Fourth Quarter 2021 Highlights
- Revenue increased 132.8% to $44.3 million; Pro forma revenue1
increased 18.4%
- Total orders increased 25.9% to $49.1 million
- Net income totaled $21.0 million; adjusted net loss totaled
$1.7 million1
- Adjusted EBITDA1 increased to $10.5 million, representing an
Adjusted EBITDA margin1 of 23.8%
- Commenced trading on the New York Stock Exchange under the
ticker “FATH”
Full Year 2021 Highlights
- Revenue increased 148.5% to $152.2 million; Pro forma revenue1
increased 8.8% to $162.6 million
- Net income totaled $13.0 million; adjusted net loss totaled
$5.4 million1
- Adjusted EBITDA1 increased to $34.4 million, representing an
Adjusted EBITDA margin1 of 22.6%
Fathom Digital Manufacturing Corp. (NYSE: FATH), an
industry leader in on-demand digital manufacturing services, today
announced its preliminary unaudited financial results for the
fourth quarter and full year ended December 31, 2021.
Three Months Ended
Twelve Months Ended
($ in thousands)
12/31/2021
12/31/2020
12/31/2021
12/31/2020
Revenue
$44,330
$19,040
$152,196
$61,240
Pro forma revenue1
$44,330
$37,455
$162,576
$149,400
Net income (loss)
$20,981
$(6,858)
$13,019
$(7,963)
Adjusted net income (loss) 1
$(1,682)
$(5,018)
$(5,408)
$(4,198)
Adjusted EBITDA1
$10,534
$1,510
$34,353
$11,194
Adjusted EBITDA margin1
23.8%
7.9%
22.6%
18.3%
1 See “Non-GAAP Financial Information.” Reconciliations of
non-GAAP financial measures are included in the appendix.
“Fathom’s strong fourth quarter and full year 2021 financial
results reflect the increasing demand for our comprehensive
on-demand digital manufacturing services,” said Ryan Martin, Fathom
Chief Executive Officer. “Our scalable, technology-agnostic
platform for prototyping and low- to mid-volume production provides
timely, value-added solutions with quality assurances for corporate
enterprise customers, uniquely positioning Fathom to accelerate new
product development and manufacturing innovation for some of the
largest and most innovative companies in the world. During the
fourth quarter, our record order volumes of $49.1 million
translated into organic revenue growth of 18.4% while expanding our
backlog of new business. We also maintained our focus on profitable
growth by generating $10.5 million in Adjusted EBITDA, representing
23.8% of revenue for the quarter and demonstrating Fathom’s
industry-leading margins.”
Mr. Martin added, “In December, Fathom commenced trading on the
New York Stock Exchange, representing a major milestone in the
company’s deep-rooted history. We believe our successful public
listing enhances our ability to achieve continued market
penetration for our additive and advanced traditional manufacturing
technologies and take full advantage of the Industry 4.0 digital
manufacturing revolution. Our focus remains on further
strengthening Fathom’s breadth of leading offerings as we continue
to invest in the business. Additionally, we intend to maintain
Fathom’s role as an active consolidator in a large and highly
fragmented $25 billion industry. By leveraging our proven business
model and attractive financial profile, we expect to build upon our
solid performance and drive long-term profitable growth in 2022 and
beyond for the benefit of our shareholders.”
Summary of Financial Results (preliminary unaudited)
Revenue for the fourth quarter of 2021 was $44.3 million compared
to $19.0 million in the fourth quarter of 2020, an increase of
132.8%. The year-over-year growth was driven by an increase in the
volume of customers served, primarily through acquisition-related
activity and growth within Fathom’s strategic accounts.
On a pro forma basis, which combines the results of Fathom for
the applicable period with the pre-acquisition results of
businesses acquired in 2021 and 2020 for the respective period,
revenue for the fourth quarter of 2021 increased 18.4% to $44.3
million from $37.5 million for the fourth quarter of 2020.
