First Quarter 2017 Conference Call May 11, 2017 Jim McCarley, CEO Brian Smith, CFO and Treasurer Asia The Americas Europe 1 2017 ExOne
Safe Harbor Statement These slides 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. In addition to risk factors previously disclosed in the Company s reports, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: the Company s ability to enhance its current three-dimensional ( 3D ) printing machines and technology and develop new 3D printing machines; its ability to qualify more industrial materials in which it can print; timing and length of sales of 3D printing machines; demand for ExOne products; the Company s ability to achieve cost savings through consolidation or exiting of certain North American operations; the impact of increases in operating expenses and expenses relating to proposed investments and alliances; the availability of skilled personnel; the impact of market conditions and other factors on the carrying value of long-lived assets; the Company s competitive environment and its competitive position; the Company s ability to continue as a going concern; individual customer contractual requirements; the impact of customer specific terms in machine sale agreements on the period in which the Company recognizes revenue; the impact of loss of key management; risks related to global operations including effects of foreign currency and risks related to the situation in the Ukraine and the United Kingdom s referendum to withdraw from the European Union; demand for aerospace, automotive, heavy equipment, energy/oil/gas and other industrial products; the Company s plans regarding increased international operations in additional international locations; the scope, nature or impact of alliances and strategic investments and the Company s ability to integrate strategic investments; sufficiency of funds for required capital expenditures, working capital, and debt service; the adequacy of sources of liquidity; the effect of litigation, contingencies and warranty claims; liabilities under laws and regulations protecting the environment; the impact of governmental laws and regulations; operating hazards, war, terrorism and cancellation or unavailability of insurance coverage; the impact of disruption of our manufacturing facilities, production service centers or ExOne adoption centers; the adequacy of the Company s protection of its intellectual property; expectations regarding demand for the Company s industrial products, operating revenues, operating and maintenance expenses, insurance expenses and deductibles, interest expenses, debt levels, and other matters with regard to outlook; and material weaknesses in the Company s internal control over financial reporting. These and other important factors, including those discussed in the Company s Annual Report on Form 10-K, may cause its actual results of operations to differ materially from any future results of operations expressed or implied by the forward-looking statements contained herein. Before making a decision to purchase ExOne common stock, you should carefully consider all of the factors identified in its Annual Report on Form 10-K that could cause actual results to differ from these forward-looking statements. Asia The Americas Europe 2 2017 ExOne
Teleconference Agenda Jim McCarley Chief Executive Officer Q1 2017 Progress Industry Advancement Brian Smith Chief Financial Officer and Treasurer Financial Review Asia The Americas Europe 3 2017 ExOne
Q1 2017 Progress and Industry Advancement Jim McCarley, CEO Asia The Americas Europe 4 2017 ExOne
Q1 2017 Results Revenue Cash flow Directional changes and technology investments Q1/Q2 significant charges within expected range Asia The Americas Europe 5 2017 ExOne
Path to Adjusted EBITDA Profitability EAC (ExOne Adoption Centers) creation underway Houston and Troy facilities Completed planned sales or redeployment of facilities and equipment for $3.8 million cash Converted Sweden PSC to third-party operation Implementing product refinement / system improvement focus Investing in Core Binder Jet technology Asia The Americas Europe 6 2017 ExOne
Expanding 3D Printing Industry GE to expand its 3D printing business through a combination of acquisitions and organic growth* Manufacturing is going through a renaissance. One of the most disruptive innovations I ve seen in the manufacturing space in my 37 years here." David Joyce, CEO, GE Aviation (Vice Chair in charge of GE 3D-Printing) * Source: Bloomberg, 4/20/17 Click here to read full article According to 3D Printing The Next Five Years **: 3D printing industry growth through 2020 forecasted at 55% CAGR Positive conference trends (RAPID, AMUG, Formnext) ** Source: 3D Printing Industry: 3D Printing The Next Five Years, 4/17/17 Click here to read full article Asia The Americas Europe 7 2017 ExOne
Binder Jet Technology Advantages Presented at AMUG*: Material flexibility Room temperature shaping Scalable Isotropic properties Throughput and cost Less variables * Listed advantages were presented by Oak Ridge National Laboratory (ORNL) at the Additive Manufacturing Users Group ( AMUG ) 2017; the graphic was created by ExOne based on information provided by ORNL. Asia The Americas Europe 8 2017 ExOne
Cost (USD) Millions Powder Bed-Based Additive Manufacturing $2.50 Binder jetting exhibits lower capital and operating costs when compared to similar direct metal technologies. The fast manufacturing speeds make binder jetting a scalable process and well suited for mass production. For these reasons, binder jetting is the best possible future investment for a mass production setting. -- Philip Morton, Manager, W.M. Keck Center for 3D Innovation, The University of Texas at El Paso $2.00 EBM $1.50 SLM $1.00 Binder Jetting $0.50 $- 0 50 100 150 200 250 300 350 400 450 Number of parts Thousands Asia The Americas Europe 9 2017 ExOne
