Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Desktop Metal Announces Fourth Quarter and Full Year 2023 Financial Results By: Desktop Metal, Inc. via Business Wire March 15, 2024 at 07:00 AM EDT Revenue of $52.3 million, down from $60.6 million in the same quarter a year ago, and up 22% sequentially over the prior quarter Year-over-year improvements to net loss, adjusted EBITDA, gross margins, non-GAAP gross margins, operating expenses, and operating cash flow following more than $150 million in cost reduction efforts announced since June 2022 Net loss of $(323.4) million in 2023 compared to net loss of $(740.3) million in 2022 Adjusted EBITDA of $(9.2 million), a year-over-year improvement of 56% – and the company’s strongest quarterly performance to date GAAP gross margin of (32)%; GAAP gross margin was negatively impacted by one-time non-cash restructuring activities in the quarter. Non-GAAP gross margin of 34%, a year-over-year improvement of 39.9%. Quarterly GAAP operating expenses declined 58% year over year, both periods were impacted by goodwill impairment. Quarterly non-GAAP operating expenses declined for seven consecutive quarters to $31.6 million, down 39% from the start of DM’s cost reduction initiative Cash, cash equivalents, and short-term investments closed fourth quarter 2023 at $84.5 million, as rate of cash consumption declined 25% compared to the same year-ago quarter Initiated a review of strategic alternatives for industrial photopolymer business in effort to further strengthen position in our core healthcare photopolymers and production binder jetting for metal, sand and ceramic parts Full year 2024 revenue guidance of between $175 and $215 million, and adjusted EBITDA between $(30) and $(10) million, with expectation to achieve adjusted EBITDA breakeven in the second half of 2024 Desktop Metal, Inc. (NYSE: DM), a global leader in Additive Manufacturing 2.0 technologies for mass production, today announced its financial results for the fourth quarter and full year ended December 31, 2023. “Despite a challenging capital investment environment led by elevated interest rates and slower sales cycles, I’m proud that Team DM buckled down and delivered a much improved operating performance including reduced not loss and a record adjusted EBITDA performance,” said Ric Fulop, Founder and CEO of Desktop Metal. “While we didn’t make our internal target of A-EBITDA positive by the end of the year, as some customer projects rolled into 2024, we are now very, very close to that goal,” Fulop continued. “We now enter the year with a lower cost structure that makes us resilient for the long term. The hard work will continue as we drive toward profitability, a goal that is clearly within sight despite the tough market conditions.” Fulop noted that DM continues to see strong demand for production binder jet systems that produce metal, sand and ceramic parts, as well as increasing evidence of the value of Additive Manufacturing 2.0 systems. For the full year, DM reported record recurring revenue of $65 million, a 29% increase over the prior year that now represents 34% of revenue, up from 24% from 2022. “Our all-time high recurring revenue levels prove that customers who have adopted our technology are using it successfully and getting great value from our technologies,” Fulop said. Fourth Quarter 2023 and Recent Business Highlights: Corporate Continued execution of cost reduction plans with expectation of positive adjusted EBITDA in the second half of 2024 Product Performance Desktop Metal and Evonik expand partnership, announce qualification of INFINAM® ST 6100 L on large format Additive Manufacturing 2.0 systems for high-performance, high-temperature products Desktop Health™ announces Flexcera™ Base Ultra+ dental resin for stronger, more comfortable 3D Printed dentures Desktop Metal now shipping the Figur G15 – a Digital Sheet Metal Forming machine that eliminates the need for custom tooling Desktop Health announces first patients treated with FDA-Cleared CMFlex™ – and off-the-shelf 3D printed synthetic bone graft product pioneered by Dimension Inx on the 3D-Bioplotter® Desktop Metal launches Live Monitor™ for users of Additive Manufacturing 2.0 production technology DM now has metal and ceramic parts in production in multiple high value programs in defense and aerospace with parts in several jet engine families, major platforms like F35 and in several space vehicles Growing business in Gigacasting with several global automakers Fourth Quarter 2023 Financial Highlights Revenue of $52.3 million, down from $60.6 million in the same quarter a year ago, and up 22% sequentially over the prior quarter GAAP gross margin of (32)%; GAAP gross margin was negatively impacted by restructuring activities in the quarter. Non-GAAP gross margin of 34%, a year-over-year increase of 39.9%. GAAP net loss of $(174.5) million, including $110.5 million of goodwill impairment; non-GAAP net loss of $(10.9) million Adjusted EBITDA of $(9.2) million, a year-over-year improvement of 56% – and the company’s strongest quarterly performance to date Cash, cash equivalents, and short-term investments closed fourth quarter 2023 at $84.5 million, as rate of cash consumption declined 25% compared to the same year-ago quarter Financial Outlook Revenue expectation of between $175 million to $215 million for 2024 Adjusted EBITDA of between $(30) million to $(10) million for full-year 2024 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 Friday, March 15, 2024 to discuss fourth quarter 2023 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 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, and 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: demand for Desktop Metal’s products and services; the global macro-economic environment; impacts of rapid technological change in the additive manufacturing industry; Desktop Metals’ 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-Q filed with the SEC on November 9, 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, 2023 2022 Assets Current assets: Cash and cash equivalents $ 83,845 $ 76,291 Current portion of restricted cash 233 4,510 Short‑term investments 625 108,243 Accounts receivable 37,690 38,481 Inventory 82,639 91,736 Prepaid expenses and other current assets 11,105 17,155 Total current assets 216,137 336,416 Restricted cash, net of current portion 612 1,112 Property and equipment, net 35,840 56,271 Goodwill — 112,955 Intangible assets, net 168,259 219,830 Other noncurrent assets 37,153 27,763 Total Assets $ 458,001 $ 754,347 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 18,190 $ 25,105 Customer deposits 5,356 11,526 Current portion of lease liability 7,404 5,730 Accrued expenses and other current liabilities 27,085 26,723 Current portion of deferred revenue 11,739 13,719 Current portion of long‑term debt, net of deferred financing costs 330 584 Total current liabilities 70,104 83,387 Long-term debt, net of current portion 89 311 Convertible notes 112,565 111,834 Lease liability, net of current portion 23,566 17,860 Deferred revenue, net of current portion 3,696 3,664 Deferred tax liability 3,523 8,430 Other noncurrent liabilities 2,806 1,359 Total liabilities 216,349 226,845 Commitments and Contingencies (Note 17) Stockholders’ Equity Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively — — Common Stock, $0.0001 par value—500,000,000 shares authorized; 325,277,419 and 318,235,106 shares issued as of December 31, 2023 and December 31, 2022, respectively, 325,271,670 and 318,133,434 shares outstanding as of December 31, 2023 and December 31, 2022, respectively 33 32 Additional paid‑in capital 1,908,504 1,874,792 Accumulated deficit (1,632,225) (1,308,954) Accumulated other comprehensive loss (34,660) (38,368) Total Stockholders’ Equity 241,652 527,502 Total Liabilities and Stockholders’ Equity $ 458,001 $ 754,347 See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Years Ended December 31, 2023 2022 2021 Revenues Products $ 168,091 $ 190,248 $ 105,994 Services 21,607 18,775 6,414 Total revenues 189,698 209,023 112,408 Cost of sales Products 184,614 178,952 87,450 Services 15,174 15,000 6,665 Total cost of sales 199,788 193,952 94,115 Gross profit (loss) (10,090) 15,071 18,293 Operating expenses Research and development 85,096 96,878 68,131 Sales and marketing 40,334 68,091 47,995 General and administrative 66,272 83,065 78,041 In-process research and development assets acquired — — 25,581 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Total operating expenses 313,131 746,834 219,748 