- Revenue of $41.3 million, with a growing number of repeat
purchases from customers with multi-machine fleets of our Additive
Manufacturing 2.0 systems
- Cost reduction plan delivered significant year-over-year
improvements to adjusted EBITDA and operating cash flow in first
quarter 2023
- Combined $100 million in annualized savings from cost reduction
plans remain on-track in order to reduce expense structure, expand
margins, and drive to profitability
- Reaffirming full year 2023 guidance of revenue between $210 to
$260 million, and adjusted EBITDA between $(50) to $(25) million,
with expectation to achieve adjusted EBITDA breakeven before year
end 2023
Desktop Metal, Inc. (NYSE: DM) today announced its financial
results for the first quarter ended March 31, 2023.
“Desktop Metal is off to a solid start to 2023 following very
strong growth last year,” said Ric Fulop, Founder and CEO of
Desktop Metal. “Customer demand trends for our unique portfolio of
AM 2.0 mass production solutions remain resilient, despite an
unsteady macro environment, giving us confidence in our growth
projections for this year. Additionally, we’ve made significant
progress on our cost reduction efforts initiated last year and
expanded in February 2023. Going forward, we expect to demonstrate
continued reductions in our cost structure in order to expand
margins and deliver on our adjusted EBITDA commitments. We believe
we can differentiate ourselves as we navigate a difficult economic
backdrop relative to our industry peers.”
First Quarter 2023 and Recent Business Highlights:
- Continued and expanded the cost reduction plan announced in
2022 to add an additional $50 million in annualized savings, as
announced in February 2023, after successfully completing $50
million in annualized savings in 2022. Total combined $100 million
in annualized cost savings remain on-track in order to reduce
expense structure, expand margins, and drive to profitability
- Expanding customer relationships with a growing number of high
adoption Super Fleet customers, or those with three or more AM 2.0
printing systems. We now have more than 370 Super Fleet customers
producing a high volume of end-use parts
- Continued progress on Production SystemTM platforms including
expanding relationships with various consumer electronics
customers, a segment we believe we can generate eight figures of
revenue over next 18 months
- Launched Live SuiteTM, a highly differentiated end-to-end
software hub delivering generative AI solutions for AM 2.0
- Expanded technical ceramic offerings across our portfolio of
binder jet systems, where we're seeing increasing adoption for
silicon carbide applications
- Continued expansion of leading production materials library
including Copper Alloy C18150 and Titanium Alloy Ti64 on the
Production SystemTM and 304L Stainless Steel on the Shop
SystemTM
First Quarter 2023 Financial Highlights:
- Revenue of $41.3 million, down 5.5% from first quarter 2022
revenue of $43.7 million
- GAAP gross margin of (3.3)%; non-GAAP gross margin of 18.0%, an
improvement of 90 basis points from first quarter 2022
- GAAP net loss of $52.6 million including $10.4 million
amortization of acquired intangibles; non-GAAP net loss of $27.7
million
- Adjusted EBITDA of $(24.4) million, an improvement of $17.1
million from first quarter 2022
- Cash, cash equivalents, and short-term investments of $149.8
million as of March 31, 2023
Financial Outlook:
- Reaffirming revenue expectation of between $210 to $260 million
for full year 2023
- Reaffirming Adjusted EBITDA expectation of between $(50) to
$(25) million for full year 2023, with expectation to achieve
Adjusted EBITDA breakeven before year end 2023
Desktop Metal has not provided a reconciliation of its Adjusted
EBITDA outlook to net income because estimates of all of the
reconciling items cannot be provided without unreasonable efforts.
See “Non-GAAP Financial Information.”
Conference Call Information:
Desktop Metal will host a conference call on Wednesday, May 10,
2023 to discuss first quarter 2023 results. Participants may access
the call at 1-877-407-4018, international callers may use
1-201-689-8471, and request to join the Desktop Metal financial
results conference call. A simultaneous webcast of the conference
call and the accompanying summary presentation may be accessed
online at the Events & Presentations section of
ir.desktopmetal.com. A replay will be available shortly after the
conclusion of the conference call at the same website.
About Desktop Metal:
Desktop Metal (NYSE:DM) is driving Additive Manufacturing 2.0, a
new era of on-demand, digital mass production of industrial,
medical, and consumer products. Our innovative 3D printers,
materials, and software deliver the speed, cost, and part quality
required for this transformation. We’re the original inventors and
world leaders of the 3D printing methods we believe will empower
this shift, binder jetting and digital light processing. Today, our
systems print metal, polymer, sand and other ceramics, as well as
foam and recycled wood. Manufacturers use our technology worldwide
to save time and money, reduce waste, increase flexibility, and
produce designs that solve the world’s toughest problems and enable
once-impossible innovations. Learn more about Desktop Metal and our
#TeamDM brands at www.desktopmetal.com.
