The world leader in the production of prosthetic applications using 3D printers HP files for bankruptcy…

SmileDirectClub – an American company that produces teeth straightening applications using MultiJet Fusion 3D printers, has filed for bankruptcy due to its difficult financial situation. The decision was made in the face of the failure of external recapitalization. The company’s founders donated $80 million to rescue it, with the first tranche amounting to $20 million. At the same time, if they do not find a buyer or investor by November 23, 2023, they will sell the company’s assets.

SmileDirect is a pioneer in the use of MJF technology in the prosthetic sector. Since 2021, the company has been cooperating directly with HP in this area, which has made it a leader in the indirect production of overlays created using 3D printing technology. At the same time, SmileDirect has become the largest user of the MJF method in this type of orthodontic production. SmileHouse – equipped with a fleet of over 60 HP 3D printers, is one of the largest 3D printing centers in the USA.

Between 2016 and 2019, the company experienced gigantic growth, with its revenues increasing from $20.6 million to $750 million. Unfortunately, as a result of the C19 pandemic, the growth rate first slowed down dramatically, and then the company began to generate a deepening loss. As a result of forced store closures, changes in consumer habits and a change in the SmileShop business model and the transition from sales in physical points to direct deliveries to customers, the company recorded a net loss of USD 278 million by the end of 2020.

An additional problem that plunged the company was a legal dispute with a competing company – Align Technology, which was a pioneer in the use of 3D printing to create the Invisalign overlay system. SmileDirect lost the case in court and received a judgment and financial penalty of $63 million. Although the company disputed this outcome, it affected its financial liquidity and prospects for negotiations with third parties.

To address these challenges, the company raised $747.5 million through convertible notes and other financial instruments in 2021. These proceeds helped finance the company’s growth. However, with the convertible notes due in 2026, the company faced enormous difficulties in obtaining any financing from existing creditors or third parties to help right-size its capital structure.

SmileDirect also employed cost-cutting strategies such as trimming marketing budgets, halting some unprofitable global operations and focusing on core growth plans. However, these actions did not prevent a further decline in financial liquidity. In August this year, the company announced its financial results for the second quarter of 2023, reporting another year-on-year decline in revenue. Although net losses and adjusted EBITDA improved, the second-quarter metrics were not enough to avoid a bankruptcy filing.

SmileDirect formally filed on September 29, 2023. The next key hearing was scheduled for October 24, 2023. Unfortunately, with the news that the company had filed for bankruptcy, its stock price fell by -61%, reaching the lowest level in history. On October 3, the company’s share price fell even further, by -81.7% compared to the price on September 29. Depending on the outcome of the legal proceedings, the future of SmileDirect does not look good…

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