First Quarter 2018 Conference Call

Transcription

1 First Quarter 2018 Conference Call May 10, 2018 Jim McCarley, CEO Brian Smith, CFO and Treasurer Asia The Americas Europe ExOne

2 Teleconference Agenda Jim McCarley Chief Executive Officer Brian Smith Chief Financial Officer and Treasurer Asia The Americas Europe ExOne

3 Safe Harbor Statement These slides 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 and those identified elsewhere in 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 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 current three-dimensional ( 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 scope, 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, production service centers ( PSCs ) or ExOne adoption centers ( 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 that could cause actual results to differ from these forward-looking statements. This presentation will discuss some non-gaap financial measures, which The ExOne Company believes are useful in evaluating its performance. You should not consider the presentation of this additional information in isolation or as a substitute for results compared in accordance with GAAP. The ExOne Company has provided reconciliations of comparable GAAP to non-gaap measures in tables found in the Supplemental Information portion of this presentation. Asia The Americas Europe ExOne

4 Q Highlights Jim McCarley, CEO Asia The Americas Europe ExOne

5 Market Adoption & ExOne Binder Jetting Adoption is Expanding Industry-wide binder jetting based sales are increasing Printers and components printed with binder jetting based technologies are growing Overall customer acceptance of binder jetting is expanding ExOne is capitalizing on the binder jetting expansion Remain market leader in providing binder jetting based printers and printed products Widest selection of binder jetting printer sizes and configurations, broadest range of materials, largest installed base Demand for ExOne s workhorse S-Max continues to grow, significant uptick in Innovent systems Machine demand is robust, over 50 potential projects from 48 new and repeat customers Asia The Americas Europe ExOne

6 Q Highlights Total revenue up 9% to $11.9 million Machine revenue up 6% to $4.5 million Non-machine revenue up 12% to $7.4 million Adjusted for an exited product line, non-gaap revenue up 13% Gross profit improved to $2.6 million Accelerated R&D efforts on plan Backlog grew to $26.1 million Asia The Americas Europe ExOne

7 Financial Review Brian Smith, CFO Asia The Americas Europe ExOne

8 Revenue Quarterly Revenue Trailing Twelve Month Revenue $50.3* $58.8 $10.9* $ % 51% 39% 38% 61% 62% 54% 49% Q Q Q TTM Q TTM *Q and Q TTM non-gaap revenue was $10.6 million and $48.4 million, respectively, excluding revenue attributable to an exited product line. On a comparable non-gaap basis, Q and Q TTM revenue increased 13% and 21%, respectively. Note: Non-machine revenue includes 3D printed and other products, materials and services Asia The Americas Europe ExOne

9 Machine Sales Quarterly Machine Sales Trailing Twelve Month Machine Sales $30.2 $23.1 $4.3 $4.5 Q Q Q TTM Q TTM Asia The Americas Europe ExOne

10 Q & 2018 Machine Shipments First Quarter 2017 First Quarter 2018 Shipped Revenue recorded Exerial 1 1 Leased Shipped Revenue recorded Leased S-Max S-Print 1 1 M-Flex Innovent 3 3 TOTAL Asia The Americas Europe ExOne

11 Non-Machine Revenue Product & Aftermarket Quarterly Non-Machine Revenue Trailing Twelve Month Non-Machine Revenue $27.2* $28.5 $6.6* $7.4 Q Q Q TTM Q TTM *On a comparable non-gaap basis Q and Q TTM non-machine revenue grew 17% and 13% over the prior-year periods, respectively. Revenue attributable to exited product lines in Q and Q TTM was $0.3 million and $1.9 million of revenue, respectively. Note: Non-machine revenue includes 3D printed and other products, materials and services Asia The Americas Europe ExOne

12 Growing Backlog $10.9 $13.0 $16.5 Backlog $19.7 $21.3 $ /31/ /31/ /31/ /31/ /31/2017 3/31/2018 Asia The Americas Europe ExOne

13 Gross Profit and Margin Quarterly Gross Profit Trailing Twelve Month Gross Profit $13.9 $15.4 $1.6 $ % 22.0% 27.6% 26.2% Q Q Q TTM Q TTM Q TTM impacted by Q $1.5 million charge for obsolete inventories associated with the completion of design evaluation of the Exerial TM Q TTM gross profit and margin impacted by $2.8 million sale of four Exerial TM machines during Q at a breakeven contribution margin Quarter and annual comparisons impacted by other factors including product mix, restructuring costs and gains/losses on disposals associated with exited product lines Asia The Americas Europe ExOne

14 SG&A and Percent of Sales Quarterly SG&A Trailing Twelve Month SG&A $21.7 $24.1 $6.3 $ % 52.1% 43.1% 41.0% Q Q Q TTM Q TTM Asia The Americas Europe ExOne

15 R&D and Percent of Sales Quarterly R&D Trailing Twelve Month R&D $10.7 $7.9 $2.0 $ % 23.5% 15.8% 18.2% Q Q Q TTM Q TTM Asia The Americas Europe ExOne

16 Capital Expenditures Three months ended March 31, Cash capital expenditures... $ 0.5 $ 0.2 Non-cash transfers of inventories to property and equipment for internal use or leasing activities... $ 0.8 $ 0.1 $ 1.3 $ 0.3 Approximately $1 - $1.5 million of Cash CapEx in 2018 (1) Note: Recorded noncash transfers of internally developed 3D printing machines from property and equipment to inventories for sale was $0.1 million and $0.4 million during the three months ended March 31, 2018 and March 31, (1) CapEx guidance for 2018 as of May 10, 2018 Asia The Americas Europe ExOne

