R&D expense was $10.7 million in 2018 compared with $9.9 million in 2017, with the increase primarily due to higher employee-related costs, which were reduced in the second half of 2018 following enactment of the 2018 global cost realignment program.
SG&A in 2018 was $23.2 million compared with $24.2 million in 2017. The decrease was driven by lower equity-based compensation and a reduction in amortization expense associated with intangible assets, partially offset by higher employee-related costs which were reduced in the second half following enactment of the 2018 global cost realignment initiative.
The net loss was $12.7 million, or $0.78 per share, in 2018, compared with $20.0 million, or $1.25 per share, in 2017.
Adjusted EBITDA*, a non-GAAP measure, was a $6.5 million loss in 2018 and a $10.9 million loss in 2017.
* See the attached tables for important disclosures regarding the Company’s use of Adjusted EBITDA, a non-GAAP measure (indicated by * where used in this release), as well as a reconciliation of net income (loss) (the most directly comparable GAAP measure) to Adjusted EBITDA for the quarters ended December 31, 2018 and 2017 and the six months ended December 31, 2018. ExOne management believes that, when used in conjunction with other measures prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), Adjusted EBITDA assists in the understanding of its financial results.
Capitalization – Operating Cash Flow Usage Supports Growth
Cash, cash equivalents and restricted cash as of December 31, 2018 were $9.1 million, compared with $22.2 million at December 31, 2017. There were no borrowings outstanding on the Company’s $15 million credit facility.
Cash used for operating activities during 2018 was $11.8 million, compared with $9.7 million in 2017. The $2.1 million increase was driven by higher working capital, primarily due to timing of payments from customers and investments in inventory to support growth, partially offset by improved operating results.
Cash capital expenditures were $1.3 million and $1.0 million in 2018 and 2017, respectively. In 2019, the Company expects cash capital expenditures of $1 million to $2 million.
2019 Goals – Increase Revenue Growth Rate and Generate Positive Adjusted EBITDA
Mr. Rockwell concluded, “Given the strength of our pipeline and customer interest in our technology, we are targeting revenue growth at increasing rates over each of the next several years. We believe that our new cost structure positions us well for operating leverage that will lead to positive adjusted EBITDA for the full year of 2019 and beyond. As is typical for the first quarter of our year, we expect a slow start to 2019 and we currently estimate about a 35/65 revenue split between the first half and second half of the year.”
Webcast and Conference Call
ExOne will host a conference call and live webcast on Thursday, March 14, 2019 at 8:30 a.m. Eastern Time. During the conference call and webcast, management will review the financial and operating results for the 2018 fourth quarter and full year, along with ExOne’s corporate strategies and outlook. A question-and-answer session will follow. The teleconference can be accessed by calling (201) 689-8470. The webcast can be monitored 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 Thursday, March 21, 2019. To listen to a replay of the call, dial (412) 317-6671 and enter the conference ID number 13686221, or access the webcast replay via the Company’s website, where a transcript will also be posted once available.
About ExOne
ExOne is a global provider of 3D printing machines and 3D printed and
other products, materials and services to industrial customers. ExOne's
business primarily consists of manufacturing and selling 3D printing
machines and printing products to specification for its customers using
its installed base of 3D printing machines. ExOne’s machines serve
direct and indirect applications. Direct printing produces a component;
indirect printing makes a tool to produce a component. ExOne offers
pre-production collaboration and print products for customers through
its network of ExOne Adoption Centers (“EACs”) and Production Service
Centers (“PSCs”). ExOne also supplies the associated materials,
including consumables and replacement parts, and other services,
including training and technical support that is necessary for
purchasers of its 3D printing machines to print products. The Company
believes that its ability to print in a variety of industrial materials,
as well as its industry-leading volumetric output (as measured by build
box size and printing speed) uniquely position ExOne to serve the needs
of industrial customers.