Loss from operations (323,221) (731,763) (201,455) Change in fair value of warrant liability — — (56,576) Interest expense (4,099) (1,743) (149) Interest and other (expense) income, net 944 (8,335) (11,822) Loss before income taxes (326,376) (741,841) (270,002) Income tax benefit 3,105 1,498 29,668 Net loss $ (323,271) $ (740,343) $ (240,334) Net loss per share—basic and diluted $ (1.00) $ (2.35) $ (0.92) Weighted average shares outstanding, basic and diluted 322,196 314,817 260,770 See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Years Ended December 31, 2023 2022 2021 Net loss $ (323,271) $ (740,343) $ (240,334) Other comprehensive (loss) income, net of taxes: Unrealized loss (203) (290) (40) Foreign currency translation adjustment 3,911 (31,664) (6,365) Total comprehensive (loss) income, net of taxes of $0 $ (319,563) $ (772,297) $ (246,739) See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) Accumulated Additional Other Total Common Stock Paid‑in Accumulated Comprehensive Stockholders’ Shares Amount Capital Deficit (Loss) Equity BALANCE—January 1, 2021 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 Exercise of Common Stock options 1,006,046 — 1,203 — — 1,203 Vesting of restricted Common Stock 95,859 — — — — — Vesting of restricted share units 5,802,852 1 (1) — — — Repurchase of shares for employee tax withholdings - RSU (211,314) — (250) — — (250) Issuance of common stock related to settlement of contingent consideration 444,793 — 797 — — 797 Stock‑based compensation expense — — 31,963 — — 31,963 Net loss — — — (323,271) — (323,271) Other comprehensive income — — — — 3,708 3,708 BALANCE—December 31, 2023 325,271,670 $ 33 $ 1,908,504 $ (1,632,225) $ (34,660) $ 241,652 See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2023 2022 2021 Cash flows from operating activities: Net loss $ (323,271) $ (740,343) $ (240,334) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 53,632 50,767 24,854 Stock‑based compensation 33,177 48,001 28,778 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Inventory write-off 28,966 — — Change in fair value of warrant liability — — 56,576 Change in fair value of subscription agreement — — 2,920 Amortization of capitalized commissions 318 — — Amortization (accretion) of discount on investments (490) (888) 3,021 Amortization of debt financing cost — — 9 Amortization of deferred costs on convertible notes 731 453 — Provision for bad debt 2,215 975 447 Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net 17 (45) — Acquired in-process research and development — — 25,581 Loss on disposal of property and equipment 209 224 74 Net increase (decrease) in accrued interest related to marketable securities 238 847 (819) Net unrealized (gain) loss on equity investment 464 6,332 9,660 Net unrealized (gain) loss on other investments - 1,595 (130) Deferred tax benefit (3,105) (1,498) (29,668) Change in fair value of contingent consideration — (1,567) (429) Foreign currency transaction (gain) loss (613) 303 189 Changes in operating assets and liabilities: — Accounts receivable (1,297) 6,737 (18,299) Inventory (19,079) (28,183) (16,962) Prepaid expenses and other current assets 5,205 1,787 (8,937) Other assets 4,265 2,505 (3) Accounts payable (6,894) (6,595) 12,797 Accrued expenses and other current liabilities 1,966 (10,613) (8,761) Customer deposits (6,169) (2,037) (2,569) Current portion of deferred revenue (1,962) (4,749) 5,989 Change in right of use assets and lease liabilities, net (6,626) (4,298) (641) Other liabilities 1,679 (41) 1,609 Net cash used in operating activities (114,995) (181,531) (155,048) Cash flows from investing activities: Purchases of property and equipment (2,762) (11,517) (7,683) Purchase of other investments — — (3,620) Proceeds from other investments 4,089 3,155 — Purchase of equity investment — — (20,000) Proceeds from sale of property and equipment 9,942 6 44 Proceeds from policy buyout — — 333 Purchase of marketable securities (4,973) (158,404) (330,873) Proceeds from sales and maturities of marketable securities 112,719 248,150 243,349 Proceeds from capital grant — 200 — Cash paid to acquire in-process research and development — — (21,220) Cash paid for acquisitions, net of cash acquired (1,750) (23) (287,624) Net cash provided by (used in) investing activities 117,265 81,567 (427,294) Cash flows from financing activities: Proceeds from reverse recapitalization, net of issuance costs — — — Proceeds from the exercise of stock options 1,203 3,190 6,426 Proceeds from the exercise of stock warrants — — 170,665 Payment of taxes related to net share settlement upon vesting of restricted stock units (250) (243) (541) Repayment of loans (419) (542) — Proceeds from issuance of convertible notes — 115,000 — Costs incurred in connection with the issuance of convertible notes — (3,619) — Repayment of term loan — — (10,000) Net cash provided by financing activities 534 113,786 166,550 Effect of exchange rate changes on cash, cash equivalents and restricted cash (27) (167) (87) Net increase (decrease) in cash, cash equivalents, and restricted cash 2,777 13,655 (415,879) Cash, cash equivalents, and restricted cash at beginning of period 81,913 68,258 484,137 Cash, cash equivalents, and restricted cash at end of period $ 84,690 $ 81,913 $ 68,258 Supplemental disclosures of cash flow information Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows: Cash and cash equivalents $ 83,845 $ 76,291 $ 65,017 Restricted cash included in other current assets 233 4,510 2,129 Restricted cash included in other noncurrent assets 612 1,112 1,112 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 84,690 $ 81,913 $ 68,258 Supplemental cash flow information: Interest paid $ 6,900 $ 3,488 $ 148 Taxes paid $ — $ — $ 150 Non‑cash investing and financing activities: Net unrealized (gain) loss on investments $ (339) $ 290 $ 40 Exercise of private placement warrants $ — $ — $ 149,904 Common Stock issued for acquisitions $ — $ — $ 620,590 Common Stock issued for acquisition of in-process research and development $ — $ — $ 4,300 Common Stock issued for settlement of contingent consideration $ 797 $ 500 $ — Accrued purchase price related to acquisitions $ — $ — $ 1,800 Additions to right of use assets and lease liabilities $ 13,926 $ 10,812 $ 5,582 Purchase of property and equipment included in accounts payable $ 239 $ 516 $ 90 Purchase of property and equipment included in accrued expense $ 31 $ — $ 38 Transfers from property and equipment to inventory $ 2,214 $ 4,993 $ 1,068 Transfers from inventory to property and equipment $ 1,566 $ 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 Deferred contract costs $ — $ 1,341 $ — Equipment financing $ — $ 175 $ — See notes to consolidated financial statements. 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, and acquisition-related and integration costs 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, and change in fair value of investments We define non-GAAP operating expense as GAAP operating expense excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, and acquisition-related and integration costs including in operating expenses We define EBITDA as GAAP net income (loss) excluding interest, income taxes, and depreciation and amortization expense We define Adjusted EBITDA as EBITDA excluding change in fair value of investments, inventory step-up adjustments, stock-based compensation, restructuring, and acquisition-related and integration costs 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) 2023 2022 2021 GAAP gross margin $ (10,090) $ 15,071 $ 18,293 Stock-based compensation included in cost of sales(1) 2,262 2,257 1,018 Amortization of acquired intangible assets included in cost of sales 27,789 23,707 8,467 Restructuring expense in cost of sales 30,205 3,273 — Acquisition-related and integration costs included in cost of sales 958 1,148 — Inventory step-up adjustment in cost of sales — 1,496 2,194 Non-GAAP gross margin $ 51,124 $ 46,952 $ 29,972 GAAP operating loss $ (323,221) $ (731,763) $ (201,455) Stock-based compensation(2),(3) 33,177 48,785 28,778 Amortization of acquired intangible assets 41,617 38,662 17,581 Restructuring expense 37,488 6,574 — Inventory step-up adjustment in cost of sales — 1,496 2,194 Acquisition-related and integration costs(4) 6,179 6,766 23,788 In-process research and development assets acquired — — 25,581 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Non-GAAP operating loss $ (83,331) $ (130,680) $ (103,533) GAAP net loss $ (323,271) $ (740,343) $ (240,334) Stock-based compensation(2),(3) 33,177 48,785 28,778 