The ExOne Company Reports 2018 Fourth 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,” “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 SEC filings, 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 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, PSCs 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)

 

 

   

 

 

Quarter Ended

%

Year Ended

%

December 31,

Change

December 31,

Change
 

2018

     

2017

   

2018

   

2017

 
Revenue $ 25,305 $ 20,189 25 % $ 64,644 $ 57,744 12 %
Cost of sales   15,143     13,533   12 %   43,703     43,362   1 %
Gross profit 10,162 6,656 53 % 20,941 14,382 46 %
Gross margin 40.2 % 33.0 % 32.4 % 24.9 %
Research and development 2,270 2,690 (16 %) 10,744 9,909 8 %
Selling, general and administrative   5,439     5,817   (6 %)   23,194     24,155   (4 %)
  7,709     8,507   (9 %)   33,938     34,064   (0 %)
Operating income (loss) 2,453 (1,851 ) NM (12,997 ) (19,682 ) 34 %
Interest expense 75 25 200 % 254 94 170 %
Other expense (income) ̶ net   192     69   178 %   (744 )   203  

NM

  267     94   184 %   (490 )   297   NM
Income (loss) before income taxes 2,186 (1,945 ) NM (12,507 ) (19,979 ) 37 %
Provision for income taxes   108     15   620 %   160     38   321 %
Net income (loss)

 

$ 2,078   $ (1,960 ) NM $ (12,667 ) $ (20,017 ) 37 %
Net income (loss) per common share:
Basic $ 0.13 $ (0.12 ) NM $ (0.78 ) $ (1.25 ) 37 %
Diluted $ 0.13 $ (0.12 ) NM $ (0.78 ) $ (1.25 ) 37 %
Weighted average shares outstanding ̶ basic 16,234 16,104 16,176 16,062
Weighted average shares outstanding ̶ diluted 16,264 16,104 16,176 16,062
 

NM: Not Meaningful

 
 
The ExOne Company
Consolidated Balance Sheet
(in thousands, except per-share and share amounts)

 

December 31,

2018

 

2017

Assets
Current assets:
Cash and cash equivalents $ 7,592 $ 21,848
Restricted cash 1,548 330
Accounts receivable – net 6,695 8,647
Inventories – net 15,930 15,430
Prepaid expenses and other current assets   2,438     1,710  
Total current assets 34,203 47,965
Property and equipment – net 41,906 46,797
Intangible assets – net 62
Other noncurrent assets   1,573     736  
Total assets $ 77,682   $ 95,560  
Liabilities
Current liabilities:
Current portion of long-term debt $ 144 $ 137
Accounts payable 4,376 4,291
Accrued expenses and other current liabilities 6,049 6,096
Deferred revenue and customer prepayments   2,343     8,282  
Total current liabilities 12,912 18,806
Long-term debt – net of current portion 1,364 1,508

Other noncurrent liabilities

  631     37  

Total liabilities

14,907 20,351
Contingencies and commitments

Stockholders' equity

Common stock, $0.01 par value, 200,000,000 shares authorized, 16,234,201

(2018) and 16,124,617 (2017) shares issued and outstanding

162 161
Additional paid-in capital 175,214 173,718
Accumulated deficit (101,853 ) (89,186 )
Accumulated other comprehensive loss   (10,748 )   (9,484 )
Total stockholders' equity   62,775     75,209  
Total liabilities and stockholders' equity $ 77,682   $ 95,560  
   
The ExOne Company
Statement of Consolidated Cash Flows

(in thousands)

 

Year Ended

December 31,

2018

2017

Operating activities
Net loss $ (12,667 ) $ (20,017 )
Adjustments to reconcile net loss to net cash used for operations:
Depreciation and amortization 5,503 6,278
Equity-based compensation 968 2,456
Amortization of debt issuance costs 75 6
Deferred income taxes 1
Provision (recoveries) for bad debts – net 58 (64 )

Provision for slow-moving, obsolete and lower of cost

or net realizable value inventories – net

1,022 2,056
Gain from disposal of property and equipment – net (51 ) (325 )

Changes in assets and liabilities, excluding effects of foreign

currency translation adjustments:

Decrease (increase) in accounts receivable

1,637 (1,733 )

(Increase) decrease in inventories

(3,441 ) 357
Increase in prepaid expenses and other assets (335 ) (856 )
Increase in accounts payable 195 2,017
Increase in accrued expenses and other liabilities 181 445
Decrease in deferred revenue and customer prepayments   (4,988 )   (294 )
Net cash used for operating activities (11,843 ) (9,673 )
Investing activities
Capital expenditures (1,327 ) (987 )
Proceeds from sale of property and equipment   98     3,706  
Net cash (used for) provided by investing activities (1,229 ) 2,719
Financing activities
Payments on long-term debt (142 ) (137 )
Payments on capital leases (17 ) (78 )
Proceeds from exercise of employee stock options 529 147
Debt issuance costs   (265 )    
Net cash provided by (used for) financing activities 105 (68 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash   (71 )   1,045  
Net change in cash, cash equivalents, and restricted cash (13,038 ) (5,977 )
Cash, cash equivalents, and restricted cash at beginning of period   22,178     28,155  
Cash, cash equivalents, and restricted cash at end of period $ 9,140   $ 22,178  
 
Supplemental disclosure of cash flow information

Cash paid for interest

$ 169   $ 87  

Cash paid for income taxes

$ 103   $ 5  
 

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

$ 2,194   $ 2,868  

Transfer of internally developed 3D printing machines from property and equipment

to inventories for sale

$ 1,042   $ 3,042  
Property and equipment included in assets held for sale $ 822   $  
Property and equipment included in accounts payable $ 79   $ 64  
Property and equipment included in accrued expenses and other current liabilities $   $ 108  
Property and equipment acquired through financing arrangements $ 14   $ 48  
 
 

The ExOne Company

Additional Information

(Unaudited)

 

 

Quarter Ended

 

Year Ended

December 31,

December 31,

2018

 

2017

2018  

2017

3D printing machine units sold:

Direct

14 7 30 18

Indirect

14 9 26 23
28 16 56 41
 
 
The ExOne Company

Adjusted EBITDA Reconciliation

(in millions)

(Unaudited)

     

 

 

Quarter Ended

Six Months Ended

Year Ended

December 31,

December 31,

December 31,

2018

2017

2018

2018

2017

Net income (loss) $ 2.1 $ (1.9 ) $ 1.8 $ (12.7 ) $ (20.0 )
Interest expense 0.1 0.0 0.1 0.2 0.1
Provision for income taxes 0.1 0.0 0.1 0.2 0.0
Depreciation and amortization 1.4 1.3 2.7 5.5 6.3
Equity-based compensation 0.3 0.4 0.6 1.0 2.5
Other expense (income) ̶ net   0.2   0.1     (0.6 )   (0.7 )   0.2  
Adjusted EBITDA $ 4.2 $ (0.1 ) $ 4.7   $ (6.5 ) $ (10.9 )
 

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