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 results of its global cost realignment initiative; 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 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, 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
June 30, |
% Change |
Six Months Ended
June 30, |
% Change | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||
Revenue | $ | 10,857 | $ | 10,799 | 1 | % | $ | 22,750 | $ | 21,668 | 5 | % | ||||||||||||
Cost of sales | 9,267 | 8,773 | 6 | % | 18,544 | 18,039 | 3 | % | ||||||||||||||||
Gross profit | 1,590 | 2,026 | (22 | %) | 4,206 | 3,629 | 16 | % | ||||||||||||||||
Gross margin | 14.6 | % | 18.8 | % | 18.5 | % | 16.7 | % | ||||||||||||||||
Research and development | 3,235 | 2,349 | 38 | % | 6,030 | 4,348 | 39 | % | ||||||||||||||||
Selling, general and administrative | 6,353 | 6,013 | 6 | % | 12,555 | 12,276 | 2 | % | ||||||||||||||||
9,588 | 8,362 | 15 | % | 18,585 | 16,624 | 12 |
% |
|||||||||||||||||
Operating loss | (7,998 | ) | (6,336 | ) | (26 | %) | (14,379 | ) | (12,995 | ) | (11 | %) | ||||||||||||
Interest expense | 73 | 23 | 217 | % | 106 | 45 | 136 | % | ||||||||||||||||
Other (income) expense – net | (52 | ) | 35 | NM | (98 | ) | 145 | NM | ||||||||||||||||
21 | 58 | (64 | %) | 8 | 190 | (96 | %) | |||||||||||||||||
Loss before income taxes | (8,019 | ) | (6,394 | ) | (25 | %) | (14,387 | ) | (13,185 | ) | (9 | %) | ||||||||||||
Provision for income taxes | 18 | 9 | 100 | % | 35 | 9 | 289 | % | ||||||||||||||||
Net loss | $ | (8,037 | ) | $ | (6,403 | ) | (26 | %) | $ | (14,422 | ) | $ | (13,194 | ) | (9 | %) | ||||||||
Net loss per common share: | ||||||||||||||||||||||||
Basic | $ | (0.50 | ) | $ | (0.40 | ) | (25 | %) | $ | (0.89 | ) | $ | (0.82 | ) | (9 | %) | ||||||||
Diluted | $ | (0.50 | ) | $ | (0.40 | ) | (25 | %) | $ | (0.89 | ) | $ | (0.82 | ) | (9 | %) | ||||||||
Weighted average shares outstanding (basic and diluted) | 16,150 | 16,046 | 16,144 | 16,037 |
NM: Not Meaningful |
The ExOne Company | ||||||||||
Consolidated Balance Sheet | ||||||||||
(in thousands, except per-share and share amounts) |
||||||||||
(Unaudited) |
||||||||||
June 30,
2018 |
December 31,
2017 |
|||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 11,584 | $ | 21,848 | ||||||
Restricted cash | 1,463 | 330 | ||||||||
Accounts receivable - net of allowance of $1,122 (2018) and $1,193 (2017) | 5,003 | 8,647 | ||||||||
Inventories - net | 20,551 | 15,430 | ||||||||
Prepaid expenses and other current assets | 2,677 | 1,710 | ||||||||
Total current assets | 41,278 | 47,965 | ||||||||
Property and equipment - net | 44,791 | 46,797 | ||||||||
Intangible assets - net | - | 62 | ||||||||
Other noncurrent assets | 770 | 736 | ||||||||
Total assets | $ | 86,839 | $ | 95,560 | ||||||
Liabilities | ||||||||||
Current liabilities: | ||||||||||
Current portion of long-term debt | $ | 140 | $ | 137 | ||||||
Current portion of capital leases | 16 | 15 | ||||||||
Accounts payable | 4,756 | 4,291 | ||||||||
Accrued expenses and other current liabilities | 6,665 | 6,081 | ||||||||
Deferred revenue and customer prepayments | 13,460 | 8,282 | ||||||||
Total current liabilities | 25,037 | 18,806 | ||||||||
Long-term debt - net of current portion | 1,437 | 1,508 | ||||||||
Capital leases - net of current portion | 41 | 36 | ||||||||
Other noncurrent liabilities | 1 | 1 | ||||||||
Total liabilities | 26,516 | 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 | 174,092 | 173,718 | ||||||||
Accumulated deficit | (103,608 | ) | (89,186 | ) | ||||||
Accumulated other comprehensive loss | (10,322 | ) | (9,484 | ) | ||||||
Total stockholders' equity | 60,323 | 75,209 | ||||||||
Total liabilities and stockholders' equity | $ | 86,839 | $ | 95,560 | ||||||
The ExOne Company | ||||||||||
Statement of Consolidated Cash Flows | ||||||||||
(in thousands) |
||||||||||
(Unaudited) |
||||||||||
Six Months Ended | ||||||||||
