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Stratasys Reports Record Full-Year Revenue and Earnings

Annual system shipments increase 58 percent as 3D printing market continues to grow

MINNEAPOLIS, Feb 16, 2005 (BUSINESS WIRE) -- Stratasys, Inc. (SSYS) today announced record full-year revenue and earnings for the year ended Dec. 31, 2004.

The company reported revenue of $70.3 million for fiscal 2004, up 38% from $50.9 million for the prior year. Operating profit grew 49% to $13.0 million for 2004, compared with $8.7 million for 2003. Net income rose 48% to $9.1 million, or $0.85 per diluted share, for fiscal 2004, from $6.2 million, or $0.64 per diluted share, for the prior year. Year-over-year total system shipments rose 58% to 1090 units for 2004.

Revenue increased 28% to $19.4 million for the fourth quarter ended Dec. 31, 2004, over the $15.2 million reported for the same quarter of the previous year. Operating profit grew to $3.1 million for the fourth quarter of 2004 compared with $2.7 million for the fourth quarter of 2003. Net income grew 52% to $2.3 million, or $0.21 per diluted share, for the fourth quarter of 2004, compared with net income of $1.5 million, or $0.14 per diluted share, for the same period in 2003. Total system shipments increased to 272 in the fourth quarter of 2004 versus 226 in the fourth quarter of the prior year.

Higher expenses associated with Sarbanes-Oxley compliance and higher variable commission selling expenses resulting from better-than-expected sales performance both impacted fourth quarter results. In addition, Stratasys is accelerating research and development investments to position the company for new growth opportunities. These investments contributed to higher costs in the fourth quarter of 2004, and included projects related to 3D printing, materials development, rapid manufacturing and Stratasys' paid-parts business.

"Sales growth in fiscal 2004 exceeded our expectations across our entire family of products," said Scott Crump, chairman and chief executive officer of Stratasys. "Despite significantly higher operating costs in the fourth quarter versus last year, the robust demand for our family of 3D printers and rapid prototyping systems contributed to a higher corresponding growth rate in sales. In addition to strong system sales, we continue to experience strong revenue growth from consumables, as our installed base of systems continues to grow. We believe these sales trends will continue into fiscal 2005.

"We believe Stratasys grew its leadership position in the fast-growing 3D printing market in 2004, as unit sales of our Dimension systems grew by 73 percent. Initial order activity in fiscal 2005 for Dimension appears promising when compared to last year, as we are observing more customers purchasing multiple 3D printers for single locations. Engineers are becoming increasingly aware of the benefits of having affordable access to durable, accurate models at the touch of a button. With a growing universe of more than five million designers and engineers now using computer-aided-design (CAD) software globally, we believe a significant, untapped market opportunity exists for Stratasys within 3D printing.

"We also experienced increased sales of our FDM productivity systems in 2004. During the fourth quarter, Stratasys received the largest order from an end-user in company history. The order, which came from a major global automobile manufacturer, is a three-year equipment rental package valued in excess of $1 million.

"We continue to report strong cash flow from operations -- financial strength that provides us a competitive advantage. Cash flow from operations amounted to approximately $16 million for fiscal 2004.

"Overall, we believe we are positioned for growth in 2005 as we continue to innovate and expand our product continuum to meet the needs of both small and large companies worldwide. Although we will continue to invest for the future in fiscal 2005, we remain confident in our previously stated growth goals," Crump concluded.

The company will hold a conference call to discuss year-end and fourth quarter 2004 financial results on Feb. 16, 2005 at 8:30 a.m. EST. To access the call, dial 877-707-9628 (or 785-832-2041 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 800-839-5631 (or 402-220-2558 internationally).

(Financial Tables follow available on the Stratasys Web site at

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