Mar 5, 2009
Operator
Good morning and welcome to 3D Systems’ Fourth Quarter and Full Year 2008 Earnings Results Conference Call and Audio Webcast. My name Brandy and I will facilitate the audio portion of today's interactive broadcast.
After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) At this time, I’d now like to turn the call over to Chanda Hughes with 3D Systems.
Chanda Hughes
Good morning and welcome to 3D Systems' conference call. I am Chanda Hughes and with me on the call are Abe Reichental, CEO, Damon Gregoire, CFO, and Bob Grace, General Counsel.
The audio webcast portion of this call contains a slide presentation that we will refer to during the call. Those following along on the phone who wish to access the slide portion of the presentation may do so via the web at www.3dsystems.com/ir.
Participants who would like to ask questions related to matters discussed in this conference call at the end of the session should call in using the phone numbers provided here on slide three. The phone numbers are also provided in the press release that we issued yesterday.
For those who have accessed the streaming portion of the call or the streaming portion of the webcast, please be aware that there is a three second delay and that you will not be able to post questions via the web. Before we begin the discussion, I would like to preface our presentation today with a statement regarding forward-looking information.
Certain statements made in this presentation 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 may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from historical results or from any future results expressed or implied by forward-looking statements.
In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements in the future or conditional tenses or that include the terms believe, belief, expects, estimates, intends, anticipates or plans to be uncertain and forward-looking. Forward-looking statements may include comments as to the company's beliefs and expectations as to future events and trends affecting its business.
Forward-looking statements are based upon management's current expectations concerning future events and trends and are necessarily subject to uncertainties, many of which are outside the control of the company. In particular, the factors stated under the heading forward-looking statements, cautionary statements and risk factors that appear in the company's periodic filing with the Securities and Exchange Commission as well as other factors could cause actual results to differ materially from those reflected or predicted in forward-looking statements.
At this time, I would like to introduce Abe Reichental, President and CEO.
Abe Reichental
Good morning, everyone, and thanks for taking the time to listen to our call this morning. As you already know yesterday, we released our operating results for the fourth quarter and full year '08 and we also filed our annual report on Form 10-K with the SEC.
I would like to review these operating results with you this morning and give you my perspective on our current business operations and prospects. Let me start by saying that it should come as no surprise that 2008 represented a difficult and challenging economic environment for us and all of our key customers.
Not withstanding the worsening economic condition that resulted in a significant revenue decline during the fourth quarter, the quality of our business improved. Specifically, we reported improved gross profit margin and operating income and continue to lower our pricing expenses for the fourth quarter of '08 on lower revenue.
We also reported higher unrestricted cash at the year end, than we had at the end of the third quarter. As you can see on slide 6, for the fourth quarter of '08, we reported a 22% revenue decline from our strong '07 fourth quarter primarily due to a shortfall in our high-end large-frame systems sales.
A corresponding 15% gross profit decrease of $15.4 million primarily on lower volumes. A four percentage point improvement in gross profit margin from the fourth quarter of '07, and a five percentage point sequential gross profit improvement relative to the third quarter of '08.
We also reported a 17% decline in operating expenses of $13.9 million and a $1.5 million of operating income and $1.8 million of net income resulting in $0.08 of fully diluted net income per share. I should note that fourth quarter net income was influenced by two items.
First, the $1.2 million favorable foreign tax settlement which added $0.05 fully diluted earnings per shares to our net income for the fourth quarter and full year '08. And second, the net effect of an increase in bad debt expense in the fourth quarter of '08 that was made upon learning on February 25, of '09 is one of our large Japanese customers filed for financial reorganization under Japanese law.
The net effect of this increase in bad debt expense was a reduction in our EPS for the fourth quarter and full-year of $0.02. We also reported our restricted cash increase during the fourth quarter of a $4 million to $22.2 million at December 31st.
As you can see on slide 7, our results for all of 2008 show most of the same trends. First, our revenue primarily due to a shortfall in our high-end large-frame system sales, a corresponding decrease in gross profit muting the effect of our '08 improvements when compared with '07, and continuing decline in authorizing expenses and a $6.2 million net loss for the full-year that resulted in a $0.28 fully diluted net loss per share.
