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ExOne 1Q17 results ?3
I've just finished listening to the replay of ExOne's conference
call. Cost cutting is going well, but the main thing that has
improved seems to be presentation skills, thanks to new
management. Management spent a good part of the call touting
Industry interest increasing, but I see reason to doubt the
applicability to ExOne's binder jet specialization.
Most of the new sales are replacement S-Max machines, at lower
net prices, and there will be continued impact on margins going
forward. Results will be further challenged by the company
dropping its high margin specialty machining operations, probably
due to emerging
competition in that area. The current quarter was also boosted by
unusually high customer prepayments.
Nonetheless, management maintains its full year outlook and
expects sales and margins to improve in the second half. Given
the 12 month sales process for revamped CHP
machines, that seems realistic. However, I could easily imagine
improvements dragging, especially as customers check out new
alternatives. Analysts paid particular attention to Desktop
Metals in their questioning. Though the products are
unproven, I see this entrant as potentially eating away at ExOne's
low-end sales. Overall, I still found no good reason to own XONE
shares in this call.
ExOne has announced results for its first quarter:
New management affirms its projection of 25% sales growth for the year, and the backlog growing by 19% lends a little creditability to that. The company was slightly in the black on an operating basis, allowing the balance sheet to remain stable with around $28M in cash. The conference call is tomorrow morning.
- a loss of 42 cents per share misses by 16 cents
- on sales of $10.9M, which beats by $800K