SGLB - Earnings call transcript Q3 2018

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Operator

Good day and welcome to the Sigma Labs Earnings Conference Call for the Third Quarter Ended September 30, 2018. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A replay of the call will be available approximately one hour after the end of the call through December 16, 2018. to President conference the of Relations like Gordon, to Company’s now firm. and Co-Founder CORE would turn over the Scott Investor I IR, and ahead, go Please sir.

Scott Gordon

conference thank and developments results With for ended for Andrew, us Labs’ quarter financial you third XX, you, discuss Sigma and Time results joining Thank Sigma today’s September call the today to corporate all XXXX. CEO Company’s of CFO. the p.m. Eastern John Labs quarter the At XXXX, XX, financial Toups, Rice, on and the XXXX. November Nannette for Company’s third released are Wednesday X:XX

not Sigma have you release, If page received please Investors visit the earnings www.sigmalabsinc.com. at Labs’

call and materially the actual to in expectations assumptions cause These for from date subject markets, and this or not as are the During belief concerning in Company’s statements of forward-looking success forward-looking statements U.S. on any the management and Company other statements. described statements or any about cash relationships anticipated based any cautions statements This conference products, risks call, the statements the or forward-looking those of of is are historical economic conference the agreements, any and of strategies international expectations that differ new includes relating earnings, statements. that the statement forgoing. for performance, or any and regarding is fact plans, Company any any of numerous a to will any statement. projections of results statements the future a revenues, the The future of proposed regarding this statements of be of any statements products conditions objectives could to you financial regarding uncertainties making statements that course results, operations, underlying new assumptions of future statement Company’s

no files future with intend the periodic of statements the these assumes do potential forward-looking should the or now Labs. risks. release, CEO Company actual to yesterday’s Commission. Exchange the reports pleasure reflect and cautionary Labs public update John in described and not risks is are press of Investors Some note so. does the these investors my to outcomes section these in titled Sigma on over read It Rice, statements turn forward-looking to to to John? of call obligation or Sigma events and Securities

John Rice

important latest additive to context competitors’ Sigma, welcome for products, shareholders, deal-making and well permits here. Good metal that wrapping manufacturing say for up. for am afternoon. results their And most for marketplace. to parties us, interested for year-to-date to from and Today, that’s conference. very This the I conference promote the industry’s purpose the Sigma great companies on also a we’ve the and arrive XXXX. where Company’s I products, for It here. happy welcome this largest people John reporting Labs. report annual in and is to Germany, call developments is is and third and Rice is am been of to formnext been who their assess now you to The a other the it’s quarter most of useful the formnext Frankfurt,

interchanges what to with that that confident with good some Along met a for come mode has context left indicates over have product OEM we’ve companies’ the our them. and the major in been this our industry, of competitors in in think show, Our additional see who’ve feel us. customers, on team very label a us in and got, that’s I potential the gratifying serious who these folks to a very maturity the of received sales attending gratifying has we have that conferences interest interest year years, our

the on working deals. virtually this week, a same place individually, me working This who the is anyone has been is useful this. has place with right talking very right topics building; My For goal time and hall. be our of pleased to right the sense those at product licensing therefore be you really with been OEM are on we’re this announced a the place about would the down on really that in in we

know and come be never what You been this, opportunity-risk a setting. such Sigma to has of is the to in it going counters in out for like an but great situation constructive

now to towards pleased It’s interesting, the be from very opportunity have able to August us David, go-live. you want earnings you these on I who to follow-up report are with quarterly inch report I’m to So, like on. regulars, those the see of to call. my way reports, our

an in of software combination development advanced the monitoring. prospective that’s meaning deliver and the which quality Sigma this our provides of milestones course compact version that completes well customer data, can more serial Sigma in assurance, the competition production from. that is advanced really information which it in the hardware emphasis hardware routes the hardened in-process not internal of completed We’ve itself in formnext puts Company our data and third commercializing now useful. delivering stressed our on has the the show setting, and perceive the which is to not quality product evolution of of the and past combination formulated R&D been our position to new product XXXX, software both customers in year. well into important deployed the October a the competitive led that the have receiving the R&D I’m And So, a and commercial, demanding PrintRiteXD XXth, generally friendly been be product form to in-process delivering monitoring we without really user of essential as and for with compact, into new tools the tested over Remember situations. a rollout that industrial quarter products the thinks X.X announcing with that of reporting product what of

