3D Systems Corporation · NYSE:DDD
3D Systems — Q2 2017 Earnings Presentation
28 slides from 3D Systems's earnings presentation, Aug 2, 2017
Slide 1: Second Quarter and Six Months 2017
Second Quarter and Six Months 2017 August 2, 2017
Slide 2: Welcome and Participants
Welcome and Participants • Vyomesh Joshi – President & Chief Executive Officer • John McMullen To participate via phone, – Executive Vice President & Chief Financial Officer please dial: • Patrick Rogers US: 1-800-407-8291 – Vice President & Assistant General Counsel Outside the US: 1-201-689-8345 •
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains certain statements 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 include statements concerning plans, o
Slide 4: Vyomesh Joshi (VJ)
Vyomesh Joshi (VJ) President & Chief Executive Officer
Slide 5: Q2 Overview
Q2 Overview In the second quarter of 2017: • Revenue of $159.5 million driven by continued demand from healthcare and industrial customers • Growth in production printers, materials, software and healthcare revenue • GPM of 50.6% as cost savings continue to fund strategic initiatives and competitive
Slide 6: 2017 Guidance
2017 Guidance • Revised full year 2017 guidance • Revenue growth of 2% to 6%, resulting in revenue of $643 million to $671 million • GAAP loss per share of approximately $0.14 • Approximately flat full year non-GAAP earnings per share • Revenue drivers include: • Double digit growth in healthcare •
Slide 7: John McMullen
John McMullen Executive Vice President & Chief Financial Officer
Slide 8: GAAP Operating Results
GAAP Operating Results Second Quarter Six Months ($ in millions, except per share) 2017 2016 Y/Y Change 2017 2016 Y/Y Change Revenue $ 159.5 $ 158.1 1% $ 315.9 $ 310.7 2% Gross Profit $ 80.7 $ 80.4 0% $ 160.9 $ 157.9 2% Gross Profit Margin 50.6% 50.9% -30 bps 50.9% 50.8% 10 bps SG&A $ 63.1 $ 63.2 (0
Slide 9: Non-GAAP Financial Measures
Non-GAAP Financial Measures Second Quarter Six Months ($ in millions, except per share amounts) 2017 2016 Y/Y Change 2017 2016 Y/Y Change R&D Expense $ 24.4 $ 20.9 17% $ 47.3 $ 41.2 15% Non-GAAP SG&A Expense $ 46.4 $ 45.4 2% $ 95.9 $ 98.1 (2%) Non-GAAP Operating Expenses $ 70.8 $ 66.3 7% $ 143.2 $ 1
Slide 10: Q2 Revenue Drivers
Q2 Revenue Drivers Q2 2017 Compared to Q2 2016: • Healthcare solutions increased 25% to $49 million • Software increased 9% to $24 million • Materials increased 8% to $44 million • On demand manufacturing decreased 5% to $26 million • Printers decreased 14% to $28 million 10
Slide 11: Gross Profit and Margin
Gross Profit and Margin • GPM of 50.6% in Q2 2017 compared to 50.9% in Q2 2016 • Cost savings in supply chain and manufacturing continue to support strategic investments and competitive pricing • We plan to drive further cost of sales reductions in the second half $ in millions - Charges related to
Slide 12: Operating Expenses
Operating Expenses • GAAP SG&A expenses remained flat and non-GAAP SG&A expenses increased 2%, inclusive of investments in IT and go to market • R&D expenses increased 17% driven by investment in Figure 4, metals and materials • We plan to continue to invest in strategic areas while accelerating oth
Slide 13: Cash and Balance Sheet
Cash and Balance Sheet • Used $1 million of cash in operations during Q2, resulting in $18 million of cash generated in the first half • Continue to drive improvements in working capital and cash conversion cycle • Cash balance of $154 million at June 30, 2017 13
Slide 14: Revised 2017 Guidance
