$70 Million Will Fund Creation of Dedicated Additive Manufacturing R&D Institute

Initiative Aims to Make American Manufacturers More Competitive and Encourage Investment in the U.S.

MINNEAPOLIS — (BUSINESS WIRE) — August 20, 2012 — Will U.S. innovation and competitiveness grow or contract in the next decade? A billion-dollar initiative by the Obama administration — the National Network for Manufacturing Innovation (NNMI) — aims to ensure its growth through the development of 15 “centers of excellence” that bring industries together to solve manufacturing problems in an innovative way and provide U.S. manufacturers access to best-in-class technologies.

Stratasys (NASDAQ: SSYS) has been selected as part of a team of leaders under this new program to develop the first center of excellence — an additive manufacturing institute — funded by $70 million, with $30 million coming from the NNMI and $40 million from private industry. Additive manufacturing was chosen as one of the centers because the process was identified as key to the future of U.S. production. The center will be called the National Additive Manufacturing Innovation Institute (NAMII).

“The competitiveness of our country depends on new technologies, such as additive manufacturing,” said Stratasys VP of direct digital manufacturing, Jeff DeGrange. “This new institute will accelerate development of additive manufacturing technologies to benefit U.S. competitiveness. Additive manufacturing, also called 3D printing, reduces tooling costs, startup costs, inventory, raw-material use, energy consumption and the waste stream associated with traditional manufacturing processes.”

The additive manufacturing center will be managed by the National Center for Defense Manufacturing and Machining (NCDMM). The NCDMM said in a news release that each of the 15 institutes:

“will bridge the gap between basic research and product development, provide shared assets to give companies — particularly small manufacturers — better access to cutting-edge capabilities and equipment, and create an unparalleled environment to educate and train students and workers in advanced manufacturing skills. These Institutes will serve as regional hubs of manufacturing innovation, and will be known as world-class centers for applied research, technology incubation, and commercialization.”

For more information on Stratasys, visit www.stratasys.com.

Stratasys Inc., Minneapolis, is a maker of additive manufacturing machines for prototyping and producing plastic parts. The company markets under the brands Mojo, uPrint and Dimension 3D Printers and Fortus Production 3D Printers. The company also operates RedEye On Demand, a digital-manufacturing service for prototypes and production parts. In 2011 Stratasys acquired 3D printer maker Solidscape Inc. According to Wohlers Report 2012, Stratasys had a 41.5 percent market share in 2011, and has been the unit market leader for the tenth consecutive year. Stratasys patented and owns the Fused Deposition Modeling (FDM^®) process. The process creates functional prototypes and manufactured goods directly from any 3D CAD program, using high-performance industrial thermoplastics. The company holds 380 granted or pending additive manufacturing patents globally. Stratasys products are used in the aerospace, defense, automotive, medical, business and industrial equipment, education, architecture, and consumer-product industries. Online at: www.Stratasys.com

Fused Deposition Modeling is a trademark, and Stratasys FDM, Fortus, Dimension, uPrint, Mojo and RedEye are registered trademarks of Stratasys Inc.

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All statements herein that are not historical facts or that include such words as "expects," "anticipates," "projects," "estimates," "vision," "could," "potential," "plan", "intends", "desires", "assume" or "believes" or similar words constitute forward-looking statements covered by the safe harbor protection of the Private Securities Litigation Reform Act of 1995. Except for the historical information herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. These include statements regarding the expected timing and ultimate closing of the merger with Objet, as well as the financial and operating results of the combined company after, and the anticipated benefits of, the merger; the size of the 3D printing market; our objectives for the marketing and sale of our Dimension® , uPrint® and Mojo® 3D Printers; our support removal systems; and our Fortus® 3D Production Systems, particularly for use in direct digital manufacturing (DDM); the demand for our proprietary consumables; the expansion of our paid parts service; and our beliefs with respect to the growth in the demand for our products. Actual results may differ from those expressed or implied in our forward-looking statements. Such forward-looking statements involve and are subject to certain risks and uncertainties, which may cause our actual results to differ materially from those discussed in a forward-looking statement. Risks and uncertainties that may affect our business include our ability to penetrate the 3D printing market; our ability to achieve the growth rates experienced in preceding quarters; our ability to introduce, produce and market consumable materials, and the market acceptance of these materials; the impact of competitive products and pricing; our timely development of new products and materials and market acceptance of those products and materials; the success of our recent R&D initiative to expand the DDM capabilities of our core FDM technology; the success of our RedEye On Demand™ and other paid parts services; our ability to obtain the necessary approvals, including the affirmative vote of the Stratasys stockholders, and to satisfy the necessary closing conditions in order to successfully close the proposed merger with Objet; our ability to successfully integrate and market the combined company's products; the combined company's ability to achieve the expected revenue targets, the combined company's ability to attract and retain management; and the combined company's ability to protect and defend intellectual property. These statements represent beliefs and expectations only as of the date they were made. We may elect to update forward-looking statements, but we expressly disclaim any obligation to do so, even if our beliefs and expectations change. In addition to the statements described above, such forward-looking statements are subject to the risks and uncertainties described more fully in our reports filed or to be filed with the Securities and Exchange Commission, including our annual reports on Form 10-K and quarterly reports on Form 10-Q.