00%	65.00%
Value of voting rights acquired	$ 13.5	$ 2.3
Purchase of noncontrolling interest			$ 2.5

XML

Segment Information (Schedule Of Intercompany Sales By Geographic Area) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Total revenue	$ 155,272	$ 164,511	$ 464,524	$ 506,948
Intercompany Sales
Total revenue	43,776	49,748	141,277	145,928
Americas | Intercompany Sales
Total revenue	16,103	19,892	53,975	56,771
EMEA | Intercompany Sales
Total revenue	20,607	22,494	67,965	64,471
Asia Pacific | Intercompany Sales
Total revenue	7,066	7,362	19,337	24,686
Americas | Intercompany Sales
Total revenue	12,832	20,927	47,742	64,588
Americas | Americas | Operating Segments
Total revenue	371	499	1,361	1,521
Americas | EMEA | Operating Segments
Total revenue	7,730	15,540	33,193	45,764
Americas | Asia Pacific | Operating Segments
Total revenue	4,731	4,888	13,188	17,303
EMEA
Total revenue	60,356	55,020	175,776	169,300
EMEA | Intercompany Sales
Total revenue	27,590	26,749	87,209	74,849
EMEA | Americas | Operating Segments
Total revenue	14,001	18,259	49,438	51,471
EMEA | EMEA | Operating Segments
Total revenue	12,067	6,939	33,923	18,691
EMEA | Asia Pacific | Operating Segments
Total revenue	1,522	1,551	3,848	4,687
Asia Pacific
Total revenue	17,090	27,336	54,407	82,707
Asia Pacific | Intercompany Sales
Total revenue	3,354	2,072	6,326	6,491
Asia Pacific | Americas | Operating Segments
Total revenue	1,731	1,134	3,176	3,779
Asia Pacific | EMEA | Operating Segments
Total revenue	810	15	849	16
Asia Pacific | Asia Pacific | Operating Segments
Total revenue	$ 813	$ 923	$ 2,301	$ 2,696

XML

Fair Value Measurements (Summary Of Assets And Liabilities Measured At Fair Value On Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 20,780	$ 6,141
Israeli severance funds	7,394	6,822
Derivative financial instruments	(798)
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	20,780	6,141
Israeli severance funds	0	0
Derivative financial instruments	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Israeli severance funds	7,394	6,822
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Israeli severance funds	0	$ 0
Derivative financial instruments	$ 0

XML

Leases - Supplemental Cash Flows (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$ 11,657
Operating cash outflow from finance leases	343
Financing cash outflow from finance leases	$ 513

XML

Intangible Assets (Intangible Assets Other Than Goodwill) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Sep. 30, 2019
Finite-Lived Intangible Assets [Line Items]
Intangible assets with finite lives: Gross	$ 254,288	$ 252,628
Intangible assets with finite lives: Accumulated Amortization	(186,013)	(201,375)
Intangible assets with finite lives: Net	$ 68,275	51,253
Weighted average useful life remaining (in years)	5 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets with finite lives: Gross	$ 103,332	102,023
Intangible assets with finite lives: Accumulated Amortization	(67,129)	(74,349)
Intangible assets with finite lives: Net	$ 36,203	27,674
Weighted average useful life remaining (in years)	5 years
Acquired technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets with finite lives: Gross	$ 52,691	54,067
Intangible assets with finite lives: Accumulated Amortization	(47,546)	(51,241)
Intangible assets with finite lives: Net	$ 5,145	2,826
Weighted average useful life remaining (in years)	2 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Intangible assets with finite lives: Gross	$ 25,096	23,668
Intangible assets with finite lives: Accumulated Amortization	(17,669)	(18,402)
Intangible assets with finite lives: Net	$ 7,427	5,266
Weighted average useful life remaining (in years)	5 years
Patent costs
Finite-Lived Intangible Assets [Line Items]
Intangible assets with finite lives: Gross	$ 11,032	11,678
Intangible assets with finite lives: Accumulated Amortization	(8,382)	(9,079)
Intangible assets with finite lives: Net	$ 2,650	2,599
Weighted average useful life remaining (in years)	14 years
Trade secrets
Finite-Lived Intangible Assets [Line Items]
Intangible assets with finite lives: Gross	$ 19,374	19,296
Intangible assets with finite lives: Accumulated Amortization	(13,574)	(15,076)
Intangible assets with finite lives: Net	$ 5,800	4,220
Weighted average useful life remaining (in years)	3 years
Acquired patents
Finite-Lived Intangible Assets [Line Items]
Intangible assets with finite lives: Gross	$ 16,212	16,184
Intangible assets with finite lives: Accumulated Amortization	(13,160)	(14,340)
Intangible assets with finite lives: Net	$ 3,052	1,844
Weighted average useful life remaining (in years)	7 years
Other
Finite-Lived Intangible Assets [Line Items]
Intangible assets with finite lives: Gross	$ 26,551	25,712
Intangible assets with finite lives: Accumulated Amortization	(18,553)	(18,888)
Intangible assets with finite lives: Net	$ 7,998	$ 6,824
Weighted average useful life remaining (in years)	1 year

XML

Hedging Activities And Financial Instruments (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Derivative [Line Items]
Derivative financial instruments	$ (798,000)
Not Designated as Hedging Instrument
Derivative [Line Items]
Foreign currency contracts	105,923,000	$ 75,304,000
Level 2 | Designated as Hedging Instrument
Derivative [Line Items]
Derivative financial instruments	$ (798,000)
Interest Rate Contract | Designated as Hedging Instrument
Derivative [Line Items]
Floor interest rate (as a percentage)	0.00%
Notional interest rate contracts outstanding	$ 50,000,000

