The ExOne Company Reports 2018 First Quarter Results

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 and those identified elsewhere in its Annual Report on Form 10-K, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: the Company’s ability to 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 develop 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 on the period in which the Company recognizes revenue; risks related to global operations including effects of foreign currency; the adequacy of sources of liquidity; the scope, 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, production service centers (“PSCs”) or ExOne Adoption Centers (“EACs”); the adequacy of ExOne’s protection of its intellectual property; and 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.

These and other important factors, including those discussed in the Company’s Annual Report on Form 10-K, 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 that could cause actual results to differ from these forward-looking statements.

 

The ExOne Company

Statement of Consolidated Operations

(in thousands, except per-share amounts)

(Unaudited)

 
 

Quarter Ended
March 31,

 

%
Change

2018   2017
 
Revenue $ 11,893 $ 10,869 9 %
Cost of sales   9,277     9,266   0 %
Gross profit   2,616     1,603   63 %
Gross margin 22.0 % 14.7 %
 
Research and development 2,795 1,999 40 %
Selling, general and administrative   6,202     6,263   (1 %)
  8,997     8,262   9 %
Operating loss (6,381 ) (6,659 ) 4 %
 
Interest expense 33 22 50 %
Other (income) expense – net   (46 )   110   NM
  (13 )   132   NM
Loss before income taxes (6,368 ) (6,791 ) 6 %
 
Provision for income taxes   17     -   NM
 
Net loss $ (6,385 ) $ (6,791 ) 6 %
 
Net loss per common share:
Basic $ (0.40 ) $ (0.42 ) 5 %
Diluted $ (0.40 ) $ (0.42 ) 5 %
 

Weighted average shares outstanding (basic and diluted)

16,139 16,029
 

NM:  Not Meaningful

 
 

The ExOne Company

Consolidated Balance Sheet

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

(Unaudited)

 
 

March 31,

2018

 

December 31,

2017

 
Assets
Current assets:
Cash and cash equivalents $ 15,222 $ 21,848
Restricted cash 1,634 330
Accounts receivable - net of allowance of $1,199 (2018) and $1,193 (2017) 5,272 8,647
Inventories - net 18,603 15,430
Prepaid expenses and other current assets   3,188     1,710  
Total current assets 43,919 47,965
Property and equipment - net 47,536 46,797
Intangible assets - net - 62
Other noncurrent assets   870     736  
Total assets $ 92,325   $ 95,560  
 
Liabilities
Current liabilities:
Current portion of long-term debt $ 138 $ 137
Current portion of capital leases 19 15
Accounts payable 5,591 4,291
Accrued expenses and other current liabilities 5,700 6,081
Deferred revenue and customer prepayments   8,752     8,282  
Total current liabilities 20,200 18,806
Long-term debt - net of current portion 1,473 1,508
Capital leases - net of current portion 46 36
Other noncurrent liabilities   1     1  
Total liabilities 21,720 20,351
Contingencies and commitments
Stockholders' equity
Common stock, $0.01 par value, 200,000,000 shares authorized, 16,149,617 (2018)
and 16,124,617 (2017) shares issued and outstanding 161 161
Additional paid-in capital 174,097 173,718
Accumulated deficit (95,571 ) (89,186 )
Accumulated other comprehensive loss   (8,082 )   (9,484 )
Total stockholders' equity   70,605     75,209  
Total liabilities and stockholders' equity $ 92,325   $ 95,560  
 
 

The ExOne Company

Statement of Consolidated Cash Flows

(in thousands)

(Unaudited)

 
  Quarter Ended
March 31,
2018   2017
 
Operating activities
Net loss $ (6,385 ) $ (6,791 )
Adjustments to reconcile net loss to net cash (used for) provided by operations:
Depreciation and amortization 1,488 2,307
Equity-based compensation 379 561
Amortization of debt issuance costs 5 2
Provision for bad debts - net 9 123
Provision for slow-moving, obsolete and lower of cost or net realizable value
inventories - net 16 427
Loss (gain) from disposal of property and equipment - net 9 (8 )
Changes in assets and liabilities, excluding effects of foreign currency translation adjustments:
Decrease in accounts receivable 3,518 944
Increase in inventories (3,486 ) (295 )
Increase in prepaid expenses and other assets (1,351 ) (902 )
Increase in accounts payable 1,244 787
Decrease in accrued expenses and other liabilities (511 ) (195 )
Increase in deferred revenue and customer prepayments   219     3,203  
Net cash (used for) provided by operating activities (4,846 ) 163
 
Investing activities
Capital expenditures (483 ) (249 )
Proceeds from sale of property and equipment   25     37  
Net cash used for investing activities (458 ) (212 )
 
Financing activities
Payments on long-term debt (35 ) (35 )
Payments on capital leases (4 ) (22 )
Debt issuance costs   (188 )   -  
Net cash used for financing activities (227 ) (57 )
 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash   209     285  
Net change in cash, cash equivalents, and restricted cash (5,322 ) 179
Cash, cash equivalents, and restricted cash at beginning of period   22,178     28,155  
 
Cash, cash equivalents, and restricted cash at end of period $ 16,856   $ 28,334  
 
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 $ 814   $ 131  
Transfer of internally developed 3D printing machines from property and equipment to
inventories for sale $ 113   $ 395  
Property and equipment acquired through financing arrangements $ 14   $ 48  
Property and equipment included in accounts payable $ 49   $ 25  
Property and equipment included in accrued expenses and other current liabilities $ 50   $ -  
Debt issuance costs included in accrued expenses and other current liabilities $ 76   $ -  
 
 

The ExOne Company

Additional Information

(Unaudited)

 

Machine Sales by Type

 
       

Quarter Ended
March 31,

2018   2017
S-Max ® 3 4
M-Flex ® - 1
Innovent ® 3 -
6 5
 
 

The ExOne Company

Adjusted Non-machine Revenue and Adjusted Revenue Reconciliation

(in millions)

(Unaudited)

 
  Quarter Ended  
March 31,    
2018   2017 % Change
Revenue by Product Line    
3D Printing Machines $ 4.5 38 % $ 4.3 40 % 6 %
3D Printed and Other Products, Materials and Services 7.4 62 % 6.6 63 % 12 %

Less: Revenue associated with exited
specialty machining operations in April 2017

  - 0 %   (0.3 ) (3 )% (100 )%
Adjusted Non-machine   7.4 62 %   6.3   60 % 17 %
Total Adjusted Revenue $ 11.9 100 % $ 10.6   100 % 13 %
 

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