Sidoti & Company Spring 2017 Convention March 29, 2017 Jim McCarley Chief Executive Officer Brian Smith CFO & Treasurer Asia The Americas Europe 1 2017 ExOne
Safe Harbor Statement These slides may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to the Company s future financial or business performance, strategies, or expectations. Forward-looking statements typically are identified by words or phrases such as trend, potential, opportunity, pipeline, believe, comfortable, expect, anticipate, current, intention, estimate, position, assume, outlook, continue, remain, maintain, sustain, seek, achieve, as well as similar expressions, or future or conditional verbs such as will, would, should, could and may. The Company cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and the Company assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. In addition to risk factors previously disclosed in the Company s reports, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: the Company s ability to enhance its current three-dimensional ( 3D ) printing machines and technology and develop new 3D printing machines; its ability to qualify more industrial materials in which it can print; timing and length of sales of 3D printing machines; demand for ExOne products; the Company s ability to achieve cost savings through consolidation or exiting of certain North American operations; the impact of increases in operating expenses and expenses relating to proposed investments and alliances; the availability of skilled personnel; the impact of market conditions and other factors on the carrying value of long-lived assets; the Company s competitive environment and its competitive position; the Company s ability to continue as a going concern; individual customer contractual requirements; the impact of customer specific terms in machine sale agreements on the period in which the Company recognizes revenue; the impact of loss of key management; risks related to global operations including effects of foreign currency and risks related to the situation in the Ukraine and the United Kingdom s referendum to withdraw from the European Union; demand for aerospace, automotive, heavy equipment, energy/oil/gas and other industrial products; the Company s plans regarding increased international operations in additional international locations; the scope, nature or impact of alliances and strategic investments and the Company s ability to integrate strategic investments; sufficiency of funds for required capital expenditures, working capital, and debt service; the adequacy of sources of liquidity; the effect of litigation, contingencies and warranty claims; 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 impact of disruption of our manufacturing facilities, production service centers or ExOne adoption centers; the adequacy of the Company s protection of its intellectual property; expectations regarding demand for the Company s industrial products, operating revenues, operating and maintenance expenses, insurance expenses and deductibles, interest expenses, debt levels, and other matters with regard to outlook; and material weaknesses in the Company s internal control over financial reporting. These and other important factors, including those discussed in the Company s Annual Report on Form 10-K, may cause its actual results of operations to differ materially from any future results of operations expressed or implied by the forward-looking statements contained herein. Before making a decision to purchase ExOne common stock, you should carefully consider all of the factors identified in its Annual Report on Form 10-K that could cause actual results to differ from these forward-looking statements. Asia The Americas Europe 2 2017 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 $9.96 Shares Outstanding 16.1 million Market Cap $160.4 million Institutional Ownership 23.7% 52 Wk Low/High $9.03/$16.15 Insider Holdings 30.5% Average Trading Volume (Trailing three months) 145,869 5-Yr. Revenue CAGR (2011-2016) 25.6% Market Data as of 3/23/2017 (Source: Bloomberg) Ownership as of 12/31//2016, updated for latest filing Founded in 2005 Asia The Americas Europe 3 2017 ExOne
