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Desktop Metal Announces Fourth Quarter and Full Year 2022 Financial Results and Initiates 2023 Guidance

  • Record fourth quarter revenue of $60.6 million, up 6.8% from the fourth quarter of 2021
  • Record full year 2022 revenue of $209.0 million, up 86.0% from 2021
  • Cost reduction initiatives on-track to deliver $100 million in aggregate, annualized cost savings in 2023, prioritizing path to profitability
  • Initiates full year 2023 revenue guidance of between $210 and $260 million

Desktop Metal, Inc. (NYSE: DM) today announced financial results for the fourth quarter and full year ended December 31, 2022.

“Desktop Metal delivered record revenue for fourth quarter and full year 2022, fueled by our differentiated portfolio of AM 2.0 mass production solutions, our strong market position, and the team’s solid execution amidst an unsteady macro environment,” said Ric Fulop, Founder and CEO of Desktop Metal. “We also took actions to streamline the business and expanded our cost reduction plans to $100 million in annualized cost savings to prioritize our path to profitability and position the business for long-term growth. As a result, we enter 2023 a stronger, more resilient company focused on driving another year of revenue growth at scale, delivering on our cost reduction measures, and dramatically improving adjusted EBITDA and cash flow, in order to capitalize on the next stage of secular growth in the additive manufacturing market.”

Recent Business Highlights:

  • Continued and expanded the cost reduction plan announced in 2022 to add an additional $50 million in annualized savings after successfully completing $50 million in annualized savings in 2022. Total combined $100 million in annualized cost savings are on-track in order to reduce expense structure, drive margin expansion, and prioritize path to profitability
  • Announced strategic collaboration with Align Technology to accelerate adoption of digital dentistry in the $30 billion annual dental parts market. Align’s market-leading iTero intraoral scanners will be offered as a seamless managed service to dentists in a subscription model with recurring revenue, enabling a gateway for a connected suite of digital dentistry solutions with a workflow backed by Desktop Labs’ experienced network of digitized dental laboratories and premium Desktop Health 3D printers and materials
  • Commenced shipments of Production System™ P-50 in 2022 including continued traction with automotive, industrial, and other major end markets. Recently signed master supply agreement with one of the largest consumer electronics companies in the world
  • Launched the all-new S-Max Flex® for affordable and scalable digital sand casting, leveraging Single Pass Jetting™ technology
  • Unveiled FreeFoam, a revolutionary, expandable 3D printable resin designed for volume production of foam parts
  • Launched Figur G15, the first commercial platform of its kind to shape standard sheet metal on demand using patent-pending Digital Sheet Forming (DSF) technology
  • Installations of additive manufacturing systems for metal parts surpassed 1,100 units including some of largest production deployments in additive manufacturing

Fourth Quarter 2022 Financial Highlights:

  • Revenue of $60.6 million, up 6.8% from the fourth quarter of 2021
  • GAAP gross margin of 13.7%; non-GAAP gross margin of 24.3%, a sequential improvement of 440 basis points from the third quarter of 2022
  • GAAP net loss of $312.4 million, including $269.3 million of goodwill impairment and $10.1 million of amortization of acquired intangible assets; non-GAAP net loss of $24.0 million
  • Adjusted EBITDA of $(21.1) million

Full Year 2022 Financial Highlights:

  • Revenue of $209.0 million, up 86.0% from 2021
  • Revenue contribution of 24% from high-margin consumables, services, and subscription
  • GAAP gross margin of 7.2%; non-GAAP gross margin of 22.5%
  • GAAP net loss of $740.3 million, including $498.8 million of goodwill impairment and $38.7 million of amortization of acquired intangible assets; non-GAAP net loss of $130.7 million
  • Adjusted EBITDA of $(118.4) million
  • Cash, cash equivalents, and short-term investments of $184.5 million as of December 31, 2022

Outlook for Full Year 2023:

  • Revenue expectation of between $210 to $260 million for full year 2023
  • Adjusted EBITDA expectation of between $(50) to $(25) million for full year 2023, with expectation to achieve Adjusted EBITDA breakeven before year end 2023

Desktop Metal has not provided a reconciliation of its Adjusted EBITDA outlook to net income because estimates of all of the reconciling items cannot be provided without unreasonable efforts. See “Non-GAAP Financial Information.”

