Greetings, and welcome to The ExOne Company First Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. A 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, Ms.

Karen Howard, Investor Relations for ExOne. Please go ahead, sir [sic]..

Thank you, Jerry, and good morning, everyone. We appreciate your time today for the ExOne first quarter 2020 financial results conference call. Referring to Slide 2 in our slide deck, on the line with me today are our presenters, John Hartner, our Chief Executive Officer; and Doug Zemba, our Chief Financial Officer and Treasurer.

John and Doug will be reviewing the results that were published in the press release distributed yesterday afternoon. If you don't have that release, it's available on our website at www.exone.com. The slides that accompany our discussion today are also posted on our website. 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 other documents filed by the company with the Securities and Exchange Commission. These documents can be found on our website or at 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 to non-GAAP measures in the tables accompanying today's release. John will get us started providing a business update.

Doug will go through a detailed review of the financial results, and then John will provide perspective on our outlook for the rest of the year before we open up the line for questions and answers. And with that, it's my pleasure to turn the call over to John to begin.

John?.

Our global leadership team has taken a 20% salary reduction. And similarly, our Board has taken a 20% reduction in their cash fees. We've implemented a 10% salary reduction for most of our North American employees, and we've initiated furloughs or short work in our German workforce.

Finally, we took a hard look at all discretionary spending and made further cost reductions, some temporary and some permanent. We expect to deliver approximately $5 million of savings in the second through fourth quarters of 2020, of which about half are permanent reductions that will carry over into 2021.

As we progress through 2020, we will continue to assess the market situations and stay proactive. We believe that these early actions are important for our corporate health and we will preserve capital as we manage through these uncertain times.

At the same time, though, we've stayed true to our strategic goals, investing in long term priorities, just at a reduced rate. Please turn to Slide 7, and I will share our recent announcement on our collaboration with the University of Pittsburgh to produce a reusable respirator filter.

Currently undergoing initial testing, the filter cartridge contains a 3D printed porous metal filter intended for sustainable, long-term protection against contaminants such as COVID-19. I say sustainable because these sterilizable filters avoid the biowaste issues associated with disposable masks.

Our team has been working urgently to expedite this solution for medical personnel on the frontlines. Once approved, we can print these filters in a variety of shapes for respirators, ventilators and other new customized PPE mask designs that are being developed today.

While this filter presents a solution to help address the current PPE shortage, we believe it is a long-term solution for a variety of other applications. Please turn to Slide 8. Over the next few slides, I want to provide some color on the diversified revenue streams that we believe help differentiate ExOne and provide stability in turbulent times.

We have long talked about the diversity of our customers and end markets. Binder jetting technology lends itself to a broad range of applications that enable that diversity. We categorized our 2019 revenues by industry, as shown in the chart here.

Not surprising, automotive was our largest sector, being one of the more innovative industries at the forefront of 3D printing. Important to note that almost half of our revenue was categorized into the other category, emphasizing the diverse nature of our end market exposure.

We believe that this is beneficial to ExOne as different industries advance through the economic cycle at varying rates. Now, let's turn to Slide 9, and I'll touch on that concept further.

We've been advancing binder jetting technology since 1995, interacting with customers, developing solutions, and in the end driving, diversity from a perspective of our revenue stream. We have a wide breadth of machine platforms.

These range from our smaller Innovent+, which is ideal for research and prototyping, to our S-Max Pro and our X1 160Pro, which are the markets largest and fastest production machines for sand and metal printing, in between are S-Print and M-Flex and X1 25 Pro, commonly used for small batch productions of sand molds, cores, and metal components.

This diversity of machine sizes, positions us well to respond to a wide variety of customer applications. Our service offerings generate recurring revenue, ranging from collaborative R&D contracts to customized part production to printing high volumes of custom parts for customers at one of our adoption centers.

Focusing on recurring revenue is one of our strategic pillars. During a period of economic turmoil, this becomes even more important and provides a steady revenue base. Now, let's turn to Slide 10. The chart on the right demonstrates the breadth of our materials and how they align with our various machine platforms.

We have more than 20 qualified powders consisting of sands, ceramics, composites and metal. Additionally, we print more than 20 R&D materials, a number which is constantly growing as we work with our customers.

The combination of these powders along with the breath of our machines, drives a wide range of high value manufacturing solutions for our customers. These factors help demonstrate ExOne's resiliency to weather the economic storm and emerge even stronger. I'm now going to let Doug walk through the details of our financial slides.

Doug?.