For the year ended December 31, 2021, revenue increased 148.5%
to $152.2 million from $61.2 million for the year ended December
31, 2020. Pro forma revenue for the full year 2021 totaled $162.6
million compared to $149.4 million for the full year 2020,
representing an increase of 8.8%.
Net income for the fourth quarter of 2021 was $21.0 million
compared to a net loss of $6.9 million in the fourth quarter of
2020. For the year ended December 31, 2021, the company reported a
net income of $13.0 million compared to a net loss of $8.0 million
for the same period in 2020.
On an adjusted basis excluding acquisition costs and purchase
accounting adjustments related to the revaluation of Fathom
warrants and earnout shares following the completion of its
business combination on December 23, 2021, Fathom reported a net
loss of $1.7 million compared to a net loss of $5.0 for the same
period in 2020. For the year ended December 31, 2021, the adjusted
net loss of $5.4 million compared to an adjusted net loss of $4.2
million for the same period in 2020.
Adjusted EBITDA for the fourth quarter of 2021 increased to
$10.5 million from $1.5 million for the same period in 2020
primarily due to higher volumes stemming from acquisition-related
activity. The Adjusted EBITDA margin increased to 23.8% in the
quarter from 7.9% in the fourth quarter of 2020.
For the year ended December 31, 2021, Adjusted EBITDA and
Adjusted EBITDA margin were $34.4 million and 22.6%, respectively,
compared to $11.2 million and 18.3%, respectively, for the same
period in 2020.
Full Year 2022 Outlook For the full year 2022, Fathom
expects reported revenue to range between $182 million and $192
million, representing a year-over-year increase of approximately
23% at the midpoint. The company also expects Adjusted EBITDA to
range between $40 million and $45 million, representing a
year-over-year increase of approximately 26% at the midpoint and an
implied Adjusted EBITDA margin of 22.0% to 23.4%. This outlook, as
of March 4, 2022, reflects management’s current projections and
excludes the impact of any potential new acquisitions.
Conference Call Fathom will host a conference call on
Friday, March 4, 2022 at 8:30 am Eastern Time. The dial-in number
for callers in the U.S. is +1-844-200-6205 and the dial-in number
for international callers is +1-929-526-1599. The access code for
all callers is 830754. The conference call will be broadcast live
over the Internet and include a slide presentation. To access the
webcast and supporting materials, please visit the investor
relations section of Fathom’s website at
https://investors.fathommfg.com.
A replay of the conference call can be accessed through March
11, 2022 by dialing +1-866-813-9403 (US) or +1-226-828-7578
(international), and then entering the access code 983238. The
webcast will also be archived on Fathom’s website.
About Fathom Digital Manufacturing Fathom is one of the
largest on-demand digital manufacturing platforms in North America,
serving the comprehensive product development and low- to
mid-volume manufacturing needs of some of the largest and most
innovative companies in the world. With more than 25 unique
manufacturing processes and a national footprint with nearly
450,000 square feet of manufacturing capacity across 12 facilities,
Fathom seamlessly blends in-house capabilities across plastic and
metal additive technologies, CNC machining, injection molding &
tooling, sheet metal fabrication, and design and engineering. With
more than 35 years of industry experience, Fathom is at the
forefront of the Industry 4.0 digital manufacturing revolution,
serving clients in the technology, defense, aerospace, medical,
automotive and IOT sectors. Fathom's certifications include: ITAR
Registered, ISO 9001:2015 Design Certified, ISO 9001:2015, ISO
13485:2016, AS9100:2016, and NIST 800-171. To learn more, visit
https://fathommfg.com/.
