U.S. Markets closed

3D Printing Outlook Hot, Stratasys CEO Tells IBD

3D printing has been around for more than 20 years as a niche technology. But a sharp drop in costs has opened the door to increasingly widespread use in design and manufacturing.

3D printers use different materials and methods, but basically work this way: Following computer designs, a 3D printer adds layer after layer of a liquid, powder or sheet material, eventually fusing it together.

Industry leaders include 3D Systems (DDD) and Stratasys (SSYS), which recently merged with Israel-based Objet.

Stratasys' earnings per share rose 33% to 38% over each of the past four quarters — with faster growth before that. Investors have taken notice. The stock is up 124% since April 13, hitting a fresh high Monday.

Objet's David Reis is now CEO of Stratasys. He succeeded co-founder Scott Crump, who remains chairman.

Reis recently spoke with IBD on a variety of topics, from the industry's big opportunities to why 3D printers won't be in every home anytime soon. IBD: What accounts for the widespread interest in 3D printing

Reis: Several reasons: One is a major reduction in 3D printer prices. Many companies, including Stratasys, have introduced major improvements in the number of 3D printer applications.

Another is that governments worldwide realize 3D printing has the ability to bring manufacturing back home.

The Obama administration will provide $60 million for additive 3D manufacturing activity. The European Union has a similar program to finance 3D research.

3D printing is being adopted as a tool to attract students. And it's being adopted by artists who (discover) its groundbreaking technology.

IBD: Will 3D printing really bring manufacturing back to the U.S.

Reis: I don't think we're at an inflection point yet. And I don't think 3D printing will completely replace traditional manufacturing. The production-line processes developed since the Industrial Revolution are very robust.

What 3D printing will make possible is to add customization. It will automate the first stages of design production, which today is difficult to implement with standard manufacturing processes. This will allow faster production and greater efficiency.

It will provide the ability to customize on a very high level and allow for short-run manufacturing of complex structures and products that are difficult to do with traditional manufacturing.

IBD: What industries are the biggest users of 3D printing

Reis: Theoretically, everyone that designs and develops products could use 3D printing.

Everything starts in the design world, and this is increasingly moving to 3D design tools. The biggest users include aerospace, automotive, medical and dental, the consumer market and education.

Perhaps the biggest area will be education, because it's the beginning of everything. You need to train students for them to get into the industry and use those tools.

IBD: Do you foresee 3D printers being ubiquitous in the home

Reis: I'm not sure what the right answer is here. I think the inherent technology is more complex than just 3D printing. There's another dimension of complexity. I can envision 3D printing even in kindergarten. But in the home, I don't see a situation where your doorknob is broken and you print it in the home. Not right now.

It's going to take time, not because of the printing process but because of the materials you'll need. It's not like buying ink for your computer printer.

But there might be niche applications that will find their way into homes.

IBD: What are the opportunities for Stratasys in 2013

Reis: The Stratasys-Objet merger was unique, where you have two top companies coming together with complementary products. A lot of our customers use Objet and Stratasys equipment. I see both companies having the ability to cross-sell into the installed base and increase our number of printers in the market. We expect to continue growing at a fast pace over the next few years while we're working on this integration, with its many cost synergies.

IBD: What are your thoughts about the global economy in 2013

Reis: The world clearly in the past year did not fully recover from the 2008-09 recession. But both Objet and Stratasys in most parts of the world were successful and grew at very strong double-digit rates, even in places where we did not expect. The reason had to do with the attractiveness of 3D printing as an additive manufacturing technology. We are able to help companies bring products to market. We are part of the answer to making your business more efficient and more creative.

IBD: Are regulations making it difficult for this industry to grow

Reis: I see it as the opposite. Governments are encouraging 3D printing and additive manufacturing. I see this as a positive. We're in good shape.