Fathom Digital Manufacturing Reports Fourth Quarter and Full Year 2022 Preliminary Unaudited Financial Results

Financial Disclosure Disclaimer

Fathom has not yet completed its reporting process for the three and twelve months ended December 31, 2022. The company expects to submit a notification of late filing on Form 12b-25 with the SEC on March 31, 2023. 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 and relate specifically to potential changes in the provision for income taxes. Such adjustments may be material and could impact the results reported herein.

Consolidated Balance Sheets (preliminary unaudited)

($ in thousands)

Period Ended

 

December 31, 2022

December 31, 2021

Assets

Current assets

Cash

$

10,713

$

20,357

Accounts receivable, net

 

28,641

 

25,367

Inventory

 

15,718

 

13,165

Prepaid expenses and other current assets

 

3,588

 

1,836

Total current assets

 

58,660

 

60,725

Property and equipment, net

 

47,703

 

44,527

ROU Lease Assets - operating

 

10,312

 

-

ROU Lease Assets - financing

 

2,253

Intangible assets, net

 

251,412

 

269,622

Goodwill

 

-

 

1,189,464

Other non-current assets

 

175

 

2,036

Total assets

$

370,515

$

1,566,374

Liabilities and Shareholders’ Equity

Current liabilities

Accounts payable

 

7,982

 

9,409

Accrued expenses

 

8,176

 

5,957

Current operating lease liability

 

2,174

 

-

Current finance lease liability

 

200

 

-

Other current liabilities

 

4,128

 

2,748

Contingent consideration

 

700

 

29,697

Current portion of debt

 

42,744

 

2,058

Total current liabilities

 

66,104

 

49,869

Long-term debt, net

 

114,327

 

120,491

Fathom earnout shares liability

 

5,960

 

64,300

Sponsor earnout shares liability

 

930

 

9,380

Warrant liability

 

2,780

 

33,900

Payable to related parties pursuant to the tax receivable agreement (includes $5,200 and $4,600 at fair value, respectively)

 

25,360

 

4,600

Long-term contingent consideration

 

-

 

850

Noncurrent operating lease liability

 

8,958

 

-

Noncurrent finance lease liability

 

2,125

Deferred tax liability

 

-

 

17,570

Other noncurrent liabilities

 

-

 

4,655

Total liabilities

 

226,544

 

305,615

Commitments and Contingencies:

Redeemable non-controlling interest in Fathom OpCo

 

101,911

 

841,982

Shareholders' Equity:

Class A common stock, $0.0001 par value; 300,000,000 shares authorized; issued and outstanding 65,808,764 and 50,785,656 shares as of December 31, 2022 and December 31, 2021, respectively

 

7

 

5

Class B common stock, $0.0001 par value; 180,000,000 shares authorized; issued and outstanding 70,153,051 and 84,294,971 shares as of December 31, 2022 and December 31, 2021, respectively

 

7

 

8

Additional paid-in-capital

 

577,599

 

466,345

Accumulated other comprehensive loss

 

(107)

 

-

Accumulated deficit

 

(535,446)

 

(47,581)

Shareholders’ equity attributable to Fathom Digital Manufacturing Corporation

 

42,060

 

418,777

Total Liabilities, Shareholders’ Equity, and Redeemable Non-Controlling Interest

$

370,515

$

1,566,374

Consolidated Statements of Comprehensive Income (Loss) (preliminary unaudited)

 

Three Months Ended

Twelve Months Ended

($ in thousands)

December 31, 2022

December 31, 2021

December 31, 2022

December 31, 2021

 

 

Revenue

$

38,402

 

$

44,309

$

161,141

 

$

152,196

Cost of revenue

 

28,417

 

 

26,923

 

108,623

 

 

93,003

Gross profit

 

9,985

 

 

17,386

 

52,518

 

 

59,193

Operating expenses

 

 

Selling, general, and administrative

 

11,528

 

 

13,529

 

49,869

 

 

40,640

Depreciation and amortization

 

4,584

 

 

3,418

 

18,179

 

 

10,773

Restructuring

 

926

 

 

-

 

1,897

 

 

-

Goodwill Impairment

 

122,954

 

 

-

 

1,189,518

 

 

-

Total operating expenses

 

139,992

 

 

16,947

 

1,259,463

 

 

51,413

Operating (loss) income

 

(130,007)

 

 

439

 

(1,206,945)

 

 

7,780

Interest expense and other (income) expense

 

 

Interest expense

 

3,355

 

 

4,514

 

9,015

 

 

13,314

Other expense

 

50

 

 

12,308

 

350

 

 

21,315

Other income

 

(10,389)

 

 

(37,419)

 

(99,160)

 

 

(40,634)

Total interest expense and other (income) expense, net

 

(6,984)

 

 

(20,597)

 

(89,795)

 

 

(6,005)

Net income (loss) before income tax

 

(123,023)

 

 

21,036

 

(1,117,150)

 

 

13,785

Income tax (benefit) expense

 

(8,147)

 

 

(4,018)

 

(7,979)

 

 

(3,211)

Net income (loss)

 

(114,876)

 

 

25,054

 

(1,109,171)

 

 

16,996

Q4 2022 Revenue by Product Line (preliminary unaudited)

 

 

Reported Three Months Ended

($ in thousands)

12/31/2022

Percentage

12/31/2021

Percentage

% Change

Revenue By Product Line

 

 

 

 

 

