The following summarizes ExOne’s financial results for the fourth quarter ended December 31, 2020:

• Revenue was $17.4 million, compared to $17.5 million in the fourth quarter of 2019. Despite an increase in unit volume sales, the decrease in revenue was driven by a 9% decline in revenue from 3D printing machines as a result of the mix of machines sold (higher average selling price sand systems decreased from 11 units in Q4 2019 to five units in Q4 2020 while lower average selling price metal systems increased from three units in Q4 2019 to 13 units in Q4 2020). The decrease in 3D printing machine revenue was offset by an increase in recurring revenue (3D printed and other products, materials and services) of 11% compared to the year-ago period, led by an increase in revenue from funded research and development services, largely in support of future production metal equipment sale opportunities, as well as materials and aftermarket revenue associated with the Company’s global installed base of printers. Those gains were offset by a decline in sand printing services revenue due to a continued decline in demand as a result of COVID-19. Revenue for both product groups continued to be impacted by COVID-19, including disruptions to domestic and international shipping and travel, in addition to negative macroeconomic effects.
• Gross margin was 22.2%, compared to 38.6% in the fourth quarter of 2019. The decrease was primarily due to low contribution margin on various system sales, including the X1 25Pro following its initial market introduction as well as unfavorable product warranty experience and other operating inefficiencies and challenges driven by the COVID-19 operating environment.
• Research and development expenses were $2.0 million, compared to $2.5 million in the fourth quarter of 2019. The decrease was primarily due to cost saving measures and other cost reductions associated with COVID-19 and lower machine development spending. Investments remain focused on the further development of binder jetting technology, including the X1 160Pro^TM production metal 3D printing system and the recently announced InnoventPro advanced entry-level metal 3D printing system.
• Selling, general and administrative expenses were $5.5 million, compared to $5.7 million for the fourth quarter of 2019. This decrease was driven by a combination of factors including lower travel, trade show, consulting and employee-related expenses, offset by higher external commissions expense.
• Net loss was $4.0 million, or $0.21 per fully diluted share, compared with a net loss of $2.0 million, or $0.12 per fully diluted share, in the fourth quarter of 2019.
• Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), a non-GAAP measure, was a loss of $2.4 million, compared with a break-even result in the fourth quarter of 2019. Refer to the attached table captioned “Adjusted EBITDA Reconciliation” and the section below titled “Non-GAAP Financial Measure” for important disclosures regarding the Company’s definition and use of Adjusted EBITDA as well as a reconciliation of net loss (the most directly comparable measure under accounting principles generally accepted in the United States (“GAAP”)) to Adjusted EBITDA. ExOne management believes that, when used in conjunction with other measures prepared in accordance with GAAP, Adjusted EBITDA assists in the understanding of its financial results.
• Cash, cash equivalents and restricted cash as of December 31, 2020 increased to $50.2 million, from $39.9 million at September 30, 2020 and $6.2 million at December 31, 2019. The sequential increase was driven by cash inflows from financing activities of $11.7 million, including $11.6 million in net proceeds from the sale of common stock in “at-the-market” offerings. These inflows were offset by cash outflows from operations of $1.2 million mostly due to the widening net loss, net of noncash items for the period, offset by an increase in cash inflows from customers based on timing of payments.
• Total liquidity, which includes unrestricted cash and cash equivalents and availability under the Company’s related party revolving credit facility, increased to $59.7 million at December 31, 2020, compared to $49.4 million at September 30, 2020 and $20.3 million at December 31, 2019. There were no borrowings outstanding under the Company’s $10.0 million related party revolving credit facility at December 31, 2020.

Liquidity Update

On February 12, 2021, the Company completed an underwritten public offering of its common stock resulting in net proceeds to the Company after commissions and expenses of approximately $95.0 million intended for use as working capital and for general corporate purposes, including strategic investments. Prior to completion of its underwritten public offering of common stock, the Company came to agreement for the termination of its equity distribution agreement associated with “at-the-market” offerings of its common stock on February 9, 2021. Following completion of its underwritten public offering of common stock, on March 5, 2021, the Company elected to terminate its $10.0 million related party revolving credit facility.

Outlook

ExOne CEO John Hartner commented, “With a record year-end backlog, strong interest in our core binder jetting technology, and expansion into new product areas like bound metal and sintering furnaces, we remain optimistic about our future. While there are still some headwinds as a result of COVID-19, which continues to influence the timing of our customers’ capital spending and is causing operational disruption and compressed margins in the mid-term, our backlog growth, refreshed product portfolio, and enhanced liquidity supports our projected 15% to 25% revenue growth in 2021.”

Webcast and Conference Call

ExOne will host a conference call and live webcast on Friday, March 12, 2021 at 8:30 a.m. Eastern Time. During the conference call and webcast, management will review the financial and operating results for the fourth 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. ET on the day of the teleconference through Friday, March 19, 2021. 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 13716146, or access the webcast replay via the Company’s website, where a transcript will also be posted once available.

Non-GAAP Financial Measure

This press release includes a non-GAAP financial measure that is not prepared in accordance with, nor as an alternative to, GAAP. In addition, this non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to a similarly titled measure presented by other companies.

The table captioned “Adjusted EBITDA Reconciliation” in this press release provides a reconciliation of net loss (the most directly comparable GAAP measure) to Adjusted EBITDA.

ExOne defines Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) as net income (loss) (as calculated under accounting principles generally accepted in the United States (“GAAP”)) plus interest expense, provision (benefit) for income taxes, depreciation, equity-based compensation, gain from sale-leaseback of property and equipment and other expense (income) – net. Use of Adjusted EBITDA, as defined under SEC rules, is intended as a supplemental measure of ExOne’s performance that is not required by, or presented in accordance with, GAAP. The presentation of Adjusted EBITDA is not intended to be a substitute for, and should not be considered in isolation from, net loss reported in accordance with GAAP. The Company’s presentation of Adjusted EBITDA should not be construed to imply that its future results will be unaffected by unusual or non-recurring items.

The Company believes that Adjusted EBITDA is meaningful to its investors to enhance their understanding of ExOne’s financial results. Although Adjusted EBITDA is not necessarily a measure of the Company’s ability to fund its cash needs, the Company understands that it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance and to compare ExOne’s performance with the performance of other companies that report Adjusted EBITDA.

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.