Fathom Digital Manufacturing Reports Second Quarter 2023 Financial Results

Consolidated Balance Sheets

 

 

 

Period Ended

 

 

 

June 30, 2023
(Unaudited)

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$

10,733

 

 

$

10,713

 

Accounts receivable, net

 

 

24,496

 

 

 

28,641

 

Inventory

 

 

17,177

 

 

 

15,718

 

Prepaid expenses and other current assets

 

 

2,618

 

 

 

3,588

 

Total current assets

 

 

55,024

 

 

 

58,660

 

Property and equipment, net

 

 

48,384

 

 

 

47,703

 

Right-of-use lease assets, net

 

 

12,034

 

 

 

12,565

 

Intangible assets, net

 

 

242,342

 

 

 

251,412

 

Other non-current assets

 

 

144

 

 

 

175

 

Total assets

 

$

357,928

 

 

$

370,515

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

10,311

 

 

$

7,982

 

Accrued expenses

 

 

8,155

 

 

 

8,176

 

Current lease liability

 

 

2,233

 

 

 

2,374

 

Other current liabilities

 

 

3,478

 

 

 

4,828

 

Current portion of debt, net

 

 

49,167

 

 

 

42,744

 

Total current liabilities

 

 

73,344

 

 

 

66,104

 

Long-term debt, net

 

 

109,551

 

 

 

114,327

 

Fathom earnout shares liability

 

 

808

 

 

 

5,960

 

Sponsor earnout shares liability

 

 

137

 

 

 

930

 

Warrant liability

 

 

600

 

 

 

2,780

 

Payable to related parties pursuant to the tax receivable agreement (includes $4,050 and $4,000 at fair value, respectively)

 

 

28,263

 

 

 

25,360

 

Noncurrent lease liability

 

 

10,285

 

 

 

11,083

 

Total liabilities

 

 

222,988

 

 

 

226,544

 

Commitments and Contingencies:

 

 

 

 

 

 

Contingently Redeemable Preferred Equity:

 

 

 

 

 

 

Redeemable non-controlling interest in Fathom OpCo

 

 

80,059

 

 

 

92,207

 

Shareholders' Equity:

 

 

 

 

 

 

Class A common stock, $0.0001 par value; 300,000,000 shares authorized; issued and outstanding 70,085,417 and 65,808,764 shares as of June 30, 2023 and December 31, 2022, respectively

 

 

7

 

 

 

7

 

Class B common stock, $0.0001 par value; 180,000,000 shares authorized; issued and outstanding 66,547,589 and 70,153,051 shares as of June 30, 2023 and December 31, 2022, respectively

 

 

7

 

 

 

7

 

Additional paid-in-capital

 

 

592,068

 

 

 

587,941

 

Accumulated other comprehensive loss

 

 

(107

)

 

 

(107

)

Accumulated deficit

 

 

(537,094

)

 

 

(536,084

)

Shareholders’ equity attributable to Fathom Digital Manufacturing Corporation

 

 

54,881

 

 

 

51,764

 

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

 

$

357,928

 

 

$

370,515

 

Consolidated Statements of Comprehensive Income (Loss)

 

Three Months Ended

Six Months Ended

 

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

 

 

Revenue

$

34,474

 

 

$

41,985

 

$

69,481

 

 

$

82,526

 

Cost of revenue

 

23,940

 

 

 

26,437

 

 

47,002

 

 

 

54,981

 

Gross profit

 

10,534

 

 

 

15,548

 

 

22,479

 

 

 

27,545

 

Operating expenses

 

 

Selling, general, and administrative

 

9,445

 

 

 

11,617

 

 

20,217

 

 

 

26,381

 

Depreciation and amortization

 

4,643

 

 

 

4,452

 

 

9,218

 

 

 

8,968

 

Restructuring

 

1,406

 

 

 

-

 

 

2,056

 

 

 

-

 

Total operating expenses

 

15,494

 

 

 

16,069

 

 

31,491

 

 

 

35,349

 

Operating loss

 

(4,960

)

 

 

(521

)

 

(9,012

)

 

 

(7,804

)

Interest expense and other (income) expense

 

 

Interest expense

 

3,959

 

 

 

1,858

 

 

7,429

 

 

 

3,332

 

Other expense

 

65

 

 

 

129

 

 

138

 

 

 

195

 

Other income

 

(1,784

)

 

 

(36,108

)

 

(8,103

)

 

 

(63,223

)

Total interest expense and other (income) expense, net

 

2,240

 

 

 

(34,121

)

 

(536

)

 

 

