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I agree with the analysis of Sanders and your viewpoint. I am convinced because of the advantages of 3d printing that manufacturing places will be found for this new technique
The real interesting question will be how much of the business will EBM and Arcam get. As Rene said in that interview just before 3q ER, EBM is best for some parts, bad for others and a wash on still others. So through research and experimentation, we need to see just how many parts are EBM compatable and then hope that arcam will get a large percentage of those parts to print
We shall see but all the news, including Rene's statements, and the actual sales figures, seem very optimistic. The key question as we have learned over the last year and change is how long will this realization take and how long will the customers take to implement. Some of arcam's follower's had already given up on GE, despite Rene's promise, because it took longer than they wanted.
Still awaiting your full ER analysis, not just your continued obsession with printer sales which has prompted so many posts.
Until you come up with a full analysis, in depth responding is not possible. I commented on your so called ER prediction and what little data was provided.
My self I must disagree with you. Arcam over the years has shown excellent printer sales growth and revenue growth. You are free to disagree. Myself I think my 29% growth in printer sales will be an acceptable number, especially with the revenue growth we expect and the potential super q1 based on a markedly increased backlog which should be turned into deliveries and revenue in q1.
We disagree but until you actually make a prediction, other than keep repeating that sales will be low based on the lack of announced sales, all we are doing is repeating the same info.
We shall see in about 4 weeks, till then you can keep your negative prognosis. How can you hope for a good er, a blow out, when all you do is focus on what you consider the negative??? We shall see. I have seen nothing to change my outlook which I think equates to a good ER. You can keep your disagreement. Actually I hope that the other two predictors are right as they are more optimistic than me and they at least provided some rationale other than just the lack of announced sales. Enough
Agree. But might had some type of conveyor system or multi nozzle system like what was contemplated in the google/ddd idea which has been cancelled. Also as I understand it one of the delays, especially in the aerospace sector comes with the quality control testing after an item is printed. If the part can be certified as meeting standard on a flow basis as the item is printed, and no post printing production is required, that will speed up the ultimate time. Sigma working with materialize is working on that type of software But any speedup in creating the part or certifying it as ready for use will be good for arcam.
We agree in part but I am more optimistic. You emphasize the sales factor in evaluating the streets reaction and foresee a mixed to poor reaction if sales are only up 20%.
I disagree. I think Arcam will have an excellent ER if revenue is up 70% to 580 as I predict, that sales are 25 or greater as I predict, that back log rises from 14 to 23ish foretelling much better deliveries and consequent revenue in q1 and Rene offers some positive outlook and vision. The Revenue growth in q4 and the prospect of even greater revenue growth in q1 based on higher backlog plus vision will trump a 30% ONLY??? printer sales increase.
Have no idea what will happen to the pps but to me that would be a good ER. BUt then I thought q3 was a good ER as well. We cannot expect ever increasing sales growth as the more the base number is the harder percentage increases are. But as long as backlog is up, foretelling good deliveries along with subsidiary growth we will have nice revenue growth and the street likes that. We shall see. Remember Rene hinted this will be a great quarter.
Trader I read that post. That's where I got my comments that you agreed with me that revenue growth was the most important, that you thought the street would be happy with 50% revenue growth and 20% sales growth. Where else did you think that I got those values?
But I did not equate that to an ER prediction, rather a Trader wish list as you included wish, maybe, probable and other such qualifiers, rather that actual figures that were predicted like us predictors did.
But to equate your wish list to actual predictions, I note you offered no revenue figure. BUt if we accept the 50% revenue growth wished for as a prediction, you are below my 70% revenue growth. You hope for 15 deliveries more than my 14 prediction, but possible if no customer delays and less than investors. You offered no backlog number so can't comment on that. You misquoted my sales prediction on the Arcam board viz 29 vs 25 and here by suggesting that I predicted 50% sales growth while my number was actually 29% as I recall. But my prediction is actually more conservative than the other two predictors despite your numerous posts disagreeing with my number by quoting the lack of announced deliveries
If you offer a revenue number prediction, a revenue growth figure, actual prediction rather than pure hope, a actual sales number and make a back log prediction, then I will agree that you have finally offered an ER prediction post. Regardless, the jury will be in in about 4 weeks.
Deliveries are what are booked into revenues. I do not know why we keep repeating the same info. I would be interested in your analysis and expectations for the next ER not just refocusing on announced sales. Of course sales are a relevant harbinger of future deliveries, company performance and revenue growth and as such are very important. But in analyzing an ER, deliveries and Revenue growth take the top pole. And I must disagree with one of your points. While the street does look forward in setting pps, it also looks at current health which is a reason that pps frequently goes up with a good ER and revenue growth which is a past value. PPS has gone up with good Revenue Growth even though sales might take a breather, especially if the company gives an explanation for the breather and the street can see improvement such as a markedly increased backlog value like we predict for arcam.
Bottom line, would be nice to see you provide an analysis and some insight into the upcoming ER besides just lack of announced sales and I say that to all posters. Meanwhile I have seen nothing to change my ER analysis and predicted values. I think my prediction of 25 sales is valid and actually low compared to the other ER predictors. The issue will be decided in about 5 weeks and we will see if we have another good ER And if my analysis is correct, we will do even better in q1. In q4 deliveries are limited by the 14 backlog, if all of us predictors are right the q4 backlog will be in the 20s going into q1 and deliveries and thus revenue will be up smartly. JMHO May even have more bulk sales in q1 and if the street not only focuses on the ER but on future prospects, that should bode well for the future. Right??
It seemed to me last 2 CCs that Rene was kinda apologizing for Di Santos lack of advancement in contract sales, saying it was a slow period and he expected them to do better in later quarters. This while he was totally bragging about progress in the printers and materials with 3 new atomizers.
I may be totally wrong but it seemed that of the three, Di Santo was the weakest. Just my gut reaction. But all 3 subsidiaries are executing better than the other 3ders.