Conference Call Information:

Desktop Metal will host a conference call on Wednesday, March 1, 2023 at 4:30 p.m. ET to discuss fourth quarter and full year 2022 results. Participants may access the call at 1-877-407-4018, international callers may use 1-201-689-8471, and request to join the Desktop Metal financial results conference call. A simultaneous webcast of the conference call and the accompanying summary presentation may be accessed online at the Events & Presentations section of https://ir.desktopmetal.com. A replay will be available shortly after the conclusion of the conference call at the same website.

About Desktop Metal:

Desktop Metal (NYSE:DM) is driving Additive Manufacturing 2.0, a new era of on-demand, digital mass production of industrial, medical, and consumer products. Our innovative 3D printers, materials, and software deliver the speed, cost, and part quality required for this transformation. We’re the original inventors and world leaders of the 3D printing methods we believe will empower this shift, binder jetting and digital light processing. Today, our systems print metal, polymer, sand and other ceramics, as well as foam and recycled wood. Manufacturers use our technology worldwide to save time and money, reduce waste, increase flexibility, and produce designs that solve the world’s toughest problems and enable once-impossible innovations. Learn more about Desktop Metal and our #TeamDM brands at www.desktopmetal.com.

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical facts contained in these communications, including statements regarding Desktop Metal’s future results of operations and financial position, financial targets, business strategy, plans and objectives for future operations, are forward-looking statements. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to risks associated with the integration of the business and operations of acquired businesses, our ability to realize the benefits from cost saving measures, and supply and logistics disruptions, including shortages and delays. For more information about risks and uncertainties that may impact Desktop Metal’s business, financial condition, results of operations and prospects generally, please refer to Desktop Metal’s reports filed with the SEC, including without limitation the “Risk Factors” and/or other information included in the Form 10-K filed with the SEC on March 1, 2023, and such other reports as Desktop Metal has filed or may file with the SEC from time to time. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Desktop Metal, Inc. assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

DESKTOP METAL, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

December 31,

 

 

2022

 

2021

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

76,291

 

 

$

65,017

 

Current portion of restricted cash

 

 

4,510

 

 

 

2,129

 

Short‑term investments

 

 

108,243

 

 

 

204,569

 

Accounts receivable

 

 

38,481

 

 

 

46,687

 

Inventory

 

 

91,736

 

 

 

65,399

 

Prepaid expenses and other current assets

 

 

17,155

 

 

 

18,208

 

Total current assets

 

 

336,416

 

 

 

402,009

 

Restricted cash, net of current portion

 

 

1,112

 

 

 

1,112

 

Property and equipment, net

 

 

56,271

 

 

 

58,710

 

Goodwill

 

 

112,955

 

 

 

639,301

 

Intangible assets, net

 

 

219,830

 

 

 

261,984

 

Other noncurrent assets

 

 

27,763

 

 

 

25,480

 

Total Assets

 

$

754,347

 

 

$

1,388,596

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

25,105

 

 

$

31,558

 

Customer deposits

 

 

11,526

 

 

 

14,137

 

Current portion of lease liability

 

 

5,730

 

 

 

5,527

 

Accrued expenses and other current liabilities

 

 

26,723

 

 

 

33,829

 

Current portion of deferred revenue

 

 

13,719

 

 

 

18,189

 

Current portion of long‑term debt, net of deferred financing costs

 

 

584

 

 

 

825

 

Total current liabilities

 

 

83,387

 

 

 

104,065

 

Long-term debt, net of current portion

 

 

311

 

 

 

548

 

Convertible notes

 

 

111,834

 

 

 

 

Contingent consideration, net of current portion

 

 

 

 

 

4,183

 

Lease liability, net of current portion

 

 

17,860

 

 

 

13,077

 

Deferred revenue, net of current portion

 

 

3,664

 

 

 

4,508

 

Deferred tax liability

 

 

8,430

 

 

 

10,695

 

Other noncurrent liabilities

 

 

1,359

 

 

 

3,170

 

Total liabilities

 

 

226,845

 

 

 

140,246

 

Commitments and Contingencies (Note 17)

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively

 

 

 

 

 

 

