The ExOne Company Reports 2020 Second Quarter Results

Outlook

ExOne CEO John Hartner commented, “Our operating results continue to be impacted by a prolonged downturn in the global manufacturing sector, which has influenced the capital expenditures of our customers. Despite these headwinds, we ended the second quarter with a record backlog of $38.2 million. We expect the combination of our backlog, our recurring revenue stream and an acceleration in market adoption of our technology to provide the basis for operating stability for the remainder of 2020 and into 2021, despite continuing negative macroeconomic trends.”

Webcast and Conference Call

ExOne will host a conference call and live webcast on Friday, August 7, 2020 at 8:30 a.m. Eastern Time. During the conference call and webcast, management will review the financial and operating results for the second quarter of 2020, along with ExOne’s corporate strategies and outlook. A question-and-answer session will follow. The teleconference can be accessed by calling (877) 407-9039 or, for international callers, (201) 689-8470. The webcast can be accessed on the Company’s website at www.investor.exone.com.

A telephonic replay of the conference call will be available from 11:30 a.m. Eastern Time on the day of the teleconference through 11:59 p.m. Eastern Time on Friday, August 14, 2020. To listen to a replay of the call, dial (844) 512-2921 or, for international callers, (412) 317-6671, and enter the conference ID number 13707347, or access the webcast replay via the Company’s website, where a transcript will also be posted once available.

About ExOne

ExOne is the pioneer and global leader in binder jet 3D printing technology. Since 1995, we’ve been on a mission to deliver powerful 3D printers that solve our customers’ toughest problems and enable world-changing innovations. Our 3D printing systems quickly transform powder materials — including metals, ceramics, composites and sand — into precision parts, metalcasting molds and cores, and innovative tooling solutions. Industrial customers use our technology to save time and money, reduce waste, increase their manufacturing flexibility, and deliver designs and products that were once impossible. As home to the world’s leading team of binder jetting experts, ExOne also provides specialized 3D printing services, including on-demand production of mission-critical parts, as well as engineering and design consulting. Learn more about ExOne at www.exone.com or on Twitter at @ExOneCo.

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 filings with the U.S. Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: the severity and duration of world health events, including the recent COVID-19 outbreak and the related economic repercussions and operational challenges; the Company’s ability to consistently generate operating profits; fluctuations in the Company’s revenues and operating results; the Company’s competitive environment and its competitive position; ExOne’s ability to enhance its current three-dimensional (“3D”) printing machines and technology and to develop and introduce new 3D printing machines; the Company’s ability to qualify more industrial materials in which it can print; demand for ExOne’s products; the availability of skilled personnel; the impact of loss of key management; the impact of market conditions and other factors on the carrying value of long-lived assets; the Company’s ability to continue as a going concern; the impact of customer specific terms in machine sale agreements in determining the period in which the Company recognizes revenue; risks related to global operations including effects of foreign currency and COVID-19; the adequacy of sources of liquidity; the amount and sufficiency of funds for required capital expenditures, working capital, and debt service; dependency on certain critical suppliers; nature or impact of alliances and strategic investments; reliance on critical information technology systems; 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 the Company’s manufacturing facilities or ExOne Adoption Centers; the adequacy of ExOne’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 other factors beyond our control, including the impact of COVID-19.

These and other important factors, including those discussed under Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, and under Part II, Item 1A, “Risk Factors” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, may cause the Company’s actual results of operations to differ materially from any future results of operations expressed or implied by the forward-looking statements contained therein. 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 and Quarterly Reports on Form 10-Q that could cause actual results to differ from these forward-looking statements.

FINANCIAL TABLES FOLLOW.

