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Edited Transcript of DDD earnings conference call or presentation 28-Feb-19 9:30pm GMT

Q4 2018 3D Systems Corp Earnings Call

ROCK HILL Mar 1, 2019 (Thomson StreetEvents) -- Edited Transcript of 3D Systems Corp earnings conference call or presentation Thursday, February 28, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* John Nicholas McMullen

3D Systems Corporation - Executive VP & CFO

* Stacey Witten

3D Systems Corporation - VP of Finance, IR and Financial Planning & Analysis

* Vyomesh I. Joshi

3D Systems Corporation - President, CEO & Director

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Conference Call Participants

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* Ananda Prosad Baruah

Loop Capital Markets LLC, Research Division - MD

* Hendi Susanto

G. Research, LLC - Research Analyst

* James Andrew Ricchiuti

Needham & Company, LLC, Research Division - Senior Analyst

* Joseph Aiken

William Blair & Company L.L.C., Research Division - Associate

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Presentation

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Operator [1]

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Good afternoon, and welcome to 3D Systems conference call and audio webcast to discuss the results of the fourth quarter and full year 2018. My name is Roya, and I'll facilitate the audio portion of today's interactive broadcast. (Operator Instructions) Please note, this conference is being recorded.

At this time, I'd like to turn the call over to Stacey Witten, Vice President of Investor Relations and FP&A, 3D Systems.

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Stacey Witten, 3D Systems Corporation - VP of Finance, IR and Financial Planning & Analysis [2]

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Good afternoon, and welcome to 3D Systems conference call. I'm Stacey Witten, and with me on the call are Vyomesh Joshi, our President and Chief Executive Officer; John McMullen, Executive Vice President and Chief Financial Officer; and Andy Johnson, Chief Legal Officer. The 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 this presentation, may do so on the Investor Relations section of our website.

Participants who would like to ask questions at the end of the session related to matters discussed in this conference call should call in this using the phone numbers provided on this slide and in the press release that we issued today. For those who have accessed the streaming portion of the webcast, please be aware there may be a few second delay, and you will not be able to post questions via the web.

The following discussion and responses to your questions reflects management's views as of today only and will include forward-looking statements as described on this slide. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and our filings with the SEC, including our most recent annual report on Form 10-K.

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

Finally, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2017.

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

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [3]

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Thanks, Stacey. Good afternoon, everyone. We have made significant progress in our multi-year turnaround and transformation of the company. Before we discuss the details of our financial results, I would like to recap the progress we made during 2018. After stabilizing the company and putting a foundation in place, we shifted our transformation efforts, enhancing our portfolio with several innovative and disruptive new products, while at the same time improving our infrastructure, operations, go-to-market and cost structure.

Throughout the year, we launched a series of new products from the next-generation SLS 6100 and expanded MJP 2500 product line and low-cost DLP FabPro 1000 printer to disruptive Figure 4 stand-alone and production systems, and a game-changing dental solution with the NextDent 5100 printer and 30 dental-specific 3D printing materials.

Additionally, we introduced our next-generation metal systems with the DMP Flex 350, DMP Factory 350 and DMP Factory 500. Announced a strategic partnership with GF Machining Solutions, which brings us traditional metals manufacturing expertise, automation know-how and scalability as well as strong partner sales network and enhanced integration capabilities between additive and subtractive solutions.

Implemented a major Oracle ERP system upgrade, which went live in mid-2018, which we expect will help drive longer-term operational efficiencies, better automation of processes and data analytics. Continued to invest in and build out our go-to-market strategy, including completing the building of customer innovation centers in Germany and Belgium. And in fourth quarter, we hired a VP and General Manager to lead the Americas region, Lynn McLean brings a wealth of experience as a sales executive leading direct and partner sales teams in digital transformation, cloud service and industrial environment.

Lynn joining also fills the last portion of our regional sales management structure under Herbert Koeck's direct global leadership. Additionally, in the fourth quarter, we hired an executive leader for software and digitization, Radhika Krishnan who brings a consistent track record for a customer-first approach to driving growth in emerging technologies and has expertise to improve simplicity, automation and collaborations through software.

