ExOne Logo 3D Printing Industry Feature

By On Wed, February 17, 2016 · 3D Printers, Business, Stock MarketAdd Comment

ExOne (NASDAQ: XONE), a developer of industrial sand and metal 3D printing devices, raised over $150M in 2013, benefiting of the worthwhile interest of investors in 3D printing innovation. Since and so, ExOne’s cash position has sharply decreased to $15-20M at the end of 2015. XONE share price has followed the same trajectory as its peer’s with a near 10x reduction since the 2013 peak.

eXone share over the last 2 years

ExOne share over the last 2 years

Focus on Metal and Production 3D Printers

ExOne’s binder jetting innovation is centered around larger industrial 3D printing devices that can create metal parts (stainless steel, bronze, iron…) and industrial series production. It is a mid-dimensions 3D printing player founded in 2005 as a spin-off of Extrude Hone Corporation. Annual sales have plateaued since 2013 at $40M. Services represent over two-thirds of the sales, a higher than usual percentage.

CEO is Further Investing to assist Grow the Business

ExOne’s cash position depleted worthwhilely in 2014 and 2015 to a level of less than $20M. In January 2016, ExOne decided to go on the road to raise a extra
$50M. Considering the volatility of the markets, it’s great news for the company that the CEO has deep pockets and full trust in the ability for ExOne to reach profitability soon. S. Kent Rockwell, CEO, invested 13M$ on the 11th of January to bring his shareholding only under 30%. He commented, “We believe customers, globally, are adopting our 3D printing innovation and transforming their making processes at an accelerating rate, that is requiring ExOne to have the availability of extra
working capital. I assume that these funds can provide the Company proper liquidity to meet our 2016 objectives of growth and profitable performance.

S. Kent Rockwell, CEO eXone (XONE)

S. Kent Rockwell, CEO ExOne (XONE)

ExOne Needs More Capital and… a Better Margin

It is always really great to see a CEO investing extra
into their own business. The dimensions of S. Kent Rockwell’s new investment in ExOne coupled with his quite worthwhile shareholding are a quite sturdy message to the investment community. On the other hand, ExOne is facing worthwhile challenges: the share of systems revenues (revenues of the sale of 3D printing devices) is low, revenues have plateaued at $40M since 2013, and the gross margin is low, at under 20%. To bring their margins in line with its peers, at over 40%, ExOne can require to worthwhilely increase the share of systems revenues, and it requires to do it rapidly as cash consumption is worthwhile at over $20M a year. Following Rockwell’s investment, the company has adequate cash to finance its operations in 2016. Failing to raise additional cash in the following 6 months can pretty hustle the CEO to appear for a buyer…

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Samuel Adams

About The Author

Samuel is passionate by value driven investment strategies on stocks and financial markets