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Desktop Metal Announces Second Quarter 2024 Financial Results

BOSTON — (BUSINESS WIRE) — July 30, 2024 — Desktop Metal, Inc. (NYSE: DM), a global leader in Additive Manufacturing 2.0 technologies for mass production, today announced its financial results for the second quarter ended June 30, 2024.

“Since the beginning of 2022, Desktop Metal has worked tirelessly to align our cost structure with macroeconomic realities, making hard decisions about the business. By the end of Q1 we had delivered nine quarters of non-GAAP opex reduction and brought our cash burn down dramatically. I am proud of the progress we have shown,” said Ric Fulop, Founder and CEO of Desktop Metal.

“However, despite these efforts, we've faced an increasingly challenging business environment as a result of rising rates, slowing capex budgets and other macro related challenges. We began to notice a concerning trend towards the end of this quarter with customers becoming hesitant to engage in closing deals due to our weakening financial outlook making it more difficult to reach our targets.

“This feedback from the market was a clear signal that we needed to take action. The proposed combination with Nano Dimension represents the best path forward for Desktop Metal and all of our stakeholders. This merger offers several key benefits that we expect will strengthen our competitive position and preserve shareholder value.”

Second Quarter 2024 Recent Business Highlights:

Corporate

Product Performance

Second Quarter 2024 Financial Highlights

Conference Call Information:

Desktop Metal will host a conference call on Wednesday, July 31, 2024 at 8:30 am ET to discuss second quarter 2024 results. Participants may access the call at 1-800-717-1738, international callers may use 1-646-307-1865, and request to join the Desktop Metal financial results conference call. A simultaneous webcast of the conference call and the accompanying summary presentation may be accessed online at the Events & Presentations section of ir.desktopmetal.com/. A replay will be available shortly after the conclusion of the conference call at the same website.

About Desktop Metal

Desktop Metal (NYSE: DM) is driving Additive Manufacturing 2.0, a new era of on-demand, digital mass production of industrial, medical, and consumer products. Our innovative 3D printers, materials, and software deliver the speed, cost, and part quality required for this transformation. We’re the original inventors and world leaders of the 3D printing methods we believe will empower this shift, binder jetting and digital light processing. Today, our systems print metal, polymer, sand and other ceramics, as well as foam and recycled wood. Manufacturers use our technology worldwide to save time and money, reduce waste, increase flexibility, and produce designs that solve the world’s toughest problems and enable once-impossible innovations. Learn more about Desktop Metal and our #TeamDM brands at www.desktopmetal.com.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical facts contained in these communications, including statements regarding Desktop Metal’s future results of operations and financial position, financial targets, business strategy, plans and objectives for future operations and the expected benefits of the proposed transaction with Nano Dimension, are forward-looking statements. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: demand for Desktop Metal’s products and services; the global macro-economic environment; impacts of rapid technological change in the additive manufacturing industry; Desktop Metal’s ability to realize the benefits from cost saving measures; supply and logistics disruptions, including shortages and delays; and risks related to the completion of the proposed transaction and actions related thereto. 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-K filed with the SEC on March 15, 2024, 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.

No Offer or Solicitation

This press release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

Additional Information about the Transaction and Where to Find It

In connection with the proposed transaction, Desktop Metal intends to file a proxy statement with the SEC. Desktop Metal may also file other relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the proxy statement or any other document that Desktop Metal may file with the SEC. The definitive proxy statement (if and when available) will be mailed to stockholders of Desktop Metal. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the proxy statement (if and when available) and other documents containing important information about Desktop Metal and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Desktop Metal will be available free of charge on Desktop Metal’s website at https://ir.desktopmetal.com/sec-filings/all-sec-filings.

Participants in the Solicitation

Desktop Metal, Nano and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of Desktop Metal is set forth in Desktop Metal’s proxy statement for its 2024 Annual Meeting of Stockholders, which was filed with the SEC on April 23, 2024. Information about the directors and executive officers of Nano is set forth in Nano’s Annual Report on Form 20-F, which was filed with the SEC on March 21, 2024. Other information regarding persons why may be deemed to be participants in the solicitation of Desktop Metal’s stockholders in connection with the proposed transaction and any direct or indirect interests they may have in the proposed transaction will be set forth in Desktop Metal’s definitive proxy statement for its special meeting of stockholders when it is filed with the SEC.

