BOSTON–(BUSINESS WIRE)–Desktop Metal, Inc. (NYSE: DM) today announced its financial results for the first quarter ended March 31, 2021.
“We are pleased with the strong start to the year. Revenue growth accelerated as we captured strong organic momentum and inorganic opportunities,” said Ric Fulop, Founder and CEO of Desktop Metal. “Continued innovation in our core business, coupled with our inorganic strategy, strengthens our ability to grow our product portfolio, expand the high-volume applications we can offer customers, and increase our category leadership. We are well positioned to execute on our long-term growth strategy focused on Additive Manufacturing 2.0 for high-volume, end-use parts.”
First Quarter 2021 and Recent Business Highlights:
Expanded materials portfolio to over 225 materials across metals, composites, polymers, ceramics, biocompatible materials, and now wood and elastomers Accelerated customer adoption, adding more customers in the first quarter of 2021 than all of 2020 combined Introduced Forust process for high-volume, printed wood parts leveraging existing metal binder jetting printer technology Launched Flexcera as the first major product line for dental applications from Desktop Health and received FDA 510(k) clearance for Flexcera Base Acquired Adaptive3D, a category-leader in printable elastomers and rubber materials, adding to our growing materials portfolio Closed EnvisionTEC acquisition and began shipping two new area-wide photopolymer printers: the Xtreme 8K and Envision One HT Completed redemption of all outstanding public warrants in first quarter of 2021 to streamline capital structure and enhance cash position, contributing $170.7 million to our cash position Grew Desktop Metal team to over 470 employees today, up from 180 employees in May 2020 First Quarter 2021 Financial Highlights:
Revenue of $11.3 million, up 35% from the fourth quarter of 2020 and up 234% from the first quarter of 2020 Net Loss of $59.1 million, including the non-cash negative change in fair value of warrant liability of $56.6 million and an income tax benefit of $27.9 million Non-GAAP Gross Profit of $0.6 million, an improvement of $3.3 million from the first quarter of 2020 Adjusted EBITDA of $(19.4) million Strong liquidity position with cash, cash equivalents and short-term investments of $572.2 million as of March 31, 2021 Outlook for Full Year 2021:
Reiterating expectation of over $100 million of revenue for 2021, exiting the year with an annualized revenue run rate of $160 million Adjusted EBITDA in the range of $(60)–(70) million Conference Call Information:
Desktop Metal will host a conference call on May 17, 2021 at 4: 30 p.m. EDT to discuss first quarter 2021 results. Participants may access the call at 1-877-300-8521, international callers may use 1-412-317-6026, 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 from a link in the Events & Presentations section of https://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 and named to MIT Technology Review’s list of 50 Smartest Companies.
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 statement 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 the risks and uncertainties set forth in Desktop Metal, Inc.’s filings with the U.S. Securities and Exchange Commission. 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,
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
416,379
$
483,525
Short-term investments
155,847
111,867
Restricted cash
1,021
—
Accounts receivable
9,234
6,516
Inventory
20,837
9,708
Prepaid expenses and other current assets
18,657
976
Total current assets
621,975
612,592
Restricted cash
776
612
Property and equipment, net
12,331
12,160
Capitalized software, net
268
312
Goodwill
201,308
2,252
Intangible assets, net
144,103
9,102
Other noncurrent assets
6,826
4,879
Total Assets
$
987,587
$
641,909
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
5,227
$
7,591
Customer deposits
2,792
1,480
Current portion of lease liability
1,639
868
Accrued expenses and other current liabilities
15,324
7,565
Deferred revenue
3,405
3,004
Current portion of long-term debt, net of deferred financing costs
11,019
9,991
Total current liabilities
39,406
30,499
Warrant liability
—
93,328
Long-term debt, net of deferred financing costs
163
—
Lease liability, net of current portion
3,248
2,157
Deferred tax liability
5,206
—
Total liabilities
48,023
125,984
Commitments and Contingencies
Stockholders’ Equity
Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively
