Slide 1: Second Quarter & Six Months 2014 Conference Call
7) Zs BDSYST EMSs SECOND QUARTER & SIX MONTHS 2014 CONFERENCE CALL AND ESES MANUFACTURING THE FUTURE WW.W.3DSYSTEMS.COM| NYSE:DDD
Slide 2: Presenters
PRESENTERS Stacey witen meee * President & Chief Executive Officer * Senior Vice President & Chief Financial Officer * Vice President & General Counsel
Slide 3: Welcome Webcast Viewers
WELCOME WEBCAST VIEWERS -953-6860 in the United States To listen to the conference via phone * 1-617-399-3484 from outside the and to ask questions during our Q&A United States session, please dial: Participant Code: 39529244 Pd Pd
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, , projections, s, future events, perf or products, underlyin
Slide 5: Operating Results
OPERATING RESULTS Avi Reichental President & CEO MANUFACTURING THE FUTURE
Slide 6: Second Quarter 2014 Highlights
SECOND QUARTER 2014 HIGHLIGHTS ( Higher demand for design and manufacturing printers drove a 126% unit sales increase for the category { Growing advanced manufacturing printer placement fueled a 30% increase in materials revenue, and service revenue grew by 38% Revenue grew 25% to $151.5 million on
Slide 7: Revenue Highlights
REVENUE HIGHLIGHTS Sin ilons $144.2 Design & Manufacturing $112.3 74 Consumer $85 $275 Healthcare $18.9 Design and manufacturing sales grew on robust demand for our leading fab- grade plastic and metal printers a 2014 42013 Strengthening consumer backlog, with $7.7 million of orders in hand, is expe
Slide 8: Consumer New Products
CONSUMER NEW PROD Cube Pro ‘Available now iSense ‘Available now UCT ROADMAP August EKOCYCLE Cube Fourth Quarter 3DMe Photobooth ‘Fourth Quarter Cubelet Fourth Quarter Cheflet & Cheflet Pro Fourth Quarter
Slide 9: New Products Contribution
NEW PRODUCTS CONTRIBUTION Sinmilions $160 $140 $120 135.1 $100 $80 $60 $40 $20 | .. Six months new Expect greater prodietalinn lee sic products revenue revenue impact from fronthsof2014 increased 49% over new products during 2013 second half of 2014 -Produets are considered new forthe fist 3 years o
Slide 10: Financial Review
FINANCIAL REVIEW Damon Gregoire Senior Vice President & CFO
Slide 11: Second Quarter GAAP Operating Results
SECOND QUARTER GAAP OPERATING RESULTS $n millions, except earnings per share % Change Drivers 2014 2013 Favorable/ (Unfavorable) 25.4% Revenue Gross Profit $72.4 $ 62.6 15.7% Gross Profit Margin 47.8% 51.8% Operating Expenses $68.0 $45.8 (48.6%) % of Revenue 44.9% 37.9% Operating Income $4.4 $16.8 (
Slide 12: Six Months GAAP Operating Results
SIX MONTHS GAAP OPERATING RESULTS $n millions, except earnings per share % Change Drivers 2014 2013 Favorable/ (Unfavorable) Revenue 34.3% Gross Profit $147.9 $116.1 27.4% Gross Profit Margin 49.4% 52.1% Operating Expenses $134.0 $81.7 (63.9%) % of Revenue 44.8% 36.7% Operating Income $13.9 $34.3 (5
Slide 13: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Quarter Ended ‘Six Months Ended June 30, June 30, {Sn milions, except per share amounts} 2018 2013 2014 2013 GAAP net income $24 $93 $70 $152 Cost of sales adjustments: Amortization of intangibles Sor $o1 $o1 sor Operating expense adjustments: Amortization of intangibles $81
Slide 14: Revenue by Category & Geography
REVENUE BY CATEGORY & GEOGRAPHY ia milons $150 $151.5 ae im $300 $100 Services oe ian all = $200 ne terials ian 7 so a 2 Materials S Printers $50 2013 2014 = $375, -—_—____— $150, oon $125 on oa $250 30° $200 = $150 em cx MN 2% ss al $50 $0 i 1
Slide 15: Accelerating Materials Growth
ACCELERATING MATERIALS GROWTH LE * Materials increased 30% over the 2013 quarter * Integrated materials grew 35% for the quarter and 41% for six months * Expect materials growth rate to rise as more manufacturing printers are installed and customers’ capacity utilization increases 15
Slide 16: Metal Printing Performance
METAL PRINTING PERFORMANCE ® oe We successfully expanded metal e printer sales into aerospace, 1 Growing customer demand e continues to outpace our ‘manufacturing capacity e e We are adding our direct metal printing to our Quickparts services Sequentially, direct metals printing revenue grew 55% fro
Slide 17: Gross Profit and Margin
GROSS PROFIT AND MARGIN $n mitlons Second Quarter Gross Profit Gross Profit Gross Profit Category Gross Profit Margin Gross Profit Margin Gross Profit Margin Printers & other products $221 35.7% $24.7 45.6% (10.4%) (21.6%) Print materials $26.6 70.0% $21.5 73.6% 23.5% (4.9%) Services $23.6 45.9% $16
