Good morning and welcome to 3D Systems Conference Call and Audio Webcast to discuss the Results of the Third Quarter 2022. My name is Kevin and I will facilitate the audio portion of today’s interactive broadcast. At this time, I would like to turn the call over to Russell Johnson, Vice President, Treasurer and Investor Relations. Please go ahead.

Good morning, and welcome to 3D Systems' Third Quarter 2022 Conference Call. With me on today's call are Dr. Jeffrey Graves, President and Chief Executive Officer; Michael Turner, Executive Vice President and Chief Financial Officer; and Andrew Johnson, Executive Vice President and Chief Legal Officer. The webcast portion of this call contains a slide presentation that we will refer to during the call. Those following along on the phone who wish to access the slide portion of this presentation may do so on the Investor Relations section of our website. For those who have access to streaming portion of the webcast, please be aware that there may be a few seconds delay and that you will not be able to post questions via the web. The following discussions and responses to your questions reflect management views as of today only and will include forward-looking statements as described on this slide. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in last night's press release and our filings with the SEC, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. During this call, we will discuss certain non-GAAP financial measures. In our press release and slides accompanying this webcast, which are both available on our Investor Relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. Finally, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2021. With that, I'll turn the call over to our CEO, Jeff Graves, for opening remarks.

Thanks, Russell, and good morning, everyone. I'll open this morning with a few comments on the current business climate, our position in the markets and a summary of our Q3 performance. After that, I'll turn the call over to our new CFO, Michael Turner, for a more detailed review of our third quarter results. I know that many of you are looking forward to hearing from Michael for the first time. Having joined the company in September, Michael has already proven to be an excellent leader of our finance organization and a valuable addition to our executive team. So welcome aboard, Michael. Reflecting on the year-to-date, the global economic and geopolitical backdrop has compounded existing supply chain disruptions created by the COVID pandemic. While these macro headwinds are negatively impacting many companies, the good news for our industry is that customers are increasingly adopting additive manufacturing in their production operations in order to reduce supply chain risks, enhance product design flexibility and reduce manufacturing costs. This gives us an opportunity for growth even in a more cautious capital investment environment. For 3D Systems specifically, we benefited this year from our prior efforts to focus and streamline the company while significantly strengthening our balance sheet. This has allowed us to make important investments in new technology platforms and in operational efficiency initiatives, which are already showing results. Our customers are confident that once recession fears subside, we will emerge from this period stronger than ever with a completely refreshed product lineup and efficient operational footprint and the scale needed to support their growth. In the meantime, we're focusing intently on execution, profitability and cash performance, which is what our customers and our shareholders expect from an industry leader. On behalf of my nearly 2,000 dedicated 3D Systems colleagues around the world, as we finished out the year and look ahead to 2023, I can tell you that we're proud of our leadership role in the additive industry and very confident about the future. Turning then to Slide 5. Reflecting on our third quarter, we delivered results that were basically in line with our internal expectations and, in some areas, exceeded them. From an operating standpoint, high inflation is impacting both purchase components and labor costs. We're taking pricing actions, where possible, to offset these pressures, but there's typically a lag effect that can put a drag on quarterly performance. In addition, the strength of the U.S. dollar has clearly impacted our financial performance. Michael will shed more light on these factors in a few moments. On the positive side, supply chains are showing signs of initial stabilization. And if no further disruptions occur, we expect this trend to continue. Our engineers have worked hard to increase our component supply base and to design our new products with more sourcing options in mind. With regard to our in-sourcing of manufacturing, I'm very pleased with the progress we've made in our Rock Hill, South Carolina production facility, which we took over mid-quarter from a contract manufacturer. This plant will soon produce over 40% of our polymer printing systems. We expect that percentage to grow rapidly as our investments in people and technology gain momentum. In the third quarter, we were pleased to see our production rates increase, our productivity improve and our gross margins begin to expand as the workforce transitioned to 3D Systems management. I want to give a sincere shout out to our new manufacturing colleagues in South Carolina. Your efforts are noticed and greatly appreciated. From a broader standpoint, inflation is taking a significant toll on global markets that are dependent upon discretionary consumer spending. As consumers spend more on daily necessities like food and gasoline, they have less to spend on optional items. For us, this impacts our dental markets and particularly, our orthodontic products. While this is still a great business that we're fully committed to, key customers have slowed their spending, which, while largely anticipated in our previous guidance, can clearly be seen in our financials. Fortunately, we expect this business to strengthen once the economy normalizes, but this may take some time. More to come on our market dynamics in a few moments, but for now, I want to give you a clear understanding of our position in the industry and how our business model works in this volatile climate. As additive manufacturing in production environments becomes widespread, we're very well positioned to enable rapid adoption across virtually all market verticals. The reasons are twofold. First, we have the greatest experience base to draw on. With over 20,000 production printers active in the field, consuming almost 5,000 tons of our proprietary materials each year, our customers produce over 1 million parts every day using our technology. This output is greater than the entire rest of the industry combined, giving us unparalleled experience in the management of large fleets of printers and in the integration of complex workflows in our customers' factories around the world. Second, over the last 2.5 years, we've reorganized and restructured our company into 2 market-facing business units, Industrial Solutions and Healthcare Solutions. This enables us to focus on market-specific applications, developing with our customers the most effective manufacturing workflows and then supporting the transfer of these technologies into their factories. Once complete, additional workflows are then added and manufacturing capacity expanded to support their growth plans. This approach has proven highly effective, and we believe it will drive exciting growth for our company in the years ahead. This operational model is one that we increasingly see mimicked by others around our industry, but the key to success is having a full complement of metal and polymer printing technologies supported by software expertise and a wide range of production materials. It is the combination of these elements, to address specific high-value applications, that our customers are looking for in a partner. That is what sets our company apart from the competition, and this gap continues to grow. Today, at 3D Systems, our core technology spans not only the broadest range of metal and polymer systems in the industry, but now also includes the unique materials