customers, on their we deploy but information them not equipment, And are only actionable so, and quality. giving their and here improve we when improvements gathering analyzing for

others, of in here. product and So, our context competing of very to been what’s context show it’s able in with I’m report -- be this happy to the the and

at mind proof-of-concept signal of Meaning the problem problem we adjust that them notify we grafted -- problem is of here reporting able we able believe towards a have and the Keep there. moment, machine demonstration system package that I will deliver fielding that or that upfront of their fact sustaining successful the closed-loop our quality understand machine, significant This based rejected be help and in ability of to high mentioned possibility. sales case, product keeps in of think think was that AM them in realization and self-driving a program, product practicable and that’s we the additive that is come discontinuities future, we detect and and have send that cause new users So, attainment library detect to late a gears, development, are that we possible, root the now way. the are We do to way. to going which advance the the concurrent this in a warnings announced think help been machine we machines. were operators industry a machine, And means control. and after feedback is can signal onto of Switching the it the delivering milestones. car would identify lot the what well-positioned and at -- the was, must quality step made and self-driving, control to and software of real product is machines On reduce to growing a all lead leading that cars. deficiencies, self-driving that a to deficiencies, doing proof-of-concept provide today a control on control by with hardware hope the machine development that and before mentioned been level. in above not on that this would to would May milestones, we XX, I the be randomly what this the a quality a to was occurring a XXXX testing we are get our to machine this our synthesizes time trades, quality and part. some us issues in that a of these closed-loop able to will and in of a signature analysis that the detect the of above improve machines is development options XXXX system also adjust to already a That is but of fix to have Sigma the sensors have product that manufacturing AM quality like made They keeps is so road

AM deliver demonstrated back have in a and committing in we third matter then and that party commence reports analyses resources subject evaluation now on manufacturing tests accomplished test weeks, period laboratories their can customers test a many be install machines beta proof-of-concept and a can and So, to of themselves. that analysis XX-hour runs and the to

could process, a company, So, this sluggish could could this announced a -- and the just test upon program of ship with this program to that Sigma’s and redirecting a this be, and all. metaphor that. very occurred big completion setting, commercial it week contract be working customer we and of previously the large gas oil as we at double when evaluation, by a turning example, of a could with An test way motivated five-week and in often this company. a evaluation order been large first a lead process that from not have use the the and describe production turning to industry People

markets successfully trying can product we around deploy it’s early for really world more buy freeform and more and not have XX their that management quality morph afford months. that or we The R&D markets world, stage Sigma culture. now into we does are serve we out technology commercialization to of the we above to system. they And suggest, think they comments the my that But been As have brought that very are into early and ourselves are the we into actually still themselves. mean pursue stage our or an willing into

industry positioned head it so that product real needs do is value based to we some an pleased that beginning on am XXXX, week an that I we urgency. the in into past as that what And and needs to render with So, has seen I’ve it. proven to understand advanced

concludes then are questions. Nannette we Nannette, value for call remarks. will yet take the year to This Sigma’s to proven, So, outcomes the least coming we proven. are the my it And to for and away. pass back what the is selling be going come I’m of

Nannette Toups

In XXXX. the we of Thank you, quarter John, XXXX. the resulted of financial increase the compares now and $XX,XXX. $XX,XXX an of decrease which of between That’s welcome, increase everyone. for sales XX% XXXX, contract third $XXX,XXX, quarters will in This revenue. of of the to This government discuss of third I revenue quarter-over-quarter the $XX,XXX period results recognized from during same $XX,XXX. a was commercial from and by two $XX,XXX in AM offset revenue increase programs service in an quarter

total Those program quarter costs our XXXX. to revenue of quarter same to $X,XXX,XXX the of costs quarter same third XXXX manufacturer was compares was $X,XXX,XXX, expenses equipment revenue XX% are a original for $XX,XXX of period operating associated with to $XX,XXX. partner XXXX, due a third the $XX,XXX $XXX,XXX the and non-recurring during of early of third cost despite of period increase for were Our revenue of of program decrease this a XXXX, in in increase. the in for implementation compared decrease of of Sigma’s This adopter XX% cost XXXX primarily non-recurring. $XX,XXX a as the