I want to talk for a few minutes about some key factors that shaped the fourth quarter starting here with revenue. For '08, our total revenue fell some 11% as a result of the worsening global recession and frozen credit market, a very challenging operating environment that adversely impacted many of our automotive aerospace and consumer electronic customers and our first-tier service provider.
While this unprecedented global economic conditions result in a significant decline in large-frame system sales, and slowdown our materials revenue growth, our new line-up of 3-D Printers continue to grow. 3-D Printers sales increased 64% over the comparable 2007 quarter.
And it's worth noting that half of our yearend backlog of $1.4 million was attributable to 3D Printers. As I already mentioned earlier, even on a significant decline in revenue, our gross profit margin increased to 44%, up almost 400 basis points year-over-year, and up more than 500 basis points sequentially compared to our September '08 quarter.
We expect to continue to benefit in '09 from the cost base improvement that we begun in '08. As I mentioned earlier, our continuing efforts to reduce our operating expenses and ongoing improvement in our gross profit margin coupled with our effort to improve working capital management led to an improved year-end cash position.
Given the fact that we have no debt borrowing at this time, I believe that our financial resources remained adequate for our current and anticipated needs during this unprecedented economic period. Few words about our integrated material performance on slide 10.
Notwithstanding flat total material sales for the '08 year, our integrated materials revenue grew some 31% since the first quarter of '08, but fell well below our expectations on decline in system sales and demand for parts across our automotive, aerospace and consumer electronic customer. Revenue from integrated materials and composites grew to 28% of total material sales for the fourth quarter.
This increase continued to sequential trend experienced in each quarter in '08, which started 22% in the third quarter. However, as the fourth quarter came to an end, we started to see a decline in our overall material revenue driving by recessionary conditions, this reflected a decline in demand for parts made on our direct rapid manufacturing systems.
And now for a more detailed look at our financial performance for the third quarter and first nine months of 2008, I will turn the presentation over to Damon Gregoire, our Chief Financial Officer. Damon?
Damon Gregoire
Thanks, Abe. Good morning, everybody.
On the first slide, we have broken out fourth quarter revenue by category and region. As you can see on the left, our largest revenue category was materials, which increased to 45% of total revenue for the full year 2008.
The right side of the graph shows that European region was largest revenue contributor geographically with 45% of total revenue followed closely by North America were 39%. Foreign currency translation positively affected our sales outside the United States by $3.9 million for 2008.
Gross profit declined by 15% to $15.4 million for the fourth quarter of '08 from $18.1 million in the 2007 quarter due to lower revenue. Gross margin increased to 44% for the fourth quarter 2008, representing an almost 400 basis points increase year-over-year and a more than 500 basis point increase sequentially.
The increase in gross profit margin is consistent with our previously disclosed gross profit margin improvement initiatives. Changes in product mix among the systems that we sold during the fourth quarter and the contribution shortfall from the decline in large-frame system sales affected our gross profit margin and offset some of the progress noted above.
Other items affecting gross profit margin in the fourth quarter were an absence of duplicate supply chain cost associated with the transfer of logistics activities to Rock Hill and lowered amortization of internally developed software costs. For the full year gross profit decreased by 12% to $56 million, gross profit margins decreased to 40% for the full year of 2008 from 41% in the full year of 2007.
The decline in gross profit margin for the full year of '08 was primarily due to the factors just discussed that effected the fourth quarter along with the cost associated with our initial planned build up V-Flash finished goods inventory and higher amortization of internally developed software cost in the first three quarters of 2008 which were significantly lower in the fourth quarter of '08. Operating expenses continued their favorable downward trend in the fourth quarter of 2008 declining by 17% to $13.9 million from $16.7 million in the fourth quarter of '07.
This decrease reflected lower selling, general and administrative expenses while research and development expenses remained relatively flat. On a sequential quarter basis operating expenses have declined in each quarter of this year.
They declined 3% or $400,000 from the third to fourth quarter they also declined by 11% or $1.8 million for the second quarter to the third quarter and by 3% or $0.5 million from the first quarter to the second quarter of '08. The decline in SG&A cost consisted primarily of contract labor, accounting fees, occupancy cost, sales commissions, bonuses and incentive compensation as well as travel and other discretionary cost cutting initiatives.