Investor, I know deliveries are what matter, I;ve been saying that for 2 years to all those that keep focusing on quarterly sales. Of course sales are important but deliveries and consequent revenue growth is the most important factor. So I was right, if you read my post, deliveries was the discrepant factor, 14 vs. 15 delivery estimate. And you may well be right. We have 14 backlog, I assumed 2 delayed by customers and one advance from 4q sales. If there were no delivery delays or more were advanced 15 or even 16 or 17 deliveries could happen
But again thanks for participating in this exercise and I sure hope you are right. Your more optimistic. And our sales and delivery optimism put those posters who predict poor quarterly sales and poor ER in their place.
Lets put our very optimistic cap on. Think no delivery delays and one or two q4 sales delivered, that could make 16 deliveries which might push quarterly revenue to 200 and annual revenue to 600 or a revenue increase of circa 79%
Speculation: Assuming the nay sayers are right and sales are down to only 10 single plus the 10 bulk a total of 20 printers sold. Would a revenue increase of 71 or 76% and optimistic vision satisfy the street, despite a slowdown in sales, and would the pps move up or down? Might put to rest the question of whether i;m right and revenue growth is the most important matrix or whether others are right who keep emphasizing reported sales.
One last point. Assuming no delayed deliveries (with GE who knows as its a bulk sale and production timing is unknown) just think what the backlog will look like and most of those will be delivered in q1 making that a very nice quarter.
But I'm sure getting tired of this down market sentiment moving our arcam down. Given last quarters ER and our position this quarter, I think 22 should have been a floor and we should be moving up. But then I admit I never could understand the lemmings who move the pps.
Thanks again for your comments and if either of us are right, as we are both optimistic, arcam will have a good ER and be in good shape.
I agree with you totally. Remember about a year or more back, guessing it was 2q 2014 but when we had that bad quarter and the pps tanked. On the CC rene said the miss was due to lack of deliveries. That lack was caused by problems with China acceptances and quality control focus on the new printer being manufactured. He promised that the problems would be corrected I believed him, held and bought more. He executed.
He has also promised bulk sales and a part in the GE engines. Even though it took a while, as the timing was not in his control, he delivered. He promised great things with APC, he delivered a 3 atomizer expansion and better revenue He said he was unhappy with Di Santo last quarter and now he is intervening to insure improvement. He has initiated a 2x expansion executed just in time for bulk engine sales. I could go on
You are totally right. Rene is my kind of CEO. He takes the initiative to anticipate need like expansion unlike DDD which was caught flatfooted. He has preside over expansion of the printer and material lines and looks like he may be intervening in Di Santo where the results have not been as good. Arcam is showing sales and revenue growth while the others are declining.
Yes Rene is my kind of CEO and until proven wrong will rely on what he says and not call hima dreamere like some others have.
Now fore a good ER and some favorable pps action which is long overdue Based on 3q er IMHO the pps should not have gone down despite the market weakness.
Trader, my reasoning is obvious. Please try to read and comprehend my posts rather than just disagree and handwringing. Frist, I explained how I got the 25 number. Second, it was 25 not the 29 you claimed I predicted on the Arcam board. Third, I'm even more conservative on printer sales than the poster who predicted 80 total sales for the year which you posted disagreement with and with investor 123 who predicted 28 sales. So i'm in good company contrary to your posting history who just before the bulk announcement was stating that he was afraid of a bad ER because of the poor pps action and no bulk sale announcments. You also posted that the EBAM posed competition to arcam and that composites would leapfrog EBM while stating the LEAP train had left the station. Might be true, might not, but why post till you know or at least have some indicia while Rene is saying no decision on the Leap has been made.
Trader, instead of hand wringing and lamenting, why not try to provide an ER analysis like I and investor did. We may be wrong, we may be right but at least we explained and analyzed how we got our numbers. And while you focus on printer sales, which of course is an important matrix, I'll focus on revenue growth which is even a more important matrix.
Trader, I might be right, I might be wrong. But at last I provided an analysis. You doubted the existence of bulk sales and you are now obsessed with multiunit sales. To meet my prediction, I need only 15 more unannounced sales while we got 21 total sales in last 4q and the environment is showing increasing medical and aviation printer sales across the spectrum
So bottom line we will know in about 5 weeks. But why ask me how I got to 25 printers, when you misquoted me saying I predicted 29, while INvestor has predicted 28 and another poster predicted 80 total sales. So hope you can understand my relatively straight forward post although you sure could not quote it correctly, and hopefully your can rest and stop handwringing and repeating the lack of announced sales. How many times must I respond to your handwringing and announced sales comments?? Ask the others how they got their even higher sales figures. LOL
Sorry for the error, thanks for the correction. Thanks also for responding to my ER exercise, might create some useful discussion and analysis and reduce the hand wringing.
I like your analysis even better as its more optimistic in sales and deliveries and consequently backlog. Little surprised that you have a lot more printer sales, 28 vs my 25, yet come up with less revenue. I'm also surprised at your revenue figure. Arcam has 400 in the bank, first 3 quarters, RIght. THe best quarter was the 2nd with 150.6. IF we just tied this quarterly revenue, the 2015 revenue would be 551 with rounding. Your 560 is not that much higher. Based upon Rene's statement that the 4q would be our best, expansion in the materials and contract printing and your more optimistic deliveries (15 vs my 14) I would have expected a higher total revenue figure.
But again thank you for participating in this exercise and correcting my error. Sometimes I go to fast and am sloppy with my memory and typing. But the fact is we both are optimistic and don't give in to the negative handwringing of some. Hope you are right, but lest compromise, take your sales figure and my revenue figure. LOL The Jury will give its verdict in about 5 weeks.
Multi Unit orders are not the only factor that moves the pps despite your obsession and multi posts about such sales. WIth sales its the total number of sales that matter, whether single or multi and I;m predicting 25 and investor predicts 28, more optimistic than me. Your repeatedly suggest lower.
But the key is revenue growth and for your information that includes printer sales AND material sales and contract sales. In total, im predicting a 70% increase at 580 and investor is close to me at 570. Both would represent nice revenue growth which is what the street wants. Investor is also more optimistic than me on deliveries (15 vs 14) and on backlog 27 vs 23.)
