Karen Howard - IR Jim McCarley - Chief Executive Officer Brian Smith - Chief Financial Officer and Treasurer.

Dan Drawbaugh - B. Riley FBR Bobby Burleson - Canaccord.

Greetings and welcome to the ExOne Company First quarter 2018 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.

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

Thank you, Jeremy, and good afternoon everyone. We appreciate your time today for our first quarter 2018 financial results conference call. Referring to our slide deck on Slide 2, on the line with me today are Jim McCarley, our Chief Executive Officer and Brian Smith, our Chief Financial Officer and Treasurer.

Jim and Brian will be reviewing the results that were published in the press release distributed this afternoon just a short time ago. If you don't have that release, it's available on our Web site. The slides that will accompany our discussion today are also posted on our Web site. On Slide 3 is our Safe Harbor statement.

As you may be aware, we will make some forward-looking statements during this presentation and may also during the Q&A. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ from where we are today.

These risks and uncertainties and other factors are provided in the earnings release as well as in other documents filed by the company with the Securities and Exchange Commission. These documents can be found on our Web site or www.sec.gov.

I also want to point out that during today's call, we may discuss some non-GAAP financial measures, which we believe are useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP.

We have provided reconciliations of comparable GAAP and to non-GAAP measures in the table accompanying today's earnings release. Jim will get started with summarizing our first quarter 2018 results and progress.

Brian will go through the detailed review of the financial results and then we'll turn it back to Jim to offer a perspective on our outlook before we open up the lines for questions and answers. And with that, it's my pleasure to turn the call over to you to begin Jim..

Thank you, Karen and good afternoon. I want to begin our conversation today on Slide 5, talking about binder jetting adoption and ExOne's business because both of these very important dynamics are growing again in 2018. Let's start with binder jetting adoption.

Every leading indicator we have observed over the last year but particularly in the last six months is showing positive trends. Industry-wide binder jetting sales are increasing. Printers and components printed with binder jetting based technologies are growing, and overall customer acceptance of binder jetting is expanding. Now let's talk about ExOne.

ExOne’s machine and printed product sales are growing at a rate that make our company one of the leaders in the additive industry. We are the market leader in the production and sale of binder jet printers and a market leading supplier of components printed with our machine.

Our suite of printers and printer sizes offer the widest range of equipment with the most configurable options in terms of material and binder combinations and largest installed base of machines in the market. We continue to see solid demand for our workhorse S-Max as well as a solid uptick in Innovent machine sales.

On the non-machine side, sales of ExOne direct printed components also grew over 50% on a year-over-year basis. Last but not least, ExOne's pipeline in Q2 remains robust. Later, Brian will describe this in more detail, but this pipeline consists of repeat customers.

And finally, a resounding active project list of over 50 projects spanning 48 potential customers, simply put ExOne continues to believe, we can grow our business and revenues at rates greater than 20% for the foreseeable future. Now please turn to Slide 6 and let's provide you a little more operational color.

Here are some key takeaways from Q1 of 2018. ExOne achieved solid revenue growth; total revenues grew by 9% to $11.9 million, 6% machine and 12% non-machine. If adjusted for product line exited in 2017, revenue grew by 13% year-over-year.

Machine revenue included 3 S-Max machines and 3 Innovent delivered into our traditional Sand Molding core market and into the university and industrial company R&D facility. Sales of ExOne printed fine and coarse powder components also grew over 20% year-over-year as well as sequentially by 8%.

Gross profits improved in Q1 of '18 versus Q1 of '17 to $2.6 million. ExOne’s focused R&D efforts in support of our suite of technical initiatives are progressing on plan and we expect to begin printing test articles on our newest machine platform this quarter. Overall, we are pleased with our team's efforts in the first quarter and our start to 2018.

And we are bullish that we can accelerate our progress towards meeting our revenue, cost improvement and technical goals this year. Now, I'll turn it over to Brian and he can walk you through the Q1 financials..

Thanks Jim and good afternoon everyone. If you could please turn to Slide 8, we'll start with revenue. As Jim said, revenue was up 9% to nearly $12 million in Q1 2018 compared with 2017.

Recall we had exited our specialty machining product line in Q2 of last year, so comparable basis revenue after eliminating the 307,000 revenue from Q1 2017 increased 13% for the quarter. Our machine revenue contributed about 30% of total revenue in the quarter and non-machine had a strong showing at 62%.

