3D Systems (DDD, Financial) was unable to satisfy the increasing demand for its direct metal and customer products that blocked its organic growth in the last quarter. Moreover, the company’s higher investments in metals and healthcare are producing excellent segment growth rates that considerably outperformed present industry growth.
Witnessing strong growth
3D Systems sold 57% additional design and manufacturing printer packages compared to the same period last year, including its metal, composite, nylon and plastic printers.
3D Systems introduced another manufacturing line online that enables it to cover the rising demand for metal printers and it started the shipments of its unique consumer printers.
Smart acquisitions and strategies
In the beginning of this year, 3D Systems acquired Medical Modeling to add medical device 3D printing and virtual surgical planning expertise. The company also acquired LayerWise, expanding its capabilities in medical and dental direct metal 3D printed devices and implants, as well as Simbionix which is a top enabler of 3-D virtual reality surgical simulation coupled with training products.
3D Systems has extended its reach from providing integrated and complex 3D solutions from the training room to the operating room.
3D Systems outperformed its rising manufacturing capacity in all reporting periods with the acquisition of Phenix Systems and remained unsuccessful in adding enough capacity in time for meeting the increasing demand for its metal printers.
3D Systems is now expanding its production in a facility for second direct metals and estimates to meet this increasing demand in the fourth quarter and beyond. The industrial grade direct metal printing will provide considerable growth opportunities in manufacturing the ready-to-use medical devices, production tire molds, functional automotive assemblies and flight-ready aerospace parts.
These ongoing investments have already produced 11 innovative products and were expected to reveal many fresh design and manufacturing products in the approaching Euromold 2014 show that include fresh production materials and printers.
In the third quarter, 3D Systems implemented compelling synergistic technologies, alternative sales channels and key domain expertise by many acquisitions all in line with its growth efforts. The company expanded its Quickparts abilities for acquiring three U.S.-based local service bureaus that enhanced its expertise in industrial and aerospace applications.
The company is also developing a 200,000 square foot manufacturing facility in Rock Hill, South Carolina in expectation of future growth for further expanding its manufacturing capacity. This new facility is estimated to become completely operational in the first quarter of 2015.
Conclusion
Since there is a lot of opportunity present in the 3D printing market, 3D Systems can do well in the future due to its acquisitions and strategic moves. As a result, it will be a good idea for investors to invest in this stock for long-term gains.
