XONE - Earnings call transcript Q4 2019

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Operator

Greetings, and welcome to The ExOne Company Fourth Quarter 2019 Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Ms. for Relations Investor Howard, ExOne. Karen Thank you.

begin. may You

Karen Howard

We Thank today time year financial everyone. quarter you, and good XXXX call. conference Melissa, appreciate results for full your and morning, The fourth ExOne

release the are in slide Slide to the yesterday me will Hartner, distributed Doug Officer; X Doug Chief our Zemba, the Financial reviewing our Referring Treasurer. deck, our John John presenters, and results Chief in line published on with Executive press that and were our today afternoon. Officer be and

If have website release, discussion available at on it's www.exone.com. also our our are you accompany that don't on website. The our slides today posted that

On statement. Slide harbor safe is X our

are may to factors that in documents company this to at other as statements you Securities risks found we by forward-looking the apply other aware, may Exchange and with risks where release some These our website well events other on filed as Q&A. make statements presentation are be www.sec.gov. and that as to These and Commission. earnings These well As future during the and uncertainties today. results differ uncertainties subject we documents from also be provided could will can the and during are actual cause or factors as the

that in our evaluating I discuss also out performance. which useful are want to we during will call, measures, today's believe point some non-GAAP we financial

as isolation GAAP. should substitute of You in additional results or a presentation prepared not consider accordance the for information in with this

measures accompanying release. provided reconciliations in to of the have comparable tables non-GAAP We GAAP today's

John we the the of for through started financial business the on our rest a of outlook review and line will will year us Doug perspective a go providing get before answers. questions up will provide John results, for open and then the detailed update.

pleasure the turn John? to John begin. my over that, with call to it's And to

John Hartner

everybody. joining ExOne's Thanks Karen. us fourth Thank report. for morning, for you, Good quarter

investors and reassure proactively. environment want moving partners customers, are well positioned ExOne, First, and our unprecedented employees, that the to we, current acknowledge forward and at I

our Let's positive financial for the move to quarter. From and of Then quarter. the we progress summary margins update EBITDA pleased a on technological high I'm for I'll results gross solid our adjusted reported developments. of the Slide X with level standpoint, that a you

also with record We backlog. closed year the a

$XX.X realized the We newly revenue fourth our record fourth from revenue This introduced year's XXXX, million quarter but and longer quarter, of anticipated. of is expectations in our for short duration our than last highest machines installations the of of timing quarter. as down took

growth. continues operating well cost suited adjusted stable to the slightly level, positive for generate drive be level, leverage Our revenue structure we to able EBITDA at on At were quarter. this to

more believe year XXXX, well We finished in touch uncertainty. of X.X are on I'll that with times in even our prior Together we backlog. than backlog. with growth towards year pipeline, of presentation. $XX.X the million we the of end for positioned light the That's market further the

in team, have the that Germany hard This perspective, capital us to worked complete a facility leaseback of to support plans foreseeable the growth my adequate future. a sale successfully extend last who Finance confidence to I From to for capital very our we our thanks want month. gives

a sand moment. talk more perspective, we our I'll those printer. fourth during XX business shipped first our Pro a from the first Finally, metal quarter, S-MAX and XXPro about printers in

please to X. Slide Now turn

in was I of transition on a significant organization, a As as change characterize our would amount year. there year, I the reflect and XXXX

new we as congratulate rolled material First at record and teams our foremost, out R&D a developments and pace. product I

globe. expanded team, our with than investments touch which around We and in customers points also We our ever introduced shipping. three Internally, of we more now made new machines, started resources. the we customer-facing leadership have two we

to continued our manage and us we accelerated we efficiently we well to prudently facing resources, as operating our and grow. realize While technology leverage This development positions cost. customer

timing tougher making impacted external year softening economy manufacturing for customer of as made the decision a backdrop it from for perspective, the XD capital Finally, well. an the printers. purchases, That including

Slide our strategic of I to X. to want remind turn Please you pillars.

operational will You aligns progress with see our how our strategy.

