3D Systems Corporation
Conference Call & Webcast
First-Quarter 2006 Results
May 4, 2006
®
NASDAQ: TDSC
www.3dsystems.com
Transform Your Products
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Participants
 Chanda Hughes
Coordinator, Investor Relations
 Abe N. Reichental
President & Chief Executive Officer
 Fred R. Jones
Vice President & Chief Financial Officer
 Robert M. Grace, Jr.
Vice President, General Counsel & Secretary
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Forward-Looking Statements
Certain statements made in this release 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. Forwardlooking statements may involve known and unknown risks, uncertainties
and other factors that may cause the actual results, performance or
achievements of the company to be materially different from historical
results or from any future results expressed or implied by such forwardlooking statements. In addition to statements which explicitly describe
such risks and uncertainties, readers are urged to consider statements in
the future tenses or that include the terms “believes,” “belief,” “expects,”
“intends,” “anticipates” or “plans” to be uncertain and forward-looking.
Forward-looking statements may include comments as to the company’s
beliefs and expectations as to future events and trends affecting its
business. Forward-looking statements are based upon management’s
current expectations concerning future events and trends and are
necessarily subject to uncertainties, many of which are outside the control
of the company. The factors stated under the heading “Forward-Looking
Statements” and “Cautionary Statements and Risk Factors” in
management’s discussion and analysis of results of operations and financial
condition, which appear in the company’s periodic filings with the Securities
and Exchange Commission, as well as other factors, could cause actual
results to differ materially from those reflected or predicted in forwardlooking statements.
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Operating Highlights
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Operating Highlights
 Record revenue of $33.5 Million--up 10%
 In constant U.S. dollars up 14.5%
 System revenue up 21%
 Material revenue up 18%
 Service revenue down 9%
 FX accounted for half the service decline
 Planned reductions of legacy upgrade packages
 Foregone T&M service revenue
 Component reliability resulting in lower volume of replacements
 Gross profit up 8%
 Gross margin down one percentage point
 Growth pains from increased system placements
 Duplicate overhead costs
 Grand Junction and Valencia closure
 Marly, Switzerland start-up
 Rock Hill start up
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Operating Highlights
 Operating expenses
 Restructuring and relocation $1.6 MM
 Other strategic initiatives
 European shared service center
 Outsourcing of logistics to UPS
 Oracle-based ERP implementation
 FAS 123R effect $0.2 MM
 Volume-related selling expenses up $0.4 MM
 R&D investments up $0.6 MM
 Growth pains from increased systems’ volume
 Bottom line
 Strategic and special initiatives negatively affected profitability
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Financial Review
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Quarterly Revenue Trends
($ Millions)
$ 45
40
35
30
25
20
15
10
5
0
1st Qtr
2nd Qtr
2003
2004
3rd Qtr
2005
4th Qtr
2006
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Q1 Revenue Component Changes
($ Millions)
40,000
$40
$5.3
35,000
$35
$30
30,000
$1.2
$30.4
$25
25,000
($1.3)
$33.5
($2.1)
20,000
$20
15,000
$15
10,000
$10
$5
5,000
Q2 2004
Q1 2005
Volume Core Products
Volume
Core
Products
Price / Mix
Price/Mix
Volume New Products
Volume
New
Products
FX Effects
FX Effects
Q2 2005
Q1 2006
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New Product Revenue
2003 – 2006