and printing systems that I broadly refer to as biologics. These truly groundbreaking materials and printing technologies are essential in addressing biological applications within the human body and in the development of new methodologies for drug development. When viewed in total, this unique combination of technologies and application expertise in a company with global scale allows us to assume a leadership position in the additive industry as we now enter true production environments. With that introduction, I'll now turn to Slide 6 for a brief overview of the quarter. For the consolidated company, after adjusting for businesses that we divested during 2021, revenue for the third quarter decreased 3.2% year-over-year. However, adjusting for the impact of foreign currency fluctuations, consolidated revenue increased 2.7%, showing the significant negative impact of the strong U.S. dollar. While this growth rate is much lower than we would like, we fully expect to meet our long-term expectations of double-digit organic growth in the years ahead as consumer spending rebounds and additive manufacturing takes hold in production environments across virtually all market segments. Turning to our divestiture-adjusted segment performance in the third quarter. Revenue for our Industrial Solutions segment was flat year-over-year but increased nearly 9% in constant currency. Revenue for our Healthcare Solutions segment decreased 6.6% per year and decreased 3.5% in constant currency, driven by a substantial slowing of our Dental segment due to softer consumer spending. As we saw last quarter, the FX impact on our Industrial Solutions segment was most pronounced due to that segment's exposure to manufacturers and service bureau customers in Europe and Asia Pacific. With that said, the currency impact on Healthcare Solutions sales was also material. In our Industrial Solutions business, we saw regional variations in the third quarter. In Europe, the war in Ukraine and uncertainty regarding recession and energy supplies continue to pressure our customers. This is impactful given our Industrial Solutions segment's historically strong market presence in Europe and particularly, in Germany. On the positive side, demand in the Americas remained robust during the third quarter with strong SLA printer sales into the energy and commercial space verticals. We also saw solid demand for our recently acquired Titan printer platform among consumer goods and defense customers. In our Healthcare Solutions business, the third quarter performance varied sharply by market. In our Medical Devices business, we saw significant year-over-year growth in printer sales to customers who manufacture orthopedic and surgical instrumentation. And our industry-leading business of providing virtual surgical planning packages and other personalized health care solutions for doctors, surgeons, and hospitals had a strong quarter as well. The broader story here is the demand for non-elective surgical procedures is holding up well despite economic uncertainty. Within that strong market, 3D Systems stands out for its best-in-class suite of products, strong regulatory infrastructure, and years of experience using additive manufacturing solutions to improve patient outcomes. However, the biggest factor for our Healthcare Solutions business during the quarter was a significant year-over-year decline in dental market sales, particularly in the orthodontic area. As we communicated to our investors last quarter, we were aware that this decline was coming. And our general results for the third quarter, while disappointing, were roughly in line with our expectations. It's difficult to gauge how long this softer demand might last because it's so dependent on how macroeconomic conditions evolve over the coming quarters. We expect this business to eventually recover and to be a strong contributor to our growth and profitability. So despite these ups and downs, we believe we now have good visibility into our broad business performance for the remainder of this year. This is why, as Michael will describe for you in a moment, we're updating our full-year 2022 guidance to significantly tighten our revenue range while improving the forecast for operating expenses to reflect strong execution and cost controls. Turning to Slide 7. I'd like to highlight some advancements from the third quarter. These are not only interesting in isolation, but they also provide valuable insights into the type of core activities that will drive our company's growth in the next five years. As I described for you on our last quarter's call, we agreed during the third quarter to acquire dp polar, the Germany-based developer of the industry's first additive manufacturing system designed for true high-speed mass production of customized components. I'm pleased to report that we closed this acquisition in early October, ahead of schedule, and integration efforts are well underway. I can't emphasize enough the importance of bringing this revolutionary printer technology into the 3D Systems portfolio. The machine's continuously rotating build platform can print jetted polymer parts up to five times faster than today's batch process systems, which represents a quantum leap toward true mass production of custom componentry using additive manufacturing. We plan to move forward with this technology as fast as possible with a critical mass of dp polar machines moving into beta testing with key customers in 2023 and initial commercial sales targeted for 2024. If any of you are planning to be at the upcoming Form Next Trade Show in November, I strongly encourage you to visit the dp polar booth and see this exciting new system for yourself. With our metal printing portfolio, we continue to leverage the unique capabilities of our applications innovation group, along with our strong lineup of metal printing technologies, to drive solution sales to customers in both industrial and healthcare segments. Our technological advantage is primarily in our atmosphere control system, which is the industry's best for the manufacture of reactive metals such as titanium, nickel, and refractory metal alloys. We've been very successful recently with customers in commercial space and medical devices, both of which are extremely well suited to our technology and the type of application-focused customer-specific printing solutions in which 3D Systems has long specialized. During the third quarter, we also announced several significant additions to our materials portfolio. On the polymer side, we introduced two new production-grade materials, tough clear for our Figure 4 projection-based printing platforms, and DuraForm Pax Black for our SLS printer line. Both of these materials address critical applications with key customers across several market verticals. On the metals front, we introduced a new copper nickel alloy, which is now certified for use on all of our DMP metal printing solutions. This copper nickel alloy was developed in close collaboration with Newport News Shipbuilding, which is a division of Huntington Ingalls Industries and is the largest shipbuilding company in the United States. Copper can be particularly challenging to 3D print due to its high reflectivity. However, it's an ideal material for extremely demanding applications in marine systems, chemical processing plants, oil and gas, and rocketry. Turning to Slide 8, and before I hand off to Michael, I want to highlight the tremendous progress we're making on one of my most important goals for 3D Systems, namely the creation of a world-class regenerative medicine business. As I've shared with you previously, our efforts in this area are currently proceeding along three primary lines: first, through a long-standing partnership with our biotechnology partner, United Therapeutics. We've achieved remarkable progress toward our goal of 3D printing functional human organs for transplantation, initially targeting lungs, but now with an expanded scope, including livers and kidneys. Our partner announced publicly this summer that our goal is to have printed organs and human trials within five years. Second, building on the organ program's technological progress, we've expanded into the adjacent field of printing non-organ human