When 3D Systems Corporation (NYSE:DDD) CEO Vyomesh “VJ” Joshi met earlier today with analysts and investors he was, as usual upbeat about the future of 3D printing and his company. However, investors hoping to get rich overnight might not share the same time horizons. Since taking the helm at 3D Systems, VJ has brought in a new level of senior management and began to target cost-savings across the business. A key word in his strategy is focus.
As always VJ took time to answer a long list of questions from analysts keen to understand the business and the call lasted over an hour. VJ says that 3D Systems are at inflection point in AM, and believe the company has the infrastructure to “make 3D printing real.” While recent share price performance has been decidedly average, as often pointed out on 3DPI this is rarely a useful metric to appraise a company.
For VJ “A key priority is reducing cost of sales,” however making changes in the cost structure are actions that will not become evident until 2017. During today’s call significant growth was promised, but this will be a long term journey.
Highlights from the Q3 results show an increase in revenue to $156.4 million, from $151.6 million for the same period in 2015. Operating expenses have reduced to $91.0 million and operations generated a loss of $22 million versus $34.6 million for Q3’15.
Key Verticals
In one one of the most actively watched areas of 3D printing, metal the company did not provide the level of granular detail some analysts wanted. 3D systems do not break down revenue to the level of material type, but VJ said that GE’s entry into the metal space, “validates” the technology. One analyst suggested that metals might constitute less than 10% of revenue at 3D Systems, however the CEO would not be drawn on providing a number.
The two key verticals in metals are medical and healthcare. For the healthcare vertical VJ is keen to replicate this model, and its success in the other sectors 3D Systems operate in.
CFO John McMullen characterized the recent quarter as a “careful” approach. Information about cost reduction efforts will be forthcoming in 2017, also investments in IT will be announced. These efforts around cost structure are just getting started according to the company.
Update on Figure 4
During the most recent reporting period 3D Systems have continued to rationalize their product portfolio and, as illustrated by the Figure 4 modular system, are looking at ways to recombine their wealth of IP in new ways.
Troy Jensen at Piper Jaffray asked about Figure 4, and was keen to learn when will it be available. On today’s call there were, “No specifics on the release, but since IMTS we have seen signifi...
SOURCE: 3dprintingindustry.com ( go on reading...)
