Stratasys (SSYS) Spins Off Evolve And Vulcan Labs Units
Zacks Investment Research | Apr 03, 2018 11:13PM ET
Stratasys Ltd. (NASDAQ:SSYS) recently announced that it has spun off two of its additive manufacturing units that deal with different applications and technologies of 3D printing.
One of the units, Vulcan Labs will work on advancement of Powder-Bed Fusion (PBF) additive manufacturing with a focus on improving efficiency of the same and solve certification related issues, primarily related to metals.
The other one, Evolve Additive Solutions will deal with Selective Electrophotographic Process (STEP) technology. This project was in an incubation phase for around 10 years and is currently in the process of hitting the market with its unique capability of producing higher volume in a short span of time.
Notably, both the companies will operate as subsidiaries of Stratasys. We believe this decision of separating the two entities will ensure focus on both the divisions. This in turn will lead to the advancement of the solutions and products and result in revenue generation.
Strategic Initiatives
Stratasys, on the back of product launches and strategic partnerships, is trying to excel in the 3D printing industry, which is anticipated to witness CAGR of 25.76% from 2017 to 2023 and reach $32.78 billion.
In February 2018, it announced a partnership with the USA Luge team, marking its entry into the sports industry. The luge team deployed Stratasys’ “applied additive technology solutions” for manufacturing customized racing sleds for athletes participating in the 2018 Winter Games.
The company is already a leader in aerospace and automotive industries. Its partnerships with the likes of Schneider Electric (PA:SCHN), The Boeing Company (NYSE:BA) , Ford Motor Company (NYSE:F) , Siemens, Boom Supersonic and United Launch Alliance have expanded its geographic reach and market penetration.
Additionally the company’s efforts in reducing operating expenses will also be beneficial for financials going forward. It recorded operating margin of 7.6% in the fourth quarter compared with 6.6% in the year-ago quarter.
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