Karen L. Howard – Kei Advisors, Inc. S. Kent Rockwell – Chairman of the Board & Chief Executive Officer David J. Burns – President, Chief Operating Officer & Director Brian W. Smith – Chief Financial Officer & Treasurer.

John A. Baliotti – Janney Capital Markets Sherri Scribner – Deutsche Bank Holden Lewis – Oppenheimer & Co. Jason North – Jeffries & Company Ajay Kejriwal – FBR Capital Markets David Ryzhik – Brean Capital, LLC Brandon Wright – Stephens, Inc. Bobby Burleson – Canaccord Genuity [James Mevidas] – Cowen & Company.

Welcome to the ExOne Company third quarter 2014 financial results. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Karen Howard of Investor Relations for ExOne Company..

We certainly appreciate your time today for our third quarter 2014 conference call. On the call with me this morning are Kent Rockwell, our Chairman and Chief Executive Officer; David Burns, President and Chief Operating Officer; and Brian Smith, Chief Financial Officer of the ExOne Company.

We will be reviewing the results for the quarter and the first nine months of the year that were published in the press release distributed after yesterday’s market close. If you don’t have that release it is available on our website at www.ExOne.com. The Slides that will accompany the discussion today, are posted there as well.

Referring to the Slide Deck, on Slide Two is the Safe Harbor Statement. As you may be aware, we may make some forward-looking statements during the discussion as well as in the Q&A.

These statements apply to future events and are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what was stated here today.

These risks and uncertainties and other factors are provided in the earnings release, as well with the other documents filed by the company with the Securities & Exchange Commission. These documents can be found at the company’s website or at www.SEC.Gov.

We’ll have Kent first provide an overview, David will review our third quarter 2014 progress and revenue as well as our revenue look ahead for the remainder of 2014, and then Brian will provide a detailed review of the financial results. Then we’ll turn it back to Kent to discuss our outlook before we open the line for Q&A.

With that, I’ll turn it over to you Kent..

You’ve had a chance, I’m sure, to all look at the release we put out and as for most of you, we at ExOne are also disappointed in the machine revenue shortfall that impacted our reporting for the quarter. But I want to spend a little bit of time and get you comfortable with that fact that this is not about losing sales, or losing orders.

We have every order that did not ship is now in place set up for shipping in the fourth quarter and it’s really about shipment timing. We missed by about $4 million to $5 million of revenue that we had anticipated would ship in that period.

When you’re shipping very large and very expensive orders to customers worldwide, particularly in India, China, Slovenia, and all those different places where we ship machines you do have customers that call back and they say, “Gee, we need you to hold this machine for 30 days because the building is not done,” and it’s pretty hard for us to spend the time and energy to have to argue.

Some of these things are no the customer’s fault, some of them are our fault, but they’re minor in nature as to why they occurred and the fact is, as long as we’re capturing those sales, I think you’ll see it reflected in future sales.

So the important thing is we are walking away with a continued base, increasingly larger base, of satisfied customers. As a result of this miss and one or two things that we’re going to discuss in a moment we have revised revenue guidance down to $45 million to $50 million and we’ll touch on why that’s occurring in a bit.

The positive news is that the non-machine revenue is up 40% through year-to-date and that we are fairly confident we’re going to continue to maintain a high growth rate in that spirit of our business real.

We have some pricing strategies that we’re just starting to engage in right now to increase large volume orders in our PSC’s so we are maturing the volumes that are running through there.

We have a very fixed unabsorbed overhead and so the incremental effect of some of these new large frame orders will definitely improve both revenues and margins as we move forward. A quick global overview of what’s going on in our various markets, in the Americas we are seeing a growing acceptance.

We have a larger sales force that’s been in place now long enough to start to have a real impact on us. We were also seeing more applications engineering coming out of our R&D center with customers that are now coming in and a lot more customers that are funding specific focuses that they have for some of these machines.

So the American acceptance is fairly positive and I think we are just maturing in this particular market. The European market during the course of the year has had cap ex spending reductions, as you know, the economies are going a little softer there.

Our biggest European base of business really comes from the automotive sectors in Europe and while they’re still having fairly good years, they are more cautious about spending.

Having said that, we have had a record growth in the non-machine revenue business in Europe and one of the things we have encountered that right now we’re still evaluating is the Russian sanctions have slowed down. The sanctions are both coming from the EU and from the United States.

We have a clear obligation to meet all the standards of those sanctions and we are doing that. In the process of that we will be able, we believe, to sell to most of our customers in Russia and we have quite a few there, but we have to get through the sanctions to prove that the applications used by these machines is not for military purposes.

It’s put a definite delay on some of the things. Our guidance would be higher for the year but we know we’re sitting right now on orders for delivery in Russia and we don’t know when or if they will ever be released until this sanction issue is audibly rectified.

In Asia our markets have been a little varied, the Chinese – there’s a lot of activity with the Chinese. We haven’t sold a whole lot yet but we have pending orders right now. Some very substantial pending orders in China and we have – I guess we’ve shipped some [M classes] into China this quarter.

In Japan in particular, which has been a stalwart part of our machine growth, we have not seen a single sale for over three quarters and the reason for that is that the Japanese government funded a program to compete with the X1 machining process, a $30 million to $40 million venture that they started about a year ago, to challenge building a sand machine for their foundry because they’re so desperately depending on export that would compete with our process.

So the Japanese customer they’re all closely united with their government. They tend to just slow up, even though we’ve had good relationships with our customers.

It has put pressure on our order flow and taken time to service and then to reestablish our preeminent position in Japan and we are now experiencing orders back in Japan because that program appears to be faltering and we are taking the appropriate steps to remind them of our IP position and the strength of even our soft IP.

The last reports we’ve heard from our offices and some of our customers was that that program is probably moving a lot less to sand and a lot more to other applications.

As a result of that our customers which have sort of sat back on their heels waiting to see what was going to happen are now ordering new machines and they’ve talked about a substantial order uptick in the ’15 period.

