3D Systems Announces Q1 Results; Vantico Settlement Contributes $0.82 to EPS.

Business Editors

VALENCIA, Calif.--(BUSINESS WIRE)--April 17, 2002

3D Systems Corp. (Nasdaq: TDSC) today announced revenues for the first quarter 2002 of $27.2 million and net income of $8.5 million or $0.58 per fully diluted share. This compares with the first quarter 2001 revenue of $27.9 million and EPS of $0.11 per fully diluted share for 3D Systems, prior to the acquisition of DTM Corporation.

Compared with the combined results of 3D Systems and DTM Corporation in the first quarter of 2001, totaling $37.5 million, revenue decreased by 28% in the first quarter of 2002.

Included in the first quarter earnings is a pretax benefit associated with the Vantico arbitration settlement of $18.5 million or $0.82 per share after taxes. Without the benefit associated with the Vantico arbitration, a net loss of $3.5 million or $0.27 per fully diluted share would have been realized. The company continued to strengthen its working capital position and reduced total senior bank debt to $19 million from $21 million at Dec. 31, 2001.

The revenue and earnings shortfall results primarily from lower European revenues and continued slowness in the U.S. manufacturing sector across all product lines.

"We are not pleased with first quarter results," stated Brian K. Service, president and chief executive officer. "We are in the process of recalibrating our cost structure in line with current market conditions including a reduction of approximately 10% of our work force on a worldwide basis.

"The total number of SLA(R) 7000 systems shipped in Q1 increased over Q4 2001, although total unit shipments across most other SLA and SLS(R) systems categories were lower than anticipated," continued Service. "The reduction in our gross margins to 37.3% overall compared with 46.1% in Q1 2001 (3D Systems and DTM on a combined basis) and 42.9% in Q4 2001 is a result of the lower overall system sales.

"During the first quarter, we made progress on several fronts, especially relating to our Advanced Digital Manufacturing strategic program. And we are very pleased with the Vantico settlement which resolved one of the major challenges surrounding our business," Service said.

"We are now refocusing the management resources consumed by the arbitration toward our resin conversion program and our overall materials business. This includes our new Accura(TM) materials line, which will be announced at the beginning of next week. We also expect to finalize details of the license divestiture, as required under the DOJ Consent Decree, during the second quarter," Service concluded.

As previously announced, 3D Systems will hold a conference call today to discuss the first quarter results at 9:30 a.m. Eastern Daylight Time (6:30 a.m. Pacific Daylight Time). To access the call, dial 877/613-8341 or 706/679-7620 internationally. A recording of the call will be available for 72 hours beginning one hour after the call ends. To access the recording, dial 800/642-1687 or 706/645-9291 internationally and enter 3756743.

About 3D Systems

Founded in 1986, 3D Systems provides solid imaging products and solutions that help reduce the time and cost of designing products and facilitate direct and indirect manufacturing. Its systems utilize patented technologies that create physical objects from digital input.

3D Systems currently offers the ThermoJet(R) solid object printer, SLA(R) (stereolithography) systems and SLS(R) (selective laser sintering) systems, as well as related software and materials. Product pricing in the U.S. ranges from $49,995, for the ThermoJet printer, to $799,000 for the high-end SLA 7000 system. The company licenses the complementary 3D Keltool(R) process, a method for producing steel mold inserts, and currently is developing systems that use composite paste materials for direct manufacturing.

More information on the company is available at www.3dsystems.com, or by phoning 888/337-9786, extension 809, or 661/295-5600 internationally. An investor packet can be obtained by calling 800/757-1799.

Note to editors: Accura is a trademark; and 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 which 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: world economic conditions; the ability to timely and cost-effectively identify and obtain or independently develop resins adequate for use with 3D Systems' products; the funding of amounts of capital adequate to provide for the working capital needs of the company; actions of competitors and customers; reliance on single or limited suppliers; and such other factors as are described in the company's filings with the Securities and Exchange Commission, including annual reports on Form 10-K for the year ended Dec. 31, 2001, and 3D Systems' current report on Form 8-K filed on March 21, 2002.

                        3D SYSTEMS CORPORATION
                 Consolidated Statements of Operations
                              (Unaudited)
                            (in thousands)

                                             Three Month Periods
                                               Ended March 31,
                                              2002         2001
Sales:
  Products                                 $ 18,942     $ 20,686
  Services                                    8,253        7,217
    Total sales                              27,195       27,903
Cost of sales:
  Products                                   10,744        9,287
  Services                                    6,314        5,412
    Total cost of sales                      17,058       14,699
Gross profit                                 10,137       13,204
Operating expenses:
  Selling, general and administrative        10,970        8,919
  Research and development                    3,858        2,184
    Total operating expenses                 14,828       11,103
Income (loss) from operations                (4,691)       2,101
Interest and other income (expense), net       (700)          66
Gain on lawsuit settlement                   18,464
Income before provision for
 income taxes                                13,073        2,167
Provision for income taxes                    4,575          802
Net income                                 $  8,498     $  1,365
Shares used to calculate basic net
 income per share                            13,132       12,294
Basic net income per share                 $   0.65     $   0.11
Shares used to calculate diluted net
 income per share                            14,651       12,940
Diluted net income per share               $   0.58     $   0.11


                        3D SYSTEMS CORPORATION
                      Consolidated Balance Sheets
                            (in thousands)

                                              03/31/2002    12/31/2001
ASSETS
Current assets:
  Cash and cash equivalents                  $   5,542     $   5,948
  Accounts receivable, less allowances for
   doubtful accounts of $2,816 (2002)
   and $2,710 (2001)                            27,014        38,181
  Lawsuit Settlement                            20,000            --
  Current portion of lease receivables             391           498
  Inventories                                   18,626        17,822
  Deferred tax assets                              731         5,271
  Prepaid expenses and other current assets      2,577         2,817
      Total current assets                      74,881        70,537
Property and equipment, net                     17,511        17,864
Licenses and patent costs, net                  12,530        12,314
Deferred tax assets                              6,618         6,618
Lease receivables, less current portion          1,226         1,750
Acquired technology, net                         8,780         9,192
Goodwill                                        44,729        44,158
Other assets                                     3,288         3,572
                                             $ 169,563     $ 166,005
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Line of Credit                             $   5,074     $   6,151
  Accounts payable                              12,408        12,819
  Accrued liabilities                           11,707        15,681
  Current portion of long-term debt              3,145         3,135
  Customer deposits                                904         1,624
  Deferred revenues                             13,085        13,697
      Total current liabilities                 46,323        53,107
Deferred tax liabilities                         4,232         4,210
Other liabilities                                3,211         3,329
Long-term debt, less current portion            15,415        16,240
Subordinated debt                               10,000         9,400
                                                79,181        86,286
Stockholders' equity:
  Preferred stock, authorized 5,000 shares,
   none issued
  Common stock, authorized 25,000 shares,
   issued 13,370 and outstanding 13,145
   (March 2002) and issued 13,357 and
   outstanding 13,132 (December 2001)               13            13
  Capital in excess of par value                94,982        93,173
  Notes receivable from officers                  (244)         (244)
  Retained earnings (loss)                       3,235        (5,263)
  Accumulated other comprehensive loss          (6,064)       (6,420)
  Treasury stock, at cost, 225 shares
   (2002 and 2001)                              (1,540)       (1,540)
      Total stockholders' equity                90,382        79,719
                                             $ 169,563     $ 166,005