3d Systems Corporation · NYSE:DDD
3d Systems — Q3 2014 Earnings Presentation
28 slides from 3d Systems's earnings presentation, 2014
Slide 1: Third Quarter & Nine Months 2014 Conference Call and Webcast
THIRD QUARTER & NINE MONTHS 2014 CONFERENCE CALL AND WEBCAST WWW.3DSYSTEMS.COM|NYSE:DDD
Slide 2: Presenters
PRESENTERS Stacey Witten • Vice President, Investor Relations Avi Reichental • President & Chief Executive Officer Damon Gregoire • Senior Vice President & Chief Financial Officer Andy Johnson • Executive Vice President & Chief Legal Officer 2
Slide 3: Welcome Webcast Viewers
WELCOME WEBCAST VIEWERS To listen to the conference via phone • 1-877-407-8291 in the United States and to ask questions during our Q&A session, please dial: • 1-201-689-8345 from outside the United States 3
Slide 4: Forward Looking Statements
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, perfor
Slide 5: Highlights & Operating Results
HIGHLIGHTS & OPERATING RESULTS Avi Reichental President & CEO 5
Slide 6: Trends Driving Performance
TRENDS DRIVING PERFORMANCE Our inability to fulfill demand for our direct metal and consumer products restricted organic growth during the quarter Our bold investments in healthcare and metals are delivering category growth rates that substantially outperformed industry growth, validating our early
Slide 7: Third Quarter 2014 Highlights
THIRD QUARTER 2014 HIGHLIGHTS Total revenue for the quarter increased 23% to $166.9 million. We sold 57% more design and manufacturing printer units than the same period last year. Our services revenue increased 29% and our materials revenue increased 18%. We exited with a record order book of $46 m
Slide 8: Healthcare Revenue Growth
HEALTHCARE REVENUE GROWTH $ in millions • Delivering impressive top $37.4 and bottom line results • Added Medical Modeling, Simbionix and LayerWise to enhance $27.5 expertise and expand our capabilities $21.8 $21.7 • Provides a digital thread $18.9 from training room to $16.9 operating room $14.1 •
Slide 9: Direct Metals
DIRECT METALS • Decisive investments contributed to revenue growth of 241% in the first nine months of the year compared to ProForma results of the same Nine Months Revenue 2013 period 30 • Outsold manufacturing capacity in every quarter 25 since we acquired Phenix Systems 20 • Production now rampin
Slide 10: New Products Contribution
NEW PRODUCTS CONTRIBUTION $ in millions $250 $207.1 $200 $156.0 $150 $100 $89.0 $50 $0 2012 2013 2014 Announced 11 new Nine months new Expect increasing products in first nine products revenue contribution from months of 2014 increased 33% over new products 2013 - Products are considered new for the
Slide 11: Financial Review
FINANCIAL REVIEW Damon Gregoire Senior Vice President & CFO 11
Slide 12: Third Quarter GAAP Operating Results
THIRD QUARTER GAAP OPERATING RESULTS $ in millions, except earnings per share % Change Drivers 2014 2013 Favorable/ (Unfavorable) Revenue $ 166.9 $ 135.7 23.0% Gross Profit $ 79.8 $ 71.4 11.7% Gross Profit Margin 47.8% 52.6% Operating Expenses $ 71.6 $ 42.9 (67.0%) % of Revenue 42.9% 31.6% Operating
Slide 13: Nine Months GAAP Operating Results
NINE MONTHS GAAP OPERATING RESULTS $ in millions, except earnings per share % Change Drivers 2014 2013 Favorable/ (Unfavorable) Revenue $ 466.2 $ 358.6 30.0% Gross Profit $ 227.7 $ 187.5 21.4% Gross Profit Margin 48.8% 52.3% Operating Expenses $ 205.6 $ 124.6 (65.0%) % of Revenue 44.1% 34.8% Operati
Slide 14: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Quarter Ended Nine Months Ended September 30, September 30, ($ in millions, except per share amounts) 2014 2013 2014 2013 GAAP net income $ 3.1 $ 17.7 $ 10.1 $ 32.9 Cost of sales adjustments: Amortization of intangibles $ 0.1 $ 0.1 $ 0.2 $ 0.2 Operating expense adjustments: A
