Slide 1: Fourth Quarter and Full Year 2013 Conference Call and Webcast
> o— 1 — Call and Webcast Fourth Quarter and Full Year 2013 Conference
Slide 2: Presenters
Stacey Witten Avi Reichental Damon Gregoire Andrew Johnson Director Investor Relations President & Chief Executive Officer Senior Vice President & Chief Financial Officer Vice President & General Counsel
Slide 3: Welcome: conference call dial-in details
Welc © 1-866-953-6856 in the To listen to the conference United States via phone and to ask * 1-617-399-3480 from questions during our Q&A A . outside the United States session, please dial: ¢ Participant Code: 77177985
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, underly
Slide 5: Operating Results
> o— 1 — Operating Results Avi Reichental, President & CEO
Slide 6: 2013 Highlights
2013 Highlights
Slide 7: Record Quarterly Revenue
Record Quarterly Revenue $in miions Q4 Revenue by Catego! Printers & [oe $739 Other | go12 wy $41.9 Vaterias AY ¢37.2 er } $26.8 0312 $328 Healthcare i $215 2012 [$13.4 =f = scrics a! $437 2 ee = 52% overall revenue growth 34% organic revenue growth
Slide 8: Record Annual Revenue
Record Annual Revenue $in miions Full Year Revenue by Categ: Printers & §i55 $227.6 Other 20125 $126.8 Lc 5122.4 te 2012 $103.2 Rich cmed $71.7 Healthcare mm eas3 Consumer HAS $24.8 ose $11.4 45% overall revenue growth 29% organic revenue growth
Slide 9: Direct Metal
Direct Metal 2013 E008 : $8.0 $10.0 $12.0 $14.0 $1 2013 ProForma direct metals annual revenue increased 204% over 2012 revenue Demand for our OEM's and service Our ProX printers Direct Metal 3D providers are are ideal for a printers is on the investing in our growing list of rise and our order ProX
Slide 10: Full Year New Products Revenue
$ inmillions Full Year New Products Revenue $250 $200 $150 $100 $132 $50 $78 $o 2011 2012 2013 Q4 2013 new products Full year 2013 new products revenue rose 76% over Q4_ |revenue rose 75% compared 2012 to 2012 Launched 27 new products in 2013 Products are considered new for the first 3 years of a pr
Slide 11: Financial Review
> o— 1 — cial Review ire, Senior Vice President and CFO
Slide 12: Fourth Quarter Financial Results
inmillons, except exrnires per share % Change 2013 Favorable/ (Unfavorable) Revenue $101.6 $154.8 52.4% Gross Profit $52.5 $80.1 52.6% Gross Profit Margin 51.7% 51.7% Operating Expenses $ 34.3 $62.1 81.0% % of Revenue 33.8% 40.1% Operating Income $18.2 $18.0 (1.0%) % of Revenue 17.9% 11.6% Net Incom
Slide 13: Full Year Financial Results
inmillons, except exrnires per share % Change Favorable/ (Unfavorable) Revenue $ 353.6 Gross Profit $181.2 Gross Profit Margin 51.2% 52.1% Operating Expenses $ 120.6 $186.7 54.8% % of Revenue 34.1% 36.4% Operating Income $ 60.6 $80.9 33.5% % of Revenue 17.1% 15.8% Net Income $38.9 $44.1 13.3% % of R
Slide 14: Non-GAAP Net Income Reconciliation
(Sin milions, except per share omourts) GAAP net income Cost of sales adjustments: Amortization of intangibles Operating expense adjustments: Amortization of intangibles Acquisition and severance expenses Non-cash stock-based compensation expense Other expense adjustments: Non-cash interest expense
Slide 15: Revenue by Category & Geography
Revenue by Category & Geography a0 sm 7 sin pe $101.6 Services Aen. $3535 sarvionr 100 300 25% 2 8 ‘Materials si6 = Materials 25 t | Printers 400 | Printare ° ° 2012 2013 2012 2013 = $154.8 fon. - soo $5134 125 Asia Pacific Kaheak 100 $101.6 Bex #00) $353.6 = Europe 300 er ad 29% 29% sal Wer 5 ~ Nor
Slide 16: Gross Profit and Gross Margin
Gross Profit] Gross Fourth Quarter Gross Profit] Gross Gross Profit 2012 2013 Gross Category Profit Margin Profit Margin Profit Printers & other products $18.0 Print materials $19.0 Services $15.4 Total $52.5 Gross Profit] Gross 43.1% $32.4 43.8% 79.2% 71.0% $27.7 74.4% 45.4% 46.9% $20.1 45.9% 30.2%