Forward-Looking Statements Certain statements made in
this press release are “forward looking statements” within the
meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. Words such as
“estimates,” “projects,” “expects,” “anticipates,” “forecasts,”
“plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,”
“should,” “future,” “propose,” “target,” “goal,” “objective,”
“outlook” and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements. These forward-looking
statements are not guarantees of future performance, conditions or
results, and involve a number of known and unknown risks,
uncertainties, assumptions and other important factors, many of
which are outside the control of Fathom Digital Manufacturing
Corporation (“Fathom”) that could cause actual results or outcomes
to differ materially from those discussed in the forward-looking
statements. Important factors, among others, that may affect actual
results or outcomes include: the inability to recognize the
anticipated benefits of our business combination with Altimar
Acquisition Corp. II (“Altimar”); changes in general economic
conditions, including as a result of the COVID-19 pandemic; the
outcome of litigation related to or arising out of the business
combination, or any adverse developments therein or delays or costs
resulting therefrom; the ability to meet the New York Stock
Exchange’s listing standards following the consummation of the
business combination; costs related to the business combination and
additional factors discussed in Altimar’s final prospectus/proxy
statement filed with the Securities and Exchange Commission (the
“SEC”) on December 3, 2021 (the “Proxy Statement/Prospectus”) and
the documents of Altimar and Fathom filed, or to be filed, with the
SEC. If any of the risks described above materialize or our
assumptions prove incorrect, actual results could differ materially
from the results implied by our forward-looking statements. There
may be additional risks that Fathom does not presently know or that
Fathom currently believes are immaterial that could also cause
actual results to differ from those contained in the
forward-looking statements. In addition, forward-looking statements
reflect Fathom’s expectations, plans or forecasts of future events
and views as of the date of this presentation. Although Fathom may
elect to update these forward-looking statements at some point in
the future, Fathom specifically disclaims any obligation to do so.
These forward-looking statements should not be relied upon as
representing Fathom’s assessments as of any date subsequent to the
date of this press release. Accordingly, undue reliance should not
be placed upon the forward-looking statements.
Non-GAAP Financial Information This press release
includes Adjusted Net Income and Adjusted EBITDA, which are
non-GAAP financial measures that we use to supplement our results
presented in accordance with U.S. GAAP. We believe Adjusted Net
Income and Adjusted EBITDA are useful in evaluating our operating
performance, as they are similar to measures reported by our public
competitors and regularly used by security analysts, institutional
investors and other interested parties in analyzing operating
performance and prospects. Adjusted Net Income and Adjusted EBITDA
are not intended to be a substitute for any U.S. GAAP financial
measure and, as calculated, may not be comparable to other
similarly titled measures of performance of other companies in
other industries or within the same industry.
We define and calculate Adjusted Net Income as net loss before
the impact of any increase or decrease in the estimated fair value
of the Company’s warrants or earnout shares. We define and
calculate Adjusted EBITDA as net losses before the impact of
interest income or expense, income tax expense and depreciation and
amortization, and further adjusted for the following items:
stock-based compensation, transaction-related costs, and certain
other non-cash and non-core items, as described in the
reconciliation included in the appendix to this press release.
Adjusted EBITDA margin represents Adjusted EBITDA divided by total
revenue. We include these non-GAAP financial measures because they
are used by management to evaluate Fathom’s core operating
performance and trends and to make strategic decisions regarding
the allocation of capital and new investments. Adjusted EBITDA
excludes certain expenses that are required in accordance with U.S.
GAAP because they are non-recurring (for example, in the case of
transaction-related costs), non-cash (for example, in the case of
depreciation and amortization, stock-based compensation) or are not
related to our underlying business performance (for example, in the
case of interest income and expense).
Information reconciling forward-looking Adjusted EBITDA to GAAP
financial measures is unavailable to Fathom without unreasonable
effort. The company is not able to provide reconciliations of
forward-looking Adjusted EBITDA to GAAP financial measures because
certain items required for such reconciliations are outside of
Fathom's control and/or cannot be reasonably predicted, such as the
provision for income taxes. Preparation of such reconciliations
would require a forward-looking balance sheet, statement of income
and statement of cash flow, prepared in accordance with GAAP, and
such forward-looking financial statements are unavailable to Fathom
without unreasonable effort. Fathom provides a range for its
Adjusted EBITDA forecast that it believes will be achieved, however
it cannot accurately predict all the components of the Adjusted
EBITDA calculation. Fathom provides an Adjusted EBITDA forecast
because it believes that Adjusted EBITDA, when viewed with the
company's results under GAAP, provides useful information for the
reasons noted above. However, Adjusted EBITDA is not a measure of
financial performance or liquidity under GAAP and, accordingly,
should not be considered as an alternative to net income or cash
flow from operating activities as an indicator of operating
performance or liquidity.