Around the world it’s a variety of different activities overall but we still remain very firm about our machine orders remaining strong and stronger. Dave is going to mention to you some of the things about our new machines and the various customers we have on the S-Max machine.

While the machine order rate has declined so far this year, if you’re tracing that, the fact of the matter is we are now taking these machines and moving them into instead of just being sand we’re moving them into Phenolic and silicate materials that we’re printing which provide a variety of new applications for these machines and even some in totally new materials which David will address further.

With that I believe I’ll just turn it over to David to cover some of the [inaudible] points of our quarter and then to Brian..

This is David Burns, President of ExOne.

If you could flip to Slide Six, I want to begin this section by reminding you that we said at the beginning of 2014 that we expected 2014 to be a transition year, that we felt it was our opportunity to take the proceeds from the raises we had done to transition those into a build out of an infrastructure that was going to support a much larger company moving forward, and I want to touch on a few of the initiatives that we continue to invest in, in 2014 before we review where we are with revenue and sales.

On Slide Six you see people. We’ve talked about a build out worldwide in terms of people capacity. Year-to-date or since the IPO we’ve added about the equivalent of 100 people, but as you can see the growth rate is slowing significantly in terms of people build out.

We believe on the R&D, on the sales and marketing side, and the capacity to build product side we now have a workforce that’s large enough to sustain a higher revenue base so we’re slowing down in terms of our hiring rate and you can see where we were at the end of Q3.

On Slide Seven we continue to invest in enhancing controls to be sure that the company we have going forward is a world class company in every regard. We are pursuing ISO certifications. As you may know, that’s a quality certification that’s recognized globally as the standard for quality certifications.

During the quarter two more of our US facilities achieved ISO certification. By the end of this year we expect all five of our US facilities to be certified. Our German certification is tied directly into our move to our new European headquarters. Now that that move is complete we will continue a pace to get ISO certification in Germany as well.

The financial controls and our ERP system implementation are also linked together and we’ve been talking about this for a while, that we feel we need a world class ERP system in order to conduct the business of this company appropriately.

We are engaged on a multiphase rollout of a new ERP system and we will go live by January 1st with the first phase of our ERP rollout.

I want to remind you it’s going to continue certainly through 2015 and probably into 2016 before we get all the modules implemented but we’re very excited about the fact that we’re going to turn on our new XRP system on January 1st. On Slide Eight, a quick picture of our European headquarters.

We of course, have been talking about this for a year now and let’s just say we continue to be on schedule. The building itself is done, the offices are moved in and must of our machine build activity has already been relocated to our new facility.

Our production service center is not moved, and we’ve got a lot of moves to make between now and year end, and of course we’re phasing all of those moves to be timed in a way that we’re not interfering with customer orders. We are adding significant capacity in Europe and we feel comfortable that that’s what we need going forward.

But beyond the capacity, it’s simply a reminder that we’re combining five individual locations into one and the efficiency and effectivity that we’re going to achieve as a result of that should be significant and we’ll see the results of that in 2015. Slide Nine, our Italian production service center and sales center is open.

The machines that we need there are being installed now and we’re just beginning to print customer parts. In North Huntington we’re also doing an expansion and it’s not an elegant picture but you can see a picture very recently taken of where we are and that facility will be open before year end as well.

Slide 10, when we went through the IPO process we talked about the need to invest heavily in both materials development and machine technology to be sure that we stayed in the lead in terms of being the industrial 3D printing company in the world.

Materials development side, as you know, and we talked about rolling out a new material let’s say every six months, and we have these calls more frequently than that, it’s hard to give color to what’s going on even though there’s a lot of activity that we see internally so I want to highlight a couple of things.

There are groups of materials that are either highly thermally conductive or they are very low in terms of thermal conductivity that are almost uniquely suited for binder jetting and the technology for industrial 3D printing.

Because thermal conductivity is a big issue when you’re dealing with laser centering and it’s not a big issue when you’re dealing with binder jetting, we have focused fairly recently on a set of materials that are ether very highly thermally conductive or have low thermal conductivity.

I would put carbon in that category, I would put graphite in that category, I would put ceramics in that category. In all cases, these are materials that are well suited for the oil and gas industry as well as the aerospace industry and we are making significant progress in both of those arenas.

In order to give you a little more sense of what we see internally, late yesterday I walked around before we sent the slide deck out and I took two of our R&D folks and I simply said, “Tell me over the last 12 to 18 months how many different powders either customers have sent in here for test or we’ve initiated testing on?” The low number I got was at least 25 so I’m telling you in the last 12 to 18 months, worked on at least 25 different materials and powder combinations for customers and when you begin to add in the binder combinations that we add to that, you get even a multiple of that.

There is a lot going on in our R&D world and we’re actually very, very pleased in the progress and it’s progress you’re going to hear more about as we go forward.

The next Slide, I wanted to point out something that we have recently developed which we find intriguing and without being specific about the metrics around it, let me just simply say that we have developed now what we’re loosely calling at this moment 3D printed metal holography.

If you see the imagine on the left, that is a .jpeg, a picture that you take with a digital camera.

We’re able today, with software that we have developed and have control of, to take that picture to convert it to an SPL file which is what you need for machine language to actually 3D print, in less than a minute, and you see the middle image is the SPL file of that digital picture and in less than 30 elapsed hours, we can product the object on the right.

It’s relatively thin, it can be printed on both sides, and it’s nearly holographic in nature in that if you turn the object you see different contrasts within the object itself.

It is intriguing and I’m not, at this point, revealing anything other than this is the first time we’ve talked about this publically but we are capable of taking hundreds, and hundreds of pictures simultaneously and printing and hundreds and hundreds of these objections within any 30 hour period. So it’s a business opportunity.

We’re not sure exactly what we’re going to do with it, but we’re calling it for the moment 3D printed metal holography and as I said, this is the first time we’ve publically talked about this. The next Slide is on machine development. Let me quickly review the same four machines that we talked about on our last call.

