3D Systems Corporation (NYSE:DDD)
Annual Investor and Analyst Day Call
June 17, 2013 10:00 ET
Stacey Witten - Investor Relations Director
Avi Reichental - Chief Executive Officer
Michele Marchesan - Vice President and General Manager, 3D Printing
Ping Fu - Chief Strategy Officer
Andy Christensen - Chief Executive Officer, Medical Modeling
Cathy Lewis - Chief Marketing Officer
Damon Gregoire - Chief Financial Officer
Stacey Witten - Investor Relations Director
Good morning everyone, and welcome to 3D Systems’ Annual Analyst and Investor Day. We appreciate you taking the time to join us today. Before we begin the discussion, I would like to remind everyone that this presentation is subject to forward-looking statement displayed on the slide and subject to Safe Harbor provisions provided within the Private Securities Litigation Reform Act of 1995. I would like to begin today with an overview of today’s agenda.
First up this morning is our CEO, Avi Reichental. He will give an overview of the company. Next, Michele Marchesan, Vice President and General Manager, 3D Printing will discuss the accelerated adoption of 3D printers, and then Ping Fu, our Chief Strategy Officer will talk about how we are reinventing the engineer’s desktops. Following that, our guest speaker and valued customer, Andy Christensen, CEO of Medical Modeling will discuss the impact of 3D Systems solutions on patient’s lives. Then Cathy Lewis, our Chief Marketing Officer will provide an update on our consumer initiatives. Damon Gregoire, our CFO will discuss our growth and expectations and then Avi will wrap up our presentation with the discussion over manufacturing the future. We will then conclude with a question-and-answer session.
We expect that formal part of our Investor Day to conclude at noon and following that we encourage you to spend some time in the display area outside this room to experience the sample of our latest content-to-print solutions, including our recently added haptic devices and Geomagic Solutions software, and a preview of our ready-to-be-launched Bespoke Hand and Wrist Braces solutions. We also invite you all to visit our nearest city creative centers that we recently opened just around the corner from the hotel at the local (indiscernible) Community Hub. Due to the large attendance today and the size of our office, we ask that you please visit at the time designated on your name badge. We will have a group gather out here and just walk over it’s about a block away every half hour. At this time, I would like to turn presentation over to our CEO, Avi Reichental.
Avi Reichental - Chief Executive Officer
Thank you, Stacey. Good morning everybody, and welcome to our Annual Investor Day. I wanted to acknowledge some of our board members that are here with us today and the senior management team and basically say that on behalf of our board, our entire team worldwide, I would like to express my business gratitude to all of you who are being on the journey with us.
So, we are in the midst of an incredible growth period that is benefiting substantially from our innovative strategy, from our focused growth initiatives, and from the convergence of exponential technologies that are enabling us for the first time to do things that we could not have done just on our own. That means that we are innovating faster, extending our solutions tool back, but quicker, and creating a differentiated end-to-end platform ecosystem and experience. And I want to repeat that again, for us, it’s not about being a device company at this point in time or a materials company. What sets us apart and what allows us to innovate and disrupt in the way that we are doing it is about our end-to-end platform. It’s about the ecosystem for creating in the workflows all the way from content-to-print and it’s about the differentiated customer experience that comes with it.
We believe that our unmatched portfolio, our first-mover advantage in key verticals like patient-specific medical devices, like advanced manufacturing, where we already have dozens of installations that produced millions of parts on an annual basis, our consumer of first-mover advantage not just in best-in-class devices, but in the whole platform and ecosystem that gamify and simplifies content creation and the enjoyment of content creation, our leading brands and our rapidly extending channel combined with our unparalleled technology and financial strengths provides us with greater flexibility to pursue the open end of growth opportunities that are available to us as we disrupt and transform the entire design-to-manufacturing work flow.
3D Printing, I believe is poised to change everything how we create, what we make and where we manufacture, we invented it, Chuck Hull invented it. We advanced it over the past couple of decades and we are democratizing it and here in now. We believe that our innovative business model combined with our focused and balanced growth initiative executed by our experienced management team positions us for significant value creation potential.
Our solutions replace or compliments traditional design-to-manufacturing alternatives and additionally as you can see on this slide rapid growth is forecasted for 3D content to print solutions driven by strong secular demand. We believe that our five growth pillars position us squarely at the heart of some $30 billion of 3D design-to-manufacture value chain opportunities, which we expect could allow us to outpace marketplace role for the foreseeable future.
And in the additional to that we benefit from several favorable trends. First, R&D spending remained strong due to compressed product life cycle and the competitive pressure that many of our users are under to constantly reduce their new product time to market and their overall innovation timeline. Furthermore, increased parts complexity and product complexity increased parts counts have also driven the adoption of 3D Printing technology that enable us manufacturing of complex geometries that are not possible with traditional manufacturing methods and delivers increased part complexity without increased costs. Our first-mover decisive effort to democratize access to 3D Printing through lower price 3D printers and simple to use creative apps and tools continued to push 3D Printing into new applications and marketplaces.
Added to this a more proactive sustainability profile we have reduced waste and energy consumption is also aiding adoption as companies are becoming increasingly more conscious and proactive about sustainability in their products. And you will see ample examples of this in some of the testimonies that we have today from customers. And if that’s not enough a recent engineering.com survey revealed that 66% of engineers do not yet use professional 3D printers regularly today meaning that even within the traditional design prototyping space there is still plenty of upside.
Many of you have heard me say these before. We live in exponential times and because we live in exponential times we benefit from the convergence of exponential technologies such as unlimited computing power in the cloud. This now allows us to process giant data files instantly, the kind of thing that we couldn’t even dream off a few years ago. The emergence of powerful and affordable sensors that allow us to digitize readily now at our finger tips, the emergence of very powerful and inexpensive robotic devices that in combination with sensors allow us to digitize affordably and reduce our own 3D printers cost of goods while adding functionality really following Moore’s Law of doubling up in performance, capability and speed and doubling down on costs. The growth in artificial intelligence, our adoption of gamification technology in all the apps and tools that we put together that when you place them all in combination enables us to deliver a new more powerful and more affordable manufacturing and consumer solution that were not possible a few years ago.
Since our last annual investor meeting our strategic growth initiatives expanded and their impact we believe is already transforming entire industry. We are taking significant steps to accelerate 3D printer adoption through new product, through ongoing channel extension with some really attractive channel partners coming into the mix. And for the continuous technology enhancements that are evident as you walked into this room and all the displays that we have outside and that I encourage you to really spend some time with.