Forward-looking Statements:
This press release contains forward-looking statements within
the meaning of the federal securities laws. All statements other
than statements of historical facts contained in these
communications, including statements regarding Desktop Metal’s
future results of operations and financial position, financial
targets, business strategy, plans and objectives for future
operations, are forward-looking statements. Forward-looking
statements generally are identified by the words “believe,”
“project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,”
“will,” “would,” “will be,” “will continue,” “will likely result,”
and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this document, including but not
limited to risks associated with the integration of the business
and operations of acquired businesses, our ability to realize the
benefits from cost saving measures, and supply and logistics
disruptions, including shortages and delays. For more information
about risks and uncertainties that may impact Desktop Metal’s
business, financial condition, results of operations and prospects
generally, please refer to Desktop Metal’s reports filed with the
SEC, including without limitation the “Risk Factors” and/or other
information included in the Form 10-Q filed with the SEC on May 10,
2023, and such other reports as Desktop Metal has filed or may file
with the SEC from time to time. These filings identify and address
other important risks and uncertainties that could cause actual
events and results to differ materially from those contained in the
forward-looking statements. Forward-looking statements speak only
as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and Desktop Metal,
Inc. assumes no obligation and does not intend to update or revise
these forward-looking statements, whether as a result of new
information, future events, or otherwise.
DESKTOP METAL, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in
thousands, except share and per share amounts)
March 31,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
101,252
$
76,291
Current portion of restricted cash
4,595
4,510
Short‑term investments
48,554
108,243
Accounts receivable
35,603
38,481
Inventory
98,221
91,736
Prepaid expenses and other current
assets
21,067
16,325
Assets held for sale
6,871
830
Total current assets
316,163
336,416
Restricted cash, net of current
portion
612
1,112
Property and equipment, net
45,262
56,271
Goodwill
113,571
112,955
Intangible assets, net
210,117
219,830
Other noncurrent assets
28,461
27,763
Total Assets
$
714,186
$
754,347
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
21,988
$
25,105
Customer deposits
12,300
11,526
Current portion of lease liability
6,106
5,730
Accrued expenses and other current
liabilities
28,026
26,723
Current portion of deferred revenue
14,639
13,719
Current portion of long‑term debt, net of
deferred financing costs
403
584
Total current liabilities
83,462
83,387
Long-term debt, net of current portion
252
311
Convertible notes
112,017
111,834
Lease liability, net of current
portion
17,679
17,860
Deferred revenue, net of current
portion
3,965
3,664
Deferred tax liability
8,074
8,430
Other noncurrent liabilities
3,167
1,359
Total liabilities
228,616
226,845
Commitments and Contingencies (Note
17)
Stockholders’ Equity
Preferred Stock, $0.0001 par
value—authorized, 50,000,000 shares; no shares issued and
outstanding at March 31, 2023 and December 31, 2022,
respectively
—
—
Common Stock, $0.0001 par
value—500,000,000 shares authorized; 320,477,686 and 318,235,106
shares issued at March 31, 2023 and December 31, 2022,
respectively, 320,401,389 and 318,133,434 shares outstanding at
March 31, 2023 and December 31, 2022, respectively
32
32
Additional paid‑in capital
1,883,764
1,874,792
Accumulated deficit
(1,361,596)
(1,308,954)
Accumulated other comprehensive loss
(36,630)
(38,368)
Total Stockholders’ Equity
485,570
527,502
Total Liabilities and Stockholders’
Equity
$
714,186
$
754,347
DESKTOP METAL, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in
thousands, except per share amounts)
Three Months Ended
March 31,
2023
2022
Revenues
Products
$
36,697
$
39,476
Services
4,619
4,230
Total revenues
41,316
43,706
Cost of sales
Products
38,891
41,902
Services
3,789
3,132
Total cost of sales
42,680
45,034
Gross profit (loss)
(1,364)
(1,328)
Operating expenses
Research and development
23,144
24,605
Sales and marketing
