3D Systems publishes disappointing financial results for the first quarter of 2023 and announces redundancies

3D Systems published financial results for the first quarter of 2023. The company’s revenues amounted to USD 121.2 million, which means a decrease of -8.8% compared to the previous year. This state of affairs is largely due to the collapse in sales of solutions for dentistry, where the company had already noticed a tendency to weaken. As a result, 3D Systems shares on the New York Stock Exchange fell by -10%.

In addition to the decline in revenue, 3D Systems reported a net loss of -$29.4 million. It can be attributed to lower sales and inflation affecting prime costs. In addition, the company experienced a drop of -$12 million in adjusted EBITDA, reaching -$10 million in the first quarter of 2023.

As at March 31, 2023, the company had cash and cash equivalents and short-term investments of $529,925, down $38,812 from December 31, 2022. The company’s total debt less deferred financing costs was $450,179. At the same time, 3D Systems confirmed its revenue forecasts, which are to range from 545 to 575 million dollars.

Broad Health Solutions revenue declined -24.3% to $48.7 million compared to the same period in 2022. At the same time, the company managed to compensate for this decrease by +22.4% with an increase in revenues from sources other than the dental market. During the conference with shareholders, Jeffrey Graves – CEO and president of 3D Systems, explained the achieved result to the poor condition of the orthodontics market in general, especially in the segment of transparent braces. This segment has been hit hard in recent years – despite its strong position in the market, reduced consumer spending has significantly impacted demand. Rising inflation has forced many end users to prioritize basic needs like food, fuel and rent, leading to a decline in demand for braces, Graves explained to investors.

According to Graves, the market “appears to be stabilising”, but has not yet returned to the growth stage. As a result, the management of 3D Systems expects the pressure on the dental sector to continue until mid-year and then stabilize as supply and demand return to balance in the second half of 2023.

Despite the decrease in revenues in the dental sector, a noticeable increase in sales in other markets helped to slightly offset the overall financial results. In contrast, the company is developing its business in the orthopedic segment, where the latest developments in 3D printing and new materials are integrated with the integration of artificial intelligence (AI) to optimize the entire medical process. The process includes receiving digital patient imaging data, surgical planning with the doctor, up to 3D printing and post-processing of the received parts, providing patients with individually tailored medical implants.

The ability to produce these implants within days of the initial request, as well as the production of personalized surgical instruments and cutting guides to assist surgeons in the operating room, has already been used on more than 150,000 patients.

3D Systems has announced restructuring to improve profitability in 2023, announcing the need to lay off 6% of its staff. During a conference call, the company’s chief financial officer, Michael Turner, suggested that the planned staff cuts are part of the next phase of a restructuring initiative aimed at improving operational efficiencies across the company’s footprint.

As part of the ongoing reorganization efforts, 3D Systems anticipates a $4-6 million reduction in operating costs in 2023, resulting in annual savings of $9-11 million starting in 2024. Additionally, the company has announced restructuring initiatives expected to generate savings of $2.5-3.5 million in 2023 and $5.5-7 million in 2024 and beyond. Combined, these initiatives could save the company up to $9.5 million in 2023 and $18 million in 2024.

Source: www.3dsystems.com