GRAPHICS OMITTED
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 ANNOUNCES Q2 AND FIRST HALF 2003 RESULTS
VALENCIA, Calif. - August 12, 2003. 3D Systems Corp. (NASDAQ: TDSC). 3D
Systems Corp. announced today revenues for the quarter ended June 27, 2003 were
$26.9 million compared with revenues of $28.5 in the second quarter a year ago a
decrease of 5.9%. Net loss available to common shareholders for Q2 2003 was $3.8
million or $.30 per fully diluted share compared with a net loss available to
common shareholders of $5.6 million or $.44 per fully diluted share in the prior
year period.
Gross profit margins rose to 40% in Q2 2003 compared with gross margins of
38% for the same period a year ago, reflecting improved materials margins
resulting from the shift from distribution of Vantico materials to the
production and distribution of the Company's Accura(R) materials. Total
operating expenses decreased 36% to $12.5 million in Q2 2003 from $19.3 million
in the second quarter 2002, reflecting a concerted effort to reduce costs and
expenses which began in the third quarter of 2002.
During the quarter we had one time unusual expenses of approximately $1.4
million related to the now completed investigation of the Audit Committee of the
Board of Directors into revenue recognition issues, increased professional fees
associated with the investigation, the write-off of deferred financing costs
associated with the repayment of the term loan and other one time costs relating
to severance.
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3D SYSTEMS ANNOUNCES Q2 AND FIRST HALF 2003 RESULTS
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Revenues for the first six months of 2003 were $49.9 million compared with
revenues of $56.1 million in the first half of 2002. Net loss available to
common shareholders for the first six months was $10.6 million or $.84 per fully
diluted share compared with net income available to common shareholders of $3.1
million or $.21 per fully diluted share in the first six months a year ago.
Results for the first half 2002 include an $18.5 million pretax benefit
associated with the Vantico arbitration settlement and also include
approximately $2.8 million in costs associated with the investigation of the
Audit Committee, increased professional fees associated with the investigation,
the write-off of deferred financing costs associated with the repayment of the
term loan, and other one time costs relating to severance.
On May 5, 2003, the Company completed a private placement resulting in net
proceeds to the Company of $15.2 million. Of these proceeds, $9.6 million was
used to pay down bank debt incurred in conjunction with the acquisition of DTM
Corp. in 2001. At June 27, 2003, the Company had cash balances of $9 million.
"The past six months have been a very difficult period for our Company,"
said G. Walter Loewenbaum II, chairman of the Board of Directors. "A decrease in
revenues principally resulting from the continuing downturn in capital expense
purchasing, combined with the time, attention and costs required by the Audit
Committee's investigation and the need to obtain additional finances severely
strained our resources. I am pleased to report that by the end of the second
quarter, the Audit Committee had completed its investigation, we paid down bank
debt, reduced costs, developed and begun implementing new systems of internal
controls and we are fully compliant with SEC and Nasdaq regulations relating to
the timely filing of our reports.
There is sustained interest in our ADM applications. In the second quarter
2003, ADM revenues were $9.1 million," Mr. Loewenbaum continued. "We begin the
second half of the year with the decks cleared, ready to move forward throughout
the remainder of 2003 and into 2004."
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3D SYSTEMS ANNOUNCES Q2 AND FIRST HALF 2003 RESULTS
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3D Systems will hold a conference call to discuss Q2 2003 results on August
12, 2003 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 two hours after the completion of the
call for 7 days. To access the recording, dial 800/642-1687 or 706/645-9291
internationally and enter 2121776, the conference call ID number.
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
email at moreinfo@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
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3D SYSTEMS ANNOUNCES Q2 AND FIRST HALF 2003 RESULTS
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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; 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; the 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
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.