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Accounts receivable, reserves	$ 8,182	$ 8,423
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	220,000	220,000
Common stock, shares issued (in shares)	120,997	118,650
Treasury stock, at cost, shares (in shares)	3,583	2,946

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Statement of Cash Flows [Abstract]
Restricted cash included in other assets	$ 931	$ 921	$ 934	$ 487

XML

Hedging Activities and Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional and Fair Value amount on Balance Sheet

The notional amount and fair value of the derivative on our balance sheet at September 30, 2019 are disclosed below:

(in thousands)	Balance Sheet location	Notional amount		Fair value
Interest rate swap contract	Other liabilities	$	50,000	$	(798)

XML

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Components of Lease Cost

Components of lease cost (income) were as follows:

(in thousands)	Quarter ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	3,646	$	11,110
Finance lease cost - amortization expense	174		592
Finance lease cost - interest expense	114		344
Short-term lease cost	30		80
Variable lease cost	102		137
Sublease income	(33)		(33)
Total	$	4,033	$	12,230

Balance Sheet Classifications

Balance sheet classifications at September 30, 2019 are summarized below:

	September 30, 2019
(in thousands)	Right of use assets		Current right of use liabilities		Long-term right of use liabilities
Operating Leases	$	30,786	$	10,092	$	26,488
Finance Leases	4,242		705		6,179
Total	$	35,028	$	10,797	$	32,667

Supplemental Cash Flow Information

Supplemental cash flow information related to our operating leases for the period ending September 30, 2019, was as follows:

(in thousands)	September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases	$	11,657
Operating cash outflow from finance leases	$	343
Financing cash outflow from finance leases	$	513

Weighted-average remaining lease terms and discount rate for our operating leases for the period ending September 30, 2019, were as follows:

	September 30, 2019
	Operating		Financing
Weighted-average remaining lease term	5.2 years		10.9 years
Weighted-average discount rate	6.47	%	6.74	%

Future Minimum Lease Payments - Finance Leases

The Company’s future minimum lease payments as of September 30, 2019 under operating lease and finance leases, with initial or remaining lease terms in excess of one year, were as follows:

	September 30, 2019
(in thousands)	Operating Leases		Finance Leases
Years ending September 30:
2020	$	3,785	$	292
2021	10,514		1,103
2022	7,486		829
2023	6,227		832
2024	5,406		828
Thereafter	10,398		6,021
Total lease payments	43,816		9,905
Less: imputed interest	(7,236)		(3,021)
Present value of lease liabilities	$	36,580	$	6,884

Future Minimum Lease Payments - Operating Leases

The Company’s future minimum lease payments as of September 30, 2019 under operating lease and finance leases, with initial or remaining lease terms in excess of one year, were as follows:

	September 30, 2019
(in thousands)	Operating Leases		Finance Leases
Years ending September 30:
2020	$	3,785	$	292
2021	10,514		1,103
2022	7,486		829
2023	6,227		832
2024	5,406		828
Thereafter	10,398		6,021
Total lease payments	43,816		9,905
Less: imputed interest	(7,236)		(3,021)
Present value of lease liabilities	$	36,580	$	6,884

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

(13) Commitments and Contingencies

Put Options

Owners of interests in a certain subsidiary have the right in certain circumstances to require the Company to acquire either a portion of or all of the remaining ownership interests held by them. The owners’ ability to exercise any such “put option” right is subject to the satisfaction of certain conditions, including conditions requiring notice in advance of exercise. In addition, these rights cannot be exercised prior to a specified exercise date. The exercise of these rights at their earliest contractual date would result in obligations of the Company to fund the related amounts in 2019.

Management estimates, assuming that the subsidiary owned by the Company at September 30, 2019, performs over the relevant future periods at its forecasted earnings levels, that these rights, if exercised, could require the Company, in future periods, to pay approximately $8,872 to the owners of such rights to acquire such ownership interests in the relevant subsidiary. This amount has been recorded as redeemable noncontrolling interests on the Consolidated Balance Sheet at September 30, 2019 and December 31, 2018. The ultimate amount payable relating to this transaction will vary because it is dependent on the future results of operations of the subject business.

Litigation

Derivative Litigation

Nine related derivative complaints have been filed by purported Company stockholders against certain of the Company’s former executive officers and members of its Board of Directors.  The Company is named as a nominal defendant in all nine actions. The derivative complaints are styled as follows: (1) Steyn v. Reichental, et al., Case No. 2015-CP-46-2225, filed on July 27, 2015 in the Court of Common Pleas for the 16th Judicial Circuit, County of York, South Carolina (“Steyn”); (2) Piguing v. Reichental, et al., Case No. 2015-CP-46-2396, filed on August 7, 2015 in the Court of Common Pleas for the 16th Judicial Circuit, County of York, South Carolina (“Piguing”); (3)Booth v. Reichental, et al., Case No. 15-692-RGA, filed on August 6, 2015 in the United States District Court for the District of Delaware; (4) Nally v. Reichental, et al., Case No. 15-cv-03756-MGL, filed on September 18, 2015 in the United States District Court for the District of South Carolina (“Nally”); (5) Gee v. Hull, et al., Case No. BC-610319, filed on February 17, 2016 in the Superior Court for the State of California, County of Los Angeles (“Gee”); (6) Foster v. Reichental, et al., Case No. 0:16-cv-01016-MGL, filed on April 1, 2016 in the United States District Court for the District of South Carolina (“Foster”); (7) Lu v. Hull, et al., Case No. BC629730, filed on August 5, 2016 in the Superior Court for the State of California, County of Los Angeles (“Lu”); (8) Howes v. Reichental, et al., Case No. 0:16-cv-2810-MGL, filed on August 11, 2016 in the United States District Court for the District of South Carolina (“Howes”); and (9) Ameduri v. Reichental, et al., Case No. 0:16-cv-02995-MGL, filed on September 1, 2016 in the United States District Court for the District of South Carolina (“Ameduri”). Steyn and Piguing were consolidated into one action styled as In re 3D Systems Corp. Shareholder Derivative Litig., Lead Case No. 2015-CP-46-2225 in the Court of Common Pleas for the 16th Judicial Circuit, County of York, South Carolina. Gee and Lu were consolidated into one action styled as Gee v. Hull, et al., Case No. BC610319 in the Superior Court for the State of California, County of Los Angeles. Nally, Foster, Howes, and Ameduri were consolidated into one action in the United States District Court for the District of South Carolina with Nally as the lead consolidated case.

