3D Systems Corporation · NYSE:DDD
3D Systems — Q3 2017 Earnings Presentation
31 slides from 3D Systems's earnings presentation, Oct 31, 2017
Slide 1: Third Quarter and Nine Months 2017
Third Quarter and Nine Months 2017 October 31, 2017
Slide 2: Welcome and Participants
Welcome and Participants • Vyomesh Joshi – President & Chief Executive Officer To participate via phone, • John McMullen please dial: – Executive Vice President & Chief Financial Officer In the US: • Andy Johnson 1-800-407-8291 – Executive Vice President & Chief Legal Officer • Stacey Witten Outside
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains certain statements 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 include statements concerning plans, o
Slide 4: Vyomesh Joshi (VJ)
Vyomesh Joshi (VJ) President & Chief Executive Officer
Slide 5: Investing for the Long Term
Investing for the Long Term • While our third quarter results did not meet our expectations, we believe the actions we took during the quarter better position the company • We completed an extensive evaluation of our portfolio and inventory • Accelerated investments in plastics, metals, materials, s
Slide 6: Q3 Results Overview
Q3 Results Overview In the third quarter of 2017: • Revenue was $152.9 million, inclusive of growth in healthcare, materials, and on demand manufacturing • GPM was 38.3%, including a $12.9 million inventory adjustment • Investing in innovation, IT infrastructure, go to market and customer satisfacti
Slide 7: John McMullen
John McMullen Executive Vice President & Chief Financial Officer
Slide 8: GAAP Operating Results
GAAP Operating Results Third Quarter Nine Months ($ in millions, except per share) 2017 2016 Y/Y Change 2017 2016 Y/Y Change Revenue $ 152.9 $ 156.4 (2%) $ 468.8 $ 467.0 0% Gross Profit $ 58.5 $ 68.9 (15%) $ 219.4 $ 226.9 (3%) Gross Profit Margin 38.3% 44.1% -580 bps 46.8% 48.6% -180 bps SG&A $ 66.5
Slide 9: Non-GAAP Financial Measures
Non-GAAP Financial Measures Third Quarter Nine Months ($ in millions, except per share amounts) 2017 2016 Y/Y Change 2017 2016 Y/Y Change Non-GAAP R&D Expense $24.4 $20.1 21% $71.7 $61.3 17% Non-GAAP SG&A Expense $51.5 $44.7 15% $147.4 $141.3 4% Non-GAAP Operating Expenses $75.9 $64.8 17% $219.1 $20
Slide 10: Q3 Revenue Drivers
Q3 Revenue Drivers Q3 2017 compared to Q3 2016: • Healthcare solutions increased 10% to $47 million • Materials increased 4% to $39 million • Software was flat at $21 million • On demand manufacturing increased 3% to $27 million • Printers decreased 11% to $29 million 10
Slide 11: Gross Profit and Margin
Gross Profit and Margin • GPM of 38.3% in Q3 2017, including a $12.9 million adjustment to inventory as a result of a comprehensive portfolio and inventory analysis • Cost savings in supply chain and manufacturing continue to support strategic investments and competitive pricing $ in millions - Q3 2
Slide 12: Operating Expenses
Operating Expenses • SG&A expenses increased primarily from investments in go to market and IT • R&D expenses included accelerated investment in plastics, primarily Figure 4, metals, materials and software • We plan to continue to invest to best position the company for long term success $ in millio
Slide 13: Cash and Balance Sheet
Cash and Balance Sheet • Used $0.7 million of cash in operations during Q3 • Generated $17.7 million of cash from operations year to date • Cash balance of $138.3 million at September 30, 2017 13
Slide 14: Guidance Update
Guidance Update • Withdrawing financial guidance for the time being • Focusing on the turnaround and transformation of the company and building the company for long term profitability and success • Resolving legacy issues as quickly as possible while investing in strategic initiatives and innovation
Slide 15: Vyomesh Joshi (VJ)
Vyomesh Joshi (VJ) President & Chief Executive Officer
Slide 16: Summary
Summary • We remain excited about and focused on long term success • We believe we have taken the actions necessary to improve execution • We have focused on necessary investments and organizing for the long term • We have made significant progress in quality, reliability and customer satisfaction •
