Slide 1: Fourth Quarter & Full Year 2014 Conference Call and Webcast
BDSYST EMS FOURTH QUARTER & FULL YEAR 2014 CONFERENCE CALL AND ) WEBCAST MANUFACTURING THE FUTURE WWW.3DSYSTEMS.COM| NYSE:DDD-
Slide 2: Presenters
PRESENTERS r Stacey Witten * Vice President, Investor Relations \ > Avi Reichental ° President & Chief Executive Officer \ > Ted Hull * Executive Vice President & Chief Financial Officer \ > Andy Johnson * Executive Vice President & Chief Legal Officer a SS
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 plcace alek + 1-201-689-8345 from outside the United States
Slide 4: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements include statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developm
Slide 5: Operating Results
OPERATING RESULTS Avi Reichental President & CEO MANUFACTURINGTHE FUTURE
Slide 6: Fourth Quarter 2014 Highlights
FOURTH QUARTER 2014 HIGHLIGHTS Record revenue of $187.4 million, GAAP earnings of $0.01 per share and non-GAAP earnings of $0.21 per share. Significant foreign currency headwinds reduced our total revenue by $6 million during the quarter * Products, including materials, revenue grew by 16% and servi
Slide 7: Revenue Highlights
REVENUE HIGHLIGHTS FULL YEAR Sin millons $609.8 Design & Manufacturing. $478.6 $129.3 Healthcare sna $43.8 Consumer $348 92014 02013 Design and Expanded portfolio Consumer manufacturing sales drove higher contribution grew on demand for our increased on new strengthening healthcare products demand s
Slide 8: Healthcare
HEALTHCARE During 2014, we expanded our digital thread from training room to operating room $42.8 Digital thread from training. room to operating room Sas baz ae | $18.9 =] ' $169 ene XY 2 2 x 3: = s ‘Annual growth of 80%, /Strong organic growth of 34% é ¢ & @ 6 ¢ 6 sequential growth of 14% for 06 a
Slide 9: Direct Metals
$20 $10 DIRECT METALS $39 2013" 2014 We ended 2014 at the higher end of our expected revenue range Revenue increased 178% compared to the fourth quarter of 2013 Revenue grew 175% compared to 2013* revenue Rif] Revenue increased 73% sequentially Significant opportunities in manufacturing of aerospace
Slide 10: Growth in Design & Manufacturing Units
10 GROWTH IN DESIGN & MANUFACTURING UNITS 9% ; | Jetting sla = 2013 2014 oon 167% sis oMp+ 2013, m2014 *2013 represents proforma results inclusive of Phenix Systems units sold prior to its acquisition by 30S in July 2013, r Va \ We placed 70% more design and manufacturing printer units in 2014 than
Slide 11: Channel Performance
un CHANNEL PERFORMANCE Q4 Growth Full Year Growth $100 13% $375 17% sad $300 46% =) $225 41% $40 11% $150 : LU I : $0 $0 Americas EMEA Asia-Pac ‘Americas EMEA 2013 m2014 2013 m2014 Our EMEA channel delivered impressive growth despite foreign currency headwinds 30% Asia-Pac We are taking decisive ste
Slide 12: Effective Returns on R&D Investment
EFFECTIVE RETURNS ON R&D INVESTMENT Sinnitons $300 272 Our effective R&D investments 20 $231 contributed to a 44% increase innew products revenue over the past two 5360 years and delivered 27 new products in x 2014 alone aed $132 5x Included in our 2014 R&D investments 108 was the strategic addition
Slide 13: Financial Review
FINANCIAL REVIEW Ted Hull Executive Vice President & CFO MANUFACTURINGTHE FUTURE
Slide 14: Fourth Quarter GAAP Operating Results
FOURTH QUARTER GAAP OPERATING RESULTS Sin millions, except earnings per share % Change Drivers 2014 2013 Favorable/ (Unfavorable) 21.1% Revenue Gross Profit $89.8 $80.1 12.1% Gross Profit Margin 47.9% 51.7% Operating Expenses $85.5 $62.1 (37.7%) % of Revenue 45.6% 40.1% Operating Income $4.2 $18.0 (
Slide 15: Full Year GAAP Operating Results
FULL YEAR GAAP OPERATING RESULTS Sin millions, except earnings per share % Change Drivers 2014 2013 Favorable/ (Unfavorable) Revenue 27.3% Gross Profit $317.4 $267.6 18.6% Gross Profit Margin 48.6% 52.1% Operating Expenses $291.1 $186.7 (55.9%) % of Revenue 44.5% 36.4% Operating Income $26.3 $80.9 (
Slide 16: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION ‘Quarter Ended December 31, Full Year Ended December 31, {So millors, except per share amounts} 2014 2013 2014 2013 GAAP net income $16 $11.2 $116 $441 Cost of sales adjustments: ‘Amortization of intangibles $01 $01 $03 $02 Operating expense adjustments: ‘Amortization of inta
Slide 17: Revenue Highlights: Fourth Quarter
