SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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FATHOM DIGITAL MANUFACTURING CORPORATION |
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By: |
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/s/ Mark Frost |
Name: |
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Mark Frost |
Title: |
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Chief Financial Officer |
Date: March 4, 2022
Exhibit 99.1
Fathom Digital Manufacturing Reports Fourth Quarter
and Full Year 2021 Preliminary Unaudited Financial Results
Fourth Quarter 2021 Highlights
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Revenue increased 132.8% to $44.3 million; Pro forma revenue1 increased 18.4% |
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Total orders increased 25.9% to $49.1 million |
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Net income totaled $21.0 million; adjusted net loss totaled $1.7 million1 |
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Adjusted EBITDA1 increased to
$10.5 million, representing an Adjusted EBITDA margin1 of 23.8% |
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Commenced trading on the New York Stock Exchange under the ticker FATH |
Full Year 2021 Highlights
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Revenue increased 148.5% to $152.2 million; Pro forma revenue1 increased 8.8% to $162.6 million |
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Net income totaled $13.0 million; adjusted net loss totaled $5.4 million1 |
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Adjusted EBITDA1 increased to
$34.4 million, representing an Adjusted EBITDA margin1 of 22.6% |
HARTLAND, Wis., March 4, 2022 Fathom Digital Manufacturing Corp. (NYSE: FATH), an industry leader in on-demand digital manufacturing services, today announced its preliminary unaudited financial results for the fourth quarter and full year ended December 31, 2021.
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Three Months Ended |
|
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Twelve Months Ended |
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($ in thousands) |
|
12/31/2021 |
|
|
12/31/2020 |
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12/31/2021 |
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12/31/2020 |
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Revenue |
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$ |
44,330 |
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|
$ |
19,040 |
|
|
$ |
152,196 |
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$ |
61,240 |
|
Pro forma revenue1 |
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$ |
44,330 |
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$ |
37,455 |
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$ |
162,576 |
|
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$ |
149,400 |
|
Net income (loss) |
|
$ |
20,981 |
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|
$ |
(6,858 |
) |
|
$ |
13,019 |
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$ |
(7,963 |
) |
Adjusted net income (loss)
1 |
|
$ |
(1,682 |
) |
|
$ |
(5,018 |
) |
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$ |
(5,408 |
) |
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$ |
(4,198 |
) |
Adjusted EBITDA1 |
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$ |
10,534 |
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$ |
1,510 |
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$ |
34,353 |
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$ |
11,194 |
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Adjusted EBITDA margin1 |
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23.8 |
% |
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7.9 |
% |
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22.6 |
% |
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18.3 |
% |
1 |
See Non-GAAP Financial Information.
Reconciliations of non-GAAP financial measures are included in the appendix. |
Fathoms 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 Fathoms industry-leading margins.
Mr. Martin added, In December, Fathom commenced trading on the New York Stock Exchange, representing a major milestone in the companys
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 Fathoms breadth of leading offerings as we continue to invest in the business. Additionally, we intend to maintain Fathoms 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 Fathoms 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 managements 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 Fathoms 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 Fathoms 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. Fathoms 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 Exchanges listing standards following the consummation of the business combination; costs related
to the business combination and additional factors discussed in Altimars 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 Fathoms 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 Fathoms 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 Companys
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 Fathoms 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 Fathoms 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 companys 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 Fathoms 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.