Amortization of acquired intangible assets 41,617 38,662 17,581 Restructuring expense 37,488 6,957 — Inventory step-up adjustment in cost of sales — 1,496 2,194 Acquisition-related and integration costs(4) 6,179 6,766 23,788 In-process research and development assets acquired — — 25,581 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Change in fair value of investments 1,239 8,164 12,475 Change in fair value of warrant liability — — 56,576 Non-GAAP net loss $ (82,142) $ (130,713) $ (73,361) (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 years ended December 31, 2023 and 2022. (2) Includes $7.3 million of stock-based compensation expense associated with the 2022 Initiative for the year ended December 31, 2022. (3) Includes $2.0 million and $1.0 million of liability-award stock-based compensation, respectively, for the years ended December 31, 2023 and 2022. (4) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023. DESKTOP METAL, INC. NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE (in thousands) For the Year Ended December 31, (Dollars in thousands) 2023 2022 2021 GAAP operating expenses $ 313,131 $ 746,834 $ 219,748 Stock-based compensation included in operating expenses(1),(2) (30,915) (46,528) (27,760) Amortization of acquired intangible assets included in operating expenses (13,828) (14,955) (9,114) Restructuring expense included in operating expenses (7,283) (3,301) — Acquisition-related and integration costs included in operating expenses(3) (5,221) (5,618) (23,788) In-process research and development assets acquired — — (25,581) Impairment charges (8,518) — — Goodwill impairment (112,911) (498,800) — Non-GAAP operating expenses $ 134,455 $ 177,632 $ 133,505 (1) Includes $7.3 million of stock-based compensation expense associated with the 2022 Initiative for the year ended December 31, 2022. (2) Includes $1.9 million and $0.9 million of liability-award stock-based compensation, respectively, for the years ended December 31, 2023 and 2022. (3) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023. DESKTOP METAL, INC. NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE (in thousands) For the Years Ended December 31, (Dollars in thousands) 2023 2022 2021 Net loss attributable to common stockholders $ (323,271) $ (740,343) $ (240,334) Interest (income) expense, net 4,099 1,743 (334) Income tax expense (benefit) (3,105) (1,498) (29,668) Depreciation and amortization 53,632 50,767 24,854 In-process research and development assets acquired — — 25,581 EBITDA (268,645) (689,331) (219,901) Change in fair value of warrant liability — - 56,576 Change in fair value of investments 1,239 8,164 12,475 Inventory step-up adjustment — 1,496 2,194 Stock-based compensation expense(1),(2) 33,177 48,785 28,778 Restructuring expense 37,488 6,957 — Goodwill impairment 112,911 498,800 — Impairment charges 8,518 Acquisition-related and integration costs(3) 6,179 6,766 23,788 Adjusted EBITDA $ (69,133) $ (118,363) $ (96,090) (1) Includes $7.3 million of stock-based compensation expense associated with the 2022 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. (3) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023. DESKTOP METAL, INC. NON-GAAP RECONCILIATION TABLE (in thousands) For the Quarter Ended December 31, (Dollars in thousands) 2023 2022 GAAP gross margin $ (16,739) $ 8,311 Stock-based compensation included in cost of sales 475 365 Amortization of acquired intangible assets included in cost of sales 7,045 5,890 Restructuring expense in cost of sales 26,984 147 Acquisition-related and integration costs included in cost of sales 45 — Inventory step-up adjustment in cost of sales — — Non-GAAP gross margin $ 17,810 $ 14,713 GAAP operating loss $ (177,267) $ (311,895) Stock-based compensation 6,478 7,615 Amortization of acquired intangible assets 10,320 10,140 Restructuring expense 30,878 1,488 Inventory step-up adjustment in cost of sales — — Acquisition-related and integration costs 2,866 133 In-process research and development assets acquired — — Impairment charges 2,456 — Goodwill impairment 110,461 269,300 Non-GAAP operating loss $ (13,808) $ (23,219) GAAP net loss $ (174,529) $ (312,353) Stock-based compensation 6,478 7,615 Amortization of acquired intangible assets 10,320 10,140 Restructuring expense 30,878 1,488 Inventory step-up adjustment in cost of sales — — Acquisition-related and integration costs 2,866 133 In-process research and development assets acquired — — Impairment charges 2,456 — Goodwill impairment 110,461 269,300 Change in fair value of investments 178 (329) Change in fair value of warrant liability — — Non-GAAP net loss $ (10,892) $ (24,006) DESKTOP METAL, INC. NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE (in thousands) For the Quarter Ended December 31, (Dollars in thousands) 2023 2022 Net loss attributable to common stockholders $ (174,528) $ (312,353) Interest (income) expense, net 1,134 462 Income tax expense (benefit) (2,430) 104 Depreciation and amortization 13,312 12,473 In-process research and development assets acquired — — EBITDA (162,512) (299,314) Change in fair value of warrant liability — - Change in fair value of investments 178 (329) Inventory step-up adjustment — — Stock-based compensation expense 6,478 7,615 Restructuring expense 30,878 1,488 Goodwill impairment 110,461 269,300 Impairment charges 2,456 Acquisition-related and integration costs 2,866 133 Adjusted EBITDA $ (9,195) $ (21,107) View source version on businesswire.com: https://www.businesswire.com/news/home/20240315314376/en/Contacts Investor Relations: (857) 504-1084 DesktopMetalIR@icrinc.com Media Relations: Sarah Webster (313) 715-6988 sarahwebster@desktopmetal.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Desktop Metal Announces Fourth Quarter and Full Year 2023 Financial Results By: Desktop Metal, Inc. via Business Wire March 15, 2024 at 07:00 AM EDT Revenue of $52.3 million, down from $60.6 million in the same quarter a year ago, and up 22% sequentially over the prior quarter Year-over-year improvements to net loss, adjusted EBITDA, gross margins, non-GAAP gross margins, operating expenses, and operating cash flow following more than $150 million in cost reduction efforts announced since June 2022 Net loss of $(323.4) million in 2023 compared to net loss of $(740.3) million in 2022 Adjusted EBITDA of $(9.2 million), a year-over-year improvement of 56% – and the company’s strongest quarterly performance to date GAAP gross margin of (32)%; GAAP gross margin was negatively impacted by one-time non-cash restructuring activities in the quarter. Non-GAAP gross margin of 34%, a year-over-year improvement of 39.9%. Quarterly GAAP operating expenses declined 58% year over year, both periods were impacted by goodwill impairment. Quarterly non-GAAP operating expenses declined for seven consecutive quarters to $31.6 million, down 39% from the start of DM’s cost reduction initiative Cash, cash equivalents, and short-term investments closed fourth quarter 2023 at $84.5 million, as rate of cash consumption declined 25% compared to the same year-ago quarter Initiated a review of strategic alternatives for industrial photopolymer business in effort to further strengthen position in our core healthcare photopolymers and production binder jetting for metal, sand and ceramic parts Full year 2024 revenue guidance of between $175 and $215 million, and adjusted EBITDA between $(30) and $(10) million, with expectation to achieve adjusted EBITDA breakeven in the second half of 2024 Desktop Metal, Inc. (NYSE: DM), a global leader in Additive Manufacturing 2.0 technologies for mass production, today announced its financial results for the fourth quarter and full year ended December 31, 2023. “Despite a challenging capital investment environment led by elevated interest rates and slower sales cycles, I’m proud that Team DM buckled down and delivered a much improved operating performance including reduced not loss and a record adjusted EBITDA performance,” said Ric Fulop, Founder and CEO of Desktop Metal. “While we didn’t make our internal target of A-EBITDA positive by the end of the year, as some customer projects rolled into 2024, we are now very, very close to that goal,” Fulop continued. “We now enter the year with a lower cost structure that makes us resilient for the long term. The hard work will continue as we drive toward profitability, a goal that is clearly within sight despite the tough market conditions.” Fulop noted that DM continues to see strong demand for production binder jet systems that produce metal, sand and ceramic