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 reports, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: the Company’s ability to enhance its current three-dimensional (“3D”) printing machines and technology and develop new 3D printing machines; its ability to qualify more industrial materials in which it can print; timing and length of sales of 3D printing machines; demand for ExOne products; the Company’s ability to achieve cost savings through consolidation or exiting of certain North American operations; the impact of increases in operating expenses and expenses relating to proposed investments and alliances; the availability of skilled personnel; the impact of market conditions and other factors on the carrying value of long-lived assets; the Company’s competitive environment and its competitive position; the Company’s ability to continue as a going concern; individual customer contractual requirements; the impact of customer specific terms in machine sale agreements on the period in which the Company recognizes revenue; the impact of loss of key management; risks related to global operations including effects of foreign currency and risks related to the situation in the Ukraine and the United Kingdom’s referendum to withdraw from the European Union; demand for aerospace, automotive, heavy equipment, energy/oil/gas and other industrial products; the Company’s plans regarding increased international operations in additional international locations; the scope, nature or impact of alliances and strategic investments and the Company’s ability to integrate strategic investments; sufficiency of funds for required capital expenditures, working capital, and debt service; the adequacy of sources of liquidity; 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 our manufacturing facilities, production service centers or ExOne adoption centers; the adequacy of the Company’s protection of its intellectual property; 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; and material weaknesses in the Company’s internal control over financial reporting.
These and other important factors, including those discussed in the Company’s Annual Report on Form 10-K, may cause its actual results of operations to differ materially from any future results of operations expressed or implied by the forward-looking statements contained herein. 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 that could cause actual results to differ from these forward-looking statements.
FINANCIAL TABLES FOLLOW.
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The ExOne Company Statement of Consolidated Operations (in thousands, except per-share amounts) (Unaudited) |
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Quarter Ended
June 30, |
% Change |
Six Months Ended
June 30, |
% Change | |||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||
| Revenue | $ | 10,799 | $ | 11,755 | (8 | %) | $ | 21,668 | $ | 20,169 | 7 | % | ||||||||||||
| Cost of sales | 8,773 | 8,249 | 6 | % | 18,039 | 14,787 | 22 | % | ||||||||||||||||
| Gross profit | 2,026 | 3,506 | (42 | %) | 3,629 | 5,382 | (33 | %) | ||||||||||||||||
| Gross margin | 18.8 | % | 29.8 | % | 16.7 | % | 26.7 | % | ||||||||||||||||
| Research and development | 2,349 | 1,946 | 21 | % | 4,348 | 3,839 | 13 | % | ||||||||||||||||
| Selling, general and administrative | 6,013 | 4,663 | 29 | % | 12,276 | 9,988 | 23 | % | ||||||||||||||||
| 8,362 | 6,609 | 27 | % | 16,624 | 13,827 | 20 | % | |||||||||||||||||
| Operating loss | (6,336 | ) | (3,103 | ) | (104 | %) | (12,995 | ) | (8,445 | ) | (54 | %) | ||||||||||||
| Interest expense | 23 | 22 | 5 | % | 45 | 254 | (82 | %) | ||||||||||||||||
| Other expense (income) – net | 35 | (205 | ) | NM | 145 | (298 | ) | NM | ||||||||||||||||
| 58 | (183 | ) | NM | 190 | (44 | ) | NM | |||||||||||||||||
| Loss before income taxes | (6,394 | ) | (2,920 | ) | (119 | %) | (13,185 | ) | (8,401 | ) | (57 | %) | ||||||||||||
| Provision for income taxes | 9 | 22 | (59 | %) | 9 | 18 | (50 | %) | ||||||||||||||||
| Net loss | $ | (6,403 | ) | $ | (2,942 | ) | (118 | %) | $ | (13,194 | ) | $ | (8,419 | ) | (57 | %) | ||||||||
| Net loss per common share: | ||||||||||||||||||||||||
| Basic | $ | (0.40 | ) | $ | (0.18 | ) | (122 | %) | $ | (0.82 | ) | $ | (0.53 | ) | (55 | %) | ||||||||
| Diluted | $ | (0.40 | ) | $ | (0.18 | ) | (122 | %) | $ | (0.82 | ) | $ | (0.53 | ) | (55 | %) | ||||||||
| Weighted average shares outstanding (basic and diluted) | 16,046 | 15,994 | 16,037 | 15,870 | ||||||||||||||||||||
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NM: Not Meaningful |
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The ExOne Company Consolidated Balance Sheet (in thousands, except per-share and share amounts) (Unaudited) |
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June 30,
2017 |
December 31,
2016 |
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| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 24,051 | $ | 27,825 | ||||||
| Restricted cash | 1,112 | 330 | ||||||||
| Accounts receivable - net of allowance of $1,687 (2017) and $1,566 (2016) | 6,566 | 6,447 | ||||||||
| Inventories - net | 17,022 | 15,838 | ||||||||
| Prepaid expenses and other current assets | 2,059 | 1,159 | ||||||||
| Total current assets | 50,810 | 51,599 | ||||||||
| Property and equipment - net | 49,011 | 51,134 | ||||||||
| Intangible assets - net | 236 | 668 | ||||||||
| Other noncurrent assets | 304 | 777 | ||||||||
| Total assets | $ | 100,361 |
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$ | 104,178 | |||||
| Liabilities | ||||||||||
| Current liabilities: | ||||||||||
| Current portion of long-term debt | $ | 133 | $ | 132 | ||||||
