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Desktop Metal Announces Second Quarter 2022 Financial Results

  • Record revenue of $57.7 million, up 204% from second quarter 2021, and an increase of 32% sequentially from first quarter 2022

  • GAAP gross margin of 14.6%; non-GAAP gross margin of 26.7%, increasing over 170 basis points from second quarter 2021

  • Announced Strategic Integration and Cost Optimization Initiative to accelerate AM 2.0 growth, support path to profitability, and drive value to shareholders

  • Unveiled FreeFoam, a revolutionary, expandable 3D printable resin designed for volume production of foam parts

  • Reaffirming full year 2022 guidance of approximately $260 million for revenue, representing 131% growth from 2021, and approximately $(90) million for adjusted EBITDA

BOSTON, August 08, 2022--(BUSINESS WIRE)--Desktop Metal, Inc. (NYSE: DM) today announced its financial results for the second quarter ended June 30, 2022.

"Desktop Metal continued to build on its momentum in the second quarter, delivering record revenue of $57.7 million and expanding non-GAAP gross margins to 26.7%," said Ric Fulop, Founder and CEO of Desktop Metal. "Our strong financial results represent the strength and breadth of our unmatched AM 2.0 portfolio as our team continues to execute at a high level in a dynamic macro environment."

Fulop continued, "We enter the second half of the year with a more streamlined and efficient operating model, combining continued revenue growth at scale with a disciplined strategy to optimize our expense structure, in order to achieve our financial commitments and support our path to profitability."

Second Quarter 2022 and Recent Business Highlights:

  • Announced Strategic Integration and Cost Optimization Initiative to accelerate AM 2.0 growth, support path to profitability, and drive value to shareholders including expectation of approximately $40 million of annualized run rate non-GAAP cost savings, $20 million of which is expected to take place in the second half of 2022, and at least $100 million of aggregate cost savings over the next 24 months

  • Unveiled FreeFoam, a revolutionary, expandable 3D printable resin designed for volume production of foam parts

  • Awarded a sub-contract under the Defense Logistics Agency (DLA) of the Department of Defense prime contract worth a potential $15 million

  • Began effort to monetize dominant IP portfolio of over 650 patents and pending applications

Second Quarter 2022 Financial Highlights:

  • Revenue of $57.7 million, up 203.9% from second quarter 2021 revenue of $19.0 million, and an increase of 32.0% sequentially from first quarter 2022

  • Revenue growth driven by strength from metals platform and contributions from acquisitions

  • GAAP gross margin of 14.6%; non-GAAP gross margin of 26.7%, increasing over 170 basis points from second quarter 2021

  • Net loss of $297.3 million, primarily due to a non-cash goodwill impairment charge of $229.5 million as a result of the Company’s and comparable companies’ stock price declines and including $2.4 million of restructuring charges in connection with the Strategic Integration and Cost Optimization Initiative

  • Adjusted EBITDA of $(27.5) million

  • Cash, cash equivalents, and short-term investments of $255.7 million as of June 30, 2022

  • Successfully completed $115 million convertible notes offering in May 2022, bolstering liquidity in an uncertain macro environment and providing sufficient runway to reach cash flow breakeven

Outlook for Full Year 2022:

  • Reaffirming revenue expectation of approximately $260 million for 2022, representing 131% growth from 2021

  • Reaffirming adjusted EBITDA expectation of approximately $(90) million for 2022

Conference Call Information:

Desktop Metal will host a conference call on Monday, August 8, 2022 at 4:30 p.m. ET to discuss second quarter 2022 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, Inc., based in Burlington, Massachusetts, is accelerating the transformation of manufacturing with an expansive portfolio of 3D printing solutions, from rapid prototyping to mass production. Founded in 2015 by leaders in advanced manufacturing, metallurgy, and robotics, the company is addressing the unmet challenges of speed, cost, and quality to make additive manufacturing an essential tool for engineers and manufacturers around the world. Desktop Metal was selected as one of the world’s 30 most promising Technology Pioneers by the World Economic Forum, named to MIT Technology Review’s list of 50 Smartest Companies, and the 2021 winner of Fast Company’s Innovation by Design Award in materials.

For more information, visit www.desktopmetal.com.