Our first our margins. to more addresses market in on as customers people, needs. pillar Investing doing, new penetration, we will leading customer have been focus expanded facing drive

ownership jetting Our relates second and This new been total pillar addresses that cost core. applications technology reducing addressable materials we've markets. in machines the of our to and the expanding introducing, binder

the with Our recurring in We third and A on to and on solid of will this our I will stability fluctuation off renew bottom share focuses at with top line, revenue growth. helping is you revenue. focus pillar government later. more us our level balance how revenue provide paying contracts, attention recurring machine

So team financial is executing our to strategic long-term focused and on summarize, our plan our goals. realizing

S-Max our we've you shown or turn had proud cores, than of full It photo, large a the see, system range can Please X, molds to well as Slide over current to introduced new, is as sand for upper in lineup year. The the has past more our industrial capabilities machine and of clearly and fastest Pro now half production yet. and a say that smartest serial year printer, prototyping production. so. busy is I'm for

it automated can a We available our for fully printer solution, connected volume This line. a launched create as currently a where be stand-alone new units patented and production several methodology to or printers, enhancing delivers significantly This compaction industry-leading Triple powders. which and our ACT metal density refer the patented printers we repeatability, using technology. fine performance methodology of the as advanced is to

or customers in the to diverse for metal volume. metal mid-sized molding, injection seeking powder metallurgy new an and This powders addresses production increased a MIM, needs printer with platform manufacturing print platform environment. larger Our of users a of solution range production at XX a enables XXPro producing

really announced the We're build excited the than of parts. for but introduction fastest on about production direct XXXPro metal front, X.X the and largest this XX is times competing And and not which certainly volume our systems. we machine metal of more printer, of last, least, our ceramic system printing platform,

cloud is a and is connectivity Defense more Automotive, metal, the attractive dozen of enabled It industries. linking Siemens Industry particularly platform for capable capabilities and materials. revolutionary. We has process It's and this printing composite MindSphere. Aerospace X.X It than believe ceramic truly by also

binders updated materials also We that a qualification new have with I'll process and moments. an launched review in few

first metal user. turn will X, of a printer an order production provide Please Slide and They one to several key receive of metal customer I a XX are our printers. QX. antidote new the has and about XXPro to This in shipped M-Flex

an volumes, that sites. additional activities ordered Given to have printer, XXPro expand and printers their development new Innovent+ expand their also with XX to to they their satisfaction production

ExOne's Additionally, expressing have metal later year. ability direct reserved commitment for from move innovative they this to their customers to in the that help are and scaled development systems several believe products pattern We production. demonstrates more

describe And new briefly process. Please turn XX. qualification to material our Slide I'll

print Our ceramics capable to dozens materials, direct shown composites. three been of into and have They fall printers as metals, here. categories,

have materials by seven include they as been readiness. meaning First, parties, have stainless marketplace and Examples have qualified third common XX-X steels. full that we such XXX L materials,

for own are been that proprietary more customers materials, as those XX differentiators qualified customers. their for materials our have Several these application. by have of we serving Next,

of R&D new believe leads but printable The HXX in include this, many has third the We undergoing of get including tool than new carbide. that growing pallet an steel the further more aluminum, markets. in are examples materials in are category pyramid, setting, includes the Tungsten widest materials, and to them turn, development XX and many - ExOne top to to applications

we've talked the past, Please Slide and turn consumables to related about In XX. to revenue mostly recurring parts.

upon touch expanded today, While focus will those efforts contracts. continue, on R&D our I

We've been advanced development commercial our jetting binder with increasing customers joint programs to applications.

our revenues, XXXPro printer. opportunities R&D these contract should of the lead several to Beyond projects XX for

U.S. R&D new won focus Department several government on In SBIR is Next, have small off. And with we we already of our Energy. contract a in paying renewed awards. XXXX, XXXX, the

grant, This $X in million. It over conditions. high-temperature ceramic amounting is is multiyear develop innovative, that operate heat to harsh service a exchangers extremely to

before, are of progress for sector. focus, is showing talked as aluminum especially innovative this considering such exciting, material that Automotive those This is steady opportunities involve which in our now opens customers, there. Silicon materials, light these I've Carbide, big weighting contracts we and the the Some a about really but up

let Doug results. through Doug? walk details the our to financial of going now I'm

Douglas Zemba

Thanks, John. morning, everyone. Good

to XXXX compared XX, QX If million we'll you XXXX with with please start turn could revenue. to quarter. our in $XX.X Slide QX record Revenue down was

groups, $XX.X which on For as you with the attributable product see year, John both The was mentioned, was million million to in can $XX.X slide. in our of revenue next the decrease compared revenue XXXX.