Table follows:
###
3D SYSTEMS CORPORATION
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 27, 2003 and June 28, 2002
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
------------- ------------- ------------- -------------
June 28, 2002 June 28, 2002
June 27, 2003 As Restated June 27, 2003 As Restated
------------- ------------- ------------- -------------
Sales:
Products $ 18,010 $ 19,110 $ 32,746 $ 38,371
Services 8,861 9,433 17,141 17,686
------------- ------------- ------------- -------------
Total sales 26,871 28,543 49,887 56,057
------------- ------------- ------------- -------------
Cost of sales:
Products 9,543 10,861 18,044 21,741
Services 6,547 6,883 13,569 13,197
------------- ------------- ------------- -------------
Total cost of sales 16,090 17,744 31,613 34,938
------------- ------------- ------------- -------------
Gross profit 10,781 10,799 18,274 21,119
------------- ------------- ------------- -------------
Operating expenses:
Selling, general and administrative 9,719 12,974 20,375 23,944
Research and development 2,564 4,707 5,163 8,635
Severance and other restructuring costs 251 1,617 251 1,617
------------- ------------- ------------- -------------
Total operating expenses 12,534 19,298 25,789 34,196
------------- ------------- ------------- -------------
Loss from operations (1,753) (8,499) (7,515) (13,077)
Interest and other expense, net 993 668 1,887 1,368
Gain on arbitration settlement - - - 18,464
------------- ------------- ------------- -------------
(Loss) income before provision for income taxes (2,746) (9,167) (9,402) 4,019
Provision for (benefit from) income taxes 815 (3,539) 1,031 953
------------- ------------- ------------- -------------
Net (loss) income (3,561) (5,628) (10,433) 3,066
Preferred stock dividend 198 - 198 -
Net (loss) income available to common shareholders $ (3,759) $ (5,628) $ (10,631) $ 3,066
============= ============= ============= =============
Shares used to calculate basic net (loss) income
available to common shareholders per share 12,734 12,845 12,730 12,986
============= ============= ============= =============
Basic net (loss) income available to
common shareholders per share $ (0.30) $ (0.44) $ (0.84) $ 0.24
============= ============= ============= =============
Shares used to calculate diluted net (loss) income
available to common shareholders per share 12,734 12,845 12,730 14,445
============= ============= ============= =============
Diluted net (loss) income available to
common shareholders per share $ (0.30) $ (0.44) $ (0.84) $ 0.21
============= ============= ============= =============
3D SYSTEMS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 27, 2003 AND DECEMBER 31, 2002
(IN THOUSANDS)
(UNAUDITED)
ASSETS June 27, 2003 December 31, 2002
--------------- -----------------
Current Assets:
Cash and cash equivalents, including restricted cash of $1,269 in 2003 $ 8,985 $ 2,279
Accounts receiveable, less allowances for
doubtful accounts of $2,660 and $3,068 18,054 27,420
Current portion of lease receivables 322 322
Inventories, net of reserves of $2,318 and $1,876 12,897 12,564
Prepaid expenses and other current assets 2,222 3,687
--------------- -----------------
Total current assets 42,480 46,272
Property and equipment, net 13,493 15,339
Licenses and patent costs, net 16,979 14,960
Lease receivables, less current portion,
net of allowance of $510 and $414 363 553
Acquired technology, net 6,860 7,647
Goodwill 44,650 44,456
Other assets, net 2,420 3,006
--------------- -----------------
$ 127,245 $ 132,233
=============== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $ 8,550 $ 2,450
Accounts payable 6,454 10,830
Accrued liabilities 14,577 15,529
Current portion of long-term debt 155 10,500
Customer deposits 648 801
Deferred revenues 13,430 14,770
--------------- -----------------
Total current liabilities 43,814 54,880
Other liabilities 3,373 3,397
Long-term debt, less current portion 4,010 4,090
Subordinated debt 10,000 10,000
--------------- -----------------
Total liabilities 61,197 72,367
--------------- -----------------
Redeemable preferred stock, 8% convertible, authorized 5,000
shares, issued and outstanding 2,634 15,158 ---
Stockholders' equity:
Common stock, authorized 25,000 shares, issued and
outstanding 12,734 and issued and outstanding 12,725 13 13
Capital in excess of par value 85,100 84,931
Notes receivable from officers for purchases of stock (59) (59)
Preferred stock dividend (198) ---
Accumulated deficit (31,852) (21,419)
Accumulated other comprehensive loss (2,114) (3,600)
--------------- -----------------
Total stockholders' equity 50,890 59,866
--------------- -----------------
$ 127,245 $ 132,233
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