EXHIBIT 99.1
NEWS RELEASE
For Immediate Release
Contact:
Elizabeth Goode, Director Marketing
(661) 295-5600, ext. 2632
goodee@3dsystems.com
Trudy Self, Investor Relations
Self & Associates
(909) 336-5685
tmself@aol.com
3D SYSTEMS CORP. ANNOUNCES 2002 RESULTS
VALENCIA, Calif.- June 30, 2003. 3D Systems Corp. (NASDAQ: TDSCE). 3D
Systems Corp. announced today revenue for the year ended December 31, 2002 was
$116.0 million compared with revenue of $118.8 million in the previous year. Net
loss for 2002 was $14.9 million or $1.16 per share compared with a net loss of
$2.4 million or $.19 in 2001. Included in the results are severance and other
restructuring costs of $4.4 million relating to reductions in personnel in 2002
and the closure of the DTM facility in Austin, TX. Also included in the 2002
results is a provision for income taxes of $8.9 million compared with a benefit
from taxes of $1.0 million in 2001. The Company also recorded a gain of $18.5
million as a result of the Vantico arbitration.
"2002 was a very challenging, and ultimately disappointing year for 3D
Systems," said Brian K. Service, chief executive officer. "The worldwide
decrease in capital spending by corporate purchasers and general economic
downturn after September 2001 impacted both the number of systems sold and the
product mix, and as a result, the Company was forced into significant additional
restructuring with respect to the DTM acquisition and integration. Material
sales were impacted by the termination of the 13 year resin development and
distribution agreement with Vantico, the concurrent acquisition of RPC Ltd., and
launch of our own competing range of SL resins. Subsequent to year-end, in
February 2003 the Company's outside auditors, Deloitte & Touche, LLP informed
the Company that they had questions regarding the revenue recognition of
approximately $3.0 million recorded in 4th Quarter 2002, which was subsequently
reversed.
"We sold fewer large frame systems as many of our rapid prototyping
corporate customers tried to make do with the systems they had or chose to buy
the least expensive systems available to meet their most immediate needs. Sales
of our large frame SLA systems decreased by 26% from 2001. Sales of our smallest
MJM (Multi-Jet Modeling) systems also
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decreased as we began the transition to, but were forced to delay the launch of
a third generation MJM system, the InVision(TM) 3-D printer," Service continued.
"On a more positive note, results for our advanced digital manufacturing
(ADM(SM)) systems were much as expected with ADM revenues for 2002 rising to
$37.2 million from $28 million in 2001, an increase of 33%. In 2002, we sold 79
systems (SLA(R) and SLS(R) systems) to ADM customers and four new ADM centers
opened in 2002, one for motorsport applications, one for aerospace applications
and two devoted to hearing aid shell production. Given the opportunities
available for ADM applications, we believe that ADM will continue to show
similar sustainable growth in the future.
"We also recovered approximately 50% of the worldwide market for SL resins used
in our SLA systems by year-end, generating approximately the same annualized
margin dollars as in prior periods," Service added. "And although sales, general
and administrative, and research and development expenses rose in 2002
reflecting an increase in professional and other fees and development costs
related to the InVision 3-D printer, in July, the Company instituted an
aggressive cost containment program and accompanying personnel reductions to
substantially reduce operating costs for 2003. We are continuing to pursue a
program to increase margins and continue to work to contain costs, however the
accounting and audit fees associated with the audit committee investigation will
be a substantial additional cost in the first half of 2003," Service concluded.
In response to the questions raised by Deloitte regarding the revenue
recognition of certain transactions, the Audit Committee of the Board of
Directors commenced an investigation and retained Morgan Lewis (who subsequently
retained BDO) to assist. As a result of the investigation, we restated our
previously issued financial statements for the years ended December 31, 2001 and
2000. The restatements arose from the adjustments of certain income statement
items which principally relate to the treatment and timing of revenue
recognition of a small percentage of total equipment sales transactions. The
effect of the adjustments for the year ended December 31, 2001 is to decrease
the Company's previously reported fiscal 2001 consolidated revenues from $121.2
million to $118.7 million, increase net loss from $1.3 million to $2.4 million
and increase diluted loss per share from $0.11 to $0.19. For the year ended
December 31, 2000, the effect of these adjustments is to decrease the Company's
previously reported fiscal 2000 consolidated revenues from $109.7 million to
$109.3 million, decrease net income from $8.1 million to $7.9 million and
decrease diluted income per share from $0.63 to $0.61. Following the completion
of the investigation, changes have been made in personnel, systems and
procedures and 3D Systems is in the process of implementing all of the
recommendations made by BDO.
The Company's financial statements for 2002 include a going concern
qualification. On May 5, 2003, the Company completed a private placement of
approximately 2.6 million shares of its Series B Convertible Preferred stock for
an aggregate consideration of $15.8 million. Of these proceeds, $9.6 million was
used to pay down the bank debt incurred in conjunction with the acquisition of
DTM in 2001. The Company is working to obtain alternate financing to replace its
revolving debt by September 30, 2003 and currently has accepted a proposal from
Congress Financial, a subsidiary of Wachovia, to provide, subject to due
diligence, a secured revolving credit facility of up to $20 million. The going
concern reflects the uncertainty that the Company will be able to raise capital
in order to fund operations and obtain a commitment letter from a qualified
lending institution by September 30, 2003, to refinance all of the outstanding
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obligations (approximately $8.5 million) with US Bank. At June 13, 2003, the
Company had cash balances of $6 million. 3D Systems expects to release results
for Q1 2003 on or before July 14, 2003 and will hold a conference call following
the release of those results.
ABOUT 3D SYSTEMS
Founded in 1986, 3D Systems(R), 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 applications.
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 ThermoJet, SLA, SLS, Accura, 3D Systems 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 failure to
file the 10-Q within the extended time period granted by Nasdaq, disruption
caused by the reconfiguration of the management team, the receipt of a
commitment letter by September 30, 2003 to refinance the outstanding obligations
with US Bank, 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
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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.
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