The ExOne Company Reports 2017 Second Quarter Results

Safe Harbor Regarding Forward Looking Statements

This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to the Company’s future financial or business performance, strategies, or expectations. Forward-looking statements typically are identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” as well as similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could” and “may.”

The Company cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and the Company assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to risk factors previously disclosed in the Company’s reports, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: the Company’s ability to enhance its current three-dimensional (“3D”) printing machines and technology and develop new 3D printing machines; its ability to qualify more industrial materials in which it can print; timing and length of sales of 3D printing machines; demand for ExOne products; the Company’s ability to achieve cost savings through consolidation or exiting of certain North American operations; the impact of increases in operating expenses and expenses relating to proposed investments and alliances; the availability of skilled personnel; the impact of market conditions and other factors on the carrying value of long-lived assets; the Company’s competitive environment and its competitive position; the Company’s ability to continue as a going concern; individual customer contractual requirements; the impact of customer specific terms in machine sale agreements on the period in which the Company recognizes revenue; the impact of loss of key management; risks related to global operations including effects of foreign currency and risks related to the situation in the Ukraine and the United Kingdom’s referendum to withdraw from the European Union; demand for aerospace, automotive, heavy equipment, energy/oil/gas and other industrial products; the Company’s plans regarding increased international operations in additional international locations; the scope, nature or impact of alliances and strategic investments and the Company’s ability to integrate strategic investments; sufficiency of funds for required capital expenditures, working capital, and debt service; the adequacy of sources of liquidity; the effect of litigation, contingencies and warranty claims; liabilities under laws and regulations protecting the environment; the impact of governmental laws and regulations; operating hazards, war, terrorism and cancellation or unavailability of insurance coverage; the impact of disruption of our manufacturing facilities, production service centers or ExOne adoption centers; the adequacy of the Company’s protection of its intellectual property; expectations regarding demand for the Company’s industrial products, operating revenues, operating and maintenance expenses, insurance expenses and deductibles, interest expenses, debt levels, and other matters with regard to outlook; and material weaknesses in the Company’s internal control over financial reporting.

These and other important factors, including those discussed in the Company’s Annual Report on Form 10-K, may cause its actual results of operations to differ materially from any future results of operations expressed or implied by the forward-looking statements contained herein. Before making a decision to purchase ExOne common stock, you should carefully consider all of the factors identified in its Annual Report on Form 10-K that could cause actual results to differ from these forward-looking statements.

FINANCIAL TABLES FOLLOW.

 

The ExOne Company

Statement of Consolidated Operations

(in thousands, except per-share amounts)

(Unaudited)

           
Quarter Ended

June 30,

% Change Six Months Ended

June 30,

% Change
2017   2016 2017   2016
 
Revenue $ 10,799 $ 11,755 (8 %) $ 21,668 $ 20,169 7 %
Cost of sales   8,773     8,249   6 %   18,039     14,787   22 %
Gross profit 2,026 3,506 (42 %) 3,629 5,382 (33 %)
Gross margin 18.8 % 29.8 % 16.7 % 26.7 %
 
Research and development 2,349 1,946 21 % 4,348 3,839 13 %
Selling, general and administrative   6,013     4,663   29 %   12,276     9,988   23 %
  8,362     6,609   27 %   16,624     13,827   20 %
Operating loss (6,336 ) (3,103 ) (104 %) (12,995 ) (8,445 ) (54 %)
 
Interest expense 23 22 5 % 45 254 (82 %)
Other expense (income) – net   35     (205 ) NM   145     (298 ) NM
  58     (183 ) NM   190     (44 ) NM
Loss before income taxes (6,394 ) (2,920 ) (119 %) (13,185 ) (8,401 ) (57 %)
 
Provision for income taxes   9     22   (59 %)   9     18   (50 %)
 
Net loss $ (6,403 ) $ (2,942 ) (118 %) $ (13,194 ) $ (8,419 ) (57 %)
 
 
Net loss per common share:
Basic $ (0.40 ) $ (0.18 ) (122 %) $ (0.82 ) $ (0.53 ) (55 %)
Diluted $ (0.40 ) $ (0.18 ) (122 %) $ (0.82 ) $ (0.53 ) (55 %)
 
Weighted average shares outstanding (basic and diluted) 16,046 15,994 16,037 15,870
 

NM: Not Meaningful

 
 

The ExOne Company

Consolidated Balance Sheet

(in thousands, except per-share and share amounts)

(Unaudited)

       
June 30,

2017

December 31,

2016

 
Assets
Current assets:
Cash and cash equivalents $ 24,051 $ 27,825
Restricted cash 1,112 330
Accounts receivable - net of allowance of $1,687 (2017) and $1,566 (2016) 6,566 6,447
Inventories - net 17,022 15,838
Prepaid expenses and other current assets   2,059     1,159  
Total current assets 50,810 51,599
Property and equipment - net 49,011 51,134
Intangible assets - net 236 668
Other noncurrent assets   304     777  
Total assets $ 100,361  

