Slide 1: Third Quarter and Nine Months 2013 Conference Call and Webcast
nd Nine Months 2013 Conference Call and Webcast Third Quarter a
Slide 2: Presenters
Presenters Stacey Witten * Director Investor Relations . Avi Reichental * President & Chief Executive Officer . ¢ Senior Vice President & Chief Financial Officer . Andrew Johnson * Vice President & General Counsel R
Slide 3: Welcome Webcast Viewers
Welcome Webcast Viewers © 1-800-706-7745 in the To listen to the conference United States pind lca dinten wil oaie ° 1-617-614-3472 from questions during our Q&A . . outside the United States session, please dial: ¢ Participant Code: 86406937
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: Operating Results
Operating Results Avi Reichental, President & CEO
Slide 6: Revenue grew 49.9% to a record $135.7 million
Revenue grew 49.9%, to a record $135.7 million on a 75.6% increase in printers & other products revenue and 29.7% overall organic growth Gross profit increased 52.4% on higher revenue and gross profit margin expansion to 52.6% even as printers continued to make up a higher portion of total revenue W
Slide 7: Record Quarterly Revenue
Record Quarterly Revenue $in millions Printers & (CCA $34.2 Other 2013 $59.8 ee 5 25.5 2013, $33.2 a a $31.0 Services For — eo Materials 2012 2013 12013; $16.9 Healthcare iced $3.3 2013 $13.5 Consumer 49.9% overall revenue growth 29.7% organic revenue growth
Slide 8: Consumer revenue nearly doubled versus first half
Compared to the first half of 2013, third quarter consumer revenue nearly doubled and for the first nine months of 2013 amounted to $25.8 million, driven primarily by sales of printers In-store retail operations expanding to about 400 retail stores before the holiday season, including Staples and Of
Slide 9: New Products Revenue
$in millions Nine Months New Products Revenue $160 $140 $120 $100 $40 | $89 $20 $1 2011 2012 2013 New Products Revenue Performance 2013 New products revenue rose Launched 12 new products | New products revenue rose 75% compared to the first in the first 9 months 2013 79% over Q3 2012 nine months of
Slide 10: Financial Results - Senior Vice President and CFO
Vice President and CFO Damon Gregoire, Senior
Slide 11: Third Quarter Financial Results
Sin millions, except earnings per share % Change Drivers Favorable/ (Unvaforable) Revenue $90.5 $ 135.7 49.9% Gross Profit $ 46.9 $71.4 52.4% Gross Profit Margin 51.8% 52.6% Operating Expenses $28.4 $42.9 (50.7%) % of Revenue 31.4% 31.6% Operating Income $18.4 $ 28.6 55.0% % of Revenue 20.4% 21.1% N
Slide 12: Nine Months Financial Results
Sin millions, except earnings per share Drivers 2012 Revenue $252.1 Gross Profit $128.7 Gross Profit Margin 51.1% Operating Expenses $ 86.3 % of Revenue 34.2% Operating Income $42.4 % of Revenue 16.8% Net Income $ 28.0 % of Revenue 11.1% Diluted Earnings Per Share $0.35 $ 358.6 $ 187.5 52.3% $124.6
Slide 13: GAAP Reconciliation
GAAP Reconciliation Quarter Ended Nine Months Ended September 30, September 30, (Sin millions, except per share amounts) 2012 2013 2012 2013 GAAP net income $13.5 5 A7.7. $ 28.0 $ 32.9 Cost of sales adjustments: Amortization of intangibles $o1 $01 $0.2 $0.2 Operating expense adjustments: Amortizatio
Slide 14: Revenue by Category & Geography
Revenue by Category & Geography { Pine mont ( itis | $160 $400 $140 $1357 $350 53555 $120 $300 = 32% $100 $905 Services ae a6 [ee Seales $: 36% = ee 34% Materials 24% “ Materials eh $40 28% $100 ahs $20 Printers 44% ae Printers 43% co 38% and Other co aie and Other 2012 2013 2012 2023 $160 $400 ae $
Slide 15: Third Quarter Gross Profit by Category
Sin millions Third Quarter 2012 2013 Gross Gross Profit) Gross Gross Profit} Gross Gross Profit Category Profit Margin Profit Margin Profit Margin Printers & other products $15.4 45.2% $26.9 45.0% 74.8% (0.4%) Print materials $17.4 68.3% $24.5 73.8% 40.6% 8.1% Services $14.1 45.4% $ 20.0 46.9% 42.4%
Slide 16: Nine Months Gross Profit by Category
Sin millions Nine Months Gross Gross Profit] Gross Gross Profit} Gross Gross Profit Category Profit Margin Profit Margin Profit Margin Printers & other products $ 36.2 42.7% $69.5 45.2% 91.8% 5.9% Print materials $51.4 67.3% $66.9 73.4% 30.2% 9.1% Services $411 45.2% SS 45.0% 24.4% (0.4%) Total $128
Slide 17: Operating Expenses
Sin millions Third Quarter Category SG&A R&D Total Operating Expenses % of Revenue GAAP Non-GAAP % Change Favorable/ (Unfavorable) (40.0%) (95.1%) (50.7%) Nine Months % Change Favorable/ (Unfavorable) (20.1%) (95.1%) (37.4%) Category SG&A R&D Total Operating Expenses % of Revenue GAAP Non-GAAP % Cha
Slide 18: Working Capital
Working $in millions December | September % Change Cash $155.9 $ 345.4 121.6% Inventory $41.8 $66.1 (58.1%) Accounts Receivable $79.9 $114.0 42.7% Accounts Payable $32.1 $46.5 (45.0%) Working Capital $ 212.3 $ 436.8 105.8% Cash on hand at end of September 2013 compared to the end of 2012 increased $
Slide 19: Updated 2013 guidance
We are increasing our revenue guidance range: >Was in the range of $485 million to $510 million >Expected to be in the range of $500 million to $530 million We are decreasing our non-GAAP earnings per share range: >Was in the range of $1.05 to $1.20 >Expected to be in the range of $0.93 to $1.03 Our
Slide 20: Outlook and Progress
Outlook and Progress Avi Reichental, President and CEO
Slide 21: Demand and acquisitions driving growth
* Unprecedented demand for our professional and consumer printers continues to drive our growth + New materials, expanded manufacturing use cases and new SW products set the stage for further margin expansion = Phenix Systems enhances our direct metals printing capabilities and positions us at the h
Slide 22: Entering fourth quarter with positive sales momentum
We entered the fourth quarter of 2013 with positive sales momentum, driven by increased demand from advanced manufacturing and consumer activities We expect accelerated portfolio diversification, expanded channels and focused growth initiatives to deliver continued success We expect to launch breakt
Slide 23: 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.: 1-800-706-7745 To ask questions: ¢ International: 1-617-614-3472 © C
Slide 24: Thank You
Thank You