Slide 1: Call and Webcast Conference
Call and Webcast nference November 19, 2012
Slide 2: Presenters
Presenters Stacey Witten ¢ Investor Relations Manager Abe Reichental ¢ President & Chief Executive Officer ¢ Senior Vice President & Chief Damon Gregoire Financial Officer Andrew Johnson * Vice President & General Counsel
Slide 3: Conference call dial-in information
© 1-866-543-6407 in the To listen to the conference United States via phone and to ask + 1-617-213-8898 from questions during our Q&A P - outside the United States session, please dial: ¢ Participant Code: 18116839
Slide 4: Forward-looking statements
This presentation contains forward-looking statements, as defined by federal and state securities laws. Forward-looking statements include statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance or products, underlyi
Slide 5: Opening Remarks
Opening Remarks Abe Reichental, President & CEO
Slide 6: Response to articles containing materially false statements
We would like to call to your attention that several recently published online articles contain materially false statements and erroneous conclusions that we believe defamed the company and its reputation and resulted in losses to our shareholders. We respect opposing views on our company’s strategy
Slide 7: Growth Initiatives
Growth Initiatives Accelerate 3D Grow healthcare printer penetration solutions Integrate 3D authoring solutions to combine capture, mesh, surface, model and measure Expand Quickparts Build significant services globally consumer presence
Slide 8: Acquisitions by growth initiative
Material To Material To Company Acquired Date Revenue Technology Company Acquired Date Revenue Technology Expand Parts Services Build Consumer Presence [Acucast October-09 Y The3dStudio.com May-11 v Adva-Tech November-09 =v Freedom of Creation May-11 ’ Moeller February-10 ’ My Robot Nation April-12
Slide 9: Acquisition purchase consideration
J Sinmitions | Cash | Shares | Total Purchase Consideration $ 300.3 $ 16.0 $ 316.3 * From August 2009 to November 2012, we completed 31 acquisitions of which 10 were early stage technology startup investments that did not contribute materially to revenue. * Management has never had any separate stak
Slide 10: Growth initiatives and capabilities
Expand Accelerate Integrated Build Grow Quickparts Printer Authoring Consumer Healthcare services Penetration Platform Presence Solutions L L. . 5 H Leverage Seamless CAD- Gamification of Vertical personalized Extended portfoto ito-print and scan. content creation integration |ceaeaes rece medical d
Slide 11: Acquisition Track Record Aug 2009-Nov 2012
Acquisition Track Record Aug 2009-Nov 2012 We acquired 31 companies from August 2009 to November 2012 15 related to on- | 5 building blocks 3 related to 3D 2 related to demand parts for consumer authoring healthcare services growth growth solutions solutions 6 related to printers initiative We prima
Slide 12: R&D spending and new products revenue
$s $0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 Nine Months R&D Spending $15.4 $8.0 $97 2010 2011 2012 Nine Months New Products Revenue $89.0 $36.6 pals 2010 2011 2012 We investeda total $316.3 million in acquisitions, inclusive of $19.6 million paid for pure technology acquisitions We commercialized 11 n
Slide 13: Fact Checking & Affirming Accuracy Of Reporting
Fact Checking & Affirming Accuracy Of Reporting Damon Gregoire, Senior Vice President, Chief Financial Officer www.3dsystems.com NYSE: DDD
Slide 14: Revenue by product and service ($ in millions)
$ in millions Printers & joan tts Other Products ST - Print 2042, Materials a = °>> a er Healthcare Printers & 2011 $445 Other Products sao a 2013 fssos _ —e- SS eS 2012 fsese Healthcare
Slide 15: Organic Growth Calculation Methodology
Organic Growth Calculation Methodology Organic Growth Calculation Example: * Assume acquisitions at January 1* of a year added: Year 1 Year 2 Year 3 Year 4 Core revenue $ 100.0 $ 120.0 $144.0 $173.0 Acquisition one : $ 10.0 $15.0 $20.0 Acquisition two - - $ 10.0 $15.0 Total revenue $ 100.0 $ 130.0 $
Slide 16: Actual Q3 2012 Organic Growth Calculation
Actual Q3 2012 Organic Growth Calculation Core revenue Acquired revenue Total revenue Organic revenue growth Organic growth rate Based on actual acquisition anniversary dates Acquired revenue consists of revenue from Formero, Kemo, Huntsman, Z Corp, Vidar, Fresh Fiber, My Robot Nation, Paramount, Be
Slide 17: Actual Nine Months 2012 Organic Growth Calculation
Actual 9 Months 2012 Organic Growth Calculation re revenue Acquired revenue Total revenue Organic revenue growth Organic growth rate Based on actual acquisition anniversary dates Acquired revenue consists of revenue from Formero, Kemo, Huntsman, Z Corp, Vidar, Paramount and although not material als
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Quarter Ended Nine Months Ended September 30, September 30, (in millions, except per share amounts) 2011 ~+| 2012 2011 2012 GAAP Net Income $7.2 $ 13.5 $27.4 $28.0 Adjustments (tax effected): Stock-based compensation $0.6 $1.0 $18 $33 Amortization of intangibles (a) $0.9 $27
Slide 19: Quarterly printer units
Quarterly Units — Cumulative Units from Q12011 Effective way in which we increased our reseller channel from 165 to 420 over the past nine months through -quisitions Continued shifting of our production and professional ters towards lower priced printers that are capable of enerating comparable mate
Slide 20: Cash Generation From Sept 2009 To Sept 2012
Cash Generation From Sept 2009 To Sept 2012 Since September 2009, our cash on hand increased $160.0 million after excluding $317.9 million of proceeds from capital markets and payment of $264.2 million for acquisitions* We generated $109.0 million of cash flow from operations over that period All ac
Slide 21: Total Shares Held by Insiders
