3D Systems Corporation · NYSE:DDD
3D Systems — Q3 2010 Earnings Presentation
28 slides from 3D Systems's earnings presentation, Oct 28, 2010
Slide 1: Conference Call & Webcast Third Quarter 2010 Results
3D Systems Conference Call & Third www.3dsystems.com Webcast Quarter NASDAQ:TDSC October 28, 2010 2010 Results Copyright 3D Systems Corporation All Rights Reserved
Slide 2: Participants
Participants Stacey Witten • Investor Relations Coordinator • President & Chief Executive Abe Reichental Officer • Senior Vice President & Chief Damon Gregoire Financial Officer Bob Grace • Vice President & General Counsel 2 Copyright 3D Systems Corporation All Rights Reserved
Slide 3: Welcome Webcast Viewers
Welcome Webcast Viewers • 1-888-626-7452 in the To listen to the conference United States via phone and to ask questions during our Q&A session, please dial: • 1-201-604-5102 from outside the United States 3 Copyright 3D Systems Corporation All Rights Reserved
Slide 4: Forward Looking Statements
Forward Looking Statements Certain statements made in this presentation that are not statements of historical or current facts are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve known and unknown risks, u
Slide 5: Operating Results
Operating Results Abe Reichental President & CEO Copyright 3D Systems Corporation All Rights Reserved
Slide 6: Third Quarter 2010 Overview
Third Quarter 2010 Overview We are pleased with our performance and results We enjoyed quarter-over-quarter revenue growth from all revenue buckets led by production systems and parts and enjoyed record 3D Printer sales We expanded gross profit margin Our improved performance and record results are
Slide 7: Financial Review
Financial Review Damon Gregoire Senior Vice President & CFO Copyright 3D Systems Corporation All Rights Reserved
Slide 8: Third Quarter 2010 Operating Results
Third Quarter 2010 Operating Results ($ in millions, except per share amounts) Third Quarter 2010 % Change Favorable Operating Results 2010 2009 (Unfavorable) Revenue $41.5 $27.7 50% Gross Profit $18.8 $12.3 53% % of Revenue 45% 45% Operating Expenses $13.7 $11.2 (22%) % of Revenue 33% 41% Net Incom
Slide 9: Nine Months 2010 Operating Results
Nine Months 2010 Operating Results ($ in millions, except per share amounts) Nine Months % Change Favorable Operating Results 2010 2009 (Unfavorable) Revenue $108.3 $76.4 42% Gross Profit $49.1 $33.6 46% % of Revenue 45% 44% Operating Expenses $37.9 $35.0 (8%) % of Revenue 35% 46% Net Income (Loss)
Slide 10: Across-The-Board Revenue Growth
Across-The-Board Revenue Growth ($ in millions) Nine Months Production 2009 $9.5 104% Systems 2010 $19.2 2009 $8.1 Printers 2010 $14.7 82% 2009 $23.4 Services 39% 2010 $32.5 2009 $35.5 Materials 2010 18% $41.8 2009 $11.7 Health Care 2010 23% $14.5 10 Copyright 3D Systems Corporation All Rights Reser
Slide 11: Healthcare Solutions Third Quarter Revenue
Healthcare Solutions Third Quarter Revenue Healthcare solutions revenue consists of systems, materials and services sales for hearing aids, dental and medical device applications Healthcare solutions grew sequentially by $1.5 million and represented $6.0 million of total revenue Recurring revenue fr
Slide 12: Factors Shaping Third Quarter Results
Factors Shaping Third Quarter Results ($ in millions) Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Operating Expenses $ 11.2 $ 11.7 $ 11.7 $ 12.5 $ 13.7 Gross Profit Margin 45% 44% 45% 45% 45% Cash $ 24.0 $ 24.9 $ 26.6 $ 25.9 $ 33.8 Inventory $ 20.3 $ 18.4 $ 20.3 $ 22.0 $ 20.8 **Percents are rounded to the nearest
Slide 13: Q3 Revenue Composition by Category and Region
Q3 Revenue Composition by Category and Region 45 $ 41.5 $ 41.5 40 Asia 16% 35 31% Pacific Services 30 $ 27.7 $ 27.7 40% Millions 25 16% 28% 34% Europe 20 Materials 40% 15 47% 10 North 44% Systems & 35% 44% America 5 25% Other 0 2009 2010 2009 2010 Recurring revenue represents 69% of total revenue Re
Slide 14: Nine Months Revenue by Category and Region
Nine Months Revenue by Category and Region 120 $ 108.3 $ 108.3 100 14% Asia Pacific 30% $ 76.4 Services $ 76.4 80 14% 40% 31% Millions 60 Europe 39% Materials 41% 40 46% 46% 20 31% 45% North Systems & 23% Other America 0 2009 2010 2009 2010 Recurring revenue Recurring revenuerepresents 69%ofoftotal
