xone-10q_20200630.htm
false 2020 Q2 0001561627 --12-31 Accelerated Filer P1Y P1Y P5Y 2020 P60D P30D P3Y P5Y 2020-10-31 2023-02-28 P5Y P3Y P3Y P40Y P20Y P20Y P2Y6M 3.48 3.68 0.540 0.601 0.022 0.025 P2Y6M P3Y6M 0001561627 2020-01-01 2020-06-30 xbrli:shares 0001561627 2020-08-06 iso4217:USD 0001561627 2020-04-01 2020-06-30 0001561627 2019-04-01 2019-06-30 0001561627 2019-01-01 2019-06-30 iso4217:USD xbrli:shares 0001561627 2020-06-30 0001561627 2019-12-31 0001561627 2018-12-31 0001561627 2019-06-30 0001561627 us-gaap:CommonStockMember 2018-12-31 0001561627 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001561627 us-gaap:RetainedEarningsMember 2018-12-31 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001561627 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001561627 2019-01-01 2019-03-31 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001561627 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001561627 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001561627 us-gaap:CommonStockMember 2019-03-31 0001561627 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001561627 us-gaap:RetainedEarningsMember 2019-03-31 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001561627 2019-03-31 0001561627 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001561627 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001561627 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001561627 us-gaap:CommonStockMember 2019-06-30 0001561627 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001561627 us-gaap:RetainedEarningsMember 2019-06-30 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001561627 us-gaap:CommonStockMember 2019-12-31 0001561627 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001561627 us-gaap:RetainedEarningsMember 2019-12-31 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001561627 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001561627 2020-01-01 2020-03-31 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001561627 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001561627 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001561627 us-gaap:CommonStockMember 2020-03-31 0001561627 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001561627 us-gaap:RetainedEarningsMember 2020-03-31 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001561627 2020-03-31 0001561627 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001561627 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001561627 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001561627 us-gaap:CommonStockMember 2020-06-30 0001561627 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001561627 us-gaap:RetainedEarningsMember 2020-06-30 0001561627 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 xbrli:pure 0001561627 xone:SubsidiaryGuarantorsMember 2020-06-30 0001561627 us-gaap:RevolvingCreditFacilityMember 2020-06-30 0001561627 xone:InitialAndSecondaryPublicOfferingsMember 2018-03-14 2020-03-31 0001561627 xone:EquityDistributionAgreementOppenheimerAndCompanyMember 2020-01-01 2020-06-30 0001561627 xone:EquityDistributionAgreementOppenheimerAndCompanyMember 2020-06-30 0001561627 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001561627 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001561627 us-gaap:RestrictedStockMember 2020-01-01 2020-06-30 0001561627 us-gaap:RestrictedStockMember 2019-01-01 2019-06-30 0001561627 xone:PrintingMachinesMember 2020-04-01 2020-06-30 0001561627 xone:PrintingMachinesMember 2019-04-01 2019-06-30 0001561627 xone:PrintingMachinesMember 2020-01-01 2020-06-30 0001561627 xone:PrintingMachinesMember 2019-01-01 2019-06-30 0001561627 xone:PrintedAndOtherProductsMaterialsAndServicesMember 2020-04-01 2020-06-30 0001561627 xone:PrintedAndOtherProductsMaterialsAndServicesMember 2019-04-01 2019-06-30 0001561627 xone:PrintedAndOtherProductsMaterialsAndServicesMember 2020-01-01 2020-06-30 0001561627 xone:PrintedAndOtherProductsMaterialsAndServicesMember 2019-01-01 2019-06-30 0001561627 srt:MinimumMember 2020-01-01 2020-06-30 0001561627 srt:MaximumMember 2020-01-01 2020-06-30 0001561627 2020-07-01 2020-06-30 0001561627 xone:UnitedStatesBankMember 2020-06-30 0001561627 xone:UnitedStatesBankMember 2019-12-31 0001561627 xone:GermanBankMember 2019-12-31 0001561627 us-gaap:InventoriesMember 2020-04-01 2020-06-30 0001561627 us-gaap:LandMember 2020-06-30 0001561627 us-gaap:LandMember 2019-12-31 0001561627 us-gaap:BuildingAndBuildingImprovementsMember 2020-06-30 0001561627 us-gaap:BuildingAndBuildingImprovementsMember 2019-12-31 0001561627 us-gaap:MachineryAndEquipmentMember 2020-06-30 0001561627 us-gaap:MachineryAndEquipmentMember 2019-12-31 0001561627 us-gaap:PropertyPlantAndEquipmentOtherTypesMember 2020-06-30 0001561627 us-gaap:PropertyPlantAndEquipmentOtherTypesMember 2019-12-31 0001561627 us-gaap:BuildingAndBuildingImprovementsMember srt:MinimumMember 2020-01-01 2020-06-30 0001561627 us-gaap:BuildingAndBuildingImprovementsMember srt:MaximumMember 2020-01-01 2020-06-30 0001561627 us-gaap:MachineryAndEquipmentMember srt:MinimumMember 2020-01-01 2020-06-30 0001561627 us-gaap:MachineryAndEquipmentMember srt:MaximumMember 2020-01-01 2020-06-30 0001561627 xone:OtherMember srt:MinimumMember 2020-01-01 2020-06-30 0001561627 xone:OtherMember srt:MaximumMember 2020-01-01 2020-06-30 xone:Asset_Group 0001561627 2019-01-01 2019-12-31 0001561627 xone:RelatedPartiesUnderCommonControlMember 2020-04-01 2020-06-30 0001561627 xone:RelatedPartiesUnderCommonControlMember 2020-01-01 2020-06-30 0001561627 country:DE xone:PurchaseAgreementMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2019-12-10 iso4217:EUR 0001561627 country:DE xone:PurchaseAgreementMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2019-12-01 2019-12-30 0001561627 country:DE xone:PurchaseAgreementMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2019-12-09 2019-12-10 0001561627 country:DE xone:PurchaseAgreementMember us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2020-01-01 2020-06-30 xone:RenewalOption 0001561627 srt:MinimumMember 2020-06-30 0001561627 srt:MaximumMember 2020-06-30 0001561627 xone:FinancialGuaranteesAndLettersOfCreditMember xone:AmendedGmbHCreditAgreementMember 2020-02-24 2020-02-24 0001561627 srt:MinimumMember xone:FinancialGuaranteesAndLettersOfCreditMember xone:GermanBankMember xone:AmendedGmbHCreditAgreementMember 2020-02-24 2020-02-24 0001561627 srt:MaximumMember xone:CashCollateralMember xone:FinancialGuaranteesAndLettersOfCreditMember xone:GermanBankMember xone:AmendedGmbHCreditAgreementMember 2020-02-24 2020-02-24 0001561627 xone:GermanBankMember xone:AmendedGmbHCreditAgreementMember xone:FinancialGuaranteesAndLettersOfCreditMember xone:CommercialTransactionsRequiringSecurityMember 2020-06-30 0001561627 xone:GermanBankMember xone:AmendedGmbHCreditAgreementMember xone:FinancialGuaranteesAndLettersOfCreditMember xone:CommercialTransactionsRequiringSecurityExpiringFromOctoberTwentyTwentyThroughFebruaryTwentyTwentyThreeMember 2020-06-30 0001561627 xone:GermanBankMember xone:AmendedGmbHCreditAgreementMember xone:FinancialGuaranteesAndLettersOfCreditMember us-gaap:UnusedLinesOfCreditMember 2020-06-30 0001561627 xone:GermanBankMember xone:AmendedGmbHCreditAgreementMember xone:FinancialGuaranteesAndLettersOfCreditMember 2020-01-01 2020-06-30 0001561627 xone:GermanBankMember xone:AmendedGmbHCreditAgreementMember xone:FinancialGuaranteesAndLettersOfCreditMember 2019-12-31 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember 2018-03-12 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember 2018-03-11 2018-03-12 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember 2020-01-01 2020-06-30 0001561627 us-gaap:LondonInterbankOfferedRateLIBORMember xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember 2018-03-11 2018-03-12 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember 2020-06-30 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001561627 xone:CreditAgreementFirstAmendmentMember xone:LBMHoldingsLLCMember 2020-02-18 0001561627 xone:CreditAgreementFirstAmendmentMember xone:LBMHoldingsLLCMember 2020-02-18 2020-02-18 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember 2020-04-01 2020-06-30 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember 2019-04-01 2019-06-30 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember 2019-01-01 2019-06-30 0001561627 xone:LBMHoldingsLLCMember xone:CreditAgreementFirstAmendmentMember 2020-06-30 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2020-06-30 0001561627 xone:LBMHoldingsLLCMember us-gaap:RevolvingCreditFacilityMember us-gaap:OtherNoncurrentAssetsMember 2020-06-30 0001561627 us-gaap:RevolvingCreditFacilityMember 2019-04-01 2019-06-30 0001561627 us-gaap:RevolvingCreditFacilityMember 2019-01-01 2019-06-30 0001561627 xone:HuntingtonNationalBankMember xone:PaycheckProtectionProgramLoanMember 2020-04-18 0001561627 xone:PaycheckProtectionProgramLoanMember 2020-04-18 0001561627 xone:PaycheckProtectionProgramLoanMember 2020-04-17 2020-04-18 0001561627 xone:BuildingNotePayableMember 2020-01-01 2020-06-30 0001561627 us-gaap:USTreasuryNotesSecuritiesMember xone:BuildingNotePayableMember 2020-01-01 2020-06-30 0001561627 xone:BuildingNotePayableMember 2020-06-30 0001561627 us-gaap:BuildingMember xone:NorthHuntingtonPennsylvaniaMember xone:BuildingNotePayableMember 2020-06-30 0001561627 srt:SubsidiariesMember us-gaap:StateAndLocalJurisdictionMember country:DE 2019-03-31 0001561627 xone:TwoThousandThirteenEquityIncentivePlanMember 2013-01-24 0001561627 xone:TwoThousandThirteenEquityIncentivePlanMember us-gaap:CommonStockMember srt:MaximumMember 2013-01-23 2013-01-24 0001561627 xone:TwoThousandThirteenEquityIncentivePlanMember us-gaap:CommonStockMember srt:MaximumMember 2013-01-24 0001561627 xone:TwoThousandThirteenEquityIncentivePlanMember 2020-06-30 0001561627 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2020-01-01 2020-06-30 0001561627 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2020-01-01 2020-06-30 0001561627 us-gaap:RestrictedStockMember srt:MinimumMember 2020-01-01 2020-06-30 0001561627 us-gaap:RestrictedStockMember srt:MaximumMember 2020-01-01 2020-06-30 0001561627 xone:TwoThousandAndNineteenAnnualIncentiveProgramMember 2019-04-01 2019-06-30 0001561627 xone:TwoThousandAndNineteenAnnualIncentiveProgramMember 2019-01-01 2019-06-30 0001561627 xone:TwoThousandAndTwentyAnnualIncentiveProgramMember 2020-04-01 2020-06-30 0001561627 xone:TwoThousandAndTwentyAnnualIncentiveProgramMember 2020-01-01 2020-06-30 0001561627 us-gaap:EmployeeStockOptionMember 2020-04-01 2020-06-30 0001561627 us-gaap:EmployeeStockOptionMember 2019-04-01 2019-06-30 0001561627 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001561627 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001561627 us-gaap:RestrictedStockMember 2020-04-01 2020-06-30 0001561627 us-gaap:RestrictedStockMember 2019-04-01 2019-06-30 0001561627 us-gaap:RestrictedStockMember 2020-01-01 2020-06-30 0001561627 us-gaap:RestrictedStockMember 2019-01-01 2019-06-30 0001561627 xone:OtherAwardsMember 2020-04-01 2020-06-30 0001561627 xone:OtherAwardsMember 2019-04-01 2019-06-30 0001561627 xone:OtherAwardsMember 2020-01-01 2020-06-30 0001561627 xone:OtherAwardsMember 2019-01-01 2019-06-30 0001561627 us-gaap:EmployeeStockOptionMember 2020-06-30 0001561627 us-gaap:RestrictedStockMember 2020-06-30 0001561627 us-gaap:EmployeeStockOptionMember srt:MinimumMember 2020-06-30 0001561627 us-gaap:EmployeeStockOptionMember srt:MaximumMember 2020-06-30 0001561627 us-gaap:RestrictedStockMember 2019-12-31 0001561627 us-gaap:RestrictedStockMember 2018-12-31 0001561627 us-gaap:RestrictedStockMember 2019-06-30 0001561627 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-06-30 0001561627 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-06-30 0001561627 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0001561627 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001561627 us-gaap:RevolvingCreditFacilityMember us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2019-12-31 0001561627 us-gaap:RevolvingCreditFacilityMember us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2020-06-30 0001561627 us-gaap:RevolvingCreditFacilityMember us-gaap:OtherNoncurrentAssetsMember 2019-12-31 0001561627 us-gaap:RevolvingCreditFacilityMember us-gaap:OtherNoncurrentAssetsMember 2020-06-30 0001561627 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember xone:TopFiveCustomersMember 2020-04-01 2020-06-30 0001561627 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember xone:TopFiveCustomersMember 2019-04-01 2019-06-30 0001561627 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember xone:TopFiveCustomersMember 2020-01-01 2020-06-30 0001561627 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember xone:TopFiveCustomersMember 2019-01-01 2019-06-30 0001561627 xone:TopFiveCustomersMember 2020-06-30 0001561627 xone:TopFiveCustomersMember 2019-12-31 0001561627 srt:BoardOfDirectorsChairmanMember 2019-04-01 2019-06-30 0001561627 srt:BoardOfDirectorsChairmanMember 2019-01-01 2019-06-30 0001561627 srt:BoardOfDirectorsChairmanMember 2020-04-01 2020-06-30 0001561627 srt:BoardOfDirectorsChairmanMember 2020-01-01 2020-06-30

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File No. 001-35806

 

The ExOne Company

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

46-1684608

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

127 Industry Boulevard

North Huntingdon, Pennsylvania 15642

(Address of principal executive offices) (Zip Code)

(724) 863-9663

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of class

Trading symbol

Name of exchange on which registered

Common stock

XONE

The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of August 6, 2020, 16,910,852 shares of common stock, par value $0.01, were outstanding.

 

 

 

 


PART I – FINANCIAL INFORMATION

Item 1.     Financial Statements.

The ExOne Company and Subsidiaries

Condensed Statement of Consolidated Operations and Comprehensive Loss (Unaudited)

(in thousands, except per-share amounts)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue

 

$

11,099

 

 

$

15,279

 

 

$

24,482

 

 

$

24,858

 

Cost of sales

 

 

8,009

 

 

 

10,137

 

 

 

17,763

 

 

 

17,074

 

Gross profit

 

 

3,090

 

 

 

5,142

 

 

 

6,719

 

 

 

7,784

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

2,369

 

 

 

2,537

 

 

 

4,845

 

 

 

4,969

 

Selling, general and administrative

 

 

4,488

 

 

 

6,167

 

 

 

10,651

 

 

 

11,590

 

Gain from sale-leaseback of property and equipment

 

 

 

 

 

 

 

 

(1,462

)

 

 

 

 

 

 

6,857

 

 

 

8,704

 

 

 

14,034

 

 

 

16,559

 

Loss from operations

 

 

(3,767

)

 

 

(3,562

)

 

 

(7,315

)

 

 

(8,775

)

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

53

 

 

 

71

 

 

 

117

 

 

 

142

 

Other expense  ̶  net

 

 

195

 

 

 

57

 

 

 

5

 

 

 

69

 

 

 

 

248

 

 

 

128

 

 

 

122

 

 

 

211

 

Loss before income taxes

 

 

(4,015

)

 

 

(3,690

)

 

 

(7,437

)

 

 

(8,986

)

Provision (benefit) for income taxes

 

 

8

 

 

 

99

 

 

 

234

 

 

 

(701

)

Net loss

 

$

(4,023

)

 

$

(3,789

)

 

$

(7,671

)

 

$

(8,285

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.24

)

 

$

(0.23

)

 

$

(0.47

)

 

$

(0.51

)

Diluted

 

$

(0.24

)

 

$

(0.23

)

 

$

(0.47

)

 

$

(0.51

)

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,023

)

 

$

(3,789

)

 

$

(7,671

)

 

$

(8,285

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

370

 

 

 

583

 

 

 

(468

)

 

 

(193

)

Comprehensive loss

 

$

(3,653

)

 

$

(3,206

)

 

$

(8,139

)

 

$

(8,478

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2


The ExOne Company and Subsidiaries

Condensed Consolidated Balance Sheet (Unaudited)

(in thousands, except per-share and share amounts)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

19,658

 

 

$

5,265

 

Restricted cash

 

 

508

 

 

 

978

 

Accounts receivable  ̶  net

 

 

4,531

 

 

 

6,522

 

Current portion of net investment in sales-type leases

 

 

292

 

 

 

213

 

Inventories  ̶  net

 

 

24,208

 

 

 

19,770

 

Prepaid expenses and other current assets

 

 

3,510

 

 

 

2,182

 

Total current assets

 

 

52,707

 

 

 

34,930

 

Property and equipment  ̶  net

 

 

20,609

 

 

 

38,895

 

Operating lease right-of-use assets

 

 

4,533

 

 

 

432

 

Net investment in sales-type leases  ̶  net of current portion

 

 

639

 

 

 

738

 

Other noncurrent assets

 

 

242

 

 

 

371

 

Total assets

 

$

78,730

 

 

$

75,366

 

Liabilities

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

1,128

 

 

$

153

 

Current portion of operating lease liabilities

 

 

1,754

 

 

 

158

 

Accounts payable

 

 

5,127

 

 

 

5,818

 

Accrued expenses and other current liabilities

 

 

4,183

 

 

 

6,942

 

Current portion of contract liabilities

 

 

16,438

 

 

 

11,846

 

Total current liabilities

 

 

28,630

 

 

 

24,917

 

Long-term debt  ̶  net of current portion

 

 

2,354

 

 

 

1,211

 

Operating lease liabilities  ̶  net of current portion

 

 

2,779

 

 

 

274

 

Contract liabilities  ̶  net of current portion

 

 

213

 

 

 

286

 

Other noncurrent liabilities

 

 

223

 

 

 

96

 

Total liabilities

 

 

34,199

 

 

 

26,784

 

Contingencies and commitments

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Common stock, $0.01 par value, 200,000,000 shares authorized,

   16,863,602 (2020) and 16,346,960 (2019) shares issued and outstanding

 

 

169

 

 

 

163

 

Additional paid-in capital

 

 

180,932

 

 

 

176,850

 

Accumulated deficit

 

 

(124,619

)

 

 

(116,948

)

Accumulated other comprehensive loss

 

 

(11,951

)

 

 

(11,483

)

Total stockholders' equity

 

 

44,531

 

 

 

48,582

 

Total liabilities and stockholders' equity

 

$

78,730

 

 

$

75,366

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3


The ExOne Company and Subsidiaries

Condensed Statement of Consolidated Cash Flows (Unaudited)

(in thousands)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(7,671

)

 

$

(8,285

)

Adjustments to reconcile net loss to net cash used for operations:

 

 

 

 

 

 

 

 

Depreciation

 

 

2,107

 

 

 

2,349

 

Equity-based compensation

 

 

449

 

 

 

1,081

 

Amortization of debt issuance costs

 

 

29

 

 

 

47

 

Recoveries for bad debts  ̶  net

 

 

(19

)

 

 

(150

)

Provision for slow-moving, obsolete and lower of cost or

   net realizable value inventories  ̶  net

 

 

305

 

 

 

131

 

Foreign exchange (gains) losses on intercompany transactions  ̶  net

 

 

(51

)

 

 

19

 

Gain from sale-leaseback of property and equipment

 

 

(1,462

)

 

 

 

Gain from disposal of property and equipment  ̶  net

 

 

(1

)

 

 

(2

)

Deferred income taxes

 

 

195

 

 

 

 

Changes in assets and liabilities, excluding effects of foreign currency

   translation adjustments:

 

 

 

 

 

 

 

 

Decrease in accounts receivable

 

 

2,016

 

 

 

1,879

 

Decrease in net investment in sales-type leases

 

 

20

 

 

 

153

 

Increase in inventories

 

 

(5,369

)

 

 

(1,325

)

Increase in prepaid expenses and other assets

 

 

(1,034

)

 

 

(221

)

(Decrease) increase in accounts payable

 

 

(821

)

 

 

927

 

Decrease in accrued expenses and other liabilities

 

 

(458

)

 

 

(1,689

)

Increase in contract liabilities

 

 

4,428

 

 

 

3,608

 

Net cash used for operating activities

 

 

(7,337

)

 

 

(1,478

)

Investing activities

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(591

)

 

 

(423

)

Proceeds from sale of property and equipment

 

 

16,229

 

 

 

3

 

Net cash provided by (used for) investing activities

 

 

15,638

 

 

 

(420

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from borrowings on long-term debt

 

 

2,194

 

 

 

 

Payments on long-term debt

 

 

(78

)

 

 

(74

)

Proceeds from at-the-market offerings of common stock, net of issuance costs

 

 

2,894

 

 

 

 

Proceeds from exercise of employee stock options

 

 

541

 

 

 

171

 

Other

 

 

(29

)

 

 

(75

)

Net cash provided by financing activities

 

 

5,522

 

 

 

22

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

 

100

 

 

 

(12

)

Net change in cash, cash equivalents, and restricted cash

 

 

13,923

 

 

 

(1,888

)

Cash, cash equivalents, and restricted cash at beginning of period

 

 

6,243

 

 

 

9,140

 

Cash, cash equivalents, and restricted cash at end of period

 

$

20,166

 

 

$

7,252

 

Supplemental disclosure of noncash investing and financing activities

 

 

 

 

 

 

 

 

Transfer of internally developed 3D printing machines from inventories to

   property and equipment for internal use or leasing activities

 

$

1,834

 

 

$

1,066

 

Transfer of internally developed 3D printing machines from property

   and equipment to inventories for sale

 

$

1,107

 

 

$

182

 

Property and equipment included in accounts payable

 

$

41

 

 

$

110

 

Property and equipment included in accrued expenses and other current liabilities

 

$

 

 

$

48

 

Unsettled proceeds from at-the-market offerings of common stock, net of issuance costs

 

$

204

 

 

$

 

Unsettled proceeds from exercise of employee stock options

 

$

 

 

$

91

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4


The ExOne Company and Subsidiaries

Condensed Statement of Changes in Consolidated Stockholders’ Equity (Unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

other

 

 

Total

 

 

 

Common stock

 

 

Additional

 

 

Accumulated

 

 

comprehensive

 

 

stockholders'

 

 

 

Shares

 

 

$

 

 

paid-in capital

 

 

deficit

 

 

loss

 

 

equity

 

Balance at December 31, 2018

 

 

16,234

 

 

$

162

 

 

$

175,214

 

 

$

(101,853

)

 

$

(10,748

)

 

$

62,775

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,496

)

 

 

 

 

 

(4,496

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(776

)

 

 

(776

)

Equity-based compensation

 

 

 

 

 

 

 

 

439

 

 

 

 

 

 

 

 

 

439

 

Exercise of employee stock options

 

 

23

 

 

 

1

 

 

 

164

 

 

 

 

 

 

 

 

 

165

 

Taxes related to the net share settlement of

   equity-based awards

 

 

 

 

 

 

 

 

(68

)

 

 

 

 

 

 

 

 

(68

)

Common stock issued from equity incentive plan

 

 

38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2019

 

 

16,295

 

 

$

163

 

 

$

175,749

 

 

$

(106,349

)

 

$

(11,524

)

 

$

58,039

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(3,789

)

 

 

 

 

 

(3,789

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

583

 

 

 

583

 

Equity-based compensation

 

 

 

 

 

 

 

 

642

 

 

 

 

 

 

 

 

 

642

 

Exercise of employee stock options

 

 

13

 

 

 

 

 

 

97

 

 

 

 

 

 

 

 

 

97

 

Common stock issued from equity incentive plan

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2019

 

 

16,318

 

 

$

163

 

 

$

176,488

 

 

$

(110,138

)

 

$

(10,941

)

 

$

55,572

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2019

 

 

16,347

 

 

$

163

 

 

$

176,850

 

 

$

(116,948

)

 

$

(11,483

)

 

$

48,582

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(3,648

)

 

 

 

 

 

(3,648

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(838

)

 

 

(838

)

Equity-based compensation

 

 

 

 

 

1

 

 

 

291

 

 

 

 

 

 

 

 

 

292

 

Common stock issued from equity incentive plan

 

 

39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2020

 

 

16,386

 

 

$

164

 

 

$

177,141

 

 

$

(120,596

)

 

$

(12,321

)

 

$

44,388

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,023

)

 

 

 

 

 

(4,023

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

370

 

 

 

370

 

Equity-based compensation

 

 

 

 

 

 

 

 

157

 

 

 

 

 

 

 

 

 

157

 

Exercise of employee stock options

 

 

73

 

 

 

1

 

 

 

540

 

 

 

 

 

 

 

 

 

541

 

Common stock issued from equity incentive plan

 

 

22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At-the-market offerings of common stock,

   net of issuance costs

 

 

383

 

 

 

4

 

 

 

3,094

 

 

 

 

 

 

 

 

 

3,098

 

Balance at June 30, 2020

 

 

16,864

 

 

$

169

 

 

$

180,932

 

 

$

(124,619

)

 

$

(11,951

)

 

$

44,531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5


The ExOne Company and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(dollars in thousands, except per-share and share amounts)

Note 1. Basis of Presentation

Organization

The ExOne Company (“ExOne”) is a corporation organized under the laws of the state of Delaware. ExOne was formed on January 1, 2013, when The Ex One Company, LLC, a Delaware limited liability company, merged with and into a Delaware corporation, which survived and changed its name to The ExOne Company (the “Reorganization”). As a result of the Reorganization, The Ex One Company, LLC became ExOne, the common and preferred interest holders of The Ex One Company, LLC became holders of common stock and preferred stock, respectively, of ExOne, and the subsidiaries of The Ex One Company, LLC became the subsidiaries of ExOne. The condensed consolidated financial statements include the accounts of ExOne, its wholly-owned subsidiaries, ExOne Americas LLC (United States); ExOne GmbH (Germany); ExOne Property GmbH (Germany); and ExOne KK (Japan). Collectively, the consolidated group is referred to as the “Company”.

The Company filed a registration statement on Form S-3 (No. 333-223690) with the Securities and Exchange Commission on March 15, 2018. The purpose of the Form S-3 was to register various equity and debt securities. Subsidiaries of the Company are co-registrants with the Company (“Subsidiary Guarantors”), and the registration statement registered guarantees of debt securities by one or more of the Subsidiary Guarantors. The Subsidiary Guarantors are 100% owned by the Company and any guarantees by the Subsidiary Guarantors will be full and unconditional.

Basis of Presentation

The condensed consolidated financial statements of the Company are unaudited. The condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the results of operations, financial position and cash flows of the Company. All material intercompany transactions and balances have been eliminated in consolidation. The results reported in these condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The December 31, 2019 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Quarterly Report on Form 10-Q should be read in connection with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which includes all disclosures required by GAAP.

The preparation of these condensed consolidated financial statements requires the Company to make certain judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. Areas that require significant judgments, estimates and assumptions include accounting for accounts receivable (including the allowance for doubtful accounts); inventories (including the allowance for slow-moving and obsolete inventories); product warranty reserves; contingencies; income taxes (including the valuation allowance on certain deferred tax assets and liabilities for uncertain tax positions); equity-based compensation (including the valuation of certain equity-based compensation awards issued by the Company); and testing for impairment of long-lived assets (including the identification of asset groups by management, estimates of future cash flows of identified asset groups and fair value estimates used in connection with assessing the valuation of identified asset groups). The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Certain amounts relating to operating lease right-of-use assets ($432), current portion of operating lease liabilities ($158) and operating lease liabilities – net of current portion ($274) in the accompanying condensed consolidated balance sheet at December 31, 2019, have been reclassified from other noncurrent assets, accrued expenses and other current liabilities and other noncurrent liabilities, respectively, to conform to current period presentation.

Certain amounts in the accompanying condensed statement of consolidated cash flows have been reclassified to conform to current period presentation.

COVID-19

In March 2020, the World Health Organization declared the novel strain of coronavirus a global pandemic (“COVID-19”) and recommended containment and mitigation measures worldwide. The impact of COVID-19 and the related economic, business and market disruptions are evolving rapidly, and their effects are uncertain. As a result of COVID-19, the Company was required to temporarily close its operations at its North Huntingdon, Pennsylvania facility for the period from March 23 through March 30, 2020. In response to COVID-19, the Company has incurred incremental costs associated with protecting the health and safety of the Company’s global workforce, enhanced sanitization of the Company’s global operating facilities, and information technology capabilities for employees operating remotely. Beginning in March 2020, restrictions imposed by various governmental authorities on both domestic and international shipping and travel have caused a disruption to the timing of delivery and installation of the Company’s 3D printing machines, resulting in negative impacts to the Company’s financial position, results of operations and cash flows. The duration and severity of the outbreak and its long-term impact on the Company’s business are uncertain at this time. The Company is unable to predict the impact that COVID-19 will have on its future financial position, results of operations and cash flows.

6


Recently Issued Accounting Guidance

The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (the “FASB”). Recently issued ASUs not listed below either were assessed and determined to be not applicable or are currently expected to have no impact on the consolidated financial statements of the Company.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses.” This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b-2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. Management is currently evaluating the potential impact of these changes on the consolidated financial statements of the Company.

Note 2. Liquidity

The Company has incurred a net loss in each of its annual periods since its inception. As shown in the accompanying condensed statement of consolidated operations and comprehensive loss, the Company incurred a net loss of $4,023 and $7,671 for the three months and six months ended June 30, 2020, respectively. At June 30, 2020, the Company had $19,658 in unrestricted cash and cash equivalents. In addition to its unrestricted cash and cash equivalents, the Company also has access to additional capital through its $10,000 related party revolving credit facility (Note 12).