parts, as well as increasing evidence of the value of Additive Manufacturing 2.0 systems. For the full year, DM reported record recurring revenue of $65 million, a 29% increase over the prior year that now represents 34% of revenue, up from 24% from 2022. “Our all-time high recurring revenue levels prove that customers who have adopted our technology are using it successfully and getting great value from our technologies,” Fulop said. Fourth Quarter 2023 and Recent Business Highlights: Corporate Continued execution of cost reduction plans with expectation of positive adjusted EBITDA in the second half of 2024 Product Performance Desktop Metal and Evonik expand partnership, announce qualification of INFINAM® ST 6100 L on large format Additive Manufacturing 2.0 systems for high-performance, high-temperature products Desktop Health™ announces Flexcera™ Base Ultra+ dental resin for stronger, more comfortable 3D Printed dentures Desktop Metal now shipping the Figur G15 – a Digital Sheet Metal Forming machine that eliminates the need for custom tooling Desktop Health announces first patients treated with FDA-Cleared CMFlex™ – and off-the-shelf 3D printed synthetic bone graft product pioneered by Dimension Inx on the 3D-Bioplotter® Desktop Metal launches Live Monitor™ for users of Additive Manufacturing 2.0 production technology DM now has metal and ceramic parts in production in multiple high value programs in defense and aerospace with parts in several jet engine families, major platforms like F35 and in several space vehicles Growing business in Gigacasting with several global automakers Fourth Quarter 2023 Financial Highlights Revenue of $52.3 million, down from $60.6 million in the same quarter a year ago, and up 22% sequentially over the prior quarter GAAP gross margin of (32)%; GAAP gross margin was negatively impacted by restructuring activities in the quarter. Non-GAAP gross margin of 34%, a year-over-year increase of 39.9%. GAAP net loss of $(174.5) million, including $110.5 million of goodwill impairment; non-GAAP net loss of $(10.9) million Adjusted EBITDA of $(9.2) million, a year-over-year improvement of 56% – and the company’s strongest quarterly performance to date Cash, cash equivalents, and short-term investments closed fourth quarter 2023 at $84.5 million, as rate of cash consumption declined 25% compared to the same year-ago quarter Financial Outlook Revenue expectation of between $175 million to $215 million for 2024 Adjusted EBITDA of between $(30) million to $(10) million for full-year 2024 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 Friday, March 15, 2024 to discuss fourth quarter 2023 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 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, and 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: demand for Desktop Metal’s products and services; the global macro-economic environment; impacts of rapid technological change in the additive manufacturing industry; Desktop Metals’ 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-Q filed with the SEC on November 9, 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, 2023 2022 Assets Current assets: Cash and cash equivalents $ 83,845 $ 76,291 Current portion of restricted cash 233 4,510 Short‑term investments 625 108,243 Accounts receivable 37,690 38,481 Inventory 82,639 91,736 Prepaid expenses and other current assets 11,105 17,155 Total current assets 216,137 336,416 Restricted cash, net of current portion 612 1,112 Property and equipment, net 35,840 56,271 Goodwill — 112,955 Intangible assets, net 168,259 219,830 Other noncurrent assets 37,153 27,763 Total Assets $ 458,001 $ 754,347 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 18,190 $ 25,105 Customer deposits 5,356 11,526 Current portion of lease liability 7,404 5,730 Accrued expenses and other current liabilities 27,085 26,723 Current portion of deferred revenue 11,739 13,719 Current portion of long‑term debt, net of deferred financing costs 330 584 Total current liabilities 70,104 83,387 Long-term debt, net of current portion 89 311 Convertible notes 112,565 111,834 Lease liability, net of current portion 23,566 17,860 Deferred revenue, net of current portion 3,696 3,664 Deferred tax liability 3,523 8,430 Other noncurrent liabilities 2,806 1,359 Total liabilities 216,349 226,845 Commitments and Contingencies (Note 17) Stockholders’ Equity Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively — — Common Stock, $0.0001 par value—500,000,000 shares authorized; 325,277,419 and 318,235,106 shares issued as of December 31, 2023 and December 31, 2022, respectively, 325,271,670 and 318,133,434 shares outstanding as of December 31, 2023 and December 31, 2022, respectively 33 32 Additional paid‑in capital 1,908,504 1,874,792 Accumulated deficit (1,632,225) (1,308,954) Accumulated other comprehensive loss (34,660) (38,368) Total Stockholders’ Equity 241,652 527,502 Total Liabilities and Stockholders’ Equity $ 458,001 $ 754,347 See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Years Ended December 31, 2023 2022 2021 Revenues Products $ 168,091 $ 190,248 $ 105,994 Services 21,607 18,775 6,414 Total revenues 189,698 209,023 112,408 Cost of sales Products 184,614 178,952 87,450 Services 15,174 15,000 6,665 Total cost of sales 199,788 193,952 94,115 Gross profit (loss) (10,090) 15,071 18,293 Operating expenses Research and development 85,096 96,878 68,131 Sales and marketing 40,334 68,091 47,995 General and administrative 66,272 83,065 78,041 In-process research and development assets acquired — — 25,581 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Total operating expenses 313,131 746,834 219,748 Loss from operations (323,221) (731,763) (201,455) Change in fair value of warrant liability — — (56,576) Interest expense (4,099) (1,743) (149) Interest and other (expense) income, net 944 (8,335) (11,822) Loss before income taxes (326,376) (741,841) (270,002) Income tax benefit 3,105 1,498 29,668 Net loss $ (323,271) $ (740,343) $ (240,334) Net loss per share—basic and diluted $ (1.00) $ (2.35) $ (0.92) Weighted average shares outstanding, basic and diluted 322,196 314,817 260,770 See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Years Ended December 31, 2023 2022 2021 Net loss $ (323,271) $ (740,343) $ (240,334) Other comprehensive (loss) income, net of taxes: Unrealized loss (203) (290) (40) Foreign currency translation adjustment 3,911 (31,664) (6,365) Total comprehensive (loss) income, net of taxes of $0 $ (319,563) $ (772,297) $ (246,739) See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) Accumulated Additional Other Total Common Stock Paid‑in Accumulated Comprehensive Stockholders’ Shares Amount Capital Deficit (Loss) Equity BALANCE—January 1, 2021 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 Exercise of Common Stock options 1,006,046 — 1,203 — — 1,203 Vesting of restricted Common Stock 95,859 — — — — — Vesting of restricted share units 5,802,852 1 (1) — — — Repurchase of shares for employee tax withholdings - RSU (211,314) — (250) — — (250) Issuance of common stock related to settlement of contingent consideration 444,793 — 797 — — 797 Stock‑based compensation expense — — 31,963 — — 31,963 Net loss — — — (323,271) — (323,271) Other comprehensive income — — — — 3,708 3,708 BALANCE—December 31, 2023 325,271,670 $ 33 $ 1,908,504 $ (1,632,225) $ (34,660) $ 241,652 See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2023 2022 2021 Cash flows from operating activities: Net loss $ (323,271) $ (740,343) $ (240,334) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 53,632 50,767 24,854 Stock‑based compensation 33,177 48,001 28,778 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Inventory write-off 28,966 — — Change in fair value of warrant liability — — 56,576 Change in fair value of subscription agreement — — 2,920 Amortization of capitalized commissions 318 — — Amortization (accretion) of discount on investments (490) (888) 3,021 Amortization of debt financing cost — — 9 Amortization of deferred costs on convertible notes 731 453 — Provision for bad debt 2,215 975 447 Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net 17 (45) — Acquired in-process research and development — — 25,581 Loss on disposal of property and equipment 209 224 74 Net increase (decrease) in accrued interest related to marketable securities 238 847 (819) Net unrealized (gain) loss on equity investment 464 6,332 9,660 Net unrealized (gain) loss on other investments - 1,595 (130) Deferred tax benefit (3,105) (1,498) (29,668) Change in fair value of