| Current portion of capital leases | 41 | 72 | ||||||||
| Accounts payable | 4,365 | 2,036 | ||||||||
| Accrued expenses and other current liabilities | 5,120 | 5,124 | ||||||||
| Deferred revenue and customer prepayments | 10,539 | 7,371 | ||||||||
| Total current liabilities | 20,198 |
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14,735 | |||||||
| Long-term debt - net of current portion | 1,578 | 1,644 | ||||||||
| Capital leases - net of current portion | 44 | 10 | ||||||||
| Other noncurrent liabilities | 9 | 9 | ||||||||
| Total liabilities | 21,829 | 16,398 | ||||||||
| Contingencies and commitments | ||||||||||
| Stockholders' equity | ||||||||||
| Common stock, $0.01 par value, 200,000,000 shares authorized, 16,045,949 (2017) | ||||||||||
| and 16,017,115 (2016) shares issued and outstanding | 160 | 160 | ||||||||
| Additional paid-in capital | 171,951 | 171,116 | ||||||||
| Accumulated deficit | (82,363 | ) | (68,761 | ) | ||||||
| Accumulated other comprehensive loss | (11,216 | ) | (14,735 | ) | ||||||
| Total stockholders' equity | 78,532 | 87,780 | ||||||||
| Total liabilities and stockholders' equity | $ | 100,361 | $ | 104,178 | ||||||
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The ExOne Company Statement of Consolidated Cash Flows (in thousands) (Unaudited) |
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| Six Months Ended | ||||||||||
| June 30, | ||||||||||
| 2017 | 2016 | |||||||||
| Operating activities | ||||||||||
| Net loss | $ | (13,194 | ) | $ | (8,419 | ) | ||||
| Adjustments to reconcile net loss to net cash used for operations: | ||||||||||
| Depreciation and amortization | 3,589 | 2,862 | ||||||||
| Equity-based compensation | 835 | 554 | ||||||||
| Amortization of debt issuance costs | 3 | 207 | ||||||||
| Deferred income taxes | - | (29 | ) | |||||||
| Provision (recoveries) for bad debts - net | 132 | (271 | ) | |||||||
| Provision (recoveries) for slow-moving, obsolete and lower of cost or market inventories - net | 1,835 | (403 | ) | |||||||
| (Gain) loss from disposal of property and equipment - net | (314 | ) | 198 | |||||||
| Changes in assets and liabilities, excluding effects of foreign currency translation adjustments: | ||||||||||
| Decrease in accounts receivable | 69 | 4,652 | ||||||||
| Increase in inventories | (3,358 | ) | (545 | ) | ||||||
| (Increase) decrease in prepaid expenses and other assets | (770 | ) | 820 | |||||||
| Increase in accounts payable | 2,111 | 208 | ||||||||
| Decrease in accrued expenses and other liabilities | (252 | ) | (1,551 | ) | ||||||
| Increase in deferred revenue and customer prepayments | 2,390 | 1,550 | ||||||||
| Net cash used for operating activities | (6,924 | ) | (167 | ) | ||||||
| Investing activities | ||||||||||
| Capital expenditures | (392 | ) | (331 | ) | ||||||
| Proceeds from sale of property and equipment | 3,677 | 44 | ||||||||
| Net cash provided by (used) for investing activities | 3,285 | (287 | ) | |||||||
| Financing activities | ||||||||||
| Net proceeds from issuance of common stock - registered direct offering to a related party | - | 12,447 | ||||||||
| Net proceeds from issuance of common stock - at the market offerings | - | 595 | ||||||||
| Payments on long-term debt | (68 | ) | (68 | ) | ||||||
| Payments on capital leases | (45 | ) | (41 | ) | ||||||
| Net cash (used for) provided by financing activities | (113 | ) | 12,933 | |||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 760 | 63 | ||||||||
| Net change in cash, cash equivalents, and restricted cash | (2,992 | ) | 12,542 | |||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 28,155 | 19,672 | ||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 25,163 | $ | 32,214 | ||||||
| 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 | $ | 1,917 | $ | 1,997 | ||||||
| Transfer of internally developed 3D printing machines from property and equipment to | ||||||||||
| inventories for sale | $ | 395 | $ | 682 | ||||||
| Property and equipment included in accounts payable | $ | 100 | $ | 20 | ||||||
| Property and equipment acquired through financing arrangements | $ | 48 | $ | - | ||||||
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The ExOne Company Additional Information (Unaudited) |
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Machine Sales by Type |
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Quarter Ended
June 30, |
Six Months Ended
June 30, |
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| 2017 | 2016 | 2017 | 2016 | ||||||||
| S-Max+™ | - | - | - | 1 | |||||||
| S-Max® | 2 | 1 | 6 | 1 | |||||||
| S-Print® | - | 2 | - | 2 | |||||||
| S-15™ | - | 1 | - | 1 | |||||||
| M-Flex® | 3 | 2 | 4 | 2 | |||||||
| Innovent® | 3 | 3 | 3 | 3 | |||||||
| 8 | 9 | 13 | 10 | ||||||||
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The ExOne Company Adjusted EBITDA Reconciliation (in millions) (Unaudited) |
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Quarter Ended
June 30, |
Six Months Ended
June 30, |
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| 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
| Net loss | $ | (6.4 | ) | $ | (2.9 | ) | $ | (13.2 | ) | $ | (8.4 | ) | |||||||
| Interest expense | 0.0 | 0.0 | 0.1 | 0.2 | |||||||||||||||
| Provision for income taxes | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||
| Depreciation and amortization | 1.3 | 1.5 | 3.6 | 2.9 | |||||||||||||||
| Equity-based compensation | 0.3 | 0.2 | 0.8 | 0.6 | |||||||||||||||
| Other expense (income) - net | 0.0 | (0.2 | ) | 0.1 | (0.3 | ) | |||||||||||||
| Adjusted EBITDA | $ | (4.8 | ) | $ | (1.4 | ) | $ | (8.6 | ) | $ | (5.0 | ) | |||||||