Since its inception, the Company has received cumulative unrestricted net proceeds from the sale of its common stock (through its initial public offering and subsequent public offerings) of $168,361 to fund its operations. The Company maintains additional access to capital through its active shelf registration statement (Note 1) which allows for the sale of various equity or debt instruments up to an aggregate amount of $125,000. In June 2020, the Company entered into an Equity Distribution Agreement with Oppenheimer & Company, Inc. (“Oppenheimer”) pursuant to which Oppenheimer agreed to act as sales agent in the sale of up to $25,000 in the aggregate of ExOne common stock in “at-the-market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended. Terms of the Equity Distribution Agreement require a 3.0% commission on the sale of ExOne common stock as well as reimbursement of certain expenses incurred by Oppenheimer. During the three months ended June 30, 2020, the Company sold 382,601 shares of common stock in at-the-market offerings at an average selling price of $8.86 per share resulting in net proceeds to the Company (after deducting commissions) of $3,288 (of which, at June 30, 2020, $362 remained unsettled and was included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet, such net proceeds received by the Company in July 2020). During the three months ended June 30, 2020, the Company incurred expenses (other than commissions) associated with the at-the-market offerings of $190 (of which, at June 30, 2020, $158 were unpaid and included in accounts payable in the accompanying condensed consolidated balance sheet). There have been no sales of shares of common stock in at-the-market offerings subsequent to June 30, 2020. Future sales of securities in at-the-market offerings and the Company’s active shelf registration, if any, are dependent on market conditions, which may restrict the timing and extent of any future offering of securities by the Company.

In addition to net proceeds from the sale of its common stock, on April 18, 2020, the Company received additional unrestricted cash proceeds of $2,194 in connection with a Paycheck Protection Program loan (Note 13).

The Company has previously exhibited its ability to modify its operating structure and support its liquidity position through various restructuring and other actions, including its 2018 global cost realignment program. In response to adverse market conditions associated with COVID-19, beginning in March 2020 and through April 2020, the Company initiated various cost savings actions including a mix of employee terminations, furloughs and pay rate reductions, as well as reductions in consulting and other expenses, all in an effort to conserve cash and maintain adequate liquidity.  

Management believes that the Company’s existing capital resources will be sufficient to support the Company’s operating plan. If management anticipates that the Company’s actual results will differ from its operating plan, management believes it has sufficient capabilities to enact cost savings measures to preserve capital (in addition to those further discussed above). The Company may also seek to raise additional capital to support its growth through additional debt, equity or other alternatives (including asset sales) or a combination thereof.

7


Note 3. Accumulated Other Comprehensive Loss

The following table summarizes changes in the components of accumulated other comprehensive loss for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

(12,321

)

 

$

(11,524

)

 

$

(11,483

)

 

$

(10,748

)

Other comprehensive income (loss)

 

 

370

 

 

 

583

 

 

 

(468

)

 

 

(193

)

Balance at end of period

 

$

(11,951

)

 

$

(10,941

)

 

$

(11,951

)

 

$

(10,941

)

 

Foreign currency translation adjustments consist of the effect of translation of functional currency financial statements (denominated in the euro and Japanese yen) to the reporting currency of the Company (United States dollar) and certain long-term intercompany transactions between subsidiaries for which settlement is not planned or anticipated in the foreseeable future.

There were no tax impacts related to income tax rate changes and no amounts were reclassified to earnings for either of the periods presented.

Note 4. Loss Per Share

The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the applicable period. Diluted loss per common share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares and common equivalent shares outstanding during the applicable period.

As the Company incurred a net loss during each of the three months and six months ended June 30, 2020 and 2019, basic average common shares outstanding and diluted average common shares outstanding were the same because the effect of potential shares of common stock, including stock options (679,198 – 2020 and 608,787 – 2019) and unvested restricted stock issued (47,250 – 2020 and 96,264 – 2019), was anti-dilutive.

The information used to compute basic and diluted net loss per common share was as follows for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(4,023

)

 

$

(3,789

)

 

$

(7,671

)

 

$

(8,285

)

Weighted average shares outstanding (basic and diluted)

 

 

16,464,345

 

 

 

16,301,157

 

 

 

16,416,867

 

 

 

16,278,043

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.24

)

 

$

(0.23

)

 

$

(0.47

)

 

$

(0.51

)

Diluted

 

$

(0.24

)

 

$

(0.23

)

 

$

(0.47

)

 

$

(0.51

)

 

Note 5. Revenue

The Company derives revenue from the sale of 3D printing machines and 3D printed and other products, materials and services. Revenue is recognized when the Company satisfies its performance obligation(s) under a contract (either implicit or explicit) by transferring the promised product or service to a customer either when (or as) the customer obtains control of the product or service. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenue) basis. Shipping and handling costs are included in cost of sales.

Certain of the Company’s contracts with customers provide for multiple performance obligations. Sales of 3D printing machines may also include optional equipment, materials, replacement components and services (installation, training and other services, including maintenance services and/or an extended warranty). Certain other contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of stand-alone selling price for each distinct product or service in the contract, which is generally based on an observable price.

8


The Company’s revenue from products is transferred to customers at a point in time. The Company’s contracts for 3D printing machines generally include substantive customer acceptance provisions. Revenue under these contracts is recognized when customer acceptance provisions have been satisfied. For all other product sales, the Company recognizes revenue at the point in time in which the customer obtains control of the product, which is generally when product title passes to the customer upon delivery. In limited cases, title does not transfer and revenue is not recognized until the customer has received the products at its physical location.

The Company’s revenue from service arrangements includes deferred maintenance contracts and extended warranties that can be purchased at the customer’s option. The Company generally provides a standard one-year warranty on the Company’s 3D printing machines, which is considered an assurance type warranty, and not considered a separate performance obligation (Note 9). Revenue associated with deferred maintenance contracts is generally recognized at a point in time when the related services are performed where sufficient historical evidence indicates that the costs of performing the related services under the contract are not incurred on a straight-line basis, with such revenue recognized in proportion to the costs expected to be incurred. Revenue associated with extended warranties is generally recognized over time on a straight-line basis over the related contract period.

The Company’s revenue from service arrangements includes contracts with the Federal government under fixed-fee, cost reimbursable and time and materials arrangements (certain of which may have periods of performance greater than one year). Revenue under these contracts is generally recognized over time using an input measure based upon labor hours incurred and provisional rates provided under the contracts. As such, the nature of these contracts may give rise to variable consideration, primarily based upon completion of the Company’s annual Incurred Cost Submission filing as required by the Federal government. Historically, amounts associated with variable consideration have not been significant.

The Company’s revenue from service arrangements includes certain research and development services. Revenue under research and development service contracts is generally recognized over time using an output measure, specifically units or parts delivered, based upon certain customer acceptance and delivery requirements. Revenue recognized over time using an output measure is not significant.

The following table summarizes the Company’s revenue by product group for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

2019

 

 

2020

 

 

2019

 

3D printing machines

 

$

4,898

 

 

$

9,231

 

 

$

11,215

 

 

$

12,560

 

3D printed and other products, materials and services

 

 

6,201

 

 

 

6,048

 

 

 

13,267

 

 

 

12,298

 

 

 

$

11,099

 

 

$

15,279

 

 

$

24,482

 

 

$

24,858

 

 

Revenue from 3D printing machines includes leasing revenue whereby the Company is the lessor of 3D printing machines to its customers. Leasing revenue is accounted for under ASU 2016-02, “Leases” (Note 10).

The timing of revenue recognition, billings and cash collections results in billed receivables, unbilled receivables (contract assets) and deferred revenue and customer prepayments (contract liabilities) in the accompanying condensed consolidated balance sheet. The Company considers a number of factors in its evaluation of the creditworthiness of its customers, including past due amounts, past payment history, and current economic conditions. For 3D printing machines, the Company’s terms of sale vary by transaction. To reduce credit risk in connection with 3D printing machine sales, the Company may, depending upon the circumstances, require customers to furnish letters of credit or bank guarantees or to provide advanced payment (either partial or in full). For 3D printed and other products and materials, the Company’s terms of sale generally require payment within 30 to 60 days after delivery, although the Company also recognizes that longer payment periods are customary in certain countries where it transacts business. Service arrangements are generally billed in accordance with specific contract terms and are typically billed in advance or in proportion to performance of the related services.

For the six months ended June 30, 2020, the Company recognized revenue of $4,978 related to contract liabilities at January 1, 2020. There were no other significant changes in contract liabilities during the six months ended June 30, 2020. Contract assets are not significant.

As of June 30, 2020, the Company had approximately $38,200 of remaining performance obligations (including contract liabilities), which is also referred to as backlog, of which approximately $33,200 is expected to be fulfilled during the next twelve months notwithstanding uncertainty related to the impact of COVID-19 (Note 1) including, but not limited to, international shipping and travel restrictions brought about by COVID-19 which could have an adverse effect on the timing of delivery and installation of products and/or services to customers.

The Company has elected to apply the practical expedient associated with incremental costs of obtaining a contract, and as such, sales commission expense is generally expensed when incurred because the amortization period would be one year or less. These costs are recorded within selling, general and administrative expenses.

9


Accounts receivable and net investment in sales-type leases (Note 10) are reported at their net realizable value. The Company carries its investment in sales-type leases based on discounting the minimum lease payments by the interest rate implicit in the lease, less an allowance for doubtful accounts. The Company’s estimate of the allowance for doubtful accounts related to accounts receivable and net investment in sales-type leases is based on the Company’s evaluation of customer accounts with past-due outstanding balances or specific accounts for which it has information that the customer may be unable to meet its financial obligations. Based upon review of these accounts, and management’s analysis and judgment, the Company records a specific allowance for that customer’s accounts receivable or net investment in sales-type lease balance to reduce the outstanding balance to the amount expected to be collected. The allowance is re-evaluated and adjusted periodically as additional information is received that impacts the allowance amount reserved. At June 30, 2020 and December 31, 2019, the allowance for doubtful accounts was $488 and $508, respectively. During the three months ended June 30, 2020 and 2019, the Company recorded net recoveries for bad debts of $70 and $77, respectively. During the six months ended June 30, 2020 and 2019, the Company recorded net recoveries for bad debts of $19 and $150, respectively.

Note 6. Cash, Cash Equivalents, and Restricted Cash

The following provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the accompanying condensed consolidated balance sheet to the same such amounts shown in the accompanying condensed statement of consolidated cash flows as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Cash and cash equivalents

 

$

19,658

 

 

$

5,265

 

Restricted cash

 

 

508

 

 

 

978

 

Cash, cash equivalents, and restricted cash

 

$

20,166

 

 

$

6,243

 

 

Restricted cash at both June 30, 2020 and December 31, 2019 included $508 associated with cash collateral required by a United States bank to offset certain short-term, unsecured lending commitments associated with the Company’s corporate credit card program. 

Restricted cash at December 31, 2019 included $470 associated with cash collateral required by a German bank for short-term financial guarantees issued by ExOne GmbH in connection with certain commercial transactions requiring security. Refer to Note 11 for further discussion related to an amendment to this cash collateral requirement effective in February 2020.

Each of the balances discussed above are considered legally restricted by the Company.

Note 7. Inventories

Inventories consisted of the following as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Raw materials and components

 

$

11,149

 

 

$

8,841

 

Work in process

 

 

5,890

 

 

 

4,922

 

Finished goods

 

 

7,169

 

 

 

6,007

 

 

 

$

24,208

 

 

$

19,770

 

 

Raw materials and components consist of consumable materials and component parts and subassemblies associated with 3D printing machine manufacturing and support activities. Work in process consists of 3D printing machines and other products in varying stages of completion. Finished goods consist of 3D printing machines and other products prepared for sale in accordance with customer specifications.

10


At June 30, 2020 and December 31, 2019, the allowance for slow-moving and obsolete inventories was $2,493 and $3,443, respectively, and has been reflected as a reduction to inventories (principally raw materials and components). The following table summarizes changes in the allowance for slow-moving and obsolete inventories for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Balance at beginning of period

 

$

3,370

 

 

$

4,177

 

 

$

3,443

 

 

$

4,143

 

Provision for slow-moving and obsolete inventories  ̶  net

 

 

78

 

 

 

24

 

 

 

100

 

 

 

131

 

Reductions for sale, consumption or scrap of previously

   reserved amounts

 

 

(1,019

)

 

 

(106

)

 

 

(1,055

)

 

 

(106

)

Foreign currency translation adjustments

 

 

64

 

 

 

54

 

 

 

5

 

 

 

(19

)

Balance at end of period

 

$

2,493

 

 

$

4,149

 

 

$

2,493

 

 

$

4,149

 

 

Reductions for sale, consumption or scrap of previously reserved amounts for both the three and six months ended June 30, 2020 consist principally of certain raw material and component inventories associated with the Company’s former Exerial 3D printing platform, which were disposed of during the period. There was no significant benefit or charge recorded during the period in connection with the related disposals.

During the three months ended June 30, 2020, the Company recorded a charge of $205 to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss associated with certain inventories for which cost was determined to exceed net realizable value.

Note 8. Property and Equipment

Property and equipment consisted of the following as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

Economic Life

 

 

2020

 

 

2019

 

 

(in years)

Land

 

$

3,385

 

 

$

6,980

 

 

N/A

Buildings and related improvements

 

 

10,036

 

 

 

25,675

 

 

5 - 40

Machinery and equipment

 

 

19,119

 

 

 

19,531

 

 

3 - 20

Other

 

 

6,027

 

 

 

7,086

 

 

3 - 20

 

 

 

38,567

 

 

 

59,272

 

 

 

Less: Accumulated depreciation

 

 

(19,417

)

 

 

(21,478

)

 

 

 

 

 

19,150

 

 

 

37,794

 

 

 

Construction-in-progress

 

 

1,459

 

 

 

1,101

 

 

 

Property and equipment  ̶  net

 

$

20,609

 

 

$

38,895

 

 

 

 

For both the three months ended June 30, 2020 and 2019, depreciation expense was $1,184. For the six months ended June 30, 2020 and 2019, depreciation expense was $2,107 and $2,349, respectively.

On February 18, 2020, the Company completed a sale-leaseback transaction associated with its European headquarters and operating facility in Gersthofen, Germany (Note 10). As a result of the completion of this transaction, the Company derecognized $17,282 in net property and equipment during the three months ended March 31, 2020. Sale of the facility resulted in a gain of $1,462 during the three months ended March 31, 2020.

During the three months ended June 30, 2020, as a result of continued operating losses and cash flow deficiencies, the Company identified a triggering event requiring a test for the recoverability of long-lived assets held and used at the asset group level. Assessing the recoverability of long-lived assets held and used requires significant judgments and estimates by management.

For purposes of testing long-lived assets for recoverability, the Company operates as three separate asset groups: United States, Europe and Japan. In assessing the recoverability of long-lived assets held and used, the Company determined the carrying amount of long-lived assets held and used to be in excess of the estimated future undiscounted net cash flows of the related assets. The Company proceeded to determine the fair value of its long-lived assets held and used, principally through use of the market approach. The Company’s use of the market approach included consideration of market transactions for comparable assets. Management concluded that the fair value of long-lived assets held and used exceeded their carrying value, and as such, no impairment loss was recorded.   

A significant decrease in the market price of a long-lived asset, adverse change in the use or condition of a long-lived asset, adverse change in the business climate or legal or regulatory factors impacting a long-lived asset and continued operating losses and cash flow deficiencies associated with a long-lived asset, among other indicators, could cause a future assessment to be performed which may result in an impairment of long-lived assets held and used, which could result in a material adverse effect on the financial position and results of operations of the Company.

11


Note 9. Product Warranty Reserves

Substantially all of the Company’s 3D printing machines are covered by a standard one-year warranty. Generally, at the time of sale, a liability is recorded (with an offset to cost of sales) based upon the expected cost of replacement parts and labor to be incurred over the life of the standard warranty. Expected cost is estimated using historical experience for similar products. The Company periodically assesses the adequacy of the product warranty reserves based on changes in these factors and records any necessary adjustments if actual experience indicates that adjustments are necessary. Future claims experience could be materially different from prior results because of the introduction of new, more complex products, a change in the Company’s warranty policy in response to industry trends, competition or other external forces, or manufacturing changes that could impact product quality. In the event that the Company determines that its current or future product repair and replacement costs exceed estimates, an adjustment to these reserves would be charged to cost of sales in the period such a determination is made.

The following table summarizes changes in product warranty reserves, which amounts were reflected in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Balance at beginning of period

 

$

810

 

 

$

1,251

 

 

$

866

 

 

$

1,670

 

     Provisions for new issuances

 

 

187

 

 

 

383

 

 

 

463

 

 

 

529

 

     Payments

 

 

(501

)

 

 

(457

)

 

 

(845

)

 

 

(848

)

     Reserve adjustments

 

 

101

 

 

 

36

 

 

 

121

 

 

 

(123

)

     Foreign currency translation adjustments

 

 

6

 

 

 

10

 

 

 

(2

)

 

 

(5

)

Balance at end of period

 

$

603

 

 

$

1,223

 

 

$

603

 

 

$

1,223

 

 

Note 10. Leases

Lessee

The Company leases facilities, machinery and other equipment and vehicles under operating lease arrangements (with initial terms greater than twelve months), expiring in various years through 2026. In addition, the Company leases certain equipment and vehicles under finance lease arrangements, which are not significant.

For all operating lease arrangements (with the exception of short-term lease arrangements), the Company presents at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. 

The Company has elected, as a practical expedient, not to separate non-lease components from lease components, and instead account for each separate component as a single lease component for all lease arrangements, as lessee. In addition, the Company has elected, as a practical expedient, not to apply lease recognition requirements to short-term lease arrangements, generally those with a lease term of less than twelve months, for all classes of underlying assets. In determination of the lease term, the Company considers the likelihood of lease renewal options and lease termination provisions. As a result, lease payments under these short-term lease arrangements are recognized in the accompanying condensed statement of consolidated operations and comprehensive loss on a straight-line basis over the lease term.  

The Company uses its incremental borrowing rate in determining the present value of lease payments, as the implicit rate of the lease arrangements is generally not readily determinable.

Through July 2019, certain of the Company’s operating lease arrangements were with related parties under common control (Note 18). Lease cost under operating lease agreements with related parties, included within short-term lease cost below, was $12 and $24 for the three months and six months ended June 30, 2019, respectively.

12


Future minimum lease payments of operating lease arrangements (with initial terms greater than twelve months) at June 30, 2020, were as follows:

 

2020

 

$

978

 

2021

 

 

1,925

 

2022

 

 

1,891

 

2023

 

 

32

 

2024

 

 

11

 

Thereafter

 

 

2

 

Total minimum lease payments

 

 

4,839

 

Less: Present value discount

 

 

(306

)

Total operating lease liabilities

 

$

4,533

 

 

For the three months and six months ended June 30, 2020, lease cost under operating lease arrangements was $529 and $1,033, including $41 and $72 relating to short-term lease arrangements, respectively. For the three months and six months ended June 30, 2019, lease cost under operating lease arrangements was $98 and $211, including $47 and $112 relating to short-term lease arrangements, respectively.

Supplemental information related to operating lease arrangements was as follows as of and for the six months ended June 30, 2020:

 

Operating lease right-of-use assets

 

$

4,533

 

Current portion of operating lease liabilities

 

$

1,754

 

Operating lease liabilities  ̶  net of current portion

 

$

2,779

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

4,876

 

Cash paid for amounts included in the measurement of operating lease liabilities

 

$

961

 

Weighted average remaining lease term (in years)

 

 

2.5

 

Weighted average discount rate

 

 

5.1

%

On December 10, 2019, ExOne Property GmbH and ExOne GmbH, the German subsidiaries of the Company (the “German Subsidiaries”), entered into a purchase agreement (the “Purchase Agreement”) with Solidas Immobilien und Grundbesitz GmbH, a private, unaffiliated German real estate investor (the “Buyer”), for the sale of the Company’s European headquarters and operating facility in Gersthofen, Germany (the “Facility”) for a purchase price of approximately $18,500 (€17,000), of which approximately $2,200 (€2,000) was received prior to December 31, 2019. Concurrent with the execution of the Purchase Agreement, ExOne GmbH and the Buyer entered into a rental contract (the “Lease”) for the leaseback of the Facility for an initial aggregate annual rent totaling approximately $1,700 (€1,500), plus applicable taxes, which is fixed during the initial three-year term and is subject to adjustment on an annual basis (in accordance with the consumer price index for Germany) during the two five-year option extension periods. The sale-leaseback transaction closed on February 18, 2020. In connection with the completion of the sale-leaseback transaction, the Company recorded an operating lease right-of-use asset and corresponding operating lease liability of $4,605, which was representative of the present value of future minimum lease payments over the initial three-year term, as there were no penalties or other factors associated with the lease that result in reasonable assurance of its extension at inception.

Lessor

The Company leases machinery and equipment to customers (principally 3D printing machines and related equipment) under lease arrangements classified as either operating leases or sales-type leases. The Company’s operating lease arrangements have initial terms generally ranging from one to five years, certain of which may contain extension or termination clauses, or both. Such operating lease arrangements also generally include a purchase option to acquire the related machinery and equipment at the end of the lease term for either a fixed amount as determined at inception, or a subsequently negotiated fair market value. At June 30, 2020, the Company estimated that the total fair market value significantly exceeded the related net book value of the machinery and equipment held under the Company’s operating lease arrangements. The Company’s sales-type lease arrangements generally include transfer of ownership at the end of the lease term, and as such, the Company’s net investment in sale-type lease arrangements presented in the Company’s accompanying condensed consolidated balance sheet generally does not include an amount of unguaranteed residual value.

For certain of its arrangements, the Company separates and allocates (Note 5) certain non-lease components (principally maintenance services) from lease components. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from lease income) basis. In determination of the lease term, the Company considers the likelihood of lease renewal options and lease termination provisions. Additionally, certain of the Company’s lease arrangements do not qualify as sale-type leases, as collectability is not reasonably assured.

13


The Company recognized the following components under operating and sales-type lease arrangements in the accompanying condensed statement of consolidated operations and comprehensive loss for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

Operating

 

 

Sales-type

 

 

Operating

 

 

Sales-type

 

 

Operating

 

 

Sales-type

 

 

Operating

 

 

Sales-type

 

Revenue

 

$

154

 

 

$

 

 

$

706

 

 

$

 

 

$

362

 

 

$

 

 

$

1,026

 

 

$

 

Interest income(a)

 

$

 

 

$

17

 

 

$

 

 

$

27

 

 

$

 

 

$

35

 

 

$

 

 

$

55

 

 

(a)

Interest income relating to sales-type leases is recorded as a component of revenue in the accompanying condensed statement of consolidated operations and comprehensive loss for each of the periods presented.

The Company’s net investment in sales-type leases consisted of the following as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Future minimum lease payments receivable

 

$

1,547

 

 

$

1,595

 

Less: Allowance for doubtful accounts

 

 

(424

)

 

 

(424

)

Net future minimum lease payments receivable

 

 

1,123

 

 

 

1,171

 

Less: Unearned interest income

 

 

(192

)

 

 

(220

)

   Net investment in sales-type leases

 

$

931

 

 

$

951

 

 

Future minimum lease payments of non-cancellable operating and sales-type lease arrangements as of June 30, 2020 were as follows:

 

 

 

Operating

 

 

Sales-type

 

2020

 

$

384

 

 

$

327

 

2021

 

 

48

 

 

 

429

 

2022

 

 

 

 

 

380

 

2023

 

 

 

 

 

411

 

2024

 

 

 

 

 

 

Thereafter

 

 

 

 

 

 

Total minimum lease payments

 

$

432

 

 

$

1,547

 

Less: Allowance for doubtful accounts

 

 

 

 

 

 

(424

)

Less: Present value discount

 

 

 

 

 

 

(192

)

Future minimum lease payments receivable

 

 

 

 

 

$

931

 

 

Note 11. Contingencies and Commitments

Contingencies

On March 1, 2018, the Company’s ExOne GmbH subsidiary notified Voxeljet AG that it had materially breached a 2003 Patent and Know-How Transfer Agreement and asserted its rights to set-off damages as a result of the breaches against the annual license fee due from the Company under the agreement. At this time, the Company cannot reasonably estimate a contingency, if any, related to this matter.

The Company is subject to various litigation, claims, and proceedings which have been or may be instituted or asserted from time to time in the ordinary course of business. Management does not believe that the outcome of any pending or threatened matters will have a material adverse effect, individually or in the aggregate, on the financial position, results of operations or cash flows of the Company.

Commitments

In the normal course of its operations, ExOne GmbH issues short-term financial guarantees and letters of credit to third parties in connection with certain commercial transactions requiring security through a credit facility with a German bank.

On February 24, 2020, ExOne GmbH entered into an amendment and replacement of its credit facility with the German bank. The credit facility amendments included the elimination of the overdraft credit and short-term loan features of the prior agreement and replaced them with an increased capacity amount of approximately $3,900 (€3,500) for the issuance of financial guarantees and letters of credit for commercial transactions requiring security. The cash collateral requirement for the issuance of financial guarantees and letters of credit for commercial transactions requiring security was eliminated for amounts up to approximately $1,100 (€1,000) as the amendment provided the German bank with a collateral interest in the accounts receivable of ExOne GmbH. Amounts in excess of approximately $1,100 (€1,000) continue to require cash collateral under the amended credit facility.

14


At June 30, 2020, total outstanding financial guarantees and letters of credit issued by ExOne GmbH under the amended credit facility were $906 (€807) including $265 (€236) with expiration dates ranging from October 2020 through February 2023 and $641 (€571) which do not expire. At December 31, 2019, total outstanding financial guarantees and letters of credit issued by ExOne GmbH under the former credit facility were $560 (€499).

 

Note 12. Related Party Revolving Credit Facility

On March 12, 2018, the Company and its ExOne Americas LLC and ExOne GmbH subsidiaries, as guarantors (collectively, the “Loan Parties”), entered into a Credit Agreement and related ancillary agreements with LBM Holdings, LLC (“LBM”), a company controlled by S. Kent Rockwell, who was the Executive Chairman of the Company (a related party) at such date and is currently Chairman of the Company, relating to a $15,000 revolving credit facility (the “Credit Agreement”) to provide additional funding to the Company for working capital and general corporate purposes. The Credit Agreement provided a credit facility for a term of three years (through March 12, 2021), bearing interest at a rate of one-month LIBOR plus an applicable margin of 500 basis points (6.8% at December 31, 2019 and 5.2% at June 30, 2020). The Credit Agreement required a commitment fee of 75 basis points, or 0.75%, on the unused portion of the facility, payable monthly in arrears. In addition, an up-front commitment fee of 125 basis points, or 1.25% ($188), was required at closing. Borrowings under the Credit Agreement were collateralized by the accounts receivable, inventories and machinery and equipment of the Loan Parties.

On February 18, 2020, the Loan Parties and LBM entered into a First Amendment to the Credit Agreement (the “Amendment”) which (i) reduced the available capacity under the revolving credit facility to $10,000, (ii) extended the term of the credit facility until March 31, 2024, (iii) increased the commitment fee to 100 basis points, or 1.00%, on the unused portion of the revolving credit facility, and (iv) provided a process for the replacement of the LIBOR index after 2021. In addition, the accounts receivable of ExOne GmbH no longer serve as collateral for borrowings under the amended revolving credit facility.

Borrowings under the credit facility are required to be made in minimum increments of $1,000. The Company may terminate or reduce the credit commitment at any time during the term of the amended Credit Agreement without penalty. The Company may also make prepayments against outstanding borrowings under the amended Credit Agreement at any time without penalty. At December 31, 2019 and June 30, 2020, the total estimated value of collateral was in significant excess of the maximum borrowing capacity under the credit facility.

The amended Credit Agreement contains several affirmative covenants including prompt payment of liabilities and taxes; maintenance of insurance, properties, and licenses; and compliance with laws. The amended Credit Agreement also contains several negative covenants including restricting the incurrence of certain additional debt; prohibiting future liens (other than permitted liens); prohibiting investment in third parties; limiting the ability to pay dividends; limiting mergers, acquisitions, and dispositions; and limiting the sale of certain property and equipment of the Loan Parties. The amended Credit Agreement does not contain any financial covenants. The amended Credit Agreement also contains events of default, including, but not limited to, cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants. The Company has obtained waivers related to its event of default on its building note payable (Note 13) and for the incurrence of additional debt associated with its PPP Loan (Note 13).

The Company does not consider the Credit Agreement, as amended, indicative of a fair market value lending, as LBM was determined to be a related party based on common control by S. Kent Rockwell. S. Kent Rockwell is the indirect sole owner of LBM. Prior to execution, each of the Credit Agreement and the Amendment was reviewed and approved by the Audit Committee of the Company’s Board of Directors (the “Board”), in accordance with The ExOne Company Policy and Procedures with Respect to Related Person Transactions, and subsequently by a sub-committee of independent members of the Board. At the time of execution of the Credit Agreement, the available loan proceeds were deposited into an escrow account with an unrelated, third party financial institution acting as escrow agent pursuant to a separate Escrow Agreement by and among the parties. Loan proceeds held in escrow are available to the Company upon its submission to the escrow agent of a loan request. Such proceeds will not be available to LBM until payment in-full of the obligations under the amended Credit Agreement and termination of the amended Credit Agreement. Payments of principal and other obligations will be made to the escrow agent, while interest payments will be made directly to LBM. Provided there exists no potential default or event of default, the amended Credit Agreement and Escrow Agreement prohibit any acceleration of repayment of any amount outstanding under the amended Credit Agreement and prohibit termination of the amended Credit Agreement or withdrawal from escrow of any unused portion of the available loan proceeds.

There were no borrowings under the credit facility during the three or six months ended June 30, 2020 or 2019. There were no borrowings outstanding under the credit facility at either June 30, 2020 or December 31, 2019.

The Company incurred $265 in debt issuance costs associated with the inception of the credit facility (including the aforementioned up-front commitment fee paid at closing to LBM) and $49 in debt issuance costs associated with the Amendment.

During the three and six months ended June 30, 2020, the Company recorded interest expense relating to the credit facility of $34 and $79, respectively. Included in interest expense for the three months and six months ended June 30, 2020 was $9 and $27, respectively, associated with amortization of debt issuance costs (resulting in $129 in remaining debt issuance costs at June 30, 2020, of which $35 was included in prepaid expenses and other current assets and $94 was included in other noncurrent assets in the accompanying condensed consolidated balance sheet). Included in interest expense for the three months and six months ended June 30, 2020 was $25 and $52, respectively, associated with the commitment fee on the unused portion of the revolving credit facility.

15


In connection with the Company’s efforts to conserve cash as a result of COVID-19, LBM agreed in April 2020 to temporarily defer (through July 2020) cash payments associated with the commitment fee on the unused portion of the revolving credit facility. There were no incremental interest or other fees incurred by the Company as a result of this deferral. At June 30, 2020 and December 31, 2019, $52 and $28, respectively, associated with the commitment fee on the unused portion of the revolving credit facility were included in accounts payable in the accompanying condensed consolidated balance sheet. Amounts payable to LBM at June 30, 2020 and December 31, 2019 were settled by the Company in July 2020 and January 2020, respectively.