And neither investor nor I need any multi sales to get our figures. Mine is based on 6 less non GE non bulk sales based on increased demand in the aviation and medical sector and just a general market feel. But in evaluating the pps one also has to look at outlook and vision, the expectation of more bulk sales, the technological improvements, Rene's move to the USA and what the might foretell, arcam's improvements over the last 4 quarters and just general sentiment that arcam is executing unlike the other 3ders. Heck DDD just admitted that its consumer printers were not a big mover like SSYS recognized a while ago with its makerbot writedown and DDD's cancellation of project with Google.
So we do not need multi sales to move the pps and make a good ER, but they couldn't hurt either. Enough handwringing, arcam is executing despite all the nay saying and the pps move today is because of that and arcam's outlook, not a multi sale. Question answered.
2015 4Q AND ANNUAL EARNINGS REPORT PREDICTION AND ANALYSIS
As promised here is my attempt at analyzing and predicting the 4q 2015 and annual Arcam ER. Doing it earlier than I was planning, EOY, but since I analyzed a lot of the data to respond to some of the questions and hand wringing posed by Trader, I will post now, to avoid having to relook at the data later. I hereby incorporate herein my 3 ER response posts to Trader as well as my ER analysis on the Arcam board by reference.
We will see if I get as close as I did on the last ER. And remember, the only data we have involves the 10 GE sales, all the rest is guesstimating. And to all, I'm doing this to promote Arcam discussion and analysis so feel free to agree or disagree as i'm sticking my early neck out. But both in agreeing/disagreeing please provide analysis, reasoning and explanation as I'm endeavoring to do here.
First a couple of general comments. There is almost no data or news except for the GE sales so I'm applying my reasoning and analysis to reach my derived conclusions and explaining that process. I will not try to estimate EPS or income as those figures are so spotty and dependent on composition of sales, scheduling of sales and such other iffy stuff that its impossible to predict. I do speculate that RD will be up with the new markets and potential new printers in 2016, while cap ex will be down as expansion is completing. But I will predict and analyze the printer sales, deliveries, backlog, revenue and revenue growth.
Couple of other comments, As I said in the posts I incorporated by reference, I expect at least 20% increase in printer sales, 50% increase in revenue growth, increased printer contracting revenue, increased material sales from the 3 additional atomizers and the increased number of metal printers in use and predict that we will have some great vision and outlook from Rene hopefully including timing and size of additional printer sales, the GE engines, how the subsidiaries are expanding, the benefits of his relocation and the 2016 technological progress from the hi res/speed study. All of the above should be very optimistic re Arcam growth. But here is my 4q 2015 analysis:
SALES: I predict 24 to 25 printer sales this quarter. For the sake of my conclusions lets use 25, but if this is not correct, lower my following numbers by one.
Some lament incessantly about the lack of bulk and announced sales. I care not so long as the totals are good.
We got 21 printers sold last 4q without bulk or announced sales or sales to GE. Since this was before the 2/6/15 sales announcement policy change, despite Trader's worries, all of these sales were announced individually so we know none were bulk or multiunit or GE sales. RIGHT??
This quarter we have the 10 GE sales in the bank. Since we got 21 single sales last 4q, Rene says this quarter will be great and both aviation and medical sectors are expanding towards real manufacture, I would be surprised if single non GE 4q sales fell by more than 6 from last q4. Reasonable???
That would equate to individual printer sales of 15 for q4 2015 or a total of 25 printers sold including the 10 bulk GE sales for a total 2015 printer sales volume of 54 printers sold during 2015. We needed 50 printers for Traders wished for 20% increase. ACTUAL PRINTER SALES FOR 2015 WOULD BE 54 COMPARED WITH 42 LAST YEAR OR A 28.5% INCREASE. That is annual, the q/q increase would be 20%, 25 vs. 21.
DELIVERIES: 14 printers delivered. We had a backlog of 14 last quarter. Rene says about one quarter turn around. I will assume all 14 would be deliverable except maybe 2 may be customer delayed. Plus i'll be optimistic and conclude that 2 q4 sales might be advanced to delivery. So i'll pick 14 delivered which equates to our best quarter in 2015, the 2nd quarter with the most deliveries and revenue. And rene said this will be our best quarter. But cannot see more than 2 4q sales also delivered and we are limited by our 14 backlog. But if no customer delays and more 4q sales advanced to delivery, we may have even more delivered which will increase revenue since the delivered are the ones booked to revenue. Happy with this number
BACKLOG: 23. Based on 25 sales and 2 advanced to delivery. Higher if more delivered. One of our highest backlog numbers and very optimistic for q1 as most of these will be delivered baring customer delays and this bodes well for q1 deliveries and revenue.
REVENUE: 580. I don't know what each printer will bring as don't know which type will be sold. Moreover, don't have any idea re the subsidiary sales except predict increases with the 3 additional atomizers and additional metal printers in use and think Di Santo will do better. Also have Rene's statement, who I trust more than the nay sayers who has stated the 4q would be the best this year.
Therefore we have the following booked revenue. 1q 111.4, 2q 150.6, 3q 138.1 or 400.1 in revenue for 3 quarters. Since Rene said 4q would be our best, revenue must be over 150.6 our best 2015 quarter so far. Betting on the increased printer sales and my thesis that subsidiary revenue will be up, I have concluded that the 4q revenue will be 180, 30 above our best 2q. I'm comfortable with that guess which may even be conservative. But the GE bulk sales won't be booked in revenue till delivered. THUS, OUR 2015 REVENUE TOTAL WILL BE 580 (400 first 3 quarters PLUS 180 4q revenue.)
REVENUE GROWTH: 339 REVENUE FOR 2014 VS 580 REVENUE FOR 2014 EQUATES TO 71% REVENUE GROWTH. As most will admit this is the most important matrix and hope I did my math correctly. I am math challenged but stand by the reasoning beyond my premised numbers.
In fact may be conservative if the printers were higher margined and the subsidiaries did real well
I invite any and all to agree or disagree with my analysis, just please provide rationale for your position not just bald statements. But hopefully this effort will promote some useful arcam discussion and silence the handwringers and obsessive PR and announcement needers except to the extent they provide contra supported numbers for the above arcam milestones. Hope you readers find this useful and will prompt intellectual and analytical thought and posting.
Trader, why are you still concerned about bulk and announced sales after all the prior posts on the subject???
