The following summarizes ExOne’s financial results for the second quarter ended June 30, 2021:

• Revenue was $18.8 million representing a record second quarter performance for the Company and an increase of 69% compared to the year-ago quarter. Revenue from 3D printing machines increased 114% compared to the prior year quarter as a result of an increase in volumes (18 units in Q2 2021 compared to eight units in Q2 2020) slightly offset by an unfavourable mix of machines sold. Recurring revenue (3D printed and other products, materials and services) increased 34% compared to the year-ago period, led by a record quarterly period for consumable material sales driven by the developing global economic restart and an expansion of our global installed base of printers. In addition, revenue from funded research and development services, largely in support of future production metal equipment sale opportunities, increased comparably based on continued investments in our Production Adoption Model. Despite these increases, 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, particularly in Europe and Asia.
• Gross margin was 26.0%, compared to 27.8% in the second quarter of 2020. The decrease was primarily due to the continued impact of operating inefficiencies and challenges driven by the COVID-19 operating environment resulting in higher input costs, low contribution margin on X1 25Pro system sales following their initial introduction to market and an increase in productive workforce costs to meet increased demand from customers.
• Research and development expenses were $3.0 million, compared to $2.4 million in the second quarter of 2020. The increase was primarily due to higher employee-related costs and certain material costs incurred associated with systems and materials development of binder jetting technology.
• Selling, general and administrative expenses were $7.2 million, compared to $4.5 million in the second quarter of 2020. The increase was primarily due to higher employee-related costs for investments in the Company’s commercial infrastructure and higher variable selling expenses based on higher revenues, as well as increases in consulting and professional fees and other corporate overhead costs following certain cost reductions brought about by COVID-19 during the second quarter of 2020.
• Net loss was $5.6 million, or $0.25 per fully diluted share, compared with a net loss of $4.0 million, or $0.24 per fully diluted share, in the second quarter of 2020.
• Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), a non-GAAP measure, was a loss of $4.1 million, compared with a loss of $2.4 million in the second quarter of 2020. 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 June 30, 2021 decreased to $129.5 million, from $138.3 million at March 31, 2021. The decrease was driven by cash outflows from operations of $7.3 million mostly due to the widening net loss, net of noncash items for the period, and net cash outflows from working capital changes driven by an increase in inventories to support expanded contractual backlog and a reduction in cash inflows from customers based on timing of payments. In addition, capital expenditures for Q2 2021 were $1.6 million, including the acquisition of certain intellectual property and property and equipment associated with Freshmade 3D.

Conference Call Information

Desktop Metal will host a joint conference call on August 11, 2021 at 4:30 p.m. EST to discuss second quarter 2021 results and the ExOne acquisition announcement. Participants may access the call at 1-877-300-8521, international callers may use 1-412-317-6026, and request to join the Desktop Metal financial results conference call. A simultaneous webcast of the conference call, and the accompanying financial results presentation and transaction overview presentation may be accessed online from a link in the Events & Presentations section of https://ir.desktopmetal.com. A replay will be available shortly after the conclusion of the conference call at the same website.

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 and amortization, equity-based compensation, gain from sale-leaseback of property and equipment and other expense – 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.

About Desktop Metal

Desktop Metal, Inc., based in Burlington, Massachusetts, is accelerating the transformation of manufacturing with an expansive portfolio of 3D printing solutions, from rapid prototyping to mass production. Founded in 2015 by leaders in advanced manufacturing, metallurgy, and robotics, the company is addressing the unmet challenges of speed, cost, and quality to make additive manufacturing an essential tool for engineers and manufacturers around the world. Desktop Metal was selected as one of the world’s 30 most promising Technology Pioneers by the World Economic Forum and named to MIT Technology Review’s list of 50 Smartest Companies.

For more information, visit www.desktopmetal.com.

Additional Information and Where to Find It

This press release relates to a proposed transaction between Desktop Metal and the Company. In connection with the proposed transaction, Desktop Metal will file a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”), which will include a document that serves as a proxy statement/prospectus of Desktop Metal. A proxy statement/prospectus will be sent to all of the Company’s stockholders. Each party also will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and the Company’s stockholders may obtain free copies of the proxy statement/prospectus (when available) and other documents that are filed or will be filed with the SEC by Desktop Metal or the Company through the website maintained by the SEC at www.sec.gov . The documents filed by Desktop Metal with the SEC also may be obtained free of charge at Desktop Metal’s website at ir.desktopmetal.com. The documents filed by the Company with the SEC also may be obtained free of charge at the Company’s website at investor.exone.com .