The ExOne Company
Condensed Statement of Consolidated Operations and Comprehensive Loss (Unaudited)
(in thousands, except per-share amounts)

 

Three Months Ended

Six Months Ended

June 30,

June 30,

2020

2019

2020

2019

Revenue

$

11,099

 

$

15,279

 

$

24,482

 

$

24,858

 

Cost of sales

 

8,009

 

 

10,137

 

 

17,763

 

 

17,074

 

Gross profit

 

3,090

 

 

5,142

 

 

6,719

 

 

7,784

 

Operating expenses
Research and development

 

2,369

 

 

2,537

 

 

4,845

 

 

4,969

 

Selling, general and administrative

 

4,488

 

 

6,167

 

 

10,651

 

 

11,590

 

Gain from sale-leaseback of property and equipment

 

 

 

 

 

(1,462

)

 

 

 

6,857

 

 

8,704

 

 

14,034

 

 

16,559

 

Loss from operations

 

(3,767

)

 

(3,562

)

 

(7,315

)

 

(8,775

)

Other expense
Interest expense

 

53

 

 

71

 

 

117

 

 

142

 

Other expense – net

 

195

 

 

57

 

 

5

 

 

69

 

 

248

 

 

128

 

 

122

 

 

211

 

Loss before income taxes

 

(4,015

)

 

(3,690

)

 

(7,437

)

 

(8,986

)

Provision (benefit) for income taxes

 

8

 

 

99

 

 

234

 

 

(701

)

Net loss

$

(4,023

)

$

(3,789

)

$

(7,671

)

$

(8,285

)

Net loss per common share:
Basic

$

(0.24

)

$

(0.23

)

$

(0.47

)

$

(0.51

)

Diluted

$

(0.24

)

$

(0.23

)

$

(0.47

)

$

(0.51

)

Comprehensive loss:
Net loss

$

(4,023

)

$

(3,789

)

$

(7,671

)

$

(8,285

)

Other comprehensive income (loss):
Foreign currency translation adjustments

 

370

 

 

583

 

 

(468

)

 

(193

)

Comprehensive loss

$

(3,653

)

$

(3,206

)

$

(8,139

)

$

(8,478

)

The ExOne Company
Condensed Consolidated Balance Sheet (Unaudited)
(in thousands, except per-share and share amounts)

 

June 30,

December 31,

2020

2019

Assets
Current assets:
Cash and cash equivalents

$

19,658

 

$

5,265

 

Restricted cash

 

508

 

 

978

 

Accounts receivable – net

 

4,531

 

 

6,522

 

Current portion of net investment in sales-type leases

 

292

 

 

213

 

Inventories – net

 

24,208

 

 

19,770

 

Prepaid expenses and other current assets

 

3,510

 

 

2,182

 

Total current assets

 

52,707

 

 

34,930

 

Property and equipment – net

 

20,609

 

 

38,895

 

Operating lease right-of-use assets

 

4,533

 

 

432

 

Net investment in sales-type leases – net of current portion

 

639

 

 

738

 

Other noncurrent assets

 

242

 

 

371

 

Total assets

$

78,730

 

$

75,366

 

Liabilities
Current liabilities:
Current portion of long-term debt

$

1,128

 

$

153

 

Current portion of operating lease liabilities

 

1,754

 

 

158

 

Accounts payable

 

5,127

 

 

5,818

 

Accrued expenses and other current liabilities

 

4,183

 

 

6,942

 

Current portion of contract liabilities

 

16,438

 

 

11,846

 

Total current liabilities

 

28,630

 

 

24,917

 

Long-term debt – net of current portion

 

2,354

 

 

1,211

 

Operating lease liabilities – net of current portion

 

2,779

 

 

274

 

Contract liabilities – net of current portion

 

213

 

 

286

 

Other noncurrent liabilities

 

223

 

 

96

 

Total liabilities

 

34,199

 

 

26,784

 

Contingencies and commitments
Stockholders' equity
Common stock, $0.01 par value, 200,000,000 shares authorized, 16,863,602 (2020) and 16,346,960 (2019) shares issued and outstanding

 

169

 

 

163

 

Additional paid-in capital

 

180,932

 

 

176,850

 

Accumulated deficit

 

(124,619

)

 

(116,948

)

Accumulated other comprehensive loss

 

(11,951

)

 

(11,483

)

Total stockholders' equity

 

44,531

 

 

48,582

 

Total liabilities and stockholders' equity

$

78,730

 

$

75,366

 

