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The Manitowoc Company and 3D Systems have been highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – April 29, 2022 – Zacks Equity Research shares The Manitowoc Company MTW as the Bull of the Day and 3D Systems DDD as the Bear of the Day.

Here is a synopsis of the two stocks:

Bull of the Day:

The Manitowoc Company is a $500 million industrial manufacturer of heavy construction equipment with a focus on lift cranes. The company is projected to deliver $2 billion in sales this year, representing 21% annual growth and a price-to-sales ratio of just 0.25.

Incorporated in 1902, Manitowoc is a leading provider of engineered lifting solutions, including lattice-boom cranes, tower cranes, mobile telescopic cranes and boom trucks. The company reports for three geographic segments, the Americas, EURAF, and the MEAP segment.

Strong Q4 and 2022 Outlook

Manitowoc delivered a stunning earnings surprise for its Q4'21 report in late February. The company reported adjusted EPS of 27 cents against the Zacks Consensus Estimate of a loss of 1 cent per share. The bottom line increased 42% from the year-ago quarter's earnings of 19 cents per share.

Given improved demand, the company witnessed strong order rates and the highest backlog levels in more than 10 years during the quarter. Cost inflation, parts shortages and logistics disruptions continue to impact results.

Including one-time items, the company reported a loss per share of 10 cents in the quarter against the prior-year quarter's earnings of 5 cents per share.

Manitowoc's revenues rose 15.7% year over year to $498 million during the December-end quarter. However, the top line lagged the Zacks Consensus Estimate of $514 million. Revenues were affected by changes in foreign currency translation rates.

Orders in the reported quarter increased 21% year over year to $615 million. Backlog at the end of 2021 was $1,010.9 million, up 86.1% from the 2020-end's levels.

MTW is projected to earn $1.14 per share this year, for 32.5% growth. And next year is expected to ramp even more with EPS of $1.74, an advance of 52%. This gives the stock a forward P/E of under 8 times.

Operational Update

Cost of sales increased 18.7% year over year to $418 million in the reported quarter. Gross profit inched up 1.8% year over year to $79 million. The gross margin was 16% in the reported quarter compared with 18% in the prior-year quarter.

Engineering, selling and administrative expenses increased 44% year over year to $78 million. Adjusted operating income was $17.5 million in the quarter, down 28% from $24.2 million in the prior-year quarter's levels. Adjusted EBITDA in the reported quarter was $34.2 million, flat year over year. Adjusted EBITDA margin contracted to 6.9% from the year-ago quarter's 7.9%.

Financial Updates

Manitowoc reported cash and cash equivalents of $75.4 million at the end of 2021, down from $128.7 million at 2020-end. Long-term debt was $399.9 million at the end of 2021, up from $300 million at 2020-end. The company generated $76 million of cash in operating activities in 2021 compared with cash utilization of $35 million in 2020.

2021 Performance

Manitowoc reported adjusted EPS of 86 cents in 2021 against the loss per share of 35 cents reported in the prior year. Earnings beat the Zacks Consensus Estimate of 55 cents. Including one-time items, the bottom line came in at 31 cents per share against a loss per share of 55 cents reported in 2020.

Sales were up 19% year over year to $1.72 billion. The top line missed the Zacks Consensus Estimate of $1.74 billion.

2022 Outlook

Manitowoc is witnessing positive trends in crane demand in 2022. It expects cost inflation, part shortages and supply chain constraints to subside gradually through the year.

For the current year, Manitowoc expects revenues in the range of $2.0-$2.2 billion. Adjusted EBITDA is anticipated between $130 million and $160 million. Adjusted EPS is expected between 65 cents and $1.35.

Bottom line for MTW: Just because inflation and interest rates are on the rise is no reason to call for a recession in construction. In fact, the rising costs for raw materials, labor and capital may only spur the boom to get projects done for the next 1-2 years and MTW should continue to benefit. Consider the stock now at these bargain levels.

Bear of the Day:

3D Systems slipped into the cellar of the Zacks Ranks again as EPS estimates continue to drift lower this year.

Not only is annual EPS expected to decline by 78%, but in the past two months since the company reported Q4 earnings, the Zacks consensus among analysts has been cut in half from 22-cents to 11-cents.

3D reported Q4'21 non-GAAP earnings of 9 cents per share, beating the Zacks Consensus Estimate of 3 cents per share. The bottom line remained flat year over year.

In the fourth quarter of 2021, 3D Systems reported revenues of $150.9 million, down 12.6% from the year-ago quarter and 3.5% from the previous quarter. Excluding the impact of business divestments in 2021, revenues surged 13.1% year over year. The top line outpaced the consensus mark of $144.6 million.

Business Offerings and Operating Segments

Headquartered in Rock Hill, SC, 3D Systems is a leading provider of 3D content-to-print solutions including 3D printers, print materials, on-demand custom parts services and 3D authoring solutions for professionals and consumers, worldwide.

The company also provides scanners for a variety of medical and mechanical X-Ray film digital archiving.

The company's primary print engines comprise stereolithography, selective laser sintering, multi-jet modeling as well as ZPrinters. Its 3D printers convert data input from computer aided design software or 3D scanning and sculpting devices to produce physical objects from engineered plastic, metals, ceramics and edibles.

