ExOne goes public, share price closes up 47 percent

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ExOne, the Pittsburgh region's newest public company, got an enthusiastic welcome from investors Thursday, sending shares of the North Huntingdon 3-D printing company up 47 percent in heavy trading.

ExOne shares debuted at $18 per share and traded as high as $27.25 before closing at $26.52, up $8.52. Nearly 6.6 million shares changed hands on the Nasdaq exchange.

The 5.3 million offering included 300,000 shares owned by chairman and CEO S. Kent Rockwell, the company's largest stockholder and son of industrialist Willard F. Rockwell.

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If the demand is there, investment banks underwriting the offering have an option to sell another 795,000 shares, including 311,667 owned by Rockwell Holdings, an affiliate of Mr. Rockwell.

Based on the closing price and if investors buy all the shares offered, ExOne would have a market capitalization -- the value of all of its outstanding shares -- of about $352 million.

The company expects to generate up to $85.2 million from the offering, depending on whether underwriters sell the additional shares over the next 30 days.

Proceeds will be used to expand capacity and the number of metals ExOne can make products from, to repay about $9.8 million in debt owed to an affiliate of Mr. Rockwell, and $3 million to purchase affiliates of the company.

ExOne makes 3-D printers used to produce complex parts from digital images. Advocates of the technology contend it will spark the next industrial revolution and cause more U.S. manufacturers to make more products domestically rather than overseas.

The company lost $11.1 million in the first nine months of 2012 on revenue of $15.9 million, according to documents filed with the Securities and Exchange Commission. It lost $8 million in 2011 on revenue of $15.3 million.

ExOne comes to market at a time when investor appetite has bid up prices of two 3-D printing companies that are already publicly traded. Shares of 3D Systems of Rock Hill, S.C., jumped 270 percent last year, while those of Minneapolis-based Stratasys jumped 164 percent.

"The market has been looking at these 3-D printers and for any kind of exposure they can get to this base," Morningstar analyst Daniel Holland said.

He was not surprised by ExOne's first-day performance, but it did not change his view that ExOne faces significant opportunities as well as risks. In a note to investors Wednesday, Mr. Holland wrote that the company plans to use cash from the IPO to triple capacity by 2015, a project that may be a challenge to execute.

"Right now, you have very heavy growth expectations put on the stock and the company has not proven yet that it can deliver on those terms," he said in an interview.

ExOne initially expected to price its shares between $14 and $16, then raised its estimate this week to $16 to $18.

The company used to be part of Extrude Hone, which was sold in 2005 to Kennametal, a Latrobe tool maker. ExOne was not part of the sale and was purchased two years later by Mr. Rockwell for $7.2 million. He and other investors have invested another $40.7 million in equity and debt since then, according to SEC filings.

Mr. Rockwell would own 37.1 percent of the stock if all the shares he and the company are offering are purchased.

The company's 3-D printers slice digital images of industrial pumps, automotive equipment and other complex products into hundreds or thousands of layers the width of a human hair. The data is sent to a printer similar to a inkjet printer.

But instead of ink, the printer emits alternating layers of sand and powdered metals into a "build box," where a liquid binder holds the layers together. The result is a physical version of the digital image.

ExOne's customers include Boeing, Ford Motor, BMW, Caterpillar and Deere & Co.

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Len Boselovic: lboselovic@post-gazette.com or 412-263-1941. First Published February 7, 2013 3:30 PM


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