Stratasys, Inc. Announces Record Third Quarter Revenues
27 October 1998
Stratasys, Inc. Announces Record Third Quarter Revenues; Revenues up 7% Over Third Quarter 1997; Backlog Increases 30% -- Largest Backlog in Company History
MINNEAPOLIS, Minn.--Oct. 26, 1998--Stratasys, Inc. today announced record revenues for the third quarter and nine months ended September 30, 1998. Revenues for the third quarter rose to a record $7,836,247 as compared to $7,345,471 in the third quarter of 1997, a 6.7% increase.
Net income for the third quarter of 1998 was $49,616, or $0.01 per share, as compared to income of $50,763, or $0.01 per share, for the same period in 1997. Gross profit margin as a percentage of sales grew to 62.4% for the third quarter of 1998 compared to 62.1% for the third quarter of 1997.
For the nine months ended September 30, 1998, revenues totaled $23,100,729 compared with revenues of $19,519,332 for the nine months ended September 30, 1997, an 18.3 percent increase. The Company reported net income for the nine months of $496,125, or $0.08 per share, compared with a net loss of $436,535, or ($0.08) per share, for the same period of 1997.
Scott Crump, Chairman and Chief Executive Officer, stated, "We are pleased to report record revenues for the third quarter as well as profits that were within the First Call range."
"Moreover, at the end of the third quarter, the Company had the largest backlog in its history. At September 30, 1998, backlog increased by 30% as compared with the prior quarter, which we believe is significant. During the third quarter, bookings from the Far East were also above plan. This backlog supports our confidence in fourth quarter results."
Mr. Crump added, "We continue to reduce operating expenses as a percentage of sales. For the nine months ended September 30, 1998, operating expenses decreased to 64.6%, compared with 70% in the comparable 1997 period, which resulted in an operating profit of $313,517 for the nine month period of 1998 compared with an operating loss of $1,001,782 for the comparable 1997 period.
"The Company continues its commitment to deliver to the RP market user friendly, technically superior and robust FDM(R) products. Our continued confidence in the concept modeling market was underscored by the exceptionally strong performance of Genisys(R), The 3D Printer(tm), this quarter. Strong demand for the FDM product line was also evident in the outstanding performance of FDM Quantum(tm), our most recently released large volume, high-speed rapid prototyping system.
"We believe that there is cause for optimism going forward into the fourth quarter and that 1998 will be the most successful year in our history."
Mr. Crump concluded, "In addition to product commitment, we continue to strive to enhance shareholder value. Our recently announced purchase of warrants from funds managed by Archery Capital was intended to ensure the containment of future dilution. In addition, based on our recently announced stock repurchase program, we will strategically purchase Stratasys shares when market conditions dictate. We are also proud that during the third quarter we were ranked 8th in Deloitte & Touche's prestigious Minnesota Technology Fast 50, a ranking of the 50 fastest growing companies in the state, as well as being ranked as one of the United State's 100 fastest growing high-tech exporters by World Trade magazine."
Stratasys Inc., is a manufacturer of rapid prototyping systems for automotive, aerospace, industrial, recreation, electronic, medical and consumer products OEM's. The Company's patented Fused Deposition Modeling (FDM) and Genisys rapid prototyping processes create 3-dimensional plastic and wax prototype parts directly from 3-D CAD systems. The Company is located at 14950 Martin Drive, Eden Prairie, Minnesota 55344-2020.
Except for the historical information herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, including the timely development and acceptance of new products, the impact of competitive products and pricing, and the other risks detailed from time to time in the Company's SEC Reports, including the report on Form 10-KSB for the year ended December 31, 1997, and on Form 10-QSB for the quarters ended March 31, 1998 and June 30, 1998.
This release is available on the Stratasys website at www.stratasys.com and the KCSA Worldwide website at www.kcsa.com.
Item 1. Financial Statements
STRATASYS, INC.
CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------
September 30, December 31,
1998 1997
(unaudited) (audited)
----------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 12,361,203 $ 9,116,232
Marketable Securities 4,625,990 4,441,380
Accounts receivable, less
allowance for doubtful
accounts of $395,291 in
1998 and $514,461 in 1997 6,794,629 11,666,054
Inventories 5,645,505 5,492,130
Prepaid expenses 742,706 226,698
Deferred taxes 1,051,000 1,051,000
----------------------------------
Total current assets 31,221,033 31,993,494
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Machinery and Equipment, less
accumulated depreciation 3,585,108 3,445,265
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Other assets
Intangible assets 2,909,363 3,376,038
Sundry 213,634 169,633
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3,122,997 3,545,671
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$ 37,929,138 $ 38,984,430
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LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Obligations under capitalized
leases, current portion 192,290 144,137
Accounts payable and other
current liabilities 2,408,442 3,066,342
Unearned maintenance revenue 2,316,903 2,426,270
Income taxes payable 267,144
----------------------------------
Total current liabilities 5,184,779 5,636,749
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Deferred taxes 124,000 124,000
Obligations under capitalized
leases, less current portion 232,822 136,314
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356,822 260,314
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Stockholders' Equity
Common Stock, $.01 par value,
authorized 15,000,000
shares, issued 6,096,212
shares in 1998 and 6,079,659
shares in 1997 60,898 60,797
Capital in excess of par value 32,592,432 33,556,084
Accumulated deficit (33,387) (529,514)
Cumulative translation adjustment (6,421)
Less treasury stock, 35,400
shares in 1998 and (225,985)
no shares in 1997
----------------------------------
Total stockholders' equity 32,387,537 33,087,367
----------------------------------
$ 37,929,138 $ 38,984,430
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See notes to financial statements
STRATASYS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
(unaudited) (unaudited) (unaudited) (unaudited)
------------------------------------------------------------------------
Sales $ 7,836,247 $ 7,345,471 $ 23,100,729 $ 19,519,332
Cost of goods sold 2,948,307 2,786,163 7,859,872 6,863,028
----------- ----------- ------------ ------------
Gross profit 4,887,940 4,559,308 15,240,857 12,656,304
Costs and expenses
Research and
development 1,470,715 1,445,121 4,053,744 3,786,117
Selling, general
and administrative 3,507,876 3,181,057 10,873,596 9,871,969
----------- ----------- ------------ ------------
4,978,591 4,626,178 14,927,340 13,658,086
----------- ----------- ------------ ------------
Operating income
(loss) (90,651) (66,870) 313,517 (1,001,782)
----------- ----------- ------------ ------------
Other income (expense)
Interest income 175,857 163,005 483,725 370,757
Interest expense (8,874) (18,045) (33,973) (40,568)
----------- ----------- ------------ ------------
166,983 144,960 449,752 330,189
----------- ----------- ------------ ------------
Income (loss) before
income taxes 76,332 78,090 763,269 (671,593)
Income taxes (benefit) 26,716 27,327 267,144 (235,058)
----------- ----------- ------------ ------------
Net income (loss) $ 49,616 $ 50,763 $ 496,125 $ (436,535)
----------- ----------- ------------ ------------
Earnings (loss) per
common share
Basic $ 0.01 $ 0.01 $ 0.08 $ (0.08)
----------- ----------- ------------ ------------
Diluted $ 0.01 $ 0.01 $ 0.08 $ (0.08)
----------- ----------- ------------ ------------
Weighted average
number of common
shares outstanding
Basic 6,059,269 5,676,502 6,074,416 5,608,179
----------- ----------- ------------ ------------
Diluted 6,109,275 5,885,372 6,191,682 5,660,371
----------- ----------- ------------ ------------
See notes to financial statements