Common Stock, $0.0001 par value—500,000,000 shares authorized; 318,235,106 and 311,737,858 shares issued at December 31, 2022 and December 31, 2021, respectively, 318,133,434 and 311,473,950 shares outstanding at December 31, 2022 and December 31, 2021, respectively

 

 

32

 

 

 

31

 

Additional paid‑in capital

 

 

1,874,792

 

 

 

1,823,344

 

Accumulated deficit

 

 

(1,308,954

)

 

 

(568,611

)

Accumulated other comprehensive loss

 

 

(38,368

)

 

 

(6,414

)

Total Stockholders’ Equity

 

 

527,502

 

 

 

1,248,350

 

Total Liabilities and Stockholders’ Equity

 

$

754,347

 

 

$

1,388,596

 

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

2022

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

 

 

Products

 

$

190,248

 

 

$

105,994

 

 

$

13,718

 

Services

 

 

18,775

 

 

 

6,414

 

 

 

2,752

 

Total revenues

 

 

209,023

 

 

 

112,408

 

 

 

16,470

 

Cost of sales

 

 

 

 

 

 

 

 

 

Products

 

 

178,952

 

 

 

87,450

 

 

 

26,945

 

Services

 

 

15,000

 

 

 

6,665

 

 

 

4,574

 

Total cost of sales

 

 

193,952

 

 

 

94,115

 

 

 

31,519

 

Gross profit (loss)

 

 

15,071

 

 

 

18,293

 

 

 

(15,049

)

Operating expenses

 

 

 

 

 

 

 

 

 

Research and development

 

 

96,878

 

 

 

68,131

 

 

 

43,136

 

Sales and marketing

 

 

68,091

 

 

 

47,995

 

 

 

13,136

 

General and administrative

 

 

83,065

 

 

 

78,041

 

 

 

20,734

 

In-process research and development assets acquired

 

 

 

 

 

25,581

 

 

 

 

Goodwill impairment

 

 

498,800

 

 

 

 

 

 

 

Total operating expenses

 

 

746,834

 

 

 

219,748

 

 

 

77,006

 

Loss from operations

 

 

(731,763

)

 

 

(201,455

)

 

 

(92,055

)

Change in fair value of warrant liability

 

 

 

 

 

(56,576

)

 

 

56,417

 

Interest expense

 

 

(1,743

)

 

 

(149

)

 

 

(328

)

Interest and other (expense) income, net

 

 

(8,335

)

 

 

(11,822

)

 

 

1,011

 

Loss before income taxes

 

 

(741,841

)

 

 

(270,002

)

 

 

(34,955

)

Income tax benefit

 

 

1,498

 

 

 

29,668

 

 

 

940

 

Net loss

 

$

(740,343

)

 

$

(240,334

)

 

$

(34,015

)

Net loss per share—basic and diluted

 

$

(2.35

)

 

$

(0.92

)

 

$

(0.22

)

Weighted average shares outstanding, basic and diluted

 

 

314,817

 

 

 

260,770

 

 

 

157,906

 

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

2022

 

2021

 

2020

Net loss

 

$

(740,343

)

 

$

(240,334

)

 

$

(34,015

)

Other comprehensive (loss) income, net of taxes:

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale marketable securities, net

 

 

(290

)

 

 

(40

)

 

 

(84

)

Foreign currency translation adjustment

 

 

(31,664

)

 

 

(6,365

)

 

 

 

Total comprehensive (loss) income, net of taxes of $0

 

$

(772,297

)

 

$

(246,739

)

 

$

(34,099

)

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Legacy Convertible Preferred Stock

 

 

Common Stock

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—January 1, 2020

 

100,038,109

 

 

$

436,553

 

 

 

26,813,113

 

 

$

3

 

$

16,722

 

 

$

(294,262

)

 

$

75

 

 

$

(277,462

)

Retroactive application of recapitalization (Note 1)

 

(100,038,109

)

 

 

(436,553

)

 

 

128,100,821

 

 

 

13

 

 

436,520

 

 

 

 

 

 

 

 

 

436,533

 

Adjusted balance, beginning of period

 

 

 

 

 

 

 

154,913,934

 

 

 

16

 

 

453,242

 

 

 

(294,262

)

 

 

75

 

 

 

159,071

 