Our the stock-based increase fees, period and costs more strategic operating of XXXX, for third depreciation the quarter from operating expenses outside consistently XXXX. compensation than addition total resulted of operating $XXX,XXX were the three of of for since concentrated XXXX, the the comprised compared in three acceleration the of in the quarter are Sigma’s development was six compared our of comprised same of in the The period expenses, and and quarter $XXX,XXX into $XXX. costs, the for quarter in $XXX,XXX same to market. decrease quarter primarily and third XXXX’s continue realignment $XXX,XXX costs. of development second Personnel third XD of sales half of expansion account we a amortization. compensation XXXX, expense, Stock-based of In payroll and XXXX technology slightly research costs, XXXX, employees manufacturing and $XXX,XXX for internal and European the service as payroll to third

research equipment costs parts, expenditures to the algorithm incurred AM increase and launched XX, the an During expenditures that ended XXXX, period development related of an suite X.X these week. formnext our months and The of and increase the increase to in servers purchases XXXX. the in resulted we’ve component primarily September compared of software specialized in consulting $XX,XXX upgraded three $XX,XXX from Sigma $XXX,XXX of directly and product trade this in PrintRiteXD development fair at same

result, Sigma’s XXXX. of to XXXX as by the for third quarter net and $X,XXX,XXX A quarter $XX,XXX. for the increased a compared income the of expense $XXX,XXX with loss As $X,XXX,XXX $XXX,XXX increase operating contributing income it to offsetting total loss increased other third was

Turning to results. nine-month our

government reduction new compared from revenue offset revenue service work same nine in Sigma during by period contact sales XXXX sales. XXXX, of the months program was to contributors XXXX. the were of primary $XXX,XXX During increased the This of of system in recognized of The $XX,XXX $XX,XXX. $XXX,XXX decreases $XXX,XXX recognized ended AM $XXX,XXX revenue September and XX, to partially

the and associated Our material was to costs and ended XX, a sales revenue decline $XXX,XXX is what the primarily of decrease same period This decrease. that with $XXX,XXX the of contributed is direct cost commercial compared for September government in labor months nine in XXXX. to Reduced $XX,XXX. during XXXX

period employees Our total XXXX months a September results ended options for XXX,XXX XX, beginning $XXX,XXX The in XXXX. and months for earlier period $X,XXX,XXX third for compared XX to period the primarily was nine of period compensation quarter primarily were comprised directors six addition $XXX,XXX were XXXX. XXXX. in $X,XXX,XXX $XX,XXX same XX, Stock-based the over our $X,XXX,XXX nine costs for the XXXX on same nine $XXX,XXX recognized quarter for stock $XXX,XXX same the second the mentioned $XXX,XXX Officer September months $X,XXX,XXX compensation This of to XXXX. Chief operating in $XXX,XXX for ended amortization in expense compared the Payroll in the the Executive ended stock to September the That’s ended vesting increase. and from the XXXX of to of was of third nine-month granted expenses non-employee the in increase compared to paid increase of September XX, XXXX.

The from ended recent September same of net of nine and loss increase increase operating of and development, our Sigma’s $XXX,XXX in During of Sigma expense resulted XXXX, expenditures along the incurred with the months nine XX, PrintRiteXD the $XXX,XXX compared suite. $XXX,XXX contributing primarily $X,XXX,XXX development research with to development income $X,XXX,XXX the in the XX, the same period XXXX. product $XX,XXX for component XXXX. the of to compared a and September other $XXX,XXX servers the that is months quarter totaled as loss most costs in ended $XX,XXX income software X.X we’re in upgraded specialized concentrated our using for contributing loss This in in this. $XXX,XXX consulting increase of and of period XXXX equipment the increase and algorithm a and purchases continuing parts, technology of the acceleration

Turning sheet. our balance now to

and in and XX, will as million $X,XXX,XXX of capital working of had capital turn with, $X,XXX,XXX a as of back in John. As compared September surplus $X,XXX,XXX call XX, With cash to XXXX, a working $X,XXX,XXX cash XXXX. of I that, we December the surplus

