Following disappointing financial results, Nano Dimension is facing strategic review — and 20% layoffs.
Israel-based Nano Dimension has put out a few tough press releases this week, starting with its preliminary Q2/H1 2019 financial results and continuing down a downsizing path.
I don’t like to be the bearer of bad news, especially when it comes to companies and technologies I think have something strong behind them. Electronics 3D printing has been steadily gaining interest among those focused both on 3D printing and on electronics, and especially at the intersection of the two. I’ve certainly been among those keenly interested in what Nano Dimension has been up to, keeping up with the team at events and even visiting their Ness Ziona, Israel headquarters last fall.
But there’s no sugar coating this: the three releases this week are worrying.
The first announcement concerns Nano Dimension’s preliminary financial results for the second quarter and the first half of 2019.
It’s so short we can include it essentially in full:
In the first half of 2019, the company sold 13 DragonFly systems, five systems of which were sold in the second quarter of 2019. This brings the system sales to 43 systems in total worldwide to date.
Revenues for the second quarter of 2019 are expected to be within a range of $1 million to $1.2 million, which is below management’s expectation.
The company estimates total revenues between $2.7 million to $2.9 million for the first half of 2019, compared to $1.7 million in the first half of 2018.
The company ended the second quarter of 2019 with approximately $5.2 million in cash on its balance sheet, mainly as a result of an increase in inventory.
The company’s CEO, Amit Dror, noted that they are “disappointed” in these results — and that they have “taken several actions to change that,” with the belief that the latter half of the year will see improvements.
In a release shorter still, Nano Dimension announces “a review of strategic alternatives.” That review does not include assurance that any of these “will result in a transaction” — is the company considering being acquired? Now is not the time for answers here:
“The company has not set a timetable for the conclusion of its review of strategic alternatives, and it does not intend to comment further”
They are working with financial advisor Stifel for the strategic review, so perhaps some outside input will be just what they need to forge ahead with clearer vision.
Finally, some “corporate updates” provide a more definite immediate step: layoffs.
In order to reduce operating expenses, Nano Dimension announced a “headcount reduction of approximately 20%.” These are certainly never good to see, and there was no follow-up information regarding which departments are impacted, or whether these layoffs were effective immediately.
The latest employment information available in Nano Dimension’s SEC filings comes from the end-of-2018 annual report, which shares:
“As of December 31, 2018, we have four senior management, full-time employees, two of whom also serve as directors in our Company. In addition, we have 91 full-time employees and eight part-time employees. Four employees are located in Hong Kong, 11 employees are located in the United States and the rest are located in Israel.”
There’s one more departure as well, as Co-Founder and President of North America Simon Fried also “decided to step down from his executive role, to pursue other opportunities.” Fried was probably the first member of the team I got to know, and his expertise and leadership have certainly been an asset to the company he helped to form. He will be staying on the Board of Directors “and to advise the company to ensure a smooth transition.”
Brighter Days Ahead?
The silver lining shared in all these is news for the company’s systems, as the portfolio is apparently soon to expand.
“In the coming weeks, after a year of extensive product development in close cooperation with select customers, the company plans to launch a new system within the DragonFly family. This new 3D printer delivers substantial performance improvements and mission critical features that were developed in direct response to customer needs,” said Amit Dror, CEO of Nano Dimension. “The new system is expected to significantly increase the value for our existing and targeted customers and fuel further revenue growth as we expand our end user universe and use cases.”
In further fortifying news, yesterday Nano Dimension also announced the sale of a DragonFly Pro in Italy to Istituto Italiano di Technologia (IIT) Biomolecular Nanotechnologies. The team at IIT is set to put the DragonFly Pro system to use in their R&D work in a new platform “that provides rapid device and microsystem prototyping, making it possible to produce and embed our MEMS technology and wearable electronics into customized multilayer PCBs,” as IIT’s Massimo De Vittorio explains.
We’ll be keeping up with the latest from Nano Dimension, as it sounds like soon they’ll have much more concrete news to share following their hopefully-well-advised review and new system announcement.
Via Nano Dimension