contingent consideration — (1,567) (429) Foreign currency transaction (gain) loss (613) 303 189 Changes in operating assets and liabilities: — Accounts receivable (1,297) 6,737 (18,299) Inventory (19,079) (28,183) (16,962) Prepaid expenses and other current assets 5,205 1,787 (8,937) Other assets 4,265 2,505 (3) Accounts payable (6,894) (6,595) 12,797 Accrued expenses and other current liabilities 1,966 (10,613) (8,761) Customer deposits (6,169) (2,037) (2,569) Current portion of deferred revenue (1,962) (4,749) 5,989 Change in right of use assets and lease liabilities, net (6,626) (4,298) (641) Other liabilities 1,679 (41) 1,609 Net cash used in operating activities (114,995) (181,531) (155,048) Cash flows from investing activities: Purchases of property and equipment (2,762) (11,517) (7,683) Purchase of other investments — — (3,620) Proceeds from other investments 4,089 3,155 — Purchase of equity investment — — (20,000) Proceeds from sale of property and equipment 9,942 6 44 Proceeds from policy buyout — — 333 Purchase of marketable securities (4,973) (158,404) (330,873) Proceeds from sales and maturities of marketable securities 112,719 248,150 243,349 Proceeds from capital grant — 200 — Cash paid to acquire in-process research and development — — (21,220) Cash paid for acquisitions, net of cash acquired (1,750) (23) (287,624) Net cash provided by (used in) investing activities 117,265 81,567 (427,294) Cash flows from financing activities: Proceeds from reverse recapitalization, net of issuance costs — — — Proceeds from the exercise of stock options 1,203 3,190 6,426 Proceeds from the exercise of stock warrants — — 170,665 Payment of taxes related to net share settlement upon vesting of restricted stock units (250) (243) (541) Repayment of loans (419) (542) — Proceeds from issuance of convertible notes — 115,000 — Costs incurred in connection with the issuance of convertible notes — (3,619) — Repayment of term loan — — (10,000) Net cash provided by financing activities 534 113,786 166,550 Effect of exchange rate changes on cash, cash equivalents and restricted cash (27) (167) (87) Net increase (decrease) in cash, cash equivalents, and restricted cash 2,777 13,655 (415,879) Cash, cash equivalents, and restricted cash at beginning of period 81,913 68,258 484,137 Cash, cash equivalents, and restricted cash at end of period $ 84,690 $ 81,913 $ 68,258 Supplemental disclosures of cash flow information Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows: Cash and cash equivalents $ 83,845 $ 76,291 $ 65,017 Restricted cash included in other current assets 233 4,510 2,129 Restricted cash included in other noncurrent assets 612 1,112 1,112 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 84,690 $ 81,913 $ 68,258 Supplemental cash flow information: Interest paid $ 6,900 $ 3,488 $ 148 Taxes paid $ — $ — $ 150 Non‑cash investing and financing activities: Net unrealized (gain) loss on investments $ (339) $ 290 $ 40 Exercise of private placement warrants $ — $ — $ 149,904 Common Stock issued for acquisitions $ — $ — $ 620,590 Common Stock issued for acquisition of in-process research and development $ — $ — $ 4,300 Common Stock issued for settlement of contingent consideration $ 797 $ 500 $ — Accrued purchase price related to acquisitions $ — $ — $ 1,800 Additions to right of use assets and lease liabilities $ 13,926 $ 10,812 $ 5,582 Purchase of property and equipment included in accounts payable $ 239 $ 516 $ 90 Purchase of property and equipment included in accrued expense $ 31 $ — $ 38 Transfers from property and equipment to inventory $ 2,214 $ 4,993 $ 1,068 Transfers from inventory to property and equipment $ 1,566 $ 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 Deferred contract costs $ — $ 1,341 $ — Equipment financing $ — $ 175 $ — See notes to consolidated financial statements. 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, and acquisition-related and integration costs 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, and change in fair value of investments We define non-GAAP operating expense as GAAP operating expense excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, and acquisition-related and integration costs including in operating expenses We define EBITDA as GAAP net income (loss) excluding interest, income taxes, and depreciation and amortization expense We define Adjusted EBITDA as EBITDA excluding change in fair value of investments, inventory step-up adjustments, stock-based compensation, restructuring, and acquisition-related and integration costs 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) 2023 2022 2021 GAAP gross margin $ (10,090) $ 15,071 $ 18,293 Stock-based compensation included in cost of sales(1) 2,262 2,257 1,018 Amortization of acquired intangible assets included in cost of sales 27,789 23,707 8,467 Restructuring expense in cost of sales 30,205 3,273 — Acquisition-related and integration costs included in cost of sales 958 1,148 — Inventory step-up adjustment in cost of sales — 1,496 2,194 Non-GAAP gross margin $ 51,124 $ 46,952 $ 29,972 GAAP operating loss $ (323,221) $ (731,763) $ (201,455) Stock-based compensation(2),(3) 33,177 48,785 28,778 Amortization of acquired intangible assets 41,617 38,662 17,581 Restructuring expense 37,488 6,574 — Inventory step-up adjustment in cost of sales — 1,496 2,194 Acquisition-related and integration costs(4) 6,179 6,766 23,788 In-process research and development assets acquired — — 25,581 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Non-GAAP operating loss $ (83,331) $ (130,680) $ (103,533) GAAP net loss $ (323,271) $ (740,343) $ (240,334) Stock-based compensation(2),(3) 33,177 48,785 28,778 Amortization of acquired intangible assets 41,617 38,662 17,581 Restructuring expense 37,488 6,957 — Inventory step-up adjustment in cost of sales — 1,496 2,194 Acquisition-related and integration costs(4) 6,179 6,766 23,788 In-process research and development assets acquired — — 25,581 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Change in fair value of investments 1,239 8,164 12,475 Change in fair value of warrant liability — — 56,576 Non-GAAP net loss $ (82,142) $ (130,713) $ (73,361) (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 years ended December 31, 2023 and 2022. (2) Includes $7.3 million of stock-based compensation expense associated with the 2022 Initiative for the year ended December 31, 2022. (3) Includes $2.0 million and $1.0 million of liability-award stock-based compensation, respectively, for the years ended December 31, 2023 and 2022. (4) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023. DESKTOP METAL, INC. NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE (in thousands) For the Year Ended December 31, (Dollars in thousands) 2023 2022 2021 GAAP operating expenses $ 313,131 $ 746,834 $ 219,748 Stock-based compensation included in operating expenses(1),(2) (30,915) (46,528) (27,760) Amortization of acquired intangible assets included in operating expenses (13,828) (14,955) (9,114) Restructuring expense included in operating expenses (7,283) (3,301) — Acquisition-related and integration costs included in operating expenses(3) (5,221) (5,618) (23,788) In-process research and development assets acquired — — (25,581) Impairment charges (8,518) — — Goodwill impairment (112,911) (498,800) — Non-GAAP operating expenses $ 134,455 $ 177,632 $ 133,505 (1) Includes $7.3 million of stock-based compensation expense associated with the 2022 Initiative for the year ended December 31, 2022. (2) Includes $1.9 million and $0.9 million of liability-award stock-based compensation, respectively, for the years ended December 31, 2023 and 2022. (3) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023. DESKTOP METAL, INC. NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE (in thousands) For the Years Ended December 31, (Dollars in thousands) 2023 2022 2021 Net loss attributable to common stockholders $ (323,271) $ (740,343) $ (240,334) Interest (income) expense, net 4,099 1,743 (334) Income tax expense (benefit) (3,105) (1,498) (29,668) Depreciation and amortization 53,632 50,767 24,854 In-process research and development assets acquired — — 25,581 EBITDA (268,645) (689,331) (219,901) Change in fair value of warrant liability — - 56,576 Change in fair value of investments 1,239 8,164 12,475 Inventory step-up adjustment — 1,496 2,194 Stock-based compensation expense(1),(2) 33,177 48,785 28,778 Restructuring expense 37,488 6,957 — Goodwill impairment 112,911 498,800 — Impairment charges 8,518 Acquisition-related and integration