Slide 1: Conference Call & Webcast Discussion of Fourth Quarter and Full Year 2007 Results
Conference Call & Webcast Discussion of Fourth Quarter and Full Year 2007 Results March 18, 2008 NASDAQ: TDSC www.3dsystems.com
Slide 2: Participants
Participants Chanda Hughes Coordinator, Investor Relations Abe N. Reichental President & Chief Executive Officer Damon Gregoire Vice President & Chief Financial Officer Andy Johnson Assistant General Counsel
Slide 3: Welcome Webcast Viewers
Welcome Webcast Viewers To listen to the conference via phone and to ask questions during our Q&A session, please dial: 1-877-591-4956 in the United States 1-719-325-4936 from outside the United States We will not accept questions through the web site or "Audio Streaming."
Slide 4: Forward-Looking Statements
Forward-Looking Statements Certain statements made in this presentation that are not statements of historical or current facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve known and unknown risks, un
Slide 5: Operating Results
Operating Results Abe Reichental President & CEO
Slide 6: Fourth Quarter 2007 Operating Results
Operating Results Fourth Quarter Fourth Quarter % Change YR - YR Operating Results 2007 2006 % Change YR - YR Revenue $44.9 $42.6 6% Gross Profit % of Revenue $18.1 40% $16.1 38% 13% Operating Expenses % of Revenue $16.7 37% $21.4 50% (22%) Net Income (Loss) Available To Common Stockholders $1.4 ($6
Slide 7: Full Year 2007 Operating Results
Full Year 2007 Operating Results ($ Millions except per share amounts) Operating Results Full Year Full Year % Change YR - YR Operating Results 2007 2006 % Change YR - YR Revenue $156.5 $134.8 16% Gross Profit % of Revenue $63.5 41% $46.3 34% 37% Operating Expenses % of Revenue $68.6 44% $71.9 53% (
Slide 8: Annual Materials Revenue Growth
Annual Materials Revenue Growth Proprietary Material Cartridges 8.1% CAGR 17.1% CAGR 2000 2006 2001 2002 2003 2004 2005 2007 Full Year + 19% Millions 5 10 15 20 25 30 35 40 45 50 60 0 $25 Million $62 Million
Slide 9: Revenue Contribution From New Products
Revenue Contribution From New Products 4Q03 1Q04 1Q07 2Q07 3Q07 4Q07 2Q04 1Q06 2Q06 3Q06 4Q06 4Q04 1Q05 2Q05 3Q05 4Q05 3Q04 0% 40% 30% 20% 10% 60% 50% New Products As % of Total Revenue by Quarter
Slide 10: Other Matters: Tangible Express Update
Other Matters: Tangible Express Update Tangible Express (TE) filed suit in Salt Lake City on January 22 claiming more than $4.3 million of damages on various theories. Subsequently Tangible Express announced that it was closing its doors, no longer providing prototyping services and selling its equi
Slide 11: Financial Review
Financial Review Damon Gregoire Vice President & CFO
Slide 12: Full Year 2007 Revenue Mix By Category and Region
Full Year 2007 Revenue Mix By Category and Region 25 50 75 100 125 150 175 0 Millions 34% 39% 27% 37% 40% 23% 43% 40% 17% 42% 44% 14% 2006 2007 2006 2007 Services Materials Systems & Other Asia Pacific Europe North America $134.8 $156.5 $134.8 $156.5
Slide 13: Fourth Quarter 2007 Gross Profit Margin
Fourth Quarter 2007 Gross Profit Margin ($ Millions) Gross profit margin increase due to: Higher revenue in the fourth quarter Relatively lower increase in cost of sales Absence in the 2007 period of the business disruptions that reduced 2006 margins Higher service revenue and profit margin in the p
Slide 14: Full Year 2007 Gross Profit Margin
Full Year 2007 Gross Profit Margin ($ Millions) Gross profit margin increase due to: Higher revenue for the year Relatively lower increase in cost of sales Absence of business disruptions that reduced 2006 margins *Columns may not add due to rounding 45% $54.5 TOTAL Services Products 25% 41% $ 8.9 $
Slide 15: Fourth Quarter 2007 Operating Expenses
Fourth Quarter 2007 Operating Expenses ($ Millions) SG&A R&D $12.5 Restructuring $ 4.2 (22%) Total Operating Cost $16.7 $21.4 2007 (24%) 5% (100%) $16.4 $ 4.0 $ 1.0 2006 Yr-Yr % - - Expect SG&A expenses in 2008 to fall into the range of $44 million to $52 million
Slide 16: Full Year 2007 Operating Expenses
Full Year 2007 Operating Expenses ($ Millions) Expect to incur approximately $13 million to $14 million of R&D expenses for 2008 2007 2006 Yr-Yr % SG&A R&D $54.2 Restructuring $14.4 (5%) Total Operating Cost $68.6 $71.9 6% 2% (100%) $51.2 $14.1 $6.6 - - *Columns may not add due to rounding
