3D Systems Announces 2015 Results: Is It Enough?

As expected, 3D Systems announced their quarterly and annual results yesterday, and the results were indicative of the 3D printing industry today. 

Specifically, the company said their fourth quarter results included revenue of USD$183M, which happens to be some 2% less than the corresponding period the previous year: Their sales were flat for the year. 

Actually, this is relatively good news, as some were expecting worse results. 

The release also indicated that they took a USD$27.4M charge to shut down their consumer division, Cubify. That cost represents paying down all leftover expenses, which could include settlements for laid-off staff, paying out leases and contracts, etc. The amount, USD$27.4M, is quite large, indicating the level of investment that 3D Systems had placed into the consumer market. Basically, they pushed the concept as hard as anyone could with that level of resource allocation. 

And it still didn’t work. 

That tells us a lot about the state of consumer 3D printing. 

For the full year 2015, the company’s revenue actually rose 2%, which is again, flat for all intents and purposes. 

In spite of the doom and gloom from investment analysts, 3D Systems managed to produce a relatively flat year, aside from one-time charges. They accomplished this by changing course in mid-year, with the departure of their longtime CEO and replacement with an interim CEO, Andrew Johnson. 

Under Johnson’s temporary rule, 3D Systems not only shut down the consumer division, but also made a number of other moves to effect financial optimization. Since their results were flat, one can imagine what it might have looked like if those moves had not been taken. 

Meanwhile, 3D Systems is still operating under a temporary CEO, and my understanding is that they are actively searching for a replacement. Now that they’ve survived 2015 intact, a new CEO could be chosen to take the next steps, which likely involves cleaning up the accumulation of more than 54 companies acquired by 3D Systems over the past years. 3D Systems has a staggering amount of technology within their organization that could be leveraged in many ways. 

If a new CEO can do that, then 3D Systems will be in much better shape. 

In spite of the unexpectedly good results, several investment analysts still downgraded their rating on 3D Systems stock. Why so? I suspect they’re awaiting the arrival of the new CEO to better gauge the new path 3D Systems will take in the future. 

Via 3D Systems