Materialise Reports Second Quarter 2018 Results

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our intentions, beliefs, assumptions, projections, outlook, analyses or current expectations, plans, objectives, strategies and prospects, both financial and business, including statements concerning, among other things, current estimates of fiscal 2018 revenues, deferred revenue from annual licenses and maintenance and Adjusted EBITDA, the benefits of our collaboration with BASF and the ACTech acquisition, results of operations, cash needs, capital expenditures, expenses, financial condition, liquidity, prospects, growth and strategies (including our strategic priorities for 2018), and the trends and competition that may affect the markets, industry or us. Such statements are subject to known and unknown uncertainties and risks. When used in this press release, the words “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “forecast,” “will,” “may,” “could,” “might,” “aim,” “should,” and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon the expectations of management under current assumptions at the time of this press release. These expectations, beliefs and projections are expressed in good faith and the company believes there is a reasonable basis for them. However, the company cannot offer any assurance that our expectations, beliefs and projections will actually be achieved. By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. We caution you that forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All of the forward-looking statements are subject to risks and uncertainties that may cause the company’s actual results to differ materially from our expectations, including risk factors described in the company’s annual report on Form 20-F filed with the U.S. Securities and Exchange Commission on April 30, 2018. There are a number of risks and uncertainties that could cause the company’s actual results to differ materially from the forward-looking statements contained in this press release.

The company is providing this information as of the date of this press release and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise, unless it has obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.

Consolidated income statement (Unaudited)

	For the three months ended									For the six months
	June 30,									ended June 30,
(in 000, except per share amounts)	2018			2018			2017			2018			2017
		U.S.$			€			€			€			€

Revenue		52,550			45,076			33,612			88,975			65,533
Cost of sales		(23,652	)		(20,288	)		(14,224	)		(40,232	)		(27,668	)
Gross profit		28,898			24,788			19,388			48,743			37,865
Gross profit as % of revenue		55.0	%		55.0	%		57.7	%		54.8	%		57.8	%

Research and development expenses		(6,798	)		(5,831	)		(5,131	)		(11,446	)		(9,723	)
Sales and marketing expenses		(13,805	)		(11,842	)		(10,009	)		(22,441	)		(19,617	)
General and administrative expenses		(9,358	)		(8,027	)		(5,771	)		(15,187	)		(11,150	)
Net other operating income (expenses)		2,146			1,841			1,228			2,390			2,246
Operating (loss) profit		1,083			929			(295	)		2,059			(379	)

Financial expenses		(1,127	)		(967	)		(1,317	)		(2,517	)		(2,236	)
Financial income		689			591			890			1,431			1,667
Share in loss of joint venture		(164	)		(141	)		(42	)		(244	)		(431	)
(Loss) profit before taxes		481			412			(764	)		729			(1,379	)

Income taxes		(50	)		(43	)		(191	)		(543	)		(392	)
Net (loss) profit for the period		431			369			(955	)		186			(1,771	)
Net (loss) profit attributable to:
The owners of the parent		431			369			(955	)		186			(1,771	)
Non-controlling interest		−			−			−			−			−

Earnings per share attributable to owners of the parent
Basic		0.01			0.01			(0.02	)		0.00			(0.04	)
Diluted		0.01			0.01			(0.02	)		0.00			(0.04	)

Weighted average basic shares outstanding		47,428			47,428			47,325			47,378			47,325
Weighted average diluted shares outstanding		48,131			48,131			47,325			48,106			47,325

Consolidated statements of comprehensive income (Unaudited)

	For the three months ended							For the six months
	June 30,							ended June 30,
(in 000)	2018		2018		2017			2018			2017
	U.S.$		€		€			€			€