17 $22.2 (1) ($0.5) Q Cash Flows ($0.4) ($4.4) $16.9 (1) 12/31/2017 Cash & Equivalents & Restricted Cash Capital Expenditures Working Capital Net Loss, Net of Non- Cash Items and Other 3/31/2018 Cash & Equivalents & Restricted Cash (1) Includes restricted cash of $0.3 million and $1.6 million at December 31, 2017 and March 31, 2018 Asia The Americas Europe ExOne

18 Solid Balance Sheet for Growth December 31, 2017 March 31, 2018 Cash, equivalents & restricted cash (1) $22.2 $16.9 Total debt (2) $1.7 $1.7 Total equity $75.2 $71.0 (1) Includes restricted cash of $0.3 million and $1.6 million at December 31, 2017 and March 31, 2018 (2) Excluding unamortized debt issuance costs Asia The Americas Europe ExOne

19 Outlook Jim McCarley, CEO Asia The Americas Europe ExOne

20 R&D Project: Large Format Fine Powder Printing Machine Cell Leverage existing machine designs to fast track capability enhancements Engage target customers for Beta process Complete Proof of Concept trials by year end Development underway and on plan! Asia The Americas Europe ExOne

21 ExOne Estimated Machine Market $200M+ Potential Machine Market Pipeline in 2020 Print Material Size Industry Mix Note: Management assessment based on ExOne s technology roadmap as of March 2018 Asia The Americas Europe ExOne

22 Potential Coarse Powder Machine Market Pipeline Coarse Powder Market End-Use Coarse Powder Machine Platform Note: Management assessment based on ExOne s technology roadmap as of March 2018 Note: Machine Platforms represent families of printers based on build box size Asia The Americas Europe ExOne

23 Potential Fine Powder Machine Market Pipeline Market Use / Machine Platform Large Format M-Print Note: Management assessment based on ExOne s technology roadmap as of March 2018 Note: Machine Platforms represent families of printers based on build box size Asia The Americas Europe ExOne

24 24 Fine Powder Printer Platforms Innovent M-Flex M-Print (Large Format) P r o g r e s s Build Box - Sizes 160mm x 65mm x 65mm ~1.5 pints Market - End Use Metal Injection Molding (MIM) Press & Sinter Specialty R&D Samples 400mm x 250mm x 250mm ~5.5 gallons Metal Injection Molding (MIM) Press & Sinter Specialty Tooling Investment Cast Filters 800mm x 500mm x 400mm ~42 gallons Metal Injection Molding (MIM) Press & Sinter Specialty Tooling Investment Cast Filters Asia The Americas Europe ExOne

25 Industry Conference Attendees Indicate Growing Knowledge & Interest AMUG April 8-12th St. Louis, MO RAPID+TCT April 23-26th Fort Worth, TX Growing First time attendees up ~20-30% Well-informed attendees seeking solutions to specific application needs Confirmation of ExOne portfolio of machines including the large format fine powder printer platform Asia The Americas Europe ExOne

26 Reaffirming 2018 Outlook Growth & Investment Revenue growth > 20%, driven by backlog & order rates $6 million - $8 million of increased R&D investment for new market opportunities, driven by customer demand Key to growth in 2018, 2019 and beyond Accelerate development of fine powder printing Enhance precision and productivity of coarse powder printers Accelerate development of new materials for printers Optimize consumables and services Gross margin improvement Asia The Americas Europe ExOne

27 Supplemental Information Asia The Americas Europe ExOne

28 Adjusted Non-machine and Total Revenue Reconciliation (Unaudited) Quarter Ended (in millions) March 31, % Change Revenue by Product Line 3D Printing Machines $ % $ % 6% 3D Printed and Other Products, Materials and Services % % 12% Total Revenue $ % $ % 9% Quarter Ended March 31, % Change Revenue by Product Line 3D Printing Machines $ % $ % 6% 3D Printed and Other Products, Materials and Services % % 12% Less: Revenue associated with exited specialty machining operations 0% (0.3) (0)% (1)% Adjusted Non-machine % % 17% Total Adjusted Revenue $ % $ % 13% Trailing Twelve Months ("TTM") Ended March 31, % Change Revenue by Product Line 3D Printing Machines $ % $ % 31% 3D Printed and Other Products, Materials and Services % % 5% Less: Revenue associated with exited specialty machining operations (0.0) (0)% (1.4) (3)% (97)% Less: Revenue associated with exited laser micromachining operations 0% (0.5) (1)% (100)% Adjusted Non-machine % % 13% Total Adjusted Revenue $ % $ % 21% Adjusted Non-machine Revenue and Adjusted Revenue are non-gaap measures. 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 Non-machine Revenue and Adjusted Revenue assist in the understanding of its financial results. Asia The Americas Europe ExOne

29 Adjusted EBITDA Reconciliation (in millions, unaudited) Quarter Ended March 31, Net loss... $ (6.4) $ (6.8) Interest expense Provision for income taxes Depreciation and amortization Equity-based compensation Other (income) expense - net... (0.0) 0.1 Adjusted EBITDA... $ (4.5) $ (3.8) ExOne defines Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) as net loss (as calculated under accounting principles generally accepted in the United States ( GAAP )) plus interest expense, provision for income taxes, depreciation and amortization, equity-based compensation, and other (income) expense - net. Use of Adjusted EBITDA, which is a non-gaap financial measure, as defined under the rules of the U.S. Securities and Exchange Commission, is intended as a supplemental measure of ExOne s performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA should not be considered as an alternative to net loss or any other performance measure derived 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 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. ExOne s calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Asia The Americas Europe ExOne

30 First Quarter 2018 Conference Call May 10, 2018 Asia The Americas Europe ExOne