During the three and six months ended June 30, 2019, the Company recorded interest expense related to the credit facility of $50 and $100, respectively.

Note 13. Long-Term Debt

Long-term debt consisted of the following as of the dates indicated:

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

Principal

 

 

Unamortized

Debt Issuance

Costs

 

 

Net

 

 

Principal

 

 

Unamortized

Debt Issuance

Costs

 

 

Net

 

Paycheck Protection Program loan

 

$

2,194

 

 

$

 

 

$

2,194

 

 

$

 

 

$

 

 

$

 

Building note payable

 

 

1,306

 

 

 

(18

)

 

 

1,288

 

 

 

1,384

 

 

 

(20

)

 

 

1,364

 

Less: Amount due within one year

 

 

(1,132

)

 

 

4

 

 

 

(1,128

)

 

 

(157

)

 

 

4

 

 

 

(153

)

 

 

$

2,368

 

 

$

(14

)

 

$

2,354

 

 

$

1,227

 

 

$

(16

)

 

$

1,211

 

 

On April 18, 2020, the Company entered into an unsecured promissory note (the “Note”) with an unrelated United States bank (the “Lender”) reflecting a loan in the principal amount of $2,194 (the “Loan”). The Loan was granted pursuant to the Paycheck Protection Program (the “PPP”) administered by the United States Small Business Administration (the “SBA”) as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

Pursuant to the terms of the Note, the Loan bears interest at a rate of 1.00% per annum and matures on April 18, 2022 (the “Maturity Date”). Principal and interest payments on the Loan are deferred until November 18, 2020, at which time equal installments of principal and interest will be due and payable monthly through the Maturity Date. The Note may be prepaid by the Company at any time prior to maturity without penalty. If the Company defaults on the Note, the Lender may, at its option, accelerate the maturity of the Company’s obligations under the Note.

Pursuant to the terms of the PPP, the Loan, or a portion thereof, may be forgiven if Loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, costs used to continue group health care benefits, mortgage interest payments, rent and utilities. The Company intends to use all or a significant majority of the Loan proceeds for qualifying expenses. The terms of the Loan, including eligibility and forgiveness, may be subject to further requirements in regulations and guidance adopted by the SBA.

On May 21, 2012, the Company entered into a building note payable with an unrelated United States bank. Terms of the building note payable include monthly payments of $18 including interest at 4.00% through May 2017, and subsequently, monthly payments of $19 including interest at the monthly average yield on United States Treasury Securities plus 3.25% for the remainder of the term through May 2027. The building note payable is collateralized by the Company’s facility located in North Huntingdon, Pennsylvania which had a carrying value of $4,854 at June 30, 2020.

At December 31, 2019, the Company identified that it was not in compliance with the annual cash flow-to-debt service ratio covenant associated with the building note payable. The Company requested and was granted a waiver related to compliance with this annual covenant at December 31, 2019 and through December 31, 2020. Related to the 2019 non-compliance, there were no cross-default provisions or related impacts on other lending or financing agreements (Note 12).

Future maturities of long-term debt at June 30, 2020, were as follows:

 

2020

 

$

322

 

2021

 

 

1,627

 

2022

 

 

668

 

2023

 

 

188

 

2024

 

 

195

 

Thereafter

 

 

500

 

 

 

$

3,500

 

 

 

Note 14. Income Taxes

The provision for income taxes for the three months ended June 30, 2020 and 2019 was $8 and $99, respectively. The provision (benefit) for income taxes for the six months ended June 30, 2020 and 2019 was $234 and ($701), respectively. The Company has

16


completed a discrete period computation of its provision (benefit) for income taxes for each of the periods presented. The discrete period computation was required as a result of jurisdictions with losses before income taxes for which no tax benefit can be recognized and an inability to generate reliable estimates for results in certain jurisdictions as a result of inconsistencies in generating net operating profits (losses) in those jurisdictions.

The effective tax rate for the three months ended June 30, 2020 and 2019 was 0.2% (provision on a loss) and 2.7% (provision on a loss), respectively. The effective tax rate for the six months ended June 30, 2020 and 2019 was 3.1% (provision on a loss) and 7.8% (benefit on a loss), respectively.

For the three and six months ended June 30, 2020 and the three months ended June 30, 2019, the effective tax rate differed from the United States federal statutory rate of 21.0% primarily due to net changes in valuation allowances for the period. For the six months ended June 30, 2019, the effective tax rate differed from the United States federal statutory rate of 21.0% primarily due to the reversal of previously recorded liabilities for uncertain tax positions (further discussed below) and net changes in valuation allowances for the period.

The Company has provided a valuation allowance for certain of its net deferred tax assets as a result of the Company not generating consistent net operating profits in certain jurisdictions in which it operates. As such, certain benefits from deferred taxes in the periods presented have been fully offset by changes in the valuation allowance for the related net deferred tax assets. The Company continues to assess its future taxable income by jurisdiction based on recent historical operating results, the expected timing of reversal of temporary differences, various tax planning strategies that the Company may be able to enact in future periods, the impact of potential operating changes on the business and forecast results from operations in future periods based on available information at the end of each reporting period. To the extent that the Company is able to reach the conclusion that net deferred tax assets are realizable based on any combination of the above factors in a single, or in multiple, taxing jurisdictions, a reversal of the related portion of the Company’s existing valuation allowances may occur.

A reconciliation of the beginning and ending amount of unrecognized tax benefits (including accrued interest and penalties) was as follows for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Balance at beginning of period

 

$

 

 

$

102

 

 

$

 

 

$

1,186

 

Additions based on tax positions related to the current

   year

 

 

 

 

 

 

 

 

 

 

 

 

Additions for tax positions of prior years

 

 

 

 

 

1

 

 

 

 

 

 

2

 

Reductions for tax positions of prior years

 

 

 

 

 

 

 

 

 

 

 

(1,075

)

Settlements

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

2

 

 

 

 

 

 

(8

)

Balance at end of period

 

$

 

 

$

105

 

 

$

 

 

$

105

 

 

The Company includes interest and penalties related to income taxes as a component of the provision (benefit) for income taxes in the accompanying condensed statement of consolidated operations and comprehensive loss. There were no such interest or penalties included in the provision (benefit) for income taxes for any of the periods presented.

At December 31, 2018, the Company’s ExOne GmbH (2010-2013) and ExOne Property GmbH (2013) subsidiaries were under examination by local taxing authorities in Germany. In January 2019, this examination was concluded without significant adjustment to previously established tax positions. As a result, during the three months ended March 31, 2019, the Company recorded a reversal of certain of its previously recorded liabilities for uncertain tax positions of $1,075, of which $257 was offset against net operating loss carryforwards.

Note 15. Equity-Based Compensation

On January 24, 2013, the Board adopted the 2013 Equity Incentive Plan (the “Plan”). In connection with the adoption of the Plan, 500,000 shares of common stock were reserved for issuance pursuant to the Plan, with automatic increases in such reserve available each year annually on January 1 from 2014 through 2023 equal to the lesser of 3.0% of the total outstanding shares of common stock as of December 31 of the immediately preceding year, or a number of shares of common stock determined by the Board, provided that the maximum number of shares authorized under the Plan could not exceed 1,992,241 shares, subject to certain adjustments. The maximum number of shares authorized under the Plan was reached on January 1, 2017. At June 30, 2020, 688,217 shares remained available for future issuance under the Plan.

Stock options and restricted stock issued by the Company under the Plan are generally subject to service conditions resulting in annual vesting on the anniversary of the date of grant over a period typically ranging between one and three years. Certain stock options and restricted stock issued by the Company under the Plan vest immediately upon issuance. Stock options issued by the Company under the Plan have contractual lives which expire over a period typically ranging between five and ten years from the date of grant, subject to continued service to the Company by the participant.

17


On February 6, 2019, the Compensation Committee of the Board adopted the 2019 Annual Incentive Program (the “2019 Program”) as a subplan under the Plan. The 2019 Program provided an opportunity for performance-based compensation to senior executive officers of the Company, among others. The target annual incentive for each 2019 Program participant was expressed as a percentage of base salary and was conditioned on the achievement of certain financial goals (as approved by the Compensation Committee of the Board). The Compensation Committee of the Board retained negative discretion over amounts payable under the 2019 Program. During the three and six months ended June 30, 2019, the Company recorded $234 and $376, respectively, in equity-based compensation expense based on the estimated outcome of the defined financial goals for 2019 under the 2019 Program.

On February 5, 2020, the Compensation Committee of the Board adopted the 2020 Annual Incentive Program (the “2020 Program”) as a subplan under the Plan. The 2020 Program provided an opportunity for performance-based compensation to senior executive officers of the Company, among others. The target annual incentive for each 2020 Program participant was expressed as a percentage of base salary and was conditioned on the achievement of certain financial goals (as approved by the Compensation Committee of the Board). The Compensation Committee of the Board retained negative discretion over amounts payable under the 2020 Program. During the three and six months ended June 30, 2020, the Company recorded no equity-based compensation expense based on the estimated outcome of the defined financial goals for 2020 under the 2020 Program.

The following table summarizes the total equity-based compensation expense recognized by the Company for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Equity-based compensation expense recognized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

$

44

 

 

$

150

 

 

$

189

 

 

$

316

 

Restricted stock

 

 

105

 

 

 

245

 

 

 

246

 

 

 

374

 

Other(a)

 

 

8

 

 

 

247

 

 

 

14

 

 

 

391

 

Total equity-based compensation expense before income taxes

 

 

157

 

 

 

642

 

 

 

449

 

 

 

1,081

 

Benefit for income taxes(b)

 

 

 

 

 

 

 

 

 

 

 

 

Total equity-based compensation expense net of income taxes

 

$

157

 

 

$

642

 

 

$

449

 

 

$

1,081

 

 

(a)

For each of the 2020 periods, Other represents expense associated with certain employee contractual amounts to be settled in equity. For each of the 2019 periods, Other represents expense associated with the 2019 Program and certain employee contractual amounts to be settled in equity.

(b)

The Benefit for income taxes from equity-based compensation for each of the periods presented has been determined to be $0 based on recorded valuation allowances against net deferred tax assets.

At June 30, 2020, total future compensation expense related to unvested awards yet to be recognized by the Company was $412 for stock options and $164 for restricted stock. Total future compensation expense related to unvested awards yet to be recognized by the Company is expected to be recognized over a weighted-average remaining vesting period of 1.1 years.

The fair value of stock options granted during the six months ended June 30, 2019 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

 

Weighted average fair value per stock option

 

$3.48 - $3.68

 

Volatility

 

54.0% - 60.1%

 

Average risk-free interest rate

 

2.2% - 2.5%

 

Dividend yield

 

0.0%

 

Expected term (years)

 

2.5 - 3.5

 

 

18


For certain stock option awards, volatility is estimated based on the historical volatility of the Company when the expected term of the award is less than the period for which the Company has been publicly traded. For certain stock option awards, volatility is estimated based on the historical volatilities of certain peer group companies when the expected term of the award exceeds the period for which the Company has been publicly traded. The average risk-free rate is based on a weighted average yield curve of risk-free interest rates consistent with the expected term of the awards. Expected dividend yield is based on historical dividend data as well as future expectations. Expected term is calculated using the simplified method as the Company does not have sufficient historical exercise experience upon which to base an estimate.

The activity for stock options was as follows for the periods indicated:

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Number of

Options

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Grant Date Fair

Value

 

 

Number of

Options

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Grant Date Fair

Value

 

Outstanding at beginning of period

 

 

854,259

 

 

$

9.34

 

 

$

4.49

 

 

 

621,986

 

 

$

10.66

 

 

$

5.52

 

Stock options granted

 

 

 

 

$

 

 

$

 

 

 

57,610

 

 

$

8.33

 

 

$

3.67

 

Stock options exercised

 

 

(73,251

)

 

$

7.38

 

 

$

3.22

 

 

 

(36,370

)

 

$

7.22

 

 

$

3.03

 

Stock options forfeited

 

 

(79,936

)

 

$

7.85

 

 

$

3.41

 

 

 

(9,773

)

 

$

7.67

 

 

$

3.70

 

Stock options expired

 

 

(21,874

)

 

$

11.18

 

 

$

6.14

 

 

 

(24,666

)

 

$

17.10

 

 

$

10.45

 

Outstanding at end of period

 

 

679,198

 

 

$

9.67

 

 

$

4.70

 

 

 

608,787

 

 

$

10.43

 

 

$

5.33

 

Exercisable at end of period

 

 

423,456

 

 

$

11.20

 

 

$

5.83

 

 

 

385,709

 

 

$

11.56

 

 

$

6.20

 

Expected to vest at end of period

 

 

255,742

 

 

$

7.14

 

 

$

2.82

 

 

 

223,078

 

 

$

8.48

 

 

$

3.82

 

 

At June 30, 2020, intrinsic value associated with stock options exercisable and expected to vest was $147 and $360, respectively. The weighted average remaining contractual term of stock options exercisable and expected to vest at June 30, 2020, was 3.4 years and 4.1 years, respectively. Stock options with an aggregate intrinsic value of $624 were exercised by employees during the six months ended June 30, 2020, resulting in proceeds to the Company from the exercise of stock options of $541. Stock options with an aggregate intrinsic value of $326 were exercised by employees during the six months ended June 30, 2019, resulting in proceeds to the Company from the exercise of stock options of $262 (of which, at June 30, 2019, $91 remained unsettled). The Company recorded no income tax benefit related to these exercises.

The activity for restricted stock was as follows for the periods indicated:

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Shares of

Restricted

Stock

 

 

Weighted Average

Grant Date Fair

Value

 

 

Shares of

Restricted

Stock

 

 

Weighted Average

Grant Date Fair

Value

 

Outstanding at beginning of period

 

 

66,513

 

 

$

8.76

 

 

 

67,001

 

 

$

8.30

 

Restricted stock granted

 

 

37,500

 

 

$

7.12

 

 

 

66,763

 

 

$

8.98

 

Restricted stock vested

 

 

(56,763

)

 

$

9.11

 

 

 

(37,500

)

 

$

8.12

 

Restricted stock forfeited

 

 

 

 

$

 

 

 

 

 

$

 

Outstanding at end of period

 

 

47,250

 

 

$

7.04

 

 

 

96,264

 

 

$

8.84

 

Restricted stock expected to vest at end of period

 

 

47,250

 

 

$

7.04

 

 

 

96,264

 

 

$

8.84

 

 

Restricted stock that vested during the six months ended June 30, 2020 and 2019, had a fair value of $408 and $356, respectively.

 

Note 16. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

19


The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

 

Level 1

 

Observable inputs such as quoted prices in active markets for identical investments that the Company has the ability to access.

 

 

 

Level 2

 

Inputs include:

 

Quoted prices for similar assets or liabilities in active markets;

 

Quoted prices for identical or similar assets or liabilities in inactive markets;

 

Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

 

Inputs that are derived principally from, or corroborated by, observable market data by correlation or other means.

 

 

 

Level 3

 

Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

 

The Company is required to disclose its estimate of the fair value of material financial instruments, including those recorded as assets or liabilities in its consolidated financial statements, in accordance with GAAP. At June 30, 2020 and December 31, 2019, the Company had no financial instruments (assets or liabilities) measured at fair value on a recurring basis.

The carrying values and fair values of other financial instruments (assets and liabilities) not required to be recorded at fair value were as follows as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

Carrying

Value

 

 

Fair

Value

 

 

Carrying

Value

 

 

Fair

Value

 

Cash and cash equivalents

 

$

19,658

 

 

$

19,658

 

 

$

5,265

 

 

$

5,265

 

Restricted cash

 

$

508

 

 

$

508

 

 

$

978

 

 

$

978

 

Debt issuance costs(a)

 

$

129

 

 

$

 

 

$

107

 

 

$

 

Current portion of long-term debt(b)

 

$

1,128

 

 

$

990

 

 

$

153

 

 

$

157

 

Long-term debt  ̶  net of current portion(b)

 

$

2,354

 

 

$

2,309

 

 

$

1,211

 

 

$

1,227

 

 

(a)

Represents debt issuance costs associated with the Company’s related party revolving credit facility (Note 12) of which $35 and $88 was included in prepaid expenses and other current assets and $94 and $19 was included in other noncurrent assets in the accompanying condensed consolidated balance sheet at June 30, 2020 and December 31, 2019, respectively.

(b)

Carrying values at June 30, 2020 and December 31, 2019 are net of unamortized debt issuance costs of $18 and $20, respectively.

 

The carrying amounts of cash and cash equivalents and restricted cash approximate fair value due to their short-term maturities. The fair value of current portion of long term debt and long-term debt – net of current portion has been estimated by management based on the consideration of applicable interest rates, including certain instruments at variable or floating rates and the nominal fixed interest rate (1.0%) associated with the Company’s PPP Loan (Note 13) and other available information (including quoted prices of similar instruments available to the Company). Cash and cash equivalents and restricted cash were classified as Level 1; Current portion of long-term debt and long-term debt – net of current portion were classified as Level 2.

Note 17. Concentration of Credit Risk

During the three months and six months ended June 30, 2020 and 2019, the Company conducted a significant portion of its business with a limited number of customers, though not necessarily the same customers for each respective period. For the three months ended June 30, 2020 and 2019, the Company’s five most significant customers represented 40.7% and 46.4% of total revenue, respectively. For the six months ended June 30, 2020 and 2019, the Company’s five most significant customers represented 24.3% and 33.0% of total revenue, respectively. At June 30, 2020 and December 31, 2019, accounts receivable from the Company’s five most significant customers were $1,480 and $3,230, respectively.

20


Note 18. Related Party Transactions

Purchases of products and/or services from related parties during the three months and six months ended June 30, 2019 were $43 and $58, respectively.  Purchases of products and/or services by the Company during the three and six months ended June 30, 2019 included leased office space and website design services from related parties under common control by S. Kent Rockwell, (currently Chairman of the Board of the Company and previously the Executive Chairman and Chief Executive Officer of the Company) and the purchase of a 3D printing machine and certain ancillary equipment for $30 from an educational institution determined to be a related party on the basis that S. Kent Rockwell serves as a trustee of the educational institution. None of the transactions met a threshold requiring review and approval by the Audit Committee of the Board. There were no purchases of products and/or services from related parties during the three or six months ended June 30, 2020. There were no amounts due to related parties at either June 30, 2020 or December 31, 2019.  

The Company also receives the benefit of the corporate use of an airplane from a related party under common control by S. Kent Rockwell for no consideration.  The Company estimated the fair market value of the benefits received during each of the three months and six months ended June 30, 2019 was $3. There were no such benefits received during the three months and six months ended June 30, 2020.

Refer to Note 12 for further discussion relating to the Company’s revolving credit facility with a related party.

 

Note 19. Other Expense – Net

 

Other expense – net consisted of the following for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Interest income

 

$

(3

)

 

$

(2

)

 

$

(15

)

 

$

(8

)

Foreign currency losses (gains) – net

 

 

128

 

 

 

29

 

 

 

(37

)

 

 

51

 

Other – net

 

 

70

 

 

 

30

 

 

 

57

 

 

 

26

 

 

 

$

195

 

 

$

57

 

 

$

5

 

 

$

69

 

 

Note 20. Subsequent Events

The Company has evaluated all of its activities and concluded that no other subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes to the condensed consolidated financial statements.

21


Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(dollars in thousands, except per-share amounts)

The following discussion and analysis should be read together with our unaudited condensed consolidated financial statements and related notes thereto set forth in this Quarterly Report on Form 10-Q as well as our Annual Report on Form 10-K for the year ended December 31, 2019.

This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to our 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.”

We caution 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 we assume no duty, and do 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 items described under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 and as modified and supplemented by “Risk Factors” in Part II, Item 1A of our Quarterly Reports on Form 10-Q for the periods ended March 31, 2020 and June 30, 2020, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: the severity and duration of world health events, including the outbreak of the novel strain of coronavirus COVID-19 and the related economic repercussions and operational challenges; our ability to consistently generate operating profits; fluctuations in our revenues and operating results; our competitive environment and our competitive position; our ability to enhance our current three-dimensional (“3D”) printing machines and technology and develop and introduce new 3D printing machines; our ability to qualify more industrial materials in which we can print; demand for our products; the availability of skilled personnel; the impact of loss of key management; the impact of market conditions and other factors on the carrying value of long-lived assets; our ability to continue as a going concern; the impact of customer specific terms in machine sale agreements in determining the period in which we recognize revenue; risks related to global operations including effects of COVID-19; foreign currency; the adequacy of sources of liquidity; the amount and sufficiency of funds for required capital expenditures, working capital, and debt service; dependency on certain critical suppliers; nature or impact of alliances and strategic investments; reliance on critical information technology systems; 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 or ExOne Adoption Centers (“EACs”); the adequacy of our protection of our intellectual property; expectations regarding demand for our industrial products, operating revenues, operating and maintenance expenses, insurance expenses and deductibles, interest expenses, debt levels, and other matters with regard to outlook; and other factors beyond our control, including the impact of COVID-19.

Overview

Our Business

We are a global provider of 3D printing machines and 3D printed and other products, materials and services to industrial customers. Our business primarily consists of manufacturing and selling 3D printing machines and printing products to specification for our customers using our installed base of 3D printing machines. Our machines serve direct (metal) and indirect (sand) applications.  Direct printing produces a component; indirect printing makes a tool to produce a component. We offer pre-production collaboration and print products for customers through our network of EACs. We also supply the associated materials, including consumables and replacement parts, and other services, including training and technical support, that are necessary for purchasers of our 3D printing machines to print products. We believe that our ability to print in a variety of industrial materials, as well as our industry-leading volumetric output (as measured by build box size and printing speed), uniquely position us to serve the needs of industrial customers.

Outlook

The impact of COVID-19 and the related economic, business and market disruptions are evolving rapidly, and their effects are uncertain. As a result of COVID-19, we were required to temporarily close our operations at our North Huntingdon, Pennsylvania facility for the period from March 23 through March 30, 2020. In response to COVID-19, we have incurred incremental costs associated with protecting the health and safety of our global workforce, enhanced sanitization of our global operating facilities, and information technology capabilities for employees operating remotely. Beginning in March 2020, restrictions imposed by various governmental authorities on both domestic and international shipping and travel have caused a disruption to the timing of delivery and installation of our 3D printing machines, resulting in negative impacts to our financial position, results of operations and cash flows. The duration and severity of the outbreak and its long-term impact on our business are uncertain at this time. We are unable to predict the impact that COVID-19 will have on our future financial position, results of operations and cash flows.

22


In response to adverse market conditions associated with COVID-19, beginning in March 2020 and through April 2020, we initiated various cost savings actions including a mix of employee terminations, furloughs and pay rate reductions, as well as reductions in consulting and other expenses, all in an effort to conserve cash and maintain adequate liquidity. As a result of these actions, and other reduced costs such as global travel, we realized approximately $2,000 in cost savings during the three months ended June 30, 2020. We estimate additional cost savings in the range of approximately $2,000 to $3,000 for the remainder of 2020, with approximately $2,500 of the total 2020 cost savings sustained into 2021. Given the high level of uncertainty associated with the duration and severity of COVID-19, we expect to continue to assess whether additional cost actions are necessary to further adjust our operating model.

We are the global leader in industrial 3D printers utilizing binder jetting technology for non-polymer-based materials. Our continued focus is to achieve profitable growth via three strategic initiatives:

 

-

Expand Both Our Customer and Application Focus. We intend to leverage our substantial experience in binder jetting technology to focus on the highest value industries and applications. We have made a significant investment in our global commercial operations to drive our growth in this area.

 

-

Extend the Capabilities of Our Core Technology. We intend to expand our core binder jetting technology through our machine platforms while at the same time lowering the total cost of ownership of our systems for our customers. We are also focused on driving modularity among our various machine platforms for both direct (metal) and indirect (sand) applications.

 

-

Execute on Recurring Revenue Growth. We intend to execute on our plan to expand our offerings for 3D printed and other products, materials and services while better leveraging our growing global installed base of 3D printers.

Our operating results continue to be impacted by a prolonged downturn in global manufacturing trends which has influenced the capital expenditure investments of our customers. Despite these headwinds, we ended the second quarter with a record backlog balance of approximately $38,200. We expect the combination of our backlog at June 30, 2020 and an acceleration in market adoption of our binder jetting technology, including our newly introduced printer platforms (our X1 25ProTM and X1 160ProTM for metal applications and S-Max ProTM for sand applications), to provide the basis for our operating stability for the remainder of 2020 and into 2021 despite continuing negative macroeconomic trends for global manufacturing, including the impact of COVID-19.

Sale-Leaseback of European Headquarters and Operating Facility in Gersthofen, Germany

On December 10, 2019, ExOne Property GmbH and ExOne GmbH (our “German Subsidiaries”), entered into a purchase agreement (the “Purchase Agreement”) with Solidas Immobilien und Grundbesitz GmbH, a private, unaffiliated German real estate investor (the “Buyer”), for the sale of our European headquarters and operating facility in Gersthofen, Germany (the “Facility”) for a cash price of approximately $18,500 (€17,000), of which approximately $2,200 was received prior to December 31, 2019. Concurrently with the execution of the Purchase Agreement, ExOne GmbH and the Buyer entered into a rental contract (the “Lease”) for the leaseback of the Facility for an initial aggregate annual rent totaling approximately $1,700 (€1,500), plus applicable taxes, which is fixed during the initial three-year term and is subject to adjustment on an annual basis (in accordance with the consumer price index for Germany) during the two five-year option extension periods. The sale-leaseback transaction closed on February 18, 2020.

As a result of the completion of the sale-leaseback transaction further discussed above, we recorded or expect to record the following effects on our results of operations, financial condition and cash flows:

 

-

As indicated, we expect to incur annual rent expense (which commenced during the three months ending March 31, 2020) of approximately $1,700 (with an expected allocation of approximately $1,300, $200 and $200 to cost of sales, research and development and selling, general and administrative expenses, respectively, based on the relative utilization of the Facility). This is in place of depreciation recorded in prior annual periods associated with the Facility of approximately $600 (allocated approximately $400, $100 and $100 to cost of sales, research and development and selling, general and administrative expenses, respectively, based on the relative utilization of the Facility).

 

-

During the three months ended March 31, 2020, we recorded a gain from sale-leaseback of property and equipment of $1,462.

 

-

During the three months ended March 31, 2020, we recorded an operating right-of-use asset and corresponding operating lease liability of $4,605, which was representative of the present value of future minimum lease payments over the initial three-year term as there were no penalties or other factors associated with the lease that resulted in reasonable assurance of its extension at inception.

Backlog

At June 30, 2020, our backlog was approximately $38,200 of which approximately $33,200 is expected to be fulfilled during the next twelve months notwithstanding uncertainty related to the impact of COVID-19 (further discussed above) including, but not limited to, domestic and international shipping and travel restrictions brought about by COVID-19 which could have an adverse effect on the timing of delivery and installation of products and/or services to customers. At December 31, 2019, our backlog was approximately $31,100 and at June 30, 2019 our backlog was approximately $23,100.

23


Seasonality

Purchases of our 3D printing machines are often subject to the capital expenditure cycles of our customers. Generally, 3D printing machine sales are higher in our third and fourth quarters than in our first and second quarters; however, as acceptance of our 3D printing machines as a credible alternative to traditional methods of production grows, we expect to limit the seasonality we experience.

We believe that COVID-19 may have an adverse effect on the future capital expenditure decisions of our customers outside of their normal spending cycles, which may impact the timing and extent of such decisions.

Results of Operations

Net Loss

Net loss for the three months ended June 30, 2020 was $4,023, or $0.24 per basic and diluted share, compared with a net loss of $3,789, or $0.23 per basic and diluted share, for the three months ended June 30, 2019. The increase in our net loss was principally due to a decrease in our revenues and gross profit, primarily due to a lower volume of sales of 3D printing machines. This decrease was partially offset by lower operating expenses (research and development and selling, general and administrative expenses) primarily as a result of certain cost savings actions taken, and other cost reductions realized, as a result of COVID-19 and the absence of costs associated with the GIFA international foundry show in Dusseldorf, Germany (a once every four-year event), which we attended in June 2019.

Net loss for the six months ended June 30, 2020 was $7,671, or $0.47 per basic and diluted share, compared with a net loss of $8,285, or $0.51 per basic and diluted share, for the six months ended June 30, 2019. The decrease in our net loss was principally due to lower operating expenses primarily as a result of certain cost savings actions taken, and other cost reductions realized, as a result of COVID-19 and the absence of costs associated with the GIFA international foundry show. In addition, we recognized a gain of $1,462 during the three months ended March 31, 2020 associated with the sale-leaseback of our European headquarters and operating facility in Gersthofen, Germany. These amounts were offset by lower gross profit on our sales mostly as a result of lower realized pricing on products sold. In addition, during the three months ended March 31, 2019, we recorded an income tax benefit of $818 associated with the reversal of previously recorded liabilities for uncertain tax positions following the completion of a tax examination of our German operations.

Revenue

The following table summarizes revenue by product group for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

3D printing machines

 

$

4,898

 

 

 

44.1

%

 

$

9,231

 

 

 

60.4

%

 

$

11,215

 

 

 

45.8

%

 

$

12,560

 

 

 

50.5

%

3D printed and other products,

   materials and services

 

 

6,201

 

 

 

55.9

%

 

 

6,048

 

 

 

39.6

%

 

 

13,267

 

 

 

54.2

%

 

 

12,298

 

 

 

49.5

%

 

 

$

11,099

 

 

 

100.0

%

 

$

15,279

 

 

 

100.0

%

 

$

24,482

 

 

 

100.0

%

 

$

24,858

 

 

 

100.0

%

Revenue for the three months ended June 30, 2020 was $11,099, compared with revenue of $15,279 for the three months ended June 30, 2019, a decrease of $4,180, or 27.4%. The decrease in revenue resulted from a decrease in revenue attributable to our 3D printing machines product group, offset by an increase in revenue attributable to our 3D printed and other products, materials and services product group.

The decrease in revenues from 3D printing machines of $4,333 for the three months ended June 30, 2020, or 46.9%, resulted from lower volumes (8 units sold during the three months ended June 30, 2020 versus 13 units sold during the three months ended June 30, 2019) and an unfavorable mix of machines sold.