Slide 18: Gross Profit Margin Drivers
GROSS PROFIT MARGIN DRIVERS Suppressed gross profit margin from a one time inventory write down, the residual impact of start up costs of new products, change in quarterly sales mix and timing of shipments * Aone time inventory write down for stock of legacy products reduced Q2 gross profit margin b
Slide 19: Operating Expenses
OPERATING EXPENSES Sin mitons Second Quarter % Chang Soda 2013 Favorable/ 2014 (Unfavorable) SG&A $36.2 (39.1%) $31.0 R&D $9.6 (84.6%) $17.7 Total Operating Expenses $45.8 (48.6%), $48.7 96 of Revenue 4496 37.9% 32.2% First Six Months Change = 2014 Favorable/ (Unfavorable) SGRA $990 $65.6 (50.9%) $6
Slide 20: Operating Leverage
OPERATING LEVERAGE Sin millions $180 $160 Revenue Trend — $140 ti Ve $120 $100 aga Actual a Operating $80 | Expenses $60 ra $40 — $20 $0 &, & %, %, &, &, %, %, &, %&, ec SC € 2 & eo & 20 GAAP Operating Expenses Operating Expense Expectations * Continued expansion of operating leverage * Flattening S
Slide 21: Working Capital
WORKING CAPITAL 2014 Use of Cash Sin mions Cash $570.3 $ 306.3 Inventory $90.2 $75.1 Accounts Receivable $137.4 $132.1 Accounts Payable $65.4 $51.7 |Working Capital $ 692.7 $ 416.4 Generated $19 million of cash from operations during the second quarter of 2014 Paid $54 million of cash for acquisitio
Slide 22: Revenue Growth Expectations
REVENUE GROWTH EXPECTATIONS We entered the second half of 2014 with higher demand and a 77% higher order-book than the June quarter last year We typically generate a higher portion of our revenue during the second half of a given year * In 2013, 57% of revenue was generated in second half of the yea
Slide 23: Updating Full-Year 2014 Guidance
UPDATING FULL-YEAR 2014 GUIDANCE 23 We expect annual revenue for 2014 to be in the range of $700 million to $740 million with greater growth during the second half of the year We expect our GAAP earnings per share to be in the range of $0.44 to $0.56 and our non-GAAP earnings per share to be in the
Slide 24: Outlook & Progress
OUTLOOK & PROGRESS Avi Reichental President & CEO MANUFACTURING THE FUTURE
Slide 25: Business Highlights
BUSINESS HIGHLIGHTS Acquired Medical Modeling, adding proprietary VSP software and FDA clearance expertise Announced the acquisition of Robtec in Brazil, which we now expect to close during the second half of this year Added several major distributors globally including ScanSource, Konica Minolta an
Slide 26: Simbionix Transaction Summary
SIMBIONIX TRANSACTION SUMMARY 26 Total Transaction Value: $120 million Form of Consideration: 100% Cash Source of Funds: Financed from cash on hand Simbionix Headquarters: Cleveland, Ohio (R&D in Israel) Transaction Timing: Closing expected in 30 days Immediately accretive to Non-GAAP EPS and cash F
Slide 27: Strategic Rationale
STRATEGIC RATIONALE * Combination expands our healthcare reach from the training room to the operating room ‘* Synergistic technologies accelerate the creation of an end-to-end platform for 3D simulation, training, virtual surgical planning, guiding and delivery of 3D printed procedures and devices
Slide 28: Complementary Channels & Customers
COMPLEMENTARY CHANNELS & CUSTOMERS LEADING HOSPITALS, SIMULATION CENTERS & MEDICAL DEVICE OEM’S a Tey We Top 17 Raspes Waning Comes > Li cleveland ciinie Imperial Colles CJAMI ol Teo eee ane @ @sianrorn , Methatist — fop Medical Device OFMs Jotmenfohmon stryker sBeitific PENTAX © Loree? ,<5| i = amo
Slide 29: Completes Digital Thread for Personalized Surgery
COMPLETES DIGITAL THREAD FOR PERSONALIZED SURGERY dseaeated 3D planning and, ceria ED thread for personalized id patient if ws eva surgi Pita meso at surgi ([Simpbignix The Market Leader in Medical Simulation _} 29
Slide 30: Outlook
OUTLOOK We entered Q3 with a record order book and positive sales momentum We expect to benefit from the recent addition of several key distributors We expect to generate a higher portion of our revenue during the second half and normalized mix and rebounding margins
Slide 31: Q&A Session
Q&A SESSION conference call participants, please ask one question and return to the queue to ask additional questions U.S.: 1-866-953-6860 To ask questions: ¢ International: 1-617-399-3484 * Conference ID: 39529244 31
Slide 32: Thank You
an A || SBDSYST EMSs THANK YOU WW.W.3DSYSTEMS.COM| NYSE:DDD