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 |
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Statement of Consolidated Operations |
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(in thousands, except per-share amounts) |
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Quarter Ended |
% |
Year Ended |
% | |||||||||||||||||||
December 31, |
Change |
December 31, |
Change | |||||||||||||||||||
2018 |
2017 |
2018 |
2017 |
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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 |
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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) |
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$ | 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 |
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The ExOne Company | ||||||||
Consolidated Balance Sheet | ||||||||
(in thousands, except per-share and share amounts) | ||||||||
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December 31, |
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2018 |
2017 |
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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 |
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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) |
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Year Ended |
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December 31, |
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2018 |
2017 |
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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: |
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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 |
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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 |
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Additional Information | ||||||||
(Unaudited) |
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Quarter Ended |
Year Ended |
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December 31, |
December 31, |
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2018 |
2017 |
2018 |
2017 |
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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 |
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(in millions) |
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(Unaudited) |
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Quarter Ended |
Six Months Ended |
Year Ended | |||||||||||||||||
December 31, |
December 31, |
December 31, |
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2018 |
2017 |
2018 |
2018 |
2017 |
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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 | ) | ||||||