Voxeljet’s stock performance was among the most disastrous of the post 2014 hype period for pure player public 3D printing companies so it should not be a surprise that it is leading the recent rebound phase supported by positive signs from its large size industrial binder jetting service business.
“We enter 2017 with great momentum and a strong focus on executing on our strategy 2020. This will help us to continue to achieve our goals and to generate sustainable, long-term value to our shareholders. We rigorously leverage all our strengths: our global presence with a highly talented and motivated team, our leadership in 3D printing technology and our in-depth market knowledge. The opportunities all around the world are vast and we are ready to take them.” Dr. Ingo Ederer, Chief Executive Officer of voxeljet.
First Quarter 2017 Results
Not all is rosy by signs are encouraging. Revenues for the first quarter of 2017 decreased by 7.0% to kEUR 4,530 compared to kEUR 4,870 in the first quarter of 2016. This is due to continued decreases in the Systems segment, which focuses on the development, production and sale of 3D printers. Sales decreased by decreased 39.2% to kEUR 1,693 in the first quarter of 2017 from kEUR 2,783 in last year’s first quarter. The Company delivered two new printers in the first quarter of 2017, compared to three new printers delivered in last year’s first quarter. Systems revenues also include all revenues from consumables, spare parts and maintenance. Systems revenues represented 37.4% of total revenues in the first quarter of 2017 compared to 57.1% in last year’s first quarter.
Revenues from the Services segment, which focuses on the printing of on-demand parts for our customers, however were strong. The 35.9% increase reflects revenues for kEUR 2,837 in the first quarter of 2017 from kEUR 2,087 in the comparative period of 2016. This was mainly due to higher revenue contribution from the German operation and our subsidiary voxeljet America Inc. (“voxeljet America”) amounting to kEUR 2,085 and kEUR 548 in the first quarter of 2017 compared to kEUR 1,657 and kEUR 363 in last year’s first quarter. The increase is also attributable to the revenue contribution amounting to kEUR 124 from our Chinese operation (voxeljet China) which was established during the second quarter of 2016.
Gross profit for our Systems segment decreased to kEUR 353 in the first quarter of 2017 from kEUR 693 in the first quarter of 2016. The gross profit margin for this segment decreased to 20.9% in the first quarter of 2017 compared to 24.9% in the first quarter of 2016. The decrease in gross profit is mainly due to the decline of revenues. The decrease of gross profit margin resulted mainly from weaker contributions from the areas of spare parts, maintenance, and consumables which were related to the move to our new facility in Friedberg, Germany. This was partially offset by improved gross profit as well as gross profit margin contribution from voxeljet America.
Gross profit for our Services segment increased to kEUR 1,228 in the first quarter of 2017 from kEUR 638 in the first quarter of 2016. The gross profit margin for this segment increased to 43.3% in the first quarter of 2017 from 30.6% in the first quarter of 2016. This was mainly related to higher gross profit and gross profit margin contribution from the German operation as well as voxeljet America due to a higher utilization in the first quarter of 2017, compared to the last year’s same period.
Selling expenses were kEUR 1,385 for the first quarter of 2017 compared to kEUR 1,203 in the first quarter of 2016. The increase of kEUR 182 was mainly due to higher personnel expenses related to an increase in headcount of nine full time employees compared to the first quarter of 2016. Administrative expenses were kEUR 1,194 for the first quarter of 2017 compared to kEUR 1,096 in the first quarter of 2016.
Research and development (“R&D”) expenses increase to kEUR 1,497 in the first quarter of 2017 from kEUR 1,307 in the first quarter 2016. The increase of kEUR 190 was mainly due to higher expenses for materials and external services related to various projects. Other operating expenses in the first quarter of 2017 were kEUR 190 compared to kEUR 1,129 in the prior year period. This was mainly due to lower losses from foreign currency transactions amounting to kEUR 138 in the first quarter of 2017 compared to kEUR 1,104 in the first quarter of 2016.
Other operating income was kEUR 297 for the first quarter of 2017 compared to kEUR 317 in the first quarter of 2016. This slight decrease was mainly due to a smaller amount of release of deferred income regarding our sale and lease back transaction which amounted KEUR 54 in the first quarter of 2017 compared to kEUR 74 in last year’s same period.
Operating loss was kEUR 2,388 in the first quarter of 2017, compared to an operating loss of kEUR 3,087 in the comparative period in 2016. The decrease is mainly due to the significant improvement of gross profit from the Services segment partially offset by a decrease from the Systems Segment. Overall gross profit improved by kEUR 250. In addition other operating expense improved by kEUR 939. This was partially offset by higher research and development and selling expenses.
Guidance for the second quarter of 2017 is in the range of kEUR 5,500 to kEUR 6,500. The company is reaffirming guidance for the full year ended December 31, 2017.
- Full year revenue is expected to be in the range of kEUR 26,000 and kEUR 28,000
- Gross margin is expected to be above 40%
- Operating expenses for the full year are expected as follows: SG&A expenses in the range of kEUR 9,250 and kEUR 10,250 and R&D expenses to be approximately kEUR 4,750 to kEUR 5,750. Depreciation and amortization expense is expected to be between kEUR 3,000 and kEUR 4,000.
- EBITDA is expected to be neutral-to-positive in 2017
- Capital expenditures are projected to be in the range of kEUR 8,000 to kEUR 9,000, which primarily includes ongoing investments in our global subsidiaries.
Total backlog of 3D printer orders at March 31, 2017 was kEUR 4,302, which represents five 3D printers. This compares to a backlog of kEUR 3,784 representing five 3D printers, at December 31, 2016. As production and delivery is generally characterized by lead times ranging between three to nine months, the conversion rate of order backlog into revenue is dependent on the equipping process for the respective 3D printer as well as the timing of customers’ requested deliveries. At March 31, 2017, the company had cash and cash equivalents of kEUR 6,941 and held kEUR 11,657 of investments in bond funds, which are included in current financial assets on our consolidated statements of financial position.