During the year, we reduced companywide total headcount, while improving overall operations and processes. When I joined the company, I brought executives with very specific talent and expertise to help turnaround the company. And I had some members of my team narrowly focused to improve operations, in particular, in supply chain and services.

At the end of 2018, we were in position to start, to take steps to streamline and simplify the leadership team, and we made a series of organizational changes, which we believe will improve execution, efficiency, collaboration and decision-making across the company.

We carved out several key operational areas and created an operations group under the leadership of Phil Schultz. Menno Ellis now leads the plastics group in addition to the dental and advanced application development teams. And we moved Strategy and Corporate Development into the CFO organization under John McMullen's leadership.

With these changes, the former executive team members who were leading supply chain, services and corporate development left the company. While improving our operational structure, we also continued to deliver on our previously-discussed growth drivers. For the full year, we reported total revenue growth of 6%. Printer revenue growth of 25% on a 76% increase in printer unit sales. Software revenue growth of 5%. Healthcare solutions revenue growth of 19% growth. And on-demand manufacturing revenue growth of 2%, despite the headwinds related to export compliance and outsourcing changes.

Materials revenue grew 1%, a rate we expect to increase during the second half of 2019 as a result of printer unit placements during 2018 and expected ongoing unit growth and ramp of new products in 2019.

We are pleased with the operational progress we have made, the portfolio enhancements introduced throughout 2018, our improved execution and the cost structure opportunities available to us as we enter 2019. With that, I would like to provide an overview of the fourth quarter before John provides more detail on our financial results.

In the fourth quarter, total revenue increased 2%, driven by continued growth in printer units and printer revenue in both metals and plastics and software and healthcare solutions growth. Our new products have been well received, in particular, the NextDent 5100 and new DMP systems. And we expect to continue to ramp sales and production of all our new solutions.

GAAP gross profit margin in the fourth quarter of 2018 was 45.7%, and non-GAAP gross margin was 46.3%. We are beginning to see results from the actions we are taking to improve our cost structure. And both GAAP and non-GAAP operating expenses decreased 2% compared to the fourth quarter of 2017. For the fourth quarter of 2018, we reported non-GAAP earnings of $0.10 per share and a GAAP loss of $0.04 per share.

Now let me turn it over to John to discuss our fourth quarter 2018 financial performance in more detail. John?

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [4]

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Thanks, VJ. Good afternoon, everyone. For the fourth quarter, we reported revenue of $180.7 million, an increase of 2% compared to the fourth quarter of 2017.

GAAP gross profit margin was 45.7% compared to 48.2% in the fourth quarter of 2017. Gross profit margin was pressured by sales mix across printers, materials and on-demand services and lower on-demand margins were also pressured by facility consolidation costs, while also investing in other facilities to improve and enhance our overall capabilities and global footprint.

GAAP operating expenses decreased 2% to $89.6 million as we began to see the results of our cost structure improvement actions, which offset higher legal costs related to the ongoing export compliance investigation and litigation.

We reported a GAAP loss of $0.04 per share in the fourth quarter of 2018, inclusive of a $4.9 million tax benefit related to the release of reserves resulting from the expiration of open tax periods compared to a GAAP loss of $0.08 per share in the fourth quarter of 2017.

We reported non-GAAP earnings of $0.10 per share or $11.4 million in the fourth quarter of 2018, including the tax benefit compared to non-GAAP earnings of $0.05 per share or $5.3 million in the fourth quarter of 2017.

We are pleased with our revenue growth across many categories of the business in the fourth quarter, in particular, the continued growth in printer revenue, which resulted from growth across multiple platforms in all regions as well as continued growth in software and healthcare solutions revenue. Printer revenue increased 17% to $40.7 million on a 113% increase in printer unit sales across categories.

As we have discussed, printer unit sales, revenue mix and overall average ASPs will likely continue to fluctuate, particularly as we ramp sales of new products, which have a very wide range of prices. We believe the printer unit placements we continue to make today will help fuel our annuity-based business model over the longer term.