Slide 17: Operating Expenses
$ inmillions Fourth Quarter SG&A R&D Total Operating Expenses % of Revenue % Change Favorable/ (Unfavorable) (71.7%) (112.3 (81.0%) Full Year % Change Favorable/ (Unfavorable) (64.3%) (112.3%) (77.6%) SG&A R&D Total Operating Expenses % of Revenue $120.6 34.1% $143.2 $43.5 $ 186.7 36.4% % Change Fav
Slide 18: Operating Expense Increases vs Expectations
marketing expense increase of $3.0 million from Q3 Actual sales and marketing expense increased $8.4 million due to vastly accelerated new product introductions, faster and greater sales force and channel expansion, and acquisitions Ne J increase of $1.5 million over Q3 Actual R&D expense increased
Slide 19: Balance Sheet and Working Capital
December cember 2012 2013 % Change Favorable/(Unfavorable) $155.9 $ 306.3 96.5% Inventory $41.8 $75.1 (79.7%) Accounts Receivable $79.9 Sug2 65.4% Accounts Payable $32.1 $51.7 (61.2%) Working Capital $212.3 $416.4 96.2% Cash on hand at end of December 2013 compared to the end of 2012 increased $150
Slide 20: 2014 Guidance and Expectations
20098 SW82014 Guiaane: *based on business today, exclu 20108-2011 Sema Revenue 20120 2015E 2013A = 2014G Gross Margin = Expected Gro ding future acquisitions and opportu Margin EXPECTATIONS: Revenue doubles in two years, driven primarily by printers, materials and software driven perceptual devices
Slide 21: 2014 Revenue and Earnings Guidance
* We expect annual revenue for 2014 to be in the range of $680 million to $720 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 range of $0.73 to $0.85 with gre
Slide 22: Outlook and Progress
YSTEMS" nd CEO Outlook and Progress Avi Reichental, President a
Slide 23: Design and Manufacturing 3D Printer Progress
» =) *] =) =) *] =) =) Annual design and manufacturing 3D printer revenue increased 60% “50% of this category is sold into outright manufacturing of functional parts from plastics and metals Annual integrated materials revenue increased 40% primarily driven by design and manufacturing use cases We e
Slide 24: Consumer Products Revenue Progress
Annual consumer products revenue increased 206% over 2012 Over 22,000 consumer printers were sold since the launch of our consumer initiative We are now present in hundreds of Staples, Office Depot and other regional and global retail chains We expect the acquisition of Village Plastics to speed up
Slide 25: 2014 Consumer and Direct Metal Revenue Expectations
$ in millions Expect 2014 revenue in the range of $80 to $120 million 4 2014 Expectation Consumer §4 2013 Actual | 2012 Actual $o $20 $40 $60 $80 $100 $120 Expect 2014 revenue in the range of $25 to $50 million 2014 Expectation Direct Metal 42013 ProForma 2012 Proforma $0 $10 $20 $30 $40 $50 $60
Slide 26: Partnerships
Hershey JDA to deliver first ever high-speed continuous fab- grade 3D printer for the manufacture of Google’s Ara phone components JDA to explore and deliverfab-grade manufacturing platforms and prosumerand consumer 3D printers L for printable chocolates and sweets Co-ventureto exclusively co-develo
Slide 27: 2014 Growth Outlook
“This chart is intended to depict our expected relative 2014 growth rate trends in revenue categories. Itis not to scale and doesnotiindicate actual percentages or absolute amounts We entered the first quarter of 2014 with positive sales momentum and strong backlog, driven by increased demand from a
Slide 28: 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.: 1-866-953-6856 To ask questions: ¢ International: 1-617-399-3480 © C
Slide 29: Thank You
> o— 1 — Thank You