Full-service additive manufacturing specialist 3D Systems is undertaking a restructuring program that will focus on "growing markets" for its 3DP technologies, specifically the Industrial and Health Care lines of business. The shift was announced by the recently appointed president and CEO Dr. Jeffery Graves, together with the group's disappointing Q2 2020 results.
Graves was named to his position in mid-May, replacing Vyomesh Joshi, who announced his retirement in February.
“We will focus on markets and applications where a premium is placed upon performance and reliability; with engineering/technology cultures that seek product innovation as a means of delivering value to their customers; and with processes that tend to be highly controlled," Graves stated.
He continued: "Thanks to our unique offering of hardware, software, materials and services, combined with our leadership in application knowledge, we believe we are best-positioned to provide additive manufacturing solutions for specific, high-value applications in growing markets like healthcare, aerospace and defense.”
3D Systems missed analysts' expectations with its latest earnings summary, with Q2 revenue falling -29% year-over-year and -17% quarter-over-quarter, largely reflecting the period of the COVID-19 pandemic and the disruption to manufacturing and service activities. For the two sectors that will be the emphasized by the restructuring, 3D Systems reported its Industrial revenues fell -37% year-over-year to $62.1 million; and Health care revenue fell -11% to $50 million year-over-year.
While it pursues the restructuring, 3D Systems confirmed it is evaluating the divesture of some parts of the business that do not align with its new strategic focus. That could include production of on-demand parts and prototypes, various design and programming software platforms, and 3D scanning and haptics devices which it now offers.
In the course of the restructuring effort, 3D Systems will reduce its workforce of about 2,5000 by 20%.
3D Systems expects the downsizing and other cost-reduction measures to reduce annualized costs by approximately $100 million by the end of 2021.