REVENUE HIGHLIGHTS FOURTH QUARTER Sin mons $172.4 Design & Manufacturing $145.9 $028 Healtheare $2.8 $15.0 Consumer $89 Metal production Positive marketplace Design and capacity increased Expanded products reception to Cube 3 manufacturing sales and we expect to be and services drove and CubePro and
Slide 18: Revenue Growth by Category
REVENUE GROWTH BY CATEGORY FULL YEAR 2014 Sin mins $300 25%. $250 34% $200 24% $150 $100 $50 $0 Products Materials Services 2013 m2014 _—— All categories are contributing to growth Ye Y O————— Products, including materials, grew 24% VY _ Services increased 34% VY
Slide 19: Printers Revenue and Units Performance
19 PRINTERS REVENUE AND UNITS PERFORMANCE Design & Manufacturing Printers Revenue Design & Manufacturing Units 2014 ~¢ 70% Growth 2013 2014
Slide 20: Gross Profit Margin
GROSS PROFIT MARGIN Sin milons Fouth Quarter Suppressed gross profit margin from the Sequential YoY introduction of new products, manufacturing 42014 Q32014 Change 42013 Change expansion. and unfavorable mix Products 33.8% 35.3% | -150bps | 43.8% | -1000bps Materials 75.3% 73.1% | 220bps_| 74.4% ‘90
Slide 21: Operating Expenses
Sin mitlons OPERATING EXPENSES Fourth Quarter GAAP Operating Expenses Non-GAAP Operating Expenses % Change % Change Favorable/ Favorable/ 242013 |(Unfavorable) a8 2018 | Q42013 |(Unfavorable) R&D (35.5%) | $225 $166 (35.8%) %of Revenue 12.0% 107% scaa (38.5%) | $403 $33.4 — (20.5%) %ofRevenve 215% 2
Slide 22: Operating Leverage
OPERATING LEVERAGE Sia milons $200 $180 Operating Expense $160 Expectations $140 Reverie Lipa: * Continuing operating $120 leverage $100 Flattening G&A expense $80 * Incremental sales and marketing spend in line with Si _ ai revenue growth sip Non-GAAP Operating Expenses * Normalized R&D expenses at
Slide 23: Working Capital
WORKING CAPITAL $i milions December 2014 December 2013 Cash $ 284.9 § 306.3 Accounts Receivable $ 168.4 $132.1 eerste Inventory $96.6 S 7B Accounts Payable $64.4 $51.7. Ge Working Capital $ 432.2 $416.4 Generated $23 million of cash from operations during Q4 and $51 million for the full year 2014 Pa
Slide 24: Path to 2015 Guidance
PATH TO 2015 GUIDANCE ‘Growing demand for 30S products and Sufficient capacty ‘supports continued growth trajectory of primers Increasing materials, software and healthcare revenue wil expand gross profie margins Faster orders detuer ere wit contig ngoinginastucure _enablesNpmentofa Spratt synergies
Slide 25: Full Year 2015 Guidance
FULL YEAR 2015 GUIDANCE (~ "y We expect annual revenue for 2015 to be in the range of $850 million to $900 million with greater revenue during the second half of 2015 XY SJ 7 We expect our GAAP earnings per share to be in the range of $0.35 to $0.45 and our non-GAAP earnings per share to be in the r
Slide 26: Outlook & Progress
OUTLOOK & PROGRESS Avi Reichental President & CEO MANUFACTURINGTHE FUTURE
Slide 27: Infrastructure Expansion
INFRASTRUCTURE EXPANSION We continue to increase production capacity to meet growing demand for our comprehensive portfolio of 3D products and services We increased production capacity for several design, manufacturing and consumer printers at our new 200,000 sq. ft. manufacturing facility in Rock H
Slide 28: M&A Highlights
M&A HIGHLIGHTS We continue to add synergistic technology, domain expertise and complementary sales channels We closed the acquisition of Cimatron in February 2015, strengthening our 3D digital design and fabrication portfolio We acquired botObjects in December 2014, enhancing our desktop product lin
Slide 29: We Are Building an Agile Enterprise
WE ARE BUILDING AN AGILE ENTERPRISE Unified business Increased customer Integrated global practicesand = —> intimacy and supply chain shared capabilities responsiveness id v Improved working Enhanced business Sustainable and capital -——_ planning and —— > scalable company decision-making r r val man
Slide 30: Outlook
OUTLOOK We have completed a 15-month period of stepped up investments and have put our strategic foundation in place For us, 2015 is all about execution: leveraging, fine-tuning and scaling our recent investments into sustainable, profitable growth We plan to advance our reach and penetration in key
Slide 31: Q&A Session
a1 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 J >) Please direct all questions through the teleconference portion of this call y, ~ © U.S.: 1-877-407-8291 * International: 1-201-689-8345
Slide 32: Thank You
BDSYST EMS THANK YOU MANUFACTURINGTHE FUTURE WWW.3DSYSTEMS.COM| NYSE:DDD-