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 Second Quarter 2024 Financial Results By: Desktop Metal, Inc. via Business Wire July 30, 2024 at 16:10 PM EDT Revenue of $38.9 million compared to $53.3 million for the same period a year ago Q2 net loss of $(103.4) million, impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Adjusted EBITDA of $(13.2) million, an improvement from $(15) million from Q2 2023 Quarterly GAAP operating expenses increased to $69.1 million due to accelerated amortization and depreciation from discontinued operations. Ongoing cost reductions delivered non-GAAP operating expenses of $27 million, a 22% year-over-year improvement Services revenue in support of current and prospective customers increased 27% to $7.5 million, up from $5.9 million a year ago. Announced definitive merger agreement for a proposed business combination with Nano Dimension Desktop Metal, Inc. (NYSE: DM), a global leader in Additive Manufacturing 2.0 technologies for mass production, today announced its financial results for the second quarter ended June 30, 2024. “Since the beginning of 2022, Desktop Metal has worked tirelessly to align our cost structure with macroeconomic realities, making hard decisions about the business. By the end of Q1 we had delivered nine quarters of non-GAAP opex reduction and brought our cash burn down dramatically. I am proud of the progress we have shown,” said Ric Fulop, Founder and CEO of Desktop Metal. “However, despite these efforts, we've faced an increasingly challenging business environment as a result of rising rates, slowing capex budgets and other macro related challenges. We began to notice a concerning trend towards the end of this quarter with customers becoming hesitant to engage in closing deals due to our weakening financial outlook making it more difficult to reach our targets. “This feedback from the market was a clear signal that we needed to take action. The proposed combination with Nano Dimension represents the best path forward for Desktop Metal and all of our stakeholders. This merger offers several key benefits that we expect will strengthen our competitive position and preserve shareholder value.” Second Quarter 2024 Recent Business Highlights: Corporate Continued execution of cost reduction plans as we work to align business structure with current 3D printing market Product Performance Launched and began selling the all-new PureSinter™ Furnace for high-purity, one-run debinding and sintering of metal parts produced with either additive manufacturing or traditional manufacturing methods. The first unit has been sold to AmPd Labs in Texas, a manufacturing services provider and DM Super Fleet customer with three Shop Systems being used for metal production. Announced that platinum is now customer-qualified on the DM Production System binder jet 3D printing platform by Legor, an Italy-based leader in metals science and production of best-in-class alloys, powders, and plating solutions for the jewelry and fashion hardware and accessories markets. Showcased more than 24 customer applications and new breakthroughs in production metal and ceramic 3D Printing at RAPID + TCT, including aluminum 6061 components produced with Bega, a global leader in fine architectural outdoor and indoor lighting, and Eaton, an intelligent power management company with six DM printers Installed our fourth Figur G-15 Digital Sheet Forming system to Wisconsin-Based Evology Manufacturing, an ITAR-registered full-service contract manufacturer with 30+ years of experience using traditional and additive manufacturing to serve some of the most innovative product companies in the world Desktop Health® announced Flexcera® Smile Ultra+ Dental Resin is now validated to 3D print strong and lifelike teeth restorations for use in dental implantology with All-on-X implant provisionals. Second Quarter 2024 Financial Highlights Revenue of $38.9 million, down from $53.3 million in the same quarter a year ago. GAAP gross margin of (83)%; Non-GAAP gross margin of 29.2%. GAAP gross margins impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Q2 2024 net loss of $(103.4) million, impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Adjusted EBITDA of $(13.2) million, a year-over-year improvement of 12% Cash, cash equivalents, and short-term investments closed first quarter 2024 at $46.7 million, as rate of operating cash consumption declined 40% compared to the same year-ago quarter Removing financial guidance for the remainder of the year due to the pending acquisition by Nano Dimension Conference Call Information: Desktop Metal will host a conference call on Wednesday, July 31, 2024 at 8:30 am ET to discuss second quarter 2024 results. Participants may access the call at 1-800-717-1738, international callers may use 1-646-307-1865, 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, plans and objectives for future operations and the expected benefits of the proposed transaction with Nano Dimension, 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 Metal’s ability to realize the benefits from cost saving measures; supply and logistics disruptions, including shortages and delays; and risks related to the completion of the proposed transaction and actions related thereto. For more information about risks and uncertainties that may impact Desktop Metal’s business, financial condition, results of operations and prospects generally, please refer to Desktop Metal’s reports filed with the SEC, including without limitation the “Risk Factors” and/or other information included in the Form 10-K filed with the SEC on March 15, 2024, 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. No Offer or Solicitation This press release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. Additional Information about the Transaction and Where to Find It In connection with the proposed transaction, Desktop Metal intends to file a proxy statement with the SEC. Desktop Metal may also file other relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the proxy statement or any other document that Desktop Metal may file with the SEC. The definitive proxy statement (if and when available) will be mailed to stockholders of Desktop Metal. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the proxy statement (if and when available) and other documents containing important information about Desktop Metal and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Desktop Metal will be available free of charge on Desktop Metal’s website at https://ir.desktopmetal.com/sec-filings/all-sec-filings. Participants in the Solicitation Desktop Metal, Nano and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of Desktop Metal is set forth in Desktop Metal’s proxy statement for its 2024 Annual Meeting of Stockholders, which was filed with the SEC on April 23, 2024. Information about the directors and executive officers of Nano is set forth in Nano’s Annual Report on Form 20-F, which was filed with the SEC on March 21, 2024. Other information regarding persons why may be deemed to be participants in the solicitation of Desktop Metal’s stockholders in connection with the proposed transaction and any direct or indirect interests they may have in the proposed transaction will be set forth in Desktop Metal’s definitive proxy statement for its special meeting of stockholders when it is filed with the SEC. DESKTOP METAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share amounts) June 30, December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 45,855 $ 83,845 Current portion of restricted cash 215 233 Short‑term investments 177 625 Accounts receivable 29,507 37,690 Inventory 84,005 82,639 Prepaid expenses and other current assets 10,096 11,105 Total current assets 169,855 216,137 Restricted cash, net of current portion 612 612 Property and equipment, net 26,351 35,840 Intangible assets, net 80,390 168,259 Other noncurrent assets 29,284 37,153 Total Assets $ 306,492 $ 458,001 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 18,089 $ 18,190 Customer