ExOne revenue growth stable for Q1 2021, but $ 48 million backlog looks promising
Binder Jet 3D printer manufacturer ExOne (XONE) revealed that despite a recovery in demand within its U.S. business, its revenue fell slightly by 3% in the first quarter of 2021.
In the first quarter of 2021, the company’s financial data shows it generated $ 13 million in revenue, 3% less than the $ 13.4 million reported in the first quarter of 2020. Citing a “difficult operating environment Caused by COVID-19, ExOne says it has been unable to finalize orders due to travel restrictions, but expects to be able to convert record $ 48 million backlog and resume growth by now the end of the year.
Elsewhere, rivals throwing binders Office metal and voxeljet reported annual revenue growth of 234% and 5% respectively in the first quarter of 2021, although the former injected $ 182 million to expand its portfolio. Following the release of the results, ExOne shares fell 10% at the start of trading, but they recovered quickly and the company continues to forecast 15-25% growth in fiscal 2021.
According to ExOne CEO John Hartner, the company began to see signs of an “economic rebound” during the first quarter, particularly in the US markets, which significantly increased its order backlog, and he expects that As COVID-19 will begin to recede later in the year, customers will continue to look for new ways to transition to localized 3D printing production.
“The ExOne team is pleased to report record levels of recurring revenue and machine backlog, which shows the strength of our product offerings, our adoption model and our momentum,” said Hartner . “We look forward to entering the post-pandemic period with new favorable winds, as manufacturers seek to reduce supply chain risks and improve the sustainability of their products.”
“With signs of a broader economic recovery on the horizon, we see the remainder of 2021 as the start of our next phase of growth.”
ExOne first quarter 2021 financial data
ExOne reports its revenue in two main segments: 3D printing machines and 3D printed products and others, the latter including any revenue generated from its services and materials business. The company’s 3D printing machine revenue fell 22% between the first quarter of 2020 and the first quarter of 2021, from $ 6.3 million to $ 4.9 million.
Even though ExOne has now amassed an agreed backlog of 45 machines, it says pandemic-induced travel restrictions in Asia and Europe have impacted its ability to perform installations. However, as the global vaccine rollout begins to take effect, Hartner said he expects “almost all” of that $ 48 million backlog to be cleared, which would amount to revenue in “two to three. coming quarters ”.
The company also saw a decrease in the quantity of machine orders between Q1 2020 and Q1 2021, which fell from 14 to 7, but this was somewhat offset by the shift of its entry-level Innovent systems. range to higher value X1 25Pro machines. Going forward, the company now expects this sales trend to continue, which could provide further growth opportunities when it launches its new X1 160Pro 3D printer in 2022.
In contrast, ExOne’s revenue from its 3D printed and other products division actually increased in the first quarter of 2021, from $ 7.1 million reported in the first quarter of 2020 to $ 8.1 million. . During the company’s earnings call, Doug Zemba, CFO of ExOne, described the division’s revenue growth as an “area of strategic focus” and said it brought “stability in the face of volatility. economic ”observed during the first quarter of 2021.
As part of its operating costs, ExOne was also able to reduce its expenses in the sales, general and administrative areas from $ 6.2 million in the first quarter of 2020 to $ 5.9 million, which further mitigated lost revenue due to sales of unconverted machines. This decrease is mainly due to lower personnel costs and travel costs due to COVID-19 and a one-time net bad debt collection during the quarter.
|ExOne Financials ($)||Q1 2020||Q1 2021||Difference (%)|
|3D printing machines||6.3 m||4.9 m||-22|
|3D printed products and others||7.1 m||8.1 m||+16|
|Total revenue||13.4 m||13m||-3|
|Backlog||33.8 m||47.8 m||+41|
ExOne’s long-term R&D strategy
Rather than continue its cautious approach to organic investing, ExOne has now indicated its intention to increase its internal spending during the remainder of 2021 by 20-25%. Indeed, the company aims to expand its machine building capabilities in the United States by developing its team there, allowing it to convert its backlog into revenue as quickly as possible.
During the company’s earnings call, Zemba also identified an “increased interest in binder jetting” and said it would increase its spending on R&D, to develop materials that take advantage of this trend. . As part of this initiative, ExOne has already worked with Ford develop a new rapid process for spraying aluminum binder, and the company now sees these R&D contracts as a valuable means of advancing its technologies.
Likewise, ExOne has partnered with a Swedish start-up Celwise to 3D print porous metal tools from a wood-based material, using technology similar to that developed by Desktop Metal’s Forust subsidiary.
In the short term, ExOne acquired the “ AMClad ” assets of Freshmade 3D in April 2021, and it now intends to expand its “ AMClad ” process and generate revenue through an agreement with a global aerospace customer. The company also launched its Rapidia-powered Designlab 3D printer at AMUG 2021, and Hartner said it not only received an “exceptional reception” but had “order commitments” ahead of its launch in the second quarter. .
Additionally, although the company’s X1 160Pro system is not expected until 2022, Hartner said the company already has a series of “big brands lined up” to adopt the machine, and is working hard to achieve it. bring it to market quickly, in order to take advantage of this demand.
Upcoming “challenges” during fiscal year 2021
In his closing remarks, Hartner admitted that ExOne still faces “challenges” related to COVID in the second quarter of 2021, but added that “increased confidence from US customers” led to “excess demand. For his systems there. The company therefore plans to convert these orders into sales later in the year and, with the continued deployment of vaccines, it anticipates a recovery in its EMEA and Asia businesses by the second half of 2021.
Earlier in February 2021, ExOne also completed a takeover bid for common shares, which raised $ 95 million, bringing its total cash balance to $ 138 million as of March 31, 2021. Accordingly Hartner concluded that the company had a track record of “investing in external strategic opportunities”, as well as in its organic expansion plans.
“While there are still some execution challenges due to COVID-19, particularly in Europe and Asia, we are confident that our operational plan for 2021 is well supported,” Hartner said. “In addition, improving our liquidity position gives us the opportunity to strategically invest in further growth.”
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The featured image shows a row of ExOne 3D printers. Image via ExOne.