costs(3) 6,179 6,766 23,788 Adjusted EBITDA $ (69,133) $ (118,363) $ (96,090) (1) Includes $7.3 million of stock-based compensation expense associated with the 2022 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. (3) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023. DESKTOP METAL, INC. NON-GAAP RECONCILIATION TABLE (in thousands) For the Quarter Ended December 31, (Dollars in thousands) 2023 2022 GAAP gross margin $ (16,739) $ 8,311 Stock-based compensation included in cost of sales 475 365 Amortization of acquired intangible assets included in cost of sales 7,045 5,890 Restructuring expense in cost of sales 26,984 147 Acquisition-related and integration costs included in cost of sales 45 — Inventory step-up adjustment in cost of sales — — Non-GAAP gross margin $ 17,810 $ 14,713 GAAP operating loss $ (177,267) $ (311,895) Stock-based compensation 6,478 7,615 Amortization of acquired intangible assets 10,320 10,140 Restructuring expense 30,878 1,488 Inventory step-up adjustment in cost of sales — — Acquisition-related and integration costs 2,866 133 In-process research and development assets acquired — — Impairment charges 2,456 — Goodwill impairment 110,461 269,300 Non-GAAP operating loss $ (13,808) $ (23,219) GAAP net loss $ (174,529) $ (312,353) Stock-based compensation 6,478 7,615 Amortization of acquired intangible assets 10,320 10,140 Restructuring expense 30,878 1,488 Inventory step-up adjustment in cost of sales — — Acquisition-related and integration costs 2,866 133 In-process research and development assets acquired — — Impairment charges 2,456 — Goodwill impairment 110,461 269,300 Change in fair value of investments 178 (329) Change in fair value of warrant liability — — Non-GAAP net loss $ (10,892) $ (24,006) DESKTOP METAL, INC. NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE (in thousands) For the Quarter Ended December 31, (Dollars in thousands) 2023 2022 Net loss attributable to common stockholders $ (174,528) $ (312,353) Interest (income) expense, net 1,134 462 Income tax expense (benefit) (2,430) 104 Depreciation and amortization 13,312 12,473 In-process research and development assets acquired — — EBITDA (162,512) (299,314) Change in fair value of warrant liability — - Change in fair value of investments 178 (329) Inventory step-up adjustment — — Stock-based compensation expense 6,478 7,615 Restructuring expense 30,878 1,488 Goodwill impairment 110,461 269,300 Impairment charges 2,456 Acquisition-related and integration costs 2,866 133 Adjusted EBITDA $ (9,195) $ (21,107) View source version on businesswire.com: https://www.businesswire.com/news/home/20240315314376/en/Contacts Investor Relations: (857) 504-1084 DesktopMetalIR@icrinc.com Media Relations: Sarah Webster (313) 715-6988 sarahwebster@desktopmetal.com
Revenue of $52.3 million, down from $60.6 million in the same quarter a year ago, and up 22% sequentially over the prior quarter Year-over-year improvements to net loss, adjusted EBITDA, gross margins, non-GAAP gross margins, operating expenses, and operating cash flow following more than $150 million in cost reduction efforts announced since June 2022 Net loss of $(323.4) million in 2023 compared to net loss of $(740.3) million in 2022 Adjusted EBITDA of $(9.2 million), a year-over-year improvement of 56% – and the company’s strongest quarterly performance to date GAAP gross margin of (32)%; GAAP gross margin was negatively impacted by one-time non-cash restructuring activities in the quarter. Non-GAAP gross margin of 34%, a year-over-year improvement of 39.9%. Quarterly GAAP operating expenses declined 58% year over year, both periods were impacted by goodwill impairment. Quarterly non-GAAP operating expenses declined for seven consecutive quarters to $31.6 million, down 39% from the start of DM’s cost reduction initiative Cash, cash equivalents, and short-term investments closed fourth quarter 2023 at $84.5 million, as rate of cash consumption declined 25% compared to the same year-ago quarter Initiated a review of strategic alternatives for industrial photopolymer business in effort to further strengthen position in our core healthcare photopolymers and production binder jetting for metal, sand and ceramic parts Full year 2024 revenue guidance of between $175 and $215 million, and adjusted EBITDA between $(30) and $(10) million, with expectation to achieve adjusted EBITDA breakeven in the second half of 2024
Desktop Metal, Inc. (NYSE: DM), a global leader in Additive Manufacturing 2.0 technologies for mass production, today announced its financial results for the fourth quarter and full year ended December 31, 2023. “Despite a challenging capital investment environment led by elevated interest rates and slower sales cycles, I’m proud that Team DM buckled down and delivered a much improved operating performance including reduced not loss and a record adjusted EBITDA performance,” said Ric Fulop, Founder and CEO of Desktop Metal. “While we didn’t make our internal target of A-EBITDA positive by the end of the year, as some customer projects rolled into 2024, we are now very, very close to that goal,” Fulop continued. “We now enter the year with a lower cost structure that makes us resilient for the long term. The hard work will continue as we drive toward profitability, a goal that is clearly within sight despite the tough market conditions.” Fulop noted that DM continues to see strong demand for production binder jet systems that produce metal, sand and ceramic parts, as well as increasing evidence of the value of Additive Manufacturing 2.0 systems. For the full year, DM reported record recurring revenue of $65 million, a 29% increase over the prior year that now represents 34% of revenue, up from 24% from 2022. “Our all-time high recurring revenue levels prove that customers who have adopted our technology are using it successfully and getting great value from our technologies,” Fulop said. Fourth Quarter 2023 and Recent Business Highlights: Corporate Continued execution of cost reduction plans with expectation of positive adjusted EBITDA in the second half of 2024 Product Performance Desktop Metal and Evonik expand partnership, announce qualification of INFINAM® ST 6100 L on large format Additive Manufacturing 2.0 systems for high-performance, high-temperature products Desktop Health™ announces Flexcera™ Base Ultra+ dental resin for stronger, more comfortable 3D Printed dentures Desktop Metal now shipping the Figur G15 – a Digital Sheet Metal Forming machine that eliminates the need for custom tooling Desktop Health announces first patients treated with FDA-Cleared CMFlex™ – and off-the-shelf 3D printed synthetic bone graft product pioneered by Dimension Inx on the 3D-Bioplotter® Desktop Metal launches Live Monitor™ for users of Additive Manufacturing 2.0 production technology DM now has metal and ceramic parts in production in multiple high value programs in defense and aerospace with parts in several jet engine families, major platforms like F35 and in several space vehicles Growing business in Gigacasting with several global automakers Fourth Quarter 2023 Financial Highlights Revenue of $52.3 million, down from $60.6 million in the same quarter a year ago, and up 22% sequentially over the prior quarter GAAP gross margin of (32)%; GAAP gross margin was negatively impacted by restructuring activities in the quarter. Non-GAAP gross margin of 34%, a year-over-year increase of 39.9%. GAAP net loss of $(174.5) million, including $110.5 million of goodwill impairment; non-GAAP net loss of $(10.9) million Adjusted EBITDA of $(9.2) million, a year-over-year improvement of 56% – and the company’s strongest quarterly performance to date Cash, cash equivalents, and short-term investments closed fourth quarter 2023 at $84.5 million, as rate of cash consumption declined 25% compared to the same year-ago quarter Financial Outlook Revenue expectation of between $175 million to $215 million for 2024 Adjusted EBITDA of between $(30) million to $(10) million for full-year 2024 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 Friday, March 15, 2024 to discuss fourth quarter 2023 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 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, and 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: demand for Desktop Metal’s products and services; the global macro-economic environment; impacts of rapid technological change in the additive manufacturing industry; Desktop Metals’ 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-Q filed with the SEC on November 9, 