ExOne (Nasdaq:XONE) Reports Larger 4Q Loss Than Expected

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e2While there has certainly been excitement within the 3D printing industry over the past 24 hours as Carbon3D announced a breakthrough new 3D printing technology, it’s the already established players within the industry who seem to be struggling. While growth continues for some of the larger players, expenses seem to be adding up as competition spawns greater R&D budgets, which in turn equates to plenty of cash spent.

Take for example the The ExOne Company (Nasdaq:XONE). Over the last year, they have seen their stock price drop by over 60%, as they’ve consistently been missing market expectations. With that said, the company had the opportunity to redeem themselves in investors’ eyes yesterday afternoon as they reported their fourth quarter, 2014 earnings.

While the company did expand, the numbers reported were well under what Wall Street analysts had been expecting. The company reported a $0.50 loss per diluted share as compared with just a $0.03 loss that analysts had been predicting. Fourth quarter revenue also fell well short of most analysts’ expectations, with the company reporting $15.8 million compared to anticipated revenues of $19 million.

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“With solid fourth quarter sales, we experienced a good finish to an otherwise challenging transition year,” explained S. Kent Rockwell, Chairman and Chief Executive Officer. “Customer feedback indicates that we are accelerating implementation with many global customers as they move into their adoption phase. They are planning purchases of additional machines and larger orders of PSC produced parts.”

The company blames much of their revenue miss on the fact that long sales cycles may have displaced sales from one quarter to another. In fact, in this calendar year, they expect to see 70% of their revenue realized in the second half, and only 30% in the first half.

“While disappointed with our near-term financial results, we are proud of the progress we made in our strategic efforts to create a high growth global enterprise based on our binder jetting technology,” Rockwell continued. “We made significant investments in our people and processes, our facilities, our machine platforms and our materials. We believe these investments will lead to an escalation in market acceptance of binder jetting applications in global industrial development.”e1

Just as we’ve seen with many of the other large publicly traded 3D printing companies this year, ExOne seems to be investing heavily for the future. While the market for their products may be somewhat meager now, they expect rapid growth within the industry over the coming quarters. With competition coming from all angles, the importance of staying ahead in the game becomes rather apparent. Below are a few more interesting tidbits of information from the ExOne fourth quarter report:

  • $3.9 million gross profit, resulting in a gross margin of 24.5%. This compares to the prior year’s 4th quarter which saw a gross profit of $3.3 million, on a much higher 30.9% gross margin.
  • $7.3 million operating loss for the quarter as compared to only a $3.3 million operating loss for the 4th quarter of 2013.
  •  $5.6 million quarterly non-machine revenue, up 51% over 4th quarter of 2013
  • SG&A expenses were $9.0 million, as compared to $4.9 million in the prior year’s quarter
  • R&D expenses rose $500,000 from $1.7 million to $2.2 million compared to the 4th quarter of 2013
  • Year over year revenue growth is 11% or $4.4 million
  • 2015 Guidance: Revenue growth of 32% to 50% and gross margin of 36% to 40%

It will be very interesting to watch as the year continues to unfold. Will the company continue to grow rapidly? Will they get their expenses under control? Let’s hear your thoughts on this earnings report in the ExOne 4th Quarter Earnings forum thread on 3DPB.com.

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