3d Systems Corporation · NYSE:DDD
3d Systems — Investor Day (January 2005)
44 slides from 3d Systems's investor day presentation, Jan 10, 2005
Slide 1: Experience the Difference
4 Jantiany a | Win odsystenis: com EXPERIENCE THE DIFFERENCE Tenor nae Way people design) develop and iantfactire products ca star
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements made by the company in this presentation are forward-looking statements. These statements include comments as to the company’s beliefs and expectations as to future events and trends affecting the company’s business. These forward- looking statements are
Slide 3: Overview
Overview ENE ISAS A Global Leader in rapid 3-D printing, + $110 MM sales in 03 prototyping & manufacturing solutions * HQ in Valencia, CA + 361 employees * Pioneered RP&M industry ey | Li me fl * 365 patents worldwide * 3 technology platforms 7 4 Modeling Prototyping * Global presence * Largest fiel
Slide 4: Customer-Driven Solutions
Experience Customer-Driven Solutions To Physical Part From Digital Art... Computer design (CAD) Plastic or metal part
Slide 5: Comprehensive Technology Portfolio
Comprehensive Technology Portfolio Stereolithography Laser Sintering InVision™ 3-D printer Viper™ SLA system InVision HR 3-D printer SLA 5000 system SLA 7000 system = 23 DuraForm® & PA/Gr ay —— CastForm™ PS
Slide 6: Presence
Presence LEA [ voce tneviealigne PHONAK | Benin - ; tockners maw CATERPILLAR sane ou: & AlliedSignal & <m ee Polaroid Wa TET “#@ TELEDYNE WATER PIK — FLUKE. pocciPoLn) 3) Broad, Diverse Installed Base Experience the difference... Nasdaq: TDSC
Slide 7: Advantage
Advantage Time to market Time to volume Time to replacement Instant manufacturing Mass customization Broad flexibility Experience the difference... Global reach Expert support Customer Value Page?
Slide 8: Improving Our Customer's Bottom Line
Improving Our Customer’s Bottom Line Customer: Gentle Giant Studios Solution: InVision 3-D printer Application: Re-create real-world objects in digital form for the movie, video game and toy industries Advantages and benefits: > Produces 20 to 30 models every week > Reduced labor costs by 40% » Elim
Slide 9: Our Customer's Bottom Line
Our Customer's Bottom Line Medical Modeling LLC Stereolithography Successful separation of conjoined twins Pre-operative planning by a team of ten surgeons to successfully separate twin boys in October 2003 g & e 5 g 3 a $ a & g g & The ability to transform CAT scans into physical models allows a su
Slide 10: Improving Our Customer's Bottom Line
Improving Our Customer’s Bottom Line Customer: Burton Snowboards Solution: Selective Laser Sintering Application: Development and rapid testing of functional snowboard bindings « Binding prototype developed and tested on snow within 48 hours of the initial concept Burton formerly outsourced rapid pr
Slide 11: Improving Our Customer's Bottom Line
Improving Our Customer’s Bottom Line ustomer: Solid Concepts/ BAI Aerosystems, Inc. Solution: Selective Laser Sintering Application: Direct Manufacturing of aerodynamic engine cowlings for UA\ a aL } = Solid Concepts employs its direct digital manufacturing process to produce critical engine cooling
Slide 12: Nine Months Revenue by Region and Category
- 9 Months ($87 Million) Europe 41% Americas By Region 4% AsiaPacific 16% Systems 3% Experience the difference... By Catego Materials 30% Services SP “ib Fimeslareting tie may panpdadision, devnilen muh manidactoo nendects: Nasdaq: Tose
Slide 13: Industry Presence
Industry Presence Academic Govemment/ institutions military Medical 2% on other 10% 90% 9 uy s g Consumer ‘AuFometive Fy products om S 220% : is Business aa machines 70 Aerospace 8% SN 3) creams rises S ‘i wsynms Treasferming
Slide 14: Industry Growth Trends: 3-D Printing
Industry Growth Trends: 3-D Printing Pa oa ZL Experience 1 oF Models \ er, Unit Sales Growth & Forecasts No. of Models Being Produced 3) Double-Digit Unit Growth and Parts Volume Page ta
Slide 15: Industry Growth Trends: Worldwide CNC Industry
Industry Growth Trends: Worldwide CNC Industry ($ Millions) 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Experience 2002 2003 2004 2005 2006 2007
Slide 16: Competitive Profile
le Prof Competitive ““@0UBIOLIP BY} BIUaLIadXZ BulinpeynueN uolpnpoid- uonesdey Pr "i Model uoneounw Page te
Slide 17: Competitive Profile
Competitive Profile type Patte g & e 5 g 3 a $ a & g g & anufacturing Nasdaq: TDSC
Slide 18: Sandbox Markets: Prototyping, Manufacturing, 3-D Printing
Experience N N SS cowie: Wotlers Arsacuies and 10 Systems Estimates Key Application: development, veri testing Sandbox Revenue: ~$500 Million Other Major Players: EOS / Sony / Huntsman / DSM ‘Annual. Growth Rats Penetration: <10% Advantage: Broad customer base, extensive presence, multiple technolog
Slide 19: We Play in More Than One Sandbox
WE PLAY IN m MORE THAN ONE : SANDBOX!!!
