AL3 installs largest custom system for $2BN Austal in the USA.
Our 2024 Tech Pick of the Year AML3D Limited (ASX:AL3) just installed it’s biggest custom 3D printing system for $2BN Austal in the USA.
Austal USA runs the US Navy’s Additive Manufacturing Center of Excellence (AM CoE) in Danville, Virginia where it is already operating one of AL3’s 3D printing systems.
That facility is the US Navy’s “flagship” facility for additive manufacturing - especially for the shipbuilding industry in the US.
After today’s announcement that facility will have another system in place - the biggest one supplied by AL3 to date.
From a revenue perspective today’s announcement also means AL3 unlocks the final payment for 50% of its contract for the system.
AL3 had announced to the market previously that the order would be worth ~A$2.2M…
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Revenue aside, the bigger takeaway for us is that Austal can now build bigger parts, faster and really show the capability of additive manufacturing systems.
The more Austal can market this tech, the better it will be for uptake & eventually AL3’s sales/integrations into the US defence industrial complex.
The timing of today’s announcement could not have been better too…
The macro tailwinds for AL3 are getting stronger almost on a daily basis.
The US Government was recently talking about how far behind the US shipbuilding industry has fallen relative to the rest of the world.
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These were the key passages of that Executive Order for us:
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AL3 makes key maritime components stronger, more quickly and with less waste, so this was good language to see in the Executive Order.
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We think the Musk-led Department of Government Efficiency (DOGE) will be well aligned with what AL3’s tech can offer.
Our reasoning: Why spend months machining and casting parts when AL3’s Wire Additive Manufacturing can do the same thing in just weeks?
AL3 now has a US manufacturing base too - which should align well with the re-shoring of manufacturing efforts that Trump and the US government are now pursuing.
Trump and the US Government’s plan is to change that with tariffs and the recent Executive Order which aims to ‘Make Shipbuilding Great Again’.
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AL3’s Managing Director Sean Ebert summarised the impacts of that push pretty well in today’s announcement, saying it would multiply the market’s AL3 is targeting by a “factor of three”.
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We wrote about how the expansion of the remit of the “Marine Industrial Base” (MIB) could impact AL3 in our last AL3 note,
Here is an image showing the expanded remit of the MIB:
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AL3 teased potential orders for its systems from the MIB in its recent investor presentation, with specific mentions of Huntington Ingalls, Austal and Fastech.
Huntington Ingalls is America’s largest military shipbuilding company…
Together, they have combined budgets of over ~$40BN to deploy into tech like AL3…
Below is the reference in AL3’s deck which specifically said “MIB endorsed specific efforts that should lead to near-term machine sales with....”
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AL3 is already generating cash, and has had over $19M in orders from customers in the US alone...
Customers like $96BN BAE Systems, $200BN Boeing and the US Navy.
AL3 is also providing parts to the US Navy via the Blue Forge Alliance which was recently given a US$951M contract (most of which is said to be directed at additive manufacturing companies... like AL3).
AL3 recently opened its US technology centre & manufacturing hub set up in Ohio, USA.
And late last year said it would look to double its capacity in the US.
With Austal also pushing for the adoption of Additive Manufacturing tech we think sales out of the US for AL3 could be about to reach an inflection point (especially with the current macro tailwinds blowing in its favour).
Check out our last AL3 note here: Trump announces tariffs to revive US shipbuilding - AL3 3D prints metal ship parts fast… in the USA.
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What’s next for AL3?
🔄 More sales out of the US
In the US we want to see AL3 scale up it’s business with new sales.
AL3 has previously mentioned it will be doubling the capacity of its US facility.
In the US trip presentation, AL3 mentions several times that it would use it’s facility as a base to market its tech from.
We are hoping that the US facility coming online brings with it big new contracts to fulfil (and hopefully big $ revenue amounts attached to those deals).
In the half yearly presentation last week AL3 mentioned there was a $40M+ sales pipeline that the company was going after…
We are also hoping to see some of those lucrative ITAR contracts that AL3 have mentioned get converted into sales.
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🔄 UK/European expansion on the cards?
AL3 has also previously flagged the opportunity of expanding into the UK.
Yesterday AL3 announced a $0.83M contract with BAE Systems to supply alloys into the UK Defence Market.
We covered that announcement in a Quick Take here: AL3 marks entrance to UK defence market with new contract
The majority of AL3’s sales are out of the US, so expansion into a new market is completely new upside from a revenues perspective.
We are looking forward to newsflow from the company’s push into the UK/European market.