As described in the Proxy Statement/Prospectus, during 2020
Fathom completed the acquisitions of Incodema Holdings, Inc.,
Newchem, Inc., GPI Prototype and Manufacturing Services, LLC,
Dahlquist Machine, Inc., Majestic Metals, LLC, and Mark Two
Engineering, Inc. (the “2020 Acquisitions”). During 2021 we
completed the acquisitions of Summit Tooling, Inc., Summit
Plastics, LLC, Centex Machine and Welding, Inc., Laser
Manufacturing, Inc. and Screenshot Precisions, LLC d/b/a Micropulse
West and Precisions Process Corp. (the “2021 Acquisitions”). Pro
forma revenue gives pro forma effect to the 2020 Acquisitions and
2021 Acquisitions, as though such transactions occurred on January
1, 2020.
Financial Disclosure Disclaimer Fathom has not yet
completed its reporting process for the three and twelve months
ended December 31, 2021. Full financial statements for these
periods will be filed on or before March 31, 2022. The preliminary
unaudited results presented herein are based on Fathom’s reasonable
estimates and the information available at this time. The amounts
reported herein are subject to various adjustments that are still
under review, including potential adjustments relating to changes
in the estimated fair value of warrants and earnout shares,
purchase accounting and provision for income taxes. Such
adjustments may be material and could impact the results reported
herein.
Q4 2021 U.S GAAP Income Statement (preliminary
unaudited) ($ in thousands)
Three Months Ended December
31,
2021
2020
Net Sales
44,330
19,040
Cost of Revenue1
26,290
10,178
Gross Profit
18,040
8,862
Operating expenses
Selling, general, and administrative
(SG&A)1
12,276
8,713
Depreciation and amortization
3,309
2,028
Total operating expenses
15,585
10,741
Operating income (loss)
2,455
(1,879)
Interest expense
3,536
1,330
Other expense (income)
9,387
3,811
Other income
(30,985)
(162)
Total other expense, net
(18,062)
4,979
Net income (loss) before income tax
20,517
(6,858)
Provision for income tax (benefit)
(464)
Net income (loss)
20,981
(6,858)
Net income (loss) attributable to
noncontrolling interest
13,092
-
Net income (loss) attributable to Fathom
Digital Manufacturing Corporation
7,889
(6,858)
1 Fathom reclassified certain historically reported expenses within
the statement of operations to reflect go-forward policy.
Specifically, cost of revenue included a reclassification of
certain expenses equal to 4.4% and 0.5% of revenue for the three
months ended December 31, 2021, and December 31, 2020,
respectively. Additionally, SG&A included a reclassification of
certain expenses equal to 1.8% and 3.4% net of revenue for the
three months ended December 31, 2021, and December 31, 2020,
respectively. Prior to the Company’s ownership of applicable
acquired entities, these expenses were recorded inconsistently. The
accounting reclassification had no impact on net income (loss).
Full Year 2021 US GAAP Income Statement (preliminary
unaudited) ($ in thousands)
Year Ended December
31,
2021
2020
Net Sales
152,196
61,240
Cost of Revenue1
92,388
33,064
Gross Profit
59,808
28,176
Operating expenses
Selling, general, and administrative
(SG&A)1
39,490
24,642
Depreciation and amortization
10,606
4,672
Total operating expenses
50,096
29,314
Operating income (loss)
9,712
(1,138)
Interest expense
12,318
3,635
Other expense
14,846
2,208
Other expense (income)
(30,872)
959
Total other expense, net
(3,707)
6,802
Net income (loss) before income tax
13,419
(7,940)
Provision for income tax
400
23
Net income (loss)
13,019
(7,963)
Net income (loss) attributable to
noncontrolling interest
8,124
-
Net income (loss) attributable to Fathom
Digital Manufacturing Corporation
4,895
(7,963)
1 Fathom reclassified certain historically reported expenses within
the statement of operations to reflect go-forward policy.