Thanks John. Good morning, everyone. If you could please turn to Slide 12, we'll start with revenue. Revenue increased by 40% to $13.4 million in Q1 2020, compared with $9.6 million in the first quarter of 2019. Total first quarter 2020 revenue growth was driven by increases in both machine sales and recurring revenues.

On a trailing 12 month basis, revenue was $57.1 million in the first quarter of 2020 compared to $62.3 million through Q1 of 2019. Now, let's go to Slide 13. Our Machine Sales were $6.3 million in the current quarter, up from $3.3 million in last year's first quarter. This 90% increase was due to higher volumes and a favorable mix of machines sold.

Trailing 12 months machine sales were $30.2 million in the first quarter of 2020, compared to $35.2 million for the first quarter of 2019. Now, if we can turn to Slide 14, we'll review machine unit sales.

As a reminder, our direct machines print components such as metal and ceramic parts for industrial and other applications, and include our X1 25 Pro, Innovent+ and M-Flex platforms, as well as our recently introduced X1 160 Pro platform, for which development is expected to be completed in the second half of 2020.

Our Indirect Machines print tools such as sand, cores, and molds, and include our S-Max Pro, S-Max and S-Print platforms. Our Indirect Machines are our larger footprint systems generally achieving a higher average sales value. We sold 14 machines in the 2020 first quarter, compared with 8 in the prior year quarter.

As I already mentioned, this quarter we benefited from an increase in volume as well as a favorable mix of machines sold. The 14 machines sold in the first quarter of 2020 consists of five indirect and nine direct printing machines, including our first customer acceptance of an X1 25 Pro.

This customer was an early adopter of binder jetting technology through our M-Flex platform. Following the successful completion of their first X1 25 Pro installation, this customer is firmly committed to delivery of four additional 25 Pro systems, as well as an Innovent+ system during 2020, to support their global operations.

Once again, our Machine Sales during Q1 2020 represented a diverse set of global geographies and customer applications and included a mix of industrial and research and development users.

On a TTM basis, we sold a total of 50 machines, split 24 direct and 26 indirect for 2020 versus 58 machines, split 33 direct and 25 indirect for the first quarter 2019 TTM period. Now, let's turn to Slide 15.

Recurring revenue, which includes our 3D printed and other products, materials and services, was $7.1 million in the first quarter of 2020, reflecting a 13% increase over last year's first quarter.

The growth as compared to 2019 first quarter was driven primarily by an increase in sales of consumables to our growing global installed base of machines, as well as an increase in revenue associated with commercial, research and development contracts.

For the trailing 12 months, recurring revenue of $26.9 million was relatively in line with $27.1 million in the prior year period. Turning to Slide 16, we'll talk about gross profit and margin. Gross profit was $3.6 million for the first quarter of 2020, up from $2.6 million in the 2019 first quarter.

For the first quarter of 2020, gross Margin was 27.1%, down from a 27.6% margin for the first quarter of 2019.

Improved execution drove our higher revenue base during first quarter 2020, which was partially offset by lower realized pricing and an approximate 160 basis point impact of the completed sale leaseback of our European headquarters and operating facility in Gersthofen, Germany.

On the right, for the trailing 12 months, the decline is attributed to lower revenue volumes and lower realized pricing, partially offset by reductions in overhead costs and lower net inventory charges following our 2018 global cost realignment program initiated in June 2018. Please turn to Slide 17, and we'll discuss SG&A.

Comparing the first quarter of 2020 to 2019, our SG&A expenses were up $800,000 to $6.2 million. This increase was driven by our investments in our global sales and marketing infrastructure. For the trailing 12 months, our SG&A increased by $900,000 to $23.3 million.

The increase was due to costs incurred for executive management changes, our investment in selling and marketing efforts, including costs associated with the GIFA Trade Fair, which we discussed during our prior calls, and higher net provisions for bad debts.

This was partially offset by employee and consulting cost reductions associated with our 2018 global cost realignment program. Please turn to Slide 18, and we'll discuss our investment spending in R&D.

First Quarter R&D expense increased by $100,000 to $2.5 million, driven by an increase in employee related cost, partially offset by a decrease in consulting and professional fees associated with lower overall machine development costs.

Q1 2020 trailing 12 month period reflects lower consulting and professional fees associated with our 2018 global cost realignment program.

Before moving on to backlog, I'd like to point out that as a result of the completion of the sale leaseback transaction I mentioned earlier, we recognized a nonrecurring gain of $1.5 million during the first quarter of 2020, reported as a separate line item in our statement of operations. Now, if you'll turn to Slide 19, I'll review backlog.