(59,696

)

Net income (loss) before income tax

$

(7,200

)

 

$

33,601

 

$

(8,476

)

 

$

51,892

 

Income tax (benefit) expense

 

64

 

 

 

(683

)

 

119

 

 

 

(1,386

)

Net income (loss)

$

(7,264

)

 

$

34,284

 

$

(8,595

)

 

$

53,278

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Class A common shares outstanding

 

 

Basic

 

69,703,407

 

 

 

52,259,885

 

 

68,382,896

 

 

 

51,530,961

 

Diluted

 

136,302,053

 

 

 

135,524,773

 

 

136,213,635

 

 

 

135,305,168

 

Q2 2023 Revenue by Product Line

 

 

 

 

 

 

 

Three Months Ended

($ in thousands)

6/30/2023

% Revenue

6/30/2022

% Revenue

% Change

Revenue By Product Line

 

 

 

 

 

Additive manufacturing

$3,287

9.5%

$4,410

10.5%

-25.5%

Injection molding

$6,064

17.6%

$7,093

16.9%

-14.5%

CNC machining

$13,240

38.4%

$14,584

34.7%

-9.2%

Precision sheet metal

$10,164

29.5%

$14,751

35.1%

-31.1%

Other revenue

$1,719

5.0%

$1,147

2.7%

49.9%

Total

$34,474

100.0%

$41,985

100.0%

-17.9%

 

 

 

 

 

 

Six Months 2023 Revenue by Product Line

 

 

 

 

 

 

 

Six Months Ended

($ in thousands)

6/30/2023

% Revenue

6/30/2022

% Revenue

% Change

Revenue By Product Line

 

 

 

 

 

Additive manufacturing

$6,875

9.9%

$8,559

10.4%

-19.7%

Injection molding

$10,743

15.5%

$13,908

16.9%

-22.8%

CNC machining

$27,470

39.5%

$27,910

33.8%

-1.6%

Precision sheet metal

$20,547

29.6%

$29,434

35.7%

-30.2%

Other revenue

$3,846

5.5%

$2,715

3.3%

41.7%

Total

$69,481

100.0%

$82,526

100.0%

-15.8%

 

 

 

 

 

 

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

Three Months Ended

Six Months Ended

 

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Net (loss) income

$

(7,264)

$

34,284

$

(8,595)

$

53,278

Stock compensation

 

1,239

 

1,796

 

2,332

 

3,926

Inventory step-up amortization

 

-

 

-

 

-

 

3,241

Restructuring expense

 

1,406

 

-

 

2,056

 

-

Change in fair value of warrant liability (1)

 

(400)

 

(12,500)

 

(2,180)

 

(20,600)

Change in fair value of earnout share liabilities (1)

 

(1,115)

 

(22,930)

 

(5,945)

 

(41,900)

Change in fair value of tax receivable agreement (1)

 

(250)

 

(200)

 

50

 

(200)

Integration, non-recurring, non-operating, cash, and non-cash costs (2)

 

715

 

1,047

 

1,111

 

2,951

Adjusted net loss

$

(5,669)

$

1,497

$

(11,171)

$

696

 

1 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 completed on December 23, 2021; 2 Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs for acquisitions and severance.

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA

 

Three Months Ended

Six Months Ended

 

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Net income (loss)

$

(7,264)

$

34,284

$

(8,595)

$

53,278

Depreciation and amortization

 

6,465

 

5,996

 

12,543

 

12,204

Interest expense, net

 

3,959

 

1,858

 

7,429

 

3,332

Income tax expense (benefit)

 

64

 

(378)

 

119

 

(1,386)

Stock compensation

 

1,239

 

1,796

 

2,332

 

3,926

Inventory step-up amortization

 

-

 

-

 

-

 

3,241

Restructuring expense

 

1,406

 

-

 

2,056

 

-

Change in fair value of warrant liability (1)

 

(400)

 

(12,500)

 

(2,180)

 

(20,600)

Change in fair value of earnout shares liability (1)

 

(1,115)

 

(22,930)

 

(5,945)

 

(41,900)

Change in fair value of tax receivable agreement (1)

 

(250)

 

(200)

 

50

 

(200)

Integration, non-recurring, non-operating, cash, and non-cash costs (2)

 

715

 

1,047

 

1,111

 

2,951

Adjusted EBITDA

$

4,819

$

8,973

$

8,920

$

14,846

 

1 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 completed on December 23, 2021; 2 Represents adjustments for other integration, non-recurring, non-operating, cash, and non-cash costs related primarily to integration costs for acquisitions and severance.


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