We’re building and refining our Quickparts services globally and we’re growing our healthcare solutions portfolio with some new personalized medical device product in production like this wrist and brace that we will reveal a little bit later today to all of you. And is on track to be commercialized in the second half of this year and we’re continuing to build our consumer presence including the production of the second generation Cube and CubeX which was the best of CES 2013 that are supported by a growing menu of incredible apps that are redefining ease of use and creativity. And again I want to encourage you to spend sometime and see the most recent 3D Photo Book that we have outside the 3D sculpting capabilities, and the overall Cubify upfront – platform that is available outside.
Finally, through our most recent initiative to build an integrated 3D authoring solutions platform, we are beginning to take important significant steps to reinvent the engineer’s desktop environment which we will discuss later this morning as well. We continue to apply Moore’s Law and introduce substantially improved faster new products at lower price points. In fact over the past several years we brought the cost of our 3D printers down to $1300 with the Cube, while extending the middle range and the high end and creating increasingly more attractive price points and feature sets that are following Moore’s Law very nicely enabling the access of our systems to the living room, the classroom, the garage, the desktop, and the engineering space and manufacturing floor.
We expect this plan to accelerate, and we in fact said publicly on several occasions now, and I want to reinforce it again today that we expect this year 2013 to be our most exciting new product introduction year as ever in the history of the company, but we don’t stop at the device, the device is only precursor to the incredible portfolio of materials that we have. In fact, our extensive portfolio represents some 100 proprietary print materials including some of the best performing thermoplastics, digital and metal materials, as well as special surface biocompatible material, conformal structures, and leading castable materials that enable high value foundry investment casting in a way that nobody else can do today covering the broadest brands of design models, functional prototypes, and end parts.
Our print materials used through our purpose-built printers delivered the highest definition and most detailed snap-fit parts as well as high impact durable lightweight parts, and high temperature parts for the most demanding applications. They can also deliver very realistic clear parts, which is something that nobody else can do today. And of course, we are the only provider of full color printing with up to 1 million color combinations in single print. These materials constitute the consumable in our razors and blade model and provide very attractive contribution margins.
Quickparts is fast becoming a leading choice for quick-turn on-demand rapid manufacturing services and our best customer acquisition portal from cross-selling and up-selling. For a series of well-timed and executed acquisitions of service providers coupled with significant technology investments, we have emerged as a leading provider of the widest range of additive and traditional capabilities with growing revenues and extending margins. We firmly believe that our on-demand part services gives us unfiltered and direct access to end users providing them with the latest ideation to production solutions, which in turn provides us with access to shape our customers’ brand expectations.
In a fast and fiercely competitive global economy, we have compressed new product development cycles, shorter product lifespan and stretched resources in many large and small companies. As the new normal, we are positioning ourselves as the convenient one-stop-shop for all of our customers’ ideation to production needs. We have integrated intuitive, powerful and productive design to manufacturing tools, that we believe are certain to transform the entire ideation to production workflow. And our culture shapes and informs our behaviors, guides our execution, and reflects our organizational identity. Ours is shaped by the collective wisdom of our teammates and grounded by our belief that we succeed when we make good for our customers, our stockholders, and each other.
Our ever expanding global coverage and growing channels are powered by dedicated professionals and dealers and served via a growing number of local facilities around the world. In fact, we have nearly 30 locations serving well over 500 channel partners. Our local presence delivers quality service and supports all of the key marketplaces that we serve with local professional intimacy. I am very proud, I am particularly proud of our senior management team. Ours is a diverse group of entrepreneurs, many serial entrepreneurs representing many different nationalities and personalities bringing together a rich range of experiences and perspectives to form a powerful, global, dynamic, and experienced management team. We believe that our diversity is one of our competitive advantages.
So, I wanted to close and say that for the past several years, we are increasingly moving this technology from the prototype lab on to the manufacturing floor and our growing installed base is the testament to our success and to the resulting recurring revenue growth and margin expansion that we enjoy. With that, I would like to introduce a long-time colleague, friend and leader in the company, Michele Marchesan, our Vice President and General Manager of 3D Printers to discuss some of the favorable sectors that are deriving accelerated adoption for our printers. Michele?
Michele Marchesan - Vice President and General Manager, 3D Printing
Thanks, Avi. Good morning everybody. Let me turn right to the point. When we say that we believe the numbers come from numbers, what I mean by that is that our continued and sustainable growth is driven by our unique sales channel. Our channels are managed by some 140 sales and sales support professionals that are obviously over 500 channel partners. We are benefiting enormously from our expanding Quickparts online and underground sales presence which is by far our most powerful customer acquisition portal and from our rapidly expanding consumer and retail presence which is increasing marketplace awareness and adoption of our entire content-to-print portfolio.
Learning from our experienced customers’ purchase and choices over time, we continued to invest and expanded our technology portfolio that with seven unique print engines is the most extensive and comprehensive portfolio available from a single source. And with the right toolbox, we can deliver unparalleled printability of thermoplastic and digital materials, the only full color capability and as pending close of the acquisition of Phenix Systems, the only selective metal sintering system that can fruit chemically fuel, full events, metal and ceramic parts from very fine powders with the granularity of 6 to 9 microns creating an unmatched portfolio with differentiated performance at every price points. Within our print engines, we constantly develop new expensive print materials, formulating capabilities that are really aggregates to over 100 print materials. We continue to enhance this portfolio with a steady stream of the materials like our soon-to-be-commercialized VisiJet M3 material, a game changer that delivers injection model plastic quality.
3D Systems is a recognized printability leader in overall product performance, quality, accuracy, affordability, and sustainability. That is evidenced by the constant competitive comparisons to our print quality by other 3D printing and traditional manufacturing competitors alike. Our high-performance precision printability is the reason why many of the leading aerospace patient-specific medical device, metal casting, and jewelry manufacturers continued to deploy and integrate our systems into their manufacturing operations underscoring the depth and the breadth of our multiple print engines performance before the session utility and scalability. To clarify, for us printability means part of accuracy of print and function, print quality of product data definition as sharpness and was weakness and print cost base on the productivity and total cost of ownership.
Our extensive portfolio of print materials includes high-performance materials from medical, aerospace, and casting applications covering the broadest range of design models, functional prototypes, and realigning used parts. Our print materials used to our (indiscernible) printers delivered the highest definition and most details not Quickparts as well as high-impact durable, lightweight parts, and high temperature parts for the landing aerospace and automotive applications. Our extended range of new print materials cover the widest array of customers’ applications including high-impact durable plastic for functional testing, cast-friendly wax for rapid-foundry production, materials with injection molded like properties, and specialized material for additional production of jewelry, dental prosthesis, dental models, and medical implants. Our professional grade printers are capable of high throughput for mass customization as well as the mass manufacturing of highly complex parts. Our manufacturing systems and materials exceed the performance of traditional manufacturing methods and deliver consistently superior accuracy and resolution.