The derivative complaints allege claims for breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment and seek, among other things, monetary damages and certain corporate governance actions. All of the derivative complaints listed above have been stayed.

Following negotiations with the assistance of a mediator, on September 20, 2019, the parties to the derivative actions listed above entered into a Stipulation of Settlement to resolve all nine related previously disclosed stockholder derivative complaints. On September 20, 2019, the plaintiffs filed a motion to seek approval of the global settlement in the derivative action captioned Nally v. Reichental, et al., Docket No. 0:15-cv-03756-MGL (D.S.C. Sept. 18, 2015), pending before Hon. Mary Geiger Lewis of the U.S. District Court for the District of South Carolina (the “Court”).

On October 2, 2019, the Court issued an order granting preliminary approval of the settlement, which consists of various corporate governance reforms and plaintiffs’ attorneys’ fees in the amount of $2,150. A hearing to determine whether the Court should issue an order finally approving the proposed settlement has been scheduled for December 19, 2019. If the settlement is approved by the Court, the Company’s insurance carrier will fund the entire monetary aspect of the settlement. A current liability of $2,150 was recorded for the preliminary approval amount and an offsetting receivable of $2,150 was recorded for related insurance proceeds.

Ronald Barranco and Print3D Corporation v. 3D Systems Corporation, et. al.

On August 23, 2013, Ronald Barranco, a former Company employee, filed two lawsuits against the Company and certain officers in the United States District Court for the District of Hawaii. The first lawsuit (“Barranco I”) is captioned Ronald Barranco and Print3D Corporation v. 3D Systems Corporation, 3D Systems, Inc., and Damon Gregoire, Case No. CV 13-411 LEK RLP, and alleges seven causes of action relating to the Company’s acquisition of Print3D Corporation (of which Mr. Barranco was a 50% shareholder) and the subsequent employment of Mr. Barranco by the Company. The second lawsuit (“Barranco II”) is captioned Ronald Barranco v. 3D Systems Corporation, 3D Systems, Inc., Abraham Reichental, and Damon Gregoire, Case No. CV 13-412 LEK RLP, and alleges the same seven causes of action relating to the Company’s acquisition of certain website domains from Mr. Barranco and the subsequent employment of Mr. Barranco by the Company.  Both Barranco I and Barranco II allege the Company breached certain purchase agreements in order to avoid paying Mr. Barranco additional monies pursuant to royalty and earn out provisions in the agreements.

With regard to Barranco I, the Hawaii district court, on February 28, 2014, denied the Company’s motion to dismiss and its motion to transfer venue to South Carolina for the convenience of the parties. However, the Hawaii court recognized that Barranco’s claims were all subject to mandatory and binding arbitration in Charlotte, North Carolina. The parties selected an arbitrator and arbitration took place in September 2015 in Charlotte, North Carolina.

On September 28, 2015, the arbitrator issued a final award in favor of Barranco with respect to two alleged breaches of contract and implied covenants arising out of the contract.  The arbitrator found that the Company did not commit fraud or make any negligent misrepresentations to Barranco. Pursuant to the award, the Company was directed to pay approximately $11,282, which includes alleged actual damages of $7,254, fees and expenses of $2,318 and prejudgment interest of $1,710.

On August 3, 2018, following an unsuccessful appeal to the federal court in the Western District of North Carolina and the United States Court of Appeals for the Fourth Circuit, the Company paid $9,127 of the Barranco I judgment, net setoff. On September 28, 2018, the parties filed a Consent Stipulation Resolving Motion for Setoff of Judgment, stipulating that subject only to vacatur or amendment reducing the Barranco II judgment in Barranco’s appeal to the Ninth Circuit related to the Barranco II action discussed below, the Barranco II judgment in the amount of $2,182 was setoff against the Barranco I judgment (“Stipulated Setoff”). The Company paid Barranco the $101 balance remaining due after the Stipulated Setoff.

With regard to Barranco II, the case was tried to a jury in Hawaii district court in May 2016, and on May 27, 2016 the jury found that the Company was not liable for either breach of contract or breach of the implied covenant of good faith and fair dealing.  Additionally, the jury found in favor of the Company on its counterclaim against Barranco and determined that Barranco violated his non-competition covenant with the Company. On March 30, 2018, the court entered Findings of Fact and Conclusions of Law and Order requiring Barranco to disgorge, and the Company recover, $523, representing all but four months of the full amount paid to Barranco as salary during his employment with the Company as well as a portion of the up front and buyout payments made to Barranco in connection with the purchase of certain web domains. In addition, the court ordered Barranco to pay pre-judgment interest to the Company to be calculated beginning as of his first breach of the non-competition covenant in August 2011. Judgment was entered thereafter on April 2, 2018.