First off, our new lab machine, you see a picture of the prototype of the new machine there. It’s a bigger build chamber than our traditional lab machine. It is much, much faster and it will carry a purchase price of less than the $100,000. We’re building these machines in North Huntington and we expect to sell several of them in 2015.

We talked about converting our print platform to be capable of direct printing of metals and we will in fact ship our first M Print in the first quarter.

The S-Max Plus machine is a machine that was especially developed to allow the use of inorganic and semi organic binders, which for a lot of applications in the testing world are better binder combination and we had hoped to have machines available earlier in the year.

Again, when we talk about machine sales for the year, we have not yet shipped an S-Max Plus and we have three in the queue to ship in Q4. Finally, we’ve talked now actually since pre IPO about the build out of a series production machine.

This is a machine that would be used in relatively mid volume production and the machine itself we are announcing here again, for the first time, will be shown at the GEFA Show in Dusseldorf in June of 2015. Every four years, there’s a large foundry show, and again, it’s only held once every four years in Dusseldorf.

We have a large booth there and we will be showing our new series production machine with some automated features which will be able to take parts we’ve printed in an automated way, deliver them into production. It’s an exciting time for us and we’re looking forward to the GEFA Show.

Flipping now to Slide 13, let’s go quickly through the revenue review of Q3. Our revenue was just under $10 million which was of course, a disappointment. It’s split between machine and non-machine.

You can see non-machine revenue was more than 50% which was unexpected and the splits by region, our Americas region as Kent pointed out, is relatively robust and we have had a significant lag in business in Asia. I want to go to Slide 14, which is more revealing, which is the year-to-date. You see exactly the same pattern.

We have more non-machine sales year-to-date than machine sales and our Asian business has been lagging significant. As Kent pointed out, on Slide 15, we are very pleased with the growth of our non-machine business. In all categories we’re seeing significant year-over-year growth and we see no reason for that growth to abate as we move into 2015.

The CAGER line is at 28.3% and that’s – it is what it is, we’re pleased and happy. We had committed to grow out our non-machine business which we felt over time could be as much as 50% of our overall revenue and the non-machine categories are all growing nicely.

Slide 16, machine sales for the quarter and for the trailing 12 months, as Kent pointed out, our third quarter was a disappointment to us. Between sanctions in Russia and the lagging sales in Japan, and some other extraneous factors, we certainly are not pleased with where we are.

But I do want to jump to Slide 17 which is our view of Q4 and full year. I think for all the reasons that we have said in the past, with some regulatory, that we feel that we can’t give quarterly guidance and we want to be judged on a full year basis.

We’re asking for you to understand that we still feel positive about how we’re going to emerge from 2014. I want to reiterate the guidance that Kent has already provided of $45 million to $50 million in total revenue.

In order to achieve that revenue base, of course, if you look at our non-machine business, my guess is all of its using the growth line that we have could forecast within $100,000 what we think is going to happen with Q4 with non-machine. That will be a record since we seem every quarter, to exceed the quarter before and set records.

At the same time, in order to each that guidance, we need to have a record quarter in terms of machine shipments.

So, what gives us confidence that that is going to be true? When I take a look at where we are in terms of machine orders, we today in hand, have the highest number and order value in machines that we’ve ever had in the 10 year history of ExOne and I’ve been here for all 10 years.

Those orders that we have in hand are fueled by a resurgence in our Asian business, they’re being fueled by customers in many cases taking their second or third machines. We believe we’re going to be pleased with the machine business that we report out for the full year.

We have the capacity to accomplish what we need to in terms of machine shipments so while we’re talking about a very hefty machine volume in Q4 we’ve been telling you for a year now that we built out in anticipation of our move, enough machines and inventory to be sure that we could satisfy the market as we approach the end of the year and we have the capacity to ship the machines we need to in order to reach our revenue guidance.

So while we feel certainly disappointed, as everyone does with the machine volume in the third quarter, in fact, we are very, very confident we’re going to achieve our revenue goals and that would yield of course, a record quarter in both non-machine and machine in Q4.

With that, I’m going to turn it over to Brian, our CFO to go through a little bit more of the numbers..

This is Brian Smith. I will cover Slide 19 with a little more color on revenue margin and gross profit. We felt, absent the volume, we were relatively in line with what we expected in margin. A couple of points of color there.

Running at a roughly $10 million pace this year if you compare us back to Q3 ’13, we are 70 more people globally and we are three more PSEs than we were in Q3 ’13. So to support that we obviously need higher volume to absorb those costs and Q3 ’14 shows that. The ExCast investment which we said was largely over is largely over.

We do have some linger costs in Q3. Again, because of lower revenue they are a little higher, they are somewhere between 2.5 and 3 points. Otherwise, we felt like we were pretty much in line.

You’ll see later that I’ll talk about that we’ve reforecasted margin again based on volume of machines and as we’ve said before, our machine margins are higher than our non-machine margins. Trailing 12 falls largely in line with the same discussion. If you’ll turn to page 20, G&A, our G&A costs have leveled off.

In fact, Q3 ’14 is actually lower than Q4 of ’13. We do have slightly higher costs in Q4 ’13, or will have slightly higher costs in Q4 ’14 due to the cyclical nature of our G&A as we get closer to year end as well as higher sales of our machines and selling costs related thereto and we believe we’ll fall right in line with our guidance for ’14.

If you move to R&D Q3 ’14, last quarter we said we were preparing our new machines for delivery as well as continuing with our materials qualification activities and that increase between Q2 ’14 and Q3 ’14 is largely related to the machine technology development and accelerating the release of those new machines.

If you turn to Page 22, we’ll talk about capital available for growth. As we’ve said, we’ve been putting the capital to work consistent with our strategic plans of building out our facilities and our infrastructure. At the end of September we have approximately $45 million cash and virtually no debt.

Our investment in our facilities at the end of the year will be largely complete. We’ve had an uptick in working capital principally related to inventory and obviously expect some of that inventory to turn here in Q4.

In line with that, we would probably estimate that we were in the $36 million to $40 million range at the end of the year available for 2015 and beyond continued growth. We originally said $45 million to $50 million in cash at the end of the year, if you remember back in Q1 I said that.