Our professional printers are capable of printing to a full size of a car dashboard while preserving the final speech details not observed by a naked eye without the same print. And as Avi mentioned earlier, Moore’s Law applies. In fact, our newest 3D printers nearly twice as fast as the models they replaced, and we expect to continue to increase the productivity of our new 3D printers. Our professional grade printers economically built parts with outstanding surface smoothness, future resolution as definition and tolerances, that dream of those of CNC machine parts. These production grade printers rapidly manufacture high-definition, durable plastics parts from the broadest range of available materials.
Our advanced manufacturing systems are equipped for automated push button data processing of hundreds of parts that high. These production printers are ideal for the rapid manufacturing of aerospace parts, automotive parts, and medical parts, including orthodontics, implants their guides, dental restorations, hearing aid sales and ear models. We developed and deliver the broadest range of 3D printers from $1,300 home printers to $950,000 professional printers expanding our use of cases substantially. Customer needs and budgets arrive greatly and part of our strategy is to democratize success at all price and performance points. We believe that we must continue to deliver to our customers’ best-in-class printers and solutions to address all their design to manufacturing needs.
We believe that advanced manufacturing applications will drive growth in the near-term and that we will benefit from this trend, because our vast array of production grade systems that can bring comparable thermoplastics and metal parts with accuracy, resolution, functionality, size and scalability the reveals traditional methods. We believe that cost saving from reduced machining operation, compressed lead times, and lower power cards coupled with enhanced design for manufacturing are amongst some of the key drivers to accelerate adoption. We are working with several leading aerospace companies on specific manufacturing projects, and we have been selected by the Department of Defense to work with the aircraft manufacturers to bring the S35 3D printed parts to production. As we have mentioned that we are the only provider of multi-color 3D printers up to million colors on the single part.
Now, I would like to turn the presentation over to Ping Fu, Chief Strategy Officer to discuss how 3D printing authoring solutions are re-inventing the engineer’s desktop.
Ping Fu - Chief Strategy Officer
Thank you, Michele. Over the past six months we invested over $100 million to assemble some of the leading 3D authoring solutions available today, including volumetric CAD for feedback hectic devices and a complete scan-to-print and the inspection tool box reached the goal to re-inventing engineering desktop. Our aim is to deliver an integrated design to manufacturing platform – our aim is to develop and deliver an integrated design to manufacturing platform that’s simple, intuitive, powerful and productive.
We expect engineers and designers could reduce complex design operations by a factor of 10. Concurrently we – sorry concurrently we moved to integrate our Alibre Rapidform Geomagic and Sensible products on a single brand called Geomagic Solutions. And we launched several new products, starts with our volumetric CAD engine three form, you see here, is a touch-enabled organic design software that provides powerful flexible industrial design, robust volumetric-based modeling, complete design freedom, combined with manufacture parody. The package is to design 3D print, 3D printing anywhere and it is complexity free. We launched a design package called Geomagic Design, which has these three different levels. Geometric Design is a powerful mechanical design to us. Design X provides the most comprehensive and the fastest path from 3D capture to 3D CAD. Design DIRECT is the ultimate design tools for manufacturing and analysis available today. What’s going on with that? Geomagic Verify which is the safe and first article inspection tools for designers. And Geomagic Control is the most powerful metrology automation package for enhanced productivity and automated reporting.
So, let me repeat the Geomagic Verify is the first article inspection tool and Geomagic Control is the factory automation and metrology packages. As part of our strategy to invent engineering desktop, we see a greater opportunity to become connectivities platform and spend us which can all capture input devices and the manufacturing systems. Towards that end, we believe that we could deliver and develop a host of interoperable connectivity platform that will connect your desktop, mobile devices, cloud computing, and manufacturing devices for ultimate productivity and fidelity.
Finally, I also like to leave you with a picture of how we re-imagine engineering desktop packed with (indiscernible) designing tools that we readily manufacture on powerful desktop printer, the ability to go seamlessly from this device and back using our affordable desktop digitizer with a ubiquitous connectivity and interoperability throughout. It is now my pleasure to introduce an industry pioneer and leader, Andy Christensen, CEO of Medical Modeling to share how 3D Systems product used by ships company impacts patient’s lives. Andy?
Andy Christensen - Chief Executive Officer, Medical Modeling
Good morning everyone. Just a quick changeover here.
Avi Reichental - Chief Executive Officer
While Andy is rewiring himself, let me say a few things about Andy Christensen. Andy is a pioneer and a visionary in Medical Modeling. He has been in business for over a decade and a half. He saw the opportunities of additive fabrication in patient-specific tactile modeling and implanting years ahead of everybody else. And he is really a power user of all of our technologies in that field and a great entrepreneur in his own right.
Andy Christensen - Chief Executive Officer, Medical Modeling
Thanks Avi. I appreciate it. Thank you. It’s a pleasure to be here this morning. Coming out from a little bit of a different perspective, but me as a user and as a customer of 3D Systems, I appreciate Avi and the group having me today to share our experience.
I come from a company in Golden, Colorado called Medical Modeling. I am the President of the company, and we have been at this for roughly 15 years using additive manufacturing from much earlier days obviously to now. So, first today, I would share a little bit about our background as a company, and then how the tools, some of the tools that you have seen and many of the tools that you will see out in the hall area, are not only the tools for making the parts physically producing the parts, but the tools that we used to actually design and facilitate the surgical planning and other things that we do that have all now come over the years many of the tools that we view is that come under the umbrella through these systems. So, I think it’s an interesting convergence. I’ll talk about what we do and how it impacts patients which I think to us is what drives us to do more and do better is how our technology and using the technology that you see here is impacting people around the world and I will wrap up.
Many of the types of things that we do, we have a basis as a company doing a lot of head and neck surgeries over the course of time we’ve done much work in facial reconstruction and cranial reconstruction for cases from children that are three days old to patients needing much more severe with cancer and other things requiring major reconstruction. Many faces like this on the slide you would see examples of stereo lithography technology as well as 3D Printing now called color jet modeling, correct and in full color.
