Sigma Additive Solutions (NASDAQ: SASI), a developer of quality assurance software to the commercial 3D printing industry, has reported its financial and operational results for the second quarter ended June 30, 2022.
Key Second Quarter and Subsequent 2022 Highlights and Business Update
- In collaboration with Sigma’s partner in India, Excel3D, amace Solutions Pvt. Ltd. agreed to join the Sigma OEM Partner Network. amace is the 3D Printing arm of Ace Micromatic Group (AMG), the largest machine tool conglomerate in India.
- Began doing business under the name “Sigma Additive Solutions,” reflecting strategic initiative to deploy technology on thousands of production printers and began trading under new ticker symbol ”SASI”.
- Appointed Jacob Brunsberg as President and Chief Executive Officer; effective April 1st, Mark Ruport, Sigma Labs’ former Chief Executive Officer, transitioned to the role of Chairman of the Board of Directors.
“We are tracking the following key performance indicators (KPIs) to monitor the progress and execution of our new business plan: (1) revenue growth; (2) order backlog; (3) pipeline growth; (4) deal closure time reduction; and (5) partner expansion. These are the KPIs we see as critical to achieving our business plan over the next two years. To be clear, we are focused on moving away from only selling an individual printer solution, to supporting the additive industry, as a whole, at scale,” stated Jacob Brunsberg, President and Chief Executive Officer of Sigma.
KPIs to Monitor Progress:
- Revenue increased from $51.8 thousand in Q1 2022 to $237 thousand in Q2, tracking with the implementation of our new business model.
- The current order backlog for the third quarter is total revenue of $240,000, which consists of a mix of subscriptions and perpetual sales, and remaining revenue to be recognized related to year-to-date 2022 transactions is approximately $30,000.
- Solid sales pipeline growth, and an increase of total qualified opportunities from 134 in the second half of 2021 to 250 in first half of 2022, or an increase of 87%.
- Increase in forecasted closures from 19 deals to 40, or more than a 100% increase from the second half of 2021 to the first half of 2022.
- With adjustments to strategy and product roadmap in the first half of 2022, the sales cycle has moved from a prior range of 12-18 months down to an average of 6 months over the last 9 deals.
- Partner additions increased, bringing the total to 4 OEM partners (Additive Industries, DMG Mori, Aconity, and aMACE) and 3 ISV partners (Materialise, AMFG, and Sentient Science).
“The second quarter of 2022 continued our evolution from a laboratory engaged in research and development of 3D metal printing technology into a solutions provider focused on deploying our technology on thousands of production printers,” said Brunsberg. “To highlight this transformation, we began doing business under the name ‘Sigma Additive Solutions’, conveying our ability to enable customers and OEM partner providers to use a standard set of patented quality metrics across 3D printers from different manufacturers, using different processes, for the total additive manufacturing industry.”
“Since implementation of our new business model in the first quarter, revenue is beginning to show growth aligned with feedback we are getting from the market that our product adjustments and approach are better aligned with customer needs. We believe a revenue tail is beginning to develop that will help us increase our foundational level and begin to make revenue more predictable over time, with a current backlog of orders which consists of a mix of subscriptions and perpetual sales.”
“We are highly focused on setting the quality standard for the industry by collaborating and supporting industry participants, from the most successful, to the new, up and coming 3D printer manufacturers, and integrating with additive manufacturing software solution providers. To that end, we recently welcomed amace Solutions to our OEM Partner Network, entering the India market with the 3D printing arm of the largest machine tool conglomerate in India. amace will integrate our PrintRite3D® monitoring and analytics technology into its production-ready machines to support customers with real-time quality monitoring and analytics. The agreement starts with multi-unit sales to support both internal future development and customer deployment. This brings us to a total of 4 OEM partners, which we believe are critical to our growth over time.”
“Looking ahead, we believe our new subscription model and transition to software only product options make Sigma accessible at scale for supporting qualification and production across thousands of machines at hundreds of customer sites. We are seeing solid pipeline growth, with 87% increase of total qualified opportunities from the second half of 2021 to the first half of 2022. Our goal is to dramatically lower the barriers to entry for the additive manufacturing industry and enable end users to expand their use of industrial 3D printing at a lower cost with higher quality results. We seek to significantly impact the entire AM quality continuum with scalable solutions that improve machine, process, and part quality. I look forward to providing additional updates in the months to come on our progress,” Brunsberg concluded.
Second Quarter 2022 Financial Results
Revenue for the second quarter of 2022 totaled $236,660 compared to $144,148 for the second quarter of 2021. The increase was primarily due to increased PrintRite3D® unit sales, revenue from subscription sales, revenue recognized from installations related to previous year sales, and an increase in annual maintenance contract renewals in the second quarter of 2022, as compared the second quarter of 2021.
Gross profit for the second quarter of 2022 was $43,585, which resulted in a gross margin of 18% as compared to $27,751, or 19%, in the second quarter of 2021.
Operating expenses for the second quarter of 2022 were $2.3 million as compared to $2.2 million for the same period in 2021. The increase in operating expenses was mainly attributable to additional employee headcount and office expenses, in particular increased travel costs.
Cash used in operating activities for the six months ended June 30, 2022 totaled $4.3 million compared to $3.3 million in the first half of 2021, an increase of $1.0 million.
Net loss for the second quarter of 2022 was $2.3 million, or $0.22 per share, as compared to a net loss of $1.8 million, or $0.18 per share, in the second quarter of 2021.
Cash totalled $6.9 million at June 30, 2022, as compared to $11.4 million at December 31, 2021.
Second Quarter 2022 Results Conference Call
Sigma Additive Solutions CEO Jacob Brunsberg and CFO Frank Orzechowski hosted a conference call on Friday, August 5, 2022, followed by a question-and-answer period.
The conference call will be available for replay at https://viavid.webcasts.com/starthere.jsp?ei=1561591&tp_key=0e8df6f010 and via the investor relations section of the Company’s website at www.sigmaadditive.com.
A replay of the conference call will be available after 11:30 a.m. Eastern time, through August 19, 2022.
Toll-free replay number:
International replay number:
For more information, please visit sigmaadditive.com.