The ExOne Company Reports Third Quarter 2014 Results
Staff posted on November 14, 2014 |
ExOne declares its Q3 earnings, disappointing investors with a .18c per share shortfall. How do meta...
3d printing, exone, investor, manufacturing, business The ExOne Company (Nasdaq:XONE) ("ExOne" or "the Company"), a global provider of three-dimensional ("3D") printing machines and printed products to industrial customers, reported financial results today for the third quarter and nine-month period ended September 30, 2014.

Third Quarter Revenue - Ongoing Non-machine Growth

  Quarter Ended Nine Months Ended
  September 30, September 30,
($ in millions) 2014 2013 2014 2013
Revenue by Product Line                
3D Printing Machines & Micromachinery $4.2 44% $7.8 67% $12.6 45% $17.8 62%
3D Printed Products, Materials &                
Other Services ("Non-machine")  5.4  56%  3.8  33%  15.5  55%  11.0  38%
Total Revenue $9.6 100% $11.6 100% $28.1 100% $28.8 100%

S. Kent Rockwell, Chairman and Chief Executive Officer, commented, "We continue to see this year as a transition to 2015. As we invest in our business, we are excited by the building momentum demonstrated by record levels we are hitting in non-machine sales. Our experience with customers has shown that acceptance of our binder jetting technology is demonstrated first in non-machine revenue generated from our production service centers ("PSCs") and then through machine sales." 

Given the long sales cycle and significance of a machine's average selling price relative to total revenue, fluctuations in machine-sale revenue vary from quarter to quarter. ExOne does not believe that such quarter-to-quarter fluctuations are necessarily indicative of larger trends.

Mr. Rockwell continued, "We are in the latter stages of completing the move into our new European headquarters facility in Germany, which will provide more than three times the production capacity there. The expansion at our North Huntingdon facility is also near completion, providing us with more than two times additional capacity at that facility. Expansion of our US R&D facility is ongoing as well, to give us needed space for our metals development activities. These investments represent the planning necessary to support our growing demand."      

Third Quarter Operations - Continued Investments

Gross profit was $2.5 million, resulting in a 25.8% gross margin, in the 2014 third quarter compared with $5.3 million, resulting in a 45.2% gross margin, in the 2013 third quarter. Compared with the prior year, third quarter 2014 gross margin was primarily impacted by the mix of machine revenue versus non-machine revenue, higher costs in existing facilities, and the costs associated with having more PSC facilities. 

Operating loss was $4.4 million compared with $0.3 million operating income in the third quarter of 2013. SG&A expenses were $4.6 million, compared with $3.7 million in the prior-year quarter. Consistent with the Company's stated intent to accelerate machine technology and materials development, R&D expenses for the quarter were $2.3 million, compared with $1.3 million in the 2013 third quarter. Net loss attributable to ExOne for the reported quarter was $4.5 million, or $0.31 loss per diluted share, compared with $0.2 million, or $0.02 loss per diluted share, for the prior-year third quarter. 

Adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") was a $3.1 million loss in the 2014 quarter, compared with $1.1 million during last year's third quarter.  ExOne management believes that when used in conjunction with other measures prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), that Adjusted EBITDA, a non-GAAP measure, assists in the understanding of operating performance. See the attached tables for important disclosures regarding the Company's use of Adjusted EBITDA as well as a reconciliation of net loss attributable to ExOne to Adjusted EBITDA for the quarters and nine months ended September 30, 2014 and 2013.

Year-to-Date 2014 Review - Ongoing Investments

Revenue for the nine-month period ended September 30, 2014 was $28.1 million, relatively flat compared with $28.8 million in the prior-year period, driven by 42% growth in global non-machine revenue, offset by lower machine revenue.  

Year-to-date gross profit was $6.6 million, down $5.7 million compared with last year's $12.3 million. Gross profit as a percentage of sales was 23.5% in the 2014 period compared with 42.6% last year. SG&A expense for the first nine months of 2014 was $15.1 million, up $3.9 million over the prior-year period. R&D expense was $6.0 million in the first nine months of 2014, compared with $3.4 million in the 2013 period, reflecting the Company's accelerated investments in growth. 

Operating loss for the first nine months of 2014 was $14.5 million compared with a loss of $2.3 million during the comparable prior-year period. Net loss attributable to ExOne was $14.6 million, or $1.02 loss per diluted share, for the first nine months of 2014 compared with $3.3 million, or $0.28 loss per diluted share, for the first nine months of 2013.

Updating 2014 Outlook - Clearer Machine Sales Visibility

  • Revenue expected to be approximately $45 million to $50 million
  • Gross margin now expected to be between 28% and 32%, excluding anticipated non-recurring costs estimated at $1.5 million to $2.5 million associated with facility expansions
  • SG&A expenses expected to be in a range of $19 million to $21 million
  • R&D expenses expected to be in a range of $7 million to $8 million
  • Capital expenditures expected to be between $29 million and $31 million, including investments for capacity expansion and a global ERP implementation

S. Kent Rockwell, Chairman and CEO, concluded, "We continue to struggle with predicting timing of our machine sales and therefore we are lowering our expectations for 2014 revenue based on clearer visibility for the remainder of the year. We're focused on our development activities, especially initial customer reaction to our production-oriented machines currently under development which can be applied to a variety of industrial applications. Additionally, we're developing market opportunities that will serve to drive us to meet our long-term goals."

Source: ExOne

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