So, as is a company, our new vision today I mean which we’ve just – we just waked, but improving lives one layer to time we are very focused, we are very focused on people who are on patients around the world, our company is based in Colorado but we service people many in the U.S. and all over the world because were somewhere unique in what we do. We are privately held. We’ve been focused in medical almost the entire time of our existence and it became clear early on to me that medical was an area that we really could find a unique spot and still we continue to find the unique spot.
And our core competencies really in dealing with medical image data, so the input for lot of what we do comes from CT scan or an MRI. Taking that data and making usable for additive manufacturing and printing out a model takes some software steps. And so we’ve become very advanced users of the tools available today for kind taking the software and extracting out of the CT scan or the MRI usable three-dimensional information that can guide treatment. So, we do that treatment is guided now by a process we call Virtual Surgical Planning and I will get into in a minute.
And then we are a user of additive manufacturing both in kind of resin and composite materials as well as metals in the work that we do and we think that we are pretty good at the navigation of things that are specifically the medical devices many of the products that we make are considered medical devices by the FDA and as such we are under there preview as well as we are self under certified under ISO as well. And we develop our own products as well as products many of the leading companies in the medical device field.
This group would like numbers. The left side of the graph will be interesting too, we are private I don’t share numbers too often offer but to give an idea of the growth pattern that were in these are patients that we help per year and like I have said we got history all the way back into 90s. But I think we are into exponential to borrow from Avi and exponential growth period where we are finding more and more application of the convergence of these technologies that would help, that would enable treatment planning on an individual patient’s data set as well as off the shelf solutions and much of what’s going on here.
This is all, these are all custom solutions that illustrated here, so we are in a very high growth phase as a company finding new applications. And looking what the global world looks like I mean just for if you look at the biggest markets in medical device field which is roughly $35 billion or $40 billion field. And hips and knees are really the two key areas for where the largest number of implants are done. You look at the numbers, one there is fairly large field and two it’s growing a lot. So, just the U.S. market is growing substantially over the next few years. It has a lot of opportunity.
I can mention we do a lot of work in additive metals as well. So, some of that patient specific, some of that off the shelf but illustrating devices here from head and neck reconstruction to spine to hip and we also do some work for knee and extremities. So, some interesting work there, using additive metals for titanium alloy. So, I want to talk about using 3D System tools and solutions we – I’m just as you little bit, you can probably my slides you’ll see parts, physical parts, but they are really about the tools we use. So, stereo lithography has been the earliest tool. We also use the color jet modeling process, the former Z Corporation process which we have used since roughly 1998. So, it was interesting to talk to – I was just wondering about how I don’t know how many years ago we started using some of these tools and the same for the sensible free form project which is part of Geomagic solutions toolset, which we’ve used from the early 2000 to this point.
And then under the Geomagic side we use these tools. These really were game changing tools for us in this field allowing us to interact with the data and very personalized way and in a very kind of free form way allowing us to manipulate things like you see in the bottom of a patient with the large defect in the skull and being able to design perfectly that implant. And many of the things I’ll show are touched by those technologies. So, we have a long history in doing this work and back when we started things were little different. We used printers that were a little slower than today’s printers and a little more limited in materials. And in the old days the input data as well was a challenge and CT scans were done and our first cases were done by taking reel to reel nine track tapes and extracting would take an hour to do extract the information off of the tape to be able to do something. Everything took longer and but we found applications early on that kind of propelled us into what we do today.
So, a case like this where we would take a CT scan and as a service provider physical model of that patient’s jawbone or hip or whatever back to be used for planning as they plan taking out what is the large tumor on the left side there and putting in a reconstruction plate that likely would be back with bone or whatever. But by just contouring that plate before surgery on a model they can save 30 to 45 minutes in the operating room. And operating room time as you might know is every expensive and so that time savings turned into what propelled us from kind of the earliest stages to where we are now and continuing to find applications.
RenShape materials and other material we’ve used for a long time our company Huntsman that was purchased maybe two years ago or so by 3D Systems make some very unique materials and obviously full color training which isn’t available anywhere else like this. And so we use it for many things that are monochrome but as well for full color. And so here on the left showing a patient actually with the 3-dimensional photograph before and after surgery. And if you look at the chin of that patient you see a little bit of movement and on the right of the prototypes.
So, what do we – what we do and what drives us really impacting lives is a lot of what drives us and keeps us interested. In our history some of the most complex cases that we have had the opportunity to work on are in joint twins. And as a company we’ve donated most of the work we done in these cases but we have been able to help I think today 26 that’s have been joint twins in surgical planning for these cases. And there are good use of I will show these two boys and these two boys are kind of close to my heart (indiscernible) who are from Egypt and they were separated in roughly 2003. We made many models for this case and many of the models really you would ask the surgeons and people on TV would ask the surgeon what were the most important tools and the models the physical models were the most important tool they said they have for planning these cases.
And you can imagine on the left the model showing the two kids joined at the head and a bunch of vasculature in the middle, very complex we submitted and we are proud to win a prize at the North American user group Meeting many years ago for that work. And other things that lead into I don’t want to bore you with too much of this, but we used much of the technology that you will see out on the – outside the room here including the intelligent modeling process. And on the right you are actually seeing what was about a five and a half foot long model of these kids bodies that was used in stimulation of every thing from the creation of the operating bed to how there we’re going to have IV lines coming out which way and the other and very hands on kind of modeling work. And then in surgery and I happen to have the pleasure of being in this operation for 35 hours of surgery back in 2003 and to see the models used was very exciting and obviously very rewarding outcome those kids today they must be 13 or there are above and both doing well in Egypt.
Personalized design is the next stage we worked on. You’ve seen some of this type of word before, but taking a patient that has a large hole in the head and creating a perfectly fitting implant. And I think it’s the perfectly fitting part that really sets apart some of these tools. So, if you’re using the touch-enabled tools that are now under Geomagic’s platform we’re able to create and design an implant that will fit that patient’s defect perfectly. The implant will then be created using more traditional techniques guided in a digital way but created in an implantable polymer.
And then the next slide may have some bloody images and I will warn you slightly in advance maybe two more slides. And then it will be to put in and the goal here is to get the patient from what is on the top, so you can see a major defect and this happens more than you think. This happens many thousands of times a year custom implants like this are put into patient in the U.S. alone. And it really it’s dangerous one because the brain is uncovered, but two is obviously major effect on this person’s life. And so we are able with these technologies to create something you give that person back a more normal appearance. Another good application has come in knee replacement, so for total knee replacement and some tens of thousands of these cases are done using additively manufactured guides today and these cases involve taking on the top right it’s kind of a total knee, so you wouldn’t necessarily know that the femur kind of on the top and the tibia.