tissue for transplantation and surgical reconstruction applications. More details regarding this exciting initiative will be announced in the months ahead. But today, I want to focus on the third initiative, which is summarized on Chart 8. In this case, we're leveraging our expertise in creating vascularized human tissue and combining this capability with our polymer printing expertise to develop and manufacture highly differentiated organs on chips for use in drug discovery and development by the pharmaceutical industry. During the third quarter, we marked a major milestone in this initiative with our announcement of the formation of a new wholly-owned biotech company called Systemic Bio. This subsidiary is being managed as an internal startup with its own dedicated management team and R&D staff. We've committed to support Systemic Bio with an initial seed investment of $15 million, which should sustain the company until it reaches a material level of revenue and profitability. One point that I want to emphasize is that Systemic Bio's go-to-market strategy will differ from 3D Systems' traditional business model. Due to the unique value of the printed products themselves and the sensitivity of this novel technology platform, Systemic Bio will not sell printers and materials; rather it will work with customers to develop organ- and disease-specific human models for organs on chips, and then will market those chips directly to pharmaceutical and biotech companies engaged in drug discovery. To support the business model, Systemic Bio has invented a novel patent-pending organ-on-a-chip platform which we call HVIOS. This stands for Human Vascularized Integrated Organ System. This platform is comprised of 3D-printed microfluidic components and bioprinted vascular 3D scaffolds. Once printed, these custom-designed vascularized scaffolds are then seeded with any desired combination of healthy or disease cell types for use in drug studies. We're producing HVIOS chips daily at our state-of-the-art laboratory in Houston, Texas, where they're being tested by our Systemic Bio team of scientists to validate their use for modeling specific organ and disease functions in collaboration with key pharma customers. As you can see in the images on Slide 8, virtually any desired vasculature architecture can be printed and then mass produced to develop the statistical data needed for drug studies. Turning to Slide 9. Let me emphasize what differentiates Systemic Bio's technological approach from those in the market today and therefore, why we're so excited about this new business. The 3D bioprinted fully integrated vasculature contained within Systemic Bio's HVIOS chip can closely mimic human organ structures, allowing for active perfusion of blood through the tissue sample, as shown in the lower left image, where you can see blood flow through the printed structure. This vasculature is critical for cell survival as the blood flow is needed to bring nutrients to the implanted cells and then remove waste products, just as the process works within your body. You can see the success of this approach in the lower right-hand image on Slide 9, with the green regions being human cells that have thrived in this printed tissue sample for over 28 days. This is unique, and it's the true magic of the HVIOS system. The cell types comprising these tissues can be of any type. For example, on one end of the chip can be human liver cells, and on the other can be cancer cells with the printed blood vessels connecting them together in a continuous circuit. Developmental drugs can then be introduced to evaluate the interaction with both the healthy cells and the cancer cells in a continuous blood flow environment with an ability to create virtually any combination of tissues at high volumes. For evaluation using this technology, we believe that the drug development cycle can be shortened, success rates enhanced, and the use of animal testing ultimately eliminated over time. From a financial standpoint, our goal is to establish key contracts with the pharmaceutical industry over the next year to affirm the technology and incorporate it into drug development protocols. Needless to say, I'm tremendously excited about the potential of this new business, and I'm driving to see early customer validation of our technology. Investors in our company should note that we believe Systemic Bio, given its highly advanced bioprinting and biomaterial capabilities and its business model of selling proprietary HVIOS chips rather than printing technology, has the potential to achieve profit margins more like a biotech company than a manufacturing technology supplier. Based upon early customer feedback, I believe Systemic Bio could be a $100 million revenue company within five years. I'm confident that we'll announce the first agreement with a major pharmaceutical company in the near future, and we look forward to sharing the progress with you. Before I turn the call over to Michael, I'd like to close my remarks by turning to Slide 10 to highlight our software business. 3D Systems has long been an innovator in 3D printing software, offering specialized applications such as Geomagic, 3D Sprint, and 3D Experts. We advanced that position significantly in late 2021 by acquiring Oqton, a leading provider of software solutions to utilize AI and machine learning to help manufacturers intelligently automate their entire digital production workflows. Since the acquisition of Oqton, we've transformed our entire software go-to-market strategy. All software operations are now under a single management structure of that being Oqton. And we're integrating 3D Systems legacy stand-alone applications into the Oqton manufacturing OS. The end-to-end result will be complete cloud-based digital manufacturing solution that is hardware agnostic and technology neutral. It will be able to seamlessly integrate the entire factory floor across multiple sites with a digital thread that provides complete control and traceability of every action in the manufacturing workflow from order to delivery. The combined suite of Oqton and 3D Systems software provides, by far, the most complete and feature-rich software offering in the additive industry today, as shown in the comparison table on Slide 10. While customers themselves can put together point solutions for each feature, an approach commonly called do-it-yourself, they're hesitant to do so given the cost and complexity of the approach. The only alternative to this approach are the leading CAD suppliers shown in the middle column or other 3D equipment manufacturers who, at best, have only a fraction of the capability spectrum that Oqton offers. And we will continue to refine and add to the Oqton offering over time through both R&D investments and commercial partnerships with leading players in the field of industrial automation. As just one example of our development roadmap, we have ongoing partnership discussions with major manufacturing partners that would include joint development of new software functionality in part identification, e-commerce, and cataloging. Most importantly, the new integrated Oqton suite of applications not only leads the industry, it has the potential to become a key enabler of true serial scale additive manufacturing that can make an impact on our entire industry. For this reason, we have opened Oqton's availability to the entire additive manufacturing industry. This includes all elements of the new Oqton platform, including the historical 3D Systems printing software, as we believe it will have a tremendous impact on the acceptance of additive manufacturing broadly. To facilitate industry-wide adoption, the Oqton business is run as a stand-alone operation with a high priority on the protection of user sensitive data, including externally audited firewalls to ensure security and confidentiality. With this approach, Oqton is gaining traction every day and now has customer wins in the automotive, aerospace, contract manufacturing, healthcare, and dental markets. With growth potential ranging from double to triple digits, we're very excited about the future of this software platform. And with that, I'd like to turn the call over to Michael to review our third quarter financial results.

