Stratasys Reports Record Q1 Revenue & Earnings
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Stratasys Reports Record Q1 Revenue & Earnings



MINNEAPOLIS--(BUSINESS WIRE)--April 22, 2003--Stratasys, Inc. (Nasdaq: SSYS) today announced the highest first quarter revenue and earnings in the Company's history.

The Company reported revenues of $10,677,641 for the first quarter 2003, up from $6,396,389 for the prior year period. The Company reported net income of $1,143,576, or $0.20 per share, for the first quarter of 2003 comparing favorably to a net loss of $724,926, or $0.14 per share, for the first quarter of 2002. System shipments rose 158% to 134 units from 52 units for the first quarter of 2002.

The Company also achieved record sales order bookings for the first quarter. As a result, the Company begins the second quarter with a $3.1 million backlog, comparable to its backlog at the end of 2002. This backlog is expected to help provide more consistent quarter-to-quarter revenues.

The Company's improved gross profit margins for the quarter were a result of increased volumes and favorable mix. Operating expenses remained consistent with internal expectations as the Company incurred increased selling and marketing expenses associated with the worldwide distribution of the Dimension(TM).

"Stratasys had a strong first quarter, especially considering the uncertainties of the global economy. We are proud to report record revenues and earnings for the first quarter, while we improved our balance sheet," said Scott Crump, Chairman and CEO. "We expect the trend demonstrated by our strong Q1 results in sales and profits to improve consistently through the year. The company's desktop 3D-printer, Dimension(TM), favorably impacted Q1 revenue. This ultra low-priced product ($29,900), which outputs plastic prototype parts directly from CAD at the engineer's desktop, is redefining a rapidly expanding office prototyping market."

"We continue to observe strong acceptance for our high performance systems, especially our Titan. Our ability to offer a variety of genuine production-grade plastic parts is allowing us to expand our position in rapid prototyping and rapid short-run manufacturing," said Crump.

"We believe that a revolution has now started in the emerging $550 million global rapid prototyping/3D-printing industry. It is defined by a low-priced, easy-to-use 3D-printer that will enhance the investment many companies have already made in 3D solid CAD. With a Dimension(TM) at the designer's desk, concept models can be built quickly, allowing the designs to be reviewed and modified inexpensively, as needed. Stratasys is the first to commercially launch an ultra-low priced desktop 3D-printer and thus set the parameters for this emerging market. www.DimensionPrinting.com We are confident that future growth will result from our expansion of this application."

"There are over 2 million 3D CAD engineering workstations now operating globally, according to Daratech, generating over 4 million rapid prototype parts annually. We believe that there is an excellent opportunity for significant 3D-printer unit expansion. Priced at $29,900, a 3D-printer 'inflection price point' has occurred due to price elasticity allowing for significant growth. We believe that a market exists for over 500,000 3D-printers at the right price. Currently, about 10,000 RP systems are in the field globally, which is less than 3% of the market potential."

"In the second quarter, we expect to commercialize a new plastic prototype material polyphenylsulfone (PPSF) for our Titan system. This material offers design engineers the ability to functionally test high strength applications while operating at high temperatures of up to 400 degree F. This is in addition to its resistance to chemicals and fire. You can cook a pizza on this stuff. This is a very exciting time for Stratasys," Crump concluded.

The Company will hold a conference call to discuss these results on April 23, 2003 at 9:30 A.M. (Eastern Daylight Time). To access the call, dial 1-866-482-6973 (new number). A recording of the call will be available for 48 hours beginning two hours after the call ends. To access the recording, dial 888-211-2648 and enter access code #3409334.

Stratasys, Inc. is in the three-dimensional solid imaging business as a manufacturer of rapid prototyping systems for automotive, aerospace, industrial, recreational, electronic, medical and consumer products OEM's. The Company's patented Fused Deposition Modeling (FDM) rapid prototyping processes create precision 3-dimensional plastic and wax prototyping parts directly from 3-D CAD systems. Stratasys holds over 88 granted and pending patents worldwide focused on rapid prototyping. The Company is located at 14950 Martin Drive, Eden Prairie, Minnesota 55344-2020 and www.Stratasys.com.

(Financial Tables follow)

Except for the historical information herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties; these include the continued market acceptance and growth of the Company's Dimension, Prodigy Plus, Maxum and Titan product lines; the size of the 3D Printing market; our ability to penetrate the 3D Printing market; our ability to maintain the growth rates experienced in this and preceding quarters; our ability to introduce and market new materials such as polyphenylsulfone and the market acceptance of this and other material; the impact of competitive products and pricing; the timely development and acceptance of new products and materials; and the other risks detailed from time to time in the Company's SEC Reports, including the reports on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2002, and Form 10-K for the year ended December 31, 2002.