Materials revenue decreased 2% to $42 million in the fourth quarter. A lag time between printer placements and scaling materials utilization is very typical, and over time, we expect stronger growth in materials as we continue to place highly productive units quarter after quarter and continue to reshape our installed base of printer units.

Healthcare revenue increased 16% to $58.4 million, with growth across all categories. We continue to be pleased with the overall demand trends for healthcare, and we expect to continue to ramp sales of NextDent 5100 printers and to grow all categories of healthcare solutions.

Software revenue increased 3% to $26.7 million in the fourth quarter. While quarterly performance may fluctuate, we continue to expect growth from this category long term.

On-demand manufacturing revenue increased 5% to $27.7 million in the fourth quarter, benefiting from some large orders from industrial customers. We believe our investments in facilities, technology, customer experience, demand generation and our enhanced sales approach have resulted in improvements in our on-demand business. However, we expect headwinds over the next several quarters as we implement actions to change our approach and processes related to global sourcing of orders. As a reminder, consistent with our disclosures, our quarterly results and revenue growth can be partially impacted by buying patterns of large enterprise customers.

We reported GAAP gross profit margin of 45.7% and non-GAAP gross profit margin of 46.3% in the fourth quarter of 2018 as cost improvements from ongoing supply chain cost-reduction initiatives continue to be offset by the impact of sales mix, cost related to ramping new products and cost to close certain facilities, while at the same time, investing in other facilities to improve and enhance our utilization, capabilities and global footprint, in particular, with on-demand and customer innovation center facilities.

We continue to drive supply chain optimization, manufacturing efficiencies and process improvements, and therefore, continue to expect fairly stable gross profit margins in 2019, with opportunities for expansion over the longer term with increasing materials growth and mix improvements.

GAAP operating expenses for the quarter were $89.6 million, a decrease of 2% compared to the fourth quarter of 2017, including a 3% decrease in SG&A expenses and a 2% increase in R&D expenses.

Non-GAAP operating expenses in the fourth quarter were $75.7 million, a 2% decrease from the fourth quarter of the prior year. While timing of certain expenses fluctuate, in the second half of 2018, we believe we are beginning to see the results of the actions we are taking to reduce our cost structure. Compared to the 2017 quarter, non-GAAP SG&A expenses decreased 4% to $52.2 million and non-GAAP R&D expenses increased $500,000 or 2% to $23.5 million. We are shifting from development to marketing and sales support of the new products we have rolled out throughout 2018.

And for 2019, we plan to focus R&D on materials innovations and software growth opportunities. We are moving beyond some of the heavy investments which were necessary to turn around the company, and have multiple significant product launches behind us as well. We have reduced overall headcount and total cost of workforce, including contractors and consultants, and have reduced operating expenses even as higher legal fees related to export compliance and litigation continue.

We are very focused on reducing our cost structure and driving cash generation during 2019. We generated $7.7 million of cash from operations during the fourth quarter and $4.8 million of cash from operations in the full year of 2018.

We ended the quarter with $110 million of cash on hand, including $25 million of proceeds from our revolving credit facility. We have continued to invest in IT transformation and go-to-market, including facilities, e-commerce capabilities and support for new product rollouts. Support for the rollout and ramping of new products also included a significant increase in inventory as a result of timing of supply chain lead times and product production and shipment plans for our expanded portfolio.

While cash use and generation will continue to fluctuate from period to period, we expect to generate organic free cash flow in 2019 as we begin to reduce inventory and capital expenditures and drive improved profitability.

Additionally, our existing $150 million revolver was nearing the end of its 5-year original term, so we took action to initiate a new revolver for $100 million with an additional $100 million 5-year term loan, repayable at any time without penalty, which we believe provides the right level of liquidity support, while we shift from investment phase to cash generation in 2019.

Before I turn the call back to VJ, I'd like to take a moment to summarize where we are today and a high-level 2019 outlook.