Now Slide to XX. let's go

Sales machine $XX current the shortfall The Here, the of quarter, in you $XX.X year. and can driver from quarter were in full the see million Machine in the million clearly down revenue finalizing quarter. fourth released QX platforms the and due S-MAX introduced facilities, is installations our customer XXPro primarily of This newly including Pro XXXX. year's at timing XX to during last

the to $XX.X prior customer decisions Machine of in $XX.X impact the delays continue in manufacturing compared million resulted addition, for In in we broader which compared million equipment. year XXXX, with of general capital XXXX finished year to purchasing in has the We Sales experience to slowdown period. the

Now, if we can review Machine XX, sales. unit we'll turn to Slide

and as and in include is XX Machines and platform, Direct XX online to which Innovent+, directly our as such our platforms introduced come as components, As other reminder, XXXX. newly ceramic for a well industrial metal print XXPro our applications and late M-Flex XXXPro parts, expected

cores sand molds and S-Print Our our Indirect platforms. such, print as Pro, include and and S-Max Machines tools S-MAX

Our quarter. a generally XX XXXX average Indirect higher selling systems, year Machines value. compared in fourth with XX achieving the We quarter are the such prior with our larger systems in machines footprint sold

Sales lower significantly quarter than of Direct XXXX fourth included Our Machine of fewer a Machines quarter the our fourth XXXX. and proportion

fewer see Machine the Machines can dollar the year on quarter Direct volume This as in sold last with slide. the prior the revenue charts decrease you and we decrease XX we the unfavorably three impacted compared saw fewer on As left, Indirect quarter. fourth Machine on XXXX the

of Sales development research XXXX represent quarter set Machine and fourth continue during and to industrial diverse of global mix the included a and geographies customer and a users. applications, Our

The year full the explained. factors in I fourth as XX previously sold the period, quarter XXXX driven During by to machines XX we compared XXXX. decrease

Now revenue, reflecting products, XXXX, in our quarter an to XD fourth let's includes printer of Slide X% and services, over other XX. turn Recurring prior the the and increase $X.X period. was which year million materials

in million XXXX, $XX.X down XXXX. recurring was million, For full year from $XX.X revenue

the quarter, the fourth global increase reflects funded contributions growth, base manufacturer. project an automotive resulting The sales was of second research Beginning to as from quarter the from XXXX half. driven an the on and compared left, with a in our in stability aftermarket development increased shown XXXX and machines our XXXX by fourth installed

year, the year, both orders from projects for facility, the Indirect of of a volume of is which the right, in the first half for under decline the of the printing full - lower and contributed million Houston On plus XXXX to our XXXX. attributed primarily Direct impact exit $X just the in

also in base for offset of were growing decreases experienced an These aftermarket global machines. sales pricing consumable based We our sale lower our by installed on materials. increase our realized of

$X.X profit machine offset The was Turning XX.X% a talk revenue quarter to margin. lower Slide the million, we'll the for XXXX, about sales. margin fourth by volume driven profit a resulting XXXX. primarily and for margin realized fourth in quarter, XX, on XX.X% of of down decline pricing Gross was higher gross partially by gross the in from quarter strong

XXXX $XX.X in reduction and improvement recorded facility gross lower The costs also exit in gross XX.X% our June $XX.X from costs benefited driven in initiated inventory global profit million The in For by gross expansion absence net of XX.X% compared XXXX. million cost was we from charges the program realized the and of margin XXXX of impairment realignment year, margin and year prior a XXXX. resulting to period. a the fixed

$X.X we'll Please about fourth increase our XXXX our marketing discuss up is Slide This SG&A XXXX, in turn investment Comparing quarter primarily sales to expenses XX, to global million. infrastructure. and to our SG&A. were driven and of by the $XXX,XXX

We continue global to see general realignment stability in cost XXXX program. in following our our operating expenses

prior including XXXX were reductions decreased costs approximately by and which we our to Fair, with The offset $XX.X improvement and associated investment the million. our cost associated GIFA our by Trade and discussed selling by cost For efforts, for program, in our realignment global executive driven with the SG&A was during employee incurred $XXX,XXX management marketing costs calls. which consulting changes year,

annual to R&D. $X.X R&D Slide declined increased to XXXX $XXX,XXX and in expense by whereas expense spending $X.X investment we'll by our to turn discuss Please Fourth million, about million. quarter XX, $XXX,XXX R&D

development partially cost were of year the with of offset XXXX printer and XXXX The full by in the These savings reflects lower and resulting benefits consulting our S-MAX costs. realignment associated global XX costs our Pro employee-related program, platforms. XXPro

turn backlog as agreements. you, the review our from Now I'll lease firmly remind XX, and of includes our customers. machine our our portion orders backlog. cancelable revenue if received well operating It includes recurring committed machine as contracts To you'll to maintenance Slide non

