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ExOne 1Q15 Conference Call Notes -5

The ExOne conference call has just concluded, but for most purposes, it was a repeat of the last one.  Management continues to talk about progress externally and battle for efficiency internally. 

Specifically, on the external side, 2 machines were delivered but not installed, and thus revenue was not recognized.  1 more shifted to an operating lease for eventual sale when government money comes through.  NDAs, which are required for each and every customer, tripled.  4 of the new Exerial machines were shipped, but complexity surrounding putting them into production means that it may be multiple quarters until that revenue is recognized.  However, customers continue to be happy and the technology continues to prove itself.  For instance, it was mentioned that production of the new S-97 Raider would not have been possible without castings from ExOne.  More military projects are said to be on the way.

Internally, ExOne has hired a new European CFO to help deal with the accounting issues which delayed this report.  2 new customers in Europe, created most of the 8% currency impact, and the Q&A indicated that ExOne's only plans to mitigate that are by adjusting pricing and/or the location of production.  It was also noted that some of the higher costs we saw will continue into the second quarter, and guidance may move to the lower end.

It's possible that the GIFA show in Germany next week could provide some uplift for the XONE, but I doubt it.  Fundamentally, I continue to see ExOne being pushed to show financial results around the beginning of next year.  It seems like it will be a close call as to whether or not the company manages to execute well enough to be seen as a success.  In the meantime, scepticism from investors continues to be very understandable.