Will Arcam AB Beat Its 2012 Record Result?

Apr.10.13 | About: Arcam AB (AMAVF)

Would it be nice to invest in a company that has stated already in April that it will beat its record sales during 2013? Arcam AB, OTCPK:AMAVF, a small Swedish 3D printer company did just that. On Monday, the 8th of April, Arcam released a statement that it has received an order for four EBM systems from its long term customer in aerospace industry. With this new order the order intake for year 2013 has increased to 10 systems with additional 10 orders in backlog from 2012. As Arcam delivered a total of 15 systems during 2012 the current situation would hint a major growth for 2013. It has been only three full months of 2013 and the record of delivered systems from last year has already been topped by 33%.

I wrote an article about a week ago about the prospects of Arcam for the year 2013. I estimated that Arcam would receive orders for nine systems during the first half of 2013 but it seems Arcam has already beaten that estimate by one system and three months. My estimate for total amount of delivered systems during 2013 was 30 systems. At the moment that amount is starting to seem even more realistic than before. Figure 1 shows my updated estimates for the year 2013.

2013 (2012)

H1

Q2

Q1

Order Intake

12 (7)

6 (5)

6 (2)

Delivered Systems

14 (4)

8 (2)

6 (2)

Order Book At Period End

8 (4)

8 (4)

10 (1)

System sales

$9.5M

$5.5M

$4M

Aftermarket Sales

$3.7M

$1.9M

$1.8M

Revenue

$13.2M ($8.2M)

$7.4M ($5.2M)

$5.8M ($3M)

Revenue Growth

61 %

42 %

93 %

EPS

$0.79 (0)

$0.42 ($0.01)

$0.37 ($-0.01)

Click to enlarge

Figure 1. Updated estimates for Q1 and Q2.

These figures may seem astonishing but do know that the first half has never been busy time for Arcam, except this year. If my estimate for Arcams revenue and EPS growth are accurate, it would seem that earnings per share would grow from zero to $0.79 for the first half. The EPS for Q3/2012 was $0.01 and EPS for Q4/2012 was $0.59. This means that trailing EPS after Q1 result could be $1.03 and after Q2 result $1.39. This could affect Arcam stock price positively as currently the trailing EPS is $0.65. I would like to point out that by delivering eight systems during Q4/2012 Arcams system sales was $8.1M and EPS $0.59. In comparison I have used quite conservative values for sales and EPS.

Conclusion

Arcam has stated that it will beat its 2012 record sales and that it has already more orders for its printing systems for 2013 than it delivered last year. Due to low sales during the first half of 2012 Arcams EPS is still quite modest. If Arcam is able to deliver the orders in due time, its earnings per share would increase significantly. This in turn could increase the stock price as well. Arcam is in a very good position to make a record year of 2013.

Arcam will release its Q1 results the 19th of April.

Disclosure: I am long OTCPK:AMAVF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.