ExOne CEO John Hartner commented, “With a record backlog, strong interest in our core binder jetting technology, and exciting new products still launching, we remain optimistic about our future. However, our enthusiasm must be tempered by the headwinds in the global manufacturing sector as a result of COVID-19, which continues to influence the timing of our customers’ capital spending and is causing intermittent disruption to our global operations. Despite these headwinds, our backlog growth, refreshed product portfolio, and enhanced liquidity sets the stage for strong operational performance in the fourth quarter and heading into 2021.”
Webcast and Conference Call
ExOne will host a conference call and live webcast on Friday, November 6, 2020 at 8:30 a.m. Eastern Time. During the conference call and webcast, management will review the financial and operating results for the third 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, November 13, 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 13712268, 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 Report on Form 10-Q for the quarter ended September 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 Report on Form 10-Q for the quarter ended September 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 Report 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
| Revenue | $ |
17,399 |
|
$ |
10,884 |
|
$ |
41,881 |
|
$ |
35,742 |
|
||||
| Cost of sales |
|
13,500 |
|
|
8,006 |
|
|
31,263 |
|
|
25,080 |
|
||||
| Gross profit |
|
3,899 |
|
|
2,878 |
|
|
10,618 |
|
|
10,662 |
|
||||
| Operating expenses | ||||||||||||||||
| Research and development |
|
2,013 |
|
|
2,430 |
|
|
6,858 |
|
|
7,399 |
|
||||
| Selling, general and administrative |
|
4,825 |
|
|
5,326 |
|
|
15,476 |
|
|
16,916 |
|
||||
| Gain from sale-leaseback of property and equipment |
|
— |
|
|
— |
|
|
(1,462 |
) |
|
— |
|
||||
|
|
6,838 |
|
|
7,756 |
|
|
20,872 |
|
|
24,315 |
|
|||||
| Loss from operations |
|
(2,939 |
) |
|
(4,878 |
) |
|
(10,254 |
) |
|
(13,653 |
) |
||||
| Other expense (income) | ||||||||||||||||
| Interest expense |
|
54 |
|
|
85 |
|
|
171 |
|
|
227 |
|
||||
| Other expense (income) - net |
|
314 |
|
|
(134 |
) |
|
319 |
|
|
(65 |
) |
||||
|
|
368 |
|
|
(49 |
) |
|
490 |
|
|
162 |
|
|||||
| Loss before income taxes |
|
(3,307 |
) |
|
(4,829 |
) |
|
(10,744 |
) |
|
(13,815 |
) |
||||
| (Benefit) provision for income taxes |
|
(34 |
) |
|
15 |
|
|
200 |
|
|
(686 |
) |
||||
| Net loss | $ |
(3,273 |
) |
$ |
(4,844 |
) |
$ |
(10,944 |
) |
$ |
(13,129 |
) |
||||
| Net loss per common share: | ||||||||||||||||
| Basic | $ |
(0.19 |
) |
$ |
(0.30 |
) |
$ |
(0.65 |
) |
$ |
(0.81 |
) |
||||
| Diluted | $ |
(0.19 |
) |
$ |
(0.30 |
) |
$ |
(0.65 |
) |
$ |
(0.81 |
) |
||||
| Comprehensive loss: |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
| Net loss | $ |
(3,273 |
) |
$ |
(4,844 |
) |
$ |
(10,944 |
) |
$ |
(13,129 |
) |
||||
| Other comprehensive income (loss): |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
| Foreign currency translation adjustments |
|
856 |
|
|
(1,387 |
) |
|
388 |
|
|
(1,580 |
) |
||||
| Comprehensive loss | $ |
(2,417 |
) |
$ |
(6,231 |
) |
$ |
(10,556 |
) |
$ |
(14,709 |
) |
||||
| The ExOne Company Condensed Consolidated Balance Sheet (Unaudited) (in thousands, except per-share and share amounts) |
||||||||
| September 30, | December 31, | |||||||
| 2020 |
2019 |
|||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
39,428 |
|
$ |
5,265 |
|
||
| Restricted cash |
|
508 |
|
|
978 |
|
||
| Accounts receivable - net |
|
5,540 |
|
|
6,522 |
|
||
| Current portion of net investment in sales-type leases |
|
225 |
|
|
213 |
|
||
| Inventories - net |
|
22,187 |
|
|
19,770 |
|
||
| Prepaid expenses and other current assets |
|
3,848 |
|
|
2,182 |
|
||
| Total current assets |
|
71,736 |
|
|
34,930 |
|
||
| Property and equipment - net |
|
20,924 |
|
|
38,895 |
|
||
| Operating lease right-of-use assets |
|
4,278 |
|
|
432 |
|
||
| Net investment in sales-type leases - net of current portion |
|
568 |
|
|
738 |
|
||
| Other noncurrent assets |
|
260 |
|
|
371 |
|
||
| Total assets | $ |
97,766 |
|
$ |
75,366 |
|
||
| Liabilities | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ |
1,496 |
|
$ |
153 |
|
||
| Current portion of operating lease liabilities |
|
1,843 |
|
|
158 |
|
||
| Accounts payable |
|
4,445 |
|
|
5,818 |
|
||
| Accrued expenses and other current liabilities |
|
5,163 |
|
|
6,942 |
|
||
| Current portion of contract liabilities |
|
12,732 |
|
|
11,846 |
|
||
| Total current liabilities |
|
25,679 |
|
|
24,917 |
|
||
| Long-term debt - net of current portion |
