ExOne Reports Financial Results
The manufacturer of additive manufacturing equipment reports that 2013 revenue grew 38 percent to $39.5 million, driven by 29 machines sold, compared with 13 in 2012 and five in 2011; sold 12 machines in fourth quarter, including five M-Flex units; and confirms expectations of 40 percent to 50 percent revenue growth for 2014, in line with strategic goals.
The ExOne Company (North Huntingdon, PA), a global provider of three-dimensional printing machines and printed products to industrial customers, reported financial results today for its 2013 fourth quarter and year ended December 31, 2013.
2013 REVIEW: INVESTING FOR GROWTH
Revenue for the year ended December 31, 2013 was $39.5 million, up $10.8 million, or 38 percent, compared with the prior-year period, driven primarily by machine sales as well as growth in Production Service Center (PSC) revenue globally. Unfavorable currency translation impacted the comparison by $0.6 million, or 2 percent.
Gross profit was $15.6 million, up $3.4 million compared with 2012. Gross profit as a percentage of sales was 39.4 percent, compared with last year’s 42.4 percent. The 2013 margin was impacted by sales mix and a higher fixed cost base. Selling, general and administrative (SG&A) expense was $16.1 million, down $2.2 million from 2012. The 2012 SG&A included a $7.7 million equity-based compensation charge, compared with $0.4 million in 2013. Research and development (R&D) expense was $5.1 million, compared with $1.9 million in 2012, reflecting the Company’s investments for growth.
Operating loss for the year was $5.7 million, compared with a loss of $8.1 million in 2012. Net loss attributable to ExOne was $6.5 million, or $0.51 per diluted share, compared with a $10.2 million loss in 2012.
Revenue for the quarter was $10.7 million, down 16 percent compared with revenue of $12.7 million for the fourth quarter of 2012. ExOne sold twelve 3D printing machines during the 2013 fourth quarter compared with eight during the prior year quarter as well as eight in the trailing third quarter. Machine revenue, representing 66 percent of total revenue, decreased 22 percent from the prior-year period given the mix of machines sold.
In the 2013 fourth quarter, three S-Max™ machines and one S-Print™ were sold to customers in Asia, specifically China, South Korea and Japan. Of the five M-Flex™ machines sold in the quarter, four were to U.S. customers and one to a Canadian customer. Finally, three X1-Lab™ machines were sold to U.S customers. The prior year’s fourth quarter sales included five S-Max and three S-Print machines.
PSC revenue was down 3 percent compared with the prior-year quarter, due to capacity utilized in the fourth quarter to support two casting projects deliverable in the first half of 2014.
4Q OPERATIONS: 2013 INVESTMENTS IN TECHNOLOGY, RESOURCES, AND STRATEGIC INITIATIVES
Gross profit was $3.3 million, or 30.9 percent gross margin, compared with $6.2 million, or 49.0 percent gross margin, in the 2012 fourth quarter. The 2013 gross profit and margin were impacted by lower volume, sales mix and a higher cost base. The 2012 gross profit included a $1.1 million non-recurring benefit related to the reversal of certain accrued license fees. Excluding that benefit, 2012 fourth quarter gross margin would have been 40.6 percent.
Operating loss was $3.3 million compared with operating income of $2.0 million in the fourth quarter of 2012. SG&A expenses were $4.9 million, compared with $3.5 million in the prior-year quarter. The current quarter included $0.4 million of expenses to support the Company’s pursuit of strategic acquisitions.
R&D expenses for the quarter increased by $1.0 million to $1.7 million, in support of the Company’s ongoing materials qualification and machine technology enhancements. Net loss attributable to ExOne for the reported quarter was $3.2 million, or $0.22 per diluted share, compared with net income attributable to ExOne of $0.9 million for the prior-year period.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was a $2.1 million loss in the 2013 quarter, compared with Adjusted EBITDA of $2.5 million during last year’s fourth 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.
OUTLOOK AND STRATEGY
The Company expects 2014 revenue to grow 40 percent to 50 percent, resulting in approximately $55 million to $60 million. Its 2014 gross margin is expected to be between 43 percent and 46 percent, excluding anticipated non-recurring costs estimated at $1.5 million to $2.5 million, associated with facility expansions.
The Company expects 2014 SG&A expenses to be in a range of $19 million to $21 million and R&D expenses to be in a range of $6 million to $7 million. Capital expenditures in 2014 are expected to be between $31 million and $34 million, including investments for capacity expansion and a global ERP implementation.
S. Kent Rockwell, the chairman and chief executive officer, noted, “For our relatively young manufacturing technology company, 2013 has been a dynamic year of significant progress. We invested in a variety of sales-related initiatives and technological advancements. We are expanding our manufacturing capacity and, most importantly, we enhanced our personnel and leadership capabilities, increasing our full-time equivalent headcount by 45 percent.
“Our customers are responding favorably to our ExCast process, which encompasses the entire pre-print through post-print cycle,” he continued. “While we can’t predict timing of our customers’ behavior with accuracy, their feedback gives us their commitment to and confidence in our binder jetting technology and its varied industrial applications. Accordingly, as we progress in 2014, we believe that the adoption of 3D printing in industrial manufacturing applications is gaining momentum in our global marketplace.”
ExOne is a global provider of 3D printing machines and printed products, materials and other services to industrial customers. ExOne’s business primarily consists of manufacturing and selling 3D printing machines and printing products to specification for its customers using its in‐house 3D printing machines.
ExOne offers pre‐production collaboration and prints products for customers through its seven production service centers, which are located in the United States, Germany and Japan. ExOne builds 3D printing machines at its facilities in the United States and Germany. ExOne also supplies the associated materials, including consumables and replacement parts, and other services, including training and technical support, necessary for purchasers of its machines to print products.