All right. Great. Thanks, Jeff, for the warm welcome. I'm excited to be here, and I look forward to upcoming opportunities to meet our investor and analyst community directly. Before I start, I'd like to remind everyone that 3D Systems made three significant divestitures in 2021. The earnings release that we issued last night contains tables with non-GAAP measures relating to our 2021 results, from which we excluded the impact of the 2021 divested businesses. Likewise, on today's call, any reference that I'll make to our 2021 results will be on that same ex-divestiture basis. The point of this adjustment is to make our 2022 results comparable to our 2021 results on an organic basis. Starting out on Slide 12 of the presentation. As Jeff discussed, our revenue results for the quarter were generally in line with our expectations with some bright spots in certain areas that we will highlight to you this morning. As we saw last quarter, the overall business environment during the third quarter remained challenging due to continued FX headwinds, inflationary pressures, recessionary fears, persistent supply chain challenges, and geopolitical tensions. However, the biggest headwind we faced during the quarter, which we expected and called out in our revised Q2 guidance, was a significant year-over-year decline in revenues from dental market customers. Revenue for the third quarter was $132.3 million, a decrease of 15.3% versus the prior year. Excluding divestitures and the unfavorable impact of FX, revenue increased by 2.7% compared to the prior year. This top line growth reflects continued solid demand in both our Industrial and Healthcare segments, partially offset by weakness in dental market sales, which, as you know, represents a significant portion of our overall business. Just to quantify the impact on revenue from some of the factors I mentioned earlier, starting with FX. We experienced headwinds of over $8 million related to the sharp appreciation of the U.S. dollar that occurred during the third quarter, which reduced the U.S. dollar value of our international sales made in foreign currencies, which typically represents roughly 40% of our total sales. There may have also been some third quarter international sales that did not materialize because, in some cases, we price our overseas product offerings in U.S. dollars. And in these cases, the customer has to convert more of their local currency earnings into U.S. dollars to pay us, which represents a price increase for them and can therefore result in some lost sales. On our second quarter earnings call, we highlighted two additional items that had an adverse impact on our year-over-year revenue growth, one being the Russia-Ukraine conflict and the other being persistent supply chain disruptions. Both of these items had less of an impact during the third quarter. Regarding sales to Russia, while our second quarter 2021 sales to Russia were relatively material, by the start of the third quarter of 2021, we had largely exited the Russia market. And as a result, our year-over-year revenue comparisons for the third quarter were much less impacted than what we saw in Q2. And on the supply chain front, you'll recall that we commented on the impact of these disruptions, including component shortages as well as inefficiencies in portions of our contract manufacturing network that caused us to get behind on supply to orders. We estimate that the total impact of supply chain issues in Q2 resulted in approximately $9 million of customer orders that we could not ship as planned. During the current quarter, however, we were able to significantly catch up on many of these late shipments. And as a result, we estimate that we had approximately $2 million of firm customer printer orders that we were unable to ship due to supply chain delays. I'm pleased to say that this was, in large part, attributable to our decision earlier last quarter to bring one of our major outsourced printer manufacturing facilities back in-house. This has enabled us to significantly increase the rate of printer production at that facility and thereby work on our backlog of late customer orders while also having a favorable impact on gross profit margins. And lastly, for consolidated year-to-date revenue, looking back over the first nine months of the year, we grew revenue, excluding divestitures and the unfavorable impacts of FX, by 7.6%. Despite a very challenging operating environment, we were able to achieve year-over-year revenue growth for the first nine months of the year in the high single digits. Turning now to Slide 13 for a review of segment revenues. For our Healthcare Solutions segment, revenue, excluding divestitures and the unfavorable impact of FX, decreased by 3.5% as compared to the third quarter of the prior year, while revenue excluding divestitures and the unfavorable impact of FX in our Industrial Solutions segment increased by 9% year-over-year. The biggest driver of the decline in Healthcare Solutions was a sharp reduction in spending by certain key dental customers in the market for elective orthodontic procedures. High inflation, reduced consumer confidence, and geopolitical factors are negatively impacting patient demand for such elective procedures, resulting in lower caseloads. At this time, we cannot say with confidence how long the weaker dental demand environment will last, given that it is so heavily dependent on how macroeconomic and other factors evolve over the coming quarters. But starting last quarter, we have incorporated this revised view into our 2022 revenue guidance. And at this point, we do not foresee a material improvement for the rest of 2022. Outside of Dental, we saw healthy growth in some of the other major business lines within our Healthcare Solutions segment, including strong sales to customers at 3D Print various types of medical devices, such as orthopedic implants and surgical guides. Additionally, our sales of virtual surgical planning and point-of-care solutions to doctors, surgeons, and hospitals grew very nicely in the third quarter. These business lines tend to serve patients needing surgical procedures that are less elective in nature. Therefore, demand in this area has held up very well despite macroeconomic uncertainty. As Jeff noted, 3D Systems is recognized as a leader in the surgical planning field with the ability to combine 3D printing services, software, and materials to create an integrated end-to-end surgical package in a way that our competitors cannot. Turning now to our Industrial Solutions segment. Industrial revenue growth was driven by continued strength in precision microcasting applications and for production machines in energy and commercial space applications. Offsetting this were lower sales in automotive applications, largely because of a tough year-over-year comparison provided by some large deals in the third quarter of last year that did not repeat in the current year. As Jeff noted, we are starting to see good sales traction with our Titan family of printers, which we acquired in 2021. Overall, both of our polymer and metal printers continue to sell well across our Industrial Solutions segment. Moving on to gross profit on Slide 14. Our gross profit margin was 39.8% compared to 41.2% in the prior year. The decrease in margins is due to multiple factors, including 2021 divestitures of noncore assets, inflationary impacts on input costs, and freight and product mix changes, mostly related to selling more printers and fewer materials than in the prior year. I'd also like to note that while margins are down on a year-over-year basis, we have seen some sequential improvement with a 190 basis point increase from Q2, driven by the full run rate impact of price increases announced earlier in the year as well as the early benefit of bringing some of our outsourced printer production back in-house during the quarter. Turning now to operating expenses on Slide 15. GAAP operating expenses increased by 6% or $4.9 million to $86.4 million in the third quarter of 2022 compared to the same period a year ago. This includes a $9 million increase in legal and other settlement costs, partially offset by decreases in expenditures due to divestitures. On a non-GAAP basis, which excludes nonrecurring charges and divestitures, operating expenses were $58.3 million as compared to $49.3 million from the same period a year ago. The higher non-GAAP operating expenses reflect spending in targeted areas to support future growth, including expenses from acquired businesses, research and development, and investments in corporate infrastructure. We did, however, see some sequential improvement in operating expenses as compared to the second quarter of 2022, which reflects our efforts to tighten cost controls in response to the volatile demand conditions that we've experienced this year. Moving now to Slide 16. Adjusted EBITDA, which is defined as non-GAAP operating profit plus depreciation, was negative $0.3 million for the third quarter of 2022 compared to $11.6 million for the third quarter of 2021. The year-over-year decline in adjusted EBITDA reflects all the factors that we've previously discussed. One call-out I would like to mention here is regarding SG&A and R&D expenses from businesses that we have acquired over the last 1.5 years. These acquisitions represent important investments by 3D Systems, and we expect to contribute significantly to our revenue growth over the coming years. However, for the time being, these acquired businesses in aggregate have yet to generate meaningful revenue for us. As a result, you should expect our adjusted EBITDA to run below our natural potential for a period of time due to the near-term expense impact of recent acquisitions. And for EPS in the third quarter, we had a fully diluted loss per share of $0.30 compared to income per share of $2.34 in the third quarter of 2021. Excluding charges for stock-based compensation expense and other nonrecurring items, as detailed in the appendix of the earnings release that we posted last night, our non-GAAP loss per share in the third quarter was $0.05 compared to non-GAAP earnings per share of $0.05 in the third quarter of the prior year. The year-over-year decline again reflects all the factors that we've previously discussed. Now turning to Slide 17 for balance sheet highlights. We ended the quarter with $609 million of cash and short-term investments on hand. Our cash and short-term investments declined approximately $180 million since the end of 2021, driven primarily by $85 million paid for acquisitions and equity investments, cash used in operations of $52 million, capital expenditures of $17 million, and other cash used in financing activities of approximately $13 million. We continue to have a strong balance sheet with sufficient cash to support organic growth. As previously stated, we regard 2022 as an investment year, during which we will make additional targeted investments in high-potential growth areas of our business and in our corporate infrastructure. This is part of our overall strategy to profitably grow revenue in both the Industrial and Healthcare segments, as well as to enter new businesses such as regenerative medicine. While we are always willing to consider M&A opportunities as they arise, we are currently focused on integrating and growing the businesses that we have acquired over the last 1.5 years. And finally, I'll conclude my remarks on Slide 18 with an update on our full-year guidance for 2022. As a reminder, we announced a reduction in our 2022 full-year guidance during our second quarter earnings call. We took this step because we expect that the challenging macroeconomic and geopolitical environment to put pressure on international Industrial Solutions sales and because we believe that softer demand for elective procedures would negatively impact our Healthcare Solutions segment, particularly in the dental market. Our third-quarter results were in line with these revised expectations. And at this point in the year, we now have improved visibility into our likely revenue and operating expenses during the fourth quarter. This improved visibility incorporates the impact of certain cost control measures that we have taken to better align our cost with the current revenue environment. Based on these factors, we are updating our full-year guidance to significantly tighten our expected revenue range while improving our outlook for non-GAAP operating expenses. Our full-year gross profit margin guidance remains unchanged. Pulling it all together, our updated guidance for 2022 is as follows: we expect revenue to be within a range of $535 million to $545 million, we expect non-GAAP gross profit margins to remain unchanged and in the range of 39% to 41%, and we expect non-GAAP operating expenses to be in the range of $240 million to $245 million. This full-year 2022 guidance assumes no significant additional changes in the macroeconomic environment that can negatively impact business demand or disrupt our supply chain, such as COVID-19, geopolitical events, or continued foreign exchange volatility. That concludes my prepared remarks. Operator, we are now ready to open up the line for questions.

