Jefferies 3D Printing Summit March 29, 2016 Brian Smith Chief Financial Officer and Treasurer Asia The Americas Europe 1 2016 ExOne
Safe Harbor Statement These slides contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as expects, estimates, projects, typically, anticipates, believes, appears, could, plan, and other similar words. Such statements include, but are not limited to, statements concerning future revenue and earnings, involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, which include our ability to qualify more materials in which we can print; the availability of skilled personnel; the impact of increased operating expenses and expenses relating to proposed acquisitions, investments and alliances; our strategy, including the expansion and growth of our operations; the impact of loss of key management; our plans regarding increased international operations in additional international locations; sufficiency of funds for required capital expenditures, working capital, and debt service; the adequacy of sources of liquidity; expectations regarding demand for our industrial products, operating revenues, operating and maintenance expenses, insurance expenses and deductibles, interest expenses, debt levels, and other matters with regard to outlook; demand for aerospace, automotive, heavy equipment, energy/oil/gas and other industrial products; the scope, nature or impact of acquisitions, alliances and strategic investments and our ability to integrate acquisitions and strategic investments; 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 effect of litigation and contingencies; the impact of disruption of our manufacturing facilities or PSCs; the adequacy of our protection of our intellectual property; material weaknesses in our internal control over financial reporting; the impact of customer specific terms in machine purchase agreements on the period in which we recognize revenue and the impact of market conditions and other factors on the carrying value of long-lived assets; our ability to continue as a going concern and other factors disclosed in the Company s Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. Because they are forward-looking, these statements should be evaluated in light of important risk factors and uncertainties. Asia The Americas Europe 2 2016 ExOne
Global Industrial Additive Manufacturer ExOne is distinctively positioned for 3D printing of industrial applications using binder jetting technology NASDAQ: XONE IPO Date: February 12, 2013 Recent Price $12.93 Shares outstanding 16.1 million Market Cap $207.8 million Institutional Ownership 16.6% 52 Wk Low/High $5.81/15.97 Insider Holdings 30.1% Average Trading Volume (Trailing three months) 271 thousand 4-Yr. Revenue CAGR (2011-2015) 27.5% Market Data as of 3/22/2016 (Source: Bloomberg) Ownership as of 12/31/2015, updated for latest filing Founded in 2005 Asia The Americas Europe 3 2016 ExOne
Emerging Industrial Technology Extrude Hone explores 3D printing ExOne formed S. Kent Rockwell acquired Initial Public Offering; M-Flex ; Opened PSCs in Auburn, WA and Las Vegas, NV Innovent ; Exerial ; ISO Certification; Opened PSC in Sweden; Opened DREAM Center in North Huntingdon, PA 1999 2002 2003 2005 2007 2009 2011 2012 2013 2014 2015 First direct 3D printing machine developed R-2 First indirect 3D printing machine developed S-15 S-Print S-Max S-Print 2.0 M-Print ; Opened PSC in Italy; Completed European HQ, manufacturing & PSC facility in Gersthofen, Germany Asia The Americas Europe 4 2016 ExOne
Focused Business Model Indirect Printers Indirect Parts PSCs 9 locations Machine Non-Machine Direct Printers Direct Parts Asia The Americas Europe 5 2016 ExOne
Customer-Centric Development Customers desire diverse material/binder systems to maximize utility, speed, strength and sustainability Progressing from prototyping to series production Accommodating customers existing binder-sand combinations ExOne is developing multiple systems to satisfy customer demands Developing application-specific solutions Designing tools unique to binder jetting technology Asia The Americas Europe 6 2016 ExOne
Machine Sales State of Adoption Indirect Printing Production applications Migration to batch & series production Direct Printing R&D and prototype applications Nascent with high potential Technological maturity timeline Asia The Americas Europe 7 2016 ExOne
Indirect Printing for the Casting Industry Sand molds and cores Global metal casting industry produces ~100* million metric tons of castings annually Quicker than traditional methods Process reduced to days, not weeks Several 3D printed molds may be combined to make even larger parts * Source: American Foundry Society Asia The Americas Europe 8 2016 ExOne
Direct Printing of Metal 3DP Technology Options Binder Jetting Market Focus Oil and Gas, Automotive, General industry Advantages Speed Cost Size Laser & E Beam Aerospace and Medical Density Postprocessing Asia The Americas Europe 9 2016 ExOne