ExOne Market Leading Positions Indirect Printing Shipped first CHP technology machine into North America Began installation of second Exerial production platform in European automotive market Direct Printing First installation of tool-making direct printing platform Began next generation machine development Consumable localization strategy underway Metal PSC realized Q1 2017 double digit growth Setting the Standard in Binder Jet Technology Asia The Americas Europe 10 2017 ExOne
Financial Review Brian Smith, CFO Asia The Americas Europe 11 2017 ExOne
Revenue Quarterly Revenue Trailing Twelve Month Revenue $42.0 $50.3 $10.9 $8.4 39% 26% 74% 61% 40% 60% 46% 54% Q1 2016 Q1 2017 Q1 2016 TTM Q1 2017 TTM Included in Q1 2016, Q1 2017, Q1 2016 TTM and Q1 2017 TTM is revenue with related parties of less than $0.1 million, less than $0.1 million, $1.5 million and less than $0.1 million, respectively Note: Non-machine revenue includes 3D printed and other products, materials and services Asia The Americas Europe 12 2017 ExOne
Q1 2016 & 2017 Machine Shipments Shipped First Quarter 2016 First Quarter 2017 Revenue recorded Leased Shipped Revenue recorded Exerial 1 1 S-Max+ 1 S-Max 5 4 1 S-15 1 1 S-Print 3 2 1 1 M-Flex 1 1 2 1 Innovent Leased TOTAL 5 1 4 9 5 3 Asia The Americas Europe 13 2017 ExOne
Record Backlog Backlog $13.2 $16.5 $16.4 $19.5 $19.9 $19.7 $23.5 12/31/2014 12/31/2015 3/31/2016 6/30/2016 9/30/2016 12/31/2016 3/31/2017 Asia The Americas Europe 14 2017 ExOne
Machine Sales Quarterly Machine Sales Trailing Twelve Month Machine Sales $23.1 $16.6 $2.2 $4.3 Q1 2016 Q1 2017 Q1 2016 TTM Q1 2017 TTM Included in Q1 2016 TTM is revenue with related parties of $1.4 million There is no machine revenue with related parties in Q1 2016, Q1 2017 or Q1 2017 TTM Asia The Americas Europe 15 2017 ExOne
Non-Machine Revenue Product & Aftermarket Quarterly Non-Machine Revenue Trailing Twelve Month Non-Machine Revenue $25.4 $27.2 $6.2 $6.6 Q1 2016 Q1 2017 Q1 2016 TTM Q1 2017 TTM Included in Q1 2016, Q1 2017, Q1 2016 TTM and Q1 2017 TTM is revenue with related parties of less than $0.1 million, less than $0.1 million, $0.1 million, and less than $0.1 million, respectively Note: Non-machine revenue includes 3D printed and other products, materials and services Asia The Americas Europe 16 2017 ExOne
Gross Profit and Margin Quarterly Gross Profit Trailing Twelve Month Gross Profit $13.9 $10.2 $1.9 $1.6 22.3% 14.7% 24.3% 27.6% Q1 2016 Q1 2017* Q1 2016 TTM Q1 2017 TTM* * Q1 2017 and Q1 2017 TTM include $0.7 million of employee termination costs and asset impairments, $0.6 million of which is non-cash, associated with the Company s exit from its non-core specialty machining operation and combining its Las Vegas production service center into its Troy and Houston facilities. Gross profit was also unfavorably impacted by a $0.2 million charge primarily to record certain indirect printing machine platforms at net realizable value. Asia The Americas Europe 17 2017 ExOne
SG&A and Percent of Sales Quarterly SG&A Trailing Twelve Month SG&A $21.8 $21.7 $5.3 $6.3 63.3% 57.6% 51.9% 43.1% Q1 2016 Q1 2017* Q1 2016 TTM Q1 2017 TTM* * Q1 2017 and Q1 2017 TTM include $0.3 million for a non-cash intangible asset write-off associated with the Company s exit from its non-core specialty machining operation. Asia The Americas Europe 18 2017 ExOne
R&D and Percent of Sales Quarterly R&D Trailing Twelve Month R&D $7.4 $7.9 $1.9 $2.0 22.5% 18.4% 17.7% 15.8% Q1 2016 Q1 2017 Q1 2016 TTM Q1 2017 TTM Asia The Americas Europe 19 2017 ExOne
Capital Expenditures Quarter ended March 31, 2016 2017 Cash capital expenditures... $ 0.2 $ 0.2 Non-cash transfers of inventories to property and equipment for internal use or leasing activities... $ 1.5 $ 0.1 $ 1.7 $ 0.3 Approximately $1 - $2 million of Cash CapEx in 2017 (1) Note: Recorded noncash transfers of internally developed 3D printing machines from property and equipment to inventories for sale of $0.4 million during the three months ended March 31, 2017 (1) CapEx guidance for 2017 provided as of May 10, 2017 Asia The Americas Europe 20 2017 ExOne
Q1 2017 Cash Flows $28.2 (1) $(0.2) $4.0 $(3.5) $28.3 (1) 12/31/2016 Cash & Equivalents & Restricted Cash Capital Expenditures Working Capital Net Loss, Net of Non- Cash Items and Other 3/31/2017 Cash & Equivalents & Restricted Cash (1) Includes restricted cash of $0.3 million and $2.7 million at December 31, 2016 and March 31, 2017, respectively Asia The Americas Europe 21 2017 ExOne
Solid Balance Sheet for Growth December 31, 2016 March 31, 2017 Cash, equivalents & restricted cash (1) $28.2 $28.3 Total debt (2) $1.9 $1.9 Total equity $87.8 $82.2 (1) Includes restricted cash of $0.3 million and $2.7 million at December 31, 2016 and March 31, 2017, respectively (2) Excluding unamortized debt issuance costs Asia The Americas Europe 22 2017 ExOne
Closing Remarks Jim McCarley, CEO Asia The Americas Europe 23 2017 ExOne
2017 Outlook & Beyond At least 25% sales growth, with quarterly fluctuations 2017 Operating leverage Stable cash flow and working capital utilization Positive Adjusted EBITDA experienced by year end Beyond Sustained year-over-year revenue growth >25% Asia The Americas Europe 24 2017 ExOne
Q&A RAPID + TCT 2017 Conference, Pittsburgh, PA; May 8-11, 2017 Asia The Americas Europe 25 2017 ExOne
First Quarter 2017 Conference Call May 11, 2017 Asia The Americas Europe 26 2017 ExOne