Our progress would have been greater except for increased legal costs related to our previously disclosed litigation matters and an increase in allowance for bed debt. SG&A costs decreased 16% to $45.9 million for the year '08, these savings consisted primarily of contract labor, accounting fees, occupancy costs, sales commissions, bonus and incentive compensation as well as other discretionary cost cutting initiatives.
These savings were partially offset by $600,000 increase in legal costs and a bad debt increase of $700,000 for the year. And consistent with our new product roll outs, R&D increased by 5% to $15.2 million.
We expect SG&A costs to be in the range of $38 million to $42 million and R&D expenses to be in the range of $10 million to $12 million for the full year 2009. Accounts receivable decreased to $25.2 million at December 31, 2008 from $31.5 million at December 31, 2007, primarily due to lower sales, partially offset by an increase of days outstanding to 66 days at December 31 '08, from 64 days at December 31, 2007.
And the slight sequential decrease in days inventory on hand by one day to 100 days was due primarily to decreased revenue for the fourth quarter of '08. In line with what we expected based on our go-to-market strategy at December 31, 2008 inventories increased to $21.0 million from $20 million at December 31, 2008, reflecting the short-term materials and systems inventory purchases that we undertook to support future revenue including purchase of V-Flash Desktop Modelers and certain key components to support future production of 3-D Printers.
In the second half of the year, inventory reduction plans were put in place. And although we ended 2008 with inventory levels $1 million higher than at the end of '07, we reduced our inventories by $5.1 million since June of 2008.
And despite our contracting economy in which we operated during '08, we ended the fourth quarter with approximately $22.2 million of unrestricted cash compared to $18.1 million of unrestricted cash at September 30. The increase reflects our efforts to conserve cash by reducing operating expenses, improving gross profit margins and managing working capital.
Our year end cash balance also includes $1.1 million net cash proceeds from the sale of our Grand Junction facility and in January 2009 we used $3.1 million of restricted cash to payoff our outstanding industrial development bonds. Currently we have no other debt except for capital leases which in the ordinary course of business can not be called or accelerated.
And we believe that our financial resources are adequate for our current and anticipated future needs during these trying economic periods. We continue to focus on improving on working capital management in order to pursue our near-term growth opportunities vigorously.
That concludes my comments. Abe?
Abe Reichental
Thank you Damon, before we begin the Q&A session I would like to spend a few minutes reviewing the state of our business as we see them. I would like to begin this portion with a few cautionary remarks.
First, based on current economic conditions we expect 2009 to be an extremely challenging year. In fact it is entirely possible that we will experience continued sales declines during this unprecedented deepening global recession.
Second, I should also note that in the absence of the historical year-end surge in systems revenue, we anticipate reduced integrated material revenue growth in '09. Furthermore, softness in some of the key industries that we serve such as automotive, aerospace, consumer electronics, et cetera can result in a continued decline of revenue from our Direct Rapid Manufacturing Systems during the next several quarters.
And finally as we already experienced in Japan, customer solvency issue could result in reduced recurring revenue as we work to balance potential collection risk against revenue opportunities. On the other hand, we can expect some positive contributions during these unusual times.
Specifically, we anticipate that our service revenue could grow and benefit profitably from increased sales of iPro and sPro conversion packages and sales of additional service agreement as more customers seek to prolong the useful life of their aging systems during their on-cash conservation period. Additionally, we expect that sales of our new Direct Rapid Manufacturing Systems could help condition the otherwise elongated capital spending cycle aided by previously announced availability of our iPro XL with the largest build envelope in the industry for SLA parts.
And the sPro Centers that are coming to the market, March of this year. We just attended the mid-winter Lab Day tradeshow.
And based on our current offering and polls of the show, we anticipate dental manufacturing solutions to continue to grow even during this challenging period aided by our commercial initiatives that are already in placed with 3M, Sirona and SensAble, and also by additional commercial alliances without significant dental players. And the fruition of the dedicated business development in '08 at 3D Systems to accelerate penetration into this vertical market opportunity.
We further believe that sales of our new lineup of 3-D Printers will continue to grow as a result of the availability of our new RealWax printers that are already gaining positive traction in the marketplace. Continued expansion of our reseller network, previously announced plans to launch a larger format 3-D Printer, the Projet 5000 during the third quarter of this year.