deposits 4,630 5,356 Current portion of lease liability 7,756 7,404 Accrued expenses and other current liabilities 24,891 27,085 Current portion of deferred revenue 9,860 11,739 Current portion of long‑term debt, net of deferred financing costs 225 330 Total current liabilities 65,451 70,104 Long-term debt, net of current portion 29 89 Convertible notes 112,930 112,565 Lease liability, net of current portion 20,522 23,566 Deferred revenue, net of current portion 1,842 3,696 Deferred tax liability 3,138 3,523 Other noncurrent liabilities 2,739 2,806 Total liabilities 206,651 216,349 Commitments and Contingencies (Note 17) Stockholders’ Equity Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively — — Common Stock, $0.0001 par value—500,000,000 shares authorized; 33,196,705 and 32,527,742 shares issued at June 30, 2024 and December 31, 2023, respectively, 33,196,705 and 32,527,167 shares outstanding at June 30, 2024 and December 31, 2023, respectively 4 4 Additional paid‑in capital 1,923,978 1,908,533 Accumulated deficit (1,787,763 ) (1,632,225 ) Accumulated other comprehensive loss (36,378 ) (34,660 ) Total Stockholders’ Equity 99,841 241,652 Total Liabilities and Stockholders’ Equity $ 306,492 $ 458,001 See notes to condensed consolidated financial statements DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Revenues Products $ 31,411 $ 47,398 $ 67,042 $ 84,095 Services 7,521 5,888 12,490 10,507 Total revenues 38,932 53,286 79,532 94,602 Cost of sales Products 67,209 43,224 106,228 82,115 Services 3,912 3,973 7,699 7,762 Total cost of sales 71,121 47,197 113,927 89,877 Gross profit (loss) (32,189 ) 6,089 (34,395 ) 4,725 Operating expenses Research and development 17,143 21,223 36,956 44,367 Sales and marketing 25,802 10,440 36,955 20,047 General and administrative 26,193 22,944 42,410 41,145 Total operating expenses 69,138 54,607 116,321 105,559 Loss from operations (101,327 ) (48,518 ) (150,716 ) (100,834 ) Interest expense (1,690 ) (1,109 ) (3,181 ) (1,920 ) Interest and other expense, net (78 ) (78 ) (1,494 ) (149 ) Loss before income taxes (103,095 ) (49,705 ) (155,391 ) (102,903 ) Income tax benefit (expense) (345 ) $ (23 ) $ (147 ) $ 534 Net loss $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Net loss per share—basic and diluted (3.13 ) (1.55 ) (4.73 ) (3.20 ) Weighted average shares outstanding, basic and diluted 33,085,262 32,165,582 32,898,836 32,038,281 See notes to condensed consolidated financial statements DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net loss $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Other comprehensive loss, net of taxes: Unrealized gain (loss) on available-for-sale marketable securities, net — 148 (451 ) 337 Foreign currency translation adjustment (500 ) (1,316 ) (1,267 ) 233 Total comprehensive loss, net of taxes of $0 $ (103,940 ) $ (50,896 ) $ (157,256 ) $ (101,799 ) See notes to condensed consolidated financial statements. · DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (in thousands, except share amounts) Three Months Ended June 30, 2024 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE— April 1, 2024 32,970,519 $ 4 $ 1,917,535 $ (1,684,323 ) $ (35,878 ) $ 197,338 Fractional shares redeemed for cash in lieu of reverse stock split (1,338 ) — (7 ) — — (7 ) Vesting of restricted stock units 234,110 — — — — — Repurchase of shares for employee tax withholdings (6,586 ) — (47 ) — — (47 ) Stock‑based compensation expense — — 6,497 — — 6,497 Net loss — — — (103,440 ) — (103,440 ) Other comprehensive loss — — — — (500 ) (500 ) BALANCE—June 30, 2024 33,196,705 $ 4 $ 1,923,978 $ (1,787,763 ) $ (36,378 ) $ 99,841 Six Months Ended June 30, 2024 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE—January 1, 2024 32,527,167 $ 4 $ 1,908,533 $ (1,632,225 ) $ (34,660 ) $ 241,652 Fractional shares redeemed for cash in lieu of reverse stock split (1,338 ) — (7 ) — — (7 ) Vesting of restricted Common Stock 574 — — — — — Vesting of restricted stock units 730,477 — — — — — Repurchase of shares for employee tax withholdings (60,175 ) — (375 ) — — (375 ) Issuance of common stock related to share-based liability awards — — 1,997 — — 1,997 Stock‑based compensation expense — — 13,830 — — 13,830 Net loss — — — (155,538 ) — (155,538 ) Other comprehensive loss — — — — (1,718 ) (1,718 ) BALANCE—June 30, 2024 33,196,705 $ 4 $ 1,923,978 $ (1,787,763 ) $ (36,378 ) $ 99,841 Three Months Ended June 30, 2023 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE—April 1, 2023 32,040,139 $ 3 $ 1,883,793 $ (1,361,595 ) $ (36,630 ) $ 485,571 Exercise of Common Stock options 47,223 — 560 — — 560 Vesting of restricted Common Stock 5,021 — — — — — Vesting of restricted stock units 126,662 — — — — — Repurchase of shares for employee tax withholdings (505 ) — (11 ) — — (11 ) Issuance of Common Stock related to settlement of contingent consideration 44,479 — 797 — — 797 Stock‑based compensation expense — — 8,438 — — 8,438 Net loss — — — (49,728 ) — (49,728 ) Other comprehensive income (loss) — — — — (1,168 ) (1,168 ) BALANCE—June 30, 2023 32,263,019 $ 3 $ 1,893,577 $ (1,411,323 ) $ (37,798 ) $ 444,459 Six Months Ended June 30, 2023 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE—January 1, 2023 31,813,343 $ 3 $ 1,874,821 $ (1,308,954 ) $ (38,368 ) $ 527,502 Exercise of Common Stock options 96,811 — 1,157 — — 1,157 Vesting of restricted Common Stock 7,559 — — — — — Vesting of restricted stock units 307,504 — — — — — Repurchase of shares for employee tax withholdings (6,677 ) — (109 ) — — (109 ) Issuance of Common Stock related to settlement of contingent consideration 44,479 797 797 Stock‑based compensation expense — — 16,911 — — 16,911 Net loss — — — (102,369 ) — (102,369 ) Other comprehensive income (loss) — — — — 570 570 BALANCE—June 30, 2023 32,263,019 $ 3 $ 1,893,577 $ (1,411,323 ) $ (37,798 ) $ 444,459 See notes to condensed consolidated financial statements. DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Six Months Ended June 30, 2024 2023 Cash flows from operating activities: Net loss $ (155,538 ) $ (102,369 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 96,043 26,965 Stock‑based compensation 14,335 19,016 Amortization (accretion) of discount on investments — (484 ) Amortization of deferred costs on convertible notes 365 365 Provision for bad debt 200 962 Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net (45 ) — Loss on disposal of property and equipment (92 ) 496 Foreign exchange (gains) losses on intercompany transactions, net 299 — Net decrease in accrued interest related to marketable securities — 238 Net unrealized loss on equity investment 448 148 Deferred tax benefit 147 (534 ) Foreign currency transaction loss 497 97 Changes in operating assets and liabilities: Accounts receivable 7,777 (3,661 ) Inventory (3,353 ) (8,760 ) Prepaid expenses and other current assets 910 (675 ) Other assets 8,909 1,595 Accounts payable (38 ) (407 ) Accrued expenses and other current liabilities (282 ) 1,097 Customer deposits (644 ) (2,322 ) Current portion of deferred revenue (3,611 ) (918 ) Change in right of use assets and lease liabilities, net (3,778 ) (3,110 ) Other liabilities 19 1,767 Net cash used in operating activities (37,432 ) (70,494 ) Cash flows from investing activities: Purchases of property and equipment (681 ) (1,305 ) Proceeds from sale of property and equipment 1,694 9,942 Purchase of marketable securities — (4,973 ) Proceeds from sales and maturities of marketable securities — 107,719 Cash paid for acquisitions, net of cash acquired — (500 ) Net cash provided by investing activities 1,013 110,883 Cash flows from financing activities: Proceeds from the exercise of stock options — 1,157 Payment of taxes related to net share settlement upon vesting of restricted stock units (376 ) (108 ) Repayment of loans (158 ) (328 ) Net cash (used in) provided by financing activities (534 ) 721 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,055 ) 73 Net increase (decrease) in cash, cash equivalents, and restricted cash (38,008 ) 41,183 Cash, cash equivalents, and restricted