And using guidance, we are able to personalize the fit of an off-the-shelf component and that personalized fit is what gives this technology kind of a good foothold here. You don’t have to customize the implant, which you can customize the tools and make a disposable tool that will go into surgery and only fit your knee and only fit at the very specific way and so guides that look like this that are created with stereolithography and then integrated as needed with other metallic components for areas that need to be cutting against, so the metallic components here where you would have a saw blade inserted.
So, then another application area, this is a young man that presented it, not a bad looking guy, but he was concerned about his chin. He had kind of a small lower jaw and presented to his surgeon wanting to know what options exist to change his appearance as well as functional. He could have potential functional issues with eating and other things and you see patients like that that have sleep apnea sometimes. They have a small or generally need to expand that to give the airway room to breathe. And so in this case, we planned in the computer where we are going to move the jawbone, so the arrows kind of indicate a cut and they are going to cut and move part of the mandible forward. And to do that, we will digitally design that and then we will digitally design a piece of plastic. So, the red part will become a tool that will be used in surgery to actually guide that movement and use the teeth, you got the teeth or a great guiding tool, use the teeth to guide the movement of the other jaw. And in surgery that piece of plastic will be put in place and then that jaw will be fixated and then when they are done and they pull it out, the patient will be where we have planned digitally before. So, here you kind of seem to be, again, you look at the chin, it made a decent difference for this guy, and I don’t know if you will be able to see that from our back, but it’s a big magnet on his picture. They brought back to his surgeon. So, he was obviously a very – he was a happy patient after the surgery.
And then I guess to kind of finish, a lot of what we do happen to be that last case last severe than many of them, but major cases of reconstruction following trauma or following cancer or other things, so this is a case where someone has a malignant lesion in the mandible, this is someone without having teeth. There is actually only one tooth you can see in the mandible there, but the plan is they are going to have to take out the whole area in green. So, we are planning now digitally. And the concept of the kind of thing I was thinking about the talk today and about the word democratization that I steal from Avi every once in a while, because I like the word, and I think what we are doing here is allowing kind of democratization of very advanced tools to surgeons. So, this plan you will see here, the cutting plane is in red and the green outline of the bone to be removed. That plan is done in a web meeting with a surgeon and that web meeting takes 15 minutes roughly, so 15 to 30 minutes. And in that time, the surgeon is planning with an engineer at our facility in Colorado who has access to a lot of software and a lot of hardware. So, we can allow – we are allowing kind of democratization of all of our tools to the surgeons and kind of giving them their own personal engineer in a way that they haven’t had before. Somebody that’s on, that knows, that speaks their language, they can help them plan the case.
So, they are going to remove the area in green and to put back the gold standard for the mandible for reconstructing is taking loan from the leg, the lower leg in the fibula bone, specifically and pulling that bone up. So, they are going to, in a virtual sense, figure out what piece of that long straight bone they are going to put in the mandible, and on the right, you see three different pieces in blue. Those three different pieces are then going to be taken out of the leg and put up into the mandible. So, we guide – this is some of the guide design here you are seeing using the touch-enabled tools to create guides to actually that these guides will be created by stereolithography and placed into the patient and used to guide the cuts, so that the green part exactly the green part comes down.
And then the three parts that we saw to reconstruct the mandible are then taken and re kind of linearized in a flat guide that will fit the fibula and like a miter box, we will end cutting those three pieces. So, the surgeon has the set of tools to guide those cuts to take that plan and then take it to the patient and then we make a series of models and guides and templates to take that plan to surgery. So, here is stereolithography model and a guide produced also using stereolithography with standard stainless steel instrumentation. And then used in surgery, sorry, didn’t give any warning on that, but used in surgery actually guide the saws and make very precise what is usually a very non-precise surgery. So, taking and applying digital tools to get precision in a way that they didn’t have before and reducing the learning curve. So, younger surgeons can do better surgery now because of the advanced tools that are out there to allow them to not have to do 500 cases to get it, to be experienced, but now they can get to that same level in the first 50 cases or something like that. So, one last thing I will show a video here, I think the audio will work as well the local case.
I have a slightly different takeaway message, but it’s pretty good. So, that surgery what happened there in the stage of a single surgery would have taken two or three surgeries if not for these tools both the planning tools as well as the additive manufacturing tools. So, it’s pretty amazing stuff. And we are pleased to be involved with many leading groups like that group at NYU Langone.
So, in summary, additive manufacturing and personalized surgery, which is obviously our field are really a good fit, have always been a good fit together, because of the one-off nature of personalized surgery. And there is I think continued growth and in many areas that really are, there is an explosion in the medical field for things to do with these technologies. So, the trick is just putting for us as a fairly small company putting our eggs in the basket that many areas that we think can grow. And I think 3D this is from my standpoint, 3D seems to be well poised in this space and many of the companies that we have used for vendors for many years are now under the umbrella of 3D Systems. So, I feel like there are a good – there is a lot of growth ahead in the medical space. So, I appreciate your time today and it’s been a pleasure to be here. So, I’d now like to turn the presentation back over to Avi who will introduce Cathy. So, I will turn it over to Cathy Lewis, the Chief Marketing Officer for 3D Systems, yes.
Cathy Lewis - Chief Marketing Officer
Okay. Well, first off, thanks Andy and Avi. I want to talk to you today about what we are doing with Cubify? We are expanding and scaling Cubify.com, our online 3D destination and marketplace, and more significantly, our powerful and secure online hosting, publishing, production, and secure platform that serves both individual consumers and major brands alike. And this is important because beyond our affordable friendly award winning 2/3D printer, we believe that democratization of creativity and personal manufacturing is a very high priority.
Cubify.com provides a unique ecosystem for all things 3D Printing with apps for gamified content creation. Cubify Invent software and download hosting, publishing and production services allowing creators, designers, and developers to monetize their creations and apps and empowering everyone else to create, to collaborate, and buy those creations. Through our consumer and professional cloud printing services, everyone can access the same manufacturing capabilities traditionally reserved only for the deep-pocketed corporation and users to create functional prototypes and end use real products. In combination with this powerful ecosystem, it’s what is attracting large retailers like Staples to our consumer initiatives, and we expect more likeminded retailers to join our camp in the coming periods.
Retail organizations are coming to us to reinvent the way they interact with consumers. 3D Printing and personalization enables entertainment companies and retailers to monetize their products in a new, interactive, immersive, and customized way. This is one of the early adopters. They have been providing an opportunity in Downtown Disney business to turn yourself into printers, (indiscernible) or a Storm Tripper. Interest from traditional retailers is increasing. Last month, Staples became the first major U.S. retailers to announce the availability of 3D printers with immediate online availability and by the end of this month they will be in stores as well. And then just last week, Amazon announced that they too will dedicate a section of their web properties for 3D Printing, and of course, we have been invited to participate as well.