To remind you, our backlog includes firmly committed orders received from our machine and recurring revenue customers and includes our machine maintenance contracts as well as the non-cancelable portion of our operating lease agreements.

Backlog also includes orders for our global direct and indirect printing operations and other contractual services, including funded research and development. We ended Q1 2020 with another record backlog balance of $33.8 million, compared to $18.8 million at the end of the 2019 first quarter and $31.8 million at year-end 2019.

Despite this increase in backlog both year-on-year and sequentially, we anticipate that the impacts of the COVID-19 global pandemic, including disruptions to international shipping and travel and overall adverse impacts in the macroeconomic environment, will result in a lower revenue result for our 2020 second quarter as compared to Q1 2020.

Significant uncertainties associated with the duration and severity of the outbreak make it difficult for us to predict the full year and longer term effect on our business at this time, including the impact on future capital, equipment spending decisions of our customers.

Nonetheless, we remain confident in the underlying thesis of our binder jetting technology, including its ability to shorten global supply chains, which has been a notable topic of discussion in the industrial space during the COVID-19 outbreak.

Our goal is to appropriately manage our business and ultimately come out of this situation in a position of strength, further enhancing our market leading position in binder jetting. Turning to Slide 20, this chart represents a waterfall of our first three months 2020 cash flows.

Overall, we had a net positive cash flows of $11.1 million during the quarter. This net increase was driven by proceeds received from the completion of our sale leaseback transaction, which generated $16.2 million cash during the quarter. Our cash capital expenditures for the first quarter were limited to $300,000.

We anticipate an additional $1 million to $2 million of planned cash CapEx spending in 2020. If you'll turn to Slide 21, you will see our total liquidity at year-end 2019 and at March 31, 2020. At the end of the first quarter, we had $26.8 million of liquidity as compared to $20.2 million at year-end 2019.

This increase reflects the proceeds from the completion of the sale leaseback I just spoke about, offset by the reduced amount available under our related party revolving credit facility, following its amendment and extension through March 2024, also completed during Q1 2020.

We continue to believe that we have sufficient liquidity to manage through these uncertain times, and to provide stability for our business.

In response to the COVID-19 global pandemic, in March and April 2020, we initiated various cost saving actions, including a mix of employee terminations, furloughs, pay rate reductions, and decreases in consulting and other spending, all in an effort to conserve cash and maintain adequate liquidity.

We've targeted a net cost reduction for the remainder of 2020 of approximately $5 million as a result of these actions. Given the high level of uncertainty associated with the timing, and extent of the COVID-19 global pandemic, we expect to continue to assess whether additional cost actions are necessary to further adjust our operating model.

That concludes my prepared comments. And now I'll turn it back to John..

Thanks Doug. Please turn to Slide 23, and I'll discuss our current outlook for 2020. With record backlog and a fresh lineup of machines we entered the year, we were cautiously optimistic for growth and improve financial performance in 2020. Our backlog drove solid revenue in the first quarter.

But, as I mentioned earlier, due to COVID-19, shipping and travel have been restricted, delaying machine installations in the first quarter as well as into the second quarter at least. Our operations teams continue to build machines from our backlog, but we can't predict when we'll be able to install them and realize those revenues.

At the same time, our customer facing team is working hard with customers that see the value of additive manufacturing, despite the economic backdrop. That is part of the reason we set another backlog record this quarter. So, we remain excited about the future growth once we get past the COVID-19 induced economic downturn.

In addition, to the new machines we started to ship last year, we are on-track for the development of our newest machine, the extra-large metal production printer X1 160 Pro. We plan to have development completed by year-end and revenues in the first half of 2021.

Despite our fresh lineup of machines, we recognize that some capital investment decisions are likely to be postponed. This certainly increases our focus on recurring revenue, which provides a more stable revenue stream.

Finally, we continue to be proactive to respond to the market situation, ensuring we come out of this crisis stronger than when we entered. Please turn to Slide 24, for my closing slide.

We have engaged in discussions with some of our customers and some potential new customers, as others have stated publicly that the current COVID-19 pandemic reveals shortcomings in the global supply chain. Some companies are looking for ways to revamp their supply chains with a more decentralized production method that makes it more resilient.

This could lead to the accelerated adoption of 3D printing. Our customers are attracted to the faster response to changing market demands, de-risking of global supply chains, and in many cases lower total cost, which is now being delivered by binder jet printing. We know that many things will change as a result of this historic pandemic.

