3D Systems announced a major restructuring program.
“Restructuring” is a dark word in corporate circles, as it usually means layoffs, among other things. But what is it that they are doing? They explain:
“3D Systems today announced a multi-faceted restructuring initiative designed to improve operating efficiencies that include optimizing its European metal printer operations and streamlining its software organization. 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.”
It seems they want to converge the design and manufacturing of their DMP series of metal 3D printers, which they believe will “reduce cycle time on new product introductions” and “increase operational efficiencies”. Those are likely true, if the two are currently separate.
As for the software savings, they explained that they’ve already undertaken these moves and are simply reporting them at this stage. They wrote:
“3D Systems has streamlined its software development operating structure to further reduce ongoing operating expenses. Software is an essential element of the company’s future growth strategy, and over the past year, the company has merged its legacy portfolio of 3D printing applications with the Oqton Manufacturing Operating System organization, creating an integrated end-to-end software suite under a unified management structure. The software-related cost savings announced today reflect synergies derived from this successful integration effort.”
Oqton was an acquisition of 3D Systems some time ago, but continues to operate independently. Evidently 3D Systems saw a way to shift resources (and expense) from their own tent to Oqton’s, while maintaining the necessary software functions. Oqton is a very powerful product and in retrospect, this should not be a surprise move. In fact, 3D Systems has been visibly moving in this direction for some time.
The restructuring should benefit the company’s stock price and provide added income in future years.
This move is not the first for 3D Systems, which underwent a significant restructuring soon after the current CEO, Jeffrey Graves, took hold of the company. 3D Systems required that restructuring to put it back on the path to profitability, after many years of neglect.
“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. 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. These efforts have reduced operating costs while improving customer quality and delivery reliability. 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. While we have significant benefits to realize from all of these efforts, they by no means represent the last chapter of efficiency improvements that are available to us. Moving forward, we will continue to implement improvement plans to meet our goal of being the leading, most successful additive manufacturing company in the world.”
It seems that Graves is still looking for savings, and that’s ultimately a good thing for the company.
Via 3D Systems