 

$ 104,178  
 
Liabilities
Current liabilities:
Current portion of long-term debt $ 133 $ 132
Current portion of capital leases 41 72
Accounts payable 4,365 2,036
Accrued expenses and other current liabilities 5,120 5,124
Deferred revenue and customer prepayments   10,539     7,371  
Total current liabilities 20,198

 

14,735
Long-term debt - net of current portion 1,578 1,644
Capital leases - net of current portion 44 10
Other noncurrent liabilities   9     9  
Total liabilities 21,829 16,398
Contingencies and commitments
Stockholders' equity
Common stock, $0.01 par value, 200,000,000 shares authorized, 16,045,949 (2017)
and 16,017,115 (2016) shares issued and outstanding 160 160
Additional paid-in capital 171,951 171,116
Accumulated deficit (82,363 ) (68,761 )
Accumulated other comprehensive loss   (11,216 )   (14,735 )
Total stockholders' equity   78,532     87,780  
Total liabilities and stockholders' equity $ 100,361   $ 104,178  
 
     

The ExOne Company

Statement of Consolidated Cash Flows

(in thousands)

(Unaudited)

 
Six Months Ended
June 30,
2017   2016
 
Operating activities
Net loss $ (13,194 ) $ (8,419 )
Adjustments to reconcile net loss to net cash used for operations:
Depreciation and amortization 3,589 2,862
Equity-based compensation 835 554
Amortization of debt issuance costs 3 207
Deferred income taxes - (29 )
Provision (recoveries) for bad debts - net 132 (271 )
Provision (recoveries) for slow-moving, obsolete and lower of cost or market inventories - net 1,835 (403 )
(Gain) loss from disposal of property and equipment - net (314 ) 198
Changes in assets and liabilities, excluding effects of foreign currency translation adjustments:
Decrease in accounts receivable 69 4,652
Increase in inventories (3,358 ) (545 )
(Increase) decrease in prepaid expenses and other assets (770 ) 820
Increase in accounts payable 2,111 208
Decrease in accrued expenses and other liabilities (252 ) (1,551 )
Increase in deferred revenue and customer prepayments   2,390     1,550  
Net cash used for operating activities (6,924 ) (167 )
 
Investing activities
Capital expenditures (392 ) (331 )
Proceeds from sale of property and equipment   3,677     44  
Net cash provided by (used) for investing activities 3,285 (287 )
 
Financing activities
Net proceeds from issuance of common stock - registered direct offering to a related party - 12,447
Net proceeds from issuance of common stock - at the market offerings - 595
Payments on long-term debt (68 ) (68 )
Payments on capital leases   (45 )   (41 )
Net cash (used for) provided by financing activities (113 ) 12,933
 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash   760     63  
Net change in cash, cash equivalents, and restricted cash (2,992 ) 12,542
Cash, cash equivalents, and restricted cash at beginning of period   28,155     19,672  
 
Cash, cash equivalents, and restricted cash at end of period $ 25,163   $ 32,214  
 
Supplemental disclosure of noncash investing and financing activities
Transfer of internally developed 3D printing machines from inventories to property and
equipment for internal use or leasing activities $ 1,917   $ 1,997  
Transfer of internally developed 3D printing machines from property and equipment to
inventories for sale $ 395   $ 682  
Property and equipment included in accounts payable $ 100   $ 20  
Property and equipment acquired through financing arrangements $ 48   $ -  
 
 

The ExOne Company

Additional Information

(Unaudited)

 

Machine Sales by Type

         
Quarter Ended

June 30,

Six Months Ended

June 30,

2017   2016 2017   2016
S-Max+™ - - - 1
S-Max® 2 1 6 1
S-Print® - 2 - 2
S-15™ - 1 - 1
M-Flex® 3 2 4 2
Innovent® 3 3 3 3
8 9 13 10
 
 

The ExOne Company

Adjusted EBITDA Reconciliation

(in millions)

(Unaudited)

           
Quarter Ended

June 30,

Six Months Ended

June 30,

2017 2016 2017 2016
 
Net loss $ (6.4 ) $ (2.9 ) $ (13.2 ) $ (8.4 )
 
Interest expense 0.0 0.0 0.1 0.2
Provision for income taxes 0.0 0.0 0.0 0.0
Depreciation and amortization 1.3 1.5 3.6 2.9
Equity-based compensation 0.3 0.2 0.8 0.6
Other expense (income) - net   0.0     (0.2 )   0.1     (0.3 )
Adjusted EBITDA $ (4.8 ) $ (1.4 ) $ (8.6 ) $ (5.0 )
 

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