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, 2023 2022 Assets Current assets: Cash and cash equivalents $ 83,845 $ 76,291 Current portion of restricted cash 233 4,510 Short‑term investments 625 108,243 Accounts receivable 37,690 38,481 Inventory 82,639 91,736 Prepaid expenses and other current assets 11,105 17,155 Total current assets 216,137 336,416 Restricted cash, net of current portion 612 1,112 Property and equipment, net 35,840 56,271 Goodwill — 112,955 Intangible assets, net 168,259 219,830 Other noncurrent assets 37,153 27,763 Total Assets $ 458,001 $ 754,347 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 18,190 $ 25,105 Customer deposits 5,356 11,526 Current portion of lease liability 7,404 5,730 Accrued expenses and other current liabilities 27,085 26,723 Current portion of deferred revenue 11,739 13,719 Current portion of long‑term debt, net of deferred financing costs 330 584 Total current liabilities 70,104 83,387 Long-term debt, net of current portion 89 311 Convertible notes 112,565 111,834 Lease liability, net of current portion 23,566 17,860 Deferred revenue, net of current portion 3,696 3,664 Deferred tax liability 3,523 8,430 Other noncurrent liabilities 2,806 1,359 Total liabilities 216,349 226,845 Commitments and Contingencies (Note 17) Stockholders’ Equity Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively — — Common Stock, $0.0001 par value—500,000,000 shares authorized; 325,277,419 and 318,235,106 shares issued as of December 31, 2023 and December 31, 2022, respectively, 325,271,670 and 318,133,434 shares outstanding as of December 31, 2023 and December 31, 2022, respectively 33 32 Additional paid‑in capital 1,908,504 1,874,792 Accumulated deficit (1,632,225) (1,308,954) Accumulated other comprehensive loss (34,660) (38,368) Total Stockholders’ Equity 241,652 527,502 Total Liabilities and Stockholders’ Equity $ 458,001 $ 754,347 See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Years Ended December 31, 2023 2022 2021 Revenues Products $ 168,091 $ 190,248 $ 105,994 Services 21,607 18,775 6,414 Total revenues 189,698 209,023 112,408 Cost of sales Products 184,614 178,952 87,450 Services 15,174 15,000 6,665 Total cost of sales 199,788 193,952 94,115 Gross profit (loss) (10,090) 15,071 18,293 Operating expenses Research and development 85,096 96,878 68,131 Sales and marketing 40,334 68,091 47,995 General and administrative 66,272 83,065 78,041 In-process research and development assets acquired — — 25,581 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Total operating expenses 313,131 746,834 219,748 Loss from operations (323,221) (731,763) (201,455) Change in fair value of warrant liability — — (56,576) Interest expense (4,099) (1,743) (149) Interest and other (expense) income, net 944 (8,335) (11,822) Loss before income taxes (326,376) (741,841) (270,002) Income tax benefit 3,105 1,498 29,668 Net loss $ (323,271) $ (740,343) $ (240,334) Net loss per share—basic and diluted $ (1.00) $ (2.35) $ (0.92) Weighted average shares outstanding, basic and diluted 322,196 314,817 260,770 See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Years Ended December 31, 2023 2022 2021 Net loss $ (323,271) $ (740,343) $ (240,334) Other comprehensive (loss) income, net of taxes: Unrealized loss (203) (290) (40) Foreign currency translation adjustment 3,911 (31,664) (6,365) Total comprehensive (loss) income, net of taxes of $0 $ (319,563) $ (772,297) $ (246,739) See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) Accumulated Additional Other Total Common Stock Paid‑in Accumulated Comprehensive Stockholders’ Shares Amount Capital Deficit (Loss) Equity BALANCE—January 1, 2021 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 Exercise of Common Stock options 1,006,046 — 1,203 — — 1,203 Vesting of restricted Common Stock 95,859 — — — — — Vesting of restricted share units 5,802,852 1 (1) — — — Repurchase of shares for employee tax withholdings - RSU (211,314) — (250) — — (250) Issuance of common stock related to settlement of contingent consideration 444,793 — 797 — — 797 Stock‑based compensation expense — — 31,963 — — 31,963 Net loss — — — (323,271) — (323,271) Other comprehensive income — — — — 3,708 3,708 BALANCE—December 31, 2023 325,271,670 $ 33 $ 1,908,504 $ (1,632,225) $ (34,660) $ 241,652 See notes to consolidated financial statements. DESKTOP METAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2023 2022 2021 Cash flows from operating activities: Net loss $ (323,271) $ (740,343) $ (240,334) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 53,632 50,767 24,854 Stock‑based compensation 33,177 48,001 28,778 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Inventory write-off 28,966 — — Change in fair value of warrant liability — — 56,576 Change in fair value of subscription agreement — — 2,920 Amortization of capitalized commissions 318 — — Amortization (accretion) of discount on investments (490) (888) 3,021 Amortization of debt financing cost — — 9 Amortization of deferred costs on convertible notes 731 453 — Provision for bad debt 2,215 975 447 Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net 17 (45) — Acquired in-process research and development — — 25,581 Loss on disposal of property and equipment 209 224 74 Net increase (decrease) in accrued interest related to marketable securities 238 847 (819) Net unrealized (gain) loss on equity investment 464 6,332 9,660 Net unrealized (gain) loss on other investments - 1,595 (130) Deferred tax benefit (3,105) (1,498) (29,668) Change in fair value of contingent consideration — (1,567) (429) Foreign currency transaction (gain) loss (613) 303 189 Changes in operating assets and liabilities: — Accounts receivable (1,297) 6,737 (18,299) Inventory (19,079) (28,183) (16,962) Prepaid expenses and other current assets 5,205 1,787 (8,937) Other assets 4,265 2,505 (3) Accounts payable (6,894) (6,595) 12,797 Accrued expenses and other current liabilities 1,966 (10,613) (8,761) Customer deposits (6,169) (2,037) (2,569) Current portion of deferred revenue (1,962) (4,749) 5,989 Change in right of use assets and lease liabilities, net (6,626) (4,298) (641) Other liabilities 1,679 (41) 1,609 Net cash used in operating activities (114,995) (181,531) (155,048) Cash flows from investing activities: Purchases of property and equipment (2,762) (11,517) (7,683) Purchase of other investments — — (3,620) Proceeds from other investments 4,089 3,155 — Purchase of equity investment — — (20,000) Proceeds from sale of property and equipment 9,942 6 44 Proceeds from policy buyout — — 333 Purchase of marketable securities (4,973) (158,404) (330,873) Proceeds from sales and maturities of marketable securities 112,719 248,150 243,349 Proceeds from capital grant — 200 — Cash paid to acquire in-process research and development — — (21,220) Cash paid for acquisitions, net of cash acquired (1,750) (23) (287,624) Net cash provided by (used in) investing activities 117,265 81,567 (427,294) Cash flows from financing activities: Proceeds from reverse recapitalization, net of issuance costs — — — Proceeds from the exercise of stock options 1,203 3,190 6,426 Proceeds from the exercise of stock warrants — — 170,665 Payment of taxes related to net share settlement upon vesting of restricted stock units (250) (243) (541) Repayment of loans (419) (542) — Proceeds from issuance of convertible notes — 115,000 — Costs incurred in connection with the issuance of convertible notes — (3,619) — Repayment of term loan — — (10,000) Net cash provided by financing activities 534 113,786 166,550 Effect of exchange rate changes on cash, cash equivalents and restricted cash (27) (167) (87) Net increase (decrease) in cash, cash equivalents, and restricted cash 2,777 13,655 (415,879) Cash, cash equivalents, and restricted cash at beginning of period 81,913 68,258 484,137 Cash, cash equivalents, and restricted cash at end of period $ 84,690 $ 81,913 $ 68,258 Supplemental disclosures of cash flow information Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows: Cash and cash equivalents $ 83,845 $ 76,291 $ 65,017 Restricted cash included in other current assets 233 4,510 2,129 Restricted cash included in other noncurrent assets 612 1,112 1,112 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 84,690 $ 81,913 $ 68,258 Supplemental cash flow information: Interest paid $ 6,900 $ 3,488 $ 148 Taxes paid $ — $ — $ 150 Non‑cash investing and financing activities: Net unrealized (gain) loss on investments $ (339) $ 290 $ 40 Exercise of private placement warrants $ — $ — $ 149,904 Common Stock issued for acquisitions $ — $ — $ 620,590 Common Stock issued for acquisition of in-process research and development $ — $ — $ 4,300 Common Stock issued for settlement of contingent consideration $ 797 $ 500 $ — Accrued purchase price related to acquisitions $ — $ — $ 1,800 Additions to right of use assets and lease liabilities $ 13,926 $ 10,812 $ 5,582 Purchase of property and equipment included in accounts payable $ 239 $ 516 $ 90 Purchase of property and equipment included in accrued expense $ 31 $ — $ 38 Transfers from property and equipment to inventory $ 2,214 $ 4,993 $ 1,068 Transfers from inventory to property and equipment $ 1,566 $ 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 Deferred contract costs $ — $ 1,341 $ — Equipment financing $ — $ 175 $ — See notes to consolidated financial statements. 