Exercise of Common Stock options

 

 

 

 

 

 

 

521,925

 

 

 

 

 

325

 

 

 

 

 

 

 

 

 

325

 

Vesting of restricted Common Stock

 

 

 

 

 

 

 

5,307,357

 

 

 

1

 

 

6

 

 

 

 

 

 

 

 

 

7

 

Issuance of Common Stock in connection with acquisitions

 

 

 

 

 

 

 

61,060

 

 

 

 

 

500

 

 

 

 

 

 

 

 

 

500

 

Repurchase of shares for employee tax withholdings

 

 

 

 

 

 

 

(9,308

)

 

 

 

 

(101

)

 

 

 

 

 

 

 

 

(101

)

Stock‑based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

8,006

 

 

 

 

 

 

 

 

 

8,006

 

Common Stock warrants issued and exercised

 

 

 

 

 

 

 

692,366

 

 

 

 

 

1,915

 

 

 

 

 

 

 

 

 

1,915

 

Reverse recapitalization, net of transaction costs

 

 

 

 

 

 

 

63,139,263

 

 

 

6

 

 

380,295

 

 

 

 

 

 

 

 

 

380,301

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,015

)

 

 

 

 

 

(34,015

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(84

)

 

 

(84

)

BALANCE—December 31, 2020

 

 

 

$

 

 

 

224,626,597

 

 

$

23

 

$

844,188

 

 

$

(328,277

)

 

$

(9

)

 

$

515,925

 

Exercise of Common Stock options

 

 

 

 

 

 

 

5,732,247

 

 

 

1

 

 

6,425

 

 

 

 

 

 

 

 

 

6,426

 

Vesting of restricted Common Stock

 

 

 

 

 

 

 

491,293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings - RSA

 

 

 

 

 

 

 

(109,150

)

 

 

 

 

(958

)

 

 

 

 

 

 

 

 

(958

)

Vesting of restricted share units

 

 

 

 

 

 

 

650,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings - RSU

 

 

 

 

 

 

 

(61,498

)

 

 

 

 

(541

)

 

 

 

 

 

 

 

 

(541

)

Issuance of Common Stock in connection with acquisitions

 

 

 

 

 

 

 

57,267,401

 

 

 

5

 

 

620,585

 

 

 

 

 

 

 

 

 

620,590

 

Issuance of Common Stock in connection with acquired in-process research and development

 

 

 

 

 

 

 

334,370

 

 

 

 

 

4,300

 

 

 

 

 

 

 

 

 

4,300

 

Stock‑based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

28,778

 

 

 

 

 

 

 

 

 

28,778

 

Vesting of Trine Founder Shares

 

 

 

 

 

 

 

1,850,938

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock issued in connection with warrants exercised

 

 

 

 

 

 

 

20,690,975

 

 

 

2

 

 

320,567

 

 

 

 

 

 

 

 

 

320,569

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(240,334

)

 

 

 

 

 

(240,334

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,405

)

 

 

(6,405

)

BALANCE—December 31, 2021

 

 

 

$

 

 

 

311,473,950

 

 

$

31

 

$

1,823,344

 

 

$

(568,611

)

 

$

(6,414

)

 

$

1,248,350

 

Exercise of Common Stock options

 

 

 

 

 

 

 

2,310,931

 

 

 

 

 

3,190

 

 

 

 

 

 

 

 

 

3,190

 

Vesting of restricted Common Stock

 

 

 

 

 

 

 

157,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted share units

 

 

 

 

 

 

 

4,153,939

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

1

 

Repurchase of shares for employee tax withholdings - RSU

 

 

 

 

 

 

 

(74,719

)

 

 

 

 

(243

)

 

 

 

 

 

 

 

 

(243

)

Issuance of common stock related to settlement of contingent consideration

 

 

 

 

 

 

 

112,202

 

 

 

 

 

500

 

 

 

 

 

 

 

 

 

500

 

Stock‑based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

48,001

 

 

 

 

 

 

 

 

 

48,001

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(740,343

)

 

 

 

 

 

(740,343

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,954

)

 

 

(31,954

)

BALANCE—December 31, 2022

 

 

 

$

 

 

 

318,133,434

 

 

$

32

 

$

1,874,792

 