The ExOne Company
Condensed Statement of Consolidated Cash Flows (Unaudited)
(in thousands)

 

Six Months Ended

June 30,

2020

2019

Operating activities
Net loss

$

(7,671

)

$

(8,285

)

Adjustments to reconcile net loss to net cash used for operations:
Depreciation

 

2,107

 

 

2,349

 

Equity-based compensation

 

449

 

 

1,081

 

Amortization of debt issuance costs

 

29

 

 

47

 

Recoveries for bad debts – net

 

(19

)

 

(150

)

Provision for slow-moving, obsolete and lower of cost or net realizable value inventories – net

 

305

 

 

131

 

Foreign exchange (gains) losses on intercompany transactions – net

 

(51

)

 

19

 

Gain from sale-leaseback of property and equipment

 

(1,462

)

 

 

Gain from disposal of property and equipment – net

 

(1

)

 

(2

)

Deferred income taxes

 

195

 

 

 

Changes in assets and liabilities, excluding effects of foreign currency translation adjustments:
Decrease in accounts receivable

 

2,016

 

 

1,879

 

Decrease in net investment in sales-type leases

 

20

 

 

153

 

Increase in inventories

 

(5,369

)

 

(1,325

)

Increase in prepaid expenses and other assets

 

(1,034

)

 

(221

)

(Decrease) increase in accounts payable

 

(821

)

 

927

 

Decrease in accrued expenses and other liabilities

 

(458

)

 

(1,689

)

Increase in contract liabilities

 

4,428

 

 

3,608

 

Net cash used for operating activities

 

(7,337

)

 

(1,478

)

Investing activities
Capital expenditures

 

(591

)

 

(423

)

Proceeds from sale of property and equipment

 

16,229

 

 

3

 

Net cash provided by (used for) investing activities

 

15,638

 

 

(420

)

Financing activities
Proceeds from borrowings on long-term debt

 

2,194

 

 

 

Payments on long-term debt

 

(78

)

 

(74

)

Proceeds from at-the-market offerings of common stock, net of issuance costs

 

2,894

 

 

 

Proceeds from exercise of employee stock options

 

541

 

 

171

 

Other

 

(29

)

 

(75

)

Net cash provided by financing activities

 

5,522

 

 

22

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

100

 

 

(12

)

Net change in cash, cash equivalents, and restricted cash

 

13,923

 

 

(1,888

)

Cash, cash equivalents, and restricted cash at beginning of period

 

6,243

 

 

9,140

 

Cash, cash equivalents, and restricted cash at end of period

$

20,166

 

$

7,252

 

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

$

1,834

 

$

1,066

 

Transfer of internally developed 3D printing machines from property and equipment to inventories for sale

$

1,107

 

$

182

 

Property and equipment included in accounts payable

$

41

 

$

110

 

Property and equipment included in accrued expenses and other current liabilities

$

 

$

48

 

Unsettled proceeds from at-the-market offerings of common stock, net of issuance costs

$

204

 

$

 

Unsettled proceeds from exercise of employee stock options

$

 

$

91

 

The ExOne Company
Adjusted EBITDA Reconciliation (Unaudited)
(in millions)

 

Three Months Ended

Six Months Ended

June 30,

June 30,

2020

2019

2020

2019

Net loss

$

(4.0

)

$

(3.8

)

$

(7.7

)

$

(8.3

)

Interest expense

 

0.0

 

 

0.1

 

 

0.1

 

 

0.1

 

Provision (benefit) for income taxes

 

0.0

 

 

0.1

 

 

0.3

 

 

(0.7

)

Depreciation

 

1.2

 

 

1.2

 

 

2.1

 

 

2.4

 

Equity-based compensation

 

0.2

 

 

0.6

 

 

0.5

 

 

1.1

 

Gain from sale-leaseback of property and equipment

 

0.0

 

 

0.0

 

 

(1.5

)

 

0.0

 

Other expense – net

 

0.2

 

 

0.1

 

 

0.0

 

 

0.1

 

Adjusted EBITDA

$

(2.4

)

$

(1.7

)

$

(6.2

)

$

(5.3

)





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