In addition to Cubify apps, 3D content creation has become simpler and easier using digital photography or sensor improvements. In essence, every camera-equipped smartphone or tablet can now become a handy mobile content digitizer, and our proprietary feature recognition software and gamification technology allows this content to be turned into principle objects within minutes. What could be cloned, excuse me, is limited only by our imagination from family and set forth risks to collectibles, wedding cake toppers, just to name a few. It’s pretty much only limited by your imagination.
And it gets even easier and simpler. We talked about sensing. We now have the XBOX Kinect, we have Prime Sense motion and we have Leap motion interfaces, and these are a whole way of interacting and creating. As you can see from some of these videos, we and many others are working very quickly to create new apps and experiences bringing us to principle creations.
In education, we have taken the lead to bring affordable 3D content-to-print packages to – like I was saying, in education, we have taken the lead to bring affordable 3D content-to-print packages to elementary and middle schools. We are unleashing creativity through curriculum developments, community projects, and educate our partnerships and sponsorships with seamless student and teacher experience integration. And we are taking the way kids learn not only in STEM skills, but also in art and literature. We are working hard to impart tomorrow’s competitive skills today.
Or you can reincarnate the Photo Booth experience in 3D coupled with fun and exciting gamified apps to make collectables and mementos powered by Cubify. With every development we are getting closer and closer to true coloring book simple, scalable, consumer experience. And you’ll have a chance to see that’s outside later. And the hit rate continues with Cubify draws our first tablet doodling app that is now available for download free from the Apple AppStore.
And now I’ll turn the presentation over to Damon Gregoire, our CFO to discuss growth and expectations moving forward.
Damon Gregoire - Chief Financial Officer
Thanks Cathy. Good morning everyone. Please go with me as I find it hard to follow somebody like Andy that spoke here, but I’ll tell you I don’t have any slides I have to warn you about for this. So, we are taking significant steps to accelerate 3D printer adoption through new products, ongoing channel expansion and continuous technology enhancements. We are building and redefining our Quickparts services globally and we are growing our healthcare solutions portfolio with some new personalized medical device product announcements planned from the second half of this year.
We are continuing to build our consumer presence including the introduction of the second generation cube and the best of see you have 2013, new multi-color CubeX 3D printers that are supported by a growing menu of incredible apps that are defining ease of creativity. And to our most recent initiatives to build a 3D authoring solution platform, we have taken important steps to begin reinvent the engineer’s desktop. Our differentiated end-to-end business model drives our profitable growth. We are the only provider of comprehensive design to manufacturing solutions that assemble the entire print engines and materials tool box.
And that is developing a platform for ideation to production connectivity. We will be only provider of full color printability with up to 1 million colors in a single print and six other durable high resolution print engines with the widest range of materials from plastic to metal and wax. These are all complemented by our Quickparts cloud printing services, powerful design and inspection tools and an ecosystem for professional and consumers alike. And as you can see on this slide since the end of 2009 we have tripled our revenue, expanded our gross profit margins 710 basis points from 44.1% in 2009 to 51.2% in 2012 this is in spite of unfavorable mix. We’ve delivered significant value to our customers and stockholders.
For the full year of 2012 indicative of our continue P&L leverage, we improved our performance and productivity further by delivering the 66% improvement in non-GAAP operating net income and 54% revenue growth that was driven by 124% boost in printer unit placements. And notwithstanding our increased headcount in support of growth initiatives and activities that did not be revenue is in 2012. We are able to improve net income per employee by 17% over the 2011 period. This underscores the effectiveness of our execution.
I’d like take a moment to talk about and recap a few of our highlights from the first quarter of this year. So, in Q1 revenue grew by 31% from the prior year and gross profit margin expanded to 52.4%. We continued to see strong organic growth and balanced growth among revenue categories including 60% increase in new products revenue. And non-GAAP operating margins expanded to 25% and we also our strong cash flow from operations. As we increased our R&D investments to support our portfolio expansion and diversification, we continued to closely monitor the effectiveness of our R&D expenditures and their contribution to our profitable growth. Throughout 2012, which was consistent with our plans we increased our annual R&D spending by 62% to a total of $23.2 million in support of our portfolio expansion and diversification efforts.
In addition, we also completed four non-revenue bearing technology acquisitions during 2012 to complement our current R&D spending. Our combined and effective R&D investment resulted in introduction of 60 new products including eight new printers expanding four different print engines and revenue from new products grew 70%, $131.9 million for 2012. For 2013 our new product introduction plans off to a great start. And consistent with that, we increased our R&D spending by 32% to a total of $6.5 million for the first quarter of 2013 and revenue from new products grew 60% to $38.3 million. We expect 2013 to be our most exciting new product introduction year ever.
Based on our performance to-date, we affirm our 2013 guidance that we previously announced. And as a remainder that includes revenue expectations in the range of $460 million to $510 million which has growth of 30% to 44% over 2012. This guidance is inclusive of all of our completed acquisitions, but does not include the Phenix acquisition that we announced but have not yet closed. We expect to generate non-GAAP earnings per share the range of $1.05 to $1.20 per share. And our non-GAAP adjusted earnings estimate is fully tax effective, it includes management anticipated incremental expenditures and expected litigation costs as we currently understand them.
As a remainder our non-GAAP earnings exclude acquisitions and severance expenses, non-cash interest expense related to our outstanding senior convertible notes, non-cash stock-based compensation expenses, intangibles amortization and any loss that would be incurred on conversion of our outstanding notes. And I’d also I remind you that this guidance is based on current plans and assumptions and is subject to risks and uncertainties that are more fully described in our company’s reports filed with SEC.
For the first quarter 2013 gross profit margin improved some 38% over 2012 the quarter for – to $53.5 million or 52.4% as I mentioned earlier. Our gross profit margin for the quarter expanded primarily from the combined effect of expanding print material’s gross profit margin, continuing to expand printer’s gross profit margin and the addition of software products.
We’re making steady progress towards our target gross profit margins and we expect continue to see progress towards through gross profit margins and continued expansion. Within our gross profit margin expansion plans the positive drivers are materials gross profit margin expansion, the addition of software, continued operational improvements and increased volume for cost absorption. Concurrent with that we expect pressure on our gross profit margin from the newly acquired Quickparts operations such as RPDG that we announced a month and a half ago, as we continued and as we continue – as we continue to shut lower margin services. We’ve also continued to see pressure from our consumer solutions and from continued printing units surge and adverse mix. Notwithstanding this drag we remain confident in our ability to continue to expand our gross profit margins.