On September 13, 2018, the Hawaii district court entered its Amended Judgment in a Civil Case, awarding the Company a final amended judgment of $2,182. On September 19, 2018, Barranco filed an Amended Notice of Appeal. On January 13, 2019, Barranco filed Appellant’s Opening Brief in the Ninth Circuit. On March 15, 2019, the Company filed its Answering Brief. On April 14, 2019, Barranco filed his Reply Brief. Oral Arguments took place on October 24, 2019. The Company intends to defend the appeal.

Export Controls and Government Contracts Compliance Matter

In October 2017 the Company received an administrative subpoena from the Bureau of Industry and Security of the Department of Commerce (“BIS”) requesting the production of records in connection with possible violations of U.S. export control laws, including with regard to the On Demand manufacturing business done by our subsidiary, Quickparts.com, Inc. In addition, while collecting information responsive to the above-referenced subpoena, the Company identified potential violations of the International Traffic in Arms Regulations (“ITAR”) administered by the Directorate of Defense Trade Controls of the Department of State (“DDTC”) and potential violations of the Export Administration Regulations administered by the BIS.

On June 8, 2018 and thereafter, the Company submitted voluntary disclosures to BIS and DDTC identifying numerous potentially unauthorized exports of technical data, which supplemented an initial notice of voluntary disclosure that the Company submitted to DDTC in February 2018. The Company has and will continue to implement compliance enhancements to export controls, trade sanctions, and government contracting compliance to address the issues identified through its internal investigation and cooperate with DDTC and BIS, as well as the U.S. Departments of Justice, Defense, and Homeland Security, in their reviews of these matters.

In addition, on July 19, 2019, the Company received a notice of immediate suspension of federal contracting from the United States Air Force, pending the outcome of an ongoing investigation. The suspension applied to 3D Systems, its subsidiaries and affiliates, and was related to the potential export controls violations involving the Company’s On Demand manufacturing business described above. Under the suspension, the Company was generally prohibited from receiving new federal government contracts or subcontracts from any executive branch agency as described in the provisions of 48 C.F.R Subpart 9.4 of the Federal Acquisition Regulation. The suspension allowed the Company to continue to perform current federal contracts, and also to receive awards of new subcontracts for items under $35 and for items considered commercially available off-the-shelf items. The Air Force lifted the suspension on September 6, 2019 following the execution of a two-year Administrative Agreement with the Company. The Company is now eligible to obtain and perform U.S. government contracts and subcontracts without restrictions. Under the Administrative Agreement, the Company will be monitored and evaluated by independent monitors who will report to the Air Force on the Company’s compliance with the terms of the Company’s Ethics & Compliance Program, including its overall culture, government contracting compliance program, and export controls compliance program.

Although the Company cannot predict the ultimate resolution of these matters, the Company has incurred and expects to continue to incur significant legal costs and other expenses in connection with responding to the U.S. government agencies.

Other

The Company is involved in various other legal matters incidental to its business. Although the Company cannot predict the results of the litigation with certainty, the Company believes that the disposition of all these various other legal matters will not have a material adverse effect, individually or in the aggregate, on its consolidated results of operations, consolidated cash flows or consolidated financial position.

XML

Net Loss Per Share (Schedule Of Net Loss Per Share Reconciliation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Net loss attributable to 3D Systems Corporation	$ (16,843)	$ (11,550)	$ (65,167)	$ (41,369)
Weighted average shares (in shares)	114,053	112,534	113,587	112,095
Net loss per share — basic and diluted (in dollars per share)	$ (0.15)	$ (0.10)	$ (0.57)	$ (0.37)

XML

Leases - Lease Weighted Average (Details)	Sep. 30, 2019
Weighted-average remaining lease term
Operating	5 years 2 months 12 days
Financing	10 years 10 months 24 days
Weighted-average discount rate
Operating	6.47%
Financing	6.74%

XML

Accrued And Other Liabilities (Schedule Of Accrued Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Compensation and benefits	$ 19,648	$ 23,787
Accrued taxes	19,500	17,246
Vendor accruals	12,033	6,895
Product warranty liability	2,985	3,788
Arbitration awards	4,406	2,256
Accrued professional fees	2,116	1,657
Accrued other	779	2,219
Royalties payable	1,234	1,417
Total	$ 62,701	$ 59,265