Was it really necessary to repost the entire 1q ER which most of us have read? Why report all that old info when it served no purpose. We all knew effective 2/6/15 Arcam was not posting single sales anymore and would only post "crucial" sales. Unless I've missed something in my 2 previous posts to you, postulating 20% printer growth and 50% revenue growth, you should have been comforted and stopped hand wringing. Guess you need more elucidation.
Since I've already looked at the numbers and gave you your Christmas present on the Arcam board, guess I'll have to do my ER analysis now as it serves no purpose to review the data again at end of year.
But besides the waste of repeating so much detail, where you worry needlessly:
(1) Why are you so concerned about bulk sales and announced sales. Trader they are separate issues. (a) bulk sales are defined by Rene as 5 printers and they are announced. (b) Reported sales are sales considered "crucial" or material to Arcam and are not put in machine numbers. Why provide all that repetition which didn't provide the info you wanted. Investor 123 did so in one sentence and did announce the number announcement policy. So all that text was unnecessary.
(2) While I do like announced individual printer sales, why focus on it in so many posts. Bulk or announced sales are not specifically material. IT is the total number of sales that matter. Moreover, it is not even the number of sales that really matter (except as a measure of company health, progress and future revenue) as you admitted====it is REVENUE GROWTH and you admitted that the street would be happy if it was 50% and I showed you that it probably will be. That should have stopped your hand wringing, but guess I was wrong as I need to respond to yet another wringing.
(3) Your "by the way" paragraph makes absolutely no sense and shows your lack of comprehension re the announcement policy.
As Rene clearly stated, the announcement policy was on going from 2/6/15 and obviously not retroactive to 4q 2014. Therefore, unless I missed something, in the 4q 2014 ALL sales were reported, single and multi. So one only has to read the PRs to determine whether any of the 4q sales were multi unit. RIGHT?? They were not.
Therefore, Arcam achieved the 21 sales 4q 2014 without any significant multiunit sales. RIGHT???? So why your by the way paragraph which was also simply redundant. IF they got 21 without significant bulk sales last 4q, who cares whether they had any multiunit sales beyond the GE ones this quarter, so long as the total sales is a significant amount and in my arcam yahoo board analysis I postulated 25 printer sales this 4q and explained why. So more PRs as you keep hoping for would be nice, but not necessary.
Chill trader, you jump to so many negative erroneous conclusions.
like that EBAM printer from Sciaky which you worried would pose competition to Arcam. We all pointed out that it was for much larger coarser materials and does not compete with Arcam.
Like all those posts where you worried that Rene would not validate his over 1 year ago promise that there would be bulk orders from GE. You worried that too much time had lapsed, that the leap train had left the station and composites would leapfrog over EBM. This week that fear, at least short term, was put to rest and now your opining that GE will buy 100 printers.
Now for the ER. Your forcing me to critique the ER before i'm ready but I need to assuage your fears like on the other issues including your fears that the Leaps and blades had already been certified and Arcam would loose out.
Oh and to clarify other point of yours, Rene has clearly stated that bulk orders would be 5 and as other posters noted, the announcement policy has clearly been set forth in CCs. So those are non issues.
Now to assuage your fears. As we both agree, REVENUE growth not sales is the key to pleasing the street. Sales are of course important for future revenue, backlog and indicia of company health but it will be deliveries that will be booked into revenue.
I've stuck my neck out and promised you at least a 20% increase in printer sales and 50% in revenue 2014/2015 so that should assuage your fears. Color for those bold statements.
Printer Sales. Not waiting for next weeks results, we have 10 printer sales to GE booked this week. In the comparison quarter, 4q 2014, we sold 21 printers with a couple In Jan just missing the cutoff. None of them were to GE and none of them were bulk sales. Rene says 4q will be the best 2015 quarter.
I've explained previously a 20% increase in printer sales is in the bank and I expect more. In another post, I also stuck my neck out and said we will have a minimum 50% REVENUE GROWTH. Need I repeat the 20% analysis. Guess so since your still hand wringing. We had 42 sales last year, 20% increase is to 50 printers for 2015. We have 29 sold already, meaning we need 21 more. We Got 10 with GE, meaning 11 more from all sources. Trader do you really believe in our best quarter of the year we won't have 11 non GE sales? Even if they are singles. If you do you must be very negative. I will explain in my ER post why we will have more than that 21 this quarter.
REVENUE GROWTH: I will explain my 50% and more REVENUE GROWTH analysis in my ER post but that goal will easily be obtained with the entire revenue mix, Increased printer sales, 3 new materal atomizers and hopefully more contract sales as the inplant market here and abroad blossoms
Trader, To answer the question you posed to me, Yes we will have an ER which will satisfy your criteria and should please the street. Chill out and stop making such premature erroneous conclusions and fears. If you think 20% sales growth and 50% revenue growth, year over year, will please the street you should be happy. This sale and Rene's prediction that arcam will have trouble meeting aerospace demand rendered just before the last ER is good news and should have pleased and relaxed everyone, assuming you believe Rene which I do.
Relax and enjoy the ride Trader.
Trader, we agree on total revenue being the benchmark. Not quite sure what you mean by maybe single sales will make it. Make what?? Are you referring to the 20% gain you said Mr. market needed to be happy in another post??? In response, I already posted that the 20% was in the bank. I explained why. So if that is what you mean, yes single sales will make "it" up and we will be there. But as I said, I want more.
Couple of conclusion corrections and my preliminary opinions which will be fleshed out when I do my ER analysis.
1. Rene said 5 equals a bulk purchase so no others qualify for PR per his announcement which I do not agree with.
2. you mentioned the 2 PR'd from Cal Ram on 9/30. Rene said they would only announce 'bulk" sales and company moving events. Reading the Cal Ram PR, perhaps it was announced because it was an add to 5 existing printers and "confirms" the potential for Arcam. As I recall this was at a time when arcam pps was doing poorly and some were wondering if we would be getting the bulk orders promised. That Rene was simply a dreamer. Don't know but maybe this prompted the announcement.
3. As I said in another post, we will have at least the 20% increase in printer sales that you wanted and I explained why.