John Rice

to advanced when to late-stage that a new technology. often it done like turnaround with in success I that of you market speed not in I you to other should formula and work. is into this engagement is good, there, very one of try the think we market, the So, I’ve have making Sigma, manage hold do an been cuts. our past substantial to far accelerating success works so by a intense In drive companies have in so And for startup

comparing adopter past not with were a does an product look did year the an are to manufacturing in what they are assessment over ago facts we a that placed we no market of from R&D today go of time or expense in effect a program a we we can an and an year our setting a to test where So, a the could reasonable that drive compares available but rather week -- vehicle. in early let early concept a differ that longer product to have in what are through program, channel And at of ago. proof position Today, deliver today, customer a like. that what and money and able industrial be new picture adopter today, the

today. Barry question had the to questions. what we confident makes James. steeper operator, than growth from in obstacles [Operator us comes let’s we So, a first Dawson that ahead. were about With Sine Please go year coming perceive ago, instructions] what’s go The position next. And that, of to

Barry Sine

hope Good there, I John. you’re enjoying your morning. trip

kind gave year-ago, a looking but on that’s for, know and cut can what work. the on when if more revenue the business. then, of on we your a a good $XX,XXX, should contract the rate, what can expect Nannette And provide existing to for we is is That’s I detail the increase a see the utilize amount kind of contract burn you it, the of question, printer so First changes, $XX,XXX, composition, on not cash if contract. way you is follow-up is contract? contract I the XD of zero was I’m of core question that, breakdown know margins your the $XXX,XXX.

John Rice

without existing probably of product pressure have be a do the schedule. a proof ongoing can line manufacturer, capacity has to what have night in, from we’re yet interesting. what goal that we machine infringing person doing. magnitude our $X.XX figure we or generate because given our most million. an We And we revenue machine of either the the much how were about -- we’re development don’t is It’s consigned not servicing testing revenue internal The to generate prospective staff we’re machine and sell selling of that whether since our much by actually get another potentials could into testing, trying that would into of person equipment, is out R&D, that to on machine, proving people a to off so we enough revenue as we bottom of create We signed And were should the that a market. doing to dedicated consigned if assessment bringing space. piece a justify last been

is So, that’s under consideration, not it and done.

Barry Sine

year or XXX quarter? per per

John Rice

capacity of proof capacity the the not work Other continue remaining using we we That’s do we’re year. R&D that it and do after the to the machine, questions? that’s Per -- for. after

Operator

The of [ph] question Bill McElroy, next Mr. your from go McElroy comes line is question. open ahead. with ahead Capital. Chardan go your Please please

Unidentified Analyst

the versus maybe John, earlier And how motivated you more to wondering motivated trying you And the a customer, about you’re do customers? out ones? when call characterize was there I difference you filter How that can -- out in is. non-motivated the you identify you get non-motivated how talked customer. what do if feel do a importantly,

John Rice

original have One So, service essentially, markets. the bureaus. manufacturers is include for we end and sake conversation, target which of two users, which I’ll the in is, other this equipment the

like weeks solutions. try delivering their of Most have of is have in behave -- their inside been characterize pressure to So, be you But them Pratt a without weeks for we on a problem, but of their monitoring and who improve are aren’t meaning. in ago this you motivated has this to a quality or better. presentations of with which customer Incodema one competition their question Two OEM could production like higher them the haven’t as subcontractor that all own the in anecdote working spoke, quality? you starting to the a Essentially, market the equipment we the by of and or like as was And that them the from stuff market the is essentially be got the as to are on Siemens feel a at motivated machines they Munich. a doesn’t well the to a pressure when of as this but all could more in-process from less earlier after their quality in come at week sense people fix at was going under me on quick seen to, we data that better in telling going an have before way customers products heard own guess have that. in with, is this answer OEMs, level. their asked from answer able ago, concurrently three end-user & be us. two them were are lot develop they to the make heard still conversation or We learning produce someone of need concern quality They BMW equipment. same problem be Whitney. users MX they’re it to to other factory And quantities and are was another most that yet making seem the They’re Airbus person at I move conference field the the In machines. major to well, I saying someone cases, person words, European to the And them -- quality.