Contact:
Michael Cimini
Director, Investor Relations
Fathom Digital Manufacturing
(262) 563-5575
michael.cimini@fathommfg.com
Q4 2021 U.S GAAP Income Statement (preliminary unaudited)
($ in thousands)
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Three Months Ended December 31, |
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2021 |
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2020 |
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Net Sales |
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44,330 |
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|
|
19,040 |
|
Cost of Revenue1 |
|
|
26,290 |
|
|
|
10,178 |
|
|
|
|
|
|
|
|
|
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Gross Profit |
|
|
18,040 |
|
|
|
8,862 |
|
Operating expenses |
|
|
|
|
|
|
|
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Selling, general, and administrative
(SG&A)1 |
|
|
12,276 |
|
|
|
8,713 |
|
Depreciation and amortization |
|
|
3,309 |
|
|
|
2,028 |
|
|
|
|
|
|
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Total operating expenses |
|
|
15,585 |
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|
|
10,741 |
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|
|
|
|
|
|
|
|
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Operating income (loss) |
|
|
2,455 |
|
|
|
(1,879 |
) |
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|
|
|
|
|
|
|
|
Interest expense |
|
|
3,536 |
|
|
|
1,330 |
|
Other expense (income) |
|
|
9,387 |
|
|
|
3,811 |
|
Other income |
|
|
(30,985 |
) |
|
|
(162 |
) |
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|
|
|
|
|
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|
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Total other expense, net |
|
|
(18,062 |
) |
|
|
4,979 |
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|
|
|
|
|
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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% of revenue for the three months ended December 31, 2021, and December 31, 2020, respectively. Prior to the Companys 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)
|
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|
|
|
|
|
|
|
|
|
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 Companys 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; 2 Represents 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 Fathoms principal owner. |
###
Q4 and Full Year 2021 Financial Results
March 4, 2022 Exhibit 99.2
Forward-Looking Statements Certain
statements made in this presentation 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. Disclaimers
Non-GAAP Information This presentation
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. Disclaimers, continued
Agenda Fathom Overview Business Update
Q4 and Full Year 2021 Financial Review Liquidity and Capital Resources Full Year 2022 Guidance Summary Q&A
Fathom is at the Center of the Industry
4.0 Digital Manufacturing Revolution Leading on-demand digital manufacturing company in a large and fragmented $25bn+ market Comprehensive hybridized services and deep technical expertise combine to deliver integrated solutions for enterprise
customers Expansive software suite complements growth prospects Attractive financial profile and cash generation Proven and profitable track record with a highly experienced leadership team Fathom’s mission is to accelerate manufacturing
innovation for the most product-driven companies in the world
Rapid Prototyping and Low-Mid Volume
Production are the highest value stages of the manufacturing as a service value chain Manufacturing as a Service Value Chain Rapid Prototyping Low-Mid Volume Production High-Volume Production Typical Production Run Production Environment Value Add
One to tens of thousands High mix, low volume – difficult to replicate at scale; Core technologies include 1) Additive Manufacturing, 2) CNC Machining, 3) Injection Molding, and 4) Precision Sheet Metal Fabrication Unique suite of on-demand
manufacturing/ engineering services that speed iteration and finalization of new product designs, reducing time to market Hundreds of thousands to millions Low mix, high volume – largely commoditized High volume outsourced manufacturing of
finalized designs Product Development and Manufacturing Team Large Contract Manufacturers
Fathom’s Differentiated Model
Fathom delivers unique proprietary solutions that enable: Acceleration of new product development and manufacturing innovation Entrenched partnerships with blue-chip companies across diverse end-markets Resulting in: Technology agnostic