 

DESKTOP METAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

June 30,

 

December
31,

 

 

2024

 

2023

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

45,855

 

 

$

83,845

 

Current portion of restricted cash

 

 

215

 

 

 

233

 

Short‑term investments

 

 

177

 

 

 

625

 

Accounts receivable

 

 

29,507

 

 

 

37,690

 

Inventory

 

 

84,005

 

 

 

82,639

 

Prepaid expenses and other current assets

 

 

10,096

 

 

 

11,105

 

Total current assets

 

 

169,855

 

 

 

216,137

 

Restricted cash, net of current portion

 

 

612

 

 

 

612

 

Property and equipment, net

 

 

26,351

 

 

 

35,840

 

Intangible assets, net

 

 

80,390

 

 

 

168,259

 

Other noncurrent assets

 

 

29,284

 

 

 

37,153

 

Total Assets

 

$

306,492

 

 

$

458,001

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

18,089

 

 

$

18,190

 

Customer deposits

 

 

4,630

 

 

 

5,356

 

Current portion of lease liability

 

 

7,756

 

 

 

7,404

 

Accrued expenses and other current liabilities

 

 

24,891

 

 

 

27,085

 

Current portion of deferred revenue

 

 

9,860

 

 

 

11,739

 

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

 

 

225

 

 

 

330

 

Total current liabilities

 

 

65,451

 

 

 

70,104

 

Long-term debt, net of current portion

 

 

29

 

 

 

89

 

Convertible notes

 

 

112,930

 

 

 

112,565

 

Lease liability, net of current portion

 

 

20,522

 

 

 

23,566

 

Deferred revenue, net of current portion

 

 

1,842

 

 

 

3,696

 

Deferred tax liability

 

 

3,138

 

 

 

3,523

 

Other noncurrent liabilities

 

 

2,739

 

 

 

2,806

 

Total liabilities

 

 

206,651

 

 

 

216,349

 

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, 2024 and December 31, 2023, respectively

 

 

 

 

 

 

Common Stock, $0.0001 par value—500,000,000 shares authorized; 33,196,705 and 32,527,742 shares issued at June 30, 2024 and December 31, 2023, respectively, 33,196,705 and 32,527,167 shares outstanding at June 30, 2024 and December 31, 2023, respectively

 

 

4

 

 

 

4

 

Additional paid‑in capital

 

 

1,923,978

 

 

 

1,908,533

 

Accumulated deficit

 

 

(1,787,763

)

 

 

(1,632,225

)

Accumulated other comprehensive loss

 

 

(36,378

)

 

 

(34,660

)

Total Stockholders’ Equity

 

 

99,841

 

 

 

241,652

 

Total Liabilities and Stockholders’ Equity

 

$

306,492

 

 

$

458,001

 

 

See notes to condensed consolidated financial statements

 

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,

 

 

2024

 

2023

 

2024

 

2023

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

31,411

 

 

$

47,398

 

 

$

67,042

 

 

$

84,095

 

Services

 

 

7,521

 

 

 

5,888

 

 

 

12,490

 

 

 

10,507

 

Total revenues

 

 

38,932

 

 

 

53,286

 

 

 

79,532

 

 

 

94,602

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

67,209

 

 

 

43,224

 

 

 

106,228

 

 

 

82,115

 

Services

 

 

3,912

 

 

 

3,973

 

 

 

7,699

 

 

 

7,762

 

Total cost of sales

 

 

71,121

 

 

 

47,197

 

 

 

113,927

 

 

 

89,877

 

Gross profit (loss)

 

 

(32,189

)

 

 

6,089

 

 

 

(34,395

)

 

 

4,725

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

17,143

 

 

 

21,223

 

 

 

36,956

 

 

 

44,367

 

Sales and marketing

 

 

25,802

 

 

 

10,440

 

 

 

36,955

 

 

 

20,047

 

General and administrative

 

 

26,193

 

 

 

22,944

 

 

 

42,410

 

 

 

41,145

 

Total operating expenses

 

 

69,138

 

 

 

54,607

 

 

 

116,321

 

 

 

105,559

 

Loss from operations

 

 

(101,327

)

 

 

(48,518

)

 

 

(150,716

)

 

 

(100,834

)

Interest expense

 

 

(1,690

)

 

 

(1,109

)

 

 

(3,181

)

 

 