Slide 20: Significance to Investors—Lower Expected Volatility
Significance to Investors— Lower Expected Volatility » Diversified portfolio: four growth areas in same business » Global composition: different economic cycles » Significant recurring revenue: independent of capex spending cycles » Growing penetration: tiny base permits expansion even during downtu
Slide 21: First Fifteen Months' Accomplishments
First Fifteen Months’ Accomplishments « Established clear priorities «= Developed comprehensive strategy « Recruited and realigned management team » Recapitalized the business « Settled significant litigation « Created strategic alliances = Effected corporate governance changes «= Implemented prefer
Slide 22: Strategic Priorities & Initiatives
Strategic Priorities & Initiatives = Improve our customer’s bottom line = Develop key applications > 3-D printing > Manufacturing = Expand range of customer services = Accelerate new product development = Optimize cash flow and supply chain » Create performance and ethical culture » Develop people a
Slide 23: Revenue
Revenue ($ millions) g 120 119 § 109 110 ot o 100 2 = 3 a 80 $ 9 2 60 g 87 G 40 78 82 ‘a 75 By g 20 0 1999 2000 2001 2002 2003 2004 3 9Mos. YTD :Full Year Fimeslareting tie may panpdadision, devnilen muh manidactoo nendects: Nasdaq: Tose
Slide 24: Operating Highlights
‘Operating Highlights sales % of Sales Highlights Third Quarter & Nine Months 2004 ($ millions except for per share amounts) Third Quarter 2003 $24.9 100% Change 19% Nine Months 2004 $87.0 100% 2003 $74.8 100% Gross Profit % of Sales $9.7 39% $38.4 44% $27.8 37% Operating Expenses % of Sales $14.7 5
Slide 25: Operating Results
Operating Results ($ Millions) g S & 60% a | ze & bec a) 5 i § a 2 ie g 40% ia a > Q = Target a ° os Revenue (eft ecale)| Operating Expenses % (ight scale) I Gross Margin % (ight scale) Tronsiiraiiig themappeopledesignjil win snd mamiilintionnelerte: Nasdaq: Tose
Slide 26: Cash Flow Bridge, Nine Months YTD
Experience the difference. SS - 9 Months YTD ($ Millions) OPENING — LEGACY STRATEGIC OPERATING ENDING BALANCE —-COSTS.-«COUTFLOWS = @ OTHER BALANCE Fimeslareting tie may panpdadision, devnilen muh manidactoo nendects:
Slide 27: Commitments for Debt Service, Preferred Stock & Operating Leases
Commitments for Debt Service, Preferred Stock & Operating Leases Estimated at 12/31/04 $ Millions 3 3 30 2s 22.7 alae a0 ton Q 2 Se aetllpak eet § 1s ie ar) = oa 10 By Wy an 2-2-2 2005 2006 2007 2008 2009 2010 2011 2012 2013 m= Senior m Op Lease jm SubDebt m Pfd Stck ’ 3 nage27 NS ; wsynms Treasferm
Slide 28: Common Shares
Common Shares a Shares outstanding 9/30/04 13,407,751 Stock options exerdsed, shares granted and stock awards 240, 120 Shares issued upon conversion of 7% debentures 833,312 Total number of shares outstanding at 12/31/04 14,481,183 o KB [Additional shares upon exercise or conversion of a Stock optio
Slide 29: Redemption of 7% Subordinated Convertible Debentures
Redemption of 7% Subordinated Convertible Debentures = $10.0 MM of 7% Debentures called for redemption 1/4/05 « All debenture holders chose instead to convert to common stock effective 12/30/04 = Conversions reflected in YE balance sheet, but de minimus EPS effect in FYO4 » Financial impacts: >» Red
Slide 30: Capitalization
Capitalization ($ 00's) ‘Actual Pro Forma 9/30/2004 Adjmts 9/30/2004 Current portion L-Tdebt $ 180 0.2% $ 180 0.2% Long-term senior debt 3,745 4.2% 3,745 4.2% Long-term subordinated debt 32,704 36.7% (10,000) 22,704 (9 25.5% PEE | Series B preferred stock ( 15,214 17.1% 15,214 17.1% u ES [common cau
Slide 31: Holders - September 30, 2004
Holders - September 30, 2004 Common Shares Owner or Portfolio Manager Including Equivalents) Percentage.) a The Clark Estates, Inc.“ 2,061,301) 9.496 a St. Denis J, Villere & Company“? 1,393,914] 6.496 ESM [darums asset Management, ino. 1,355,300 6.2% x Goldsmith & Harris Inc. and Principals? 925,52
