Slide 1: Investor Meeting RAPID Show Orlando
Investor Meeting RAPID Show Orlando May 21, 2008
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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, uncerta
Slide 3: Today's Agenda
Today's Agenda Overview of 3D Systems Rapid Manufacturing Solutions Dental Digital manufacturing Solutions State of the business Target Model Q&A Kevin McAlea, Vice-President and GM Sintering Products Lee Dockstader, Vice-President and GM Stereolithography Products Abe Reichental, President and CEO
Slide 4: We Are Addressing The Following Questions Today
We Are Addressing The Following Questions Today: Are we well positioned and able to regain the revenue shortfall that we experienced in the first quarter 2008 in the coming quarters? Executing our growth plan, can we overcome the uncertain domestic economy and adverse impact from TE? What specific g
Slide 5: Our Strategic Growth Plan
Our Strategic Growth Plan Achieve sustained double-digit revenue growth from the development and pursuit of: Manufacturing opportunities within aerospace, automotive and consumer goods Manufacturing opportunities within healthcare and dentistry Prototyping opportunities within a network of Authorize
Slide 6: Rapid Manufacturing Solutions
Rapid Manufacturing Solutions Kevin McAlea VP and General Manager Sintering Products May 21, 2008
Slide 7: Manufacturing Systems
Manufacturing Systems SLA(r), SLS(r) and metals-based processes Proven, complementary technologies Economic, high-throughput production Broad range of applications Large base of traditional service provider customers Growing list of non-traditional service providers and rapid manufacturing customers
Slide 8: 3-D Modelers and Printers
3-D Modelers and Printers MJM and FTI-based technologies Office and desktop systems Affordable and easy to use Quickly produce high-quality models in-house Growing range of applications, including rapid manufacturing Customers include end users and service providers and service providers and service
Slide 9: Pro Manufacturing Systems - The Next Generation
Pro Manufacturing Systems - The Next Generation Viper(tm) SLA(r) and Sinterstation(r) Pro Systems Capacity » larger parts ProScan(tm) Imaging System » unmatched part accuracy Materials capability » higher performance materials Automation » reduced skill and labor requirement Materials capability » h
Slide 10: Pro Manufacturing Systems - Direct Metals
Pro Manufacturing Systems - Direct Metals Sinterstation(r) Pro DM SLM Systems Unmatched material range, including Ti & Al Excellent feature definition and build surface finish Fast build speed Compact system for small part applications part applications part applications part applications part appli
Slide 11: ProJet HD 3000 3-D Printer
ProJet(tm) HD 3000 3-D Printer MJM-based technology High definition and ultra high definition build modes Part accuracy and resolution rival stereolithography Simple "hands-free" wax support removal Investment casting compatible materials compatible materials compatible materials compatible material
Slide 12: ProJet HD 3000 3-D Printer Z-Nesting
ProJet(tm) HD 3000 3-D Printer Nest and stack parts in the z-direction Use entire build volume Run long unattended builds Maximum Productivity With Proprietary Z-Nesting Capability 12 12
Slide 13: ProJet HD 3000 Printer
ProJet(tm) HD 3000 Printer 13
Slide 14: V-Flash Desktop 3-D Printer
V-Flash(tm) Desktop 3-D Printer FTI-based technology System fits on a desktop Build speed similar to SLA(r) and SLS(r) Systems Good part accuracy and resolution $9,900 system price $9,900 system price $9,900 system price $9,900 system price $9,900 system price $9,900 system price $9,900 system price
Slide 15: V-Flash Desktop 3-D Printer
V-Flash(tm) Desktop 3-D Printer Modular, rugged design Few moving components Disposable cartridge 15
Slide 16: V-Flash Desktop 3-D Printer
V-Flash(tm) Desktop 3-D Printer Incorporates materials handling wear components Closed, self- contained 16
Slide 17: V-Flash Desktop 3-D Printer
V-Flash(tm) Desktop 3-D Printer Remove parts from build pad Washes and cures parts in compact, V-Flash(tm) finisher Closed-loop cleaning, no draining Environmentally-friendly cleaning solution 17
Slide 18: New Opportunities - Larger Parts & Assemblies
