3D Systems Corporation · NYSE:DDD
3D Systems — Q1 2017 Earnings Presentation
28 slides from 3D Systems's earnings presentation, May 3, 2017
Slide 1: First Quarter 2017 Conference Call & Webcast
First Quarter 2017 Conference Call & Webcast May 3, 2017
Slide 2: Welcome and Participants
Welcome and Participants • Vyomesh Joshi – President & Chief Executive Officer • John McMullen To participate via phone, – Executive Vice President & Chief Financial Officer please dial: • Andy Johnson US: 1-800-407-8291 – Executive Vice President & Chief Legal Officer Outside the US: 1-201-689-8345
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: Overview and Highlights
Overview and Highlights • Driving shift from prototyping to production with solutions that deliver improved productivity, repeatability, durability and total cost of operations • Continued strength in healthcare, production printers and materials • Clear progress in quality, reliability, supply chai
Slide 6: Financial Highlights
Financial Highlights In the first quarter of 2017: • Revenue increased 3%, or 4% at constant currency • Expanded GPM to 51.3% • Lower SG&A expenses by balancing investments with cost savings initiatives • Increased focused R&D, including investments in Figure 4, materials and software • Non-GAAP EPS
Slide 7: John McMullen
John McMullen Executive Vice President & Chief Financial Officer
Slide 8: Operating Results (GAAP)
Operating Results GAAP First Quarter Y/Y Favorable ($ in millions, except per share) 2017 2016 (Unfavorable) Revenue $ 156.4 $ 152.6 3% Gross Profit $ 80.2 $ 77.5 3% Gross Profit Margin 51.3% 50.8% 50 bps Operating Expenses $ 89.3 $ 94.3 5% % of Revenue 57.1% 61.8% Operating Income (Loss) ($9.1) ($1
Slide 9: Operating Results (Non-GAAP)
Operating Results Non-GAAP First Quarter Y/Y Favorable ($ in millions, except per share) 2017 2016 (Unfavorable) Revenue $ 156.4 $ 152.6 3% Gross Profit $ 80.3 $ 77.6 3% Gross Profit Margin 51.3% 50.9% 40 bps Operating Expenses $ 72.3 $ 72.9 1% % of Revenue 46.2% 47.8% Operating Income $8.0 $4.7 71%
Slide 10: Revenue Drivers
Revenue Drivers Q1 2017 Compared to Q1 2016: • Healthcare solutions increased 29% • Software was flat • On demand manufacturing decreased 6% • Printers decreased 4% • Materials increased 11% 10
Slide 11: Gross Profit & Margin
Gross Profit & Margin • GPM improved to 51.3% in the first quarter of 2017 • Executing plans to reduce costs and improve supply chain and manufacturing efficiency $ in millions - Charges related to portfolio prioritization negatively impacted Q3 2016 GAAP GPM 11
Slide 12: Operating Expenses
Operating Expenses • Non-GAAP SG&A expenses decreased 6% and GAAP SG&A expenses decreased 10% • R&D expenses increased 13%, including investment in Figure 4 development • Balanced investments in go to market and innovation while driving operational excellence $ in millions 12
Slide 13: Cash and Balance Sheet
Cash and Balance Sheet • Generated $19 million of cash from operations in Q1 2017 • Cash balance of $162 million at March 31, 2017, after paying for the acquisition of Vertex Global • Driving working capital improvements 13
Slide 14: Reiterate 2017 Guidance
Reiterate 2017 Guidance • Revenue growth between 2% and 8% – In the range of $643 million to $684 million • GAAP EPS improvement of 106% to 117% – In the range of $0.02 to $0.06 per share • Non-GAAP EPS increase of 10% to 20% – In the range of $0.51 to $0.55 per share • Continued positive cash flow
Slide 15: Vyomesh Joshi (VJ)
Vyomesh Joshi (VJ) President & Chief Executive Officer
Slide 16: Scalable, Modular Figure 4 Platform
Scalable, Modular Figure 4 Platform Low Volume Mid-Volume Automated Platform Platform Production Customer Complex part production line Dental Labs Production line for Start-up Application Examples for Industrial Company Parts Volume Low Mid High Materials NextDent 3D Systems broad materials portfoli
Slide 17: Disruptive Total Cost of Operations
Disruptive Total Cost of Operations Illustrative Example – Figure 4 vs. Traditional SLA Figure 4 Production Configuration with 16 Print Engines Improvement Printers Required 225 x Fewer Annual Throughput Per Printer (prints) 225 x Higher Facility Floor Space (sq ft) 26 x Lower Printer Upkeep Labor 4
Slide 18: Replicate and Scale Across Industries
Replicate and Scale Across Industries Teaching & Training 18
Slide 19: Delivering on Making 3D Production Real
Delivering on Making 3D Production Real • Focusing on production customer needs – productivity, durability, repeatability and total cost of operations • Accelerating innovation in precision metals solutions • Developing solutions that combine hardware, materials and software to accelerate adoption o
Slide 20: Q&A Session
Q&A Session In the USA: 1-877-407-8291 Outside the USA: 1-201-689-8345
Slide 21: Thank You
ZN 3D SYSTEMS Thank You
Slide 22: Appendix
ZN 3D SYSTEMS Appendix
Slide 23: GAAP to Non-GAAP Reconciliation – Q1
GAAP to Non-GAAP Reconciliation – Q1 Quarter Ended March 31, 2017 Quarter Ended March 31, 2016 Amortization, Amortization, Stock-Based Legal and Stock-Based Legal and Compensatio Acquisition- Portfolio Compensatio Acquisition- Portfolio (in thousands, except per share amounts) GAAP n & Other Related
Slide 24: GAAP to Non-GAAP Reconciliation – Guidance
GAAP to Non-GAAP Reconciliation – Guidance Full Year Ended December 31, 2017 (in millions, except per share amounts) Low High Revenue $ 643 $ 684 GAAP Earnings per Share $ 0.02 $ 0.06 Estimated adjustments to arrive at non-GAAP EPS: Amortization 0.30 0.30 Stock Based Compensation 0.14 0.14 Acquisiti
Slide 25: GAAP to Non-GAAP Reconciliation – Q2 2016
GAAP to Non-GAAP Reconciliation – Q2 2016 Quarter Ended June 30, 2016 Amortization, Stock- Based Compensation Legal and Acquisition- Portfolio (in thousands, except per share amounts) GAAP & Other Related Restructuring Non-GAAP Revenue $ 158,111 $ — $ — $ — $ 158,111 Cost of sales 77,700 (80) — — 77
Slide 26: GAAP to Non-GAAP Reconciliation – Q3 2016
GAAP to Non-GAAP Reconciliation – Q3 2016 Quarter Ended September 30, 2016 Amortization, Stock- Based Compensation Legal and Acquisition- Portfolio (in thousands, except per share amounts) GAAP & Other Related Restructuring Non-GAAP Revenue $ 156,362 $ — $ — $ — $ 156,362 Cost of sales 87,425 (83) —
Slide 27: Reconciliation of GAAP to Non-GAAP – Q4 2016
Reconciliation of GAAP to Non-GAAP – Q4 2016 Quarter Ended December 31, 2016 Amortization, Stock-Based Legal and Compensation & Acquisition- Portfolio C (in thousands, except per share amounts) GAAP Other Related Restructuring Non-GAAP GAAP Revenue $ 165,937 $ — $ — $ — $ 165,937 $ 183,363 $ Cost of
Slide 28: Thank You
ZN 3D SYSTEMS Thank You