Voxeljet (VJET, Financial) disappointed the street with its third quarter results that reported a greater than expected loss. Although revenue was up year over year yet it came below the consensus estimate. Led by it tepid performance the stock tanked to its 52-week low with an uncertain outlook for the days ahead. Let’s see in detail how Voxeljet performed during the quarter and what are its future prospects.
The way ahead
The company had some disruptions during the quarter as its service business in Germany was affected due to technical issues with a VX4000 model printer. As a result, its production capacity declined, which ultimately lowered its service revenue. But the management is determined to turnaround its situation even as it strides to lead the 3D printers into production and not just in prototyping.
To facilitate this further, the company has increased its production capacity at the manufacturing plant, which will increase its volumes. The management cites three main benefits of this transition. Firstly it will provide stable and predictable revenue for stated amount of volume at fixed rates. Secondly, this transition reflects that more industries are opting for its 3D printers for higher volume production applications. And lastly, it is a great step forward to drive its future growth.
The Detroit facility will house two sand printers one of which will be installed in December, while the second is expected to be installed in the first quarter of 2015. Along with this, it will also install two classic printers, and with these four printers in operation it anticipates that, this facility will initially have around 30% of the printing capacity of the German service center annually. On the international front, it plans to expand its service centers around the world and is also searching for suitable opportunities to set up new facilities.
Initiatives to consider
All its growth initiatives were backed by strong innovation, which remains as one of the most critical drivers for its business. The company is working on its new material called phenolic binder, which is suitable for different powder materials and applications. One of the main advantages of phenolic binder is that there is no requirement for treatment of the powder, so the unused powder can be reclaimed 100%. In addition, the company is progressing well with its metal casting benchmarks.
Moreover, the integration of its new acquisition Propshop, which is primarily focused on building props for the entertainment industry, will add further strength to its business. Ederer said “Propshop’s innovation, creativity and advanced experience with our 3D printing technology, has made it a leading provider of sophisticated and complex content to the entertainment industry. These attributes have presented Propshop with several new and very exciting consumer-related opportunities in the on-demand parts service market uniquely suited to for large scale 3D printing production.”
Conclusion
With such moves Voxeljet has initiated the process of turnaround. The company had been sailing through troubled waters for quite some, which led its stock to all time lows. Although these are some strong initiatives taken by the company, but still it will be a matter of time to see, as the stock regains its lost momentum.