Revised 2017 Guidance • Revenue growth between 2% and 6%, resulting in a range of $643 million to $671 million • GAAP loss per share of approximately $0.14 • Non-GAAP earnings per share approximately flat compared to $0.46 in 2016 • Positive cash flow from operations for the full year - See appendix
Slide 15: Vyomesh Joshi (VJ)
Vyomesh Joshi (VJ) President & Chief Executive Officer
Slide 16: Focused Execution
Focused Execution • Continued growth in key areas, including healthcare and higher placements of production solutions • Accelerating cost reductions into the latter half of 2017 while continuing to invest in innovation • Improve regional execution in Americas and APAC • Actions underway to position
Slide 17: Q&A Session
Q&A Session In the USA: 1-877-407-8291 Outside the USA: 1-201-689-8345
Slide 18: Thank You
ZN 3D SYSTEMS Thank You
Slide 19: Appendix
ZN 3D SYSTEMS Appendix
Slide 20: Revenue Summary by Category
Revenue Summary by Category YOY Sequential Q2 2017 Q1 2017 Q2 2016 $ in millions Change Change Printers $ 27.7 $ 31.6 $ 32.3 (14%) (12%) Software Products $ 12.8 $ 9.8 $ 11.1 15% 31% Other Products $ 10.1 $ 10.5 $ 10.9 (7%) (4%) Total Products $ 50.6 $ 51.9 $ 54.3 (7%) (3%) Total Materials $ 43.9 $
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q2 and Six Months Non-GAAP Earnings Second Quarter Six Months ($ in millions, except per share amounts) 2017 2016 2017 2016 GAAP Net loss attributable to 3D Systems Corporation ($8.4) ($4.6) ($18.4) ($22.4) Adjustments: Amortization, stock-based compensation & other 1 $ 16.3
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q2 and Six Months Non-GAAP Expenses Second Quarter Six Months ($ in millions, except per share amounts) 2017 2016 2017 2016 GAAP R&D Expenses $ 24.4 $ 20.9 $ 47.3 $ 41.2 GAAP SG&A Expenses $ 63.1 $ 63.2 $ 129.5 $ 137.2 GAAP Operating Expenses $87.5 $84.1 $176.8 $178.4 Adjustm
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q1 2017 Non-GAAP Earnings First Quarter ($ in millions, except per share amounts) 2017 2016 GAAP Net loss attributable to 3D Systems Corporation ($10.0) ($17.8) Adjustments: Amortization, stock-based compensation & other 1 $ 16.0 $ 20.5 Legal and acquisition-related 2 $ 1.1 $
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q1 2017 Non-GAAP Operating Expenses First Quarter ($ in millions, except per share amounts) 2017 2016 GAAP R&D Expenses $ 22.9 $ 20.3 GAAP SG&A Expenses $ 66.4 $ 74.0 GAAP Operating Expenses $89.3 $94.3 Adjustments1: Amortization, stock-based compensation & other $ 15.9 $ 20.
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2016 Non-GAAP Earnings 2016 ($ in millions, except per share amounts) Q1 Q2 Q3 Q4 GAAP Net loss attributable to 3D Systems Corporation ($17.8) ($4.6) ($21.2) $5.2 Adjustments: Amortization, stock-based compensation & other 1 $ 20.5 $ 16.1 $ 29.1 $ 12.7 2 Legal and acquisition
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2016 Non-GAAP Operating Expenses 2016 ($ in millions, except per share amounts) Q1 Q2 Q3 Q4 GAAP R&D Expenses $ 20.3 $ 20.9 $ 26.1 $ 21.1 GAAP SG&A Expenses $ 74.0 $ 63.2 $ 64.8 $ 57.8 GAAP Operating Expenses $94.3 $84.1 $90.9 $78.9 Adjustments: Amortization, stock-based comp
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2017 Annual Guidance Full Year Ended December 31, 2017 Expected GAAP Earnings per Share $ (0.14) Estimated adjustments to arrive at non-GAAP Earnings per Share: Amortization 0.30 Stock Based Compensation 0.25 Acquisition, severance and settlements 0.05 Total Adjustments 1 $ 0
Slide 28: Thank You
ZN 3D SYSTEMS Thank You