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Desktop Metal Announces First Quarter 2024 Financial Results
"We started 2024 on a solid foot, despite persistent challenges across the capital investment backdrop, which has been a headwind to our overall demand function. The DM team has shown a continued ability to improve operational performance as we decrease our operating expenses for the ninth consecutive quarter," said Ric Fulop, Founder and CEO of Desktop Metal.
"We are continuing to see strong demand for our production binder jet systems that produce metal, sand and ceramic parts, as well as a constructive environment for the value of Additive Manufacturing 2.0 systems. Looking ahead to the balance of 2024, we are confident in achieving positive adjusted EBITDA in the second half of 2024. Given our strategic cost-outs, we expect strong leverage as sales growth returns."
First Quarter 2024 Recent Business Highlights:
Corporate
Continued execution of cost reduction plans with expectation of positive adjusted EBITDA in the second half of 2024
Product Performance
Desktop Health launches ScanUp(TM) digital dentistry adoption subscription program to modernize dental practice efficiency and patient care Desktop Metal and Evonik expand partnership, announce qualification of INFINAM(R) ST 6100 L on large format Additive Manufacturing 2.0 systems for high-performance, high-temperature products Desktop Health(TM) announces Flexcera(TM) Base Ultra+ dental resin for stronger, more comfortable 3D Printed dentures
First Quarter 2024 Financial Highlights
Revenue of $40.6 million, down from $41.3 million in the same quarter a year ago. GAAP gross margin of (5.4)%; Non-GAAP gross margin of 30.5%, a year-over-year improvement of 69.9%. GAAP gross margins impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets 1Q 2024 net loss of $(52.1) million, impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets Adjusted EBITDA of $(13.6) million, a year-over-year improvement of 44.3% Cash, cash equivalents, and short-term investments closed first quarter 2024 at $66.3 million, as rate of cash consumption declined 47% compared to the same year-ago quarter
Financial Outlook
Reaffirm 2024 full year guidance of:
Revenue expectation of between $175 million to $215 million for 2024 Adjusted EBITDA of between $(30) million to $(10) million for full-year 2024
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. See "Non-GAAP Financial Information."
Conference Call Information:
Desktop Metal will host a conference call on Thursday, May 9, 2024 at 8:30 am ET to discuss first quarter 2024 results. Participants may access the call at 1-888-886-7786, international callers may use 1-416-764-8658, 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, and plans and objectives for future operations, 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; and supply and logistics disruptions, including shortages and delays. 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.
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share and per share amounts)
March 31, December 31,
2024 2023
------------------------------------------------------------ ------------------------------------------------------------
Assets
Current assets:
$ 65,559 $ 83,845
Cash and cash equivalents
216 233
Current portion of restricted cash
495 625
Short-term investments
35,420 37,690
Accounts receivable
83,097 82,639
Inventory
11,008 11,105
Prepaid expenses and other current assets
1,528 --
Assets held for sale
-------------------- -------------------- -------------------- --------------------
Total current assets 197,323 216,137
Restricted cash, net of current portion 612 612
Property and equipment, net 31,651 35,840
Intangible assets, net 146,545 168,259
Other noncurrent assets 35,899 37,153
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total Assets $ 412,030 $ 458,001
==================== ==================== ==================== ==================== ==================== ====================
Liabilities and Stockholders' Equity
Current liabilities:
$ 18,332 $ 18,190
Accounts payable
4,271 5,356
Customer deposits
7,793 7,404
Current portion of lease liability
24,936 27,085
Accrued expenses and other current liabilities
14,179 11,739
Current portion of deferred revenue
276 330
Current portion of long-term debt, net of deferred financing costs
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total current liabilities 69,787 70,104
Long-term debt, net of current portion 58 89
Convertible notes 112,747 112,565
Lease liability, net of current portion 22,563 23,566
Deferred revenue, net of current portion 3,564 3,696
Deferred tax liability 3,202 3,523
Other noncurrent liabilities 2,771 2,806
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total liabilities 214,692 216,349