Finally, what sets our growth plan apart is our pursuit of two parallel growth paths concurrently. We believe that the near-term growth opportunity is with advanced manufacturing pushing further into the manufacturing floor. Today approximately half of our professional grade printers are placed into a direct and indirect manufacturing environment. And we expect significant upside as major corporations are announcing multi-year additive manufacturing initiatives. And although consumers not yet a meaningful part of our business today, we believe that there is significant upside potential. Importantly, we believe that both our manufacturing and consumer growth initiatives benefit from our expanding global Quickpart services that continue to power our customer acquisition capabilities and also enable professionals and consumers alike to harness the power of rapid and flexible manufacturing the world over.
Alright, so to tie that near-term opportunity I am going to turn the presentation back over to Avi to discuss manufacturing the future.
Avi Reichental - Chief Executive Officer
Thank you, Damon. What I like to do is begin to wrap up and talk to you about over views about manufacture in the future powered by 3D printing, which we believe is already underway in key verticals like aerospace, automotive and patient specific medical devices you have seen as was evidenced in Andy’s presentation already. We are also excited by another company that is making a great deal of commitment to additive and advanced manufacturing which is General Electric that is committing over $3 billion over the next few years to advancing its own integration and harnessing of advanced manufacturing.
So, you have the turbine blade and where the hosts go, what the coding is that might be the difference in one or two points of fuel burn and the way the jet engine works and that’s billions of dollars for our customers in terms of performance. Now, today is kind of subtracted right you get a block of something and you weld that and you arcade and you take the scrap and it goes some place and that’s how you make those parts today. And 3D printing allows you to make that product weight the first hundred. Allows you to make it form the core up, so you basically don’t have as much waste, the tool is cheaper, the cycle time is faster and that is the holy grill.
And that is the holy grill for companies like GE, because it’s all about the maps manufacturing of complex powers and for learning from customers like this where we, for many years, thought that advanced manufacturing will apply to mass customization only. We are beginning to learn now that is applies very well to mass production of the complex parts which we now call mass complexity. And the same story repeats for automotive where we see increasingly the importance of fuel efficiency we see increasingly the importance of flexible manufacturing and bridge manufacturing and we are evidencing a steady stream of migration of this technology from advanced prototyping and tooling to actual everyday manufacturing operations.
And of course the fastest growing segments and the one that is eloquently described as well is the patient-specific medical device where you can see ample examples of customers that already manufacturing millions of patient specific medical devices in the world over from and your hearing aids that are dominated today by 3D Printing manufacturing to dental restorations which is a fast growing area for us and to patient specific implants the kinds that Andy mentioned before this happens to be Conformist which is another one of our leading customers that just like in Andy’s example basically uses virtual planning tools and then prints or manufacturers the entire tool sets that goes that is patient specific for each and every procedure that is undertaken reducing the surgeon’s variability, improving the outcome and in this case also eliminating great deal of tool labor intensity and sterilization and all the ways that comes with it as well.
As you know few days ago we announced that we signed an agreement to acquire 80% of Phenix Systems. Phenix Systems is publicly for the French company and we – once we close the deal in the next few weeks subject to some customer recondition we will then tender for their remaining float of about 20% and we expect to get to a point where we have a 100% ownership in the next few months. The reason that we are very excited about Phenix Systems is because we view it as one of the hidden jewels if you will an indirect method. And as you know for the few years we have had a private label distribution agreement with Vantico to sell selective laser melting and we’ve learned the great deal about what our customers want, what our customers need.
We believe that the great deal of corporate sponsorship today on the parts of many corporations that are asking for laser melting metal capabilities and so we felt this now the right time for us to make such an acquisition that once closed would give us immediate capabilities not just in aerospace, defense and automotive but also with a class of dedicated medical metal printers. And you can see some examples of that outside in the whole area when we break was even more exciting to us is that we have Phenix Systems technology we can now paint chemically pure fully dense metal and ceramic parts from very fine powders that are proprietary we’ve the granularity of six to nine microns. And the granularity here plays major part because it makes a difference in the kind of feature detail and density and purity an area of goal that required performance for many demanding engineering applications.
Materials that can be processed through these advance manufacturing systems include stainless steel, tool steel, super alloys, non-ferrous alloys, precious metals and alumina for a variety of aerospace, automotive and patient specific medical device applications. And for those of you that may not be aware super alloys are commonly used in parts of gas turbine engines that are subject to high temperatures and require high strength, excellent high temperature quick resistance, fatigue life feasibility and oxidation and corrosion resistance. And non-ferrous metals include aluminum and titanium, precious metals such as gold, silver and platinum and exotic or rare metals such as cobalt, mercury, tungsten can also be processed. And what’s even more exciting for us about this hidden gem of the technology that we are going to scale, commercialize and deploy in the coming months is that, it sounds as a proprietary adjustable powders spreading technology that allows for the creation of different regions and to build at different granularity and provide powder formulations that can produce refined features at full density.
So, we’ve all of that’s we’re discussing in terms of advanced manufacturing, one of the question is, is it economical and does it scale and there are many people that believe that its neither - that it’s neither economical nor does it scale. And so I wanted to show just one example of one of our very good customers Align Technologies the maker of the Invisalign clear braces that just last year printed over 17 million unique and distinct molds for the manufacturing of their clear aligners. They did it in a factory of the future that already exists today in a space that’s not much bigger than this room that we are holding our annual meeting in, we’ve some 65 printers. And what’s even more interesting is that they did it 24/7 write out with uptime of over 98% and they build a complete factory of the future around it that is recognized and automated and capable of making millions of one of the kind. So, I just wanted to underscore that this movement of manufacturing over the future is economical, it’s scalable, it’s profitable and it’s happening already in the year now.
I want to switch the gears a little bit and talk to you about what’s to come. We’ve already said that this year was going to be our most exciting new product introduction year what I’m going to discuss a little bit past this year this is what we expect to see in the next 6 to 12 months. So, expect steady stream of new product introductions that will include systems, materials, services and tools. And as you know just in the last six months, we completely refreshed Cube, the CubeX, the ProJet 3500 series and we launched the next generation full-color just printing series the X60 series. But we are already looking at what’s next we’ve ended personal printer and what’s next we’ve ended the personal printer is arena is greater portability which means that in keeping with ex-financial times and keeping with Moore’s Law expect to see a next generation CubeX sub $1000 and within the next 12 to 18 months expect to see going even beyond $500 that’s the affordability, expect more functionality which means greater speeds, greater accuracy and multi-materials we’ve in the Cube version and even better high definition printability. And at the same time expect this generation of plastic just printing devices to also migrate up in capabilities and again to occupy engineers and designers desktop as a full-blown engineering model that would fit into our vision of reinventing the engineer’s desktop that Ping outlined earlier.