And previously announced plans to commence commercial shipment of V-Flash modelers, our sub $10,000 desktop 3-D modeler, during the second quarter of this year. In connection with V-Flash, I would like to remind that as we begin to scale up shipment of our V-Flash systems, we expect quarterly drag on our EPS in the range of $0.02 to $0.04 per share for the initial four quarters of commercial activity.
I will also give you some sense about our target and ranges on operating expenses for '09. As Damon already mentioned, we expect to continue to reduce SG&A during the '09 to a range of $38 million to $42 million for the full year '09 and this is inclusive of our anticipated higher legal expenses for '09.
We also expect to be able to reduce our R&D spending to a range of between $10 million to $12 million for '09 without slowing down the rate of planed new product introductions for this period. I also wanted to tell you that should it become necessary, as a result of further deterioration of the global economic condition, we plan to take further actions to reduce our operating expenses and conserve cash.
Finally, I wanted to close by reminding everybody that particularly during this challenging economic period, we remain committed to our long-term goal of improving our customers' bottom line. And doing it through economical rapid design and manufacturing solutions that help our customers reduce cost and accelerate their new products to market.
Although we are feeling the impact of an unprecedented slowdown in manufacturing worldwide, we believe that our financial position and debt free balance sheet is adequate to enable us to continue with our future plan. And even within the current elongated capital spending cycle, our new lineup of 3-D Printers and direct profit manufacturing centers and materials should help drive demand for our product during this uncertain economic period.
Remember that our business model is built around significant recurring revenue components that are beginning to generate improved contribution margin. And with that, we will now gladly take your questions.
Chanda Hughes
We will now open the call to questions. We kindly request that you ask one question at a time and then return to the queue, thus allowing others to participate in the Q&A session.
As a reminder, please direct all questions thorough the teleconference portion of this call. The telephone numbers are provided again here on slide 25.
If you are calling inside the US, the number is 1-888-336-3485, the conference code is 85493285.
Operator
(Operator Instructions) Your first question comes from the line of Brian Drab with William Blair.
Brian Drab
Good morning.
Abe Reichental
Good morning.
Brian Drab
My question is just around the V-Flash, I just wanted to be clear, the $0.02 to $0.04 that you mentioned is that for the four quarters of shipments or is that per quarter?
Abe Reichental
It will be per quarter, and that's the range of anticipated drag as we scale up the shipments until we reach certain critical volumes.
Brian Drab
Okay. And could you remind us what types of volumes work into that assumption and is the EPS hit primarily coming from gross margin contraction?
Abe Reichental
Yes. It comes from gross margin contraction on systems ahead of recurring revenue contribution from V-Flash, more than making up for it.
In the models that we shared with you starting in May of '08, we begin to outline the potential scalability and recurring revenue generation based on unit placements and we said repeatedly in the last few quarters that we expect to exit the first 12 months of full commercial activity with at least at run rate of a 1000 units.
Brian Drab
Fine okay thank you I’ll get back in the queue.
Abe Reichental
You are welcome.
Operator
Your next question comes from the line of Bill Gibson with Nollenberger Capital.
Bill Gibson
Hi I think you talked about the expansion of the reseller channel could you give us a little more detail on that as to where we stand and just efforts you are taking in terms of tracking their financial strength?
Abe Reichental
Well let me start with tracking the financial strength of resellers; obviously in a period like this when we or as we contemplate adding additional resellers we look well beyond the conventional due diligence that one would have done 12 or 18 months ago and we particularly scrutinize and do a deep dive into their financial strength and flexibility of the resellers during this period. When we speak about where and how we are adding resellers today, our offering deal of 3-D Printers expanded significantly in the last 12 months, starting last March with the introduction of the first project HD and culminating in October and November with the introduction of the project CP and CPX, our first two RealWax units.
So a lot of the additional 3-D Printers that was introduced throughout the second, third, and fourth quarters of 2008 were aimed specially at rapid manufacturing production opportunities in jewelry, in dental, in micro casting applications. And that gave us an opportunity to go after additional resellers that specialized in those machine tool type applications and/or in jewelry applications and/or in dental application.
And this is where the extension effort are targeted today.
Bill Gibson
Thanks, Abe.
Abe Reichental
You are welcome.
Operator
Your next question comes from the line of Jay Harris with Goldsmith & Harris.