We had mentioned in our year-end call in March that this quarter revenue growth will be less than our guidance for the year of 20%. For the trailing 12, 2018 period, our revenue was up 17% over the comparable 2017 year to nearly $59 million. Again, when adjusted for the exited product line, TTM's grew up over 21%. Now, if you'll please turn to Slide 9.

Here you can see that our first quarter machine sales were up 6% to $4.5 million compared with Q1'17. There was one more machine sold in the '18 quarter versus '17. Included in our Q1 machine sales, are three of our S-Max machines.

We sold these machines into the aerospace industry, the pump industry, and to a diversified foundry customer with significant customer waiting in automotive. Worth noting is that two of the S-Max's were sold to repeat machine customers. One of those being the sixth machine purchased by that customer.

I would also mention that included in our current backlog is the seventh and eighth machine that will be purchased by this customer and we expect to deliver these last two machines in the second half of this year. We also sold three Innovent machines in the quarter.

These machines were sold to a university, to a ceramic engineered products company and to a medical device company. And all of these were new machine customers to ExOne. We are pleased with this mix of customers who are expanding the application or geography services with our technology as well as those that are adopting it for the very first time.

Referring to the trailing 12-month revenue chart on the right-side of the slide, you can see Q1 2018 TTM machine sales were up 31% over the 17 TTM period to over $30 million. Now, please turn to Slide 10. Here, you will see shipments in revenue recorded in units by machine type for the first quarter of '17 and of '18.

We recorded six machines in revenue in the first quarter of '18. At quarter end, there were 8 of our machines that were shipped and are in-transit, or in the process of being installed and accepted by our customers and therefore are still in backlog.

Those machine units include 7 of our larger indirect printing machines and one of our direct printing machines. We also shipped one S-Max to a customer for a new lease this period. There continues to be variability in certain instances that will result in lags between shipment and revenue recognition.

This can happen for a number of reasons including contract terms, performance obligations, and/or overseas shipments. Now, if you'll please start to Slide 11. Non-machine revenue was our highest ever of $7.4 million in the first quarter of 2018.

This reflects a 12% growth rate over the 2017 period and when adjusted for the exited product line, revenue in Q1 of '17, it reflects a 17% rate of growth. This growth was primarily driven by significant increases in demand on our direct metal PSC.

Also included in this category are sales of consumables, service, and other component and spare parts which collectively grew at more moderate rates.

We continue our efforts with our supply chain to lower the cost of our consumables for our customers, which we think helps drive adoption rates from our binder jetting technology, but at time, serves to dampen the impact growth in this area.

Offsetting these growth areas was lower revenue in our indirect service center sales due principally to machine sales to service center customers. On a trailing 12-month period, absent our exited product line, our non-machine revenue grew at a rate of 13%.

Now, if you'll turn to Slide 12, we finished the quarter with backlog of $26.1 million or an increase of 20% from year end. Backlog as you know includes firm orders received from customers. This includes eight units in transit that I talked about earlier as well as orders taken on machines that have later delivery dates.

It includes our machine service contracts as well as operating leases that are non-cancelable. Backlog also includes production orders for our production of metal and sand parts from service centers and other contractual services such as our ongoing Missile Defense Agency contract.

I want to mention here that we were recently made aware from the Government of their intention to extend and fund that contract for year 3 or through mid-2019. We continue to see strong activity in terms of machine customers in the first 40 days of this quarter.

This activity includes both customer orders we have accepted and those we have received but are under review and are waiting to or negotiating final terms. A total of 13 machines fall into this group thus far this quarter.

This additional Q2 activity includes an order for three of our M-Flex machines from a customer that is anticipating expanding their production capacity with our technology and that is already operating an M-Flex in its production facility. This customer is principally serving the automotive industry.

Turning to Slide 13, we'll talk about gross profit and margin. Gross profit was $2.6 million resulting in a 22% gross margin for the first quarter of 2018 compared with $1.6 million, a 14% margin in the prior year quarter.

We benefited in gross profit from the higher revenue versus Q1 2017 as well as a reduction of certain costs including our restructuring and asset impairment and inventory reserve charges from last year of 2017.

In the 2018 first quarter, we also had about 250,000 of exit cost and asset impairments from the consolidation of our former production service center in Italy into our German adoption center that negatively impacted our 2018 Q1 margin.