The increase in revenues from 3D printed and other products, materials and services of $153 for the three months ended June 30, 2020, or 2.5%, resulted from an increase of $198 associated with research and development arrangements primarily due to an automotive project which commenced during the three months ended December 31, 2019.

Revenue for both product groups were impacted by COVID-19, including disruptions to domestic and international shipping and travel in addition to the negative macroeconomic effects.

Revenue for the six months ended June 30, 2020 was $24,482, compared with revenue of $24,858 for the six months ended June 30, 2019, a decrease of $376, or 1.5%. The decrease in revenue resulted from a decrease in revenue attributable to our 3D printing machines product group, offset by an increase in revenue attributable to our 3D printed and other products, materials and services product group.

24


The decrease in revenues from 3D printing machines of $1,345 for the six months ended June 30, 2020, or 10.7%, resulted from an unfavorable mix of machines sold, offset by slightly higher volumes (22 units sold during the six months ended June 30, 2020 versus 21 units sold during the six months ended June 30, 2019).

The increase in revenues from 3D printed and other products, materials and services of $969 for the six months ended June 30, 2020, or 7.9%, resulted from an increase of $512 in consumable materials and aftermarket revenues based on growth in our global installed base of 3D printing machines and an increase of $614 associated with research and development arrangements primarily due to an automotive project which commenced during the three months ended December 31, 2019. Offsetting these increases were reductions in revenues of $220 from our global EACs (metal and sand) based on lower customer demand for printed products.

Revenue for both product groups were impacted by COVID-19, including disruptions to domestic and international shipping and travel in addition to the negative macroeconomic effects.

Cost of Sales and Gross Profit

Cost of sales for the three months ended June 30, 2020 was $8,009, compared with cost of sales of $10,137 for the three months ended June 30, 2019, a decrease of $2,128, or 21.0%. Gross profit for the three months ended June 30, 2020 was $3,090, compared with gross profit of $5,142 for the three months ended June 30, 2019, a decrease of $2,052. Gross profit percentage was 27.8% for the three months ended June 30, 2020, compared with 33.7% for the three months ended June 30, 2019.

The decrease in gross profit during the three months ended June 30, 2020, was primarily due to our lower revenue volumes, partially offset by lower fixed overhead costs during the period. Lower fixed overhead costs during the three months ended June 30, 2020 were driven by a reduction in labor, travel and other discretionary manufacturing expense based on actions taken and other realized reductions as a result of COVID-19. These decreases were offset by an increase in facility rent expense (versus depreciation) following completion of the sale-leaseback of our European headquarters and operating facility in Gersthofen, Germany during the three months ended March 31, 2020.    

Cost of sales for the six months ended June 30, 2020 was $17,763, compared with cost of sales of $17,074 for the six months ended June 30, 2019, an increase of $689, or 4.0%. Gross profit for the six months ended June 30, 2020 was $6,719, compared with gross profit of $7,784 for the six months ended June 30, 2019, a decrease of $1,065. Gross profit percentage was 27.4% for the six months ended June 30, 2020, compared with 31.3% for the six months ended June 30, 2019.

The decrease in gross profit during the six months ended June 30, 2020, was primarily due to lower realized pricing on products sold and unfavorable product warranty experience, partially offset by lower fixed overhead costs during the period. Lower fixed overhead costs during the six months ended June 30, 2020, were driven by a reduction in labor, travel and other discretionary manufacturing expense based on actions taken and other realized reductions as a result of COVID-19. These decreases were offset by an increase in facility rent expense (versus depreciation) following completion of the sale-leaseback of our European headquarters and operating facility in Gersthofen, Germany during the three months ended March 31, 2020.    

Research and Development

Research and development expenses for the three months ended June 30, 2020 were $2,369, compared with research and development expenses of $2,537 for the three months ended June 30, 2019, a decrease of $168, or 6.6%. The decrease in research and development expenses was primarily due to a decrease of $141 in employee-related costs, including $101 as a result of actions taken (employee terminations, furloughs and pay rate reductions) in response to the impact of COVID-19.

Research and development expenses for the six months ended June 30, 2020, were $4,845 compared with research and development expenses of $4,969 for the six months ended June 30, 2019, a decrease of $124, or 2.5%. The decrease in research and development expenses is primarily as a result of $141 in lower material costs incurred between the periods associated with 3D printing machine development projects.

Selling, General and Administrative

Selling, general and administrative expenses for the three months ended June 30, 2020 were $4,488, compared with selling, general and administrative expenses of $6,167 for the three months ended June 30, 2019, a decrease of $1,679, or 27.2%. The decrease in selling, general and administrative expenses was principally due to a reduction in incentive compensation of $469 based on executive changes and lower-than-expected performance against 2020 Program targets, lower travel-related expenses of $279 due to global travel restrictions brought about by COVID-19, a reduction in selling costs (sales promotional, trade show and commissions expense) of $701 based on the impact of COVID-19 and the absence of costs associated with the GIFA international foundry show in Dusseldorf, Germany (a once every four-year event) and lower consulting and professional fees of $342. Offsetting these decreases was an increase in employee-related costs (salaries and benefits) of $201 driven by severance costs of $331 incurred in connection with cost savings measures taken in response to COVID-19 offset by related cost savings of $130.

25


Selling, general and administrative expenses for the six months ended June 30, 2020 were $10,651, compared with selling, general and administrative expenses of $11,590 for the six months ended June 30, 2019, a decrease of $939, or 8.1%The decrease in selling, general and administrative expenses was principally due to a reduction in incentive compensation of $602 based on executive changes and lower-than-expected performance against 2020 Program targets, lower travel-related expenses of $264 due to global travel restrictions brought about by COVID-19, a reduction in selling costs (sales promotional, trade show and commissions expense) of $588 based on the impact of COVID-19 and the absence of costs associated with the GIFA international foundry show in Dusseldorf, Germany (a once every four-year event) and lower consulting and professional fees of $382. Offsetting these decreases was an increase in employee-related costs (salaries and benefits) of $855 driven by an increase in severance costs of $374 incurred in connection with cost savings measures taken in response to COVID-19 and other investments made to our commercial operations and a reduction of $132 in net recoveries for bad debts.

Interest Expense

Interest expense for the three months ended June 30, 2020 was $53, compared with interest expense of $71 for the three months ended June 30, 2019, a decrease of $18, or 25.4%. Interest expense for the six months ended June 30, 2020 was $117, compared with interest expense of $142 for the six months ended June 30, 2019, a decrease of $25, or 17.6%. The decrease in interest expense for both periods was principally due to lower interest associated with our related party revolving credit facility (including lower debt issuance cost amortization) following amendment of the Credit Agreement (which reduced the borrowing capacity of the facility) and the extension of the term of the credit facility in February 2020.

Other Expense – Net

Other expense – net for the three months ended June 30, 2020 was $195, compared with other expense – net of $57 for the three months ended June 30, 2019. The increase of $138 was principally due to unfavorable foreign exchange rate changes and the related impact on certain intercompany transactions between subsidiaries for which settlement has occurred or is planned and an increase in financing fees associated with commercial transactions.

Other expense – net for the six months ended June 30, 2020 was $5, compared with other expense – net of $69 for the six months ended June 30, 2019. The decrease of $64 was principally due to favorable foreign exchange rate changes and the related impact on certain intercompany transactions between subsidiaries for which settlement has occurred or is planned.

Provision (Benefit) for Income Taxes

The provision for income taxes for the three months ended June 30, 2020 and 2019 was $8 and $99, respectively. The provision (benefit) for income taxes for the six months ended June 30, 2020 and 2019 was $234 and ($701), respectively. We have completed a discrete period computation of our provision (benefit) for income taxes for each of the periods presented. The discrete period computation was required as a result of jurisdictions with losses before income taxes for which no tax benefit can be recognized and an inability to generate reliable estimates for results in certain jurisdictions as a result of inconsistencies in generating net operating profits (losses) in those jurisdictions.  

The effective tax rate for the three months ended June 30, 2020 and 2019 was 0.2% (provision on a loss) and 2.7% (provision on a loss), respectively. The effective tax rate for the six months ended June 30, 2020 and 2019 was 3.1% (provision on a loss) and 7.8% (benefit on a loss), respectively.

For the three and six months ended June 30, 2020 and the three months ended June 30, 2019, the effective tax rate differed from the United States federal statutory rate of 21.0% primarily due to net changes in valuation allowances for the period. For the six months ended June 30, 2019, the effective tax rate differed from the United States federal statutory rate of 21.0% primarily due to the reversal of previously recorded liabilities for uncertain tax positions (further discussed below) and net changes in valuation allowances for the period.

We have provided a valuation allowance for certain of our net deferred tax assets as a result of our inability to generate consistent net operating profits in certain jurisdictions in which we operate. As such, certain benefits from deferred taxes in the periods presented have been fully offset by changes in the valuation allowance for the related net deferred tax assets. We continue to assess our future taxable income by jurisdiction based on our recent historical operating results, the expected timing of reversal of temporary differences, various tax planning strategies that we may be able to enact in future periods, the impact of potential operating changes on our business and our forecast results from operations in future periods based on available information at the end of each reporting period. To the extent that we are able to reach the conclusion that net deferred tax assets are realizable based on any combination of the above factors in a single, or multiple, taxing jurisdictions, a reversal of the related portion of our existing valuation allowances may occur.

At December 31, 2018, our ExOne GmbH (2010-2013) and ExOne Property GmbH (2013) subsidiaries were under examination by local taxing authorities in Germany. In January 2019, this examination was concluded without significant adjustment to previously established tax positions. As a result, during the three months ended March 31, 2019, we recorded a reversal of certain of our previously recorded liabilities for uncertain tax positions of $1,075, of which $257 was offset against net operating loss carryforwards.

26


Impairment

During the three months ended June 30, 2020, as a result of continued operating losses and cash flow deficiencies, we identified a triggering event requiring a test for the recoverability of long-lived assets held and used at the asset group level. Assessing the recoverability of long-lived assets held and used requires significant judgments and estimates by management.

For purposes of testing long-lived assets for recoverability, we operate as three separate asset groups: United States, Europe and Japan. In assessing the recoverability of long-lived assets held and used, we determined the carrying amount of long-lived assets held and used to be in excess of the estimated future undiscounted net cash flows of the related assets. We proceeded to determine the fair value of our long-lived assets held and used, principally through use of the market approach. Our use of the market approach included consideration of market transactions for comparable assets. Management concluded that the fair value of long-lived assets held and used exceeded their carrying value, and as such, no impairment loss was recorded.   

A significant decrease in the market price of a long-lived asset, adverse change in the use or condition of a long-lived asset, adverse change in the business climate or legal or regulatory factors impacting a long-lived asset and continued operating losses and cash flow deficiencies associated with a long-lived asset, among other indicators, could cause a future assessment to be performed which may result in an impairment of long-lived assets held and used, which could result in a material adverse effect on our financial position and results of operations.

Impact of Inflation

Our results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our results of operations and financial condition are not significant.

Liquidity and Capital Resources

Liquidity

We have incurred a net loss in each of our annual periods since our inception. We incurred a net loss of $4,023 and $7,671 for the three months and six months ended June 30, 2020, respectively. At June 30, 2020, we had $19,658 in unrestricted cash and cash equivalents. In addition to our unrestricted cash and cash equivalents, we also have access to additional capital through our $10,000 related party revolving credit facility (further discussed below).

Since our inception we have received cumulative unrestricted net proceeds from the sale of our common stock (through our initial public offering and subsequent public offerings) of $168,361 to fund our operations. We maintain additional access to capital through our active shelf registration statement which allows for the sale of various equity or debt instruments up to an aggregate amount of $125,000. In June 2020, we entered into an Equity Distribution Agreement with Oppenheimer & Company, Inc. (“Oppenheimer”) pursuant to which Oppenheimer agreed to act as sales agent in the sale of up to $25,000 in the aggregate of our common stock in “at-the-market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended. Terms of the Equity Distribution Agreement require a 3.0% commission on the sale of our common stock as well as reimbursement of certain expenses incurred by Oppenheimer. During the three months ended June 30, 2020, we sold 382,601 shares of common stock in at-the-market offerings at an average selling price of $8.86 per share resulting in net proceeds to us (after deducting commissions) of $3,288 (of which, at June 30, 2020, $362 remained unsettled and was included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet, such net proceeds received by the Company in July 2020). During the three months ended June 30, 2020, we incurred expenses (other than commissions) associated with the at-the-market offerings of $190 (of which, at June 30, 2020, $158 were unpaid and included in accounts payable in the accompanying condensed consolidated balance sheet). There have been no sales of shares of common stock in at-the-market offerings subsequent to June 30, 2020. Future sales of securities in at-the-market offerings and our active shelf registration, if any, are dependent on market conditions, which may restrict the timing and extent of any future offering of securities by us.

In addition to net proceeds from the sale of our common stock, on April 18, 2020, we received additional unrestricted cash proceeds of $2,194 in connection with a Paycheck Protection Program loan (further discussed below).

We have previously exhibited our ability to modify our operating structure and support our liquidity position through various restructuring and other actions, including our 2018 global cost realignment program. As further discussed above, in response to adverse market conditions associated with COVID-19, beginning in March 2020 and through April 2020, we commenced various cost savings actions including a mix of employee terminations, furloughs and pay rate reductions, as well as reductions in consulting and other expenses, all in an effort to conserve cash and maintain adequate liquidity.  

We believe that our existing capital resources will be sufficient to support our operating plan. If we anticipate that our actual results will differ from our operating plan, we believe we have sufficient capabilities to enact cost savings measures to preserve capital (in addition to those further discussed above). We may also seek to raise additional capital to support our growth through additional debt, equity or other alternatives (including asset sales) or a combination thereof.

27


Related Party Revolving Credit Facility

On March 12, 2018, we and our ExOne Americas LLC and ExOne GmbH subsidiaries, as guarantors (collectively, the “Loan Parties”), entered into a Credit Agreement and related ancillary agreements with LBM Holdings, LLC (“LBM”), a company controlled by S. Kent Rockwell, who was our Executive Chairman (a related party) at such date and is currently our Chairman, relating to a $15,000 revolving credit facility (the “Credit Agreement”) to provide additional funding to us for working capital and general corporate purposes. The Credit Agreement provided a credit facility for a term of three years (through March 12, 2021), bearing interest at a rate of one-month LIBOR plus an applicable margin of 500 basis points (6.8% at December 31, 2019 and 5.2% at June 30, 2020). The Credit Agreement required a commitment fee of 75 basis points, or 0.75%, on the unused portion of the facility, payable monthly in arrears. In addition, an up-front commitment fee of 125 basis points, or 1.25% ($188), was required at closing. Borrowings under the Credit Agreement were collateralized by the accounts receivable, inventories and machinery and equipment of the Loan Parties.

On February 18, 2020, the Loan Parties and LBM entered into a First Amendment to the Credit Agreement (the “Amendment”) which (i) reduced the available capacity under the revolving credit facility to $10,000, (ii) extended the term of the credit facility until March 31, 2024, (iii) increased the commitment fee to 100 basis points, or 1.00%, on the unused portion of the revolving credit facility, and (iv) provided a process for the replacement of the LIBOR index after 2021. In addition, the accounts receivable of ExOne GmbH no longer serve as collateral for borrowings under the amended revolving credit facility.

Borrowings under the credit facility are required to be made in minimum increments of $1,000. We may terminate or reduce the credit commitment at any time during the term of the amended Credit Agreement without penalty. We may also make prepayments against outstanding borrowings under the amended Credit Agreement at any time without penalty. At December 31, 2019 and June 30, 2020, the total estimated value of collateral was in significant excess of the maximum borrowing capacity under the credit facility.

The amended Credit Agreement contains several affirmative covenants including prompt payment of liabilities and taxes; maintenance of insurance, properties, and licenses; and compliance with laws. The amended Credit Agreement also contains several negative covenants including restricting the incurrence of certain additional debt; prohibiting future liens (other than permitted liens); prohibiting investment in third parties; limiting the ability to pay dividends; limiting mergers, acquisitions, and dispositions; and limiting the sale of certain property and equipment of the Loan Parties. The amended Credit Agreement does not contain any financial covenants. The amended Credit Agreement also contains events of default, including, but not limited to, cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants.

We do not consider the Credit Agreement, as amended, indicative of a fair market value lending, as LBM was determined to be a related party based on common control by S. Kent Rockwell. S. Kent Rockwell is the indirect sole owner of LBM. Prior to execution, each of the Credit Agreement and the Amendment was reviewed and approved by the Audit Committee of the Board, in accordance with The ExOne Company Policy and Procedures with Respect to Related Person Transactions, and subsequently by a sub-committee of independent members of the Board. At the time of execution of the Credit Agreement, the available loan proceeds were deposited into an escrow account with an unrelated, third party financial institution acting as escrow agent pursuant to a separate Escrow Agreement by and among the parties. Loan proceeds held in escrow are available to us upon our submission to the escrow agent of a loan request. Such proceeds will not be available to LBM until payment in-full of the obligations under the amended Credit Agreement and termination of the amended Credit Agreement. Payments of principal and other obligations will be made to the escrow agent, while interest payments will be made directly to LBM. Provided there exists no potential default or event of default, the amended Credit Agreement and Escrow Agreement prohibit any acceleration of repayment of any amount outstanding under the amended Credit Agreement and prohibit termination of the amended Credit Agreement or withdrawal from escrow of any unused portion of the available loan proceeds.

There were no borrowings under the credit facility during the three or six months ended June 30, 2020 or 2019. There were no borrowings outstanding under the credit facility at either June 30, 2020 or December 31, 2019.

In connection with our efforts to conserve cash as a result of COVID-19, LBM agreed in April 2020 to temporarily defer (through July 2020) cash payments associated with the commitment fee on the unused portion of the revolving credit facility. There were no incremental interest or other fees incurred by us as a result of this deferral. At June 30, 2020 and December 31, 2019, $52 and $28, respectively, associated with the commitment fee on the unused portion of the revolving credit facility were included in accounts payable in the accompanying condensed consolidated balance sheet. Amounts payable to LBM at June 30, 2020 and December 31, 2019 were settled by us in July 2020 and January 2020, respectively.

Paycheck Protection Program

On April 18, 2020, we entered into an unsecured promissory note (the “Note”) with an unrelated United States bank (the “Lender”) reflecting a loan in the principal amount of $2,194 (the “Loan”). The Loan was granted pursuant to the Paycheck Protection Program (the “PPP”) administered by the United States Small Business Administration (the “SBA”) as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

28


Pursuant to the terms of the Note, the Loan bears interest at a rate of 1.00% per annum and matures on April 18, 2022 (the “Maturity Date”). Principal and interest payments on the Loan are deferred until November 18, 2020, at which time equal installments of principal and interest will be due and payable monthly through the Maturity Date. The Note may be prepaid by us at any time prior to maturity without penalty. If we default on the Note, the Lender may, at its option, accelerate the maturity of our obligations under the Note.

Pursuant to the terms of the PPP, the Loan, or a portion thereof, may be forgiven if Loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, costs used to continue group health care benefits, mortgage interest payments, rent and utilities. We intend to use all or a significant majority of the Loan proceeds for qualifying expenses. The terms of the Loan, including eligibility and forgiveness, may be subject to further requirements in regulations and guidance adopted by the SBA.

Cash Flows

The following table summarizes the significant components of cash flows for the periods indicated, and our cash, cash equivalents, and restricted cash balances as of the periods indicated:

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

Net cash used for operating activities

 

$

(7,337

)

 

$

(1,478

)

Net cash provided by (used for) investing activities

 

 

15,638

 

 

 

(420

)

Net cash provided by financing activities

 

 

5,522

 

 

 

22

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

 

100

 

 

 

(12

)

Net change in cash, cash equivalents, and restricted cash

 

$

13,923

 

 

$

(1,888

)

 

 

 

 

 

 

 

 

 

 

 

June 30,

2020

 

 

December 31,

2019

 

Cash and cash equivalents

 

$

19,658

 

 

$

5,265

 

Restricted cash

 

 

508

 

 

 

978

 

Cash, cash equivalents, and restricted cash

 

$

20,166

 

 

$

6,243

 

 

Operating Activities

Net cash used for operating activities for the six months ended June 30, 2020 was $7,337, compared with net cash used for operating activities of $1,478 for the six months ended June 30, 2019. The increase in net cash outflows of $5,859 was due to an increase in our net loss (net of noncash items) and an unfavorable change in our net working capital attributable to an increase in net cash outflows related to inventory production of our 3D printing machines (impacted by delivery and installation delays associated with COVID-19 and our growth in backlog during the period) and the timing of payments to our suppliers and vendors for our production and operating expenses, offset by an increase in net cash inflows from customers (principally due to timing of cash collections on 3D printing machine sales).

We expect to maintain a balanced net working capital position for the remainder of 2020, with a targeted reduction in inventories consistent with our revised production plans which are expected to offset lower commercial activity (customer prepayments) stemming from the impact of COVID-19.

Investing Activities

Net cash provided by investing activities for the six months ended June 30, 2020 was $15,638, compared with net cash used for investing activities of $420 for the six months ended June 30, 2019.

For the six months ended June 30, 2020, net cash provided by investing activities included $16,229 in proceeds from the sale of property and equipment, including the sale-leaseback of our European headquarters and operating facility in Gersthofen, Germany.

Activity for both periods included cash outflows for capital expenditures (consistent with our operating plans).

We expect our remaining 2020 capital expenditures to be limited to spending associated with sustaining our existing operations and strategic asset acquisition and deployment (additional estimated spending of approximately $500 to $1,000, which reflects a reduced spending target as part of our capital conservation plans in response to COVID-19 and its effect on our operations).

29


Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2020 was $5,522, compared with net cash provided by financing activities of $22 for the six months ended June 30, 2019.

For the six months ended June 30, 2020, net cash provided by financing activities included cash inflows of $2,194 in proceeds from borrowings on long-term debt associated with our PPP Loan (further discussed above) and $2,894 proceeds from at-the-market offerings of common stock, net of issuance costs (further discussed above).

Activity for both periods included cash inflows associated with proceeds from the exercise of stock options by employees and cash outflows associated with principal payments on outstanding debt.

Financial Condition

The following summarizes the material changes in our financial condition from December 31, 2019 to June 30, 2020:

Restricted cash decreased by $470 following an amendment to our credit facility agreement with a German bank completed in February 2020 which relieved us of a cash collateral requirement for financial guarantees and letters of credit issued by us for commercial transactions requiring security for amounts up to approximately $1,100.

Accounts receivable decreased by $1,991 based on the timing of cash payments by customers (principally the timing of cash collections on 3D printing machine sales).

Inventories increased by $4,438 consistent with our growth in backlog. Inventories have also been impacted (primarily the increase in finished goods inventories) as a result of disruptions in delivery and installation of our 3D printing machines as a result of COVID-19.

Prepaid expenses and other current assets increased by $1,328, mostly due to increases in prepayments to suppliers for 3D printing machine components and subassemblies, prepaid insurance (based on the timing of payments to providers as compared to the period of coverage) and unsettled proceeds from at-the-market offerings of common stock, net of issuance costs (further discussed above).

Property and equipment – net decreased by $18,286, mostly due to the impact of the sale-leaseback of our European headquarters and operating facility in Gersthofen, Germany (which resulted in a derecognition of $17,282 of related property and equipment) and depreciation expense of $2,107 incurred during the period. These decreases were offset by increases associated with capital expenditure additions of $633 and net transfers from inventory to property and equipment of 3D printing machines of $727.

Operating lease right-of-use assets increased by $4,101, principally as a result of the sale-leaseback transaction further discussed above.

Accounts payable decreased by $691 due to the timing of payments to our suppliers and vendors for our production and operating expenses.

Accrued expenses and other current liabilities decreased by $2,759, mostly due to the sale-leaseback transaction further discussed above based on the release of $2,243 of a deposit liability received from the buyer in December 2019 as well as a reduction in our product warranty liabilities of $263 as the expiration of previously recorded liabilities has exceeded new provisions.

Operating lease liabilities increased $4,101, principally as a result of the sale-leaseback transaction further discussed above.

Contract liabilities increased $4,519 based on the timing of cash payments by customers (principally the timing of cash collections on 3D printing machine sales consistent with growth in our backlog). Contract liabilities have also been impacted as a result of disruptions in delivery and installation of our 3D printing machines as a result of COVID-19.    

Off Balance Sheet Arrangements

In the normal course of our operations, our ExOne GmbH subsidiary issues financial guarantees and letters of credit to third parties in connection with certain commercial transactions requiring security. At June 30, 2020, total outstanding financial guarantees and letters of credit issued by ExOne GmbH were $906 (€807) including $265 (€236) with expiration dates ranging from October 2020 through February 2023 and $641 (€571) which do not expire. At December 31, 2019, total outstanding financial guarantees and letters of credit issued by ExOne GmbH were $560 (€499). For further discussion related to financial guarantees and letters of credit issued by ExOne GmbH, refer to Note 11 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Recently Issued and Adopted Accounting Guidance

Refer to Note 1 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

Refer to Note 1 to the condensed consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2019.

 

30


Item 3.     Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information under this item.

Item 4.     Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and our Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, as a result of certain material weaknesses in our internal control over financial reporting (further discussed below), our disclosure controls and procedures were ineffective. 

In connection with the preparation of our condensed consolidated financial statements as of and for the three and six months ended June 30, 2020, we concluded that there are material weaknesses in the design and operating effectiveness of our internal control over financial reporting as defined in Securities and Exchange Commission Regulation S-X. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

A description of the identified material weaknesses in internal control over financial reporting is as follows:

 

-

We did not maintain adequate control over user access rights for a significant information technology system.

 

-

We did not maintain adequate control over application changes for a significant information technology system.

 

-

We did not maintain adequate control over pricing and discounts associated with sales of certain of our products.

Notwithstanding the identified material weaknesses described above, management believes that the condensed consolidated financial statements and related notes thereto included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

During the three months ended June 30, 2020, as a result of the identification of the material weaknesses described above, management continued the execution of its remediation plans in an effort to ensure that our disclosure controls and procedures are effective. Our remediation plans include a comprehensive evaluation of the people, processes and systems responsible for each of the underlying control activities. We expect to complete this evaluation in 2020 and put measures in place in an effort to remediate the identified material weaknesses. However, we cannot be certain that the measures we may take will ensure that we establish and maintain adequate controls over our financial processes and reporting in the future or that material weaknesses identified will be remediated.

Other than the items described above, there were no changes in our internal control over financial reporting during the three months ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

31


PART II – OTHER INFORMATION

Item 1.     Legal Proceedings.

We are subject to various litigation, claims, and proceedings which have been or may be instituted or asserted from time to time in the ordinary course of business. Management does not believe that the outcome of any pending or threatened matters will have a material adverse effect, individually or in the aggregate, on our financial position, results of operations or cash flows.

Item 1A.     Risk Factors.

We face risks related to the COVID-19 global pandemic which could significantly disrupt our commercial activities and operations.

The outbreak of a novel strain of coronavirus and subsequent global pandemic (“COVID-19”) has resulted in global government-enforced travel and business closures throughout the world. Our sales, installation and service of 3D printing machines have been disrupted, and the future spread of the disease may cause our commercial efforts to be disrupted again. We may incur expenses or delays resulting from such events outside of our control, which could have a material adverse effect on our financial position, results of operations or cash flows.

We manufacture our 3D printing machines at our facilities in Gersthofen, Germany and North Huntingdon, Pennsylvania. In addition, we have a network of EACs in the United States, Germany and Japan. If the operations of one or more of these facilities are materially disrupted (including as a result of COVID-19), we may be unable to fulfill certain customer orders for the period of the disruption, we may not be able to recognize revenue on certain orders and we might need to modify our standard sales terms to secure commitments of customers during the period of the disruption and perhaps longer. Depending on the cause of the disruption, we could incur significant costs to remedy the disruption. Such a disruption could have an adverse effect on our financial position, results of operations or cash flows.

In addition to the commercial risks, the long-term effects of COVID-19 may also include risks associated with employee health and safety and supply chain disruption, each of which may have a material adverse effect on our financial position, results of operations or cash flows.

There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, except as described above.

Item 6.     Exhibits.

(a)(3) Exhibits

The Exhibits listed on the accompanying Index to Exhibits are filed as part of this Quarterly Report on Form 10-Q.

 

32


EXHIBIT INDEX

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

 

Exhibit

Number

 

Description

 

Method of Filing

 

 

 

 

 

  10.1

 

Equity Distribution Agreement dated June 11, 2020 between the Company and Oppenheimer & Company, Inc.

 

Incorporated by reference to Exhibit 10.1 on Form 8-K (#001-35806) filed on June 11, 2020.

 

 

 

 

 

  10.2

 

Promissory Note (Paycheck Protection Program Loan) dated April 18, 2020 in favor of The Huntington National Bank.

 

Incorporated by reference to Exhibit 10.4 on Form 10-Q (#001-35806) filed on May 7, 2020.

 

 

 

 

 

  10.3

 

Separation and Release Agreement dated April 9, 2020 between the Company and Charlie Grace.

 

Incorporated by reference to Exhibit 10.3 on Form 10-Q (#001-35806) filed on May 7, 2020.

 

 

 

 

 

  10.4

 

First Amendment to Employment Agreement dated April 3, 2020 between the Company and John F. Hartner.

 

Incorporated by reference to Exhibit 10.2 on Form 10-Q (#001-35806) filed on May 7, 2020.

 

 

 

 

 

  31.1

 

Rule 13(a)-14(a) Certification of Principal Executive Officer.

 

Filed herewith.

 

 

 

 

 

  31.2

 

Rule 13(a)-14(a) Certification of Principal Financial Officer.

 

Filed herewith.

 

 

 

 

 

  32

 

Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.

 

Filed herewith.

 

 

 

 

 

101.INS

 

XBRL Instance Document.

 

Filed herewith.

 

 

 

 

 

101.SCH

 

XBRL Taxonomy Extension Schema Document.

 

Filed herewith.

 

 

 

 

 

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase Document.

 

Filed herewith.

 

 

 

 

 

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase Document.

 

Filed herewith.

 

 

 

 

 

101.LAB

 

XBRL Taxonomy Extension Label Linkbase Document.

 

Filed herewith.

 

 

 

 

 

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase Document.

 

Filed herewith.