Backlog also global includes contractual funded ended our end XXXX. approximately to research and other the direct with year including the a indirect compared of services, and $XX.X balance orders printing record from backlog operations development. million at and $XX.X million We of

in binder portfolio the in expect the our our XX, technology. We to We including and the platforms leading for of global manufacturing, additive space in expanding XXXX, macroeconomic the for our global product business certain market despite remain basis of confident December adoption coronavirus. within the negative XXXX our market position impact jetting at newly our combination given manufacturing printer for and of backlog growth acceleration provide trends introduced

XX. and fourth fourth won't positive X X months I'll quarter. a our XXXX flows. flow here. cash repeat $XXX,XXX chart the the quarter section Turning that the the net I to during waterfall a months cash you on reviewed Slide approximately right. first XXXX through of fourth turned previously, represents We Instead, quarter Since This of first I walk

This of cash and million Germany, was our the primarily combined which net Houston, received sale sale Gersthofen, $X.X in the former by driven facility, of generated proceeds quarter. facility the operating European and headquarters increase from for operating Texas in our

credit related repay fully cash facility, borrowings This XX. at to party outstanding available allowed December us on generation was which our revolving our

primarily we tied our net outflows had installation cash QX, in changes, activities. to increase unfavorable due mostly loss still net our to operations, capital from narrowed an we in working While inventories machine

approximately We Our million for anticipate to $XXX,XXX. of cash fourth $X the XXXX. million capital in were expenditures to quarter cash CapEx $X planned limited spending

which XXXX, the Slide as to At $XX.X into year-end end liquidity had of total you account at our turn we XXXX takes XX, of the liquidity XXXX. early see as XXXX. pro actions with will we the compared well million $XX.X at end of you'll XXXX, If in liquidity certain total forma XXXX, million took

the XX, our total On of our proceeds December operating completion from the headquarters in sale liquidity in Gersthofen, Germany, forma in and position and XXXX. right, which remaining which of can chart, facility XXXX, see rolls you the European takes pro closed the February leaseback

approximately of $X.X cash $XX.X unrestricted which included proceeds December total to in XXXX. This was transaction at resulted us net in and of equivalents approximately million, million cash XX,

amendment the to which term party credit total the million. pro a This an through $XX our related forma into XXXX. of entered extended generates revolving facility approximately and -- million of we Separately, revolving to million credit reduced facility, amount liquidity $XX.X the the under $XX available March facility

an cut burn program and operating significantly cash and generation In necessary, when ability the cost flow growth XXXX, to remains realignment profitable XXXX modify on model, example. shown XXXX, we as business. centered our our our for compared cash focus operating as We've the our global to rate

shown non within management liquidity cost efficient and and dilutive effective identify of our growth the support on low-cost business. execute to initiatives. on our focused sources remain ability We to We've also

to believe that near-term liquidity to support continue growth our sufficient plans. We have we

overview wanted in Turning the operating an provide to pro forma Slide actions We related we of the February XXXX completed XX. to and impacts liquidity on model. our additional

rate. run of We replaces rent which annual with expect our $XXX,XXX approximately annual the incur expense completed leaseback sale $X.X depreciation million, to associated

in gain our We expect also sale $X.X of XXXX to the approximately on recognize a quarter. million first

my I'll That it now, to comments. prepared concludes turn John. back And

John Hartner

and see as Please Slide we discuss to it. economic Doug. Thanks, the current I'll turn XX, backdrop

the chart XXXX grow. that in were initial predictions would for As here, production noted manufacturing

of the well has as of ExOne, our With before caused COVID-XX, that was customers continuity our However, to health and employees outbreak significant business uncertainty. remains for our our which our and priority as respect the partners.

countries, subcontractors At chain XX% Italy, highly present given not have Korea, China, to annually our but about impacted market from certain we the supplies, has a time, we impacted, do From XX% revenues risk. particularly our global South our been supply a of reach, note are electronics, that only business. perspective, -

situation needed. We are adjusting where monitoring closely the dynamically and

where I outlook. to our that, me XX, discuss will turn With let Slide

attributes lineup believe under year, pipeline, remains backlog our momentum in have a factors We positive our by driven operational followed our These several new and and customer-facing expanded capital us solid into include these record the machine Also, position control. team. entering growth XXXX. driving by margins XXXX. favorable for spending solid well We and