Net profit (loss) for the period		431		369		(955	)		186			(1,771	)
Other comprehensive income
Exchange difference on translation of foreign operations		62		53		(448	)		(42	)		(326	)
Other comprehensive income (loss), net of taxes		62		53		(448	)		(42	)		(326	)
Total comprehensive income (loss) for the year, net of taxes		493		422		(1,403	)		144			(2,097	)
Total comprehensive income (loss) attributable to:
The owners of the parent		493		422		(1,403	)		144			(2,097	)
Non-controlling interest		−		−		−			−			−

Consolidated statement of financial position (Unaudited)

			As of
	As of June 30,		December 31,
(in 000)	2018		2017
	€		€
Assets

Non-current assets
Goodwill		18,416		18,447
Intangible assets		27,058		28,646
Property, plant & equipment		89,011		86,881
Investments in joint ventures		−		31
Deferred tax assets		288		304
Other non-current assets		4,062		3,667
Total non-current assets		138,835		137,976

Current assets
Inventories		10,794		11,594
Trade receivables		38,408		35,582
Other current assets		10,213		9,212
Cash and cash equivalents		48,719		43,175
Total current assets		108,134		99,563
Total assets		246,969		237,539

				As of
	As of June 30,			December 31,
(in 000)	2018			2017
	€			€
Equity and liabilities
Equity
Share capital		2,735			2,729
Share premium		80,396			79,839
Consolidated reserves		(4,233	)		(3,250	)
Other comprehensive income		(1,845	)		(1,803	)
Equity attributable to the owners of the parent		77,053			77,515
Non-controlling interest		−			−
Total equity		77,053			77,515

Non-current liabilities
Loans & borrowings		85,700			81,788
Deferred tax liabilities		6,603			7,006
Deferred income		6,892			5,040
Other non-current liabilities		1,692			1,904
Total non-current liabilities		100,887			95,738

Current liabilities
Loans & borrowings		12,519			12,769
Trade payables		16,437			15,670
Tax payables		3,288			3,560
Deferred income		22,309			18,791
Other current liabilities		14,476			13,496

Total current liabilities		69,029			64,286
Total equity and liabilities		246,969			237,539

Consolidated statement of cash flows (Unaudited)

	For the six months
	ended June 30,
(in 000)	2018			2017
	€			€
Operating activities
Net (loss) profit for the period		186			(1,771	)
Non-cash and operational adjustments
Depreciation of property, plant & equipment		5,517			3,954
Amortization of intangible assets		2,498			1,269
Share-based payment expense		366			700
Loss (gain) on disposal of property, plant & equipment		(90	)		28
Movement in provisions		−			14
Movement reserve for bad debt		68			139
Financial income		(58	)		(318	)
Financial expense		1,032			585
Impact of foreign currencies		111			302
Share in loss of a joint venture (equity method)		244			431
Income taxes and deferred taxes		543			392
Other		(92	)		(58	)
Working capital adjustment & income tax paid
Increase in trade receivables and other receivables		(4,147	)		(3,580	)
Decrease (increase) in inventories		774			(509	)
Increase in trade payables and other payables		5,634			4,207
Income tax paid		(1,555	)		(597	)
Net cash flow from operating activities		11,031			5,188

	For the six months ended
	June 30,
(in 000)	2018			2017
	€			€
Investing activities
Purchase of property, plant & equipment		(8,588	)		(15,770	)
Purchase of intangible assets		(583	)		(1,027	)
Proceeds from the sale of property, plant & equipment (net)		486			104
Available for sale investments		(50	)		−
Investments in joint-ventures		−			(500	)
Interest received		(2	)		241
Net cash flow used in investing activities		(8,737	)		(16,952	)

Financing activities
Proceeds from loans & borrowings		18,770			14,203
Repayment of loans & borrowings		(14,074	)		(1,634	)
Repayment of finance leases		(1,366	)		(1,405	)
Direct attributable expense capital increase		207			−
Interest paid		(814	)		(302	)
Other financial income (expense)		(130	)		(154	)
Net cash flow from (used in) financing activities		2,593			10,708