From March 2018 TTM's gross profited margin were impacted by significant actions we took to realign our organization businesses last year. In prior quarter's last year, we called out individual net about totaling $1.9 million for asset write downs net of a gain on the sale of our Las Vegas facility.

Additionally gross margins in the TTM period were impacted from the third quarter sale last year of $2.8 million of revenue recorded on four Exerial machines which yielded breakeven margin. Please turn to Slide 14 and we'll discuss SG&A. Comparing the first quarter of 2018 to 2017, our SG&A expenses were down about 100,000.

The decrease was due to the absent of intangible asset impairment and bad debt charges including the prior first quarter partially offset by higher personnel and consulting and professional costs in the 2018 first quarter. For the trailing 12 months, our SG&A was up about $2.4 million.

For 2018 TTM period includes about 500,000 of unusual employee costs and 300,000 for impairment of intangibles associated with our exited product. Now if you please turn to Slide 15, we'll discuss our investments in R&D.

The 2018 first quarter reflects an $800,000 increase over the 2017 first quarter as we accelerated development activities to meet the demand for our technology advancement as Jim mentioned earlier.

This consists primarily of internal talent and external resources to advance our technology and IP development particularly fine powder development to continue to maintain our leading position in binder jetting technology.

As we discussed with you in March, we expect to spend an additional $6 million $8 million of R&D in 2018 over the prior year to expand our technology principally in our fine powder printing capabilities. Now please turn to Slide 16 and we'll review CapEx. Our cash CapEx needs were very modest.

Our first quarter cash spending was about 500,000 compared with 200,000 for Q1 '17. For 2018, we estimate spending will be between $1 million and $1.5 million in total.

The non-cash portion of our CapEx shown here pertains to the transfers of machinery from inventory into PP&E for our own use in our service centers for customer leases or for our R&D development activities including the development of our large format fine powder printing machine as well as transfers from PP&E to inventory.

That impacted the current quarter of these non-cash items was about 700,000. If we turn to Slide 17, you'll see a waterfall of our Q1 2018 cash flows. I mentioned cash CapEx already given our strong order activity we increased inventory by $3.5 million in preparation for second and third quarter machine shipments.

We also had good collection activity on our accounts receivable and generated about $3.5 million from those activities. These items as well as other items resulted in a usage of about $400,000 for our working capital.

Our net loss that of non-cash and other items used about $4.4 million of cash in Q1 2018 and we ended the quarter at $16.9 million of total cash. If you'll turn to Slide 18, you'll see we have virtually no debt on our balance sheet and as planned we have not drawn on our available credit facility.

That concludes my prepared comments and I'll turn it back to Jim..

Thank you, Brian. Please turn to page or Slide 20. Now let's talk about the ExOne technology. As we mentioned on the last call, ExOne is initiating an accelerated push towards improving and expanding our binder jet printing technology.

I want to take a few minutes to talk to you about what this means in terms of bringing value to our customers and our shareholders from the investment we are making in research and development. Although, I can't be too detail in terms of the specific activities and approach to how we will make advancements.

I do want to help you understand the lead project, building the large format fine powder printing cell and how we expect that investment to impact our business. The development of this large format machine is officially underway and on plan.

Since we are utilizing an existing machine base design as the core of our machine, we have been able to quickly leverage much of the previous design and focus our team on the specific areas that will drive greater capability.

Our team has also been able to develop a multiple design concept on parallel paths to ensure that we can work as efficiently and cost effectively as possible. This means that if one of the early designs works well we can begin moving forward with the next phase of development.

Likewise, if we run into challenges, our team will have more options for maintaining forward progress. In addition to the machine design, we are working with key customers to develop a beta process concept to perfect the machine's performance.

We are taking this approach this time based on what we learned from earlier development projects like our Exerial beta machine as well as the fact that success with a fine powder machine where we're currently bringing together materials, a machine and a profit in order to be successful.

A second benefit in the beta process is that it will allow our technical team to experience firsthand what the customer will experience and when necessary integrate improvements as they go. Based on our present project scheduled, we anticipate beginning product trial in this quarter and are targeting proof of concept trial by year end.

Now, let's talk about the value we expect to achieve from these efforts. Let's look now to Slide 21, these graphs represent our most recent update to an internal market assessment that our ExOne team performs every six months.

At this update, we pull together our technical roadmap and our sales intelligence to develop our view of what the market potential is for our present and future portfolio of machine. There are a few items I would like to call to your attention.