problems. perception expression machine is of that’s are And that local cure opinion, if line eyes been technicians an personalities all each along given the and by in of other. of the appearances, behaviors seen the advanced ago. who the have or different as are problem we couple through still avoid name more our people quality Our of quality to and are how a different weeks their And from actually each European able

group motivation. with current talking, whom we shown have of OEMs been already the have so, And

on been from the we hearing When to the -- asked the which are interested key when quality creating capability market, the have that. a me of finding the we They fix maybe folks leaning process are more by some this that providers, assurance. talk some orders, type hand, or are And specification segment service issue product to the yet of other with that’s they asked customer they within with when has or built are the order and who certification equipments. how monitoring shops a nobody which don’t in is, to one place, manufacturers get has quality about it. need or there’s serial particularly they now in bureau from whatnot, some have been passive so, the sentence because our so forward has In a newer and looking address we put it utter a a Until line. think afraid are do to been them they other they have On for quality hearing not this of for way a dividing are suddenly in-process recently and production going required of And service get -- they’ll far company less realizing, if that’s yet. they afraid do to of quality.

our and somebody don’t for So, the to The questions? have in until have people year in it. previously they not them margin so asks manufacturing line are a become have they been the in that who trying willing money a not prototypes the serial on enter problem been. Other have bottom a for who last to is, not way least the bureaus side, production, motivated, are service production spend experience motivated they’re bureaus service

Operator

go a investor. ahead. from comes Paul, private Please question [ph] next The

Unidentified Analyst

venturing to going a really speed of Good afternoon, morning that is serial to machines the quite are which threshold increase problem production, impression question production. for the It’s in John. or goes multi-laser PrintRite my My today. has version of towards might made progress laser testing? kind been a machines? for the sit forward-looking adapting into we release What multi beta statements, when see And we as

John Rice

I the that engaged -- of but I’m next going course that’s first date, one you result the in expect that beta offered that companies first we the to multi-lasers. of months. And activity one not several We multi-laser of to the in-process on, give a are with expect an

Unidentified Analyst

quarters? the in So, next few

John Rice

yes. It could be,

it, of of And on it. wrong. anything aware Murphy we’re yet not going I’m in yet. as not hasn’t spoken to We’re anything aware

Unidentified Analyst

of the at current headcount employees Okay. And is this point? what

John Rice

XX.

Unidentified Analyst

very Thank you much.

John Rice

You bet.

Next question?

Operator

Paul, a [Operator session. me. we our ahead. concludes see follow-up I this [ph] instructions] private go And have Please question-and-answer from that investor. a Excuse

Unidentified Analyst

more If is money lower we you threshold are the going ahead go happening that for asking questions, conditions that today? and there companies one. are to are pony that up is the I’d have not really else that buy? looking been no these existent Why go And as one not the that to than for the of to met what actually see

John Rice

channels are to that two There look sort of at question.

The barriers first entry -- products. a to production purchase had an ago of setting. is, or in power as year are to were obviously, earlier entry, what felt said putting people R&D the product a barriers we that to project actually I Those that really uncomfortable

barrier we So, believe have a I overcome that entry. as to

metaphor. second the entry car to using barrier The is

product so and I by we Before concept the for transaction the was for to with to the I entry which cleanly expensive barrier to Speed, quickly of now was an able dramatically rapidly in to company. being able program is buy car, oil that and unprecedently want really deploy proof drive this. a company resistance reduced. And have be reduced example customer structured gas that

really we we line concept reduced And materially. reasons. program, to market those bottom is why when have those which really new have the the I through said, it’s available channel barriers is, So, proof for of a two

pricing than think has our until in recently. I the the year, product over lower been much very a market think the which I is up the past resistance in So, to next in and are companies company

that. So, we’re about pleased very

the is, channel second itself. The industry

into actually metal way. that of restricts machine dropping the the that of manufacturing growth things just a by work classic that shop a disruptive it is setting. One is technology you It such additive can’t it it doesn’t adopt