Forward-looking Statements:

This press release contains certain forward-looking statements within the meaning of the federal securities laws. 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 August 8, 2022, 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)

June 30,

December 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$

107,966

$

65,017

Current portion of restricted cash

3,152

2,129

Short‑term investments

147,774

204,569

Accounts receivable

37,291

46,687

Inventory

88,609

65,399

Prepaid expenses and other current assets

21,086

18,208

Total current assets

405,878

402,009

Restricted cash, net of current portion

1,112

1,112

Property and equipment, net

57,667

58,710

Goodwill

377,710

639,301

Intangible assets, net

238,069

261,984

Other noncurrent assets

30,713

25,480

Total Assets

$

1,111,149

$

1,388,596

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

29,309

$

31,558

Customer deposits

12,050

14,137

Current portion of lease liability

5,169

5,527

Accrued expenses and other current liabilities

29,154

33,829

Current portion of deferred revenue

17,746

18,189

Current portion of long‑term debt, net of deferred financing costs

587

825

Total current liabilities

94,015

104,065

Long-term debt, net of current portion

430

548

Convertible notes

111,420

Contingent consideration, net of current portion

1,160

4,183

Lease liability, net of current portion

18,040

13,077

Deferred revenue, net of current portion

4,326

4,508

Deferred tax liability

7,961

10,695

Other noncurrent liabilities

2,657

3,170

Total liabilities

240,009

140,246

Commitments and Contingencies (Note 17)

Stockholders’ Equity

Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Common Stock, $0.0001 par value—500,000,000 shares authorized; 315,292,925 and 311,737,858 shares issued at June 30, 2022 and December 31, 2021, respectively, 315,147,677 and 311,473,950 shares outstanding at June 30, 2022 and December 31, 2021, respectively

32

31

Additional paid‑in capital

1,851,836

1,823,344

Accumulated deficit

(935,827

)

(568,611

)

Accumulated other comprehensive loss

(44,901

)

(6,414

)

Total Stockholders’ Equity

871,140

1,248,350

Total Liabilities and Stockholders’ Equity

$

1,111,149

$

1,388,596

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

Three Months Ended

Six Months Ended

June 30,

June 30,

2022

2021

2022

2021

Revenues

Products

$

52,672

$

17,560

$

92,148

$

27,871

Services

5,002

1,417

9,232

2,419

Total revenues

57,674

18,977

101,380

30,290

Cost of sales

Products

44,913

15,490

86,815

25,977

Services

4,364

1,115

7,496

2,528

Total cost of sales

49,277

16,605

94,311

28,505

Gross profit

8,397

2,372

7,069

1,785

Operating expenses

Research and development

31,370

15,651

55,975

26,509

Sales and marketing

20,406

10,894

40,070

16,343

General and administrative

19,691

13,142

43,573

26,988

In-process research and development assets acquired

10,400

10,400

Goodwill impairment

229,500

229,500

Total operating expenses

300,967

50,087

369,118

80,240

Loss from operations

(292,570

)

(47,715

)

(362,049

)

(78,455

)

Change in fair value of warrant liability

(56,576

)

Interest expense

(633

)

(51

)

(601

)

(125

)

Interest and other (expense) income, net

(5,013

)

268

(6,766

)

630

Loss before income taxes

(298,216

)

(47,498

)

(369,416

)

(134,526

)

Income tax benefit

944

4,318

2,200

32,238

Net loss

$

(297,272

)

$

(43,180

)

$

(367,216

)

$

(102,288

)

Net loss per share—basic and diluted

$

(0.95

)

$

(0.17

)

$

(1.17

)

$

(0.41

)

Weighted average shares outstanding, basic and diluted

313,556,886

255,097,905

312,798,328

246,717,400

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)

Three Months Ended

Six Months Ended

June 30,

June 30,

2022

2021

2022

2021

Net loss

$

(297,272

)

$

(43,180

)

$

(367,216

)

$

(102,288

)

Other comprehensive (loss) income, net of taxes:

Unrealized gain (loss) on available-for-sale marketable securities, net

(41

)

(5

)

(29

)

(4

)

Foreign currency translation adjustment

(27,411

)

130

(38,458

)

117

Total comprehensive (loss) income, net of taxes of $0

$

(324,724

)

$

(43,055

)

...