3D Systems Corporation · NYSE:DDD
3D Systems — Q2 2010 Earnings Presentation
26 slides from 3D Systems's earnings presentation, Jul 29, 2010
Slide 1: Investor Call and Webcast: Second Quarter 2010 Results
Conference Investor Call and Webcast Presentation Nasdaq:TDSC www.3dsystems.com Discussion of Second Quarter 2010 Results July 29, 2010 NASDAQ: TDSC - www.3dsystems.com
Slide 2: Participants
Participants Stacey Witten Coordinator, Investor Relations Abe Reichental President & Chief Executive Officer Damon Gregoire Senior Vice President & Chief Financial Officer Bob Grace Vice President & General Counsel 2 Copyright 3D Systems Corporation All Rights Reserved
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: 1-888-336-3485 in the United States 1-706-634-0653 from outside the United States Participant Code: 81216601 3 Copyright 3D Systems Corporation All Rights Reserved
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 Investor Results Presentation Nasdaq:TDSC www.3dsystems.com Abe Reichental, President & CEO Copyright 3D Systems Copyright Corporation 3D Systems All Corporation Rights Reserved All Rights Reserved
Slide 6: Second Quarter 2010 Overview
Second Quarter 2010 Overview We experienced improved global business conditions We enjoyed quarter-over-quarter revenue growth from all revenue buckets led by materials and Production Systems revenue contributions and record 3D printer sales We expanded gross profit margin We continued to gr
Slide 7: Financial Review
Financial Investor Review Presentation Nasdaq:TDSC www.3dsystems.com Damon Gregoire, Senior Vice President & CFO Copyright 3D Systems Copyright Corporation 3D Systems All Corporation Rights Reserved All Rights Reserved
Slide 8: Second Quarter 2010 Operating Results
Second Quarter 2010 Operating Results ($ Millions except per share amounts) Second Quarter % Change Favorable Operating Results 2010 2009 (Unfavorable) Revenue $35.1 $24.7 42% Gross Profit $16.0 $10.8 47% % of Revenue 45% 44% Operating Expenses $12.5 $11.7 (7%) % of Revenue 36% 47% Net Income (Loss)
Slide 9: Six Months 2010 Operating Results
Six Months 2010 Operating Results ($ Millions except per share amounts) Six Months % Change Favorable Operating Results 2010 2009 (Unfavorable) Revenue $66.8 $48.7 37% Gross Profit $30.3 $21.3 42% % of Revenue 45% 44% Operating Expenses $24.2 $23.8 (2%) % of Revenue 36% 49% Net Income (Loss) $4.8 ($
Slide 10: Factors Shaping Second Quarter Results
Factors Shaping Second Quarter Results ($ Millions) Q2-10 vs. Q2-09 Revenue Growth 2010 2009 Growth % Growth Systems $10.7 $5.9 $4.8 81% Materials 14.0 11.7 2.3 19% Services 10.5 7.1 3.4 47% Total 35.1 24.7 10.4 42% **Columns may not foot due to rounding Systems revenue in Q2 2010 consisted of:
Slide 11: Healthcare Solutions Second Quarter Revenue
Healthcare Solutions Second Quarter Revenue Healthcare solutions represented 14% of total revenue Recurring revenue from materials and services amounted to 73% of total healthcare solutions revenue Healthcare solutions revenue consists of sales of systems, materials and services for: Hearing
Slide 12: Factors Shaping Second Quarter Results
Factors Shaping Second Quarter Results ($ Millions) Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Operating Expenses $ 11.7 $ 11.2 $ 11.7 $ 11.7 $ 12.5 Gross Profit Margin 44% 45% 44% 45% 45% Cash $ 24.0 $ 24.0 $ 24.9 $ 26.6 $ 25.9 Inventory $ 19.1 $ 20.3 $ 18.4 $ 20.3 $ 22.0 Gross margin improved compared to the
Slide 13: Second Quarter Revenue Composition by Category and Region
Second Quarter Revenue Composition by Category and Region 40 $35.1 $35.1 35 13% 30 30% 25 $24.7 $24.7 38% Asia Pacific 10% Millions Services 29% 20 40% Europe 44% 15 Materials 47% 10 49% North America 46% 5 30% Systems & Other 24% 0 2009 2010 2009 2010 Recurring revenue represents 70% of total reven
Slide 14: Second Quarter 2010 Gross Profit and Margin
