Slide 1: Third Quarter & Nine Months 2014 Conference Call and Webcast
BDSYST EMS THIRD QUARTER & NINE MONTHS 2014 CONFERENCE CALL AND WEBCAST MANUFACTURING THEFUTURE WWW.3DSYSTEMS.COM| NYSE:DDD-
Slide 2: Presenters
PRESENTERS | Damon Gregore * Senior Vice President & Chief Financial Officer * Executive Vice President & Chief Legal Officer
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 ion, please dial: F lo + 1-201-689-8345 from outside the United States
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 MANUFACTURING THE FUTURE
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 Sin lions Delivering impressive top and bottom line results Added Medical Modeling, Simbionix and LayerWise to enhance expertise and expand our capabilities Provides a digital thread from training room to $21.7 $18.9 " $16.9 operating room $14 121% growth in Q3 2014 siz. fg
Slide 9: Direct Metals
DIRECT METALS Nine Months Revenue growth of 241% in the first nine months of the year compared to ProForma results of the same * Decisive investments contributed to revenue 2013 period * Outsold manufacturing capacity in every quarter since we acquired Phenix Systems facility and we expect to meet t
Slide 10: New Products Contribution
10 NEW PRODUCTS CONTRIBUTION Sinmillons $250 $150 $100 $50 $0 Nine months new Expect increasing products revenue contribution from increased 33% over new products 2013 Announced 11 new products in first nine months of 2014 -Produets are considered new forthe fist 3 years of a product's commercial fe
Slide 11: Financial Review
FINANCIAL REVIEW Damon Gregoire Senior Vice President & CFO MANUFACTURING THE FUTURE
Slide 12: Third Quarter GAAP Operating Results
THIRD QUARTER GAAP OPERATING RESULTS Sin millions, except earnings per share % Change Drivers 2014 2013 Favorable/ (Unfavorable) Revenue 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 Income $8.2 $28.6 (7
Slide 13: Nine Months GAAP Operating Results
NINE MONTHS GAAP OPERATING RESULTS Sin millions, except earnings per share Drivers Revenue Gross Profit Gross Profit Margin Operating Expenses % of Revenue Operating Income % of Revenue 3DS Net Income % of Revenue Diluted Earnings Per Share columns may not foot due to rounding 2014 $ 466.2 $227.7 48
Slide 14: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Quarter Ended Nine Months Ended September 30, September 30, {Sin millions, except per share amounts) 2014 2013 2014 2013 GAAP net income $3.1 $177 $10.1 $32.9 Cost of sales adjustments: Amortization of intangibles $01 $01 $02 $02 Operating expense adjustments: ‘Amortization o
Slide 15: Third Quarter Revenue Highlights
THIRD QUARTER REVENUE HIGHLIGHTS
Slide 16: Revenue Growth by Category & Geography
REVENUE GROWTH BY CATEGORY & GEOGRAPHY NINE MONTHS Sin milions 27% [| i Products Materials 2013 m2014 19% 47% ‘Americas EMEA 2013 m2014 35% Services 39% Asia-Pac All categories are contributing to growth Products growth driven by plastic, nylon, composite and metal 3D printers An expanding customer
Slide 17: Organic Growth Drivers
ORGANIC GROWTH DRIVERS Q3 Organic Growth Rates 26% 138% 10% 3% o | | se ’ * 3 2013 m2014
Slide 18: Gross Profit and Margin
GROSS PROFIT AND MARGIN Sin milions + Consolidated gross profit margin Third Quarter remained sequentially flat at 47.8% on Gross Profit Gross Profit eee Testun costsof new protits ramp Up Category Come ELSI © * As we anticipated, materials GPM Products $258 35.3% $26.9 45.0% (43%) (21.5%) rebounded
Slide 19: Operating Expenses
OPERATING EXPENSES Sin mitlons Third Quarte 2 Category % Change % Change 2014 2013 Favorable/ 2014 2013 Favorable/ (Unfavorable) (Unfavorabl GRA $537 $324 (67.4%) $331 $221 (49.4%) Rao $179 $108 (65.9%) $179 $108 (65.9%) Total Operating Expenses $71.6 $429 (67.0%) $510 $330 (54.8%) % of Revenue 428%
Slide 20: Operating Leverage
OPERATING LEVERAGE $n miions $180 $160 7 em Revenue Trend nn 4 a0 al Expanding —— leverage $100 — $80 + . $60 ‘Actual $40 A 4 Operating $20 Investment _xPenses phase $0 T , T T T : T T T T 1 &, &, %, % &%, &, %, %, &, &, & e © S$ © © © © © %& % % “GAAP Operating Expenses 20 Operating Expense Expecta
Slide 21: Working Capital
WORKING CAPITAL a Sinmitions 2014 Use of Cash September 2014 December 2013 Cash $377.3 $ 306.3 Accounts Receivable S 15515 $132.1 Inventory $104.9 $75.1 ipa Accounts Payable $57.1 $51.7 Working Capital $537.2 $416.4 Generated $8.6 million of cash from operations during Q3 and $27.9 for the first nin
Slide 22: Reiterating Full-Year 2014 Guidance
REITERATING FULL-YEAR 2014 GUIDANCE 2 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 th
Slide 23: Outlook & Progress
OUTLOOK & PROGRESS Avi Reichental President & CEO MANUFACTURING THE FUTURE
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 record order book, positive sales momentum and the most comprehensive portfolio of 3D products and services available today [> With product availability gaps addressed, we expect direct metal and consumer to contribute favorably to our growth in Q4 We strengthened our se
Slide 27: Q&A Session
Q&A SESSION r conference call participants, please ask one question and return to the queue to ask additional questions rect all questions through the teleconference portion of ti 4 "| ¢ U.S.: 1-877-407-8291 SESS CLE * International: 1-201-689-8345 7
Slide 28: Thank You
BDSYST EMS THANK YOU MANUFACTURINGTHE FUTURE WWW.3DSYSTEMS.COM| NYSE:DDD-