15 Nov 2019, 07:01 GMT+10
Recent Progress with OEMs, End Users and Additive Manufacturing Integrators Position Sigma for Commercial Revenue Growth in 2020
SANTA FE, NM / ACCESSWIRE / November 14, 2019 / Sigma Labs, Inc. (NASDAQ:SGLB) ('Sigma Labs'), a leading developer of quality assurance software for the commercial 3D printing industry, reported its financial and operational results for the third quarter ended September 30, 2019.
Key Third Quarter 2019 and Subsequent Highlights
'The third quarter of 2019 was highlighted by continued success in engaging both OEMs and end-users as PrintRite3D customers, driving continued industry awareness and developing promising commercial opportunities,' said John Rice, Chairman and Chief Executive Officer of Sigma Labs.
'Notably, we were recently selected by a major Japanese OEM machine tool manufacturer entering the commercial metal 3D printing market, as well as an unnamed major international OEM machine manufacturer, to deploy PrintRite3D systems for their respective evaluation programs. We believe a partnership to integrate our technology at the OEM level for any major additive manufacturing machine OEM, such as those we are in evaluations with now, could drive notable license revenue growth in the short term and very significant pass-through revenue from the OEM's customers in the mid and long term. We are pleased and encouraged by the robust interest we continue to see from industry OEMs and look forward to providing our shareholders with an update as these evaluations progress over the next several months.
'On the end-user front, we continue to see intense interest in PrintRite3D as manufacturers seek to reduce their quality risks, material waste, and uncertainty and expense of post-process inspection from their additive manufacturing processes. Recently announced global energy technology company, and our second major Test and Evaluation customer, has now placed an order for Phase 2 deployment of our technology which they have advised Sigma will enable them to determine if our equipment should be integrated into their serial production equipment. We expect Phase 2 testing and evaluation to take substantially less time than Phase 1. Our third major end-user and contract manufacturer is also having us deploy our technology on a second round of equipment. Airbus (AR.PA), an international aerospace company, was our fourth major announcement on the end-user front and substantial progress has been made implementing IPQA® to ensure process quality by identifying thermal signatures of defects found in both process and parts. On the integration front, we recently partnered with VTT Technical Centre of Finland, who leads international research and technology adoption for private and public sectors. We believe that our two-pronged commercialization model, targeting both additive manufacturing machine OEMs as well as end-users, will allow us to most rapidly aggregate market share while most efficiently monetizing our incredible quality assurance software,' continued Rice.
'On a new front, commencing in June 2019, Sigma opened a third channel to market with the release of PrintRite3D® 5.0. Sigma brought a user-friendly version of its product to market that no longer requires substantial onsite customer support from Sigma. Therefore, the company commenced calling on research tanks, universities and small users to open a ‘retail' channel. As of today, the pipeline of signed purchase orders (PO) in the channel total $317,000 and we have verbal commitments for PO's totaling approximately $895,000.
'In terms of broader industry awareness, we are undertaking several exciting initiatives to share the numerous success stories from our PrintRite3D technology. Ron Fisher, our Vice President of Business Development, hosted successful PrintRite3D demonstrations for high-level industry executives in Austin, Texas at the Additive Manufacturing Conference 2019 in late August. In addition, our Chief Technology Officer Darren Beckett will showcase our PrintRite3D technology later this month at Formnext 2019, the additive manufacturing sector's premier global exhibition in both the Sigma Labs' booth as well as in the booth of our strategic partner and leading 3D printing solutions provider, Materialise. We are particularly excited about Formnext 2019 and the immense commercial potential that could stem from this event.
'We continue to align ourselves with thought leaders in the additive manufacturing space and I believe our partnership with VTT Technical Centre of Finland is a testament to this, as they enter in our PrintRite3D installation and testing network of our third party Additive Technology resources and influencers composed of the Fraunhofer Institute in Germany, the Manufacturing Technology Center in England and the National Institute of Standards and Technology (NIST) in the U.S. As part of that VTT contract win, we beat out a major global additive manufacturing machine OEM in a head-to-head technology comparison that scored our competitor as ‘unable to perform' key features provided by PrintRite3D®. To work with an organization like VTT, an established innovation leader supporting leading brands worldwide through their 3D metal printing facility, is particularly exciting as it opens the door to their innovation-centric customer base.
'A very important asset that I believe separates us from the competition as we ramp up commercialization is our broad span of intellectual property comprising numerous trade secrets, nine patents granted, and 25 pending in both the U.S. and around the globe. A year ago, today, we didn't have a fully hardened and fully user-friendly commercial product to sell and in 12 short months, we now have a hardened commercial industrial user-friendly product with 19 beta customers who are some of the largest industrial companies on the planet and in the top echelon of additive manufacturing OEMs,' explained Rice.
'We are also seeing increasing momentum from major industry players into the fourth quarter and believe that as our initial testing and evaluation programs come to a close, such as those with Airbus, our recently announced global energy technology company or our unnamed end-user as well as the additive manufacturing machine OEM partners, we believe we will begin to secure noteworthy commercial orders as they aggressively roll-out our technology organization-wide. Current evaluation programs underway, when paired with the business development in queue for Formnext 2019, provides me with a high level of confidence in our ability to scale revenues significantly into 2020 and beyond.
