Arcam AB, (AMAVF), is the first 3D printer OEM to report Q1 2014 results this morning, and the results are impressive.
However, the most significant event of the quarter in my opinion was not reported by Arcam in their results: The progress made on their Fast EBM project, the goal of which is to speed print times of high-grade metal components by a factor of 5X.
Q1 2014 Highlights:
- 70% increase in sales
- Net profit after financial items increased to 3.6 (0.1) MSEK (including non-recurring costs associated with the acquisition of AP&C of 6 MSEK)
- Earnings per share amounted to 0.20 (0.01) MSEK
- Cash at the end of the period 368.1 (38.3) MSEK
- Order intake amounted to 6 (6) systems, and 7(4) systems were delivered in the period
- The order book contained 11 (12) systems by the end of the period
- The acquisition of the metal powder manufacturer AP&C was completed on February 11
- Cash balance of 368 MSEK
Currency conversion SEK to USD
|1,000,000.00 SEK||=||152,132.56 USD|
|Swedish Krona||↔||US Dollar|
|1 SEK = 0.152133 USD||1 USD = 6.57321 SEK|
Increased sales and improved earnings
For the first quarter we report a 70% increase in sales compared to the first quarter in 2013 and a significantly improved result. Trailing twelve month sales amounts to 226.2 MSEK and earnings amount to 18.9 MSEK. The result includes non-recurring costs in the first quarter 2014 associated with the acquisition of AP&C of 6 MSEK. The order intake during the period amounts to 6 systems and the order book as of today comprises 13 systems.
Acquisition of AP&C
In February we acquired the powder producer AP&C from Raymor Industries in Canada. AP&C is a leading manufacturer of high quality metal powder and supplier of titanium powder to Arcam since 2006. Titanium powder is an important part of our offering and with this acquisition we have secured access to the best technology for the production of high quality metal powder for our customers. The acquisition is fully in line with our growth strategy and complements our EBM technology and product portfolio. The acquisition was completed on February 11, and is consolidated from this date. AP&C´s share of group sales in the first quarter amounts to 3.5 MSEK after group eliminations.
We received 6 new orders during the quarter and we see a continued strong demand, particularly in Asia. The sales of our new large system, Arcam Q20, gains momentum and we have received 4 system orders. Arcam Q20 is planned for delivery to the first customers during the second quarter. The work to industrialize our technology with the major players within the aerospace and implant industries continue and we can now see good opportunities for volume orders during the year. At the same time, we see that the growing interest and knowledge in Additive Manufacturing and 3D printing creates interest within new segments. This may long term give opportunities for broadening of our product applications. Of the 7 systems that were delivered during the first quarter the majority went to customers within the implant or the aerospace industry.
The cooperation with DiSanto is progressing with agreements with customers for which DiSanto is manufacturing products.
Growth – organic and through acquisition
In addition to the acquisition of AP&C we are in rapid organic growth. We thus continue to recruit qualified employees in order to meet the expectations from our customers. During the quarter we have strengthened our service office in China and the support organization in Sweden. Through the acquisition of AP&C and through recruitment the number of employees has increased from 55 to 109 since March 2013.
An order book of 13 systems, increasing aftermarket sales and a positive business situation lays a solid foundation for a continued strong growth in 2014.
Fast EBM Project update
The Fast EBM project which I wrote about last year, was a 2 year project funded by governments of the European Union that is now completed. The project’s goal was to increase printing speeds in high-grade metal components using enhanced EBM technology by a factor of 5X.
Arcam AB led the project and is the recipient of all intellectual property rights resulting form the R&D.
The recent project update on the Cordis website indicates:
-High productivity EBM machine: This depends upon high frequency deflection and high power electron beam generation. Designs have been produced and parts are being manufactured.
- FastEBM pre-qualification for aerospace components manufacture: These tests will commence once the testbed equipment is established.
- High power EB gun design: A 10kW gun design has been made and this is under manufacture.
- Low-aberration deflector system: A number of deflection systems have been analysed and a design developed. Drive electronics have been considered and a design proposed. This is now being manufactured ready for test.
- Manufacturing process model: Software has been developed to enable beam powder interaction to be modelled
Fast EBM Arcam AB printers in commercialization next year?
I asked during this morning’s conference call where things stood with Fast EBM and was surprised to learn that commercialization of the first iteration of Fast EBM machines is expected to begin as early as next year. CEO Magnus Renee also stated that their new Fast EBM machines will speed printing times by a factor of “at least” 2X in their first generation.
The move from 3D printing’s use for prototyping and small batch production to full-scale manufacturing capabilities in high-grade metal components for the aerospace, defense, automotive, and medical industries is drawing closer.
Surprisingly still unknown to many investors and American analysts, Arcam AB is looking more and more like a company that will officially usher in that new era very soon.
Disclosure: I am long shares of Arcam AB (AMAVF). I have not been paid for this post by the company or any third-party.
Gary Anderson…..Follow me on Twitter: @3DPrintingStock
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