2015 Machine Highlights Sold 10 Innovent machines (1) Developed fine powder capabilities Introduced Cold Hardening Phenolic ( CHP ) binder Market introduction of Exerial Series production machine for foundries Shipped four, received order for 5 th Exerial More active pursuit of leases (1) Includes two units sold to related parties. Asia The Americas Europe 10 2016 ExOne
Non-machine Revenue: 3D Printed Products and Aftermarket Non-machine Revenue: PSCs: gateway to 3D printing for new industrial customers Try before you buy PSCs drive machine sales and aftermarket opportunities Consumables: ongoing customer support Service: long-term machine maintenance Asia The Americas Europe 11 2016 ExOne
2015 Non-Machine Highlights Introduced tool printing for composite applications Lowered cost of certain consumables Quality systems advances: ISO certification achieved or pending in all PSCs Implemented new PSC model in Sweden New customer support model in Texas Asia The Americas Europe 12 2016 ExOne
Other 2015 Highlights Strengthened organization Improved processes globally DREAM Center ExTEC Academy Asia The Americas Europe 13 2016 ExOne
Strategic Direction Direct Printing Metal Monolithic and fine powder for industrial applications Non-Metal New applications unique to binder jetting Ceramic components Indirect Printing Sand New binder and additive systems Machines for series production Non-Sand Ceramic and graphite molds and cores Sand-based tooling Asia The Americas Europe 14 2016 ExOne
Financial Review Asia The Americas Europe 15 2016 ExOne
Customer Demand Shows Growth >20% CAGR Non-Machine Revenue ($ in millions) 21.1 24.9 9.9 13.0 13.2 2011 2012 2013 2014 2015 Asia The Americas Europe 16 2016 ExOne
2015 Machines Direct Indirect 2015 Revenue Leased Shipped (1) (1) 0 5 10 15 20 25 Number of Machines (1) Includes one M-Print TM unit and two Innovent TM units sold to related parties. Asia The Americas Europe 17 2016 ExOne
Q4 2015 Results Demonstrate Potential Indicative of results that are achievable Higher sales volume, favorable mix with large machines Better operating leverage Positive adjusted EBITDA Record year-end backlog Asia The Americas Europe 18 2016 ExOne
Revenue & Gross Margin Revenue ($Million) Gross Margin (% of Revenue) 4-year CAGR: 27.5% 39.5 43.9 40.4 42.4% 39.4% 15.3 28.7 13.0 14.6 21.1 24.9 23.8%* 20.7%* 9.9 5.4 15.7 24.9 22.8 15.5 2011 2012 2013 2014 2015 2012 2013 2014 2015 3D Printed Products & Aftermarket (Non-machine) 3D Printing Machines *Gross profit for 2014 includes $0.6 million associated with transitioning our German and United States operations and writing off a non-core product line; gross profit for 2015 includes $0.9 million associated with transitioning our German operations, our ERP system implementation, and developing our Italy PSC. Asia The Americas Europe 19 2016 ExOne
Expanding Backlog Indicates Growth ($ in millions) 16.5 10.9 13.2 5.1 12/31/12 12/31/13 12/31/14 12/13/15 Key metric to evaluate performance Asia The Americas Europe 20 2016 ExOne
Strong Leverage Opportunity R&D ($Million) SG&A ($Million) 24.0 (2) 22.5 (3) 18.3 (1) 16.1 5.1 8.2 7.3 1.9 2012 2013 2014 2015 2012 2013 2014 2015 (1) 2012 SG&A includes equity-based compensation expense unrelated to the Company s 2013 Equity Incentive Plan. (2) SG&A expense for 2014 includes $3.5 million of atypical costs including $0.5 million relating to ERP system implementation, $2.2 million for bad debt charges, and $0.4 million for severance costs. (3) SG&A expense for 2015 includes atypical items consisting of $0.2 million benefit from a bad debt provision reversal, a $0.3 million charge associated with employee terminations and a $0.8 million charge associated with an ERP system implementation. Asia The Americas Europe 21 2016 ExOne
Capital Expenditures ($ in millions) 2014 2015 Facility Expansions $22.4 $2.5 Machines & Related Equipment* $5.3 $6.8 ERP System $0.9 $0.4 TOTAL $28.6 $9.7 * Includes approximately $4.7 million for 2015 and $5.3 million for 2014 of non-cash transfers of inventories to property and equipment for internal use and leases. Asia The Americas Europe 22 2016 ExOne
2015 Cash Flows ($ in millions) 36.2 1H 2015 2H 2015 (2.8) 3.2 (11.8) 24.8 (2.1) 1.1 (4.5) 19.3 12/31/2014 Cash & Equivalents Capital Expenditures* Working Capital Net Loss, Net of Non-Cash Items and Other 6/30/2015 Cash & Equivalents Capital Expenditures* Working Capital Net Loss, Net of Non-Cash Items and Other 12/31/2015 Cash & Equivalents * Excludes $4.7 million of non-cash transfers of inventory to property and equipment for internal use and leases. Asia The Americas Europe 23 2016 ExOne
Solid Balance Sheet for Growth ($ in millions) December 31, 2014 December 31, 2015 Cash & equivalents $36.2 $19.3 Total debt $2.6 $2.1 Total equity $118.5 $89.1 Issued 1.4 million shares to an entity controlled by Chairman & CEO, S. Kent Rockwell in January 2016 Generated $13 million of gross proceeds Asia The Americas Europe 24 2016 ExOne