Total Shares Held by Insiders* 5,041,474 4,851,423 Insiders believe that our company is a solid long term investment, as evidenced by their long term holdings During 2012 some 950,000 options were exercised by insiders. These options were due to expire by 2013 20,000 options remaining among all insi
Slide 22: SEC filings and financial statement disclosures
We file Form 8-Ks with financial statements and pro-forma information for all significant acquisitions as required by the SEC. We filed Form 8-Ks for Provel, Quickparts, Z Corporation and Vidar. We evaluate the intangible assets fair values and estimated useful lives for each acquisition individuall
Slide 23: Response to Seeking Alpha article: false allegations and facts
In response to the article titled “3D Systems: Has the Printer Jammed” posted on SeekingAlpha.com on November 12, 2012, below is a non-exclusive list of assertions in that article that are materially inaccurate and false and the corresponding facts. This list has also been submitted to Seeking Alpha
Slide 24: False allegation: cash and stock deals
False allegation The 22nd and 23rd paragraphs of the Acquisition Analysis section state, “... Thirteen of the 24 (54%) were cash and stock deals...” “All of the disclosures of the thirteen cash and stock deals contain the bold type sentence. What is the nature of the private transactions? | found th
Slide 25: Fact: shares issued as purchase consideration
Fact 17 of the 29 transactions included shares of common stock issued by 3D Systems Corporation as part of the purchase consideration and the author has the shares transaction and total transaction count incorrect. Furthermore, stock based compensation and option proceeds are separate from acquisiti
Slide 26: Q&A Session
Q&A Session 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 ° U.S.: 1-866-543-6407 To ask questions: ¢ International: 1-617-213-8898 © C
Slide 27: Thank You
Thank You
Slide 28: Supplemental Information
Supplemental Information
Slide 29: Response to Seeking Alpha article: allegations 1-2
In response to the article titled “3D Systems: Has the Printer Jammed” posted on SeekingAlpha.com on November 12, 2012, below is a non-exclusive list of assertions in that article that are materially inaccurate and false and the corresponding facts. This list has also been submitted to Seeking Alpha
Slide 30: False allegation 3 and fact
3) False allegation * In the Acquisition Analysis section, the seventh paragraph states: “When DDD buys a company, it immediately incorporates the acquisition's revenues into its own. This is how the CFO, Damon Gregoire, explained it in DDD's Q3 earnings call: "Specifically, we count newly acquired
Slide 31: False allegations 5-6 and facts
5) False allegation + The ninth paragraph of the Acquisition Analysis section states, “... total revenues of $251.1M representing yoy growth of 56%. If the Z Corp/Vidar revenues are backed out, then the total revenues are $210.9M”” 5) Fact Our reported revenue for the first nine months of 2012 was $
Slide 32: False allegations 7-8
7) False allegation * Further in the tenth paragraph, the article states “... DDD rarely discloses its acquisitions, revenues (or anything else)...” 7) Fact Our disclosures are in compliance with US GAAP. See acquisition disclosures in footnote 2 of our Form 10-Qs and footnote 3 of our Form 10-Ks. W
Slide 33: Fact 8 and false allegation 9
8) Fact There are no mistakes. Both Quickparts and Provel are accurate and appropriate disclosures, and Provel did decline. The $24,127 is revenue since acquisition, accurately reported in DDD revenue. The proforma revenue of $233,612 (as clearly noted on page F-19 of 2011 Form 10-K) includes the 20
Slide 34: False allegation 10
10) False allegation The 21st paragraph of the Acquisition Analysis section states, “... The absence of any disclosure of revenue or operating results for 24 acquisitions out of 26 is troubling. DDD discloses minimal information for only two: Quickparts and Provel.” 10) Fact In addition to Quickpart
Slide 35: False allegation 11
11) False allegation The 22nd and 23rd paragraphs of the Acquisition Analysis section state, “... Thirteen of the 24 (54%) were cash and stock deals...” “All of the disclosures of the thirteen cash and stock deals contain the bold type sentence. What is the nature of the private transactions? | foun
Slide 36: Fact 11
11) Fact 17 of the 29 transactions included shares of common stock issued by 3D Systems Corporation as part of the purchase consideration and the author has the shares transaction and total transaction count incorrect. Furthermore, stock based compensation and option proceeds are separate from acqui
Slide 37: False allegations 12-13
12) False allegation The 25th paragraph of the Acquisition Analysis section states, “Is management adding the revenue numbers of the undisclosed acquisitions to its base? There is no way to tell. This is suspicious.” 12) Fact It is disclosed. Organic growth is disclosed in 10-Qs (see pages 20 and 25
Slide 38: Fact 13 and false allegation 14
13) Fact It is unclear why the author believes licenses and patents are written down over 1 year. There have been no impairments or write downs and these intangibles have been amortized in accordance with our policy in the 10-K that states licenses and patent costs are amortized on a straight-line b
Slide 39: False allegation 14 (cont.)
14) False allegation (cont! + its lower-cost and smaller-frame systems, which have reduced gross margins compared to high-end stereolithography systems. If this trend continues over time, the Company may experience lower average gross margins and returns. * “The next year, DDD began including a line
Slide 40: False allegation 15
15) False allegation + The first paragraph of the Cube: The Savior? Section states, “The profits are further downstream because the real money is not made until satisfied Cube users upgrade to a more sophisticated and expensive 3D printer. Until then, the objective is to get as many units in the fie