NEWS: pr-Apr. 28, 2004

3D Systems Announces Higher First-Quarter Revenue
Contact: Elizabeth Goode, Director Corporate Development 661) 295-5600, ext. 2632 goodee@3dsystems.com	Download PDF
VALENCIA, Calif., Apr. 28, 2004 - 3D Systems Corporation (Nasdaq: TDSC) announced today that revenues for the first quarter of 2004 grew 28.2% to $29.5 million from $23.0 million in the first quarter of 2003. Every region and product class delivered positive contributions to revenue growth. Higher sales of core products and services added $2.9 million to revenue, new products introduced in the last six months added $1.8 million and favorable foreign currency translation accounted for the remaining $1.8 million of the $6.5 million year-over-year increase. Revenues from the sale of systems, materials and services increased in the first quarter of 2004 by 51%, 17% and 18%, respectively, compared to 2003’s first quarter. System sales benefited from unit volume increases of core systems from last year’s depressed levels and from sales of new products. Cost of goods sold and operating expenses for the first quarter of 2003 in the accompanying financial statements have been restated to reflect previously announced changes in two accounting principles adopted at the end of 2003 with retroactive effect to January 1, 2003. Cost of goods sold in 2004 includes a $1.0 million increase from foreign currency translation effects. Gross profit rose 62.3% to $12.0 million from $7.4 million in last year’s first quarter from the leveraged effects of 28.2% revenue growth and ongoing operating improvements. As a percentage of total revenue, gross profit rose to 40.8% in the first quarter of 2004 from 32.2% in the prior-year period. Margins for both products and services increased. Service margins benefited globally from lower warranty costs whereas product margin increases were slightly offset with production ramp-up costs associated with new products introduced within the last six months. Operating expenses declined by $0.9 million to $13.3 million from $14.2 million last year. Operating expenses in 2004 included an additional $0.5 million attributable to foreign currency translation effects and $2.1 million of legal costs compared to an adjusted $1.6 million of legal costs in the previous year’s first quarter. Legal costs in the first quarter of this year included $1.7 million of fees and expenses associated with a combination of the EOS GmbH litigation settled in February 2004 and compliance with the subpoenas that the Company received from the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) in 2003. Loss from operations narrowed to $1.2 million in the first quarter in 2004 compared to $6.7 million in the prior-year period. Net loss available to common shareholders for the first quarter of 2004 was $2.5 million, or $0.19 per fully diluted share. After adjusting last year’s first-quarter results to reflect the $7.0 million cumulative effect of two changes in accounting principles adopted at the end of 2003 but effective as of January 1, 2003, the net loss available to common shareholders for the first quarter of 2003 was $14.9 million or $1.17 per share. “In the first quarter of 2004, 3D Systems continued to deliver solid operating improvements,” said Abe Reichental, 3D Systems’ Chief Executive Officer, “and we achieved the highest first-quarter revenues in the company’s history. We are particularly pleased with the broad base of our revenue increase, the encouraging results of new products and services introduced within the past six months, improved profit margins and, except for legal costs associated with some legacy issues, continued operating cost reductions. At the end of the first quarter we had $22.9 million of unrestricted cash on hand, reflecting $0.8 million of net cash used by operating activities during the first quarter; an additional $2.2 million net reduction during the quarter in working capital investment in receivables, inventory and payables; and unusually high payments during the quarter for previously accrued costs.” 3D Systems will discuss first-quarter 2004 results on a conference call and audio webcast to be held at 11:00 a.m. EDT (8:00 a.m. PDT) today. First-quarter business highlights: Settled costly and distracting litigation, specifically suits involving EOS GmbH and Regent Pacific Management Corporation. Signed hearing-aid resin development and distribution agreement with Dreve. Terminated the company’s shareholder rights plan. Resolved issues related to prior defaults under the company’s industrial development bonds. 