(1,920

)

Interest and other expense, net

 

 

(78

)

 

 

(78

)

 

 

(1,494

)

 

 

(149

)

Loss before income taxes

 

 

(103,095

)

 

 

(49,705

)

 

 

(155,391

)

 

 

(102,903

)

Income tax benefit (expense)

 

 

(345

)

 

$

(23

)

 

$

(147

)

 

$

534

 

Net loss

 

$

(103,440

)

 

$

(49,728

)

 

$

(155,538

)

 

$

(102,369

)

Net loss per share—basic and diluted

 

 

(3.13

)

 

 

(1.55

)

 

 

(4.73

)

 

 

(3.20

)

Weighted average shares outstanding, basic and diluted

 

 

33,085,262

 

 

 

32,165,582

 

 

 

32,898,836

 

 

 

32,038,281

 

 

See notes to condensed consolidated financial statements

 

DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

2023

 

2024

 

2023

Net loss

 

$

(103,440

)

 

$

(49,728

)

 

$

(155,538

)

 

$

(102,369

)

Other comprehensive loss, net of taxes:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

148

 

 

 

(451

)

 

 

337

 

Foreign currency translation adjustment

 

 

(500

)

 

 

(1,316

)

 

 

(1,267

)

 

 

233

 

Total comprehensive loss, net of taxes of $0

 

$

(103,940

)

 

$

(50,896

)

 

$

(157,256

)

 

$

(101,799

)

 

See notes to condensed consolidated financial statements.

·

 

DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE— April 1, 2024

 

32,970,519

 

 

$

4

 

$

1,917,535

 

 

$

(1,684,323

)

 

$

(35,878

)

 

$

197,338

 

Fractional shares redeemed for cash in lieu of reverse stock split

 

(1,338

)

 

 

 

 

(7

)

 

 

 

 

 

 

 

 

(7

)

Vesting of restricted stock units

 

234,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(6,586

)

 

 

 

 

(47

)

 

 

 

 

 

 

 

 

(47

)

Stock‑based compensation expense

 

 

 

 

 

 

6,497

 

 

 

 

 

 

 

 

 

6,497

 

Net loss

 

 

 

 

 

 

 

 

 

(103,440

)

 

 

 

 

 

(103,440

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

(500

)

 

 

(500

)

BALANCE—June 30, 2024

 

33,196,705

 

 

$

4

 

$

1,923,978

 

 

$

(1,787,763

)

 

$

(36,378

)

 

$

99,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—January 1, 2024

 

32,527,167

 

 

$

4

 

$

1,908,533

 

 

$

(1,632,225

)

 

$

(34,660

)

 

$

241,652

 

Fractional shares redeemed for cash in lieu of reverse stock split

 

(1,338

)

 

 

 

 

(7

)

 

 

 

 

 

 

 

 

(7

)

Vesting of restricted Common Stock

 

574

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

730,477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(60,175

)

 

 

 

 

(375

)

 

 

 

 

 

 

 

 

(375

)

Issuance of common stock related to share-based liability awards

 

 

 

 

 

 

1,997

 

 

 

 

 

 

 

 

 

1,997

 

Stock‑based compensation expense

 

 

 

 

 

 

13,830

 

 

 

 

 

 

 

 

 

13,830

 

Net loss

 

 

 

 

 

 

 

 

 

(155,538

)

 

 

 

 

 

(155,538

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

(1,718

)

 

 

(1,718

)

BALANCE—June 30, 2024

 

33,196,705

 

 

$

4

 

$

1,923,978

 

 

$

(1,787,763

)

 

$

(36,378

)

 

$

99,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—April 1, 2023

 

32,040,139

 

 

$

3

 

$

1,883,793

 

 

$

(1,361,595

)

 

$

(36,630

)

 

$

485,571

 

Exercise of Common Stock options

 

47,223

 

 

 

 

 

560

 

 

 

 

 

 

 

 

 

560

 

Vesting of restricted Common Stock

 

5,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

126,662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(505

)

 

 

 

 

(11

)

 

 

 

 

 

 

 

 

(11

)

Issuance of Common Stock related to settlement of contingent consideration

 

44,479

 

 

 

 

 

797

 

 

 

 

 

 

 

 

 

797

 

Stock‑based compensation expense

 

 

 

 

 

 

8,438

 

 

 

 

 

 

 

 

