R&D expense was $8.5 million in the first nine months of 2018 compared with $7.2 million in the 2017 period, with the increase primarily due to higher employee-related costs, consulting and professional fees in the first half of the year, prior to enactment of the global cost realignment program.
SG&A for the first nine months of 2018 was $17.8 million compared with $18.3 million in the 2017 period. The decrease was driven by lower equity-based compensation and the net impact of the global cost realignment noted above.
The net loss was $14.7 million, or $0.91 per share, for the first nine months of 2018, compared with $18.1 million, or $1.13 per share, in the 2017 period.
Adjusted EBITDA, a non-GAAP measure, was a $10.8 million loss in both the 2018 and 2017 year-to-date periods. ExOne management believes that, when used in conjunction with other measures prepared in accordance with GAAP, Adjusted EBITDA assists in the understanding of its financial results.
See the attached tables 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 nine months ended September 30, 2018 and 2017.
Capitalization – Cash Usage Significantly Moderated in Third Quarter
Cash, cash equivalents and restricted cash as of September 30, 2018 were $12.0 million, compared with $13.0 million at June 30, 2018 and $22.2 million at December 31, 2017. The $1.0 million net use of cash in the third quarter was primarily due to timing of working capital requirements, partially offset by cash generated from operating performance.
Cash used for operating activities during the first nine months of 2018 was $8.9 million, compared with $12.9 million in the 2017 period. The improvement was primarily driven by the lower net loss and improved working capital utilization.
Cash capital expenditures were $1.2 million and $0.9 million in the 2018 and 2017 year-to-date periods, respectively. In 2018, the Company expects total cash capital expenditures of less than $2 million.
Outlook – Goal of Net Income, Positive Operating Cash Flow in Q4 2018 as well as 2019
Mr. Rockwell concluded, “Consistent with our pattern of quarterly revenue cyclicality, we expect a very strong fourth quarter. We anticipate this will be driven by current backlog, recent order activity, and our increasing sales pipeline as we strive toward our 2018 goal of 20% revenue growth over 2017. With that level of revenue we are confident in our ability to achieve net income in the second half of 2018. We reinforce our commitment to further the advancement and market acceptance of our binder jetting technology as well as achieve net income and positive operating cash flow in 2019. Additionally, we continue to believe that our existing capital resources are sufficient to support our operating plan.”
Webcast and Conference Call
ExOne will host a conference call and live webcast on Thursday, November 8, 2018 at 8:30 a.m. Eastern Time. During the conference call and webcast, management will review the financial and operating results for the 2018 third quarter and year-to-date period, along with ExOne’s corporate strategies and outlook. A question-and-answer session will follow. The teleconference can be accessed by calling (201) 689-8470. The webcast can be monitored on the Company’s website at www.investor.exone.com/.
A telephonic replay of the conference call will be available from 11:30 a.m. ET on the day of the teleconference through Thursday, November 15, 2018. To listen to a replay of the call, dial (412) 317-6671 and enter the conference ID number 13683877, or access the webcast replay via the Company’s website, where a transcript will also be posted once available.
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”) and Production Service
Centers (“PSCs”). 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.