Additive manufacturing

$3,204

8.3%

$4,514

10.2%

-29.0%

Injection molding

$5,318

13.8%

$9,032

20.4%

-41.1%

CNC machining

$14,947

38.9%

$14,196

32.0%

5.3%

Precision sheet metal

$12,154

31.6%

$13,855

31.3%

-12.3%

Other revenue

$2,779

7.2%

$2,712

6.1%

2.5%

Total

$38,402

100.0%

$44,309

100.0%

-13.3%

Full Year 2022 Revenue by Product Line (preliminary unaudited)

 

 

Reported Twelve Months Ended

($ in thousands)

12/31/2022

Percentage

12/31/2021

Percentage

% Change

Revenue By Product Line

 

 

 

 

 

Additive manufacturing

$14,917

9.3%

$17,830

11.7%

-16.3%

Injection molding

$25,210

15.6%

$28,892

19.0%

-12.7%

CNC machining

$58,388

36.2%

$43,149

28.4%

35.3%

Precision sheet metal

$55,307

34.3%

$53,445

35.1%

3.5%

Other revenue

$7,319

4.5%

$8,880

5.8%

-17.6%

Total

$161,141

100.0%

$152,196

100.0%

5.9%

Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income (Loss) (preliminary unaudited)

 

 

Three Months Ended

 

 

Twelve Months Ended

($ in thousands)

12/31/2022

 

12/31/2021

 

 

12/31/2022

 

12/31/2022

Net income (loss)

$

(114,876)

 

$

25,054

 

 

$

(1,109,171)

 

$

16,996

Acquisition expenses (1)

 

-

 

 

-

 

 

 

-

 

 

4,045

Transaction costs (2)

 

-

 

 

12,515

 

 

 

-

 

 

12,515

Stock compensation

 

1,699

 

 

-

 

 

 

7,386

 

 

-

Inventory step-up amortization

 

-

 

 

-

 

 

 

3,241

 

 

-

Goodwill impairment

 

122,954

 

 

-

 

 

 

1,189,518

 

 

-

Restructuring

 

901

 

 

-

 

 

 

1,897

 

 

-

Change in fair value of warrant liability (3)

 

(3,120)

 

 

(8,200)

 

 

 

(31,120)

 

 

(8,200)

Change in fair value of earnout shares liabilities (3)

 

(6,810)

 

 

(27,260)

 

 

 

(66,790)

 

 

(27,260)

Change in fair value of tax receivable agreement (TRA) liability (3)

 

(400)

 

 

300

 

 

 

(600)

 

 

300

Integration, non-recurring, non-operating, cash, and non-cash costs (4)

 

1,337

 

 

(5,309)

 

 

 

4,780

 

 

-

Adjusted net income (loss)

$

1,685

 

$

(2,900)

 

 

$

(859)

 

$

(1,604)

1 Represents expenses incurred related to business acquisitions; 2 Represents legal, consulting, and auditing costs associated with the business combination completed on December 23, 2021; 3 Represents the impacts from the change in fair value related to the earnout shares liability, the warrant liability and the tax receivable agreement associated with the business combination; 4 Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs for new acquisitions, severance, charges for the increase of fair value of inventory related to acquisitions, and management fees paid to our principal owner during the predecessor period.

 

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (preliminary unaudited)

 

 

Three Months Ended

 

 

Twelve Months Ended

($ in thousands)

 

12/31/2022

 

 

12/31/2021

 

 

 

12/31/2022

 

 

12/31/2021

Net income (loss)

$

(114,876)

 

$

25,054

 

 

$

(1,109,171)

 

$

16,996

Depreciation and amortization

 

6,357

 

 

4,612

 

 

 

24,896

 

 

16,618

Interest expense, net

 

3,277

 

 

4,514

 

 

 

9,015

 

 

13,314

Income tax expense (benefit)

 

(8,146)

 

 

(4,018)

 

 

 

(7,979)

 

 

(3,211)

Acquisition expenses (1)

 

-

 

 

-

 

 

 

-

 

 

4,045

Transaction costs (2)

 

-

 

 

12,515

 

 

 

-

 

 

12,515

Stock compensation

 

1,699

 

 

-

 

 

 

7,386

 

 

-

Inventory step-up amortization

 

-

 

 

-

 

 

 

3,241

 

 

-

Goodwill impairment

 

122,954

 

 

-

 

 

 

1,189,518

 

 

-

Restructuring

 

901

 

 

-

 

 

 

1,897

 

 

-

Change in fair value of warrant liability (3)

 

(3,120)

 

 

(8,200)

 

 

 

(31,120)

 

 

(8,200)

Change in fair value of earnout shares liability (3)

 

(6,810)

 

 

(27,260)

 

 

 

(66,790)

 

 

(27,260)

Change in fair value of tax receivable agreement (TRA) liability (3)

 

(400)

 

 

300

 

 

 

(600)

 

 

300

Loss on extinguishment of debt (4)

 

-

 

 

-

 

 

 

-

 

 

2,031

Contingent consideration (5)

 

(148)

 

 

(2,430)

 

 

 

(148)

 

 

(3,550)

Integration, non-recurring, non-operating, cash, and non-cash costs (6)

 

1,337

 

 

5,444

 

 

 

4,780

 

 

10,753

Adjusted EBITDA

$

3,025

 

$

10,531

 

 

$

24,925

 

$

34,351

1 Represents expenses incurred related to business acquisitions; 2 Represents legal, consulting, and auditing costs associated with the business combination completed on December 23, 2021; 3 Represents the impacts from the change in fair value related to the earnout shares liability, the warrant liability and the tax receivable agreement associated with the business combination; 4 Represents amounts paid to refinance debt in April of 2021; 5 Represents the change in fair value of contingent consideration payable to former owners of acquired businesses; 6 Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs for new acquisitions, severance, charges for the increase of fair value of inventory related to acquisitions, and management fees paid to our principal owner during the predecessor period.

 

 


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