 

8,438

 

Net loss

 

 

 

 

 

 

 

 

 

(49,728

)

 

 

 

 

 

(49,728

)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

(1,168

)

 

 

(1,168

)

BALANCE—June 30, 2023

 

32,263,019

 

 

$

3

 

$

1,893,577

 

 

$

(1,411,323

)

 

$

(37,798

)

 

$

444,459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—January 1, 2023

 

31,813,343

 

 

$

3

 

$

1,874,821

 

 

$

(1,308,954

)

 

$

(38,368

)

 

$

527,502

 

Exercise of Common Stock options

 

96,811

 

 

 

 

 

1,157

 

 

 

 

 

 

 

 

 

1,157

 

Vesting of restricted Common Stock

 

7,559

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

307,504

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(6,677

)

 

 

 

 

(109

)

 

 

 

 

 

 

 

 

(109

)

Issuance of Common Stock related to settlement of contingent consideration

 

44,479

 

 

 

 

 

 

797

 

 

 

 

 

 

 

 

 

797

 

Stock‑based compensation expense

 

 

 

 

 

 

16,911

 

 

 

 

 

 

 

 

 

16,911

 

Net loss

 

 

 

 

 

 

 

 

 

(102,369

)

 

 

 

 

 

(102,369

)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

570

 

 

 

570

 

BALANCE—June 30, 2023

 

32,263,019

 

 

$

3

 

$

1,893,577

 

 

$

(1,411,323

)

 

$

(37,798

)

 

$

444,459

 

 

See notes to condensed consolidated financial statements.

 

DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

 
 

 

 

Six Months Ended June 30,

 

 

2024

 

2023

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(155,538

)

 

$

(102,369

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

96,043

 

 

 

26,965

 

Stock‑based compensation

 

 

14,335

 

 

 

19,016

 

Amortization (accretion) of discount on investments

 

 

 

 

 

(484

)

Amortization of deferred costs on convertible notes

 

 

365

 

 

 

365

 

Provision for bad debt

 

 

200

 

 

 

962

 

Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net

 

 

(45

)

 

 

 

Loss on disposal of property and equipment

 

 

(92

)

 

 

496

 

Foreign exchange (gains) losses on intercompany transactions, net

 

 

299

 

 

 

 

Net decrease in accrued interest related to marketable securities

 

 

 

 

 

238

 

Net unrealized loss on equity investment

 

 

448

 

 

 

148

 

Deferred tax benefit

 

 

147

 

 

 

(534

)

Foreign currency transaction loss

 

 

497

 

 

 

97

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

7,777

 

 

 

(3,661

)

Inventory

 

 

(3,353

)

 

 

(8,760

)

Prepaid expenses and other current assets

 

 

910

 

 

 

(675

)

Other assets

 

 

8,909

 

 

 

1,595

 

Accounts payable

 

 

(38

)

 

 

(407

)

Accrued expenses and other current liabilities

 

 

(282

)

 

 

1,097

 

Customer deposits

 

 

(644

)

 

 

(2,322

)

Current portion of deferred revenue

 

 

(3,611

)

 

 

(918

)

Change in right of use assets and lease liabilities, net

 

 

(3,778

)

 

 

(3,110

)

Other liabilities

 

 

19

 

 

 

1,767

 

Net cash used in operating activities

 

 

(37,432

)

 

 

(70,494

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(681

)

 

 

(1,305

)

Proceeds from sale of property and equipment

 

 

1,694

 

 

 

9,942

 

Purchase of marketable securities

 

 

 

 

 

(4,973

)

Proceeds from sales and maturities of marketable securities

 

 

 

 

 

107,719

 

Cash paid for acquisitions, net of cash acquired

 

 

 

 

 

(500

)

Net cash provided by investing activities

 

 

1,013

 

 

 

110,883

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from the exercise of stock options

 

 

 

 

 

1,157

 

Payment of taxes related to net share settlement upon vesting of restricted stock units

 

 

(376

)

 

 

(108

)

Repayment of loans

 

 

(158

)

 

 

(328

)

Net cash (used in) provided by financing activities

 

 

(534

)

 

 

721

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(1,055

)

 

 

73

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

(38,008

)

 

 

41,183

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

84,690

 

 

 

81,913

 

Cash, cash equivalents, and restricted cash at end of period

 

 

46,682

 

 

 