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents		$ 127,616	$ 109,998
Accounts receivable, net of reserves — $8,182 (2019) and $8,423 (2018)		110,333	126,618
Inventories		122,706	133,161
Prepaid expenses and other current assets		30,945	27,697
Total current assets		391,600	397,474
Property and equipment, net	[1]	92,935	103,252
Intangible assets, net		51,253	68,275
Goodwill		217,688	221,334
Right of use assets	[1]	35,028	4,466
Deferred income tax asset		6,492	4,217
Other assets, net		27,767	26,814
Total assets		822,763	825,832
Current liabilities:
Current portion of long term debt		3,025	0
Current right of use liabilities	[1]	10,797
Current right of use liabilities	[1]		654
Accounts payable		53,014	66,722
Accrued and other liabilities		62,701	59,265
Customer deposits		5,226	4,987
Deferred revenue		36,320	32,432
Total current liabilities		171,083	164,060
Long-term debt		55,421	25,000
Long-term right of use liabilities	[1]	32,667
Long-term right of use liabilities	[1]		6,392
Deferred income tax liability		7,119	6,190
Other liabilities		41,178	39,331
Total liabilities		307,468	240,973
Redeemable noncontrolling interests		8,872	8,872
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value, authorized 220,000 shares; issued 120,997 (2019) and 118,650 (2018)		120	117
Additional paid-in capital		1,367,198	1,355,503
Treasury stock, at cost — 3,583 shares (2019) and 2,946 shares (2018)		(18,601)	(15,572)
Accumulated deficit		(787,868)	(722,701)
Accumulated other comprehensive loss		(46,100)	(38,978)
Total 3D Systems Corporation stockholders' equity		514,749	578,369
Noncontrolling interests		(8,326)	(2,382)
Total stockholders’ equity		506,423	575,987
Total liabilities, redeemable noncontrolling interests and stockholders’ equity		$ 822,763	$ 825,832

[1] For comparative purposes, prior year finance lease assets have been reclassified from "Property and equipment, net" to "Right of use assets." Prior year finance lease liabilities have been reclassified as right of use liabilities.

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net loss		$ (64,972)	$ (41,123)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		39,305	44,986
Stock-based compensation		19,221	21,082
Provision for bad debts		1,152	2,522
Loss on the disposition of property, equipment and other assets		1,620	0
Provision for deferred income taxes		(1,346)	(3,132)
Impairment of assets		1,728	1,411
Changes in operating accounts:
Accounts receivable		12,290	(1,509)
Inventories		6,481	(29,502)
Prepaid expenses and other current assets		(3,122)	41,589
Accounts payable		(12,885)	6,261
Deferred revenue and customer deposits		4,491	(37)
Accrued and other current liabilities		1,199	(45,309)
All other operating activities		4,922	(170)
Net cash provided by (used in) operating activities		10,084	(2,931)
Cash flows from investing activities:
Purchases of property and equipment		(18,265)	(28,323)
Proceeds from sale of assets		1,620	9
Other investing activities		(1,744)	(1,236)
Net cash used in investing activities		(18,389)	(29,550)
Cash flows from financing activities:
Proceeds from borrowings		100,000	0
Repayment of borrowings/long term debt		(66,013)	0
Payments related to net-share settlement of stock based compensation		(3,029)	(5,723)
Purchase of noncontrolling interest		(2,500)	0
Payments on earnout consideration		0	(2,675)
Other financing activities		(1,125)	(508)
Net cash provided by (used in) financing activities		27,333	(8,906)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(1,400)	(2,417)
Net increase (decrease) in cash, cash equivalents and restricted cash		17,628	(43,804)
Cash, cash equivalents and restricted cash at the beginning of the period	[1]	110,919	136,831
Cash, cash equivalents and restricted cash at the end of the period	[1]	128,547	93,027
Supplemental Cash Flow Information [Abstract]
Cash interest payments		3,020	353
Cash income tax payments, net		8,984	7,119
Transfer of equipment from inventory to property and equipment, net	[2]	2,861	4,638
Transfer of equipment to inventory from property and equipment, net	[3]	30	628
Purchase of noncontrolling interest	[4]	$ (11,000)	$ 0

[1] The amounts for cash and cash equivalents shown above include restricted cash of $931 and $934 as of September 30, 2019 and 2018, respectively, and $921 and $487 as of December 31, 2018, and 2017, respectively, which were included in Other assets, net, in the condensed consolidated balance sheets.

[2] Inventory is transferred from inventory to property and equipment at cost when the Company requires additional machines for training or demonstration or for placement into on demand manufacturing services locations.

[3] In general, an asset is transferred from Property and equipment, net, into inventory at its net book value when the Company has identified a potential sale for a used machine.

[4] Purchase of noncontrolling interest to be paid in installments over a four-year period recorded to Accrued and other liabilities and Other liabilities on the condensed consolidated balance sheets.

XML

Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of 3D Systems Corporation and

all majority-owned subsidiaries and entities in which a controlling interest is maintained (the “Company”). A non-controlling interest in a subsidiary is considered an ownership interest in a majority-owned subsidiary that is not attributable to the parent. The Company includes noncontrolling interests as a component of total equity in the condensed consolidated balance sheets and the net income attributable to noncontrolling interests are presented as an adjustment from net loss used to arrive at net loss attributable to 3D Systems Corporation in the condensed consolidated statements of operations and comprehensive loss. All significant intercompany transactions and balances have been eliminated in consolidation.

The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim reports. Accordingly, they do not include all the information and notes required by GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”).

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

On January 1, 2019, the Company adopted the Financial Accounting Standards Board ("FASB") ASU No. 2016-02, “Leases (Topic 842),” which requires the recognition of right-of-use ("ROU") assets and related operating and finance lease liabilities on the balance sheet. The Company adopted ASU 2016-02 effective January 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented.

As permitted under ASU 2016-02, the Company applied practical expedients that allowed it to not (1) reassess historical lease classifications, (2) recognize short-term leases on the balance sheet, nor (3) separate lease and non-lease components for its real estate leases.

As a result of the adoption of ASU 2016-02 on January 1, 2019, the Company recorded operating lease liabilities and ROU assets of $38,415. The adoption of ASU 2016-02 had an immaterial impact on the Company's condensed consolidated statement of operations and condensed consolidated statement of cash flows for the nine months ended September 30, 2019. For additional information about leases, see Note 3.