4. I said was not happy with 20% increase. Not ready for my thorough analysis yet. But I want more than 20%. I will stick my neck out, WE WILL GET AT LEAST A 50% revenue INCREASE and probably more. Do you think that will satisfy the street? I will fully explain how I got this figure and why it will be more than 50% but I will commit to that number as a preliminary number.
Remember the 10 GE sales are completely new and unanticipated. Arcam will obviously have a lot of sales from other buyers in a quarter, especially the 4th quarter which Rene promised would be arcam's best this year once again. We had 21 printers sold in q4 last year, none from GE, and given arcam's executing and the budding aviation production environment, and the medical front, I would not be shocked with a good number of non GE sales as well. Possibly near the number last year (remember there were additional sales shortly after the close of the quarter which could have been added to the 4q number) and then add the revenue from 3 more atomizers if used to their max due to increased number of metal printer customers and hopefully more contract mfg.
5. I agree that to please wall street, arcam needs to show revenue increases in subsidiary revenue AND machine sales, but disagree it would have to be terrific in both. IMHO its revenue growth that is important and the street will be happy with that growth even if its made with a big growth in the subsidiary revenue and a small gain in printer sales. Terrific in both will not be needed as you postulate. It is overall revenue growth that will matter most. But I can only predict, and will do so, my analysis of the ER. I cannot predict the streets pps action.
6. I notice that you quote Rene favorably. Should have had more faith in his promise for bulk sales more than a year ago and his promise of GE sales and so much aviation business that it would be hard for arcam to keep up with demand. As I have posted, it pays to believe in what Rene says as he has always delivered since I;ve owned the stock. He cannot control buyer timing, but he can do all that is possible to be ready for it such as the expansion, the foresight to work with Avio and now his move to the USA to be close to new customers and the certification process. Rene is not just the dreamer that some have claimed.
Anyway, after addressing your concerns and noting my disagreements, I think we will be pleased with the ER for the reasons I will outline and now we will see how the street reacts. We will have a minimum of 50% in revenue growth.
I realize that you are very detail orientated and I respect that. When I originate a post I put thought and analysis into it. When I reply, it is frequently off the cuff from what I remember or logic and often not proofed in detail. My bad but time dictates and I frequently admit that its off the cuff. But I must explain what you find fault with.
1. 10% gain in 3 months. I find that statement to be flawed and so stated. IMHO I was right, although the arbitrary time periods may be different. But the premise, as I saw it, was that Arcam has only gone up 10%. Facts. Arcam was 11.24 on 8/24/15, got to 22.14 on 10/13/15 and closed yesterday at 17.13. All of which numbers are well over 10% and indeed from top to bottom almost 100% increase. So I standby the statement that arcam has shown over 10% growth and 3 months is merely arbitrary. I can take any period and show different results. BUt the fact is arcam has had substantial growth which may be explaining the somewhat weak pps action at least before todays orders.
2. 30% appreciation: In post 2849 I clearly said I was going from memory but it was my impression that Arcam showed substantial growth in q4 2014. I used that to rebut the Trader postulation that another posters suggestion that arcam would sell 80 printers was false because of the lack of sales news and probably lack of bulk sales. I pointed out that 4q last year there was no sales info and poor pps action and we had great sales. So while I did not know, 80 was not ipsofacto impossible.
Trader in post 2857 agreed that I was correct so I assumed that was sufficient and relied on that in subsequent posts. I know we had a 30% appreciation because I reviled in it, but don't know exactly when as I admitted but thought it was 4q. But my suggestion that the 4q could be excellent, closing us in to the other posters 80 was not ipso facto impossible and remains intact. Trader seemed to agree with it.
So my points in both was Arcam is doing better than the pps movement would suggest and I attempted to rebut the negative conclusions reflected in both posts. While the exact dates may be flawed, I think my thesis is vindicated. Arcam has done real well in the 4q and it has appreciated more than 10%. To the extent that my premise was right, but the details off, I apologize and offer any mea culpas desired.
I agree totally that Arcam needs growth big time but don't agree in total with your conclusions. Will elucidate more when I do my ER analysis.
IMHO the 20% sales growth is already in the bank. But I will not be happy with just 20% and think we will have much more. Just off the cuff, we have sold 29 printers in the first 3 quarters. WE sold 42 last year so need a total of 8.40 printers to
equate to 20% printer sales growth or 50 printers based on normal rounding. So to get the 50 printers we need 21 more sales of which we got 10 today. THat means we only need 11 regular sales this quarter and Rene has stated that this will be the best quarter of the year. Quarterly sales so far have been 12, 7 and 10 respectively. So it seems pretty sure that we will get the 11 we need. The question is how many more.
But while printer sales are obviously important, IMHO that is not the most relevant criteria. ERs and most analysts focus on not individual sales for a quarter, but on REVENUE GROWTH which is not necessarily the same thing. In analyzing an ER you will see that the emphasis is on revenue growth and the more the better. Individual sales are important, but primarily as a means to an end. The street also focusses on backlog increases, profit growth and outlook such as Rene saying something about the blade number on the GE engines and other markets such as the Chinese inplant approval and progress on high speed/high resolution technology updates.
So while I will add more analysis in my critique, IMHO as I've said before its deliveries, more than sales, that are important as the deliveries are booked into revenue while the sales are not. So to please the street, we need to consider the sales numbers, the profit numbers, the delivery numbers, the backlog, and outlook/vision that Rene will supply on the cc and ER. Considering the entire story, despite some negativism from others based on current pps action, I am expecting a good ER. Now how the street will move the pps is anyones guess especially given the almost doubling of the pps since the low only a few months ago.
But in the long term as I've incessantly said, I've been bullish on arcam. When I do my ER analysis I will see how optimistic my short term outlook is.
Very interesting article and I thank you for presenting it.
Wish Avio had issued an approval update like this one but probably because they plan their product for inhouse (GE) use, vs this company that appears to be a contract producer, Avio may not want competitors to know where it is in the approval process or how well their product is viewed.
But it would be interesting to know how the arcam blades went through the approval process, where their readiness rating is and how soon they will be approved and ready to be included in the engines. Wonder if all the testing was with just abstract blades or if some was in the respective destination engines. Would they be ready for use in LEAP, NX and 90 engines being produced or for replacement parts??? Would really be nice to see is rating and have a idea when (if) they are ready for inclusion.