123,096

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows:

 

 

 

 

 

 

Cash and cash equivalents

 

$

45,855

 

 

$

121,660

 

Restricted cash included in other current assets

 

 

215

 

 

 

824

 

Restricted cash included in other noncurrent assets

 

 

612

 

 

 

612

 

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows

 

$

46,682

 

 

$

123,096

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

Interest paid

 

$

3,488

 

 

$

 

Taxes paid

 

$

 

 

$

 

 

 

 

 

 

 

 

Non‑cash investing and financing activities:

 

 

 

 

 

 

Net unrealized gain on investments

 

$

 

 

$

(337

)

Common Stock issued for settlement of contingent consideration

 

 

 

 

 

797

 

Additions to right of use assets and lease liabilities

 

$

863

 

 

$

8,489

 

Purchase of property and equipment included in accounts payable

 

$

129

 

 

$

365

 

Purchase of property and equipment included in accrued expense

 

$

 

 

$

32

 

Transfers from inventory to PP&E

 

 

1,285

 

 

 

 

Transfers from property and equipment to inventory

 

$

 

 

$

841

 

Transfers from inventory to property and equipment

 

$

 

 

$

1,345

 

 

See notes to condensed consolidated financial statements.

Non-GAAP Financial Information

This press release contains non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA.

In addition to Desktop Metal’s results determined in accordance with GAAP, Desktop Metal’s management uses this non-GAAP financial information to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information, when taken collectively, may be helpful to investors in assessing Desktop Metal’s operating performance.

We believe that the use of Non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends because it eliminates the effect of financing, capital expenditures, and non-cash expenses such as stock-based compensation and warrants, and provides investors with a means to compare Desktop Metal’s financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, investors should be aware that when evaluating non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA, we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of these measures may not be comparable to other similarly titled measures computed by other companies because not all companies calculate these measures in the same fashion.

Because of these limitations, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP operating expense, EBITDA and Adjusted EBITDA on a supplemental basis. Management uses, and investors should consider, our non-GAAP financial measures only in conjunction with our GAAP results. Desktop Metal has not provided a reconciliation of its Adjusted EBITDA outlook to net income because estimates of all of the reconciling items cannot be provided without unreasonable efforts.

Set forth below is a reconciliation of each non-GAAP financial measure used in this press release to its most directly comparable GAAP financial measure.

 

DESKTOP METAL, INC.
NON-GAAP RECONCILIATION TABLE
(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30,

 

June 30,

(Dollars in thousands)

 

2024

 

2023

 

2024

 

2023

GAAP gross margin

 

$

(32,189

)

 

$

6,089

 

 

$

(34,395

)

 

$

4,725

 

Stock-based compensation included in cost of sales(1)

 

 

475

 

 

 

590

 

 

 

1,043

 

 

 

1,270

 

Amortization of acquired intangible assets included in cost of sales(2)

 

 

42,681

 

 

 

6,928

 

 

 

57,021

 

 

 

13,855

 

Restructuring expense in cost of sales(2)

 

 

28

 

 

 

2,488

 

 

 

37,543

 

 

 

3,205

 

Acquisition-related and integration costs included in cost of sales

 

 

366

 

 

 

434

 

 

 

366

 

 

 

913

 

Non-GAAP gross margin

 

$

11,361

 

 

$

16,529

 

 

$

61,578

 

 

$

23,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

 

$

(101,327

)

 

$

(48,518

)

 

$

(150,716

)

 

$

(100,834

)

Stock-based compensation(2)

 

 

6,497

 

 

 

9,703

 

 

 

14,335

 

 

 

19,016

 

Amortization of acquired intangible assets

 

 

65,931

 

 

 

10,457

 

 

 

86,978

 

 

 

20,899

 

Restructuring expense(3)

 

 

11,211

 

 

 

2,850

 

 

 

14,217

 

 

 

6,469

 

Acquisition-related and integration costs

 

 

2,050

 

 

 

7,359

 

 

 

3,305

 

 

 

8,765

 

Non-GAAP operating loss

 

$

(15,638

)

 

$

(18,149

)

 

$

(31,881

)

 

$

(45,685

)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(103,440

)

 

$

(49,728

)

 

$

(155,538

)

 

$

(102,369

)

Stock-based compensation(2)

 

 

6,497

 

 

 

9,703

 

 

 

