3D Systems Management Shakeup: McMullen To Be New CFO

Leading 3D printer maker 3D Systems Corporation (NYSE:DDD) announced that its Chief Financial Officer’s position has been taken up by veteran executive John N. McMullen, who was most recently serving as the Executive Vice President and CFO of Eastman Kodak Co. (NYSE:KODK) .

Management Shakeup

This appointment closely follows last week’s management shakeup with the company’s chief operating officer Mark Wright and chief merchandising officer Cathy Lewis resigning from their positions. McMullen’s predecessor David Styka, who spent only about a year as the company’s CFO, has chosen to stay with the 3D printer company to provide operational and financial support to the management.

McMullen brings to the table over three decades of experience in progressive finance leadership. Before Kodak, he had a successful career of 32 years at HP Inc. (NYSE:HPQ) , where he fulfilled various finance positions.

3D Systems expects McMullen to leverage his significant aptitude to help build an effective business model, as well as devise a suitable cost structure and scalable process, to enable the company to drive its profitability. His appointment will be effective from Jul 1, 2016.

Short Term Challenges

The executive overhaul seems to be part of management’s strategy to restructure the company under its new leader and former HP printing chief Vyomesh Joshi, who was named the CEO just two months back.

Similar to other 3D printing companies, 3D Systems has faced a lot of turbulence and has struggled with execution and performance in the past year and a half.

Over the past few quarters, the company has been experiencing particularly unfavorable broader market conditions that have badly hit its financial performance. It is grappling with macroeconomic headwinds such as economic slowdown, inflation, currency fluctuations, commodity prices and credit availability. These conditions continue to impact 3D Systems’ performance and future outlook negatively.

Also, competition is intensifying in the field, and 3D Systems’ operations could be impacted by the changes that HP is attempting to bring to the business models in the industry.

Long-Term Vision: Changing Winds?

The newly appointed CEO plans to direct the company toward improved quality and reliability in its operations, and will rationalize and optimize its supply chain. To this end, the company has already begun to implement changes in its planning and procurement processes for superior inventory management, and plans to execute cost control strategies as well.

The management plans to create a market-based strategy which will focus on identifying industries and end users to which 3D Systems’ technology can provide a sustained advantage. Thereafter, with this strategy as the focal point, the company will be able to define and build its operating model.

3D Printing is Here To Stay

3D printing is a disruptive technology that is here to stay and has huge implications for many industries. This is substantiated by the Wohlers Report 2016, which forecasts that the 3D printing market will grow 29% in 2016 to $6.7 billion, and will rise to $8.8 billion by 2017.

For its part, 3D Systems is taking numerous steps to channelize its resources into more lucrative areas in professional and industrial markets. 3D Systems also conducted numerous successful product launches and strategic deals, which could help the company to capitalize on the technology’s prospects and establish a strong operating base.

We believe that these initiatives, coupled with the reconstituted management’s turnaround plan, might just turn the fortunes around for this Zacks Rank #5 (Strong Sell) company.

A better-ranked stock in the broader computer & technology sector is TransAct Technologies Incorporated (NASDAQ:TACT) , which carries a Zacks Rank #2 (Buy).