We can't predict exactly what or how things will change. But we can say that ExOne has the capabilities to support manufacturers as they move forward to success in the new world. That concludes my prepared comments. And now, let's open up the lines for questions..

[Operator Instructions] The first question is from Brian Kinstlinger, Alliance Global Partners. Please go ahead, sir..

I hope your daughter is doing okay in the ICU and God bless the work she's done. You talked about the international restrictions on travel, but I guess I'm curious about North America.

Have you been able to deliver installed machines quarter to-date in the U.S.?.

Brian, this is Doug. We have. Domestic travel for the most part still been pretty clean. Certain companies depending on what their geographies are, may have restrictions for access by outsiders, but for the most part, we have been able to continue work on a number of machines and have closed out a few transactions here in the second quarter already..

Great, that's helpful. And then you obviously mentioned difficult to assess the impact long-term and even short-term on capital decisions, I appreciate that. In light of the difficult economic conditions, what are prospective customers saying, are they communicating delays? And is there a reasonable scenario, do you believe, at least in the U.S.

side that you won't be able to deliver all of your backlog and install it this year, even if social distance eases?.

Yes, thanks, Brian. I think there's kind of two questions there. One is the perspective for new orders and I'll talk about that. Broadly as a result of the pandemic, one of the things customers do many times is just put a halt to things until they can see through the fog a little bit.

Yes, the good news is I think a lot of these customers understand the importance of additive to their future product roadmaps. So many of the projects we're working on are not for products that are out today, but for products that are going to be launched in 2022 or 2021.

So, we continue to see customers making, at a reduced level positive decisions to move forward there. It certainly affects us, it varies by industry.

That's why I pointed out the real diversity of our industry obviously, things like aerospace and oil and gas are more effective than let's say, medical or other general industrial like food processing equipment.

So, we're seeing a variety of responses, but overall there are still positive opportunities out there that our customer facing team is pushing through.

Do you want to take the second part?.

Sure, yes. So if you look at the business currently, and you hit on this with your first question, we continue to have the ability to move around domestic-to-domestic. And that applies both for the U.S. operation as well as Germany and Japan, where we've seen sort of similar impacts the ability to move around domestically, but just not internationally.

There's no doubt that when you look at the backlog that we have, we have various scenarios that suggest when those transactions may be able to be completed, either within 2020 or then beyond.

In a best case scenario, we believe that those transactions are gettable in 2020 but that's contingent on international travel restrictions being lifted and having our teams be able to get out and execute the work understanding that there's a pretty heavy concentration of work to be completed given the slowdown in the large number of machine contracts that we currently have..

Great, thank you for that.

The reusable metal cartridges, how and when do you see this impacting the consumable side your business, which I guess I assume is the main benefit for ExOne, is that right?.

Yes I mean, frankly, it just started as a some project to say how could, we help there - broadly has been recognition that 3D printing has been very responsive in conjunction with response to COVID-19. Some of that - much of that that press has been on the polymer side, for head, face shields, et cetera.

We saw the opportunity with the unique technology that binder jet can deliver a variety of porosities that are used in industrial filters. And so, we thought about it and we came into, try it with mask and - we're seeing very good initial testing results. Yes, we haven't quantified it.

I frankly, we meet daily on it with our collaborators, including end customers, medical centers, and now have as a result of the press release, upwards of 20 different companies that are very interested in incorporating this in their masks or in their future mask designs. We haven't been able to quantify it.

I think it would be just normal course, broadly. And I just think like, as other people have said, despite some positive things like this for us, COVID is a drag, but this is a really interesting sustainable solution that we think has legs for the long-term..

Last question I have on the cost side. Do we expect to see about $1.6 million less in operating expenses per quarter, beginning in 2Q, is it more backend loaded Doug.

And then are there any severance or other cash charges we should think about for the restructuring?.

The way we have it mapped out its pretty ratable for the remainder of the year, the actions that we did take, were sort of near the end of March and very early in April. And we're sort of based on the timeline of how we were sort of getting out in front of the market conditions that ensued.

There's not a substantial charge that we expect to incur, associated even with the permanent employee terminations. But nonetheless, I think, we're looking at it as being fairly well spread out for the remainder of the year..

The next question is from Chris Van Horn, FBR. Please go ahead, sir..

Good morning, thanks for taking my call. And thank you for everything you're doing on the healthcare side with your printers. Just want to follow-up on the previous caller, just how were conversations going real-time and you're hearing as the economy is somewhat opening back up.