That difference is largely the guidance change we’ve had in revenue and that investment in inventory. Those are the two places that that delta is. If you turn to Page 23, you will see that we have updated our cap ex forecast.

It was original $31 million to $34 million, that has come into the $29 million to $31 million range and in each one of the categories, including facilities, PFC, and related equipment as well as PRP have come down slightly to fit within that $29 million to $31 million range.

I think, if you remember, back in June I had said that we would be at the lower end of the cap ex planned range and now we’ve been able to narrow that down. If you’ll turn to our guidance, our 2014 guidance, as Kent said and David elaborated on, we’ve updated our revenue guidance to $45 million to $50 million.

Our gross margin guidance is now projected $28 million to $32 million, that’s largely because of the lower machine revenue and the mix as well as we talked last quarter about our investment in ExCast and those amounts are all in.

Then obviously, that excludes, as consistent with the last couple of quarters, we’ve talked about that, excludes the moving costs, non-recurring costs relating to our facility expansions. We had very little cost in Q3, in COGS, probably a point or less. We will, as David said, we’re moving soon here in North Huntington to be completed by year end.

That facility is nearing completion and our PFC move is ongoing. Having said that and being in the middle of it, we believe we’re probably trending towards the low end of that 1.5 to 2.5 range, but we’ll be able to pin that down more closely once we complete that move and all costs are in.

G&A and R&D, we have maintained our guidance of $19 million to $21 million for G&A and $7 million to $8 million in R&D. We’re probably trending towards the higher end of the range in the R&D area and certainly within the range in SG&A. With that, I’ll turn it over to Kent..

We came out of the box in February of ’13 as an emerging growth company and emerging growth was identified for companies that had the opportunity to be growing at a high rate and some of the issues of being an emerging growth company is that you will experience great variances because you have to be strategically adept at making changes to be able to respond to what you’re learning in the marketplace with what has basically been an unfounded but seemingly wisely thought out new technology.

I can only say that the affirmation in the marketplace of the binder jetting technology is very, very essential and very, very well founded in our thinking and with our customer’s thinking as reflected by the level and the kind of customers that we’re dealing with.

We really didn’t recognize 2014 was going to be as much as a transition year until we got into the actual year itself and realized the variances that we would be dealing with as we started completing several tactical objectives.

First and foremost the facilities expansion in Germany which is huge moving into one very, very fine, large facility from the five [inaudible] facilities that were presently located in, took the focus on a lot of the people in Germany away from their day-to-day jobs while they started looking at, “Okay, how are we going to make this process change? How are we going to get it done? How are we going to move all these things and make it happen?” It turns out that the effort to get that accomplished was much, much more intense than we’d anticipated.

While I think we’ve successfully concluded it, or are still in the last pieces of concluding it, I think it’s absolutely the wisest thing we could have done. Maybe we just underestimated what that effort took. Similarly, the moves in opening up a couple new PFCs simultaneously the large expansion that we put in in the North Huntington facility.

We fired up the new furnace yesterday, it’s a whole new furnace process, we never even used before. We tested our first pieces, I went out and looked at them at seven o’clock this morning and they were coming out of this 70 foot oven with a dramatically improved effectivity in what we were hoping we would get by coming to this new process.

So we’ve had a lot of process changes just being put in place and with all of those things taking place it has been a difficult transitory year, added to that the locking down of our Russian market on a temporary basis while we get validation for those customers that we’re not doing military business, and getting opened in Italy which is working well, but it’s not reflecting anywhere in revenues yet.

But, we do have new customer development with some very good Italian customers that are working with us, and that’s coming along fine, but it’s slow because it’s all about applications.

We did have, as I mentioned earlier in our S-Max product line, which has been our prime large machine new opportunities in printing Phenolic, silicate and other materials including the carbons that David mentioned.

These are phenomenal opportunities for us because it keeps us in a very, very distinctive market that we’re not competing with anywhere else in the world [inaudible]. We were slow – the printing of the materials, by the way, has not been an issue at all, it’s the post printing processing of these new processes that have had us slowed up a little bit.

We’ve found the solutions, we’re working with our customers on continuing solutions that will meet their specific needs because a lot of this is becoming more of an applications engineering science rather than just our R&D science. So, coming through the year I’m proud of what our teams have achieved from a progress perspective.

It’s been tough, we’ve had to be humble, I hate it when my credibility is challenged with regards to having to forecast and then not achieve it.

It is one of the reasons that we’ve said that we only provide annual guidance because trying to meet the standards of quarterly guidance in such an emergent opportunity actually creates a huge amount of stress on the management team here and sometimes we even take actions that I would deem weren’t intelligent but they were necessary to try and address the market expectations as opposed to just working through the customer expectation and letting these things mature until they pretty well disappear.

As we move to 2015, much of this is going to be behind us and the opportunities of all the R&D work that we’re doing in these other areas is going to start to demonstrate itself.

We have anticipated an organic growth of 25% to 35% and I really believe that that’s a opportunity we could even exceed if things continue to go in the R&D side where we have some proprietary things that we’re accomplishing that could really open up some new opportunities for us. Sustaining our organic growth will be good.

I did mention earlier we are reducing prices in the PSCs as we move to the larger production capabilities that we now have available in our PSCs. As we do that we have to – we are only reducing it where we get large orders, but we have the flexibility to do that and still maintain very good margins.

It will be the timing of getting these frame orders into these shops that will determine if we can exceed even this goal, but it doesn’t take very many of them for us to be able to do that. In terms of strategic growth opportunities, acquisitions we’ve focused on just little pieces in the past here that have supplemented our base of core business.

I’m not interested in stepping outside of the core business. The binder jetting opportunity is a multibillion dollar opportunity as it matures itself over the coming years.

It’s big enough for us to say, “Let’s stay where we’re the smartest, where we’re the best, and we’re making our best penetration,” and so we may consider other things that complement our existing strategy. The existing strategies of ExCast, and our machine sales, and our machine growth.

