3D Systems publishes financial results for Q2 2023 and comments on the lack of progress in merger talks with Stratasys

At the end of July 3D Systems announced that on August 4, 2023, it is to conclude negotiations on the merger agreement with Stratasys. Stratasys immediately distanced itself from this information, claiming that there are still a number of discrepancies between the companies and expects additional explanations and financial analyzes from the other side. It’s August 9 and nothing new has happened so far… Instead, 3D Systems has published its financial results for Q2 2023, and they are a bit disappointing for the second time in a row…

Second quarter 2023 revenue fell -8.5% to $128 million compared to the same period last year. The company explains this with lower sales of 3D printers in the dental orthodontics market due to macroeconomic factors that negatively affect the demand for elective dental procedures. Revenues from other market sectors fell by -2.1%.

Revenue for the first half of 2023 also fell by -8.6% to $249.4 million. Here, too, 3D Systems explains the lower demand for dental 3D printers, boasting at the same time that in other industry sectors it recorded an increase of +3.3% (but as you can see, it is mainly due to the first quarter of the year).

The gross profit margin in the second quarter of 2023 was 39.0% compared to 37.9% in the same period last year. The company generated a net loss of -28.9 million dollars in the second quarter, which was 4 million “better” result than a year ago, when the loss exceeded -30 million dollars. In the entire first half of the year, 3D Systems generated a total loss of -$58 million.

As of June 30, 2023, 3D Systems had cash and cash equivalents and short-term investments of $491.6 million, down $77 million from December 31, 2022. The decrease is mainly due to the use of cash in operations, investments, acquisitions and other investments. The company’s total debt, net of deferred financing costs, is $450.8 million.

Merger with Stratasys

The market was convinced that with the publication of the financial results for the second quarter of 2023, the decision to conclude a merger agreement with Stratasys would be announced. Which so far has not come true … This is how Jeffrey Graves – CEO of 3D Systems comments on this issue:

“While we had hoped to be able to announce a deal with Stratasys today, we are unable to do so. However, the end of this process is in sight. We will bring it to a final conclusion” (…)

“Honestly, we expected this deal to be announced already and are frustrated with the pace and lack of any commitment to the merger deal we delivered to Stratasys (…) on July 13. We remain committed to delivering this powerful merger for the benefit of our shareholders … but the merger can only be completed if Stratasys shares our commitment.”

It is quite interesting that Stratasys also published its financial results today, where the total revenue for the second quarter of the year is ~$40 million higher than what was achieved by 3D Systems. Also, the expected level of revenue for the entire current year is to be higher by nearly USD 100 million (more on this in a separate article). Considering this difference in revenue, it is hardly surprising that Stratasys is sluggish and 3D Systems is impatient…?

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