Accounting Standards Issued But Not Yet Adopted

In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those of developing or obtaining internal-use software. This standard is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is evaluating the impact the new standard will have on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The standard is effective for fiscal years beginning after December 15, 2019.  Early adoption is permitted for interim or annual impairment tests performed on testing dates after January 1, 2017. The Company has elected not to adopt the provisions of this standard early but will re-evaluate as part of performing its 2019 impairment analysis.

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which provides guidance regarding the measurement of credit losses for financial assets and certain other instruments that are not accounted for at fair value through net income, including trade and other receivables, debt securities, net investment in leases, and off-balance sheet credit exposures. The new guidance requires companies to replace the current incurred loss impairment methodology with a methodology that measures all expected credit losses for financial assets based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance expands the disclosure requirements regarding credit losses, including the credit loss methodology and credit quality indicators. In May 2019, the FASB issued ASU 2019-05, "Financial Instruments—Credit Losses (Topic 326)," which provides transition relief to entities adopting ASU 2016-13 by allowing entities to elect the fair value option on certain financial instruments. ASU 2016-13 will be effective for annual reporting periods, including interim reporting within those periods, beginning after December 15, 2019. Early adoption is permitted for annual reporting periods, including interim periods after December 15, 2018 and will be applied using a modified retrospective approach. The Company is evaluating the impact of adoption of this standard on its consolidated financial statements.

No other new accounting pronouncements, issued or effective during 2019, have had or are expected to have a significant impact on the Company’s consolidated financial statements.

Revenue Recognition

Revenue Recognition

Revenue is recognized when control of the promised products or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Many of its contracts with customers include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative stand-alone selling price (“SSP”). Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The amount of consideration received and revenue recognized may vary based on changes in marketing incentive programs offered to our customers. The Company's marketing incentive programs take many forms, including volume discounts, trade-in allowances, rebates and other discounts.

A majority of the Company’s revenue is recognized at the point in time when products are shipped or services are delivered to customers. Please see below for further discussion.

Hardware and Materials

Revenue from hardware and material sales is recognized when control has transferred to the customer which typically occurs when the goods have been shipped to the customer, risk of loss has transferred to the customer and the Company has a present right to payment for the hardware. In limited circumstances when a printer or other hardware sales include substantive customer acceptance provisions, revenue is recognized either when customer acceptance has been obtained, customer acceptance provisions have lapsed, or the Company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied.

Software

The Company also markets and sells software tools that enable our customers to capture and customize content using our printers, design optimization and simulation software, and reverse engineering and inspection software. Software does not require significant modification or customization and the license provides the customer with a right to use the software as it exists when made available. Revenue from these software licenses is recognized either upon delivery of the product or of a key code which allows the customer to download the software. Customers may purchase post-sale support. Generally, the first year is included but subsequent years are optional. This optional support is considered a separate obligation from the software and is deferred at the time of sale and subsequently recognized ratably over future periods.

Services

The Company offers training, installation and non-contract maintenance services for its products. Additionally, the Company offers maintenance contracts customers can purchase at their option. For maintenance contracts, revenue is deferred at the time of sale based on the stand-alone selling prices of these services and costs are expensed as incurred. Deferred revenue is recognized ratably over the term of the maintenance period on a straight-line basis. Revenue from training, installation and non-contract maintenance services is recognized at the time of performance of the service.

On demand manufacturing and healthcare service sales are included within services revenue and revenue is recognized upon shipment or delivery of the parts or performance of the service, based on the terms of the arrangement.

Terms of sale

Shipping and handling activities are treated as fulfillment costs rather than as an additional promised service. The Company accrues the costs of shipping and handling when the related revenue is recognized. Costs incurred by the Company associated with shipping and handling are included in product cost of sales.

Credit is extended, and creditworthiness is determined, based on an evaluation of each customer’s financial condition. New customers are generally required to complete a credit application and provide references and bank information to facilitate an analysis of creditworthiness. Customers with a favorable profile may receive credit terms that differ from the Company’s general credit terms. Creditworthiness is considered, among other things, in evaluating the Company’s relationship with customers with past due balances.

The Company’s terms of sale generally provide payment terms that are customary in the countries where it transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require significant deposits or payment in full prior to shipment. For maintenance services, the Company either bills customers on a time-and-materials basis or sells maintenance contracts that provide for payment in advance on either an annual or other periodic basis.

See Note 12 for additional information related to revenue by reportable segment and major lines of business.

Significant Judgments

The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. For such arrangements, the Company allocates revenues to each performance obligation based on its relative SSP.

Judgment is required to determine the SSP for each distinct performance obligation in a contract. For the majority of items, the Company estimates SSP using historical transaction data. The Company uses a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when the product or service is not sold separately, the Company determines the SSP using information that may include market conditions and other observable inputs.

In some circumstances, the Company has more than one SSP for individual products and services due to the stratification of those products and services by customers, geographic region or other factors. In these instances, it may use information such as the size of the customer and geographic region in determining the SSP.

The determination of SSP is an ongoing process and information is reviewed regularly in order to ensure SSP reflects the most current information or trends.

The nature of the Company’s marketing incentives may lead to consideration that is variable. Judgment is exercised at contract inception to determine the most likely outcome of the contract and resulting transaction price. Ongoing assessments are performed to determine if updates are needed to the original estimates.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer deposits and deferred revenues (contract liabilities) on the consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized at the time of invoicing, or unbilled receivables when revenue is recognized prior to invoicing. For most of the Company’s contracts, customers are invoiced when products are shipped or when services are performed resulting in billed accounts receivables for the remainder of the owed contract price. Unbilled receivables generally result from items being shipped where the customer has not been charged, but for which revenue had been recognized. In the Company’s on demand manufacturing business, customers may be required to pay in full before work begins on their orders, resulting in customer deposits. The Company typically bills in advance for installation, training and maintenance contracts as well as extended warranties, resulting in deferred revenue. Changes in contract asset and liability balances were not materially impacted by any other factors for the period ended September 30, 2019.