New Opportunities » Larger Parts & Assemblies Cover Skins Door trim Manifolds Air Ducts Dashboard Seat 18
Slide 19: New Opportunities - Unmatched Part Accuracy
New Opportunities » Unmatched Part Accuracy 7.3MM hearing aid users in the U.S.*, represent >10% penetration Increasing use of digital manufacturing for ITE shells and BTE ear molds Drivers are "Remake, Repair and Return for Credit" Viper(tm) Systems dominate ITE shell production at centralized faci
Slide 20: New Opportunities - Unmatched Part Accuracy
New Opportunities » Unmatched Part Accuracy Study and work models Wax-ups for crowns, copings and bridges Implant drill guides Orthodontic devices 20
Slide 21: New Opportunities - Higher Performance Materials
New Opportunities » Higher Performance Materials (r) 21
Slide 22: New Opportunities - Higher Performance Materials
New Opportunities » Higher Performance Materials Aircraft applications include environmental control ducts (ECDs), brackets, housings, and other non-load bearing parts Potential SLS(r) part counts per aircraft*: 6,400 (commercial) 1,600 (military) New DuraForm(r) EX plastic certified by Bell Helicop
Slide 23: New Opportunities - Higher Performance Materials
New Opportunities » Higher Performance Materials Ti & Al aerospace parts Direct copings, crowns and bridges from precious metal alloys for dental applications Ti implants for surgical applications Stainless steel surgical guides 23
Slide 24: Digital Dental Manufacturing Solutions
Digital Dental Manufacturing Solutions Lee Dockstader VP and General Manager Stereolithography Products May 21, 2008 24
Slide 25: Align Technologies SLA Systems
Align Technologies SLA(r) Systems used to produce models 230,000 cases forecast for 2008* 48 models per case Up to 11 million models in 2008 *Align Q4 Financial Summary 25
Slide 26: Align 10-Year Anniversary
Align 10-Year Anniversary *Align 2007 Annual Report 26
Slide 27: Aesthetics Driving Digital Dentistry
Aesthetics Driving Digital Dentistry Visible Metal Metal-based crown Ceramic-based crown 27
Slide 28: New Technology Driving Digital Dentistry
New Technology Driving Digital Dentistry $8.8 Billion U.S. marketplace for prosthetics (crowns, bridges, dentures, etc.) 28 Million procedures annually CAD/CAM U.S. marketplace valued at $773 Million for 2007 CAGR of 14.9% until 2014 Shrinking pool of doctors drives need for increased chair-time eff
Slide 29: Economics of Chair-Time Utilization
Economics of Chair-Time Utilization Chair time savings 10-30 minutes Variability reduction 3-4 additional patients per week * Chair time valued at $4/min. Source: Jeff Lavers, VP Marketing 3M ESPE Selling efficiency improvement $40-$120 value* $360-$480 value* "Incalculable value; huge!" Joe Carrick
Slide 30: General Dental Products
General Dental Products General Dental Products General Dental Products General Dental Products Wax Coping Pressed Glass Full Form Wax Full Gold Porcelain to Porcelain PFM or or PFM, PFZ or Materials and fabrication capabilities broadly cover $4 billion general dental crown and bridge marketplace 30
Slide 31: Subtractive Manufacturing
Subtractive Manufacturing Start with a big block Large amount of waste High detail means longer milling times 31
Slide 32: Additive Manufacturing
Additive Manufacturing Use only what is required Small amount of waste High detail with no loss of build speed 32
Slide 33: Dental Manufacturing Applications - Restorations
Dental Manufacturing Applications - Restorations 3D Systems has the dental marketplace opportunity covered from the top to the bottom. Coping Working Models Study Models Pressables Implant drill guide 33
Slide 34: Dental Manufacturing Applications - Orthodontics
Dental Manufacturing Applications - Orthodontics Custom brackets Aligner pattern Study Models Behind the Teeth braces Teeth braces Teeth braces 34
Slide 35: Materialise SimPlant - Dental Implant Planning Software
Materialise SimPlant - Dental Implant Planning Software
Slide 36: Study Models and Materialise SurgiGuide Drill Guides
Study Models and Materialise SurgiGuide Drill Guides Study Models and Materialise SurgiGuide Drill Guides
Slide 37: 3M ESPE Lava Precision Solutions