Certainly, David mentioned the new machine we will have much more to say about that later, so it’s a great opportunity that we’re sort of keeping under wraps for the time being for intelligent reasons.

Finally, we are focusing on getting to a sustained level of profitability and I think that that’s an obligation that we obviously have to our marketplace.

Brian mentioned that our cap ex is essentially over so that we don’t radically diminish cash unless we were to continue with losses and we don’t see that happening so we have enough cash still to make our way through the markets and so I feel that we’re positioned to look at a couple of acquisition opportunities.

Strategically also, we have a couple of other growth initiatives in our marketplaces for some very, very large responses in government programs which can impact us positively in ’15 and also even external to the US government, but in other areas where we have promising initiatives in foreign markets.

All of those are coming along, we’re not capable of addressing them yet, but if they mature the way we believe they will, ’15 is going to be an exciting year for us.

Again, my apologies that our performance doesn’t meet the standards of what the street had out there collectively for us, but I just have to say our job is to keep our heads down and keep doing what we’re doing and we’ll get here as we move into ’15 and even with ’14 because it would be hard to screw that up if you didn’t ship any machines in the third quarter, it’s pretty easy to get to a record in the fourth quarter and we’re going to do that and we’re going to move on from there I think in a prosperous manner..

Operator, we’re ready to open the lines for questions..

(Operator Instructions) Your first question comes from John A. Baliotti – Janney Capital Markets..

Dave or Kent, with respect to the $4 million to $5 million in machines, I think that was the number you said had slipped and the record machine orders, can you give us a sense of the firmness of those in terms of customers being able to potentially walk away from them? I mean, I know they can push them out and obviously, if the facility is not ready there is not much you can do about that, but in terms of the firmness of these machine sales, can you give us a sense of that?.

Given our history of success in being able to demonstrate this information, we’re all quivering like little rabbits in a hole.

We’re not trying to get too specific but I think in all honesty we have a pretty good handle on the fourth quarter, down to the very exact individual names where we’ve got a good backlog, but I’m going to let David kind of scope it out for you in terms of what are the total opportunities and what we’ll probably deduct from that..

I guess I would characterize what we go through on a machine order as obviously a process that goes from sort of a customer commitment to us receiving a purchase order to us settling financing terms to getting a machine shipped, and ultimately revenue being recognized.

There’s a variety of steps, depending on the customer those steps are different and looks different in different countries. I think where we struggled in the past a little bit is at the point we felt we had commitment, we felt we were pretty well locked in for revenue and that hasn’t necessarily been true.

What I would say is different in the fourth quarter is simply that we are farther down that process chain with many more orders than we were this time last year, or we certainly were in the third quarter.

So we have hard POs in hand for a variety of machines, not all of those are going to translate into revenue in the fourth quarter and we recognize that. But we’re sitting on actual POs that far exceed anything we’ve had in our history at this point in time.

So I can tell you that when we guide the $45 million to $50 million we’re doing it because we can see ahead of us a clear path to get to that number. It’s not a wish, it is in fact what we are charting ourselves in terms of that’s the way it’s going to turn out. I hope that’s helpful..

We talked about this in the past, but historically your sales cycle in general is six months to two years long and yet I think you had mentioned recently in one of the prior quarters that a new customer tends to be on the longer side of that and an existing customer tends to be on the shorter cycle, and you made a comment earlier that several of your customers that have orders in are ordering second and third machines.

So, I would assume that helps the visibility because those would be more on the shorter side of that lead time?.

Yes, that’s actually true and secondarily from a perspective of revenue recognition when you’ve done business with a customer once it’s far clearer the path to machine acceptance and revenue recognition so once you’ve done it once you may stub your toe along that path but once you’ve done it with somebody you do it a second time you don’t get surprised.

So the fact that we’ve got repeat orders with customers is really helpful because it’s a very predictable outcome in terms of both content and timing..

Just one follow up and I’ll pass it along.

You’ve also talked in the past that every one of your machine customers starts out as a PFC or service customer and I was wondering with regard to the mix in this last quarter or maybe as the year has gone on, is there a mix of – I know you had some very large customers that are stable but are you seeing more new customers come in that provide opportunity for new lead generation?.

Kent just made a point, by the way, that as our business expands especially into direct printers, that comment about all customers come through PFC is becoming less true and in fact, now that we’re shipping equipment to China, in some cases we’re doing no pre work, they’re buying machine without any PFC work.

But yes, the breadth of customers we’re touching with our PFCs is expanding partially because we’re reaching different geographies now. Even within the US it’s easier for people to get to us on the west coast, we’re opening up Italy and so we’re seeing new customers just simply as a result of having new PFCs.

But within the existing PFCs we discover customers every week that we necessarily would not have thought would be customers and they show up and we start doing a little bit of work for them and maybe those seeds grow and maybe they don’t. .

Your next question comes from Sherri Scribner – Deutsche Bank..

I just wanted to follow up on the previous question, if you look at the full year guidance it suggests for the fourth quarter that revenue basically double year-over-year and sequentially.

I know you mentioned a $4 million to $5 million in machines that may be shipped but I’m trying to get a sense of what else is in that number that makes you confident that you can do roughly $20 million next quarter?.

Well, if you hypothesis what the non-machine revenue is likely to be and since we are on a pretty firm growth path I think that number is fairly easy to get to, I said within a few $100,000 we could probably guess.

You’re talking about probably $12 million to $15 million in machines and of that when they’re $1.5 million apiece it gets you to eight or nine units and as I said, we have tremendous confidence in a block of orders that we have in hand today that make up the majority of that.

We expect incremental POs yet this year, in fact, as early as this morning at 6AM we were negotiating for another PO. POs are going to come, not all of those are going to translate into Q4 revenue, but there is enough there to support our revenue forecast..

Then also, just thinking about the ASPs this quarter, you shipped about eight machines suggesting that ASP for the machines were about $500,000 versus about $1 million last quarter.