 

$

(1,308,954

)

 

$

(38,368

)

 

$

527,502

 

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

2022

 

2021

 

2020

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net loss

 

$

(740,343

)

 

$

(240,334

)

 

$

(34,015

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

50,767

 

 

 

24,854

 

 

 

8,589

 

Stock‑based compensation

 

 

48,001

 

 

 

28,778

 

 

 

8,006

 

Goodwill impairment

 

 

498,800

 

 

 

 

 

 

 

Change in fair value of warrant liability

 

 

 

 

 

56,576

 

 

 

(56,417

)

Change in fair value of subscription agreement

 

 

 

 

 

2,920

 

 

 

 

Expense related to Common Stock warrants issued

 

 

 

 

 

 

 

 

1,915

 

Amortization (accretion) of discount on investments

 

 

(888

)

 

 

3,021

 

 

 

75

 

Amortization of debt financing cost

 

 

 

 

 

9

 

 

 

19

 

Amortization of deferred costs on convertible notes

 

 

453

 

 

 

 

 

 

 

Provision for bad debt

 

 

975

 

 

 

447

 

 

 

377

 

Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net

 

 

(45

)

 

 

 

 

 

 

Acquired in-process research and development

 

 

 

 

 

25,581

 

 

 

 

Loss on disposal of property and equipment

 

 

224

 

 

 

74

 

 

 

18

 

Foreign exchange (gains) losses on intercompany transactions, net

 

 

259

 

 

 

182

 

 

 

 

Net increase (decrease) in accrued interest related to marketable securities

 

 

847

 

 

 

(819

)

 

 

(3

)

Net unrealized (gain) loss on equity investment

 

 

6,332

 

 

 

9,660

 

 

 

 

Net unrealized (gain) loss on other investments

 

 

1,595

 

 

 

(130

)

 

 

 

Deferred tax benefit

 

 

(1,498

)

 

 

(29,668

)

 

 

(940

)

Change in fair value of contingent consideration

 

 

(1,567

)

 

 

(429

)

 

 

 

Foreign currency transaction (gain) loss

 

 

44

 

 

 

7

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

6,737

 

 

 

(18,299

)

 

 

(2,370

)

Inventory

 

 

(28,183

)

 

 

(16,962

)

 

 

(1,303

)

Prepaid expenses and other current assets

 

 

1,787

 

 

 

(8,937

)

 

 

901

 

Other assets

 

 

2,505

 

 

 

(3

)

 

 

 

Accounts payable

 

 

(6,595

)

 

 

12,797

 

 

 

(2,637

)

Accrued expenses and other current liabilities

 

 

(10,613

)

 

 

(8,761

)

 

 

(2,391

)

Customer deposits

 

 

(2,037

)

 

 

(2,569

)

 

 

(845

)

Current portion of deferred revenue

 

 

(4,749

)

 

 

5,989

 

 

 

774

 

Change in right of use assets and lease liabilities, net

 

 

(4,298

)

 

 

(641

)

 

 

(328

)

Other liabilities

 

 

(41

)

 

 

1,609

 

 

 

 

Net cash used in operating activities

 

 

(181,531

)

 

 

(155,048

)

 

 

(80,575

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(11,517

)

 

 

(7,683

)

 

 

(1,429

)

Purchase of other investments

 

 

 

 

 

(3,620

)

 

 

(3,000

)

Proceeds from other investments

 

 

3,155

 

 

 

 

 

 

 

Purchase of equity investment

 

 

 

 

 

(20,000

)

 

 

 

Proceeds from sale of property and equipment

 

 

6

 

 

 

44

 

 

 

 

Proceeds from policy buyout

 

 

 

 

 

333

 

 

 

 

Purchase of marketable securities

 

 

(158,404

)

 

 

(330,873

)

 

 

(136,286

)

Proceeds from sales and maturities of marketable securities

 

 

248,150

 

 

 

243,349

 

 

 

109,016

 

Proceeds from capital grant

 

 

200

 

 

 

 

 

 

 

Cash paid to acquire in-process research and development

 

 

 

 

 

(21,220

)

 

 

 

Cash paid for acquisitions, net of cash acquired

 

 

(23

)

 

 

(287,624

)

 

 

(5,284

)