On the competition front, is this new technology a new one to be added to laser and EBM or a possible replacement for either one. Will this new technology possibly reduce EBM options or will it only compete with laser or both
If it simply competes with laser, good. If competes with EBM and may reduce EBM usage, bad. LOL We shall see but would be nice for a similar blade update Unless you already have one that I may have missed.
But thanks a lot for the interesting provocative post.
Good catch, I noticed that discrepancy myself. I had assumed that the earlier quote was anticipating this 10 printer buy, was PREMATURE and simply reflecting what he knew would be the shorterm printer situation for Avio.
But if Charles's second possible suggestion is true, that he was reflecting current realty and the printers have already been delivered that would be even better news. (1) It would mean the printers are delivered and ready to go which would suggest more current needs than the in the future 9x, possibly the leap. (2) More importantly, if delivered, then they can be booked into revenue and might suggest a nice revenue boost especially if they are the more highly margined printers which would suggest a real good ER. A nice pop now on the announcement and on ER day when the good news is booked in investor psyche.
Hope the already delivered explanation is the right one for the above reasons but think it was an advance statement and that the deliveries and booking will be in the future. We shall see, but either way great news that the first GE bulk order is now booked.
Thanks for all the good and accurate info you give us. Far more the know that I am, but I do know what rings true.
I agree with your suggestions and postulations totally. Differences of opinion are excellent to sharpen the mind and maybe be exposed to contrary thought processes which might put your own opinions and conclusions under scrutiny. But what I have problems with are conclusions shouted by posters which are based on faulty premises or just obviously wrong. I feel those need to be pointed out. For example on the Arcam blade issue, per Rene, we don't know whether they will be on the Leap or not, what their usage will be and how they will be combined with other technologies. Yet some have posted incessantly conclusions upon which they simply don't know such as whether Arcam blades will be on the GE engines, including the Leap or not. Again, Rene says no decision has been made. I also have problems with concluding that this ER will be poor based on poor pps action in a down market and lack of sales news. I addressed the fallacy of that conclusion including what happened last 4q.
Now today I feel vindicated. The long awaited GE bulk buy happened, it is for arcam blades so the arcam blades will be on the GE engnes and these sales plus whatever other sales we have for the quarter suggest a good sales figure and consequent good ER. I also expect a nice pps pop today. So all those nay saying conclusions were as stated based on faulty premises and probably wrong. Now we don't know whether these printers will include blades for the LEAP or for which GE engines (the timing can suggest that the Leap may be in the picture but we don't know)but its clear that the suggestions for a bad ER are premature if not flawed. Its the unsupported nay saying that I have problems with.
Maybe i'm missing something. You say Arcam went up 10% in about 3 months. Did I misread your post???
In that roughly 3 months, did Arcam not go up from 11.24 to over 22???? Is that not a lot more than 10%????? May explain the somewhat weak pps action, in addition to the lack of news and low volume, currently going into the next ER.
Finally you've posted that the poor arcam pps and lack of sales news suggests an upcoming poor ER. Did you not. I will critique my 2 cents on the ER at end of year like I did last quarter and was essentially right.
But is it not a fact that going into q4 2014 the pps was acting poorly aslo and there was no sales news to speak of despite Arcam's then policy of announcing sales???
So while we do not really know what the ER will be like given the lack of sales info per Arcam policy, a policy I disagree with, why postulate a bad ER. Since the circumstances are the same, we could have a great ER lie we did last 4q. We just don't know. So why speculate negatively till we have some facts or data.
You may well be right. And if so, I give Rene credit for taking the trouble to relocate to be close to the subsidiaries, customers and the FAA certifiers/qualifiers to facilitate EBM adoption and approval. Also to the Street to hopefully kick start arcam stock as well and to correct the pathetic volume the ADR shares are experiencing. Will enhance Arcam's ability to serve its customers and to facilitate EBM adoption in the USA market.
Believe it or not, some posters have indicated that all the LEAP engines and the arcam blades have already been certified/qualified and that they are all good to go, no more approvals needed. Whereas its obvious that both the LEAPS and parts thereof, including potential EBM parts, are still in the approval phase since the aero EBM discovery was first announced in 8/14. Would be nice if as the certification/qualifying process for the EBM process comes to a successful end, those blades can be included on current new engines (LEAP) and replacement engines ASAP
Maybe realizes that the USA Arcam ADR needs some publicity and activity to increase its pathetic volume. I for one appreciate the emphasize on the subsidiaries, the American 3d market and the investor community. It can only help and maybe enhance Arcam's influence with GE and other American companies that can use EBM printing. Another smart move on Rene's part. Becoming more impressed with his management. What is real interesting is that this move is coming at a time when volume 3d manufacturing is jsu beginning to commence. My bullish thesis is enhanced.
Trader you have pointed out the flaws in your conclusions yourself. You have confirmed my q4 2014 thesis. At that time, if I recall, arcam was reporting all sales. Had not started its new only material sales will be PRd policy.
So trader, even when they were announcing all sales in q4 last year, they snuck up on us. So it can happen again. And your now at least 2 posts saying they won't is misplaced.
Will they repeat with a stunning 4q, Who knows. BUt they did it once. You don't know and I'll give the arcam board another critique as the quarter closes.
So while it may or may not happen, your post attacking the posters 80 figure was misplaced. At this juncture, I think he has more credibility than you as the 4q has been robust In the past. Myself, given the robust statements from Rene and the documented progress of aerospace and medical 3d printing, and the tendency of arcam to announce sales on the last days of the quarter, I will assess the better credibility to the 80 poster than you and your flawed conclusion track record. We shall see, and I don't know, but I think a good quarter is more likely than not despite your conclusion that the poor pps action is a harbinger of a poor ER as you posted on the arcam board. We shall see
Nobahamas, thanks for your tonnage response, was well thought out and I agree with the thrust of your post if not the exact numbers but hope you are right. And you are right the q4 has always been arcam's quarter and they tend to announce at the last moment if at all. As I said in another post, I think it was in q4 2014 that Arcam had that great surprise in sales and experienced a 30% appreciation in pps oh ER day.
