Desktop Metal Announces Second Quarter 2021 Financial Results

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

 

For the Six Months Ended

 

 

June 30,

 

June 30,

(Dollars in thousands)

 

2021

 

2020

 

2021

 

2020

GAAP gross margin

 

$

2,372

 

$

(8,289)

 

$

1,785

 

$

(11,108)

Stock-based compensation included in cost of sales

 

 

128

 

 

52

 

 

246

 

 

152

Amortization of acquired intangible assets included in cost of sales

 

 

2,235

 

 

 

 

3,327

 

 

Non-GAAP gross margin

 

$

4,735

 

$

(8,237)

 

$

5,358

 

$

(10,956)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

 

$

(47,715)

 

$

(24,037)

 

$

(78,455)

 

$

(46,315)

Stock-based compensation

 

 

3,999

 

 

1,074

 

 

6,216

 

 

2,333

Amortization of acquired intangible assets included in cost of sales

 

 

2,235

 

 

 

 

3,327

 

 

Amortization of acquired intangibles assets

 

 

2,033

 

 

160

 

 

3,241

 

 

324

Acquisition-related and other transactional charges included in
general and administrative expenses

 

 

3,329

 

 

 

 

8,313

 

 

In-process research and development assets acquired

 

 

10,198

 

 

 

 

10,198

 

 

Non-GAAP operating loss

 

$

(25,921)

 

$

(22,803)

 

$

(47,160)

 

$

(43,658)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(43,180)

 

$

(23,766)

 

$

(102,288)

 

$

(45,570)

Stock-based compensation

 

 

3,999

 

 

1,074

 

 

6,216

 

 

2,333

Amortization of acquired intangible assets included in cost of sales

 

 

2,235

 

 

 

 

3,327

 

 

Amortization of acquired intangibles assets

 

 

2,033

 

 

160

 

 

3,241

 

 

324

Acquisition-related and other transactional charges included in
general and administrative expenses

 

 

3,329

 

 

 

 

8,313

 

 

In-process research and development assets acquired

 

 

10,198

 

 

 

 

10,198

 

 

Change in fair value of investments

 

 

(18)

 

 

 

 

(18)

 

 

Change in fair value of warrant liability

 

 

 

 

 

 

56,576

 

 

Non-GAAP net loss

 

$

(21,404)

 

$

(22,532)

 

$

(14,435)

 

$

(42,913)

DESKTOP METAL, INC.

ADJUSTED EBITDA RECONCILIATION TABLE

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30,

 

June 30,

(Dollars in thousands)

 

2021

 

2020

 

2021

 

2020

Net loss attributable to common stockholders

 

$

(43,180)

 

$

(23,766)

 

$

(102,288)

 

$

(45,570)

Interest (income) expense, net

 

 

(140)

 

 

(185)

 

 

(182)

 

 

(663)

Income tax benefit

 

 

(4,317)

 

 

 

 

(32,238)

 

 

Depreciation and amortization

 

 

5,679

 

 

2,154

 

 

9,571

 

 

4,475

In-process research and development assets acquired

 

 

10,198

 

 

 

 

10,198

 

 

EBITDA

 

 

(31,760)

 

 

(21,797)

 

 

(114,939)

 

 

(41,758)

Change in fair value of warrant liability

 

 

 

 

 

 

56,576

 

 

Change in fair value of investments

 

 

(18)

 

 

 

 

(18)

 

 

Stock compensation expense

 

 

3,999

 

 

1,074

 

 

6,216

 

 

2,333

Warrant expense

 

 

 

 

87

 

 

 

 

211

Transaction costs associated with acquisitions

 

 

3,329

 

 

 

 

8,313

 

 

Adjusted EBITDA

 

$

(24,450)

 

$

(20,636)

 

$

(43,852)

 

$

(39,214)


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