At a high level the overall potential has grown since last November by 10% to be in excess of $220 million, when we look at our market potential in 2020. This growth was driven primarily by continued expansion of our mature course powder printers. However, we continue to see good potential from our plan fine powder printing platform.

From an industry serve standpoint, the mix remains consistent with the prior assessment with no significant changes. Although this graph does a nice job of showing what industries our products will go into we have some additional slides we have put together to try and peel the onion back a few more layers. Please turn to Slide 22.

This slide slices the data from our assessment in a different way. As you can see this breaks down the data into two views, market in use and machine platform. From a market in use point, the graph on the left shows something many of you had known for a long time.

Products serving the casting in use are a major part of both our present and future machine sales potential. Likewise, our workhorse S-Max machine is a key platform to deliver that growth.

Together this underpins why we will continue investing in the core technology that supports this platform both an improved component reliability, productivity, diversity of material set and overall affordability. Next turn to Slide 23. This slide shows the same in use in platform data, but this time over the fine powder machine potential.

Here there are multiple takeaway. First, the number of machines is reduced in focus, these machines break into three general build box size. I will talk more about the break out on the next slide.

Second, I want to note that our smallest platform, the Innovent is available now and is in the market and is already producing products utilizing fine powder at ExOne and therefore providing us valuable insight into developing profit.

Third, the large format machine which is represented by the imprint cloud platform on this chart represents over 50% of the total future potential for machine sales. This is exactly why we chose to accelerate the development of that machine.

You can see a similar breakdown by market in use for our fine powder platforms as you might anticipate, we are focusing our target beta products for the areas of -- highest areas of potential first. Finishing up this discussion, let's move now to Slide 24.

We added this slide to help you visualize what it will mean to be printing fine powders in a small, medium and large format. We have taken the liberty to show this information in three stops. An everyday item on the left, a type of industrial product that might be produced in the machine on the right and engineering units below.

Clearly, there is a significant difference between the products we can print in our Innovent machine versus what we would be able to print in our large format printer. So the reason to move to this large format printer is clear to our team. However, there is one very key point that may not be so clear.

That is that we believe the fine powder process that we have been developing on the Innovent platform will be scalable to the large format machine. This means that the time and cost to develop product will be greatly enhanced by the combination of these two in concert. Now, I will wrap up this part of the discussion with some final comments on value.

As I believe this project illustrates, ExOne is very confident that we have created and will continue to create exceptionally solid fundamental know-how and IP that is pointed towards the right growth markets for our technology.

We also believe our continued focus on improving our IP portfolio is resulting in increased strength in the marketplace every day.

As we now begin to get more visibility into the actual technologies that new entrants are releasing into the market we are rigorously monitoring the marketplace and taking action as needed to protect both our ability to grow as a business and to prevent others from using our IP.

Next let's turn to Slide 25 and discuss some recent industry meetings and overall market outlook. Over the last couple of months, the additive community has come together at a wide variety of conferences but I'd like to talk about two notable industry conferences in particular. These are the Additive Manufacturers User Group, AMUG held in St.

Louis and most recently the rapid TCT conference in Fort Worth. Based on one account at a step, both conferences continued to see growing attendance with year-over-year expanding attendees. Likewise both are attracting increasing levels of first time attendees at a notable 20% to 30% growth rate.

But from the ExOne perspective whether returning our first time participant, the level of seriousness and resolve on the part of the attendees in our booth was noticeably increased during these shows.

In previous years many booth guest were looking for an education on what a given technology could do, how it fit into the larger tapestry of additive technologies and often politely accepting the magic 8-ball type answers from exhibitioner. Not this year. This year potential clients were coming with applications in mind.

Well-educated on many additive technologies often skilled in the use of at least one printing method and demanding real answers to technical requirements about how our technology would address their specific need.

Best of all, they wanted to know what was available to purchase and ready for use now or how our technology today could serve their immediate need. I'm very happy to say our team believes that ExOne benefited from this closer level of review.

Furthermore, our decision develop fine powder printing capability on Innovent in 2017 and rapidly expanding it to our large format printer in 2018 was only reinforced by this experience. Finally, let's turn to Slide 26. Although a lumpy machine revenue recognition on a quarter-to-quarter basis will continue.

We are confident and are reaffirming our 2018 guidance including revenue growth in excess of 20%. Now, with that we can open up the phone lines to questions..

