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ExOne 4Q16 results -3

09:31 17-Mar-17


The ExOne conference call has just concluded.  I think the market will focus most on statements that restructuring costs are still to come over the next two quarters plus "other inefficiencies" which mean significant profitability challenges over the first half of the year.  The prepared remarks were one big ball of corporate-speak, but looking at the actual figures in the presentation fills in detail on the poor picture that I had painted.  Despite cost-cutting focus fourth quarter R&D spend equaled its highest in the past two years due to material development, as predicted, and SG&A was the highest in over a year.  The backlog that prior management always touted is down slightly. 

Furthermore, in response to the decreasing # of analysts questions, management revealed that customizations and changes to machine design would be required to drive adoption.  For instance, the company may need to change the way it de-powders its production boxes and increase the speed of S-Max, which could mitigate Exerial interest. For that larger, more expensive mass production platform, only 1 more machine is in process, and it is supposed to ship late this month.  3 or 4 machines are in discussion with customers.

ExOne has $27.8M of cash on the books, down from $32.3 after the capital raise last year.  We'll see whether or not costs really can be kept under control over the next year.  I still see no reason to own the stock.

On 03/16/2017 04:29 PM, Esekla wrote:

ExOne has announced results for its fourth quarter:

  • an earnings loss of 16 cents per share misses by 11 cents
  • on revenue of $14.6M, which misses by $3.9M

Overall, revenue decreased 10% YoY.  Machine sales, lower margins and higher SG&A expenses were the main culprits, whereas non-machine sales saw a modest increase.  That tells me that early adopters are at least continuing to use the technology.  The company once again refused to provide quarterly guidance, but projects sales growth of at least 25% for 2017 and beyond.  I doubt that will be enough to help the stock, as investors should be looking for a clear and quantified path to profitability at this point.

The conference call is tomorrow morning; I will write again if there is anything of interest.