Through September 30, 2019, the Company recognized revenue of $24,072 related to our contract liabilities at January 1, 2019.

Practical Expedients and Exemptions

The Company generally expenses sales commissions when incurred because the amortization period would be one year or less. These costs are recorded within selling, general and administrative expenses.

Fair Value Measurements

ASC 820, “Fair Value Measurements and Disclosures,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities;

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

For the Company, the above standard applies to cash equivalents, Israeli severance funds and derivatives. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

XML

Segment Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

(12) Segment Information

The Company operates as one segment and conducts its business through various offices and facilities located throughout the Americas region (United States, Canada, Brazil, Mexico and Uruguay), EMEA region (Belgium, France, Germany, Israel, Italy, the Netherlands, Switzerland and the United Kingdom), and Asia Pacific region (Australia, China, India, Japan and Korea). The Company has historically disclosed summarized financial information for the geographic areas of operations as if they were segments in accordance with ASC 280, “Segment Reporting.” Financial information concerning the Company’s geographical locations is based on the location of the selling entity. Such summarized financial information concerning the Company’s geographical operations is shown in the following tables:

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Revenue from unaffiliated customers:
United States	$	75,578	$	81,282	$	227,392	$	250,023
Other Americas	2,248		873		6,949		4,918
EMEA	60,356		55,020		175,776		169,300
Asia Pacific	17,090		27,336		54,407		82,707
Total revenue	$	155,272	$	164,511	$	464,524	$	506,948

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
Revenue by class of product and service:
Products	$	53,117	$	59,648	$	156,564	$	188,016
Materials	41,389		40,274		124,047		128,137
Services	60,766		64,589		183,913		190,795
Total revenue	$	155,272	$	164,511	$	464,524	$	506,948

	Quarter ended September 30, 2019
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	371	$	7,730	$	4,731	$	12,832
EMEA	14,001		12,067		1,522		27,590
Asia Pacific	1,731		810		813		3,354
Total intercompany sales	$	16,103	$	20,607	$	7,066	$	43,776

	Quarter ended September 30, 2018
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	499	$	15,540	$	4,888	$	20,927
EMEA	18,259		6,939		1,551		26,749
Asia Pacific	1,134		15		923		2,072
Total intercompany sales	$	19,892	$	22,494	$	7,362	$	49,748

	Nine Months Ended September 30, 2019
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	1,361	$	33,193	$	13,188	$	47,742
EMEA	49,438		33,923		3,848		87,209
Asia Pacific	3,176		849		2,301		6,326
Total intercompany sales	$	53,975	$	67,965	$	19,337	$	141,277

	Nine Months Ended September 30, 2018
	Intercompany Sales to
(in thousands)	Americas		EMEA		Asia Pacific		Total
Americas	$	1,521	$	45,764	$	17,303	$	64,588
EMEA	51,471		18,691		4,687		74,849
Asia Pacific	3,779		16		2,696		6,491
Total intercompany sales	$	56,771	$	64,471	$	24,686	$	145,928

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2019		2018		2019		2018
(Loss) income from operations:
Americas	$	(21,183)	$	(16,599)	$	(72,039)	$	(50,122)
EMEA	7,105		386		13,499		(2,948)
Asia Pacific	2,144		5,229		6,135		16,898
Total	$	(11,934)	$	(10,984)	$	(52,405)	$	(36,172)

XML

Accrued And Other Liabilities (Tables)

9 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Schedule Of Accrued Liabilities

Accrued liabilities at September 30, 2019 and December 31, 2018 are summarized as follows:

(in thousands)	2019		2018
Compensation and benefits	$	19,648	$	23,787
Accrued taxes	19,500		17,246
Vendor accruals	12,033		6,895
Product warranty liability	2,985		3,788
Arbitration awards	4,406		2,256
Accrued professional fees	2,116		1,657
Accrued other	779		2,219
Royalties payable	1,234		1,417
Total	$	62,701	$	59,265

Schedule Of Other Liabilities

Other liabilities at September 30, 2019 and December 31, 2018 are summarized as follows:

(in thousands)	2019		2018
Long term employee indemnity	$	14,105	$	13,609
Long term tax liability	3,246		4,168
Defined benefit pension obligation	8,083		8,518
Long term deferred revenue	6,804		8,121
Other long term liabilities	8,940		4,915
Total	$	41,178	$	39,331

XML

Hedging Activities and Financial Instruments

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Hedging Activities and Financial Instruments

(8) Hedging Activities and Financial Instruments

Derivatives Designated as Hedging Instruments

On July 8, 2019, the Company entered into an interest rate swap contract, designated as a cash flow hedge, to minimize the risk associated with the variability of cash flows in interest payments from variable-rate debt due to fluctuations in the one-month USD-LIBOR, subject to a 0% floor, through February 26, 2024. Changes in the interest rate swap are expected to offset the changes in cash flows attributable to fluctuations of the one-month USD-LIBOR for the interest payments associated with the Company's variable-rate debt.

