The last financial report published in November this year. by 3D Systems was quite disappointing and since then the company has been taking further steps to reverse the negative trend, restore the profitability of its business and improve its quotations on the stock exchange. One of them is to be the plan to repurchase “Senior Notes” bonds with an interest rate of 0%, announced this week, in order to reduce its debt. At the same time, the 3DPrint.com portal noticed another interesting thing in the November report, which is the potential sale of the Belgian IT company Oqton, which was taken over by 3D Systems just two years ago…
Oqton was acquired by 3D Systems in the fourth quarter of 2021 for $180 million, with the transaction including settlement in cash and 3D Systems stock. The company expected that by 2025, revenue from sales of Oqton software would exceed $100 million.
Oqton’s MOS platform enables the automation of scalable digital manufacturing processes that are based on the Industrial Internet of Things, artificial intelligence and machine learning. Its services are used by the absolute leading companies in the 3D printing industry: HP, EOS, Stratasys, Trumpf, Prodways, Sandvik and 3D Systems itself. Oqton operated as an independent organization, ensuring the confidentiality and security of their data to its clients.
However, this probably did not work out as expected… The financial report quoted by 3DPrint included the following information: “in the quarter ended September 30, 2023, the company concluded that it was more likely that it would sell or otherwise dispose of Oqton MOS, businesses that the Company acquired in 2021. Oqton MOS represents a distinct asset group within the Industrial Solutions segment because its identifiable cash flows are largely independent of the cash flows of other asset and liability groups within the Industrial Solutions segment. Based on the Company’s expectations that it will sell or otherwise dispose of Oqton MOS, the long-term cash flow forecast for this group of assets has been adjusted.
“The revised long-term cash flow forecast indicated that the carrying value of Oqton MOS’s long-term assets, consisting primarily of product technology and intangible assets initially recorded at the time of the Oqton MOS acquisition, may not be recovered. Accordingly, the carrying value of Oqton MOS’s long-term assets was tested for impairment based on an estimate of the related discounted future cash flows. (…) Because the present value of the estimated future cash flows that are expected to result from the use and eventual disposal of the group of assets is lower than the carrying amount of the group’s value assets, in the quarter ended September 30, 2023
A possible decision to sell Oqton does not necessarily mean problems with the company itself, but rather the need to get rid of assets and improve the operations of 3D Systems itself. This comes amid a decline in the company’s overall revenues and a widening net loss. By focusing on the more profitable or core areas of its business, 3D Systems appears to believe it can strengthen its financial position by generating capital immediately or by reducing operating costs. Additionally, 3D Systems announced a plan to reduce employment by approximately 6% as well as centralize the production of 3D metal printers.
Source: www.3dsystems.com & www.3dprint.com