outcome-based approach 25+ industry leading manufacturing processes 12 manufacturing facilities nationwide Pioneer in the on-demand manufacturing space Early adopter of plastic & metal additive manufacturing Full-service support system
Proprietary software enablement tool Additive Technology Advanced & Traditional Manufacturing Software Materials Corporate customers want an integrated solution that delivers Comprehensive Manufacturing Capabilities Speed Quality Engineering
Services Customer Support Representative Customers:
Key Recent Business Wins Continued
expansion of wallet with new and existing blue-chip accounts Customer / Industry Order Size Order Type $40k validation order, $450k production order Validation & low-volume production $4 million in 2022 and $10 million over
next two years Expanded mid-volume production of existing program $1.7 million in 2021; expect $4-$8 million in 2022 orders Prototype with mid-volume production follow-on $4.5 million over three-month period New cross-sell of sheet metal low-volume
production $450k in 2021; expect over $1.5 million in 2022 orders Prototype & low-volume production Global healthcare company Global semiconductor company Disruptive electric vehicle manufacturer Global leader in mobile robotics 1 2 3 4 5 6
Global leader in gas measurement instruments and technologies Leading subsea technology company $550K production order Expansion to higher volume production of existing program New Strategic Accounts Existing Strategic Accounts
Q4 2021 Highlights 1 Reconciliations of
Non-GAAP financial measures are included in the Appendix. $49.1 million Q4 2021 Total Orders $44.3 million Q4 2021 Reported Revenue $10.5 million Q4 2021 Reported Adjusted EBITDA1 Q4 order growth of 25.9% Increased backlog of new business Q4 organic
revenue increased 18.4% Continued demand for Fathom’s broad services Q4 Adjusted EBITDA up $9.0 million Highlights strength of business model
Q4 and Full Year 2021 Revenue 1
Reconciliations of Non-GAAP financial measures are included in the Appendix. Revenue growth driven by increase in volume of customers served, primarily via M&A Fathom completed 5 acquisitions in 2021 focused on CNC Machining and Injection
Molding Full year 2021 pro forma revenue1, totaled $162.6 million, up nearly 9% from 2020 Q4 2021 pro forma revenue1, increased 18.4% from prior year period +132.8% +148.5%
Q4 and Full Year 2021 Adjusted
EBITDA1 Q4 2021 Adjusted EBITDA increased significantly to $10.5 million Record performance due to higher volume leverage, partially offset by sales mix Q4 SG&A increased 41% primarily from 2021 acquisitions as well as integration and public
company expenses Strong Q4 and full year 2021 Adj. EBITDA margins of 23.8% and 22.6%, respectively 1 Reconciliations of Non-GAAP financial measures are included in the Appendix. +206.9% +597.6%
Liquidity and Capital Resources 1
Equity market capitalization based on FATH closing price on March 1, 2022. Availability Liquidity ($ in millions) 12/31/2021 Term debt $125.0 Secured revolving credit facility $27.0 Gross debt $152.0 Cash and cash equivalents $20.1 Net debt $131.9
Undrawn revolver commitments $23.0 Available liquidity $43.1 Equity Capitalization (shares in millions) 12/31/2021 Class A common stock 51.6 Class B common stock 84.3 Total common stock 135.9 Equity market capitalization1 ($ in millions) $1,243
Available liquidity totaled $43.1 million as of 12/31/2021 Net debt to Adjusted EBITDA was 3.8x as of 12/31/2021 Class A shares listed on NYSE under ticker FATH; Class B shares are non-economic with same voting rights as Class A shares (one vote per
share) Equity market capitalization1 totaled ~$1.24 billion as of 3/1/2022
Financial Guidance Planning
Assumptions Strong revenue growth driven by acceleration in additive manufacturing and injection molding technologies Continued synergies from previous acquisitions; execution of land and expand strategy Forecast reflects incremental public company
and integration expenses Inflationary pressures expected to persist Capital expenditures expected to total ~6% of annual revenue Guidance excludes any potential new acquisitions in 2022 Projected 2022 revenue growth of ~23% at midpoint Adjusted
EBITDA expected to increase ~24% at midpoint with margin ranging between 22.0% and 23.4% ($ in thousands) Low End High End Revenue $182,000 $192,000 Adjusted EBITDA2 $40,000 $45,000 Full Year 2022 Forecast1 1 Source: Fathom’s full year 2022
outlook, as of March 4, 2022, reflects management projections. 2 Adjusted EBITDA is a non-GAAP measure. See Appendix for a calculation of historical Adjusted EBITDA.
