Slide 1: Conference Call & Webcast Discussion of 2Q and First Six Months 2007 Operating Results
3D Systems Corporation Conference Call & Webcast Discussion of 2Q and First Six Months 2007 Operating Results August 7, 2007 NASDAQ: TDSC www.3dsystems.com
Slide 2: Welcome Webcast Viewers
Welcome Webcast Viewers If you wish to ask questions at the end of the conference call, you should register as "Interactive Teleconference." If you did not register as "Interactive" and wish to participate, please follow the steps below: Check the icon marked "Phone Connection" on the toolbar at the
Slide 3: Participants
Participants Chanda Hughes Coordinator, Investor Relations Abe N. Reichental President & Chief Executive Officer Damon Gregoire Vice President & Chief Financial Officer Robert M. Grace, Jr. Vice President, General Counsel & Secretary
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: Summary Operating Results
Summary Operating Results Abe Reichental, CEO
Slide 6: Second Quarter 2007 Operating Results
Second Quarter 2007 Operating Results ($ Millions except per share amounts) NM=not meaningful
Slide 7: First Six Months 2007 Operating Results
First Six Months 2007 Operating Results ($ Millions except per share amounts) NM=not meaningful
Slide 8: Detailed Financial Results
Detailed Financial Results Damon Gregoire, CFO
Slide 9: Second Quarter 2007 Revenue by Category
Second Quarter 2007 Revenue by Category ($ Millions) $27.1 17.5% 38.3% 44.2% $36.4 13.0% 41.1% 45.9% $36.4 24.2% 41.0% 34.8% 27.5% 42.3% $27.1 30.2% Asia Pacific North America Services Materials Systems & Other Europe
Slide 10: First Six Months 2007 Revenue by Category
First Six Months 2007 Revenue by Category ($ Millions) $60.8 14.6% 35.4% 50.0% $73.4 12.8% 42.3% 44.9% $73.4 23.5% 41.3% 35.2% 32.6% 38.4% $60.8 29.0% Asia Pacific North America Services Materials Systems & Other Europe
Slide 11: Second Quarter 2007 Gross Profit Margin
Second Quarter 2007 Gross Profit Margin ($ Millions) Gross profit margin improvements due primarily to: absence of the disruptions that reduced 2006 margins higher installation revenue resulting in better fixed cost absorption $0.2 million favorable foreign currency translation effect partially offs
Slide 12: First Six Months 2007 Gross Profit Margin
First Six Months 2007 Gross Profit Margin ($ Millions) Gross profit margin improvements due primarily to: absence adverse operating issues in the second quarter of 2006 $0.7 million favorable foreign effect of currency translation effect. partially offset by selected discounts for certain strategic
Slide 13: 2Q 2007 Abnormal Operating Expenses
2Q 2007 Abnormal Operating Expenses ($ Millions) Expect SG&A expenses to be in the range of $22-26 Million for second half 2007
Slide 14: Second Quarter 2007 Net Income (Loss)
Second Quarter 2007 Net Income (Loss) ($ Millions, except per share amounts)
Slide 15: First-Half 2007 Net Income (Loss)
First-Half 2007 Net Income (Loss) ($ Millions, except per share amounts)
Slide 16: First Six Months Cash Flow
First Six Months Cash Flow ($ Millions)
Slide 17: Key Operating Results Trends
Key Operating Results Trends ($ Millions) Operating & Net Loss Revenue (Right axis) (Left axis) Net Loss to Common Operating Loss Revenue 1st QTR 06 2nd QTR 06 3rd QTR 06 4th QTR 06 1st QTR 07 2nd QTR 07
Slide 18: Working Capital Management
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Q1 Q2 Q3 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 DSO 82 95 89 81 76 61 67 62 60 59 61 53 59 54 61 68 78 101 78 74 67 65 Days Inventory 96 85 85 65 78 73 76 46 53 79 80 42 44 46 69 57 72 95 107 91 136 105 Working Capital Management Days Days Sales O
Slide 19: Inventory Reduction Progress
Inventory Reduction Progress Opportunity Turns Inventory Values ($000)'s
Slide 20: Cash Position 6-30-2007
Cash Position 6-30-2007 ($000's) Cash before PIPE Proceeds -Cash Includes Borrowings of $8,200 PIPE Proceeds (net) Unrestricted Cash after PIPE $ 8,611 $20,562 $29,173 Unrestricted cash before PIPE proceeds at $8,611 represents a $1,604 increase over Q1 unrestricted cash of $7,007 Includes $2,621 fr