Slide 17: Working Capital Management Progress
40 60 80 100 120 140 160 Days Working Capital Management Progress Days Inventory On Hand Days Sales Outstanding Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 68 64 131 101 100 68 78 74 78 93 67 65 116 90 95 73
Slide 18: Cash Position 12/31/2007
Cash Position 12/31/2007 ($000's) Cash increased by $4,217 during Q4. Net cash provided by operating activities was $10.2 million in second half of 2007, reversing $7.6 million of cash used in operating activities through first half of 2007. $29,689 Cash at 12/30/07 Net Cash at 9/30/07 $25,472 Q4 In
Slide 19: Progress Report
Progress Report Abe Reichental President & CEO
Slide 20: State of Business
State of Business We believe that: The significant business setbacks and disruptions we experienced in 2006 are now completely behind us Healthy sales of our systems and materials suggest that the demand for our new products is strong Repeat sales of Viper(tm) Pro and Sinterstation(r) Pro systems to
Slide 21: V-Flash Rollout Update
We have resolved the causes for our previously announced rollout delays We have commenced selected shipments to hearing aid customers Initial hearing aid customer reception is favorable We plan to commence with selective general purpose reseller shipments before the end of March We anticipate contin
Slide 22: Multi-Jet Modeling high definition parts and patterns
Mass-production of high definition parts and patterns Patented and proprietary Multi-Jet Modeling technology Unmatched part fidelity, best in class details and surfaces Hands-free support removal Direct-investment castable materials Higher productivity through proprietary part nesting/stacking Dual
Slide 23: Introducing New Pro Direct Metal Systems
Introducing New Pro Direct Metal Systems Systems Sinterstation(r) Pro DM100 SLM System Sinterstation(r) Pro DM250 SLM System New DuraForm Metal Materials DuraForm(r) Al-Aluminum for aerospace and automotive DuraForm(r) Ti-Titanium for medical and dental DuraForm(r) Co-Cobalt Chrome for dental DuraFo
Slide 24: 3M ESPE Lava Precision Solutions
3M ESPE Lava(tm) Precision Solutions The new Lava(tm) Chairside Oral Scanner "C.O.S. " Offers dentists the ability to capture high speed and precise digital impressions to feed into a wide range of digital production technologies. Uniquely positions doctors and labs for the future of digital dentist
Slide 25: Anatomic Wax-Patterns Through Sirona infiniDent
Anatomic Wax-Patterns Through Sirona infiniDent Sirona Dental Systems offers anatomic wax-patterns to their Lab/inEos users through infiniDent using 3D Systems InVision(r) and Projet(tm) DP 3-D Modelers.
Slide 26: Our Digital Manufacturing Solution: Direct Metal Dental Solutions
Our Digital Manufacturing Solution: Uses all CoCr alloys, stainless, titanium Precise material quantity = no waste High precision through digital technology Less finishing than with cast products Traditional Alternatives: Casting process for mass production not economical Cobalt - chrome (CoCr) allo
Slide 27: Long-Term Target Model Remains Unchanged
Long-Term Target Model Remains Unchanged Assumptions: Revenue ~ $150 million Status: @$156 Million as of YE 2007 Recurring revenue from materials ~ 55-65% of total revenue Status @ 40% as of YE 2007
Slide 28: Always Looking Ahead
Always Looking Ahead Transitioning From Restructuring To Profitable Growth 28 Meeting customers' needs Leading in innovation through technology Improving financial strength and flexibility Developing new products and categories Growing globally Creating new marketplace applications Rapid Manufacturi
Slide 29: Question and Answer Session
Question and Answer Session Out of respect for other conference call participants, please ask one question and then return to the queue to ask additional questions. All questions must be directed through the teleconference portion of this call. Questions via the web will not be accepted.
Slide 30: Thank You For Participating
Thank You For Participating A recording of this Webcast will be available two hours after completion of the call. To access the recording, dial 1-888-203- 1112 (or 719-457-0820 from outside the United States) and enter the confirmation code, 4467834 A replay of this Webcast will be available approxi