Summary 1 Reconciliations of
Non-GAAP financial measures are included in the Appendix. Strong Q4 2021 performance led by organic revenue growth of 18.4% 1 2 4 6 5 3 Record Q4 order volume of $49.1 million expands backlog of new business Proven and scalable business model with
history of profitability and cash generation Attractive financial position to continue to execute growth strategy Poised for further growth in 2022, excluding the potential impact from new M&A Delivered profitable growth with Q4 Adj. EBITDA1 of
$10.5 million and margin of 23.8%
Appendix
Income Statement (preliminary
unaudited) Reported Three Months Ended Reported Twelve Months Ended ($ in thousands) 12/31/2021 12/31/2020 12/31/2021 12/31/2020 Revenue $44,330 $19,040 $152,196 $61,240 Cost of revenue1 $26,290 $10,178 $92,388
$33,064 Gross profit $18,040 $8,862 $59,808 $28,176 Gross margin % 40.7% 46.5% 39.3% 46.0% Selling, general, and administrative (SG&A)1 $12,276 $8,713 $39,490 $24,642 Depreciation
and amortization $3,309 $2,028 $10,606 $4,672 Total operating expenses $15,585 $10,741 $50,096 $29,314 Operating income (loss) $2,455 ($1,879) $9,712 ($1,138)
Other expenses (income), net ($18,502) $4,979 ($4,147) $6,802 Income before taxes $20,957 ($6,858) $13,859 ($7,940) Provision for income
taxes (benefit) ($464) - $400 $23 Net income (loss) $21,421 ($6,858) $13,459 ($7,963) Adjusted net income (loss)2 ($1,682) ($5,018) ($5,408)
($4,198) 1 Fathom reclassified certain historically reported expenses within the statement of operations to reflect go-forward policy. Specifically, cost of revenue included a reclassification of certain expenses equal to 6.2% and 0.5% of revenue
for the twelve months ended December 31, 2021, and December 31, 2020, respectively, as well as 4.4% and 0.5% of revenue for the three months ended December 31, 2021, and December 31, 2020, respectively. Additionally, SG&A included a
reclassification of certain expenses equal to 3.4% net of revenue for both the twelve months ended December 31, 2021, and December 31, 2020, as well as 1.8% and 3.4% of revenue for the three months ended December 31, 2021, and December 31, 2020,
respectively. Prior to the Company’s ownership of applicable acquired entities, these expenses were recorded inconsistently. The accounting reclassification had no impact on net income (loss). 2 Adjusted net income (loss) excludes acquisition
expenses, transaction costs, and income statement impacts from the change in fair value related to both the earnout liability and the warrant liability. See reconciliation of adjusted net income in the Appendix.
Revenue By Product Line (preliminary
unaudited) Reported Three Months Ended Reported Twelve Months Ended ($ in thousands) 2021 % Revenue 2020 % Revenue $ Change 2021 % Revenue 2020 % Revenue $ Change Revenue By Product Line
Additive manufacturing $4,514 10.2% $4,320 22.7% $194 $17,830 11.7% $17,075 27.9% $755 Injection molding $9,032 20.4% $4,905 25.8% $4,127 $28,892 19.0% $17,904 29.2% $10,988 CNC machining $14,196
32.0% $2,484 13.0% $11,712 $43,149 28.4% $10,380 16.9% $32,769 Precision sheet metal $13,855 31.3% $5,819 30.6% $8,036 $53,445 35.1% $10,166 16.6% $43,279 Other revenue $2,733 6.2% $1,512 7.9% $1,173 $8,880 5.8% $5,715 9.3%
$3,166 Total $44,330 100% $19,040 100% $25,241 $152,196 100% $61,240 100% $90,957
Pro Forma Revenue Calculation ($ in
thousands) Q4 2021 Q4 2020 FY 2021 FY 2020 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 adjusted revenue $44,330 $37,455 $162,576
$149,400 1 As described in the Proxy Statement/Prospectus, during 2020 Fathom completed the acquisitions of Incodema Holdings, Inc., Newchem, Inc., GPI Prototype and Manufacturing Services, LLC, Dahlquist Machine, Inc., Majestic Metals, LLC, and
Mark Two Engineering, Inc. (the “2020 Acquisitions”). During 2021 we completed the acquisitions of Summit Tooling, Inc., Summit Plastics, LLC, Centex Machine and Welding, Inc., Laser Manufacturing, Inc. and Screenshot Precisions, LLC
d/b/a Micropulse West and Precisions Process Corp. (the “2021 Acquisitions”). Information gives pro forma effect to the 2020 Acquisitions, as though such transactions occurred on January 1, 2020. 2 Information gives pro forma effect the
2021 Acquisitions, as though such transactions occurred on January 1, 2020.
Adjusted Net Income Calculation ($
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 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) ($4,198) 1 Represents expenses incurred related to business acquisitions. 2
Represents the income statement impacts from the change in fair value related to both the earnout liability and the warrant liability.
Adjusted EBITDA Calculation ($ 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) - 860 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 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; 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.
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