3D Systems 2016 Results Challenging

3D Systems released their 2016 financial results

3D Systems released their 4Q16 and full 2016 financial results, where we can see what kind of turnaround has occurred. Or not. 

The company is likely the largest pure 3D printing company in the world today, having a market capitalization (the total worth of all their shares) at USD$1.6B. Stratasys, their nearest pure competitor, has a market cap of “only” USD$1.06B as of this writing. So it is very important to see how 3D System is doing. 

During 2016, their revenue dropped about 5% to USD$633M from USD$666.2M, with the fourth quarter’s results being even worse, with a drop of 10% from USD$183.4M to USD$165.9M. 

That’s the bad news, but the company is improving: their net loss (using GAAP, the Generally Accepted Accounting Principles) was USD$0.35 per share, whereas in 2015 the company actually lost USD$5.85 per share. So things are getting better, but mostly through internal efficiency programs, rather than additional sales. 

The loss per share doesn’t mean the company is in difficulty; In fact, they ended the year with USD$185M in cash on hand, an increase of about USD$30M over 2015. This is sufficient to keep them running for several quarters even if they sold nothing at all, so they are certainly solid financially going forward, as long as they turn up their revenue generation. 

And on that topic, they say: 

For the full year 2017, management expects revenue growth of 2% to 8% resulting in a revenue range of $643 million to $684 million. Management expects GAAP earnings per share in the range of $0.02 to $0.06 and non-GAAP earnings per share in the range of $0.51 to $0.55. Additionally, management expects to continue to generate positive cash flow from operations in 2017.

And how did the market react to this? Well, you can see what happened in this chart of the days before and after their results announcement. 

 3D Systems' stock price dropped about 12% upon release of their 2016 results
3D Systems’ stock price dropped about 12% upon release of their 2016 results

The year 2016 was interesting for 3D Systems, in that it was the year they replaced their long time CEO. It was my expectation that the new regime would streamline operations and begin moving forward, but it appears that most of 2016 was spent reorganizing. We have 2017 to look forward to. 

Via 3D Systems

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