We have a strong operational foundation in place with improved processes across the company and with new products launched in 2018, an unmatched portfolio. We expect revenue linearity throughout 2019 to be similar to recent years, but with weaker sequential seasonality in Q1. We continue to expect growth to be driven by printer revenue growth, including the expected ramp of sales of new products launched throughout 2018, materials growth with higher growth beginning in the second half of 2019, continuing healthcare revenue growth and software growth continuing and improving over time.

We are pleased with the overall progress we have made, but we continue to focus on additional operational efficiencies and cost-reduction opportunities. We believe we are well positioned for profitable growth as we enter 2019, and expect continued revenue growth, improved profitability and cash generation.

With that, I'll turn the call back to VJ for some concluding remarks. VJ?

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [5]

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Thanks, John. We have made significant progress in our turnaround and transformation work for the company. We launched several new products in 2018, and are very excited about the strength of our entire portfolio of workflow solutions focused on production applications. We believe we have significant opportunities across our key verticals and are increasing our market share in several categories, while also expanding our market opportunities with new solutions and additional capabilities.

With our improved operations, execution and unmatched portfolio, we believe we are well positioned to drive continued and increasingly profitable growth in 2019 and beyond. And with that, I would like to turn the call back to Stacey, who will open the floor for questions. Stacey?

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Stacey Witten, 3D Systems Corporation - VP of Finance, IR and Financial Planning & Analysis [6]

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Thanks, VJ. We'll now open the call to questions. (Operator Instructions) As a reminder, please direct all questions to the teleconference portion of this call. The telephone numbers are provided again on the slide. If you're calling inside the U.S., the number is 1 (877) 407-8291, and if you're calling outside the U.S., the number is 1 (201) 689-8345.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Ananda Baruah with Loop Capital.

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Ananda Prosad Baruah, Loop Capital Markets LLC, Research Division - MD [2]

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Just 2 for me, if I could. Just on the revenue guide, can you walk us through why the softer seasonality in the March quarter? And then VJ, do you think that revenue growth in 2019 can be as strong or stronger as in '18? It sounds like you have more things, more sort of wind -- winded to sail, so to speak. But if not, what would be the reasons that it might not be? And then I have a follow-up.

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [3]

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Yes. I'll say a little on Q1, maybe turn it over to VJ for the full year. So in Q1, I think one of the impacts for us and the reason that we directed to a little more seasonality, sequential seasonality there, is related to large customer year-over-year order tends, which by the way has nothing to do with their own revenue performance or anything like that, but just timing of large orders. And we have visibility to that, and that has somewhat of an impact in Q1. But it's not something we'd view as weakness.

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [4]

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So I think for 2019, we will continue to drive the unit growth because the unit growth is going to be very important. The new products now, they all are ramping very nicely. As I mentioned, our dental product is doing extremely well. We are getting -- even in the Lab Day last week, we heard from our customers and our channel partners that the acceptance of our 5100 is phenomenal. We also feel very good about our metal printers, the 350, the 500. And materials growth will come in second half because we absolutely are putting now the units. Our legacy materials are declining a little bit faster than we thought. But I do believe by second half of 2019, you will be able to see the materials grow. The health care and software will continue to grow. Again in healthcare, depending on the big enterprise customer, we may have a different kind of a growth rate. But I absolutely believe that 2019, we want to grow both top line and the profitability and cash generation will be also a focus for 2019.

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [5]

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I can give you a little more color on Q1 versus what was in the prepared remarks. So our typical seasonality from Q4 to Q1 is, on average, it varies a little bit year-to-year, is about 6%. And we think it could be a few points higher than that this year, if that helps you.

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Ananda Prosad Baruah, Loop Capital Markets LLC, Research Division - MD [6]

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Yes, that's helpful. And then just my follow-up is, in both the press release and prepared remarks, John, you talked about turning focus in materials innovation and software growth opportunities. Can you just go into that a little bit more? And sort of give a little more detail around where you're focusing, what we should expect, like that, that would be great.

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [7]

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Yes. I think -- I'll let VJ take that one because I think he can explain a little bit more on the focus.