cash at beginning of period 84,690 81,913 Cash, cash equivalents, and restricted cash at end of period 46,682 123,096 Supplemental disclosures of cash flow information Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows: Cash and cash equivalents $ 45,855 $ 121,660 Restricted cash included in other current assets 215 824 Restricted cash included in other noncurrent assets 612 612 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 46,682 $ 123,096 Supplemental cash flow information: Interest paid $ 3,488 $ — Taxes paid $ — $ — Non‑cash investing and financing activities: Net unrealized gain on investments $ — $ (337 ) Common Stock issued for settlement of contingent consideration 797 Additions to right of use assets and lease liabilities $ 863 $ 8,489 Purchase of property and equipment included in accounts payable $ 129 $ 365 Purchase of property and equipment included in accrued expense $ — $ 32 Transfers from inventory to PP&E 1,285 — Transfers from property and equipment to inventory $ — $ 841 Transfers from inventory to property and equipment $ — $ 1,345 See notes to condensed 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 Three Months Ended For the Six Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 2024 2023 GAAP gross margin $ (32,189 ) $ 6,089 $ (34,395 ) $ 4,725 Stock-based compensation included in cost of sales(1) 475 590 1,043 1,270 Amortization of acquired intangible assets included in cost of sales(2) 42,681 6,928 57,021 13,855 Restructuring expense in cost of sales(2) 28 2,488 37,543 3,205 Acquisition-related and integration costs included in cost of sales 366 434 366 913 Non-GAAP gross margin $ 11,361 $ 16,529 $ 61,578 $ 23,968 GAAP operating loss $ (101,327 ) $ (48,518 ) $ (150,716 ) $ (100,834 ) Stock-based compensation(2) 6,497 9,703 14,335 19,016 Amortization of acquired intangible assets 65,931 10,457 86,978 20,899 Restructuring expense(3) 11,211 2,850 14,217 6,469 Acquisition-related and integration costs 2,050 7,359 3,305 8,765 Non-GAAP operating loss $ (15,638 ) $ (18,149 ) $ (31,881 ) $ (45,685 ) GAAP net loss $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Stock-based compensation(2) 6,497 9,703 14,335 19,016 Amortization of acquired intangible assets 65,931 10,457 86,978 20,899 Restructuring expense(3) 11,211 2,850 14,217 6,469 Acquisition-related and integration costs 2,050 7,359 3,305 8,765 Change in fair value of investments 497 107 1,814 286 Non-GAAP net loss $ (17,254 ) $ (19,252 ) $ (34,889 ) $ (46,934 ) (1) Includes immaterial liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $0.2 million and $0.4 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively. (2) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.3 million and $2.9 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively (3) Includes $3.9 million and $4.3 million of depreciation classified as restructuring charges for the three and six months ended June 30, 2024, respectively. DESKTOP METAL, INC. NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE (in thousands) For the Three Months Ended For the Six Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 2024 2023 GAAP operating expenses $ 69,138 $ 54,607 $ 116,321 $ 105,559 Stock-based compensation included in operating expenses(1) (6,022 ) (9,113 ) (13,292 ) (17,746 ) Amortization of acquired intangible assets included in operating expenses (23,250 ) (3,529 ) (29,957 ) (7,044 ) Restructuring expense included in operating expenses (11,183 ) (362 ) 23,326 (3,264 ) Acquisition-related and integration costs included in operating expenses (1,684 ) (6,925 ) (2,939 ) (7,852 ) Non-GAAP operating expenses $ 26,999 $ 34,678 $ 93,459 $ 69,653 (1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.1 million and $2.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively. DESKTOP METAL, INC. NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE (in thousands) For the Three Months Ended For the Six Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 2024 2023 Net loss attributable to common stockholders $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Interest expense 1,690 1,109 3,181 1,920 Income tax benefit (expense) 345 23 147 (534 ) Depreciation and amortization (2) 71,858 13,530 96,043 26,965 EBITDA (29,547 ) (35,066 ) (56,167 ) (74,018 ) Change in fair value of investments 497 107 1,814 286 Stock-based compensation expense(1) 6,497 9,703 14,335 19,016 Restructuring expense (2) 7,295 2,850 9,887 6,469 Acquisition-related and integration costs 2,050 7,359 3,305 8,765 Adjusted EBITDA $ (13,208 ) $ (15,047 ) $ (26,826 ) $ (39,482 ) (1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.3 million and $2.9 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively (2) In connection with the Photopolymer Initiative, we recorded incremental depreciation and amortization for the shortened useful life of various fixed assets and intangibles to restructuring charges. For the three and six months ended June 30, 2024, we recorded incremental depreciation of $3.9 million and $4.3 million, respectively, and incremental amortization of $59.9 million and $71.1 million, respectively. These amounts are listed in the depreciation and amortization line. View source version on businesswire.com: https://www.businesswire.com/news/home/20240730009179/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 Second Quarter 2024 Financial Results By: Desktop Metal, Inc. via Business Wire July 30, 2024 at 16:10 PM EDT Revenue of $38.9 million compared to $53.3 million for the same period a year ago Q2 net loss of $(103.4) million, impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Adjusted EBITDA of $(13.2) million, an improvement from $(15) million from Q2 2023 Quarterly GAAP operating expenses increased to $69.1 million due to accelerated amortization and depreciation from discontinued operations. Ongoing cost reductions delivered non-GAAP operating expenses of $27 million, a 22% year-over-year improvement Services revenue in support of current and prospective customers increased 27% to $7.5 million, up from $5.9 million a year ago. Announced definitive merger agreement for a proposed business combination with Nano Dimension Desktop Metal, Inc. (NYSE: DM), a global leader in Additive Manufacturing 2.0 technologies for mass production, today announced its financial results for the second quarter ended June 30, 2024. “Since the beginning of 2022, Desktop Metal has worked tirelessly to align our cost structure with macroeconomic realities, making hard decisions about the business. By the end of Q1 we had delivered nine quarters of non-GAAP opex reduction and brought our cash burn down dramatically. I am proud of the progress we have shown,” said Ric Fulop, Founder and CEO of Desktop Metal. “However, despite these efforts, we've faced an increasingly challenging business environment as a result of rising rates, slowing capex budgets and other macro related challenges. We began to notice a concerning trend towards the end of this quarter with customers becoming hesitant to engage in closing deals due to our weakening financial outlook making it more difficult to reach our targets. “This feedback from the market was a clear signal that we needed to take action. The proposed combination with Nano Dimension represents the best path forward for Desktop Metal and all of our stakeholders. This merger offers several key benefits that we expect will strengthen our competitive position and preserve shareholder value.” Second Quarter 2024 Recent Business Highlights: Corporate Continued execution of cost reduction plans as we work to align business structure with current 3D printing market Product Performance Launched and began selling the all-new PureSinter™ Furnace for high-purity, one-run debinding and sintering of metal parts produced with either additive manufacturing or traditional manufacturing methods. The first unit has been sold to AmPd Labs in Texas, a manufacturing services provider and DM Super Fleet customer with three Shop Systems being used for metal production. Announced that