Net cash provided by (used in) investing activities

 

 

81,567

 

 

 

(427,294

)

 

 

(36,983

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from reverse recapitalization, net of issuance costs

 

 

 

 

 

 

 

 

534,597

 

Proceeds from the exercise of stock options

 

 

3,190

 

 

 

6,426

 

 

 

325

 

Proceeds from the exercise of stock warrants

 

 

 

 

 

170,665

 

 

 

 

Payment of taxes related to net share settlement upon vesting of restricted stock units

 

 

(243

)

 

 

(541

)

 

 

 

Repayment of loans

 

 

(542

)

 

 

 

 

 

 

Proceeds from issuance of convertible notes

 

 

115,000

 

 

 

 

 

 

 

Costs incurred in connection with the issuance of convertible notes

 

 

(3,619

)

 

 

 

 

 

 

Proceeds from PPP loan

 

 

 

 

 

 

 

 

5,379

 

Repayment of PPP loan

 

 

 

 

 

 

 

 

(5,379

)

Repayment of term loan

 

 

 

 

 

(10,000

)

 

 

 

Net cash provided by financing activities

 

 

113,786

 

 

 

166,550

 

 

 

534,922

 

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

 

 

(167

)

 

 

(87

)

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

13,655

 

 

 

(415,879

)

 

 

417,364

 

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

 

 

68,258

 

 

 

484,137

 

 

 

66,773

 

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

 

$

81,913

 

 

$

68,258

 

 

$

484,137

 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

76,291

 

 

$

65,017

 

 

$

483,525

 

Restricted cash included in other current assets

 

 

4,510

 

 

 

2,129

 

 

 

 

Restricted cash included in other noncurrent assets

 

 

1,112

 

 

 

1,112

 

 

 

612

 

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows

 

$

81,913

 

 

$

68,258

 

 

$

484,137

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Interest paid

 

$

3,488

 

 

$

148

 

 

$

322

 

Taxes paid

 

$

 

 

$

150

 

 

$

 

 

 

 

 

 

 

 

 

 

 

Non‑cash investing and financing activities:

 

 

 

 

 

 

 

 

 

Net liabilities assumed from Trine Business Combination

 

$

 

 

$

 

 

$

152,395

 

Accrued reverse recapitalization transaction costs

 

$

 

 

$

 

 

$

1,901

 

Net unrealized (gain) loss on investments

 

$

290

 

 

$

40

 

 

$

 

Exercise of private placement warrants

 

$

 

 

$

149,904

 

 

$

 

Common Stock issued for acquisitions

 

$

 

 

$

620,590

 

 

$

500

 

Common Stock issued for acquisition of in-process research and development

 

$

 

 

$

4,300

 

 

$

 

Common Stock issued for settlement of contingent consideration

 

$

500

 

 

$

 

 

$

 

Accrued purchase price related to acquisitions

 

$

 

 

$

1,800

 

 

$

200

 

Additions to right of use assets and lease liabilities

 

$

10,812

 

 

$

5,582

 

 

$

 

Purchase of property and equipment included in accounts payable

 

$

516

 

 

$

90

 

 

$

 

Purchase of property and equipment included in accrued expense

 

$

 

 

$

38

 

 

$

 

Transfers from property and equipment to inventory

 

$

4,993

 

 

$

1,068

 

 

$

 

Transfers from inventory to property and equipment

 

$

4,513

 

 

$

1,435

 

 

$

 

Accrued contingent consideration in connection with acquisitions

 

$

 

 

$

6,083

 

 

$

 

Taxes related to net share settlement upon vesting of restricted stock awards in accrued expense

 

$

 

 

$

958

 

 

$

 

Tax liabilities related to withholdings on Common Stock issued in connection with acquisitions

 

$

 

 

$

 

 

$

102

 

Deferred contract costs

 

$

1,341

 

 

$

 

 

$

 

Equipment financing

 

$

175

 

 

$

 

 

$

 

Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA.