Thank you. [Operator Instructions] Our first question comes from the line of Christopher Van Horn from B. Riley FBR..

Hi, this is Dan Drawbaugh on the line for Chris. Thanks for taking our questions..

Hi, Dan..

Hi, Dan..

Hi. So just to start with the more than 50 projects that you mentioned in your prepared remarks, a couple of questions on that.

So can you help us understand what that represents from a revenue perspective, is one project one machine or could it be multiple machines and what's the timeframe on that 50 projects?.

Yes. So, what I would tell you is that it's most likely a customer and a machine, but in a fair number of cases it’s multiple machines for a customer, that's why you get from 48 to the 50 -- to the greater than 50 number. So, for the most part it's one up. And I think we see that as a good thing.

And remind me, what is the second part of the question?.

I was just curious to know if you can kind of size it or give us the timeframe that you're thinking about those?.

Yes. So the timeframe is that a sort of a percent of success, and it would go out over anywhere from the next 6 to 12 months. And really those projects, you know they will move a little bit, some will move out, some will move in.

So you really can't just take that number and multiply it, Dan, and try to get sort of a forecast that wasn't what I was trying to do there. I was really just trying to give you a flavor for how much diversity of contact that we're seeing..

Perfectly understood. Thank you. So I guess a little more broadly, can you talk about the overall demand environment in additive as far as you guys are seeing it.

There's been some mixed commentary from some other names, some other guys in your space, and I'm just curious to know what you what you're seeing as far as the overall demand environment goes..

Well, we're seeing a pull. We've got -- I would tell you that we're not seeing weakening in that environment. I've said this on other calls, the customer expectations are higher. So I’d tell you they're showing up expecting the machine to do more and really wanting to understand that.

So from that standpoint, I'd say the customer expectations are higher, but the interest is not lower. We really see a good, positive biorhythm really from the market around the technology.

So I'm bullish on where we think the opportunity is, it really gets back to what I've said repeatedly, and that is we just got to keep focusing on getting our technology in close alignment with customer expectations..

Okay. That's good to hear. Thank you. And then last one for me. Can you comment a little bit specifically on the CHP machines. This came up a couple of times last quarter's call. I think you mentioned that you were looking for that specific technology line to accelerate in 2018.

Are you seeing that and how should we be thinking about that playing out this year?.

That's a binder sand combination going on there that really does some nice things in the marketplace in terms of how you're handling the product. We've got a healthy number of those machines in that project list that I talked of. I'm not going to characterize how much of it makes up, but it is a fair representation inside there.

And frankly it really represents what's coming because we're going to continue to look at other binder types and start introducing those, because I think what really that -- the real takeaway on the CHP conversation is that, we've got to evolve the binders that these machines are running on a pretty consistent basis and blend that with the sand in that case, so that it matches up what customer requirements.

That's just really a matter of us trying to move closer to a customer requirement..

Got it. Thank you. That's very helpful color. I'll leave it there..

Okay. Thank you..

Thanks..

Our next question comes from the line of Bobby Burleson from Canaccord. Please proceed with your question..

Hey, guys..

Hey, Bobby..

Hey, Bobby..

So, just curious, it sounds like I was [indiscernible] you guys are getting some nice traction with some pretty sophisticated players in the whole kind of from metal powders to kind of finished metal parts ecosystem or supply chain.

And I'm wondering, they're now talking about binder jetting as a process that they can help customers understand and leverage in their supply chains.

And I'm wondering what's the – what are the switching costs or what is the stickiness of ExOne fulfilling that role now with the given customer and then a new entrant coming into the market and trying to kind of capitalize on some of the ground work you guys have made..

So I'd say the stickiness to our particular product if it's used to develop -- used to develop somebody's product is pretty high, so I don't think you're going to want to put a process together with our equipment and then have to go and bring somebody else's on line and replicate it, because there are subtleties about how the machine operates that I'm sure are going to be different.

Otherwise, they're using our IP. And if that's the case, so I think there's going to be differences in how the process works, and it's going to be a process development all over again. So the stickiness is really around the time effort and expense of qualifying the same part in multiple platforms.

So being there first, Bobby I really think is an important thing for us to continue to try to capitalize on. And the last thing, I would say is the material properties that you're trying to achieve with the equipment is going to drive a lot of variables inside the machine too. So I think it's a pretty high switching cost itself..

Okay. And then, as you migrate as the customer, obviously, you're working on large format and print. I'm assuming there's you guys are looking to increase speeds in terms of the part per hour output et cetera.