Slide 21: Commitments for Debt Service & Leases
Commitments for Debt Service & Leases Subsequent to 6-30-07 Converted 6% Subordinated Debentures on 7/20 Paid down $8.2 Million revolving credit facility on 7/20 Total indebtedness reduced by $23.0 Million Outstanding Debt Elements (000) Industrial Development Bonds: Grand Junction Facility $3,435 C
Slide 22: Business Update
Business Update Abe Reichental, CEO
Slide 23: State of Business
State of Business In the second quarter of 2007, we incurred abnormally high expenses related to the completion of year-end and first quarter audit work We believe that the significant business setbacks and disruptions that we experienced in the course of implementing our strategic initiatives in 20
Slide 24: Significant Developments
Significant Developments Announced revolutionary compact, fast and affordable V-Flash(tm) Desktop Modeler Selected Canon Virginia, Inc. as manufacturer of new V-Flash(tm) systems Plan to unveil at the 3D Systems' World Conference on September 24 Expect commercial shipments to commence around World C
Slide 25: Expect Business Fundamentals to Improve
Expect Business Fundamentals to Improve Average selling price and cost of goods sold remained relatively unchanged Abnormal Operating Expenses reflect remaining relocation, ERP, restatement, SOX Gross Profit expected to return to and exceed historical levels Restoring customer confidence expected to
Slide 26: Improving Revenue Mix and Profitability
Improving Revenue Mix and Profitability Leveraging Volume, Mix and Fixed Costs to Maximize Profitability Materials: Highest margin in the mix: double-digit growth Service: Lowest margin in the mix: flattening Systems: Installed base is growing: greater recurring revenue Rapid Manufacturing: Drive ma
Slide 27: In Conclusion
In Conclusion Leading industry position through technology Dedicated business units focused on customer success Clear priorities for sustained, profitable growth Powerful brands deep customer relations diverse base vertical success Global presence and reach Differentiated product portfolio Four pate
Slide 28: Question & 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. Question & Answer Session
Slide 29: 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 1-800-642-1687 (or 706-645-9291 from outside the United States) and enter the conference call ID number. A replay of this Webcast will be available after th
Slide 30: First Half 2007 Product Announcements: V-Flash Desktop Modeler
First Half 2007 Product Announcements Announced development of the revolutionary compact, fast and affordable V-Flash(tm) Desktop Modeler Based on a Disruptive Technology Platform - - Film Transfer Imaging (FTI) - 4th technology platform for 3D Systems SLA(r)-like Part Quality User-Friendly Operatio
Slide 31: First Half 2007 Product Announcements: Hearing Aid Manufacturing System
In partnership with World-Class Leaders: Announced first economical, high-speed desktop manufacturing system for hearing aids Based on 3D Systems' new, disruptive Film Transfer Imaging (FTI) technology Builds high-quality hearing aid shells within hours - improved efficiency Will provide multiple-ma
Slide 32: First Half 2007 Product Announcements: Accura and InVision
Launched Accura(r) 55 Plastic, a tough and versatile Stereolithography Material that simulates the look and feel of molded ABS Launched InVision(r) XT 3-D Modeler Fast and productive High-definition, functional and durable models Material Color variety Compact Announced revolutionary Accura(r) Xtrem
Slide 33: 3D Systems Launches GO PRO! Campaign
3D Systems Launches GO PRO! Campaign
Slide 34: 3D Systems World Conference Investor Days
3D Systems World Conference Beyond Your Imagination... Investor Days - September 24-25, 2007 Rock Hill, SC USA Monday, September 24 8:30am 3D Systems Golf Outing: Pre-registration required with RSVP. More details soon. 6:00pm Conference Registration and Welcome Reception 8:00pm Dinner with Abe Reich