The notional amount and fair value of the derivative on our balance sheet at September 30, 2019 are disclosed below:

(in thousands)	Balance Sheet location	Notional amount		Fair value
Interest rate swap contract	Other liabilities	$	50,000	$	(798)

Amounts released from Accumulated Other Comprehensive Loss (AOCL) and reclassified into “Interest and other expense, net” did not have a material impact on our condensed consolidated statements of operations and comprehensive loss for the quarter and nine months ended September 30, 2019. The net amount of AOCL expected to be reclassified to earnings in the next 12 months is not expected to have material impact on our condensed consolidated statements of operations and comprehensive loss.

Derivatives Not Designated as Hedging Instruments

The Company conducts business in various countries using both the functional currencies of those countries and other currencies to effect cross border transactions. As a result, the Company is subject to the risk that fluctuations in foreign exchange rates between the dates that those transactions are entered into and their respective settlement dates will result in a foreign exchange gain or loss. When practicable, the Company endeavors to match assets and liabilities in the same currency on its balance sheet and those of its subsidiaries in order to reduce these risks. When appropriate, the Company enters into foreign currency contracts to hedge exposures arising from those transactions. The Company has elected not to prepare and maintain the documentation to qualify for hedge accounting treatment under ASC 815, “Derivatives and Hedging,” and therefore, all gains and losses (realized or unrealized) are recognized in “Interest and other expense, net” in the condensed consolidated statements of operations and comprehensive loss. Depending on their fair value at the end of the reporting period, derivatives are recorded either in prepaid expenses and other current assets or in accrued liabilities on the condensed consolidated balance sheet.

The Company had $105,923 and $75,304 in notional foreign exchange contracts outstanding as of September 30, 2019 and December 31, 2018, respectively. The fair values of these contracts were not material.

The Company translates foreign currency balance sheets from each international businesses’ functional currency (generally the respective local currency) to U.S. dollars at end-of-period exchange rates, and statements of earnings at average exchange rates for each period. The resulting foreign currency translation adjustments are a component of other comprehensive income (loss).

The Company does not hedge the fluctuation in reported revenue and earnings resulting from the translation of these international operations' results into U.S. dollars.

XML

Inventories

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventories

(4) Inventories

Components of inventories at September 30, 2019 and December 31, 2018 are summarized as follows:

(in thousands)	2019		2018
Raw materials	$	49,130	$	49,624
Work in process	5,941		2,969
Finished goods and parts	67,635		80,568
Inventories	$	122,706	$	133,161

XML

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Operating Leases
2020	$ 3,785
2021	10,514
2022	7,486
2023	6,227
2024	5,406
Thereafter	10,398
Total lease payments	43,816
Less: imputed interest	(7,236)
Present value of lease liabilities	36,580
Finance Leases
2020	292
2021	1,103
2022	829
2023	832
2024	828
Thereafter	6,021
Total lease payments	9,905
Less: imputed interest	(3,021)
Present value of lease liabilities	$ 6,884

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Summary Of Assets And Liabilities Measured At Fair Value On Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements as of September 30, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Description
Cash equivalents (a)	$	20,780	$	—	$	—	$	20,780
Israeli severance funds (b)	$	—	$	7,394	$	—	$	7,394
Derivative financial instruments(c)	$	—	$	(798)	$	—	$	(798)
	Fair Value Measurements as of December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Description
Cash equivalents (a)	$	6,141	$	—	$	—	$	6,141
Israeli severance funds (b)	$	—	$	6,822	$	—	$	6,822

(a)Cash equivalents include funds held in money market instruments and are reported at their current carrying value, which approximates fair value due to the short-term nature of these instruments and are included in cash and cash equivalents in the consolidated balance sheet.

(b)The Company partially funds the liability for its Israeli severance requirement through monthly deposits into fund accounts, the value of these contributions are recorded to non-current assets on the consolidated balance sheet.

(c)See Note 8 for additional information on the Company's derivative financial instruments.

XML

Revenue - Narrative (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Revenue Recognition [Abstract]
Outstanding performance obligation	$ 107,486
Amounts included in contract liability at the beginning of period	$ 24,072
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Axis]: 2019-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation (as a precentage)	93.00%
Performance obligations expected to be satisfied, expected timing	12 months
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Axis]: 2020-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation (as a precentage)	3.00%
Performance obligations expected to be satisfied, expected timing	3 months

XML

Segment Information (Schedule Of Revenue From Unaffiliated Customers By Product And Service) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Total revenue	$ 155,272	$ 164,511	$ 464,524	$ 506,948
Products
Total revenue	53,117	59,648	156,564	188,016
Materials
Total revenue	41,389	40,274	124,047	128,137
Services
Total revenue	$ 60,766	$ 64,589	$ 183,913	$ 190,795

XML

Net Loss Per Share (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Effect of dilutive securities excluded	$ 5,786	$ 5,770	$ 5,786	$ 5,455

XML

Accumulated Other Comprehensive Loss (Schedule Of Accumulated Other Comprehensive Loss By Component) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	$ 575,987
Other comprehensive income (loss)	(7,122)
Ending Balance	506,423
Foreign currency translation adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(36,669)
Other comprehensive income (loss)	(6,787)
Ending Balance	(43,456)
Defined benefit pension plan
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(2,647)
Other comprehensive income (loss)	207
Ending Balance	(2,440)
Derivative financial instruments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	0
Other comprehensive income (loss)	(798)
Ending Balance	(798)
Liquidation of non-US entity and purchase of non-controlling interests
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	338
Other comprehensive income (loss)	256
Ending Balance	594
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	(38,978)
Ending Balance	$ (46,100)