Slide 15: Third Quarter Revenue Highlights
THIRD QUARTER REVENUE HIGHLIGHTS $ in millions $155.2 Design & Manufacturing 27% $122.2 $37.4 Healthcare 121% $16.9 $11.8 13% Consumer $13.5 2014 2013 With a strengthening With a second metal Design and order-book and Robust demand for our manufacturing line now manufacturing sales commercial shipme
Slide 16: Revenue Growth by Category & Geography
REVENUE GROWTH BY CATEGORY & GEOGRAPHY NINE MONTHS $ in millions 27% $200 35% All categories are $150 29% contributing to growth $100 Products growth driven by $50 plastic, nylon, composite and metal 3D printers $0 An expanding customer Products Materials Services base and increasing 2013 2014
Slide 17: Organic Growth Drivers
17 ORGANIC GROWTH DRIVERS Q3 Organic Growth Rates 26% 18% 10% 23% m2013 m™2014 3% (43%)
Slide 18: Gross Profit and Margin
GROSS PROFIT AND MARGIN $ in millions • Consolidated gross profit margin Third Quarter remained sequentially flat at 47.8% on 2014 2013 Yr-Yr% the sales volume and mix and the residual costs of new products ramp up Gross Profit Gross Profit Gross Profit Category Gross Profit Margin Gross Profit Marg
Slide 19: Operating Expenses
OPERATING EXPENSES $ in millions Third Quarter • SG&A increase was GAAP Non-GAAP primarily from Category % Change % Change higher sales and 2014 2013 Favorable/ 2014 2013 Favorable/ marketing, legal (Unfavorable) (Unfavorable) costs, expanded SG&A $ 53.7 $ 32.1 (67.4%) $ 33.1 $ 22.1 (49.4%) staffing
Slide 20: Operating Leverage
OPERATING LEVERAGE $ in millions $180 $160 Operating Expense Revenue Trend $140 Line Expectations $120 Expanding • Flattening leverage $100 operating $80 expenses $60 Actual • Continued $40 Operating expansion of Investment Expenses operating $20 phase leverage $0 -GAAP Operating Expenses 20
Slide 21: Working Capital
WORKING CAPITAL $ in millions 2014 Use of Cash September 2014 December 2013 Operations Cash $ 377.3 $ 306.3 CapEx 11% 6% Accounts Receivable $ 155.5 $ 132.1 Acquisitions & Inventory $ 104.9 $ 75.1 Ventures Accounts Payable $ 57.1 $ 51.7 83% Working Capital $ 537.2 $ 416.4 • Generated $8.6 million of
Slide 22: Reiterating Full-Year 2014 Guidance
REITERATING FULL-YEAR 2014 GUIDANCE • We expect annual revenue for 2014 to be in the range of $650 million to $690 million with greater growth during the second half of the year • We expect our GAAP earnings per share to be in the range of $0.18 to $0.28 and our non-GAAP earnings per share to be in
Slide 23: Outlook & Progress
OUTLOOK & PROGRESS Avi Reichental President & CEO 23
Slide 24: Business Highlights
BUSINESS HIGHLIGHTS Added powerful, synergistic technology, domain expertise and complementary sales channels through several acquisitions during the quarter Enhanced Quickparts capabilities through the acquisitions of three U.S. based service bureaus, which brought expertise in aerospace and indust
Slide 25: Senior Leadership Update
SENIOR LEADERSHIP UPDATE We named Ted Hull, previously CFO of Fusion-io and VP Finance at Cisco, as our incoming Chief Financial Officer, effective November 11, 2014, succeeding Damon Gregoire, who will transition to the role of Executive Vice President, Mergers and Acquisitions. Ted’s career spans
Slide 26: Outlook
OUTLOOK We entered Q4 with a With product We strengthened our record order book, availability gaps senior leadership team positive sales addressed, we expect and are shifting towards momentum and the direct metal and fine tuning our most comprehensive consumer to contribute investments for portfolio
Slide 27: 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.: 1-877-407-8291 To ask questions: • International: 1-201-689-8345 27
Slide 28: Thank You
THANK YOU WWW.3DSYSTEMS.COM|NYSE:DDD