VALENCIA, Calif.--(BUSINESS WIRE)--Feb. 18, 2003--3D Systems Corp.
TDSC) announced today that it is revising its previous
announcement about preliminary results for the fourth quarter of 2002.
During the course of the audit, which is not yet completed, the
Company became aware that approximately $3.0 million of equipment that
was shipped at the end of the year could not be reported as revenue in
the fourth quarter of 2002. As a result, the Company expects to report
revenue for the fourth quarter of approximately $31 million. Further,
the Company expects that it will not be profitable in the fourth
quarter or fiscal 2002.
As a result of the shortfall in revenue, the Company will not
comply with certain covenants of its bank loan agreements. "We have
discussed these developments with our bank and expect to propose in
the next 30 days a repayment schedule to reduce or repay our bank debt
in exchange for waiving these covenants," explained Brian K. Service,
Chief Executive Officer. "Certain members of the Board of Directors
have expressed an interest in investing up to approximately $5 million
in an equity offering," Service added.
Service stated, "We are disappointed by this development, but
appreciate the fact that since all sales are expected to be paid for
as if they were Q4 sales the company's cash flow should not be
impaired. To date, we have received payments of $200,000 on these
deferred sales. We believe the majority of these deferred sales will
be recognized as revenue in the first quarter of 2003."
The Company also announced that effective February 15, 2003, it
placed E. James Selzer, its Senior Vice President, Global Finance and
Administration and Chief Financial Officer on administrative leave.
The Company has appointed Grant R. Flaharty, 3D President & Chief
Operating Officer, to serve as Principal Accounting Officer on an
interim basis or until a replacement CFO is appointed. Flaharty,
joined the company in April 1998 and has served as Controller, Vice
President and General Manager for the Company's European operations,
and Senior Vice President of Worldwide Sales and Marketing. Before
joining 3D Systems, he was the Director of Manufacturing Finance at
Qualcomm Inc., a leading wireless communications company. Prior to
that, he acted as Operations Controller at Motorola Inc. Flaharty is a
graduate of Regis College as well as a Certified Public Accountant.
"I am very disappointed by our inability to meet the applicable
standards for recognizing revenue on the equipment shipped late in Q4.
While 2002 was a very challenging year, we made substantial progress
in many areas. I am looking forward to discussing these
accomplishments in the conference call after release of our 2002
results," stated Service.
The Company will reschedule the regular investors quarterly
conference call scheduled for Wednesday, February 19, 2002 at 6:30
a.m. in order to enable its outside auditors to complete the 2002 year
end audit. A date will be announced. The Company believes that it will
file its Annual Report on Form 10-K within the period required by the
SEC and continue to meet its other reporting requirements.
About 3D Systems
Founded in 1986, 3D Systems, the solid imaging company(SM),
provides solid imaging products and solutions that reduce the time and
cost of designing products and facilitate direct and indirect
manufacturing. Its systems utilize patented technologies to create
physical objects from digital input that can be used in design
communication, prototyping, and as functional end-use parts.
3D Systems currently offers the ThermoJet(R) solid object printer,
SLA(R) (stereolithography) systems, SLS(R) (selective laser sintering)
systems, and Accura(R) materials (including photopolymers, metals,
nylons, engineering plastics, and thermoplastics).
3D Systems is the originator of the advanced digital manufacturing
(ADM(SM)) solution for manufacturing applications. ADM is the
utilization of 3D Systems solid imaging technologies to accelerate
production of smaller volumes of customized/specialized parts. A
typical ADM center is expected to contain multiple 3D Systems' SLA,
MJM and/or SLS systems dedicated to full-time manufacturing
Product pricing in the U.S. ranges from $49,995, for the ThermoJet
printer, to $799,000 for the high-end SLA 7000 system. 3D Systems'
multiple platform product line enables companies to choose the most
appropriate systems for applications ranging from the creation of
design communication models to prototypes to production parts. More
information on the company is available at
www.3dsystems.com, or by
phoning 888/337-9786, or 661/295-5600 ext. 2882 internationally. An
investor packet can be obtained by calling 800/757-1799.
Note to editors: ADM and the solid imaging company are service
marks; and si2 is a trademark; and Accura, ThermoJet, SLA, SLS,
Keltool and the 3D logo are registered trademarks of 3D Systems Inc.
Certain statements in this news release may include
forward-looking statements that express the expectation, prediction,
belief or projection of 3D Systems. These statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results, performance and achievement of 3D Systems to be
materially and adversely different from any future results,
performance or achievement expressed or implied by these
forward-looking statements. Factors that may cause actual results to
differ from the forward-looking statements contained in this release
and that may affect the company's prospects in general include, but
are not limited to: the funding of amounts of capital adequate to
provide for the working capital needs of the company; actions of
competitors and customers; the company's ability to successfully
design and produce new products; customer acceptance of new products;
the company's ability to enter into successful relationships with new
customers to fully exploit its products; the company's ability to
successfully implement all elements of its restructuring and cost
savings program, and such other factors as are described in the
company's filings with the Securities and Exchange Commission. The
company does not undertake to update any forward-looking statements.
RJ/la CONTACT: 3D Systems Corp. Elizabeth Goode, 661/295-5600, ext. 2632 Email Contact or Self & Associates Trudy Self, 909/336-5685 Email Contact