3D Systems, Rock Hill, South Carolina, USA, has announced the next phase of its multi-faceted restructuring initiative, adopted in an effort to improve operating efficiencies throughout the organisation and drive long-term value.
This next evolution of restructuring will reduce headcount by approximately 6%, with the majority of reductions being made in corporate and business support functions, predominantly located in the US and Europe. The company expects this initiative to reduce operating expenses by approximately $4.0-6.0 million in 2023 and to provide annualised savings between approximately $9-11 million beginning in 2024. The company expects to incur cash charges in the range of $3.5-4.5 million for severance-related costs related to this initiative during 2023.
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This reduction in operating costs is a result of investments made in improved business processes, rationalisation of operations, improved operational efficiencies, and integration of acquisitions completed over the last two years. Only recently announced, the majority of these changes will be fully executed in the current quarter, with the remainder occurring in the second half of the year.
In addition to the above, the company is providing further detail related to its previously announced initiative to improve manufacturing efficiencies in its European metal Additive Manufacturing operations. These changes will include the insourcing of certain metal AM platforms into its Riom, France manufacturing facility, co-locating the manufacturing with the current engineering of these products. This approach is expected to improve cycle time from development to production while improving operating efficiencies. The company is reaffirming the expectation for its European insourcing initiative to reduce operating expenses in 2023 by approximately $2.5-3.5 million and provide annualised savings of approximately $5.5-7.0 million beginning in 2024.
“We are very proud to offer our customers the broadest range of Additive Manufacturing technologies in the industry, including both metal and polymer hardware systems, an enormous range of value-added materials, and the leading suite of software solutions in the industry, which we bring together through specific customer applications that enable rapid adoption in production environments,” stated Dr Jeffrey Graves, president and CEO. “Building from this success, our challenge now is to leverage our scale to bring increased operating efficiencies to benefit our customers and shareholders. The actions we have announced over the course of this year are expected to generate a combined savings of approximately $6.5-9.5 million in 2023, and $14.5 million to $18.0 million in annualised savings beginning in 2024. These actions reflect our commitment to generating positive adjusted EBITDA this year, which we now expect to be over $2.0 million for the full year 2023, with continued momentum in 2024 and beyond.”
“These efforts are an extension of the ongoing work we began in late-2020 to streamline our operational footprint, focus our efforts, and better leverage our rich history in Additive Manufacturing,” Graves added. “We continue to believe that right-sizing our cost structure and delivering positive adjusted EBITDA and free cash flow in 2023 will further improve 3D Systems’ already strong balance sheet and enhance our flexibility to continue investing in the most critical areas of R&D, operations, customer service, and an efficient corporate infrastructure that is required to capitalise on the exciting market opportunities across our industrial, healthcare and emerging biologics markets. We believe this focused approach will unlock sustained value creation for our customers, shareholders, and society for years to come.”