9,607
19,689
General and administrative
18,202
23,857
Total operating expenses
50,953
68,151
Loss from operations
(52,317)
(69,479)
Interest expense
(811)
32
Interest and other (expense) income,
net
(71)
(1,753)
Loss before income taxes
(53,199)
(71,200)
Income tax benefit
557
1,256
Net loss
$
(52,642)
$
(69,944)
Net loss per share—basic and diluted
$
(0.16)
$
(0.22)
Weighted average shares outstanding, basic
and diluted
319,095,656
312,016,627
DESKTOP METAL, INC. CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED) (in thousands)
Three Months Ended
March 31,
2023
2022
Net loss
$
(52,642)
$
(69,944)
Other comprehensive (loss) income, net of
taxes:
Unrealized gain (loss) on
available-for-sale marketable securities, net
189
12
Foreign currency translation
adjustment
1,549
(11,047)
Total comprehensive (loss) income, net of
taxes of $0
$
(50,904)
$
(80,979)
DESKTOP METAL, INC. CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED) (in thousands, except share amounts)
Three Months Ended March 31,
2023
Accumulated
Other
Common Stock
Additional
Comprehensive
Total
Voting
Paid‑in
Accumulated
(Loss)
Stockholders’
Shares
Amount
Capital
Deficit
Income
Equity
BALANCE—January 1, 2023
318,133,434
$
32
$
1,874,792
$
(1,308,954)
$
(38,368)
$
527,502
Exercise of Common Stock options
495,876
—
597
—
—
597
Vesting of restricted Common Stock
25,375
—
—
—
—
—
Vesting of restricted stock units
1,808,422
—
—
—
—
—
Repurchase of shares for employee tax
withholdings
(61,718)
—
(99)
—
—
(99)
Stock‑based compensation expense
—
—
8,474
—
—
8,474
Net loss
—
—
—
(52,642)
—
(52,642)
Other comprehensive income (loss)
—
—
—
—
1,738
1,738
BALANCE—March 31, 2023
320,401,389
$
32
$
1,883,764
$
(1,361,596)
$
(36,630)
$
485,570
Three Months Ended March 31,
2022
Accumulated
Other
Common Stock
Additional
Comprehensive
Total
Voting
Paid‑in
Accumulated
(Loss)
Stockholders’
Shares
Amount
Capital
Deficit
Income
Equity
BALANCE—January 1, 2022
311,473,950
$
31
$
1,823,344
$
(568,611)
$
(6,414)
$
1,248,350
Exercise of Common Stock options
786,693
—
900
—
—
900
Vesting of restricted Common Stock
84,384
—
—
—
—
—
Vesting of restricted stock units
520,265
—
—
—
—
—
Repurchase of shares for employee tax
withholdings
(39,720)
—
(158)
—
—
(158)
Stock‑based compensation expense
—
—
9,912
—
—
9,912
Net loss
—
—
—
(69,944)
—
(69,944)
Other comprehensive income (loss)
—
—
—
—
(11,035)
(11,035)
BALANCE—March 31, 2022
312,825,572
$
31
$
1,833,998
$
(638,555)
$
(17,449)
$
1,178,025
DESKTOP METAL, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in
thousands)
Three Months Ended March
31,
2023
2022
Cash flows from operating
activities:
Net loss
$
(52,642)
$
(69,944)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
13,433
12,883
Stock‑based compensation
9,313
9,912
Amortization (accretion) of discount on
investments
(382)
413
Amortization of deferred costs on
convertible notes
183
—
Provision for bad debt
179
419
Loss on disposal of property and
equipment
519
2
Net increase (decrease) in accrued
interest related to marketable securities
(8)
949
Net unrealized (gain) loss on equity
investment
402
1,700
Deferred tax benefit
(557)
(1,256)
Change in fair value of contingent
consideration
—
(114)
Foreign currency transaction (gain)
loss
(25)
195
Changes in operating assets and
liabilities:
Accounts receivable
2,792
9,489
Inventory
(6,892)
(15,506)
Prepaid expenses and other current
assets
(4,664)
(4,087)
Other assets
991
(210)
Accounts payable
(3,011)
(1,333)
Accrued expenses and other current
liabilities
878
(3,391)
Customer deposits
705
2,980
Current portion of deferred revenue
1,127
721
Change in right of use assets and lease
liabilities, net
(1,493)
(108)
Other liabilities
1,806
12
Net cash used in operating
activities
(37,346)
(56,274)
Cash flows from investing
activities:
Purchases of property and equipment
(1,011)
(4,074)
Proceeds from sale of property and
equipment
3,071
6
Purchase of marketable securities
(4,973)
—
Proceeds from sales and maturities of
marketable securities
64,840
98,625
Cash paid for acquisitions, net of cash
acquired
(500)
(23)
Net cash provided by investing
activities
61,427
94,534
Cash flows from financing
activities:
Proceeds from the exercise of stock
options
597
900
Payment of taxes related to net share
settlement upon vesting of restricted stock units
(99)
(158)
Repayment of loans
(250)
(43)
Net cash provided by financing
activities
248
699