3M ESPE Lava(tm) Precision Solutions The new Lava(tm) Chairside Oral Scanner "C.O.S." Offers dentists the ability to capture high speed and precise digital impressions to feed into a wide range of digital production technologies. Uniquely positions doctors and labs for the future of digital dentistr
Slide 38: The Lab Kit - Typical Quadrant Case
Opposing Operative Prep Operative Full (fit check) The Lab Kit - Typical Quadrant Case 38
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Slide 40: Lingual Braces
Lingual Braces Lingual Braces 40
Slide 41: ProJet DP 3000 Dental Professional
Digital manufacturing system prints highly accurate, dental patterns for direct investment casting of dental prostheses such as copings, bridges and crowns. Metal supported crowns are still 80%+ of the market opportunity ProJet(tm) DP 3000 Dental Professional 41
Slide 42: ProJet DP 3000 3-D Output
ProJet(tm) DP 3000 3-D Output 3M ESPE announced its strategic intent to further expand the Lava(tm) platform to provide multiple materials and indications for lab and dentist customers - including wax and resin patterns, laser sintered metal and custom implant abutment solutions. To meet this goal,
Slide 43: Anatomic Wax-Patterns Through Sirona infiniDent
Anatomic Wax-Patterns Through Sirona infiniDent Sirona Dental Systems offers anatomic wax-patterns to their Lab/inEos users through infiniDent using 3D Systems InVision(r) and ProJet(tm) DP 3-D Modelers. 43
Slide 44: ProJet DP 3000 3-D Output
ProJet(tm) DP 3000 3-D Output
Slide 45: Direct Metal Dental Solutions
Our Digital Manufacturing Solution: Uses all CoCr alloys, stainless, titanium Precise material quantity = no waste High precision through digital technology Less finishing than with cast products Traditional Alternatives: Casting process for mass production is expensive Cobalt - chrome (CoCr) alloys
Slide 46: State of the Business
State of the Business Abe Reichental President &CEO May 21, 2008 46
Slide 47: State of The Business
State of The Business We believe and expect that: The independent events that occurred during the first quarter of 2008 and countered the sequential progress that we made in 2007 are behind us. Notwithstanding the current uncertain economic climate, we are well positioned to regain the ground that w
Slide 48: Target Operating Model Assumptions
Target Operating Model Assumptions Emphasize materials growth relative to systems Reflect systems' mix weighted toward mid to low-range Realization of our profit upside potential Initial V-Flash(tm) drag on gross profit Ability to reach target revenue levels independently of V-Flash(tm) with higher
Slide 49: Target Operating Model Assumptions
Emphasize technological leadership from new products New products will drive growth and amount to more than 50% of revenue New products are treated as new for the first 3 years of useful commercial life Continue to spend between $13-14 million annually on research and development Remain a low capita
Slide 50: Target Operating Model Expectations
Target Operating Model Expectations Target Operating Model Expectations $170 million $200 million Revenue Gross Profit SG&A R&D Operating Income Net Income after tax Depreciation & Amortization Capital Expenditures Materials Revenue New Products Revenue 55%-65% 46% 25% 8% 15% 10% 4% 2% 42% 55% 23% 7
Slide 51: Revenue Upside Supporting Our Target Model
Revenue Upside Supporting Our Target Model Opening the Japanese marketplace to our key Accura(r) materials Launching two new professional, high-definition 3-D printers: The ProJet(tm) HD 3000 3-D Production System The ProJet(tm) DP 3000 3-D Dental Professional System Launching two direct metal laser
Slide 52: Gross Profit Upside Supporting Our Target Model
Gross Profit Upside Supporting Our Target Model Expect net incremental gross profit improvement to be in the range of 4%-13% over the modeling period Profit Leakage Source Inefficient third-party logistics and warehousing. Material weaknesses related to inventory management and cost accounting. Inef
Slide 53: SG&A Upside Supporting Our Target Model
SG&A Upside Supporting Our Target Model Curtail special legal and accounting costs Curtail remaining contractors and consultants Take advantage of available South Carolina job development incentives Normalize annual audit and tax review cost Absence of expansive recruitment and relocation cost Deliv
Slide 54: Additional Revenue Upside From V-Flash System
