Stratasys, the global leader in additive manufacturing, this morning reported very disappointing quarterly financial results, reflecting the plunge in its MakerBot business, global economic weakness, and increased competitiveness in its core legacy business, rapid prototyping. The light at the end of the tunnel for the Israeli company may be what it calls “direct manufacturing”: the injection molding business.
The financials are stunning:
- Unit sales dropped from 10,965 in the third quarter of 2014 to 5,467 in the 2015 quarter—a 50 percent drop;
- Total revenue dropped 18 percent; and
- Operating profit dropped 131 percent.ear-on-year revenue growth is off 18 percent and a key indicator of net income is down 98 percent.
Year-on-year revenue growth is off 18 percent and a key indicator of net income is down 98 percent.
Big changes are taking place at MakerBot, including the outsourced manufacturing of a legacy printer. Other cost-cutting is under way.
“Although we expect market conditions will remain challenging over the near term, we remain committed to our long-term investment plan and growth strategy that focuses on vertical markets and manufacturing-related applications,” said David Reis, who became CEO when Stratasys and Objet Geometries merged in a reverse acquisition in December, 2012. The company, while still known as Stratasys, was based in Israel for tax reasons.
Responders to a recent survey conducted by Stratasys said the applications with highest potential for growth of additive manufacturing are: tooling and patterns, trial and bridge production parts, and end-use parts.
Use of 3D printed mold inserts can produce molded parts made with the actual production material. Designs can be adapted on the fly by switching inserts.
Machine builder Milacron recently reported on why it sees potential for the technology, which it also demonstrated at NPE 2015.
A prototyping service provider approached Milacron with a customer project involving the production of low-volume gear prototypes. A mold was produced in five hours on a PolyJet-based Objet500 Connex3 3D Production System using digital ABS. The prototype was available two hours later.
Dr. Boy demonstrated use of 3D printed tooling inserts at the German trade show Fakuma last month.
HASCO, a global mold components supplier based in Germany, used a Connex printer to make a mold insert to test the integrity of a new sealing plug design before going into mass production. HASCO now offers Stratasys 3D printing with its K3500 quick-change mold system, allowing molders to quickly change inserts for different products.
There is definitely potential in this area, particularly considering that a Minnesota company called Proto Labs has built a $210 million business making aluminum tools for short-run production. Proto Labs also now offers additive manufacturing and other services and estimates a $55 to $60 billion market for prototype and production parts in injection molding.
Proto Labs has done a better job than Stratasys in marketing directly to design engineers and product development executives. That’s a problem that Stratasys is addressing.
Meanwhile, Stratasys still sees significant potential in rapid prototyping, which it identifies as a $10 billion to $15 million market. According to the company’s own research, additive manufacturing only represents 23 percent of the total market. Urethane molds, CNC machining and other methods are still used for the remainder.
Stratasys stock, which peaked at $136 last year, was trading at around $30 per share this morning.