And with all of the refreshing that we’ve done of the 3500 and the XC60 series and the personal printing, we have been also very busy working at the higher professional grade manufacturing systems. And so what you should expect from us in the next 6 to 12 months is an ongoing introduction of systems first in the higher grade of our multi-jet printing that will come with multiple materials. And this will be multiple materials that will be precise will fit all of our printability criteria that we kill it, so eloquently discussed with you earlier and will be stable and functional over time, exposure and temperature. We also expect within the same time period to expand our color jet printing technology from the cluster and ceramic material classes into full blown functional plastics. And so I expect to see completely new to the world fully functional plastics in all colors that will meet the same criteria of up to 1 million color combinations in a certain print.
And within our larger platforms, manufacturing platforms, in SLS and SLA both expect to see the same application of Moore’s Law, which means you expect to see lower price points, expect to see higher productivity and higher speeds, up to 2X productivity as we begin to rollout greater productivity systems within the next 6 to 12 months, not all at once, greater productivity in systems, greater affordability and larger formats of production grade capabilities that are designed for the manufacturing floor. And with that in the near-term roadmap expect to see the whole new series of materials coming to the market starting with the material that we previewed last week at Rapid, which is our new class VisiJet material for the 3500, which we call, M3, a highly durable black jacquard material the (indiscernible) we will be happy to show you outside and which we believe is a game changer and a groundbreaking material that we are bringing into the markets, expect to see the full-color plastics materials coming, and expect to see more biocompatible materials that will nicely complement our patient-specific medical device development.
And as I mentioned earlier, we have done production of a multi-material jetting system, expect to see a new class of our composites that will bring greater functionality and stability over time, temperature, and exposure, and expect to see a completely new class of materials and super-alloys to complement and enhance our direct metal strategy as we complete the acquisition of Phenix.
Finally, I want to say that with exponential technologies and with the rapid and fast developments that are available to us today from suppliers, because remember the exponential is not only applied to us, they are applied to the suppliers of our print engine components, and in materials we for the first time now can see a clear path to begin to actually introduce a whole new class of material that we call super materials. And our definition of super materials is materials that could have increase in engineer’s properties and performance of up to 10X materials that are available to-date. We now are confident that those building blocks exist that are sufficiently affordable, and you can expect to begin to see more and more super materials coming on to the market in the near and mid-term.
With that, I’d like to take a few minutes and talk about another exciting development that as we promised since the acquisition of Bespoke would be commercialized in the second half of this year and that is the Bespoke Wrist Brace, which is our first application of exponential technologies such as very affordable, powerful, and accurate sensors, very functional tablets as the interface we are using actually in iPad, cloud computing to do all the magic, all of our software that does now the automated processing of the data, descripting and the meshing of the data into very attractive designs in a way that begins to provide something that is custom fixed for me, ventilated, stylish, easily cleanable and dishwashable, and allows me to continue to function without any debilitating aspects of traditional hand braces, and where we have the opportunity to disrupt under existing insurance reimbursement codes, a field that is begging for some disruption, because non-new innovations have been around for conditions like carpal tunnel in decades.
And so this is the first application of exponential technologies in a way that completely disrupts a category and in a way that we can bring together our cloud printing technology, our scanning technology, our Geomagic solutions software technology, in this case, our laser sintering technology, and bring into the market something that’s completely new and revolutionary. And just a few words about the sizing of this market, there are about 10 million wrist braces that are sold annually in the United States. And the market is sized by Frost & Sullivan here is in the hundreds of millions of dollars. Insurance companies are moving towards the preventable care. So, what we do in terms of customs say it offers a real opportunity here and the average reimbursable amount here is between $250 and $450. And what’s unique about the technology that we developed and you can see the actual Bespoke scanner on display out in the hallway is that because we have implemented exponential technology into it and components rate, the cost of goods of this device is so low that if we choose we could put it out there as on a subscription model, just like a cable box.
And that is the nature of how we can begin to innovate when we live in exponential times, but we are not stopping with the Hand and Wrist Brace. Work is already underway to begin to look it’s another very interesting area that fits perfectly into the same paradigm, which is pediatric braces. And if you know anything about pediatric braces, you will know that they are very challenging and difficult to implement that in many cases, it takes multiple bracing operations as the swelling shrinks and that the compliance is not very good what we know about the few cases that we experimented with is that, they don’t want to give up their braces, but they are no longer necessary because they felt that it was really cool. As you can see, they could swim and they could bathe and they could do everything that they wanted to do with the braces. So, that is what we have next in terms of what’s in the pipeline.
So, to begin to summarize, if you ever heard throughout this morning’s presentation, all of our new product development efforts fit directly into our strategic growth pillars. We are taking significant steps to accelerate 3D printer adoption through new products, ongoing channel expansion, and continuous technology enhancements. We are building and refining our Quickparts business. We are continuing to build our consumer presence. And we are very excited about the Staples deal and what’s coming with Amazon in the next few weeks as well as other retail expansion opportunities and in-store customization opportunities. And of course you will stand from saying whose presentation that we are already taking important steps to reinvent the engineer’s desktop which are really exciting.
So, in closing, we believe that our unmatched solutions portfolio and leading brands position us well for continued success. Our technology is trying some flexibility provides the foundation for marketplace leadership and our targeted 3D content-to-print sales provides unlimited growth opportunities in the near and mid-term. We have developed an innovative business model that is unique with the end-to-end solutions and is anchored by our focused growth initiatives and augmented nicely by a proven acquisition strategy that is ably executed by an experienced management team. We believe that in exponential times it’s full to thank that we can invent everything ourselves. And so we have made 3D Systems attractive and reputationally magnetic to people that have no ideas. And so we are on an ongoing basis augmenting and complementing what we can innovate in-house with the acquisition of early stage startups that constantly refresh our technology and nicely augment our own internal development capability and R&D spending.
So, with that, let me say that I am deeply grateful to our loyal customers. We have asked whom none of this would happen to my teammates, to our board, and to all of our long-term investors for your ongoing support. Thank you very much. And with that, we will take some questions.
[No Q&A session for this event]
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