Stratasys Reports Record Quarterly Revenue and Earnings.MINNEAPOLIS Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. -- Company Reports Record System Shipments Stratasys Stratasys, Inc. is a company headquartered in Eden Prairie, MN that manufactures and sells both rapid prototyping machines and materials. Stratasys FDM systems use fused deposition modeling technology to produce parts out of industrial-grade thermoplastic materials such as ABS, , Inc. (Nasdaq:SSYS) today announced the highest quarterly revenue, earnings and system shipments in the company's history. Revenues rose 20% to $20.8 million for the second quarter ended June June: see month. 30, 2005 over the $17.3 million recorded in the same quarter of the previous year. Net income grew 21% to $2.9 million, or $0.27 per share, for the second quarter compared with net income of $2.4 million, or $0.22 per share, for the same quarter of the previous year. Total system shipments increased 25% to 351 units during the second quarter of 2005 compared to 281 units for the same period in 2004. The second quarter financial results included a $246,000 loss related to foreign currency translation caused by depreciation in the Euro versus the U.S. dollar. In addition, the second quarter tax liability was reduced by $325,000 as a result of discrete tax benefits. Revenues rose 20% to $39.6 million for the six months ended June 30, 2005 over the $33.2 million recorded for the same period of the previous year. Net income grew 23% to $5.3 million, or $0.49 per share, for the six-month period, compared with net income of $4.3 million, or $0.40 per share, for the same period in 2004. Total system shipments were 628 units for the six-month period, compared with 572 units for the same period in 2004. Stratasys released the following information regarding its financial guidance for the fiscal year ending Dec. 31, 2005: --The company reconfirms expected revenue of $84 million to $89 million or growth of 20% to 27% over fiscal 2004. --Operating margins are anticipated to be in the range of 18.5% to 20.5%, versus the previous target of 20% to 22%. --The tax rate, excluding discrete tax benefits, is expected to be 34% to 35% versus the previous estimate of 37% to 39%. The impact of the known discrete tax benefits will reduce the expected annual rate to 31% to 32%. --The company reconfirms its expected earnings of $1.07 to $1.12 per share or growth of 26% to 32% over fiscal 2004, which includes the second quarter discrete items. "The second quarter generated record Dimension 3D Printer and maintenance revenue, as well as and strong growth in consumables revenue, all of which exceeded our expectations. This growth was partially offset by slower than expected sales of our high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. systems, particularly in Europe, as well as weaker than expected sales within our emerging paid parts business," said Scott Crump crump v. crumped, crump·ing, crumps v.tr. 1. To crush or crunch with the teeth. 2. To strike heavily with a crunching sound. v.intr. , chairman and chief executive officer of Stratasys. "Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the second quarter reflect the ongoing investments we are making in new product and channel development. These investments, combined with a mix of system sales System sales is a business term used in the franchising industry. Franchisors provide supplies, marketing and administration services to franchisees in return for a part of the franchisees' revenues. Some franchisors also operate some outlets directly. that favored our lower-margin products, including our Dimension 3D printers and Eden systems, offset the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. margin impact of rapid growth in consumables and maintenance revenue during the quarter. "Beyond our proven growth drivers, we continue to develop new opportunities, including our paid parts business, as well new initiatives targeting the emerging market for rapid manufacturing Building parts out of plastic or metal one layer at a time using a method of additive fabrication such as 3D printing. Multiple pieces, either similar or dissimilar, can be built simultaneously. applications. "Overall, we are pleased with our performance over the first six months of fiscal 2005, and we continue to expect strong growth for the balance of the year. We believe the growth in system sales over the first six months of 2005 reflects favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. on end-user demand for our products. In addition, the ongoing expansion of our installed base of systems should bode bode 1 v. bod·ed, bod·ing, bodes v.tr. 1. To be an omen of: heavy seas that boded trouble for small craft. 2. well for future growth in consumables and maintenance revenue," Crump concluded. The company will hold a conference call to discuss these results on July 28, 2005 at 8:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . To access the call, dial 877-236-1078 (or 213-408-0663 internationally). The conference I.D. is "Stratasys." A recording of the call will be available for two weeks after the call. To access the recording, dial 800-862-9098 (or 785-424-1051 internationally). A live webcast will be available through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Stratasys Website (www.stratasys.com). A replay of the webcast will be made available on the Stratasys Website for 90 days. About Stratasys Inc. Stratasys Inc., Minneapolis, manufactures office-based rapid prototyping Building a part one layer at a time using a method of additive fabrication such as 3D printing. Such parts are used for concept modeling to determine if the product design meets the customer's expectations. systems and 3D printers. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Wohlers Report 2005, the company supplied 36 percent of all systems installed worldwide in 2004, making it the unit market leader. Stratasys patented the rapid prototyping process known as fused deposition modeling See 3D printing. (FDM (1) (Fused Deposition Modeling) See 3D printing. (2) (Frequency Division Multiplexing) Transmitting multiple data signals simultaneously over a single wire by using multiple carriers, each having a unique center frequency. ). The process creates functional models directly from any 3D CAD CAD: see computer-aided design. (Computer-Aided Design) Using computers to design products. CAD systems are high-speed workstations or desktop computers with CAD software. program using ABS (Automatic Backup System) See backup program. plastic, polycarbonate A category of plastic materials used to make a myriad of products, including CDs and CD-ROMs. , and PPSF PPSF Procurement/Production Status File . The company holds 175 granted or pending rapid prototyping patents. Stratasys products are used in the aerospace, defense, automotive, medical, education, electronic, and consumer product industries. The company's systems are also used for rapid manufacturing and rapid tooling applications. For more information on the company, go to www.Stratasys.com or www.DimensionPrinting.com. (Financial Tables follow) All statements herein that are not historical facts or that include such words as "expects", "anticipates", "projects", "estimates" or "believes" or similar words are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that we deem to be covered by and to qualify for the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. protection covered by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. 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 our Dimension BST (convention) BST - British Summer Time. The name for daylight-saving time in the UK GMT time zone. (TM), Dimension SST SST: see airplane. (TM), Prodigy An online information service that provides access to the Internet, e-mail and a variety of databases. Launched in 1988, Prodigy was the first consumer-oriented online service in the U.S. Plus, FDM Maxum(TM), FDM Vantage(TM), and Titan(TM) product lines; the size of the 3D printing market; our ability to penetrate the 3D printing market; our ability to maintain the growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. 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 materials; the impact of competitive products and pricing; the timely development and acceptance of new products and materials; our ability to effectively and profitably market and distribute the Eden line; and the other risks detailed from time to time in our SEC Reports, including the annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004 and the quarterly reports on Form 10-Q Form 10-Q See 10-Q. filed throughout 2005. This release is also available on the Stratasys Web site at www.Stratasys.com.