Net increase of cash & cash equivalents		4,887			(1,056	)
Cash & cash equivalents at beginning of the year		43,175			55,912
Exchange rate differences on cash & cash equivalents		657			(1,024	)
Cash & cash equivalents at end of the year		48,719			53,832

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

	For the three months						For the six months
	ended June 30,						ended June 30,
(in 000)	2018			2017			2018			2017
	€			€			€			€

Net profit (loss) for the period		369			(955	)		186			(1,771	)

Income taxes		43			191			543			392
Financial expenses		967			1,317			2,517			2,236
Financial income		(591	)		(890	)		(1,431	)		(1,667	)
Share in loss of joint venture		141			42			244			431
Depreciation and amortization		4,010			2,656			8,015			5,224

EBITDA		4,939			2,361			10,074			4,845

Non-cash stock-based compensation expense (1)		277			371			366			700
Acquisition-related expenses of business combinations (2)		−			−			−			−

ADJUSTED EBITDA		5,216			2,732			10,440			5,545

(1)		Non-cash stock-based compensation expenses represent the cost of equity-settled and cash-settled share-based payments to employees
(2)		During the periods presented, we did not incur any fees or costs in connection with acquisitions.

Segment P&L (Unaudited)

					Materialise
	Materialise		Materialise		Manufact-		Total		Unallocated		Consoli-
(in 000)	Software		Medical		uring		segments		(1)		dated
	€		€		€		€		€			€

For the six months ended June 30, 2018
Revenues	17,457		24,346		47,019		88,822		153			88,975
Segment EBITDA	5,183		4,184		5,397		14,764		(4,690	)		10,074

Segment EBITDA %	29.7	%	17.2	%	11.5	%	16.6	%				11.3	%

For the six months ended June 30, 2017
Revenues	16,880		20,578		27,862		65,320		213			65,533
Segment EBITDA	5,945		1,072		2,563		9,580		(4,735	)		4,845

Segment EBITDA %	35.2	%	5.2	%	9.2	%	14.7	%				7.4	%

					Materialise
	Materialise		Materialise		Manufact-		Total		Unallocated		Consoli-
(in 000)	Software		Medical		uring		segments		(1)		dated
	€		€		€		€		€			€

For the three months ended June 30, 2018
Revenues	9,131		12,400		23,387		44,918		158			45,076
Segment EBITDA	2,859		2,124		2,264		7,247		(2,308	)		4,939

Segment EBITDA %	31.3	%	17.1	%	9.7	%	16.1	%				11.0	%

For the three months ended June 30, 2017
Revenues	8,305		10,646		14,455		33,406		206			33,612
Segment EBITDA	2,952		758		1,241		4,951		(2,590	)		2,361

Segment EBITDA %	35.5	%	7.1	%	8.6	%	14.8	%				7.0	%

(1) Unallocated Revenues consist of occasional one-off sales by our core competencies not allocated to any of our segments. Unallocated Segment EBITDA consists of corporate research and development, corporate headquarter costs and net other operating income (expense).

Reconciliation of Net Profit (Loss) to Segment EBITDA (Unaudited)

	For the three months						For the six months
	ended June 30,						ended June 30,
(in 000)	2018			2017			2018			2017
	€			€			€			€

Net profit (loss) for the period		369			(955	)		186			(1,771	)
Income taxes		43			191			543			392
Financial expenses		967			1,317			2,517			2,236
Financial income		(591	)		(890	)		(1,431	)		(1,667	)
Share in loss of joint venture		141			42			244			431

Operating profit		929			(295	)		2,059			(379	)

Depreciation and amortization		4,010			2,656			8,015			5,224
Corporate research and development		496			516			986			1,025
Corporate headquarter costs		2,813			2,464			5,077			4,537
Net other operating income (expense)		(1,001	)		(390	)		(1,373	)		(827	)

Segment EBITDA		7,247			4,951			14,764			9,580

« Previous Page 1 | 2 | 3 | 4 Next Page »