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, and acquisition-related and integration costs 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, and change in fair value of investments We define non-GAAP operating expense as GAAP operating expense excluding the effect of stock-based compensation, amortization of acquired intangible assets, restructuring, and acquisition-related and integration costs including in operating expenses We define EBITDA as GAAP net income (loss) excluding interest, income taxes, and depreciation and amortization expense We define Adjusted EBITDA as EBITDA excluding change in fair value of investments, inventory step-up adjustments, stock-based compensation, restructuring, and acquisition-related and integration costs 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) 2023 2022 2021 GAAP gross margin $ (10,090) $ 15,071 $ 18,293 Stock-based compensation included in cost of sales(1) 2,262 2,257 1,018 Amortization of acquired intangible assets included in cost of sales 27,789 23,707 8,467 Restructuring expense in cost of sales 30,205 3,273 — Acquisition-related and integration costs included in cost of sales 958 1,148 — Inventory step-up adjustment in cost of sales — 1,496 2,194 Non-GAAP gross margin $ 51,124 $ 46,952 $ 29,972 GAAP operating loss $ (323,221) $ (731,763) $ (201,455) Stock-based compensation(2),(3) 33,177 48,785 28,778 Amortization of acquired intangible assets 41,617 38,662 17,581 Restructuring expense 37,488 6,574 — Inventory step-up adjustment in cost of sales — 1,496 2,194 Acquisition-related and integration costs(4) 6,179 6,766 23,788 In-process research and development assets acquired — — 25,581 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Non-GAAP operating loss $ (83,331) $ (130,680) $ (103,533) GAAP net loss $ (323,271) $ (740,343) $ (240,334) Stock-based compensation(2),(3) 33,177 48,785 28,778 Amortization of acquired intangible assets 41,617 38,662 17,581 Restructuring expense 37,488 6,957 — Inventory step-up adjustment in cost of sales — 1,496 2,194 Acquisition-related and integration costs(4) 6,179 6,766 23,788 In-process research and development assets acquired — — 25,581 Impairment charges 8,518 — — Goodwill impairment 112,911 498,800 — Change in fair value of investments 1,239 8,164 12,475 Change in fair value of warrant liability — — 56,576 Non-GAAP net loss $ (82,142) $ (130,713) $ (73,361) (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 years ended December 31, 2023 and 2022. (2) Includes $7.3 million of stock-based compensation expense associated with the 2022 Initiative for the year ended December 31, 2022. (3) Includes $2.0 million and $1.0 million of liability-award stock-based compensation, respectively, for the years ended December 31, 2023 and 2022. (4) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023. DESKTOP METAL, INC. NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE (in thousands) For the Year Ended December 31, (Dollars in thousands) 2023 2022 2021 GAAP operating expenses $ 313,131 $ 746,834 $ 219,748 Stock-based compensation included in operating expenses(1),(2) (30,915) (46,528) (27,760) Amortization of acquired intangible assets included in operating expenses (13,828) (14,955) (9,114) Restructuring expense included in operating expenses (7,283) (3,301) — Acquisition-related and integration costs included in operating expenses(3) (5,221) (5,618) (23,788) In-process research and development assets acquired — — (25,581) Impairment charges (8,518) — — Goodwill impairment (112,911) (498,800) — Non-GAAP operating expenses $ 134,455 $ 177,632 $ 133,505 (1) Includes $7.3 million of stock-based compensation expense associated with the 2022 Initiative for the year ended December 31, 2022. (2) Includes $1.9 million and $0.9 million of liability-award stock-based compensation, respectively, for the years ended December 31, 2023 and 2022. (3) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023. DESKTOP METAL, INC. NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE (in thousands) For the Years Ended December 31, (Dollars in thousands) 2023 2022 2021 Net loss attributable to common stockholders $ (323,271) $ (740,343) $ (240,334) Interest (income) expense, net 4,099 1,743 (334) Income tax expense (benefit) (3,105) (1,498) (29,668) Depreciation and amortization 53,632 50,767 24,854 In-process research and development assets acquired — — 25,581 EBITDA (268,645) (689,331) (219,901) Change in fair value of warrant liability — - 56,576 Change in fair value of investments 1,239 8,164 12,475 Inventory step-up adjustment — 1,496 2,194 Stock-based compensation expense(1),(2) 33,177 48,785 28,778 Restructuring expense 37,488 6,957 — Goodwill impairment 112,911 498,800 — Impairment charges 8,518 Acquisition-related and integration costs(3) 6,179 6,766 23,788 Adjusted EBITDA $ (69,133) $ (118,363) $ (96,090) (1) Includes $7.3 million of stock-based compensation expense associated with the 2022 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. (3) For the year ended December 31, 2023, we incurred $10.0 million in merger expenses related to the Stratasys transaction and recognized a $10.0 million reduction in expenses as a result of the reimbursement from Stratasys, with no net impact to the adjustment for Acquisition-related and integration costs for the year ended December 31, 2023. DESKTOP METAL, INC. NON-GAAP RECONCILIATION TABLE (in thousands) For the Quarter Ended December 31, (Dollars in thousands) 2023 2022 GAAP gross margin $ (16,739) $ 8,311 Stock-based compensation included in cost of sales 475 365 Amortization of acquired intangible assets included in cost of sales 7,045 5,890 Restructuring expense in cost of sales 26,984 147 Acquisition-related and integration costs included in cost of sales 45 — Inventory step-up adjustment in cost of sales — — Non-GAAP gross margin $ 17,810 $ 14,713 GAAP operating loss $ (177,267) $ (311,895) Stock-based compensation 6,478 7,615 Amortization of acquired intangible assets 10,320 10,140 Restructuring expense 30,878 1,488 Inventory step-up adjustment in cost of sales — — Acquisition-related and integration costs 2,866 133 In-process research and development assets acquired — — Impairment charges 2,456 — Goodwill impairment 110,461 269,300 Non-GAAP operating loss $ (13,808) $ (23,219) GAAP net loss $ (174,529) $ (312,353) Stock-based compensation 6,478 7,615 Amortization of acquired intangible assets 10,320 10,140 Restructuring expense 30,878 1,488 Inventory step-up adjustment in cost of sales — — Acquisition-related and integration costs 2,866 133 In-process research and development assets acquired — — Impairment charges 2,456 — Goodwill impairment 110,461 269,300 Change in fair value of investments 178 (329) Change in fair value of warrant liability — — Non-GAAP net loss $ (10,892) $ (24,006) DESKTOP METAL, INC. NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE (in thousands) For the Quarter Ended December 31, (Dollars in thousands) 2023 2022 Net loss attributable to common stockholders $ (174,528) $ (312,353) Interest (income) expense, net 1,134 462 Income tax expense (benefit) (2,430) 104 Depreciation and amortization 13,312 12,473 In-process research and development assets acquired — — EBITDA (162,512) (299,314) Change in fair value of warrant liability — - Change in fair value of investments 178 (329) Inventory step-up adjustment — — Stock-based compensation expense 6,478 7,615 Restructuring expense 30,878 1,488 Goodwill impairment 110,461 269,300 Impairment charges 2,456 Acquisition-related and integration costs 2,866 133 Adjusted EBITDA $ (9,195) $ (21,107) View source version on businesswire.com: https://www.businesswire.com/news/home/20240315314376/en/
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