The ExOne Company Reports 2019 First 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,” “goal,” “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, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: 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 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 or 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 and other SEC filings 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 %

March 31

Change
  2019         2018  
Revenue $ 9,579 $ 11,893 (19 %)
Cost of sales   6,937     9,277   (25 %)
Gross profit 2,642 2,616 1 %
Gross margin 27.6 % 22.0 %
Research and development 2,432 2,795 (13 %)
Selling, general and administrative   5,423     6,202   (13 %)
Operating expenses   7,855     8,997   (13 %)
Operating loss (5,213 ) (6,381 ) 18 %
Interest expense 71 33 115 %
Other expense (income) ̶ net   12     (46 ) NM
  83     (13 ) NM
Loss before income taxes (5,296 ) (6,368 ) 17 %
(Benefit) provision for income taxes   (800 )   17   NM
Net loss $ (4,496 ) $ (6,385 ) 30 %
Net loss per common share:
Basic $ (0.28 ) $ (0.40 ) 30 %
Diluted $ (0.28 ) $ (0.40 ) 30 %
Weighted average shares outstanding (basic and diluted) 16,253 16,139
 

NM: Not Meaningful

 
         

The ExOne Company

Consolidated Balance Sheet

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

(Unaudited)

 
March 31, December 31,
  2019     2018  
Assets
Current assets:
Cash and cash equivalents $ 5,446 $ 7,592
Restricted cash 1,896 1,548
Accounts receivable ̶ net 3,546 6,393
Current portion of net investment in sales-type leases 287 302
Inventories ̶ net 16,361 15,930
Prepaid expenses and other current assets   2,917     2,438  
Total current assets 30,453 34,203
Property and equipment ̶ net 41,356 41,906
Net investment in sales-type leases ̶ net of current portion 1,272 1,351
Other noncurrent assets   537     222  
Total assets $ 73,618   $ 77,682  
Liabilities
Current liabilities:
Current portion of long-term debt $ 147 $ 144
Accounts payable 3,488 4,376
Accrued expenses and other current liabilities 4,397 6,049
Current portion of contract liabilities   5,573     2,343  
Total current liabilities 13,605 12,912
Long-term debt ̶ net of current portion 1,326 1,364
Contract liabilities ̶ net of current portion 352 527
Other noncurrent liabilities   296     104  
Total liabilities 15,579 14,907
Contingencies and commitments

Stockholders' equity

Common stock, $0.01 par value, 200,000,000 shares authorized,

16,284,948 (2019) and 16,234,201 (2018) shares issued and outstanding

163 162
Additional paid-in capital 175,749 175,214

Accumulated deficit

(106,349 ) (101,853 )
Accumulated other comprehensive loss   (11,524 )   (10,748 )
Total stockholders' equity   58,039     62,775  
Total liabilities and stockholders' equity $ 73,618   $ 77,682  
 
     

The ExOne Company

Statement of Consolidated Cash Flows

(in thousands)

(Unaudited)

 
Quarter Ended
March 31,
  2019         2018  
Operating activities
Net loss $ (4,496 ) $ (6,385 )
Adjustments to reconcile net loss to net cash used for operations:
Depreciation and amortization 1,165 1,488
Equity-based compensation 439 379
Amortization of debt issuance costs 23 5
(Recoveries) provision for bad debts ̶ net (73 ) 9
Provision for slow-moving, obsolete and lower of cost or net realizable value

inventories ̶ net

107 16
Loss from disposal of property and equipment ̶ net 9
Changes in assets and liabilities, excluding effects of foreign currency

translation adjustments:

Decrease in accounts receivable 2,877 3,467
Decrease in net investment in sales-type leases 87 51
Increase in inventories (1,576 ) (3,486 )
Increase in prepaid expenses and other assets (509 ) (1,351 )
(Decrease) increase in accounts payable (793 ) 1,244
Decrease in accrued expenses and other liabilities (1,748 ) (511 )
Increase in contract liabilities   3,122     219  
Net cash used for operating activities (1,375 ) (4,846 )
Investing activities
Capital expenditures (347 ) (483 )
Proceeds from sale of property and equipment       25  
Net cash used for investing activities (347 ) (458 )
Financing activities
Payments on long-term debt (36 ) (35 )
Proceeds from exercise of employee stock options 165
Taxes related to the net share settlement of equity-based awards (68 )
Debt issuance costs (188 )
Other   (5 )   (4 )
Net cash provided by (used for) financing activities 56 (227 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash   (132 )   209  
Net change in cash, cash equivalents, and restricted cash (1,798 ) (5,322 )
Cash, cash equivalents, and restricted cash at beginning of period   9,140     22,178  
Cash, cash equivalents, and restricted cash at end of period $ 7,342   $ 16,856  
 
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

$ 819   $ 814  
Transfer of internally developed 3D printing machines from property and equipment to inventories for sale $   $ 113  
Property and equipment included in accounts payable $ 23   $ 49  
Property and equipment included in accrued expenses and other current liabilities $ 7   $ 50  
Property and equipment acquired through financing arrangements $   $ 14  
Debt issuance costs included in accrued expenses and other current liabilities $   $ 76  
 
         

The ExOne Company

Additional Information

(Unaudited)

 
Quarter Ended
March 31,
2019 2018
3D printing machine units sold:
Direct 6 3
Indirect 2 3
8 6
 
         

The ExOne Company

Adjusted EBITDA Reconciliation

(in millions)

(Unaudited)

 
Quarter Ended
March 31,
  2019     2018  
Net loss $ (4.5 ) $ (6.4 )
Interest expense 0.1 0.0
(Benefit) provision for income taxes (0.8 ) 0.0
Depreciation and amortization 1.2 1.5
Equity-based compensation 0.4 0.4
Other expense (income) ̶ net   0.0     (0.0 )
Adjusted EBITDA $ (3.6 ) $ (4.5 )
 

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