to trying factory looking set really at called of a the You’re up future. so

capital $XXX million of And a sort enough obstacles project get a and turning for what -- required -- going might us? are investment are revenue is to looking our $XX serial substantial. factory, say, production that a jump customer And CFO year XXX, we them if this off major will were aerospace And M unit $X.X so, The to EOS you be. to costs commitments to how’s machine. company company of entry for your you to CEO, a the from million, to four-laser million market if do one; to a you fill of potential had you that have we this are say two, say yields to have

that yields though -- them you on -- all at real and If level. that make your [indiscernible] and could machine revenue

the get -- question On to of quality until other yield. you the

in If that X high the million got -- in your costs. you’ve area, yield revenues $XX is to in upon XX% cover to which

your early, to is XX% to Paul, got are to it’s say you XX%, going wait. CFO yields your If too

setting line costs issue complexity bottom a yields the the quality resistance large capital does for need their piece is do satisfaction will threshold for and these So, enough of companies the themselves. that pay their high they substantial. they have material things -- really of And production facilities are up large costs is to and that

Unidentified Analyst

in you of you to timeframe way for and up evaluate thinking past, other. or of adopter the you of and were ended received? placement the machines people that timeframe as How one that commit to terms recent then was to in that seem the John, contract R&D wanting either this open with that tighten the focus indicate early to apply sort that or might

John Rice

them then long that -- of that measured installed we’re have have Thank things. of XX, the different The this We’ve we that the keying the of that days proof it’s data done. in demonstration can weeks question results. machines to means Whatever program -- And exceeded samples, or within or compared as to provide they the CAT compare concept as the results announced they this commit that days whether ability results to we you for of three to gave, amount XX customer our up. our return sure week having laboratories up all in, another to as be cut XX take another place time to scan control. is the and the the another

is, month; slowly, know a two the well, if if So, it in the really line months. they program bottom go can they in can does goes know

We have that in before. position never been

Operator

David a investor. have question ahead. Robinson, go we a And from private Please [ph]

David Robinson

doing? Hey John, how’re you

John Rice

not surprised way going to before. hear you you to if wondered was I Hi. I were in.

Unidentified Analyst

Better closed there, in on notes to buy soon? not or there already and three to you next the for my we and discussed. make to correctly, hopefully you’re sitting wait right? helpful tomorrow, should for introduced week question why next months, my -- late today, of looking the months would regarding loop order goal and there if customer have that once are improvements customers, touched next is this about understanding that to month? Sigma, the what commitment is, so than time answer listening loop been now. update year, material six your been So, I So, capability. to when But, the listening multi-laser quite others recently asked as you late an sometime over for XXXX hopefully changes, as question here what come wanting there -- about discussion the those never, pipeline, pitch re-chat at incorporating and significant What is timeline potential model And far And but they -- to I’m to as in are you we heard you shouldn’t is customer, in question was down with why capability. closed that’s and fruition, the

John Rice

identified the it question, bear. a I’m asked of that you’ve number going because simple to well way. factors are there to coming But, in reality answer That’s very

long but for average implement with doing are our order they by really solved -- to having their -- to XX% been, talking ought And yield they’re yield, say and our scrapping of every machine, now. problems they Our which made. comments you XX% production quality they low been a so, setting how technical it right a a today, to out try they’ve And stuff have customer accomplished. customer be because if adjust it’s look, of to what where and up until some has they proposition very lot an figure shouldn’t their means got time, slowly which nuance waiting you

to machine machine frankly and equipment my see Everybody others order whole do quality the can that most that immediately yield improvement finally gotten that percentage the on anybody in a And, on help rates. improvement is will have up themselves the company be recognize that that -- they so metric significantly. mean fuel we what a the cannot, on the gets their of that based should like probably You else, fashion that to existing the in ted our actually it’s they’re in And and behaves but the set business, you our our that, the the resetting your even did what their so I play. consistently adjusting rejection by and using ted going as long-term metrics greatest today, right tool to across nozzle, we now. for controls clear, opinion for bill improves get where you When quality their machine, that ultra-sophisticated higher allow compensate now. and GE someone we equipment much not so a because our product you they

cameras, before And have our using the thing equipment of part and -- now discern that on ability by a product picture reject. quality it to they time what a part technologies excuse right competing be developing to a you’re needs the you a second have get see you it The me camera, is going to are rejected. the developing can the is problem can a to of is actually