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [8]

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So I think the materials, for us, Figure 4 is a really incredibly transformative platform. And I think what we need to do is to focus on use cases we can go after the production workflows. So what we're doing now is to really align our application engineering, our material science developers, and saying, "Okay, let's pick 2 or 3 very important production workflows just like what we have done in dental, can we come up with some new production workflows and we are inventing new materials for that." That's the innovation R&D that will really enable us to scale our Figure 4 platform for production workflows. As far as the software is concerned, I really think software in the digital factory environment, we have incredible opportunity. When we think about -- right now, we have, what I call, component-based point solutions for additive manufacturing, but I think we can really build out some cloud-based solutions and new ways to do additive manufacturing. That's why software is another very important R&D work that we want to do. And these are the 2 annuities. The way I think about it is even do the installed base and then enjoy the annuity stream in materials and software and services.

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Ananda Prosad Baruah, Loop Capital Markets LLC, Research Division - MD [9]

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And do you -- when should we expect the innovation to be there, like when do you expect -- or when can we expect you guys to actually -- for both of those, for, say, material...

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [10]

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Yes, I think it will be coming throughout the year of 2019 and beyond. And -- so the approach I -- basically if you think about it, our turnaround and transformation was build a foundation, get the quality, reliability right, get the go-to-market and all the supply chain and all the business processes right, invent new products, and that's what we did both in plastics and metals and software platform. Now let's add new materials, both in plastics and metals and go after the innovation in software.

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [11]

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And just from a cost structure point of view, right, it's -- there's an opportunity for us right now to save because we put so much money into product development over the last year, 1.5 years with all these launches, right? So we're able to scale back there and now put some of that to these 2 areas. Now that's kind of the message we're trying to get across some in terms of the shift.

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Ananda Prosad Baruah, Loop Capital Markets LLC, Research Division - MD [12]

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That's great. And we can expect the new solutions and work -- new materials and new workflow solutions come to market in 2019?

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [13]

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Yes.

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Operator [14]

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Our next question comes from the line of Jim Ricchiuti with Needham & Company.

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James Andrew Ricchiuti, Needham & Company, LLC, Research Division - Senior Analyst [15]

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Can you hear me?

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [16]

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We can.

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James Andrew Ricchiuti, Needham & Company, LLC, Research Division - Senior Analyst [17]

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Just question on the materials business. It sounds like there are some moving parts to the business. It seems like your legacy materials businesses may be declining a little faster. And I'm wondering are you seeing the pickup from some of the -- you had strong unit shipments for several quarters now and yet you still seem to be suggesting the real benefit of that may still be a couple of quarters away. So I'm trying to understand what point you're going to start to see that?

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [18]

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So I think, what we're seeing is in all our new products, we are seeing the appropriate materials growth. And the core platforms like our SLA machines, our SLS machines, our new 2500 MJP, we are seeing materials growth consistent with our installed base. The legacy printers like the Vipers, which have been introduced years ago, our 3600 MJP, our 5000 MJP, our CJP printers, their materials revenue is declining. So that's the kind of a headwind that we have to fight. And I think it will take us next 6 months where the crossover will happen, and you're going to see very consistent materials growth with the installed base growth. So I think you have 2 more quarters of really managing that balance between the legacy versus core versus the new products.

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [19]

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I think the other thing that I'd add to, we really have some pretty good analytics now around understanding all those components. So we're looking at this as kind of a model of when those lines crossover basically, and that's why we feel the way we do relative to the second half.

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James Andrew Ricchiuti, Needham & Company, LLC, Research Division - Senior Analyst [20]

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Okay, that's helpful. And one final question, if I may, and I'll jump back in the queue. John, you seem to suggest that some changes in the on-demand business in the organization could impact the business in the near term, if I heard you correctly. I'm just wondering is that the case? And when should we start seeing the benefits of some of the changes you're making there?

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [21]

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Yes, I think that what we wanted to get across there is that we did see some slowdown and pullback in revenue in the second half versus -- as a result of some of the actions we are taking. So if you look at that from a run rate point of view throughout 2019, we're thinking kind of flattish there, yes, year for year.

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [22]

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I think the main thing that we have talked about, the export compliance headwinds we have. And because of that, we are changing our outsourcing strategy. And that has impact because this is something that we absolutely need to make sure we do the right thing on the export compliance point of view, and that puts pressure on our on-demand parts business.

