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Stratasys Reports Record Quarterly Revenue And Non-GAAP Net Income

(a) Represents amortization expense of $436,012 related to acquired Solidscape, Inc. intangible assets and expense of $71,000 associated with the Company's current efforts to combine with Objet Ltd.

(b) Represents non-cash stock-based compensation expense of $784,181, amortization expense of $133,333 related to acquired Solidscape, Inc. intangible assets and expense of $2,493,479 associated with the Company's current efforts to combine with Objet Ltd.

(c) Represents the tax benefit related to non-GAAP adjustments.

(d) Represents amortization expense related to acquired Solidscape, Inc. intangible assets.

(e) Represents non-cash stock-based compensation expense of $440,829 and amortization expense of $133,333 related to acquired Solidscape, Inc. intangible assets.

(f) Represents gain on sale of an auction rate security during the third quarter of 2011.

The Company considers these non-GAAP measures to be indicative of its core operating results and facilitates a comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes, however these measures should not be viewed as a substitute for the Company’s GAAP results.

             
STRATASYS, INC. AND SUBSIDIARIES
 
RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS
 
                                 
Nine Months Ended September 30, 2012 Nine Months Ended September 30, 2011
As Reported Non-GAAP As Reported Non-GAAP
    (unaudited)   Adjustments       (unaudited)   (unaudited)   Adjustments       (unaudited)
 
Net sales
Products $ 120,301,057 $ - $ 120,301,057 $ 91,273,133 $ - $ 91,273,133
Services   23,791,947     -     23,791,947     21,048,816     -     21,048,816  
144,093,004 - 144,093,004 112,321,949 - 112,321,949
 
Cost of sales
Products 54,692,340 (1,379,036 ) (a) 53,313,304 43,752,872 (1,287,781 ) (d) 42,465,092
Services   12,328,692     -     12,328,692     9,029,273     -     9,029,273  
67,021,032 (1,379,036 ) 65,641,996 52,782,145 (1,287,781 ) 51,494,365
           
Gross profit 77,071,972 1,379,036 78,451,008 59,539,804 1,287,781 60,827,585
 
Operating expenses
Research and development 12,576,094 - 12,576,094 10,687,578 - 10,687,578
Selling, general and administrative   42,365,253     (9,274,541 ) (b)   33,090,712     28,738,325     (1,925,579 ) (e)   26,812,746  
54,941,347 (9,274,541 ) 45,666,806 39,425,903 (1,925,579 ) 37,500,324
           
Operating income 22,130,625 10,653,577 32,784,202 20,113,901 3,213,360 23,327,261
 
Other income (expense)
Interest income, net 672,052 - 672,052 698,469 - 698,469
Foreign currency transaction losses, net (265,141 ) - (265,141 ) (429,840 ) - (429,840 )
Other, net   109,922     -     109,922     2,264,307     (1,830,596 ) (f)   433,711  
516,833 - 516,833 2,532,936 (1,830,596 ) 702,340
           
Income before income taxes 22,647,458 10,653,577 33,301,035 22,646,837 1,382,764 24,029,601
 
Income tax expense   9,924,615     1,513,033   (c)   11,437,648     7,806,524     358,211   (c)   8,164,735  
 
Net income $ 12,722,843   $ 9,140,544   $ 21,863,387   $ 14,840,313   $ 1,024,552   $ 15,864,865  
 
Earnings per common share
Basic $ 0.60   $ 0.43   $ 1.02   $ 0.70   $ 0.05   $ 0.75  
Diluted $ 0.58   $ 0.42   $ 1.00   $ 0.68   $ 0.05   $ 0.73  
 

Weighted average number of common shares outstanding

Basic   21,348,967     21,348,967     21,107,474     21,107,474  
Diluted   21,856,719     21,856,719     21,669,848     21,669,848  
 

These adjustments reconcile the Company’s GAAP results of operations to its non-GAAP results of operations. The Company believes that presentation of results adjusted for the non-GAAP items described below provides meaningful supplemental information to both management and investors.

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