April 17, 2024

First Washington News

We Do Spectacular General & News

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

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{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} from the fourth quarter of 2021

  • Record full year 2022 revenue of $209.0 million, up 86.0{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} 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

BOSTON, March 01, 2023–(BUSINESS WIRE)–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{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} from the fourth quarter of 2021

  • GAAP gross margin of 13.7{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809}; non-GAAP gross margin of 24.3{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809}, 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{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} from 2021

  • Revenue contribution of 24{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} from high-margin consumables, services, and subscription

  • GAAP gross margin of 7.2{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809}; non-GAAP gross margin of 22.5{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809}

  • 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

)