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Commitments and Contingencies (Note 17)
Stockholders' Equity
Preferred Stock, $0.0001 par value--authorized, 50,000,000 shares; no shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively -- --
Common Stock, $0.0001 par value--500,000,000 shares authorized; 329,705,193 and 325,277,419 shares issued at March 31, 2024 and December 31, 2023, respectively, 329,705,193 and 325,271,670 shares outstanding at March 31, 2024 and December 31, 2023, respectively 33 33
Additional paid-in capital 1,917,506 1,908,504
Accumulated deficit (1,684,323 ) (1,632,225 )
Accumulated other comprehensive loss (35,878 ) (34,660 )
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total Stockholders' Equity 197,338 241,652
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total Liabilities and Stockholders' Equity $ 412,030 $ 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
March 31,
--------------------------------------------------------------------------------------------------------------------------
2024 2023
--------------------------------------------------- ---------------------------------------------------
Revenues
$ 35,631 $ 36,697
Products
4,969 4,619
Services
-------------------- ----------- -------------------- -------------------- ----------- --------------------
Total revenues 40,600 41,316
Cost of sales
39,019 38,891
Products
3,787 3,789
Services
-------------------- ----------- -------------------- -------------------- ----------- --------------------
Total cost of sales 42,806 42,680
-------------------- ----------- -------------------- -------------------- ----------- --------------------
(2,206 ) (1,364 )
Gross loss
-------------------- ----------- -------------------- -------------------- ----------- --------------------
Operating expenses
19,813 23,144
Research and development
11,153 9,607
Sales and marketing
16,217 18,202
General and administrative
-------------------- ----------- -------------------- -------------------- ----------- --------------------
Total operating expenses 47,183 50,953
-------------------- ----------- -------------------- -------------------- ----------- --------------------
Loss from operations (49,389 ) (52,317 )
Interest expense (1,491 ) (811 )
Interest and other expense, net (1,416 ) (71 )
-------------------- ----------- -------------------- -------------------- ----------- --------------------
(52,296 ) (53,199 )
Loss before income taxes
198 $ 557
Income tax benefit
-------------------- ----------- -------------------- -------------------- ----------- --------------------
$ (52,098 ) $ (52,642 )
Net loss
-------------------- ----------- -------------------- -------------------- ----------- --------------------
(0.16 ) (0.16 )
Net loss per share--basic and diluted
==================== =========== ==================== ==================== =========== ====================
327,124,115 319,095,656
Weighted average shares outstanding, basic and diluted
==================== =========== ==================== ==================== =========== ====================
See notes to condensed consolidated financial statements.
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(in thousands)
Three Months Ended
March 31,
-------------------------------------------------------------------------------------------------------------
2024 2023
--------------------------------------- --------------------------------------------------
Net loss $ (52,098 ) $ (52,642 )
Other comprehensive loss, net of taxes:
(451 ) 189
Unrealized gain (loss) on available-for-sale marketable securities, net
(767 ) 1,549
Foreign currency translation adjustment
-------------------- ---------- --------- -------------------- ---------- --------------------
Total comprehensive loss, net of taxes of $0 $ (53,316 ) $ (50,904 )
==================== ========== ========= ==================== ========== ====================
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 March 31, 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Accumulated
Other
Common Stock Additional Comprehensive Total
Voting Paid-in Accumulated (Loss) Stockholders'
----------------------------------------------------------------------------------------------
Shares Amount Capital Deficit Income Equity
---------------------------------- ---------------------------------------- ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------
BALANCE--January 1, 2024 325,271,670 $ 33 $ 1,908,504 $ (1,632,225 ) $ (34,660 ) $ 241,652
-- -- -- -- -- --
Exercise of Common Stock options
5,749 -- -- -- -- --
Vesting of restricted Common Stock
4,963,667 -- -- -- -- --
Vesting of restricted stock units
(535,893 ) -- (328 ) -- -- (328 )
