This release is available on the Stratasys web site at www.stratasys.com.

Stratasys Ltd. (Nasdaq: SSYS) is the corporate entity formed in 2012 by the merger of 3D printing companies Stratasys Inc. and Objet Ltd., based in Minneapolis, Minn. and Rehovot, Israel. Stratasys manufactures 3D printers and materials for prototyping and production. The company’s patented FDM^® and PolyJet^® processes produce prototypes and manufactured goods directly from 3D CAD files or other 3D content. Systems include affordable desktop 3D printers for idea development, a range of systems for prototyping, and large production systems for direct digital manufacturing. Since June 2012, the company’s range of over 130 3D printing materials has been the widest in the industry and includes more than 120 proprietary inkjet-based photopolymer materials and 10 proprietary FDM-based thermoplastic materials. Stratasys also manufactures Solidscape 3D Printers and operates the RedEye On Demand digital-manufacturing service. The company has more than 1100 employees, holds more than 500 granted or pending additive manufacturing patents globally, and has received more than 20 awards for its technology and leadership. Online at: www.stratasys.com or http://blog.stratasys.com.

Stratasys Ltd.
Consolidated Statements of Operations
(in thousands, except per share data)
			Three Months Ended March 31,
			2013						2012
			(unaudited)						(unaudited)
Net sales
Products			$	81,810					$	37,546
Services				15,397						7,418
				97,207						44,964
Cost of sales
Products				49,043						17,811
Services				10,790						4,199
				59,833						22,010
Gross profit				37,374						22,954
Operating expenses
Research and development, net				10,789						4,352
Selling, general and administrative				43,325						11,375
				54,114						15,727
Operating income (loss)				(16,740	)					7,227
Other income (expense)				514						296
Income (loss) before income taxes				(16,226	)					7,523
Income taxes (benefit)				(743	)					3,001
Net income (loss)			$	(15,483	)				$	4,522
Net income attributable to non-controlling interest			$	53					$	-
Net income (loss) attributable to Stratasys Ltd.			$	(15,536	)				$	4,522
Net income (loss) per ordinary share attributable to Stratasys Ltd.
Basic			$	(0.40	)				$	0.21
Diluted				(0.40	)					0.21
Weighted average ordinary shares outstanding
Basic				38,494						21,266
Diluted				38,494						21,802

Stratasys Ltd.
Consolidated Balance Sheets
(in thousands)
				March 31,						December 31,
				2013						2012
				(unaudited)
ASSETS
Current assets
Cash and cash equivalents				$	65,505					$	133,826
Short-term bank deposits					75,370						20,063
Restricted deposits					820						929
Accounts receivable:
Trade, net					72,375						64,678
Other					20,979						22,934
Inventories					66,395						67,995
Net investment in sales-type leases, net					5,082						5,134
Prepaid expenses					2,894						2,751
Deferred income taxes					7,777						4,968
Total current assets					317,197						323,278
Property, plant and equipment, net					63,842						62,070
Other assets
Goodwill					822,450						822,475
Other intangible assets, net					497,508						510,372
Net investment in sales-type leases					7,990						7,872
Long-term investments					1,634						1,634
Amounts funded in respect of employees
rights upon retirement					2,740						2,628
Other non-current assets					1,728						1,184
Total other assets					1,334,050						1,346,165
Total assets				$	1,715,089					$	1,731,513
LIABILITIES AND EQUITY
Current liabilities
Accounts payable				$	24,587					$	35,235
Other current liabilities					36,964						40,179
Deferred tax liabilities					137						945
Unearned revenues					21,961						18,068
Total current liabilities					83,649						94,427
Non-current liabilities
Employee rights upon retirement					4,238						4,188
Deferred tax liabilities					54,436						54,693
Unearned revenues - long-term					3,137						3,181
Other non-current liabilities					3,178						2,868
Total liabilities					148,638						159,357
Commitments and contingencies
Equity
Ordinary shares, NIS 0.01 nominal value, authorized 60,000 shares;
38,669 and 38,372 shares issued and outstanding at March 31,
2013 and December 31, 2012, respectively					101						101
Additional paid-in capital					1,469,379						1,459,294
Retained earnings					96,966						112,503
Accumulated other comprehensive loss					(606	)					(238	)
Equity attributable to Stratasys Ltd.					1,565,840						1,571,660
Non-controlling interest					611						496
Total equity					1,566,451						1,572,156
Total liabilities and equity				$	1,715,089					$	1,731,513