 

33


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

The ExOne Company

 

 

By:

 

/s/ John F. Hartner

 

 

John F. Hartner

 

 

Chief Executive Officer

 

 

(Principal Executive Officer)

 

 

 

Date:

 

August 6, 2020

 

 

 

By:

 

/s/ Douglas D. Zemba

 

 

Douglas D. Zemba

 

 

Chief Financial Officer

 

 

(Principal Financial Officer and Principal Accounting Officer)

 

 

 

Date:

 

August 6, 2020

 

34

xone-ex311_9.htm

 

Exhibit 31.1

CERTIFICATIONS

I, John F. Hartner, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The ExOne Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2020

 

The ExOne Company

 

/s/ John F. Hartner

John F. Hartner

Chief Executive Officer

(Principal Executive Officer)

 

 

xone-ex312_7.htm

 

Exhibit 31.2

CERTIFICATIONS

I, Douglas D. Zemba, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of The ExOne Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2020

 

The ExOne Company

 

/s/ Douglas D. Zemba

Douglas D. Zemba

Chief Financial Officer

(Principal Financial Officer and Principal

Accounting Officer)

 

 

xone-ex32_6.htm

 

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the filing of this Quarterly Report on Form 10-Q of The ExOne Company (the “Company”) for the quarterly period ended June 30, 2020, with the Securities and Exchange Commission on the date hereof (the “Report”), the Undersigned certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 6, 2020

 

/s/ John F. Hartner

John F. Hartner

Chief Executive Officer

(Principal Executive Officer)

 

/s/ Douglas D. Zemba

Douglas D. Zemba

Chief Financial Officer

(Principal Financial Officer and Principal

Accounting Officer)

 

v3.20.2
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2020
Aug. 06, 2020
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2020  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Trading Symbol XONE  
Entity Registrant Name ExOne Co  
Entity Central Index Key 0001561627  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   16,910,852
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Title of 12(b) Security Common stock  
Security Exchange Name NASDAQ  
Entity File Number 001-35806  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 46-1684608  
Entity Address, Address Line One 127 Industry Boulevard  
Entity Address, City or Town North Huntingdon  
Entity Address, State or Province PA  
Entity Address, Postal Zip Code 15642  
City Area Code 724  
Local Phone Number 863-9663  
v3.20.2
Condensed Statement of Consolidated Operations and Comprehensive Loss - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Statement [Abstract]        
Revenue $ 11,099 $ 15,279 $ 24,482 $ 24,858
Cost of sales 8,009 10,137 17,763 17,074
Gross profit 3,090 5,142 6,719 7,784
Operating expenses        
Research and development 2,369 2,537 4,845 4,969
Selling, general and administrative 4,488 6,167 10,651 11,590
Gain from sale-leaseback of property and equipment     (1,462)  
Total operating expenses 6,857 8,704 14,034 16,559
Loss from operations (3,767) (3,562) (7,315) (8,775)
Other expense        
Interest expense 53 71 117 142
Other expense ̶ net 195 57 5 69
Total other (income) expense 248 128 122 211
Loss before income taxes (4,015) (3,690) (7,437) (8,986)
Provision (benefit) for income taxes 8 99 234 (701)
Net loss $ (4,023) $ (3,789) $ (7,671) $ (8,285)
Net loss per common share:        
Basic $ (0.24) $ (0.23) $ (0.47) $ (0.51)
Diluted $ (0.24) $ (0.23) $ (0.47) $ (0.51)
Comprehensive loss:        
Net loss $ (4,023) $ (3,789) $ (7,671) $ (8,285)
Other comprehensive income (loss):        
Foreign currency translation adjustments 370 583 (468) (193)
Comprehensive loss $ (3,653) $ (3,206) $ (8,139) $ (8,478)
v3.20.2
Condensed Consolidated Balance Sheet - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Current assets:    
Cash and cash equivalents $ 19,658 $ 5,265
Restricted cash 508 978
Accounts receivable ̶ net 4,531 6,522
Current portion of net investment in sales-type leases 292 213
Inventories ̶ net 24,208 19,770
Prepaid expenses and other current assets 3,510 2,182
Total current assets 52,707 34,930
Property and equipment ̶ net 20,609 38,895
Operating lease right-of-use assets 4,533 432
Net investment in sales-type leases ̶ net of current portion 639 738
Other noncurrent assets 242 371
Total assets 78,730 75,366
Current liabilities:    
Current portion of long-term debt 1,128 153
Current portion of operating lease liabilities 1,754 158
Accounts payable 5,127 5,818
Accrued expenses and other current liabilities 4,183 6,942
Current portion of contract liabilities 16,438 11,846
Total current liabilities 28,630 24,917
Long-term debt ̶ net of current portion 2,354 1,211
Operating lease liabilities ̶ net of current portion 2,779 274
Contract liabilities ̶ net of current portion 213 286
Other noncurrent liabilities 223 96
Total liabilities 34,199 26,784
Contingencies and commitments
Stockholders' equity    
Common stock, $0.01 par value, 200,000,000 shares authorized, 16,863,602 (2020) and 16,346,960 (2019) shares issued and outstanding 169 163
Additional paid-in capital 180,932 176,850
Accumulated deficit (124,619) (116,948)
Accumulated other comprehensive loss (11,951) (11,483)
Total stockholders' equity 44,531 48,582
Total liabilities and stockholders' equity $ 78,730 $ 75,366
v3.20.2
Condensed Consolidated Balance Sheet (Parenthetical) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Statement Of Financial Position [Abstract]    
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 16,863,602 16,346,960
Common stock, shares outstanding 16,863,602 16,346,960
v3.20.2
Condensed Statement of Consolidated Cash Flows - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Operating activities    
Net loss $ (7,671) $ (8,285)
Adjustments to reconcile net loss to net cash used for operations:    
Depreciation 2,107 2,349
Equity-based compensation 449 1,081
Amortization of debt issuance costs 29 47
Recoveries for bad debts ̶ net (19) (150)
Provision for slow-moving, obsolete and lower of cost or net realizable value inventories ̶ net 305 131
Foreign exchange (gains) losses on intercompany transactions ̶ net (51) 19
Gain from sale-leaseback of property and equipment (1,462)  
Gain from disposal of property and equipment ̶ net (1) (2)
Deferred income taxes 195  
Changes in assets and liabilities, excluding effects of foreign currency translation adjustments:    
Decrease in accounts receivable 2,016 1,879
Decrease in net investment in sales-type leases 20 153
Increase in inventories (5,369) (1,325)
Increase in prepaid expenses and other assets (1,034) (221)
(Decrease) increase in accounts payable (821) 927
Decrease in accrued expenses and other liabilities (458) (1,689)
Increase in contract liabilities 4,428 3,608
Net cash used for operating activities (7,337) (1,478)
Investing activities    
Capital expenditures (591) (423)
Proceeds from sale of property and equipment 16,229 3
Net cash provided by (used for) investing activities 15,638 (420)
Financing activities    
Proceeds from borrowings on long-term debt 2,194  
Payments on long-term debt (78) (74)
Proceeds from at-the-market offerings of common stock, net of issuance costs 2,894  
Proceeds from exercise of employee stock options 541 171
Other (29) (75)
Net cash provided by financing activities 5,522 22
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 100 (12)
Net change in cash, cash equivalents, and restricted cash 13,923 (1,888)
Cash, cash equivalents, and restricted cash at beginning of period 6,243 9,140
Cash, cash equivalents, and restricted cash at end of period 20,166 7,252
Supplemental disclosure of noncash investing and financing activities    
Transfer of internally developed 3D printing machines from inventories to property and equipment for internal use or leasing activities 1,834 1,066
Transfer of internally developed 3D printing machines from property and equipment to inventories for sale 1,107 182
Property and equipment included in accounts payable 41 110
Property and equipment included in accrued expenses and other current liabilities   48
Unsettled proceeds from at-the-market offerings of common stock, net of issuance costs $ 204  
Unsettled proceeds from exercise of employee stock options   $ 91
v3.20.2
Condensed Statement of Changes in Consolidated Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Loss [Member]
Beginning Balance at Dec. 31, 2018 $ 62,775 $ 162 $ 175,214 $ (101,853) $ (10,748)
Beginning Balance, Shares at Dec. 31, 2018   16,234,000      
Net loss (4,496)     (4,496)  
Other comprehensive income (loss) (776)       (776)
Equity-based compensation 439   439    
Exercise of employee stock options 165 $ 1 164    
Exercise of employee stock options, shares   23,000      
Taxes related to the net share settlement of equity-based awards (68)   (68)    
Common stock issued from equity incentive plan, shares   38,000      
Ending Balance at Mar. 31, 2019 58,039 $ 163 175,749 (106,349) (11,524)
Ending Balance, Shares at Mar. 31, 2019   16,295,000      
Beginning Balance at Dec. 31, 2018 62,775 $ 162 175,214 (101,853) (10,748)
Beginning Balance, Shares at Dec. 31, 2018   16,234,000      
Net loss $ (8,285)        
Exercise of employee stock options, shares 36,370        
Ending Balance at Jun. 30, 2019 $ 55,572 $ 163 176,488 (110,138) (10,941)
Ending Balance, Shares at Jun. 30, 2019   16,318,000      
Beginning Balance at Mar. 31, 2019 58,039 $ 163 175,749 (106,349) (11,524)
Beginning Balance, Shares at Mar. 31, 2019   16,295,000      
Net loss (3,789)     (3,789)  
Other comprehensive income (loss) 583       583
Equity-based compensation 642   642    
Exercise of employee stock options 97   97    
Exercise of employee stock options, shares   13,000      
Common stock issued from equity incentive plan, shares   10,000      
Ending Balance at Jun. 30, 2019 55,572 $ 163 176,488 (110,138) (10,941)
Ending Balance, Shares at Jun. 30, 2019   16,318,000      
Beginning Balance at Dec. 31, 2019 $ 48,582 $ 163 176,850 (116,948) (11,483)
Beginning Balance, Shares at Dec. 31, 2019 16,346,960 16,347,000      
Net loss $ (3,648)     (3,648)  
Other comprehensive income (loss) (838)       (838)
Equity-based compensation 292 $ 1 291    
Common stock issued from equity incentive plan, shares   39,000      
Ending Balance at Mar. 31, 2020 44,388 $ 164 177,141 (120,596) (12,321)
Ending Balance, Shares at Mar. 31, 2020   16,386,000      
Beginning Balance at Dec. 31, 2019 $ 48,582 $ 163 176,850 (116,948) (11,483)
Beginning Balance, Shares at Dec. 31, 2019 16,346,960 16,347,000      
Net loss $ (7,671)        
Exercise of employee stock options, shares 73,251        
Ending Balance at Jun. 30, 2020 $ 44,531 $ 169 180,932 (124,619) (11,951)
Ending Balance, Shares at Jun. 30, 2020 16,863,602 16,864,000      
Beginning Balance at Mar. 31, 2020 $ 44,388 $ 164 177,141 (120,596) (12,321)
Beginning Balance, Shares at Mar. 31, 2020   16,386,000      
Net loss (4,023)     (4,023)  
Other comprehensive income (loss) 370       370
Equity-based compensation 157   157    
Exercise of employee stock options 541 $ 1 540    
Exercise of employee stock options, shares   73,000      
Common stock issued from equity incentive plan, shares   22,000      
At the market offerings of common stock,net of issuance costs 3,098 $ 4 3,094    
At the market offerings of common stock,net of issuance costs, shares   383,000      
Ending Balance at Jun. 30, 2020 $ 44,531 $ 169 $ 180,932 $ (124,619) $ (11,951)
Ending Balance, Shares at Jun. 30, 2020 16,863,602 16,864,000      
v3.20.2
Basis of Presentation
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Basis of Presentation

Note 1. Basis of Presentation

Organization

The ExOne Company (“ExOne”) is a corporation organized under the laws of the state of Delaware. ExOne was formed on January 1, 2013, when The Ex One Company, LLC, a Delaware limited liability company, merged with and into a Delaware corporation, which survived and changed its name to The ExOne Company (the “Reorganization”). As a result of the Reorganization, The Ex One Company, LLC became ExOne, the common and preferred interest holders of The Ex One Company, LLC became holders of common stock and preferred stock, respectively, of ExOne, and the subsidiaries of The Ex One Company, LLC became the subsidiaries of ExOne. The condensed consolidated financial statements include the accounts of ExOne, its wholly-owned subsidiaries, ExOne Americas LLC (United States); ExOne GmbH (Germany); ExOne Property GmbH (Germany); and ExOne KK (Japan). Collectively, the consolidated group is referred to as the “Company”.

The Company filed a registration statement on Form S-3 (No. 333-223690) with the Securities and Exchange Commission on March 15, 2018. The purpose of the Form S-3 was to register various equity and debt securities. Subsidiaries of the Company are co-registrants with the Company (“Subsidiary Guarantors”), and the registration statement registered guarantees of debt securities by one or more of the Subsidiary Guarantors. The Subsidiary Guarantors are 100% owned by the Company and any guarantees by the Subsidiary Guarantors will be full and unconditional.

Basis of Presentation

The condensed consolidated financial statements of the Company are unaudited. The condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the results of operations, financial position and cash flows of the Company. All material intercompany transactions and balances have been eliminated in consolidation. The results reported in these condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The December 31, 2019 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Quarterly Report on Form 10-Q should be read in connection with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which includes all disclosures required by GAAP.

The preparation of these condensed consolidated financial statements requires the Company to make certain judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. Areas that require significant judgments, estimates and assumptions include accounting for accounts receivable (including the allowance for doubtful accounts); inventories (including the allowance for slow-moving and obsolete inventories); product warranty reserves; contingencies; income taxes (including the valuation allowance on certain deferred tax assets and liabilities for uncertain tax positions); equity-based compensation (including the valuation of certain equity-based compensation awards issued by the Company); and testing for impairment of long-lived assets (including the identification of asset groups by management, estimates of future cash flows of identified asset groups and fair value estimates used in connection with assessing the valuation of identified asset groups). The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Certain amounts relating to operating lease right-of-use assets ($432), current portion of operating lease liabilities ($158) and operating lease liabilities – net of current portion ($274) in the accompanying condensed consolidated balance sheet at December 31, 2019, have been reclassified from other noncurrent assets, accrued expenses and other current liabilities and other noncurrent liabilities, respectively, to conform to current period presentation.

Certain amounts in the accompanying condensed statement of consolidated cash flows have been reclassified to conform to current period presentation.

COVID-19

In March 2020, the World Health Organization declared the novel strain of coronavirus a global pandemic (“COVID-19”) and recommended containment and mitigation measures worldwide. The impact of COVID-19 and the related economic, business and market disruptions are evolving rapidly, and their effects are uncertain. As a result of COVID-19, the Company was required to temporarily close its operations at its North Huntingdon, Pennsylvania facility for the period from March 23 through March 30, 2020. In response to COVID-19, the Company has incurred incremental costs associated with protecting the health and safety of the Company’s global workforce, enhanced sanitization of the Company’s global operating facilities, and information technology capabilities for employees operating remotely. Beginning in March 2020, restrictions imposed by various governmental authorities on both domestic and international shipping and travel have caused a disruption to the timing of delivery and installation of the Company’s 3D printing machines, resulting in negative impacts to the Company’s financial position, results of operations and cash flows. The duration and severity of the outbreak and its long-term impact on the Company’s business are uncertain at this time. The Company is unable to predict the impact that COVID-19 will have on its future financial position, results of operations and cash flows.

Recently Issued Accounting Guidance

The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (the “FASB”). Recently issued ASUs not listed below either were assessed and determined to be not applicable or are currently expected to have no impact on the consolidated financial statements of the Company.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses.” This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b-2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. Management is currently evaluating the potential impact of these changes on the consolidated financial statements of the Company.

v3.20.2
Liquidity
6 Months Ended
Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Liquidity

Note 2. Liquidity

The Company has incurred a net loss in each of its annual periods since its inception. As shown in the accompanying condensed statement of consolidated operations and comprehensive loss, the Company incurred a net loss of $4,023 and $7,671 for the three months and six months ended June 30, 2020, respectively. At June 30, 2020, the Company had $19,658 in unrestricted cash and cash equivalents. In addition to its unrestricted cash and cash equivalents, the Company also has access to additional capital through its $10,000 related party revolving credit facility (Note 12).

Since its inception, the Company has received cumulative unrestricted net proceeds from the sale of its common stock (through its initial public offering and subsequent public offerings) of $168,361 to fund its operations. The Company maintains additional access to capital through its active shelf registration statement (Note 1) which allows for the sale of various equity or debt instruments up to an aggregate amount of $125,000. In June 2020, the Company entered into an Equity Distribution Agreement with Oppenheimer & Company, Inc. (“Oppenheimer”) pursuant to which Oppenheimer agreed to act as sales agent in the sale of up to $25,000 in the aggregate of ExOne common stock in “at-the-market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended. Terms of the Equity Distribution Agreement require a 3.0% commission on the sale of ExOne common stock as well as reimbursement of certain expenses incurred by Oppenheimer. During the three months ended June 30, 2020, the Company sold 382,601 shares of common stock in at-the-market offerings at an average selling price of $8.86 per share resulting in net proceeds to the Company (after deducting commissions) of $3,288 (of which, at June 30, 2020, $362 remained unsettled and was included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet, such net proceeds received by the Company in July 2020). During the three months ended June 30, 2020, the Company incurred expenses (other than commissions) associated with the at-the-market offerings of $190 (of which, at June 30, 2020, $158 were unpaid and included in accounts payable in the accompanying condensed consolidated balance sheet). There have been no sales of shares of common stock in at-the-market offerings subsequent to June 30, 2020. Future sales of securities in at-the-market offerings and the Company’s active shelf registration, if any, are dependent on market conditions, which may restrict the timing and extent of any future offering of securities by the Company.

In addition to net proceeds from the sale of its common stock, on April 18, 2020, the Company received additional unrestricted cash proceeds of $2,194 in connection with a Paycheck Protection Program loan (Note 13).

The Company has previously exhibited its ability to modify its operating structure and support its liquidity position through various restructuring and other actions, including its 2018 global cost realignment program. In response to adverse market conditions associated with COVID-19, beginning in March 2020 and through April 2020, the Company initiated various cost savings actions including a mix of employee terminations, furloughs and pay rate reductions, as well as reductions in consulting and other expenses, all in an effort to conserve cash and maintain adequate liquidity.  

Management believes that the Company’s existing capital resources will be sufficient to support the Company’s operating plan. If management anticipates that the Company’s actual results will differ from its operating plan, management believes it has sufficient capabilities to enact cost savings measures to preserve capital (in addition to those further discussed above). The Company may also seek to raise additional capital to support its growth through additional debt, equity or other alternatives (including asset sales) or a combination thereof.

v3.20.2
Accumulated Other Comprehensive Loss
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Accumulated Other Comprehensive Loss

Note 3. Accumulated Other Comprehensive Loss

The following table summarizes changes in the components of accumulated other comprehensive loss for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

(12,321

)

 

$

(11,524

)

 

$

(11,483

)

 

$

(10,748

)

Other comprehensive income (loss)

 

 

370

 

 

 

583

 

 

 

(468

)

 

 

(193

)

Balance at end of period

 

$

(11,951

)

 

$

(10,941

)

 

$

(11,951

)

 

$

(10,941

)

 

Foreign currency translation adjustments consist of the effect of translation of functional currency financial statements (denominated in the euro and Japanese yen) to the reporting currency of the Company (United States dollar) and certain long-term intercompany transactions between subsidiaries for which settlement is not planned or anticipated in the foreseeable future.

There were no tax impacts related to income tax rate changes and no amounts were reclassified to earnings for either of the periods presented.

v3.20.2
Loss Per Share
6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Loss Per Share

Note 4. Loss Per Share

The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the applicable period. Diluted loss per common share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares and common equivalent shares outstanding during the applicable period.

As the Company incurred a net loss during each of the three months and six months ended June 30, 2020 and 2019, basic average common shares outstanding and diluted average common shares outstanding were the same because the effect of potential shares of common stock, including stock options (679,198 – 2020 and 608,787 – 2019) and unvested restricted stock issued (47,250 – 2020 and 96,264 – 2019), was anti-dilutive.

The information used to compute basic and diluted net loss per common share was as follows for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(4,023

)

 

$

(3,789

)

 

$

(7,671

)

 

$

(8,285

)

Weighted average shares outstanding (basic and diluted)

 

 

16,464,345

 

 

 

16,301,157

 

 

 

16,416,867

 

 

 

16,278,043

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.24

)

 

$

(0.23

)

 

$

(0.47

)

 

$

(0.51

)

Diluted

 

$

(0.24

)

 

$

(0.23

)

 

$

(0.47

)

 

$

(0.51

)

v3.20.2
Revenue
6 Months Ended
Jun. 30, 2020
Revenue From Contract With Customer [Abstract]  
Revenue

Note 5. Revenue

The Company derives revenue from the sale of 3D printing machines and 3D printed and other products, materials and services. Revenue is recognized when the Company satisfies its performance obligation(s) under a contract (either implicit or explicit) by transferring the promised product or service to a customer either when (or as) the customer obtains control of the product or service. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenue) basis. Shipping and handling costs are included in cost of sales.

Certain of the Company’s contracts with customers provide for multiple performance obligations. Sales of 3D printing machines may also include optional equipment, materials, replacement components and services (installation, training and other services, including maintenance services and/or an extended warranty). Certain other contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of stand-alone selling price for each distinct product or service in the contract, which is generally based on an observable price.

The Company’s revenue from products is transferred to customers at a point in time. The Company’s contracts for 3D printing machines generally include substantive customer acceptance provisions. Revenue under these contracts is recognized when customer acceptance provisions have been satisfied. For all other product sales, the Company recognizes revenue at the point in time in which the customer obtains control of the product, which is generally when product title passes to the customer upon delivery. In limited cases, title does not transfer and revenue is not recognized until the customer has received the products at its physical location.

The Company’s revenue from service arrangements includes deferred maintenance contracts and extended warranties that can be purchased at the customer’s option. The Company generally provides a standard one-year warranty on the Company’s 3D printing machines, which is considered an assurance type warranty, and not considered a separate performance obligation (Note 9). Revenue associated with deferred maintenance contracts is generally recognized at a point in time when the related services are performed where sufficient historical evidence indicates that the costs of performing the related services under the contract are not incurred on a straight-line basis, with such revenue recognized in proportion to the costs expected to be incurred. Revenue associated with extended warranties is generally recognized over time on a straight-line basis over the related contract period.

The Company’s revenue from service arrangements includes contracts with the Federal government under fixed-fee, cost reimbursable and time and materials arrangements (certain of which may have periods of performance greater than one year). Revenue under these contracts is generally recognized over time using an input measure based upon labor hours incurred and provisional rates provided under the contracts. As such, the nature of these contracts may give rise to variable consideration, primarily based upon completion of the Company’s annual Incurred Cost Submission filing as required by the Federal government. Historically, amounts associated with variable consideration have not been significant.

The Company’s revenue from service arrangements includes certain research and development services. Revenue under research and development service contracts is generally recognized over time using an output measure, specifically units or parts delivered, based upon certain customer acceptance and delivery requirements. Revenue recognized over time using an output measure is not significant.

The following table summarizes the Company’s revenue by product group for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

2019

 

 

2020

 

 

2019

 

3D printing machines

 

$

4,898

 

 

$

9,231

 

 

$

11,215

 

 

$

12,560

 

3D printed and other products, materials and services

 

 

6,201

 

 

 

6,048

 

 

 

13,267

 

 

 

12,298

 

 

 

$

11,099

 

 

$

15,279

 

 

$

24,482

 

 

$

24,858

 

 

Revenue from 3D printing machines includes leasing revenue whereby the Company is the lessor of 3D printing machines to its customers. Leasing revenue is accounted for under ASU 2016-02, “Leases” (Note 10).

The timing of revenue recognition, billings and cash collections results in billed receivables, unbilled receivables (contract assets) and deferred revenue and customer prepayments (contract liabilities) in the accompanying condensed consolidated balance sheet. The Company considers a number of factors in its evaluation of the creditworthiness of its customers, including past due amounts, past payment history, and current economic conditions. For 3D printing machines, the Company’s terms of sale vary by transaction. To reduce credit risk in connection with 3D printing machine sales, the Company may, depending upon the circumstances, require customers to furnish letters of credit or bank guarantees or to provide advanced payment (either partial or in full). For 3D printed and other products and materials, the Company’s terms of sale generally require payment within 30 to 60 days after delivery, although the Company also recognizes that longer payment periods are customary in certain countries where it transacts business. Service arrangements are generally billed in accordance with specific contract terms and are typically billed in advance or in proportion to performance of the related services.

For the six months ended June 30, 2020, the Company recognized revenue of $4,978 related to contract liabilities at January 1, 2020. There were no other significant changes in contract liabilities during the six months ended June 30, 2020. Contract assets are not significant.

As of June 30, 2020, the Company had approximately $38,200 of remaining performance obligations (including contract liabilities), which is also referred to as backlog, of which approximately $33,200 is expected to be fulfilled during the next twelve months notwithstanding uncertainty related to the impact of COVID-19 (Note 1) including, but not limited to, international shipping and travel restrictions brought about by COVID-19 which could have an adverse effect on the timing of delivery and installation of products and/or services to customers.

The Company has elected to apply the practical expedient associated with incremental costs of obtaining a contract, and as such, sales commission expense is generally expensed when incurred because the amortization period would be one year or less. These costs are recorded within selling, general and administrative expenses.

Accounts receivable and net investment in sales-type leases (Note 10) are reported at their net realizable value. The Company carries its investment in sales-type leases based on discounting the minimum lease payments by the interest rate implicit in the lease, less an allowance for doubtful accounts. The Company’s estimate of the allowance for doubtful accounts related to accounts receivable and net investment in sales-type leases is based on the Company’s evaluation of customer accounts with past-due outstanding balances or specific accounts for which it has information that the customer may be unable to meet its financial obligations. Based upon review of these accounts, and management’s analysis and judgment, the Company records a specific allowance for that customer’s accounts receivable or net investment in sales-type lease balance to reduce the outstanding balance to the amount expected to be collected. The allowance is re-evaluated and adjusted periodically as additional information is received that impacts the allowance amount reserved. At June 30, 2020 and December 31, 2019, the allowance for doubtful accounts was $488 and $508, respectively. During the three months ended June 30, 2020 and 2019, the Company recorded net recoveries for bad debts of $70 and $77, respectively. During the six months ended June 30, 2020 and 2019, the Company recorded net recoveries for bad debts of $19 and $150, respectively.

v3.20.2
Cash, Cash Equivalents, and Restricted Cash
6 Months Ended
Jun. 30, 2020
Cash And Cash Equivalents [Abstract]  
Cash, Cash Equivalents, and Restricted Cash

Note 6. Cash, Cash Equivalents, and Restricted Cash

The following provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the accompanying condensed consolidated balance sheet to the same such amounts shown in the accompanying condensed statement of consolidated cash flows as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Cash and cash equivalents

 

$

19,658

 

 

$

5,265

 

Restricted cash

 

 

508

 

 

 

978

 

Cash, cash equivalents, and restricted cash

 

$

20,166

 

 

$

6,243

 

 

Restricted cash at both June 30, 2020 and December 31, 2019 included $508 associated with cash collateral required by a United States bank to offset certain short-term, unsecured lending commitments associated with the Company’s corporate credit card program. 

Restricted cash at December 31, 2019 included $470 associated with cash collateral required by a German bank for short-term financial guarantees issued by ExOne GmbH in connection with certain commercial transactions requiring security. Refer to Note 11 for further discussion related to an amendment to this cash collateral requirement effective in February 2020.

Each of the balances discussed above are considered legally restricted by the Company.

v3.20.2
Inventories
6 Months Ended
Jun. 30, 2020
Inventory Disclosure [Abstract]  
Inventories

Note 7. Inventories

Inventories consisted of the following as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Raw materials and components

 

$

11,149

 

 

$

8,841

 

Work in process

 

 

5,890

 

 

 

4,922

 

Finished goods

 

 

7,169

 

 

 

6,007

 

 

 

$

24,208

 

 

$

19,770

 

 

Raw materials and components consist of consumable materials and component parts and subassemblies associated with 3D printing machine manufacturing and support activities. Work in process consists of 3D printing machines and other products in varying stages of completion. Finished goods consist of 3D printing machines and other products prepared for sale in accordance with customer specifications.

At June 30, 2020 and December 31, 2019, the allowance for slow-moving and obsolete inventories was $2,493 and $3,443, respectively, and has been reflected as a reduction to inventories (principally raw materials and components). The following table summarizes changes in the allowance for slow-moving and obsolete inventories for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Balance at beginning of period

 

$

3,370

 

 

$

4,177

 

 

$

3,443

 

 

$

4,143

 

Provision for slow-moving and obsolete inventories  ̶  net

 

 

78

 

 

 

24

 

 

 

100

 

 

 

131

 

Reductions for sale, consumption or scrap of previously

   reserved amounts

 

 

(1,019

)

 

 

(106

)

 

 

(1,055

)

 

 

(106

)

Foreign currency translation adjustments

 

 

64

 

 

 

54

 

 

 

5

 

 

 

(19

)

Balance at end of period

 

$

2,493

 

 

$

4,149

 

 

$

2,493

 

 

$

4,149

 

 

Reductions for sale, consumption or scrap of previously reserved amounts for both the three and six months ended June 30, 2020 consist principally of certain raw material and component inventories associated with the Company’s former Exerial 3D printing platform, which were disposed of during the period. There was no significant benefit or charge recorded during the period in connection with the related disposals.

During the three months ended June 30, 2020, the Company recorded a charge of $205 to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss associated with certain inventories for which cost was determined to exceed net realizable value.

v3.20.2
Property and Equipment
6 Months Ended
Jun. 30, 2020
Long Lived Assets [Abstract]  
Property and Equipment

Note 8. Property and Equipment

Property and equipment consisted of the following as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

Economic Life

 

 

2020

 

 

2019

 

 

(in years)

Land

 

$

3,385

 

 

$

6,980

 

 

N/A

Buildings and related improvements

 

 

10,036

 

 

 

25,675

 

 

5 - 40

Machinery and equipment

 

 

19,119

 

 

 

19,531

 

 

3 - 20

Other

 

 

6,027

 

 

 

7,086

 

 

3 - 20

 

 

 

38,567

 

 

 

59,272

 

 

 

Less: Accumulated depreciation

 

 

(19,417

)

 

 

(21,478

)

 

 

 

 

 

19,150

 

 

 

37,794

 

 

 

Construction-in-progress

 

 

1,459

 

 

 

1,101

 

 

 

Property and equipment  ̶  net

 

$

20,609

 

 

$

38,895

 

 

 

 

For both the three months ended June 30, 2020 and 2019, depreciation expense was $1,184. For the six months ended June 30, 2020 and 2019, depreciation expense was $2,107 and $2,349, respectively.