Finally, our to sheet capitalized our growth. is balance strong and well support

feel on continuing We the plan COVID-XX. and it's quantitative don't to give so We economic there's unknown macro focused our much remain quantitative future including prudent provide currently strategic may time to guidance a of uncertainty, in guidance However, specific execute for periods. period. impact

Please will expanded sustainability. we with close on that at our realized ExOne, our I we've to And the communication recently jetting Slide our binder sustainability technology and commitment to XX, green. We, always that turn stakeholders to is have value provide.

sustainable Our deliver our a technology of jetting to without lends drivers. to to binder processes, number manufacturing manufacturing sustainability limitations. vision is itself Compared traditional

lighter these weight even materials. parts components, less here, using listed As recycled waste, consolidation of include and

Sustainable supply are closer qualities, they but and aware Supply that risk. stakeholders want chains more that are our are really our customers to the of. decentralized, chains end shorter, and we customer be are new, becoming sure to with are These important. not factors less

prepared for And up let's my questions. now open the comments. concludes That lines

Operator

from FBR. question. Please you. Thank the B. [Operator proceed Our comes with Instructions] line Van your of with Horn first question Chris Riley

Chris Van Horn

Good for my Thank morning, taking you call. everyone.

John Hartner

Morning, Chris.

Chris Van Horn

guess, of But right are time? XXXX real it's in somewhat are where kind customers from know at shutting our situation, kind marketplace I quantitative seeing So of a I to alternative down the and suppliers level. seeing our what maybe plans. hard now, you it's a look fluid And you making just

John Hartner

that. with start I'll

in and facilities Obviously, are earliest point. say at again the was I'd this China. customers starting calls impacted with Asia Their region. up So some varies it by

So then expand production they're to looking capacity to manufacturing. with stabilize move digital and

been And recently strong impacted a say. that And do region. rest market of Asia, continue there, very of not significant has is and for have to although we I the conversations, similar In has the seen is those good across it Europe, an would in customers Japan as attitude pausing, be us. uncertainty.

expanded in significant here In customers as and well and opportunity we customers programs had moving customer as America, finalizing have be organization, We which forward week, the facing appear in many this ways. to North projects. pipeline

But good next forward. this news the then there's of backlog, year. in feel, change it the you our sales vary sometimes our people's pretty about combination sheet, balance confident to move day's our up I feel by and Americas, and minds. wake the So confidence products, force, region, may our does new we But well-capitalized

Chris Van Horn

Okay, And a mix on of strong the little visibility the that you on your great. that backlog? then color us give Could Thanks end-market some of into backlog, focusing And obviously. maybe on backlog? really for color. the growth, bit perspective then

John Hartner

there. start I'll Yes,

as far the by broad. mix positive our again, very the is technology industry, As of its things one about

So a I with very as cyclical we there's consumer built broad people and that are customers, general business not pumps industrial. for industrial a and and spending. have lot that things utilities, mean, Aerospace, brackets of Automotive related to

So and both it geographically broad. is industry

So - Doug, think I concentration. there's add you anything particular else? Yes, no would

Douglas Zemba

the sort to certainly that, of XXXX. that uptick that's fair. an mid- product introductions we I year in based think that did saw related on We backlog

flight us. PRO we've are starting the a take got S-MAX share and to for the XX Pro So nice of

of the component as do part a early that up us you XXXX. that So sets there, for and see really

Chris Van Horn

P&L? Got it. to backlog on the when visibility good that comes just give then is And the that of timing you Okay. of

John Hartner

Yeah, sure.

end our is, the is we XXXX. in So recognize there $XX.X from of of that's the year, to something at million perspective, $XX.X expect million the

Chris Van Horn

some kind you you it. perspective and just what last year? do during then what on -- Got shipped Okay. do know out of the year, booked break put you And to

John Hartner

typically don't the one the an wide. the disclose we finished variability It's to We that from to actually time project. the time And the order that. the quite transaction reason being from we next take

That then multiyear take can period in can separate these a and of a a period. be in through work discussions of a deliver ultimately and we forms. Some bunch where different start process one product

we take before have cases, that. at order and turn it quickly, rather an may other on the discussions In Genesis well had which

their So so use operationally run it's not how because we're at adoption discussions where in different a fluid statistic just many in they're and with to customers cycle. that we