Second Quarter 2010 Gross Profit and Margin Second Quarter Second Quarter Yr-Yr % 2010 2009 $ Millions % Revenue $ Millions % Revenue $ Margin Systems $ 3.7 35% $ 1.1 19% 240% 87% Materials $ 8.3 60% $ 7.0 60% 18% (1%) Services $ 3.9 37% $ 2.7 38% 46% (1%) TOTAL $ 16.0 45% $10.8 44% 47% 4% **Columns
Slide 15: Six Months 2010 Gross Profit and Margin
Six Months 2010 Gross Profit and Margin Six Months 2010 Six Months 2009 Yr-Yr % $ Millions % Revenue $ Millions % Revenue $ Margin Systems $ 6.8 35% $ 1.9 18% 252% 94% Materials $16.6 60% $ 13.8 62% 21% (2%) Services $ 6.9 35% $ 5.6 36% 22% (3%) TOTAL $ 30.3 45% $21.3 44% 42% 4% Systems gross profit
Slide 16: Second Quarter Working Capital Management
Second Quarter Working Capital Management 160 140 132 125 122 121 120 105 103 102 101 100 100 83 80 73 70 66 63 63 63 60 62 60 59 60 40 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Days Sales Outstanding Days Inventory On Hand 16 Copyright 3D Systems Corporation Al
Slide 17: Six Months Working Capital Update
Six Months Working Capital Update ($ Thousands) Inventory Balance at 12/31/09 $ 18,378 Q1 2010 Increase 1,900 Q2 2010 Increase 1,733 Balance at 6/30/10 $ 22,011 Cash Balance at 12/31/09 $ 24,913 Q1 2010 Increase 1,723 Q2 2010 Decrease (758) Balance at 6/30/10 $ 25,878 17 Copyright 3D Systems Corpora
Slide 18: Long Term Operating Model
Long Term Operating Model Revenue $150 million $200 million Gross Profit 48% 58% SG&A 25% 23% R&D 8% 7% Operating Income 15% 28% Net Income after tax 10% 20% Depreciation & Amortization 4% 4% Capital Expenditures 2% 2% Recurring Revenue 70% 80% This target model is not intended to constitute financi
Slide 19: Progress & Outlook
Progress Investor & Outlook Presentation Nasdaq:TDSC www.3dsystems.com Abe Reichental, President & CEO Copyright 3D Systems Corporation All Rights Reserved Nasdaq:TDSC - www.3dsystems.com
Slide 20: Recent Developments
Recent Developments We expanded our 3Dproparts™ services by: Acquiring Design Prototyping Technologies (Q2 2010) Acquiring CEP and ProtoMetal (Q3 2010) Investing in new state-of-the-art iPro™ and sPro™ capacity including two new iPro™ XL systems We grew our healthcare solutions revenue and
Slide 21: Growth Drivers
Growth Drivers We entered the third quarter of 2010 with a strong sales funnel We expect 3D printer sales to continue to grow, helped by expanding channel and our V-Flash® and ProJet™ printers marketplace acceptance We expect revenue from our 3Dproparts™ services to continue to grow globally
Slide 22: Revenue Outlook
Revenue Outlook We expect continued revenue growth over prior year quarters and sequentially during the second half of 2010 We expect continued record 3D printer revenue growth driven by: Higher ProJet™ and V-Flash® sales Although our total printer revenue is above our expectations, given th
Slide 23: Gross Profit and Operating Expenses Outlook
Gross Profit and Operating Expenses Outlook We expect our gross profit margin to remain stable despite: Potential adverse systems mix in favor of lower margin printers and integration period of acquired businesses and Continued negative 2-4 percentage point quarterly drag from V-Flash® through
Slide 24: Bottom Line
Bottom Line Our sales funnel remains robust Our Parts, Printers and Production Systems are expected to generate increased customer demand Our business model is built around significant, recurring revenue components that generate improved margins We remain committed to our long-term growth obje
Slide 25: Q&A Session
Q&A Investor Session Presentation Nasdaq:TDSC www.3dsystems.com Out of respect for other conference call participants, please ask one question and then return to the queue to ask additional questions. Please direct all questions through the teleconference portion of this call. To ask questions: • Ph
Slide 26: Thank You for Participating
Thank You for Investor Participating Presentation Nasdaq:TDSC www.3dsystems.com Replay available at www.3dsystems.com/ir Copyright 3D Systems Corporation All Rights Reserved