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
217
(349)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
24,546
38,610
Cash, cash equivalents, and restricted
cash at beginning of period
81,913
68,258
Cash, cash equivalents, and restricted
cash at end of period
$
106,459
$
106,868
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
$
101,252
$
103,590
Restricted cash included in other current
assets
4,595
2,166
Restricted cash included in other
noncurrent assets
612
1,112
Total cash, cash equivalents and
restricted cash shown in the condensed consolidated statements of
cash flows
$
106,459
$
106,868
Supplemental cash flow
information:
Interest paid
$
—
$
—
Taxes paid
$
—
$
—
Non‑cash investing and financing
activities:
Net unrealized (gain) loss on
investments
$
(189)
$
(12)
Additions to right of use assets and lease
liabilities
$
1,531
$
7,784
Purchase of property and equipment
included in accounts payable
$
183
$
313
Purchase of property and equipment
included in accrued expense
$
32
$
—
Transfers from property and equipment to
inventory
$
275
$
1,721
Transfers from PP&E to Asset
Held-For-Sale
$
6,040
$
—
Transfers from inventory to property and
equipment
$
1,067
$
605
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
March 31,
(Dollars in thousands)
2023
2022
GAAP gross margin
$
(1,364)
$
(1,328)
Stock-based compensation included in cost
of sales(1)
680
487
Amortization of acquired intangible assets
included in cost of sales
6,927
5,990
Restructuring expense in cost of sales
717
—
Acquisition-related and integration costs
included in cost of sales
479
1,138
Inventory step-up adjustment in cost of
sales
—
1,181
Non-GAAP gross margin
$
7,439
$
7,468
GAAP operating loss
$
(52,317)
$
(69,479)
Stock-based compensation(2)
9,313
9,912
Amortization of acquired intangible
assets
10,442
9,784
Restructuring expense
3,618
—
Inventory step-up adjustment in cost of
sales
—
1,181
Acquisition-related and integration
costs
1,406
3,986
Non-GAAP operating loss
$
(27,538)
$
(44,616)
GAAP net loss
$
(52,642)
$
(69,944)
Stock-based compensation(2)
9,313
9,912
Amortization of acquired intangible
assets
10,442
9,784
Restructuring expense
3,618
—
Inventory step-up adjustment in cost of
sales
—
1,181
Acquisition-related and integration
costs
1,406
3,986
Change in fair value of investments
179
1,700
Non-GAAP net loss
$
(27,684)
$
(43,381)
(1)
Includes $0.2 million and $0.0 million of
liability-award stock-based compensation expense for the three
months ended March 31, 2023 and 2022, respectively.
(2)
Includes $1.6 million and $0.0 million of
liability-award stock-based compensation expense for the three
months ended March 31, 2023 and 2022, respectively.
DESKTOP METAL, INC. NON-GAAP
OPERATING EXPENSE RECONCILIATION TABLE (in
thousands)
For the Three Months
Ended
March 31,
(Dollars in thousands)
2023
2022
GAAP operating expenses
$
50,953
$
68,151
Stock-based compensation included in
operating expenses(1)
(8,633)
(9,425)
Amortization of acquired intangible assets
included in operating expenses
(3,515)
(3,794)
Restructuring expense included in
operating expenses
(2,901)
—
Acquisition-related and integration costs
included in operating expenses
(927)
(2,848)
Non-GAAP operating expenses
$
34,977
$
52,084
(1)
Includes $1.6 million and $0.0 million of
liability-award stock-based compensation expense for the three
months ended March 31, 2023 and 2022, respectively.
DESKTOP METAL, INC. NON-GAAP ADJUSTED
EBITDA RECONCILIATION TABLE (in thousands)
For the Three Months
Ended
March 31,
(Dollars in thousands)
2023
2022
Net loss attributable to common
stockholders
$
(52,642)
$
(69,944)
Interest (income) expense, net
811
(32)
Income tax expense (benefit)
(557)
(1,256)
Depreciation and amortization
13,433
12,883
EBITDA
(38,955)
(58,349)
Change in fair value of investments
179
1,700
Inventory step-up adjustment
—
1,181
Stock-based compensation expense(1)
9,313
9,912
Restructuring expense
3,618
—
Acquisition-related and integration
costs
1,406
3,986
Adjusted EBITDA
$
(24,439)
$
(41,570)
(1)
Includes $1.6 million and $0.0
million of liability-award stock-based compensation for the three
months ended March 31, 2023 and 2022, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230510005937/en/
Investor Relations: Jay Gentzkow (781) 730-2110
jaygentzkow@desktopmetal.com
Media Relations: Sarah Webster (313) 715-6988
sarahwebster@desktopmetal.com
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