CONTACT: FOR IMMEDIATE RELEASE
Frank J. Spina
Vice President & Chief Financial Officer
805/295.5600, Ext. 2201
Mary E. Woods
Investor Relations
805/295.5600, Ext. 2508
3D SYSTEMS ANNOUNCES FOURTH QUARTER, FULL YEAR 1997 RESULTS
VALENCIA, Calif., Feb. 24, 1998--3D Systems Corporation (Nasdaq-NNM:TDSC)
today reported record revenues of $24.7 million for the fourth quarter 1997,
an increase of 12 percent from $22.1 million in the comparable period one
year ago.
During the quarter, the company incurred one-time charges
approximating $2.1 million related primarily to inventory adjustments and
restructuring of its European operations.
After providing for these items, 3D Systems posted a net loss of $2.6
million, equal to $.22 a share, for the three months ended Dec. 31, 1997.
This compares with net income of $1.7 million, or $.14 a share, a year ago.
For the year ended Dec. 31, 1997, revenues totaled a record $90.3
million, an increase of 13 percent from $79.6 million a year ago. The
company posted a net loss of $4.6 million, or $.40 per share, in the most
recent year. This compares with 1996 net income of $4.6 million, equal to
$.39 per share.
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PAGE 1
In commenting on the quarter and year's performance, Arthur B. Sims,
chairman and chief executive officer, cited three primary factors that
depressed the company's results.
"Softness in domestic sales was a serious drag on top line growth,
although our international business grew 48 per cent in 1997.
In Europe, restructuring charges and other operating expense increases
added to our losses in the fourth quarter.
Finally, we made significant inventory adjustments in the second half,
necessitated by a number of factors, including obsolescence created in the
wake of our aggressive rollout of new products in 1997."
Sims added that "domestic sales now appear to be recovering, we have
begun corrective actions to improve our European performance, and we
believe that the inventory issues are now well behind us."
NEW SENIOR EXECUTIVE APPOINTED IN EUROPE
Sims announced the appointment of Robert Baumgartner to head European
sales and the resignation of Eugen J. Geyer, the company's vice president
of European operations, to pursue other interests.
Baumgartner was most recently director of sales and marketing for
Geschrer GmbH, a subsidiary of Victoreen Inc. USA, a company specializing
in measurement systems. Previously, he was general manager of MAB GmbH, a
wholly owned subsidiary of BMW.
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PAGE 2
SALES PRODUCTIVITY INCREASING
"Orders flow and sales productivity have been increasing, and the
backlog for our SLA rapid prototyping systems, while down substantially
from last year's end, increased in both the third and fourth quarters,"
Sims said. "The U.S. sales team, particularly, showed progress during the
second half of the year and their volume of bookings in the early weeks of
1998 is encouraging."
RECORD UNITS SHIPPED
He reported that the company shipped 274 rapid prototyping units in
1997, of which 113 were the new Actua 2100 office systems. In 1996, the
company shipped 157 units, six of which were Actua 2100's in the fourth
quarter when the product was first introduced.
In 1997's fourth quarter, the company shipped 85 units, of which 40
were Actua 2100 office systems, compared with 48 units in the same quarter
a year ago. Actua shipments in 1997's fourth quarter included 14 units that
had previously been placed on hold awaiting European CE certification.
NEW MILLENNIUM PRODUCT LINE WELL RECEIVED
Sims reported that the company's new Millennium Series rapid
prototyping systems, introduced late in the third quarter, is being well
received across a wide range of industries. "All of the Big Three
automobile companies have ordered units," he reported, "as have several
auto companies in Europe and Asia. One U.S. car manufacturer ordered three
of the advanced-technology SLA-5000's for shipment in this year's first
quarter."
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PAGE 3
Sims indicated that the company's financial condition remains strong.
At year end, 3D Systems' current ratio stands at 3:1 and current assets
include $16.2 million in cash and equivalents.
3D Systems manufactures rapid product development systems that enable
users to move from concept models to finished parts faster, at lower cost,
and at higher quality than traditional methods. 3D's equipment fabricates
solid objects using input from CAD/CAM/CAE computer systems. Major
applications include concept modeling, rapid prototyping and rapid tooling
for products in a wide range of industries including automotive, aerospace,
medical, electronic and consumer product industries.
Except for the historical information contained in this news release,
the matters discussed are forward-looking statements that involve risks and
uncertainties, such as the ability of the company to contain expenses
attributable to its European operations, the impact of competitive products
and pricing, and other risks detailed in the company's Form 10-K.
###
For current investor information, please call our shareholder communication
service at 800-757-1799.