Slide 17: Innovation & New Products
Innovation & New Products Over the coming months, we plan to launch: • Figure 4 platform solutions from approximately $25,000 to over $1 million • Dental specific solutions for dental labs • New materials to support production • Next generation metals platform • Additional SLS production systems • E
Slide 18: Q&A Session
Q&A Session In the USA: 1-877-407-8291 Outside the USA: 1-201-689-8345 Launch Event November 7, 2017, 10:30am ET Watch live webcast: www.3dsystems.com/investor
Slide 19: Thank You
ZN 3D SYSTEMS Thank You
Slide 20: Appendix
ZN 3D SYSTEMS Appendix
Slide 21: Revenue Summary by Category
Revenue Summary by Category Sequential Q3 2017 Q2 2017 Q3 2016 YOY Change $ in millions Change $ 29.4 $ 27.7 $ 33.0 Printers (11%) 6% $ 10.6 $ 12.8 $ 10.8 Software Products (2%) (17%) $ 8.2 $ 10.1 $ 12.7 Other Products (35%) (19%) $ 48.2 $ 50.6 $ 56.5 Total Products (15%) (5%) $ 39.4 $ 43.9 $ 38.1 T
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q3 and Nine Months Non-GAAP Earnings (Loss) Per Share Third Quarter Nine Months ($ in millions, except per share amounts) 2017 2016 2017 2016 GAAP Net loss attributable to 3D Systems Corporation ($37.7) ($21.2) ($56.1) ($43.6) Adjustments: Amortization, stock-based compensati
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q3 and Nine Months Gross Profit & Margin Third Quarter Nine Months ($ in millions) 2017 2016 2017 2016 GAAP Gross Profit $58.5 $68.9 $219.4 $226.9 GAAP Gross Profit Margin 38.3% 44.1% 46.8% 48.6% Adjustments: Amortization, stock-based compensation & other $0.1 $10.8 $0.3 $11.
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q3 and Nine Months Non-GAAP Operating Expenses Third Quarter Nine Months ($ in millions, except per share amounts) 2017 2016 2017 2016 GAAP R&D Expenses $ 24.4 $ 26.1 $ 71.7 $ 67.4 GAAP SG&A Expenses $ 66.5 $ 64.8 $ 196.0 $ 202.0 GAAP Operating Expenses $90.9 $90.9 $267.7 $26
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q2 and Six Months Non-GAAP Earnings (Loss) Per Share Second Quarter Six Months ($ in millions, except per share amounts) 2017 2016 2017 2016 GAAP Net loss attributable to 3D Systems Corporation ($8.4) ($4.6) ($18.4) ($22.4) Adjustments: Amortization, stock-based compensation
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q2 and Six Months Non-GAAP Operating Expenses Second Quarter Six Months ($ in millions, except per share amounts) 2017 2016 2017 2016 GAAP R&D Expenses $ 24.4 $ 20.9 $ 47.3 $ 41.2 GAAP SG&A Expenses $ 63.1 $ 63.2 $ 129.5 $ 137.2 GAAP Operating Expenses $87.5 $84.1 $176.8 $178
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q1 2017 Non-GAAP Earnings (Loss) Per Share First Quarter ($ in millions, except per share amounts) 2017 2016 GAAP Net loss attributable to 3D Systems Corporation ($10.0) ($17.8) Adjustments: Amortization, stock-based compensation & other 1 $ 16.0 $ 20.5 Legal and acquisition-
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation Q1 2017 Non-GAAP Operating Expenses First Quarter ($ in millions, except per share amounts) 2017 2016 GAAP R&D Expenses $ 22.9 $ 20.3 GAAP SG&A Expenses $ 66.4 $ 74.0 GAAP Operating Expenses $89.3 $94.3 Adjustments1: Amortization, stock-based compensation & other $ 15.9 $ 20.
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2016 Non-GAAP Earnings (Loss) Per Share 2016 ($ in millions, except per share amounts) Q1 Q2 Q3 Q4 GAAP Net loss attributable to 3D Systems Corporation ($17.8) ($4.6) ($21.2) $5.2 Adjustments: Amortization, stock-based compensation & other 1 $ 20.5 $ 16.1 $ 29.1 $ 12.7 2 Lega
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2016 Non-GAAP Operating Expenses 2016 ($ in millions, except per share amounts) Q1 Q2 Q3 Q4 GAAP R&D Expenses $ 20.3 $ 20.9 $ 26.1 $ 21.1 GAAP SG&A Expenses $ 74.0 $ 63.2 $ 64.8 $ 57.8 GAAP Operating Expenses $94.3 $84.1 $90.9 $78.9 Adjustments: Amortization, stock-based comp
Slide 31: Thank You
ZN 3D SYSTEMS Thank You