Our first question today is coming from Troy Jensen from Lake Street.

Michael, I'm going to start with you. You talked about OpEx being $240 million to $245 million for the year. On a sequential basis, that implies about a $5 million to $10 million sequential increase in OpEx. So I'm just kind of curious, is it like one time in nature is at formats? And how do you think about OpEx trending now, you know, be explained that the sequential increase and then how do you think of OpEx growing or declining quarterly on an absolute basis beyond that?

Yeah. Great question, Troy. So one driver going from Q3 to Q4 is dp polar, which we closed on in October, as Jeff mentioned. So we will get the full run rate of their expenses going forward. We'll also have slightly higher commissions, sales commissions, and Q4 is related to higher sell demand. And, I mean, I think you should think about our kind of run rate OpEx being the Q4 exit rate for now. We'll give you further guidance in 2023 as we get to that point.

And, Jeff, how about for you with systemic, why carve out just that business segment within your regenerative businesses? I mean, what was so attractive on that, that it required to kind of its own standalone business versus everything else you're doing in regenerative?

So that's a good question. There's a couple of reasons. There's two kind of cultural reasons, if you will. Number one, we wanted to drive a real startup mentality in that business, because it is a new business, new technology going to market, it is a different customer base. And we've historically had these customer base that are the pharmaceutical companies largely, and the companies that are testing new drugs for the pharma companies. So the sales model is different. Also, Troy, as I mentioned in passing, that business model for the business is different than the rest of the company. We're selling in that case, we're setting ourselves up to sell the these h-VIOS chips, the chips that come off the printer, not the printers themselves. The fundamentally that printing technology is just too valuable to be selling printers. We want to really jealously guard that IP and know-how to do that and sell the product that comes off it. We think the product will be very valuable. We think it'll drive exciting, not only revenue growth but gross margin performance. We want real clarity on how that business model works, and that the technology is proven. So the best way to do that, in my mind, was carved out separately and look at it. In fairness to our shareholders and investors, we wanted to say how much we were going to spend on it. So we put that flag out there to say we're going to invest $15 million in this business to get it to material revenue contribution and profitability. And we think we will hit those objectives clearly we want to be able to measure that and report out on it. And beyond that, this gives us optionality to continue to invest ourselves or if we want to bring in outside parties to invest with us in that business, if the capital requirements exceed what we can comfortably do. We want to allow it to grow in its own right, as fast as it can logically grow. And I, the base plan is we'll put that capital in ourselves, based on the return, we would estimate for it at the time. If that business really requires, because it is a revolutionary technology, if it requires additional capital, we may at some point, entertain outside investment in it as well. So for all those reasons, we wanted to set it up as a standalone business. It is a wholly-owned business, and our default assumption is it'll be part of the 3D Systems portfolio forever. We'll, but it gives us optionality on how that goes in the future.