—
—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 252,660,102 and 226,756,733 shares issued at March 31, 2021 and December 31, 2020, respectively, 252,436,919 and 224,626,597 shares outstanding at March 31, 2021 and December 31, 2020, respectively
25
23
Additional paid-in capital
1,326,945
844,188
Accumulated deficit
(387,385
)
(328,277
)
Accumulated other comprehensive income (loss)
(21
)
(9
)
Total Stockholders’ Equity
939,564
515,925
Total Liabilities and Stockholders’ Equity
$
987,587
$
641,909
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended
March 31,
2021
2020
Revenues
Products
$
10,311
$
2,694
Services
1,002
691
Total revenues
11,313
3,385
Cost of sales
Products
10,487
5,041
Services
1,413
1,163
Total cost of sales
11,900
6,204
Gross margin
(587
)
(2,819
)
Operating expenses
Research and development
10,858
12,340
Sales and marketing
5,449
4,494
General and administrative
13,846
2,625
Total operating expenses
30,153
19,459
Loss from operations
(30,740
)
(22,278
)
Change in fair value of warrant liability
(56,576
)
—
Interest expense
(73
)
(104
)
Interest and other income, net
361
578
Loss before income taxes
(87,028
)
(21,804
)
Income tax benefit
27,920
—
Net loss
$
(59,108
)
$
(21,804
)
Net loss per share—basic and diluted
$
(0.25
)
$
(0.14
)
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(in thousands)
Three Months Ended
March 31,
2021
2020
Net loss
$
(59,108
)
$
(21,804
)
Other comprehensive (loss) income, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net
1
(159
)
Foreign currency translation adjustment
(13
)
—
Total comprehensive loss, net of taxes of $0
$
(59,120
)
$
(21,963
)
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(in thousands, except share amounts)
Accumulated
Other
Common Stock
Additional
Comprehensive
Total
Voting
Paid-in
Accumulated
(Loss)
Stockholders’
Shares
Amount
Capital
Deficit
Income
Equity
BALANCE—January 1, 2021
224,626,597
$
23
$
844,188
$
(328,277
)
$
(9
)
$
515,925
Exercise of Common Stock options
163,228
—
180
—
—
180
Vesting of restricted Common Stock
56,015
—
—
—
—
—
Vesting of restricted stock units
15,265
—
—
—
—
—
Repurchase of shares for employee tax withholdings
(2,241
)
—
(54
)
—
—
(54
)
Issuance of Common Stock for acquisitions
5,036,142
—
159,847
—
—
159,847
Stock-based compensation expense
—
—
2,217
—
—
2,217
Vesting of Trine Founder shares
1,850,938
—
—
—
—
—
Exercise of warrants
20,690,975
2
320,567
—
—
320,569
Net loss
—
—
—
(59,108
)
—
(59,108
)
Other comprehensive income (loss)
—
—
—
—
(12
)
(12
)
BALANCE—March 31, 2021
252,436,919
$
25
$
1,326,945
$
(387,385
)
$
(21
)
$
939,564
Accumulated
Other
Legacy Convertible
Common Stock
Additional
Comprehensive
Total
Preferred Stock
Voting
Paid-in
Accumulated
(Loss)
Stockholders’
Shares
Amount
Shares
Amount
Capital
Deficit
Income
Equity
BALANCE—January 1, 2020
100,038,109
$
436,533
26,813,113
$
3
$
16,722
$
(294,262
)
$
75
$
(277,462
)
Retroactive application of recapitalization
(100,038,109
)
(436,533
)
128,100,821
13
436,520
—
—
436,533
Adjusted balance, beginning of period
—
—
154,913,934
16
453,242
(294,262
)
75
159,071
Exercise of Common Stock options
—
—
286,636
—
132
—
—
132
Vesting of restricted Common Stock
—
—
1,750,555
—
2
—
—
2
Stock-based compensation expense
—
—
—
—
1,259
—
—
1,259
Common Stock warrants issued
—
—
—
—
124
—
—
124
Net loss
—
—
—
—
—
(21,804
)
—
(21,804
)
Other comprehensive income (loss)
—
—
—
—
—
—
(159
)
(159
)
BALANCE—March 31, 2020
—
$
—
156,951,125
$
16
$
454,759
$
(316,066
)
$
(84
)
$
138,625
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months Ended March 31,
2021
2020
Cash flows from operating activities:
Net loss
$
(59,108
)
$
(21,804
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
3,892
2,321
Stock-based compensation
2,217
1,259
Change in fair value of warrant liability
56,576
—
Expense related to Common Stock warrants issued
—
124
Amortization (accretion) of discount on investments
406
(22
)
Amortization of debt financing cost
4
4
Provision for bad debt
72
—
Net increase in accrued interest related to marketable securities
(240
)
(124
)
Net unrealized (gain) loss on marketable securities
(25
)
—
Deferred tax benefit
(27,921
)
—
Changes in operating assets and liabilities:
Accounts receivable
(61
)
752
Inventory
(2,381
)
(3,238
)
Prepaid expenses and other current assets
(4,276
)
393
Other assets
(30
)
—
Accounts payable
(3,856
)
(989
)
Accrued expenses and other current liabilities
(5,247
)
(976
)
Customer deposits
(1,234
)
285
Deferred revenue
105
(339