  • We define non-GAAP gross margin as GAAP gross margin excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, acquisition-related and integration costs and inventory step-up adjustments
  • We define non-GAAP operating loss as GAAP operating loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, inventory step-up adjustments, acquisition-related and integration costs, in-process research and development assets acquired and goodwill impairment
  • We define non-GAAP net loss as GAAP net loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, inventory step-up adjustments, acquisition-related and integration costs, in-process research and development assets acquired, goodwill impairment, change in fair value of investments, change in fair value of warrant liability, and warrant expense
  • We define non-GAAP operating expense as GAAP operating expense excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, acquisition-related and integration costs, in-process research and development assets acquired and goodwill impairment including in operating expenses
  • We define EBITDA as GAAP net income (loss) excluding interest, income taxes, depreciation and amortization expense, and in-process research and development assets acquired
  • We define Adjusted EBITDA as EBITDA excluding change in fair value of warrant liability, change in fair value of investments, inventory step-up adjustment stock based compensation, restructuring, goodwill impairment, acquisition-related and integration costs, and warrant expense

In addition to Desktop Metal’s results determined in accordance with GAAP, Desktop Metal’s management uses this non-GAAP financial information to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information, when taken collectively, may be helpful to investors in assessing Desktop Metal’s operating performance.

We believe that the use of Non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends because it eliminates the effect of financing, capital expenditures, and non-cash expenses such as stock-based compensation and warrants, and provides investors with a means to compare Desktop Metal’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, investors should be aware that when evaluating non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of these measures may not be comparable to other similarly titled measures computed by other companies because not all companies calculate these measures in the same fashion.

Because of these limitations, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA on a supplemental basis. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results. Desktop Metal has not provided a reconciliation of its Adjusted EBITDA outlook to net income because estimates of all of the reconciling items cannot be provided without unreasonable efforts.

Set forth below is a reconciliation of each non-GAAP financial measure used in this press release to its most directly comparable GAAP financial measure.

DESKTOP METAL, INC.

NON-GAAP RECONCILIATION TABLE

(in thousands)

 

 

 

For the Year Ended

 

 

December 31,

(Dollars in thousands)

 

2022

 

2021

 

2020

GAAP gross margin

 

$

15,071

 

 

$

18,293

 

 

$

(15,049

)

Stock-based compensation included in cost of sales(1)

 

 

2,257

 

 

 

1,018

 

 

 

290

 

Amortization of acquired intangible assets included in cost of sales

 

 

23,707

 

 

 

8,467

 

 

 

 

Restructuring expense in cost of sales

 

 

3,273

 

 

 

 

 

 

 

Acquisition-related and integration costs included in cost of sales

 

 

1,148

 

 

 

 

 

 

 

Inventory step-up adjustment in cost of sales

 

 

1,496

 

 

 

2,194

 

 

 

 

Non-GAAP gross margin

 

$

46,952

 

 

$

29,972

 

 

$

(14,759

)

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

 

$

(731,763

)

 

$

(201,455

)

 

$

(92,055

)

Stock-based compensation(2),(3)

 

 

48,785

 

 

 

28,778

 

 

 

8,006

 

Amortization of acquired intangible assets

 

 

38,662

 

 

 

17,581

 

 

 

758

 

Restructuring expense

 

 

6,574

 

 

 

 

 

 

 

Inventory step-up adjustment in cost of sales

 

 

1,496

 

 

 

2,194

 

 

 

 

Acquisition-related and integration costs

 

 

6,766

 

 

 

23,788

 

 

 

1,101

 

In-process research and development assets acquired

 

 

 

 

 

25,581

 

 

 

 

Goodwill impairment

 

 

498,800

 

 

 

 

 

 

 

Non-GAAP operating loss

 

$

(130,680

)

 

$

(103,533

)

 

$

(82,190

)

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(740,343

)

 

$

(240,334

)

 

$

(34,015

)

Stock-based compensation(2),(3)

 

 

48,785

 

 

 

28,778

 

 

 

8,006

 

Amortization of acquired intangible assets

 

 

38,662

 

 

 

17,581

 

 

 

758

 

Restructuring expense

 

 

6,957

 

 

 

 

 

 

 

Inventory step-up adjustment in cost of sales

 

 

1,496

 

 

 

2,194

 

 

 

 

Acquisition-related and integration costs

 

 

6,766

 

 

 

23,788

 

 

 

1,101

 

In-process research and development assets acquired

 

 

 

 

 

25,581

 

 

 

 

Goodwill impairment

 

 