platinum is now customer-qualified on the DM Production System binder jet 3D printing platform by Legor, an Italy-based leader in metals science and production of best-in-class alloys, powders, and plating solutions for the jewelry and fashion hardware and accessories markets. Showcased more than 24 customer applications and new breakthroughs in production metal and ceramic 3D Printing at RAPID + TCT, including aluminum 6061 components produced with Bega, a global leader in fine architectural outdoor and indoor lighting, and Eaton, an intelligent power management company with six DM printers Installed our fourth Figur G-15 Digital Sheet Forming system to Wisconsin-Based Evology Manufacturing, an ITAR-registered full-service contract manufacturer with 30+ years of experience using traditional and additive manufacturing to serve some of the most innovative product companies in the world Desktop Health® announced Flexcera® Smile Ultra+ Dental Resin is now validated to 3D print strong and lifelike teeth restorations for use in dental implantology with All-on-X implant provisionals. Second Quarter 2024 Financial Highlights Revenue of $38.9 million, down from $53.3 million in the same quarter a year ago. GAAP gross margin of (83)%; Non-GAAP gross margin of 29.2%. GAAP gross margins impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Q2 2024 net loss of $(103.4) million, impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Adjusted EBITDA of $(13.2) million, a year-over-year improvement of 12% Cash, cash equivalents, and short-term investments closed first quarter 2024 at $46.7 million, as rate of operating cash consumption declined 40% compared to the same year-ago quarter Removing financial guidance for the remainder of the year due to the pending acquisition by Nano Dimension Conference Call Information: Desktop Metal will host a conference call on Wednesday, July 31, 2024 at 8:30 am ET to discuss second quarter 2024 results. Participants may access the call at 1-800-717-1738, international callers may use 1-646-307-1865, 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, plans and objectives for future operations and the expected benefits of the proposed transaction with Nano Dimension, 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 Metal’s ability to realize the benefits from cost saving measures; supply and logistics disruptions, including shortages and delays; and risks related to the completion of the proposed transaction and actions related thereto. For more information about risks and uncertainties that may impact Desktop Metal’s business, financial condition, results of operations and prospects generally, please refer to Desktop Metal’s reports filed with the SEC, including without limitation the “Risk Factors” and/or other information included in the Form 10-K filed with the SEC on March 15, 2024, 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. No Offer or Solicitation This press release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. Additional Information about the Transaction and Where to Find It In connection with the proposed transaction, Desktop Metal intends to file a proxy statement with the SEC. Desktop Metal may also file other relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the proxy statement or any other document that Desktop Metal may file with the SEC. The definitive proxy statement (if and when available) will be mailed to stockholders of Desktop Metal. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the proxy statement (if and when available) and other documents containing important information about Desktop Metal and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Desktop Metal will be available free of charge on Desktop Metal’s website at https://ir.desktopmetal.com/sec-filings/all-sec-filings. Participants in the Solicitation Desktop Metal, Nano and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of Desktop Metal is set forth in Desktop Metal’s proxy statement for its 2024 Annual Meeting of Stockholders, which was filed with the SEC on April 23, 2024. Information about the directors and executive officers of Nano is set forth in Nano’s Annual Report on Form 20-F, which was filed with the SEC on March 21, 2024. Other information regarding persons why may be deemed to be participants in the solicitation of Desktop Metal’s stockholders in connection with the proposed transaction and any direct or indirect interests they may have in the proposed transaction will be set forth in Desktop Metal’s definitive proxy statement for its special meeting of stockholders when it is filed with the SEC. DESKTOP METAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share amounts) June 30, December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 45,855 $ 83,845 Current portion of restricted cash 215 233 Short‑term investments 177 625 Accounts receivable 29,507 37,690 Inventory 84,005 82,639 Prepaid expenses and other current assets 10,096 11,105 Total current assets 169,855 216,137 Restricted cash, net of current portion 612 612 Property and equipment, net 26,351 35,840 Intangible assets, net 80,390 168,259 Other noncurrent assets 29,284 37,153 Total Assets $ 306,492 $ 458,001 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 18,089 $ 18,190 Customer deposits 4,630 5,356 Current portion of lease liability 7,756 7,404 Accrued expenses and other current liabilities 24,891 27,085 Current portion of deferred revenue 9,860 11,739 Current portion of long‑term debt, net of deferred financing costs 225 330 Total current liabilities 65,451 70,104 Long-term debt, net of current portion 29 89 Convertible notes 112,930 112,565 Lease liability, net of current portion 20,522 23,566 Deferred revenue, net of current portion 1,842 3,696 Deferred tax liability 3,138 3,523 Other noncurrent liabilities 2,739 2,806 Total liabilities 206,651 216,349 Commitments and Contingencies (Note 17) Stockholders’ Equity Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively — — Common Stock, $0.0001 par value—500,000,000 shares authorized; 33,196,705 and 32,527,742 shares issued at June 30, 2024 and December 31, 2023, respectively, 33,196,705 and 32,527,167 shares outstanding at June 30, 2024 and December 31, 2023, respectively 4 4 Additional paid‑in capital 1,923,978 1,908,533 Accumulated deficit (1,787,763 ) (1,632,225 ) Accumulated other comprehensive loss (36,378 ) (34,660 ) Total Stockholders’ Equity 99,841 241,652 Total Liabilities and Stockholders’ Equity $ 306,492 $ 458,001 See notes to condensed consolidated financial statements DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Revenues Products $ 31,411 $ 47,398 $ 67,042 $ 84,095 Services 7,521 5,888 12,490 10,507 Total revenues 38,932 53,286 79,532 94,602 Cost of sales Products 67,209 43,224 106,228 82,115 Services 3,912 3,973 7,699 7,762 Total cost of sales 71,121 47,197 113,927 89,877 Gross profit (loss) (32,189 ) 6,089 (34,395 ) 4,725 Operating expenses Research and development 17,143 21,223 36,956 44,367 Sales and marketing 25,802 10,440 36,955 20,047 General and administrative 26,193 22,944 42,410 41,145 Total operating expenses 69,138 54,607 116,321 105,559 Loss from operations (101,327 ) (48,518 ) (150,716 ) (100,834 ) Interest expense (1,690 ) (1,109 ) (3,181 ) (1,920 ) Interest and other expense, net (78 ) (78 ) (1,494 ) (149 ) Loss before income taxes (103,095 ) (49,705 ) (155,391 ) (102,903 ) Income tax benefit (expense) (345 ) $ (23 ) $ (147 ) $ 534 Net loss $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Net loss per share—basic and diluted (3.13 ) (1.55 ) (4.73 ) (3.20 ) Weighted average shares outstanding, basic and diluted 33,085,262 32,165,582 32,898,836 32,038,281 See notes to condensed consolidated financial statements DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net loss $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Other comprehensive loss, net of taxes: Unrealized gain (loss) on available-for-sale marketable securities, net — 148 (451 ) 337 Foreign currency translation adjustment (500 ) (1,316 ) (1,267 ) 233 Total comprehensive loss, net of taxes of $0 $ (103,940 ) $ (50,896 ) $ (157,256 ) $ (101,799 ) See notes to condensed consolidated financial statements. · DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (in thousands, except share amounts) Three Months Ended June 30, 2024 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE— April 1, 2024 32,970,519 $ 4 $ 1,917,535 $ (1,684,323 ) $ (35,878 ) $ 197,338 Fractional shares redeemed for cash in lieu of reverse stock split (1,338 ) — (7 ) — — (7 ) Vesting of restricted stock units 234,110 — — — — — Repurchase of shares for employee tax withholdings (6,586 ) — (47 ) — — (47 ) Stock‑based compensation expense — — 6,497 — — 6,497 Net loss — — — (103,440 ) — (103,440 ) Other comprehensive loss — — — — (500 ) (500 ) BALANCE—June 30, 2024 33,196,705 $ 4 $ 1,923,978 $ (1,787,763 ) $ (36,378 ) $ 99,841 Six Months Ended June 30, 2024 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE—January 1, 2024 32,527,167 $ 4 $ 1,908,533 $ (1,632,225 ) $ (34,660 ) $ 241,652 Fractional shares redeemed for cash in lieu of reverse stock split (1,338 ) — (7 ) — — (7 ) Vesting of restricted Common Stock 574 — — — — — Vesting of restricted stock units 730,477 — — — — — Repurchase of shares for employee tax withholdings (60,175 ) — (375 ) — — (375 ) Issuance of common stock related to share-based liability awards — — 1,997 — — 1,997 Stock‑based compensation expense — — 13,830 — — 13,830 Net loss — — — (155,538 ) — (155,538 ) Other comprehensive loss — — — — (1,718 ) (1,718 ) BALANCE—June 30, 2024 33,196,705 $ 4 $ 1,923,978 $ (1,787,763 ) $ (36,378 ) $ 99,841 Three Months Ended June 30, 2023 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE—April 1, 2023 32,040,139 $ 3 $ 1,883,793 $ (1,361,595 ) $ (36,630 ) $ 485,571 Exercise of Common Stock options 47,223 — 560 — — 560 Vesting of restricted Common Stock 5,021 — — — — — Vesting of restricted stock units 126,662 — — — — — Repurchase of shares for employee tax withholdings (505 ) — (11 ) — — (11 ) Issuance of Common Stock related to settlement of contingent consideration 44,479 — 797 — — 797 Stock‑based compensation expense — — 8,438 — — 8,438 Net loss — — — (49,728 ) — (49,728 ) Other comprehensive income (loss) — — — — (1,168 ) (1,168 ) BALANCE—June 30, 2023 32,263,019 $ 3 $ 1,893,577 $ (1,411,323 ) $ (37,798 ) $ 444,459 Six Months Ended June 30, 2023 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE—January 1, 2023 31,813,343 $ 3 $ 1,874,821 $ (1,308,954 ) $ (38,368 ) $ 527,502 Exercise of Common Stock options 96,811 — 1,157 — — 1,157 Vesting of restricted Common Stock 7,559 — — — — — Vesting of restricted stock units 307,504 — — — — — Repurchase of shares for employee tax withholdings (6,677 ) — (109 ) — — (109 ) Issuance of Common Stock related to settlement of contingent consideration 44,479 797 797 Stock‑based compensation expense — — 16,911 — — 16,911 Net loss — — — (102,369 ) — (102,369 ) Other comprehensive income (loss) — — — — 570 570 BALANCE—June 30, 2023 32,263,019 $ 3 $ 1,893,577 $ (1,411,323 ) $ (37,798 ) $ 444,459 See notes to condensed consolidated financial statements. DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Six Months Ended June 30, 2024 2023 Cash flows from operating activities: Net loss $ (155,538 ) $ (102,369 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 96,043 26,965 Stock‑based compensation 14,335 19,016 Amortization (accretion) of discount on investments — (484 ) Amortization of deferred costs on convertible notes 365 365 Provision for bad debt 200 962 Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net (45 ) — Loss on disposal of property and equipment (92 ) 496 Foreign exchange (gains) losses on intercompany transactions, net 299 — Net decrease in accrued interest related to marketable securities — 238 Net unrealized loss on equity investment 448 148 Deferred tax benefit 147 (534 ) Foreign currency transaction loss 497 97 Changes in operating assets and liabilities: Accounts receivable 7,777 (3,661 ) Inventory (3,353 ) (8,760 ) Prepaid expenses and other current assets 910 (675 ) Other assets 8,909 1,595 Accounts payable (38 ) (407 ) Accrued expenses and other current liabilities (282 ) 1,097 Customer deposits (644 ) (2,322 ) Current portion of deferred revenue (3,611 ) (918 ) Change in right of use assets and lease liabilities, net (3,778 ) (3,110 ) Other liabilities 19 1,767 Net cash used in operating activities (37,432 ) (70,494 ) Cash flows from investing activities: Purchases of property and equipment (681 ) (1,305 ) Proceeds from sale of property and equipment 1,694 9,942 Purchase of marketable securities — (4,973 ) Proceeds from sales and maturities of marketable securities — 107,719 Cash paid for acquisitions, net of cash acquired — (500 ) Net cash provided by investing activities 1,013 110,883 Cash flows from financing activities: Proceeds from the exercise of stock options — 1,157 Payment of taxes related to net share settlement upon vesting of restricted stock units (376 ) (108 ) Repayment of loans (158 ) (328 ) Net cash (used in) provided by financing activities (534 ) 721 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,055 ) 73 Net increase (decrease) in cash, cash equivalents, and restricted cash (38,008 ) 41,183 Cash, cash equivalents, and restricted cash at beginning of period 84,690 81,913 Cash, cash equivalents, and restricted cash at end of period 46,682 123,096 Supplemental disclosures of cash flow information Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows: Cash and cash equivalents $ 45,855 $ 121,660 Restricted cash included in other current assets 215 824 Restricted cash included in other noncurrent assets 612 612 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 46,682 $ 123,096 Supplemental cash flow information: Interest paid $ 3,488 $ — Taxes paid $ — $ — Non‑cash investing and financing activities: Net unrealized gain on investments $ — $ (337 ) Common Stock issued for settlement of contingent consideration 797 Additions to right of use assets and lease liabilities $ 863 $ 8,489 Purchase of property and equipment included in accounts payable $ 129 $ 365 Purchase of property and equipment included in accrued expense $ — $ 32 Transfers from inventory to PP&E 1,285 — Transfers from property and equipment to inventory $ — $ 841 Transfers from inventory to property and equipment $ — $ 1,345 See notes to condensed 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 Three Months Ended For the Six Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 2024 2023 GAAP gross margin $ (32,189 ) $ 6,089 $ (34,395 ) $ 4,725 Stock-based compensation included in cost of sales(1) 475 590 1,043 1,270 Amortization of acquired intangible assets included in cost of sales(2) 42,681 6,928 57,021 13,855 Restructuring expense in cost of sales(2) 28 2,488 37,543 3,205 Acquisition-related and integration costs included in cost of sales 366 434 366 913 Non-GAAP gross margin $ 11,361 $ 16,529 $ 61,578 $ 23,968 GAAP operating loss $ (101,327 ) $ (48,518 ) $ (150,716 ) $ (100,834 ) Stock-based compensation(2) 6,497 9,703 14,335 19,016 Amortization of acquired intangible assets 65,931 10,457 86,978 20,899 Restructuring expense(3) 11,211 2,850 14,217 6,469 Acquisition-related and integration costs 2,050 7,359 3,305 8,765 Non-GAAP operating loss $ (15,638 ) $ (18,149 ) $ (31,881 ) $ (45,685 ) GAAP net loss $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Stock-based compensation(2) 6,497 9,703 14,335 19,016 Amortization of acquired intangible assets 65,931 10,457 86,978 20,899 Restructuring expense(3) 11,211 2,850 14,217 6,469 Acquisition-related and integration costs 2,050 7,359 3,305 8,765 Change in fair value of investments 497 107 1,814 286 Non-GAAP net loss $ (17,254 ) $ (19,252 ) $ (34,889 ) $ (46,934 ) (1) Includes immaterial liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $0.2 million and $0.4 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively. (2) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.3 million and $2.9 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively (3) Includes $3.9 million and $4.3 million of depreciation classified as restructuring charges for the three and six months ended June 30, 2024, respectively. DESKTOP METAL, INC. NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE (in thousands) For the Three Months Ended For the Six Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 2024 2023 GAAP operating expenses $ 69,138 $ 54,607 $ 116,321 $ 105,559 Stock-based compensation included in operating expenses(1) (6,022 ) (9,113 ) (13,292 ) (17,746 ) Amortization of acquired intangible assets included in operating expenses (23,250 ) (3,529 ) (29,957 ) (7,044 ) Restructuring expense included in operating expenses (11,183 ) (362 ) 23,326 (3,264 ) Acquisition-related and integration costs included in operating expenses (1,684 ) (6,925 ) (2,939 ) (7,852 ) Non-GAAP operating expenses $ 26,999 $ 34,678 $ 93,459 $ 69,653 (1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.1 million and $2.