Specifically, cost of revenue included a reclassification of
certain expenses equal to 6.2% and 0.5% of revenue for the twelve
months ended December 31, 2021, and December 31, 2020,
respectively. Additionally, SG&A included a reclassification of
certain expenses equal to 3.4% net of revenue for both the twelve
months ended December 31, 2021, and December 31, 2020. Prior to the
Company’s ownership of applicable acquired entities, these expenses
were recorded inconsistently. The accounting reclassification had
no impact on net income (loss).
Consolidated Balance Sheet
(preliminary unaudited) ($ in thousands)
December 31,
2021
December 31,
2020
Assets
Cash and cash equivalents
$
20,099
$
8,188
Account receivables, net
25,367
15,563
Inventory
10,539
6,325
Prepaid expenses and other current
assets
1,980
2,598
Total current assets
57,985
32,674
Investments held in trust account
—
—
Property and equipment, net
42,377
26,386
Intangible & other
249,575
83,466
Goodwill
1,242,482
63,215
Other non-current assets
9,813
1,038
Total assets
$
1,602,232
$
206,779
Liabilities and Stockholders'
Equity
Accounts payable
$
9,409
$
4,404
Accrued expenses
4,391
4,181
Other current liabilities
4,698
2,778
Contingent consideration
2,750
4,066
Current portion of debt
30,096
2,853
Total current liabilities
51,345
18,282
Long-term debt, net
120,913
90,486
Long-term contingent consideration
65,150
7,373
Deferred tax liability
—
—
Founders share liability
9,400
—
Other non-current liabilities
1,788
514
Warrant liability
16,608
—
Payable to related parties pursuant to tax
receivable agreement
4,600
—
Total liabilities
$
269,804
$
116,655
Contingently Redeemable Preferred
Equity
Class A Contingently Redeemable Preferred
Units; $100 par value, authorized 1,167,418 units, issued and
outstanding and 1,167,418 units as of December 31, 2021 and 2020,
respectively
$
—
$
54,105
Equity:
Class A common stock
5
35,869
Class B common stock
8
14,450
Additional paid-in capital
491,050
—
Accumulated other comprehensive loss
—
(68)
Accumulated deficit
(1,585)
(14,232)
Non-controlling interest in
subsidiaries
842,950
—
Total stockholders' equity
1,332,428
36,019
Total liabilities and stockholders'
equity
$
1,602,232
$
206,779
Q4 2021 Revenue by Product Line
(preliminary unaudited)
Reported Revenue for Three
Months Ended
($ in thousands)
12/31/2021
Percentage
12/31/2020
Percentage
$ Change
Additive manufacturing
$4,514
10.2%
$4,320
22.7%
$194
Injection molding
$9,032
20.4%
$4,905
25.8%
$4,127
CNC machining
$14,196
32.0%
$2,484
13.0%
$11,712
Precision sheet metal
$13,855
31.3%
$5,819
30.6%
$8,036
Other revenue
$2,733
6.2%
$1,512
7.9%
$1,173
Total
$44,330
100.0%
$19,040
100.0%
$25,241
Full Year 2021 Revenue by Product Line (preliminary
unaudited)
Reported Revenue for Twelve
Months Ended
($ in thousands)
12/31/2021
Percentage
12/31/2020
Percentage
$ Change
Additive manufacturing
$17,830
11.7%
$17,075
27.9%
$755
Injection molding
$28,892
19.0%
$17,904
29.2%
$10,988
CNC machining
$43,149
28.4%
$10,380
16.9%
$32,769
Precision sheet metal
$53,445
35.1%
$10,166
16.6%
$43,279
Other revenue
$8,880
5.8%
$5,715
9.3%
$3,166
Total
$152,196
100.0%
$61,240
100.0%
$90,957
Pro Forma Revenue Calculation (preliminary unaudited)
($ in thousands)
Q4 2021
Q4 2020
Full Year 2021
Full Year 2020
GAAP reported revenue
$44,330
$19,040
$152,196
$61,240
2020 Acquisitions adjusted revenue1
-
9,328
-
49,294
2021 Acquisitions adjusted revenue2
-
9,087
10,380
38,866
Pro forma revenue
$44,330
$37,455
$162,576
$149,400
1 As described in the Proxy Statement/Prospectus, during
2020 Fathom completed the acquisitions of Incodema Holdings, Inc.,
Newchem, Inc., GPI Prototype and Manufacturing Services, LLC,
Dahlquist Machine, Inc., Majestic Metals, LLC, and Mark Two
Engineering, Inc. (the “2020 Acquisitions”). During 2021, we
completed the acquisitions of Summit Tooling, Inc., Summit
Plastics, LLC, Centex Machine and Welding, Inc., Laser
Manufacturing, Inc. and Screenshot Precisions, LLC d/b/a Micropulse
West and Precisions Process Corp. (the “2021 Acquisitions”).
