The ExOne Company, North Huntington, Pennsylvania, USA, has announced its financial results for the third quarter, ended September 30, 2020. The company’s revenue was $17.4 million, compared to $10.9 million in last year’s third quarter, and was said to be driven by a 164% increase in revenue from Additive Manufacturing machines, led by higher volumes (thirteen units sold in the quarter versus nine in the prior-year period).
Recurring revenue (additively manufactured and other products, materials and services) was flat compared to the year-ago period, as increased aftermarket revenue and higher funded research and development revenue was offset by a decline in AM services revenue due to a continued decline in demand as a result of the coronavirus (COVID-19) pandemic. Revenue for both product groups continued to be impacted by COVID-19, including disruptions to domestic and international shipping and travel, in addition to negative macroeconomic effects.
Gross margin was 22.4%, compared to 26.4% in the third quarter of 2019. The decrease was primarily due to low contribution margin on various system sales, including the X1 25Pro following its initial market introduction and the sale of a discontinued sand system, as well as unfavourabl product warranty experience. These decreases were partially offset by lower fixed overhead costs as a result of cost savings measures and other cost reductions associated with COVID-19.
“ExOne’s global team delivered a solid quarterly performance, including record third-quarter revenue, despite challenging market conditions as a result of COVID-19,” stated John Hartner, ExOne’s CEO. “Throughout the quarter, we remained focused on machine order execution and recurring revenue growth, supported by our diverse portfolio, global footprint, and unmatched experience in a technology area benefiting from increased momentum.”
“We also continued to drive progress against our strategic pillars – getting closer to customers, evidenced by our record backlog; extending our Binder Jetting technology, with the announcement of our InnoventPro® entry-level metal 3D printer; and driving recurring revenue growth, demonstrated by our recent government contract wins and sequential quarterly gains.”
The company’s research and development expenses were $2.0 million, compared to $2.4 million in the third quarter of 2019. The decrease was primarily due to cost saving measures and other cost reductions associated with COVID-19 and lower machine development spending. Investments remain focused on the further development of Binder Jetting technology, including the X1 160Pro production metal AM machine and the recently announced InnoventPro advanced entry-level metal AM machine.
ExOne’s net loss was $3.3 million, or $0.19 per fully diluted share, compared with a net loss of $4.8 million, or $0.30 per fully diluted share, in the third quarter of 2019. Adjusted earnings before interest, taxes, depreciation and amortisation (Adjusted EBITDA), a non-GAAP measure, was a loss of $1.7 million, compared with a loss of $3.7 million in the third quarter of 2019.
Cash, cash equivalents and restricted cash as of September 30, 2020, increased to $39.9 million, from $20.2 million at June 30, 2020, and $6.2 million at December 31, 2019. The increase for the sequential quarter was driven by cash inflows from financing activities of $25.0 million, including $24.8 million in net proceeds from the sale of common stock in at-the-market offerings. These inflows were offset by cash outflows from operations of $5.3 million mostly due to the widening net loss, net of non-cash items for the period and a reduction in cash inflows from customers based on the timing of payments.
Total liquidity, which includes unrestricted cash and cash equivalents and availability under the company’s related party revolving credit facility, increased to $49.4 million at September 30, 2020, compared to $29.7 million at June 30, 2020, and $20.3 million at December 31, 2019. There were reportedly no borrowings outstanding under the company’s $10 million related party revolving credit facility at September 30, 2020.
Hartner added, “With a record backlog, strong interest in our core Binder Jetting technology, and exciting new products still launching, we remain optimistic about our future. However, our enthusiasm must be tempered by the headwinds in the global manufacturing sector as a result of COVID-19, which continues to influence the timing of our customers’ capital spending and is causing intermittent disruption to our global operations.”
“Despite these headwinds, our backlog growth, refreshed product portfolio, and enhanced liquidity sets the stage for strong operational performance in the fourth quarter and heading into 2021,” he concluded.