Other operating income was kEUR 1,468 for the nine months ended September 30, 2019, compared to kEUR 1,036 in the prior year period. The increase was mainly due to higher gains from foreign exchange transactions amounting to kEUR 1,088 for the nine months ended September 30, 2019, compared to kEUR 690 in comparative period in 2018.

The changes in foreign currency losses and gains were primarily driven by the valuation of the intercompany loans granted by the parent company to our UK and US subsidiaries.

Operating loss was kEUR 9,661 in the nine months ended September 30, 2019, compared to an operating loss of kEUR 7,555 in the comparative period in 2018. This was primarily driven by the significant decrease of gross profit accompanied by higher operating expenses within the functions administration and R&D, compared to the nine months ended September 30, 2018. This was partially offset by higher other operating income, decreased other operating expenses and lower selling expenses. Operating loss was influenced by foreign currency impacts. The total year over year impact from gains and losses from foreign currency transactions on operating loss (considering changes in other operating expenses and other operating income) for the nine-month period was kEUR 440 positive. The overall impact on operating loss related to the restructuring of voxeljet UK amounted to kEUR 531.

Financial result was negative kEUR 894 for the nine months ended September 30, 2019, compared to a financial result of negative kEUR 902 in the comparative period in 2018. Financial result mainly consists of interest expense for long-term debt amounted to kEUR 745 in the nine months ended September 30, 2019, compared to kEUR 705 for the nine months ended September 30, 2018. The impact related to the revaluation of derivative financial instruments amounted to negative kEUR 87 (nine months ended September 30, 2018: negative kEUR 89).

Net loss for the nine months ended September 30, 2019 was kEUR 10,617, or EUR 2.16 per share, as compared to net loss of kEUR 8,464, or EUR 2.27 per share in the prior year period. This is based on a weighted average number of ordinary shares outstanding of 4.836 million for the first nine months ended September 30, 2019. Compared to the last year’s same period, the number of ordinary shares outstanding was 3.720 million.

Based on a conversion rate of five ADSs per ordinary share, net loss was EUR 0.43 per ADS for the nine months ended September 30, 2019 compared to net loss of EUR 0.45 per ADS in the prior year period.

Business Outlook

Our revenue guidance for the fourth quarter of 2019 is expected to be in the range of kEUR 9,000 to kEUR 12,500.

For gross profit margin, we expect gross profit margin to be above 40% for the fourth quarter of 2019 rather than for the full year and adjusted EBITDA to be neutral-to-positive also for the fourth quarter of 2019 rather than for the second half of the year ending December 31, 2019. Those changes are a result of lower than expected gross profit for the third quarter of 2019. In addition, we are increasing the projected range for R&D expenses for 2019 from the previously disclosed kEUR 5,500 to kEUR 6,000 to kEUR 6,500 to kEUR 7,000 to reflect increased expenses for the development of VJET X. For full year guidance, we expect:

- Full year revenue is expected to be in the range of kEUR 24,000 and kEUR 27,500

- Gross profit margin for the fourth quarter of 2019 is expected to be above 40%

- Operating expenses for the full year are expected as follows: SG&A expenses expected to be in the range of kEUR 12,000 and kEUR 12,500 and R&D expenses projected to be approximately kEUR 6,500 to kEUR 7,000. Depreciation and amortization expense is expected to be between kEUR 3,750 and kEUR 4,000.

- Adjusted EBITDA for the fourth quarter of 2019 is expected to be neutral-to-positive. Adjusted EBITDA is defined as net income (loss), as calculated under IFRS accounting principles before interest (income) expense, provision (benefit) for income taxes, depreciation and amortization, and excluding other operating (income) expense resulting from foreign exchange gains or losses on the intercompany loans granted to the subsidiaries.

- Capital expenditures are projected to be in the range of kEUR 2,000 to kEUR 2,500, which primarily includes ongoing investments in our global subsidiaries.

Our total backlog of 3D printer orders at September 30, 2019 was kEUR 4,867, which represents seven 3D printers. This compares to a backlog of kEUR 3,392 representing six 3D printers, at December 31, 2018. As production and delivery of our printers is generally characterized by lead times ranging between three to nine months, the conversion rate of order backlog into revenue is dependent on the equipping process for the respective 3D printer, as well as the timing of customers’ requested deliveries.

At September 30, 2019, we had cash and cash equivalents of kEUR 6,573 and held kEUR 5,099 of investments in bond funds and one note receivable amounting to kEUR 1,309, which are included in current financial assets on our consolidated statements of financial position.

Webcast and Conference Call Details

The Company will host a conference call and webcast to review the results for the third quarter on Friday, November 15, 2019 at 8:30 a.m. Eastern Time. Participants from voxeljet will include its Chief Executive Officer, Dr. Ingo Ederer, and its Chief Financial Officer, Rudolf Franz, who will provide a general business update and respond to investor questions.

Interested parties may access the live audio broadcast by dialing 1-877-705-6003 in the United States/Canada, or 1-201-493-6725 for international, Conference Title “voxeljet AG Third Quarter 2019 Financial Results Conference Call”. Investors are requested to access the call at least five minutes before the scheduled start time in order to complete a brief registration. An audio replay will be available approximately two hours after the completion of the call at 1-844-512-2921 or 1-412-317-6671, Replay Conference ID number 13695972. The recording will be available for replay through November 22, 2019.

A live webcast of the call will also be available on the investor relations section of the Company’s website. Please go to the website https://event.on24.com/wcc/r/2072371/910C287981EC3C7210CB848ADCB61AA5 at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. A replay will also be available as a webcast on the investor relations section of the Company’s website.

Non-IFRS Measure

The Company uses Adjusted EBITDA as a supplemental financial measure of its financial performance. Adjusted EBITDA is defined as net income (loss), as calculated under IFRS accounting principles, interest (income) expense, provision (benefit) for income taxes, depreciation and amortization, and excluding other (income) expense resulting from foreign exchange gains or losses on the intercompany loans granted to the subsidiaries. Management believes Adjusted EBITDA to be an important financial measure because it excludes the effects of fluctuating foreign exchange gains or losses on the intercompany loans granted to its subsidiaries. We are unable to reasonably estimate the potential full-year financial impact of foreign currency translation because of volatility in foreign exchange rates. Therefore, we are unable to provide a reconciliation our forward-looking guidance for non-GAAP Adjusted EBITDA without unreasonable effort as certain information necessary to calculate such measure on an IFRS basis is unavailable, dependent on future events outside of our control and cannot be predicted without unreasonable efforts by the Company.

Management regularly uses both IFRS and non-IFRS results and expectations internally to assess its overall performance of the business, making operating decisions, and forecasting and planning for future periods. Management believes that Adjusted EBITDA is a useful financial measure to the Company’s investors as it helps investors better understand and evaluate the projections our management board provides. The Company’s calculation of Adjusted EBITDA may not be comparable to similarly titled financial measures reported by other peer companies. Adjusted EBITDA should not be considered as a substitute to financial measures prepared in accordance with IFRS.

Exchange rate

This press release contains translations of certain U.S. dollar amounts into euros at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from U.S. dollars to euros in this press release were made at a rate of USD 1.0905 to EUR 1.00, the noon buying rate of the Federal Reserve Bank of New York for the euro on September 30, 2019.

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