Stratasys Ltd.
Reconciliation of Pro Forma GAAP to Pro Forma Non-GAAP Results of Operations
(in thousands, except per share data)
						Three Months Ended March 31, 2013											Three Months Ended March 31, 2012
																	Pro Forma								Pro Forma
						GAAP								Non-GAAP			GAAP								Non-GAAP
						(unaudited)				Adjustments*				(unaudited)			(unaudited)				Adjustments*				(unaudited)
Net sales
Products						$	81,810			$	1,015			$	82,825		$	71,241			$	-			$	71,241
Services							15,397				-				15,397			11,798				-				11,798
							97,207				1,015				98,222			83,039				-				83,039
Cost of sales
Products							49,043				(19,177	)			29,866			38,426				(10,522	)			27,904
Services							10,790				(343	)			10,447			8,386				(347	)			8,039
							59,833				(19,520	)			40,313			46,812				(10,869	)			35,943
Gross profit							37,374				20,535				57,909			36,227				10,869				47,096
Operating expenses
Research and development, net							10,789				(899	)			9,890			9,072				(871	)			8,201
Selling, general and administrative							43,325				(15,608	)			27,717			33,112				(10,675	)			22,437
							54,114				(16,507	)			37,607			42,184				(11,546	)			30,638
Operating income (loss)							(16,740	)			37,042				20,302			(5,957	)			22,415				16,458
Other income (expense)							514				-				514			193				-				193
Income (loss) before income taxes							(16,226	)			37,042				20,816			(5,764	)			22,415				16,651
Income taxes							(743	)			3,886				3,143			2,610				1,453				4,063
Net income (loss)						$	(15,483	)		$	33,156			$	17,673		$	(8,374	)		$	20,962			$	12,588
Net income attributable to non-controlling interest						$	53			$	40			$	93		$	-			$	-			$	-
Net income (loss) attributable to Stratasys Ltd.						$	(15,536	)		$	33,116			$	17,580		$	(8,374	)		$	20,962			$	12,588
Net income (loss) per ordinary share attributable to Stratasys Ltd.
Basic						$	(0.40	)						$	0.46		$	(0.23	)						$	0.34
Diluted							(0.40	)							0.43			(0.23	)							0.32
Weighted average ordinary shares outstanding
Basic							38,494								38,494			36,710								36,710
Diluted							38,494								41,057			36,710								39,857
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.   * Refer to the "Reconciliation of Non-GAAP Adjustments" herein for further information regarding adjustments.

Stratasys Ltd.
Reconciliation of Non-GAAP Adjustments
(in thousands)
						Three Months Ended March 31,
						2013					2012
Net sales, products
Deferred revenue step-up							1,015					-
Cost of sales, products
Objet intangible assets amortization expense							(18,295	)				(9,824	)
Solidscape intangible assets amortization expense							(436	)				(436	)
Non-cash stock-based compensation expense							(318	)				(262	)
Merger related expense							(97	)				-
Fasotech Co., Ltd intangible assets amortization expense							(31	)				-
							(19,177	)				(10,522	)
Cost of sales, services
Non-cash stock-based compensation expense							(316	)				(347	)
Merger related expense							(27	)				-
							(343	)				(347	)
Research and development, net
Non-cash stock-based compensation expense							(899	)				(871	)
Selling, general and administrative
Objet intangible assets amortization expense							(5,276	)				(2,242	)
Solidscape intangible assets amortization expense							(133	)				(133	)
Fasotech Co., Ltd intangible assets amortization expense							(52	)				-
Non-cash stock-based compensation expense							(3,957	)				(5,113	)
Solidscape acquisition expense							-					(130	)
Merger related expense							(6,190	)				(3,057	)
							(15,608	)				(10,675	)
Income taxes
Tax expense related to non-GAAP adjustments							3,886					1,453
Net income attributable to non-controlling interest
Depreciation and amortization expense attributable to non-controlling interest							40					-
Net income						$	33,116				$	20,962

Stratasys Ltd.
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
Fiscal Year 2013							Earnings (loss) Per Diluted Share Range
U.S. GAAP measure							($0.41) to ($0.16)
Adjustments
Stock-based compensation expense							$0.49 to $0.55
Intangible assets amortization expense							$1.45
Merger related expense							$0.17 to $0.21
Non-GAAP estimate							$1.80 to $1.95

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