Additional Revenue Upside From V-Flash(tm) System Antcipate continued managed phased rollout through the third quarter of 2008 Our internal delays are not indicative of marketplace demand Not anticipating V-Flash(tm) to be a material revenue contributor during 2008 54
Slide 55: V-Flash Business Opportunity Scenario #1
V-Flash(tm) Business Opportunity Scenario #1 V-Flash(tm) Business Opportunity Scenario #1 Year one Year three Year Five Cumulative Units 250* 1250* 2,250* Annual Revenue $6 Million $20 Million $40 Million Annual Gross Profit ($0.6) Million $10 Million $24 Million Gross Profit % (10%) 50% 60% Table a
Slide 56: V-Flash Business Opportunity Scenario #2
V-Flash(tm) Business Opportunity Scenario #2 V-Flash(tm) Business Opportunity Scenario #2 Year One Year Three Year Five Cumulative Units 250* 2,250* 4,250* Annual Revenue $6 Million $40 Million $70 Million Annual Gross Profit ($0.6) Million $21 Million $43 Million Gross Profit % (10%) 52% 62% Table
Slide 57: Competitive Marketplace With Clear Choices
Competitive Marketplace With Clear Choices Approximately 50 Number of Players In Direct Space Direct sales force, regional distributors, international representatives and channel partners. More than 60 percent of sales are direct sales. Sales & Marketing Structure Tier 1: Stratasys, 3D Systems, EOS,
Slide 58: Setting Viper Pro Record Straight
Setting Viper(tm) Pro Record Straight Larger parts that require no finishing High fidelity plastic parts Larger castable patterns Unparalleled beautiful feature definition Exceptional Self-Aligning Recoating System Consistent leveling and layer-to-layer precision ProScan(tm) and Auto Focus capabilit
Slide 59: Sample results from customer testing
Sample results from customer testing 2,000+ data points over 4 months Zero unscheduled down time 8 mm test part Measurements repeatedly across entire production platform Standard Deviation of 11 microns (.00043") 95% of results plus or minus 30 microns Setting Viper(tm) Pro Record Straight
Slide 60: Viper Pro Customer Success
Viper(tm) Pro Customer Success Largest, single-piece construction No hand finishing Durable enough for multiple de-molding cycles Machine tool precision and accuracy accuracy accuracy accuracy accuracy accuracy accuracy accuracy accuracy accuracy
Slide 61: Pro Part Molded Article...CMM Inspection
Pro Part Molded Article...CMM Inspection Pro Part Molded Article...CMM Inspection All surfaces within +/- 0.5 mm Hand-finishing errors eliminated 1.0 mm tolerance improvement over sectioned patterns
Slide 62: Protecting And Defending Our IP Rights
Protecting And Defending Our IP Rights On March 14, 2008, DSM Desotech Inc. filed a complaint asserting that we engaged in anti- competitive behavior with respect to resins used in our Viper(tm) Pro stereolithography machines. The complaint also asserts that we are infringing on two of DSM Desotech'
Slide 63: Do We Have The Right People?
Do We Have The Right People ? Kevin McAlea Laser Sintering Products (GE: 15 years with 3D Systems) Lee Dockstader Stereolithography Products (HP: 11 years with 3D Systems) Brian Fraser 3-D Modeling Products (Sealed Air: 2 years with 3D Systems) Rajeev Kulkarni Product Development, Engineering (12 ye
Slide 64: Business Model Complexity? Or Optimum Foot Print?
Business Model Complexity? Or Optimum Foot Print? Technology Presence Leadership Materials Systems Customer Achievement of predictable and balanced systems revenue model faster. Reducing importance of large-frame systems. Leveraging our direct presence enables us to deliver more solutions faster and
Slide 65: Why Invest in 3D Systems?
Why Invest in 3D Systems? Leading industry position through technology Dedicated business units focused on customer success Powerful brands Deep customer relations Diverse base Vertical success Global presence and reach Differentiated product portfolio Measurable value, customers and stockholders Fo
Slide 66: Question and Answer Session
Question and Answer Session Out of respect for other conference call participants, please ask one question and then return to the queue to ask additional questions. All questions must be directed through the teleconference portion of this call. Questions via the web will not be accepted.
Slide 67: Thank You
Thank SYSTEMS You