A 3-D Printing Microcap Poised For Growth
A couple weeks ago, we covered Sigma Labs (OTCBB: SGLB), a 3-D printing microcap with big market potential.
Today, we’re going to cover another unique microcap in the 3-D printing space. The company is Sweden-based Arcam AB, and they have their heart set on expansion abroad and in the United States.
Founded in 1997 and trading on the Nasdaq OMX under ticker ARCM.ST since June of last year, Arcam AB is listed as an ADR (American Depositary Receipt) in the U.S. under the ticker AMAVF.
This past Friday, they released their first-half 2013 financial report and it was great news: They reported an 80% increase in sales, and earnings up six times from what was reported in the first half of 2012. This was after converting from the Swedish krona to the USD. Their net profit margins were also up a full 6%.
Another good sign is that insiders and institutions holding the company comprise almost half of the outstanding 4.1 million shares. Their research and development, and intellectual property portfolio is also in top shape for a company that size, with 50 patents secured and 25 patents pending globally. In the U.S., they’ve won nine patents, with 11 patents pending.
Arcam’s technology utilizes what’s called electron beam melting (EMB) and specializes in high-grade metals used in aerospace and orthopedic/medical industries. Here’s how it works: Metal components are built in successive layers from metal powders. These powders are melted by a high-temperature electron beam that fires from electromagnetic coils, and the beam control allows multiple pools to be maintained at the same time. The benefits in this process are speed and accuracy. Plus, the source of the heat is extremely clean, so only the purest metals are produced.
Like Sigma Labs, one of Arcam’s big customers is Boeing. They also have ties to Airbus and NASA.
One important factor in any aerospace craft is a low “buy-to-fly ratio.” Obviously, when you’re designing an aircraft for speed and resilience, you want it built out of a material that’s as light and strong as possible. Arcam’s 3-D printers can meet such needs for commercial and military aircraft, space applications, missiles and engine components for the aerospace industry.
Then there are the medical and orthopedic industry products. As you know, the baby boomers are retiring in the thousands every day, and there is a graying of America happening right now. This is one reason why the national budget will count health care as its greatest fiscal obligation. Therefore, there’s tremendous demand for orthopedic implants. Arcam is well positioned to provide both standard and custom implants for a lower cost at higher quality than what’s currently on the market.
Already, their products have received FDA approval for use in the U.S. Championing this cause is the Arcam Q10, a product that’s expected to make major headway in the coming years. They’ve already secured customers by entering in strategic alliances with California-based Renovis Surgical Technologies and Connecticut-based DiSanto Technology Inc., a full-service medical device contract manufacturer.
The company will showcase their products in New Orleans in fall 2013 at the North American Spine Society Annual Meeting, hoping to inch their way further into mainstream awareness. On top of that, their sales are outstanding. They’ve delivered 11 of their 3-D printing systems in the first half of the year and have received orders for 12 more in the second half of 2013.
All in all, this looks like a solid company. Most of the 3-D printing companies that are all the rage right now have overlooked the smaller microcaps, especially the ones outside the U.S. Arcam AB is outside the mainstream, though it shouldn’t be long before everyone knows it by name — and a few risk-takers benefit from its entrepreneurial success.
for Tomorrow in Review