STRATASYS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
2005 2004 2005 2004
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------
Net Sales
Product $16,904,541 $13,694,776 $31,727,712 $26,615,948
Services 3,880,404 3,620,872 7,920,052 6,545,875
------------------------- -------------------------
20,784,945 17,315,648 39,647,764 33,161,823
------------------------- -------------------------
Cost of goods sold
Product 7,466,598 5,900,967 13,764,804 11,267,076
Sales 1,129,328 935,128 2,319,505 1,709,059
------------------------- -------------------------
8,595,926 6,836,095 16,084,309 12,976,135
------------------------- -------------------------
Gross profit 12,189,019 10,479,553 23,563,455 20,185,688
------------------------- -------------------------
Costs and expenses
Research and
development 1,687,140 1,345,067 3,073,728 2,691,396
Selling, general
and
administrative 6,853,228 5,605,591 13,446,914 11,197,664
------------------------- -------------------------
8,540,368 6,950,658 16,520,642 13,889,060
------------------------- -------------------------
Operating income 3,648,651 3,528,895 7,042,813 6,296,628
------------------------- -------------------------
Other income
(expense)
Interest income 438,104 124,484 815,582 236,231
Other (342,912) (34,980) (311,453) (71,013)
------------------------- -------------------------
95,192 89,504 504,129 165,218
------------------------- -------------------------
Income before
income taxes 3,743,843 3,618,399 7,546,942 6,461,846
Income taxes 852,681 1,226,381 2,259,828 2,164,719
------------------------- -------------------------
Net income $2,891,162 $2,392,018 $5,287,114 $4,297,127
------------------------- -------------------------
Earnings per
common share
Basic $0.28 $0.23 $0.51 $0.42
------------------------- -------------------------
Diluted $0.27 $0.22 $0.49 $0.40
------------------------- -------------------------
Weighted average
number of common
shares
outstanding
Basic 10,451,351 10,331,963 10,466,981 10,301,560
------------------------- -------------------------
Diluted 10,779,798 10,771,375 10,827,926 10,716,031
------------------------- -------------------------
STRATASYS, INC.
CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------
June 30, December 31,
2005 2004
(unaudited)
----------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $32,436,569 $20,624,845
Short-term investments 20,000,000 35,225,000
Accounts receivable, less allowance for
returns and doubtful accounts of
$1,462,530 in 2005 and $1,731,830 in
2004 19,174,535 14,951,350
Inventories 10,167,018 7,520,422
Net investment in sales-type leases 1,554,761 1,324,499
Prepaid expenses 2,536,841 1,756,494
Deferred income taxes 455,000 455,000
------------- ------------
Total current assets 86,324,724 81,857,610
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Property and equipment, net 10,932,828 10,043,657
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Other assets
Intangible assets, net 2,886,961 2,551,581
Net investment in sales-type leases 2,557,656 2,693,830
Deferred income taxes 679,000 354,000
Long-term investments 3,314,340 720,000
Other 869,324 978,339
------------- ------------
10,307,281 7,297,750
------------- ------------
$107,564,833 $99,199,017
------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and other current
liabilities $9,763,621 $6,643,620
Unearned maintenance revenue 7,968,641 7,668,362
------------- ------------
Total current liabilities 17,732,262 14,311,982
------------- ------------
Stockholders' equity
Common Stock, $.01 par value, authorized
15,000,000 shares, issued 12,262,296
shares in 2005 and 12,211,835 shares in
2004 122,622 122,118
Capital in excess of par value 72,374,890 71,762,100
Retained earnings 25,480,162 20,193,048
Accumulated other comprehensive income
(loss) (258,600) 5,910
Less cost of treasury stock, 1,796,929
shares in 2005 and 1,770,026 shares in
2004 (7,886,503) (7,196,141)
------------- ------------
Total stockholders' equity 89,832,571 84,887,035
------------- ------------
$107,564,833 $99,199,017
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