I can't predict the exact number of sales for this quarter but it will be more than none and I expect a good number. THe question is how good. I agree with you Rene is keeping a lot of sales and other information from us for whatever reason and has stated that he will not announce any single sales. He will announce bulk sales which I think he defines as either 2 or 3. So assuming so far no bulk sales but that does not preclude a good sales number especially with the closely approaching production in aerospace and inplants along with basic research which I think is an important sales avenue as it can result in larger future sales as the research progresses.
I wish Arcam announced more as its the lack of news and hype that causes arcam's volume to be so poor. But I am bullish and we shall see how good the quarter is.
I'm going from memory and could be off a quarter. But Trader wasn't it 4q 2014 that Arcam shocked the street and posted a glowing, totally surprising, quarter and Mr. market rewarded the stock with over 30% appreciation on ER day?????? That happened and I think it was q4. So, it would not be impossible for it to happen again this quarter, with great unexpected sales and a 30% appreciation or more on ER day. That did happen, just not sure of the quarter but bet it was q4 2014.
One should not make any conclusions based on weak premises. NOt to say Arcam will achieve the stunning results, and a company cannot maintain 104% growth as its base expands, but given Rene's comments which some call Hopeful, I think the odds are in favor of a good ER this quarter or soon and I do not equate the lemming's pps action as any harbinger of this quarters ER. THe pps is a result of the low volume which I postulate is the result of no one except us few that pay attention to Arcam. Note that all the 3d articles in the popular press seem to omit Arcam. Last one I saw was the Rene interview just before last ER saying Arcam would not be able to keep up with aerospace demand. JMHO as I don't make conclusions based on weak premises. Just cite my reasoning.
TO answer your question, based on already known info, I think the answer to your printer sales question for q3 is NO. It is my understanding that under arcam's new announcement policy, it will announce sales of 2 or 3 printers at a time. Since no announcement in q3, guess the answer is NO. But going from memory, wasn't a printer sales to this manufacture announced previously. Maybe these "new" machines were included in that prior announcement in quarters q3. Would be nice if they were not and will pad the q4 sales figures of which we have heard nada 3 weeks before end of quarter.
The article we are both referring to is interesting as it suggests arcam EBM will be on more parts eventually than blades and that the main current problem is convincing regulatory authorities. That should come easier with time. But given the tone of current articles i'm not sure if any EBM parts have been finally qualified/certified by the regulatory authorities as yet and obviously that will delay EBM parts being included on airplanes and engines. We await some real solid information, but the outlook is looking more positive which is a good sign.
Thank you for the very interesting and informative article. Sounds like there are a lot of initiatives to get 3d parts into airplanes, including EBM parts. Since the project seems completed this is the first real article that suggests EBM parts beyond blades are being contemplated for inclusion in engines and airplanes which is good news. Also sounds like the big stumbling block is the certification/qualification process which will become easier as regulators become more comfortable with 3d printing. Could mean a large explosion in parts and printers as more parts are accepted. Generally good news, the big question is timing. We shall see but its obvious no one has the final answers as yet
Interesting and very informative as usual. My take is that re the GENX, for the remaining engines to be manufactured as well as the replacements down the road, ebm may have a presence if certified and found to be more efficient. Am I right?? Same with the other engines??? Given that the AERO arcam blade technology was just announced in 8/14, to your knowledge is the technology approved now and ready to be incorporated or are their still hoops to be achieved. Bottom line, using your knowledge and guessitmates, do you envision the arcam/avio technology to be a part of the future leap, GENX and 9x and to what extent. Just the blades or maybe more components as EBM becomes better known??? The questions seem to keep being asked and would be nice to have more input/expertise as obviously the more Arcam printers needed, the better.
HP is too busy coping with their splitup to consider buying an expensive company like SSYS. Moreover the money and future are not in the desktop consumer printers like makerbot. The money is in the coming volume manufacture parts for the auto, aerospace ad medical sectors where HP has no expertise even if they had the money and willingness post breakup. A much more likely buyer, if you need a buyer would be a molding/fabrication/prototype making company that might be left out if it does not jumpstart expertise into 3d manufacturing which might replace the old way of making parts. Just like I don't think a manufacturing concern would be the best fit with Arcam which with EBM is only a minority manufacturing concern until more parts become EBM compliant. BUt I an see a major laser 3d printing company wanting to monopolize the manufacturing sector buy buying EBM in addition to laser but don't see Arcam or the Euro zone willing to sell. Given the total silence, i'm not sure the broken up HP is still on schedule for its own 3d entry in 2016. BUt we shall see.
HP is having enough problems making money after the split. Wonder if they even have the money to make a minor buy much less an executing growing 3der like Arcam. That is assuming that Arcam would even consider such a sale with its current growth and ties to Europe. I postulate non starter on merger options under the circumstances. And if a buyout was likely, a deep pocket company would be more likely. Besides per HP, they are coming out with their own best of bred printer themselves and of course focusing on laser. Since EBM is a minor technology compared to the laser, even in the GE engines, unlikely any regular company would buy them out even if Europe would let them. Exceptions might be a current big 3d printing company that wants to expand beyond laser and monopolize the 3d printing market. If I wanted to give myself to imagination, and assuming they had the money, EOS comes to mind so they could be best of bred in laser and EBM metal printing. The newer German printing companies don't have the money and don't think dds or ssys could handle the technology as they can't handle their own business. LOL My two cents
Price Action Question
There sure is some story behind the poor volume and price action of the American ADR. Tired of seeing the pps not move, tried an experiment. Put in a limit order at the market price 19.25 for the Arcam ADR yesterday. For more than 2 hours, till market close, no action whatsoever even at the then market price. Now even for a low float ADR that surprised me. No one wanted to offer me shares at the market price. We need to develop demand. Is it possible that trade you cited, while executed on the public market, was actually negotiated and executed in a private transaction which is why the pps did not move??? Just a thought. But I cannot believe with 3 great ERs, the only 3d printing company executing and great prospects and revenue/earnings growth, the pps is not acting better.
Charlie, thanks for the analytical thoughtful reply.
