Following Desktop Metal’s new lawsuit, Israeli 3D printer manufacturer Nano Dimension’s interim CEO Julien Lederman has issued a letter to the company’s shareholders alongside the company’s preliminary Q4 2024 financial results.
In his letter, Lederman has addressed key concerns from shareholders, acknowledging past challenges while outlining a renewed strategic direction for Nano Dimension. He emphasized ongoing governance improvements, financial discipline, and operational adjustments aimed at restoring investor confidence.
Moreover, the company anticipates unaudited consolidated revenues of approximately $14.6 million for Q4 2024 and $57.8 million for the full year as of December 31st, 2024, reflecting nearly flat quarterly performance and a modest 3% year-over-year (Y/Y) increase. As with any unaudited report, the final audited results may see adjustments. The full financials and more detailed commentary are expected to be published in the coming months.
A call for positive change
Lederman acknowledged the need for change at Nano Dimension, highlighting a persistent lack of investor confidence in the company’s financial standing and direction.
Since assuming his role as Interim CEO a month ago, Lederman has engaged with shareholders, addressing concerns about transparency, business strategy, and governance. Investors have expressed frustration over negative returns, high operating expenses, and a lack of a clear path to sustainable growth.
Having raised $1.5 billion in early 2021, the company’s stock has declined by over 80%. To address these issues, Lederman emphasized his commitment to restructuring the business with the Board’s support.
He also highlighted that the Israeli firm is currently navigating two high-profile merger plans with Desktop Metal and Markforged, both under regulatory review. Litigation initiated by Desktop Metal has further complicated the process, and the company is in discussions with the regulators.
The outcome will impact the feasibility and timing of the mergers, but Lederman assured shareholders that the company remains compliant with all obligations and will provide updates as necessary.
Additionally, the CEO outlined a strategy centered on three key principles: strengthening shareholder engagement, ensuring disciplined capital allocation based on clear Return on Investment (ROI), and maintaining prudent expense management to align operational costs with revenue goals.
With these measures, the company aims to accelerate growth and profitability by leveraging its technological expertise and focusing on high-performance applications in advanced manufacturing.
To improve governance and financial stability, the Board decided to let the Shareholder Rights Plan, aka ‘poison pill,’ expire last month, signaling a commitment to transparency. Additionally, the company expects its core business operations, excluding merger impacts, to become cash flow positive by Q4 2025, aided by reduced operating expenses.
Nano’s Board has also approved a $150 million share repurchase program under the Israeli Companies Law as a flexible capital management tool, depending on market conditions.
Lederman closed his letter by reaffirming Nano Dimension’s commitment to financial stability and operational efficiency. He emphasized that ongoing reforms aim to create sustainable growth while the company navigates regulatory and legal challenges.
Julien Lederman’s message to shareholders
Dear Shareholders,
Since I was asked by the Board of Directors (the “Board”) to be Interim Chief Executive Officer just over four weeks ago, much thought and work has gone into assessing the business, future opportunities, risks and challenges, and envisioning and implementing plans to immediately strengthen Nano Dimension for the long term. With that said, before getting into where we are going, we have to acknowledge where we are coming from.
I, along with the Board of Directors (the “Board”), recognize that change at Nano Dimension is warranted.
Investors’ lack of confidence in the value and direction of Nano Dimension is reflected in the Company’s substantial negative enterprise value which has persisted for over three years. During this time, the Company’s total market value has traded at a discount to net cash on the balance sheet and a discount to book value of approximately 50%.
I have spent much of the last few weeks listening to our shareholders, many of whom have been continuous investors with us over the years. They not only echoed their frustration with the share price, but also voiced concerns about trust and credibility. They highlighted:
- Shareholder-to-management relationships that were unhealthy – There was an absence of the respectful relationships one expects regardless of viewpoints.
- Negative returns for shareholders – Since early 2021 when the Company raised $1.5 billion, the stock has declined by over 80%.
- Financial communications were least about financials – Communications generally lacked a clear explanation of the Company’s financial performance and how the Company could address its persistent operating losses, while at the same time focusing on a range of other matters.
- Technology vision without business strategy and deliverables – The Company had technology vision, but did not articulate a business strategy that outlined a credible path to building sustainable shareholder value.
- Operating expenses that were disproportionately high – Operating expenses that have been persistently too high for the size of the business, even one that is R&D focused.
I am working to change this with the support and stewardship of the Board.
While there is still more to consider and define, this update should provide clarity and, even more so, confidence in the prospects of the Company.
Before explaining our new perspective and strategy, I will make a brief comment on the definitive merger agreements that the Company has entered into with Desktop Metal, Inc. (NYSE: DM) and Markforged Holding Corporation (NYSE: MKFG). They remain subject to ongoing regulatory review processes. These transactions have resulted in ongoing discussions with the regulators as well as litigation initiated by Desktop Metal. We are actively engaged in addressing both the regulatory inquiries and the litigation, the outcome of which could impact the timing or ability to consummate either or both mergers under their current terms. Nano Dimension continues to act in compliance with its rights and obligations under each agreement. We will provide updates on the merger agreements as well as the litigation when appropriate.
Importantly, the principles and strategy outlined below reflects Nano Dimension’s approach under all circumstances.
Nano Dimension’s foundational principles and drivers
We are driven by three principles in operating our business:
First, the Company’s directors and management are driven by shareholder interests. We are focused on constructive engagement with shareholders as we diligently work to deliver long-term returns.
Second, assessment of capital allocation measured against demonstratable Return on Investment (“ROI”) is always top of mind. This will be evident in sensible stewardship and investment of shareholder capital.
Third, prudent operating expense management. This is being aligned based on ratios to revenue of a responsible advanced manufacturing leader.
Nano Dimension’s strategy shaping the business
We are committed to accelerating the business towards both growth and profitability. This duality is vital to building a digital manufacturing business that can both be disruptive and sustain itself long into the future.
Our growth and profitability orientation is guided by focusing on where we have technological expertise to drive distinguishing innovation, healthy gross margins, while targeting advanced manufacturing segments centered on high performance applications.
Nano Dimension’s milestones demonstrating the approach and strategy
We are matching our words with actions that recognize the issues of the past, while presenting a rejuvenated version of the Company.
We are instituting measures aimed at restoring good governance that will demonstrate that the Company’s directors and management are ultimately here to serve the shareholders. One of those first steps is that the Board decided to let a Shareholder Rights Plan (or “poison pill”), which was put in place and renewed by previous directors, lapse on January 25th, 2025.
With this renewed degree of ROI oriented decision making and organizational prudence, the Company believes it can accelerate the improvement of its financials, specifically a reduction in operating expenses. Nano Dimension’s core business (pre-2025 mergers) is expected to be cash flow positive on an adjusted basis beginning in the fourth quarter of 2025. The adjustments account for one-off transformation and legal expenses.
Additionally, the Board authorized the Company to commence the procedures under the Israeli Companies Law for a $150 million share repurchase program. The Company believes this repurchase program is a capital alternative that the Company should have at its disposal depending on market conditions and other relevant considerations.
In closing, myself and the Board recognize change is required, and it is already underway. For next steps, we will continue to diligently work to sharpen a renewed vision and strategy in our dynamic environment, ever mindful of our responsibilities to create value for shareholders.
Thank you for your trust,
Julien Lederman
Interim CEO
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Featured image shows Nano Dimension offices in Munich. Photo by Michael Petch.