'Additive manufacturing is, in our mind, undoubtedly the next industrial revolution and we are on the forefront of revolutionizing an essential element for its widely forecast leap to serial manufacturing. The flexibility inherent to additive manufacturing, combined with the increased quality and decreased risks, waste and costs accomplished with our PrintRite3D technology, create an unbeatable combination. A recent study by E&Y found that an incredible 78% of aerospace companies already leverage this technology for high-value applications, while the opportunity for additive manufacturing in serial production is immense and will continue to grow as costs for the technology continues to come down over time, in part due to the level of savings that our PrintRite3D quality assurance software provides.
'I look forward to sharing our story with the investment community at the upcoming LD Micro Main Event on December 10th in Los Angeles, California. There is an immense opportunity facing Sigma Labs today and I am eager to execute upon it, creating sustainable long-term value for our shareholders,' concluded Rice.
Third Quarter 2019 Financial Results
Revenue for the third quarter of 2019 was $171,003, as compared to $128,593 in the third quarter of 2018. Under the company's 2019 RTE program, the company has outlined the following near-term revenue pipeline:
Gross loss in the third quarter of 2019 was $7,757, as compared to a gross profit of $72,284, or 56.2% of revenues, in the third quarter of 2018. The decrease in our gross margin is primarily attributable to the additional travel and labor costs associated with the on-site and remote collaboration involved in the growth of the company's Test and Evaluation programs.
Total operating expenses were $1.6 million in the third quarter of 2019, as compared to $1.4 million in the third quarter of 2018. The company added two application engineers, two software engineers and one business development employee during the first nine months of the year. Our current employee headcount is expected to be sufficient through the first half of 2020.
Cash used in operating activities was $4.5 million for the nine months ended September 30, 2019 compared to $2.7 million in the nine months ended September 30, 2018.
Net loss in the third quarter of 2019 totaled $1.6 million, or $(0.12) per share, compared to a net loss of $1.3 million, or $(0.16) per share, in the third quarter of 2018.
Cash totaled $1.1 million at September 30, 2019, as compared to $0.7 million at June 30, 2019 and $1.3 million at December 31, 2018. Sigma Labs completed a $2.3 million public offering of common stock on August 2, 2019.
'The foundation building for our PrintRite3D commercial launch has largely been completed from a financial perspective in the third quarter of 2019,' said Chief Financial Officer Frank Orzechowski. 'Notable improvements to our sales infrastructure and channels have been made that resulted in several new RTE programs which can be seen in our growing inventory metric and why we thought it was important to articulate the multiple revenue opportunities currently underway with licensing partners and end-users. Moreover, in the fourth quarter, the pipeline of verbally committed and or signed purchase orders in the channel currently totals $1.2 million. I am also happy to report that we are in active negotiations with OEM partners for strategic alternatives who currently see the immense value in our enterprise and look forward to providing an update on that front as they develop,' concluded Orzechowski.
Third Quarter 2019 Results Conference Call
Sigma Labs will hold a conference call today at 4:30 p.m. Eastern time to discuss its results for the third quarter ended September 30, 2019. Sigma Labs Chairman and CEO John Rice and CFO Frank Orzechowski will host the conference call, followed by a question and answer period.
To access the call, please use the following information:
Thursday, November 14, 2019
4:30 p.m. Eastern time, 1:30 p.m. Pacific time
Toll-free dial-in number:
International dial-in number:
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact MZ Group at 1-949-491-8235.
The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=136449 and via the investor relations section of the Company's website at www.sigmalabsinc.com.
A replay of the conference call will be available after 7:30 p.m. Eastern time through November 28, 2019.
Toll-free replay number:
International replay number:
About Sigma Labs
Sigma Labs, Inc. (NASDAQ:SGLB) is a leading provider of quality assurance software to the commercial 3D printing industry under the PrintRite3D® brand. Founded in 2010, Sigma is a software company that specializes in the development and commercialization of real-time computer aided inspection (CAI) solutions known as PrintRite3D® for 3D advanced manufacturing technologies. Sigma Labs' advanced computer-aided software product revolutionizes commercial additive manufacturing, enabling non-destructive quality assurance mid-production, uniquely allowing errors to be corrected in real-time. For more information, please visit www.sigmalabsinc.com.
This press release contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words 'believe,' 'anticipate,' 'estimate,' 'expect,' 'intend,' 'plan,' 'project,' 'prospects,' 'outlook,' and similar words or expressions, or future or conditional verbs such as 'will,' 'should,' 'would,' 'may,' and 'could' are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any anticipated results, performance or achievements. The Company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise. For additional risks and uncertainties that could impact the Company's forward-looking statements, please see the Company's Annual Report on Form 10-K (including but not limited to the discussion under 'Risk Factors' therein) filed with the SEC on April 1, 2019 and which may be viewed at www.sec.gov.
Sigma Labs, Inc.
Condensed Balance Sheets
|September 30, 2019||December 31, 2018|
Accounts Receivable, net
Total Current Assets
Property and Equipment, net
Intangible Assets, net
Investment in Joint Venture
Total Other Assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Total Current Liabilities
Commitments & Contingencies
Preferred Stock, $0.001 par; 10,000,000 shares authorized; None issued and outstanding, respectively
Common Stock, $0.001 par; 22,500,000 shares authorized; 14,037,590, and 8,776,629 issued and outstanding, respectively
Additional Paid-In Capital
Total Stockholders' Equity
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
Sigma Labs, Inc.
Condensed Statements of Operations
Three Months Ended
Nine Months Ended
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