Emerging Industrial Technology Extrude Hone explores 3D printing ExOne formed S. Kent Rockwell acquired Initial Public Offering; M-Flex Innovent ; Exerial ; ISO Certification; Opened DREAM Center in North Huntingdon, PA 1999 2002 2003 2005 2007 2009 2011 2012 2013 2014 2015 2016 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 Completed European HQ, manufacturing & PSC facility in Gersthofen, Germany Asia The Americas Europe 4 2017 ExOne
3D Printing Industry Expectations 3D printing market revenue expected to triple to $21 billion by 2020 (1) ExOne s focus: industrial markets using binder jetting technology Cost effective production process Automotive, aerospace, industrial and commercial applications Customized materials development Increasing Demand for Direct and Indirect Printing Solutions (1) According to 3D Printing: The Next Revolution in Industrial Manufacturing available here Asia The Americas Europe 5 2017 ExOne
3D Printing Industry Drivers Machines Increasing build rates, speed Consistency & quality of output Materials Supply chain lowering costs Developing materials tailored to 3D printing Production Enhancing automation to advance from prototyping Reduced labor improves flexibility Services Availability of design creativity Support for applications development Asia The Americas Europe 6 2017 ExOne
What is Binder Jetting? Unique, binder-based 3D printing technology developed at MIT Layers of material bond to form object Liquid binding agent selectively deposited to join powder particles Job box lowers, another layer of powder is spread, binder is selectively added; layering is repeated over and over Capable of printing a variety of materials metals, sands, ceramics No melting, welding or build plate required for other 3D technologies Ability to print very large objects Some materials require post-processing Click here for video Asia The Americas Europe 7 2017 ExOne
Indirect vs. Direct Binder Jet 3D Printing Indirect Sand molds and cores Global metal casting industry produces ~100* million metric tons of castings annually Proprietary binder systems responsive to customer needs Direct Metal parts and tools Complementary to other metal 3D printing technologies; binder jetting advantages volume production, speed, cost Fine powder capability for production; ongoing materials development * Source: American Foundry Society Asia The Americas Europe 8 2017 ExOne
Vision : Mission : Market : People Our Vision: Market leader and supplier of choice Applications Our Mission: Advance and accelerate our adoption rate Indirect Machine Our People: Engaged, empowered, motivated Setting Industrial 3D Printing Standard Optimizing costs, driving innovation, creating value Aftermarket Enhancing machine capabilities Accelerating core technology adoption Direct Machine Our Market: Grows with expanding equipment capabilities and materials qualification Asia The Americas Europe 9 2017 ExOne
Stages of Binder Jet Technology Adoption Model for Disruptive Technologies Aware Accept Apply Trust Experience Afford Value Seeking Value Discovery Adopt Advance Exploit Value Creation Definition of AWARE 1: having or showing realization, perception, or knowledge Definition of EXPLOIT 1: to derive value from, make full use of Asia The Americas Europe 10 2017 ExOne
Reviewing Product Lines Indirect Machines Direct Machines Product Applications Aftermarket Asia The Americas Europe 11 2017 ExOne
ExOne s 3D Printing Platforms Innovent M-Flex M- or S-Print S-Max Exerial DIRECT DIRECT DIRECT / INDIRECT INDIRECT INDIRECT Year Launched 2015 2013 2012 2011 2015 Price Range ~$100k-$200k ~$300k-$500k ~$700k-$1m ~$1m-$2m ~$1.5m-$2.5m Job Box Size 160x65x65mm 400x250x250mm 800x500x400mm 1800x1000x700mm 2 Job Boxes X (2200x1200x700mm) Print Time 30 seconds/l 30-60 seconds/l 0.71-1.27 ft3/h 2.12-3.00 ft3/h 300-400 L/h Predecessor X-1 Lab R-2 (2002) S-Print (2009) S-15 (2003) none Asia The Americas Europe 12 2017 ExOne
Accelerating Sand Printing Adoption ExOne Global Indirect Printing Machines 127 Installations* By Geography By Machine Platform Asia 31% Americas 19% S-Print 18% Exerial TM 1% Europe 50% S-15 TM 24% S-Max 53% S-Max+ TM 4% * As of December 2016; includes 22 machines at ExOne s PSCs and EACs; ExOne cannot determine the current status of machines previously sold and installed at third party customer facilities Asia The Americas Europe 13 2017 ExOne
Directional Changes Drive adoption rate improvement Selectively converting PSCs to EACs Strengthening commercial processes and tools Focused investment in core technology Asia The Americas Europe 14 2017 ExOne
Financial Review Asia The Americas Europe 15 2017 ExOne
2016 Expanding Revenue, Gross Margin & Backlog Revenue & Gross Margin ($ in millions) Backlog ($ in millions) 20.7% $40.4 $47.8 29.6% $13.2 $16.5 $16.4 $19.5 $19.9 $19.7 $24.9 $26.8 $15.5 $21.0 2015 2016 3D Printed Products & Aftermarket (Non-machine) 3D Printing Machines Gross Margin Asia The Americas Europe 16 2017 ExOne
Strong Leverage Opportunity R&D ($ in millions) SG&A ($ in millions) $24.0 $22.6 $20.7 $8.2 $7.3 $7.8 2014 2015 2016 2014 2015 2016 Asia The Americas Europe 17 2017 ExOne
2016 Cash Flows ($ in millions) $(1.3) $4.8 $(8.0) $27.8 $19.3 $13.0 12/31/2015 Unrestricted Cash & Equivalents Cash from Capital Transactions Cash Capital Expenditures Working Capital Net Loss, Net of Non-Cash Items and Other 12/31/2016 Unrestricted Cash & Equivalents Approximately $1 - $2 million of Cash CapEx in 2017 (1) (1) CapEx guidance for 2017 provided as of March 16, 2017 Asia The Americas Europe 18 2017 ExOne
Solid Balance Sheet for Growth ($ in millions) December 31, 2015 Unrestricted cash & equivalents March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 $19.3 $31.3 $31.9 $29.8 27.8 Total debt* $2.1 $2.1 $2.0 $2.0 $1.9 Total equity $89.1 $99.0 $96.0 $93.5 $87.8 *Excluding unamortized debt issuance costs Asia The Americas Europe 19 2017 ExOne
Outlook Asia The Americas Europe 20 2017 ExOne
Aware Accept Apply Trust Experience Afford Adopt Advance Exploit ExOne s Market Adoption Rate Assessment Binder Jet Indirect Technology Value Seeking Value Discovery Value Creation Automotive Heavy Equipment Oil & Gas / General Industrial Aerospace Art / Architecture broad industry adoption selective industry adoption limited industry adoption Asia The Americas Europe 21 2017 ExOne
Aware Accept Apply Trust Experience Afford Adopt Advance Exploit ExOne s Market Adoption Rate Assessment Binder Jet Direct Technology Value Seeking Value Discovery Value Creation Metal Injection Molding Tooling O&G / General Industrial Automotive Ceramics University / Labs Aerospace broad industry adoption selective industry adoption limited industry adoption Asia The Americas Europe 22 2017 ExOne
2017 Outlook & Beyond At least 25% sales growth, with quarterly fluctuations 2017 Operating leverage Stable cash flow and working capital utilization Positive Adjusted EBITDA experienced by year end Beyond Sustained year-over-year revenue growth >25% Asia The Americas Europe 23 2017 ExOne
Questions? Asia The Americas Europe 24 2017 ExOne
Supplemental Information Asia The Americas Europe 25 2017 ExOne
Cost Why 3D Printing? 3D Printing Traditional Manufacturing Mud Pump Impeller Complexity Using 3D printing, degree of complexity is irrelevant Allows freedom of design Supports customization/ personalization Reduces working capital requirements Fewer components, shorter lead-times Traditional mfg after ~200-300 hours of use 3D printed by ExOne after ~600 hours of use Reduced cost by ~67% to $150/unit Produced in US within 15 to 20 days vs long lead-time from China Superior wear resistance Asia The Americas Europe 26 2017 ExOne
Global OEMs Leading the Way Investments in research promote advancement of 3D printing Asia The Americas Europe 27 2017 ExOne
Non-machine Revenue: 3D Printed Products and Aftermarket Non-machine Revenue: EACs/PSCs: gateway to 3D printing for new industrial customers Try before you buy EACs/PSCs drive machine sales and aftermarket opportunities Consumables: ongoing customer support Service: long-term machine maintenance Asia The Americas Europe 28 2017 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 2017 ExOne NASDAQ: XONE www.exone.com