The following summarizes ExOne’s financial results for the first quarter ended March 31, 2021:

• Revenue was $13.0 million, a decrease of 3% from a record year-ago quarter, largely due to COVID-related installation challenges. The decrease in revenue was driven by a 22% decrease in revenue from 3D printing machines as a result of a decrease in volumes (14 units in Q1 2020 compared to seven units in Q1 2021) offset by a favorable mix of metal systems sold, with increased sales of the X1 25Pro system in Q1 2021. The decrease in 3D printing machine revenue was offset by an increase in recurring revenue (3D printed and other products, materials and services) of 15% compared to the year-ago period, led by an increase in revenue from funded research and development services, largely in support of future production metal equipment sale opportunities, as well as aftermarket revenue associated with the Company’s global installed base of printers. 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, particularly in Europe and Asia.
• Gross margin was 15.4%, compared to 27.1% in the first quarter of 2020. The decrease was primarily due to the continued impact of operating inefficiencies and challenges driven by the COVID-19 operating environment, including unfavorable product warranty experience, as well as low contribution margin on X1 25Pro system sales following their initial introduction to market.
• Research and development expenses were $2.6 million, compared to $2.5 million in the first quarter of 2020. The increase was primarily due to additional material costs associated with systems and materials development of binder jetting technology. This includes the planned introduction to market of the X1 160Pro production metal 3D printing system and InnoventPro advanced entry-level metal 3D printing system in 2021, with inert atmosphere processing capabilities for the X1 160Pro for high value reactive materials to be introduced in 2022.
• Selling, general and administrative expenses were $5.9 million, compared to $6.2 million for the first quarter of 2020. The decrease was primarily due to lower employee and travel related expenses as a result of COVID-19 and a net recovery for bad debts for Q1 2021 (versus bad debt expense in Q1 2020) offset by slightly higher consulting and professional fees between the periods.
• Net loss was $6.1 million, or $0.29 per fully diluted share, compared with a net loss of $3.6 million, or $0.22 per fully diluted share, in the first quarter of 2020.
• Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), a non-GAAP measure, was a loss of $5.2 million, compared with a loss of $3.8 million in the first quarter of 2020. Refer to the attached table captioned “Adjusted EBITDA Reconciliation” and the section below titled “Non-GAAP Financial Measure” for important disclosures regarding the Company’s definition and use of Adjusted EBITDA as well as a reconciliation of net loss (the most directly comparable measure under accounting principles generally accepted in the United States (“GAAP”)) to Adjusted EBITDA. 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.
• Cash, cash equivalents and restricted cash as of March 31, 2021 increased to $138.3 million, from $50.2 million at December 31, 2020. The increase was driven by cash inflows from financing activities of $95.3 million, primarily as a result of an underwritten public offering of common stock completed in February 2021. These inflows were offset by cash outflows from operations of $5.9 million mostly due to the widening net loss, net of noncash items for the period, and net cash outflows from working capital changes driven by an increase in inventories to support expanded contractual backlog offset by cash inflows from customers based on timing of payments.

Outlook

ExOne CEO John Hartner commented, “With signs of a broader economic recovery on the horizon, a record contractual backlog and expanded product portfolio and distribution network, we see the remainder of 2021 as the beginning of our next phase of growth. While there are still some remaining execution challenges as a result of COVID-19, particularly in Europe and Asia, we feel confident that our operating plan for 2021 is well supported. In addition, our improved liquidity position gives us the ability to strategically invest in additional growth opportunities.”

Webcast and Conference Call

ExOne will host a conference call and live webcast on Tuesday, May 18, 2021 at 8:30 a.m. Eastern Time. During the conference call and webcast, management will review the financial and operating results for the first quarter of 2021, along with ExOne’s corporate strategies and outlook. A question-and-answer session will follow. The teleconference can be accessed by calling (877) 407-9039 or, for international callers, (201) 689-8470. The webcast can be accessed 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 Tuesday, May 25, 2021. To listen to a replay of the call, dial (844) 512-2921 or, for international callers, (412) 317-6671, and enter the conference ID number 13719543, or access the webcast replay via the Company’s website.

Non-GAAP Financial Measure

This press release includes a non-GAAP financial measure that is not prepared in accordance with, nor as an alternative to, GAAP. In addition, this non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to a similarly titled measure presented by other companies.

The table captioned “Adjusted EBITDA Reconciliation” in this press release provides a reconciliation of net loss (the most directly comparable GAAP measure) to Adjusted EBITDA.

ExOne defines Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) as net income (loss) (as calculated under accounting principles generally accepted in the United States (“GAAP”)) plus interest expense, provision (benefit) for income taxes, depreciation, equity-based compensation, gain from sale-leaseback of property and equipment and other expense (income) – net. Use of Adjusted EBITDA, as defined under SEC rules, is intended as a supplemental measure of ExOne’s performance that is not required by, or presented in accordance with, GAAP. The presentation of Adjusted EBITDA is not intended to be a substitute for, and should not be considered in isolation from, net loss reported in accordance with GAAP. The Company’s presentation of Adjusted EBITDA should not be construed to imply that its future results will be unaffected by unusual or non-recurring items.

The Company believes that Adjusted EBITDA is meaningful to its investors to enhance their understanding of ExOne’s financial results. Although Adjusted EBITDA is not necessarily a measure of the Company’s ability to fund its cash needs, the Company understands that it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance and to compare ExOne’s performance with the performance of other companies that report Adjusted EBITDA.

About ExOne

ExOne is the pioneer and global leader in binder jet 3D printing technology. Since 1995, we’ve been on a mission to deliver powerful 3D printers that solve our customers’ toughest problems and enable world-changing innovations. Our 3D printing systems quickly transform powder materials — including metals, ceramics, composites and sand — into precision parts, metalcasting molds and cores, and innovative tooling solutions. Industrial customers use our technology to save time and money, reduce waste, increase their manufacturing flexibility, and deliver designs and products that were once impossible. As home to the world’s leading team of binder jetting experts, ExOne also provides specialized 3D printing services, including on-demand production of mission-critical parts, as well as engineering and design consulting. Learn more about ExOne at www.exone.com or on Twitter at @ExOneCo.

Safe Harbor Regarding Forward Looking Statements

This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to the Company’s future financial or business performance, strategies, or expectations. Forward-looking statements typically are identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” as well as similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could” and “may.”

The Company cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and the Company assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.