On February 18, 2020, the Company completed a sale-leaseback transaction associated with its European headquarters and operating facility in Gersthofen, Germany (Note 10). As a result of the completion of this transaction, the Company derecognized $17,282 in net property and equipment during the three months ended March 31, 2020. Sale of the facility resulted in a gain of $1,462 during the three months ended March 31, 2020.

During the three months ended June 30, 2020, as a result of continued operating losses and cash flow deficiencies, the Company identified a triggering event requiring a test for the recoverability of long-lived assets held and used at the asset group level. Assessing the recoverability of long-lived assets held and used requires significant judgments and estimates by management.

For purposes of testing long-lived assets for recoverability, the Company operates as three separate asset groups: United States, Europe and Japan. In assessing the recoverability of long-lived assets held and used, the Company determined the carrying amount of long-lived assets held and used to be in excess of the estimated future undiscounted net cash flows of the related assets. The Company proceeded to determine the fair value of its long-lived assets held and used, principally through use of the market approach. The Company’s use of the market approach included consideration of market transactions for comparable assets. Management concluded that the fair value of long-lived assets held and used exceeded their carrying value, and as such, no impairment loss was recorded.   

A significant decrease in the market price of a long-lived asset, adverse change in the use or condition of a long-lived asset, adverse change in the business climate or legal or regulatory factors impacting a long-lived asset and continued operating losses and cash flow deficiencies associated with a long-lived asset, among other indicators, could cause a future assessment to be performed which may result in an impairment of long-lived assets held and used, which could result in a material adverse effect on the financial position and results of operations of the Company.

v3.20.2
Product Warranty Reserves
6 Months Ended
Jun. 30, 2020
Product Warranties Disclosures [Abstract]  
Product Warranty Reserves

Note 9. Product Warranty Reserves

Substantially all of the Company’s 3D printing machines are covered by a standard one-year warranty. Generally, at the time of sale, a liability is recorded (with an offset to cost of sales) based upon the expected cost of replacement parts and labor to be incurred over the life of the standard warranty. Expected cost is estimated using historical experience for similar products. The Company periodically assesses the adequacy of the product warranty reserves based on changes in these factors and records any necessary adjustments if actual experience indicates that adjustments are necessary. Future claims experience could be materially different from prior results because of the introduction of new, more complex products, a change in the Company’s warranty policy in response to industry trends, competition or other external forces, or manufacturing changes that could impact product quality. In the event that the Company determines that its current or future product repair and replacement costs exceed estimates, an adjustment to these reserves would be charged to cost of sales in the period such a determination is made.

The following table summarizes changes in product warranty reserves, which amounts were reflected in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Balance at beginning of period

 

$

810

 

 

$

1,251

 

 

$

866

 

 

$

1,670

 

     Provisions for new issuances

 

 

187

 

 

 

383

 

 

 

463

 

 

 

529

 

     Payments

 

 

(501

)

 

 

(457

)

 

 

(845

)

 

 

(848

)

     Reserve adjustments

 

 

101

 

 

 

36

 

 

 

121

 

 

 

(123

)

     Foreign currency translation adjustments

 

 

6

 

 

 

10

 

 

 

(2

)

 

 

(5

)

Balance at end of period

 

$

603

 

 

$

1,223

 

 

$

603

 

 

$

1,223

 

 

v3.20.2
Leases
6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Leases

Note 10. Leases

Lessee

The Company leases facilities, machinery and other equipment and vehicles under operating lease arrangements (with initial terms greater than twelve months), expiring in various years through 2026. In addition, the Company leases certain equipment and vehicles under finance lease arrangements, which are not significant.

For all operating lease arrangements (with the exception of short-term lease arrangements), the Company presents at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. 

The Company has elected, as a practical expedient, not to separate non-lease components from lease components, and instead account for each separate component as a single lease component for all lease arrangements, as lessee. In addition, the Company has elected, as a practical expedient, not to apply lease recognition requirements to short-term lease arrangements, generally those with a lease term of less than twelve months, for all classes of underlying assets. In determination of the lease term, the Company considers the likelihood of lease renewal options and lease termination provisions. As a result, lease payments under these short-term lease arrangements are recognized in the accompanying condensed statement of consolidated operations and comprehensive loss on a straight-line basis over the lease term.  

The Company uses its incremental borrowing rate in determining the present value of lease payments, as the implicit rate of the lease arrangements is generally not readily determinable.

Through July 2019, certain of the Company’s operating lease arrangements were with related parties under common control (Note 18). Lease cost under operating lease agreements with related parties, included within short-term lease cost below, was $12 and $24 for the three months and six months ended June 30, 2019, respectively.

Future minimum lease payments of operating lease arrangements (with initial terms greater than twelve months) at June 30, 2020, were as follows:

 

2020

 

$

978

 

2021

 

 

1,925

 

2022

 

 

1,891

 

2023

 

 

32

 

2024

 

 

11

 

Thereafter

 

 

2

 

Total minimum lease payments

 

 

4,839

 

Less: Present value discount

 

 

(306

)

Total operating lease liabilities

 

$

4,533

 

 

For the three months and six months ended June 30, 2020, lease cost under operating lease arrangements was $529 and $1,033, including $41 and $72 relating to short-term lease arrangements, respectively. For the three months and six months ended June 30, 2019, lease cost under operating lease arrangements was $98 and $211, including $47 and $112 relating to short-term lease arrangements, respectively.

Supplemental information related to operating lease arrangements was as follows as of and for the six months ended June 30, 2020:

 

Operating lease right-of-use assets

 

$

4,533

 

Current portion of operating lease liabilities

 

$

1,754

 

Operating lease liabilities  ̶  net of current portion

 

$

2,779

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

4,876

 

Cash paid for amounts included in the measurement of operating lease liabilities

 

$

961

 

Weighted average remaining lease term (in years)

 

 

2.5

 

Weighted average discount rate

 

 

5.1

%

On December 10, 2019, ExOne Property GmbH and ExOne GmbH, the German subsidiaries of the Company (the “German Subsidiaries”), entered into a purchase agreement (the “Purchase Agreement”) with Solidas Immobilien und Grundbesitz GmbH, a private, unaffiliated German real estate investor (the “Buyer”), for the sale of the Company’s European headquarters and operating facility in Gersthofen, Germany (the “Facility”) for a purchase price of approximately $18,500 (€17,000), of which approximately $2,200 (€2,000) was received prior to December 31, 2019. Concurrent with the execution of the Purchase Agreement, ExOne GmbH and the Buyer entered into a rental contract (the “Lease”) for the leaseback of the Facility for an initial aggregate annual rent totaling approximately $1,700 (€1,500), plus applicable taxes, which is fixed during the initial three-year term and is subject to adjustment on an annual basis (in accordance with the consumer price index for Germany) during the two five-year option extension periods. The sale-leaseback transaction closed on February 18, 2020. In connection with the completion of the sale-leaseback transaction, the Company recorded an operating lease right-of-use asset and corresponding operating lease liability of $4,605, which was representative of the present value of future minimum lease payments over the initial three-year term, as there were no penalties or other factors associated with the lease that result in reasonable assurance of its extension at inception.

Lessor

The Company leases machinery and equipment to customers (principally 3D printing machines and related equipment) under lease arrangements classified as either operating leases or sales-type leases. The Company’s operating lease arrangements have initial terms generally ranging from one to five years, certain of which may contain extension or termination clauses, or both. Such operating lease arrangements also generally include a purchase option to acquire the related machinery and equipment at the end of the lease term for either a fixed amount as determined at inception, or a subsequently negotiated fair market value. At June 30, 2020, the Company estimated that the total fair market value significantly exceeded the related net book value of the machinery and equipment held under the Company’s operating lease arrangements. The Company’s sales-type lease arrangements generally include transfer of ownership at the end of the lease term, and as such, the Company’s net investment in sale-type lease arrangements presented in the Company’s accompanying condensed consolidated balance sheet generally does not include an amount of unguaranteed residual value.

For certain of its arrangements, the Company separates and allocates (Note 5) certain non-lease components (principally maintenance services) from lease components. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from lease income) basis. In determination of the lease term, the Company considers the likelihood of lease renewal options and lease termination provisions. Additionally, certain of the Company’s lease arrangements do not qualify as sale-type leases, as collectability is not reasonably assured.

The Company recognized the following components under operating and sales-type lease arrangements in the accompanying condensed statement of consolidated operations and comprehensive loss for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

Operating

 

 

Sales-type

 

 

Operating

 

 

Sales-type

 

 

Operating

 

 

Sales-type

 

 

Operating

 

 

Sales-type

 

Revenue

 

$

154

 

 

$

 

 

$

706

 

 

$

 

 

$

362

 

 

$

 

 

$

1,026

 

 

$

 

Interest income(a)

 

$

 

 

$

17

 

 

$

 

 

$

27

 

 

$

 

 

$

35

 

 

$

 

 

$

55

 

 

(a)

Interest income relating to sales-type leases is recorded as a component of revenue in the accompanying condensed statement of consolidated operations and comprehensive loss for each of the periods presented.

The Company’s net investment in sales-type leases consisted of the following as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Future minimum lease payments receivable

 

$

1,547

 

 

$

1,595

 

Less: Allowance for doubtful accounts

 

 

(424

)

 

 

(424

)

Net future minimum lease payments receivable

 

 

1,123

 

 

 

1,171

 

Less: Unearned interest income

 

 

(192

)

 

 

(220

)

   Net investment in sales-type leases

 

$

931

 

 

$

951

 

 

Future minimum lease payments of non-cancellable operating and sales-type lease arrangements as of June 30, 2020 were as follows:

 

 

 

Operating

 

 

Sales-type

 

2020

 

$

384

 

 

$

327

 

2021

 

 

48

 

 

 

429

 

2022

 

 

 

 

 

380

 

2023

 

 

 

 

 

411

 

2024

 

 

 

 

 

 

Thereafter

 

 

 

 

 

 

Total minimum lease payments

 

$

432

 

 

$

1,547

 

Less: Allowance for doubtful accounts

 

 

 

 

 

 

(424

)

Less: Present value discount

 

 

 

 

 

 

(192

)

Future minimum lease payments receivable

 

 

 

 

 

$

931

 

 

v3.20.2
Contingencies and Commitments
6 Months Ended
Jun. 30, 2020
Commitments And Contingencies Disclosure [Abstract]  
Contingencies and Commitments

Note 11. Contingencies and Commitments

Contingencies

On March 1, 2018, the Company’s ExOne GmbH subsidiary notified Voxeljet AG that it had materially breached a 2003 Patent and Know-How Transfer Agreement and asserted its rights to set-off damages as a result of the breaches against the annual license fee due from the Company under the agreement. At this time, the Company cannot reasonably estimate a contingency, if any, related to this matter.

The Company is subject to various litigation, claims, and proceedings which have been or may be instituted or asserted from time to time in the ordinary course of business. Management does not believe that the outcome of any pending or threatened matters will have a material adverse effect, individually or in the aggregate, on the financial position, results of operations or cash flows of the Company.

Commitments

In the normal course of its operations, ExOne GmbH issues short-term financial guarantees and letters of credit to third parties in connection with certain commercial transactions requiring security through a credit facility with a German bank.

On February 24, 2020, ExOne GmbH entered into an amendment and replacement of its credit facility with the German bank. The credit facility amendments included the elimination of the overdraft credit and short-term loan features of the prior agreement and replaced them with an increased capacity amount of approximately $3,900 (€3,500) for the issuance of financial guarantees and letters of credit for commercial transactions requiring security. The cash collateral requirement for the issuance of financial guarantees and letters of credit for commercial transactions requiring security was eliminated for amounts up to approximately $1,100 (€1,000) as the amendment provided the German bank with a collateral interest in the accounts receivable of ExOne GmbH. Amounts in excess of approximately $1,100 (€1,000) continue to require cash collateral under the amended credit facility.

At June 30, 2020, total outstanding financial guarantees and letters of credit issued by ExOne GmbH under the amended credit facility were $906 (€807) including $265 (€236) with expiration dates ranging from October 2020 through February 2023 and $641 (€571) which do not expire. At December 31, 2019, total outstanding financial guarantees and letters of credit issued by ExOne GmbH under the former credit facility were $560 (€499).

v3.20.2
Related Party Revolving Credit Facility
6 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
Related Party Revolving Credit Facility

Note 12. Related Party Revolving Credit Facility

On March 12, 2018, the Company and its ExOne Americas LLC and ExOne GmbH subsidiaries, as guarantors (collectively, the “Loan Parties”), entered into a Credit Agreement and related ancillary agreements with LBM Holdings, LLC (“LBM”), a company controlled by S. Kent Rockwell, who was the Executive Chairman of the Company (a related party) at such date and is currently Chairman of the Company, relating to a $15,000 revolving credit facility (the “Credit Agreement”) to provide additional funding to the Company for working capital and general corporate purposes. The Credit Agreement provided a credit facility for a term of three years (through March 12, 2021), bearing interest at a rate of one-month LIBOR plus an applicable margin of 500 basis points (6.8% at December 31, 2019 and 5.2% at June 30, 2020). The Credit Agreement required a commitment fee of 75 basis points, or 0.75%, on the unused portion of the facility, payable monthly in arrears. In addition, an up-front commitment fee of 125 basis points, or 1.25% ($188), was required at closing. Borrowings under the Credit Agreement were collateralized by the accounts receivable, inventories and machinery and equipment of the Loan Parties.

On February 18, 2020, the Loan Parties and LBM entered into a First Amendment to the Credit Agreement (the “Amendment”) which (i) reduced the available capacity under the revolving credit facility to $10,000, (ii) extended the term of the credit facility until March 31, 2024, (iii) increased the commitment fee to 100 basis points, or 1.00%, on the unused portion of the revolving credit facility, and (iv) provided a process for the replacement of the LIBOR index after 2021. In addition, the accounts receivable of ExOne GmbH no longer serve as collateral for borrowings under the amended revolving credit facility.

Borrowings under the credit facility are required to be made in minimum increments of $1,000. The Company may terminate or reduce the credit commitment at any time during the term of the amended Credit Agreement without penalty. The Company may also make prepayments against outstanding borrowings under the amended Credit Agreement at any time without penalty. At December 31, 2019 and June 30, 2020, the total estimated value of collateral was in significant excess of the maximum borrowing capacity under the credit facility.

The amended Credit Agreement contains several affirmative covenants including prompt payment of liabilities and taxes; maintenance of insurance, properties, and licenses; and compliance with laws. The amended Credit Agreement also contains several negative covenants including restricting the incurrence of certain additional debt; prohibiting future liens (other than permitted liens); prohibiting investment in third parties; limiting the ability to pay dividends; limiting mergers, acquisitions, and dispositions; and limiting the sale of certain property and equipment of the Loan Parties. The amended Credit Agreement does not contain any financial covenants. The amended Credit Agreement also contains events of default, including, but not limited to, cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants. The Company has obtained waivers related to its event of default on its building note payable (Note 13) and for the incurrence of additional debt associated with its PPP Loan (Note 13).

The Company does not consider the Credit Agreement, as amended, indicative of a fair market value lending, as LBM was determined to be a related party based on common control by S. Kent Rockwell. S. Kent Rockwell is the indirect sole owner of LBM. Prior to execution, each of the Credit Agreement and the Amendment was reviewed and approved by the Audit Committee of the Company’s Board of Directors (the “Board”), in accordance with The ExOne Company Policy and Procedures with Respect to Related Person Transactions, and subsequently by a sub-committee of independent members of the Board. At the time of execution of the Credit Agreement, the available loan proceeds were deposited into an escrow account with an unrelated, third party financial institution acting as escrow agent pursuant to a separate Escrow Agreement by and among the parties. Loan proceeds held in escrow are available to the Company upon its submission to the escrow agent of a loan request. Such proceeds will not be available to LBM until payment in-full of the obligations under the amended Credit Agreement and termination of the amended Credit Agreement. Payments of principal and other obligations will be made to the escrow agent, while interest payments will be made directly to LBM. Provided there exists no potential default or event of default, the amended Credit Agreement and Escrow Agreement prohibit any acceleration of repayment of any amount outstanding under the amended Credit Agreement and prohibit termination of the amended Credit Agreement or withdrawal from escrow of any unused portion of the available loan proceeds.

There were no borrowings under the credit facility during the three or six months ended June 30, 2020 or 2019. There were no borrowings outstanding under the credit facility at either June 30, 2020 or December 31, 2019.

The Company incurred $265 in debt issuance costs associated with the inception of the credit facility (including the aforementioned up-front commitment fee paid at closing to LBM) and $49 in debt issuance costs associated with the Amendment.

During the three and six months ended June 30, 2020, the Company recorded interest expense relating to the credit facility of $34 and $79, respectively. Included in interest expense for the three months and six months ended June 30, 2020 was $9 and $27, respectively, associated with amortization of debt issuance costs (resulting in $129 in remaining debt issuance costs at June 30, 2020, of which $35 was included in prepaid expenses and other current assets and $94 was included in other noncurrent assets in the accompanying condensed consolidated balance sheet). Included in interest expense for the three months and six months ended June 30, 2020 was $25 and $52, respectively, associated with the commitment fee on the unused portion of the revolving credit facility.

In connection with the Company’s efforts to conserve cash as a result of COVID-19, LBM agreed in April 2020 to temporarily defer (through July 2020) cash payments associated with the commitment fee on the unused portion of the revolving credit facility. There were no incremental interest or other fees incurred by the Company as a result of this deferral. At June 30, 2020 and December 31, 2019, $52 and $28, respectively, associated with the commitment fee on the unused portion of the revolving credit facility were included in accounts payable in the accompanying condensed consolidated balance sheet. Amounts payable to LBM at June 30, 2020 and December 31, 2019 were settled by the Company in July 2020 and January 2020, respectively.

During the three and six months ended June 30, 2019, the Company recorded interest expense related to the credit facility of $50 and $100, respectively.

v3.20.2
Long-Term Debt
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Long-Term Debt

Note 13. Long-Term Debt

Long-term debt consisted of the following as of the dates indicated:

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

Principal

 

 

Unamortized

Debt Issuance

Costs

 

 

Net

 

 

Principal

 

 

Unamortized

Debt Issuance

Costs

 

 

Net

 

Paycheck Protection Program loan

 

$

2,194

 

 

$

 

 

$

2,194

 

 

$

 

 

$

 

 

$

 

Building note payable

 

 

1,306

 

 

 

(18

)

 

 

1,288

 

 

 

1,384

 

 

 

(20

)

 

 

1,364

 

Less: Amount due within one year

 

 

(1,132

)

 

 

4

 

 

 

(1,128

)

 

 

(157

)

 

 

4

 

 

 

(153

)

 

 

$

2,368

 

 

$

(14

)

 

$

2,354

 

 

$

1,227

 

 

$

(16

)

 

$

1,211

 

 

On April 18, 2020, the Company entered into an unsecured promissory note (the “Note”) with an unrelated United States bank (the “Lender”) reflecting a loan in the principal amount of $2,194 (the “Loan”). The Loan was granted pursuant to the Paycheck Protection Program (the “PPP”) administered by the United States Small Business Administration (the “SBA”) as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

Pursuant to the terms of the Note, the Loan bears interest at a rate of 1.00% per annum and matures on April 18, 2022 (the “Maturity Date”). Principal and interest payments on the Loan are deferred until November 18, 2020, at which time equal installments of principal and interest will be due and payable monthly through the Maturity Date. The Note may be prepaid by the Company at any time prior to maturity without penalty. If the Company defaults on the Note, the Lender may, at its option, accelerate the maturity of the Company’s obligations under the Note.

Pursuant to the terms of the PPP, the Loan, or a portion thereof, may be forgiven if Loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, costs used to continue group health care benefits, mortgage interest payments, rent and utilities. The Company intends to use all or a significant majority of the Loan proceeds for qualifying expenses. The terms of the Loan, including eligibility and forgiveness, may be subject to further requirements in regulations and guidance adopted by the SBA.

On May 21, 2012, the Company entered into a building note payable with an unrelated United States bank. Terms of the building note payable include monthly payments of $18 including interest at 4.00% through May 2017, and subsequently, monthly payments of $19 including interest at the monthly average yield on United States Treasury Securities plus 3.25% for the remainder of the term through May 2027. The building note payable is collateralized by the Company’s facility located in North Huntingdon, Pennsylvania which had a carrying value of $4,854 at June 30, 2020.

At December 31, 2019, the Company identified that it was not in compliance with the annual cash flow-to-debt service ratio covenant associated with the building note payable. The Company requested and was granted a waiver related to compliance with this annual covenant at December 31, 2019 and through December 31, 2020. Related to the 2019 non-compliance, there were no cross-default provisions or related impacts on other lending or financing agreements (Note 12).

Future maturities of long-term debt at June 30, 2020, were as follows:

 

2020

 

$

322

 

2021

 

 

1,627

 

2022

 

 

668

 

2023

 

 

188

 

2024

 

 

195

 

Thereafter

 

 

500

 

 

 

$

3,500

 

 

v3.20.2
Income Taxes
6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

Note 14. Income Taxes

The provision for income taxes for the three months ended June 30, 2020 and 2019 was $8 and $99, respectively. The provision (benefit) for income taxes for the six months ended June 30, 2020 and 2019 was $234 and ($701), respectively. The Company has

completed a discrete period computation of its provision (benefit) for income taxes for each of the periods presented. The discrete period computation was required as a result of jurisdictions with losses before income taxes for which no tax benefit can be recognized and an inability to generate reliable estimates for results in certain jurisdictions as a result of inconsistencies in generating net operating profits (losses) in those jurisdictions.

The effective tax rate for the three months ended June 30, 2020 and 2019 was 0.2% (provision on a loss) and 2.7% (provision on a loss), respectively. The effective tax rate for the six months ended June 30, 2020 and 2019 was 3.1% (provision on a loss) and 7.8% (benefit on a loss), respectively.

For the three and six months ended June 30, 2020 and the three months ended June 30, 2019, the effective tax rate differed from the United States federal statutory rate of 21.0% primarily due to net changes in valuation allowances for the period. For the six months ended June 30, 2019, the effective tax rate differed from the United States federal statutory rate of 21.0% primarily due to the reversal of previously recorded liabilities for uncertain tax positions (further discussed below) and net changes in valuation allowances for the period.

The Company has provided a valuation allowance for certain of its net deferred tax assets as a result of the Company not generating consistent net operating profits in certain jurisdictions in which it operates. As such, certain benefits from deferred taxes in the periods presented have been fully offset by changes in the valuation allowance for the related net deferred tax assets. The Company continues to assess its future taxable income by jurisdiction based on recent historical operating results, the expected timing of reversal of temporary differences, various tax planning strategies that the Company may be able to enact in future periods, the impact of potential operating changes on the business and forecast results from operations in future periods based on available information at the end of each reporting period. To the extent that the Company is able to reach the conclusion that net deferred tax assets are realizable based on any combination of the above factors in a single, or in multiple, taxing jurisdictions, a reversal of the related portion of the Company’s existing valuation allowances may occur.

A reconciliation of the beginning and ending amount of unrecognized tax benefits (including accrued interest and penalties) was as follows for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Balance at beginning of period

 

$

 

 

$

102

 

 

$

 

 

$

1,186

 

Additions based on tax positions related to the current

   year

 

 

 

 

 

 

 

 

 

 

 

 

Additions for tax positions of prior years

 

 

 

 

 

1

 

 

 

 

 

 

2

 

Reductions for tax positions of prior years

 

 

 

 

 

 

 

 

 

 

 

(1,075

)

Settlements

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

2

 

 

 

 

 

 

(8

)

Balance at end of period

 

$

 

 

$

105

 

 

$

 

 

$

105

 

 

The Company includes interest and penalties related to income taxes as a component of the provision (benefit) for income taxes in the accompanying condensed statement of consolidated operations and comprehensive loss. There were no such interest or penalties included in the provision (benefit) for income taxes for any of the periods presented.

At December 31, 2018, the Company’s ExOne GmbH (2010-2013) and ExOne Property GmbH (2013) subsidiaries were under examination by local taxing authorities in Germany. In January 2019, this examination was concluded without significant adjustment to previously established tax positions. As a result, during the three months ended March 31, 2019, the Company recorded a reversal of certain of its previously recorded liabilities for uncertain tax positions of $1,075, of which $257 was offset against net operating loss carryforwards.

v3.20.2
Equity-Based Compensation
6 Months Ended
Jun. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Equity-Based Compensation

Note 15. Equity-Based Compensation

On January 24, 2013, the Board adopted the 2013 Equity Incentive Plan (the “Plan”). In connection with the adoption of the Plan, 500,000 shares of common stock were reserved for issuance pursuant to the Plan, with automatic increases in such reserve available each year annually on January 1 from 2014 through 2023 equal to the lesser of 3.0% of the total outstanding shares of common stock as of December 31 of the immediately preceding year, or a number of shares of common stock determined by the Board, provided that the maximum number of shares authorized under the Plan could not exceed 1,992,241 shares, subject to certain adjustments. The maximum number of shares authorized under the Plan was reached on January 1, 2017. At June 30, 2020, 688,217 shares remained available for future issuance under the Plan.

Stock options and restricted stock issued by the Company under the Plan are generally subject to service conditions resulting in annual vesting on the anniversary of the date of grant over a period typically ranging between one and three years. Certain stock options and restricted stock issued by the Company under the Plan vest immediately upon issuance. Stock options issued by the Company under the Plan have contractual lives which expire over a period typically ranging between five and ten years from the date of grant, subject to continued service to the Company by the participant.

On February 6, 2019, the Compensation Committee of the Board adopted the 2019 Annual Incentive Program (the “2019 Program”) as a subplan under the Plan. The 2019 Program provided an opportunity for performance-based compensation to senior executive officers of the Company, among others. The target annual incentive for each 2019 Program participant was expressed as a percentage of base salary and was conditioned on the achievement of certain financial goals (as approved by the Compensation Committee of the Board). The Compensation Committee of the Board retained negative discretion over amounts payable under the 2019 Program. During the three and six months ended June 30, 2019, the Company recorded $234 and $376, respectively, in equity-based compensation expense based on the estimated outcome of the defined financial goals for 2019 under the 2019 Program.

On February 5, 2020, the Compensation Committee of the Board adopted the 2020 Annual Incentive Program (the “2020 Program”) as a subplan under the Plan. The 2020 Program provided an opportunity for performance-based compensation to senior executive officers of the Company, among others. The target annual incentive for each 2020 Program participant was expressed as a percentage of base salary and was conditioned on the achievement of certain financial goals (as approved by the Compensation Committee of the Board). The Compensation Committee of the Board retained negative discretion over amounts payable under the 2020 Program. During the three and six months ended June 30, 2020, the Company recorded no equity-based compensation expense based on the estimated outcome of the defined financial goals for 2020 under the 2020 Program.

The following table summarizes the total equity-based compensation expense recognized by the Company for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Equity-based compensation expense recognized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

$

44

 

 

$

150

 

 

$

189

 

 

$

316

 

Restricted stock

 

 

105

 

 

 

245

 

 

 

246

 

 

 

374

 

Other(a)

 

 

8

 

 

 

247

 

 

 

14

 

 

 

391

 

Total equity-based compensation expense before income taxes

 

 

157

 

 

 

642

 

 

 

449

 

 

 

1,081

 

Benefit for income taxes(b)

 

 

 

 

 

 

 

 

 

 

 

 

Total equity-based compensation expense net of income taxes

 

$

157

 

 

$

642

 

 

$

449

 

 

$

1,081

 

 

(a)

For each of the 2020 periods, Other represents expense associated with certain employee contractual amounts to be settled in equity. For each of the 2019 periods, Other represents expense associated with the 2019 Program and certain employee contractual amounts to be settled in equity.

(b)

The Benefit for income taxes from equity-based compensation for each of the periods presented has been determined to be $0 based on recorded valuation allowances against net deferred tax assets.

At June 30, 2020, total future compensation expense related to unvested awards yet to be recognized by the Company was $412 for stock options and $164 for restricted stock. Total future compensation expense related to unvested awards yet to be recognized by the Company is expected to be recognized over a weighted-average remaining vesting period of 1.1 years.

The fair value of stock options granted during the six months ended June 30, 2019 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

 

Weighted average fair value per stock option

 

$3.48 - $3.68

 

Volatility

 

54.0% - 60.1%

 

Average risk-free interest rate

 

2.2% - 2.5%

 

Dividend yield

 

0.0%

 

Expected term (years)

 

2.5 - 3.5

 

 

For certain stock option awards, volatility is estimated based on the historical volatility of the Company when the expected term of the award is less than the period for which the Company has been publicly traded. For certain stock option awards, volatility is estimated based on the historical volatilities of certain peer group companies when the expected term of the award exceeds the period for which the Company has been publicly traded. The average risk-free rate is based on a weighted average yield curve of risk-free interest rates consistent with the expected term of the awards. Expected dividend yield is based on historical dividend data as well as future expectations. Expected term is calculated using the simplified method as the Company does not have sufficient historical exercise experience upon which to base an estimate.

The activity for stock options was as follows for the periods indicated:

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Number of

Options

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Grant Date Fair

Value

 

 

Number of

Options

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Grant Date Fair

Value

 

Outstanding at beginning of period

 

 

854,259

 

 

$

9.34

 

 

$

4.49

 

 

 

621,986

 

 

$

10.66

 

 

$

5.52

 

Stock options granted

 

 

 

 

$

 

 

$

 

 

 

57,610

 

 

$

8.33

 

 

$

3.67

 

Stock options exercised

 

 

(73,251

)

 

$

7.38

 

 

$

3.22

 

 

 

(36,370

)

 

$

7.22

 

 

$

3.03

 

Stock options forfeited

 

 

(79,936

)

 

$

7.85

 

 

$

3.41

 

 

 

(9,773

)

 

$

7.67

 

 

$

3.70

 

Stock options expired

 

 

(21,874

)

 

$

11.18

 

 

$

6.14

 

 

 

(24,666

)

 

$

17.10

 

 

$

10.45

 

Outstanding at end of period

 

 

679,198

 

 

$

9.67

 

 

$

4.70

 

 

 

608,787

 

 

$

10.43

 

 

$

5.33

 

Exercisable at end of period

 

 

423,456

 

 

$

11.20

 

 

$

5.83

 

 

 

385,709

 

 

$

11.56

 

 

$

6.20

 

Expected to vest at end of period

 

 

255,742

 

 

$

7.14

 

 

$

2.82

 

 

 

223,078

 

 

$

8.48

 

 

$

3.82

 

 

At June 30, 2020, intrinsic value associated with stock options exercisable and expected to vest was $147 and $360, respectively. The weighted average remaining contractual term of stock options exercisable and expected to vest at June 30, 2020, was 3.4 years and 4.1 years, respectively. Stock options with an aggregate intrinsic value of $624 were exercised by employees during the six months ended June 30, 2020, resulting in proceeds to the Company from the exercise of stock options of $541. Stock options with an aggregate intrinsic value of $326 were exercised by employees during the six months ended June 30, 2019, resulting in proceeds to the Company from the exercise of stock options of $262 (of which, at June 30, 2019, $91 remained unsettled). The Company recorded no income tax benefit related to these exercises.