There's some demand happening, just want to know - is this the weekly dynamic process where - you're going to have your conversations ramp up or just to take a temperature of what you're seeing out there right now?.

Yes, I'd say again, one of the advantage of diversity and Doug mentioned the geographic diversity. So this is, we saw this starting in Asia and then Europe and then the U.S. And so in some ways, different geographies are coming out of this at different speeds obviously.

The other thing that happened I alluded to it last time is there was an initial response was shutdown capital spending, but that - in the U.S. particularly what I would say which maybe I've a little bit closer touch with on a day-to-day basis, that happened for two or three weeks.

And then as customers got through that and understood their plans and again, recognized the roadmaps that they have, that our capital and our equipment is tied to their future roadmaps, those discussions ensued.

Again, our customer facing team has been effective, even being remote and in some ways, particularly on the marketing side, we've had, significant interactions with customers and leads coming. So, there is that phenomenon.

And then, as I mentioned in my last slide, there is the start of, and I don't want to overplay this, but the start of these discussions about maybe my supply chain should be reconfigured.

And there's opportunity to look at the current cost of ownership with production based binder jet printing of more decentralised production closer to the customer and we're having those discussions all the time.

So that's not a short-term impact, but I think that's also weighing into the discussions and probably Board level conversations around the various countries. And again, that's not solely a U.S. thing that's a German thing or an Italian thing or a Japanese thing, et cetera..

Got it, okay. Thanks for that color.

And then how about your supply chain, have you seen any disruptions or interruptions that are affecting things?.

So thanks, we did look very early on this and we continue to monitor. Initially, our concern was primarily for electronics that may have been embedded inside of either control systems or subassemblies that we buy. We've not had any disruptions on that. We've been assured by our customer or our supply base that we have that.

We're also since we provide consumables have looked at our supply chain of incoming chemistries and feel that there is adequate supply out there. So, yes the supply chain has responded well. Frankly, most of our supply chain is in domestic either in Western Europe or in the U.S..

Okay. Got it. And I just want to make sure I heard you correctly on the gross margin side, the percentage - the margin down tick from last year I believe you said it was mainly due to price.

Was that just due to price concessions, competitive forces, any detail around that pricing environment?.

So a couple of areas, number one, I think we - in prior calls we talked a little bit about there's been some pricing pressure on the material - the consumable materials side. There has been a little bit of pricing pressure. Our margins are down a bit there.

The discreet machines that varies from period to period and in this particular quarter, we just introduced the new machine. The early models of the 25 pro are probably going to be a little bit less of a return than maybe what we've historically experienced on some of our other machine types.

So those two on the pricing side are probably the most significant elements notwithstanding the other items that we mentioned on the call..

The next question is from Jed Dorsheimer, Canaccord Genuity. Please go ahead..

Let me echo the sentiment about your daughter. John..

Thanks Jed..

So with respect to the business, what was the geographic breakdown on the tool side?.

We saw a little bit of an increase relative to normal performance in the U.S., which represented about 40%. The other two regions were split sort of evenly about 30/30. So we had been experiencing a little bit of an uptick in Asia recently, and that sort of leveled off just a bit.

Europe was down a little bit compared to where they had been running at, and that was then ended up being to the benefit of the U.S..

I'm assuming, but I'd rather just ask the question that is the travel restrictions that are hampering the timing and set up as you look forward to the result of the pandemic? Is that mostly coming from Asia or is it equally spread between Asia and Europe?.

So it's pretty much equally spread. We can do Japan-to-Japan transactions, and we've continued to do that. We're currently shut out from China, but we hadn't been selling a lot of systems into China.

We do have a few and into Asia more broadly of the Europe-to-Europe transactions to the limited movement that exists there, although we're starting to see signs that may be opening up has been a bit of a detriment. And so that's probably the biggest effect..

Got it. Okay. John just on cost structure, if we just assume, 2020 is flat with '19, and again, this is just for the exercise, not guidance or anything like that.

When I look at the cost reductions that you've put in place, should I just take the $5 million for three quarters in kind of getting to a OpEx of like a $28 million, $29 million at those levels? Or are there other nuances that would affect the cost structure?.

No, I think so. It'll be spread from our perspective. We believe it'll be spread pretty evenly from Q2 to Q4, so dividing by three makes a lot of sense.

