3D systems (NASDAQ:DDD) shares jumped in the secondary market after the company announced its full-year 2021 results on Feb. 28, 2022. The Rock Hill, South Carolina-based 3D printer maker reported sales worth $615.6 million, a 10.5% increase over last year’s revenue of $557 million and slightly less than 2019’s $639 annual revenue Strengthened by the acquisition of software startups Additive Works and Oqton and bioprinting manufacturers Volumetric and Allevi, 3D Systems has completed its core technologies, fueling its growth and profitability going forward.
Net income in 2021 was $56.6 million, or $0.46 per share, quadrupling from a net loss of $13.1 million, or $0.11 per share, a year earlier. Additionally, it recorded gross profit margins of 42.8%, compared to 40.1% the previous year, and generated $48.1 million in operating cash.
As demand continues to rise, the company said it expects sales to continue to rise this year, returning to pre-pandemic levels of between $570 million and $630 million. With an installed base that currently prints more than 700,000 parts per day, the company expects full-year 2022 non-GAAP gross margins to be between 40% and 44% and non-GAAP operating costs are between $225 million and $250 million.
Here’s what 3D Systems reported for its fiscal fourth quarter ended Dec. 31, 2021: Revenue for the fourth quarter of 2021 was down 12.6% to $150.9 million from the same period last year, but only due to the businesses divested in 2021 (more on that below). Excluding divestment revenue, the business posted strong double-digit growth of 13.1% over the same period last year. These results reflect continued growth in 3D Systems’ healthcare segment and increased demand from its customers for industrial solutions.
In the last quarter of the year, the strong double-digit growth in divestiture-adjusted revenue was mainly driven by higher revenues from the industrial solutions segment, which increased by 22.2% compared to the fourth quarter of 2020 and 12.4% from the third quarter of 2021. This would mark the fourth consecutive quarter of year-over-year divestiture-adjusted revenue growth in the industrial solutions segment. While healthcare divestment-adjusted revenue increased 5.1% compared to the same period last year and 8.4% compared to the third quarter of 2021.
Quarterly profit of $11.5 million, or $0.09 per share, beat analysts’ estimates. the Zacks consensus estimate, in particular, had forecast net earnings of $0.03 per share. However, this income report posted 200% surprise.
As for 3D Systems stock, even though the secondary market was up and the stock opened on March 1, 2022, up nearly 15% to $20.48 after the report was released, it retreated later in the morning. Although experts from Simply Wall Street suggest that 3D Systems stock has underperformed the US tech industry (which has returned 27.3% over the past year), the company is optimistic about the future.
With its 18-month, four-phase plan that began in May 2020 now finalized, 3D Systems has reorganized its operations into two business units (healthcare and industrial solutions), restructured for efficiency, and divested its non-core assets. As a result, 3D Systems is now ready to move into the final stage, investing for growth. As a result, CEO Jeffrey Graves announced on the company’s earnings call that he would prioritize internal investments in R&D and infrastructure, consolidating new product plans and priorities.
“Given our operational momentum, demand outlook and financial strength, we continue to seek investments that will improve our customers’ ability to adopt additive manufacturing, while delivering strong returns to our shareholders,” said underlined Graves.
Following the release of three new powder bed printing systems, including the SLS380 polymer-based system, DMP Flex 200and DMP 350 two metal-based printers, the organization said it was already expanding its market opportunities, particularly in its healthcare segment, where “the productivity benefits for medical device customers have proven compelling.” Additionally, last month 3DPrint.com reported on 3D Systems’ latest acquisition of Kumovisan engineering company with a strong focus on developing and commercializing a unique 3D printing system for use with medical grade PEEK materials.
Described as a “perfect fit” by Graves, Kumovis will allow 3D Systems to offer customers a choice between titanium and PEEK polymer solutions, each with specific use cases. Additionally, the executive clarified that the integration of Kumovis into 3D Systems’ healthcare business will drive growth in craniomaxillofacial reconstruction through PEEK implants, surgical instrumentation and anatomical models.
Other areas that will benefit from the synergy include spinal cages and bone plates for trauma patients. In addition, the German startup also has a unique stand-alone cleanroom printing system, which opens up new opportunities for 3D Systems to expand its point-of-care market segment for trauma patients, where the ability to printing is provided locally within the hospital, such as for large medical institutions like the Veterans Affairs (VA) hospital system.
In addition to the new 3D printing systems launched in 2021, the company launched its largest number of new materials, addressing key application needs such as precision surface finishes, flame retardance and improved performance characteristics. resistance and tenacity.
Another highlight of the earnings call was a reference to the ongoing Russian invasion of Ukraine, as Graves advised investors that the company had elected to “immediately suspend all sales to Russia.” 3D Systems is now one of countless companies withdrawing from the Eastern European nation, including many AM companies, like EOSwhich also announced the cessation of all commercial activity with Russian customers.
With an exciting lineup across all 3D Systems product lines and what he sees as a “rapidly growing demand outlook”, Graves says 2022 will be a year of “meaningful progress”. Significantly, as the effects of the pandemic fade and steady and sustainable economic performance regains strength. He concludes that despite the significant challenges faced in 2021, it was “a tremendous year of renewal for 3D Systems”.
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