3D Systems Announces Restructuring Plan
Restructuring initiative to improve operating efficiencies that include optimizing 3D Systems' European metal printer operations and streamlining its software, company says.
March 3, 2023
3D Systems reports on a restructuring initiative intended to improve operating efficiencies that include optimizing its European metal printer operations and streamlining its software organization, according to the company. The initiative is expected to reduce operating expenses in 2023 by approximately $2.5 million to $3.5 million, and provide an annualized savings of approximately $5.5 million to $7.0 million in 2024 and beyond.
As a key aspect of the restructuring initiative, the company will consolidate the engineering and manufacturing of its metal printers to reduce cycle time on new product introductions and increase operational efficiencies. The company’s metal additive manufacturing products include the DMP 200 (small), DMP 350 (medium) and DMP 500 (large), direct laser sintering systems.
Also as part of the restructuring initiative, 3D Systems has streamlined its software development operating structure to reduce ongoing operating expenses. Over the past year, the company has merged its legacy portfolio of 3D printing applications with the Oqton Manufacturing Operating System organization, creating an end-to-end software suite under a unified management structure.
Activities related to these restructuring initiatives will begin immediately and are expected to be completed by mid-2023.
“These restructuring efforts are an extension of the work we began in late-2020 to streamline our operational footprint and better leverage our company scale in additive manufacturing,” says 3D Systems’ president and CEO, Dr. Jeffrey Graves, commenting on the initiative. “Over the last year, we have made significant progress through the focusing of our development activities and by selectively insourcing the manufacture of our high-complexity, high-value 3D polymer printers.”
“With momentum established in our polymer platform operations, we will now extend our focus to our metal systems, bringing together and streamlining our engineering and operations teams. With regard to software, through the acquisition of Oqton and the subsequent consolidation of our software platforms under a unified organizational structure, we have now enabled further operational efficiencies to be gained in this key area of the company,” Graves adds.
In other news, 3D Systems reports 4Q and full year 2022 financial results.
(All numbers are unaudited and are presented in thousands, except per share amounts or otherwise noted).
- Q4 2022 revenue of $132,732 decreased 12% compared to Q4 2021; non-GAAP Q4 2022 revenue on a constant currency basis(1) decreased 7.6%, reflecting weakness in the dental orthodontics market.
- Net loss of $25,553, diluted loss per share of $0.20, and diluted non-GAAP loss per share of $0.06(1)
- Negative adjusted EBITDA(1) of $4,808 reflects inflationary impacts on our input costs, unfavorable product mix, and continued investments in growth areas of business and product portfolio
Full Year 2022 Financial Highlights
- 2022 revenue of $538,031 decreased 12.6% compared to 2021 revenue of $615,639; non-GAAP revenue adjusted for divestitures and on a constant currency(1) basis increased 3.3%, reflecting solid demand in the industrial and healthcare segments despite macroeconomic challenges, offset by lower sales to certain dental market customers.
- Net loss of $122,711, diluted loss per share of $0.96, and diluted non-GAAP loss per share of $0.23(1)
- Negative adjusted EBITDA(1) of $5,781 reflects inflationary impacts on input costs and investments in growth areas of the business and product portfolio.
- Cash and short-term investments of $568,737 position the company for continued growth investments.
- Continued softness in dental orthodontic market fully offset by strong performance in Industrial and non-dental healthcare solutions markets leading to mid-single digit revenue growth
- Positive full year adjusted EBITDA and free cash flow support an already-strong balance sheet.
- Sustained investments in core technologies and emerging regenerative medicine markets
Summary Comments on Results
Commenting on 2022 results and the outlook for 2023, Graves says, “2022 was a year of strong investment in our development of next-generation hardware, materials, and software platforms despite facing significant macroeconomic and geopolitical headwinds as well as softness in our key dental orthodontic market attributable to inflationary pressure on consumer discretionary spending. By sustaining this investment focus, we made major progress on the refresh of our printer portfolio, as evidenced in part by recent new product announcements.
“More such announcements will follow throughout 2023 as we complete the refresh of virtually our entire product portfolio. This organic development was complemented by our acquisition of three early-stage technology platforms over the last 18 months, which further broadened the range of customer applications we can now address. Sustaining these investments in the face of 2022's many headwinds required us to target our investment spending carefully, control operating costs, and leverage our strong balance sheet. This focus, combined with our improved operational execution gained through selective in-sourcing of manufacturing, has reinforced our industry-leading breadth of additive manufacturing technologies, our unparalleled applications expertise, and scale needed to meet our expanding customer needs for years to come.”
Sources: Press materials received from the company and additional information gleaned from the company’s website.
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