Chris Van Horn

shape capital Okay, fair enough. looks a perspective, like in here. And then from solid you're pretty

spend you CapEx to I million in XXXX. mentioned think million $X $X for

use And anything you that - else investments, cash might that working capital, you for cetera? et so continued

John Hartner

we And of I to business, talk Yeah. expanding lot parts revenue. which that a is think that the is a our related recurring our investments capital about,

So there. we're opportunities positive, and that's a seeing

matter have fact, we standpoint lead a reduce from capital a of As and lean machine several projects a times. processes implement standpoint, working to from

but So see increase large a quarter-to-quarter. lumpy we there, don't it sometimes is

point, happy So have cash uncertainty, to back we're large capital this - a quite at and with capabilities. the we're

Chris Van Horn

so you present Thank Okay. to morning. this much

John Hartner

Chris. Thanks,

Operator

Thank you.

Kinstlinger with next from comes proceed Our question Brian question. your with Alliance Global the Partners. Please

Brian Kinstlinger

Great. so I is. much Thanks appreciate the how environment difficult

printers. With for critical fewer to your most I business unless your right are the limited coming evaluate to companies, prospective now assume travel, customers facility it's

the strategy wait can expect clarity? should adjust for And few sales while few continue very How extended printer environment in should its months we next the company this more for we sales period?

John Hartner

for the thanks question, Well, Brian.

a first activity that's the we you're and in the is order also, positive occurred situation, the There Firstly, have, quarter. large already right. but backlog is fluid thing

As the Previously, forward team had we inside team, part, for a of we also sales. facility most customer talked having about facing is that strategy our of our folks in deployed. expanded

team is closer deployed Now forward to customers. our

us the allows customers serve firstly, to better that, regions. all So - across

I ability use we've to enhanced would Secondly, say that tools. our digital

very wide and of use video conferencing meeting teamwork We type have rooms.

a to trade may to able well been not continue side. that ability on expanding to whenever are customers to And even as that digital marketing are the to talk trade our There we're flipping several as canceled. we've shows travel. being And be show. So that they

to of as have forward, differences. most in But things positive far would as in the moving mean, the see. we I described orders term? seems my the and I pipeline. the short earlier in Q&A plenty Americas about little impacts I the that say be How geographic we'll bit

close to anticipate, we'll able we be So things.

sitting we're of in it's play a is going chain, remember, And continue our kind whether disruption whether to - bringing to see closer because to because The to macro manufacturing digital that supply situation tariffs, end-use aspect a the of strengths. and been a supply of where here chains viruses. it's we're there's the trend a of of

And so I looking make a trend customers think lot of long-term to for continuing decisions future. are and at the that

Brian Kinstlinger

talked Great. from versus in And backlog. confidence with that said, Of expect how that sources? Sales million XXXX, the you $XX you about your the with is much of Machine that other

Douglas Zemba

Sure.

sales say, machine $XX million. would roughly, be, So let's

So a would we quicker our turn as a than recurring you revenue, imagine, sale. lot system

the large it Machine. So of chunk geared toward is

Brian Kinstlinger

almost Great. answer from And kind question, the first can complete quarter? thus have John's market, if and the far quarter the you've of anymore, you printers in you hand? you And first can do sell uncertainty in sold quantify with the revenue many in already then again, the how first to what

Douglas Zemba

Yes.

It's pretty -- weeks of few a there's state. on related the a that's lot to company. going a with fluid to spare, So

I is So first confident And quarter. don't that prior number knock feel comp low. for was want not we type range. I we've you tell of give to any specific year the our got number It the that or the firepower best is quarter. can pretty pretty out What that to

the half first in machine were XXXX. from we end where of considering runway and backlog for of the projects over the lot of hanging these That's 'XX. at a our Looking

in continuing first did first contracts order we've the the In - up part that's the pick flow more had right now, to continued to out with we same uncertainty the period Obviously, of we've there XXXX. quarter, during in certainly than we're XXXX.

off really a us sustain fairly that up to We're shelf that of not turns it and company sells quickly. product time. well period sets a So the

we just So us It's to of these execute. projects. into were a number already incumbent upon

Brian Kinstlinger

are your you or Great. access assume, subs think, Still, I those systems, new remarks And to And China to so for machine? supplies those build your China. from some able right mentioned highlight maybe electronics sourced what can I then to you that are? sourced, that make are supplies from you prepared manufacture - now in

John Hartner

Yes.

