STRATASYS INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to_________________

Commission File Number: 1-13400

(Exact name of registrant as specified in its charter)

Delaware	36-3658792
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification No.)
organization)

14950 Martin Drive, Eden Prairie, Minnesota	55344
(Address of principal executive offices)	(Zip Code)

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

As of April 27, 2005, the Registrant had 10,443,017 shares of common stock, $.01 par value, outstanding.

	Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2005 and December 31, 2004	1
Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2005 and 2004	2
Consolidated Statements of Cash Flows for the three months ended March 31, 2005 and 2004	3
Notes to Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	6
Item 3. Quantitative and Qualitative Disclosures About Market Risk	14
Item 4. Controls and Procedures	14
Part II. Other Information
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 6. Exhibits	16
Signatures	17

Item 1. Financial Statements

STRATASYS, INC.

CONSOLIDATED BALANCE SHEETS


	March 31,		December 31,
	2005		2004
	(unaudited)

ASSETS

Current assets
Cash and cash equivalents	$37,142,578		$20,624,845
Short-term investments	20,900,000		35,225,000
Accounts receivable, less allowance for returns and
doubtful accounts of $1,463,335 in 2005 and $1,731,830 in 2004	15,319,890		14,951,350
Inventories	8,238,893		7,520,422
Net investment in sales-type leases	1,478,302		1,324,499
Prepaid expenses	1,558,499		1,756,494
Deferred income taxes	455,000		455,000
Total current assets	85,093,162		81,857,610

Property and equipment, net	10,549,898		10,043,657

Other assets
Intangible assets, net	2,738,564		2,551,581
Net investment in sales-type leases	2,715,742		2,693,830
Deferred income taxes	354,000		354,000
Long-term investments	720,000		720,000
Other	946,265		978,339
Total other assets	7,474,571		7,297,750
	$103,117,631		$99,199,017

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable and other current liabilities	$8,625,704		$6,643,620
Unearned maintenance revenue	7,655,359		7,668,362
Total current liabilities	16,281,063		14,311,982


Stockholders' equity
Common stock, $.01 par value, authorized 15,000,000
shares, issued 12,239,946 shares in 2005 and
12,211,835 shares in 2004	122,399		122,118
Capital in excess of par value	72,068,234		71,762,100
Retained earnings	22,589,000		20,193,048
Accumulated other comprehensive income (loss)	(56,562)		5,910
Less cost of treasury stock, 1,796,929 and 1,770,026 shares in 2005
and 2004 respectively	(7,886,503)		(7,196,141)
Total stockholders' equity		86,836,568		84,887,035
	$	103,117,631	$	99,199,017

See notes to consolidated financial statements.

STRATASYS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME



	Three Months Ended March 31,
	2005			2004
	(unaudited)			(unaudited)

Net sales
Product	$	14,823,171		$	12,921,173
Services		4,039,648			2,925,002
		18,862,819			15,846,175

Cost of goods sold
Product		6,298,207			5,366,109
Services		1,190,176			773,931
		7,488,383			6,140,040

Gross profit		11,374,436			9,706,135

Costs and expenses
Research and development		1,386,588			1,346,329
Selling, general and administrative		6,593,686			5,592,073
		7,980,274			6,938,402

Operating income		3,394,162			2,767,733

Other income (expense)
Interest income		377,478			111,747
Other		31,459			(36,033	)
		408,937			75,714

Income before income taxes		3,803,099			2,843,447

Income taxes		1,407,147			938,338
Net income	$	2,395,952		$	1,905,109

Earnings per common share
Basic	$	0.23		$	0.19
Diluted	$	0.22		$	0.18

Weighted average number of common
shares outstanding
Basic		10,451,399			10,271,153
Diluted		10,821,785			10,702,014
COMPREHENSIVE INCOME

Net income	$	2,395,952		$	1,905,109

Other comprehensive loss
Foreign currency translation adjustment		(62,472	)		(26,309	)
Comprehensive income	$	2,333,480		$	1,878,800

See notes to consolidated financial statements.


STRATASYS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


		Three Months Ended March 31,
		2005