|
1,948 |
|
|
1,211 |
|
||
| Operating lease liabilities - net of current portion |
|
2,435 |
|
|
274 |
|
||
| Contract liabilities - net of current portion |
|
156 |
|
|
286 |
|
||
| Other noncurrent liabilities |
|
365 |
|
|
96 |
|
||
| Total liabilities |
|
30,583 |
|
|
26,784 |
|
||
| Contingencies and commitments | ||||||||
| Stockholders' equity | ||||||||
| Common stock, $0.01 par value, 200,000,000 shares authorized,
18,988,099 (2020) and 16,346,960 (2019) shares issued and outstanding |
|
190 |
|
|
163 |
|
||
| Additional paid-in capital |
|
205,980 |
|
|
176,850 |
|
||
| Accumulated deficit |
|
(127,892 |
) |
|
(116,948 |
) |
||
| Accumulated other comprehensive loss |
|
(11,095 |
) |
|
(11,483 |
) |
||
| Total stockholders' equity |
|
67,183 |
|
|
48,582 |
|
||
| Total liabilities and stockholders' equity | $ |
97,766 |
|
$ |
75,366 |
|
||
| The ExOne Company Condensed Statement of Consolidated Cash Flows (Unaudited) (in thousands) |
||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2020 |
2019 |
|||||||
| Operating activities | ||||||||
| Net loss | $ |
(10,944 |
) |
$ |
(13,129 |
) |
||
| Adjustments to reconcile net loss to net cash used for operations: | ||||||||
| Depreciation |
|
2,925 |
|
|
3,491 |
|
||
| Equity-based compensation |
|
828 |
|
|
1,076 |
|
||
| Amortization of debt issuance costs |
|
39 |
|
|
70 |
|
||
| (Recoveries) provision for bad debts - net |
|
(4 |
) |
|
264 |
|
||
| Provision for slow-moving, obsolete and lower of cost or
net realizable value inventories - net |
|
335 |
|
|
37 |
|
||
| Foreign exchange losses (gains) on intercompany transactions - net |
|
250 |
|
|
(127 |
) |
||
| 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 |
|
1,092 |
|
|
2,790 |
|
||
| Decrease in net investment in sales-type leases |
|
158 |
|
|
218 |
|
||
| Increase in inventories |
|
(3,310 |
) |
|
(4,373 |
) |
||
| Increase in prepaid expenses and other assets |
|
(1,681 |
) |
|
(827 |
) |
||
| (Decrease) increase in accounts payable |
|
(1,679 |
) |
|
1,822 |
|
||
| Increase (decrease) in accrued expenses and other liabilities |
|
396 |
|
|
(1,934 |
) |
||
| Increase in contract liabilities |
|
248 |
|
|
6,301 |
|
||
| Net cash used for operating activities |
|
(12,615 |
) |
|
(4,323 |
) |
||
| Investing activities | ||||||||
| Capital expenditures |
|
(772 |
) |
|
(613 |
) |
||
| Proceeds from sale of property and equipment |
|
16,229 |
|
|
3 |
|
||
| Net cash provided by (used for) investing activities |
|
15,457 |
|
|
(610 |
) |
||
| Financing activities | ||||||||
| Proceeds from borrowings on long-term debt |
|
2,194 |
|
|
— |
|
||
| Proceeds from related party revolving credit facility |
|
— |
|
|
2,000 |
|
||
| Payments on long-term debt |
|
(117 |
) |
|
(111 |
) |
||
| Proceeds from at-the-market offerings of common stock, net of issuance costs |
|
27,699 |
|
|
— |
|
||
| Taxes related to the net share settlement of equity-based awards |
|
(15 |
) |
|
(68 |
) |
||
| Proceeds from exercise of employee stock options |
|
858 |
|
|
289 |
|
||
| Other |
|
(63 |
) |
|
(10 |
) |
||
| Net cash provided by financing activities |
|
30,556 |
|
|
2,100 |
|
||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
295 |
|
|
(187 |
) |
||
| Net change in cash, cash equivalents, and restricted cash |
|
33,693 |
|
|
(3,020 |
) |
||
| Cash, cash equivalents, and restricted cash at beginning of period |
|
6,243 |
|
|
9,140 |
|
||
| Cash, cash equivalents, and restricted cash at end of period | $ |
39,936 |
|
$ |
6,120 |
|
||
| 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 |
$ |
1,434 |
|
$ |
1,635 |
|
||
| Transfer of internally developed 3D printing machines from property
and equipment to inventories for sale |
$ |
2,771 |
|
$ |
485 |
|
||
| Property and equipment included in accounts payable | $ |
113 |
|
$ |
48 |
|
||
| At-the-market offering issuance costs included in accounts payable | $ |
147 |
|
$ |
— |
|
||
| At-the-market offering issuance costs included in accrued expenses
and other current liabilities |
$ |
66 |
|
$ |
— |
|
||
| The ExOne Company Adjusted EBITDA Reconciliation (Unaudited) (in millions) |
||||||||
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2020 |
2019 |
|||||||
| Net loss | $ |
(3.3 |
) |
$ |
(4.8 |
) |
||
| Interest expense |
|
0.1 |
|
|
0.1 |
|
||
| (Benefit) provision for income taxes |
|
(0.0 |
) |
|
0.0 |
|
||
| Depreciation |
|
0.8 |
|
|
1.1 |
|
||
| Equity-based compensation |
|
0.4 |
|
|
(0.0 |
) |
||
| Gain from sale-leaseback of property and equipment |
|
0.0 |
|
|
0.0 |
|
||
| Other expense (income) - net |
|
0.3 |
|
|
(0.1 |
) |
||
| Adjusted EBITDA | $ |
(1.7 |
) |
$ |
(3.7 |
) |
||