June 30, | ||||||||||
2018 | 2017 | |||||||||
Operating activities | ||||||||||
Net loss | $ | (14,422 | ) | $ | (13,194 | ) | ||||
Adjustments to reconcile net loss to net cash used for operations: | ||||||||||
Depreciation and amortization | 2,829 | 3,589 | ||||||||
Equity-based compensation | 374 | 835 | ||||||||
Amortization of debt issuance costs | 27 | 3 | ||||||||
(Recoveries) provision for bad debts - net | (37 | ) | 132 | |||||||
Provision for slow-moving, obsolete and lower of cost or net realizable value | ||||||||||
inventories - net | 771 | 1,835 | ||||||||
Gain from disposal of property and equipment - net | (41 | ) | (314 | ) | ||||||
Changes in assets and liabilities, excluding effects of foreign currency translation adjustments: | ||||||||||
Decrease in accounts receivable | 3,763 | 69 | ||||||||
Increase in inventories | (7,060 | ) | (3,358 | ) | ||||||
Increase in prepaid expenses and other assets | (658 | ) | (770 | ) | ||||||
Increase in accounts payable | 445 | 2,111 | ||||||||
Increase (decrease) in accrued expenses and other liabilities | 730 | (252 | ) | |||||||
Increase in deferred revenue and customer prepayments | 5,406 | 2,390 | ||||||||
Net cash used for operating activities | (7,873 | ) | (6,924 | ) | ||||||
Investing activities | ||||||||||
Capital expenditures | (819 | ) | (392 | ) | ||||||
Proceeds from sale of property and equipment | 25 | 3,677 | ||||||||
Net cash (used for) provided by investing activities | (794 | ) | 3,285 | |||||||
Financing activities | ||||||||||
Payments on long-term debt | (70 | ) | (68 | ) | ||||||
Payments on capital leases | (9 | ) | (45 | ) | ||||||
Debt issuance costs | (188 | ) | - | |||||||
Net cash used for financing activities | (267 | ) | (113 | ) | ||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (197 | ) | 760 | |||||||
Net change in cash, cash equivalents, and restricted cash | (9,131 | ) | (2,992 | ) | ||||||
Cash, cash equivalents, and restricted cash at beginning of period | 22,178 | 28,155 | ||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 13,047 | $ | 25,163 | ||||||
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 | $ | 895 | $ | 1,917 | ||||||
Transfer of internally developed 3D printing machines from property and equipment to | ||||||||||
inventories for sale | $ | 424 | $ | 395 | ||||||
Property and equipment acquired through financing arrangements | $ | 14 | $ | 48 | ||||||
Unsettled proceeds from sale of property and equipment | $ | 51 | $ | - | ||||||
Property and equipment included in accounts payable | $ | 95 | $ | 100 | ||||||
Property and equipment included in accrued expenses and other current liabilities | $ | 23 | $ | - | ||||||
Debt issuance costs included in accounts payable | $ | 76 | $ | - | ||||||
The ExOne Company | ||||||||||
Additional Information | ||||||||||
(Unaudited) |
||||||||||
Machine Sales by Type | ||||||||||
Quarter Ended
June 30, |
Six Months Ended
June 30, |
|||||||||
2018 | 2017 | 2018 | 2017 | |||||||
S-Max ® | 1 | 2 | 4 | 6 | ||||||
S-Print™ | 1 | - | 1 | - | ||||||
M-Flex ® | 1 | 3 | 1 | 4 | ||||||
Innovent ® + | 1 | - | 1 | - | ||||||
Innovent ® | 3 | 3 | 6 | 3 | ||||||
7 | 8 | 13 | 13 | |||||||
The ExOne Company | ||||||||||||||||||
Adjusted EBITDA Reconciliation | ||||||||||||||||||
(in millions) |
||||||||||||||||||
(Unaudited) |
||||||||||||||||||
Quarter Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Net loss | $ | (8.0 | ) | $ | (6.4 | ) | $ | (14.4 | ) | $ | (13.2 | ) | ||||||
Interest expense | 0.1 | 0.0 | 0.1 | 0.1 | ||||||||||||||
Provision for income taxes | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||
Depreciation and amortization | 1.3 | 1.3 | 2.8 | 3.6 | ||||||||||||||
Equity-based compensation | (0.0 | ) | 0.3 | 0.4 | 0.8 | |||||||||||||
Other (income) expense - net | (0.1 | ) | 0.0 | (0.1 | ) | 0.1 | ||||||||||||
Adjusted EBITDA | $ | (6.7 | ) | $ | (4.8 | ) | $ | (11.2 | ) | $ | (8.6 | ) | ||||||