I’m just trying to understand sort of the average ASP because that seems relatively low for you, in terms of trying to understand fourth quarter going forward, how should we think about ASPs?.

If you look at the mix, we’ve got a higher mix of lab machines which are lower price so again, it’s all related to mix and I think our projection is our mix for our fourth quarter will be weighted much heavier towards our higher end machines, our S-Max machines..

I guess I would say the ASP per machine unit held up if you simply take the mix times the ASPs that we’ve been talking about quantity times ASP you get the revenues that we expected. We were exactly where we expected to be from a unit perspective.

So we got $100,000 machines in there, we’ve got million dollar machines in there so obviously the ASP overall isn’t a very helpful number..

So it was mostly negative mix that drove that down to lower end machines?.

Yes, that’s right..

Your next question comes from Holden Lewis – Oppenheimer & Co..

I guess two things as it relates to your organic growth rate for 2015, when I think about the markets that you’re addressing and the materials that you’re in, I always sort of think of those as being sort of faster growth areas within the sort of additive space and I think organic growth of 25% to 35%, that’s not a lot different I think, from what you’re average sort of plastic machine manufacturer is thinking that the market can grow.

So, I’m kind of curious about that premium or lack of a premium given your markets and materials.

Then related to that, I think on the last call, maybe a few calls ago you kind of thought there was a path to breakevenish results in 2015 and when I think about obviously the lower base in ’14 and the lower growth rate in ’15, I guess I wonder if there’s still a path to breakeven performance in 2015 or has that been pushed about a period?.

Let me answer your second question first if I can. We just have a very strong fixation on getting ourselves to a profitable basis and we will do everything possible to get there.

You saw some of our slides where the maturing of the headcount, the SG&A starting to average out and the R&D still increasing more modestly, that we’ve got on a lower end of the realm, we’ve got a pretty good handle on managing our fixed costs so it’s all about what kind of revenue contributions can you get in the two categories of machine and non-machine to be able to get us to a number that demonstrates breakeven? Well, if you take the continued growth curve that we’re holding in non-machine and you run that out and then you subtract the machines and take the machine margins, I think it’s pretty easy to model something that says it’s going to take $70 million to $75 million to get to breakeven if we hold those levels and I think pretty much we should.

The real issue in my mind is some of the non-recurrent activities that we’re really not at liberty to discuss right now in terms of some of the other things that would contribute substantially to enhanced revenues which would get us beyond that level.

One could be acquisitive in nature, another could be if we pick up one or two $15 million or $20 million programs that were specific to different needs and those can get you to the profit level and your hope is that they become recurrent so that you’re stabilized in your profitability.

Will we start off with this great new revelation in Q1? Probably not, Q1 has always been a little soft anyway, but we have a lot that we’re trying to get done in Q1 that is all moving on target at this point in terms of these initiatives and so if that happens I would say at the very least if the running rate for the fourth quarter holds up we could see profitability in the fourth quarter.

So it’s just a question of getting sustaining running rates at the higher levels and I believe that we have a lot of reason to think that that’s going to occur.

Did that fully answer your question?.

I guess I was also just wondering a bit more 30,000 foot view, 25% to 35% organic growth which seems a little bit low given that it’s on par with more mature technologies, more mature materials and just sort of wondering why we’re not thinking somewhat better than that?.

First, we’re trying to become credible so I think a 35% growth rate is an admirable growth rate for a company and given that we’ve historically been chastised for missing our forecasts, we’ve choose to be a little bit more conservative in order to please the market rather than be accused of non-performance.

So I think I said it when we first mentioned the non-machine side, I frankly believe that we could exceed it. I’m not really ready to put a commitment on the table until some of these other things that we’re working on occur, but I believe they’ll get us there..

Can I add one thing to the answer to your first question? The other piece of this is the efficiencies that we expect to get from some of these facility changes that we have the ISO certification and the new facility. So we do expect to be better at what we do going forward and that’s going to contribute to that too..

Your next question comes from Jason North – Jeffries & Company..

I guess kind of following up on that organic growth question for 2015, have there been any changes in terms of rush or anything, or slowness in ExCast that’s caused you to take that down versus what you previously thought maybe a quarter ago? The second question would be for ExCast, I noticed it wasn’t in your slides at all, and just kind of thought process for growth prospects and what the order book is there?.

The opportunities in ExCast are very large ones and we are working on multiple opportunities in various programs. I have no put in my growth plans that ExCast will materially improve in revenue in the 2015 year yet because some of these events, even though they’re multiple are binary. It’s either an all or nothing win.

I’m just – in an effort to maintain some conservatism so we can gain back our credibility I haven’t put much ExCast in there.

The opportunity in some ExCast programs could be very large that right now looks [inaudible] but since it’s not been contributing in ’14 and it’s actually a negative, it took us the other way, I’ve chosen to keep ExCast somewhat nominal for the 2015 contemplation..

Has there been any change overall? Is it Russia? Because, also the market [inaudible] higher rates for next year..

Yes, Russia definitely – I mean we have to assume that Russia is a stand down. We were anticipating opening a PFC in Russia and all of that has been put on hold. The opportunities in Russia, we have a lot of machines in Russia, they have been a good customer.

They’re close to Germany, Germany has a good working relationship with them where most of our big machines come from and so Russia is a setback for us which is another reason we’ve said, “Okay, we can’t make any growth assumptions,” even though I do believe we’re going to get release on some machines that are clearly not used for military purposes.

It’s hard for the Russians to – well, the Russians will tell you they’re all going to be used for baby cribs and things like that, but the truth of the matter is they can be used for anything and we have no ability to determine whether or not they will so it’s the government looking at the customer and the government is making the decision about what is that customer really doing.

In one or two of those cases we have customers that are doing things that could be considered military applications so we’re probably going to be on hold for those even for shipping consumables to them.

So that’s one of the hedges that we’ve put into this, but we have for the temporary loss of Russia we have some other things that we’re picking up that I think are going to offset that..

Your next question comes from Ajay Kejriwal – FBR Capital Markets..