they have things direct that We've may not adequate and they and our supply have suppliers, be electronics. us we our suppliers, impacted. should various So with supplies gone through modules told and contain have our

However, China. components they that sourced may embedded ultimately some be note do from

of controls conversations we've their vendor, with us a Our good well company through feel large year. primary positive are chain kind serve Siemens, in redundancy our them. and with ability out supply sophisticated that had reached They to obviously this and has

And again, majority we that We ready. with that backlog, of to a have I already ready mean, and are built go. that,

So future the the orders it's oriented really more of year. half second the towards in

Brian Kinstlinger

remind some prices price got your but I've question that, us Last to how is Great. new technology? can older the customers you your compared of I are points two reacting are And printers? to think, higher

John Hartner

in binder Well, cases, one I the things of enhancements jetting core. everybody some of the remind want to is in our

That broadens is of the better Our application. cost ownership. drive to objective

X.X as the Pro, held faster, features, That Industry tend to machine as other capabilities. million. forward. over the to XX% output, S-MAX to $X So that price is the Relevant we're be multiple from prior such system. was moving way addition But those in far is the point as

able XX set material our system the higher a standpoint. ownership is is system compared productivity-wise, approximately $XXX,XXX. were Ampower. better But cost system, to to smaller from a than had that that capability In smaller a similar it that compared of do That to systems has PRO, a less

Brian Kinstlinger

Great. Thanks so much, guys.

Operator

Thank you.

of comes Dorsheimer question. question your Jed from proceed line next Canaccord with with the Please Genuity. Our

Jed Dorsheimer

going given fluid think situation contribution sort how or to that's for to the geographies between Thanks just geographies of question. it's of change hitting different and sand timing guess, the Do - I metal? taking my is Hi. you different and the vastly different.

of, given in the around? terms as are backlog, you that will in there thoughts Thanks. be your And that what you confident were in, some movement feel do think you coming

John Hartner

we see in it really get a don't - XD which from never parts, other than shift that metal for started. I'll a a printed opportunity standpoint. production where to metal continues sand the direct and environment mean, metal normal expectation Okay. were I guess, I between be long-term adoption a

virus this or mix. other broadly see don't we impacting So that changes

things footprint I to again, an mean, up other investment the us in say, regions I'm to, maybe global situation companies. ways, let's for and and in compared ability customer-facing the the made manage Geographically, gives resources higher some or some speed - we of the have, different in one be - the go we

I the the some shift is initially. to back hope a then in may obviously from customer good. year, area. quarter-to-quarter, slowness would closer in Asia up. that And being geographically, comes a But we see see we later always don't we that, So product and mean, anticipate

Jed Dorsheimer

it. Got

to how with just that backlog those any customers' contracts that are major question, of written, respect forced there at risk? clauses are your in put there Second and

Douglas Zemba

- conditions a we've lot are not that. customers In out And had money. discussions about other relative to mean, prior down terms and this any Certainly, of at I we've on our payments point cash of standard, and commitments. backing taken their

about pretty feel good we So that.

John Hartner

Okay.

remind significant get customer, a using this and solution. have printing closer to the chain just point-of-use long-term that the deposit XD down - is customers. - element the to to getting the Again, and to We want digital I closer manufacturing supply really of disruption,

executives We're getting more and are that. more discussions where understanding senior

funded be projects that projects continue regard. in - to so And long-term really

Jed Dorsheimer

America - remind when what North That's me the the look like helpful. at XXXX, the of breakdown we Asia, Europe? Could geographic you between what will look and

Douglas Zemba

from we've a above XX% us let's - Asia. pretty for That's for year have I they say, strong had perspective, been actually has XXXX anywhere been was U.S. just or, So a our regional the of our to, from split. what leader. Americas, XX% we predominantly guess,

a been expect the as percentage little that low in in of We maybe pretty Europe revenues down XXXX. has bit And our a balanced XX%. to come total

to how - and region have with any decent we balance deliver because exposure in no globally. we specific terms we to customers, a one operations pretty So of decentralized have we're

Jed Dorsheimer

- I'm I'm Yes. that's No, just trying come - like trying the just Asia to to helpful. get seems the worst. has through it

this where the of And get more seem Europe of to like a so, strength, seemed and it second don't providing America would at you a North wave, be point. area that's wildcard

some shift I you it relatively assuming that's how and able that be shift. that understand in might you backlog. was can - of I'm terms like what And why to better would that might to of look quickly that And trying

Douglas Zemba

we're sort think John was happen short explained Asia an regions, related bit going certainly, us to shoe the of already. I unknown at little or it's of this - the in effects the I in a that XXXX to it, to for that drop the currently other first mean, way What's feeling Yes, point.