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Operator [23]

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Our next question comes from the line of Brian Drab with William Blair.

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Joseph Aiken, William Blair & Company L.L.C., Research Division - Associate [24]

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This is actually Joe Aiken on for Brian Drab today. Staying on the materials business. Do you see the gross margin of that business continuing to decline? Or do you think that could stabilize in the coming year?

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [25]

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Well, I think it will stabilize because I think the important part here is this phenomena of the legacy materials. And we are really seeing very good correlation with our core products and the new products. And they have a very healthy margin that we get for the materials. I think the more important part for us is to invent those new materials that I talked about. Because at the end of the day, going after new production workflows with the right application engineering is what I would like to do. So I really believe, as we -- as long as we continue to innovate in materials, our gross margin on materials should be stable.

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Joseph Aiken, William Blair & Company L.L.C., Research Division - Associate [26]

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Okay. And what about -- for overall gross margin, do you see that directionally trending up or down in 2019?

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [27]

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I think it will be roughly stable. It depends on the quarter and the mix that we have quarter to quarter. I think -- our belief is over time, there's opportunity for margin expansion when the material growth kicks in. But I think in the interim, relatively stable, maybe some ups and downs quarter to quarter, but relatively stable.

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Joseph Aiken, William Blair & Company L.L.C., Research Division - Associate [28]

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Sure. And if I could just sneak one more in. How many installations of the Figure 4 system have you made at this point?

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [29]

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Well, if you think about the dental printer, we have done really well on the dental printer side because it's in 100s. It's not in just 1 or 2. That's how I would think about it.

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Operator [30]

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Our next question comes from the line of Hendi Susanto with G. Research.

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Hendi Susanto, G. Research, LLC - Research Analyst [31]

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VJ, I have a question. So looking at 2018, you demonstrated like strong printer products revenue growth of 25%. And then as 3D Systems shifted its focus more on materials innovation and software growth opportunity, and considering that you introduced good number of new products in 2018, should we expect printers products revenue growth in 2019 to normalize to a lower base?

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [32]

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Well, I think in my view, first 2 quarters, we should continue to see the unit growth. The printer revenue growth may be different depending on, as John mentioned, with respect to what's going to happen with our enterprise customer. But -- and in second half still, we, absolutely, believe that we'll have a very good unit growth. Our revenue growth will depend on the mix because, as you know, we go all the way from $5,000 product to $1 million product. So it's very hard to really look at the revenue growth and unit growth in the same way. I think the important part for us, and I thing that's how you should be measuring us, in the second half, our materials growth, that should come back.

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Hendi Susanto, G. Research, LLC - Research Analyst [33]

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And then any insight on on-demand manufacturings in 2019?

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [34]

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So I think, as John mentioned, it's kind of a flat because we have the headwinds of the export compliance. We need to put some right processes and right kind of a software in place, and we need to find the right kind of outsourcing partner in the United States. And I think that's -- the market is growing, but I think here we need to really do the right thing from the export compliance. And I think that's the headwind that we are really looking at.

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Hendi Susanto, G. Research, LLC - Research Analyst [35]

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So that headwind should continue throughout for some at least?

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [36]

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That's -- our current approach and view is...

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John Nicholas McMullen, 3D Systems Corporation - Executive VP & CFO [37]

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Next few quarters and then -- we'll -- obviously, we will keep you updated quarter to quarter, but that's our...

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Vyomesh I. Joshi, 3D Systems Corporation - President, CEO & Director [38]

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Right now our planning assumption is throughout 2019.

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Operator [39]

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We have reached the end of our Q&A session. I would like to turn the call back over to Stacey Witten for closing remarks.

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Stacey Witten, 3D Systems Corporation - VP of Finance, IR and Financial Planning & Analysis [40]

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Thank you for joining us today and for your continued support of 3D Systems. A replay of this webcast will be made available after this call on the Investor Relations section of our website, www.3dsystems.com/investor. Thank you.

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Operator [41]

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Thank you. This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.