In fact, that's just one last follow-up. I'm assuming that the weakness in kind of product sales is more on the system side. But could you just delineate maybe material demand in the quarter or just in machines being used the full extent or just some color on material demand?

Troy, as you might guess, with everybody being concerned about where the economy is going capital spending is certainly I think being viewed by our customers as being more conservative in it, which translates to fewer printer sales broadly. And we see some sales pushed off; we see some just hesitation on customers, they want us to make sure that demand is going to be there. So and, on the flip side, they're using their assets more heavily. They're bringing 3D printing in and actually using it more heavily in production. So in that scenario, you see materials going up new printer sales decline, the growth rate in it declining. So that's a quarter-to-quarter variation. And it very much depends on how customers are viewing the future and how much they need their cash. Fortunately, the people we sell to or have really good balance sheets. So it's not that they don't have the money to invest. They're just mainly being prudent about how they spend their money given all the macro stuff going on. And it has a direct impact on each quarter. Hard to predict where that goes, but that's the current trend.

Next question today is coming from Paul Chung from JP Morgan.

So just a follow-up on OpEx. I think I heard you say the exit rate of maybe $66 million or so on a quarterly run rate business or this is kind of moving forward? Is that kind of the pace of OpEx implied around high-single-digits for '23. Is that the right way to think about it?

We're not prepared to comment yet on 2023. We'll give you that guidance as we get closer, maybe on our next call, or definitely on our next call. But I think you're directionally thinking about Q4 correctly. We hope to beat that number slightly, which you mentioned that will be in that ballpark.

And Paul, from a longer-term perspective, there were investments we needed to make this year to make sure that basically our back office infrastructure could support our future growth and do so efficiently we would expect in future years to start gaining efficiencies in our G&A, if you will, our back office infrastructure. So the idea was that's why we viewed this as an investment. You're not only in R&D, but in G&A, if you will, to make those critical investments to gain efficiency in the future years, okay, to hit our scale, and you just need to do that.

Great. And then on gross margins, you know, you're seeing some sequential improvement here after a trough in Q2, how do we think about margin expansion in '23 to get some, the supply chain costs come down? You get some pricing benefits? And then what is the benefit from insourcing I guess, on the margin line and also impact on OpEx from insourcing?

So we'll give you a much better clarity on 2023 as much as any company can, when the year finishes out, Paul. But I will tell you, all the trends you just mentioned are correct. As we implement price increases, it takes a little bit to take root and flow through. Some of them are tied to the introduction of new technology, new platforms that bring more value to customers. So there is a lag between your costs going up and COGS and your recovery in pricing. So we saw some pricing improvement in the quarter flow-through; we expect more of that to come as we go into '23. We've been very careful about not getting out over our skis in advertising, manufacturing cost reductions, which again shows up on the COGS line, but they're real. And we saw the initial benefit as Michael mentioned in Q3, and we had only done it; we had only insourced it in about the mid-quarter point. And we already saw benefits from that. So we expect our gross margins to be consistently improving. Hopefully, Q2 was the low point. We expect it to be consistently improving, but we can't give you specific guidance until we get to just went through up and see what the macro-economic outlook is.

And then last one on free cash flow. How do we think about it to end the year? You've seen a usage here for the last four quarters, mostly on lower earnings. But can we start to see some kind of rebound here in pre-cash as we exit the year and look forward to '23? Maybe some moves to insourcing helps, I'm not sure. Just your general outlook?

When people look at the details, it's a big tick up in inventory, and inventory levels and working capital. That was because of the insourcing of manufacturing; we had to pick up a lot of existing inventory from that supplier. It's good inventory; we'll burn it down over time, and that'll be a cash source for us. And we would expect operational improvements that continue to drive better operating cash flow as well. So in terms of free cash flow, we're really not a very capital intensive business. So cash flow operations we get a nice flow through into free cash flow, because we don't spend a lot of capital inherently on organic growth, where we would spend it are on a kind of bolt-on acquisitions or other infrastructure changes, but a lot of the infrastructure changes we've already made. And we don't expect that to be a big cash usage going forward. So as Michael mentioned, we exited the quarter with over $600 million in cash. We did close out the dp polar acquisition after the quarter closed. But other than that, we've got a strong balance sheet, and we own the assets we really need to own for the future. We just need to execute now and grow them return.

Yeah. And I just add, right, if you kind of look at Q3, we had roughly kind of in the range of $15 million to $20 million of outflows and cash related to the insourcing and manufacturing, strip that out, and kind of strip out all the acquisition activity that we've done instead on the face of our cash flow statement. I think you'll be kind of in the ballpark for what to expect cash flow was.

Next question is coming from Tyler Hutin from William Blair.

I just want to start off just with potentially in healthcare. I know you said, obviously growth is down. I was wondering if you could quantify kind of any year-to-date numbers on how much dental was down year-over-year?

We didn't break out that number, but it was meaningful. I mean, when you look at the orthodontic business for us, if you will, have been growing strong double-digits, coming into this inflationary environment. And clearly, if you follow that segment of the market, what manufacturers of those products have said is, growth rates have declined from strong double-digit performance to more single-digits to more flattish performance all in a very rapid period of time. And what they've attributed to, which I fully understand is that consumers are having to decide between milk, eggs, and gas and straightening their teeth. And in that case, crooked teeth are tolerable for a while. So that's, I fully expect that market will rebound. And we've got great technology, great channels to market there. But for right now, it's in the doldrums and has really declined rapidly during the year.