($ millions)
$50
$45
Revenue ($ millions)
$40
$35
$30
$25
$20
$15
Revenue from
Legacy
Products
$10
Revenue From
New Products
$5
$0
Q3
Q4
2003
®
Q1
Q2
Q3
2004
Q4
Q1
Q2
Q3
2005
Q4
Q1
2006
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Q1 2006 Global Revenue
($ Millions)
By Region
By Product Class
$33.5
$ 35
$30.4
30
Asia Pacific
$30.4
12%
28%
17%
25
Services
33%
33%
20
Europe
37%
10
U.S.
47%
35%
Materials
15
5
$33.5
55%
Systems &
Other
33%
33%
37%
0
2005
2006
2005
2006
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Q1 Gross Profit Margin
($ Millions)
$
Products $
Services
Total
$
2006
% Revenue
11.7
48%
2.3
25%
14.0
42%
$
$
$
2005
% Revenue
Yr-Yr
%
9.9
49%
18%
3.1
30%
(24%)
13.0
43%
8%
Products
 Responses to growth challenges
 Benefits of material promotional efforts in prior periods
Services
 Component reliability up; lower volume of replacements
 Absence of upgrades on older, legacy models
 Responses to growth challenges--revenue & costs
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1Q06 Operating Costs
$ Millions
16
$14.7
14
$1.6
$11.4
12
10
50%
43.7%
37.4%
45%
4.9%
40%
$3.3
$2.7
35%
30%
8
8.3%
8.8%
6.9%
9.7%
25%
20%
6
4
As % of Revenue
$8.7
$9.8
29.1%
15%
34.2%
28.6%
29.1%
1Q05
1Q06
10%
2
5%
0
0%
1Q05
Severance & Restructuring
®
1Q06
R&D
SG & A
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Operating Income
($ Millions)
First Quarter
2006
Gross Profit
Differences
2005
$ 14.0
$ 13.0
SG & A
9.8
R&D
3.3
0.6 incr'd R & D
Severance & Restr.
1.6
1.6 relocation
$ 0.2 FAS 123R
Total Operating Exp. $ 14.7
Operating Income (Loss)
$ (0.6)
8.9
2.7
$ 11.4
$ 2.4
$
1.6
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Net Income (Loss)
($ Millions, except per share amounts)
Net income available (loss) to common
Weighted avg. # of basic shares
Basic EPS
Earnings pick-up from
convertible securities for
diluted EPS calculation
Weighted avg. # of diluted shares
Diluted EPS
First Quarter
2006
2005
$ (1.2)
$
0.8
15.3
($0.08)
14.6
$0.05
-
-
15.3
15.8
$ (0.08)
$ 0.05
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Influence of Special Items on Net
Income (Loss) Available to Common
Stockholders
($ 000's)
As Reported
1Q 2006
1Q 2005
Pretax Income
$
Tax Provision
Net Income
$
®
(833)
$
$
(1,244)
(0.08)
(0.08)
1,195
$ (1,638)
$
783
$ (1,638)
0.05
0.05
$
(0.11)
(0.11)
(179)
-
$
15,303
15,303
$
$
(179)
-
-
14,575
15,813
$
$
$
-
$ (1,638)
412
15,303
15,303
$
$
1,289
94
411
Basic # Shares
Diluted # Shares
Basic EPS
Diluted EPS
$
76
Pfd Stk Dividend
Net Avail. To Com.
(757)
Impact of Special Items
HQ Relo
FAS 123R
(179)
15,303
15,303
$
$
(0.01)
(0.01)
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Cash Flow
($ Millions)
First Quarter
2006
2005
Net cash provided by operations
$3.0
$0.3
Cash used in investing activities
(2.2)
(1.1)
Cash provided by financing activities
1.6
0.8
FX translation impact (loss) on cash
(0.1)
0.3
2.3
0.2
24.1
26.3
$26.4
$26.5
Net increase in cash
Beginning Cash
Ending cash
Depreciation & amortization
(incl. FAS 123R)
Property & equipment expenditures
$1.7
$1.5
2.2
0.8
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Cash Provided by
Operating Activities
($ millions)
5
4
$3.8
($ millions)
$3.0
$2.8
3
$1.8
2
$1.2
1
$0.1
$0.1
$0.3
0
($0.8)
($0.9)
(1)
(2)
($2.5)
(3)
(4)
($3.7)
(5)
1Q 2003
1Q 2004
1Q 2005
1Q 2006
Cash from operating activities before changes in operating accounts
Changes in operating accounts
Net cash provided by operating activities
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Business Highlights
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3-D Printing Update
 Grew resale channel
to 85 locations
 Introduced $14,900
desk-top 3-D Printer
 Launched InVision™
Dental Pro
 Introduced new LD
colors
 Planning to launch
additional desktop
3-D Printers
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Rapid Manufacturing Update