I know you talked about the quarter, kind of outlining some of the reasons as to the delays.

I’m just wondering how much of the delays or deferrals could have been due to the expansion of facilities? I know you’re working on multiple projects, might that have influence on the deferrals? Then to the extent you’re working on new machine development and to the extent your customers kind of know that you’re working on newer versions, might that have also contributed? So maybe just more color on what you saw in the quarter, why the deferrals?.

First off, in terms of the move in Germany, the answer is we don’t believe we experienced any machine delays as a result so it’s not as if we got caught short, we got a PO, and we couldn’t ship a machine.

Secondarily, we are aggressively pursuing new machines but we don’t believe at this point that the customer base has said, “Well, I’m going to hold off on a project because I hear you have a new machine coming.” That said, the delay in shipping S-Max plus machines did affect us and those delays are now behind us.

We have queued up multiple machines to ship in Q4 so we think that while there’s been a little bit of noise around all of this, the noise is clearly up pretty rapidly. .

You commented that you have high confidence in the fourth quarter outlook that you provided here so maybe any color on the trend so far, we are a month and a half in the quarter, is the confidence based on the trend so far that you have seen or is it what you expect in the next few weeks?.

Well the answer is yes, we have invoiced machines already in the quarter and we have orders in hand for multiple machines to go, and we’ve got POs queued up for a few others, so yes. We shipped machines already for the quarter, so yes we are confident based on what’s happening as opposed to what we hope is going to happen..

One last one for me before I pass it on.

Kent, you talked about ExCast as something that can contribute longer term and you mentioned $15 million to $20 million type projects that may come out of this, so to the extent you can, maybe talk about some of the larger projects that you’re working on? I know it’s probably not ’15, maybe it’s ’16, but maybe any color on the number of projects and the scope of those projects?.

I’d actually have to go back and get Rick’s list, but I can tell you that we have a list of over 12 large ExCast opportunities for multiple customers. Most of which are aerospace and defense customers.

Having struggled with the Sikorsky experience, and even a little bit with the [Marionette Marine], I’m hesitant to run into doing multiple large ones quickly. We’re going to sit back. We built a new team that’s focused strictly for ExCast. It is still a 16 step process where we have to manage a lot of outside vendors in addition to our own processes.

I will say the process failures that we experienced in the earlier time period were analyzed by the customers and by ourselves and we really do believe and the customer thoroughly believes that we have the solution. It was our naivety in contract negotiations that we ended up eating the costs rather than the customer.

But that’s life, that’s what happens in these experiences and so we had a good back log but we’re going to be very cautious about taking large contracts that could run a risk of deteriorating or derailing financial performance and we’re going to take a slower and more positive approach to that market. .

Your next question comes from David Ryzhik – Brean Capital, LLC..

How should we think about SG&A and R&D in ’15 in the context of organic growth expectations? Should we assume it continues flattening out as is the trend over the past few quarters? Any color on that would be helpful. Thanks..

I think we’re looking at G&A flattening out but we’re not looking at significant increases in G&A. R&D is a function of a couple of things, what opportunities do we have and what should we be investing in.

Another thing that enters into our R&D efforts is whether we’re funded or not and to the extent we are funded in our R&D then obviously that would bring our run rate down because we would be getting revenue for a contract. We don’t plan on substantial growth in R&D going forward.

There’ll probably be a little bit of growth in R&D going forward but there is a flex point with R&D that we can utilize and I think that’s what Kent was talking about, we are focused heavily on profitability and making a bottom line so there’s a little more flex in R&D. .

We have in our paper in this regard the fact that while our market credibility may not be too good our customer credibility are pretty good and I think the customers – verification of binder jetting in special markets that where the lasers can’t even play is going to give us an opportunity to collect more NRE type contracts and R&D development so that I think they recognize now that they’re going to get something for their money and they’re not going to try and hang it on our back to have us co-develop it with them and if we do, then we’re going to get some proprietary value from it.

So we can be a little arrogant in a friendly sort of way with some of these customers and that would be our intention..

What application sets are you seeing in the S-Max Plus for and what would be the selling price for that machine?.

The selling price is equivalent to the S-Max, there’s not a significant difference and the applications are places where people are interested in getting higher strength and higher heat resistant casting molds, and this is often in aerospace. There’s other applications but aerospace seems to be a focal point..

Last one, can you remind us what percent of historical business ballpark came from Russia pre sanctions? It seems like based on the comments that the organic growth estimate for ’15 doesn’t really include much from that and any Russia business would be upside there? I just wanted to clarify on that..

Well, our Russian business historically has been very cyclical. In some periods we have a large order and then very little in another period so I don’t think we can really easily estimate what the effect is.

I would say looking into ’15 we’re not expecting a significant contribution from Russian orders and if, for whatever reason, our Russian business became robust, it would probably create some upside..

I would just quickly add that the reason it’s cyclical is because we have customers with [inaudible] demand, but the customers have to get their money from the Russian government and it’s the cyclicality of Russian funding that is the issue and not the cyclicality of their demand.

If we could satisfy the demand of the customers we’d have a much bigger business but the outflow of funds is a function of government policy..

Your next question comes from Brandon Wright – Stephens, Inc..

Just real quick on the slight down revision on cap ex, just trying to get a feel for this, is it just simply cost not being as high as originally expected or are investments being curtailed to some degree?.

I think it’s costs. We were probably a little conservative with the numbers. There’s also some FX impact there relative to what we had estimated FX between the euro and the dollar, we picked up a little bit, so there’s a couple of pieces to it.

Again, that’s not a real large revision but we’re being a little bit better than what we thought and we were probably a little bit conservative..

Your next question comes from Bobby Burleson – Canaccord Genuity..

I think just looking at the growth you guys were talking about organically for next year, it looks like if we maintain kind of the gross levels the PFCs are delivering and maybe add a PFC or two, we still require a lot of machine growth, at least for consensus numbers are but if you look at organic, potentially there’s very little machine growth.