But long-term are pretty typically again, are Six these some longer. cases months. projects. In

recovered a time that that if for out of stretched it days we're the So same period Jed. there's XX, XX year, there's gets fiscal into already a we within something,

John Hartner

point - I manufacturing wins. where And again, digital that it's Yes. chain just, supply would both the

customers so those long-term And to programs. want follow

they or number other that machines, of of them to I'm methods. traditional metal thing design reminded with these going to, build customers the a The cannot products is I've direct their in they're that talked manufacture

certain want that launch they that they in to supply vehicle if components that product. a that chain ensure to has continue be is So to the able lightweight launch need to program XXXX, XXXX, ready to

discussions. take And deep a see long-term to we're programs to seeing stopping. any that while develop, they're continue those as So do said, they not sign in Doug but we

Jed Dorsheimer

it. Got I appreciate much, it. guys. Thanks so

Operator

Thank you.

line question Luke comes your next Nokomis with of Gittemeier Capital. question. proceed from the with Our Please

Luke Gittemeier

guys. Hi,

quick margin down line? guess, EBITDA the sort revenue Can a of, versus a between bit printer to of what the, talk you profile revenue. sort about the the margin those difference two little I and Just question on recurring gets gross

John Hartner

Sure.

operating pretty singular much operation. we a So are as

So we product really our don't out margins per groups. break

follow So - sell but the stream system the what generally a recurring to similar for. revenues

of of a there's lot -- see lines So lot dispersion a business. of two we not the don't between

Luke Gittemeier

Appreciate thanks. Great, it.

John Hartner

Sure.

Operator

Thank Manager. your Please question. from Our Investment proceed next you. line comes with of [indiscernible] question the Instructions] [Operator

Unidentified Analyst

number cap, in getting - getting but of with there such a as the binder huge you've the Hewlett-Packard manufacturing market morning, a in manufacturing. desktop companies maybe end-product industrial question. GE. appear in printing additive jet areas, heard guys. especially I've way I desirable for going have years, Good to into been And the area and metals jetting be of binder areas now other this that X and in for there

points having does And course, see takes this? get with new How them? it others? how against ExOne? compared are selling cetera, of on you're do what course, comparing your effect the jet with time to orders entrants your your binder the advantages the and, what offering, et might And And on offering be and the you of

John Hartner

direct the So to a of that's metal We've competitors right. advent there. of that more other the positive. way in people is joining industry, real knowledge is The - into known are there's of the recognizing parts. the We've manufacturers production been building you're a printing jet years. case. That's expand a absolutely just that for recognition a is points say, that base number for than time. long People I right XX that are would our binder for applications

positive is that of validation what we've done. So

buy really have, of they you say of and is, are today, us. entering, but systems. the to where And the are we our reality productivity our they have, the installed that's the is When that's one advantages we entering main real products are announcing, from base experience they

long-term for solution not process. Binder jetting It's is production. a simple that

other fully And expand And to we get we to of can aspects competitors' that business. to our continue so presence that recognize particular take it in market. will the time into and time, the relate

we the say that all announced to XXX deck will well related received. are Pro technology. had launched. this XX being that and has new end we've competitively, PRO, the Those that at and in have modular antidote an I'd very deliver year the the of the machines I

from actually getting customers. of attention So be proven therefore, is that other we've scaled platforms production components a out in will lot core up,

to that and. scalable. multi-off production on in Why? and not ability And - in multi-systems Because and a putting these experience parts. they one-off, X.X ability They it and to level rely has production run know our They're great the but facilities, therefore, we're position. make feel can need robust this connectivity. has It we they experience that Industry

So thanks the question. for

Operator

teleconference I'm to back for - Thank turn management final concludes today's session. you. floor This any comments. now I'll our sorry. concludes This the question-and-answer

John Hartner

team digital the Good. of updating and innovation manufacturing. transformation interest you you today, quarter members world day. hard for for And a May. to for collaboration, and in great to progress to the your again our acceleration your first on drive have thanks our in around work Thank who time ExOne. Thank forward you We look

Operator

This today. conference concludes our

your now You participation. your Thank may lines. you for disconnect

ExOne (XONE) 13 Mar 202019 Q4 Earnings call transcript