Over 60% of systems shipped
Expanding tooling and casting applications
New materials fueling growth
New capabilities open new doors
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Rapid Manufacturing:
Larger Parts
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Rapid Manufacturing:
Accurate Parts
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Rapid Manufacturing:
Higher Throughput
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Rapid Manufacturing:
More Materials, Better Utilization
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Rapid Manufacturing:
Accura® 60
Simulate polycarbonate: A clear, tough plastic

Produce parts that mimic polycarbonate
 Durable, stiff and tough parts
 High clarity allows view of internal features

Faster build speed
 Increased system utilization

Easy cleaning and finishing
 Low viscosity

Ideal for complex casting applications
Dive mask faceplate design is patented & courtesy of Kirby Morgan Dive Systems & Scicon Technologies
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Rapid Manufacturing:
New Software Tools

Viper™ Pro
 3DView™
 3DManage™
 3DPrint™

Viper™ HA
 ShellWizard™
3DPrint
- Hearing Aid Automation Software
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Rapid Manufacturing:
SLS® Automation Tools
 Smart Start (new) starts purging and
heating at same time to start build
faster. Maximum benefit with 3D
nitrogen generator.
Other software features:
 Self-learning build-time estimator
 Smart Feed
 Advanced .STL file cutting
 Opti-Scale™ software
 RealMonitor™ module
 SinterScan™ module
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Rapid Manufacturing:
Symyx Collaboration
• Steady stream of new
manufacturing-capable
materials
 Breakthrough discoveries and
commercial successes for broad
range of next-generation
materials
 Drive new technology
development to meet customer
needs and further differentiate
ourselves from competition
 Lead to significant industry
transformation
• 3D Systems has research
exclusivity and IP rights to
program inventions
• 3D Systems funds research and
pays royalties upon commercial
success
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Business Highlights:
Relocation


Interim Rock Hill, South Carolina, facility in full operation
Departmental transition ahead of plan
 Customer service
 Call center
 Supply chain
 Finance
Operating from Rock Hill
 HR
 IT
 Engineering



Key personnel on board
 Marketing
Signed lease
Commenced construction
Working on disposition of CO and CA facilities
 Listed CO and CA facilities




 Closed CO facility April 28
InVision™ material production moved to Marly, Switzerland
Outsourcing all spare parts and material logistics to UPS
Lowered ’06 cost estimates down to $6.4-8.1 MM from $7.0-8.7 MM
Plan to open new facility September 2006
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Business Highlights:
ERP Implementation
 Project Scope
 Oracle-based ERP system
 $4 million investment
 Successful U.S. go-live:
May 1, 2006
 Planned Europe/Asia-Pacific
go-live: June 1, 2006
 Expected Benefits
 Focused on customer
service and daily success
 Enhanced automation
 Effective controls
 Better financial reports and
analysis
Powered By:
®
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Business Highlights:
Supply Chain
 Same-day service until 11:00PM
(Eastern Time)
 Spare parts
 Materials
 3-D Printers
 Depot service
 Louisville… now
 Köln… June 1st
Synchronized By:
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Outlook
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Key Initiatives
 Completing planned HQ consolidation
 Correcting “growth pains” resource constraints
 Completing planned UPS transition in Europe
 Restructuring European and Japanese sales organization
 Commercializing additional desktop 3-D Printers
 Growing 3-D Printer reseller channel globally
 Enhancing service productivity and profitability
 Completing Oracle®-based ERP system implementation
 Pruning portfolio and retiring older legacy systems
 Improving operations and customer experience
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Bottom Line

Leading industry position and technology

Energized, experienced management team

Clear priorities… demonstrated execution

Stronger financial base and flexibility

Favorable results from recent strategic initiatives
 Outsourcing of assembly activities
 Reshaping and expanding sales organization
 Introducing significant new products

Healthy pipeline of opportunities

Improving operating results and cash flow

Significant growth programs
 3-D Printing
 Rapid Manufacturing

Measurable value, customers and stockholders
Transitioning from Restructuring to Growth
®
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Question & 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.
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Thank you
for participating
Replay of this webcast is available from the Investor
Relations’ section of 3D Systems’ website:
www.3DSystems.com
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3D Systems Celebrates 20th
Anniversary
SLA® 1
Spring 2006 Marks 20th
Anniversary of 3D Systems
– 3D Systems Pioneered
Stereolithography® Technology and
Launched the Entire Rapid
Prototyping Industry –
Viper™ Pro
3D Systems’ rich history began in 1986 when
Chuck Hull, founder and first inventor,
discovered that certain acrylate and epoxy
resins cured and hardened when exposed to
UV light and could be imaged in layers and
stacked on top of each other to form solid
objects.
After several attempts, many discoveries and
additional inventions, the first solid imaging
machine, the SLA® 1 system, was launched.
20 years and numerous machines later,
Stereolithography® has advanced to what it
is today with latest introductions of the SLA®
5000/7000 and Viper™ series.
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Relocation Progression
3D Systems Breaks
Ground February 27, 2006
on New Global
Headquarters Facility in
Rock Hill, South Carolina
- Facility Opening Scheduled
for September 2006 -
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3D Systems Holds Users’ Group
Meeting
3D Systems Holds Annual
Users’ Group Conference
April 30 - May 4, 2006 in
Tucson, Arizona
– Users Gather at the Hilton, El
Conquistador to learn about
3D Systems’ Rapid
Manufacturing Solutions –
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Royal College of Art Project
Royal College of Art Project
- Students use 3D Systems’
Rapid Prototyping and
Manufacturing Technology to
Create Concepts, Design in 3D
and Produce Final Products -
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3D Systems’ Chuck Hull
Receives Honorary Ph.D.
Chuck Hull, 3D Systems’ VicePresident and Chief Technology
Officer, Receives Honorary Ph.D.
– Loughborough University Awards
Chuck Hull for his Pioneering
Engineering Research, in particular
the Development of the
Stereolithography Process -
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