Appreciate the response. Thought your EBM blade comments might have been referring to the 9x but you added the GENX.
Lets see if I am comprehending and absorbing correctly your comments and my understanding thereof.
1. The Arcam blade at least for now is anticipated for the GENX and 9x. The 9x will be in the future, the NX may be ready for production now as its being used in currently flying planes, i.e. the 777.
2. Don't really understand your point re the Leap brochure. All that I took from it is that Senecma is in charge of the blades, that it is just gearing up for LEAP production which has not yet started and consequently the blade issue is still in a state of flux. Doesn't help answering the question of whether Arcamd blades will or will not be used. Am I missing something. If so, may need to be forced fed the data as didn't get it from the brochure.
3. Guess I misunderstood or was hopeful thinking re your supplier comments. Thought (hoped) that when you mentioned Micachrome and its experience with EBM and Avio that it meant EBM involvement??? Guess not. So their involvement is with non EBM stuff, that's disappointing??
4. Guess that leaves us where we were. We do not know yet whether EBM will be on the LEAP. Disappointing but the door is still open and we do have the other engines. No sure I agree that the longer we go without a decision the less likely.
Correct me if i'm wrong but the two competing technologies for the blades are composites and EBM. Both beat the existing deleting manufacture techniques?? That is my premise, if im wrong then my conclusions are wrong. If right, either composites or EBM will replace them eventually and no news is equally good/bad for both???? Now the ultimate question is net net which has the most pros and less cons and that will determine the ultimate decision. Hope its EBM LOL
EBM and the GE engines
Charlie, thanks for the answer to my post. And you caught me, I did end up with more than 2 questions. But first a compliment, I am a long time Arcam Shareholder and as with most of us seek as much information as I can get on a lay level so that I can understand Arcam's prospects better. Especially in light of the almost total lack of news. And it is refreshing to be in contact with someone who shares my concern and has a lot more knowledge and expertise in the subject. I thank you for your information on this board (I read two full pages of your posts) and your willingness to share technical insight, analysis and opinion.
First, let me say I am new to this board and have done my Arcam homework. Read a lot of articles and did a lot of research.
At the end of 2014 saw a lot of articles documenting the new AVIO/ARCAM blade process and its advantages and almost to an article they were postulating that the Arcam blade would be in the GE 90 9x LEAP ad GENX. Then quiet. Then in 2015, I read a lot of articles shouting the praises of the composites, no mention of EBM and referring to many contracts for composite materials for the LEAP blades. Again no mention of EBM. Then had the Arcam conference calls with Rene suggesting for 3 quarters that Arcam would have a role in producing one, maybe two blades, but not all. Trying to reconcile all 3 information sources, I postulated that it would not be a zero sum game and that Arcam blades would coexist with composites and other techniques with Arcam getting a piece of the pie. In many posts you bounced around between composites and Arcam blades as the PR news changed, but in your Multiple football post you seemed to be adopting my thesis. And on 9/12 and 9/18 you suggested that the Arcam blade was still in GE's plans. Now that might have been referring to the 9x and not LEAP.
That is my quandary and the answer obviously is important to Arcam as the more blade input arcam has the more printers and material needed. Now some have stated that arcam is dead on the leap and weak on the other engines with the coming of composites. I am not sure.
I fully realize that the situation is fluid and volume production has not started on the LEAP or other engines and the design is still in a state of flux. But I guess a couple of questions (yes again a couple, LOL) which might decide the matter and the answers are beyond my knowledge level, but possibly within yours are: (1) Does the Arcam blade have advantages over the alternatives in terms of speed of manufacture, cost, durability, ease of material usage (understand TIAi is hard to work with), production capacity and the fact that avio is a GE subsidiary, etc. (2) To diversify supply, and because neither composites or Arcam may be able to supply sufficient production numbers, might both technologies be adopted on the GE engines? Some of the articles indicated that the arcam blades are more dense, easier to work with and faster to produce but that might have been comparing the old technology and not composites. As I said, the articles were very confusing and sparse on details especially for a lay person like me.
I read that interesting multiple football post of yours with the useful supplier list for all 3 engines suggesting the presence of micachrome and avio which might suggest the presence of EBM blades and maybe even other parts or were they focusing on the laser components?
Bottom line, I know the situation is still fluid, no final decisions have been made and neither one of us has an inside knowledge tract. But assuming the Arcam blades are at least comparable, and given the capacity and multi supplier issues, would your best guess be that Arcam will have at least a part in the LEAP and other engines?. My best guess is that they will but that could be biased with hope. LOL
Appreciate any thoughts, opinions, analysis, wishful thinking. It is refreshing to have read all those informative posts and analysis on this board and it has peeked my desire for more knowledge. After all, the answers can yield nice pps results. Thanks again for your contribution to the knowledge universe.
This was an introductory and partly background post and I promise future posts will be a lot shorter.
No Arcam will not outsource Printer Manufacturing
Arcam has just completed a 2x printing mfg expansion. If huge orders come in, can expand further. They would not want to lose quality control of their manufacturing process and demand will greaually ramp up as well. And remember, arcam will only be printing some of the blades. AND, and this is a big and, it would take GE as much time to build the mfg capacity for printers as Arcam so will would they incur the cost and risk of production when arcam has the expertise.
Will EBM be involved in printing LEAP blades?
I do not pretend to know the technical aspects of the LEAP engine nor am I privy to the manufacturing decisions. But I do appreciate your providing the manufacturing data and your expertise and I have read multiple articles which suggest the Arcam/Avio blade will be at least present in part on the GE 90, 9X, GENX and LEAP. Am I right?
Couple of questions and then one postulation. (1) I see that for all 3 aircraft Leaps Avio and mecachrome will be suppliers and that there are multiple suppliers for a lot of the engine parts, including blades. (2) Both Avio and mecachrome use EBM to manufacture the blades.
Therefore, would it be a reasonable conclusion that in order to have multiple manufactures for the blades, that at least some of the LEAP blades will be EBM produced???? Hopefully, the answer will be yes. And if so, any estimation of how many printers may be used in the process?? I think I read that the Avio process can produce 8 blades in 7 hours??
Your opinion/expertise will be appreciated as this answer will have a large impact on arcam printer sales.