We didn’t have any this year and I’m wondering kind of – someone asked this earlier in terms of growth rates for the industry, your machine growth rates [inaudible] obviously, are tracking well below, I’m wondering is that going to correct itself 2015 or beyond and what is it that you’re doing to ensure that that happens?.

I’ll give you a quick answer and David will probably follow up. The first thing is that we have new machines that we’ve briefly discussed here that will probably have a dramatic impact in ’15 and certainly in ’16 in large productions, and those machines may be ordered four and five at a time and so it’s bigger.

But the other part is David also mentioned we have a variety of new materials that we are now flowing across these larger production machines and when you start printing carbon and graphite on these large machines as we’ll be done, we’re actually doing it now in the lab, but we’ve got to do it in our own house in the large machines before we release them to the public in any great degree.

That all moves a whole host of markets for which no one else can even bid and so the diversification of our material applications, and the use of our application’s engineering to forward market opportunities in new materials is the essence of why we see the machine growth reoccurring.

David, do you want to add to that?.

No, I think that’s a complete answer Kent. In addition to that of course, our smaller platforms are coming online and getting acceptance, and while on a unit basis they don’t contribute as much to revenue, we expect much higher volumes of those to ship overtime.

We’re still in the [inaudible] stages of the M-Flex production and that’s going to emerge and become, I think, a backbone machine with good volumes. So, across the board we feel pretty confident in what we’re looking at next year..

It seems like though, just the adoption of your machines is tracking below the adoption of other types of machines out there and I’m wondering, it seems like that wasn’t anticipated and now we have new material sets, new machines coming, what gives you confidence that you’re going to get the adoption right with a new set of products when it seems to have been disappointing in the existing set?.

I’m not sure what data you’re looking at, when we compare we’re talking about full blown industrial production equipment and 3D companies that are producing that kind of equipment are sort of few and far between. .

There are a lot of [inaudible] production equipment – I mean there’s a lot that comes out, other companies that’s for industrial production. On the metal side they’re growing 50% plus..

I think perhaps we have to look at data so we understand that but all I’ll say at this point is that I think an explanation or 2014 is hopefully clear.

We’ve gone through a fairly quiet period in Japan, we tried to explain that, we’ve talked about Russia, we see an emergence from all of that and we feel confident with the new product offerings we’re putting on the table that we’re going to step up to a higher volume level next year..

So the run rate is definitely looking like it’s improving in Q4 and you think on an average quarterly basis next year, we’re going to be at a higher machine run rate for some of the higher end machines?.

I would say on a cumulative basis for the year, that’s absolutely true yes..

Your next question comes from [James Mevidas] – Cowen & Company..

I just had a couple of follow ups.

Number one, what is the status of the PFC rollout plan?.

We’ve just completed Italy, we have deferred Russia, we’re still examining one other opportunity internationally that we may occur and implement during ’15, but we are really trying to mature.

We’re going to slowdown new initiatives until we’ve better matured the current initiatives that we’ve employed and as we see them coming online we’ll look at opportunities.

The opportunities right now are more present in the international markets that we see, even China, but the expense of doing things in the international market is very high and so we’re going to be very comfortable with the process that we’ll employee before we get there and we may even consider joint venturing some PFC activities with some customers that have come to us with that idea..

My second question is on kind of the cost of goods sold in Q3, can you say how much of ExCast costs carried over into Q3 and how much the moving expense was? I know you said it was less than 1% of gross margins but can you put a dollar figure on that?.

I think I want to stick with less than 1% of the moving costs. I think that’s accurate enough, it’s close to one, you can round. The ExCast is between 2.5 and 3 points, so again rounded it’s 3 points so that should narrow you down..

Is that now finished or is there going to be a carry through into Q4 on ExCast?.

No, it’s not finished but it will continue to diminish in nature. We don’t expect anything near what the quarters we’ve had or this quarter, it will continue to diminish. .

My final question is on ASPs. I know you said that they’re not firm at a machine level but as I do the math, I guess could you just run us though an update on what the OSPs are because as I do the math the units that you shipped times the ASPs that you’ve give us before comes out to a much lower machine revenue number.

Maybe I’m missing something like materials, or consumables, but can you just run us through the ASPs again..

S-Max at $1,250,000 ish, M-Flex is at $4,000,000 to $4,050,000, and labs $100,000 to $150,000. I’m not totting it here but it depends on option sets. I mean an S-Max can be as little as $1.1 million and it can be as high as $1.4 million depending on options..

Then there were no S-Print or M-Print in the quarter. You mentioned three S-Max Pluses keyed up for Q4, that gets you to $4.5 million maybe, maybe $4 million and that leaves $8 million or $9 million left to go.

Can you kind of just characterize where those fall in the product sets?.

No, I don’t think at this point we’re ready to model out the quarter..

Ladies and gentlemen there are no further questions at this time. I would now like to turn the floor back over to management for closing remarks.

Again, I want to thank everybody for joining us. I think we had an explanation this morning of what our story is and I hope you appreciate some of the things that we’ve discussed here in terms of the trials and tribulations of being an emerging growth company. I think we’re moving in the right direction.

We’re very confident that the investments that we’re making in the 2014 year are going to drive growth as we hear back from our customers and our perspective customers about their requirements.

When we ship a machine, I just think it’s important for everybody to understand, it’s not like you just go down to a lot and buy a car, each one of these machines more and more are being characterized for the individual applications that the customers are requiring and so it is more of an applications engineering sale separate than just, “I want color number six.” But we’re dealing better with that as we’ve moved through the silicate and Phenolic machines all coming from the S-Max line.

We believe that our unique capabilities in binder jetting are still setting us apart from other companies in 3D and that the opportunities in that element of 3D printing will lead us to focus on industrial manufacturers for metal components, are still our largest opportunity and there are a lot of materials.

As we reprioritize our R&D there’s a lot of materials that other process will not be able to work in and so we’re taking some of our effort in that regard. With that, thank you all and we look forward to speaking to you at some of the various meetings here..

Ladies and gentlemen, this concludes today’s teleconference. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day..