2016 Priorities Accelerate Adoption Rate of Binder Jetting Increase Facility Utilization Lower Breakeven Point Enhance Working Capital Management Asia The Americas Europe 25 2016 ExOne
2016 Outlook 12/31/15 backlog of $16.5 million & active pipeline expecting revenue growth & improved financial performance in 2016 Approaching 2016 with cautious optimism Macroeconomic factors Depressed energy sector Capital spending Currency devaluations Cost improvement efforts to lower breakeven point Asia The Americas Europe 26 2016 ExOne
Questions? Asia The Americas Europe 27 2016 ExOne
Supplemental Information Asia The Americas Europe 28 2016 ExOne
3D Printing Platform Innovent M-Flex M- or S-Print S-Max Exerial Direct Direct Direct / Indirect Indirect Indirect Year Launched 2015 2013 2012 2011 2015 ASP <$100k ~$400k ~$850k ~$1.5m ~$1.8m Job Box Size 160x65x65mm 400x250x250mm 800x500x400mm 1800x1000x700mm 2 Job Boxes X (2200x1200x700mm) Print Time 30 seconds/l 30-60 seconds/l 0.71-1.27 ft3/h 2.12-3.00 ft3/h 300-400 L/h Predecessor X-1 Lab R-2 (2002) S-Print (2009) S-15 (2003) none Asia The Americas Europe 29 2016 ExOne
2014/2015 Capacity Expansion ExOne Germany ExOne North Huntingdon ExOne Japan ExOne Italy ~340,000 Square Feet Globally, Up 70%+ in 2014 Asia The Americas Europe 30 2016 ExOne
Innovative Customers Automotive Aerospace Heavy Equipment Power Fluid Handling Other Industries Asia The Americas Europe 31 2016 ExOne
ExCast: Addressing the Full Value Chain ExCast Mission: Supply complex finished casting parts for prototyping and short run production on a rapid delivery platform to a global industrial customer base. ExCast vertically integrates processes under ExOne leadership & control Asia The Americas Europe 32 2016 ExOne
Customer Success: BMW Vision 2025-3D Printing of Cores Published in GIESSEREI 03/2014 By Jean-Marc Ségaud, Head of Pre-development, BMW Light Alloy Foundry, Landshut, Germany As 3D printing technology becomes more competitive, it will be possible to transfer all of its technical advantages to high-volume series production. Minimal waste of material/energy Low production costs Design freedom increases efficiency Manufacturing on-demand eliminates expensive storage Removal of sand casting molds from the installation space of a 3D printer at BMW in Landshut, Germany The first core shooting machines and the associated core boxes will be replaced by 3D printers over the next 10 years, and high-speed printers will be used in series production. Asia The Americas Europe 33 2016 ExOne
Customer Success: Bosch Rexroth For Core Production the Bosch Rexroth Foundry Relies on 3D Printing MaschinenMarkt 04/2014 In hydraulics, increasingly complex customer demands require new approaches to the functionality of cast components. To meet the requirements in this field... The Bosch Rexroth foundry is relying on 3D printing for core production. Two printers: S-Max Furan & S-Max Phenol Small-scale runs and spare parts produced with optimal efficiency and costeffectiveness Bosch Rexroth is able to respond quickly and flexibly to customer demands Free from technological limitations of traditional process 3D printing makes it possible to produce molds and cores for prototypes and small-scale runs without tooling. (Photo: Bosch Rexroth) Asia The Americas Europe 34 2016 ExOne
Customer Successes Produced lighter, more accurate magnesium castings Utilized advanced software to produce first article casting on first attempt National design award Mass producing custom castings for the aerospace industry Facilitates greater part modification and design flexibility Reduced development costs and cycles Asia The Americas Europe 35 2016 ExOne
Case Study 1: Control Arm Production Technology Traditional casting 3D printed core / mold 3D printed part Weight 5.78 lbs 5.04 lbs casted in aluminum 4.57 lbs if printed in aluminum Comment Solid internal structure Poured in foundry Permits addition of lattice structure Advanced multilayer lattice structure Asia The Americas Europe 36 2016 ExOne
Case Study 2: Value Added Solution Mud Pump Impeller Issue ExOne Solution Need precision impeller part of down-hole drilling equipment Printed impeller in S4 stainless steel/bronze matrix to specification Traditional cost: $400 to $500 per unit Produced in China long lead times Wear resistance unsatisfactory Cost: $150 per unit Produced in the US and shipped within 15 to 20 days Superior wear resistance Traditional after 200-300 hours of use 3D printing after 600 hours of use Asia The Americas Europe 37 2016 ExOne
For More Information, Contact: Brian Smith Chief Financial Officer & Treasurer (724) 765-1350 brian.smith@exone.com Karen L. Howard Investor Relations (716) 843-3942 khoward@keiadvisors.com 2016 ExOne NASDAQ: XONE www.exone.com