Press Releases 3D Systems Solid Imaging
3D Systems Reports Second Quarter Operating Results

Mary Woods, Public Relations Mgr.
3D Systems
26081 Avenue Hall
Valencia, CA 91355
ph: (661) 295-5600 ext. 2508
fx: (661) 295-3404

VALENCIA, Calif., July 22, 1999 - 3D Systems Corp. (Nasdaq NMS: TDSC) today reported a net loss of $3.7 million, or 32 cents a share, for the second quarter ended July 2, which included non-recurring charges of $2.7 million, on revenue of $22 million.

Without these non-recurring charges, the company would have reported a net loss of $1.7 million, or 15 cents a share. Last year, the company reported second quarter net income of $.5 million, or 4 cents a share, on revenue of $24.7 million.

The non-recurring charges included in this year's second quarter related primarily to corporate restructuring and previously-announced management changes, the write off of certain impaired assets and idle facilities, and litigation and settlement costs.

For the first six months of this year, the company posted a net loss of $5.9 million, or 52 cents a share, on revenue of $44.7 million. This compares to net income of $.9 million, equal to 8 cents a share, on revenue of $47.5 million a year ago.

Arthur B. Sims, Chairman and Chief Executive Officer, stated: "3D Systems continues to confront challenging sales conditions in its domestic market. We are, however, encouraged by performance internationally. Both in Europe and Asia Pacific, quarterly product sales increased significantly, both sequentially and year-over-year."

Gross Profit, Product Mix
Sims indicated that total unit shipments rose substantially in the second quarter, owing to strong sales of the new ThermoJet™ 3D printer, which continues to gain market acceptance. However, he said overall gross profit was adversely impacted by product-mix issues, specifically a downturn in shipments of the company's large-frame solid-imaging systems.

"We are seeing indications of a product transition dilemma. The introduction earlier in the year of 3D Systems' flagship SLA™ 7000 has resulted in disruption of the order flow for our large-frame systems as customers pause to evaluate their hardware requirements," Sims stated. "We view this as a short-term occurrence and expect product-mix ratios to normalize moving forward.

"The slowdown in large-frame units constrained service revenue and gross profit, as well, by resulting in lower training and service revenue," he indicated.

Operating Expense Improvement
Sims stated that, excluding special items, operating expenses were reduced by approximately $1.9 million from 1999's first quarter, which included significant sales and marketing costs for the launch of new products. He also indicated that the company continues to seek economies across the board.

Balance Sheet
With respect to the company balance sheet, accounts receivable increased reflecting the higher percentage of sales to European customers, who traditionally have a longer payment cycle, according to Sims.

He continued: "Inventory levels increased due to lower than anticipated sales, which also has contributed to a decline in deferred revenue for maintenance and training. 3D System's cash balance, while still strong, reflects greater expenditures for operating the business, including trade accounts receivable and inventory."

The company reported that backlog exiting the second quarter climbed solidly on a sequential basis.

According to Sims, "We have recently launched a series of programs to stimulate demand for larger machines. These include attractive trade-in options for customers turning in SLA 500s for the flagship SLA 7000, as well as sales incentives on transitions from our entry-level SLA 250 to bigger systems. New sales prospecting programs are also expected to contribute to higher productivity.

"The ThermoJet printer business has demonstrated real progress. In the first half of this year alone, 3D Systems shipped more office printers than in all of 1998, "he said. "As well, we have introduced a number of new service options for customers - part of a global customer support initiative - that we expect to gain strength in this year's second half."

About 3D Systems
3D Systems provides solid imaging products and services that allow users to move quickly from three-dimensional designs to finished parts, at a significantly lower cost and higher quality than more traditional methods.

The company's systems utilize patented technologies, which fabricate solid objects from digital input. These processes offer significant competitive advantages by substantially reducing the time and cost required to design, develop, and manufacture products.

The company also licenses 3D Keltool®, a commercially proven moldmaking solution that produces prototype, bridge, and production tooling inserts.

Based in Valencia, Calif., 3D Systems was founded in 1986 and is recognized as the world technology and market leader in solid imaging. For additional information, visit the company's website at or phone (888) 337-9786, ext. 711. For investor information, please call our shareholder communications service at (800) 757-1799.

Download Financials:
Financials.xls (Microsoft Excel 71K)

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