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Msg  421 of 423  at  11/8/2023 3:12:20 PM  by

str8_chuter


Q3 CC

mul,
 
Ugly quarter for DDD but nothing that wasn't already telegraphed via the pre-announcement back on Oct 25th.
 
The bad news?  2024 is going to be brutal.  Not just for DDD.  For all equities.  That's pretty clear based on the actions of CFO's everywhere.  Cash is being conserved, hoarded.  Capital expenditures are being delayed or scrutinized more closely or canceled.  DDD obviously already feeling the effects here in 2023.
 
The good news?  DDD is not waiting around for the bad news to really hit, they're taking an axe to the company cost structure.  Shedding another 200 employees and exiting about 1/3 of current company locations around the globe.  That latter move is a biggie.  Goal is to cut $45 to $55 MM out of annual cost expenditures.  That's huge for a company with just over a $500 MM annual run rate. 
 
Recall that they executed a restructuring last year (that carried over to 2023).  That exercise delivered.  Yes, the company is still losing money but the losses would have been far steeper had they not downsized a year ago.  Q3 operating margin came in at 42.7% which is a huge improvement over Q2.  Expect further improvement to come as a result of restructuring 2.0 which is underway right now.  More than half of the cuts will be in place by the end of Q1 2024.
 
More good news from regenerative health.  Recognized three separate milestone payments from United Therapeutics this quarter.  Revenue not material but proves that they're making progress towards the goal of printing a human lung.  On target for human clinical trials in 2026.  What they're learning and developing along the way is being used to improve products on the industrial side of the business.
 
New product launches next year will be triple what they've done in 2023.
 
Cost-cutting will not impact R&D.  Continuing to invest.  Headcount reduction won't impact sales and service departments.
 
Bottom line: DDD shares put through the wringer in 2023.  2024 going to be ugly but too unpredictable for management to provide guidance.  If sales simply flatline, consider it a win.
 
What DDD has experienced this year awaits the rest of the stock market in 2024.  The bear resumes.


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