This release is available on the Stratasys Website at www.stratasys.com

Dimension 3D-Printer information can be found on www.DimensionPrinting.com



STRATASYS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

----------------------------------------------------------------------
                                          Three Months Ended March 31,
                                          ----------------------------
                                              2003           2002
                                           (unaudited)    (unaudited)
----------------------------------------------------------------------

Sales                                       $10,677,641    $6,396,389

Cost of goods sold                            3,820,070     2,450,135
                                          ----------------------------

Gross profit                                  6,857,571     3,946,254

Costs and expenses
     Research and development                 1,158,157     1,142,268
     Selling, general and administrative      4,230,252     3,677,208
                                          ----------------------------
                                              5,388,409     4,819,476
                                          ----------------------------

Operating income (loss)                       1,469,162      (873,222)
                                          ----------------------------

Other income (expense)
     Interest income                             36,529        42,919
     Interest expense                           (41,312)      (46,294)
     Other                                       60,386      (137,284)
                                          ----------------------------
                                                 55,603      (140,659)
                                          ----------------------------

 Income (loss) before income taxes            1,524,765    (1,013,881)

 Income taxes (benefit)                         381,192      (288,955)
                                          ----------------------------

 Net income (loss)                           $1,143,573     $(724,926)
                                          ----------------------------

Earnings (loss) per common share
        Basic                                     $0.21        $(0.14)
                                          ----------------------------
        Diluted                                   $0.20        $(0.14)
                                          ----------------------------

Weighted average number of common
  shares outstanding
        Basic                                 5,393,877     5,363,165
                                          ----------------------------
        Diluted                               5,810,887     5,363,165
                                          ----------------------------

COMPREHENSIVE INCOME (LOSS)

Net income (loss)                            $1,143,573     $(724,926)

Other comprehensive loss
     Foreign currency translation
      adjustment                                (21,526)       (7,127)
                                          ----------------------------

Comprehensive income (loss)                  $1,122,047     $(732,053)
                                          ----------------------------



STRATASYS, INC.

CONSOLIDATED BALANCE SHEETS


----------------------------------------------------------------------
                                              March 31,   December 31,
                                                2003         2002
                                             (unaudited)
----------------------------------------------------------------------

ASSETS

Current assets
    Cash and cash equivalents                $17,450,402  $14,193,590
    Accounts receivable, less allowance for
     returns and doubtful accounts of
     $589,913 in 2003 and $537,374 in 2002     9,473,963   10,640,451
    Inventories                                6,759,453    6,537,446
    Prepaid expenses                             785,722      921,404
    Deferred income taxes                        126,000      126,000
                                             -------------------------
        Total current assets                  34,595,540   32,418,891
                                             -------------------------


Property and equipment, net                    5,925,406    5,937,200
                                             -------------------------

Other assets
    Intangible assets, net                     2,793,598    2,953,401
    Deferred income taxes                      2,174,000    2,174,000
    Other                                        114,106      116,995
                                             -------------------------
                                               5,081,704    5,244,396
                                             -------------------------

                                             $45,602,650  $43,600,487
                                             -------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
    Mortgage payable, current portion            $62,730      $61,572
    Accounts payable and other current
     liabilities                               4,228,587    4,141,635
    Unearned maintenance revenue               4,677,599    4,474,281
                                             -------------------------
        Total current liabilities              8,968,916    8,677,488
                                             -------------------------

Mortgage payable, less current portion         2,141,299    2,156,790
                                             -------------------------

Stockholders' equity
  Common Stock, $.01 par value, authorized
   15,000,000 shares, issued 6,653,910
   shares in 2003 and
   6,518,200 shares in 2002                       66,539       65,182
   Capital in excess of par value             35,628,235   35,025,413
   Retained earnings                           6,051,961    4,908,388
   Accumulated other comprehensive loss          (83,505)     (61,979)
   Less cost of treasury stock, 1,179,237
    shares in 2003 and 2002                   (7,170,795)  (7,170,795)
                                             -------------------------
        Total stockholders' equity            34,492,435   32,766,209
                                             -------------------------

                                             $45,602,650  $43,600,487
                                             -------------------------


CONTACT: Stratasys, Inc., Minneapolis
             S. Scott Crump, 952/937-3000
             or 
             Tom Stenoien, 952/937-3000 
             
www.Stratasys.com