And then in terms of the allocation as to where it's targeted or a little heavier on the COGS and the G&A side, a little bit less intensive on the R&D side and it depends a little bit on how these - the short work program in Germany plays out and how that allocation really ends up because we do have some flexibility as to how we've set that up and how we bring people in and out based on scheduling.

So there is a little bit obviously we're trying to align the production with sort of a revised forecast internally that's down a bit. So you can anticipate that the fixed cost of goods sold is likely to come down based on these actions, maybe to the tune of, let's say about a third and then the remainder going to the G&A and to the R&D efforts..

Got it. Thank you.

And then last question, John, could you just remind me of - so the new tool line up? Does that shift the end market segmentation at all? And if so, how might that shift the focus as we look forward?.

Yes, I would say on the sand side of the business, I don't think there'll be a dramatic shift, I think we continue to improve productivity of the new tools we have there. So, I would assume that the output or the split by category is about the same. On the direct metal side, as we introduced particularly the 160.

Again, even though that is moving more towards production where, let's say the Internet was more on R&D and education - is across the Board. We have we have a number of customers and they spread into categories from Defense to Automotive to food processing to precious metal production. So it's really pretty broad.

So I think our split of end market stays consistent..

Got it..

Just really nice..

So I guess one follow-up there. Is you're kind of feeding these markets, you've seen sort of one and two types of orders.

Is there a specific end market that you think is that you're seeing the signs of kind of an earnest ramp that maybe COVID pushes things out by a year but you know that you think will be running for sort of at - where the value proposition might be clear than others?.

Yes, I guess. There is that broad point I brought up at the end, which is supply chain de-risking, and, with lower cost production of metal parts, can I bring things back reassure decentralised, that's a broad thing. As far as particular segments, we see interest for relevant to automotive on the EV side.

So I think people that are coming up with either hybrid or EV vehicles, I think there is folks that are absolutely looking at high volume applications there. I think some of the unique materials we're bringing into market and tool steels, we're seeing that in a - it's really broad jet, so it's hard to say there is one that's going to break out.

There is two or three that I would say are really interested in big expansions as we get through this crisis..

[Operator Instructions] We have a question from [indiscernible]. Please go ahead, sir..

I stopped asking questions after a few others have had similar questions. But let me ask you this. You say you're a global leader in the industrial sand and metal 3D printing binder jetting technology. Can you explain in a simplistic way why binder jet printing in your mind may be the way to go for production, manufacturing.

And also if you can say how your product line or products, what the advantages and different ways to differentiate between yours and the others that are either in the field or coming in the field or trying to make a name for themselves like desktop, [Hewlett-Packard] et cetera..

Thanks [Ralph]. Binder jetting is one of multiple different tools in the additive world. It's become recognised recently that it is the highest productivity, lowest cost of ownership for metal parts. That is something that is attracted some of those names you just described.

So we've been in this business for 25 years, they've been coming in the last two or three years. So A) I think that recognition says it's lower cost, it's lower cost for a couple reasons, the scalability and speed, a majority of additive processes have a singular - almost a raster to build a part where we're going in a serial fashion to build layers.

And that speed is one key element of the productivity. The second key is lower cost materials. Our materials tend to be dramatically lower cost compared to laser powder, bed fusion, potentially even a tenth of the cost, because they're closer to standard commodity products that are used in powder metallurgy.

So those are the two primary reasons why binder jetting is the future of production, metal printing. As far as ExOne advantages, I already described we've been in this a long time, which actually does a couple things.

One, it ensures that we have - it shows we have a large install base, that install base produces a recurring revenue plus gives us experiences with these customers. Someone coming in new they're trying to place their first machine or the fifth machine where we have hundreds of machines out there.

Our machines also are the most productive in the industry. So if you're coming into this space to get high productivity, why wouldn't you go to the highest productivity machine and that's us.

Finally, I would say the breath because of that experience, and because of the- features of our equipment and our platforms, we have the widest range of materials. So some customers are very interested in standard stainless steels. Some are interested in aluminums or titaniums, some are interested in exotic ceramics.

We're able to produce across a wide range of those. So, in a downturn such as this, that also is an advantage because different folks have different needs and those maybe customers who are buying now.

So I’d say those are all the not just the reasons why binder jetting is the future of metal for 3D printing, but also why ExOne has significant advantages over new entrance..

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I'd like to turn the call back over to management for closing remarks. Please go ahead..

Thank you all for your time today. And thank you to our team members around the world who are working hard to drive collaboration, innovation and acceleration for the digital transformation of manufacturing. Take care all, talk to you next quarter..

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