14,335

 

 

 

19,016

 

Amortization of acquired intangible assets

 

 

65,931

 

 

 

10,457

 

 

 

86,978

 

 

 

20,899

 

Restructuring expense(3)

 

 

11,211

 

 

 

2,850

 

 

 

14,217

 

 

 

6,469

 

Acquisition-related and integration costs

 

 

2,050

 

 

 

7,359

 

 

 

3,305

 

 

 

8,765

 

Change in fair value of investments

 

 

497

 

 

 

107

 

 

 

1,814

 

 

 

286

 

Non-GAAP net loss

 

$

(17,254

)

 

$

(19,252

)

 

$

(34,889

)

 

$

(46,934

)

(1) Includes immaterial liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $0.2 million and $0.4 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively.
(2) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.3 million and $2.9 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively
(3) Includes $3.9 million and $4.3 million of depreciation classified as restructuring charges for the three and six months ended June 30, 2024, respectively.

 

DESKTOP METAL, INC.
NON-GAAP OPERATING EXPENSE RECONCILIATION TABLE
(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30,

 

June 30,

(Dollars in thousands)

 

2024

 

2023

 

2024

 

2023

GAAP operating expenses

 

$

69,138

 

 

$

54,607

 

 

$

116,321

 

 

$

105,559

 

Stock-based compensation included in operating expenses(1)

 

 

(6,022

)

 

 

(9,113

)

 

 

(13,292

)

 

 

(17,746

)

Amortization of acquired intangible assets included in operating expenses

 

 

(23,250

)

 

 

(3,529

)

 

 

(29,957

)

 

 

(7,044

)

Restructuring expense included in operating expenses

 

 

(11,183

)

 

 

(362

)

 

 

23,326

 

 

 

(3,264

)

Acquisition-related and integration costs included in operating expenses

 

 

(1,684

)

 

 

(6,925

)

 

 

(2,939

)

 

 

(7,852

)

Non-GAAP operating expenses

 

$

26,999

 

 

$

34,678

 

 

$

93,459

 

 

$

69,653

 

(1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.1 million and $2.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively.

 

DESKTOP METAL, INC.
NON-GAAP ADJUSTED EBITDA RECONCILIATION TABLE
(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30,

 

June 30,

(Dollars in thousands)

 

2024

 

2023

 

2024

 

2023

Net loss attributable to common stockholders

 

$

(103,440

)

 

$

(49,728

)

 

$

(155,538

)

 

$

(102,369

)

Interest expense

 

 

1,690

 

 

 

1,109

 

 

 

3,181

 

 

 

1,920

 

Income tax benefit (expense)

 

 

345

 

 

 

23

 

 

 

147

 

 

 

(534

)

Depreciation and amortization (2)

 

 

71,858

 

 

 

13,530

 

 

 

96,043

 

 

 

26,965

 

EBITDA

 

 

(29,547

)

 

 

(35,066

)

 

 

(56,167

)

 

 

(74,018

)

Change in fair value of investments

 

 

497

 

 

 

107

 

 

 

1,814

 

 

 

286

 

Stock-based compensation expense(1)

 

 

6,497

 

 

 

9,703

 

 

 

14,335

 

 

 

19,016

 

Restructuring expense (2)

 

 

7,295

 

 

 

2,850

 

 

 

9,887

 

 

 

6,469

 

Acquisition-related and integration costs

 

 

2,050

 

 

 

7,359

 

 

 

3,305

 

 

 

8,765

 

Adjusted EBITDA

 

$

(13,208

)

 

$

(15,047

)

 

$

(26,826

)

 

$

(39,482

)

(1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2024, respectively. Includes $1.3 million and $2.9 million of liability-award stock-based compensation expense for the three and six months ended June 30, 2023, respectively
(2) In connection with the Photopolymer Initiative, we recorded incremental depreciation and amortization for the shortened useful life of various fixed assets and intangibles to restructuring charges. For the three and six months ended June 30, 2024, we recorded incremental depreciation of $3.9 million and $4.3 million, respectively, and incremental amortization of $59.9 million and $71.1 million, respectively. These amounts are listed in the depreciation and amortization line.



Contact:

Investor Relations:
(857) 504-1084
DesktopMetalIR@icrinc.com

Media Relations:
Sarah Webster
(313) 715-6988
sarahwebster@desktopmetal.com