Jay Harris
Hey, within context of which you have outlined very thoroughly in terms of segments of the business that are likely to suffer some decline and segments of the business that you have optimism about growth. If we talk about cash on the balance sheet as indicator of the strength of the balance sheet, do you have internal forecasts that tell you whether you will be growing the balance sheet strength in 2009 or do not you know?
Abe Reichental
Well, let me speak in general terms and try to shed as much light as I can this. Our 2009 budget and plan took into consideration a great deal of assumptions that at the time that we made them seemed reasonable, balanced and well sought out.
And at the time that we bid our 2009 plans and budgets, we applied as many cautionary and as many optimistic assumptions to our budget and came out with an answer that suggested to us that we could be, as we continue to say in all of our disclosures, that we could be self-efficient through our own cash generation capabilities. And so far through the end of last year, we continue to maintain that.
And again in this earnings release, we indicated very clearly that based on what we have in front of us today, we believe that we can continue to execute all of our planned activities for this year based on our own resources. Jay, we live in an unprecedented period where by some of our long-term customers are hurting.
And there is no telling at this point in time, how solvent some of our, even Blue Chip customers are going to be in the next few quarters. What I can tell you is that we are very vigilant on a daily basis.
And we on a daily basis have to, some times make trade off calls in terms of potentially reducing our exposure with certain customer and trying to convince them to take a little less as we manage their potential risks. And that is the environment that we operate in.
We, Jay, have lots of customers and providers to those customers that our industry segments that are directly enacted as by end user consumption across the board whether it's in automotive, in aerospace and consumer electronics, in jewelry, and in toys. These are all segments that we do a lot with.
In the ordinary course of business, these customers are good recurring revenue customers and new revenue customers in the sense that they continue to extend our activities and when their consumption drops, they are hurt, and that is reflected in our operating model and the operating results.
Jay Harris
Thank you.
Operator
Your next question comes from the line of Andrew Nowinski with Piper Jaffray.
Andrew Nowinski
Good morning, gentlemen. Just a question on the write off in Japan.
In many cases once the reorders complete, the company emergence as the stronger customer, just wondering if you see that happening here or have all the opportunities with this customer come to an end?
Abe Reichental
No actually this is the opening procedure, if you will, for this customer. The customer just filed for what's called in Japan, a reorganization or rehabilitation act.
The initial hearing only took place a couple a days ago. What we have done out of the abundance of caution and conservatism, and we believe that given the unique viability of this customer in Japan, given the fact that they are critical to the success of some very good automotive companies in Japan, including the likes of Honda and Toyota, given the fact that if anybody is going to emerge successful out of this automotive fiasco, it's more likely to be companies like Honda and Toyota.
We are optimistic about the final outcome here. However, we are publicly-traded company, and we are governed by certain accounting rules.
And in this environment, and under the circumstances and the facts that we know today out of the abundance of caution, we have taken the steps that we have taken.
Andrew Nowinski
Okay, thanks. And then, what percentage of that $1.3 million was materials versus systems?
Abe Reichental
Damon, do you have any?
Damon Gregoire
Out of that, of the $1.3 million, it was over a half for systems.
Abe Reichental
Yeah.
Andrew Nowinski
Okay, got it. Thanks, guys.
Abe Reichental
You are welcome.
Operator
(Operator Instructions). Your next question comes from the line of Jim Bartlett with Bartlett Investors.
Jim Bartlett
It was a very large sequential improvement in the gross margins in the fourth quarter. Could you tell us a little bit more where that came from, and how, what's your outlook for gross margins going forward in 2009 are?
Abe Reichental
Good morning Jim I will start and maybe I will ask Damon to help me a little bit. Remember that starting in the second quarter of '08 we outlined to you a series of gross profit improvement plans that included bringing our service policy logistics activities in-house and for a period of time we ran with duplicate costs there.
We outlined also working with some of our key component suppliers to improve reliability and reduce the costs, our warranty costs that was one of the initiatives and we had a few other initiatives. What you are beginning to see in the 400 basis points improvement is sum of the early results of these initiatives, the fourth quarter was the first quarter that we operated with our supply chain, freight and logistics directly in the Rock Hill without duplicate costs.
We also begun to benefit from some improved component reliability. Damon, mentioned earlier that in addition to that we also had some amount of internally developed software that dropped off the amortization of that, and that contributed.