The activity for restricted stock was as follows for the periods indicated:

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Shares of

Restricted

Stock

 

 

Weighted Average

Grant Date Fair

Value

 

 

Shares of

Restricted

Stock

 

 

Weighted Average

Grant Date Fair

Value

 

Outstanding at beginning of period

 

 

66,513

 

 

$

8.76

 

 

 

67,001

 

 

$

8.30

 

Restricted stock granted

 

 

37,500

 

 

$

7.12

 

 

 

66,763

 

 

$

8.98

 

Restricted stock vested

 

 

(56,763

)

 

$

9.11

 

 

 

(37,500

)

 

$

8.12

 

Restricted stock forfeited

 

 

 

 

$

 

 

 

 

 

$

 

Outstanding at end of period

 

 

47,250

 

 

$

7.04

 

 

 

96,264

 

 

$

8.84

 

Restricted stock expected to vest at end of period

 

 

47,250

 

 

$

7.04

 

 

 

96,264

 

 

$

8.84

 

 

Restricted stock that vested during the six months ended June 30, 2020 and 2019, had a fair value of $408 and $356, respectively.

v3.20.2
Fair Value Measurements
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 16. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

 

Level 1

 

Observable inputs such as quoted prices in active markets for identical investments that the Company has the ability to access.

 

 

 

Level 2

 

Inputs include:

 

Quoted prices for similar assets or liabilities in active markets;

 

Quoted prices for identical or similar assets or liabilities in inactive markets;

 

Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

 

Inputs that are derived principally from, or corroborated by, observable market data by correlation or other means.

 

 

 

Level 3

 

Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

 

The Company is required to disclose its estimate of the fair value of material financial instruments, including those recorded as assets or liabilities in its consolidated financial statements, in accordance with GAAP. At June 30, 2020 and December 31, 2019, the Company had no financial instruments (assets or liabilities) measured at fair value on a recurring basis.

The carrying values and fair values of other financial instruments (assets and liabilities) not required to be recorded at fair value were as follows as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

Carrying

Value

 

 

Fair

Value

 

 

Carrying

Value

 

 

Fair

Value

 

Cash and cash equivalents

 

$

19,658

 

 

$

19,658

 

 

$

5,265

 

 

$

5,265

 

Restricted cash

 

$

508

 

 

$

508

 

 

$

978

 

 

$

978

 

Debt issuance costs(a)

 

$

129

 

 

$

 

 

$

107

 

 

$

 

Current portion of long-term debt(b)

 

$

1,128

 

 

$

990

 

 

$

153

 

 

$

157

 

Long-term debt  ̶  net of current portion(b)

 

$

2,354

 

 

$

2,309

 

 

$

1,211

 

 

$

1,227

 

 

(a)

Represents debt issuance costs associated with the Company’s related party revolving credit facility (Note 12) of which $35 and $88 was included in prepaid expenses and other current assets and $94 and $19 was included in other noncurrent assets in the accompanying condensed consolidated balance sheet at June 30, 2020 and December 31, 2019, respectively.

(b)

Carrying values at June 30, 2020 and December 31, 2019 are net of unamortized debt issuance costs of $18 and $20, respectively.

 

The carrying amounts of cash and cash equivalents and restricted cash approximate fair value due to their short-term maturities. The fair value of current portion of long term debt and long-term debt – net of current portion has been estimated by management based on the consideration of applicable interest rates, including certain instruments at variable or floating rates and the nominal fixed interest rate (1.0%) associated with the Company’s PPP Loan (Note 13) and other available information (including quoted prices of similar instruments available to the Company). Cash and cash equivalents and restricted cash were classified as Level 1; Current portion of long-term debt and long-term debt – net of current portion were classified as Level 2.

v3.20.2
Concentration of Credit Risk
6 Months Ended
Jun. 30, 2020
Risks And Uncertainties [Abstract]  
Concentration of Credit Risk

Note 17. Concentration of Credit Risk

During the three months and six months ended June 30, 2020 and 2019, the Company conducted a significant portion of its business with a limited number of customers, though not necessarily the same customers for each respective period. For the three months ended June 30, 2020 and 2019, the Company’s five most significant customers represented 40.7% and 46.4% of total revenue, respectively. For the six months ended June 30, 2020 and 2019, the Company’s five most significant customers represented 24.3% and 33.0% of total revenue, respectively. At June 30, 2020 and December 31, 2019, accounts receivable from the Company’s five most significant customers were $1,480 and $3,230, respectively.

v3.20.2
Related Party Transactions
6 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
Related Party Transactions

Note 18. Related Party Transactions

Purchases of products and/or services from related parties during the three months and six months ended June 30, 2019 were $43 and $58, respectively.  Purchases of products and/or services by the Company during the three and six months ended June 30, 2019 included leased office space and website design services from related parties under common control by S. Kent Rockwell, (currently Chairman of the Board of the Company and previously the Executive Chairman and Chief Executive Officer of the Company) and the purchase of a 3D printing machine and certain ancillary equipment for $30 from an educational institution determined to be a related party on the basis that S. Kent Rockwell serves as a trustee of the educational institution. None of the transactions met a threshold requiring review and approval by the Audit Committee of the Board. There were no purchases of products and/or services from related parties during the three or six months ended June 30, 2020. There were no amounts due to related parties at either June 30, 2020 or December 31, 2019.  

The Company also receives the benefit of the corporate use of an airplane from a related party under common control by S. Kent Rockwell for no consideration.  The Company estimated the fair market value of the benefits received during each of the three months and six months ended June 30, 2019 was $3. There were no such benefits received during the three months and six months ended June 30, 2020.

Refer to Note 12 for further discussion relating to the Company’s revolving credit facility with a related party.

v3.20.2
Other Expense - Net
6 Months Ended
Jun. 30, 2020
Other Income And Expenses [Abstract]  
Other Expense - Net

 

Note 19. Other Expense – Net

 

Other expense – net consisted of the following for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Interest income

 

$

(3

)

 

$

(2

)

 

$

(15

)

 

$

(8

)

Foreign currency losses (gains) – net

 

 

128

 

 

 

29

 

 

 

(37

)

 

 

51

 

Other – net

 

 

70

 

 

 

30

 

 

 

57

 

 

 

26

 

 

 

$

195

 

 

$

57

 

 

$

5

 

 

$

69

 

 

v3.20.2
Subsequent Events
6 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events

Note 20. Subsequent Events

The Company has evaluated all of its activities and concluded that no other subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes to the condensed consolidated financial statements.

v3.20.2
Basis of Presentation (Policies)
6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Organization

Organization

The ExOne Company (“ExOne”) is a corporation organized under the laws of the state of Delaware. ExOne was formed on January 1, 2013, when The Ex One Company, LLC, a Delaware limited liability company, merged with and into a Delaware corporation, which survived and changed its name to The ExOne Company (the “Reorganization”). As a result of the Reorganization, The Ex One Company, LLC became ExOne, the common and preferred interest holders of The Ex One Company, LLC became holders of common stock and preferred stock, respectively, of ExOne, and the subsidiaries of The Ex One Company, LLC became the subsidiaries of ExOne. The condensed consolidated financial statements include the accounts of ExOne, its wholly-owned subsidiaries, ExOne Americas LLC (United States); ExOne GmbH (Germany); ExOne Property GmbH (Germany); and ExOne KK (Japan). Collectively, the consolidated group is referred to as the “Company”.

The Company filed a registration statement on Form S-3 (No. 333-223690) with the Securities and Exchange Commission on March 15, 2018. The purpose of the Form S-3 was to register various equity and debt securities. Subsidiaries of the Company are co-registrants with the Company (“Subsidiary Guarantors”), and the registration statement registered guarantees of debt securities by one or more of the Subsidiary Guarantors. The Subsidiary Guarantors are 100% owned by the Company and any guarantees by the Subsidiary Guarantors will be full and unconditional.

Basis of Presentation

The condensed consolidated financial statements of the Company are unaudited. The condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the results of operations, financial position and cash flows of the Company. All material intercompany transactions and balances have been eliminated in consolidation. The results reported in these condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The December 31, 2019 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Quarterly Report on Form 10-Q should be read in connection with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which includes all disclosures required by GAAP.

The preparation of these condensed consolidated financial statements requires the Company to make certain judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. Areas that require significant judgments, estimates and assumptions include accounting for accounts receivable (including the allowance for doubtful accounts); inventories (including the allowance for slow-moving and obsolete inventories); product warranty reserves; contingencies; income taxes (including the valuation allowance on certain deferred tax assets and liabilities for uncertain tax positions); equity-based compensation (including the valuation of certain equity-based compensation awards issued by the Company); and testing for impairment of long-lived assets (including the identification of asset groups by management, estimates of future cash flows of identified asset groups and fair value estimates used in connection with assessing the valuation of identified asset groups). The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Certain amounts relating to operating lease right-of-use assets ($432), current portion of operating lease liabilities ($158) and operating lease liabilities – net of current portion ($274) in the accompanying condensed consolidated balance sheet at December 31, 2019, have been reclassified from other noncurrent assets, accrued expenses and other current liabilities and other noncurrent liabilities, respectively, to conform to current period presentation.

Certain amounts in the accompanying condensed statement of consolidated cash flows have been reclassified to conform to current period presentation.

COVID-19

COVID-19

In March 2020, the World Health Organization declared the novel strain of coronavirus a global pandemic (“COVID-19”) and recommended containment and mitigation measures worldwide. The impact of COVID-19 and the related economic, business and market disruptions are evolving rapidly, and their effects are uncertain. As a result of COVID-19, the Company was required to temporarily close its operations at its North Huntingdon, Pennsylvania facility for the period from March 23 through March 30, 2020. In response to COVID-19, the Company has incurred incremental costs associated with protecting the health and safety of the Company’s global workforce, enhanced sanitization of the Company’s global operating facilities, and information technology capabilities for employees operating remotely. Beginning in March 2020, restrictions imposed by various governmental authorities on both domestic and international shipping and travel have caused a disruption to the timing of delivery and installation of the Company’s 3D printing machines, resulting in negative impacts to the Company’s financial position, results of operations and cash flows. The duration and severity of the outbreak and its long-term impact on the Company’s business are uncertain at this time. The Company is unable to predict the impact that COVID-19 will have on its future financial position, results of operations and cash flows.

Recently Accounting Pronouncements

Recently Issued Accounting Guidance

The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (the “FASB”). Recently issued ASUs not listed below either were assessed and determined to be not applicable or are currently expected to have no impact on the consolidated financial statements of the Company.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses.” This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b-2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. Management is currently evaluating the potential impact of these changes on the consolidated financial statements of the Company.

Loss Per Share

The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the applicable period. Diluted loss per common share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares and common equivalent shares outstanding during the applicable period.

Revenue

The Company derives revenue from the sale of 3D printing machines and 3D printed and other products, materials and services. Revenue is recognized when the Company satisfies its performance obligation(s) under a contract (either implicit or explicit) by transferring the promised product or service to a customer either when (or as) the customer obtains control of the product or service. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenue) basis. Shipping and handling costs are included in cost of sales.

Certain of the Company’s contracts with customers provide for multiple performance obligations. Sales of 3D printing machines may also include optional equipment, materials, replacement components and services (installation, training and other services, including maintenance services and/or an extended warranty). Certain other contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of stand-alone selling price for each distinct product or service in the contract, which is generally based on an observable price.

v3.20.2
Accumulated Other Comprehensive Loss (Tables)
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Summary of Changes in the Components of Accumulated Other Comprehensive Loss

The following table summarizes changes in the components of accumulated other comprehensive loss for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

(12,321

)

 

$

(11,524

)

 

$

(11,483

)

 

$

(10,748

)

Other comprehensive income (loss)

 

 

370

 

 

 

583

 

 

 

(468

)

 

 

(193

)

Balance at end of period

 

$

(11,951

)

 

$

(10,941

)

 

$

(11,951

)

 

$

(10,941

)

v3.20.2
Loss Per Share (Tables)
6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Computation of Basic and Diluted Loss Per Common Share

The information used to compute basic and diluted net loss per common share was as follows for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

 

$

(4,023

)

 

$

(3,789

)

 

$

(7,671

)

 

$

(8,285

)

Weighted average shares outstanding (basic and diluted)

 

 

16,464,345

 

 

 

16,301,157

 

 

 

16,416,867

 

 

 

16,278,043

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.24

)

 

$

(0.23

)

 

$

(0.47

)

 

$

(0.51

)

Diluted

 

$

(0.24

)

 

$

(0.23

)

 

$

(0.47

)

 

$

(0.51

)

v3.20.2
Revenue (Tables)
6 Months Ended
Jun. 30, 2020
Revenue From Contract With Customer [Abstract]  
Summary of Revenue by Product Group

The following table summarizes the Company’s revenue by product group for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

2019

 

 

2020

 

 

2019

 

3D printing machines

 

$

4,898

 

 

$

9,231

 

 

$

11,215

 

 

$

12,560

 

3D printed and other products, materials and services

 

 

6,201

 

 

 

6,048

 

 

 

13,267

 

 

 

12,298

 

 

 

$

11,099

 

 

$

15,279

 

 

$

24,482

 

 

$

24,858

 

v3.20.2
Cash, Cash Equivalents, and Restricted Cash (Tables)
6 Months Ended
Jun. 30, 2020
Cash And Cash Equivalents [Abstract]  
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash The following provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the accompanying condensed consolidated balance sheet to the same such amounts shown in the accompanying condensed statement of consolidated cash flows as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Cash and cash equivalents

 

$

19,658

 

 

$

5,265

 

Restricted cash

 

 

508

 

 

 

978

 

Cash, cash equivalents, and restricted cash

 

$

20,166

 

 

$

6,243

 

v3.20.2
Inventories (Tables)
6 Months Ended
Jun. 30, 2020
Inventory Disclosure [Abstract]  
Schedule of Inventories

Inventories consisted of the following as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Raw materials and components

 

$

11,149

 

 

$

8,841

 

Work in process

 

 

5,890

 

 

 

4,922

 

Finished goods

 

 

7,169

 

 

 

6,007

 

 

 

$

24,208

 

 

$

19,770

 

Summary of Changes in Allowance for Slow-moving and Obsolete Inventories The following table summarizes changes in the allowance for slow-moving and obsolete inventories for the periods indicated:

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Balance at beginning of period

 

$

3,370

 

 

$

4,177

 

 

$

3,443

 

 

$

4,143

 

Provision for slow-moving and obsolete inventories  ̶  net

 

 

78

 

 

 

24

 

 

 

100

 

 

 

131

 

Reductions for sale, consumption or scrap of previously

   reserved amounts

 

 

(1,019

)

 

 

(106

)

 

 

(1,055

)

 

 

(106

)

Foreign currency translation adjustments

 

 

64

 

 

 

54

 

 

 

5

 

 

 

(19

)

Balance at end of period

 

$

2,493

 

 

$

4,149

 

 

$

2,493

 

 

$

4,149

 

v3.20.2
Property and Equipment (Tables)
6 Months Ended
Jun. 30, 2020
Long Lived Assets [Abstract]  
Summary of Property and Equipment

Property and equipment consisted of the following as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

Economic Life

 

 

2020

 

 

2019

 

 

(in years)

Land

 

$

3,385

 

 

$

6,980

 

 

N/A

Buildings and related improvements

 

 

10,036

 

 

 

25,675

 

 

5 - 40

Machinery and equipment

 

 

19,119

 

 

 

19,531

 

 

3 - 20

Other

 

 

6,027

 

 

 

7,086

 

 

3 - 20

 

 

 

38,567

 

 

 

59,272

 

 

 

Less: Accumulated depreciation

 

 

(19,417

)

 

 

(21,478

)

 

 

 

 

 

19,150

 

 

 

37,794

 

 

 

Construction-in-progress

 

 

1,459

 

 

 

1,101

 

 

 

Property and equipment  ̶  net

 

$

20,609

 

 

$

38,895

 

 

 

v3.20.2
Product Warranty Reserves (Tables)
6 Months Ended
Jun. 30, 2020
Product Warranties Disclosures [Abstract]  
Summary of Changes in Product Warranty Reserves

The following table summarizes changes in product warranty reserves, which amounts were reflected in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Balance at beginning of period

 

$

810

 

 

$

1,251

 

 

$

866

 

 

$

1,670

 

     Provisions for new issuances

 

 

187

 

 

 

383

 

 

 

463

 

 

 

529

 

     Payments

 

 

(501

)

 

 

(457

)

 

 

(845

)

 

 

(848

)

     Reserve adjustments

 

 

101

 

 

 

36

 

 

 

121

 

 

 

(123

)

     Foreign currency translation adjustments

 

 

6

 

 

 

10

 

 

 

(2

)

 

 

(5

)

Balance at end of period

 

$

603

 

 

$

1,223

 

 

$

603

 

 

$

1,223

 

v3.20.2
Leases (Tables)
6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Schedule of Future Minimum Lease Payments of Operating Leases Arrangements

Future minimum lease payments of operating lease arrangements (with initial terms greater than twelve months) at June 30, 2020, were as follows:

 

2020

 

$

978

 

2021

 

 

1,925

 

2022

 

 

1,891

 

2023

 

 

32

 

2024

 

 

11

 

Thereafter

 

 

2

 

Total minimum lease payments

 

 

4,839

 

Less: Present value discount

 

 

(306

)

Total operating lease liabilities

 

$

4,533

 

Schedule of Supplemental Information Related to Operating Lease Arrangements

Supplemental information related to operating lease arrangements was as follows as of and for the six months ended June 30, 2020:

 

Operating lease right-of-use assets

 

$

4,533

 

Current portion of operating lease liabilities

 

$

1,754

 

Operating lease liabilities  ̶  net of current portion

 

$

2,779

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

4,876

 

Cash paid for amounts included in the measurement of operating lease liabilities

 

$

961

 

Weighted average remaining lease term (in years)

 

 

2.5

 

Weighted average discount rate

 

 

5.1

%

Schedule of Operating and Sales-type Lease Arrangements

The Company recognized the following components under operating and sales-type lease arrangements in the accompanying condensed statement of consolidated operations and comprehensive loss for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

Operating

 

 

Sales-type

 

 

Operating

 

 

Sales-type

 

 

Operating

 

 

Sales-type

 

 

Operating

 

 

Sales-type

 

Revenue

 

$

154

 

 

$

 

 

$

706

 

 

$

 

 

$

362

 

 

$

 

 

$

1,026

 

 

$

 

Interest income(a)

 

$

 

 

$

17

 

 

$

 

 

$

27

 

 

$

 

 

$

35

 

 

$

 

 

$

55

 

 

(a)

Interest income relating to sales-type leases is recorded as a component of revenue in the accompanying condensed statement of consolidated operations and comprehensive loss for each of the periods presented.

Schedule of Net Investment in Sales-type Leases

The Company’s net investment in sales-type leases consisted of the following as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Future minimum lease payments receivable

 

$

1,547

 

 

$

1,595

 

Less: Allowance for doubtful accounts

 

 

(424

)

 

 

(424

)

Net future minimum lease payments receivable

 

 

1,123

 

 

 

1,171

 

Less: Unearned interest income

 

 

(192

)

 

 

(220

)

   Net investment in sales-type leases

 

$

931

 

 

$

951

 

Schedule of Future Minimum Lease Payment Receivable of Non-Cancellable Operating and Sales-type Lease

 

Future minimum lease payments of non-cancellable operating and sales-type lease arrangements as of June 30, 2020 were as follows:

 

 

 

Operating

 

 

Sales-type

 

2020

 

$

384

 

 

$

327

 

2021

 

 

48

 

 

 

429

 

2022

 

 

 

 

 

380

 

2023

 

 

 

 

 

411

 

2024

 

 

 

 

 

 

Thereafter

 

 

 

 

 

 

Total minimum lease payments

 

$

432

 

 

$

1,547

 

Less: Allowance for doubtful accounts

 

 

 

 

 

 

(424

)

Less: Present value discount

 

 

 

 

 

 

(192

)

Future minimum lease payments receivable

 

 

 

 

 

$

931

 

v3.20.2
Long-Term Debt (Tables)
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Components of Long-Term Debt

Long-term debt consisted of the following as of the dates indicated:

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

Principal

 

 

Unamortized

Debt Issuance

Costs

 

 

Net

 

 

Principal

 

 

Unamortized

Debt Issuance

Costs

 

 

Net

 

Paycheck Protection Program loan

 

$

2,194

 

 

$

 

 

$

2,194

 

 

$

 

 

$

 

 

$

 

Building note payable

 

 

1,306

 

 

 

(18

)

 

 

1,288

 

 

 

1,384

 

 

 

(20

)

 

 

1,364

 

Less: Amount due within one year

 

 

(1,132

)

 

 

4

 

 

 

(1,128

)

 

 

(157

)

 

 

4

 

 

 

(153

)

 

 

$

2,368

 

 

$

(14

)

 

$

2,354

 

 

$

1,227

 

 

$

(16

)

 

$

1,211

 

Future Maturities of Long-Term Debt

Future maturities of long-term debt at June 30, 2020, were as follows:

 

2020

 

$

322

 

2021

 

 

1,627

 

2022

 

 

668

 

2023

 

 

188

 

2024

 

 

195

 

Thereafter

 

 

500

 

 

 

$

3,500

 

v3.20.2
Income Taxes (Tables)
6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Reconciliation of Unrecognized Tax Benefits (Including Accrued Interest and Penalties)

A reconciliation of the beginning and ending amount of unrecognized tax benefits (including accrued interest and penalties) was as follows for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Balance at beginning of period

 

$

 

 

$

102

 

 

$

 

 

$

1,186

 

Additions based on tax positions related to the current

   year

 

 

 

 

 

 

 

 

 

 

 

 

Additions for tax positions of prior years

 

 

 

 

 

1

 

 

 

 

 

 

2

 

Reductions for tax positions of prior years

 

 

 

 

 

 

 

 

 

 

 

(1,075

)

Settlements

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

2

 

 

 

 

 

 

(8

)

Balance at end of period

 

$

 

 

$

105

 

 

$

 

 

$

105

 

v3.20.2
Equity-Based Compensation (Tables)
6 Months Ended
Jun. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Summary of Equity-Based Compensation Expense

The following table summarizes the total equity-based compensation expense recognized by the Company for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Equity-based compensation expense recognized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

$

44

 

 

$

150

 

 

$

189

 

 

$

316

 

Restricted stock

 

 

105

 

 

 

245

 

 

 

246

 

 

 

374

 

Other(a)

 

 

8

 

 

 

247

 

 

 

14

 

 

 

391

 

Total equity-based compensation expense before income taxes

 

 

157

 

 

 

642

 

 

 

449

 

 

 

1,081

 

Benefit for income taxes(b)

 

 

 

 

 

 

 

 

 

 

 

 

Total equity-based compensation expense net of income taxes

 

$

157

 

 

$

642

 

 

$

449

 

 

$

1,081

 

 

(a)

For each of the 2020 periods, Other represents expense associated with certain employee contractual amounts to be settled in equity. For each of the 2019 periods, Other represents expense associated with the 2019 Program and certain employee contractual amounts to be settled in equity.

(b)

The Benefit for income taxes from equity-based compensation for each of the periods presented has been determined to be $0 based on recorded valuation allowances against net deferred tax assets.

Assumptions for Fair Value of Stock Options Granted Estimated on the Date of Grant Using the Black-Scholes Option

The fair value of stock options granted during the six months ended June 30, 2019 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

 

Weighted average fair value per stock option

 

$3.48 - $3.68

 

Volatility

 

54.0% - 60.1%

 

Average risk-free interest rate

 

2.2% - 2.5%

 

Dividend yield

 

0.0%

 

Expected term (years)

 

2.5 - 3.5

 

Summary of Activity for Stock Options The activity for stock options was as follows for the periods indicated:

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Number of

Options

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Grant Date Fair

Value

 

 

Number of

Options

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Grant Date Fair

Value

 

Outstanding at beginning of period

 

 

854,259

 

 

$

9.34

 

 

$

4.49

 

 

 

621,986

 

 

$

10.66

 

 

$

5.52

 

Stock options granted

 

 

 

 

$

 

 

$

 

 

 

57,610

 

 

$

8.33

 

 

$

3.67

 

Stock options exercised

 

 

(73,251

)

 

$

7.38

 

 

$

3.22

 

 

 

(36,370

)

 

$

7.22

 

 

$

3.03

 

Stock options forfeited

 

 

(79,936

)

 

$

7.85

 

 

$

3.41

 

 

 

(9,773

)

 

$

7.67

 

 

$

3.70

 

Stock options expired

 

 

(21,874

)

 

$

11.18

 

 

$

6.14

 

 

 

(24,666

)

 

$

17.10

 

 

$

10.45

 

Outstanding at end of period

 

 

679,198

 

 

$

9.67

 

 

$

4.70

 

 

 

608,787

 

 

$

10.43

 

 

$

5.33

 

Exercisable at end of period

 

 

423,456

 

 

$

11.20

 

 

$

5.83

 

 

 

385,709

 

 

$

11.56

 

 

$

6.20

 

Expected to vest at end of period

 

 

255,742

 

 

$

7.14

 

 

$

2.82

 

 

 

223,078

 

 

$

8.48

 

 

$

3.82

 

Summary of Activity for Restricted Stock Awards The activity for restricted stock was as follows for the periods indicated:

 

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

Shares of

Restricted

Stock

 

 

Weighted Average

Grant Date Fair

Value

 

 

Shares of

Restricted

Stock

 

 

Weighted Average

Grant Date Fair

Value

 

Outstanding at beginning of period

 

 

66,513

 

 

$

8.76

 

 

 

67,001

 

 

$

8.30

 

Restricted stock granted

 

 

37,500

 

 

$

7.12

 

 

 

66,763

 

 

$

8.98

 

Restricted stock vested

 

 

(56,763

)

 

$

9.11

 

 

 

(37,500

)

 

$

8.12

 

Restricted stock forfeited

 

 

 

 

$

 

 

 

 

 

$

 

Outstanding at end of period

 

 

47,250

 

 

$

7.04

 

 

 

96,264

 

 

$

8.84

 

Restricted stock expected to vest at end of period

 

 

47,250

 

 

$

7.04

 

 

 

96,264

 

 

$

8.84

 

v3.20.2
Fair Value Measurements (Tables)
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Carrying Values and Fair Values of Other Financial Instruments

The carrying values and fair values of other financial instruments (assets and liabilities) not required to be recorded at fair value were as follows as of the dates indicated:

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

 

Carrying

Value

 

 

Fair

Value

 

 

Carrying

Value

 

 

Fair

Value

 

Cash and cash equivalents

 

$

19,658

 

 

$

19,658

 

 

$

5,265

 

 

$

5,265

 

Restricted cash

 

$

508

 

 

$

508

 

 

$

978

 

 

$

978

 

Debt issuance costs(a)

 

$

129

 

 

$

 

 

$

107

 

 

$

 

Current portion of long-term debt(b)

 

$

1,128

 

 

$

990

 

 

$

153

 

 

$

157

 

Long-term debt  ̶  net of current portion(b)

 

$

2,354

 

 

$

2,309

 

 

$

1,211

 

 

$

1,227

 

(a)

Represents debt issuance costs associated with the Company’s related party revolving credit facility (Note 12) of which $35 and $88 was included in prepaid expenses and other current assets and $94 and $19 was included in other noncurrent assets in the accompanying condensed consolidated balance sheet at June 30, 2020 and December 31, 2019, respectively.

