As an investor in the company, I wanted to see firsthand how additive manufacturing was being used to compliment the company's existing metal injection molding operations.
What I saw surprised me in size and scope and was in a word, “impressive”.
For those new to ARC Group Worldwide, they are one of the largest metal injection molding (MIM) companies in the world and won three prestigious awards two months ago from the Metal Powder Industries Federation World Congress.
ARC has over 700 employees globally and trades on the Nasdaq with ticker (ARCW). The company has 14.9 million shares outstanding and a market capitalization of $200 million.
Recent earnings growth has been strong, (see “ARC Group Worldwide, Inc. Reports Record Third Quarter Fiscal 2014 Results), and shares of ARCW have performed very well this year in comparison to pure play 3D printing stocks 3D Systems (DDD), Stratasys (SSYS), ExOne (XONE), and voxeljet (VJET) as a result.
I expect this trend to continue as analysts expect earnings of .50/share to be reported for company’s fiscal year 2014 (which ended June 30), increasing to .65/share for their current fiscal year as ARC Group accelerates revenue and income growth via additive manufacturing.
Now Among Largest Metals 3D Printing Service Providers
ARC brought renowned 3D printing industry expert Todd Grimm onto their BOD in December of last year and has since made multiple investments in new 3D printers with a strong emphasis on metal printing capabilities.
CEO Jason Young mentioned in an April shareholder update that:
“I believe we have one of the largest capabilities in metal 3D printing today”
Last month ARC also announced the addition of former Morris Technologies executive, Tim Warden, as Vice President of Sales and Business Development for 3D Material Technologies.
Regarding his new position Tim Warden explained:
"I was attracted to ARC and 3DMT due to their vision lining up with how I view the future of 3D printing. I have been tracking ARC's progress for some time now, and have high conviction in their business model and advanced manufacturing platform. Specifically, ARC's leadership in powder metal technology and materials science, dovetails exceptionally well with metal 3D printing. Further, their existing customer base, current metal part applications, and focus on full production solutions are very strategic to the opportunities I see in metal 3D printing. I also believe the future of manufacturing will be a world in which additive and subtractive technology work in a seamless fashion, as ARC is uniquely suited to provide."
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General Manager of 3D Material Technologies, Ashley Nichols, graciously gave me a tour of the facility and told me the Colorado facility (which also has 3D printers) is much larger at 100,000 square feet as is the Retsag, Hungary location with about 70,000 square feet. The Hungary facility currently doesn’t have any 3D printers, but I was told they’ll be added soon.
It’s worth mentioning here that ARC’s web site states:
“ARC’s thesis is that the global manufacturing supply chain is changing, and that the advent of automation, 3D printing, robotics, artificial intelligence and cheaper domestic energy prices will lead the manufacturing renaissance in the US, which is among a key area of focus for ARC.”
I can vouch that automation and robotics are heavily utilized in their metal injection molding operations. As you walk through the space there are robots to the left of you, and robots to the right of you, all going on about their work, never stopping.
Video overview of 3D Material Technologies and advantages of using additive manufacturing to accelerate and improve metal injection molding.
Ashley Nichols told me that their initial 3D printing customers have been evenly divided between the aerospace, automotive, and medical industries. They now are ramping up the service bureau and the customer mix could change in the future.
ARC plans to grow revenue and income with new customers utilizing their 3D printing services exclusively, in addition to new and existing metal injection mold customers who can now get prototypes delivered in a matter of days using 3DMT's 3D printing services as opposed to 2-3 months previously.
I see Arc Group as a company with strong underlying fundamentals now expanding into 3D printing in a meaningful way to grow customers, revenue, and income.
See also: 3DMT Presentation
Florida operations
Colorado operations
Hungary operations
Exterior, Hungary operations
General Manager of 3D Material Technologies, Ashley Nichols, next to one of two Concept Laser M1 printers at the Florida facility. The M1 machines are ideal for manufacturing metal components with elaborate structures and parts made from reactive materials like titanium for fine detail, high quality surface finish, and precision component structures.
3D Systems ProX direct metal sintering (DMS) printers for stainless steel, titanium, aluminum, and alumina with fine powders. Prints high-quality surface finishes.
Stratasys Fortus 250 printer for production-grade ABSplus thermoplastic
3D Systems ProX 300 DMS printer. This printer can manufacture components using sub 15 micron powders for fine detail and improved surface finish.
Unfortunately I didn't get to see their pair of EOS M 280 DMLS industrial printers which (among others) are at the Colorado facility.
Made in America and Exporting to China
Near the end of my tour, Ashley Nichols walked me through the MIM production area and to the furnace room. On my immediate left was a large hydrogen-fueled furnace where a large production of tiny metal surgical components was undergoing sintering.
Ashley told me the customer in this case was a large Chinese medical supply company.
This China-based company imports their most demanding and intricate surgical components from the USA, from ARC Group Worldwide.
And yes, it may sound sappy…but as I left ARC Group and 3D Material Technologies, I swear that American flag looked a little bigger and brighter than it did on my way in.
Gary Anderson
Disclosure: I am long shares of ARCW. I was not paid by ARC Group or any third-party for this article.
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Supplemental: Video of MIM operations at ARC Group with extensive use of robotics.