And then I guess my follow-up would just be on the pricing. You said there's kind of a lag in pricing, when should we kind of see that effect? Taking a part and kind of just like a long-term, not really '23 guidance, but just getting back to your long-term goals, gross margin of 50%. Where do you see that trajectory now?

So, I'll start with your question on pricing. I mean, I think that we've seen the full run rate of a price increase in Q3. The price increases announced earlier in the year. So you can kind of expect that not change materially going forward into Q4. And in 2023, I mean, we're not going to, like I said, we're not going to comment on specifically, but I'll just say that we'll continue to monitor input costs and make price adjustments where we can. But for now, I think the run rate that you're seeing in Q3 is indicative of where we are for the near-term.

If you look at what we've always said from the past, and now is there pricing opportunity on existing products is always a bit tricky to drive that because it isn't usually a capital item for our customers, at least on the printer side, materials are a little more OpEx for customers. So an opportune time to look at pricing strategy is really when you introduce new products, and we set out at the beginning of '22 to refresh our entire product line over the next two years. So '22 and '23, most of that will happen in '23. And those are always the opportunity to set new pricing points when new products hitting the market.

Next question is coming from Wamsi Mohan from Bank of America.

I would like to understand how 3D Systems is positioned as we potentially head into a downturn. If we consider a hypothetical scenario where revenue declines by 10% in a slowing market, how should investors think about the implications of this? What options do you have to address such a situation? This is a challenging question since it might not be how things will actually unfold, but investors are looking for reassurance regarding where the lowest point might be for margins and cash flows. Any insights you can share on this would be appreciated.

It's a great time to have a strong balance sheet. Our divestitures and actions in the capital markets in 2021 put us in a solid cash position for 2022, and we've largely maintained that throughout the year. We're confident about our foundational strength. In terms of flexibility going forward, the economy's direction is uncertain, and there are also currency fluctuations to consider. We hope that the recent stabilization of the dollar will remain consistent and not create additional challenges. The economy is unpredictable. Much of our business is not discretionary, so procedures outside of dental and certain medical areas are unlikely to be delayed unless the economy worsens significantly. If the economy declines, it could have some negative impact on revenue, but likely less severely than many other industries. On the cost side, we have various strategies available, including managing labor costs. I’m happy to see that supply chains are starting to stabilize and improve. Issues such as computer chip shortages earlier this year have eased, making components easier to acquire, and we are beginning to negotiate better pricing on parts. We also need to be mindful of labor costs if there’s a drop in volume, but we have all the usual strategies ready for adjustment, and we will implement them as needed. We've been diligent in maintaining our initiatives in 2022, which means while we've invested significantly this year, we can draw on those resources if we need to scale back in 2023. These are options we can consider in the future.

Yes. No, you hit all the right comments; I would just say. Just kind of double back on the strength of our balance sheet and capital structure, I mean, we do have enough liquidity to weather, I think certainly any near-term storm in levers that Jeff mentioned, I think we're very well positioned.

It's interesting to note that from a labor perspective, because the company is healthy and we have a strong balance sheet, we have been able to attract high-quality talent. The availability of talent is not a problem; the amount of labor we have depends on our business volume. We've been successful in attracting good talent. However, every company is facing rising labor costs due to inflation, and we must be mindful of our employees' needs in this regard. We have made adjustments to our pay scales to address these rising costs, but it is challenging to keep up. Nevertheless, we have the usual strategies to implement if conditions become tougher, and we will utilize them if necessary. I want to emphasize that we are focused on execution. We own the necessary assets, and now we need to execute effectively with them while prioritizing profitability and cash performance. We are hopeful for top-line growth as the markets recover, but right now, our focus is on executing our investments and enhancing profitability and cash flow.

Our next question is coming from Shannon Cross from Credit Suisse.

I just had a question with regards to the comments you made about maybe losing some sales due to U.S. dollar strength, which I think, to some extent, plays in the pricing, obviously, given how the currency impacts some of the purchasing decisions overseas. So I'm wondering what led you to say that? And how you're thinking about pricing from the standpoint of international? Do you think you need to take it down to offset currency pressure or where you price in U.S. dollars? Or just in general, what you're thinking about in terms of elasticity of demand there.

Yes, I have a few general comments, Shannon. First, we are continuously evaluating how to set prices and assessing risks related to international sales. We might have emphasized this a bit too much, but generally, we are facing some foreign exchange challenges. These challenges arise from two main factors: first, foreign-denominated sales translate to lower U.S. dollar amounts, and second, products priced in U.S. dollars overseas can face additional challenges, potentially affecting pricing or resulting in lost sales. Ultimately, this will have a similar overall impact on our business.

No, it's okay. I think we probably commented enough. Go ahead with your next question.

Okay. Now I was just wondering, can you talk a bit more about Systemic or Bio Systemic? because what I'm thinking is that those on the call, including myself, are not biotech analysts. So I'm just wondering, as we look forward, what sort of both qualitative and quantitative milestones should we watch for to show that everything is trending in the right direction?

Yes, I would say it's somewhat qualitative, but we will provide as much quantitative information as possible regarding the contracts we secure. We are currently in talks with several pharmaceutical companies to demonstrate our model and ensure its effectiveness. This concept is not entirely new, but the innovative technology we offer, including printed vasculature within tissue, enables cells to survive. If these cells can live for around a month, it allows for effective drug studies, making it very appealing to pharmaceutical companies. We need to prove that the model is functional to proceed with statistical analysis. You should look out for announcements related to contracts, as we plan to share these as we secure them, including the figures associated with them. Over time, you should expect to see this grow. The extent of our financial transparency will depend on how much effort we put into reporting the margins of the business. I believe we can discuss revenue growth and will do our best to provide information on margins because we aim to be quite open. This sector operates differently from traditional business models, and I don't believe anyone in this industry has fully ventured into it yet. For biotech investors, we want to clearly reflect what this business is achieving and its potential value to ensure our shareholders benefit from it. Therefore, we will be as transparent as possible. The first sign to look for will be contract announcements, and we will share as much financial information as we can.

I'm curious, in your discussions with some pharmaceutical companies, are you seeking strategic investments from them or are you more focused on securing a guaranteed contract to ensure revenue? From a funding perspective, as this grows, I'm interested in your thoughts.