Repurchase of shares for employee tax withholdings
-- -- 1,997 -- -- 1,997
Issuance of common stock related to share-based liability awards
-- -- 7,333 -- -- 7,333
Stock-based compensation expense
-- -- -- (52,098 ) -- (52,098 )
Net loss
Other comprehensive income (loss) -- -- -- -- (1,218 ) (1,218 )
-------------- -------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- --------------------
Three Months Ended March 31, 2023
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Accumulated
Other
Common Stock Additional Comprehensive Total
Voting Paid-in Accumulated (Loss) Stockholders'
----------------------------------------------------------------------------------------------------
Shares Amount Capital Deficit Income Equity
---------------------------------------- ---------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------ ------------------------------------------------------------
BALANCE--January 1, 2023 318,133,434 $ 32 $ 1,874,792 $ (1,308,954 ) $ (38,368 ) $ 527,502
495,876 -- 597 -- -- 597
Exercise of Common Stock options
25,375 -- -- -- -- --
Vesting of restricted Common Stock
1,808,422 -- -- -- -- --
Vesting of restricted stock units
(61,718 ) -- (99 ) -- -- (99 )
Repurchase of shares for employee tax withholdings
-- -- 8,474 -- -- 8,474
Stock-based compensation expense
-- -- -- (52,642 ) -- (52,642 )
Net loss
Other comprehensive income (loss) -- -- -- -- 1,738 1,738
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
BALANCE--March 31, 2023 320,401,389 $ 32 $ 1,883,764 $ (1,361,596 ) $ (36,630 ) $ 485,570
==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ====================
See notes to condensed consolidated financial statements.
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Three Months Ended March 31,
--------------------------------------------------------------------------------------------------------------------------------------------
2024 2023
------------------------------------------------------------ ------------------------------------------------------------
Cash flows from operating activities:
Net loss $ (52,098 ) $ (52,642 )
Adjustments to reconcile net loss to net cash used in operating activities:
24,185 13,433
Depreciation and amortization
7,838 9,313
Stock-based compensation
-- (382 )
Amortization (accretion) of discount on investments
182 183
Amortization of deferred costs on convertible notes
123 179
Provision for bad debt
30 519
Loss on disposal of property and equipment
-- (8 )
Net decrease in accrued interest related to marketable securities
130 402
Net unrealized loss on equity investment
(198 ) (557 )
Deferred tax benefit
488 (25 )
Foreign currency transaction loss (gain)
Changes in operating assets and liabilities:
2,001 2,792
Accounts receivable
(1,763 ) (6,892 )
Inventory
9 (4,664 )
Prepaid expenses and other current assets
2,317 991
Other assets
87 (3,011 )
Accounts payable
(418 ) 878
Accrued expenses and other current liabilities
(1,046 ) 705
Customer deposits
2,397 1,127
Current portion of deferred revenue
(1,684 ) (1,493 )
Change in right of use assets and lease liabilities, net
11 1,806
Other liabilities
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net cash used in operating activities (17,409 ) (37,346 )
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Cash flows from investing activities:
Purchases of property and equipment (93 ) (1,011 )
Proceeds from sale of property and equipment -- 3,071
Purchase of marketable securities -- (4,973 )
Proceeds from sales and maturities of marketable securities -- 64,840
Cash paid for acquisitions, net of cash acquired -- (500 )
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net cash (used in) provided by investing activities (93 ) 61,427
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Cash flows from financing activities:
Proceeds from the exercise of stock options -- 597
Payment of taxes related to net share settlement upon vesting of restricted stock units (328 ) (99 )
Repayment of loans (79 ) (250 )
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net cash (used in) provided by financing activities (407 ) 248
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Effect of exchange rate changes on cash, cash equivalents and restricted cash (394 ) 217
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net increase (decrease) in cash, cash equivalents, and restricted cash (18,303 ) 24,546
Cash, cash equivalents, and restricted cash at beginning of period 84,690 81,913
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Cash, cash equivalents, and restricted cash at end of period $ 66,387 $ 106,459
==================== ==================== ==================== ==================== ==================== ====================
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