NORTH HUNTINGDON, Pa.--(BUSINESS WIRE)--The ExOne Company (Nasdaq: XONE), a global provider of three-dimensional printing machines and 3D printed and other products, materials and services to industrial customers, reported financial results today for the first quarter ended March 31, 2019.

S. Kent Rockwell, ExOne’s Chairman and Chief Executive Officer, stated, “Order activity started strong this year, building backlog in support of our expectations for robust revenue growth for 2019 and reinforcing our excitement around the building momentum for our binder jetting printing technology. As we told you in March, our revenue in the first quarter was below last year’s first quarter as a result of timing, and we remain confident in our outlook for a strong second quarter. Importantly, our focus on profitable growth is demonstrated in the measurable reduction in operating expenses and we expect to realize strong operating leverage as we grow through the year.”

He added, “We are enthusiastic about our ongoing new product development efforts. Our new X1 25PRO™ larger format fine powder direct printing machine is receiving positive reviews during beta tests. Additionally, development of our new advanced indirect machine is progressing well. We continue to work closely with customers to identify innovative application opportunities, to further the adoption of binder jetting technology for additive manufacturing.”

Consolidated revenue for the 2019 first quarter was $9.6 million and impacted by shipment/acceptance timing as well as $0.4 million due to unfavorable currency exchange rates.

Machine revenue was $3.3 million in the first quarter of 2019, down from the prior-year period, reflecting the impact of timing and product mix. In the 2019 first quarter, eight machines were sold, of which two were indirect and six were direct printing machines. This compares with six machines sold in the 2018 first quarter, consisting of three indirect and three direct printing machines.

Recurring revenue (3D printed and other products, materials and services) was $6.3 million in the first quarter of 2019, compared with $7.4 million in the first quarter of 2018. The decrease was primarily due to a lower volume of printing projects at the Company’s direct and indirect service centers, including the impact of the Company’s exit from its Houston facility.

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.

Gross profit was $2.6 million in the 2019 first quarter, while gross margin expanded 560 basis points to 27.6% compared with the same period in 2018. The 2019 quarter benefited from improved operating leverage, as well as a reduction in fixed costs resulting from the 2018 global cost realignment initiative.

R&D expense of $2.4 million for the quarter was down $0.4 million, or 13%, compared with the 2018 first quarter, primarily from efficiencies gained from the 2018 global cost realignment initiative and improved resource allocation to maintain strong progress in advancing the Company’s technology.

SG&A expense of $5.4 million was down $0.8 million, or 13%, compared with the 2018 first quarter, also benefiting from the 2018 global cost realignment initiative.

ExOne realized a $0.8 million tax benefit for the quarter resulting from the completion of a tax examination.

Net loss for the quarter was $4.5 million, or $0.28 per share, compared with a $6.4 million net loss, or $0.40 loss per share, in the first quarter of 2018. The $1.9 million improvement was driven primarily by the Company’s new cost model.

Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), a non-GAAP measure, was a $3.6 million loss in the 2019 first quarter, compared with a $4.5 million loss in last year’s first 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”), Adjusted EBITDA assists in the understanding of its financial results.

**See the attached table captioned “Adjusted EBITDA Reconciliation” for important disclosures regarding the Company’s use of Adjusted EBITDA as well as a reconciliation of net loss (most directly comparable GAAP measure) to Adjusted EBITDA for the quarters ended March 31, 2019 and 2018.

Capitalization – Operating Cash Flow Improves

Cash, cash equivalents and restricted cash as of March 31, 2019 were $7.3 million, compared with $9.1 million at December 31, 2018. There were no borrowings outstanding on the Company’s $15 million credit facility as of March 31, 2019 or December 31, 2018.

Cash used for operating activities during the first quarter of 2019 was $1.4 million, compared with $4.8 million in the first quarter of 2018. The $3.4 million decrease was driven by a lower net loss and improved working capital.

Cash capital expenditures were $0.4 million and $0.5 million in 2019 and 2018 first quarters, respectively. In 2019, the Company expects cash capital expenditures of $1 million to $2 million.

Reconfirming 2019 Goals – Revenue Growth Rate in Mid-Teens, Positive Adjusted EBITDA

Mr. Rockwell concluded, “Our visibility into order activity and our improved operating model give us confidence in reconfirming our previously stated 2019 goals for mid-teen revenue growth and positive Adjusted EBITDA. In addition, as we have previously discussed, we are targeting revenue growth at increasing rates over each of the next several years. Importantly, we believe we have sufficient capital to execute our plans. We will continue to invest in innovative new opportunities in a cost efficient manner, advancing our market-leading position in binder jetting technology.”

The Company expects 2019 revenue to be distributed approximately 35% in the first half of the year and 65% in the second half.

About ExOne

ExOne is a global provider of 3D printing machines and 3D printed and other products, materials and 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 installed base of 3D printing machines. ExOne’s machines serve direct and indirect applications. Direct printing produces a component; indirect printing makes a tool to produce a component. ExOne offers pre-production collaboration and print products for customers through its network of ExOne Adoption Centers (“EACs”). ExOne also supplies the associated materials, including consumables and replacement parts, and other services, including training and technical support that is necessary for purchasers of its 3D printing machines to print products. The Company believes that its ability to print in a variety of industrial materials, as well as its industry-leading volumetric output (as measured by build box size and printing speed) uniquely position ExOne to serve the needs of industrial customers.