The company primarily caters to a broad range of industries, including manufacturers of automotive, aerospace, computer, electronic, defense, education, consumer, energy and healthcare products, as well as original equipment manufacturers, government agencies, universities, independent service bureaus and individual consumers.

3D Systems operates through two reportable segments — Products and Services. Under its Product division, the company offers 3D printers, materials, software, haptic design tools, 3D scanners and virtual surgical simulators. The segment accounted for 70% of 2021 total revenues of $615.6 million.

Under the Service segment, the company provides maintenance and service support, periodic hardware and software updates, printer installations, and training of customers. The division contributed 30% to 2021 total revenues.

End market wise, revenue contributions from Healthcare and Industrial were 49.7% and 50.3%, respectively in 2021.

Quarter in Detail

In the fourth quarter, product revenues represented 77.9% of the total revenues and jumped 4.5% to $117.6 million. Meanwhile, revenues from Services, which accounted for 22.1% of revenues, plunged 44.6% year over year to $33.3 million.

Revenues from the Healthcare segment fell 12.9% year over year to $74.5 million. The figure declined 2.5% from the prior quarter. Excluding the impact of business divestments in 2021, the segment's revenues increased 5.1% year over year.

The industrial division revenues decreased 12.3% year over year to $76.4 million and 4.1% sequentially. Excluding the impact of business divestments in 2021, the unit's revenues increased 22.2%. The company witnessed solid demand for products as well as materials.

Operating Details

During the fourth quarter of 2021, 3D Systems' non-GAAP gross profit decreased 10.3% year over year to $66.5 million. However, non-GAAP gross profit margin expanded 120 basis points (bps) to 44.1%. This increase was driven by high production levels and improved inventory management caused by increased supply chain resilience.

Non-GAAP operating expenses decreased 6.4% to $54.3 million. The downside was due to savings achieved from cost restructuring activities, and reduced SG&A expenses.

Non-GAAP operating income declined 23.6% to $12.3 million.

Adjusted EBITDA was $17.9 million. The margin of 11.8% reflected disciplined approach to growth, cost management and focus on core businesses.

Balance Sheet Details

The global leader in additive manufacturing (AM) solutions exited the fourth quarter with cash and cash equivalents of $789.7 million, significantly higher from the prior quarter's $502.8 million. As of Dec 31, 2021, 3D Systems had a total debt of $460 million.

During the full-year 2021, the company generated $48.1 million of operating cash flow.

Full-Year Highlights
 
For the full-year 2022, 3D Systems reported revenues of $615.6 million, indicating a surge of 10.5% year over year. Excluding the impact of business divestments, annual revenues surged 31.8% year over year. The year-over-year increase in top-line results reflect continued strength in the Industrial segment, growing demand from Healthcare customers and acceleration beyond pre-pandemic performance levels.

The company reported non-GAAP earnings of 45 cents per share compared with a loss of 11 cents reported year ago.

Non-GAAP gross margin expanded 40 bps to 43%. Non-GAAP operating expenses decreased 9.4% to $214.7 million.

Non-GAAP operating income increased from $0.3 million a year ago to $49.8 million in 2021. Consequently, non-GAAP operating margin expanded 150 bps to 19%.

Adjusted EBITDA was $74.1 million for the full-year 2022. The margin stood at 12%.

3D Guidance

3D Systems expects revenues between $570 million and $630 million for the full-year 2022. It projects non-GAAP gross margin to be 40-44%. The current Zacks consensus of $606.65 million represents an annual decline of 1.46%.

Non-GAAP operating expense is estimated to be $225-$250 million.

Management provided this guidance with the assumption that the pandemic, supply chain disruptions or any geopolitical events will not be of any concern in 2022.

The Innovation Frontier

3D Systems recently boosted its stereolithography (SLA) printer portfolio by introducing two new printers – SLA 750 and SLA 750 Dual. Designed to address large format or high-volume production applications, the two additive manufacturing (AM) solutions are claimed to be the company's fastest SLA printers.

The SLA 750 AM solution is a single-laser configuration that delivers up to 30% faster print speed than previous-generation SLA printers. The SLA 750 printer can be upgradable on-site to the SLA 750 Dual model, which is a synchronous, dual-laser system. The SLA 750 Dual delivers up to two times faster print speed and up to three times faster throughput compared with previous-generation SLA printers.

3D Systems noted that the two printers have a 15% larger build envelope and smaller hardware footprint than previous models that allow manufacturers to optimize and scale production. Moreover, both printers come with 3D Sprint, all-in-one software to prepare, optimize and print 3D CAD (three-dimensional computer-aided design) data.

The 3D Sprint software offers all the necessary tools required to quickly and efficiently move from design to high-quality, true-to-CAD printed parts production, thereby eliminating the need to rely on multiple software packages.

DDD plans for the general availability of SLA 750 in the second quarter of 2022, while SLA 750 Dual is planned to be made available in the fourth quarter of 2022.

Bottom line on 3D: While the early expectations for wide consumer adoption of 3D printers never panned out, the Healthcare and Industrial segments show promise. The stock should offer long-term rewards from these levels, but we have to wait for the earnings estimates to stop going down and start heading back up. The Zacks Rank will let you know.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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