(b)

Carrying values at June 30, 2020 and December 31, 2019 are net of unamortized debt issuance costs of $18 and $20, respectively.

v3.20.2
Other Expense - Net (Tables)
6 Months Ended
Jun. 30, 2020
Other Income And Expenses [Abstract]  
Schedule of Other Expense - Net

Other expense – net consisted of the following for the periods indicated:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Interest income

 

$

(3

)

 

$

(2

)

 

$

(15

)

 

$

(8

)

Foreign currency losses (gains) – net

 

 

128

 

 

 

29

 

 

 

(37

)

 

 

51

 

Other – net

 

 

70

 

 

 

30

 

 

 

57

 

 

 

26

 

 

 

$

195

 

 

$

57

 

 

$

5

 

 

$

69

 

v3.20.2
Basis of Presentation - Additional Information (Detail) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]    
Entity Incorporation, State or Country Code DE  
Date of incorporation Jan. 01, 2013  
Operating lease liabilities - net of current portion $ 2,779 $ 274
Operating lease right-of-use assets 4,533 432
Current portion of operating lease liabilities $ 1,754 $ 158
Subsidiary Guarantors [Member]    
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]    
Percentage of ownership in subsidiary guarantors 100.00%  
v3.20.2
Liquidity - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended 25 Months Ended
Jun. 30, 2020
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2020
Dec. 31, 2019
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]          
Net loss $ (4,023) $ (7,671) $ (8,285)    
Cash and cash equivalents $ 19,658 19,658     $ 5,265
Initial And Secondary Public Offerings [Member]          
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]          
Cumulative unrestricted net proceeds from common stock       $ 168,361  
Equity Distribution Agreement Oppenheimer and Company [Member]          
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]          
Sale of equity or debt instruments   125,000      
Sale of Stock, Consideration Received on Transaction   $ 25,000      
Commision on sale of common stock 3.00% 3.00%      
Sale of stock, number of shares issued in transaction   382,601      
Sale of stock, price per share $ 8.86 $ 8.86      
Proceeds from Stock Plans   $ 3,288      
Unsettled net proceeds from sale of stock $ 362 362      
Incurred Expenses   190      
Unpaid incurred expenses 158 158      
Revolving Credit Facility [Member]          
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]          
Related party revolving credit facility $ 10,000 $ 10,000      
v3.20.2
Accumulated Other Comprehensive Loss - Summary of Changes in the Components of Accumulated Other Comprehensive Loss (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]        
Balance at beginning of period $ (12,321) $ (11,524) $ (11,483) $ (10,748)
Other comprehensive income (loss) 370 583 (468) (193)
Balance at end of period $ (11,951) $ (10,941) $ (11,951) $ (10,941)
v3.20.2
Accumulated Other Comprehensive Loss - Additional Information (Detail) - USD ($)
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]    
Accumulated other comprehensive loss, tax $ 0 $ 0
Amounts reclassified to earnings from accumulated other comprehensive loss $ 0 $ 0
v3.20.2
Loss Per Share - Additional Information (Detail) - shares
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Stock Option [Member]    
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]    
Potential shares of anti-dilutive common stock 679,198 608,787
Restricted Stock [Member]    
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]    
Potential shares of anti-dilutive common stock 47,250 96,264
v3.20.2
Loss Per Share - Computation of Basic and Diluted Loss Per Common Share (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
Earnings Per Share [Abstract]            
Net loss $ (4,023) $ (3,648) $ (3,789) $ (4,496) $ (7,671) $ (8,285)
Weighted average shares outstanding (basic and diluted) 16,464,345   16,301,157   16,416,867 16,278,043
Net loss per common share:            
Basic $ (0.24)   $ (0.23)   $ (0.47) $ (0.51)
Diluted $ (0.24)   $ (0.23)   $ (0.47) $ (0.51)
v3.20.2
Revenue - Summary of Revenue by Product Group (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Revenue from External Customer [Line Items]        
Revenue $ 11,099 $ 15,279 $ 24,482 $ 24,858
3D Printing Machines [Member]        
Revenue from External Customer [Line Items]        
Revenue 4,898 9,231 11,215 12,560
3D Printed and Other Products, Materials and Services [Member]        
Revenue from External Customer [Line Items]        
Revenue $ 6,201 $ 6,048 $ 13,267 $ 12,298
v3.20.2
Revenue - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Disaggregation Of Revenue [Line Items]          
Revenue, description of payment terms     the Company’s terms of sale generally require payment within 30 to 60 days after delivery, although the Company also recognizes that longer payment periods are customary in certain countries where it transacts business.    
Revenue recognized related to contract liabilities     $ 4,978    
Revenue, remaining performance obligation $ 38,200   38,200    
Allowance for doubtful accounts 488   488   $ 508
Recoveries for bad debts ̶ net $ (70) $ (77) $ (19) $ (150)  
Maximum [Member]          
Disaggregation Of Revenue [Line Items]          
Term till payment is required from date of shipment     60 days    
Minimum [Member]          
Disaggregation Of Revenue [Line Items]          
Term till payment is required from date of shipment     30 days    
v3.20.2
Revenue - Additional Information (Detail 1)
$ in Thousands
Jun. 30, 2020
USD ($)
Disaggregation Of Revenue [Line Items]  
Revenue, remaining performance obligation $ 38,200
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01  
Disaggregation Of Revenue [Line Items]  
Revenue, remaining performance obligation $ 33,200
Revenue, remaining performance obligation, Expected timing of satisfaction, period 12 months
v3.20.2
Cash, Cash Equivalents, and Restricted Cash - Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Cash And Cash Equivalents [Abstract]    
Cash and cash equivalents $ 19,658 $ 5,265
Restricted cash 508 978
Cash, cash equivalents, and restricted cash $ 20,166 $ 6,243
v3.20.2
Cash, Cash Equivalents, and Restricted Cash - Additional Information (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Cash Cash Equivalents And Restricted Cash [Line Items]    
Restricted cash associated with cash collateral $ 508 $ 978
United States Bank [Member]    
Cash Cash Equivalents And Restricted Cash [Line Items]    
Restricted cash associated with cash collateral $ 508 508
German Bank [Member]    
Cash Cash Equivalents And Restricted Cash [Line Items]    
Restricted cash associated with cash collateral   $ 470
v3.20.2
Inventories - Schedule of Inventories (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Inventory Disclosure [Abstract]    
Raw materials and components $ 11,149 $ 8,841
Work in process 5,890 4,922
Finished goods 7,169 6,007
Inventories $ 24,208 $ 19,770
v3.20.2
Inventories - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Dec. 31, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Inventory [Line Items]            
Allowance for slow-moving and obsolete inventories $ 2,493 $ 3,370 $ 3,443 $ 4,149 $ 4,177 $ 4,143
Inventories [Member]            
Inventory [Line Items]            
Inventory (credit) charge $ 205          
v3.20.2
Inventories - Summary of Changes in Allowance for Slow-moving and Obsolete Inventories (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Inventory Disclosure [Abstract]        
Balance at beginning of period $ 3,370 $ 4,177 $ 3,443 $ 4,143
Provision for slow-moving and obsolete inventories ̶ net 78 24 100 131
Reductions for sale, consumption or scrap of previously reserved amounts (1,019) (106) (1,055) (106)
Foreign currency translation adjustments 64 54 5 (19)
Balance at end of period $ 2,493 $ 4,149 $ 2,493 $ 4,149
v3.20.2
Property and Equipment - Summary of Property and Equipment (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Property Plant And Equipment [Line Items]    
Total gross property and equipment before accumulated depreciation $ 38,567 $ 59,272
Less: Accumulated depreciation (19,417) (21,478)
Property and equipment, excluding construction-in-progress 19,150 37,794
Construction-in-progress 1,459 1,101
Property and equipment ̶ net 20,609 38,895
Land [Member]    
Property Plant And Equipment [Line Items]    
Total gross property and equipment before accumulated depreciation 3,385 6,980
Building and Related Improvements [Member]    
Property Plant And Equipment [Line Items]    
Total gross property and equipment before accumulated depreciation $ 10,036 25,675
Building and Related Improvements [Member] | Minimum [Member]    
Property Plant And Equipment [Line Items]    
Property and equipment, Economic Life 5 years  
Building and Related Improvements [Member] | Maximum [Member]    
Property Plant And Equipment [Line Items]    
Property and equipment, Economic Life 40 years  
Machinery and Equipment [Member]    
Property Plant And Equipment [Line Items]    
Total gross property and equipment before accumulated depreciation $ 19,119 19,531
Machinery and Equipment [Member] | Minimum [Member]    
Property Plant And Equipment [Line Items]    
Property and equipment, Economic Life 3 years  
Machinery and Equipment [Member] | Maximum [Member]    
Property Plant And Equipment [Line Items]    
Property and equipment, Economic Life 20 years  
Other [Member]    
Property Plant And Equipment [Line Items]    
Total gross property and equipment before accumulated depreciation $ 6,027 $ 7,086
Other [Member] | Minimum [Member]    
Property Plant And Equipment [Line Items]    
Property and equipment, Economic Life 3 years  
Other [Member] | Maximum [Member]    
Property Plant And Equipment [Line Items]    
Property and equipment, Economic Life 20 years  
v3.20.2
Property and Equipment - Additional Information (Details)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2020
USD ($)
Asset_Group
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
Asset_Group
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Long Lived Assets [Abstract]          
Depreciation $ 1,184,000 $ 1,184,000 $ 2,107,000 $ 2,349,000  
Derecognized net property and equipment     17,282,000    
Gain on sale of facility     $ 1,462,000    
Number of operating asset groups | Asset_Group 3   3    
Long-lived assets held for use impairment loss     $ 0   $ 0
v3.20.2
Product Warranty Reserves - Additional Information (Detail)
6 Months Ended
Jun. 30, 2020
Product Warranties Disclosures [Abstract]  
Standard product warranty period Substantially all of the Company’s 3D printing machines are covered by a standard one-year warranty. Generally, at the time of sale, a liability is recorded (with an offset to cost of sales) based upon the expected cost of replacement parts and labor to be incurred over the life of the standard warranty.
v3.20.2
Product Warranty Reserves - Summary of Changes in Product Warranty Reserves (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Guarantees [Abstract]        
Balance at beginning of period $ 810 $ 1,251 $ 866 $ 1,670
Provisions for new issuances 187 383 463 529
Payments (501) (457) (845) (848)
Reserve adjustments 101 36 121 (123)
Foreign currency translation adjustments 6 10 (2) (5)
Balance at end of period $ 603 $ 1,223 $ 603 $ 1,223
v3.20.2
Leases - Additional Information (Detail)
€ in Thousands
1 Months Ended 3 Months Ended 6 Months Ended
Dec. 10, 2019
USD ($)
RenewalOption
Dec. 10, 2019
EUR (€)
RenewalOption
Dec. 30, 2019
USD ($)
Dec. 30, 2019
EUR (€)
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Dec. 10, 2019
EUR (€)
Leases [Line Items]                    
Lease expiration year             2026      
Short term lease cost         $ 41,000 $ 47,000 $ 72,000 $ 112,000    
Lease cost         529,000 $ 98,000 1,033,000 $ 211,000    
Operating lease right-of-use asset         4,533,000   4,533,000   $ 432,000  
Operating lease liability         $ 4,533,000   $ 4,533,000      
Minimum [Member]                    
Leases [Line Items]                    
Operating lease arrangement terms         1 year   1 year      
Maximum [Member]                    
Leases [Line Items]                    
Operating lease arrangement terms         5 years   5 years      
Germany [Member] | Purchase Agreement [Member] | Sale-Leaseback of Gersthofen, Germany Facility [Member]                    
Leases [Line Items]                    
Purchase price from sale leaseback $ 18,500,000                 € 17,000
Proceeds from sale leaseback     $ 2,200,000 € 2,000            
Sale leaseback annual rent $ 1,700,000 € 1,500                
Sale leaseback transaction, lease terms             Concurrent with the execution of the Purchase Agreement, ExOne GmbH and the Buyer entered into a rental contract (the “Lease”) for the leaseback of the Facility for an initial aggregate annual rent totaling approximately $1,700 (€1,500), plus applicable taxes, which is fixed during the initial three-year term and is subject to adjustment on an annual basis (in accordance with the consumer price index for Germany) during the two five-year option extension periods.      
Sale leaseback, term of contract 3 years 3 years                
Number of renewal option for sale leaseback | RenewalOption 2 2                
Sale lease back renewal term 5 years 5 years                
Sale-leaseback transaction closed date February 18, 2020 February 18, 2020                
Operating lease right-of-use asset $ 4,605                  
Operating lease liability $ 4,605                  
Related Parties Under Common Control [Member]                    
Leases [Line Items]                    
Short term lease cost         $ 12,000   $ 24,000      
v3.20.2
Leases - Schedule of Future Minimum Lease Payments of Operating Leases Arrangements (Detail)
$ in Thousands
Jun. 30, 2020
USD ($)
Leases [Abstract]  
2020 $ 978
2021 1,925
2022 1,891
2023 32
2024 11
Thereafter 2
Total minimum lease payments 4,839
Less: Present value discount (306)
Total operating lease liabilities $ 4,533
v3.20.2
Leases - Schedule of Supplemental Information Related to Operating Lease Arrangements (Detail) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Leases [Abstract]    
Operating lease right-of-use assets $ 4,533 $ 432
Current portion of operating lease liabilities 1,754 158
Operating lease liabilities - net of current portion 2,779 $ 274
Right-of-use assets obtained in exchange for new operating lease liabilities 4,876  
Cash paid for amounts included in the measurement of operating lease liabilities $ 961  
Weighted average remaining lease term (in years) 2 years 6 months  
Weighted average discount rate 5.10%  
v3.20.2
Leases - Schedule of Operating and Sales-type Lease Arrangements (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Leases [Abstract]        
Operating lease revenue $ 154 $ 706 $ 362 $ 1,026
Sales-type lease interest income [1] $ 17 $ 27 $ 35 $ 55
[1]

Interest income relating to sales-type leases is recorded as a component of revenue in the accompanying condensed statement of consolidated operations and comprehensive loss for each of the periods presented.

v3.20.2
Leases - Schedule of Net Investment in Sales-type Leases (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Leases [Abstract]    
Future minimum lease payments receivable $ 1,547  
Less: Allowance for doubtful accounts (424)  
Net future minimum lease payments receivable 1,123  
Less: Unearned interest income (192)  
Net investment in sales-type leases $ 931  
Future minimum lease payments receivable   $ 1,595
Less: Allowance for doubtful accounts   (424)
Net future minimum lease payments receivable   1,171
Less: Unearned interest income   (220)
Net investment in sales-type leases   $ 951
v3.20.2
Leases - Schedule of Future Minimum Lease Payment Receivable of Non-Cancellable Operating and Sales-type Lease (Details)
$ in Thousands
Jun. 30, 2020
USD ($)
Operating lease arrangements  
2020 $ 384
2021 48
Total minimum lease payments 432
Sales-type lease arrangements  
2020 327
2021 429
2022 380
2023 411
Total minimum lease payments 1,547
Less: Allowance for doubtful accounts (424)
Less: Present value discount (192)
Future minimum lease payments receivable $ 931
v3.20.2
Contingencies and Commitments - Additional Information (Detail) - Amended GmbH Credit Agreement [Member] - Financial Guarantees and Letters of Credit [Member]
€ in Thousands, $ in Thousands
6 Months Ended
Feb. 24, 2020
USD ($)
Feb. 24, 2020
EUR (€)
Jun. 30, 2020
USD ($)
Jun. 30, 2020
EUR (€)
Dec. 31, 2019
USD ($)
Dec. 31, 2019
EUR (€)
Line Of Credit Facility [Line Items]            
Line of credit facility, increased capacity amount $ 3,900 € 3,500        
German Bank [Member]            
Line Of Credit Facility [Line Items]            
Credit facility, outstanding amount         $ 560 € 499
Debt expiration dates range start     Oct. 31, 2020      
Debt expiration dates range end     Feb. 28, 2023      
German Bank [Member] | Commercial Transactions Requiring Security [Member]            
Line Of Credit Facility [Line Items]            
Credit facility, outstanding amount     $ 906 € 807    
German Bank [Member] | Commercial Transactions Requiring Security Expiring From October 2020 Through February 2023 [Member]            
Line Of Credit Facility [Line Items]            
Credit facility, outstanding amount     265 236    
German Bank [Member] | Unused lines of credit [Member]            
Line Of Credit Facility [Line Items]            
Credit facility, outstanding amount     $ 641 € 571    
Minimum [Member] | German Bank [Member]            
Line Of Credit Facility [Line Items]            
Issuance of financial guarantees and letters of credit 1,100 1,000        
Maximum [Member] | Cash Collateral [Member] | German Bank [Member]            
Line Of Credit Facility [Line Items]            
Issuance of financial guarantees and letters of credit $ 1,100 € 1,000        
v3.20.2
Related Party Revolving Credit Facility - Additional Information (Detail) - USD ($)
3 Months Ended 6 Months Ended
Feb. 18, 2020
Mar. 12, 2018
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Related Party Transaction [Line Items]              
Amortization of debt issuance costs         $ 29,000 $ 47,000  
Revolving Credit Facility [Member]              
Related Party Transaction [Line Items]              
Line of credit facility, maximum borrowing capacity     $ 10,000,000   10,000,000    
Interest expense relating to the Credit Agreement       $ 50,000   100,000  
Revolving Credit Facility [Member] | Prepaid Expenses and Other Current Assets [Member]              
Related Party Transaction [Line Items]              
Debt issuance costs, net     35,000   35,000   $ 88,000
Revolving Credit Facility [Member] | Other Noncurrent Assets [Member]              
Related Party Transaction [Line Items]              
Debt issuance costs, net     $ 94,000   $ 94,000   $ 19,000
Revolving Credit Facility [Member] | LBM Holdings, LLC [Member]              
Related Party Transaction [Line Items]              
Line of credit facility, maximum borrowing capacity   $ 15,000,000          
Credit facility, expiration period   3 years          
Credit facility, expiration date   Mar. 12, 2021          
Credit facility, description of variable rate basis         one-month LIBOR    
Credit facility, interest rate     5.20%   5.20%   6.80%
Credit facility, commitment fee on unused portion, percentage   0.75%          
Credit facility, commitment fee on unused portion, payable term         The Credit Agreement required a commitment fee of 75 basis points, or 0.75%, on the unused portion of the facility, payable monthly in arrears    
Credit facility, up-front commitment fee percentage   1.25%          
Credit facility, up-front commitment fee amount   $ 188,000          
Credit facility, minimum increments   $ 1,000,000          
Credit facility, borrowings     $ 0 $ 0 $ 0 $ 0  
Credit facility, outstanding amount     0   0   $ 0
Debt issuance costs, gross     265,000   265,000    
Interest expense relating to the Credit Agreement     34,000   79,000    
Amortization of debt issuance costs     9,000   27,000    
Debt issuance costs, net     129,000   129,000    
Interest expense related to commitment fee     25,000   52,000    
Incremental interest or other fees on deferral of cash payments     0   0    
Accounts payable     52,000   52,000   $ 28,000
Revolving Credit Facility [Member] | LBM Holdings, LLC [Member] | Prepaid Expenses and Other Current Assets [Member]              
Related Party Transaction [Line Items]              
Debt issuance costs, net     35,000   35,000    
Revolving Credit Facility [Member] | LBM Holdings, LLC [Member] | Other Noncurrent Assets [Member]              
Related Party Transaction [Line Items]              
Debt issuance costs, net     94,000   94,000    
Revolving Credit Facility [Member] | LBM Holdings, LLC [Member] | London Interbank Offered Rate (LIBOR)              
Related Party Transaction [Line Items]              
Credit facility, basis spread on variable rate   5.00%          
Amended Revolving Credit Facility [Member] | LBM Holdings, LLC [Member]              
Related Party Transaction [Line Items]              
Line of credit facility, maximum borrowing capacity $ 10,000,000            
Credit facility, expiration date Mar. 31, 2024            
Credit facility, commitment fee on unused portion, percentage 1.00%            
Debt issuance costs, gross     $ 49,000   $ 49,000    
v3.20.2
Long-Term Debt - Components of Long-Term Debt (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Debt Disclosure [Abstract]    
Paycheck Protection Program loan, Principal $ 2,194  
Building note payable, Principal 1,306 $ 1,384
Less: amount due within one year, Principal (1,132) (157)
Long-term debt - net of current portion, Principal 2,368 1,227
Building note payable, Unamortized Debt Issuance Costs (18) (20)
Less: amount due within one year, Unamortized Debt Issuance Costs 4 4
Long-term debt - net of current portion, Unamortized Debt Issuance Costs (14) (16)
Paycheck Protection Program loan, Net 2,194  
Building note payable, Net 1,288 1,364
Less: amount due within one year, Net (1,128) (153)
Long-term debt ̶ net of current portion $ 2,354 $ 1,211
v3.20.2
Long-Term Debt - Additional Information (Detail) - USD ($)
$ in Thousands
6 Months Ended
Apr. 18, 2020
Jun. 30, 2020
Debt Instrument [Line Items]    
Loan principal amount   $ 2,194
Building Note Payable [Member]    
Debt Instrument [Line Items]    
Notes payable monthly payments   $ 18
Building note payable, with monthly payments interest rate   4.00%
Building note payable, with monthly payments basis spread   3.25%
Date of interest rate adjustment   2017-05
Notes payable maturity   2027-05
Building Note Payable [Member] | Building [Member] | North Huntington, Pennsylvania [Member]    
Debt Instrument [Line Items]    
Carrying value of collateralized facility   $ 4,854
United States Treasury Securities [Member] | Building Note Payable [Member]    
Debt Instrument [Line Items]    
Notes payable monthly payments   $ 19
Paycheck Protection Program [Member]    
Debt Instrument [Line Items]    
Loan bears interest rate 1.00%  
Maturity date Apr. 18, 2022  
Lender | Paycheck Protection Program [Member]    
Debt Instrument [Line Items]    
Loan principal amount $ 2,194  
v3.20.2
Long-Term Debt - Future Maturities of Long-Term Debt (Detail)
$ in Thousands
Jun. 30, 2020
USD ($)
Debt Disclosure [Abstract]  
2020 $ 322
2021 1,627
2022 668
2023 188
2024 195
Thereafter 500
Long-term debt $ 3,500
v3.20.2
Income Taxes - Additional Information (Detail) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2019
Schedule Of Income Taxes [Line Items]          
Provision (benefit) for income taxes $ 8,000 $ 99,000 $ 234,000 $ (701,000)  
Effective tax rate 0.20% 2.70% 3.10% 7.80%  
United States statutory rate 21.00% 21.00% 21.00% 21.00%  
Penalties and interest expense $ 0 $ 0 $ 0 $ 0  
Subsidiaries [Member] | Local Taxing Authorities [Member] | Germany [Member]          
Schedule Of Income Taxes [Line Items]          
Reversal of previously recorded liabilities for uncertain tax positions         $ 1,075,000
Uncertain tax positions expected amount to be offset against net operating loss carryforwards         $ 257,000
v3.20.2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Including Accrued Interest and Penalties) (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2019
Income Tax Disclosure [Abstract]    
Balance at beginning of period $ 102 $ 1,186
Additions for tax positions of prior years 1 2
Reductions for tax positions of prior years   (1,075)
Foreign currency translation adjustments 2 (8)
Balance at end of period $ 105 $ 105
v3.20.2
Equity-Based Compensation - Additional Information (Detail) - USD ($)
3 Months Ended 6 Months Ended
Jan. 24, 2013
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Equity-based compensation expense   $ 157,000 $ 642,000   $ 449,000 $ 1,081,000
Weighted-average remaining vesting period         1 year 1 month 6 days  
Proceeds from exercise of employee stock options         $ 541,000 $ 171,000
Incentive stock options exercised         73,251 36,370
Unsettled proceeds from exercise of employee stock options           $ 91,000
Stock Options [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Equity-based compensation expense   44,000 150,000   $ 189,000 316,000
Total future compensation expense   412,000     412,000  
Intrinsic value, stock options exercisable   147,000     147,000  
Intrinsic value, stock options expected to vest   360,000     $ 360,000  
Weighted average remaining contractual term of stock options exercisable         3 years 4 months 24 days  
Weighted average remaining contractual term of stock options expected to vest         4 years 1 month 6 days  
Intrinsic value of stock options exercised         $ 624,000 326,000
Proceeds from exercise of employee stock options         541,000 262,000
Income tax benefit         0  
Unsettled proceeds from exercise of employee stock options           91,000
Restricted Stock [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Equity-based compensation expense   105,000 $ 245,000   246,000 374,000
Total future compensation expense   $ 164,000     164,000  
Fair value of restricted shares vested         $ 408,000 356,000
Maximum [Member] | Stock Options [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Vesting period         3 years  
Stock options contractual expiration period         10 years  
Maximum [Member] | Restricted Stock [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Vesting period         3 years  
Minimum [Member] | Stock Options [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Vesting period         1 year  
Stock options contractual expiration period         5 years  
Minimum [Member] | Restricted Stock [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Vesting period         1 year  
Common Stock [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Incentive stock options exercised   73,000 13,000 23,000    
2013 Equity Incentive Plan [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Common stock reserved for issuance 500,000          
Remaining shares available for future issuance   688,217     688,217  
2013 Equity Incentive Plan [Member] | Common Stock [Member] | Maximum [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Percentage of outstanding shares of common stock 3.00%          
Number of Shares authorized 1,992,241          
2019 Annual Incentive Program [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Equity-based compensation expense     $ 234,000     $ 376,000
2020 Annual Incentive Program [Member]            
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]            
Equity-based compensation expense   $ 0     $ 0  
v3.20.2
Equity-Based Compensation - Summary of Equity-Based Compensation Expense (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Equity-based compensation expense recognized:        
Total equity-based compensation expense before income taxes $ 157 $ 642 $ 449 $ 1,081
Benefit for income taxes [1] 0 0 0 0
Total equity-based compensation expense net of income taxes 157 642 449 1,081
Stock Options [Member]        
Equity-based compensation expense recognized:        
Total equity-based compensation expense before income taxes 44 150 189 316
Restricted Stock [Member]        
Equity-based compensation expense recognized:        
Total equity-based compensation expense before income taxes 105 245 246 374
Other [Member]        
Equity-based compensation expense recognized:        
Total equity-based compensation expense before income taxes [2] $ 8 $ 247 $ 14 $ 391
[1] The Benefit for income taxes from equity-based compensation for each of the periods presented has been determined to be $0 based on recorded valuation allowances against net deferred tax assets.
[2] For each of the 2020 periods, Other represents expense associated with certain employee contractual amounts to be settled in equity. For each of the 2019 periods, Other represents expense associated with the 2019 Program and certain employee contractual amounts to be settled in equity.
v3.20.2
Equity-Based Compensation - Summary of Equity-Based Compensation Expense (Parenthetical) (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]        
Benefit for income taxes from equity-based compensation [1] $ 0 $ 0 $ 0 $ 0
[1] The Benefit for income taxes from equity-based compensation for each of the periods presented has been determined to be $0 based on recorded valuation allowances against net deferred tax assets.
v3.20.2
Equity-Based Compensation - Assumptions for Fair Value of Stock Options Granted Estimated on the Date of Grant Using the Black-Scholes Option (Detail) - Stock Options [Member]
6 Months Ended
Jun. 30, 2020
$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Dividend yield 0.00%
Minimum [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Weighted average fair value per stock option $ 3.48
Volatility 54.00%
Average risk-free interest rate 2.20%
Expected term (years) 2 years 6 months
Maximum [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Weighted average fair value per stock option $ 3.68
Volatility 60.10%
Average risk-free interest rate 2.50%
Expected term (years) 3 years 6 months
v3.20.2
Equity-Based Compensation - Summary of Activity for Stock Options (Detail) - $ / shares
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]    
Stock options outstanding, Beginning balance 854,259 621,986
Stock options granted 0 57,610
Stock options exercised (73,251) (36,370)
Stock options forfeited (79,936) (9,773)
Stock options expired (21,874) (24,666)
Stock options outstanding, Ending balance 679,198 608,787
Exercisable at end of period 423,456 385,709
Expected to vest at end of period 255,742 223,078
Weighted average exercise price, Beginning balance $ 9.34 $ 10.66
Weighted average exercise price, Stock options granted 0 8.33
Weighted average exercise price, Stock options exercised 7.38 7.22
Weighted average exercise price, Stock options forfeited 7.85 7.67
Weighted average exercise price, Stock options expired 11.18 17.10
Weighted average exercise price, Ending balance 9.67 10.43
Weighted average exercise price, Exercisable 11.20 11.56
Weighted average exercise price, Expected to vest, net of forfeitures 7.14 8.48
Weighted average grant date fair value, Beginning balance 4.49 5.52
Weighted average grant date fair value, Stock options granted 0 3.67
Weighted average grant date fair value, Stock options exercised 3.22 3.03
Weighted average grant date fair value, Stock options forfeited 3.41 3.70
Weighted average grant date fair value, Stock options expired 6.14 10.45
Weighted average grant date fair value, Ending balance 4.70 5.33
Weighted average grant date fair value, Exercisable 5.83 6.20
Weighted average grant date fair value, Expected to vest, net of forfeitures $ 2.82 $ 3.82
v3.20.2
Equity-Based Compensation - Summary of Activity for Restricted Stock Awards (Detail) - Restricted Stock [Member] - $ / shares
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number of Restricted Shares, outstanding, Beginning Balance 66,513 67,001
Number of Restricted Shares, granted 37,500 66,763
Number of Restricted Shares, vested (56,763) (37,500)
Number of Restricted Shares, forfeited 0 0
Number of Restricted Shares, outstanding, Ending Balance 47,250 96,264
Number of Restricted Shares, expected to vest 47,250 96,264
Weighted Average Grant Date Fair Value, Beginning Balance $ 8.76 $ 8.30
Weighted Average Grant Date Fair Value, granted 7.12 8.98
Weighted Average Grant Date Fair Value, vested 9.11 8.12
Weighted Average Grant Date Fair Value, forfeited 0 0
Weighted Average Grant Date Fair Value, Ending Balance 7.04 8.84
Weighted Average Grant Date Fair Value, expected to vest $ 7.04 $ 8.84
v3.20.2
Fair Value Measurements - Additional Information (Detail) - USD ($)
Jun. 30, 2020
Apr. 18, 2020
Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]      
Financial instruments (assets or liabilities) measured at fair value $ 0   $ 0
Paycheck Protection Program [Member]      
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]      
Loan bears interest rate   1.00%  
v3.20.2
Fair Value Measurements - Carrying Values and Fair Values of Other Financial Instruments (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Carrying Value [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents $ 19,658 $ 5,265
Restricted cash 508 978
Debt issuance costs 129 107
Current portion of long-term debt 1,128 153
Long-term debt ̶ net of current portion 2,354 1,211
Fair Value [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and cash equivalents 19,658 5,265
Restricted cash 508 978
Current portion of long-term debt 990 157
Long-term debt ̶ net of current portion $ 2,309 $ 1,227
v3.20.2
Fair Value Measurements - Carrying Values and Fair Values of Other Financial Instruments (Parenthetical) (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Unamortized debt issuance costs $ 18 $ 20
Revolving Credit Facility [Member] | Prepaid Expenses and Other Current Assets [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Debt issuance costs 35 88
Revolving Credit Facility [Member] | Other Noncurrent Assets [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Debt issuance costs $ 94 $ 19
v3.20.2
Concentration of Credit Risk - Additional Information (Detail) - Five Most Significant Customers [Member] - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Revenue, Major Customer [Line Items]          
Accounts receivable from significant customers $ 1,480   $ 1,480   $ 3,230
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]          
Revenue, Major Customer [Line Items]          
Revenue concentration, by most significant customers 40.70% 46.40% 24.30% 33.00%  
v3.20.2
Related Party Transactions - Additional Information (Detail) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Related Party Transaction [Line Items]          
Purchases from related parties $ 0   $ 0    
Amounts due to related party 0   0   $ 0
3D Printing Machines [Member]          
Related Party Transaction [Line Items]          
Purchases from related parties     30,000    
Chairman of the Board of Directors [Member]          
Related Party Transaction [Line Items]          
Purchases from related parties   $ 43,000   $ 58,000  
Fair market value of benefits received $ 3,000 $ 0 $ 3,000 $ 0  
v3.20.2
Other Expense - Net - Schedule of Other Expense - Net (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Other Income And Expenses [Abstract]        
Interest income $ (3) $ (2) $ (15) $ (8)
Foreign currency losses (gains) – net 128 29 (37) 51
Other – net 70 30 57 26
Other expense - net $ 195 $ 57 $ 5 $ 69