498,800

 

 

 

 

 

 

 

Change in fair value of investments

 

 

8,164

 

 

 

12,475

 

 

 

 

Change in fair value of warrant liability

 

 

 

 

 

56,576

 

 

 

(56,417

)

Warrant expense

 

 

 

 

 

 

 

 

1,915

 

Non-GAAP net loss

 

$

(130,713

)

 

$

(73,361

)

 

$

(78,652

)

(1)   

Includes $0.1 million of liability-award stock-based compensation associated with bonuses granted in dollar amounts and paid out in RSUs under our bonus plan (“liability-award stock-based compensation”) for the year ended December 31, 2022.

(2)   

Includes $7.3 million of stock-based compensation expense associated with the Initiative for the year ended December 31, 2022.

(3)   

Includes $1.0 million of liability-award stock-based compensation for the year ended December 31, 2022.

DESKTOP METAL, INC.

NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE

(in thousands)

 

 

 

For the Year Ended

 

 

December 31,

(Dollars in thousands)

 

2022

 

2021

 

2020

GAAP operating expenses

 

$

746,834

 

 

$

219,748

 

 

$

77,006

 

Stock-based compensation included in operating expenses(1),(2)

 

 

(46,528

)

 

 

(27,760

)

 

 

(7,716

)

Amortization of acquired intangible assets included in operating expenses

 

 

(14,955

)

 

 

(9,114

)

 

 

(758

)

Restructuring expense included in operating expenses

 

 

(3,301

)

 

 

 

 

 

 

Acquisition-related and integration costs included in operating expenses

 

 

(5,618

)

 

 

(23,788

)

 

 

(1,101

)

In-process research and development assets acquired

 

 

 

 

 

(25,581

)

 

 

 

Goodwill impairment

 

 

(498,800

)

 

 

 

 

 

 

Non-GAAP operating expenses

 

$

177,632

 

 

$

133,505

 

 

$

67,431

 

(1)   

Includes $7.3 million of stock-based compensation expense associated with the Initiative for the year ended December 31, 2022.

(2)   

Includes $0.9 million of liability-award stock-based compensation for the year ended December 31, 2022.

DESKTOP METAL, INC.

ADJUSTED EBITDA RECONCILIATION TABLE

(in thousands)

 

 

 

 

 

For the Years Ended

 

 

 

 

December 31,

(Dollars in thousands)

 

 

 

2022

 

2021

 

2020

Net loss attributable to common stockholders

 

 

 

$

(740,343

)

 

$

(240,334

)

 

$

(34,015

)

Interest (income) expense, net

 

 

 

 

1,743

 

 

 

(334

)

 

 

(610

)

Income tax expense (benefit)

 

 

 

 

(1,498

)

 

 

(29,668

)

 

 

(940

)

Depreciation and amortization

 

 

 

 

50,767

 

 

 

24,854

 

 

 

8,589

 

In-process research and development assets acquired

 

 

 

 

 

 

 

25,581

 

 

 

 

EBITDA

 

 

 

 

(689,331

)

 

 

(219,901

)

 

 

(26,976

)

Change in fair value of warrant liability

 

 

 

 

 

 

 

56,576

 

 

 

(56,417

)

Change in fair value of investments

 

 

 

 

8,164

 

 

 

12,475

 

 

 

 

Inventory step-up adjustment

 

 

 

 

1,496

 

 

 

2,194

 

 

 

 

Stock-based compensation expense(1),(2)

 

 

 

 

48,785

 

 

 

28,778

 

 

 

8,006

 

Restructuring expense

 

 

 

 

6,957

 

 

 

 

 

 

 

Goodwill impairment

 

 

 

 

498,800

 

 

 

 

 

 

 

Acquisition-related and integration costs

 

 

 

 

6,766

 

 

 

23,788

 

 

 

 

Warrant expense

 

 

 

 

 

 

 

 

 

 

1,915

 

Adjusted EBITDA

 

 

 

$

(118,363

)

 

$

(96,090

)

 

$

(73,472

)

(1)   

Includes $7.3 million of stock-based compensation expense associated with the Initiative for the year ended December 31, 2022.

(2)   

Includes $1.0 million of liability-award stock-based compensation for the year ended December 31, 2022.

 

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