Slide 32: New Product Introductions
In 15 Months Highlights: InVision™ 3-D Printer InVision™ HR 3-D Printer Sinterstation® HiQ™ SLS® system LaserForm® AG tool steel material Accura® Bluestone™ SL material Accura® si 50 SL material VisiJet® colors - black, blue, gray and red Viper™ HA SLA® system Achim Pap dame GNGnsAP al As % of Total
Slide 33: 3-D Printing
3-D Printing Key Attributes Advanced, user-friendly system Enhanced material toughness Superior finished surfaces Easy removal and clean-up Plug-n-play installation Point and print e of use Fast and productive Two affordable models: » Standard @ » High-Resolution © Applications Proof of concept Func
Slide 34: Manufacturing
Manufacturing Key Attributes Volume production End-use parts Mass customization Complex shapes User-friendly set: Higher producti Hearing aids Aerospace Military Orthodontics Dental casting Formula One Automotive Medical/prosthetics Footwear Tools and fixtures Rotomolding Jewelry manufacturi wom, ‘Y
Slide 35: Qualified Prospects and Installed Ratios
SS 1,000,000 2D plotters 5:1 ratio 9 & g 11,376 RP systems g 440:1 ratio $ cn) | qualified prospects = vy for the right rinti a orma solution 10:1 ratio NY SS asverems Transforming the
Slide 36: Operating Model
Operating Model (Based On $120-150 Million Annual Revenue) 2003 2004 Long-Term Sept. YTD “Sept. YTD Qs Target sales 100% 100% 100% 100% Gross Profit 37% 44% 47% 50-55% Operating Expense 57% 43% 40% 30-35% Operating Income (20%) 1% 8% 15-25% Net Income Available to Common Stockholders. (34%) (2%) 6%
Slide 37: Outsourcing Equipment Update
Outsourcing Equipment Update » Strategic re-direction of resources » Utilize others’ core competencies in assembly » Leverage others’ R&D resources » Focus on our core capabilities & unique expertise = Commenced transition during the third quarter » Low transition costs; P&L benefit beginning in ‘05
Slide 38: Organizational Update
Organizational Update Senior Executive Team >» Experienced, energized team fully in place * Sales & Marketing Recruited, realigned over 50% of team > New sales leadership in US, Europe and Asia >» Expanded product management team with product P&L responsibilities » Dedicated InVision 3-D printing sa
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Slide 40: Next Fifteen Months' Initiatives
Experience Next Fifteen Months’ Initiatives » Strengthening sales & marketing = Commercializing new SLA & SLS platforms » Growing 3-D printing portfolio & reseller channel = Expanding geographical presence: China & Japan » Enhancing service portfolio & profitability = Developing new vertical applica
Slide 41: Expected Mid-Term Outlook
Expected Mid-Term Outlook » Outsourcing assembly operations » Low transition costs: P&L benefit beginning in ‘05 » Near-term working capital increase, reduced levels thereafter » Assembly operations fully transitioned » Supply chain transition nearing completion » Accelerating new product developmen
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Slide 43: Bottom Line
Bottom Line » Leading industry position & technology » Energized, experienced management team » Clear priorities... demonstrated execution = Stronger financial base & flexibility » Favorable results from recent strategic initiatives >» Outsourcing assembly operations >» Reshaping, expanding sales an
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Searchable text section of graphics shown above 3D Sys tems Corporation Nasdaq: TDSC Investor Day New York January 10, 2005 www.3dsystems.com EXPERIENCE THE DIFFERENCE Transforming the way people design, develop and manufacture products [LOGO] Exp erience the difference… Forward-Looking Statements C