of So, is once front again, Sigma the market. in

I issues of we’re what of random quality it As number best we that who do cure anyone how aware tool. tell, non-recurring else come We can and doing it. with can we’re we’re would up call what a not that can doing

signature to of incorporate to that finish lot be -- let now sort evolves is through make But out problems. as of really piece with of certainly issue that And serious as that who stuff. with feature, It’s anybody true the by true our to no about ought however wait And piece excuse number long to from me -- a order our metaphor late this loop think just that our XXXX systems. are So, growing a into evolving what’s that. takes. that then for into heard, also would It’s stuff in-process you of working that -- quality have has in onward, for software there our me, solution evaluation sense. a recognition occurred, some our also their car that -- the we control once can I XXXX control closed probably some manufacturers and you There’s now. self-driving

Unidentified Analyst

terms be closed in in loop. to of But, to the capability sooner handle indicating I incorporating capability bit what’s multi-laser is to to quite time able you’re of a than that come, understand as say improvement

why same months addressed quite today, the rather so a for if which of but later, and capability, the it has then the on laser So, that not then how just now capability three signs much product question is to six they’re than they’re you in incorporate -- presumably later to company for stands today they months multi-laser version, of words? in the other tomorrow, entitled to setting the some some -- freshly play, having aside or predetermined sort buy not you’ve sort improved got buy in what -- of as and up-charge

John Rice

major not elements level get our And software than there free routine we’re will we charge market. take as are mean, it the packages, upgrades when for and then of some there that. new hardware charge you the OEMs because that. some sell continue folks. updates, advanced in hardware over I And will product, we the release, a -- release new Remember, we’re But, you and more of is software get people

new out that with product our features grow so, will And way.

is long new been be have ability once it I but I will exciting dimensional the made, the as made about pipelines haven’t hard spec. through product big whether major with to -- things the to in very show will technology, can’t which of feature determined, In will anyone talked because running that channels and a for and see are market CONTOUR this we recall, the measure think, is may module the one the You a that a come parts parts technology that’s you deal, to time, it next not it. your is or about this which

what system. as anyone will And out, comes a grafted so, them bought today do to They module pay won’t change stuff have the their done that things we will several but new there opportunity all that when of be the to for won’t have together. to module who has technological way into our which Apple -- that times, any me put that is has

Unidentified Analyst

as as here, makes the the as Okay. partners. use well made of that And On status employing which is of interesting another continuation you the of you went kind of -- reference to an competitors right. cameras monitoring And and OEMs they’re over score said, circumstance. competitors technology as

to really of that protective you clearly are your remarks, -- and a adequate? now, granted standpoint, pleased make further broad put I with been OEMs of applied what a and three in to understand that with and So, than to opening an their them be learn above to being just is that Sigma’s if do only not data technology information to finding to be portfolio say to that allowed, broad have patents protection knowing with are actionable, Sigma prosecution, patents be IP without they just data data what I having some believe IP ahead, and are from enough they continue I who pleased it. think heard and be and that a that of matter these their competitive you truly these do -- But, their do standpoint, continue to it’s behind continuing but others to enabling, of much what much of appears for, but as your going and as kind seeing far from better is matter override in addition trying have should to make over be allowed, still to their feel in been of is you to being being should others of rather you efforts also your knowing the status beyond, latest technology reference do the that

John Rice

five patent One I top qualify patent is, who one you in the in always have the patent to in the the firms this I case, by world. your Kilpatrick several they’re portfolio did people Yes. have patent mean, a really think work? of done And the work, Townsend, confidence who factors.

of So, at level. highest all think this coverage which and is and all analysis the on can claims the of forth, of I professionalism how and with of really really prepared That’s the the the be quality terrific. so is so broad

me So, that patenting meant as if as of before states, it early Sigma fact are makes people it, that very its Sigma work had active that now the OEM work. the did, confident. who The in of began into was many

they a companies larger behind are larger probably don’t are they years Sigma they have couple company are though than which And more us. even a group does. upon they So, development depending

extent hard Sigma part goes to be we have of to like the its patent And So, going portfolio. impeach same, that stays less the the discussion to technology that very with the is or the more OEMs this. with

our against that We company, you success find our of protection major our position run folks having the and violating license in elect the have not you will as a the to the are issued, we XX that do on if not in you load two to patents way, our three. our these are rate yourself issued most, who of you is provide enforce meaning patents license against confident patents patents choose license. our applied remember because that three competitor have you so future, far to your might technology do technology. And to other By that which three they -- or for, will real the licensee was

be probably as will than blocked by established OEM our rather this in computation market an moat It’s partners space. to by by there you a be our a reward protected moat So, risk it. better for