Slide 15: Third Quarter Gross Profit and Margin
Third Quarter Gross Profit and Margin 2010 2009 Yr-Yr % Gross Profit Gross Profit $ Millions $ Millions $ Margin Margin Margin Systems $ 5.3 36% $ 1.1 16% 371% 121% Materials $ 8.7 61% $ 7.5 57% 16% 7% Services $ 4.8 38% $ 3.7 48% 32% (20%) TOTAL $ 18.8 45% $12.3 45% 53% 2% **Columns may not foot du
Slide 16: Gross Profit Margin Trend
Gross Profit Margin Trend Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 43.6% 43.8% 44.5% 44.2% 45.3% 45.4% 45.4% Gross margin for the first nine months was 45.4% compared to 44.0% for the same period in 2009 Higher revenue results in margin expansion from improved overhead absorption Improved margin, n
Slide 17: Third Quarter Operating Expenses
Third Quarter Operating Expenses ($ Millions) Third Quarter 2010 % Change Favorable Operating Expenses 2010 2009 (Unfavorable) Selling, General & Administrative $11.0 $8.4 (31%) Research and Development $2.7 $2.9 5% Total Operating Expenses $13.7 $11.2 (22%) % of Revenue 33% 41% 19% **Columns may no
Slide 18: Third Quarter Working Capital Management
Third Quarter Working Capital Management 160 140 132 125 121 122 120 105 104 102 Days 101 99 100 83 84 80 73 71 60 66 63 63 63 60 62 60 59 59 40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 Days Sales Outstanding Days Inventory on Hand 18 Copyright 3D Syste
Slide 19: Progress Towards Long Term Operating Model
Progress Towards Long Term Operating Model ($ Millions) Operating Model Actual Results Q3 2010 YTD 2010 Revenue $150.0 $200.0 $41.5 $108.3 Gross Profit 48% 58% 45% 45% SG&A 25% 23% 26% 28% R&D 8% 7% 7% 7% Operating Income 15% 28% 12% 10% Net Income After Tax 10% 20% 13% 9% Depreciation & Amortizatio
Slide 20: Outlook And Progress
Outlook And Progress Abe Reichental President & CEO Copyright 3D Systems Corporation All Rights Reserved
Slide 21: Recent Developments
Recent Developments We expanded our 3Dproparts™ services by: • Acquiring CEP, ProtoMetal and Express We expanded our 3D printer Pattern reach and technology breadth by • Acquiring Provel early in the fourth acquiring Bits From Bytes quarter • Adding capabilities and capacity We expanded our reseller
Slide 22: Bits From Bytes Acquisition
Bits From Bytes Acquisition Proven simple technology with significant Printing technology and know-how to marketplace acceptance and following unleash growth Complementary capabilities and price points Marketplace credibility and presence Engineered for performance and cost Financial strength and fl
Slide 23: Growth Drivers
Growth Drivers We entered the fourth quarter of 2010 with a strong sales funnel We expect 3D printer sales to continue to grow, helped by expanding channel and our V-Flash®, ProJet™ and BfB™ printers growing marketplace acceptance We expect revenue from our 3Dproparts™ services to continue to grow g
Slide 24: Revenue Outlook
Revenue Outlook We expect continued revenue growth over prior year quarters and sequentially for the fourth quarter of 2010 We expect continued record 3D printer revenue growth driven by: • Higher ProJet™, V-Flash® and BfB™ sales We expect 3Dproparts™ revenue run-rate to reach 15-20% of our total fo
Slide 25: Gross Profit and Operating Expenses Outlook
Gross Profit and Operating Expenses Outlook We expect our gross profit margin to remain stable despite: • Potential adverse systems mix in favor of lower margin printers • Integration period of acquired businesses and • V-Flash® drag that is expected to decrease and end all together during the secon
Slide 26: Bottom Line
Bottom Line Our sales funnel remains robust and our growing backlog reflects the strength of our business model Our Parts, Printers and Production Systems are expected to generate increased customer demand Our business model is built around significant, recurring revenue components that generate imp
Slide 27: 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. To ask • U.S.: 1-888-626-7452 questions: • International: 1-201-604-5102 2
Slide 28: Thank You For Participating
Thank You For Participating Replay available at www.3dsystems.com/ir Copyright 3D Systems Corporation All Rights Reserved