3D Systems Corp (TDSC)

NetscribeSoftwre (98.26) Submitted: 3/27/07 9:04 AM : Start Price: $19.27 TDSC Score: 23.26

3D Systems Corporation is primarily involved in the business of providing three dimensional printing, prototyping and manufacturing systems, while also offering a range of related products and materials that enables to produce physical objects from digital data. The company’s operations revenues are primarily segregated in three key segments: Systems and other products; Materials; and Services. The system and other products segment include technology platforms like stereolithography (SLA) equipment, the selective laser sintering (SLS) equipment, and InVision jet provides the major chunk of about 40% of the over all revenues. While the Materials segment that includes sales of proprietary materials used by the ThermoJet printer, SLA and SLS systems also provide a significant contribution.


The company is currently facing tough times, with revenues falling and more importantly the bottom line sinking in red. The revenue decline can be attributed to lower unit volume and disruptions in production, while the increased operating and research & development expenses is hitting the margins. The earnings restatements, and on going consolidation and restructuring expenses in South Carolina are further adding to company’s woos.


Looking ahead in 2007, the new product line up that includes cost effective desktop modeler V-Flash and Accura 55, the new plastic material, appears to be promising. Moreover, the strong order book and the recent high end product purchases by Tangible Express augers well for the company. However, the continued manufacturing problems and production shortages for certain products, while key personal constantly leaving the company to join competitors comes as a major concern, and are likely to maintain creating a negative impact for the rest of the year. Adding to it, the balance sheet also looks over leveraged, with low cash balance, whereas the fundamentals of the company raises its own doubt, making it better for the investor to stay away from this stock at these levels.

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