)
Change in right of use assets and lease liabilities, net
(22
)
(80
)
Net cash used in operating activities
(41,129
)
(22,434
)
Cash flows from investing activities:
Purchases of property and equipment
(262
)
(1,004
)
Purchase of marketable securities
(92,386
)
(17,616
)
Proceeds from sales and maturities of marketable securities
48,241
49,300
Cash paid for acquisition, net of cash acquired
(137,646
)
—
Net cash (used in) provided by investing activities
(182,053
)
30,680
Cash flows from financing activities:
Payment of issuance costs related to reverse recapitalization
(1,239
)
—
Proceeds from the exercise of stock warrants
158,308
—
Payment of taxes related to net share settlement of upon vesting of restricted stock units
(54
)
—
Proceeds from exercise of stock options
180
132
Net cash provided by financing activities
157,195
132
Net (decrease) increase in cash, cash equivalents, and restricted cash
(65,987
)
8,378
Effect of exchange rate changes
26
—
Cash and cash equivalents at beginning of period
483,525
66,161
Restricted cash
612
612
Cash, cash equivalents, and restricted cash at end of period
$
418,176
$
75,151
Supplemental cash flow information:
Interest paid
$
73
$
107
Non-cash investing and financing activities:
Net unrealized (gain) loss on investments
$
(1
)
$
159
Exercise of private placement warrants
$
149,904
$
—
Common Stock issued for acquisitions
$
159,847
$
—
Additions to right of use assets and lease liabilities
$
364
$
—
Purchase of property and equipment included in accounts payable
$
50
$
—
Receivable for warrants exercised
$
12,357
$
—
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, 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, acquisition-related and other transactional charges included in general and administrative expenses and change in fair value of warrant liability We define Non-GAAP operating loss as GAAP operating loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, acquisition-related and other transactional charges included in general and administrative expenses and change in fair value of warrant liability We define Non-GAAP net loss as GAAP net loss excluding the effect of stock-based compensation, amortization of acquired intangible assets, acquisition-related and other transactional charges included in general and administrative expenses and change in fair value of warrant liability We define EBITDA as GAAP net income (loss) excluding interest, income taxes and depreciation and amortization expense We define Adjusted EBITDA as EBITDA excluding stock based compensation, warrant expenses and transaction costs associated with acquisitions 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, 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, 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, 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, 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.
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)
2021
2020
GAAP gross margin
$
(587
)
$
(2,819
)
Stock-based compensation included in cost of sales
117
100
Amortization of acquired intangible assets included in cost of sales
1,091
—
Non-GAAP gross margin
$
621
$
(2,719
)
GAAP operating loss
$
(30,740
)
$
(22,278
)
Stock-based compensation
2,217
1,259
Amortization of acquired intangible assets included in cost of sales
1,091
—
Amortization of acquired intangibles assets
1,208
164
Acquisition-related and other transactional charges included in general and administrative expenses
4,984
—
Non-GAAP operating loss
$
(21,240
)
$
(20,855
)
GAAP net loss
$
(59,108
)
$
(21,804
)
Stock-based compensation
2,217
1,259
Amortization of acquired intangible assets included in cost of sales
1,091
—
Amortization of acquired intangibles assets
1,208
164
Acquisition-related and other transactional charges included in general and administrative expenses
4,984
—
Change in fair value of warrant liability
56,576
—
Non-GAAP net loss
$
6,968
$
(20,381
)
DESKTOP METAL, INC.
ADJUSTED EBITDA RECONCILIATION TABLE
(in thousands)
For the Three Months Ended
March 31,
(Dollars in thousands)
2021
2020
Net loss attributable to common stockholders
$
(59,108
)
$
(21,804
)
Interest (income) expense, net
(42
)
(478
)
Income tax benefit
(27,920
)
—
Depreciation and amortization
3,892
2,321
EBITDA
(83,178
)
(19,961
)
Change in fair value of warrant liability
56,576
—
Stock compensation expense
2,217
1,259
Warrant expense
—
139
Transaction costs associated with acquisitions
4,984
—
Adjusted EBITDA
$
(19,401
)
$
(18,563
)