PAGE 4
3D SYSTEMS CORPORATION
Consolidated Balance Sheets
<CAPTION
ASSETS December 31, 1996 December 31, 1997
----------------- -----------------
Current assets:
Cash and cash equivalents $ 24,356,441 $ 12,694,831
Restricted cash 722,000 ---
Short-term investments 3,759,492 3,498,265
Accounts receivable, less allowances for
doubtful accounts of $406,178 (1996) and $441,399 (1997) 19,601,383 23,618,237
Current portion of lease receivables 987,362 1,257,006
Inventories 12,309,588 12,164,633
Deferred tax assets 2,958,227 3,319,651
Prepaid expenses and other current assets 2,332,337 2,305,163
-------------- -------------
Total current assets 67,026,830 58,857,786
Property and equipment, net 14,452,504 16,895,011
Licenses and patent costs, net 3,660,568 5,464,351
Deferred tax assets 1,821,000 3,971,000
Lease receivables, less current portion 3,773,573 3,944,462
Other assets 1,504,382 2,207,109
-------------- --------------
$ 92,238,857 $ 91,339,719
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,805,930 $ 4,885,831
Accrued liabilities 6,890,343 8,814,193
Current portion of long-term debt 100,000 95,000
Customer deposits 894,111 238,248
Deferred revenues 5,572,892 6,514,868
-------------- -------------
Total current liabilities 17,263,276 20,548,140
Other liabilities 1,472,991 1,491,534
Long-term debt, less current portion 4,800,000 4,705,000
-------------- -------------
23,536,267 26,744,674
-------------- -------------
Stockholders' equity:
Preferred stock, $.001 par value. Authorized 5,000,000
shares; none issued
Common stock, $.001 par value. Authorized 25,000,000
shares; issued and outstanding 11,358,892 (1996); and
issued 11,450,071 and outstanding 11,425,071 (1997) 11,359 11,450
Capital in excess of par value 72,527,768 73,856,965
Accumulated deficit (4,308,471) (8,897,605)
Cumulative translation adjustment 471,934 (210,827)
Treasury stock, at cost, 25,000 shares --- (164,938)
-------------- -------------
Total stockholders' equity 68,702,590 64,595,045
-------------- -------------
$ 92,238,857 $ 91,339,719
PAGE 5
3D SYSTEMS CORPORATION
Consolidated Statements of Operations
For the Three Month Periods and Years Ended
December 31, 1996 and 1997
[CAPTION]
Three Month Periods Ended December 31,
(Unaudited) Years Ended December 31,
------------------------------------- -------------------------------------
1996 1997 1996 1997
----------------- ---------------- ---------------- ----------------
Sales:
Products 15,033,628 $ 16,824,401 $ 53,228,089 $ 59,148,861
Services 7,086,348 7,876,159 26,403,414 31,107,812
----------------- ----------------- ----------------- -----------------
Total sales 22,119,976 24,700,560 79,631,503 90,256,673
----------------- ----------------- ----------------- -----------------
Cost of Sales:
Products 7,421,043 11,826,003 24,893,210 35,462,442
Services 4,834,529 5,374,159 16,905,678 21,744,779
----------------- ----------------- ----------------- -----------------
Total cost of sales 12,255,572 17,200,162 41,798,888 57,207,221
----------------- ----------------- ----------------- -----------------
Gross Profit 9,864,404 7,500,398 37,832,615 33,049,452
----------------- ----------------- ----------------- -----------------
Operating expenses
Selling, general and administrative 6,242,516 8,771,709 24,747,871 29,653,342
Research and Development 1,792,649 2,390,359 7,665,092 10,990,809
----------------- ----------------- ----------------- -----------------
Total operating expenses 8,035,165 11,162,068 32,412,963 40,644,151
----------------- ----------------- ----------------- -----------------
Income (loss) from operations 1,829,239 (3,661,670) 5,419,652 (7,594,699)
Interest income 347,141 207,843 1,541,229 1,202,176
Interest expense (82,609) (127,877) (128,860) (356,203)
----------------- ----------------- ----------------- -----------------
Income (loss) before provision for
income taxes 2,093,771 (3,581,704) 6,832,021 (6,748,726)
Provision for income taxes (benefit) 432,169 (1,019,464) 2,232,704 (2,159,592)
----------------- ----------------- ----------------- -----------------
Net income (loss) 1,661,602 $ (2,562,240) $ 4,599,317 $ (4,589,134)
================= ================= ================= =================
Weighted average shares outstanding 11,349,110 11,439,226 11,322,973 11,397,529
================= ================= ================= =================
Net income (loss) per common share .15 $ (.22) $ .41 $ (.40)
================= ================= ================= =================
Weighted average shares outstanding
and dilutive shares 11,676,962 11,439,226 11,741,635 11,397,529
================= ================= ================= =================
Net income (loss) per common share
assuming dilution .14 $ (.22) $ .39 $ (.40)
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