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively. DESKTOP METAL, INC. NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE (in thousands) For the Three Months Ended For the Six Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 2024 2023 Net loss attributable to common stockholders $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Interest expense 1,690 1,109 3,181 1,920 Income tax benefit (expense) 345 23 147 (534 ) Depreciation and amortization (2) 71,858 13,530 96,043 26,965 EBITDA (29,547 ) (35,066 ) (56,167 ) (74,018 ) Change in fair value of investments 497 107 1,814 286 Stock-based compensation expense(1) 6,497 9,703 14,335 19,016 Restructuring expense (2) 7,295 2,850 9,887 6,469 Acquisition-related and integration costs 2,050 7,359 3,305 8,765 Adjusted EBITDA $ (13,208 ) $ (15,047 ) $ (26,826 ) $ (39,482 ) (1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.3 million and $2.9 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively (2) In connection with the Photopolymer Initiative, we recorded incremental depreciation and amortization for the shortened useful life of various fixed assets and intangibles to restructuring charges. For the three and six months ended June 30, 2024, we recorded incremental depreciation of $3.9 million and $4.3 million, respectively, and incremental amortization of $59.9 million and $71.1 million, respectively. These amounts are listed in the depreciation and amortization line. View source version on businesswire.com: https://www.businesswire.com/news/home/20240730009179/en/Contacts Investor Relations: (857) 504-1084 DesktopMetalIR@icrinc.com Media Relations: Sarah Webster (313) 715-6988 sarahwebster@desktopmetal.com
Revenue of $38.9 million compared to $53.3 million for the same period a year ago Q2 net loss of $(103.4) million, impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Adjusted EBITDA of $(13.2) million, an improvement from $(15) million from Q2 2023 Quarterly GAAP operating expenses increased to $69.1 million due to accelerated amortization and depreciation from discontinued operations. Ongoing cost reductions delivered non-GAAP operating expenses of $27 million, a 22% year-over-year improvement Services revenue in support of current and prospective customers increased 27% to $7.5 million, up from $5.9 million a year ago. Announced definitive merger agreement for a proposed business combination with Nano Dimension
Desktop Metal, Inc. (NYSE: DM), a global leader in Additive Manufacturing 2.0 technologies for mass production, today announced its financial results for the second quarter ended June 30, 2024. “Since the beginning of 2022, Desktop Metal has worked tirelessly to align our cost structure with macroeconomic realities, making hard decisions about the business. By the end of Q1 we had delivered nine quarters of non-GAAP opex reduction and brought our cash burn down dramatically. I am proud of the progress we have shown,” said Ric Fulop, Founder and CEO of Desktop Metal. “However, despite these efforts, we've faced an increasingly challenging business environment as a result of rising rates, slowing capex budgets and other macro related challenges. We began to notice a concerning trend towards the end of this quarter with customers becoming hesitant to engage in closing deals due to our weakening financial outlook making it more difficult to reach our targets. “This feedback from the market was a clear signal that we needed to take action. The proposed combination with Nano Dimension represents the best path forward for Desktop Metal and all of our stakeholders. This merger offers several key benefits that we expect will strengthen our competitive position and preserve shareholder value.” Second Quarter 2024 Recent Business Highlights: Corporate Continued execution of cost reduction plans as we work to align business structure with current 3D printing market Product Performance Launched and began selling the all-new PureSinter™ Furnace for high-purity, one-run debinding and sintering of metal parts produced with either additive manufacturing or traditional manufacturing methods. The first unit has been sold to AmPd Labs in Texas, a manufacturing services provider and DM Super Fleet customer with three Shop Systems being used for metal production. Announced that platinum is now customer-qualified on the DM Production System binder jet 3D printing platform by Legor, an Italy-based leader in metals science and production of best-in-class alloys, powders, and plating solutions for the jewelry and fashion hardware and accessories markets. Showcased more than 24 customer applications and new breakthroughs in production metal and ceramic 3D Printing at RAPID + TCT, including aluminum 6061 components produced with Bega, a global leader in fine architectural outdoor and indoor lighting, and Eaton, an intelligent power management company with six DM printers Installed our fourth Figur G-15 Digital Sheet Forming system to Wisconsin-Based Evology Manufacturing, an ITAR-registered full-service contract manufacturer with 30+ years of experience using traditional and additive manufacturing to serve some of the most innovative product companies in the world Desktop Health® announced Flexcera® Smile Ultra+ Dental Resin is now validated to 3D print strong and lifelike teeth restorations for use in dental implantology with All-on-X implant provisionals. Second Quarter 2024 Financial Highlights Revenue of $38.9 million, down from $53.3 million in the same quarter a year ago. GAAP gross margin of (83)%; Non-GAAP gross margin of 29.2%. GAAP gross margins impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Q2 2024 net loss of $(103.4) million, impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Adjusted EBITDA of $(13.2) million, a year-over-year improvement of 12% Cash, cash equivalents, and short-term investments closed first quarter 2024 at $46.7 million, as rate of operating cash consumption declined 40% compared to the same year-ago quarter Removing financial guidance for the remainder of the year due to the pending acquisition by Nano Dimension Conference Call Information: Desktop Metal will host a conference call on Wednesday, July 31, 2024 at 8:30 am ET to discuss second quarter 2024 results. Participants may access the call at 1-800-717-1738, international callers may use 1-646-307-1865, 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, plans and objectives for future operations and the expected benefits of the proposed transaction with Nano Dimension, 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 Metal’s ability to realize the benefits from cost saving measures; supply and logistics disruptions, including shortages and delays; and risks related to the completion of the proposed transaction and actions related thereto. For more information about risks and uncertainties that may impact Desktop Metal’s business, financial condition, results of operations and prospects generally, please refer to Desktop Metal’s reports filed with the SEC, including without limitation the “Risk Factors” and/or other information included in the Form 10-K filed with the SEC on March 15, 2024, 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. No Offer or Solicitation This press release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. Additional Information about the Transaction and Where to Find It In connection with the proposed transaction, Desktop Metal intends to file a proxy statement with the SEC. Desktop Metal may also file other relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the proxy statement or any other document that Desktop Metal may file with the SEC. The definitive proxy statement (if and when available) will be mailed to stockholders of Desktop Metal. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the proxy statement (if and when available) and other documents containing important information about Desktop Metal and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Desktop Metal will be available free of charge on Desktop Metal’s website at https://ir.desktopmetal.com/sec-filings/all-sec-filings. Participants in the Solicitation Desktop Metal, Nano and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of Desktop Metal is set forth in Desktop Metal’s proxy statement for its 2024 Annual Meeting of Stockholders, which was filed with the SEC on April 23, 2024. Information about the directors and executive officers of Nano is set forth in Nano’s Annual Report on Form 20-F, which was filed with the SEC on March 21, 2024. Other information regarding persons why may be deemed to be participants in the solicitation of Desktop Metal’s stockholders in connection with the proposed transaction and any direct or indirect interests they may have in the proposed transaction will be set forth in Desktop Metal’s definitive proxy statement for its special meeting of stockholders when it is filed with the SEC. DESKTOP METAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share amounts) June 30, December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 45,855 $ 83,845 Current portion of restricted cash 215 233 Short‑term investments 177 625 Accounts receivable 29,507 37,690 Inventory 84,005 82,639 Prepaid expenses and other current assets 10,096 11,105 Total current assets 169,855 216,137 Restricted cash, net of current portion 612 612 Property and equipment, net 26,351 35,840 Intangible assets, net 80,390 168,259 Other noncurrent assets 29,284 37,153 Total Assets $ 306,492 $ 458,001 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 18,089 $ 18,190 Customer deposits 4,630 5,356 Current portion of lease liability 7,756 7,404 Accrued expenses and other current liabilities 24,891 27,085 Current portion of deferred revenue 9,860 11,739 Current portion of long‑term debt, net of deferred financing costs 225 330 Total current liabilities 65,451 70,104 Long-term debt, net of current portion 29 89 Convertible notes 112,930 112,565 Lease liability, net of current portion 20,522 23,566 Deferred revenue, net of current portion 1,842 3,696 Deferred tax liability 3,138 3,523 Other noncurrent liabilities 2,739 2,806 Total liabilities 206,651 216,349 Commitments and Contingencies (Note 17) Stockholders’ Equity Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively — — Common Stock, $0.0001 par value—500,000,000 shares authorized; 33,196,705 and 32,527,742 shares issued at June 30, 2024 and December 31, 2023, respectively, 33,196,705 and 32,527,167 shares outstanding at June 30, 2024 and December 31, 2023, respectively 4 4 Additional paid‑in capital 1,923,978 1,908,533 Accumulated deficit (1,787,763 ) (1,632,225 ) Accumulated other comprehensive loss (36,378 ) (34,660 ) Total Stockholders’ Equity 99,841 241,652 Total Liabilities and Stockholders’ Equity $ 306,492 $ 458,001 See notes to condensed consolidated financial statements DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Revenues Products $ 31,411 $ 47,398 $ 67,042 $ 84,095 Services 7,521 5,888 12,490 10,507 Total revenues 38,932 53,286 79,532 94,602 Cost of sales Products 67,209 43,224 106,228 82,115 Services 3,912 3,973 7,699 7,762 Total cost of sales 71,121 47,197 113,927 89,877 Gross profit (loss) (32,189 ) 6,089 (34,395 ) 4,725 Operating expenses Research and development 17,143 21,223 36,956 44,367 Sales and marketing 25,802 10,440 36,955 20,047 General and administrative 26,193 22,944 42,410 41,145 Total operating expenses 69,138 54,607 116,321 105,559 Loss from operations (101,327 ) (48,518 ) (150,716 ) (100,834 ) Interest expense (1,690 ) (1,109 ) (3,181 ) (1,920 ) Interest and other expense, net (78 ) (78 ) (1,494 ) (149 ) Loss before income taxes (103,095 ) (49,705 ) (155,391 ) (102,903 ) Income tax benefit (expense) (345 ) $ (23 ) $ (147 ) $ 534 Net loss $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Net loss per share—basic and diluted (3.13 ) (1.55 ) (4.73 ) (3.20 ) Weighted average shares outstanding, basic and diluted 33,085,262 32,165,582 32,898,836 32,038,281 See notes to condensed consolidated financial statements DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net loss $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Other comprehensive loss, net of taxes: Unrealized gain (loss) on available-for-sale marketable securities, net — 148 (451 ) 337 Foreign currency translation adjustment (500 ) (1,316 ) (1,267 ) 233 Total comprehensive loss, net of taxes of $0 $ (103,940 ) $ (50,896 ) $ (157,256 ) $ (101,799 ) See notes to condensed consolidated financial statements. · DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (in thousands, except share amounts) Three Months Ended June 30, 2024 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE— April 1, 2024 32,970,519 $ 4 $ 1,917,535 $ (1,684,323 ) $ (35,878 ) $ 197,338 Fractional shares redeemed for cash in lieu of reverse stock split (1,338 ) — (7 ) — — (7 ) Vesting of restricted stock units 234,110 — — — — — Repurchase of shares for employee tax withholdings (6,586 ) — (47 ) — — (47 ) Stock‑based compensation expense — — 6,497 — — 6,497 Net loss — — — (103,440 ) — (103,440 ) Other comprehensive loss — — — — (500 ) (500 ) BALANCE—June 30, 2024 33,196,705 $ 4 $ 1,923,978 $ (1,787,763 ) $ (36,378 ) $ 99,841 Six Months Ended June 30, 2024 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE—January 1, 2024 32,527,167 $ 4 $ 1,908,533 $ (1,632,225 ) $ (34,660 ) $ 241,652 Fractional shares redeemed for cash in lieu of reverse stock split (1,338 ) — (7 ) — — (7 ) Vesting of restricted Common Stock 574 — — — — — Vesting of restricted stock units 730,477 — — — — — Repurchase of shares for employee tax withholdings (60,175 ) — (375 ) — — (375 ) Issuance of common stock related to share-based liability awards — — 1,997 — — 1,997 Stock‑based compensation expense — — 13,830 — — 13,830 Net loss — — — (155,538 ) — (155,538 ) Other comprehensive loss — — — — (1,718 ) (1,718 ) BALANCE—June 30, 2024 33,196,705 $ 4 $ 1,923,978 $ (1,787,763 ) $ (36,378 ) $ 99,841 Three Months Ended June 30, 2023 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE—April 1, 2023 32,040,139 $ 3 $ 1,883,793 $ (1,361,595 ) $ (36,630 ) $ 485,571 Exercise of Common Stock options 47,223 — 560 — — 560 Vesting of restricted Common Stock 5,021 — — — — — Vesting of restricted stock units 126,662 — — — — — Repurchase of shares for employee tax withholdings (505 ) — (11 ) — — (11 ) Issuance of Common Stock related to settlement of contingent consideration 44,479 — 797 — — 797 Stock‑based compensation expense — — 8,438 — — 8,438 Net loss — — — (49,728 ) — (49,728 ) Other comprehensive income (loss) — — — — (1,168 ) (1,168 ) BALANCE—June 30, 2023 32,263,019 $ 3 $ 1,893,577 $ (1,411,323 ) $ (37,798 ) $ 444,459 Six Months Ended June 30, 2023 Accumulated Other Common Stock Additional Comprehensive Total Voting Paid‑in Accumulated (Loss) Stockholders’ Shares Amount Capital Deficit Income Equity BALANCE—January 1, 2023 31,813,343 $ 3 $ 1,874,821 $ (1,308,954 ) $ (38,368 ) $ 527,502 Exercise of Common Stock options 96,811 — 1,157 — — 1,157 Vesting of restricted Common Stock 7,559 — — — — — Vesting of restricted stock units 307,504 — — — — — Repurchase