Information gives pro forma effect to the 2020 Acquisitions, as
though such transactions occurred on January 1, 2020.2 Information
gives pro forma effect the 2021 Acquisitions, as though such
transactions occurred on January 1, 2020.
Reconciliation of GAAP
Net Income to Adjusted Net Loss (preliminary unaudited)
($ in thousands)
Q4 2021
Q4 2020
FY 2021
FY 2020
Net income (loss)
$20,981
($6,858)
$13,019
$(7,963)
Acquisition expenses1
-
1,840
4,236
3,765
Transaction costs
8,000
-
8,000
-
Change in fair value of tax receivable
agreement (TRA)
300
-
300
-
Change in fair value of warrant
liability2
(4,103)
-
(4,103)
-
Change in fair value of earnout share
payable2
(26,860)
-
(26,860)
-
Adjusted net income (loss)
($1,682)
($5,018)
($5,408)
($4,198)
1 Represents expenses incurred related to business
acquisitions; 2Represents the income statement impacts from the
change in fair value related to both the earnout liability and the
warrant liability associated with the business combination
completed on December 23, 2021.
Reconciliation of GAAP Net
Income to Adjusted EBITDA (preliminary unaudited)
($ in thousands)
Q4 2021
Q4 2020
FY 2021
FY 2020
Net income (loss)
$20,981
($6,858)
$13,019
$(7,963)
Depreciation and amortization
4,428
2,399
16,452
7,390
Interest expense, net
3,536
1,330
12,318
3,635
Income tax expense
(465)
-
400
23
Contingent consideration1
-
1,055
(1,120)
1,055
Acquisition expenses2
-
1,840
4,236
3,765
Loss on extinguishment of debt3
996
-
4,491
-
Transaction costs
8,000
-
8,000
-
Change in fair value of tax receivable
agreement (TRA)
300
-
300
-
Change in fair value of warrant
liability4
(4,103)
-
(4,103)
-
Change in fair value of earnout share
payable4
(26,860)
-
(26,860)
-
Non-recurring and non-cash costs5
3,721
1,744
7,220
3,289
Adjusted EBITDA
$10,534
$1,510
$34,353
$11,194
1 Represents the change in fair value of contingent
consideration payable to former owners of acquired businesses; 2
Represents expenses incurred related to business acquisitions; 3
Represents amounts paid to refinance debt in April of 2021; 4
Represents the impacts from the change in fair value related to
both the earnout liability and the warrant liability associated
with the business combination completed on December 23, 2021; 5
Represents adjustments for other non-recurring, non-operating, and
non-cash costs related primarily to integration costs for new
acquisitions, severance, and charges for the increase of fair value
of inventory related to acquisitions, and management fees paid to
Fathom’s principal owner.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220303006077/en/
Michael Cimini Director, Investor Relations Fathom Digital
Manufacturing (262) 563-5575 michael.cimini@fathommfg.com
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