3D Systems’ complete suite of customer solutions includes: Multi-Jet Modeling technology (“MJM”), or 3-D printing, uses hot-melt jetting technology to print three-dimensional physical parts by accumulating proprietary solid imaging materials (“SIMs”) in successive layers. MJM technology is the basis of our affordable three-dimensional solutions for printing any three-dimensional part from digital data. Stereolithography or SLA® systems use a laser to convert photosensitive resins into solid cross-sections, layer by layer, until the desired objects are complete. SLA® systems are capable of making multiple parts at the same time and are designed to produce prototype or end use parts that have a wide range of sizes and shapes. Selective Laser Sintering or SLS® systems use heat from a laser to melt and fuse, or sinter, powdered materials into solid cross-sections, layer-by-layer, until the desired parts are complete. SLS® systems can create parts from a variety of plastic and metal powders and are capable of processing multiple parts within the same build cycle. Materials. We blend, market and distribute material products under a variety of brand names that we sell for use in all of our solid imaging systems. The families of engineered products are designed for use with our systems and processes to produce high-quality models, prototypes and parts. We market our stereolithography products under the Accura® brand, selective laser sintering products under the DuraForm®, LaserForm™ and CastForm™ brands, and multi-jet modeling products under the ThermoJet® and VisiJet® brands. Software. We provide our customers with proprietary part-preparation software for personal computers and engineering workstations. Our proprietary software package generates the information to be used by the SLS® and SLA® systems or MJM system to create the solid images. In addition, we team up with other software companies, where appropriate, to develop complementary software for our systems. Services. We provide a comprehensive suite of services and field support to our customers ranging from applications development to installation, warranty and maintenance services. Broad Applications and End-Uses: Concept modeling, three-dimensional printing: Solid imaging solutions are used for concept-modeling and three-dimensional printing applications, to produce three-dimensional shapes, primarily for visualizing and communicating mechanical design applications, as well as for other applications including supply-chain management, architecture, art, surgical medicine, marketing and entertainment. Rapid prototyping: Solid imaging solutions are used for rapid prototyping applications, including the generation of product concept models, functional prototypes and master-casting and tooling patterns that are often used as an efficient, cost-effective means of evaluating product designs. Instant manufacturing: Solid imaging solutions are used for instant manufacturing applications to manufacture end-use parts directly from a digital image. Our instant manufacturing customers produce end-use parts without the need for expensive tooling or molds and without lengthy set-ups, resulting in significant flexibility and mass customization capabilities. Conference Call and Audio Webcast Details 3D Systems will hold a conference call and audio webcast to discuss its first- quarter 2004 financial results today at 11:00 a.m. EDT (8:00 a.m. PDT). To access the Conference Call, dial 877/791-4796 (or 706/679-6014 from outside the United States). A recording will be available two hours after completion of the call for seven days. To access the recording, dial 800/642-1687 (or 706/645-9291 from outside the United States) and enter 6758465, the conference call ID number. To access the audio webcast, log onto 3D Systems’ website at www.3dsystems.com. The link to the webcast is provided on the home page of the website. To ensure timely participation and technical capability, we recommend logging on a few minutes prior to the conference call to activate your participation. The webcast will be available for replay at: http://www.3dsystems.com/company/investor/index.asp Forward-Looking Statements Certain statements made by the company in this release are forward-looking statements. These statements include comments as to the company’s beliefs and expectations as to future events and trends affecting the company’s business. These forward-looking statements are based upon management’s current expectations concerning future events and trends and are necessarily subject to uncertainties, many of which are outside the control of the company. The factors stated under the heading “Forward-Looking Statements” and “Cautionary Statements and Risk Factors” in management’s discussion and analysis of results of operations and financial condition, which appear in the company’s periodic filings with the Securities and Exchange Commission as well as other factors, could cause actual results to differ materially from such statements. About 3D Systems Founded in 1986, 3D Systems, the solid imaging companySM, provides solid imaging products and systems solutions that reduce the time and cost of designing products and facilitate direct and indirect manufacturing. Its systems utilize patented proprietary technologies to create physical objects from digital input that can be used in design communication, prototyping, and as functional end-use parts. More information on the company is available at www.3dsystems.com, or by phoning 888/337-9786, ext. 2882 (or 661/295-5600, ext. 2882 from outside the United States), or via email at moreinfo@3dsystems.com. The 3D logo, 3D Systems, SLA, SLS, ThermoJet and Accura are registered trademarks and SLS, InVision, Amethyst, Bluestone, DuraForm, LaserForm and CastForm are trademarks of 3D Systems. “the solid imaging company” is a service mark of 3D Systems, Inc. All other product names or services mentioned are trademarks or registered trademarks of their respective companies.