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3D Systems Puts On Its Shopping Gloves

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Well ... that was quick.

Yesterday, 3D Systems  (NYSE: DDD  )  tranquilized the bears by meeting analysts' earnings expectations, and maintaining its previous full-year 2013 guidance. When all was said and done, the stock managed to close up nearly 7% for the day.

Then, just this morning, the additive manufacturing specialist announced the acquisition of Rapid Product Development Group (RPDG), a "provider of on-demand additive and traditional manufacturing services."

Quick! Before the ink dries...
Curiously, though, management stayed relatively quiet on the guidance front until an analyst from BB&T asked for clarification during the earnings conference call yesterday morning.

In response, 3D Systems CEO Abraham Reichental stated

We stand by the guidance that we have given. Nothing has changed. We didn't see any need to particularly mention it, but I believe that our guidance was $1.00 to $1.15 on revenue of $440 million to $485 million.

With the acquisition of RPDG, however, 3D Systems proceeded to simultaneously raise its 2013 guidance. Now, the company expects revenue in the range of $460 million to $510 million, and non-GAAP earnings per share between $1.05 and $1.20. All told, that means RPDG should positively contribute around $20 million to $25 million in sales, with earnings of around $0.05 per share.

Naturally, 3D Systems' VP Ziad Abou heaped praise on RPDG, saying, "We are very pleased to add a proven service provider and innovator of RPDG's reputation, experience, and scale to our rapidly growing, global network of on-demand parts services." Abou, incidentally, is also the General Manager of 3D Systems Quickparts Services segment, which was acquired way back in February, 2011. If all goes well, then, RPDG should serve to nicely complement the existing Quickparts business. 

According to its website, RPDG was founded in 2003, currently has more than 350 employees, and boasts over 150,000 square feet of manufacturing facilities across its operations in the U.S., Mexico, China, and the U.K.

Foolish final thoughts
The only remaining question, then, is how much 3D Systems actually paid for RPDG. After all, the company generated $10.7 million in cash from operations over the past three months, and ended its first quarter with around $110.5 million on its balance sheet. Considering 3D Systems paid a little over $23 million for Quickparts in 2011 -- and remembering that Quickparts managed 2010 revenue of $25 million -- I don't think 3D Systems would have paid much more for RPDG.

At any rate, I suppose that few investors should be surprised at the announcement, given 3D Systems' unrelenting streak of recent acquisitions. Besides, nobody minds a purchase that quickly proves accretive to both revenue and earnings.

3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems' share price has risen even faster, and today, the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell the stock today. To start reading, simply click here now for instant access.

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9/26/2016 4:04 PM
DDD $16.86 Up +0.46 +2.80%
3D Systems CAPS Rating: ****