And thus in our minds those benefits, the benefit of operating out of Rock Hill as opposed to paying to a third party logistic provider, the benefit of enjoying improved component reliability, the benefit of no longer having major the portions of internally developed software, those are going to be recurring benefits and those are not one time improvement. And what also is worth noting here Jim is that we have done this, without that traditional lift that we get from the contribution of large-frame gross profit margin which is much higher than our 3-D Printers gross profit margin.
So, the fact that we could generate this kind of an improvement both over last year and sequentially for the fourth quarter and sequentially over the third quarter with a very different mix of product, makes us somewhat hopeful that we are on the right track in terms of generating additional improvement down the road. And I will remind you even though we did not put it in this particular webcast that we are still working against our long term target operating module which I believe pegs gross profit margin when we reached that module much higher than we achieved in the fourth quarter.
Damon, do you have anything to add to that.
Damon Gregoire
I think you covered this quite thoroughly, but you can see on one of the slides that we put out there our gross profit margins for the quarter just what Abe was saying and its improvement on our products, gross profit margin which is where most of these fixed cost reductions, let's say take effect. So it's right on track and its right in line with we announced in the third quarter of that by the end of the first quarter '09 we should be seeing a sustainable $1 million a quarter fixed cost reduction in gross margin.
Jim Bartlett
It also looks like the majority of it was consistent. Is that correct?
Damon Gregoire
That's where a lot of these fixed costs gets allocated, up to in to systems, which is why the systems margin improved that much.
Abe Reichental
Absolutely.
Jim Bartlett
Okay just follow on a bit here in the, Abe in your update on the slides talking about the dental unit, you mentioned you got your initiatives with but also additional commercial alliances with other dental players, could you talk about that as well as the formation of this dedicated business developing unit to accelerate penetration in dental?
Abe Reichental
Yes, Jim we are in the process of discussing additional dental alliances with other significant dental players. I am not yet in a position to name specific names because the negotiations and discussions are ongoing as we speak.
But I felt confident enough mentioning it as a bullet because based on the polls of the Mid-Winter Lab Trade Show took place this past Saturday based on the status of this discussions, I felt confident mentioning it as a bullet because we believe that some of those are fairly eminent. We also are recognizing the importance of whole dental manufacturing arena, pull the few of our internal experts together in to a business development unit that can now go to the dental marketplace and able to sell all of our dental solutions across all technologies.
As you know, Jim, we have some dental solutions within our 3-D printing technology, we have other dental solutions that are using our Stereolithography technology and we also have some dental solutions that are embedded in our direct metal centering technology. And to make sure that we go out to the marketplace and have cohesive market facing strategy, we put together with this team of business developers, so that they could go and offer all the solutions and help the likes of SensAble and Sirona, 3M and others have their solution be fully powered by 3D Systems.
Jim Bartlett
How big is the team?
Abe Reichental
We have about five people in this team, and they bring in all the resources and skills that they need. Remember that their job is not to go and sell necessarily and do the things that our ordinary sales force does.
Their position is to be able to put together opportunities, line them up for further comprehensive solutions and then bring the regular sales team into it.
Jim Bartlett
You said significant commercial alliances. It's is my understanding that 3M, Sirona and SensAble was very, very large share of the market.
And domestically, anyway there wasn't too many other opportunities left.
Abe Reichental
No. I would argue that there are at least, as many other significant players, and then there are other less significant players that would be significant to our business while they may not be significant in the size.
I mean look, the value of dental material transaction that happen between the dental lab and the dentist in accordance with all the independent dental studies out there that are available to us and to everybody else, the value of those transaction in 2008 was in excess of $7 billion. That's the size of the dental solutions market between the dentist and the dental lab.
And everybody out there is trying to get a few slivers or slices out of it by trying to apply digital manufacturing technology to what was traditionally done completely manually.
Jim Bartlett
Okay.
Abe Reichental
And so, this market opportunity is enormous and there are many more players that we would like to attract and allow them to be powered by 3D Systems Additive Fabrication technology.
Jim Bartlett
Thank you.
Operator
(Operator Instructions). At this time, there are no further questions.
I would like to turn the call back to Chanda Hughes for closing remarks.
Chanda Hughes
Thank you for joining us today and for your continued support of 3D Systems. A replay of this webcast will be made available after the call on the Investor Relations section of our website www.3dsystems.com/ir.
Operator
This concludes today's conference. You may now disconnect.