of shares for employee tax withholdings (6,677 ) — (109 ) — — (109 ) Issuance of Common Stock related to settlement of contingent consideration 44,479 797 797 Stock‑based compensation expense — — 16,911 — — 16,911 Net loss — — — (102,369 ) — (102,369 ) Other comprehensive income (loss) — — — — 570 570 BALANCE—June 30, 2023 32,263,019 $ 3 $ 1,893,577 $ (1,411,323 ) $ (37,798 ) $ 444,459 See notes to condensed consolidated financial statements. DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Six Months Ended June 30, 2024 2023 Cash flows from operating activities: Net loss $ (155,538 ) $ (102,369 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 96,043 26,965 Stock‑based compensation 14,335 19,016 Amortization (accretion) of discount on investments — (484 ) Amortization of deferred costs on convertible notes 365 365 Provision for bad debt 200 962 Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net (45 ) — Loss on disposal of property and equipment (92 ) 496 Foreign exchange (gains) losses on intercompany transactions, net 299 — Net decrease in accrued interest related to marketable securities — 238 Net unrealized loss on equity investment 448 148 Deferred tax benefit 147 (534 ) Foreign currency transaction loss 497 97 Changes in operating assets and liabilities: Accounts receivable 7,777 (3,661 ) Inventory (3,353 ) (8,760 ) Prepaid expenses and other current assets 910 (675 ) Other assets 8,909 1,595 Accounts payable (38 ) (407 ) Accrued expenses and other current liabilities (282 ) 1,097 Customer deposits (644 ) (2,322 ) Current portion of deferred revenue (3,611 ) (918 ) Change in right of use assets and lease liabilities, net (3,778 ) (3,110 ) Other liabilities 19 1,767 Net cash used in operating activities (37,432 ) (70,494 ) Cash flows from investing activities: Purchases of property and equipment (681 ) (1,305 ) Proceeds from sale of property and equipment 1,694 9,942 Purchase of marketable securities — (4,973 ) Proceeds from sales and maturities of marketable securities — 107,719 Cash paid for acquisitions, net of cash acquired — (500 ) Net cash provided by investing activities 1,013 110,883 Cash flows from financing activities: Proceeds from the exercise of stock options — 1,157 Payment of taxes related to net share settlement upon vesting of restricted stock units (376 ) (108 ) Repayment of loans (158 ) (328 ) Net cash (used in) provided by financing activities (534 ) 721 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,055 ) 73 Net increase (decrease) in cash, cash equivalents, and restricted cash (38,008 ) 41,183 Cash, cash equivalents, and restricted cash at beginning of period 84,690 81,913 Cash, cash equivalents, and restricted cash at end of period 46,682 123,096 Supplemental disclosures of cash flow information Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows: Cash and cash equivalents $ 45,855 $ 121,660 Restricted cash included in other current assets 215 824 Restricted cash included in other noncurrent assets 612 612 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 46,682 $ 123,096 Supplemental cash flow information: Interest paid $ 3,488 $ — Taxes paid $ — $ — Non‑cash investing and financing activities: Net unrealized gain on investments $ — $ (337 ) Common Stock issued for settlement of contingent consideration 797 Additions to right of use assets and lease liabilities $ 863 $ 8,489 Purchase of property and equipment included in accounts payable $ 129 $ 365 Purchase of property and equipment included in accrued expense $ — $ 32 Transfers from inventory to PP&E 1,285 — Transfers from property and equipment to inventory $ — $ 841 Transfers from inventory to property and equipment $ — $ 1,345 See notes to condensed 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 Three Months Ended For the Six Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 2024 2023 GAAP gross margin $ (32,189 ) $ 6,089 $ (34,395 ) $ 4,725 Stock-based compensation included in cost of sales(1) 475 590 1,043 1,270 Amortization of acquired intangible assets included in cost of sales(2) 42,681 6,928 57,021 13,855 Restructuring expense in cost of sales(2) 28 2,488 37,543 3,205 Acquisition-related and integration costs included in cost of sales 366 434 366 913 Non-GAAP gross margin $ 11,361 $ 16,529 $ 61,578 $ 23,968 GAAP operating loss $ (101,327 ) $ (48,518 ) $ (150,716 ) $ (100,834 ) Stock-based compensation(2) 6,497 9,703 14,335 19,016 Amortization of acquired intangible assets 65,931 10,457 86,978 20,899 Restructuring expense(3) 11,211 2,850 14,217 6,469 Acquisition-related and integration costs 2,050 7,359 3,305 8,765 Non-GAAP operating loss $ (15,638 ) $ (18,149 ) $ (31,881 ) $ (45,685 ) GAAP net loss $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Stock-based compensation(2) 6,497 9,703 14,335 19,016 Amortization of acquired intangible assets 65,931 10,457 86,978 20,899 Restructuring expense(3) 11,211 2,850 14,217 6,469 Acquisition-related and integration costs 2,050 7,359 3,305 8,765 Change in fair value of investments 497 107 1,814 286 Non-GAAP net loss $ (17,254 ) $ (19,252 ) $ (34,889 ) $ (46,934 ) (1) Includes immaterial liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $0.2 million and $0.4 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively. (2) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.3 million and $2.9 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively (3) Includes $3.9 million and $4.3 million of depreciation classified as restructuring charges for the three and six months ended June 30, 2024, respectively. DESKTOP METAL, INC. NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE (in thousands) For the Three Months Ended For the Six Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 2024 2023 GAAP operating expenses $ 69,138 $ 54,607 $ 116,321 $ 105,559 Stock-based compensation included in operating expenses(1) (6,022 ) (9,113 ) (13,292 ) (17,746 ) Amortization of acquired intangible assets included in operating expenses (23,250 ) (3,529 ) (29,957 ) (7,044 ) Restructuring expense included in operating expenses (11,183 ) (362 ) 23,326 (3,264 ) Acquisition-related and integration costs included in operating expenses (1,684 ) (6,925 ) (2,939 ) (7,852 ) Non-GAAP operating expenses $ 26,999 $ 34,678 $ 93,459 $ 69,653 (1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.1 million and $2.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively. DESKTOP METAL, INC. NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE (in thousands) For the Three Months Ended For the Six Months Ended June 30, June 30, (Dollars in thousands) 2024 2023 2024 2023 Net loss attributable to common stockholders $ (103,440 ) $ (49,728 ) $ (155,538 ) $ (102,369 ) Interest expense 1,690 1,109 3,181 1,920 Income tax benefit (expense) 345 23 147 (534 ) Depreciation and amortization (2) 71,858 13,530 96,043 26,965 EBITDA (29,547 ) (35,066 ) (56,167 ) (74,018 ) Change in fair value of investments 497 107 1,814 286 Stock-based compensation expense(1) 6,497 9,703 14,335 19,016 Restructuring expense (2) 7,295 2,850 9,887 6,469 Acquisition-related and integration costs 2,050 7,359 3,305 8,765 Adjusted EBITDA $ (13,208 ) $ (15,047 ) $ (26,826 ) $ (39,482 ) (1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.3 million and $2.9 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively (2) In connection with the Photopolymer Initiative, we recorded incremental depreciation and amortization for the shortened useful life of various fixed assets and intangibles to restructuring charges. For the three and six months ended June 30, 2024, we recorded incremental depreciation of $3.9 million and $4.3 million, respectively, and incremental amortization of $59.9 million and $71.1 million, respectively. These amounts are listed in the depreciation and amortization line. View source version on businesswire.com: https://www.businesswire.com/news/home/20240730009179/en/
Investor Relations: (857) 504-1084 DesktopMetalIR@icrinc.com Media Relations: Sarah Webster (313) 715-6988 sarahwebster@desktopmetal.com