No, we don't need any investments right now. We've committed $15 million to it. That's fine to get us to a material scale where we can show to internally and externally that this business is a good business, and it's going to grow from there. So we've already had people wanting to come up and invest in it with us, but we don't want to take investment too early because I'm afraid we'll give away future value. It depends a little bit on how demand grows and what capital requirements there are. If they're really high, we might look at somebody coming in to share the burden with us on the capital investment. If they're low enough, we may do it ourselves. That will just be decided based on the magnitude and the return on investment. But we've set it up to give ourselves optionality on bringing in outside investment if we want it, and that's the way we'll run the business right now. I'm really excited to see the first contracts come in and this model demonstrated because truly, Shannon, nobody else can do this in the world right now. These models have a chance to accelerate drug development and obviously reduce the amount of animal testing. That's not just an advertisement for cruelty to animals; it is a statement that animal physiology is not the same as humans. And that's why the failure rate on drug development is so high, is you test it in mice and sheep and pigs and so forth to work your way up to scale to trust to go into the humans. And those physiologies are just not human physiologies. So if we can demonstrate this in a lab that it works with human cells, there's a chance to shorten the cycle, increase the hit rate, and reduce animal testing, which is a win for everybody. So that is the value to shareholders that we talk about creating. I want to see it come through in pharmaceutical contracts that we can talk about and show that the business model works.

Next question is coming from Alek Valero from Loop Capital.

My question is, so what's your view on the macro's impact on customer behavior, as you mentioned, 2023? And maybe if you guys could provide deeper concept on how you believe customers are doing their actions and the patient has actions as macro increasing manifests?

Yes. Do you want to start off on that?

Yes, your question pertains to how customers are responding to macroeconomic uncertainty. Firstly, no one can accurately predict what will unfold in 2023. We are still facing a volatile supply chain situation, and consumer spending is fluctuating. People are becoming more cautious. We are doing our best to manage this. As highlighted in our prepared remarks, the main effect on 3D Systems is felt in the more elective procedures within our Healthcare segments, particularly in the orthodontic market. However, we have some areas in our business that are relatively insulated from recession concerns and continue to perform well outside of the dental sector. Our healthcare business experienced a significant year-over-year increase, and our Industrial Solutions segment achieved 9% year-over-year growth, marking the seventh consecutive quarter of such growth. I just wanted to provide that context before allowing Jeff to elaborate further.

Everything Michael said is absolutely accurate. The reason for continued growth, which is a broad industry observation, is that additive manufacturing enables customers to increase flexibility in their supply chains. Additionally, it allows for the design of more advanced parts that enhance performance. Despite the economic challenges and the strong dollar presenting headwinds for us in the U.S., there’s a beneficial trend in our industry. Many of our customers have experienced difficulties due to extended supply chains, particularly those linked to Asia and Eastern Europe, affected by pandemics and wars, creating significant uncertainty. Consequently, many are considering additive manufacturing for their factories as it allows for production closer to home and provides the flexibility to produce different parts on demand, enhancing their product performance. As an industry, we've taken the lead in developing new materials for production, and customers see the potential to create the specific parts they need with additive manufacturing. This trend is particularly advantageous during recessionary times, as the effects of the pandemic still resonate, and ongoing issues with supply chains due to Chinese shutdowns are prevalent. While there are macroeconomic challenges, the acceptance of additive manufacturing presents unique advantages for our industry. I believe this trend will persist and even accelerate as the economy improves and capital spending increases. In the short term, the outcome of these factors is uncertain, but in the long run, the supply chain challenges have created a significant opportunity for our industry, likely making additive manufacturing a lasting component of the production supply chains in various sectors, including industrial and healthcare globally.

Your next question is coming from Greg Palm from Craig-Hallum Capital Group.

This is Danny Eggerichs on for Greg today. I'll try to keep it short. I guess just on the revenue guide implies Q4 more or less in line with Q3. Obviously, dental sounds like remains pretty challenged. But I guess more broadly across other end markets, what are you seeing through October and November here? And maybe how you're expecting that project into the next few months?

It's fairly consistent right now. We don't anticipate any major changes between now and the end of the year, barring any significant global events like a larger conflict or a new pandemic outbreak. Our adjusted revenue range reflects the current risks as we approach mid-November. Unless a major disruption occurs, we expect this steady state to continue. On a personal level, individuals seem more cautious, and that trend is likely to persist. Additionally, our customers are interested in improving or mitigating the risks associated with their supply chains. As we close out the year and move into next year, unless there are significant disruptions, we see the situation as relatively stable at the moment. While this may not be the most thrilling outlook, it accurately represents what we observe as of now.

Got it. And then I guess, just in light of that weaker demand environment, slower growth, just how you're thinking about managing and balancing investments.

Yes, that's the challenging aspect because we believe this is a promising growth industry. We need to plant and nurture a certain number of seeds to achieve that growth, and we want to be cautious about it. We're currently focused on managing our investments wisely. The positive aspect is that we've acquired the necessary assets to support our growth, so there aren't many additional investments required. We have the most extensive technology portfolio in the industry right now, and we aim to manage it effectively while making some incremental investments for organic growth and enhancement. Any external investments we consider will be purely opportunistic at this stage, as we don't have a pressing need to pursue them. Furthermore, we have $600 million in cash, which means we are not compelled to spend it; our priority is to execute effectively with what we have. Our emphasis is heavily on profitability and cash performance. Despite having a robust balance sheet, we are committed to this approach because it seems wise. Simultaneously, we want to nurture the assets we've acquired into something substantial over time. That’s why we maintain our long-term projection of double-digit growth and our goal of becoming a $1 billion company in five years. I still believe that target is achievable, assuming no major global disruptions. If conditions normalize in the next year or two, there’s ample potential for significant growth ahead. Kevin, with that, I think we'll conclude the Q&A.

I'll turn over to you for any further or closing comments, doctor.

Great. Thank you all for joining us today. It's been a pleasure talking to you, and we look forward to updating you with our year-end results on our next call. Thanks, and have a good day. Bye-bye.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.