Are there changes in some of the properties with the parts that come out of these machines as you move from the existing offerings to these higher speed larger format machines in terms of things like shrinkage.

Does the customer has to kind of start over again qualifying those parts on the new machines?.

Well, here's the right way to answer that. I don't know about other people's machines. And from our standpoint, we're expecting there to be scalability between the smaller testing that you do at the prototyping or even the material sample development level up to the larger.

However, there are areas that will be different just because the part geometry itself is different. So a bigger part being centered just acts differently than a smaller part being centered. But that should be something that you can calculate understand and sort of scale. But that would be very unique to our equipment.

And Bobby, that's you're kind of asking a question that I want to answer one more thing.

That's why the way that we booked into our selection between sort of the small Innovent and the much larger platform we book into those together because we think being able to develop simultaneously like that is a real edge and people can take what they've learned on the small printer and apply it to the larger..

Okay, great. And then in terms of -- there's obviously a big opportunity for the large format and print and just a large format market as you described that as 50% of that 2020 TAM that you're looking at.

Is that a fair assessment? Everything is on different slides, if I'm assuming that if we go to that first market slide, we put that $200 million I think opportunity that roughly half of that in large format?.

Yes. I think you could work through the slides and get to the answer that you're looking for. The only thing, I will correct you on, is that's not a TAM that's not the total addressable market that is bound by ExOne's view into the market. The addressable market is much bigger..

Okay. Can you explain by -- bound by ExOne's view into the market, are you talking about yours was available….

Sure, Bobby. I mean this is based on customers we're in contact with that ran our base that we know where they are. There are customers out there in the market we can't touch every customer that's out there in the market. We can't -- we haven't had everybody that wants to do and invest in casting they contact with us.

These are all leads where we've had some level of contact and we've got some level of dialog that's occurred. So it is not a total addressable market. Honestly that's the only reason I'm comfortable putting that kind of information forward is that, it's a much smaller subset of what we think the real market is..

Okay.

What do you think your market share is in terms of that -- when you look at the kind of customer engagement you guys have? What type of the subset of the market is it?.

We are the only ones out there in the marketplace. I know right now that's also why we thought that information makes sense. We're really just trying to give you a sense of what's kind of out there from our perspective.

I don't think I can -- I don't think I can give you how that fits against the other people or what that might mean against other potential competitors other than I think they're working in a different playground than I am..

Okay. And then, in terms of capacity for the large format printers and the CapEx required.

Yes, it sounds like you want to get to proof of concept by the end of the year as you start thinking about this ramping up, how much incremental investment is there required for you guys to bring this fully to market?.

To ramp up the production of the machine….

It will be in our existing machining or production capabilities Bobby. We're not building another building or renting another building. It will be all towards in our existing -- between our production facilities and our supply chain..

Okay.

So it's already reflected in the investments that you've made?.

Yes..

Yes. That's right..

Great. And then, I guess, the last one is just -- you talked about an automotive facing customer.

I'm wondering that customer, are they a large format potential customer? And then, within that 48 to 50 kind of prospect, what's the machine mix there's a lot of that S-Max or some of that even M-Print or how should we think about how that breaks down by machine type?.

Okay. Couple of things here. Couple of different directions, I think you're talking about the three machines that -- 3 M-Flex's that we had orders on I believe and that customer were covered under NDA.

I can only tell you that customers is in serving the auto industry and they're using M-Flex's to do that and they're expanding they're production lines and therefore, they awarded three more machines to be taken over a period of time one will be pretty soon, the other two will be later this year, even one might go into early next year.

So again matching up their production build out capacity. As far as that -- our pipeline list of active customers, I would say very -- there isn't any in the way of maybe one in the way of fine powder printing that we're talking about because that that machine is not out there yet.

Those customers are all in our existing machine base in events all the way to S-Max is principally, even in a potential Exerial out there. So that's -- it really is across the whole breadth of our machine capabilities..

Okay, great. Thanks..

You bet..

Okay. Thank you..

Thanks Bobby..

This is the end of the question-and-answer session. At this time, I would like to turn the conference back over to management..

Okay. Well, I want to thank everyone for your time today, we certainly appreciate it, spending it with you and talking about our results. We look forward to being back with you again in August. I wish everybody a great summer and some nice days off and we'll see in August. Have a good evening..

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation..