Canaccord Genuity 37 th Annual Growth Conference August 10, 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 $10.00 Shares Outstanding 16.1 million Market Cap $161.0 million Institutional Ownership 34.3% 52 Wk Low/High $9.13/$16.15 Insider Holdings 29.0% Average Trading Volume (Trailing three months) 160.0k 5-Yr. Revenue CAGR (2011-2016) 25.6% Market Data as of 8/7/2017 (Source: Bloomberg) Ownership as of 3/31/2017, updated for latest filing Founded in 2005 Asia The Americas Europe 3 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 4 2017 ExOne
Emerging Industrial Technology Extrude Hone explores 3D printing ExOne formed S. Kent Rockwell acquired Initial Public Offering; M-Flex Exerial Innovent 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 Cold Hardening Phenolic (CHP) & Sodium Silicate binders Asia The Americas Europe 5 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 6 2017 ExOne
Binder Jet Technology Advantages Presented at AMUG*: Material flexibility Room temperature shaping Scalable Isotropic properties Throughput and cost Less variables * Listed advantages were presented by Oak Ridge National Laboratory (ORNL) at the Additive Manufacturing Users Group ( AMUG ) 2017; the graphic was created by ExOne based on information provided by ORNL. Asia The Americas Europe 7 2017 ExOne
Cost (USD) Millions Powder Bed-Based Additive Manufacturing $2.50 Binder jetting exhibits lower capital and operating costs when compared to similar direct metal technologies. The fast manufacturing speeds make binder jetting a scalable process and well suited for mass production. For these reasons, binder jetting is the best possible future investment for a mass production setting. -- Philip Morton, Manager, W.M. Keck Center for 3D Innovation, The University of Texas at El Paso $2.00 EBM $1.50 SLM $1.00 Binder Jetting $0.50 $- 0 50 100 150 200 250 300 350 400 450 Number of parts Thousands Asia The Americas Europe 8 2017 ExOne
Binder Jet Printing Potential Materials Matrix Carbon Ceramic Metal Sand Plastic Wax Parts built through polymerization SL PJ Additive Technologies Parts built with bonding agent BJP BJP Parts built through melting LM FDM EBM LS MJ Binder Jet Printing (BJP) Electron Beam Melting (EBM) Fused Deposition Modeling (FDM) Laser Melting (LM) Laser Sintering (LS) Material Jetting (MJ) Photopolymer Jetting (PJ) Stereolithography (SL) Binder Jetting Value Proposition: Non-Weldable Materials Larger Machine Size Higher Capacity Large Part Manufacturing Lower Part Cost 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
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 Note: Management assessment as of March 2017 Asia The Americas Europe 11 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 Note: Management assessment as of March 2017 Asia The Americas Europe 12 2017 ExOne
ExOne Differentiation From Competition Printer sales and printed products Aftermarket sales (Consumables-Service-Spares) Consulting (Material & process development) Services: Functional fulfillment of part design/ printing preparation/training Supply chain optimization (modularity / common-parts) Asia The Americas Europe 13 2017 ExOne
ExOne Customers As of 12/31/2015* 8/1/2017* Change Direct Machine Customers Indirect Machine Customers 1 machine 50 71 42% 2 machines 7 12 71% 3 or more machines 5 9 80% Total 62 92 48% 1 machine 76 109 43% 2 machines 4 9 125% 3 or more machines 5 6 20% Total 85 124 46% Both Direct and Indirect Machine Customers 0 4 * Includes total customers for machines sold or PO's received through the dates indicated Asia The Americas Europe 14 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 15 2017 ExOne
Financial Review Asia The Americas Europe 16 2017 ExOne
Q2 2017 TTM Expanding Revenue & Backlog Revenue & Gross Margin ($ in millions) Backlog ($ in millions) 27.9% $45.2 $49.3 25.2% $13.0 $16.5 $19.7 $26.3 $26.3 $26.8 $18.9 $22.5 Q2 2016 TTM Q2 2017 TTM 12/31/2014 12/31/2015 12/31/2016 6/30/2017 3D Printed Products & Aftermarket (Non-machine) 3D Printing Machines Gross Margin Asia The Americas Europe 17 2017 ExOne
R&D, SG&A, and Percent of Sales R&D ($ in millions) SG&A ($ in millions) $24.0 $22.6 $20.7 $23.0 $8.2 $7.3 $7.8 $8.3 18.6% 18.0% 16.4% 16.9% 54.7% 55.9% 43.4% 46.7% 2014 2015 2016 Q2 2017 TTM 2014 2015 2016 Q2 2017 TTM Asia The Americas Europe 18 2017 ExOne
Capital Expenditures Three months ended Six months ended ($ in millions) June 30, June 30, 2017 2016 2017 2016 Cash capital expenditures... $ 0.1 $ 0.2 $ 0.4 $ 0.3 Non-cash transfers of inventories to property and equipment for internal use or leasing activities... $ 1.8 $ 0.5 $ 1.9 $ 2.0 $ 1.9 $ 0.7 $ 2.3 $ 2.3 Approximately $1 - $2 million of Cash CapEx in 2017 (1) Note: Recorded noncash transfers of internally developed 3D printing machines from property and equipment to inventories for sale of $0.7 million during three months ended June 30, 2016, and $0.4 million and $0.7 million during the six months ended June 30, 2017 and 2016, respectively (1) CapEx guidance for 2017 provided as of August 10, 2017 Asia The Americas Europe 19 2017 ExOne
YTD 2017 Cash Flows ($ in millions) $28.2 (1) $(0.4) $0.2 $3.7 ($6.5) $25.2 (1) 12/31/2016 Cash & Equivalents & Restricted Cash Capital Expenditures Working Capital Proceeds from Sale of Property & Equipment Net Loss, Net of Non-Cash Items and Other 6/30/2017 Cash & Equivalents & Restricted Cash (1) Includes restricted cash of $0.3 million and $1.1 million at December 31, 2016 and June 30, 2017, respectively Asia The Americas Europe 20 2017 ExOne
Solid Balance Sheet for Growth ($ in millions) December 31, 2016 March 31, 2017 June 30, 2017 Cash, equivalents & restricted $28.2 $28.3 $25.2 cash (1) Total debt (2) $1.9 $1.9 $1.8 Total equity $87.8 $82.2 $78.5 (1) Includes restricted cash of $0.3 million, $2.7 million, and $1.1 million at December 31, 2016, March 31, 2017 and June 30, 2017, respectively (2) Excluding unamortized debt issuance costs Asia The Americas Europe 21 2017 ExOne
Outlook Asia The Americas Europe 22 2017 ExOne
Updating 2017 Outlook 20% - 25% sales growth; weighted to Q4 2017 Operating leverage expected in Q4 Positive Adjusted EBITDA margin experienced by year end Expected year-end total cash balance in excess of $20M 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
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 26 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 27 2017 ExOne
Global OEMs Leading the Way Investments in research promote advancement of 3D printing Asia The Americas Europe 28 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 29 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