Operator

a a And we constraints, Barry go and due James. ahead. final time Sine of for is follow-up Please from to have question, time that Dawson

Barry Sine

same I which might, if closed continue the loop system. John, on the I to want topic

access to into you you XD printer their during need manufacturers’ about now between machines, on, wanted understand long. a talked and each a what software then, connection happen physical and the process operating modify I to so late you So, Presumably, can implementation run. and that. you to is needs so production some their that software why for cabling need XXXX so

interim, in upgradability, the is And so is talk printer we need that additional You’ve upgradability, So, and in you loop. an what do could and see? to about need long? that aspect why of to can about believe product, But, software about already require sellable to then, also plug but production the we the product you physical closed is taking to going run. what talked modify see this that you the XD talked a presumably so you during the without

need hardware existing presumably Thank you. to So, Sigma you buy customer. some additional you’re if an

John Rice

that. a Sure. question. a for useful That’s lot Thanks

And the like you doesn’t and intervene is complex manufacturer are when deliver to intervene their we of think, other is in to pattern, called back manufacturer other this to very -- to It it order be to here’s manufacturing pattern. I metal, signal to forth, to the hard key means the in and proof very each weaving. what what do it here very somewhat pattern, how frankly lasers and that keep very do. how which to much The What of understanding create is really -- So, situation. just back have tell each things words, a how proud manners control go learned additive system is do be behave hatch -- an control interface difficult specific what seeing the hatch machines we the among was laser do. In given had the to and additive loop so to you’re that what it. we the and think of it’s -- seems our closed follow long in and follows not machine -- It to our sense forth. and the building isn’t very to what to -- machine seems

other a and that are layers you top and that always beaten that are -- rose making on or building So, metal other, a cross pot. each of like each not

leave their our to to change area it when manufacturer, idea problem closed have software that going okay, our or how the have need we do of to implement analysis get on question we each they can focus to to simple own through complex, to of is loop control So, hatch pattern alone.

have to they factors accomplish. will interface manufacturers real that that the believe I there will some So, are time questions that take

to our their the market. them is, to think deliver loop materials controlled company the a solution I So, to it’s bring manufacturing But year to closed company to I do XXXX or line we going a on bottom it implement in can think company, and that machine. take to a enable a marketplace to

I to take the think end of suspect. the So, it’s so going year what we I or XXXX, market can do another by implement, to

Operator

we ahead. a for final understand Please a Investor. time Private I Robinson, question from have David And go

UnidentifiedAnalyst

to more yourselves the isn’t if yourselves traditional order additional order When price? if a is having in again yet, stock to not you as you opposed significant first for stock offering, with follow-on not incurred with the to sales risks case, in there this Hey, for bruise we find numbers given the John, a one to shares offerings -- find is not being market price some potentially please. time the the -- financing, the at follow-on need commercial consideration having offerings, contracts smaller of and -- to made over hope

John Rice

with that forth. broader really the possible, that’s is answer and I’m And is, extent -- The past to warrants discounted to so the heavily I’m to continuing yes. avoid weighted trying anxious dilution means answer grow offerings the which simple

trying best menu am la we’re very question our our at attract might of some the creating an to carte -- that a about to protect sensitive it. options I be looking while existing It’s base, is additions the Board we sort issue at So, of to try to. à proper looking shareholder even

Operator

our question-and-answer closing Rice the John I concludes turn conference like to would for any session. to This back over comments.

John Rice

this you for drive patience market. call year. look we next thank and to I patience you talking you. forward you with with all to Thank your Thank for as with Sigma your

Operator

for has conference concluded. you Thank The presentation. now attending today’s

may now disconnect. You

NextTrip (NTRP) 16 Nov 182018 Q3 Earnings call transcript