3D Systems to issue $92 million in convertible notes, repurchase debt

NEW YORK - 3D Systems (NYSE:DDD) announced Wednesday it has entered into agreements with qualified institutional buyers to issue $92 million in convertible senior secured notes due 2030, with plans to use the proceeds to repurchase a portion of its outstanding debt. The company, currently valued at $255 million in market capitalization, faces challenging financial conditions with negative EBITDA of -$96.67 million over the last twelve months. According to InvestingPro analysis, the company shows signs of rapidly depleting cash reserves.

The notes will bear interest at 5.875% per annum, payable semiannually, and will mature on June 15, 2030, according to a company press release. The initial conversion price is approximately $2.24 per share, representing a 20% premium over the company’s June 17 closing price of $1.87. Based on InvestingPro Fair Value analysis, the stock appears undervalued at current levels, though investors should note that undervalued stocks in challenging financial conditions require careful consideration.

The Rock Hill, South Carolina-based 3D printing company intends to use the proceeds, along with approximately $78 million of cash on hand, to repurchase about $180 million of its outstanding 0% convertible senior notes due 2026. While the company maintains a healthy current ratio of 2.79, InvestingPro data reveals potential concerns about debt servicing capability. For deeper insights into 3D Systems’ financial health and detailed analysis, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Additionally, 3D Systems will use approximately $15 million in cash to repurchase about 8 million shares of its common stock at $1.87 per share through privately negotiated transactions with note purchasers. This move comes as the stock has experienced significant volatility, with a 48% decline over the past six months.

The notes will be convertible at holders’ option into cash, shares of 3D Systems common stock, or a combination, at the company’s election. Holders will have a one-time right on June 20, 2028, to require the company to repurchase their notes at full principal value plus accrued interest.

The issuance and sale of the notes are expected to close on June 23, subject to customary closing conditions. The notes will be senior secured obligations guaranteed by certain 3D Systems subsidiaries.

The company noted that the offering has not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

In other recent news, 3D Systems reported disappointing financial results for the first quarter of 2025, with earnings per share of -$0.28, missing the forecasted -$0.14. The company’s revenue also fell short of expectations, reaching $94.5 million compared to the anticipated $100.34 million. Following these results, the company withdrew its full-year 2025 guidance due to economic uncertainty and announced a cost reduction initiative aiming for $70 million in savings by mid-2026. Craig-Hallum analyst Greg Palm subsequently cut the price target for 3D Systems to $2.00 from $2.50, maintaining a Hold rating on the stock. Palm’s analysis highlighted the company’s challenges, including decreased activity in consumables and printers, and emphasized the need for improved execution to regain investor confidence. Management is focused on returning to profitability, with plans to implement an additional $20 million in cost reductions. The company is also addressing looming debt refinancing, which could alleviate some current pressures. Despite these challenges, 3D Systems remains committed to strategic investments in R&D, particularly in high-reliability markets such as aerospace and AI infrastructure.

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